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

    111th CONGRESS
      1st Session
                                    H. R. 2454

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

    _______________________________________________________________________

                        IN THE HOUSE OF REPRESENTATIVES

                                  May 15, 2009

    Mr. Waxman (for himself and Mr. Markey of Massachusetts) introduced the
       following bill; which was referred to the Committee on Energy and
        Commerce, and in addition to the Committees on Foreign Affairs,
       Financial Services, Education and Labor, Science and Technology,
    Transportation and Infrastructure, Natural Resources, Agriculture, and
       Ways and Means, for a period to be subsequently determined by the
      Speaker, in each case for consideration of such provisions as fall
               within the jurisdiction of the committee concerned

    _______________________________________________________________________

                                     A BILL

    To 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.
                             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.
                  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. 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.
         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.
                       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.
            ``Sec. 216A. Transmission planning.
                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--Clean Energy Innovation Centers

    Sec. 171. Clean energy innovation centers.
                      Subtitle I--Marine Spatial Planning

    Sec. 181. Study of ocean renewable energy and transmission planning and
                                siting.
                          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.
         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. Purpose of Energy Star.
                     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--Planning Requirements

            ``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.
       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.
                  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 and propane consumers.
            ``Sec. 786-788. [SECTIONS RESERVED].
            ``Sec. 789. Climate change rebates.
            ``Sec. 790. Exchange for State-issued allowances.
            ``Sec. 791. Auction procedures.
            ``Sec. 792. Auctioning allowances for other entities.
            ``Sec. 793. Establishment of funds.
                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. Hazardous air pollutants.
            ``Sec. 833. New source review.
            ``Sec. 834. Title V permits.
            ``Sec. 835. Existing proceedings.
    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. 336. Enforcement.
    Sec. 337. Conforming amendments.
                      Subtitle D--Carbon Market Assurance

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

            ``Sec. 401. Oversight and assurance of carbon 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 authority of the Federal Trade Commission.
    Sec. 358. Regulation of carbon derivatives markets.
               TITLE IV--TRANSITIONING TO A CLEAN ENERGY ECONOMY

                         Subtitle A--Industrial Sector

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

            ``Sec. 761. Purposes.
            ``Sec. 762. International negotiations.
            ``Sec. 763. Definitions.
                 ``subpart 1--emission allowance rebate program

            ``Sec. 764. Eligible industrial sectors.
            ``Sec. 765. Distribution of emission allowance rebates.
              ``subpart 2--international reserve allowance program

            ``Sec. 766. International reserve allowance program.
                    ``subpart 3--presidential determination

            ``Sec. 767. Presidential reports and determinations.
    Sec. 402. Allocations to petroleum refineries.
                         ``Part G--Petroleum Refineries

            ``Sec. 771. Allocations to petroleum refineries.
                  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.
              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 tax credit.
            ``Sec. 36B. Energy tax credit.
    Sec. 432. Energy refund program for low-income consumers.
                     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. National climate change adaptation program.
    Sec. 452. Climate services.
    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.

    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 700 of the Clean Air Act, as added by section
            312 of this Act.

                             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 electric output, and the electricity saved due to the
            mechanical output, of a combined heat and power system,
            adjusted to reflect any increase in fuel consumption by that
            system as compared to the fuel that would have been required to
            produce an equivalent useful thermal energy output in a
            separate thermal-only system.
                ``(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 larger than 2 megawatts in capacity.
                ``(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) Federal land.--The term `Federal land' means land
            owned by the United States, other than land held in trust for
            an Indian or Indian tribe.
                ``(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 third parties that do not receive thermal
                    service from the fuel cell do not exceed 50 percent of
                    the total annual electricity generation by the fuel
                    cell.
                ``(11) High conservation priority land.--The term `high
            conservation priority land' means land that is not Federal land
            and is--
                        ``(A) globally or State ranked as critically
                    imperiled or imperiled under a State Natural Heritage
                    Program; or
                        ``(B) old-growth or late-successional forest, as
                    defined by the office of the relevant State Forester or
                    relevant State agency with regulatory jurisdiction over
                    forestry activities.
                ``(12) 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.
                ``(13) Qualified hydropower.--The term `qualified
            hydropower' means--
                        ``(A) energy produced from increased efficiency
                    achieved, or additions of capacity made, on or after
                    January 1, 1992, 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, 1992, 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.
                ``(14) 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 and
                            Federal environmental permits;
                                ``(ii) in the case of a facility that
                            commenced operation before the date of the
                            enactment of this section, a certification that
                            the facility meets emissions standards
                            promulgated under sections 112 or 129 of the
                            Clean Air Act (42 U.S.C. 7412 or 7429) that
                            apply as of the date of the 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.
                ``(15) 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.
                ``(16) Renewable biomass.--The term `renewable biomass'
            means any of the following:
                        ``(A) Plant material, including waste material,
                    harvested or collected from actively managed
                    agricultural land that was in cultivation, cleared, or
                    fallow and nonforested on the date of enactment of this
                    section;
                        ``(B) Plant material, including waste material,
                    harvested or collected from pastureland that was
                    nonforested on such date of enactment;
                        ``(C) Nonhazardous vegetative matter derived from
                    waste, including separated yard waste, landscape right-
                    of-way trimmings, construction and demolition debris or
                    food waste (but not municipal solid waste, recyclable
                    waste paper, painted, treated or pressurized wood, or
                    wood contaminated with plastic or metals);
                        ``(D) Animal waste or animal byproducts, including
                    products of animal waste digesters;
                        ``(E) Algae;
                        ``(F) Trees, brush, slash, residues, or any other
                    vegetative matter removed from within 600 feet of any
                    building, campground, or route designated for
                    evacuation by a public official with responsibility for
                    emergency preparedness, or from within 300 feet of a
                    paved road, electric transmission line, utility tower,
                    or water supply line;
                        ``(G) Residues from or byproducts of milled logs;
                        ``(H) Any of the following removed from forested
                    land that is not Federal and is not high conservation
                    priority land:
                                ``(i) Trees, brush, slash, residues,
                            interplanted energy crops, or any other
                            vegetative matter removed from an actively
                            managed tree plantation established--
                                        ``(I) prior to the date of
                                    enactment of this section; or
                                        ``(II) on land that, as of the date
                                    of enactment of this section, was
                                    cultivated or fallow and non-forested.
                                ``(ii) Trees, logging residue, thinnings,
                            cull trees, pulpwood, and brush removed from
                            naturally regenerated forests or other non-
                            plantation forests, including for the purposes
                            of hazardous fuel reduction or preventative
                            treatment for reducing or containing insect or
                            disease infestation.
                                ``(iii) Logging residue, thinnings, cull
                            trees, pulpwood, brush and species that are
                            non-native and noxious, from stands that were
                            planted and managed after the date of enactment
                            of this section to restore or maintain native
                            forest types.
                                ``(iv) Dead or severely damaged trees
                            removed within 5 years of fire, blowdown, or
                            other natural disaster, and badly infested
                            trees;
                        ``(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 or mature forest stands, 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.
                ``(17) 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.
                ``(18) 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).
                ``(19) 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.
                ``(20) 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.
                ``(21) 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.
                ``(22) 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.
                ``(23) Total annual electricity savings.--The term `total
            annual electricity savings' means electricity savings during a
            specified calendar year from measures that were placed into
            service since 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 (g).
                ``(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 electricity
            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 renewable electricity and energy
            efficiency programs;
                ``(2) rely upon existing and emerging State or regional
            tracking systems that issue and track non-Federal renewable
            electricity credits; and
                ``(3) cooperate with the States to facilitate coordination
            between State 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.--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.
                ``(3) Certain power sales contracts.--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 energy 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 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 son the
            proportion of the electricity that is attributable to the
            renewable energy resource or other qualifying energy resource.
                ``(7) 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.
                ``(8) 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.
                ``(9) 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 subsequent compliance year.
                ``(10) 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) avoid double-counting of savings used for
                    compliance with this section, including savings that
                    are transferred pursuant to paragraph (3);
                        ``(H) ensure that, except as provided in
                    subparagraph (J), 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);
                        ``(I) 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;
                    and
                        ``(J) 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 accord with the direction of the
                    relevant State regulatory authority.
                ``(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
                    accord 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) of
                    this subsection.
                        ``(C) Review of state implementation.--The
                    Commission shall periodically review State
                    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 may satisfy
            the requirements of subsection (b) in whole or in part by
            submitting in accord 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 accord with such regulations as the Commission may
            promulgate.
                ``(2) Payment to state funds.--Payments made under this
            subsection shall be made directly to the State in which the
            retail electric supplier is located, provided that such
            payments are deposited directly into a fund within the State's
            treasury for use pursuant to paragraph (3).
                ``(3) State use of funds.--States receiving payments under
            this subsection shall use such funds exclusively for the
            purposes of--
                        ``(A) deploying technologies that generate
                    electricity from renewable energy resources; or
                        ``(B) cost-effective energy efficiency measures and
                    programs.
                ``(4) Reporting.--Any State that receives a payment under
            this subsection shall, within 12 months of receipt of such
            payment, provide a report to the Commission giving a full
            accounting of the use of such payments, including a detailed
            description of the activities funded thereby.
        ``(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 fails to comply with the requirements of subsection
            (b) or (g), 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 (g)(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 (g).
                ``(2) Enforcement.--The Secretary 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 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. 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 (i), 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 or
            political subdivision of a State 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 or political subdivision, 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.''.

                  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 of the Environmental Protection Agency,
    in consultation with the Secretary of Energy 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 or regional level;
                (2) identify regulatory implementation challenges,
            including those related to approval of State 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 of the Environmental Protection Agency
            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 officials with
            environmental expertise, representatives of State Attorneys
            General, 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.
                (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 of the Environmental
            Protection Agency 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 or a
                            municipality.
                                (iii) Rural electric cooperatives.
                                (iv) Fossil fuel producers.
                                (v) Non-profit environmental organizations.
                                (vi) Independent generators or wholesale
                            power providers.
                                (vii) Consumer groups.
                        (B) Nonvoting members.--The Board shall also
                    include as additional non-voting 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 research agencies, non-profit
            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; 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 program 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 matter,
            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)(1); 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)(8), 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 to 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.

        (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.--To be eligible to receive emission
    allowances under this section, the owner of a 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) derives at least 50 percent of its
                            annual fuel input from coal, petroleum coke, or
                            any combination of these 2 fuels; and
                                (iii) upon implementation of capture and
                            sequestration technology, will capture and
                            permanently sequester at least 50 percent of
                            the carbon dioxide, measured on an annual
                            basis, that would be emitted by the unit absent
                            capture and sequestration technology; or
                        (B) at an industrial source that--
                                (i) injects for sequestration not less than
                            50,000 tons per year of carbon dioxide;
                                (ii) upon implementation, will capture and
                            permanently sequester at least 50 percent of
                            the carbon dioxide produced by the source,
                            measured on an annual basis, that would be
                            emitted in the absence of capture and
                            sequestration technology; and
                                (iii) does not produce a liquid
                            transportation fuel from a solid fossil-based
                            feedstock;
                (2) permanently 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 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.
                (2) Distribution.--The Administrator shall distribute
            emission allowances allocated under section 782(a)(f) to 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.
                        (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 of its intent to
                    achieve such rate of capture and sequestration by not
                    later than January 1, 2012.
                        (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) All monetary values in this section shall be
                    adjusted for inflation.
        (d) Phase II Distribution to Electric Generating Units.--
                (1) Application.--This subsection shall apply only to the
            distribution of emission allowances to 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 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 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 entities;
                                (ii) eligible entities 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
                            entity 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
                    provide deployment incentives to eligible entities
                    selected through a reverse auction under this paragraph
                    pursuant to a formula equivalent to that described in
                    subsection (c)(2), except that the incentive level that
                    is bid by the entity shall be substituted for the bonus
                    allowance value.
                (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 eligible
                    projects under this subsection, in accord with the
                    requirements of this paragraph.
                        (B) Multiple tranches.--The Administrator shall
                    divide emission allowances available for distribution
                    to 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)(2)), establishing the number of
                            allowances to be distributed per ton of carbon
                            dioxide permanently sequestered by the project.
                        (D) Requirements.--For each tranche established
                    pursuant to subparagraph (A), 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)(1)); 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
            2015.--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 such covered EGU would otherwise be eligible to receive
            under this section by the product of--
                        (A) 20 percent; and
                        (B) the number of years 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) the capture
                            and permanent sequestration of at least 50
                            percent of the carbon dioxide, measured on an
                            annual basis, that such covered EGU would emit
                            in the absence of carbon capture and
                            sequestration technology.
                (3) Covered egus initially permitted from 2015 through
            2020.--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 or
            thereafter, does not achieve and maintain the capture and
            permanent sequestration of at least 50 percent of the carbon
            dioxide, measured on an annual basis, that such covered EGU
            would emit in the absence of capture and sequestration
            technology.
        (f) Industrial Sources.--
                (1) Allowances.--The Administrator may distribute not more
            than 15 percent of the allowances allocated under section
            782(a)(f) for any vintage year to 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 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.--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, the Administrator shall auction, pursuant to section 791, any
    emission allowances that are allocated for carbon capture and
    sequestration deployment under section 782(a)(f) and are not yet
    obligated under this section.
        (h) Exhaustion of Account and Annual Roll-Over of Surplus
    Allowances.--
                (1) In distributing bonus allowances under this subsection,
            the Administrator shall ensure that qualifying projects
            receiving allowances receive distributions for 10 years.
                (2) If the Administrator determines that the allowances
            allocated under section 782(a)(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) 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 bonus 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 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.

    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).
    In determining compliance with this subsection, the Administrator shall
    assume an energy penalty of the carbon dioxide capture system of no
    greater than 15 percent.
        ``(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, shall 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. In determining
    compliance with this subsection, the Administrator shall assume an
    energy penalty of the carbon dioxide capture system of no greater than
    15 percent. 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 issues a
            determination that there are in commercial operation in the
            United States electric generating units 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 inject 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.''.

                        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 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--
                (1) the reconstruction or retooling of facilities for the
            manufacture of plug-in electric drive vehicles that are
            developed and produced in the United States; and
                (2) if appropriate, the purchase of domestically produced
            vehicle batteries to be used in the manufacture of vehicles
            manufactured pursuant to paragraph (1).
        (c) Requirements.--The Secretary may provide financial assistance
    under subsection (b) to an automobile manufacturer if--
                (1) in the case of a reconstruction or retooling described
            under subsection (b)(1), without financial assistance the
            automobile manufacturer is not able to reasonably finance the
            reconstruction or retooling of a facility; or
                (2) in the case of battery purchases described under
            subsection (b)(2), without financial assistance, the automobile
            manufacturer is not able to reasonably finance the purchase of
            such batteries.
        (d) 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.
        (e) 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 (f), for evaluating applications for financial
            assistance; and
                (3) reporting requirements for automobile manufacturers
            that receive financial assistance under this section.
        (f) 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.
        (g) Reports.--The Secretary shall annually submit to Congress a
    report on the program established pursuant to this section.
        (h) 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 section 136(a)(1)(C) shall be
            the following:
                        (A) in each of the years 2012 through 2016, the
                    average base year shall be model year 2009; and
                        (B) in 2017, the Administrator shall,
                    notwithstanding 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 allowances allocated pursuant
    to section 782(i) of the Clean Air Act not later than October 31 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 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 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 allowances
            under this subsection, 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 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 sections
                    122 or 123 of this Act;
                        (C) the Administrator confirms to the Secretary
                    that 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, 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 sections 122 or 123 of this Act, the remaining 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 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 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 per vehicle.

         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 create 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 one 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.--Except as required pursuant to
                    subparagraph (B), a State shall deposit into its SEED
                    Account all allowances received from the Administrator
                    for renewable energy and energy efficiency purposes,
                    pursuant to this Act.
                        (B) 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 or
                    withdrawn from SEED Accounts, including the proceeds of
                    any sale or such allowances, shall support renewable
                    energy and energy efficiency programs authorized or
                    approved by the Federal Government.
                        (B) Dedicated allowances.--Allowances deposited in
                    a SEED Account 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 deposited in a SEED Account 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 create and maintain
                    subaccounts 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
                    established 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
                    deposits into the SEED Account, withdrawals from the
                    SEED Account, and SEED Account balances, including any
                    subaccounts or related financial accounts. Such
                    controls and procedures shall conform to generally
                    accepted government accounting principles. Any State
                    that has established a SEED Account shall retain
                    records for a period of at least 5 years.
                        (B) Audits.--Any State that has established 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
                    Secretary 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
                    established 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) 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.
                (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).
                (3) State.--The term ``State'' shall have the meaning given
            that term in section 302(d) of the Clean Air Act (42 U.S.C.
            7602(d)).
        (b) Distribution Among States.--The Administrator shall, in
    accordance with this section, distribute emission allowances allocated
    pursuant to section 782(g)(1) not later than September 30, 2012, and
    each calendar year thereafter through 2050. The Administrator shall
    distribute the emission 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 of the American Clean Energy and
    Security Act of 2009. 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 for the purposes listed in this
    subsection, as set forth below:
                (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--
                        (A) implementation and enforcement of building
                    codes adopted in compliance with section 201 of the
                    American Clean Energy and Security Act of 2009;
                        (B) implementation of the Retrofit for Energy and
                    Environmental Performance (REEP) program established
                    pursuant to section 202 of the American Clean Energy
                    and Security Act of 2009;
                        (C) implementation of the energy efficient
                    manufactured homes program established pursuant to
                    section 203 of the American Clean Energy and Security
                    Act of 2009;
                        (D) implementation of the building energy
                    performance labeling program established pursuant to
                    section 204 of the American Clean Energy and Security
                    Act of 2009;
                        (E) 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)), including
                    integration of renewable energy resources and
                    distributed generation, demand response, demand side
                    management, and systems analysis;
                        (F) transportation planning pursuant to section
                    841; and
                        (G) other 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.
                (3) Not less than 20 percent shall be used exclusively for
            capital grants, tax credits, production incentives, loans, loan
            guarantees, forgivable loans, 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; and
                        (B) deployment of technologies to generate
                    electricity from renewable energy sources.
                (4) The remaining 47.5 percent shall be used exclusively
            for any of the purposes described in subparagraphs (A) through
            (F) of paragraph (2) and in paragraph (3).
        (d) Reporting.--Each State receiving emission allowances under this
    section shall include in its biennial reports required under section
    131 of the American Clean Energy and Security Act of 2009, in
    accordance with such requirements as the Administrator may prescribe--
                (1) a list of entities receiving allowances or allowance
            value under this section;
                (2) the amount and nature of allowances or allowance value
            received by each recipient;
                (3) the specific purposes for which such allowances or
            allowance value was conveyed;
                (4) the amount of energy savings, emission reductions,
            renewable energy deployment, or new or retooled manufacturing
            capacity resulting from such allowances or allowance value; and
                (5) an assessment of the cost-effectiveness of any energy
            efficiency program supported under subsection (c)(2)(G).
        (e) Enforcement.--If the Administrator determines that a State is
    not in compliance with this section, the Administrator may withhold a
    portion of the allowances, the value of which is equal to up to twice
    the value 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 in accordance with the requirements of subsection (b).

                       Subtitle E--Smart Grid Advancement

    SEC. 141. DEFINITIONS.

        For purposes of this subtitle:
                (1) The term ``Administrator'' means the Administrator of
            the Environmental Protection Agency.
                (2) 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.
                (3) The term``Commission'' means Federal Energy Regulatory
            Commission.
                (4) 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.
                (5) 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.
                (6) 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
            diminishing the end-use requirements for electricity or by use
            of locally stored 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.
                (7) 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.
                (8) 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.
                (9) The term ``Secretary'' means the Secretary of Energy.
                (10) 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 one 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 3 years 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 one year after the date of enactment of
    this Act, load-serving entities, or, at their option, States with
    respect to load-serving entities that they regulate, 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, 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 National 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 or regional entity, by that State 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 National Electric Reliability Corporation, and other
    relevant authorities.
        (3) In determining the applicable peak demand reduction goals,
    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).
        (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
            energy efficiency measures with reliable and continued
            application during peak demand periods.
                (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 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 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.
                        (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
    storage, use of distributed generation, or the regulation of load-
    serving entities. The Commission, in consultation with States having
    such peak management, demand response and distributed storage programs,
    shall to the maximum extent practicable, facilitate coordination
    between the Federal program and such State 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 one 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, 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 to States and Funding.--
                (1) Assistance to states.--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 pursuant to section [___] 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.

        Part II of the Federal Power Act (16 U.S.C. 824 et seq.) is amended
    by adding after section 216 the following new section:

    ``SEC. 216A. TRANSMISSION PLANNING.

        ``(a) Federal Policy.--
                ``(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 energy sources
            for generating electricity to reduce greenhouse gas emissions
            while ensuring reliability, reducing congestion, ensuring
            cyber-security, and providing for cost-effective electricity
            services throughout the United States.
                ``(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 take
            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 conductor and 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 or Federal law or regulation, including
            States, entities designated by States, public utility
            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, public
            utilities transmission providers, load-serving entities,
            transmission 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.
                ``(4) Relation to existing planning policy.--In
            implementing the Federal policy established under subsection
            (a), the Commission shall--
                        ``(A) incorporate any ongoing planning efforts
                    undertaken pursuant to section 217; and
                        ``(B) consult with and invite the participation of
                    the Secretary of Energy in relationship to the
                    Secretary's duties pursuant to section 216.
                ``(5) Assistance.--
                        ``(A) In general.--The Commission shall provide
                    support to and participate in the regional grid
                    planning processes conducted by regional planning
                    entities. 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). 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. 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. To the extent practicable, all plans
            submitted to the Commission shall be public documents and
            available on the Commission's website.
                ``(8) 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.
                ``(9) Report to congress.--Not later than 3 years after the
            date of enactment of this section, the Commission shall provide
            a report to Congress containing the results of the regional
            grid planning process, including summaries of the adopted
            regional plans. 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 and Federal
            authority.''.

                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.
        (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 306(c) of the Energy Independence and Security Act of
    2007 (121 Stat. 1559) is amended--
                (A) by striking ``Section'' and all that follows through
            ``is amended'' and inserting ``Section 342(a)(6)(C) of the
            Energy Policy and Conservation Act (42 U.S.C. 6313(a)(6)(C))
            (as amended by section 305(b)(2)) is amended''; and
                (B) by redesignating clause (iii) of section 342(a)(6)(B)
            of the Energy Policy and Conservation Act (as added by section
            306(c) of the Energy Independence and Security Act of 2007) 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) take effect on December 19, 2010; and
                (ii) subparagraph (B) 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
                        (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 543 of the National Energy Conservation Policy Act (42
    U.S.C. 8253) (as amended by sections 432 and 434(a) of the Energy
    Independence and Security Act of 2007 (121 Stat. 1607, 1614)) is
    amended by redesignating subsection (f) (as added by section 434(a) of
    that Act) as subsection (g).
        (4) 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.''.

        (5) 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''.
        (6) Section 440 of the Energy Independence and Security Act of 2007
    (42 U.S.C. 17096) is amended by striking ``and 482''.
        (7) 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) Title V--Energy Savings in Government and Public
    Institutions.--Section 541(3)(A)(i)(II) of the Energy Independence and
    Security Act of 2007 (42 U.S.C. 17151(3)(A)(i)(II)) is amended by
    striking ``and'' after the semicolon at the end and inserting ``or''.
        (d) 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--Clean Energy Innovation Centers

    SEC. 171. CLEAN ENERGY INNOVATION CENTERS.

        (a) Purpose.--The Secretary shall carry out a program to establish
    Clean Energy Innovation Centers to enhance the Nation's economic,
    environmental, and energy security by promoting commercial deployment
    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 developing and deploying 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 under section 721 of the Clean Air Act.
                (2) Center.--The term ``Center'' means a Clean Energy
            Innovation Center established in accordance with this section.
                (3) 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.
                (4) Cluster.--The term ``cluster'' means a concentration of
            firms 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.
                (5) Project.--The term ``project'' means an activity with
            respect to which a Center provides support under subsection
            (e).
                (6) Qualifying entity.--The term ``qualifying entity''
            means each of the following:
                        (A) A research university.
                        (B) A State 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 focus.--The term ``technology focus'' means
            the unique technology area in which a Center 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 areas designated by the Secretary.
                (9) Translational research.--The term ``translational
            research'' means clean energy technology research to coordinate
            basic or applied research with technical and commercial
            applications to enable promising discoveries or inventions to
            attract investment sufficient for market penetration and
            diffusion.
        (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 to consortia
            for the establishment of 8 Centers pursuant to this section,
            with each Center designated a unique technology focus area;
                (3) coordinate the innovation activities of Centers with
            those occurring through other Department of Energy entities,
            including the National Laboratories, the Advanced Research
            Projects Agency--Energy, and Energy Frontier Research Centers,
            and within industry, and to avoid duplication of research, 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) Consortium.--A consortium shall be eligible to receive
    allowances to support the establishment of a Center 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) no fewer than 1 additional qualifying entity;
                (2) its members have established a binding agreement that
            documents--
                        (A) the structure of the partnership agreement;
                        (B) the governance and management structure to
                    enable cost-effective implementation of the program;
                        (C) an intellectual property management policy;
                        (D) conflicts of interest policy consistent with
                    subsection (e)(4);
                        (E) an accounting structure that meets the
                    requirements of the Department and can be audited under
                    subsection (f)(3); and
                        (F) 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 pursuant to subsection (e)(2);
                (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) Clean Energy Innovation Centers.--
                (1) Role.--Centers shall provide support to activities
            leading to commercial deployment of clean energy technologies
            pursuant to the purposes of this section through issuance of
            awards to projects managed by qualifying entities and other
            entities meeting the Center's project criteria, including
            national laboratories. Each Center shall--
                        (A) develop and publish for public review and
                    comment proposed plans, programs, and project selection
                    criteria;
                        (B) submit an annual report to the Secretary
                    summarizing the Center'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 Center awards and
                            other forms of technology support that
                            encourage individual ingenuity and invention
                            while speeding knowledge transfer and
                            facilitating the establishment of rapid
                            commercialization pathways;
                                (ii) to prevent resources provided to the
                            Center from being used to displace private
                            sector investment likely to otherwise occur,
                            including investment from private sector
                            entities which 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 Center; and
                                (iv) to facilitate the participation of
                            entrepreneurs with a demonstrated history of
                            commercializing clean energy technologies;
                        (D) oversee project solicitations, review proposed
                    projects, and select projects for awards; and
                        (E) monitor project implementation.
                (2) Use and distribution of awards by centers.--A Center
            shall allocate awards and other support for--
                        (A) clean energy technology projects conducting
                    translational research and related activities, at least
                    40 percent of which shall be utilized for projects
                    related to the Center's technology focus; and
                        (B) administrative expenses, which may constitute
                    no more than 10 percent of the award.
                (3) Advisory boards.--
                        (A) In general.--Each Center shall establish an
                    Advisory Board whose members shall have extensive and
                    relevant scientific, technical, industry, financial, or
                    research management expertise. The Advisory Board shall
                    review the Center'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 Center. Advisory Board members
                    other than those representing consortium members shall
                    serve for no more than three years and must comply with
                    conflict of interest provisions.
                        (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; and
                                (iii) 2 members selected at large by other
                            Board members to represent the entrepreneur and
                            venture capital communities.
                    Individuals appointed under clause (iii) shall not be
                    State or Federal employees or affiliated with the
                    consortium's qualified entities.
                        (C) Nonvoting members.--The Board shall also
                    include 1 nonvoting 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.--Centers shall establish procedures
                    to ensure that employees or consortia designees for
                    Center activities who are in decisionmaking capacities
                    shall--
                                (i) disclose any financial interests in, or
                            financial relationships with, applicants for or
                            recipients of awards under paragraph (1),
                            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 Center or awards provided under
                    paragraph (1), if cognizant officials of the Center
                    fail to comply with procedures required under
                    subparagraph (A).
        (f) Distribution of Allowances to Clean Energy Innovation
    Centers.--
                (1) Selection and schedule.--Allowances to support the
            establishment of a Center shall be distributed 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 Centers, 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
            pursuant to subsection (d). The Secretary shall award 3 grants
            for the establishment of 3 Centers of Excellence to be located
            on the campus of 1890 Land Grant Institution (as defined in
            section 2 of the Agricultural Research, Extension, and
            Education Reform Act of 1998 (7 U.S.C. 7061)).
                (2) Term and use of allowances.--Allowances distributed to
            Centers shall be used to provide awards pursuant to subsection
            (e)(1). The amount of allowances distributed to support the
            establishment of a Center under this section shall not be less
            than 10 and not more than 30 percent of the allowances
            allocated under section 782(h) of the Clean Air Act, each year
            for a 6 year period. Centers shall be eligible to compete for
            additional allowance distribution after the expiration of the
            initial period. Centers shall establish award periods for
            individual awards. The transfer of allowances to a Center shall
            occur at the start of each calendar year.
                (3) Audit.--Each Center shall conduct an annual audit to
            determine the extent to which allowances distributed to the
            Center, 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 the 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 Center to ensure that allowances
            distributed to the Center, and awards made under subsection
            (e), have been utilized in a manner consistent with this
            section.

                      Subtitle I--Marine Spatial Planning

    SEC. 181. STUDY OF OCEAN RENEWABLE ENERGY AND TRANSMISSION PLANNING AND
                  SITING.

        (a) Definitions.--In this section:
                (1) Marine spatial plan.--The term ``marine spatial plan''
            means the analysis and allocation of ocean space for various
            uses to achieve ecological, economic, and social objectives,
            based on the principle of ecosystem-based management.
                (2) Marine spatial planning.--The term ``marine spatial
            planning'' means the process of developing a marine spatial
            plan.
                (3) Ecosystem-based management.--The term ``ecosystem-based
            management'' means a management approach that ensures the
            future ecological and economic sustainability of natural
            resources by--
                        (A) accounting for all ecosystem interactions and
                    direct, indirect, and cumulative impacts of human
                    activities on the ecosystem;
                        (B) emphasizing protection of ecosystem structure,
                    functions, patterns, and processes; and
                        (C) maintaining ecosystems in a healthy and
                    resilient condition.
                (4) Offshore renewable energy.--The term ``offshore
            renewable energy'' means energy generated from offshore wind or
            offshore hydrokinetic (wave, tidal, ocean current, and tidal-
            current) energy technologies.
                (5) Offshore renewable energy facility.--The term
            ``offhsore renewable energy facility'' means a facility that
            generates offshore renewable energy or any offshore
            transmission line associated with such facility.
        (b) Study.--
                (1) In general.--As soon as practicable after the date of
            enactment of this section, the Federal Energy Regulatory
            Commission, the Secretary of the Interior, and the National
            Oceanic and Atmospheric Administration, in consultation with
            the Council on Environmental Quality and, as appropriate,
            coastal States, regional organizations of coastal States, and
            relevant nongovernmental organizations, shall jointly conduct a
            study of the potential for marine spatial planning to
            facilitate the development of offshore renewable energy
            facilities in a manner that protects and maintains coastal and
            marine ecosystem health.
                (2) Requirements.--The study under paragraph (1) shall
            include--
                        (A) identification of the steps involved in
                    regional marine spatial planning for the siting of
                    offshore renewable energy facilities;
                        (B) a recommended approach for the development of
                    regional marine spatial plans for the siting of
                    offshore renewable energy facilities that provides
                    for--
                                (i) the participation of relevant Federal
                            agencies and State governments;
                                (ii) coordination, to the maximum extent
                            practicable, with any marine spatial planning
                            undertaken by States;
                                (iii) public input; and
                                (iv) the periodic revision of such plans as
                            necessary to account for significant new
                            information and ensure achievement of plan
                            objectives;
                        (C) identification of required elements of such
                    regional marine spatial plans, including rules that
                    Federal agencies shall apply to applications for any
                    authorizations required under existing Federal law to
                    construct or operate offshore renewable energy
                    facilities within areas covered by such plans;
                        (D) an assessment of the adequacy of existing data,
                    including baseline environmental data, to support such
                    marine spatial planning and identification of gaps in
                    such data and the studies needed to fill such gaps;
                        (E) an assessment of the resources required to
                    carry out such marine spatial planning;
                        (F) recommended mechanisms for the formal adoption
                    and implementation of regional marine spatial plans for
                    the development of offshore renewable energy facilities
                    by relevant Federal agencies;
                        (G) identification of any additional authority
                    relevant Federal agencies would need to adopt and
                    implement regional marine spatial plans for the
                    development of offshore renewable energy facilities;
                    and
                        (H) such other recommendations as appropriate.
                (3) Report.--Not later than 6 months after the date of
            enactment of this section, the Federal Energy Regulatory
            Commission, the Secretary of the Interior, and the National
            Oceanic and Atmospheric Administration shall jointly publish
            the findings and recommendations of the study conducted
            pursuant to this subsection and shall accept public comment for
            at least 30 days after such publication. Following
            consideration of any public comments, and not later than 8
            months after the date of enactment of this section, the Federal
            Energy Regulatory Commission, the Secretary of the Interior,
            and the National Oceanic and Atmospheric Administration shall
            jointly submit to Congress and the Council on Environmental
            Quality the findings and recommendations of the study conducted
            pursuant to this subsection.
        (c) Assessment of Report.--
                (1) In general.--Not later than 4 months after the date of
            submission of the report required under subsection (b)(3), the
            Council on Environmental Quality shall assess the
            recommendations of such report, issue a written determination
            as to whether the recommended approach to marine spatial
            planning should be implemented, and transmit such written
            determination to the relevant Federal agencies and Congress.
                (2) Coordination for recommended approach.--If the Council
            on Environmental Quality determines that the recommended
            approach to marine spatial planning should be implemented, the
            relevant Federal agencies shall implement such approach no
            later than 18 months after the written determination required
            by paragraph (1), and the Council on Environmental Quality
            shall coordinate such implementation. At the time of the
            written determination required by paragraph (1), the Council on
            Environmental Quality shall notify Congress if the relevant
            Federal agencies lack authority to carry out any aspect of the
            recommended approach.
                (3) Alternative approach.--If the Council on Environmental
            Quality determines that the recommended approach to marine
            spatial planning should not be implemented, the Council on
            Environmental Quality shall formulate an alternative approach
            and submit such alternative approach to the relevant Federal
            agencies and Congress at the time of the written determination
            required by paragraph (1).
        (d) Relationship to Existing Law.--Nothing in this section shall
    affect or be construed to affect any law, regulation, or memoranda of
    understanding governing the development of offshore renewable energy
    facilities in effect prior to the implementation of the recommended or
    alternative approach pursuant to subsection (c).
        (e) Authorization.--There are authorized to be appropriated such
    sums as may be necessary to carry out this section.

                          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; 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 one year after the
                    deadline for establishment of each such target.
                        ``(B) Existing code.--If the Secretary finds prior
                    to the date one year after the deadline for
                    establishing a target that one or more energy
                    efficiency building codes published by a recognized
                    consensus-based code development organization 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 six months prior to
                            the effective date for each target, review
                            existing and proposed codes published or under
                            review by recognized consensus-based code
                            development organizations;
                                ``(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 consensus-based code
                            development organization, adopt a code that
                            meets or exceeds the relevant national building
                            code energy efficiency target by not later than
                            one year after the effective date of such
                            target.
                        ``(B) Calculations.--Each 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 codes--
                                        ``(I) residential building
                                    standards published or proposed by
                                    ASHRAE;
                                        ``(II) residential building codes
                                    published or proposed in the
                                    International Energy Conservation Code
                                    (IECC);
                                        ``(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; and
                                ``(ii) for commercial codes--
                                        ``(I) commercial building standards
                                    proposed by ASHRAE;
                                        ``(II) commercial building codes
                                    proposed in the International Energy
                                    Conservation Code (IECC);
                                        ``(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.
                        ``(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 consensus-
            based code development organizations 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 an organization 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 and local code
                    agencies; and
                        ``(ii) provide sufficient support to such an
                    organization to make the code available on the
                    Internet, or to accomplish distribution of such code to
                    all such State and local code agencies at no cost to
                    the State and local code agencies.
                ``(C) The Secretary may contract with such an organization
            and with other organizations with expertise on codes to provide
            training for State 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 an organization 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 consensus-based
                    code development organization, negotiate and provide
                    appropriate compensation to such organization 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 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 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 throughout the 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 two years 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 1 year 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)(6)(B), the national code shall
            become the applicable energy efficiency building code for such
            jurisdiction.
                ``(2) 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.
                ``(3) Violations.--It shall be a violation of this section
            for an owner or builder of a building to knowingly occupy,
            permit occupancy of, or convey the building if the building is
            subject to the requirements of--
                        ``(A) a State energy efficiency building code with
                    respect to which a certification has been accepted by
                    the Secretary under subsection (c)(2)(B);
                        ``(B) a local energy efficiency building code with
                    respect to which a certification has been accepted by
                    the Secretary under subsection (e)(6)(B); or
                        ``(C) a national energy efficiency building code
                    adopted under subsection (c)(1)(A)(i) or made
                    applicable under paragraph (1) of this subsection,
            if the building was constructed out of compliance with such
            code.
        ``(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 (6)(B) 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
            establishment of a national energy efficiency building code
            under subsection (b), 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 a deadline established under this
                    subsection 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 applicable to the State.
                        ``(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.--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.
        ``(g) Enforcement Procedures.--(1) The Secretary shall assess a
    civil penalty for violations of this section, pursuant to subsection
    (d)(3), in accordance with the procedures described in section 333(d)
    of the Energy Policy and Conservation Act (42 U.S.C. 6303). The United
    States district courts shall also have jurisdiction to restrain any
    violation of this section or rules adopted thereunder, in accordance
    with the procedures described in section 334 of the Energy Policy and
    Conservation Act (42 U.S.C. 6304).
        ``(2) Each day of unlawful occupancy shall be considered a separate
    violation.
        ``(3) In the event a building constructed out of compliance with
    the applicable code has been conveyed by a knowing builder or knowing
    seller to an unknowing purchaser, the builder or seller shall be the
    violator.
        ``(h) Federal Support.--
                ``(1) Allowance allocation for state compliance.--Not later
            than June 1, 2011, and on that date in each year thereafter,
            the Administrator shall provide emission allowances to the SEED
            Account for each State that the Secretary identifies as a State
            from which he has accepted the State's certification under
            subsection (e)(5) for compliance with the then current national
            energy efficiency building codes. Such allowances shall be
            distributed from an amount of 0.5 percent of the allowances
            made available for each year pursuant to the American Clean
            Energy and Security Act of 2009 to each State in accordance
            with 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
                    allocation.
                ``(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 with
            respect to which a certification is accepted by the Secretary
            under subsection (c)(2)(B) or subsection (e)(6)(B), or the
            national energy efficiency building code.
        ``(i) 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 building energy efficiency
            codes;
                ``(2) the status of energy efficiency building code
            adoption and compliance in the States;
                ``(3) the implementation of this section; and
                ``(4) 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) Nonresidential building.--The term ``nonresidential
            building'' means a building with a primary use or purpose other
            than residential housing, including commercial offices,
            schools, academic and other public and private institutions,
            nonprofit organizations, hospitals, hotels, and houses of
            worship. 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.
                (2) 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.
                (3) 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.
                (4) 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)).
                (5) 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, and buildings
            used for both residential and nonresidential purposes in which
            more than half of building floor space is residential.
                (6) 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.
                (3) Allocation of allowances.--The Administrator shall
            support the REEP program by providing emission allowances to
            each State's SEED Account for the purposes of the program, and
            providing, as appropriate, emission allowances to a local
            government entity that carries out the purposes of this section
            in the absence of a State program. The Administrator shall
            support administration of the program through such existing
            State and local agencies or entities, including those regulated
            by the State, that the State designates to carry out the
            purposes of this section. The Administrator shall ensure
            accountability for allowances dispensed, and shall confirm
            measurement and verification of energy, water, and
            environmental savings achieved.
                (4) 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) Delegation.--The designated State agency, agencies, or
            entities described in subsection (d)(3) 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 delegation, a State shall give
            priority to entities that administer existing comprehensive
            retrofit programs, including those under the supervision of
            State utility regulators. The State shall ensure accountability
            for the use of allowances provided under this section, and to
            the extent such allowances are sold by the State, for the
            proceeds. 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 preclude or
            preempt 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.
                (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; and
                (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.
    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.--The REEP program shall be supported
            by the use of 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:
                        (A) Residential building program.--
                                (i) Awards.--For residential 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 $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.
                                (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 seven
                            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
                                    Secretary of Energy) 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
                                    Secretary, in consultation with the
                                    Administrator, 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) 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).
                        (D) 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 funding 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.--The program established in this
            section shall be supported by the use of emission allowances
            allocated to the States' SEED Accounts pursuant to section 782
            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 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 (e)(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 subsection (h)(8)
                            of this section;
                                (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 one 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.--The program established in
                    this section shall be supported by the use of 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.

         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, 2011, 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, 2013, 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) Each outdoor luminaire manufactured on or after
            January 1, 2015, shall--
                        ``(A) have an initial luminaire efficacy of at
                    least 80 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 0.65.
                ``(4) In addition to the requirements of paragraphs (1)
            through (3), each outdoor luminaire manufactured on or after
            January 1, 2011, 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.
                ``(5)(A) Not later than January 1, 2017, the Secretary
            shall issue a final rule amending the applicable standards
            established in paragraphs (3) and (4) if technologically
            feasible and economically justified. Such a final rule shall be
            effective no later than January 1, 2020.
                ``(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 (3) 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, 2020, or one 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, 2012, 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
            three 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 (21)''.
                        (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 (nn);
                                (ii) in subsection (nn)(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. 6293(i)), as amended by section 171(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)(C). 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 three
            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 designated 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 merchandizing 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.
    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
            section, 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 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 and inserting the following new subclauses after
            subclause (VI):
                ``(VII) the estimated value of the carbon dioxide or 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''.
                (C) By redesignating subclause (VII) as subclause (XI).
        (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
            subparagraph (I), through the adoption of regional standards
            consistent with paragraph (6) of this subsection, or other
            reasonable means consistent with this chapter;
                ``(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 one 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 171(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
                        (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 data base, 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.--Section 334
    of the Energy Policy and Conservation Act (42 U.S.C. 6304(a)) 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.''.
        (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 (E) 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 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.
        (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 retailers for the replacement, retirement, and
            recycling of older operating low-efficiency products that might
            otherwise continue in operation.
                (2) Bounties.--Bounties shall be payable upon documentation
            that the sale of a Best-in-Class Product was accompanied by the
            replacement, retirement, and recycling of--
                        (A) an inefficient but still-functioning product;
                    or
                        (B) a nonfunctioning product containing a
                    refrigerant,
            by the consumer to whom the Best-in-Class Product was sold.
                (3) Amount.--
                        (A) Functioning products.--The bounty payment
                    payable under this subsection for a product described
                    in paragraph (2)(A) 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 paragraph (2)(B)
                    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 paragraph (2)(A).
                (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.--The
            Secretary shall ensure that standards for environmentally
            responsible methods of recycling established by the
            Administrator pursuant to section 608 of the Clean Air Act are
            employed 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.
                (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 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.
                (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.
        (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 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.
        (h) Disclosure.--The Secretary of Energy may require that 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; and
                (3) 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 $300,000,000 for each of the fiscal years 2010 through
    2014 to the Secretary of Energy for purposes of this section, of which
    not more than 10 percent for any fiscal year may be expended on program
    administration.

    SEC. 215. PURPOSE OF ENERGY STAR.

        Section 324A of the Energy Policy and Conservation Act (42 U.S.C.
    6294a) is amended--
                (1) by redesignating subsections (b) through (d) as
            subsections (c) through (e), respectively; and
                (2) by inserting after subsection (a) the following new
            subsection:
        ``(b) Purpose.--The purpose of the Energy Star program for products
    is to assist consumers in selecting products for purchase that have
    demonstrated high energy efficiency and that are cost-effective from
    the consumer's perspective, ensuring that any incremental cost
    attributable to the energy-efficient features of such products will be
    more than recovered in the value of energy savings the products will
    make possible within several years of purchase, typically within 3
    years but no more than 5 years.''.

                     Subtitle C--Transportation Efficiency

    SEC. 221. EMISSIONS STANDARDS.

        (a) Motor Vehicle Standards.--The President shall use statutory
    authorities in effect on the day before the date of enactment of this
    section to set motor vehicle standards that--
                (1) are achievable by the automobile manufacturing
            companies;
                (2) to the extent practicable, harmonize standards that may
            be set by the National Highway Traffic Safety Administration
            pursuant to the authority in chapter 329 of title 49, United
            States Code, standards that may be set by the Administrator of
            the Environmental Protection Agency pursuant to the authority
            in the Clean Air Act, and standards that have or may be set by
            the State of California;
                (3) achieve at least as much emissions reductions as would
            be achieved by implementation of the California law AB 1493 if
            enforced in the State of California and the other States that
            have adopted the standard; and
                (4) do not preempt California's legal authority to adopt
            and enforce its own mobile source emissions standards.
        (b) Greenhouse Gas Emission Standards for Mobile Sources.--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) Motor Vehicles and 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 vehicles and
            engines, excluding such vehicles covered by the Tier II
            standards (as established by the Administrator as of the date
            of 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 vehicles
            and engines, excluding such vehicles covered by the Tier II
            standards (as established by the Administrator as of the date
            of enactment of this section), shall contain standards that
            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 after such period as the
            Administrator finds necessary to permit the development and
            application of the requisite technology.
        ``(b) Nonroad Vehicles and Engines.--
                ``(1) Pursuant to section 213(a)(4), the Administrator
            shall promulgate standards applicable to emissions of
            greenhouse gases from new marine vessels and locomotives, and
            from new engines used in marine vessels and locomotives, by
            December 31, 2012. The Administrator shall also promulgate
            standards applicable to emissions of greenhouse gases for such
            other classes and categories of 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) applicable to
            emissions of greenhouse gases from new marine vessels and
            locomotives, and from new engines used in marine vessels and
            locomotives, 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 after such period as the Administrator finds necessary
            to permit the development and application of the requisite
            technology.
                ``(3) For purposes of this section and standards under
            section 213(a)(4) 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) Aircraft and Aircraft Engines.--
                ``(1) Pursuant to section 231(a), the Administrator shall
            promulgate standards applicable to emissions of greenhouse
            gases from new aircraft and new engines used in aircraft by
            December 31, 2012. Notwithstanding any requirement in section
            231(a), the Administrator shall also promulgate standards
            applicable to emissions of greenhouse gases from other classes
            and categories of aircraft and aircraft engines for such
            classes and categories as the Administrator determines
            appropriate and in the timeframe the Administrator determines
            appropriate. The Administrator may revise these standards from
            time to time.
                ``(2) Standards under section 231(a) applicable to
            emissions of greenhouse gases from new aircraft and new engines
            used in aircraft, and any later revisions or additional
            standards, 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 standards shall take
            effect after such period as the Administrator finds necessary
            to permit the development and application of the requisite
            technology.
        ``(d) 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 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.
        ``(e) 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.''.

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

        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--PLANNING REQUIREMENTS

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

        ``(a) In General.--Each State shall--
                ``(1) not later than 3 years after the date of enactment of
            this section, submit to the Administrator goals for
            transportation-related greenhouse gas emissions reductions; and
                ``(2) as part of each transportation plan or transportation
            improvement program developed under title 23 or title 49,
            United States Code, ensure that a plan to achieve such goals,
            or an updated version of such a plan, is submitted to the
            Administrator and to the Secretary of Transportation (in this
            section referred to as the `Secretary') by each metropolitan
            planning organization in the State for an area with a
            population exceeding 200,000.
        ``(b) Models and Methodologies.--
                ``(1) In general.--The Administrator shall promulgate
            regulations to establish standards for use in developing goals,
            plans, and strategies under this section and for monitoring
            progress toward such goals. Such standards shall include--
                        ``(A) data collection techniques for assessing
                    State and regional transportation-related greenhouse
                    gas emissions;
                        ``(B) methodologies for determining transportation-
                    related greenhouse gas emissions baselines;
                        ``(C) models and methodologies for scenario
                    analysis; and
                        ``(D) models and methodologies for estimating
                    transportation-related greenhouse gas emissions
                    reductions from the strategies considered under this
                    section.
            Such regulations may approve or improve existing models and
            methodologies.
                ``(2) Timing.--The Administrator shall--
                        ``(A) publish proposed regulations under paragraph
                    (1) not later than 1 year after the date of enactment
                    of this section; and
                        ``(B) promulgate final regulations under paragraph
                    (1) not later than 2 years after such date of
                    enactment.
                ``(3) Assessment.--At least every 6 years after
            promulgating final regulations under paragraph (1), the
            Administrator, in coordination with the Secretary, shall assess
            current and projected progress in reducing 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, and increased efficiency in utilizing
            transportation systems.
        ``(c) Greenhouse Gas Reduction Goals.--
                ``(1) Consultation.--Each State shall develop the goals
            referred to in subsection (a)(1)--
                        ``(A) in concurrence with State agencies
                    responsible for air quality and transportation;
                        ``(B) in consultation with each metropolitan
                    planning organization for an area in the State with a
                    population exceeding 200,000 and applicable local air
                    quality and transportation agencies; and
                        ``(C) with public involvement, including public
                    comment periods and meetings.
                ``(2) Period.--The goals referred to in subsection (a)(1)
            shall be for 4-, 10-, and 20-year periods.
                ``(3) Targets; designated year.--The goals referred to in
            subsection (a)(1) shall establish targets to reduce
            transportation-related greenhouse gas emissions in the covered
            area. The targets shall be designed to ensure that the levels
            of such emissions stabilize and decrease after a designated
            year. The State shall consider designating 2010 as such
            designated year.
                ``(4) Covered area.--The goals referred to in subsection
            (a)(1)--
                        ``(A) shall be established on a statewide basis;
                        ``(B) shall be established for each metropolitan
                    planning organization in the State for an area with a
                    population exceeding 200,000; and
                        ``(C) may be established on a voluntary basis, in
                    accordance with the provisions of this section, for any
                    metropolitan planning organization not described in
                    subparagraph (B).
                ``(5) Revised goals.--Every 4 years, each State shall
            update and revise, as appropriate, the goals referred to in
            subsection (a)(1).
        ``(d) Planning.--A plan submitted under subsection (a)(2) shall--
                ``(1) be based upon the models and methodologies
            established by the Administrator under subsection (b);
                ``(2) use transportation and land use scenario analysis to
            address transportation-related greenhouse gas emissions and
            economic development impacts; and
                ``(3) be developed--
                        ``(A) with public involvement, including public
                    comment periods and meetings which provide
                    opportunities for comment from a variety of
                    stakeholders based on age, race, income, and
                    disability;
                        ``(B) with regional coordination, including with
                    respect to--
                                ``(i) metropolitan planning organizations;
                                ``(ii) the localities comprising the
                            metropolitan planning organization;
                                ``(iii) the State in which the metropolitan
                            planning organization is located; and
                                ``(iv) air quality, environmental health,
                            and transportation agencies for the State and
                            region involved; and
                        ``(C) in consultation with the State and local
                    housing, public health, economic development, land use,
                    environment, and public transportation agencies.
        ``(e) Strategies.--In developing goals under subsection (a)(1) and
    a plan under subsection (a)(2), the State or metropolitan planning
    organization, as applicable, shall consider transportation and land use
    planning strategies to reduce transportation-related greenhouse gas
    emissions, including the following:
                ``(1) Efforts to increase or improve public transportation,
            including--
                        ``(A) new public transportation systems, including
                    new commuter rail systems;
                        ``(B) expansion of existing public transportation
                    systems;
                        ``(C) employer-based subsidies;
                        ``(D) cleaner locomotive technologies; and
                        ``(E) quality of service improvements, including
                    improved frequency of service.
                ``(2) Updates to zoning and other land use regulations and
            plans to support development that--
                        ``(A) coordinates transportation and land use
                    planning;
                        ``(B) focuses future growth close to existing and
                    planned job centers and public facilities;
                        ``(C) uses existing infrastructure;
                        ``(D) promotes walking, bicycling, and public
                    transportation use; and
                        ``(E) mixes land uses such as housing, retail, and
                    schools.
                ``(3) Implementation of a policy (referred to as a
            `complete streets policy') that--
                        ``(A) ensures adequate accommodation of all users
                    of transportation systems, including pedestrians,
                    bicyclists, public transportation users, motorists,
                    children, the elderly, and individuals with
                    disabilities; and
                        ``(B) adequately addresses the safety and
                    convenience of all users of the transportation system.
                ``(4) Construction of bicycle and pedestrian infrastructure
            facilities, including facilities that improve the connections
            with networks that provide access to human services,
            employment, schools, and retail.
                ``(5) Projects to promote telecommuting, flexible work
            schedules, or satellite work centers.
                ``(6) Pricing measures, including tolling, congestion
            pricing, and pay-as-you-drive insurance.
                ``(7) Intermodal freight system strategies, including
            enhanced rail services, short sea shipping, and other
            strategies.
                ``(8) Parking policies.
                ``(9) Intercity rail service, including high speed rail.
                ``(10) Travel demand management projects.
                ``(11) Restriction of the use of certain roads, or lanes,
            by vehicles other than passenger buses and high-occupancy
            vehicles.
                ``(12) Reduction of vehicle idling, including idling
            associated with freight management, construction,
            transportation, and commuter operations.
                ``(13) Policies to encourage the use of retrofit
            technologies and early replacement of vehicles, engines and
            equipment to reduce transportation-related greenhouse gas
            emissions from existing mobile sources.
                ``(14) Other projects that the Administrator finds reduce
            transportation-related greenhouse gas emissions.
        ``(f) Public Availability.--The Administrator shall publish,
    including by posting on the Environmental Protection Agency's website--
                ``(1) the goals and plans submitted under subsection (a);
            and
                ``(2) for each plan submitted under subsection (a)(2), an
            analysis of the anticipated effects of the plan on greenhouse
            gas emissions and oil consumption.
        ``(g) Certification.--The Administrator, in consultation with the
    Secretary, shall certify a State or metropolitan planning organization
    greenhouse gas reduction plan submitted under subsection (a)(2) if the
    plan's implementation is likely to meet the corresponding greenhouse
    gas reduction goal referred to in subsection (a)(1). If the
    Administrator, in consultation with the Secretary, determines that a
    submitted plan cannot be certified, the State or metropolitan planning
    organization shall revise and resubmit the plan within 1 year.
        ``(h) Enforcement.--If the Administrator finds that a State has
    failed to submit goals under subsection (a)(1), has failed to ensure
    the submission of a plan under subsection (a)(2), or has failed to
    submit a revised plan under subsection (g), for any area in the State
    (irrespective of whether the area is a nonattainment area), the
    Administrator shall impose a prohibition in accordance with section
    179(b)(1) applicable to the area within 2 years of such a finding. The
    Administrator may not impose a prohibition under the preceding
    sentence, and no action may be brought by the Administrator or any
    other entity alleging a violation of this section, based on the content
    or adequacy of a goal or plan submitted under subsection (a)(1) or
    (a)(2) or failure to achieve the goal submitted under subsection
    (a)(1).
        ``(i) Competitive Grants.--
                ``(1) Grants.--The Administrator, in consultation with the
            Secretary, may--
                        ``(A) award grants to support activities related to
                    improving data collection, modeling, and monitoring
                    systems to assess transportation-related greenhouse gas
                    emissions and the effects of plans, policies, and
                    strategies referenced in this section;
                        ``(B) award grants to States and metropolitan
                    planning organizations for the development of goals and
                    plans to be submitted under sections (a)(1) or (a)(2);
                    and
                        ``(C) award grants, on a competitive basis, to
                    implement plans certified under subsection (g) or
                    elements thereof, provided that each project thus
                    funded includes a measurement and evaluation component
                    that meets the regulations promulgated under subsection
                    (b).
                ``(2) Priority.--In making grants under paragraph (1)(C),
            the Administrator shall give priority to applicants based
            upon--
                        ``(A) the amount of total greenhouse gas emissions
                    to be reduced as a result of implementation of a
                    certified plan, within the covered area, as determined
                    by methods established under subsection (b);
                        ``(B) the amount of per capita greenhouse gas
                    emissions to be reduced as a result of implementation
                    of a certified plan, within the covered area, as
                    determined by methods established under subsection (b);
                        ``(C) the cost effectiveness, in terms of dollars
                    per tons of greenhouse gas reductions, to be achieved
                    as a result of the implementation of a certified plan;
                        ``(D) the potential for both short- and long-term
                    reductions; and
                        ``(E) such other factors as the Administrator
                    determines appropriate.
                ``(3) Authorization of appropriations.--To carry out this
            subsection, there are authorized to be appropriated such sums
            as may be necessary.
        ``(j) Definitions.--In this section:
                ``(1) The term `metropolitan planning organization' means a
            metropolitan planning organization, as such term is used in
            section 176.
                ``(2) The term `scenario analysis' means an analysis that
            is conducted by identifying different trends and making
            projections based on those trends to develop a range of
            scenarios and estimates of how each scenario could improve
            access to goods and services, including access to employment,
            education, and health care (especially for elderly and
            economically disadvantaged communities), and could affect rates
            of--
                        ``(A) vehicle miles traveled;
                        ``(B) vehicle hours traveled;
                        ``(C) use of mobile source fuel by type, including
                    electricity; and
                        ``(D) transportation-related greenhouse gas
                    emissions.
        ``(k) Land Use Authority.--Nothing in this section may be construed
    to--
                ``(1) infringe upon the existing authority of State or
            local governments to plan or control land use; or
                ``(2) provide or transfer authority over land use to any
            other entity.''.

    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 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) Eligibility for Seed Loans.--Owners and operators of electric
    energy generation and thermal energy production facilities shall be
    eligible for SEED Fund loans under subtitle D of title I to provide
    initial capital for entering into businesses involving sales referred
    to in subsection (a)(2).
        (e) 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''.

       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, 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;
                        ``(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)(F) of the National
    Energy Conservation Policy Act (42 U.S.C. 8287(a)(2)(F)), as so
    redesignated by subsection (b)(1) of this section, 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 ``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 ``such
            sums as may be necessary 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 changing the word ``and'' to ``or''
    at the end of subclause (II), in subclause (ii)(II) by striking the
    period at the end of and inserting a semicolon and the word ``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 subclause (ii)(II) by striking the period at the
    end of and inserting a semicolon and the word ``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, non-profit, 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.

                  TITLE III--REDUCING GLOBAL WARMING POLLUTION

    SEC. 301. SHORT TITLE.

        This title, and sections 112, 116, 121, 221, 222, and 223 of this
    Act, 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 transfer
    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 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 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
                    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, including
                    effects on growing season, distribution, and yield; 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) human infrastructure, including coastal
                    infrastructure vulnerability to extreme events and sea
                    level rise, river floodplain infrastructure, and sewer
                    and water management systems;
                        ``(C) agriculture and forests, including effects on
                    potential growing season, distribution, and yield;
                        ``(D) water resources for human consumption,
                    agriculture and natural and managed ecosystems, flood
                    and drought risks and relative humidity;
                        ``(E) energy supply and use; and
                        ``(F) 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;
                ``(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 in addition to 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 by 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 targets 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 targets in
                    section 702;
                        ``(B) the quantity of additional reductions in
                    global greenhouse gas emissions needed to avoid the
                    identified concentration and temperature thresholds
                    described 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 targets
                    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.

        ``Not later than July 1, 2017, and every 4 years thereafter--
                ``(1) the President shall direct relevant Federal agencies
            to use existing statutory authority to take appropriate actions
            identified in the report submitted under section 705 by the
            National Academy of Sciences in the previous year and to
            address any shortfalls identified in such report; and
                ``(2) in the event that the National Academy of Sciences
            has concluded, in the most recent report submitted under
            section 705, 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 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 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 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) 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 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,
                            importation, or emission, a notice of such
                            person's manufacture, importation, or emission
                            of such gas, and the Administrator has not
                            determined that notice or a substantially
                            similar notice 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 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 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.
        ``(e) Regulations.--Not later than one 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 (d); and
                ``(3) methods and standards for evaluating the carbon
            dioxide equivalent value of a gas.
        ``(f) 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.
        ``(g) 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, 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
    ----------------------------------------------------------------------------------------------------------------

        ``(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 (14)
                            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 (14) 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 276,000,000 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 an
                    energy-intensive facility in an 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
                    industrial sources in energy-intensive industries;
                        ``(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, including those
                    where enhanced hydrocarbon recovery operations occur,
                    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 equivalent to 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.
                ``(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 or offset credits.
                ``(3) Other provisions unaffected.--Except as otherwise
            specified in this Act, nothing in this Act relating to
            allowances or 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 title 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 title 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 title 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 formula
                            under 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) 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 (g) 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 a fuel or are otherwise intended 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.
        ``(g) 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.
        ``(h) Feedstock Emissions Study.--
                ``(1) 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.
                ``(2) If as a result of such a study, the Administrator
            determines that the use of such products by noncoverd sources
            results in substantial emissions of greenhouse gases or their
            precursors 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 leakage.

    ``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 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 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(14)(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;
                        ``(D) petroleum coke; or
                        ``(E) any fluorinated gas that is a greenhouse gas
                    purchased for use at that covered entity, except for
                    nitrogen trifluoride.
                ``(2) Fuel producers and importers.--For a covered entity
            described in section 700(14)(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(14)(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 or released as
            fugitive emissions in the production of fluorinated gas.
                ``(4) Geological sequestration sites.--For a covered entity
            described in section 700(14)(D), 1 emission allowance for each
            ton of carbon dioxide equivalent of greenhouse gas that such
            covered entity emitted in the previous calendar year.
                ``(5) Industrial stationary sources.--For a covered entity
            described in section 700(14)(E), (F), or (G), 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;
                        ``(D) petroleum coke; or
                        ``(E) any fluorinated gas that is a greenhouse gas
                    purchased for use at that covered entity, except for
                    nitrogen trifluoride.
                ``(6) Industrial fossil fuel-fired combustion devices.--For
            a covered entity described in section 700(14)(H), 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
                        ``(D) petroleum coke.
                ``(7) Natural gas local distribution companies.--For a
            covered entity described in section 700(14)(I), 1 emission
            allowance for each ton of carbon dioxide equivalent of
            greenhouse gas that will be emitted from the combustion of the
            natural gas, and any other gas meeting the specifications for
            commingling with natural gas for purposes of deliver, 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.
                ``(8) Nitrogen trifluoride sources.--For a covered entity
            described in section 700(14)(J), 1 emission allowance for each
            ton of carbon dioxide equivalent of nitrogen trifluoride that
            such covered entity emitted in the previous calendar year.
                ``(9) Algae-based fuels.--Where carbon dioxide (or another
            greenhouse gas) is used as an input in the production of fuels,
            the Administrator shall ensure that allowances are not required
            to be held both for the carbon dioxide used to grow algae and
            for the carbon dioxide emitted from combustion of the fuel
            produced from such algae.
                ``(10) Fugitive emissions.--The greenhouse gas emissions to
            which paragraphs (1), (5), (6), and (8) 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, or fluorinated gas that is exported for any
            calendar year.
                ``(12) Natural gas liquids.--Notwithstanding subsection
            (a), in the case where the owner or operator of a covered
            entity described in section 700(14)(B) that produces natural
            gas liquids does not take ownership of the liquids, nor is
            responsible for the distribution or use of the liquids in
            commerce, the owner of the liquids shall be responsible for
            compliance under this section. In such a case, the owner of the
            covered entity shall provide the Administrator, in a manner to
            be determined by the Administrator, information regarding the
            quantity and ownership of liquids produced at the covered
            entity.
                ``(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.
        ``(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(14)(E), (F), (G), or (H) 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(14)(I) 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 for a year by holding domestic offset
                    credits, and not more than one half of the applicable
                    percentage under this paragraph may be used for a year
                    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 any calendar year at domestic offset prices
                    generally equal to or less than allowance prices, are
                    likely to offset less than 0.9 billion tons of
                    greenhouse gas emissions measured in tons of carbon
                    dioxide equivalents, the Administrator shall increase
                    the percent of emissions that can be offset through the
                    use of international offset credits (and decrease the
                    percent of emissions that can be allowed through the
                    use of domestic offset credits by the same amount) to
                    reflect the amount that 1.0 billion exceeds the number
                    of domestic offset credits the Administrator determines
                    is available for that year, up to a maximum of 0.5
                    billion emissions.
                        ``(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) 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).
                ``(3) Compensatory allowances.--To demonstrate compliance,
            a covered entity may hold a compensatory allowance obtained
            under section 721(f) in lieu of an emission allowance.
        ``(d) 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.
        ``(e) Alternative Metrics.--For categories of covered entities
    described in subparagraph (B), (C), (F), (G), or (H) of section
    700(14), 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.
        ``(f) Threshold Review.--For each category of covered entities
    described in subparagraph (B), (C), (F), (G), or (H) of section
    700(14), the Administrator shall, in 2020 and once every 8 years
    thereafter, review the carbon dioxide equivalent emission thresholds
    that are used to define covered entities. After consideration of--
                ``(1) emissions from covered entities in each 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.
        ``(g) Designated Representatives.--The regulations promulgated
    under section 721(g) shall require that each covered entity, and each
    entity holding allowances or credits or receiving allowances or credits
    from the Administrator under this title, select a designated
    representative.
        ``(h) 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.
        ``(i) 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.
        ``(j) 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.
        ``(k) 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(b) shall be a separate violation.
        ``(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) or (i), 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 for
                    which the owner or operator of a covered entity failed
                    to comply under section 722(b) on the deadline; by
                        ``(B) twice the fair market value of emission
                    allowances established for emissions occurring in the
                    calendar year for which the emission allowances were
                    due.
                ``(3) Timing.--An excess emissions penalty required under
            this subsection shall be immediately due and payable to the
            Administrator, without demand, in accordance with 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) or (i) 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 actual or attributable 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 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
    emission allowance, compensatory allowance, or 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(g).
        ``(d) Allowance Tracking System.--The regulations promulgated under
    section 721(g) shall include a system for issuing, recording, holding,
    and tracking allowances and offset credits that shall specify all
    necessary procedures and requirements for an orderly and competitive
    functioning of the allowance and offset credit market. 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 or credit established or issued by the Administrator
            under this title, 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 or credits or the allowance tracking system.
                ``(2) General rule.--An allowance or credit established or
            issued by the Administrator under this title shall not expire
            unless--
                        ``(A) it is retired by the Administrator as
                    required under 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
                    as required by 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 comply with section 722(a) or 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 satisfy up
                    to 15 percent of its compliance obligations under
                    section 722(a) in a specific calendar year 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 established by the Administrator for a
                    specific future calendar year under section 721(a) and
                    that is held by the borrower.
                        ``(C) Repayment with 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 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(a) 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 part H; and
                        ``(B) transfer emission allowances established
                    under subsection (g) from auction proceeds, and deposit
                    them 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 [insert
            amount twice the EPA-modeled 2012 allowance price EPA provides
            to the Committee] 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 emissions during the most recent year for which
            allowances or credits were retired under section 722(a).
                ``(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 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 limitation 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 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 782(c), 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 make
                    the emission allowances available for auction under
                    section 791; 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(g) 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 under
                    section 722 offset credits in an amount 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 auctioned
            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 which possessed the international offset credits
            auctioned. 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.
        ``(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 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). 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, the provisions of this title shall be implemented by permits
    issued to 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 with an approved permit
    program, shall require a covered entity to hold a number of emission
    allowances 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 emission allowances. 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 emission allowances not less than
    the total amount of carbon dioxide equivalents for a year for its
    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 emission allowances 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 from an independent power producer, 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 person 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 covered entity [that is a stationary source subject to title V]
    except in compliance with the terms and requirements of a permit issued
    by the Administrator or a State with an approved permit program. 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).

    ``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, modify the
    percentage applicable to 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 pursuant to section 734(a) and
            (b), including methodologies to address the issues of
            additionality, activity baselines, measurement, leakage,
            uncertainty, permanence, and environmental integrity;
                ``(3) make available 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 five-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.
        ``(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 developer 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 one 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 issuing methodologies
            pursuant to section 734, the Administrator shall give priority
            to methodologies for offset 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 generate additional reductions or
            avoidance of greenhouse gas emissions, or sequestration of
            greenhouse gases, subject to the requirements of this part, and
            remove a project type from the list established under
            subsection (a), in consultation with appropriate Federal
            agencies and taking into consideration the 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 for 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);
                        ``(C) are not receiving support under part E of
                    this title or title IV, subtitle D of the American
                    Clean Energy and Security Act of 2009; and
                        ``(D) 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 an offset project for
                            which offset credits are reserved under this
                            paragraph, the Administrator shall remove
                            offset credits from the offsets reserve and
                            cancel them 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 approve or deny the petition in writing and, if the
    petition is denied, provide the reasons for denial. 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 gas, 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 gas 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 reduced or avoided, or greenhouse gases
            sequestered, resulting from an offset project approved under
            section 735; and
                ``(3) notify the offset project developer in writing of
            such determination.
        ``(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 already occurred, during the offset project's
            crediting period.
        ``(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;
                        ``(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
                    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
                    activities for which 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 project or
                    activity that caused the emission reduction, avoidance,
                    or sequestration; 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, or sequestration of greenhouse gases, 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 otherwise meet all
    of the criteria of subsection (a)(2), but do not meet one of the
    following criteria:
                ``(A) were not established under State or tribal law; or
                ``(B) were not established prior to January 1, 2001.
        ``(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 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 that the Administrator determines
    meet the criteria of subsection (a)(2).

    ``SEC. 741. ENVIRONMENTAL CONSIDERATIONS.

        ``If the Administrator lists forestry 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 tree species in forestry 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 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 pursuant to the requirements of this part or as provided
    in subsection (c), (d), or (e).
        ``(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 all of 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,
            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, 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, 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 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 baseline level of performance
                    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 at levels of greenhouse gas emissions 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.
                ``(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 forest-dependent
                            communities, indigenous peoples, and vulnerable
                            social groups;
                                ``(iv) with 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
                                ``(v) with equitable sharing of profits and
                            benefits derived from offset credits with
                            forest-dependent communities and indigenous
                            peoples; 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
                    international standards, 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.
                ``(3) Protection of interests.--With respect to an
            agreement or arrangement described in subsection (b)(2)(A) with
            a country 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,
            standards, and safeguards that--
                        ``(A) give due regard to the rights and interests
                    of forest-dependent communities, indigenous peoples,
                    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) facilitate sharing of profits and benefits
                    derived from international offset credits with forest-
                    dependent communities and indigenous peoples.
                ``(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).
                ``(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, 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-level or province-level deforestation
                    baseline.--A state-level or province-level
                    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-level or
                            province-level 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 in 2017, 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, and
                    periodically review and update, a list of developing
                    countries that--
                                ``(i) the Administrator determines, based
                            on recent, credible, and reliable emissions
                            data, account 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) have, or in the determination of the
                            Administrator are 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.--
                                ``(i) 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 in the
                                    project or program boundary 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 in 2017, the
                    Administrator shall issue no further international
                    offset credits for project-level or program-level
                    activities as described in 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 section to no later than 2025 with
                    respect to eligible activities taking place in a least
                    developed nation, which is 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,
                    provided that the Administrator, in consultation with
                    the Secretary of State and the Administrator of the
                    United States Agency for International Development,
                    determines the nation--
                                ``(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
                            towards implementation of 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.
        ``(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 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 this subsection is not feasible. In modifying or
    omitting such a requirement on the basis of infeasibility, the
    Administrator 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 products 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, this assistance
            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 achieve the
    reduction of 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) 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 (iv) through (x) of this section, 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 any 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 (b)(2), the Administrator shall distribute emission
            allowances as provided in subparagraph (1) 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 subparagraph (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 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 standards to ensure that
    supplemental emissions reductions achieved through supported activities
    are additional, measurable, verifiable, permanent, 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 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) or (2), 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 forestry practices; and
                        ``(B) to promote native species and conservation or
                    restoration of native forests, if practicable, and to
                    avoid the introduction of invasive nonnative species;
                    and
                ``(6) with respect to support for all activities under this
            part, seek to ensure the establishment and enforcement by the
            recipient country of legal regimes, standards, and safeguards
            that--
                        ``(A) give due regard to the rights and interests
                    of local communities, indigenous and forest-dependent
                    peoples, and vulnerable social groups;
                        ``(B) promote consultations with local communities
                    and indigenous and forest-dependent peoples 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 sharing of profits from incentives
                    for emissions reductions or leakage prevention with
                    local communities and indigenous and forest-dependent
                    peoples.
        ``(e) Expansion of Scope.--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--
                ``(1) reduced emissions from forest degradation; or
                ``(2) 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.

    ``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 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 and 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 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);
                ``(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 and forest-dependent peoples residing in
            areas affected by such activities;
                ``(5) biodiversity and ecosystem services within forested
            areas associated with the activities;
                ``(6) 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, including an
            emission allowance, a compensatory allowance, or an
            international emission allowance.
                ``(6) Attributable greenhouse gas emissions.--The term
            `attributable greenhouse gas emissions' means--
                        ``(A) for a covered entity that is a fuel producer
                    or importer described in section 700(14)(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 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 section
                    700(14)(C), the tons of carbon dioxide equivalent of
                    carbon dioxide, nitrous oxide, any fluorinated gas,
                    other than nitrogen trifluoride, that is a greenhouse
                    gas, or any combination thereof--
                                ``(i) produced or imported by such covered
                            entity during the previous 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 section 700(14)(I), 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 the previous 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(a)(2) or (7) 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 more than 25,000 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 products
                    designated by the Administrator for sale or
                    distribution in interstate commerce in 2008 or any
                    subsequent year more than 25,000 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(b) or (c); or
                                ``(vi) any combination of greenhouse gases
                            described in clauses (i) through (vi).
                        ``(D) Any geologic sequestration site.
                        ``(E) 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.
                        ``(F) 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.
                        ``(G) 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.
                        ``(H) 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 (E), (F),
                            or (G); and
                                ``(ii) has emitted 25,000 or more tons of
                            carbon dioxide equivalent in 2008 or any
                            subsequent year.
                        ``(I) 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 to customers that are not
                    covered entities.
                        ``(J) Any stationary source that has emitted 25,000
                    or more tons of carbon dioxide equivalent emission of
                    nitrogen trifluoride in 2008 or any subsequent year.
                ``(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, an offset project developer, or any other
            entity receiving or holding allowances or offset credits under
            this title, an individual authorized, through a certificate of
            representation submitted to the Administrator by the owners and
            operators, to represent the owners and operators 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.--The term `domestic offset
            credit' means an offset credit issued under part D, other than
            an international 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 sequestered, except to the
            extent that they are later released into the atmosphere, in
            which case they shall be subject to section 722(a)(4).
                ``(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, 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(b), (c), or (d), except to the extent that it is regulated
            under title VI.
                ``(29) High conservation priority land.--The term `high
            conservation priority land' means land that is not Federal land
            and is--
                        ``(A) globally or State ranked as critically
                    imperiled or imperiled under a State Natural Heritage
                    Program; or
                        ``(B) old-growth or late-successional forest, as
                    identified by the office of the State Forester or
                    relevant State agency with regulatory jurisdiction over
                    forestry activities.
                ``(30) Hold.--The term `hold' means, with respect to an
            allowance or offset credit, to have in the appropriate account
            in the allowance tracking system, or submit to the
            Administrator for recording in such account.
                ``(31) 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 or 486210).
                ``(32) 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).
                ``(33) International forest carbon activities.--The term
            `international forest carbon activities' means national or
            subnational activities in countries other than the United
            States that are directed at--
                        ``(A) reducing greenhouse gas emissions from
                    deforestation or forest degradation; or
                        ``(B) increasing sequestration of carbon through--
                                ``(i) afforestation or reforestation of
                            acreage not forested as of January 1, 2009;
                                ``(ii) restoration of degraded land or
                            forest; or
                                ``(iii) improved forest management.
                ``(34) International offset credit.--The term
            `international offset credit' means an offset credit issued by
            the Administrator under section 743.
                ``(35) Leakage.--The term `leakage' means a significant
            increase in greenhouse gas emissions, or significant decrease
            in sequestration, which is caused by an offset project and
            occurs outside the boundaries of the offset project.
                ``(36) 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.
                ``(37) Natural gas liquid.--The term `natural gas liquid'
            means ethane, butane, isobutene natural gasoline, and propane
            which is ready for commercial sale or use.
                ``(38) 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)).
                ``(39) Offset credit.--The term `offset credit' means a
            credit issued under part D.
                ``(40) 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 issued under part D.
                ``(41) 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).
                ``(42) Petroleum.--The term `petroleum' includes crude oil,
            tar sands, oil shale, and heavy oils.
                ``(43) Renewable biomass.--The term `renewable biomass'
            means any of the following:
                        ``(A) Plant material, including waste material,
                    harvested or collected from actively managed
                    agricultural land that was in cultivation, cleared, or
                    fallow and nonforested on the date of enactment;
                        ``(B) Plant material, including waste material,
                    harvested or collected from pastureland that was
                    nonforested on the date of enactment;
                        ``(C) Nonhazardous vegetative matter derived from
                    waste, including separated yard waste, landscape right-
                    of-way trimmings, construction and demolition debris or
                    food waste (but not municipal solid waste, recyclable
                    waste paper, painted, treated or pressurized wood, or
                    wood contaminated with plastic or metals);
                        ``(D) Animal waste or animal byproducts, including
                    products of animal waste digesters;
                        ``(E) Algae;
                        ``(F) Trees, brush, slash, residues, or any other
                    vegetative matter removed from within 600 feet of any
                    building, campground, or route designated for
                    evacuation by a public official with responsibility for
                    emergency preparedness, or from within 300 feet of a
                    paved road, electric transmission line; utility tower,
                    or water supply line;
                        ``(G) Residues from or byproducts of milled logs;
                        ``(H) Any of the following removed from forested
                    land that is not Federal and is not high conservation
                    priority land:
                                ``(i) Trees, brush, slash, residues,
                            interplanted energy crops, or any other
                            vegetative matter removed from an actively
                            managed tree plantation established--
                                        ``(I) prior to the date of
                                    enactment of this section; or
                                        ``(II) on land that, as of the date
                                    of enactment of this section, was
                                    cultivated or fallow and non-forested.
                                ``(ii) Trees, logging residue, thinnings,
                            cull trees, pulpwood, and brush removed from
                            naturally regenerated forests or other non-
                            plantation forests, including for the purposes
                            of hazardous fuel reduction or preventative
                            treatment for reducing or containing insect or
                            disease infestation.
                                ``(iii) Logging residue, thinnings, cull
                            trees, pulpwood, brush and species that are
                            non-native and noxious, from stands that were
                            planted and managed after the enactment of this
                            sentence to restore or maintain native forest
                            types.
                                ``(iv) Dead or severely damaged trees
                            removed within 5 years of fire, blowdown, or
                            other natural disaster, and badly infested
                            trees.
                        ``(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 are not from components of
                            the National Wilderness Preservation System,
                            Wilderness Study Areas, Inventoried Roadless
                            Areas, old growth or mature forest stands,
                            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) are harvested in accordance with
                            Federal and State law, and applicable land
                            management plans.
                ``(44) Retire.--The term `retire', with respect to an
            allowance or offset credit established or issued under this
            title, 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 or
            offset credit to satisfy a compliance obligation.
                ``(45) Reversal.--The term `reversal' means an intentional
            or unintentional loss of sequestered greenhouse gases to the
            atmosphere.
                ``(46) 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.
                ``(47) 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.
                ``(48) Strategic reserve allowance.--The term `strategic
            reserve allowance' means an emission allowance reserved for,
            transferred to, or deposited in the strategic reserve, or
            established, under section 726.
                ``(49) Ton of carbon dioxide equivalent.--The term `ton of
            carbon dioxide equivalent' has the meaning specified in section
            712(b) or determined by the Administrator under section 711 or
            712.
                ``(50) Uncapped emissions.--The term `uncapped emissions'
            means emissions of greenhouse gases emitted after December 31,
            2011, that are not capped emissions.
                ``(51) 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.
                ``(52) 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.
                ``(53) 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, the Administrator shall--
                ``(1) auction the remaining emission allowances under
            section 791 not later than March 31 of the year following that
            vintage year; and
                ``(2) increase the allocation for the vintage year after
            the vintage year for which emission allowances were
            undistributed by the amount of undistributed emission
            allowances.

    ``SEC. 782. ALLOCATION OF EMISSION ALLOWANCES.

        ``(a) Electricity Consumers.--The Administrator shall allocate
    emission allowances for the benefit of electricity consumers, to be
    distributed in accordance with section 783 in the following amounts:
                ``(1) For vintage years 2012 and 2013, 43.75 percent of the
            emission allowances established for each year under section
            721(a).
                ``(2) For vintage years 2014 and 2015, 38.89 percent of the
            emission allowances established for each year under section
            721(a).
                ``(3) For vintage years 2016 through 2025, 35.00 percent of
            the emission allowances established for each year under section
            721(a).
                ``(4) For vintage year 2026, 28 percent of the emission
            allowances established for each year under section 721(a).
                ``(5) For vintage year 2027, 21 percent of the emission
            allowances established for each year under section 721(a).
                ``(6) For vintage year 2028, 14 percent of the emission
            allowances established for each year under section 721(a).
                ``(7) For vintage year 2029, 7 percent of the emission
            allowances established for each year under section 721(a).
        ``(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 each year under section 721(a).
                ``(3) For vintage year 2027, 5.4 percent of the emission
            allowances established for each year under section 721(a).
                ``(4) For vintage year 2028, 3.6 percent of the emission
            allowances established for each year under section 721(a).
                ``(5) For vintage year 2029, 1.8 percent of the emission
            allowances established for each 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 each year under section 721(a).
                ``(5) For vintage year 2027, 0.9 percent of the emission
            allowances established for each year under section 721(a).
                ``(6) For vintage year 2028, 0.6 percent of the emission
            allowances established for each year under section 721(a).
                ``(7) For vintage year 2029, 0.3 percent of the emission
            allowances established for each year under section 721(a).
        ``(d) Low Income Consumers.--For each vintage year starting in
    2012, the Administrator shall auction 15 percent of the emission
    allowances established for each year under section 721(a), pursuant to
    section 791, 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.
        ``(e) Trade-Vulnerable Industries.--The Administrator shall
    allocate emission allowances to energy-intensive, trade-exposed
    entities, to be distributed in accordance with part F, in the following
    amounts:
                ``(1) For vintage years 2012 and 2013, up to 2.0 percent of
            the emission allowances established for each year under section
            721(a).
                ``(2) For vintage years 2014, up to 15 percent of the
            emission allowances established for that year under section
            721(a).
                ``(3) For vintage years 2015 through 2025, the maximum
            number of allowances that shall be distributed shall decline by
            the same amount that the annual reduction target set forth in
            section 702 declines (which is 1.75 percentage points annually
            for 2015 through 2020, and 2.5 percentage points annually from
            2021 through 2025).
                ``(4) For vintage years 2026 through 2050, the maximum
            number of allowances that shall be distributed shall decline by
            the same amount that the annual reduction target set forth in
            section 702 declines (which is 2.5 percentage points annually
            for 2026 through 2030, and 1.55 percentage points annually from
            2031 through 2050) and shall be multiplied by a factor, which
            shall be 90 percent in 2026 and decline 10 percentage points a
            year until it reaches zero, unless the President sets a
            different factor under section 767(c)(3)(A), that shall not
            exceed 100 percent.
        ``(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, 2
                    percent of the emission allowances established for each
                    year under section 721(a).
                        ``(B) For vintage years 2018 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 section for a
            given vintage year by the end of that year, the Administrator
            shall--
                        ``(A) auction those emission allowances under
                    section 791 not later than March 31 of the year
                    following that vintage year; and
                        ``(B) increase the allocation under this subsection
                    for the vintage year after the vintage year for which
                    emission allowances were undisbursed by the amount of
                    undisbursed emission allowances.
        ``(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, 7.0
                    percent of the emission allowances established for each
                    year under section 721(a).
                        ``(C) For vintage years 2018 through 2021, 6.0
                    percent of the emission allowances established for each
                    year under section 721(a).
                        ``(D) For vintage years 2022 through 2025, 1.5
                    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 the vintage year 2022
                    through 2025 allowances are distributed, 3.55 percent
                    of emission allowances established under section 721(a)
                    for the vintage year four years greater shall also be
                    distributed (which shall be in addition to the emission
                    allowances in subparagraph (E)).
                ``(2) To be distributed in accordance with section 201 of
            the American Clean Energy and Security Act of 2009 in the
            amount of 0.5 percent of emission allowances established under
            section 721(a) for each vintage year from 2012 through 2050.
        ``(h) Clean Energy Innovation Centers.--The Administrator shall
    allocate 1 percent of emission allowances for each vintage year from
    2012 through 2050 to be distributed to Clean Energy Innovation Centers
    in accordance with section 181 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 2.0 percent of the emission
    allowances established under section 721(a) to domestic refiners, to be
    distributed in accordance with part F.
        ``(k) Investment in Workers.--The Administrator shall auction
    pursuant to section 791 emission allowances for workers in the
    following amounts and shall report to the Secretary of Labor the amount
    of proceeds from the sale of these allowances:
                ``(1) For vintage years 2012 through 2021, 0.5 percent of
            the emission allowances established for each year under section
            721(a).
                ``(2) For vintage years 2022 through 2050, 1.0 percent of
            the emission allowances established for each year under section
            721(a).
        ``(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 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 0.1 percent of the emission
            allowances established for each year under section 721(a),
            pursuant to section 791, 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.
        ``(m) Wildlife and Natural Resource Adaptation.--The Administrator
    shall auction pursuant to section 791 emission allowances for domestic
    wildlife and natural resource adaptation in the amounts listed in
    paragraphs (1) through (3) and shall deposit the proceeds from the sale
    of these allowances in the Natural Resources Climate Change Adaptation
    Account established pursuant to section 480(a) of the American Clean
    Energy and Security Act. Funds so deposited shall be available for
    expenditure, without further appropriation or fiscal year limitation.
                ``(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).
        ``(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 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 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 2015 through 2020, a string
            of 0.7 billion allowances with vintage years 11 to 16 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 2021 through 2025, a string
            of 0.5 billion allowances with vintage years 11 to 16 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 11 to 16 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 designated for distribution or auction pursuant
            to section 781, subsections (a) through (o) of this section, or
            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 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 vintage year 2025
            pursuant to subsection (p), the auction proceeds shall be
            deposited into the Treasury.
        ``(r) Climate Change Consumer Dividend.--For each of vintage years
    2026 through 2050, the Administrator shall auction pursuant to section
    791 any allowance established under section 721(a) for that year and
    not designated for distribution or auction pursuant to subsections (a)
    through (p), and place the proceeds from the sale of these allowances
    in the Climate Change Dividend Fund. For auctions conducted in 2026 and
    thereafter pursuant to subsection (p), the auction proceeds shall be
    deposited into the Climate Change Dividend Fund. Funds so deposited
    shall be available for expenditure, without further appropriation or
    fiscal year limitation.

    ``SEC. 783. ELECTRICITY CONSUMERS.

        ``(a) Definitions.--For purposes of this section:
                ``(1) 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 a registered electric cooperative, are regulated by
                    a State regulatory authority, regulatory commission,
                    municipality, public utility, or by an Indian tribe
                    pursuant to tribal law.
                ``(2) Long-term contract generator.--The term `long-term
            contract generator' means a qualifying small power production
            facility or a qualifying cogeneration facility (within the
            meaning of section 3(17)(C) or 3(18)(B) of the Federal Power
            Act), or a new independent power production facility (within
            the meaning of section 416(a)(2) of this Act, except that
            subparagraph (C) of such definition shall not apply for
            purposes of this paragraph), that is--
                        ``(A) a covered entity;
                        ``(B) as of the commencement of operation, a
                    facility consisting of one or more utility units with
                    total installed net output capacity (in MWe) of no more
                    than 130 percent of the facility's total planned net
                    output capacity (in MWe);
                        ``(C) as of the date of enactment of this title, a
                    facility with a power sales agreement executed before
                    January 1, 2007, that governs the facility's
                    electricity sales and provides 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; and
                        ``(B) not a merchant coal generator (within the
                    meaning of paragraph (3)).
                ``(3) Merchant coal generator.--The term `merchant coal
            generator' means an electric generation facility that--
                        ``(A) is a covered entity;
                        ``(B) derives at least 85 percent of its heat input
                    from coal, petroleum coke, or any combination of these
                    2 fuels;
                        ``(C) is not owned by a Federal, State, or regional
                    agency or power authority; and
                        ``(D) generates electricity for sale to others,
                    provided that such sales are not subject to--
                                ``(i) retail rate regulation by a State
                            public utility commission; or
                                ``(ii) self-regulation of rates by a local
                            government, State agency, or electric
                            cooperative.
                ``(4) 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)).
        ``(b) Electricity Local Distribution Companies.--
                ``(1) Allocation.--Not later than June 30 of 2011 and each
            calendar year thereafter through 2028, the Administrator shall
            distribute to electricity local distribution companies the
            quantity of emission allowances allocated for the electricity
            sector for the following vintage year pursuant to section
            782(a), provided that the Administrator shall first subtract
            from such quantity and distribute or reserve for distribution
            the quantity of emission allowances for the relevant vintage
            year that are required for distribution under subsections (c)
            and (d) of this section.
                ``(2) Distribution of allowances.--
                        ``(A) Distribution based on emissions.--
                                ``(i) In general.--For each vintage year,
                            50 percent of the emission allowances available
                            for distribution under paragraph (1) 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 sold at retail by
                            each such company during--
                                        ``(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) Determination of emissions.--As part
                            of the regulations promulgated pursuant to
                            subsection (e), the Administrator, after
                            consultation with the Energy Information
                            Administration, shall determine the average
                            amount of carbon dioxide emissions attributable
                            to generation of electricity sold at retail by
                            each electricity local distribution company for
                            each of the years 1999 through 2008. Such
                            determinations 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.
                        ``(B) Distribution based on deliveries.--
                                ``(i) Initial allocation formula.--Except
                            as provided in clause (ii), for each vintage
                            year, the Administrator shall distribute 50
                            percent of the emission allowances allocated
                            under paragraph (1) of this subsection among
                            individual electricity local distribution
                            companies ratably based on each electricity
                            local distribution company's annual average
                            retail electricity deliveries for 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.
                                ``(ii) Updating.--Prior to distributing
                            2015 vintage emission allowances under this
                            subparagraph and at 3-year intervals
                            thereafter, the Administrator shall update the
                            distribution formula under this subparagraph 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 clause
                                    (i); 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
                                    clause.
                ``(3) 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. Emission
                    allowances received by an electricity local
                    distribution company under this subsection may not be
                    used to support electricity sales to entities or
                    persons other than the retail ratepayers of such
                    electricity local distribution company.
                        ``(B) Ratepayer classes.--In using emission
                    allowances distributed under this section 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.--No electricity local
                    distribution company may use emission allowances 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.
                        ``(D) Guidelines.--As part of the regulations
                    promulgated under subsection (e), the Administrator
                    shall prescribe specific guidelines for the
                    implementation of the requirements of this paragraph.
                ``(4) Regulatory proceedings.--
                        ``(A) Requirement.--No electricity local
                    distribution company shall be eligible to receive
                    emission allowances under this subsection unless the
                    State regulatory authority with authority over such
                    company, or the entity with authority to regulate
                    retail electricity rates of an electricity local
                    distribution company not regulated by a State
                    regulatory authority, has--
                                ``(i) 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 (3) of this subsection; and
                                ``(ii) made available to the Administrator
                            and the public a report describing, in adequate
                            detail, the manner in which the requirements of
                            paragraph (3) 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, and a new
                    report be made available to the Administrator and the
                    public, pursuant to subparagraph (A), not less
                    frequently than every 5 years.
                ``(5) Plans and reporting.--
                        ``(A) Regulations.--As part of the regulations
                    promulgated under subsection (e), the Administrator
                    shall prescribe requirements governing plans and
                    reports to be submitted by electricity local
                    distribution companies 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 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,
                    in accord with the requirements of this subsection.
                        ``(C) Reports.--Not later than June 30 of 2013 and
                    each calendar year thereafter through 2031, each
                    electricity local distribution company that received
                    emission allowances under this subsection in the
                    preceding calendar year shall submit a report to the
                    Administrator, and to the relevant State regulatory
                    authority or the entity with authority to regulate
                    retail electricity rates in the case of an electricity
                    local distribution company not regulated by a State
                    regulatory authority, describing the disposition of the
                    value of any emission allowances received by the
                    company in the prior calendar year pursuant to this
                    subsection, 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
                            emission allowances received by the company
                            under this section;
                                ``(iii) the manner in which the company's
                            disposition of emission allowances received
                            under this subsection complies with the
                            requirements of this subsection, including each
                            of the requirements of paragraph (3); 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
                    by electricity local distribution companies under this
                    section, including by publishing such plans and reports
                    on the Internet.
                ``(6) Audits.--Each year, the Administrator shall conduct
            an audit of a representative sample of electricity local
            distribution companies receiving emission allowances under this
            subsection to ensure compliance with the requirements of this
            subsection. In selecting electricity local distribution
            companies for audit, the Administrator shall take into account
            any credible evidence of noncompliance with the requirements of
            this subsection. 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.
                ``(7) Enforcement.--A violation of any requirement of this
            subsection shall be a violation of this Act. Each emission
            allowance the value of which is used in violation of the
            requirements of this subsection shall be a separate violation.
        ``(c) Merchant Coal Generators.--
                ``(1) Qualifying emissions.--The qualifying emissions for a
            merchant coal generator for a given calendar year shall be the
            product of the number of megawatt hours of electricity
            generated by such generator in such calendar year and the
            average carbon dioxide emissions per megawatt hour generated by
            such generator during calendar years 2006 through 2008,
            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 generator's carbon dioxide
            emissions that were captured and sequestered in such calendar
            year and for which such generator received or will receive
            bonus emission allowances under section 785.
                ``(2) Phase-down schedule.--The Administrator shall
            identify an annual phase-down factor, applicable to
            distributions to merchant coal generators for each of calendar
            years 2012 through 2029, that corresponds to the overall
            decline in the amount of emission allowances to be allocated to
            the electricity sector in such years pursuant to section
            782(a). Such factor shall--
                        ``(A) for calendar year 2012, be equal to 1.0;
                        ``(B) for each of calendar years 2013 through 2029,
                    correspond to the quotient of--
                                ``(i) the quantity of emission allowances
                            to be allocated to the electricity sector under
                            section 782(a) for such calendar year; divided
                            by
                                ``(ii) the quantity of emission allowances
                            to be allocated to the electricity sector under
                            section 782(a) for calendar year 2012.
                ``(3) 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 each merchant coal generator equal to
            the product of--
                        ``(A) 0.5;
                        ``(B) the qualifying emissions for such merchant
                    coal generator for the preceding year, as determined
                    under paragraph (1); and
                        ``(C) the phase-down factor for the preceding
                    calendar year, as identified under paragraph (2).
                ``(4) 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.
                ``(5) Limitation on allowances.--Notwithstanding paragraph
            (3) or (4), for any 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). If the quantity of emission allowances that
            would otherwise be distributed pursuant to paragraph (3) or (4)
            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) for such
            vintage year ratably among merchant coal generators based on
            the formula in paragraph (3) or (4).
        ``(d) Generators With Long-Term Power Purchase Agreements.--
                ``(1) Reserved allowances.--Notwithstanding subsections (b)
            and (c) of this section, the Administrator shall withhold from
            distribution to electricity local distribution companies a
            number of emission allowances equal to 105 percent of the
            emission allowances the Administrator anticipates will be
            distributed to long-term contract generators under this
            subsection. If not required to distribute all of these reserved
            allowances under this subsection, the Administrator shall
            distribute any remaining emission allowances to the electricity
            local distribution companies in accordance with subsection (b).
                ``(2) Distribution.--Not later than March 1 of 2013 and
            each calendar year through 2030, the Administrator shall
            distribute to the owner or operator of each long-term contract
            generator the number of emission allowances of the preceding
            vintage year that are equal to the number of tons of carbon
            dioxide emitted as a result of a qualifying long-term power
            purchase agreement referred to in subsection (a)(2)(C).
                ``(3) Duration.--A long-term contract generator shall cease
            to be eligible to receive allocations under this subsection
            upon the earliest of the following dates:
                        ``(A) The date when the facility no longer
                    qualifies as a qualifying small power production
                    facility or a qualifying cogeneration facility (within
                    the meaning of section 3(17)(C) or 3(18)(B) of the
                    Federal Power Act), or a new independent power
                    production facility (within the meaning of section
                    416(a)(2) of this Act, except that subparagraph (C) of
                    such definition shall not apply for purposes of this
                    clause).
                        ``(B) The date when the facility no longer meets
                    the total installed net output capacity criterion
                    required to be met as of the commencement of operation
                    in subsection (a)(2)(B).
                        ``(C) The date when the power purchase agreement
                    referred to in subsection (a)(2)(C)--
                                ``(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 sold under such agreement, the
                            quantity of electricity sold under the
                            agreement, or the expiration or termination
                            date of the agreement.
                ``(4) Eligibility.--To be eligible to receive allowance
            distributions under this subsection, 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(16).
                        ``(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 the power purchase
                    agreement referred to in subsection (a)(2)(C).
                        ``(F) A copy of the power purchase agreement
                    referred to in subsection (a)(2)(C).
                ``(5) Notification.--Not later than 30 days after a
            facility loses, in accordance with paragraph (3), its
            eligibility for emission allowances distributed pursuant to
            this subsection, the designated representative of such facility
            shall notify the Administrator in writing when, and on what
            basis, the facility lost its eligibility to receive emission
            allowances.
        ``(e) 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) Natural gas local distribution company.--The term
            `natural gas local distribution company' means a natural gas
            local distribution company that is a covered entity.
                ``(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, 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.
        ``(b) Allocation.--Not later than June 30 of 2015 and each calendar
    year thereafter through 2028, the Administrator shall distribute to
    natural gas local distribution companies 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, 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
            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
                    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 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. Emission
            allowances received by a natural gas local distribution company
            under this section may not be used to support natural gas sales
            to entities or persons other than the retail ratepayers of such
            natural gas local distribution company.
                ``(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; and
                        ``(B) equitably among individual ratepayers within
                    each ratepayer class.
                ``(3) Limitation.--No natural gas local distribution
            company may use emission allowances 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 subsection to provide rebates, it shall,
            to the maximum extent practicable, provide such rebates with
            regard to the fixed portion of ratepayers' bills.
                ``(4) 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 regulatory
            authority over retail natural gas rates in the case of a
            natural gas local distribution company that is not regulated by
            a State regulatory authority.
                ``(5) Guidelines.--As part of the regulations promulgated
            under subsection (h), the Administrator shall prescribe
            specific guidelines for the implementation of the requirements
            of this subsection.
        ``(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 such company, or the entity with authority to
            regulate retail rates of a natural gas local distribution
            company not regulated by a State regulatory authority, has--
                        ``(A) 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 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 by a natural gas local distribution company, that
            a new regulation be promulgated or rate proceeding be
            completed, 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 by
            natural gas local distribution companies in accordance with
            this subsection.
                ``(2) Plans.--Not later than April 30 of 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 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 accord with the requirements of this section.
                ``(3) Reports.--Not later than June 30 of 2017 and each
            calendar year thereafter through 2031, each natural gas local
            distribution company that received emission allowances under
            this section in the preceding calendar year shall submit a
            report to the Administrator, approved by the relevant State
            regulatory authority or the entity with authority to regulate
            retail natural gas rates in the case of a natural gas local
            distribution company not regulated by a State regulatory
            authority, describing the disposition of the value of any
            emission allowances received by the company in the prior
            calendar year pursuant to this subsection, 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 subsection
                    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 conduct an audit
    of a representative sample of natural gas local distribution companies
    receiving emission allowances under this section to ensure compliance
    with the requirements of this section. In selecting natural gas local
    distribution companies for audit, the Administrator shall take into
    account any credible evidence of noncompliance with the requirements of
    this section. 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 AND PROPANE CONSUMERS.

        ``(a) Definitions.--For purposes of this section:
                ``(1) Carbon content.--The term `carbon content' means the
            amount of carbon dioxide that will be emitted as a result of
            the combustion of a fuel.
                ``(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, 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.
        ``(b) Allocation.--Not later than September 30 of each of calendar
    years 2012 through 2030, the Administrator shall distribute among the
    States, in accordance with this section, the quantity of emission
    allowances allocated pursuant to section 782(c).
        ``(c) Distribution Among States.--The Administrator shall
    distribute allowances among the States under this section each year
    ratably based on the ratio of--
                ``(1) the carbon content of home heating oil and propane
            sold to consumers within each State in the preceding year for
            residential or commercial uses; to
                ``(2) the carbon content of home heating oil and propane
            sold to consumers within the United States in the preceding
            year for residential or commercial uses.
        ``(d) Use of Allowances.--
                ``(1) In general.--States shall use emission allowances
            distributed under this section exclusively for the benefit of
            consumers of home heating oil or propane for residential or
            commercial purposes. Such proceeds shall be used exclusively
            for--
                        ``(A) cost-effective energy efficiency programs for
                    consumers that use home heating oil or propane for
                    residential or commercial purposes; or
                        ``(B) rebates or other direct financial assistance
                    programs for consumers of home heating oil or propane
                    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 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 funded 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.
        ``(e) 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 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.
        ``(f) Enforcement.--If the Administrator determines that a State is
    not in compliance with this section, the Administrator may withhold a
    portion of the allowances, the value of which is equal to up to twice
    the value 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
    (c).

    ``SEC. 786-788. [SECTIONS RESERVED].

    ``SEC. 789. CLIMATE CHANGE REBATES.

        ``(a) Rebate.--Not later than October 31 of each calendar year, the
    President, or such Federal agency or department as the President may
    designate, shall distribute the funds in the Consumer Climate Change
    Rebate Fund on a per capita basis to each household in the United
    States.
        ``(b) Limitations.--The President, or such Federal agency or
    department as the President may designate, 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 rebates
    under this section.

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

        ``(a) In General.--Not later than one 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; and
                ``(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(b).
        ``(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 four years after the
            year in which the auction is being conducted.
                ``(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). 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 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.

    ``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, the
    Administrator is not obligated to obtain the highest price possible for
    the emission 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 emission allowance owners to condition the sale of their
    allowances pursuant to this section on a minimum reserve price.
        ``(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) 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 established in the Treasury of the United States the
    following funds:
                ``(1) The Strategic Reserve Fund.
                ``(2) The Climate Change Rebate Fund.''.

                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.
            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.
                ``(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 impacts, not including 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.

        ``No greenhouse gas may be listed under section 108(a) on the basis
    of its effect on climate change.

    ``SEC. 832. 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
    climate change.

    ``SEC. 833. NEW SOURCE REVIEW.

        ``The provisions of part C of title I shall not apply to a
    greenhouse gas solely on the basis of its effect on climate change or
    regulation under title VII or this title.

    ``SEC. 834. TITLE V PERMITS.

        ``Notwithstanding any provision of title III or V, in determining
    whether a stationary source is required to apply for, or operate
    pursuant to, a permit under title V, the Administrator shall not
    consider the source's greenhouse gas emissions.

    ``SEC. 835. EXISTING PROCEEDINGS.

        ``Nothing in the American Clean Energy and Security Act of 2009, or
    the adoption thereof, shall affect the requirements to be applied in
    administrative proceedings or litigation initiated under the Clean Air
    Act prior to the date of enactment of the American Clean Energy and
    Security Act of 2009. The preceding sentence does not apply to any
    covered EGU that is subject to the requirements of section 812(b).''.

    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 gas
    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 emission
                    allowance 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), 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 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), 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 three 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), 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 years 2004,
                                    2005, or 2006, less exportation, less
                                    transfers and sales to persons who
                                    produced class II substances in the
                                    United States during calendar years
                                    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 years 2004, 2005,
                            and 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 or the bidder's employer.
                                ``(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
                                    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. 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. 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
            and 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 and consumption
                    are 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 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 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. 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 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 safety if the
            Administrator of the Federal Aviation Administration, in
            consultation with the Administrator, determines that no safe
            and effective substitute has been developed and that such
            authorization is necessary for aviation 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 sections 616(a) and 616(b), 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) International 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 international 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 international 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 and 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 years 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 years 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 years 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 and 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 consumer 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
                                    consumer 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''.
                (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 the light absorbing component of carbonaceous aerosols.
        (b) Black Carbon Abatement Report.--Not later than one 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 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 and off-road engines and programs to
                    address residential cookstoves, forest burning, and
                    other agriculture-based burning;
                        (C) potential metrics 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
                        (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
                        (C) actions, in addition to those identified by the
                    Administrator under section 851 of the Clean Air Act
                    (as amended 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 one year
    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 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 two 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.
        ``(b) International Black Carbon Mitigation.--
                ``(1) Report.--Not later than one 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 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. 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 paragraph 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.''.
        (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), 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 (relating to
                    stratospheric ozone control), or title VII or VIII
                    (relating to reduction of greenhouse gas emissions),'';
                    and
                        (B) in the first sentence of paragraph (3), by
                    striking ``or VI'' and inserting ``VI, VII, 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,''.

                      Subtitle D--Carbon Market Assurance

    SEC. 341. CARBON MARKET ASSURANCE.

        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) Contract of sale.--The term `contract of sale'
            includes sales, agreements of sale, and agreements to sell.
                ``(2) Covered entity.--The term `covered entity' shall have
            the meaning given in section 700 of the Clean Air Act.
                ``(3) Future delivery.--The term `future delivery' does not
            include any sale of any cash commodity for deferred shipment or
            delivery.
                ``(4) Offset creation contract.--The term `offset creation
            contract' mean a written agreement for the origination and
            development of an offset project, and the related issuance of
            offset credits, pursuant to title VII of the Clean Air Act.
                ``(5) Regulated allowance.--The term `regulated allowance'
            means any emission allowance, compensatory allowance, offset
            credit, or renewable energy credit established or issued under
            the American Clean Energy and Security Act of 2009.
                ``(6) Regulated allowance derivative.--The term `regulated
            allowance derivative' means an instrument that is, or includes,
            an instrument--
                        ``(A) which--
                                ``(i) is of the character of, or is
                            commonly known to the trade as, a `put option',
                            `call option', `privilege', `indemnity',
                            `advance guaranty', `decline guaranty', or
                            `swap agreement'; or
                                ``(ii) is a contract of sale for future
                            delivery other than an offset creation
                            contract; and
                        ``(B) the value of which, in whole or in part, is
                    expressly linked to the price of a regulated allowance
                    or another regulated allowance derivative.
                ``(7) 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
                    (including an entity's fraudulent or manipulative
                    conduct with respect to regulated allowance derivatives
                    that benefits the entity in regulated allowance
                    markets), 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;
                        ``(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 over-the-counter trading;
                        ``(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 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 part, 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. In any
                    such action, the validity or appropriateness of the
                    final assessment order or judgment shall not be subject
                    to review.
                ``(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) Information-sharing.--Within 6 months after a Federal
            agency with jurisdiction over regulated allowance derivatives
            is delegated authority pursuant to subsection (c)(1), the
            agency shall enter into a memorandum of understanding with the
            Commission relating to information sharing, which shall include
            provisions ensuring that information requests to markets within
            the respective jurisdiction of the agency are properly
            coordinated to facilitate, among other things, effective
            information-sharing while minimizing duplicative information
            requests, and provisions regarding the treatment of proprietary
            information.
                ``(7) 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) Delegation of Authority by the President.--
                ``(1) Delegation.--The President, taking into consideration
            the recommendations of the interagency working group
            established in subsection (d), shall delegate to members of the
            working group and the heads of other appropriate Federal
            agencies the authority to promulgate regulations for the
            establishment, operation, and oversight of all markets for
            regulated allowance derivatives.
                ``(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
                    allowance derivatives;
                        ``(C) facilitate compliance with title VII of the
                    Clean Air Act by covered entities;
                        ``(D) ensure market transparency and recordkeeping
                    necessary 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;
                        ``(E) ensure that position limitations for
                    individual market participants are established with
                    respect to each regulated allowance derivative and
                    aggregate position limitations for individual market
                    participants are established with respect to all
                    regulated allowance derivative markets;
                        ``(F) ensure that margin requirements are
                    established for each regulated allowance derivative;
                        ``(G) provide for the formation and operation of a
                    market system that allows for best execution in the
                    trading of regulated allowance derivatives;
                        ``(H) to the extent the regulations deviate from
                    the rule set forth in paragraph (4)(B), limit or
                    eliminate counterparty risks, market power
                    concentration risks, and other risks associated with
                    over-the-counter trading, and promulgate reporting and
                    market transparency rules for large traders;
                        ``(I) ensure that market participants do not evade
                    position limits or otherwise undermine the integrity
                    and effectiveness of the regulations promulgated under
                    subparagraph (C) through participation in markets not
                    subject to the position limits and regulations;
                        ``(J) establish standards, as necessary, for
                    qualification as, and operation of, trading facilities
                    for regulated allowance derivatives;
                        ``(K) establish standards, as necessary, for
                    qualification as, and operation of, clearing
                    organizations for trading facilities for regulated
                    allowance derivatives;
                        ``(L) provide boards of trade designated as
                    contract markets under the Commodity Exchange Act, and
                    market participants, with an adequate transition period
                    for compliance with any new regulatory requirements
                    established under this paragraph;
                        ``(M) determine whether and to what extent offset
                    creation contracts, to the extent incorporating
                    regulated allowance derivatives, should be governed by
                    the same regulations that apply to other regulated
                    allowance derivatives; and
                        ``(N) 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 and the
                    regulations promulgated under such title and such
                    section.
                ``(3) Deadline.--The agencies authorized to promulgate
            regulations for the establishment, operation, and oversight of
            markets for regulated allowance derivatives pursuant to
            paragraph (1) shall promulgate such regulations not later than
            18 months after the date of enactment of this section, and from
            time to time thereafter as may be appropriate.
                ``(4) Default rules.--
                        ``(A) An individual market participant, directly or
                    in concert with another participant, shall not control
                    more than 10 percent of the open interest in any
                    regulated allowance derivative.
                        ``(B) All contracts for the purchase or sale of any
                    regulated allowance derivative shall be executed on or
                    through a board of trade designated as a contract
                    market under the Commodity Exchange Act.
                        ``(C) To the extent that regulations promulgated
                    under this subsection provide different rules with
                    respect to the matters described in subparagraph (A) or
                    (B), the regulations shall supersede subparagraph (A)
                    or (B), as the case may be.
        ``(d) 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 President 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
            President 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.
        ``(e) Enforcement of Regulations.--Each Federal agency that
    promulgates under subsection (c) a regulation of conduct with respect
    to a regulated allowance derivative shall have the same authority to
    enforce compliance with the regulation as the Commodity Futures Trading
    Commission has to enforce compliance with any regulation of similar
    conduct with respect to a contract, agreement, or transaction over
    which the Commodity Futures Trading Commission has jurisdiction, except
    that any enforcement by the Federal Energy Regulatory Commission shall
    be pursuant to section 222 and Part III.
        ``(f) Prohibition on Price or Market Manipulation, Fraud, and False
    or Misleading Statements or Reports.--(1) It shall be a felony
    punishable by a fine of not more than $25,000,000 (or $5,000,000 in the
    case of a person who is an individual) or imprisonment for not more
    than 20 years, or both, together with the costs of prosecution for any
    person, directly or indirectly--
                ``(A) in connection with a transaction involving a
            regulated instrument, to knowingly--
                        ``(i) use any manipulative or deceptive device or
                    contrivance in violation of regulations promulgated
                    pursuant to this section;
                        ``(ii) corner or attempt to corner the regulated
                    instrument; or
                        ``(iii) cheat or defraud, or attempt to cheat or
                    defraud, any other person;
                ``(B) to knowingly deliver or cause to be delivered a
            false, misleading, or inaccurate report concerning information
            or conditions that affect or tend to affect the price of a
            regulated instrument;
                ``(C) to knowingly make, or cause to be made, in an
            application, report, or document required to be filed under any
            regulation promulgated pursuant to this section, a statement
            which is false or misleading with respect to a material fact,
            or to omit any material fact required to be stated therein or
            necessary to make the statements therein not misleading; or
                ``(D) to knowingly falsify, conceal, or cover up by any
            trick, scheme, or artifice a material fact, make any false,
            fictitious, or fraudulent statements or representations, or
            make or use any false writing or document that contains a
            false, fictitious, or fraudulent statement or entry, to an
            entity on or through which transactions in regulated
            instruments occur, or are settled or cleared, acting in
            furtherance of its official duties under this section or
            regulations promulgated under this section.
        ``(2) If a person is found guilty of a felony established in
    paragraph (1), the person may be prohibited from holding or trading
    regulated instruments 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.
        ``(g) 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.
        ``(h) Market Reports.--
                ``(1) Collection and analysis of information.--The
            Commission, in conjunction with the Federal agency with
            jurisdiction over regulated allowance derivatives pursuant to
            subsection (c)(1), shall, on a continuous basis, collect and
            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) Evidence of fraud or manipulation in any such
                    market, the effects on any such market of any such
                    fraud or manipulation (or threat of fraud or
                    manipulation) that the Commission, in conjunction with
                    the Federal agency, has identified, and the
                    effectiveness of corrective measures undertaken by the
                    Commission, in conjunction with the Federal agency, to
                    address the fraud, manipulation, or threat.
                        ``(E) 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.
                        ``(F) Any changes in the roles, activities, or
                    strategies of various market participants.
                        ``(G) Regional, industrial, and consumer responses
                    to the markets, and energy investment responses to the
                    markets.
                        ``(H) Any other issue related to the markets that
                    the Commission, in conjunction with the entities, deems
                    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 Federal agency, 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, 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, in conjunction with the
            Federal agency, considers necessary to address any threats to
            the transparency, fairness, or integrity of the markets in
            regulated instruments.''.

                    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) No Effect on FERC Authority.--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 11(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 11(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) 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 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 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 or 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 Commision 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) Inapplicability of certain procedural rules.--Section
            553 of title 5, United States Code, shall not apply with
            respect to any exercise of authority under this subsection.
                ``(8) 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 AUTHORITY OF THE FEDERAL TRADE COMMISSION.

        Nothing in this subtitle shall be interpreted 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 carry out the responsibilities of the Federal
    Trade Commission.

    SEC. 358. REGULATION OF CARBON DERIVATIVES MARKETS.

        (a) Default Rule.--Section 2 of the Commodity Exchange Act (7
    U.S.C. 2), as amended by section 352 of this Act, is amended by adding
    at the end the following:
        ``(k) The Commission shall have jurisdiction over the
    establishment, operations, and oversight of markets for regulated
    allowance derivatives (as defined in section 401 of the Federal Power
    Act (16 U.S.C. 791a and following), and shall provide for the
    establishment, operation, and oversight of the markets in accordance
    with the same regulations that apply under this Act to included energy
    transactions.''.
        (b) Presidential Determinations.--To the extent that the President
    delegates the authority to promulgate regulations for the
    establishment, operation, and oversight of all markets for regulated
    allowance derivatives to a Federal agency other than the Commodity
    Futures Trading Commission pursuant to section 401 of the Federal Power
    Act, such determination shall supersede subsection (a). To the extent
    that the President determines that regulations promulgated pursuant to
    section 401(c)(2) of the Federal Power Act would provide for more
    stringent and effective market oversight, such regulations shall
    supersede subsection (a). Nothing in this section shall be construed to
    affect the operation of the default rules established in section
    401(c)(4) of the Federal Power Act.

               TITLE IV--TRANSITIONING TO A CLEAN ENERGY ECONOMY

                         Subtitle A--Industrial Sector

    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) Purpose 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 rebate the owners and operators of entities in
            eligible domestic 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 this part when such distribution is no longer
            necessary to prevent carbon leakage from eligible industrial
            sectors.

    ``SEC. 762. INTERNATIONAL NEGOTIATIONS.

        ``(a) Finding.--Congress finds that the purposes of this part, as
    set forth in section 761, 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 forums, 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.--Not later than January 1,
    2020, the President shall notify foreign countries that an
    International Reserve Allowance Program, as described in subpart 2, may
    apply to primary products produced in a foreign country by a sector for
    which the President has made a determination described in section
    767(c).

    ``SEC. 763. 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) Eligible industrial sector.--The term `eligible
            industrial sector' means an industrial sector determined by the
            Administrator under section 764(b) to be eligible to receive
            emission allowance rebates under subpart 1.
                ``(3) Industrial sector.--The term `industrial sector'
            means any sector that is in the manufacturing sector (as
            defined in NAICS codes 31, 32, and 33).
                ``(4) NAICS.--The term `NAICS' means the North American
            Industrial Classification System of 2002.
                ``(5) 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.
                ``(6) Primary product.--The term `primary product' means a
            product manufactured by an eligible industrial sector that is--
                        ``(A) iron, steel, steel mill products (including
                    pipe and tube), aluminum, cement, glass (including
                    flat, container, and specialty glass and fiberglass),
                    pulp, paper, chemicals, or industrial ceramics; or
                        ``(B) any other manufactured product that is sold
                    in bulk for purposes of further manufacture or
                    inclusion in a finished product.

                 ``Subpart 1--Emission Allowance Rebate Program

    ``SEC. 764. 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 765.
                ``(2) Subsequent lists.--Not later than February 1, 2013,
            and every four 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.--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 (i) and (ii), or the criteria in clause
                    (iii).
                                ``(i) 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 (E);
                                    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; by
                                                ``(bb) the value of the
                                            shipments of the sector, based
                                            on data described in
                                            subparagraph (E).
                                ``(ii) 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 (E).
                                ``(iii) 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 (i)(I) or (II), of at least 20 percent.
                        ``(B) Iron and steel sector.--The Administrator
                    shall consider as in different industrial sectors--
                                ``(i) entities using integrated iron and
                            steelmaking technologies (including coke ovens,
                            blast furnaces, and other iron-making
                            technologies); and
                                ``(ii) entities using electric arc furnace
                            technologies.
                        ``(C) Metal production classified under more than
                    one naics code.--In determining eligibility under this
                    subsection, the Administrator shall--
                                ``(i) aggregate data for the beneficiation
                            or other processing of iron and copper ores
                            with subsequent steps in the process of metal
                            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.
                        ``(D) Exclusion.--The petroleum refining sector
                    shall not be an eligible industrial sector.
                        ``(E) 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 of Mineral Industries
                            and 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 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 data pertaining to a
                            broader industrial category classified in the
                            NAICS. 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.
                                ``(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)(i)(II)(aa), the Administrator 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) Individual showing petition.--
                                ``(i) Petition.--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 (i) and (ii)
                                    of paragraph (2)(A), or the eligibility
                                    criteria in clause (iii) 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)(E).
                                ``(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 a virgin material to
                            be a separate subsector from another entity or
                            group of entities that manufacture the same
                            product from recycled material.
                                ``(iv) Final action.--The Administrator
                            shall take final action on such petition no
                            later than 6 months after the petition is
                            received by the Administrator.
                        ``(B) 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)(i) as of
                            the date of promulgation of the rule under
                            paragraph (1); and
                                ``(ii) meets the trade intensity criteria
                            in paragraph (2)(A)(ii), using data from any
                            year after 2006.
                        ``(C) Use of most recent data.--In determining
                    whether to designate a sector or subsector as an
                    eligible industrial sector under this paragraph, the
                    Administrator shall use the most recent data available
                    from the sources described in paragraph (2)(E), rather
                    than the data from the years specified in paragraph
                    (2)(E), to determine the trade intensity of such sector
                    or subsector, but only for determining such trade
                    intensity.

    ``SEC. 765. DISTRIBUTION OF EMISSION ALLOWANCE REBATES.

        ``(a) Distribution Schedule.--
                ``(1) In general.--For each vintage year, the Administrator
            shall distribute allowances pursuant to this section 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 the entity's
                    indirect carbon factor as calculated under subsection
                    (b)(3); and
                        ``(B) for vintage year 2026 and thereafter, the
                    distribution shall be the amount calculated under
                    subsection (b) multiplied by, except as modified by the
                    President pursuant to section 767(c)(3)(A) 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(c)(3)(A), and the President subsequently makes a
            determination under section 767(b) for an eligible industrial
            sector that more than 70 percent of global output for that
            sector is produced or manufactured in countries that have met
            at least one of the criteria in that subsection, then the
            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 764(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 764(b)(3).
        ``(b) Calculation of Direct and Indirect Carbon Factors.--
                ``(1) In general.--
                        ``(A) Covered entities.--Except as provided in
                    subsection (a), for covered entities, 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 output of the covered entity for
                    the two 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 calendar year is the product obtained
                    by multiplying the average output of the entity for the
                    two years preceding the years 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.--Each
                    person selling electricity to the owner or operator of
                    an entity in any sector designated as an eligible
                    industrial sector under section 764(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--
                                        ``(I) the electricity purchased by
                                    the entity from that person in each
                                    hour (expressed in kilowatt hours),
                                    multiplied by
                                        ``(II) the cost the person selling
                                    the electricity passes to the entity
                                    per ton of carbon dioxide equivalent
                                    emitted by the electricity provider per
                                    kilowatt hour, taking into account the
                                    entity's retail rate arrangements, by
                                ``(ii) the total kilowatt hours of
                            electricity purchased by the entity from that
                            person during that year.
                        ``(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], 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
                    industrial 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 for all covered entities in each eligible
            industrial sector every four years using an average of the two
            most recent years of the best available data.
                ``(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; and
                        ``(B) limit the electric 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.
                ``(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 part pursuant to section [782] 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], 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].

              ``Subpart 2--International Reserve Allowance Program

    ``SEC. 766. INTERNATIONAL RESERVE ALLOWANCE PROGRAM.

        ``(a) Establishment.--
                ``(1) In general.--If the President takes an action
            described in section 767(c)(3)(B) with respect to a sector
            then, not later than 24 months after that determination, the
            Administrator shall issue regulations--
                        ``(A) determining an appropriate price for and
                    offering for sale to United States importers
                    international reserve allowances;
                        ``(B) requiring the submission of appropriate
                    amounts of such allowances in conjunction with the
                    importation into the United States of a primary product
                    produced or manufactured by that sector;
                        ``(C) exempting from the requirements of
                    subparagraph (B) primary products produced in--
                                ``(i) foreign countries that the United
                            Nations has identified as among the least
                            developed of developing countries; or
                                ``(ii) foreign countries that the President
                            has determined to be responsible for less than
                            0.5 percent of total global greenhouse gas
                            emissions; and
                        ``(D) prohibiting the introduction into interstate
                    commerce of a primary product without submitting the
                    required number of international reserve allowances in
                    accordance with such regulations, unless the product
                    was produced by a covered entity under this title, or
                    by an entity that is or could be regulated under this
                    title.
                ``(2) Purpose of program.--The Administrator shall
            establish the program under paragraph (1) in a manner that
            addresses, consistent with international agreements to which
            the United States is a party, the competitive imbalance in the
            costs of producing or manufacturing primary products in
            industrial sectors resulting from the difference between--
                        ``(A) the direct and indirect costs of complying
                    with this title; 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.
                ``(3) Emission allowance rebates.--The Administrator shall
            take into account the value of emission allowance rebates
            distributed under subpart 1 when making calculations under
            paragraph (2).
                ``(4) Limitation.--The International Reserve Allowance
            Program may not begin before January 1, 2025.
        ``(b) Covered Entities.--International reserve allowances may not
    be held by covered entities to comply with section 722.

                    ``Subpart 3--Presidential Determination

    ``SEC. 767. PRESIDENTIAL REPORTS AND DETERMINATIONS.

        ``(a) Report.--Not later than January 1, 2018, 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 industrial sectors. Such report shall also include--
                ``(1) recommendations on how to better achieve the purposes
            of this part, including an assessment of the feasibility and
            usefulness of an International Reserve Allowance Program; and
                ``(2) an assessment of the amount and duration of
            assistance, including distribution of free allowances, being
            provided to eligible industrial sectors in other developed
            countries to mitigate costs of compliance with domestic
            greenhouse gas reduction programs in such countries.
        ``(b) Presidential Determination.--Not later than June 30, 2022,
    and every four years thereafter, the President, in consultation with
    the Administrator and other appropriate agencies, shall determine, for
    each eligible industrial sector, whether more than 70 percent of global
    output for that sector is 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 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 which the
            United States is a party.
                ``(3) The country has an annual energy or greenhouse gas
            intensity, as described in section 764(b)(2)(A)(i), for the
            sector that is equal to or less than the energy or greenhouse
            gas intensity for such sector in the United States in the most
            recent calendar year for which data are available.
                ``(4) The country has implemented policies, including
            sectoral caps, export tariffs, production fees, electricity
            generation regulations, or greenhouse gas emissions fees, that
            individually or collectively impose an incremental increase on
            the cost of production associated with greenhouse gas emissions
            from the sector that is at least 60 percent of the cost of
            complying with this title in the United States for such sector,
            averaged over a two-year period.
        ``(c) Effect of Presidential Determination.--If the President makes
    a determination under subsection (b) with respect to an eligible
    industrial sector that 70 percent or less of the global output for the
    sector is produced or manufactured in countries that have met one or
    more of the criteria in subsection (b), then the President shall, not
    later than June 30, 2022, and every four years thereafter--
                ``(1) assess the extent to which the emission allowance
            rebates provided pursuant to subpart 1 have mitigated or
            addressed, or could mitigate or address, carbon leakage in that
            sector;
                ``(2) 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 the feasibility
            of establishing such a program; and
                ``(3) with respect to that sector--
                        ``(A) modify the percentage by which direct and
                    indirect carbon factors will be multiplied under
                    section 765(a)(1)(B);
                        ``(B) implement an International Reserve Allowance
                    Program under section 766 for the products of the
                    sector; or
                        ``(C) take the actions in both subparagraph (A) and
                    (B).
        ``(d) Report to Congress.--Not later than June 30, 2022, and every
    four years thereafter, the President shall transmit to the Congress a
    report providing notice of any determination made under subsection (b),
    explaining the reasons for such determination, and identifying the
    actions taken by the President under subsection (c).
        ``(e) Limitation.--The President may only implement an
    International Reserve Allowance Program for sectors producing primary
    products.''.

    SEC. 402. ALLOCATIONS TO PETROLEUM REFINERIES.

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

                         ``PART G--PETROLEUM REFINERIES

    ``SEC. 771. ALLOCATIONS TO PETROLEUM REFINERIES.

        ``(a) Output.--In this section, the term `output' means the total
    tonnage or other standard unit of production (as determined by the
    Administrator) produced by a petroleum refinery.
        ``(b) 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 in the United States.
        ``(c) Distribution Schedule.--The Administrator shall distribute
    emission allowances of each vintage year no later than October 31 of
    the preceding calendar year.
        ``(d) Calculation of Emission Allowance Rebates.--
                ``(1) In general.--The amount of emission allowance rebates
            distributed to each refinery shall be based on the sum of the
            refinery's direct and indirect carbon factors.
                ``(2) New refineries.--Not later than 2 years after the
            date of enactment of this section, the Administrator shall
            issue regulations governing the distribution of emission
            allowance rebates for the first and second years of operation
            of a new petroleum refinery. These regulations shall provide
            for--
                        ``(A) the distribution of emission allowance
                    rebates to such petroleum refineries based on
                    comparable petroleum refineries; and
                        ``(B) 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 petroleum refinery
                    would have received during the first and second years
                    of operation had the appropriate data been available.
                ``(3) Direct carbon factor.--The direct carbon factor for a
            petroleum refinery for a vintage year is the product of--
                        ``(A) the average output of the petroleum refinery
                    for the two 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
                    petroleum refineries, as determined by the
                    Administrator under paragraph (5).
                ``(4) Indirect carbon factor.--
                        ``(A) In general.--The indirect carbon factor for a
                    petroleum refinery for a vintage year is the product
                    obtained by multiplying the average output of the
                    petroleum refinery for the two years preceding the
                    years 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.--Each
                    person selling electricity to the owner or operator of
                    a petroleum refinery shall provide the owner or
                    operator of the petroleum refinery and the
                    Administrator, on an annual basis, the electricity
                    emissions intensity factor for the petroleum refinery.
                    The electricity emissions intensity factor for the
                    petroleum refinery, expressed in tons of carbon dioxide
                    equivalents per kilowatt hour, is determined by
                    dividing--
                                ``(i) the annual sum of the hourly product
                            of--
                                        ``(I) the electricity purchased by
                                    the petroleum refinery from that person
                                    in each hour (expressed in kilowatt
                                    hours), multiplied by
                                        ``(II) the cost the person selling
                                    the electricity passes to the petroleum
                                    refinery per ton of carbon dioxide
                                    equivalent emitted by the electricity
                                    provider per kilowatt hour, taking into
                                    account the petroleum refinery's retail
                                    rate arrangements, by
                                ``(ii) the total kilowatt hours of
                            electricity purchased by the petroleum refinery
                            from that person during that year.
                        ``(C) Electricity efficiency factor.--The
                    electricity efficiency factor is the average amount of
                    electricity (in kilowatt hours) used per unit of output
                    for all petroleum refineries, as determined by the
                    Administrator based on the best available data,
                    including data provided under paragraph (7).
                        ``(D) Indirect carbon factor reduction.--If an
                    electricity provider received a free allocation of
                    emission allowances pursuant to section 782, the
                    Administrator shall adjust the indirect carbon factor
                    to avoid rebates to the 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
                    petroleum refineries.
                ``(5) 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 for all petroleum refineries not less than once
            every five years using an average of the two most recent years
            of the best available data.
                ``(6) 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 (5), to an amount that is not greater than it
                    was in any previous calculation under this subsection;
                    and
                        ``(B) limit the electricity emissions intensity
                    factor, calculated under paragraph (4)(B) and resulting
                    from a change in electricity supply, for any petroleum
                    refinery to an amount that is not greater than it was
                    during any previous year.
                ``(7) 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 a petroleum
                    refinery 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
                    petroleum refinery subject to this section.
        ``(e) Total Maximum Distribution.--The Administrator shall not
    distribute more allowances for any vintage year pursuant to this
    section than are allocated for use under this part pursuant to section
    782 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, the
    Administrator shall reduce each petroleum refinery's distribution on a
    pro rata basis so that the total distribution under this section equals
    the number of allowances allocated under section 782.''.

                  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 renewable energy, energy efficiency, and climate
    change mitigation. 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 clean
            energy.
        (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
            field of clean energy 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 clean energy-related
            fields.
        (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. 342(c)(1)(A))) in career
    areas related to clean energy, renewable energy, energy efficiency, and
    climate change mitigation.

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

        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''.

              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
            of the Environmental Protection Agency, 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;
                                (ix) 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
                                (viii) 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); and
                                (ii) collecting, validating, and reporting
                            data required under this part; 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); and
                        (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'' includes the District of Columbia
            and the Commonwealth of Puerto Rico: and the term ``United
            States'' when used in the geographical sense includes such
            Commonwealth.
                (17) The term ``State agency'' means the agency of the
            State which administers the State law.
                (18) 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.
                (19) 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.
                (20) 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).
                (21) The term ``week'' means a week as defined in the
            applicable State law.
                (22) 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.
                (3) Penalties for fraud.--Any person who--
                        (A) makes a false statement of a material fact
                    knowing it to be false, or knowingly fails to disclose
                    a material fact, for the purpose of obtaining or
                    increasing for that person or for any other person any
                    payment authorized to be furnished under this part, or
                        (B) makes a false statement of a material fact
                    knowing it to be false, or knowingly fails to disclose
                    a material fact, when providing information to the
                    Secretary during an investigation of a petition under
                    section 425(c),
    shall be imprisoned for not more than one year, or fined under title
    18, United States Code, or both, and be ineligible for any further
    payments under this part.
        (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 TAX CREDIT.

        Subpart C of part IV of subchapter A of chapter 1 of the Internal
    Revenue Code of 1986 is amended by inserting after section 36A the
    following new section:

    ``SEC. 36B. ENERGY TAX CREDIT.

        ``(a) Allowance of Credit.--In the case of an eligible individual,
    there shall be allowed as a credit against the tax imposed by this
    subtitle for the taxable year an amount equal to--
                ``(1) for an eligible individual with applicable income of
            less than $6,000, the phase in rate times the applicable
            income;
                ``(2) for an eligible individual with applicable income
            that is greater than or equal to $6,000 and is less than or
            equal to the phase down amount, the maximum energy tax credit;
                ``(3) for an individual with applicable income that exceeds
            the phase down amount, an amount equal to--
                        ``(A) the maximum energy tax credit minus; or
                        ``(B) the difference between the individual's
                    applicable income and the phase down amount multiplied
                    by .2.
        ``(b) Coordination With Energy Refund Received Through State Human
    Service Agencies.--The amount described in subsection (a) shall be
    reduced by \1/12\ for each month in which the individual or his or her
    spouse received a refund under section 432 of the Safe Climate Act.
                ``(1) The Secretary of the Treasury shall promulgate
            regulations that instruct States on how to inform adult
            individuals who receive a refund under section 432 of the Safe
            Climate Act of the number of months he or she received a refund
            and how such information shall be provided to the Internal
            Revenue Service.
                ``(2) The Secretary of the Treasury shall establish a
            telephone and online system that allows an individual to
            inquire about the number of months she or he received such a
            refund.
                ``(3) In the case of an individual that does not report the
            number of months a refund was provided under section 432 of the
            Safe Climate Act or recorded an incorrect number of months, the
            Secretary of the Treasury shall adjust the energy tax credit
            based on the information received from States, provided that
            the Secretary of the Treasury has made a determination that the
            information meets a sufficient standard for accuracy.
        ``(c) Definitions and Special Rules.--For purposes of this
    section--
                ``(1) Eligible individual.--
                        ``(A) In general.--The term `eligible individual'
                    means any individual other than--
                                ``(i) any nonresident alien individual;
                                ``(ii) any individual with respect to whom
                            a deduction under section 151 is allowable to
                            another taxpayer for a taxable year beginning
                            in the calendar year in which the individual's
                            taxable year begins; and
                                ``(iii) an estate or trust.
                        ``(B) Identification number requirement.--Such term
                    shall not include any individual who--
                                ``(i) in the case of a return that is not a
                            joint return, does not include the social
                            security number of the individual; and
                                ``(ii) in the case of joint return, does
                            not include the social security number of at
                            least one of the taxpayers on such return.
                    For purposes of the preceding sentence, the social
                    security number shall not include a TIN issued by the
                    Internal Revenue Service.
                ``(2) Applicable income.--Applicable income means the
            larger of--
                        ``(A) earned income as defined in section 32(c)(2),
                    except that such term shall not include net earnings
                    from self-employment which are not taken into account
                    in computing taxable income; and
                        ``(B) adjusted gross income.
                ``(3) Phase in rate.--The Secretary of the Treasury shall
            compute the phase in rates each year for the energy credit for
            joint returns and for returns that are not filed jointly with
            respect to each relevant number of qualifying individuals such
            that the phase in rate equals the maximum energy tax credit
            divided by $6,000.
                ``(4) Maximum energy tax credit.--
                        ``(A) In general.--
                                ``(i) The maximum energy tax credit shall
                            vary based on the number of individuals in the
                            tax filing unit.
                                ``(ii) The maximum energy tax credit for a
                            filing unit of a particular size shall be equal
                            to the average annual reduction in purchasing
                            power for low-income households of that
                            household size, as calculated by the
                            Environmental Protection Agency, that results
                            from the regulation of greenhouse gas emissions
                            under title VII of the Clean Air Act.
                                ``(iii) The Environmental Protection
                            Agency, in consultation with other appropriate
                            federal agencies, shall calculate the maximum
                            energy tax credit by August 31 of each year for
                            the following calendar year using the most
                            recent, reliable data available.
                        ``(B) Energy tax credit calculation.--
                                ``(i) Distribution.--For each calendar
                            year, the Environmental Protection Agency shall
                            determine pursuant to subparagraph (B)(iii) the
                            aggregate reduction in purchasing power among
                            all United States households that results from
                            the regulation of greenhouse gas emissions
                            under title VII of the Clean Air Act and
                            distribute that aggregate reduction in
                            purchasing power among all United States
                            households based on--
                                        ``(I) households' share of total
                                    consumption by all households;
                                        ``(II) the carbon intensity and
                                    covered-emissions intensity of
                                    households' consumption; and
                                        ``(III) the share of households'
                                    carbon and covered-emissions
                                    consumption that is not financed by
                                    Federal benefits subject to a cost of
                                    living adjustment that offsets
                                    increased carbon costs.
                                ``(ii) Maximum energy tax credit.--The
                            maximum energy tax credit shall be equal to the
                            arithmetic mean value of the amount allocated
                            under clause (i) to households of a specified
                            household size in the lowest income quintile.
                            Tax filing units that include 5 or more
                            individuals shall be eligible for the
                            arithmetic mean value of the amount allocated
                            under clause (i) to households that includes 5
                            or more individuals.
                                ``(iii) Aggregate reduction in purchasing
                            power.--For purposes of this section, the
                            aggregate reduction in purchasing power shall
                            be based on the projected total market value of
                            the emissions allowances used to demonstrate
                            compliance with title VII of the Clean Air Act
                            in that year, adjusted to reflect costs that
                            were not incurred by households as a result of
                            allowances freely allocated pursuant to section
                            [782] of the Clean Air Act, as estimated by the
                            Environmental Protection Agency, and calculated
                            in a way generally recognized as suitable by
                            experts in evaluating such purchasing power
                            impacts.
                                ``(iv) Income quintiles.--Income quintiles
                            shall be determined by ranking households
                            according to income adjusted for household
                            size, and shall be constructed so that each
                            quintile contains an equal number of people.
                ``(5) Phase down amount.--
                        ``(A) In the case of an eligible individual who has
                    no qualifying individuals, the phase down amount shall
                    be--
                                ``(i) $20,000 in the case of an individual
                            who does not file a joint return; and
                                ``(ii) $25,000 in the case of a joint
                            return.
                        ``(B) In the case of an eligible individual who
                    files a joint return and has at least one qualifying
                    individual--
                                ``(i) If the eligible individual has one
                            qualifying individual, the lowest income level
                            that exceeds the phaseout amount as defined in
                            section 32(b)(2) at which a married couple with
                            one qualifying child is ineligible for the
                            earned income credit for the taxable year.
                                ``(ii) If the eligible individual has two
                            qualifying individuals, the lowest income level
                            that exceeds the phaseout amount as defined in
                            section 32(b)(2) at which a married couple with
                            two qualifying children is ineligible for the
                            earned income credit for the taxable year.
                                ``(iii) If the eligible individual claims
                            three or more qualifying individuals, the
                            lowest income level that exceeds the phaseout
                            amount as defined in section 32(b)(2) at which
                            a married couple with three or more qualifying
                            children is ineligible for the earned income
                            credit for the taxable year.
                        ``(C) In the case of an eligible individual who
                    does not file a joint return and has at least one
                    individual qualifying individual--
                                ``(i) If the eligible individual has one
                            qualifying individual, the lowest income level
                            that exceeds the phaseout amount as defined in
                            section 32(b)(2) at which a single individual
                            with one qualifying child is ineligible for the
                            earned income credit for the taxable year.
                                ``(ii) If the eligible individual has two
                            qualifying individuals, the lowest income level
                            that exceeds the phaseout amount as defined in
                            section 32(b)(2) at which a single individual
                            with two qualifying children is ineligible for
                            the earned income credit for the taxable year.
                                ``(iii) If the eligible individual has
                            three or more qualifying individuals, the
                            lowest income level that exceeds the phaseout
                            amount as defined in section 32(b)(2) at which
                            a single individual with three or more
                            qualifying children is ineligible for the
                            earned income credit for the taxable year.
                ``(6) Qualifying individual.--A qualifying individual is an
            individual whom the eligible individual claims as a dependent
            under section 151, or as a qualifying child for the earned
            income credit under section 32(c)(3) or the child tax credit
            under section 24, or both. The term qualifying individual does
            not include--
                        ``(A) someone claimed as a dependent under section
                    151 if that dependent is claimed as a qualifying child
                    for the earned income tax credit or the child tax
                    credit on a tax form by someone other than the eligible
                    individual; and
                        ``(B) the eligible individual and, if a joint
                    return, his or her spouse.
                ``(7) Number of people in the tax filing unit.--The number
            of people in the tax filing unit shall equal the sum of the
            number of qualifying individuals plus--
                        ``(A) in the case of a joint return, 2; and
                        ``(B) in the case of a return that is not filed
                    jointly, 1.
        ``(d) Treatment of Possessions.--
                ``(1) Payments to possessions.--
                        ``(A) Mirror code possession.--The Secretary of the
                    Treasury shall pay to each possession of the United
                    States with a mirror code tax system amounts equal to
                    the loss to that possession by reason of the amendments
                    made by this section. Such amounts shall be determined
                    by the Secretary of the Treasury based on information
                    provided by the Government of the respective
                    possession.
                        ``(B) Other possessions.--The Secretary of the
                    Treasury shall pay to each possession of the United
                    States which does not have a mirror code tax system
                    amounts estimated by the Secretary of the Treasury as
                    being equal to the aggregate benefits that would have
                    been provided to residents of such possession by reason
                    of the amendments made by this section if a mirror code
                    tax system had been in effect in such possession. The
                    preceding sentence shall not apply for a given taxable
                    year with respect to any possession of the United
                    States unless such possession has a plan, which has
                    been approved by the Secretary of the Treasury, under
                    which such possession will promptly distribute such
                    payments to residents of such possession.
                ``(2) Coordination with credit allowed against united
            states income taxes.--No credit shall be allowed against United
            States income taxes for any taxable year under this section to
            any person--
                        ``(A) to whom a credit is allowed against taxes
                    imposed by the possession by reason of the amendments
                    made by this section for such taxable year; or
                        ``(B) who is eligible for a payment under a plan
                    described in paragraph (1)(B) with respect to such
                    taxable year.
        ``(e) Amount of Credit To Be Determined Under Tables.--The amount
    of the credit allowed by this section shall be determined under tables
    prescribed by the Secretary.
        ``(f) Inflation Adjustments.--In the case of any taxable year
    beginning after 2009, dollar amounts in subsection (c)(4)(A) shall be
    increased by an amount equal to such dollar amount, multiplied by the
    cost-of-living adjustment determined under section 1(f)(3) of the
    Internal Revenue Code of 1986.
        ``(g) Treatment in Other Programs.--The energy tax credit 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 program
    (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 an energy tax credit under this Act.''.

    SEC. 432. ENERGY REFUND PROGRAM FOR LOW-INCOME CONSUMERS.

        (a) Energy Refund Program.--
                (1) The Administrator of the Environmental Protection
            Agency, or the agency designated by the Administrator shall
            formulate and administer the ``Energy Refund Program''.
                (2) At the request of the State agency, eligible low-income
            households within the State shall receive a monthly cash energy
            refund equal to the estimated loss in purchasing power
            resulting from this Act.
        (b) Eligibility.--
                (1) Eligible households.--Participation in the Energy
            Refund Program shall be limited to a household that--
                        (A) the State agency determines to be 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 the such Act (7
                    U.S.C. 2028);
                        (B) has gross income that does not exceed 150
                    percent of the poverty line; or
                        (C) consists of a single individual or a married
                    couple and (i) receives the subsidy described in
                    section 1860D-14 of the Social Security Act (42 U.S.C.
                    1395w-114); or (ii)(I) participates in the program
                    under section XVIII of the Social Security Act; and
                    (II) meets the income requirements described in section
                    1860D-14(a)(1) or (a)(2) of such Act (42 U.S.C. 1395w-
                    114(a)(1) or (a)(2)).
                (2) Streamlined eligibility for certain beneficiaries.--The
            Administrator, in consultation with the Secretary of Health and
            Human Services, the Commissioner of Social Security, the
            Railroad Retirement Board, the Secretary of Veterans Affairs,
            and the State agencies shall develop procedures to ensure that
            low-income beneficiaries of the benefit programs they
            administer receive the energy refund for which they are
            eligible.
                (3) Limitation.--Notwithstanding any provision of law, the
            Administrator shall establish procedures to ensure that
            individuals that qualify for the refund under paragraph (1)(B)
            and that do not participate in the Supplemental Nutrition
            Assistance Program are United States citizens, United States
            nationals, or individuals lawfully residing in the United
            States.
                (4) National standards.--The Administrator shall establish
            uniform national standards of eligibility 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.
        (c) Monthly Energy Refund Amount.--
                (1) Monthly energy refund.--The monthly refund under this
            subsection for households of 1, 2, 3, 4, and 5 or more members
            shall be equal to the maximum energy tax credit amount
            calculated under section 36B(c)(4) of the Internal Revenue Code
            of 1986 for each household size, divided by 12 and rounded to
            the nearest whole dollar amount.
                (2) Monthly eligibility.--A household shall not be eligible
            for the refund under this section for months that the household
            has not established eligibility under subsection (b).
        (d) Delivery Mechanism.--
                (1) Subject to standards and an implementation schedule set
            by the Administrator, 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 Administrator.
                (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
                    Administrator or the Administrator's designee.
        (e) Information About Refund Provided to Households and Internal
    Revenue Service.--
                (1) By January 31 of each year, for each adult that was a
            member of a household that received an energy refund under this
            section in the State during the prior calendar year, each State
            shall issue a form that conforms to standards established by
            the Secretary of the Treasury under section 36B(b) of the
            Internal Revenue Code of 1986, containing--
                        (A) the name, address, and social security number
                    of the adult household member; and
                        (B) the number of months the individual was a
                    member of a household that received an energy refund
                    under this section.
                (2) States shall provide this information to the Internal
            Revenue Service in accordance to standards and regulations set
            forth by the Secretary of the Treasury.
        (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
            Administrator, 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 the
                    Social Security Act, State Childrens Health Insurance
                    Program under section XXI of the Social Security Act,
                    and a State program that provides basic assistance
                    under a State program funded under title IV of the
                    Social Security Act or with qualified State
                    expenditures as defined in section 409(a)(7) of the
                    Social Security 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 thirty
                    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
                    Administrator shall issue such regulations consistent
                    with this section as the Administrator 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, during the period
                    beginning with the effective date of this section and
                    ending two years after such date, by rule promulgate as
                    final any procedures that are substantially the same as
                    the procedures governing the Supplemental Nutrition
                    Assistance Program at 7 CFR 273.2, 273.12.273.15.
        (g) Treatment.--The value of the refund provided under this Act
    shall not be considered income or resources for any purpose under any
    Federal, State, or local laws, including, but not limited to, laws
    relating to an income tax, 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 Act.
        (h) Program Integrity.--For purposes of ensuring program integrity
    and complying with the requirements of the Improper Payment Information
    Act of 2002, the Administrator shall--
                (1) to the maximum extent possible rely on and coordinate
            with the quality control sample and review procedures of
            section 16(c)(2), (3), (4), and (5) of the Supplemental
            Nutrition Assistance Program; and
                (2) develop procedures to monitor the compliance with and
            accuracy of State agencies in providing forms to household
            members and the Internal Revenue Service under subsection (f).
        (i) Definitions.--
                (1) Administrator.--The term ``Administrator'' means the
            Administrator of the Environmental Protection Agency or the
            head of another agency designated by the Administrator.
                (2) Electronic benefit transfer system.--The term
            ``electronic benefit transfer system'' means a system by which
            household benefits or refunds defined under subsection (d) are
            issued from and stored in a central databank via electronic
            benefit transfer cards.
                (3) Gross income.--The term ``gross income'' means the
            gross income of a household that is determined in accordance
            with standards and procedures established under section 5 of
            the Food and Nutrition Act of 2008 (7 U.S.C. 2014) and its
            implementing regulations.
                (4) Household.--The term ``household'' means--
                        (A)(i) except as provided in subparagraph (C), 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)); and
                        (ii) a single individual or married couple that
                    receive benefits under section 1860D-14 of the Social
                    Security Act (42 U.S.C. 1395w-114).
                        (B) The Administrator 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 a
                    combination of members described in clauses (i) and
                    (ii) of subparagraph (A), or includes additional
                    members not described in clause (i) or clause (ii) of
                    subparagraph (A).
                        (C) The Administrator 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 Act shall
            have the same meaning applied in the Supplemental Nutrition
            Assistance Program unless the Administrator finds for good
            cause that application of a particular definition would be
            detrimental to the purposes of the Energy Refund Program.
        (j) Authorization of Appropriations.--Such sums as are necessary
    are hereby appropriated for the Energy Refund Program under this
    section.

                     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''.
        (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; and
                        (B) promotes the successful negotiation of a global
                    agreement to reduce greenhouse gas emissions under the
                    United Nations Framework Convention on Climate Change.

    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
            from the International Clean Technology Account.
                (6) Interagency group.--The term ``interagency group''
            means the group established by the President under section 443
            to administer distributions from the International Clean
            Technology Account.
                (7) International clean technology account.--The term
            ``International Clean Technology Account'' means the account to
            which the Administrator allocates allowances under section
            782(o) of the Clean Air Act.
                (8) 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.
                (9) Qualifying activity.--The term ``qualifying activity''
            means an activity that meets the criteria in section 445.
                (10) 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 from the International Clean Technology
    Account.
        (b) Interagency Group.--The President shall establish an
    interagency group to administer the International Clean Technology
    Account. 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 Administrator of the United States Agency for
            International Development; and
                (6) 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 from the
    International Clean Technology Account 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.
        (b) Exceptions.--
                (1) Subsection (a)(3) applies only to bilateral assistance
            under section 446(c).
                (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, from the
    International Clean Technology Account for qualifying activities that
    take place in eligible countries.
        (b) 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 from the International Clean Technology Account--
                        (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;
                    and
                        (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.
                (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; and
                                (vii) 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.
        (c) 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.
        (d) 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.
        (e) 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; and
                (5) an estimate of the greenhouse gas emissions reductions,
            sequestration, or avoidance achieved by assistance provided
            under this subtitle during the prior fiscal year.

                     Subtitle E--Adapting to Climate Change

                          PART 1--DOMESTIC ADAPTATION

             Subpart A--National Climate Change Adaptation Program

    SEC. 451. NATIONAL CLIMATE CHANGE ADAPTATION PROGRAM.

        The President shall establish within the United States Global
    Change Research Program a National Climate Change Adaptation Program
    for the purpose of increasing the overall effectiveness of Federal
    climate change adaptation efforts.

    SEC. 452. CLIMATE SERVICES.

        The Secretary of Commerce, acting through the Administrator of the
    National Oceanic and Atmospheric Administration (NOAA), shall establish
    within NOAA a National Climate Service to develop climate information,
    data, forecasts, and warnings at national and regional scales, and to
    distribute information related to climate impacts to State, local, and
    tribal governments and the public to facilitate the development and
    implementation of strategies to reduce society's vulnerability to
    climate variability and change.

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

        (a) Distribution of Allowances.--
                (1) In general.--Not later than September 30, 2012, and
            annually thereafter through 2050, the Administrator shall
            distribute allowances allocated for purposes of this subpart
            pursuant to section [782] of the Clean Air Act ratably among
            the State governments 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) 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.
        (b) Sale of Allowances.--Each State receiving emission allowances
    under this section shall sell such allowances within 1 year of receipt,
    either directly or through consignment to the Administrator for
    auction. States shall deposit the proceeds of such sales within the
    State Energy and Environment Development (SEED) Fund established
    pursuant to section 131 of the American Clean Energy and Security Act
    of 2009. Emission allowances distributed under this section that are
    not sold within 1 year of receipt by a State shall be returned to the
    Administrator, who shall distribute such allowances to the remaining
    States ratably in accordance with the formula in subsection (a).
        (c) Use of Proceeds.--States shall, in accordance with a State
    climate adaptation plan approved pursuant to subsection (d), use the
    proceeds of sales of emission allowances distributed under this section
    exclusively for the implementation of projects, programs, or measures
    to build resilience to the impacts of climate change, including--
                (1) extreme weather events such as flooding and tropical
            cyclones;
                (2) more frequent heavy precipitation events;
                (3) water scarcity and adverse impacts on water quality;
                (4) stronger and longer heat waves;
                (5) more frequent and severe droughts;
                (6) rises in sea level;
                (7) ecosystem disruption;
                (8) increased air pollution; and
                (9) effects on public health.
        (d) State Climate Adaptation Plans.--
                (1) In general.--Not later than 2 years after the date of
            enactment of this Act, the Administrator, or such other Federal
            agency head or heads as the President may designate, shall
            promulgate regulations establishing requirements for submission
            and approval of State climate adaptation plans under this
            section. Receipt of emission allowances pursuant to this
            section shall be contingent on approval of a State climate
            adaptation plan meeting the requirements of such guidelines.
                (2) Requirements.--Regulations promulgated under this
            subsection shall require, at minimum, that--
                        (A) State climate adaptation plans assess and
                    prioritize the State's vulnerability to a broad range
                    of impacts of climate change, based on the best
                    available science;
                        (B) State climate adaptation plans identify and
                    prioritize specific cost-effective projects, programs,
                    and measures to build resilience to predicted impacts
                    of climate change; and
                        (C) in order to be eligible to receive emission
                    allowances under this section, a State shall submit a
                    revised State climate adaptation plan for approval not
                    less frequently than every 5 years.
                (3) Coordination with prior planning efforts.--In
            promulgating regulations under this subsection, the
            Administrator, or such other Federal agency head or heads as
            the President may designate, shall draw upon lessons learned
            and best practices from preexisting State climate adaptation
            planning efforts and shall seek to avoid duplication of such
            efforts.
        (e) Reporting.--Each State receiving emission allowances under this
    section shall submit to the Administrator, or such other 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 proceeds from the sale of emission allowances received under this
    section are fully expended, a report that--
                (1) provides a full accounting for the State's use of
            proceeds of sales of emission allowances distributed under this
            section, including a description of the projects, programs, or
            measures funded through such proceeds; and
                (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 funded under this section.
        (f) Enforcement.--If the Administrator, or such other Federal
    agency head or heads as the President may designate, determines that a
    State is not in compliance with this section, the Administrator may
    withhold a portion of the allowances, the value of which is equal to up
    to twice the value 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 1 or more later
    years. Allowances withheld pursuant to this subsection shall be
    distributed among the remaining States ratably in accordance with the
    formula in subsection (a).

                  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;
                        (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;
                        (B) provide funding for--
                                (i) research on the health effects of
                            climate change; and
                                (ii) preparedness planning on the
                            international, national, State, 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.--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.--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 one 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 one 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) Establishment of Fund.--There is hereby established in the
    Treasury a separate account that shall be known as the Natural
    Resources Climate Change Adaptation Account.
        (b) Availability of Amounts.--All amounts deposited into the
    Natural Resources Climate Change Adaptation Fund shall be available
    without further appropriation or fiscal year limitation.
        (c) Allocations.--
                (1) States.--38.5 percent of the amounts made available for
            each fiscal 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--
                        (A) 32.5 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
                        (B) 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)).
                (2) Department of the interior.--Of the amounts made
            available for each fiscal year to carry out this subpart--
                        (A) 17 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) 5 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) 3 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.
                (3) Land and water conservation fund.--
                        (A) Deposits.--
                                (i) In general.--Of the amounts made
                            available for each fiscal year to carry out
                            this subpart, 12 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.--Deposits into the
                            Land and Water Conservation Fund under this
                            paragraph shall--
                                        (I) 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; and
                                        (II) be available for expenditure
                                    to carry out this subpart without
                                    further appropriation or fiscal year
                                    limitation.
                        (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.
                (4) Forest service.--Of the amounts made available for each
            fiscal year to carry out this subpart, 5 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.
                (5) Department of commerce.--Of the amounts made available
            for each fiscal year to carry out this subpart, 7 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.).
                (6) Environmental protection agency.--Of the amounts made
            available each fiscal year to carry out this section, 7.5
            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.
                (7) Corps of engineers.--Of the amounts made available each
            fiscal year to carry out this section, 5 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 (6)(A);
                        (B) large-scale estuarine ecosystems, such as the
                    ecosystems described in paragraph (6)(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 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, enable each State to
            model climate impacts and adaptation, and provide
            geographically specific enhancements of State 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; and
                                (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.--If a Federal department or agency
    receives any information related to sacred sites or cultural activities
    identified by an Indian tribe as confidential, such information shall
    be exempt from disclosure under section 552 of title 5, United States
    Code, popularly known as the Freedom of Information Act (5 U.S.C. 552).
        (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.
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