[Congressional Record (Bound Edition), Volume 158 (2012), Part 2]
[Senate]
[Pages 2658-2668]
[From the U.S. Government Publishing Office, www.gpo.gov]




          STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS

      By Mr. BINGAMAN (for himself, Mr. Wyden, Mr. Sanders, Mr. Udall 
        of Colorado, Mr. Franken, Mr. Coons, Mr. Kerry, Mr. Whitehouse, 
        and Mr. Udall of New Mexico):
  S. 2146. A bill to amend the Public Utility Regulatory Policies Act 
of 1978 to create a market-oriented standard for clean electric energy 
generation, and for other purposes; to the Committee on Energy and 
Natural Resources.
  Mr. BINGAMAN. Mr. President, let me take a few minutes to describe 
this legislation for my colleagues and, hopefully, urge them to 
seriously consider the legislation. It is introduced by me with several 
cosponsors: Senator Wyden, Senator Sanders, Senator Mark Udall of 
Colorado, Senator Franken, Senator Coons, Senator Kerry, Senator 
Whitehouse, and Senator Tom Udall from my home State of New Mexico. All 
of those individuals strongly support what we are trying to do in this 
legislation.
  I particularly want to thank the staff of the Senate Energy Committee 
for the hard work they put into developing this proposal, and 
particularly Kevin Rennert, who worked very hard on this proposal and 
got a lot of very useful input from many sectors and many individuals.
  This is a simple plan to modernize the power sector and guide it 
toward a future in which more and more of our electricity is generated 
with cleaner and cleaner energy. The purpose of the legislation is to 
make sure that, as we continue to grow and power our economy, we 
leverage the clean resources we have available today and also provide a 
continuing incentive to develop the cheaper, cleaner technologies that 
will be needed in the future.
  We want to make sure we drive continued diversity in our energy 
sources and allow every region of the country to deploy clean energy 
using the appropriate resources for that region. We want to make sure 
we do all of this in a way that supports homegrown innovation and 
manufacturing and that keeps us competitive in the global clean energy 
economy. The plan we are putting forward with this legislation would 
implement a clean energy standard, or CES for short.
  Let me describe how it works. Starting in 2015, the largest utilities 
in the country would meet the clean energy standard by showing that a 
certain percentage of the electricity they sell is produced from clean 
energy sources. The initial percentage for 2015 is within the 
capabilities of those utilities today, and each year after 2015 they 
would be required to sell a little bit more of their electricity from 
clean sources. They can do so either by making incremental adjustments 
to their own energy mix to become cleaner and more efficient or by 
purchasing clean energy from those who provide it at the lowest cost or 
by purchasing credits on an open and transparent market.
  To be considered clean, a generator must either be a zero carbon 
source of energy, such as, renewables and nuclear power, or a generator 
must have a lower carbon intensity than a modern, efficient coal plant. 
By carbon intensity, I mean the amount of carbon dioxide emitted per 
megawatt hour of electricity generated. Generators with low or no 
carbon intensity receive credits based on that criterion.
  For example, renewables will receive a full credit per megawatt hour. 
Most natural gas generators would qualify for something around a half 
credit, and the more efficient natural gas generators would be 
incentivized compared to less efficient generators. A coal powerplant 
would receive some credits if it lowered its carbon intensity by 
installing carbon-capture technologies, by co-firing with renewable 
biomass.
  Accounting for clean in this way means the cleanest resources have 
the greatest incentive. Also, it means every generator has a continuing 
incentive to become even more efficient. As the standard increases over 
time, the generation fleet will transition naturally toward cleaner and 
cleaner sources to meet it. The clean energy standard sets an overall 
goal for clean energy, but the optimal and the cheapest set of 
technologies to use will be determined by the free market. The rate of 
transition is predictable and it is achievable and the rules of the 
road are transparent and they are clear.
  In addition to driving cleaner electricity generation in the power 
sector, the clean energy standard also rewards industrial efficiency. 
Combined heat and power units generate electricity while also capturing 
and using the heat for other purposes, and these units are treated as 
clean generators under this proposal for the clean energy standard. 
This will help to deploy this kind of efficiency throughout our country 
and will provide another source of inexpensive clean energy.
  Let me also describe what this proposal does not do. The clean energy 
standard does not put a limit on overall emissions. It does not limit 
the growth of electricity generation to meet the demands of a growing 
economy. All that the clean energy standard requires is that the 
generation we do use in future years and that we add to our fleet 
gradually becomes cleaner over time.
  The clean energy standard does not cost the government anything, and 
it does not raise money for the government to use either. If any money 
does

[[Page 2659]]

come to the Treasury as a result of the program because of refusal to 
participate or to comply, that money would go directly back to the 
particular State from which it came to fund energy-efficiency programs.
  Finally, the clean energy standard will not hurt the economy. This 
past fall I asked the Energy Information Administration to analyze a 
number of clean energy standard policy options. The results of their 
study showed a properly designed clean energy standard would have 
almost zero impact on gross domestic product growth and little or no 
impact on nationally averaged electricity rates for the first decade of 
the program. The Energy Information Administration analysis did show 
that a clean energy standard would result in a substantial deployment 
of new clean energy and carbon reductions between 20 percent and 40 
percent in the power sector by 2035, which is the timeframe provided 
for in the proposal.
  I have asked the Energy Information Administration to update their 
modeling to reflect this final proposal that we are introducing today, 
and when they have completed that analysis in the next few weeks I plan 
to hold hearings on the proposal to further explore the benefits and 
effects of the clean energy standard in the Energy Committee.
  The goal of the clean energy standard is ambitious. It is a doubling 
of clean energy production in this country by 2035. But analysis has 
shown that the goal is achievable and affordable. Meeting the clean 
energy standard will yield substantial benefits to our health and to 
our economy and to our global competitiveness, and, of course, to our 
environment.
  The bill we are introducing today is simple. It sets a national goal 
for clean energy. It establishes a transparent framework that lets 
resources compete to achieve that goal based on how clean they are, and 
then it gets out of the way and lets the market and American ingenuity 
determine the best path forward.
  I think this is a very well thought out proposal and one that 
deserves the attention of all colleagues. I hope they will look at it 
seriously, and I hope we can attract additional supporters and 
cosponsors as the weeks proceed in the Senate.
  Mr. President, I ask unanimous consent that the text of the bill be 
printed in the Record.
  There being no objection, the text of the bill was ordered to be 
printed in the Record, as follows:

                                S. 2146

         Be it enacted by the Senate and House of Representatives 
     of the United States of America in Congress assembled,

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Clean Energy Standard Act of 
     2012''.

     SEC. 2. FEDERAL CLEAN ENERGY STANDARD.

       Title VI of the Public Utility Regulatory Policies Act of 
     1978 (16 U.S.C. 2601 et seq.) is amended by adding at the end 
     the following:

     ``SEC. 610. FEDERAL CLEAN ENERGY STANDARD.

       ``(a) Purpose.--The purpose of this section is to create a 
     market-oriented standard for electric energy generation that 
     stimulates clean energy innovation and promotes a diverse set 
     of low- and zero-carbon generation solutions in the United 
     States at the lowest incremental cost to electric consumers.
       ``(b) Definitions.--In this section:
       ``(1) Clean energy.--The term `clean energy' means electric 
     energy that is generated--
       ``(A) at a facility placed in service after December 31, 
     1991, using--
       ``(i) renewable energy;
       ``(ii) qualified renewable biomass;
       ``(iii) natural gas;
       ``(iv) hydropower;
       ``(v) nuclear power; or
       ``(vi) qualified waste-to-energy;
       ``(B) at a facility placed in service after the date of 
     enactment of this section, using--
       ``(i) qualified combined heat and power; or
       ``(ii) a source of energy, other than biomass, with lower 
     annual carbon intensity than 0.82 metric tons of carbon 
     dioxide equivalent per megawatt-hour;
       ``(C) as a result of qualified efficiency improvements or 
     capacity additions; or
       ``(D) at a facility that captures carbon dioxide and 
     prevents the release of the carbon dioxide into the 
     atmosphere.
       ``(2) Natural gas.--
       ``(A) Inclusion.--The term `natural gas' includes coal mine 
     methane.
       ``(B) Exclusions.--The term `natural gas' excludes landfill 
     methane and biogas.
       ``(3) Qualified combined heat and power.--
       ``(A) In general.--The term `qualified combined heat and 
     power' means a system that--
       ``(i) uses the same energy source for the simultaneous or 
     sequential generation of electrical energy and thermal 
     energy;
       ``(ii) produces at least--

       ``(I) 20 percent of the useful energy of the system in the 
     form of electricity; and
       ``(II) 20 percent of the useful energy in the form of 
     useful thermal energy;

       ``(iii) to the extent the system uses biomass, uses only 
     qualified renewable biomass; and
       ``(iv) operates with an energy efficiency percentage that 
     is greater than 50 percent.
       ``(B) Determination of energy efficiency.--For purposes of 
     subparagraph (A), the energy efficiency percentage of a 
     combined heat and power system shall be determined in 
     accordance with section 48(c)(3)(C)(i) of the Internal 
     Revenue Code of 1986.
       ``(4) Qualified efficiency improvements or capacity 
     additions.--
       ``(A) In general.--Subject to subparagraphs (B) and (C), 
     the term `qualified efficiency improvements or capacity 
     additions' means efficiency improvements or capacity 
     additions made after December 31, 1991, to--
       ``(i) a nuclear facility placed in service on or before 
     December 31, 1991; or
       ``(ii) a hydropower facility placed in service on or before 
     December 31, 1991.
       ``(B) Exclusion.--The term `qualified efficiency 
     improvements or capacity additions' does not include 
     additional electric energy generated as a result of 
     operational changes not directly associated with efficiency 
     improvements or capacity additions.
       ``(C) Measurement and certification.--In the case of 
     hydropower, efficiency improvements and capacity additions 
     under this paragraph shall be--
       ``(i) measured on the basis of the same water flow 
     information that is used to determine the historic average 
     annual generation for the applicable hydroelectric facility; 
     and
       ``(ii) certified by the Secretary or the Commission.
       ``(5) Qualified renewable biomass.--The term `qualified 
     renewable biomass' means renewable biomass produced and 
     harvested through land management practices that maintain or 
     restore the composition, structure, and processes of 
     ecosystems, including the diversity of plant and animal 
     communities, water quality, and the productive capacity of 
     soil and the ecological systems.
       ``(6) Qualified waste-to-energy.--The term `qualified 
     waste-to-energy' means energy produced--
       ``(A) from the combustion of--
       ``(i) post-recycled municipal solid waste;
       ``(ii) gas produced from the gasification or pyrolization 
     of post-recycled municipal solid waste;
       ``(iii) biogas;
       ``(iv) landfill methane;
       ``(v) animal waste or animal byproducts; or
       ``(vi) wood, paper products that are not commonly 
     recyclable, and vegetation (including trees and trimmings, 
     yard waste, pallets, railroad ties, crates, and solid-wood 
     manufacturing and construction debris), if diverted from or 
     separated from other waste out of a municipal waste stream; 
     and
       ``(B) at a facility that the Commission has certified, on 
     an annual basis, is in compliance with all applicable Federal 
     and State environmental permits, including--
       ``(i) in the case of a facility that commences operation 
     before the date of enactment of this section, compliance with 
     emission standards under sections 112 and 129 of the Clean 
     Air Act (42 U.S.C. 7412, 7429) that apply as of the date of 
     enactment of this section to new facilities within the 
     applicable source category; and
       ``(ii) in the case of a facility that produces electric 
     energy from the combustion, pyrolization, or gasification of 
     municipal solid waste, certification that each local 
     government unit from which the waste originates operates, 
     participates in the operation of, contracts for, or otherwise 
     provides for recycling services for residents of the local 
     government unit.
       ``(7) Renewable energy.--The term `renewable energy' means 
     solar, wind, ocean, current, wave, tidal, or geothermal 
     energy.
       ``(c) Clean Energy Requirement.--
       ``(1) In general.--Effective beginning in calendar year 
     2015, each electric utility that sells electric energy to 
     electric consumers in a State shall obtain a percentage of 
     the electric energy the electric utility sells to electric 
     consumers during a calendar year from clean energy.
       ``(2) Percentage required.--The percentage of electric 
     energy sold during a calendar year that is required to be 
     clean energy under paragraph (1) shall be determined in 
     accordance with the following table:


------------------------------------------------------------------------
                                                               Minimum
                      ``Calendar year                           annual
                                                              percentage
------------------------------------------------------------------------
2015.......................................................           24
2016.......................................................           27
2017.......................................................           30
2018.......................................................           33
2019.......................................................           36
2020.......................................................           39
2021.......................................................           42

[[Page 2660]]

 
2022.......................................................           45
2023.......................................................           48
2024.......................................................           51
2025.......................................................           54
2026.......................................................           57
2027.......................................................           60
2028.......................................................           63
2029.......................................................           66
2030.......................................................           69
2031.......................................................           72
2032.......................................................           75
2033.......................................................           78
2034.......................................................           81
2035.......................................................           84
------------------------------------------------------------------------

       ``(3) Deduction for electric energy generated from 
     hydropower or nuclear power.--An electric utility that sells 
     electric energy to electric consumers from a facility placed 
     in service in the United States on or before December 31, 
     1991, using hydropower or nuclear power may deduct the 
     quantity of the electric energy from the quantity to which 
     the percentage in paragraph (2) applies.
       ``(d) Means of Compliance.--An electric utility shall meet 
     the requirements of subsection (c) by--
       ``(1) submitting to the Secretary clean energy credits 
     issued under subsection (e);
       ``(2) making alternative compliance payments of 3 cents per 
     kilowatt hour in accordance with subsection (i); or
       ``(3) taking a combination of actions described in 
     paragraphs (1) and (2).
       ``(e) Federal Clean Energy Trading Program.--
       ``(1) Establishment.--Not later than 180 days after the 
     date of enactment of this section, the Secretary shall 
     establish a Federal clean energy credit trading program under 
     which electric utilities may submit to the Secretary clean 
     energy credits to certify compliance by the electric 
     utilities with subsection (c).
       ``(2) Clean energy credits.--Except as provided in 
     paragraph (3)(B), the Secretary shall issue to each generator 
     of electric energy a quantity of clean energy credits 
     determined in accordance with subsections (f) and (g).
       ``(3) Administration.--In carrying out the program under 
     this subsection, the Secretary shall ensure that--
       ``(A) a clean energy credit shall be used only once for 
     purposes of compliance with this section; and
       ``(B) a clean energy credit issued for clean energy 
     generated and sold for resale under a contract in effect on 
     the date of enactment of this section shall be issued to the 
     purchasing electric utility, unless otherwise provided by the 
     contract.
       ``(4) Delegation of market function.--
       ``(A) In general.--In carrying out the program under this 
     subsection, the Secretary may delegate--
       ``(i) to 1 or more appropriate market-making entities, the 
     administration of a national clean energy credit market for 
     purposes of establishing a transparent national market for 
     the sale or trade of clean energy credits; and
       ``(ii) to appropriate entities, the tracking of dispatch of 
     clean generation.
       ``(B) Administration.--In making a delegation under 
     subparagraph (A)(ii), the Secretary shall ensure that the 
     tracking and reporting of information concerning the dispatch 
     of clean generation is transparent, verifiable, and 
     independent of any generation or load interests subject to an 
     obligation under this section.
       ``(5) Banking of clean energy credits.--Clean energy 
     credits to be used for compliance purposes under subsection 
     (c) shall be valid for the year in which the clean energy 
     credits are issued or in any subsequent calendar year.
       ``(f) Determination of Quantity of Credit.--
       ``(1) In general.--Except as otherwise provided in this 
     subsection, the quantity of clean energy credits issued to 
     each electric utility generating electric energy in the 
     United States from clean energy shall be equal to the product 
     of--
       ``(A) for each generator owned by a utility, the number of 
     megawatt-hours of electric energy sold from that generator by 
     the utility; and
       ``(B) the difference between--
       ``(i) 1.0; and
       ``(ii) the quotient obtained by dividing--

       ``(I) the annual carbon intensity of the generator, as 
     determined in accordance with subsection (g), expressed in 
     metric tons per megawatt-hour; by
       ``(II) 0.82.

       ``(2) Negative credits.--Notwithstanding any other 
     provision of this subsection, the Secretary shall not issue a 
     negative quantity of clean energy credits to any generator.
       ``(3) Qualified combined heat and power.--
       ``(A) In general.--The quantity of clean energy credits 
     issued to an owner of a qualified combined heat and power 
     system in the United States shall be equal to the difference 
     between--
       ``(i) the product obtained by multiplying--

       ``(I) the number of megawatt-hours of electric energy 
     generated by the system; and
       ``(II) the difference between--

       ``(aa) 1.0; and
       ``(bb) the quotient obtained by dividing--
       ``(AA) the annual carbon intensity of the generator, as 
     determined in accordance with subsection (g), expressed in 
     metric tons per megawatt-hour; by
       ``(BB) 0.82; and
       ``(ii) the product obtained by multiplying--

       ``(I) the number of megawatt-hours of electric energy 
     generated by the system that are consumed onsite by the 
     facility; and
       ``(II) the annual target for electric energy sold during a 
     calendar year that is required to be clean energy under 
     subsection (c)(2).

       ``(B) Additional credits.--In addition to credits issued 
     under subparagraph (A), the Secretary shall award clean 
     energy credits to an owner of a qualified heat and power 
     system in the United States for greenhouse gas emissions 
     avoided as a result of the use of a qualified combined heat 
     and power system, rather than a separate thermal source, to 
     meet onsite thermal needs.
       ``(4) Qualified waste-to-energy.--The quantity of clean 
     energy credits issued to an electric utility generating 
     electric energy in the United States from a qualified waste-
     to-energy facility shall be equal to the product obtained by 
     multiplying--
       ``(A) the number of megawatt-hours of electric energy 
     generated by the facility and sold by the utility; and
       ``(B) 1.0.
       ``(g) Determination of Annual Carbon Intensity of 
     Generating Facilities.--
       ``(1) In general.--For purposes of determining the quantity 
     of credits under subsection (f), except as provided in 
     paragraph (2), the Secretary shall determine the annual 
     carbon intensity of each generator by dividing--
       ``(A) the net annual carbon dioxide equivalent emissions of 
     the generator; by
       ``(B) the annual quantity of electricity generated by the 
     generator.
       ``(2) Biomass.--The Secretary shall--
       ``(A) not later than 180 days after the date of enactment 
     of this section, issue interim regulations for determining 
     the carbon intensity based on an initial consideration of the 
     issues to be reported on under subparagraph (B);
       ``(B) not later than 180 days after the date of enactment 
     of this section, enter into an agreement with the National 
     Academy of Sciences under which the Academy shall--
       ``(i) evaluate models and methodologies for quantifying net 
     changes in greenhouse gas emissions associated with 
     generating electric energy from each significant source of 
     qualified renewable biomass, including evaluation of 
     additional sequestration or emissions associated with changes 
     in land use by the production of the biomass; and
       ``(ii) not later than 1 year after the date of enactment of 
     this section, publish a report that includes--

       ``(I) a description of the evaluation required by clause 
     (i); and
       ``(II) recommendations for determining the carbon intensity 
     of electric energy generated from qualified renewable biomass 
     under this section; and

       ``(C) not later than 180 days after the publication of the 
     report under subparagraph (B)(ii), issue regulations for 
     determining the carbon intensity of electric energy generated 
     from qualified renewable biomass that take into account the 
     report.
       ``(3) Consultation.--The Secretary shall consult with--
       ``(A) the Administrator of the Environmental Protection 
     Agency in determining the annual carbon intensity of 
     generating facilities under paragraph (1); and
       ``(B) the Administrator of the Environmental Protection 
     Agency, the Secretary of the Interior, and the Secretary of 
     Agriculture in issuing regulations for determining the carbon 
     intensity of electric energy generated by biomass under 
     paragraph (2)(C).
       ``(h) Civil Penalties.--
       ``(1) In general.--Subject to paragraph (2), an electric 
     utility that fails to meet the requirements of this section 
     shall be subject to a civil penalty in an amount equal to the 
     product obtained by multiplying--
       ``(A) the number of kilowatt-hours of electric energy sold 
     by the utility to electric consumers in violation of 
     subsection (c); and
       ``(B) 200 percent of the value of the alternative 
     compliance payment, as adjusted under subsection (m).
       ``(2) Waivers and mitigation.--
       ``(A) Force majeure.--The Secretary may mitigate or waive a 
     civil penalty under this subsection if the electric utility 
     was unable to comply with an applicable requirement of this 
     section for reasons outside of the reasonable control of the 
     utility.
       ``(B) Reduction for state penalties.--The Secretary shall 
     reduce the amount of a penalty determined under paragraph (1) 
     by the amount paid by the electric utility to a State for 
     failure to comply with the requirement of a State renewable 
     energy program, if the State requirement is more stringent 
     than the applicable requirement of this section.
       ``(3) Procedure for assessing penalty.--The Secretary shall 
     assess a civil penalty under this subsection in accordance 
     with section 333(d) of the Energy Policy and Conservation Act 
     (42 U.S.C. 6303(d)).

[[Page 2661]]

       ``(i) Alternative Compliance Payments.--An electric utility 
     may satisfy the requirements of subsection (c), in whole or 
     in part, by submitting in lieu of a clean energy credit 
     issued under this section a payment equal to the amount 
     required under subsection (d)(2), in accordance with such 
     regulations as the Secretary may promulgate.
       ``(j) State Energy Efficiency Funding Program.--
       ``(1) Establishment.--Not later than December 31, 2015, the 
     Secretary shall establish a State energy efficiency funding 
     program.
       ``(2) Funding.--All funds collected by the Secretary as 
     alternative compliance payments under subsection (i), or as 
     civil penalties under subsection (h), shall be used solely to 
     carry out the program under this subsection.
       ``(3) Distribution to states.--
       ``(A) In general.--An amount equal to 75 percent of the 
     funds described in paragraph (2) shall be used by the 
     Secretary, without further appropriation or fiscal year 
     limitation, to provide funds to States for the implementation 
     of State energy efficiency plans under section 362 of the 
     Energy Policy and Conservation Act (42 U.S.C. 6322), in 
     accordance with the proportion of those amounts collected by 
     the Secretary from each State.
       ``(B) Action by states.--A State that receives funds under 
     this paragraph shall maintain such records and evidence of 
     compliance as the Secretary may require.
       ``(4) Guidelines and criteria.--The Secretary may issue 
     such additional guidelines and criteria for the program under 
     this subsection as the Secretary determines to be 
     appropriate.
       ``(k) Exemptions.--
       ``(1) In general.--This section shall not apply during any 
     calendar year to an electric utility that sold less than the 
     applicable quantity described in paragraph (2) of megawatt-
     hours of electric energy to electric consumers during the 
     preceding calendar year.
       ``(2) Applicable quantity.--For purposes of paragraph (1), 
     the applicable quantity is--
       ``(A) in the case of calendar year 2015, 2,000,000;
       ``(B) in the case of calendar year 2016, 1,900,000;
       ``(C) in the case of calendar year 2017, 1,800,000;
       ``(D) in the case of calendar year 2018, 1,700,000;
       ``(E) in the case of calendar year 2019, 1,600,000;
       ``(F) in the case of calendar year 2020, 1,500,000;
       ``(G) in the case of calendar year 2021, 1,400,000;
       ``(H) in the case of calendar year 2022, 1,300,000;
       ``(I) in the case of calendar year 2023, 1,200,000;
       ``(J) in the case of calendar year 2024, 1,100,000; and
       ``(K) in the case of calendar year 2025 and each calendar 
     year thereafter, 1,000,000.
       ``(3) Calculation of electric energy sold.--
       ``(A) Definitions.--In this subsection, the terms 
     `affiliate' and `associate company' have the meanings given 
     the terms in section 1262 of the Energy Policy Act of 2005 
     (42 U.S.C. 16451).
       ``(B) Inclusion.--For purposes of calculating the quantity 
     of electric energy sold by an electric utility under this 
     subsection, the quantity of electric energy sold by an 
     affiliate of the electric utility or an associate company 
     shall be treated as sold by the electric utility.
       ``(l) State Programs.--
       ``(1) Savings provision.--
       ``(A) In general.--Subject to paragraph (2), nothing in 
     this section affects the authority of a State or a political 
     subdivision of a State to adopt or enforce any law or 
     regulation relating to--
       ``(i) clean or renewable energy; or
       ``(ii) the regulation of an electric utility.
       ``(B) Federal law.--No law or regulation of a State or a 
     political subdivision of a State may relieve an electric 
     utility from compliance with an applicable requirement of 
     this section.
       ``(2) Coordination.--The Secretary, in consultation with 
     States that have clean and renewable energy programs in 
     effect, shall facilitate, to the maximum extent practicable, 
     coordination between the Federal clean energy program under 
     this section and the relevant State clean and renewable 
     energy programs.
       ``(m) Adjustment of Alternative Compliance Payment.--Not 
     later than December 31, 2016, and annually thereafter, the 
     Secretary shall--
       ``(1) increase by 5 percent the rate of the alternative 
     compliance payment under subsection (d)(2); and
       ``(2) additionally adjust that rate for inflation, as the 
     Secretary determines to be necessary.
       ``(n) Report on Clean Energy Resources That Do Not Generate 
     Electric Energy.--
       ``(1) In general.--Not later than 3 years after the date of 
     enactment of this section, the Secretary shall submit to 
     Congress a report examining mechanisms to supplement the 
     standard under this section by addressing clean energy 
     resources that do not generate electric energy but that may 
     substantially reduce electric energy loads, including energy 
     efficiency, biomass converted to thermal energy, geothermal 
     energy collected using heat pumps, thermal energy delivered 
     through district heating systems, and waste heat used as 
     industrial process heat.
       ``(2) Potential integration.--The report under paragraph 
     (1) shall examine the benefits and challenges of integrating 
     the additional clean energy resources into the standard 
     established by this section, including--
       ``(A) the extent to which such an integration would achieve 
     the purposes of this section;
       ``(B) the manner in which a baseline describing the use of 
     the resources could be developed that would ensure that only 
     incremental action that increased the use of the resources 
     received credit; and
       ``(C) the challenges of pricing the resources in a 
     comparable manner between organized markets and vertically 
     integrated markets, including options for the pricing.
       ``(3) Complementary policies.--The report under paragraph 
     (1) shall examine the benefits and challenges of using 
     complementary policies or standards, other than the standard 
     established under this section, to provide effective 
     incentives for using the additional clean energy resources.
       ``(4) Legislative recommendations.--As part of the report 
     under paragraph (1), the Secretary may provide legislative 
     recommendations for changes to the standard established under 
     this section or new complementary policies that would provide 
     effective incentives for using the additional clean energy 
     resources.
       ``(o) Exclusions.--This section does not apply to an 
     electric utility located in the State of Alaska or Hawaii.
       ``(p) Regulations.--Not later than 1 year after the date of 
     enactment of this section, the Secretary shall promulgate 
     regulations to implement this section.

     ``SEC. 611. REPORT ON NATURAL GAS CONSERVATION.

       ``Not later than 2 years after the date of enactment of 
     this section, the Secretary shall submit to Congress a report 
     that--
       ``(1) quantifies the losses of natural gas during the 
     production and transportation of the natural gas; and
       ``(2) makes recommendations, as appropriate, for programs 
     and policies to promote conservation of natural gas for 
     beneficial use.''.
                                 ______
                                 
      By Mr. BEGICH:
  S. 2147. A bill to provide for research, monitoring, and observation 
of the Arctic Ocean and for other purposes; to the Committee on 
Commerce, Science, and Transportation.
  Mr. BEGICH. Mr. President, I wish to speak about legislation I am 
introducing today aimed at providing a better understanding of the 
Arctic Ocean and its resources.
  A changing climate is radically reshaping this part of the world. 
This change brings challenges and opportunities. As you may recall, 
nearly 3 years ago, I delivered my first speech to this body on the 
changing Arctic and what our Nation needs to do in order to prepare for 
it. That work continues today.
  Retreating sea ice is leading to dramatic increases in shipping 
traffic of both goods and tourists. Our Nation's energy needs demand we 
investigate and responsibly produce the massive amounts of oil and gas 
found in the Chukchi and Beaufort Seas. These resources are now 
available due to retreating sea ice, the state of technology and the 
price of oil. Meanwhile, Native Alaskans have depended on and thrived 
for thousands of years because of the living resources of the Arctic 
Ocean.
  In order to manage this change, we need a better understanding of the 
Arctic Ocean, and the legislation I am introducing today provides a 
firm foundation for that work. It establishes a new coherent research 
strategy to gather baseline information and to provide a holistic look 
at the Arctic Ocean.
  Importantly, it doesn't create any new bureaucracy. It assigns this 
task to the North Pacific Research Board, a well regarded institution, 
and requires a high degree of coordination with other existing 
entities, including the Arctic Research Commission whose job it is to 
establish Arctic research priorities and coordinate the massive federal 
investment in this area across many agencies.
  I would argue that most people are unaware of just how much Arctic 
science and research is underway. For most people in the lower 48 
States, it is out-of-sight and out-of-mind. The Bureau of Ocean Energy 
Management has spent about half of its total research budget on the 
Arctic for the past 6

[[Page 2662]]

years, approximately $60 million. The National Science Foundation has 
spent more.
  However, the Arctic Ocean Research, Monitoring, and Observing Act 
will be important to provide funds not tied to particular projects. 
This legislation is intended to provide a firm foundation in our 
understanding of the basic science of the Arctic Ocean that can 
underlie all of our decision-making in the Arctic.
  I am always happy to inform my colleagues about how we do things 
right in Alaska. We're a natural resource development state. Because 
our economy is so dependent on that development, we bear the 
responsibility of doing it right. That is making sure that nonrenewable 
resource development doesn't harm the renewable resources of our great 
state.
  I am confident we can continue to do that as we explore and develop 
the approximately 26 billion barrels of oil and 100 trillion cubic feet 
of natural gas in the Chukchi and Beaufort Seas. However, we have to 
make prudent investments in order to meet that goal, and that is what I 
am suggesting we do today.
  With companion legislation I will be introducing in the next few 
days, I also have a plan to create an endowment to fund this critical 
research program. Baseline science and monitoring requires steady, 
dependable funding in order to have the long term data sets that can 
help us make good decisions. I look forward to working with my 
colleagues and the administration on this important need.
  Mr. President, I ask unanimous consent that the text of the bill be 
printed in the Record.
  There being no objection, the text of the bill was ordered to be 
printed in the Record, as follows:

                                S. 2147

         Be it enacted by the Senate and House of Representatives 
     of the United States of America in Congress assembled,

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Arctic Ocean Research, 
     Monitoring, and Observing Act of 2012''.

     SEC. 2. FINDINGS AND PURPOSE.

       (a) Findings.--Congress makes the following findings:
       (1) The United States is an Arctic Nation with--
       (A) an approximately 700-mile border with the Arctic Ocean;
       (B) more than 100,000,000 acres of land above the Arctic 
     Circle; and
       (C) an even broader area defined as Arctic by temperature, 
     which includes the Bering Sea and Aleutian Islands.
       (2) The Arctic region of the United States is home to an 
     indigenous population that has subsisted for millennia on the 
     abundance in marine mammals, fish, and wildlife, many of 
     which are unique to the region.
       (3) Temperatures in the United States Arctic region have 
     warmed by 3 to 4 degrees Celsius over the past half-century, 
     a rate of increase that is twice the global average.
       (4) The Arctic ice pack is rapidly diminishing and 
     thinning, and the National Oceanic and Atmospheric 
     Administration estimates the Arctic Ocean may be ice free 
     during summer months in as few as 30 years.
       (5) Such changes to the Arctic region are having a 
     significant impact on the indigenous people of the Arctic, 
     their communities and ecosystems, as well as the marine 
     mammals, fish, and wildlife upon which they depend.
       (6) Such changes are opening new portions of the United 
     States Arctic continental shelf to possible development for 
     offshore oil and gas, commercial fishing, marine shipping, 
     and tourism.
       (7) Existing Federal research and science advisory programs 
     focused on the environmental and socioeconomic impacts of a 
     changing Arctic Ocean lack a cohesive, coordinated, and 
     integrated approach and are not adequately coordinated with 
     State, local, academic, and private-sector Arctic Ocean 
     research programs.
       (8) The lack of research integration and synthesis of 
     findings of Arctic Ocean research has impeded the progress of 
     the United States and international community in 
     understanding climate change impacts and feedback mechanisms 
     in the Arctic Ocean.
       (9) An improved scientific understanding of the changing 
     Arctic Ocean is critical to the development of appropriate 
     and effective regional, national, and global climate change 
     adaptation strategies.
       (b) Purpose.--The purpose of this Act is to establish a 
     permanent environmental sentinel program to conduct research, 
     monitoring, and observation activities in the Arctic Ocean--
       (1) to promote and sustain a productive and resilient 
     marine, coastal, and estuarine ecosystem in the Arctic and 
     the human uses of its natural resources through greater 
     understanding of how the ecosystem works and monitoring and 
     observation of its vital signs; and
       (2) to track and evaluate the effectiveness of natural 
     resource management in the Arctic in order to facilitate 
     improved performance and adaptive management.

     SEC. 3. DEFINITIONS.

       In this Act:
       (1) Board.--The term ``Board'' means the North Pacific 
     Research Board established under section 401(e) of the 
     Department of the Interior and Related Agencies 
     Appropriations Act, 1998 (Public Law 105-1608).
       (2) Commission.--The term ``Commission'' means the Arctic 
     Research Commission established under the Arctic Research and 
     Policy Act of 1984 (Public Law 98-373; 15 U.S.C. 4102).
       (3) Program.--The term ``Program'' means the Arctic Ocean 
     Research, Monitoring, and Observation Program established by 
     section 4(a).

     SEC. 4. ARCTIC OCEAN RESEARCH, MONITORING, AND OBSERVATION 
                   PROGRAM.

       (a) Establishment.--There is established an Arctic Ocean 
     Research, Monitoring, and Observation Program to be 
     administered by the Board with input and assistance from the 
     Commission.
       (b) Research, Monitoring, and Observation Activities.--The 
     Program shall be an integrated, long-term scientific 
     research, monitoring, and observation program consisting of--
       (1) marine, coastal, and estuarine research, including--
       (A) fisheries research;
       (B) research on the structure and function of the ecosystem 
     and its food webs; and
       (C) research on the spatial distributions and status of 
     fish, wildlife, and other populations in the Arctic;
       (2) marine, coastal, and estuarine ecosystem monitoring and 
     observation, including expansion of the Alaska Ocean 
     Observing System in the Arctic; and
       (3) marine, coastal, and estuarine research, monitoring, 
     observation, and modeling that supports planning, 
     environmental review, decisionmaking, evaluation, impact and 
     natural resources damage assessment, and adaptive management 
     with respect to industrial and other human activities, such 
     as shipping, in the Arctic, environmental change, and their 
     interactive and cumulative effects in the Arctic.
       (c) Initial Projects.--In initiating the Program, the Board 
     shall make grants under subsection (e)--
       (1) to support research and monitoring of Arctic fisheries, 
     including on the distributions and ecology of Arctic cod and 
     other forage fishes, for a period of not less than 3 years;
       (2) to support research and monitoring of Arctic marine 
     mammals, including their responses to loss of sea ice 
     habitats and reactions to disturbance, for a period of not 
     less than 3 years; and
       (3) to establish the Alaska Ocean Observing System in the 
     Arctic Ocean such that it has sufficient capacity to provide 
     comprehensive data, nowcasts and forecasts, and information 
     products in real time and near real time on physical, 
     chemical, and biological conditions and environmental change.
       (d) Arctic Ocean Science Plan.--
       (1) Requirement.--The Board and the Commission shall 
     jointly prepare a comprehensive, integrated Arctic Ocean 
     science plan.
       (2) Recognition and coordination with other science.--The 
     content of the plan required by paragraph (1) shall be 
     developed with recognition of and in coordination with other 
     science plans and activities in the Arctic.
       (3) Informed by synthesis of existing knowledge.--
     Development of the plan required by paragraph (1) shall be 
     informed by a synthesis of existing knowledge about the 
     Arctic ecosystem, including information about how the 
     ecosystem functions, individual and cumulative sources of 
     ecosystem stress, how the ecosystem is changing, and other 
     relevant information.
       (4) Review.--
       (A) Initial review by national research council.--The Board 
     shall submit the initial plan required by paragraph (1) to 
     the National Research Council for review.
       (B) Periodic review and updates.--Not less frequently than 
     once every 5 years thereafter, the Board and the Commission 
     shall, in consultation with the National Research Council, 
     review the plan required by paragraph (1) and update it as 
     the Board and the Commission consider necessary.
       (5) Use.--The Board shall use the plan required by 
     paragraph (1) as a basis for setting priorities and awarding 
     grants under subsection (e).
       (e) Grants.--
       (1) Authority.--Except as provided in paragraph (2), the 
     Board shall, under the Program, award grants to carry out 
     research, monitoring, and observation activities described in 
     subsections (b) and (c).
       (2) Limitation.--The North Pacific Research Board may not 
     award any grants under paragraph (1) until the Board has 
     prepared the plan required by subsection (d)(1).
       (3) Conditions, considerations, and priorities.--When 
     making grants to carry out the

[[Page 2663]]

     research, monitoring, and observation activities described in 
     subsections (b) and (c), the Board shall--
       (A) consider institutions located in the Arctic and 
     subarctic;
       (B) place a priority on cooperative, integrated long-term 
     projects, designed to address current or anticipated marine 
     ecosystem or fishery or wildlife management information 
     needs;
       (C) give priority to fully establishing and operating the 
     Alaska Ocean Observing System in the Arctic Ocean, which may 
     include future support for cabled ocean observatories;
       (D) recognize the value of local and traditional ecological 
     knowledge, and, where appropriate, place a priority on 
     research, monitoring, and observation projects that 
     incorporate local and traditional ecological knowledge;
       (E) ensure that research, monitoring, and observation data 
     collected by grantees of the Program are made available to 
     the public in a timely fashion, pursuant to national and 
     international protocols; and
       (F) give due consideration to the annual recommendations 
     and review of the Commission carried out under subsection 
     (f).
       (f) Annual Recommendations and Review by Arctic Research 
     Commission.--Each year, the Commission shall--
       (1) recommend ongoing and future research, monitoring, and 
     observation priorities and strategies to be carried out 
     pursuant to subsections (b) and (c);
       (2) undertake a written review of ongoing and recently 
     concluded research, monitoring, and observation activities 
     undertaken pursuant to such subsections; and
       (3) submit to the Board the recommendations required by 
     paragraph (1) and the review required by paragraph (2).
                                 ______
                                 
      By Ms. SNOWE:
  S. 2150. A bill to amend title XVI of the Social Security Act to 
clarify that the value of certain funeral and burial arrangements are 
not to be considered available resources under the supplemental 
security income program; to the Committee on Finance.
  Ms. SNOWE. Mr. President, I rise today to introduce valuable, 
bipartisan legislation that would codify the current policy of the 
Social Security Administration, SSA, to protect access to the 
Supplemental Security Income, SSI, program for those who prepay burial 
and funeral expenses.
  When individuals are fiscally responsible, and plan ahead for their 
end-of-life costs, it makes no sense to penalize them. Under the 
current policy, if funds or life insurance are set aside, irrevocably--
so the individual cannot take them back even if he or she wants to--
then those resources do not count against the individual when 
determining whether or not they are eligible for SSI. This is a good 
policy, and I applaud the SSA for maintaining it.
  Regrettably, this has not always been the case. When Congress passed 
anti-fraud legislation in 2000, the next year SSA misinterpreted 
provisions in the new law because it did not specifically carve out the 
exclusion for burial trusts. Therefore, SSA had the power to end the 
exclusion--and in fact, it did. SSA later realized its mistake and 
restored the exclusion. However, in the meantime, this hiccup created a 
wave of chaos for responsible seniors who were wrongly denied access to 
SSI. This bill will codify the exclusion, so this or future 
administrations will not even have the possibility of making that 
mistake again. In doing so, we will not only provide clarity to the 
administrative agencies, but will also give certainty to SSI enrollees 
and applicants. They will be ensured that planning ahead to protect 
their loved ones from the costs associated with death will in no way 
penalize them when applying for assistance.
  We are all aware that Americans are facing difficult times with 
unacceptably high unemployment and an economy that continues to sag. 
That is why it is unfair to penalize individuals who are fiscally 
responsible; rather we should further encourage them to plan ahead. 
This is not a loophole or a giveaway; this is current policy at SSA, 
and remember that this exclusion is only for funds or insurance that 
are absolutely going to be spent on burial costs. They are called 
``irrevocable trusts'' because once you put the money aside, you cannot 
get it back. This bill has negligible revenue effect, because it merely 
tells the government, firmly, to keep doing what it is already doing.
  I should also point to the fact that we are talking about SSI 
enrollees-- individuals who generally do not have a lot of resources. 
If they are fiscally responsible and plan ahead for their burial and 
funeral costs, this reduces the likelihood of these costs falling on 
the obligation of State and local governments.
  I know that we want agencies like SSA to be able to use their 
discretion and be nimble enough to adapt to a changing environment. 
However, we have gone that route before, and because of the SSA's 
mistake in reversing the exclusion in 2001, we need to be absolutely 
clear about the intent of Congress on this policy. It is unconscionable 
for seniors to have their applications erroneously delayed or denied, 
and it is incumbent upon us to enact this simple, straightforward, 
uncontroversial fix.
  Americans sacrifice a portion of every paycheck in order to support 
the programs SSA administers. They do so willingly, knowing that when 
they retire, or should they become disabled or fall on hard times 
during old age, programs like SSI will be there for them. This is a 
promise that we in Congress made to Americans. Enacting this fix is 
part of keeping that promise.
  As a senior member of the Senate Finance Committee, I worked with SSA 
in developing this language. Many members have expressed support both 
for this legislation, and for the underlying policy that it codifies. I 
urge my colleagues to support enactment of this bill, so that we can 
keep our promise to the Nation's seniors, provide certainty, and reward 
fiscal responsibility and prudent planning.
  Mr. President, I ask unanimous consent that the text of the bill be 
printed in the Record.
  There being no objection, the text of the bill was ordered to be 
printed in the Record, as follows:

                                S. 2150

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. CERTAIN FUNERAL AND BURIAL ARRANGEMENTS NOT 
                   CONSIDERED RESOURCES.

       (a) In General.--Section 1613(d) of the Social Security Act 
     (42 U.S.C. 1382b(d)) is amended--
       (1) in paragraph (2)(B), by inserting ``, including a trust 
     or arrangement described in paragraph (5)'' after 
     ``irrevocable arrangement''; and
       (2) by adding at the end the following:
       ``(5) If--
       ``(A) an individual or the individual's spouse enters into 
     an irrevocable contract with a provider of funeral goods and 
     services for a funeral; and
       ``(B) the individual or the individual's spouse funds the 
     contract by--
       ``(i) prepaying for the goods and services and the funeral 
     provider places the funds in a trust;
       ``(ii) establishing an irrevocable trust fully funding the 
     goods and services and the funeral provider is the named 
     beneficiary of the trust, or
       ``(iii) purchasing a life insurance policy that provides 
     benefits to pay for the goods and services and irrevocably 
     assigning such benefits to--
       ``(I) the funeral provider; or
       ``(II) an irrevocable trust fully funding the goods and 
     services and the funeral provider is the named beneficiary of 
     the trust,
     then the irrevocable contract and the funding arrangement for 
     the irrevocable contract shall not be considered a resource 
     available to the individual or the individual's spouse.''.
       (b) Conforming Amendment.--Section 1613(e)(3)(B) of such 
     Act (42 U.S.C. 1382b(e)(3)(B)) is amended by striking ``In 
     the case of an irrevocable trust established by an 
     individual, if there are any circumstances under which 
     payment from the trust'' and inserting ``Except as provided 
     in subsection (d)(5)(B)(ii), if there are any circumstances 
     under which payment from an irrevocable trust established by 
     an individual''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to payments for supplemental security income 
     benefits under title XVI of the Social Security Act for 
     months beginning on or after the date of enactment of this 
     Act.
                                 ______
                                 
      By Mr. McCAIN (for himself, Mrs. Hutchison, Mr. Chambliss, Mr. 
        Grassley, Ms. Murkowski, Mr. Coats, Mr. Burr, and Mr. Johnson 
        of Wisconsin):
  S. 2151. A bill to improve information security, and for other 
purposes; to the Committee on Commerce, Science, and Transportation.
  Mr. McCAIN. Mr. President, I come to the floor today to introduce the

[[Page 2664]]

Strengthening and Enhancing Cybersecurity by Using Research, Education, 
Information and Technology Act, also known as the SECURE IT Act. I am 
joined today by Senator Hutchison, Senator Chambliss, Senator Grassley, 
Senator Murkowski, Senator Coats, Senator Burr, and Senator Johnson of 
Wisconsin. My colleagues and I believe that passage of this act would 
be a significant step towards improving our Nation's cyber defenses.
  It is clear to most policy makers that the Internet has transformed 
nearly all aspects of our lives by breaking down barriers and 
increasing information efficiencies. Whether you are a student 
searching for an article to complete a homework assignment or a fireman 
trying to remotely determine the landscape of a forest to safely 
extinguish a fire, the Internet has improved our lives because it has 
so greatly transformed how and when we are able to access information.
  While progress is clear, not a week goes by without fresh media 
reports of a major compromise of a cyber network in the United States. 
A recent report by the Government Accountability Office stated that 
cyber attacks against the United States are up 650 percent over the 
last 5 years, and according to one leading cybersecurity firm, the 
annual cost of cyber crime itself is nearly $388 billion. That cost is 
close to the sum of all of the profits of the top 75 Fortune 500 firms 
for 2011. My friends, if the top 75 American businesses lost all of 
their profits in one year, we would be working night and day to solve 
the problem.
  Most of us don't need an analogy like that to appreciate the need to 
improve the current state of cybersecurity in this country. But the 
reality is that advancing much needed legislation has been extremely 
difficult. I will be the first to admit there are honest differences 
within the cybersecurity debate. However, over the course of the last 
few years, several cybersecurity solutions have been brought forth that 
I believe can be advanced and offer insight as to where progress can be 
achieved. These solutions are not insignificant and their passage would 
do plenty to improve our country's cybersecurity defenses. I believe 
that inaction is no longer an option. The stakes are too high and the 
threat is too real.
  The SECURE IT Act is a serious response to the growing cyber threat 
facing our country. Our bill seeks to utilize the world-class engineers 
employed by our private sector, not compliance attorneys in billable by 
the hour law firms. This is why a primary objective of our bill is to 
enter into a cooperative information sharing relationship with the 
private sector, rather than an adversarial one rooted in prescriptive 
Federal regulations used to dictate technological solutions to 
industry.
  The centerpiece of the SECURE IT Act is a legal framework to provide 
for voluntary information sharing. Our bill provides specific 
authorities relating to the voluntary sharing of cyber threat 
information among private entities, between a private entity and a non-
federal government agency such as a local government, and between any 
entity and a pre-existing Federal cybersecurity center. In setting 
forth our information sharing framework, we do not create any new 
bureaucracy.
  Further, the SECURE IT Act includes no government monitoring, no 
government take-overs of the Internet, and no government intrusions. 
There are plenty of laws that deal with those issues--this bill is not 
one of them. The goal of the information sharing title is to remove the 
legal hurdles which prevent critical information from being shared with 
those who need it most.
  In drafting the information sharing title of our bill, my colleagues 
and I were very sensitive to the issue of privacy and we worked very 
hard to put forth understandable privacy protections. First, we limit 
the type of information involved in information sharing to ``cyber 
threat information'' as it is narrowly defined in the bill. There are 
no legal protections for entities using, receiving, or sharing 
information that falls outside that narrow ``cyber threat information'' 
definition. Second, we include techniques like information anonymizing 
and specifically state that entities can restrict the further 
dissemination of shared information. Additionally, after the first 
year, and then every other year, we will receive reports from the 
Privacy and Civil Liberties Oversight Board which will tell us how 
these authorities are being implemented. We take the issue of privacy 
very seriously.
  In addition to information sharing, the SECURE IT Act requires the 
Federal Government to improve its own cybersecurity by reforming the 
Federal Information Security Management Act--the law that governs 
federal networks. These updates are meant to ensure that the Federal 
Government transitions from paper-based reporting on network security 
to real-time monitoring--a huge step in federal cybersecurity which 
will go a long way to improve how the government addresses its own 
cyber threats. This transition from a checklist approach to continuous 
monitoring will not happen without an associated cost. However, we 
believe our approach to this necessary improvement is the most fiscally 
responsible because we require agencies to meet these requirements by 
using existing budgets, rather than by authorizing new federal 
spending.
  We are all aware that Federal Government also plays a critical role 
in cybersecurity research. The Defense Advanced Research Projects 
Agency, the Department of Energy laboratories and the National Science 
Foundation are all world-class leaders in research that is essential to 
understanding how to best protect our cyber country's infrastructure. 
This work serves an important purpose and should be a Federal priority 
even in a time of significant budget constraints. However, the 
significance of these programs does not provide us with an excuse to 
authorize new spending or establish new programs. The SECURE IT Act 
ignores this temptation and does not authorize new spending or 
programs.
  Finally, our cybersecurity bill updates our Nation's criminal laws to 
account for new cyber crimes and assists the Department of Justice to 
prosecute cyber criminals.
  In sum, it is our belief that the provisions included in the SECURE 
IT Act will dramatically improve cybersecurity in this country. More 
importantly, the approach taken in the SECURE IT Act has a real chance 
of being enacted into law this year. This is real progress that will 
impact nearly all Americans. After all, we are all in this fight 
together, and as we search for solutions, our first goal should be to 
move forward together.
  Mrs. HUTCHISON. Mr. President, I rise to talk about a bill that was 
introduced this morning. The bill is the Strengthening and Enhancing 
Cybersecurity by Using Research, Education, Information, and Technology 
Act, which we refer to as the SECURE IT Act.
  This is a very important piece of legislation because we know that 
cyber attacks are a threat to our country and we need to strengthen our 
laws to ensure we are protecting our assets, our communication systems, 
and all of the infrastructure that is run by communications systems.
  We are working as a group. Senators McCain, Chambliss, Grassley, 
Murkowski, Coats, Burr, and Johnson are original cosponsors. All of us 
are the ranking members on the relevant committees that must deal with 
cybersecurity.
  Senator McCain, the lead sponsor, is, of course, the Armed Services 
ranking member. I am the ranking member of Commerce, Senator Chambliss 
of Intelligence, Senator Grassley certainly of Judiciary, and Senator 
Murkowski of Energy.
  It is very important that our relevant committees have come together 
with our ranking members, and we hope very much to gain support from 
the Democratic side as well on a bill that we think can get through all 
of Congress and be signed by the President because the parts of our 
bill that will strengthen our cybersecurity in this country are, I 
think, accepted by those who have expertise in this area. For instance, 
our bill will help prevent the spread of cyber attacks from network to 
network and across the Internet by removing barriers to sharing 
information about threats, attacks, and

[[Page 2665]]

strategies for improvement of defenses. We remove these barriers 
through addressing the antitrust laws that would allow companies that 
are sharing information not to be threatened with antitrust suits, 
because this is a security issue, it is not a competitive issue. 
Secondly, we want to have liability protection for those who disclose 
cyber threat information with their peers.
  These are things that would be in everyone's interest for us to do, 
and we do need to address them in legislation. The liability and 
antitrust protections are available to all companies that would share 
information, not just those that share with the government but when 
they can talk to each other, to understand each other's systems.
  Further, the SECURE IT Act would require that Federal contractors 
providing electronic communication or cybersecurity services to Federal 
agencies share cyber threat information related to those contracts. Of 
course, when they have contracts with the government, that information 
is going to be very important so we would require the sharing of 
information about threats that might jeopardize the system's security.
  In addition, the government will develop procedures for the timely 
sharing of classified, declassified, and unclassified information to 
ensure that information needed to secure networks is fully accessible 
to trusted parties.
  We are concerned that there are other bills out there that will add 
another new bureaucracy, another layer of regulation that is not 
necessary and brings in another agency that would overlay the security 
agencies that already have systems in place. It would also allow the 
regulatory bodies for certain areas of interest to handle the 
cybersecurity rather than another overlay of a new department.
  I think so many people in our country who are in business feel they 
are overwhelmed with duplicative regulations and different agencies 
they have to report to. We want to streamline whom they have to report 
to and try to use existing structures and existing regulatory 
authorities to deal with each individual company or industry so that we 
don't have to give them yet another new bureaucracy that would then 
have regulations, if they are deemed to be critical infrastructure. 
That is when it becomes the regulatory threat.
  We believe the private sector is more aware of individual security 
needs and better equipped than the Department of Homeland Security to 
secure its own networks, working with its own regulators. According to 
the Office of Management and Budget, the government itself has had 
great difficulty in preventing attacks on Federal systems. So we do 
require that the reporting of Federal contractors go to the Federal 
security agencies, but we don't think the Federal agencies being in 
charge of everything is necessarily an improvement.
  We want to make sure the Federal Information Security Management Act, 
which is the law, is actually updated so that the new forms of cyber 
threats are accommodated in FISMA, the Federal Information Security 
Management Act, and to strengthen that with the updates.
  The legislation also updates the Criminal Code to address cyber 
crimes, strengthening penalties, improving the Department of Justice's 
ability to prosecute this kind of criminal who would take down whole 
systems of our government.
  Our bill will prioritize cybersecurity research and development so we 
can harness innovation to protect our country and our private 
industries from cyber attacks.
  I am very pleased that we have been able to introduce this 
legislation as an alternative to some of the other bills that have come 
out. I believe that if we can go forward with negotiating, perhaps we 
can come to an accommodation with the bills that have been introduced 
with other sponsors. But we don't think the bills that have been 
introduced address our concerns and we want to ensure that we do not 
have another big Federal bureaucracy, that we do not overlay the 
regulators who already have expertise in this area with new regulators 
whom we have to train and deal with. We think the defense agencies--the 
National Security Agency, the Defense Intelligence Agency, the CIA, 
DHS--all of those with their cybersecurity assets already in place are 
the better place to put the strength, not reinventing the wheel but 
better utilizing the systems we already have.
  I think it is time for our Senate to address cyber security. I think 
we have good proposals out there; perhaps we can take the best of 
those. I think this is the right approach, and Senators McCain, 
Chambliss, Grassley, and Murkowski were key to drafting this 
legislation that I think will get the support of all of the 
stakeholders, as well as the House of Representatives, to actually pass 
a bill to improve our systems and take it to the President for 
signature.
  Mr. CHAMBLISS. Mr. President, I rise today to speak in support of the 
Strengthening and Enhancing Cybersecurity by Using Research, 
Information, and Technology Act of 2012, otherwise known as the SECURE 
IT Act. This bill provides a strong foundation for Congress to enact 
what I hope can be a truly bipartisan approach for improving the 
ability of all Americans to protect themselves against the ever-
increasing cybersecurity threat.
  This bill was dropped today under the leadership of Senator McCain, 
Senator Hutchison, Senator Grassley, Senator Murkowski, and myself, and 
I am very pleased to be a part of that group who has worked very hard 
on this bill for a number of months.
  There are a few who dispute the significance of the problem posed by 
the threat of cyber attacks. The financial harm inflicted by these 
attacks is now costing Americans billions of dollars each year. Denial-
of-service attacks have been shutting down the Internet presence of 
business and organizations for years. Beyond the economic costs, 
malicious cyber activity is damaging our national security. Every day, 
cyber criminals and foreign adversaries steal large amounts of 
sensitive information from the networks of government and private 
sector entities. These trends need to be reversed before these 
malicious activities are measured in terms of lives lost rather than in 
terms of dollars as we are seeing today.
  For years the Senate Intelligence Committee has been following the 
growing cybersecurity threats. Early on, one of the most common 
questions asked in the cybersecurity context was, Who is in charge? 
While this seems like the natural place to start, it is important to 
understand why this is really not the right question.
  First, there is no consensus on who should be in charge. Some have 
argued it should be the Department of Defense. Some say it should be 
the Department of Homeland Security. Others think it might be best to 
start from scratch. All of these options have very obvious drawbacks.
  Second, and more important, we have been looking through the wrong 
end of the telescope in trying to answer this question. Rather than 
trying to find a governmental entity that should be in charge of 
cybersecurity, it turns out that the answer is actually much simpler: 
each and every one of us is in charge of our own cybersecurity. I know 
some people will scoff at this answer because it is too simplistic for 
such a complicated problem or they just don't trust us to act in our 
own best interests. I think they are wrong on both counts.
  So, if we--and by ``we,'' I mean all of us who use and rely on 
computer networks, whether individuals, groups, organizations, 
corporations, or government agencies--are in charge of our own 
cybersecurity, the real question then is, What should be done to reduce 
the threat of malicious cyber activity? I believe the answer to that 
question is contained in the bill called the SECURE IT Act that we have 
filed today.
  The SECURE IT Act consists of four key areas of common ground 
identified in various legislative efforts: first, information sharing; 
second, Federal Information Security Management Act reform; third, 
enhanced criminal penalties; and fourth, cybersecurity research and 
development.
  We have seen firsthand the positive impact better information sharing 
can

[[Page 2666]]

have on our national security. Since the 9/11 terrorist attack, 
improved information sharing throughout the government and especially 
within the intelligence community has greatly enhanced our national 
security. I believe a similar improvement to information sharing in the 
cyber context will pay huge, long-term dividends in terms of our safety 
and national security.
  Once there is an understanding that information sharing will work 
best if it empowers the individual rather than a discrete government 
entity, the move from a regulatory approach to one that encourages 
voluntary sharing of cyber threat information by removing unintended 
barriers quickly follows. The information-sharing title of the SECURE 
IT Act is based on this voluntary approach and on the principle that 
government cannot and should not solve every problem.
  The cosponsors of this bill relied upon a number of principles and 
practical considerations to develop the information-sharing provisions 
in this bill.
  First, private sector innovation is the engine that drives our 
economy. Private sector entities have a vested interest in protecting 
their assets, businesses, and investments. What they often lack is 
information to help them better protect themselves. Therefore, our 
information-sharing provision authorizes private sector entities and 
non-Federal Government agencies to voluntarily disclose cyber threat 
information to government and private sector entities. The only time 
cyber threat information must be shared with the government is when it 
is directly related to a contract between a communications service 
provider and the government, which ordinarily is a term included in 
that contract anyway. The only new requirement is that such information 
will ultimately need to be shared with a cybersecurity center.
  Information sharing is and must be a two-way street, but there are no 
quid pro quos here. Because the government often sees different threat 
pictures than the private sector, our bill also encourages the 
government to immediately share more classified, declassified, and 
unclassified cyber threat information. As one example, consider how 
improved information sharing might safeguard transportation industry 
systems. Suppose a commercial airline company detects a virus in their 
reservation system. The virus is stealing information, including 
customers' credit card numbers, and sending it to a hacker's server 
overseas. The airline, after investigating internally, determines where 
the stolen data is being sent. Under our bill, the airline may share 
the Internet address that is receiving the stolen credit card 
information with any other companies, such as other airlines, as well 
as with the government. With this warning from the first airline, other 
transportation companies can check their systems to see if any of their 
data is being sent to the hacker's server. Moreover, using the hacker's 
Internet address, law enforcement is able to begin an investigation to 
identify other victims of the same hacker.
  The cybersecurity centers will also be able to notify private 
entities of the nature of this particular threat. In this example, it 
is unlikely that the airline will ever need to share or release any 
customer's personally identifiable information.
  Second, my cosponsors and I intentionally omitted a critical 
infrastructure title because we believe a top-down regulatory approach 
will stifle the voluntary sharing of cyber threat information by the 
private sector. Consistent with this principle, our information-sharing 
title does not provide any additional authority to any government 
entity to impose new regulations on the private sector. In fact, the 
bill prohibits government agencies from using any shared cyber threat 
information to regulate the lawful activities of an entity. In short, 
the bill leaves the existing regulatory regime unchanged.
  The real difficulty with trying to regulate in this area is that 
malicious cyber activities occur in real time and are constantly 
changing. The bureaucracy-driven regulatory process is simply not 
nimble enough to keep up with the leading cybersecurity practices. 
Another disadvantage to a regulatory approach is that it gives hackers 
insight into existing cybersecurity performance requirements and, as a 
result, potential vulnerabilities. As industry representatives have 
told us, this could actually make us less safe, not more safe.
  Thirdly, our bill does not create any new bureaucracy to facilitate 
the sharing of cyber threat information. Rather, it relies upon the 
existing cybersecurity centers and gives private entities the 
flexibility to share their cyber threat information with any cyber 
center. To ensure thorough dissemination within the government, each 
cybersecurity center is required to pass on to other centers any cyber 
threat information it receives from an entity. Ultimately, we expect 
that our current decentralized cybersecurity center structure will be 
energized by an increase in shared cyber threat information. We also 
think these centers, with their ongoing relationships with many private 
entities, provide a more robust and secure environment for information 
sharing than creating new cybersecurity exchanges or a new national 
center.
  Another advantage of our ``no new regulatory authorities'' and ``no 
new bureaucracy'' approach is it is also a ``no new spending'' 
approach. Our bill does not authorize any new spending, which is 
particularly important given our current economic situation.
  Fourth, our bill contains clear and unconditional protection from 
civil and criminal liability for entities that rely upon the 
authorities in the information-sharing title. Specifically, a private 
entity cannot be sued or prosecuted for using lawful countermeasures 
and cybersecurity systems to defend its networks and identify threats. 
In addition, neither a private entity nor a Federal Government entity 
can be sued or prosecuted for using, disclosing, or receiving cyber 
threat information or for the subsequent action or inaction by an 
entity to which they gave cyber threat information.
  These clear liability protections are necessary to encourage robust 
information sharing. If they are watered down or made conditional on 
sharing with the government, private sector lawyers will likely 
discourage their clients from sharing cyber threat information and, at 
a minimum, sharing will be delayed while lawyers have to be consulted.
  The final practical consideration that governed the drafting of our 
information-sharing title was to provide sensible safeguards for the 
protection of personal privacy. We accomplished this in a number of 
ways.
  This information-sharing title is focused on the sharing of only 
``cyber threat information.'' It is a key definition in the bill. If 
you study it carefully, you will see it is limited primarily to 
information related to malicious cyber activities. There is no 
authorization or liability protection for using, sharing, or receiving 
information that falls outside of this definition. Nor can private 
entities use their cybersecurity systems to get information that falls 
outside this definition. Moreover, it helps to remember that people 
engaged in malicious cyber activities are essentially trespassers who 
have no standing to assert privacy interests.
  Besides this relatively narrow definition of ``cyber threat 
information,'' there is an additional privacy mechanism that limits the 
collection and disclosure of cyber threat information for the purpose 
of preventing, investigating, or mitigating threats to information 
security. In other words, if what you are doing is not for these 
purposes, then you cannot do it under this bill.
  Another way this bill protects privacy is by requiring the government 
to handle all cyber threat information in a reasonable manner that 
considers the need to protect privacy and allows the use of anonymizing 
information.
  Since information sharing is voluntary under our bill, private sector 
entities can take any steps to protect their own privacy interests and 
the privacy of their customers. Moreover, our bill allows private 
sector entities to require the recipients of their cyber

[[Page 2667]]

threat information to seek their consent before further disseminating 
the information.
  Finally, Congress will be able to conduct its oversight since our 
bill requires an implementation report to Congress within 1 year of 
enactment, with follow-on reports every 2 years thereafter. These 
reports will give Congress detailed insight into a number of areas, 
including the degree to which privacy may be impacted by the provisions 
in this title.
  Now that I have identified the key components and advantages of our 
approach to information sharing, let me explain why we were compelled 
to draft this separate bill.
  All of the cosponsors of the SECURE IT Act agree with Senators 
Lieberman and Collins and the White House that Congress needs to 
address the cybersecurity threat. When we attempted to participate in 
the cyber working groups, it became clear pretty early on that it was 
going to be difficult to come up with a consensus product.
  My experience with working on bipartisan bills such as the 
Intelligence Authorization Act is that we generally start from scratch 
and only put in those provisions that are agreed to by both sides. If a 
provision receives an objection, it is not included, but it is 
understood it may be an amendment during markup or on the floor. This 
approach always gives us a great starting point that enjoys the 
overwhelming support of both sides.
  Since the working group process had essentially reached an impasse on 
the issue of critical infrastructure regulation and how best to promote 
information sharing, the cosponsors of the SECURE IT Act joined 
together to develop a bill that would cover ``common ground'' and could 
serve as a better starting point for negotiations. We have listened to 
all sides in putting this bill together--government, industry, private 
groups, cybersecurity experts, and our colleagues on both sides of the 
aisle in both the Senate and the House. There should be nothing 
surprising in our bill. Our ranking member group has been telegraphing 
our priorities for months now.
  If we are serious about passing cybersecurity legislation in this 
Congress--and I hope we are--we should be working together to pass a 
bill with the support of a large group of Senators far in excess of the 
60 we need, as we have done in the past on many major pieces of 
legislation. I believe the ``common ground'' approach of the SECURE IT 
Act puts us on a clear path to reaching this goal.
  This is important national security legislation. Fortunately, Leaders 
Reid and McConnell have an outstanding record of garnering overwhelming 
bipartisan support for national security legislation, and I am 
confident they will seek to do so again. I look forward to continuing 
these discussions and getting a strong bipartisan bill signed into law.
  Ms. MURKOWSKI. Mr. President, I come to the floor today to speak 
about cybersecurity legislation--legislation we hope will soon be 
before the Senate.
  There is no question--no question at all--that this is a critical 
issue that should be addressed by this Congress, and I am certain that 
every Member of this body is concerned that our Nation may be 
vulnerable to cyber-attacks that could truly have very severe economic 
and security ramifications. We see stories about cyber-attacks daily--
whether they are attacks on individuals, on companies, on government--
and I believe it is time for us to take steps to protect ourselves 
against this emerging threat.
  In the coming weeks, the Senate is expected to take up legislation to 
address this very real problem, and I am hopeful this effort will 
result in legislation we can all agree is worthy of sending to the 
President. But right now it appears we are on track to follow an all-
or-nothing approach. The problem I see with the bill that is expected 
to come to the floor--featuring text that was recently released by the 
Homeland Security and Governmental Affairs Committee--is that it has 
not gone through regular order and, I fear, amounts to regulatory 
overreach. If that is our only option here, it will ultimately prevent 
us from making progress on cybersecurity here in Congress, which I 
think would be an unfortunate outcome.
  Because that outcome is unacceptable, I have introduced an 
alternative bill this morning, along with a number of ranking member 
colleagues. I know Senator Chambliss from Georgia was here on the floor 
earlier, and many of us spoke to it earlier in the day. We call our 
bill the Strengthening and Enhancing Cybersecurity by Using Research, 
Education, Information, and Technology Act of 2012. It has an acronym, 
of course. It is called SECURE IT for short. The bill follows a 
commonsense approach to address our ever-increasing cyber threats.
  Our bill focuses on four different areas we believe can draw 
bipartisan support and result in good public law. Those four areas are: 
information sharing, FISMA reform--which is intelligence-sharing 
reform--criminal penalties, as well as additional research.
  What the SECURE IT bill does not do is equally important, because it 
does not simply add new layers of bureaucracy and regulation that will 
serve little purpose and achieve meager results. The Homeland Security 
and Governmental Affairs Committee bill would arm the Department of 
Homeland Security with expansive new authorities to review all sectors 
of our economy and designate what is termed ``covered critical 
infrastructure'' for further regulation. What we hear out there from 
industry is that this amounts to regulation almost for regulation's 
sake. In the electricity industry's case, this is resulting in 
duplicative regulation that I am afraid will lead to a ``compliance 
first'' mentality. Companies will focus on meeting their new Federal 
requirements and passing a seemingly endless stream of audits, but 
these heavyhanded statistic requirements from yet one more Federal 
regulator will not necessarily address the very real threats we face. 
So again, the concern is we will have industry focused on how do we 
comply, how do we avoid a bad audit, instead of using their ingenuity 
and their resources to ensure we stay ahead of any future cyber-attack. 
We need to be more nimble. We have to have a more nimble approach to 
dealing with cyber-related threats that are constantly growing and 
constantly changing. The threat we see today is not necessarily the 
threat we might anticipate tomorrow, so we have to stay ahead of the 
game. This is important, and this is where our SECURE IT bill comes in. 
I think we have simply taken a more pragmatic approach by focusing on 
the areas where we know we can find some bipartisan support.
  One area I think we can all agree on is that the Federal Government 
needs to form a partnership with the private sector. We share the same 
goals, that is clear. The goals are to keep our computer systems and 
our Nation safe from cyber intrusions. We need the private companies to 
be talking with each other and with the government about the cyber 
problems they face as well as the potential strategies and the 
solutions to combat them. To achieve this goal, our legislation 
encourages the voluntary sharing of much needed information by removing 
legal barriers to its use and its disclosure. At the same time, we are 
very careful to safeguard the privacy and prohibit information from 
being used for competitive advantage.
  Our bill also provides necessary updates to the Federal Information 
Security Management Act. This is the FISMA I spoke to a minute ago. 
These FISMA reforms require real-time monitoring of Federal systems. It 
will modernize the way the government manages and mitigates its own 
cyber risks. And unlike other legislation on this subject, the cyber 
bill we have introduced today will update criminal statutes to account 
for cyber activities. Finally, we support advanced cybersecurity 
research by leveraging existing resources without necessarily spending 
new Federal dollars. That is very important for us.
  This straightforward approach to cybersecurity, I think, can go a 
long way in tackling the problem. Clearly, our own government agencies 
here need to be communicating a little bit better with one another. An 
example of this is

[[Page 2668]]

that the White House and Department of Homeland Security are staging an 
exercise next week. All Members have been invited to attend and go 
through this exercise. It is a mock scenario that will feature a cyber-
attack on the Nation's grid. And while I absolutely think this is a 
useful exercise, and something that is well worthwhile, I do find it 
quite surprising--quite surprising--that DHS would set up a grid attack 
scenario and fail to include the grid's primary regulators. These would 
be the electric reliability organization--what we call NERC--and the 
Federal Energy Regulatory Commission, or FERC. These are the two 
regulatory agencies currently in place that provide for that cyber 
regulation. It is mandated within our grid that these agencies tend to 
just this issue. So it does make me question if DHS is even aware the 
electric industry is the only industry already subject to mandatory 
cyber standards, or that the NERC has the ability to issue time-
sensitive alerts to electric utilities in the event of emergency 
situations. It is kind of hard for me to understand why DHS would 
proceed with a grid attack simulation and not include the existing 
governmental entities that already have these safeguards in place. It 
also begs the question as to whether Congress should provide DHS with 
such significant and expansive new authorities in the cyber arena.
  Before I close, I wish to take a moment to talk about the process 
behind cybersecurity legislation. While my colleagues and I have 
highlighted the substantive and procedural problems that are associated 
with the Homeland Security and Governmental Affairs Committee bill, the 
majority, and even the press, have attempted to dismiss our arguments 
as nothing more than partisan stall tactics.
  I stand before you to tell you that is simply not true. I want to 
take action on cyber. I know all of the ranking members who have joined 
together on this issue want to take action on cyber. We need to do it. 
I have been calling for action and for legislation since last Congress. 
We have been working on it in the Energy Committee and have moved out 
that cyber energy piece. But I do think it is important around this 
body that there is some meaning to the process; that process really 
does matter. That is how strong, bipartisan pieces of legislation are 
enacted. When we forego that process and refuse to do the hard work in 
the committee--and it is hard. But if we don't do that, we put 
ourselves on a path to failure with that legislation.
  So when we have seven ranking members taking issue with how a bill 
has been put together, I think we had better pay attention. I think we 
need to look at whether our process is working.
  The SECURE IT bill we introduced today is a strong starting point for 
us. Some may argue we need to go a little further. But additional 
layers of bureaucracy and regulations are not the answer at this time. 
Legislating in the four areas we have highlights--in the information 
sharing, the FISMA reform, criminal penalties, and research--these are 
necessary first steps that will make a tremendous amount of difference. 
If we need to do more in the future, we in Congress can certainly make 
that determination. But let's not take an all-or-nothing approach to 
cyber legislation and ultimately end up empty-handed.
  I ask my colleagues to take a look at what we have presented today 
and consider supporting the SECURE IT Act so we can continue to ensure 
our citizens, our companies, and our country are protected.

                          ____________________