[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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