[House Report 111-137]
[From the U.S. Government Publishing Office]
111th Congress Rept. 111-137
HOUSE OF REPRESENTATIVES
1st Session Part 1
======================================================================
AMERICAN CLEAN ENERGY AND SECURITY ACT OF 2009
_______
June 5, 2009.--Ordered to be printed
_______
Mr. Waxman, from the Committee on Energy and Commerce, submitted the
following
R E P O R T
together with
MINORITY AND ADDITIONAL VIEWS
[To accompany H.R. 2454]
[Including cost estimate of the Congressional Budget Office]
The Committee on Energy and Commerce, to whom was referred
the bill (H.R. 2454) to create clean energy jobs, achieve
energy independence, reduce global warming pollution and
transition to a clean energy economy, having considered the
same, report favorably thereon with an amendment and recommend
that the bill as amended do pass.
CONTENTS
Page
Purpose and Summary.............................................. 277
Background and Need for Legislation.............................. 278
Legislative History.............................................. 318
Committee Consideration.......................................... 320
Committee Votes.................................................. 320
Application of Law to the Legislative Branch..................... 357
Statement of Oversight Findings and Recommendations of the
Committee...................................................... 357
Statement of General Performance Goals and Objectives............ 357
Constitutional Authority Statement............................... 357
Advisory Committee Statement..................................... 357
Federal Mandates Statement....................................... 357
Earmarks and Tax and Tariff Benefits............................. 358
Committee Cost Estimate.......................................... 358
New Budget Authority, Entitlement Authority, and Tax Expenditures 358
Congressional Budget Office Cost Estimate........................ 358
Section-By-Section............................................... 393
Explanation of Amendments........................................ 426
Changes in Existing Law Made by the Bill, as Reported............ 435
Minority and Additional Views.................................... 725
The amendment is as follows:
Strike all after the enacting clause and insert the
following:
SECTION 1. SHORT TITLE; TABLE OF CONTENTS.
(a) Short Title.--This Act may be cited as the ``American Clean
Energy and Security Act of 2009''.
(b) Table of Contents.--The table of contents for this Act is as
follows:
Sec. 1. Short title; table of contents.
Sec. 2. Definitions.
Sec. 3. International participation.
TITLE I--CLEAN ENERGY
Subtitle A--Combined Efficiency and Renewable Electricity Standard
Sec. 101. Combined efficiency and renewable electricity standard.
Sec. 102. Clarifying State authority to adopt renewable energy
incentives.
Subtitle B--Carbon Capture and Sequestration
Sec. 111. National strategy.
Sec. 112. Regulations for geologic sequestration sites.
``Sec. 813. Geologic sequestration sites.
Sec. 113. Studies and reports.
Sec. 114. Carbon capture and sequestration demonstration and early
deployment program.
Sec. 115. Commercial deployment of carbon capture and sequestration
technologies.
``Sec. 786. Commercial deployment of carbon capture and
sequestration technologies.
Sec. 116. Performance standards for coal-fueled power plants.
``Sec. 812. Performance standards for new coal-fired power
plants.
Subtitle C--Clean Transportation
Sec. 121. Electric vehicle infrastructure.
Sec. 122. Large-scale vehicle electrification program.
Sec. 123. Plug-in electric drive vehicle manufacturing.
Sec. 124. Investment in clean vehicles.
Sec. 125. Advanced technology vehicle manufacturing incentive loans.
Sec. 126. Amendment to renewable fuels standard.
Sec. 127. Open fuel standard.
Sec. 128. Temporary Vehicle Trade-in Program.
Sec. 129. Diesel emissions reduction.
Sec. 130. Loan guarantees for projects to construct renewable fuel
pipelines.
Subtitle D--State Energy and Environment Development Accounts
Sec. 131. Establishment of SEED Accounts.
Sec. 132. Support of State renewable energy and energy efficiency
programs.
Subtitle E--Smart Grid Advancement
Sec. 141. Definitions.
Sec. 142. Assessment of Smart Grid cost effectiveness in products.
Sec. 143. Inclusions of Smart Grid capability on appliance ENERGY GUIDE
labels.
Sec. 144. Smart Grid peak demand reduction goals.
Sec. 145. Reauthorization of energy efficiency public information
program to include Smart Grid information.
Sec. 146. Inclusion of Smart Grid features in appliance rebate program.
Subtitle F--Transmission Planning
Sec. 151. Transmission planning.
Sec. 152. Net metering for Federal agencies.
Sec. 153. Support for qualified advanced electric transmission
manufacturing plants, qualified high efficiency transmission property,
and qualified advanced electric transmission property.
Subtitle G--Technical Corrections to Energy Laws
Sec. 161. Technical corrections to Energy Independence and Security Act
of 2007.
Sec. 162. Technical corrections to Energy Policy Act of 2005.
Subtitle H--Energy and Efficiency Centers
Sec. 171. Clean Energy Innovation Centers.
Sec. 172. Building Assessment Centers.
Sec. 173. Centers for Energy and Environmental Knowledge and Outreach.
Subtitle I--Nuclear and Advanced Technologies
Sec. 181. Revisions to loan guarantee program authority.
Sec. 182. Purpose.
Sec. 183. Definitions.
Sec. 184. Clean Energy Investment Fund.
Sec. 185. Energy technology deployment goals.
Sec. 186. Clean Energy Deployment Administration.
Sec. 187. Direct support.
Sec. 188. Federal credit authority.
Sec. 189. General provisions.
Subtitle J--Miscellaneous
Sec. 191. Study of ocean renewable energy and transmission planning and
siting.
Sec. 192. Clean technology business competition grant program.
Sec. 193. National Bioenergy Partnership.
Sec. 194. Office of Consumer Advocacy.
TITLE II--ENERGY EFFICIENCY
Subtitle A--Building Energy Efficiency Programs
Sec. 201. Greater energy efficiency in building codes.
Sec. 202. Building retrofit program.
Sec. 203. Energy efficient manufactured homes.
Sec. 204. Building energy performance labeling program.
Sec. 205. Tree planting programs.
Sec. 206. Energy efficiency for data center buildings.
Subtitle B--Lighting and Appliance Energy Efficiency Programs
Sec. 211. Lighting efficiency standards.
Sec. 212. Other appliance efficiency standards.
Sec. 213. Appliance efficiency determinations and procedures.
Sec. 214. Best-in-Class Appliances Deployment Program.
Sec. 215. WaterSense.
Sec. 216. Federal procurement of water efficient products.
Sec. 217. Water efficient product rebate programs.
Sec. 218. Certified stoves program.
Sec. 219. Energy Star standards.
Subtitle C--Transportation Efficiency
Sec. 221. Emissions standards.
``Part B--Mobile Sources
``Sec. 821. Greenhouse gas emission standards for mobile
sources.
Sec. 222. Greenhouse gas emissions reductions through transportation
efficiency.
``Part D--Planning Requirements
``Sec. 841. Greenhouse gas emissions reductions through
transportation efficiency.
Sec. 223. SmartWay transportation efficiency program.
``Sec. 822. SmartWay transportation efficiency program.
Sec. 224. State vehicle fleets.
Subtitle D--Industrial Energy Efficiency Programs
Sec. 241. Industrial plant energy efficiency standards.
Sec. 242. Electric and thermal waste energy recovery award program.
Sec. 243. Clarifying election of waste heat recovery financial
incentives.
Sec. 244. Motor market assessment and commercial awareness program.
Sec. 245. Motor efficiency rebate program.
Subtitle E--Improvements in Energy Savings Performance Contracting
Sec. 251. Energy savings performance contracts.
Subtitle F--Public Institutions
Sec. 261. Public institutions.
Sec. 262. Community energy efficiency flexibility.
Sec. 263. Small community joint participation.
Sec. 264. Low income community energy efficiency program.
Subtitle G--Miscellaneous
Sec. 271. Energy efficient information and communications technologies.
Sec. 272. National energy efficiency goals.
Sec. 273. Affiliated island energy independence team.
Sec. 274. Product carbon disclosure program.
TITLE III--REDUCING GLOBAL WARMING POLLUTION
Sec. 301. Short title.
Subtitle A--Reducing Global Warming Pollution
Sec. 311. Reducing global warming pollution.
``TITLE VII--GLOBAL WARMING POLLUTION REDUCTION PROGRAM
``Part A--Global Warming Pollution Reduction Goals and Targets
``Sec. 701. Findings and purpose.
``Sec. 702. Economy-wide reduction goals.
``Sec. 703. Reduction targets for specified sources.
``Sec. 704. Supplemental pollution reductions.
``Sec. 705. Review and program recommendations.
``Sec. 706. National Academy review.
``Sec. 707. Presidential response and recommendations.
``Part B--Designation and Registration of Greenhouse Gases
``Sec. 711. Designation of greenhouse gases.
``Sec. 712. Carbon dioxide equivalent value of greenhouse
gases.
``Sec. 713. Greenhouse gas registry.
``Part C--Program Rules
``Sec. 721. Emission allowances.
``Sec. 722. Prohibition of excess emissions.
``Sec. 723. Penalty for noncompliance.
``Sec. 724. Trading.
``Sec. 725. Banking and borrowing.
``Sec. 726. Strategic reserve.
``Sec. 727. Permits.
``Sec. 728. International emission allowances.
``Part D--Offsets
``Sec. 731. Offsets Integrity Advisory Board.
``Sec. 732. Establishment of offsets program.
``Sec. 733. Eligible project types.
``Sec. 734. Requirements for offset projects.
``Sec. 735. Approval of offset projects.
``Sec. 736. Verification of offset projects.
``Sec. 737. Issuance of offset credits.
``Sec. 738. Audits.
``Sec. 739. Program review and revision.
``Sec. 740. Early offset supply.
``Sec. 741. Environmental considerations.
``Sec. 742. Trading.
``Sec. 743. International offset credits.
``Part E--Supplemental Emissions Reductions From Reduced Deforestation
``Sec. 751. Definitions.
``Sec. 752. Findings.
``Sec. 753. Supplemental emissions reductions through reduced
deforestation.
``Sec. 754. Requirements for international deforestation
reduction program.
``Sec. 755. Reports and reviews.
``Sec. 756. Legal effect of part.
Sec. 312. Definitions.
``Sec. 700. Definitions.
Subtitle B--Disposition of Allowances
Sec. 321. Disposition of allowances for global warming pollution
reduction program.
``Part H--Disposition of Allowances
``Sec. 781. Allocation of allowances for supplemental
reductions.
``Sec. 782. Allocation of emission allowances.
``Sec. 783. Electricity consumers.
``Sec. 784. Natural gas consumers.
``Sec. 785. Home heating oil and propane consumers.
``Sec. 787. Allocations to refineries.
``Sec. 788. [SECTION RESERVED].
``Sec. 789. Climate change consumer refunds.
``Sec. 790. Exchange for State-issued allowances.
``Sec. 791. Auction procedures.
``Sec. 792. Auctioning allowances for other entities.
``Sec. 793. Establishment of funds.
``Sec. 794. Oversight of allocations.
Subtitle C--Additional Greenhouse Gas Standards
Sec. 331. Greenhouse gas standards.
``TITLE VIII--ADDITIONAL GREENHOUSE GAS STANDARDS
``Sec. 801. Definitions.
``Part A--Stationary Source Standards
``Sec. 811. Standards of performance.
``Part C--Exemptions From Other Programs
``Sec. 831. Criteria pollutants.
``Sec. 832. International air pollution.
``Sec. 833. Hazardous air pollutants.
``Sec. 834. New source review.
``Sec. 835. Title V permits.
Sec. 332. HFC Regulation.
Sec. 333. Black carbon.
``Part E--Black Carbon
``Sec. 851. Black carbon.
Sec. 334. States.
Sec. 335. State programs.
``Part F--Miscellaneous
``Sec. 861. State programs.
``Sec. 862. Grants for support of air pollution control
programs.
Sec. 336. Enforcement.
Sec. 337. Conforming amendments.
Sec. 338. Davis-Bacon compliance.
Subtitle D--Carbon Market Assurance
Sec. 341. Carbon market assurance.
Subtitle E--Additional Market Assurance
Sec. 351. Regulation of certain transactions in derivatives involving
energy commodities.
Sec. 352. No effect on authority of the Federal Energy Regulatory
Commission.
Sec. 353. Inspector General of the Commodity Futures Trading
Commission.
Sec. 354. Settlement and clearing through registered derivatives
clearing organizations.
Sec. 355. Limitation on eligibility to purchase a credit default swap.
Sec. 356. Transaction fees.
Sec. 357. No effect on authority of the Federal Trade Commission.
Sec. 358. Regulation of carbon derivatives markets.
Sec. 359. Cease-and-desist authority.
TITLE IV--TRANSITIONING TO A CLEAN ENERGY ECONOMY
Subtitle A--Ensuring Real Reductions in Industrial Emissions
Sec. 401. Ensuring real reductions in industrial emissions.
``Part F--Ensuring Real Reductions in Industrial Emissions
``Sec. 761. Purposes.
``Sec. 762. International negotiations.
``Sec. 763. Definitions.
``subpart 1--emission allowance rebate program
``Sec. 764. Eligible industrial sectors.
``Sec. 765. Distribution of emission allowance rebates.
``subpart 2--international reserve allowance program
``Sec. 766. International reserve allowance program.
``subpart 3--presidential determination
``Sec. 767. Presidential reports and determinations.
Subtitle B--Green Jobs and Worker Transition
Part 1--Green Jobs
Sec. 421. Clean energy curriculum development grants.
Sec. 422. Increased funding for energy worker training program.
Part 2--Climate Change Worker Adjustment Assistance
Sec. 425. Petitions, eligibility requirements, and determinations.
Sec. 426. Program benefits.
Sec. 427. General provisions.
Subtitle C--Consumer Assistance
Sec. 431. Energy tax credit.
Sec. 432. Energy refund program for low-income consumers.
Subtitle D--Exporting Clean Technology
Sec. 441. Findings and purposes.
Sec. 442. Definitions.
Sec. 443. Governance.
Sec. 444. Determination of eligible countries.
Sec. 445. Qualifying activities.
Sec. 446. Assistance.
Subtitle E--Adapting to Climate Change
Part 1--Domestic Adaptation
subpart a--national climate change adaptation program
Sec. 451. National Climate Change Adaptation Program.
Sec. 452. Climate services.
Sec. 453. State programs to build resilience to climate change impacts.
subpart b--public health and climate change
Sec. 461. Sense of Congress on public health and climate change.
Sec. 462. Relationship to other laws.
Sec. 463. National strategic action plan.
Sec. 464. Advisory board.
Sec. 465. Reports.
Sec. 466. Definitions.
Sec. 467. Climate Change Health Protection and Promotion Fund.
subpart c--natural resource adaptation
Sec. 471. Purposes.
Sec. 472. Natural resources climate change adaptation policy.
Sec. 473. Definitions.
Sec. 474. Council on Environmental Quality.
Sec. 475. Natural Resources Climate Change Adaptation Panel.
Sec. 476. Natural Resources Climate Change Adaptation Strategy.
Sec. 477. Natural resources adaptation science and information.
Sec. 478. Federal natural resource agency adaptation plans.
Sec. 479. State natural resources adaptation plans.
Sec. 480. Natural Resources Climate Change Adaptation Fund.
Sec. 481. National Wildlife Habitat and Corridors Information Program.
Sec. 482. Additional provisions regarding Indian tribes.
Part 2--International Climate Change Adaptation Program
Sec. 491. Findings and purposes.
Sec. 492. Definitions.
Sec. 493. International Climate Change Adaptation Program.
Sec. 494. Distribution of allowances.
Sec. 495. Bilateral assistance.
SEC. 2. DEFINITIONS.
For purposes of this Act:
(1) Administrator.--The term ``Administrator'' means the
Administrator of the Environmental Protection Agency.
(2) State.--The term ``State'' has the meaning given that
term in section 302 of the Clean Air Act.
SEC. 3. INTERNATIONAL PARTICIPATION.
The Administrator, in consultation with the Department of State and
the United States Trade Representative, shall annually prepare and
certify a report to the Congress regarding whether China and India have
adopted greenhouse gas emissions standards at least as strict as those
standards required under this Act. If the Administrator determines that
China and India have not adopted greenhouse gas emissions standards at
least as stringent as those set forth in this Act, the Administrator
shall notify each Member of Congress of his determination, and shall
release his determination to the media.
TITLE I--CLEAN ENERGY
Subtitle A--Combined Efficiency and Renewable Electricity Standard
SEC. 101. COMBINED EFFICIENCY AND RENEWABLE ELECTRICITY STANDARD.
(a) In General.--Title VI of the Public Utility Regulatory Policies
Act of 1978 (16 U.S.C. 2601 and following) is amended by adding at the
end the following:
``SEC. 610. COMBINED EFFICIENCY AND RENEWABLE ELECTRICITY STANDARD.
``(a) Definitions.--For purposes of this section:
``(1) CHP savings.--The term `CHP savings' means--
``(A) CHP system savings from a combined heat and
power system that commences operation after the date of
enactment of this section; and
``(B) the increase in CHP system savings from, at any
time after the date of the enactment of this section,
upgrading, replacing, expanding, or increasing the
utilization of a combined heat and power system that
commenced operation on or before the date of enactment
of this section.
``(2) CHP system savings.--The term `CHP system savings'
means the electric output, and the electricity saved due to the
mechanical output, of a combined heat and power system,
adjusted to reflect any increase in fuel consumption by that
system as compared to the fuel that would have been required to
produce an equivalent useful thermal energy output in a
separate thermal-only system.
``(3) Combined heat and power system.--The term `combined
heat and power system' means a system that uses the same energy
source both for the generation of electrical or mechanical
power and the production of steam or another form of useful
thermal energy, provided that--
``(A) the system meets such requirements relating to
efficiency and other operating characteristics as the
Commission may promulgate by regulation; and
``(B) the net sales of electricity by the facility to
customers not consuming the thermal output from that
facility will not exceed 50 percent of total annual
electric generation by the facility.
``(4) Customer facility savings.--The term `customer facility
savings' means a reduction in end-use electricity consumption
(including recycled energy savings) at a facility of an end-use
consumer of electricity served by a retail electric supplier,
as compared to--
``(A) in the case of a new facility, consumption at a
reference facility of average efficiency;
``(B) in the case of an existing facility,
consumption at such facility during a base period,
except as provided in subparagraphs (C) and (D);
``(C) in the case of new equipment that replaces
existing equipment with remaining useful life, the
projected consumption of the existing equipment for the
remaining useful life of such equipment, and
thereafter, consumption of new equipment of average
efficiency of the same equipment type; and
``(D) in the case of new equipment that replaces
existing equipment at the end of the useful life of the
existing equipment, consumption by new equipment of
average efficiency of the same equipment type.
``(5) Distributed renewable generation facility.--The term
`distributed renewable generation facility' means a facility
that--
``(A) generates renewable electricity;
``(B) primarily serves 1 or more electricity
consumers at or near the facility site; and
``(C) is no greater than--
``(i) 2 megawatts in capacity; or
``(ii) 4 megawatts in capacity, in the case
of a facility that is placed in service after
the date of enactment of this section and
generates electricity from a renewable energy
resource other than by means of combustion.
``(6) Electricity savings.--The term `electricity savings'
means reductions in electricity consumption, relative to
business-as-usual projections, achieved through measures
implemented after the date of enactment of this section,
limited to--
``(A) customer facility savings of electricity,
adjusted to reflect any associated increase in fuel
consumption at the facility;
``(B) reductions in distribution system losses of
electricity achieved by a retail electricity
distributor, as compared to losses attributable to new
or replacement distribution system equipment of average
efficiency;
``(C) CHP savings; and
``(D) fuel cell savings.
``(7) Federal land.--The term `Federal land' means land owned
by the United States, other than land held in trust for an
Indian or Indian tribe.
``(8) Federal renewable electricity credit.--The term
`Federal renewable electricity credit' means a credit,
representing one megawatt hour of renewable electricity, issued
pursuant to subsection (e).
``(9) Fuel cell.--The term `fuel cell' means a device that
directly converts the chemical energy of a fuel and an oxidant
into electricity by electrochemical processes occurring at
separate electrodes in the device.
``(10) Fuel cell savings.--The term `fuel cell savings' means
the electricity saved by a fuel cell that is installed after
the date of enactment of this section, or by upgrading a fuel
cell that commenced operation on or before the date of
enactment of this section, as a result of the greater
efficiency with which the fuel cell transforms fuel into
electricity as compared with sources of electricity delivered
through the grid, provided that--
``(A) the fuel cell meets such requirements relating
to efficiency and other operating characteristics as
the Commission may promulgate by regulation; and
``(B) the net sales of electricity from the fuel cell
to customers not consuming the thermal output from the
fuel cell, if any, do not exceed 50 percent of the
total annual electricity generation by the fuel cell.
``(11) High conservation priority land.--The term `high
conservation priority land' means land that is not Federal land
and is--
``(A) globally or State ranked as critically
imperiled or imperiled under a State Natural Heritage
Program; or
``(B) old-growth or late-successional forest, as
identified by the office of the relevant State Forester
or relevant State agency with regulatory jurisdiction
over forestry activities.
``(12) Other qualifying energy resource.--The term `other
qualifying energy resource' means any of the following:
``(A) Landfill gas.
``(B) Wastewater treatment gas.
``(C) Coal mine methane used to generate electricity
at or near the mine mouth.
``(D) Qualified waste-to-energy.
``(13) Qualified hydropower.--The term `qualified hydropower'
means--
``(A) energy produced from increased efficiency
achieved, or additions of capacity made, on or after
January 1, 1992, at a hydroelectric facility that was
placed in service before that date and does not include
additional energy generated as a result of operational
changes not directly associated with efficiency
improvements or capacity additions; or
``(B) energy produced from generating capacity added
to a dam on or after January 1, 1992, provided that the
Commission certifies that--
``(i) the dam was placed in service before
the date of the enactment of this section and
was operated for flood control, navigation, or
water supply purposes and was not producing
hydroelectric power prior to the addition of
such capacity;
``(ii) the hydroelectric project installed on
the dam is licensed (or is exempt from
licensing) by the Commission and is in
compliance with the terms and conditions of the
license or exemption, and with other applicable
legal requirements for the protection of
environmental quality, including applicable
fish passage requirements; and
``(iii) the hydroelectric project installed
on the dam is operated so that the water
surface elevation at any given location and
time that would have occurred in the absence of
the hydroelectric project is maintained,
subject to any license or exemption
requirements that require changes in water
surface elevation for the purpose of improving
the environmental quality of the affected
waterway.
``(14) Qualified waste-to-energy.--The term `qualified waste-
to-energy' means energy from the combustion of municipal solid
waste or construction, demolition, or disaster debris, or from
the gasification or pyrolization of such waste or debris and
the combustion of the resulting gas at the same facility,
provided that--
``(A) such term shall include only the energy derived
from the non-fossil biogenic portion of such waste or
debris;
``(B) the Commission determines, with the concurrence
of the Administrator of the Environmental Protection
Agency, that the total lifecycle greenhouse gas
emissions attributable to the generation of electricity
from such waste or debris are lower than those
attributable to the likely alternative method of
disposing of such waste or debris; and
``(C) the owner or operator of the facility
generating electricity from such energy provides to the
Commission, on an annual basis--
``(i) a certification that the facility is in
compliance with all applicable State and
Federal environmental permits;
``(ii) in the case of a facility that
commenced operation before the date of
enactment of this section, a certification that
the facility meets emissions standards
promulgated under sections 112 or 129 of the
Clean Air Act (42 U.S.C. 7412 or 7429) that
apply as of the date of enactment of this
section to new facilities within the relevant
source category; and
``(iii) in the case of the combustion,
pyrolization, or gasification of municipal
solid waste, a certification that each local
government unit from which such waste
originates operates, participates in the
operation of, contracts for, or otherwise
provides for, recycling services for its
residents.
``(15) Recycled energy savings.--The term `recycled energy
savings' means a reduction in electricity consumption that
results from a modification of an industrial or commercial
system that commenced operation before the date of enactment of
this section, in order to recapture electrical, mechanical, or
thermal energy that would otherwise be wasted.
``(16) Renewable biomass.--The term `renewable biomass' means
any of the following:
``(A) Plant material, including waste material,
harvested or collected from actively managed
agricultural land that was in cultivation, cleared, or
fallow and nonforested on January 1, 2009.
``(B) Plant material, including waste material,
harvested or collected from pastureland that was
nonforested on January 1, 2009.
``(C) Nonhazardous vegetative matter derived from
waste, including separated yard waste, landscape right-
of-way trimmings, construction and demolition debris or
food waste (but not municipal solid waste, recyclable
waste paper, painted, treated or pressurized wood, or
wood contaminated with plastic or metals).
``(D) Animal waste or animal byproducts, including
products of animal waste digesters.
``(E) Algae.
``(F) Trees, brush, slash, residues, or any other
vegetative matter removed from within 600 feet of any
building, campground, or route designated for
evacuation by a public official with responsibility for
emergency preparedness, or from within 300 feet of a
paved road, electric transmission line, utility tower,
or water supply line.
``(G) Residues from or byproducts of milled logs.
``(H) Any of the following removed from forested land
that is not Federal and is not high conservation
priority land:
``(i) Trees, brush, slash, residues,
interplanted energy crops, or any other
vegetative matter removed from an actively
managed tree plantation established--
``(I) prior to January 1, 2009; or
``(II) on land that, as of January 1,
2009, was cultivated or fallow and non-
forested.
``(ii) Trees, logging residue, thinnings,
cull trees, pulpwood, and brush removed from
naturally-regenerated forests or other non-
plantation forests, including for the purposes
of hazardous fuel reduction or preventative
treatment for reducing or containing insect or
disease infestation.
``(iii) Logging residue, thinnings, cull
trees, pulpwood, brush and species that are
non-native and noxious, from stands that were
planted and managed after January 1, 2009, to
restore or maintain native forest types.
``(iv) Dead or severely damaged trees removed
within 5 years of fire, blowdown, or other
natural disaster, and badly infested trees.
``(I) Materials, pre-commercial thinnings, or removed
invasive species from National Forest System land and
public lands (as defined in section 103 of the Federal
Land Policy and Management Act of 1976 (43 U.S.C.
1702)), including those that are byproducts of
preventive treatments (such as trees, wood, brush,
thinnings, chips, and slash), that are removed as part
of a federally recognized timber sale, or that are
removed to reduce hazardous fuels, to reduce or contain
disease or insect infestation, or to restore ecosystem
health, and that are--
``(i) not from components of the National
Wilderness Preservation System, Wilderness
Study Areas, Inventoried Roadless Areas, old
growth or mature forest stands, components of
the National Landscape Conservation System,
National Monuments, National Conservation
Areas, Designated Primitive Areas, or Wild and
Scenic Rivers corridors;
``(ii) harvested in environmentally
sustainable quantities, as determined by the
appropriate Federal land manager; and
``(iii) harvested in accordance with Federal
and State law and applicable land management
plans.
``(17) Renewable electricity.--The term `renewable
electricity' means electricity generated (including by means of
a fuel cell) from a renewable energy resource or other
qualifying energy resources.
``(18) Renewable energy resource.--The term `renewable energy
resource' means each of the following:
``(A) Wind energy.
``(B) Solar energy.
``(C) Geothermal energy.
``(D) Renewable biomass.
``(E) Biogas derived exclusively from renewable
biomass.
``(F) Biofuels derived exclusively from renewable
biomass.
``(G) Qualified hydropower.
``(H) Marine and hydrokinetic renewable energy, as
that term is defined in section 632 of the Energy
Independence and Security Act of 2007 (42 U.S.C.
17211).
``(19) Retail electric supplier.--
``(A) In general.--The term `retail electric
supplier' means, for any given year, an electric
utility that sold not less than 4,000,000 megawatt
hours of electric energy to electric consumers for
purposes other than resale during the preceding
calendar year.
``(B) Inclusions and limitations.--For purposes of
determining whether an electric utility qualifies as a
retail electric supplier under subparagraph (A)--
``(i) the sales of any affiliate of an
electric utility to electric consumers, other
than sales to the affiliate's lessees or
tenants, for purposes other than resale shall
be considered to be sales of such electric
utility; and
``(ii) sales by any electric utility to an
affiliate, lessee, or tenant of such electric
utility shall not be treated as sales to
electric consumers.
``(C) Affiliate.--For purposes of this paragraph, the
term `affiliate' when used in relation to a person,
means another person that directly or indirectly owns
or controls, is owned or controlled by, or is under
common ownership or control with, such person, as
determined under regulations promulgated by the
Commission.
``(20) Retail electric supplier's base amount.--The term
`retail electric supplier's base amount' means the total amount
of electric energy sold by the retail electric supplier,
expressed in megawatt hours, to electric customers for purposes
other than resale during the relevant calendar year,
excluding--
``(A) electricity generated by a hydroelectric
facility that is not qualified hydropower;
``(B) electricity generated by a nuclear generating
unit placed in service after the date of enactment of
this section; and
``(C) the proportion of electricity generated by a
fossil-fueled generating unit that is equal to the
proportion of greenhouse gases produced by such unit
that are captured and geologically sequestered.
``(21) Retire and retirement.--The terms `retire' and
`retirement' with respect to a Federal renewable electricity
credit, means to disqualify such credit for any subsequent use
under this section, regardless of whether the use is a sale,
transfer, exchange, or submission in satisfaction of a
compliance obligation.
``(22) Third-party efficiency provider.--The term `third-
party efficiency provider' means any retailer, building owner,
energy service company, financial institution or other
commercial, industrial or nonprofit entity that is capable of
providing electricity savings in accordance with the
requirements of this section.
``(23) Total annual electricity savings.--The term `total
annual electricity savings' means electricity savings during a
specified calendar year from measures that were placed into
service since the date of the enactment of this section, taking
into account verified measure lifetimes or verified annual
savings attrition rates, as determined in accordance with such
regulations as the Commission may promulgate and measured in
megawatt hours.
``(b) Annual Compliance Obligation.--
``(1) In general.--For each of calendar years 2012 through
2039, not later than March 31 of the following calendar year,
each retail electric supplier shall submit to the Commission an
amount of Federal renewable electricity credits and
demonstrated total annual electricity savings that, in the
aggregate, is equal to such retail electric supplier's annual
combined target as set forth in subsection (d), except as
otherwise provided in subsection (g).
``(2) Demonstration of savings.--For purposes of this
subsection, submission of demonstrated total annual electricity
savings means submission of a report that demonstrates, in
accordance with the requirements of subsection (f), the total
annual electricity savings achieved by the retail electric
supplier within the relevant compliance year.
``(3) Renewable electricity credits portion.--Except as
provided in paragraph (4), each retail electric supplier must
submit Federal renewable electricity credits equal to at least
three quarters of the retail electric supplier's annual
combined target.
``(4) State petition.--
``(A) In general.--Upon written request from the
Governor of any State (including, for purposes of this
paragraph, the Mayor of the District of Columbia), the
Commission shall increase, to not more than two fifths,
the proportion of the annual combined targets of retail
electric suppliers located within such State that may
be met through submission of demonstrated total annual
electricity savings, provided that such increase shall
be effective only with regard to the portion of a
retail electric supplier's annual combined target that
is attributable to electricity sales within such State.
``(B) Contents.--A Governor's request under this
paragraph shall include an explanation of the
Governor's rationale for determining, after
consultation with the relevant State regulatory
authority and other retail electricity ratemaking
authorities within the State, to make such request. The
request shall specify the maximum proportion of annual
combined targets (not more than two fifths) that can be
met through demonstrated total annual electricity
savings, and the period for which such proportion shall
be effective.
``(C) Revision.--The Governor of any State may, after
consultation with the relevant State regulatory
authority and other retail electricity ratemaking
authorities within the State, submit a written request
for revocation or revision of a previous request
submitted under this paragraph. The Commission shall
grant such request, provided that--
``(i) any revocation or revision shall not
apply to the combined annual target for any
year that is any earlier than 2 calendar years
after the calendar year in which such request
is submitted, so as to provide retail electric
suppliers with adequate notice of such change;
and
``(ii) any revision shall meet the
requirements of subparagraph (A).
``(c) Establishment of Program.--Not later than 1 year after the date
of enactment of this section, the Commission shall promulgate
regulations to implement and enforce the requirements of this section.
In promulgating such regulations, the Commission shall, to the extent
practicable--
``(1) preserve the integrity, and incorporate best practices,
of existing State renewable electricity and energy efficiency
programs;
``(2) rely upon existing and emerging State or regional
tracking systems that issue and track non-Federal renewable
electricity credits; and
``(3) cooperate with the States to facilitate coordination
between State and Federal renewable electricity and energy
efficiency programs and to minimize administrative burdens and
costs to retail electric suppliers.
``(d) Annual Compliance Requirement.--
``(1) Annual combined targets.--For each of calendar years
2012 through 2039, a retail electric supplier's annual combined
target shall be the product of--
``(A) the required annual percentage for such year,
as set forth in paragraph (2); and
``(B) the retail electric supplier's base amount for
such year.
``(2) Required annual percentage.--For each of calendar years
2012 through 2039, the required annual percentage shall be as
follows:
``Calendar year Required annual percentage
2012................................... 6.0
2013................................... 6.0
2014................................... 9.5
2015................................... 9.5
2016................................... 13.0
2017................................... 13.0
2018................................... 16.5
2019................................... 16.5
2020................................... 20.0
2021 through 2039...................... 20.0
``(e) Federal Renewable Electricity Credits.--
``(1) In general.--The regulations promulgated under this
section shall include provisions governing the issuance,
tracking, and verification of Federal renewable electricity
credits. Except as provided in paragraphs (2), (3), and (4) of
this subsection, the Commission shall issue to each generator
of renewable electricity, 1 Federal renewable electricity
credit for each megawatt hour of renewable electricity
generated by such generator after December 31, 2011. The
Commission shall assign a unique serial number to each Federal
renewable electricity credit.
``(2) Generation from certain state renewable electricity
programs.--Where renewable electricity is generated with the
support of payments from a retail electric supplier pursuant to
a State renewable electricity program (whether through State
alternative compliance payments or through payments to a State
renewable electricity procurement fund or entity), the
Commission shall issue Federal renewable electricity credits to
such retail electric supplier for the proportion of the
relevant renewable electricity generation that is attributable
to the retail electric supplier's payments, as determined
pursuant to regulations issued by the Commission. For any
remaining portion of the relevant renewable electricity
generation, the Commission shall issue Federal renewable
electricity credits to the generator, as provided in paragraph
(1), except that in no event shall more than 1 Federal
renewable electricity credit be issued for the same megawatt
hour of electricity. In determining how Federal renewable
electricity credits will be apportioned among retail electric
suppliers and generators in such circumstances, the Commission
shall consider information and guidance furnished by the
relevant State or States.
``(3) Certain power sales contracts.--When a generator has
sold renewable electricity to a retail electric supplier under
a contract for power from a facility placed in service before
the date of enactment of this section, and the contract does
not provide for the determination of ownership of the Federal
renewable electricity credits associated with such generation,
the Commission shall issue such Federal renewable electricity
credits to the retail electric supplier for the duration of the
contract.
``(4) Credit multiplier for distributed renewable
generation.--
``(A) In general.--Except as provided in subparagraph
(B), the Commission shall issue 3 Federal renewable
electricity credits for each megawatt hour of renewable
electricity generated by a distributed renewable
generation facility.
``(B) Adjustment.--Except as provided in subparagraph
(C), not later than January 1, 2014, and not less
frequently than every 4 years thereafter, the
Commission shall review the effect of this paragraph
and shall, as necessary, reduce the number of Federal
renewable electricity credits per megawatt hour issued
under this paragraph for any given energy source or
technology, but not below 1, to ensure that such number
is no higher than the Commission determines is
necessary to make distributed renewable generation
facilities using such source or technology cost
competitive with other sources of renewable electricity
generation.
``(C) Facilities placed in service after enactment.--
For any distributed renewable generation facility
placed in service after the date of enactment of this
section, subparagraph (B) shall not apply for the first
10 years after the date on which the facility is placed
in service. For each year during such 10-year period,
the Commission shall issue to the facility the same
number of Federal renewable electricity credits per
megawatt hour as are issued to that facility in the
year in which such facility is placed in service. After
such 10-year period, the Commission shall issue Federal
renewable electricity credits to the facility in
accordance with the current multiplier as determined
pursuant to subparagraph (B).
``(5) Credits based on qualified hydropower.--For purposes of
this subsection, the number of Federal renewable electricity
credits issued for qualified hydropower shall be calculated--
``(A) based solely on the increase in average annual
generation directly resulting from the efficiency
improvements or capacity additions described in
subsection (a)(13)(A); and
``(B) using the same water flow information used to
determine a historic average annual generation baseline
for the hydroelectric facility, as certified by the
Commission.
``(6) Generation from mixed renewable and nonrenewable
resources.--If electricity is generated using both a renewable
energy resource or other qualifying energy resource and an
energy source that is not a renewable energy resource or other
qualifying energy resource (as, for example, in the case of co-
firing of renewable biomass and fossil fuel), the Commission
shall issue Federal renewable electricity credits based on the
proportion of the electricity that is attributable to the
renewable energy resource or other qualifying energy resource.
``(7) Prohibition against double-counting.--Except as
provided in paragraph (4) of this subsection, the Commission
shall ensure that no more than 1 Federal renewable electricity
credit will be issued for any megawatt hour of renewable
electricity and that no Federal renewable electricity credit
will be used more than once for compliance with this section.
``(8) Trading.--The lawful holder of a Federal renewable
electricity credit may sell, exchange, transfer, submit for
compliance in accordance with subsection (b), or submit such
credit for retirement by the Commission.
``(9) Banking.--A Federal renewable electricity credit may be
submitted in satisfaction of the compliance obligation set
forth in subsection (b) for the compliance year in which the
credit was issued or for any of the 3 immediately subsequent
compliance years. The Commission shall retire any Federal
renewable electricity credit that has not been retired by April
2 of the calendar year that is 3 years after the calendar year
in which the credit was issued.
``(10) Retirement.--The Commission shall retire a Federal
renewable electricity credit immediately upon submission by the
lawful holder of such credit, whether in satisfaction of a
compliance obligation under subsection (b) or on some other
basis.
``(f) Electricity Savings.--
``(1) Standards for measurement of savings.--As part of the
regulations promulgated under this section, the Commission
shall prescribe standards and protocols for defining and
measuring electricity savings and total annual electricity
savings that can be counted towards the compliance obligation
set forth in subsection (b). Such protocols and standards
shall, at minimum--
``(A) specify the types of energy efficiency and
energy conservation measures that can be counted;
``(B) require that energy consumption estimates for
customer facilities or portions of facilities in the
applicable base and current years be adjusted, as
appropriate, to account for changes in weather, level
of production, and building area;
``(C) account for the useful life of measures;
``(D) include deemed savings values for specific,
commonly used measures;
``(E) allow for savings from a program to be
estimated based on extrapolation from a representative
sample of participating customers;
``(F) include procedures for counting CHP savings,
recycled energy savings, and fuel cell savings;
``(G) include procedures for counting electricity
savings achieved by solar water heating and solar light
pipe technology that has the capability to provide
measureable data on the amount of megawatt-hours
displaced;
``(H) avoid double-counting of savings used for
compliance with this section, including savings that
are transferred pursuant to paragraph (3);
``(I) ensure that, except as provided in subparagraph
(K), the retail electric supplier claiming the savings
played a significant role in achieving the savings
(including through the activities of a designated agent
of the supplier or through the purchase of transferred
savings);
``(J) include savings from programs administered by a
retail electric supplier (or a retail electricity
distributor that is not a retail electric supplier)
that are funded by State, Federal, or other sources;
``(K) in any State in which the State regulatory
authority has designated 1 or more entities to
administer electric ratepayer-funded efficiency
programs approved by such State regulatory authority,
provide that electricity savings achieved through such
programs shall be distributed equitably among retail
electric suppliers in accordance with the direction of
the relevant State regulatory authority; and
``(L) exclude savings achieved as a result of
compliance with mandatory appliance and equipment
efficiency standards or building codes.
``(2) Standards for third-party verification of savings.--The
regulations promulgated under this section shall establish
procedures and standards requiring third-party verification of
all reported electricity savings, including requirements for
accreditation of third-party verifiers to ensure that such
verifiers are professionally qualified and have no conflicts of
interest.
``(3) Transfers of savings.--
``(A) Bilateral contracts for savings transfers.--
Subject to the limitations of this paragraph, a retail
electric supplier may use electricity savings
transferred, pursuant to a bilateral contract, from
another retail electric supplier, an owner of an
electric distribution facility that is not a retail
electric supplier, a State, or a third-party efficiency
provider to meet the applicable compliance obligation
under subsection (b).
``(B) Requirements.--Electricity savings transferred
and used for compliance pursuant to this paragraph
shall be--
``(i) measured and verified in accordance
with the procedures specified under this
subsection;
``(ii) reported in accordance with paragraph
(4) of this subsection; and
``(iii) achieved within the same State as is
served by the retail electric supplier.
``(C) Regulatory approval.--Nothing in this paragraph
shall limit or affect the authority of a State
regulatory authority to require a retail electric
supplier that is regulated by such authority to obtain
such authority's authorization or approval of a
contract for transfer of savings under this paragraph.
``(4) Reporting savings.--
``(A) Requirements.--The regulations promulgated
under this section shall establish requirements
governing the submission of reports to demonstrate, in
accordance with the protocols and standards for
measurement and third-party verification established
under this subsection, the total annual electricity
savings achieved by a retail electric supplier within
the relevant year.
``(B) Review and approval.--The Commission shall
review each report submitted to the Commission by a
retail electric supplier and shall exclude any
electricity savings that have not been adequately
demonstrated in accordance with the requirements of
this subsection.
``(5) State administration.--
``(A) Delegation of authority.--Upon receipt of an
application from the Governor of a State (including,
for purposes of this subsection, the Mayor of the
District of Columbia), the Commission may delegate to
the State the authority to review and verify reported
electricity savings for purposes of determining
demonstrated total annual electricity savings that may
be counted towards a retail electric supplier's
compliance obligation under subsection (b). The
Commission shall make a substantive determination
approving or disapproving a State application under
this subparagraph, after notice and comment, within 180
days of receipt of a complete application.
``(B) Alternative measurement and verification
procedures and standards.--As part of an application
submitted under subparagraph (A), a State may request
to use alternative measurement and verification
procedures and standards to those specified in
paragraphs (1) and (2), provided the State demonstrates
that such alternative procedures and standards provide
a level of accuracy of measurement and verification at
least equivalent to the Federal procedures and
standards promulgated under paragraphs (1) and (2).
``(C) Review of state implementation.--The Commission
shall, not less frequently than once every 4 years,
review each State's implementation of delegated
authority under this paragraph to ensure conformance
with the requirements of this section. The Commission
may, at any time, revoke the delegation of authority
under this section upon a finding that the State is not
implementing its delegated responsibilities in
conformity with this paragraph. As a condition of
maintaining its delegated authority under this
paragraph, the Commission may require a State to submit
a revised application under subparagraph (A) if the
Commission has--
``(i) promulgated new or substantially
revised measurement and verification procedures
and standards under this subsection; or
``(ii) otherwise substantially revised the
program established under this section.
``(g) Alternative Compliance Payments.--
``(1) In general.--A retail electric supplier may satisfy the
requirements of subsection (b) in whole or in part by
submitting in accordance with this subsection, in lieu of each
Federal renewable electricity credit or megawatt hour of
demonstrated total annual electricity savings that would
otherwise be due, a payment equal to $25, adjusted for
inflation on January 1 of each year following calendar year
2009, in accordance with such regulations as the Commission may
promulgate.
``(2) Payment to state funds.--Except as otherwise provided
in this paragraph, payments made under this subsection shall be
made directly to the State or States in which the retail
electric supplier is located, in proportion to the portion of
the retail electric supplier's base amount that is sold within
each relevant State, provided that such payments are deposited
directly into a fund in the State treasury established for this
purpose and that the State uses such funds in accordance with
paragraphs (3) and (4). If the Commission determines at any
time that a State is in substantial noncompliance with
paragraph (3) or (4), the Commission shall direct that any
future alternative compliance payments that would otherwise be
paid to such State under this subsection shall instead be paid
to the Commission and deposited in the United States Treasury.
``(3) State use of funds.--As a condition of continued
receipt of alternative compliance payments pursuant to this
subsection, a State shall use such payments exclusively for the
purposes of--
``(A) deploying technologies that generate
electricity from renewable energy resources; or
``(B) implementing cost-effective energy efficiency
programs to achieve electricity savings.
``(4) Reporting.--As a condition of continued receipt of
alternative compliance payments pursuant to this subsection, a
State shall, within 12 months of receipt of any such payments
and at 12-month intervals thereafter until such payments are
expended, provide a report to the Commission, in accordance
with such regulations as the Commission may prescribe, giving a
full accounting of the use of such payments, including a
detailed description of the activities funded thereby.
``(h) Information Collection.--The Commission may require any retail
electric supplier, renewable electricity generator, or such other
entities as the Commission deems appropriate, to provide any
information the Commission determines appropriate to carry out this
section. Failure to submit such information or submission of false or
misleading information under this subsection shall be a violation of
this section.
``(i) Enforcement and Judicial Review.--
``(1) Failure to submit credits or demonstrate savings.--If
any person fails to comply with the requirements of subsection
(b) or (g), such person shall be liable to pay to the
Commission a civil penalty equal to the product of--
``(A) double the alternative compliance payment
calculated under subsection (g)(1), and
``(B) the aggregate quantity of Federal renewable
electricity credits, total annual electricity savings,
or equivalent alternative compliance payments that the
person failed to submit in violation of the
requirements of subsections (b) and (g).
``(2) Enforcement.--The Commission shall assess a civil
penalty under paragraph (1) in accordance with the procedures
described in section 31(d) of the Federal Power Act (16 U.S.C.
823b(d)).
``(3) Violation of requirement of regulations or orders.--Any
person who violates, or fails or refuses to comply with, any
requirement of a regulation promulgated or order issued under
this section shall be subject to a civil penalty under section
316A(b) of the Federal Power Act (16 U.S.C. 825o-1). Such
penalty shall be assessed by the Commission in the same manner
as in the case of a violation referred to in section 316A(b) of
such Act.
``(j) Judicial Review.--Any person aggrieved by a final action taken
by the Commission under this section, other than the assessment of a
civil penalty under subsection (i), may use the procedures for review
described in section 313 of the Federal Power Act (16 U.S.C. 825l). For
purposes of this paragraph, references to an order in section 313 of
such Act shall be deemed to refer also to all other final actions of
the Commission under this section other than the assessment of a civil
penalty under subsection (i).
``(k) Savings Provisions.--Nothing in this section shall--
``(1) diminish or qualify any authority of a State or
political subdivision of a State to--
``(A) adopt or enforce any law or regulation
respecting renewable electricity or energy efficiency,
including any law or regulation establishing
requirements more stringent than those established by
this section, provided that no such law or regulation
may relieve any person of any requirement otherwise
applicable under this section; or
``(B) regulate the acquisition and disposition of
Federal renewable electricity credits by retail
electric suppliers within the jurisdiction of such
State or political subdivision, including the authority
to require such retail electric supplier to acquire and
submit to the Secretary for retirement Federal
renewable electricity credits in excess of those
submitted under this section; or
``(2) affect the application of, or the responsibility for
compliance with, any other provision of law or regulation,
including environmental and licensing requirements.
``(l) Sunset.--This section expires on December 31, 2040.''.
(b) Conforming Amendment.--The table of contents set forth in section
1(b) of the Public Utility Regulatory Policies Act of 1978 (16 U.S.C.
2601 and following) is amended by inserting after the item relating to
section 609 the following:
``Sec. 610. Combined efficiency and renewable electricity standard.''.
SEC. 102. CLARIFYING STATE AUTHORITY TO ADOPT RENEWABLE ENERGY
INCENTIVES.
Section 210 of the Public Utility Regulatory Policies Act of 1978 is
amended by adding at the end thereof:
``(o) Clarification of State Authority to Adopt Renewable Energy
Incentives.--Notwithstanding any other provision of this Act or the
Federal Power Act, a State legislature or regulatory authority may set
the rates for a sale of electric energy by a facility generating
electric energy from renewable energy sources pursuant to a State-
approved production incentive program under which the facility
voluntarily sells electric energy. For purposes of this subsection,
`State-approved production incentive program' means a requirement
imposed pursuant to State law, or by a State regulatory authority
acting within its authority under State law, that an electric utility
purchase renewable energy (as defined in section 609 of this Act) at a
specified rate.''.
Subtitle B--Carbon Capture and Sequestration
SEC. 111. NATIONAL STRATEGY.
(a) In General.--Not later than 1 year after the date of enactment of
this Act, the Administrator, in consultation with the Secretary of
Energy and the heads of such other relevant Federal agencies as the
President may designate, shall submit to Congress a report setting
forth a unified and comprehensive strategy to address the key legal,
regulatory and other barriers to the commercial-scale deployment of
carbon capture and sequestration.
(b) Barriers.-- The report under this section shall--
(1) identify those regulatory, legal, and other gaps and
barriers that could be addressed by a Federal agency using
existing statutory authority, those, if any, that require
Federal legislation, and those that would be best addressed at
the State or regional level;
(2) identify regulatory implementation challenges, including
those related to approval of State programs and delegation of
authority for permitting; and
(3) recommend rulemakings, Federal legislation, or other
actions that should be taken to further evaluate and address
such barriers.
SEC. 112. REGULATIONS FOR GEOLOGIC SEQUESTRATION SITES.
(a) Coordinated Certification and Permitting Process.--Title VIII of
the Clean Air Act, as added by section 331 of this Act, is amended by
adding after section 812 (as added by section 116 of this Act) the
following:
``SEC. 813. GEOLOGIC SEQUESTRATION SITES.
``(a) Coordinated Process.--The Administrator shall establish a
coordinated approach to certifying and permitting geologic
sequestration, taking into consideration all relevant statutory
authorities. In establishing such approach, the Administrator shall--
``(1) take into account, and reduce redundancy with, the
requirements of section 1421 of the Safe Drinking Water Act (42
U.S.C. 300h), as amended by section 112(b) of the American
Clean Energy and Security Act of 2009, including the rulemaking
for geologic sequestration wells described at 73 Fed. Reg.
43491-541 (July 25, 2008); and
``(2) to the extent practicable, reduce the burden on
certified entities and implementing authorities.
``(b) Regulations.--Not later than 2 years after the date of
enactment of this title, the Administrator shall promulgate regulations
to protect human health and the environment by minimizing the risk of
escape to the atmosphere of carbon dioxide injected for purposes of
geologic sequestration.
``(c) Requirements.--The regulations under subsection (b) shall
include--
``(1) a process to obtain certification for geologic
sequestration under this section; and
``(2) requirements for--
``(A) monitoring, record keeping, and reporting for
emissions associated with injection into, and escape
from, geologic sequestration sites, taking into account
any requirements or protocols developed under section
713;
``(B) public participation in the certification
process that maximizes transparency;
``(C) the sharing of data between States, Indian
tribes, and the Environmental Protection Agency; and
``(D) other elements or safeguards necessary to
achieve the purpose set forth in subsection (b).
``(d) Report.--Not later than 2 years after the promulgation of
regulations under subsection (b), and at 3-year intervals thereafter,
the Administrator shall deliver to the Committee on Energy and Commerce
of the House of Representatives and the Committee on Environment and
Public Works of the Senate a report on geologic sequestration in the
United States, and, to the extent relevant, other countries in North
America. Such report shall include--
``(1) data regarding injection, emissions to the atmosphere,
if any, and performance of active and closed geologic
sequestration sites, including those where enhanced hydrocarbon
recovery operations occur;
``(2) an evaluation of the performance of relevant Federal
environmental regulations and programs in ensuring
environmentally protective geologic sequestration practices;
``(3) recommendations on how such programs and regulations
should be improved or made more effective; and
``(4) other relevant information.''.
(b) Safe Drinking Water Act Standards.--Section 1421 of the Safe
Drinking Water Act (42 U.S.C. 300h) is amended by inserting after
subsection (d) the following:
``(e) Carbon Dioxide Geologic Sequestration Wells.--
``(1) In general.--Not later than 1 year after the date of
enactment of this subsection, the Administrator shall
promulgate regulations under subsection (a) for carbon dioxide
geologic sequestration wells.
``(2) Financial responsibility.--The regulations referred to
in paragraph (1) shall include requirements for maintaining
evidence of financial responsibility, including financial
responsibility for emergency and remedial response, well
plugging, site closure, and post-injection site care. Financial
responsibility may be established for carbon dioxide geologic
sequestration wells in accordance with regulations promulgated
by the Administrator by any one, or any combination, of the
following: insurance, guarantee, trust, standby trust, surety
bond, letter of credit, qualification as a self-insurer, or any
other method satisfactory to the Administrator.''.
SEC. 113. STUDIES AND REPORTS.
(a) Study of Legal Framework for Geologic Sequestration Sites.--
(1) Establishment of task force.--As soon as practicable, but
not later than 6 months after the date of enactment of this
Act, the Administrator shall establish a task force to be
composed of an equal number of subject matter experts,
nongovernmental organizations with expertise in environmental
policy, academic experts with expertise in environmental law,
State officials with environmental expertise, representatives
of State Attorneys General, and members of the private sector,
to conduct a study of--
(A) existing Federal environmental statutes, State
environmental statutes, and State common law that apply
to geologic sequestration sites for carbon dioxide,
including the ability of such laws to serve as risk
management tools;
(B) the existing statutory framework, including
Federal and State laws, that apply to harm and damage
to the environment or public health at closed sites
where carbon dioxide injection has been used for
enhanced hydrocarbon recovery;
(C) the statutory framework, environmental health and
safety considerations, implementation issues, and
financial implications of potential models for Federal,
State, or private sector assumption of liabilities and
financial responsibilities with respect to closed
geologic sequestration sites;
(D) private sector mechanisms, including insurance
and bonding, that may be available to manage
environmental, health and safety risk from closed
geologic sequestration sites; and
(E) the subsurface mineral rights, water rights, or
property rights issues associated with geologic
sequestration of carbon dioxide.
(2) Report.--Not later than 18 months after the date of
enactment of this Act, the task force established under
paragraph (1) shall submit to Congress a report describing the
results of the study conducted under that paragraph including
any consensus recommendations of the task force.
(b) Environmental Statutes.--
(1) Study.--The Administrator shall conduct a study examining
how, and under what circumstances, the environmental statutes
for which the Environmental Protection Agency has
responsibility would apply to carbon dioxide injection and
geologic sequestration activities.
(2) Report.--Not later than 1 year after the date of
enactment of this Act, the Administrator shall submit to
Congress a report describing the results of the study conducted
under paragraph (1).
SEC. 114. CARBON CAPTURE AND SEQUESTRATION DEMONSTRATION AND EARLY
DEPLOYMENT PROGRAM.
(a) Definitions.--For purposes of this section:
(1) Secretary.--The term ``Secretary'' means the Secretary of
Energy.
(2) Distribution utility.--The term ``distribution utility''
means an entity that distributes electricity directly to retail
consumers under a legal, regulatory, or contractual obligation
to do so.
(3) Electric utility.--The term ``electric utility'' has the
meaning provided by section 3(22) of the Federal Power Act (16
U.S.C. 796(22)).
(4) Fossil fuel-based electricity.--The term ``fossil fuel-
based electricity'' means electricity that is produced from the
combustion of fossil fuels.
(5) Fossil fuel.--The term ``fossil fuel'' means coal,
petroleum, natural gas or any derivative of coal, petroleum, or
natural gas.
(6) Corporation.--The term ``Corporation'' means the Carbon
Storage Research Corporation established in accordance with
this section.
(7) Qualified industry organization.--The term ``qualified
industry organization'' means the Edison Electric Institute,
the American Public Power Association, the National Rural
Electric Cooperative Association, a successor organization of
such organizations, or a group of owners or operators of
distribution utilities delivering fossil fuel-based electricity
who collectively represent at least 20 percent of the volume of
fossil fuel-based electricity delivered by distribution
utilities to consumers in the United States.
(8) Retail consumer.--The term ``retail consumer'' means an
end-user of electricity.
(b) Carbon Storage Research Corporation.--
(1) Establishment.--
(A) Referendum.--Qualified industry organizations may
conduct, at their own expense, a referendum among the
owners or operators of distribution utilities
delivering fossil fuel-based electricity for the
creation of a Carbon Storage Research Corporation. Such
referendum shall be conducted by an independent
auditing firm agreed to by the qualified industry
organizations. Voting rights in such referendum shall
be based on the quantity of fossil fuel-based
electricity delivered to consumers in the previous
calendar year or other representative period as
determined by the Secretary pursuant to subsection (f).
Upon approval of those persons representing two-thirds
of the total quantity of fossil fuel-based electricity
delivered to retail consumers, the Corporation shall be
established unless opposed by the State regulatory
authorities pursuant to subparagraph (B). All
distribution utilities voting in the referendum shall
certify to the independent auditing firm the quantity
of fossil fuel-based electricity represented by their
vote.
(B) State regulatory authorities.--Upon its own
motion or the petition of a qualified industry
organization, each State regulatory authority shall
consider its support or opposition to the creation of
the Corporation under subparagraph (A). State
regulatory authorities may notify the independent
auditing firm referred to in subparagraph (A) of their
views on the creation of the Corporation within 180
days after the date of enactment of this Act. If 40
percent or more of the State regulatory authorities
submit to the independent auditing firm written notices
of opposition, the Corporation shall not be established
notwithstanding the approval of the qualified industry
organizations as provided in subparagraph (A).
(2) Termination.--The Corporation shall be authorized to
collect assessments and conduct operations pursuant to this
section for a 10-year period from the date 6 months after the
date of enactment of this Act. After such 10-year period, the
Corporation is no longer authorized to collect assessments and
shall be dissolved on the date 15 years after such date of
enactment, unless the period is extended by an Act of Congress.
(3) Governance.--The Corporation shall operate as a division
or affiliate of the Electric Power Research Institute (referred
to in this section as ``EPRI'') and be managed by a Board of
not more than 15 voting members responsible for its operations,
including compliance with this section. EPRI, in consultation
with the Edison Electric Institute, the American Public Power
Association and the National Rural Electric Cooperative
Association shall appoint the Board members under clauses (i),
(ii), and (iii) of subparagraph (A) from among candidates
recommended by those organizations. At least a majority of the
Board members appointed by EPRI shall be representatives of
distribution utilities subject to assessments under subsection
(d).
(A) Members.--The Board shall include at least one
representative of each of the following:
(i) Investor-owned utilities.
(ii) Utilities owned by a State agency or a
municipality.
(iii) Rural electric cooperatives.
(iv) Fossil fuel producers.
(v) Nonprofit environmental organizations.
(vi) Independent generators or wholesale
power providers.
(vii) Consumer groups.
(B) Nonvoting members.--The Board shall also include
as additional nonvoting Members the Secretary of Energy
or his designee and 2 representatives of State
regulatory authorities as defined in section 3(17) of
the Public Utility Regulatory Policies Act of 1978 (16
U.S.C. 2602(17)), each designated by the National
Association of State Regulatory Utility Commissioners
from States that are not within the same transmission
interconnection.
(4) Compensation.--Corporation Board members shall receive no
compensation for their services, nor shall Corporation Board
members be reimbursed for expenses relating to their service.
(5) Terms.--Corporation Board members shall serve terms of 4
years and may serve not more than 2 full consecutive terms.
Members filling unexpired terms may serve not more than a total
of 8 consecutive years. Former members of the Corporation Board
may be reappointed to the Corporation Board if they have not
been members for a period of 2 years. Initial appointments to
the Corporation Board shall be for terms of 1, 2, 3, and 4
years, staggered to provide for the selection of 3 members each
year.
(6) Status of corporation.--The Corporation shall not be
considered to be an agency, department, or instrumentality of
the United States, and no officer or director or employee of
the Corporation shall be considered to be an officer or
employee of the United States Government, for purposes of title
5 or title 31 of the United States Code, or for any other
purpose, and no funds of the Corporation shall be treated as
public money for purposes of chapter 33 of title 31, United
States Code, or for any other purpose.
(c) Functions and Administration of the Corporation.--
(1) In general.--The Corporation shall establish and
administer a program to accelerate the commercial availability
of carbon dioxide capture and storage technologies and methods,
including technologies which capture and store, or capture and
convert, carbon dioxide. Under such program competitively
awarded grants, contracts, and financial assistance shall be
provided and entered into with eligible entities. Except as
provided in paragraph (8), the Corporation shall use all funds
derived from assessments under subsection (d) to issue grants
and contracts to eligible entities.
(2) Purpose.--The purposes of the grants, contracts, and
assistance under this subsection shall be to support
commercial-scale demonstrations of carbon capture or storage
technology projects capable of advancing the technologies to
commercial readiness. Such projects should encompass a range of
different coal and other fossil fuel varieties, be
geographically diverse, involve diverse storage media, and
employ capture or storage, or capture and conversion,
technologies potentially suitable either for new or for
retrofit applications. The Corporation shall seek, to the
extent feasible, to support at least 5 commercial-scale
demonstration projects integrating carbon capture and
sequestration or conversion technologies.
(3) Eligible entities.--Entities eligible for grants,
contracts or assistance under this subsection may include
distribution utilities, electric utilities and other private
entities, academic institutions, national laboratories, Federal
research agencies, State research agencies, nonprofit
organizations, or consortiums of 2 or more entities. Pilot-
scale and similar small-scale projects are not eligible for
support by the Corporation. Owners or developers of projects
supported by the Corporation shall, where appropriate, share in
the costs of such projects.
(4) Grants for early movers.--Fifty percent of the funds
raised under this section shall be provided in the form of
grants to electric utilities that had, prior to the award of
any grant under this section, committed resources to deploy a
large scale electricity generation unit with integrated carbon
capture and sequestration or conversion applied to a
substantial portion of the unit's carbon dioxide emissions.
Grant funds shall be provided to defray costs incurred by such
electricity utilities for at least 5 such electricity
generation units.
(5) Administration.--The members of the Board of Directors of
the Corporation shall elect a Chairman and other officers as
necessary, may establish committees and subcommittees of the
Corporation, and shall adopt rules and bylaws for the conduct
of business and the implementation of this section. The Board
shall appoint an Executive Director and professional support
staff who may be employees of the Electric Power Research
Institute (EPRI). After consultation with the Technical
Advisory Committee established under subsection (j), the
Secretary, and the Director of the National Energy Technology
Laboratory to obtain advice and recommendations on plans,
programs, and project selection criteria, the Board shall
establish priorities for grants, contracts, and assistance;
publish requests for proposals for grants, contracts, and
assistance; and award grants, contracts, and assistance
competitively, on the basis of merit, after the establishment
of procedures that provide for scientific peer review by the
Technical Advisory Committee. The Board shall give preference
to applications that reflect the best overall value and
prospect for achieving the purposes of the section, such as
those which demonstrate an integrated approach for capture and
storage or capture and conversion technologies. The Board
members shall not participate in making grants or awards to
entities with whom they are affiliated.
(6) Uses of grants, contracts, and assistance.--A grant,
contract, or other assistance provided under this subsection
may be used to purchase carbon dioxide when needed to conduct
tests of carbon dioxide storage sites, in the case of
established projects that are storing carbon dioxide emissions,
or for other purposes consistent with the purposes of this
section. The Corporation shall make publicly available at no
cost information learned as a result of projects which it
supports financially.
(7) Intellectual property.--The Board shall establish
policies regarding the ownership of intellectual property
developed as a result of Corporation grants and other forms of
technology support. Such policies shall encourage individual
ingenuity and invention.
(8) Administrative expenses.--Up to 5 percent of the funds
collected in any fiscal year under subsection (d) may be used
for the administrative expenses of operating the Corporation
(not including costs incurred in the determination and
collection of the assessments pursuant to subsection (d)).
(9) Programs and budget.--Before August 1 each year, the
Corporation, after consulting with the Technical Advisory
Committee and the Secretary and the Director of the
Department's National Energy Technology Laboratory and other
interested parties to obtain advice and recommendations, shall
publish for public review and comment its proposed plans,
programs, project selection criteria, and projects to be funded
by the Corporation for the next calendar year. The Corporation
shall also publish for public review and comment a budget plan
for the next calendar year, including the probable costs of all
programs, projects, and contracts and a recommended rate of
assessment sufficient to cover such costs. The Secretary may
recommend programs and activities the Secretary considers
appropriate. The Corporation shall include in the first
publication it issues under this paragraph a strategic plan or
roadmap for the achievement of the purposes of the Corporation,
as set forth in paragraph (2).
(10) Records; audits.--The Corporation shall keep minutes,
books, and records that clearly reflect all of the acts and
transactions of the Corporation and make public such
information. The books of the Corporation shall be audited by a
certified public accountant at least once each fiscal year and
at such other times as the Corporation may designate. Copies of
each audit shall be provided to the Congress, all Corporation
board members, all qualified industry organizations, each State
regulatory authority and, upon request, to other members of the
industry. If the audit determines that the Corporation's
practices fail to meet generally accepted accounting principles
the assessment collection authority of the Corporation under
subsection (d) shall be suspended until a certified public
accountant renders a subsequent opinion that the failure has
been corrected. The Corporation shall make its books and
records available for review by the Secretary or the
Comptroller General of the United States.
(11) Public access.--The Corporation Board's meetings shall
be open to the public and shall occur after at least 30 days
advance public notice. Meetings of the Board of Directors may
be closed to the public where the agenda of such meetings
includes only confidential matters pertaining to project
selection, the award of grants or contracts, personnel matters,
or the receipt of legal advice. The minutes of all meetings of
the Corporation shall be made available to and readily
accessible by the public.
(12) Annual report.--Each year the Corporation shall prepare
and make publicly available a report which includes an
identification and description of all programs and projects
undertaken by the Corporation during the previous year. The
report shall also detail the allocation or planned allocation
of Corporation resources for each such program and project. The
Corporation shall provide its annual report to the Congress,
the Secretary, each State regulatory authority, and upon
request to the public. The Secretary shall, not less than 60
days after receiving such report, provide to the President and
Congress a report assessing the progress of the Corporation in
meeting the objectives of this section.
(d) Assessments.--
(1) Amount.--(A) In all calendar years following its
establishment, the Corporation shall collect an assessment on
distribution utilities for all fossil fuel-based electricity
delivered directly to retail consumers (as determined under
subsection (f)). The assessments shall reflect the relative
carbon dioxide emission rates of different fossil fuel-based
electricity, and initially shall be not less than the following
amounts for coal, natural gas, and oil:
Fuel type Rate of assessment per kilowatt
hour
Coal................................ $0.00043
Natural Gas......................... $0.00022
Oil................................. $0.00032.
(B) The Corporation is authorized to adjust the assessments
on fossil fuel-based electricity to reflect changes in the
expected quantities of such electricity from different fuel
types, such that the assessments generate not less than $1.0
billion and not more than $1.1 billion annually. The
Corporation is authorized to supplement assessments through
additional financial commitments.
(2) Investment of funds.--Pending disbursement pursuant to a
program, plan, or project, the Corporation may invest funds
collected through assessments under this subsection, and any
other funds received by the Corporation, only in obligations of
the United States or any agency thereof, in general obligations
of any State or any political subdivision thereof, in any
interest-bearing account or certificate of deposit of a bank
that is a member of the Federal Reserve System, or in
obligations fully guaranteed as to principal and interest by
the United States.
(3) Reversion of unused funds.--If the Corporation does not
disburse, dedicate or assign 75 percent or more of the
available proceeds of the assessed fees in any calendar year 7
or more years following its establishment, due to an absence of
qualified projects or similar circumstances, it shall reimburse
the remaining undedicated or unassigned balance of such fees,
less administrative and other expenses authorized by this
section, to the distribution utilities upon which such fees
were assessed, in proportion to their collected assessments.
(e) ERCOT.--
(1) Assessment, collection, and remittance.--(A)
Notwithstanding any other provision of this section, within
ERCOT, the assessment provided for in subsection (d) shall be--
(i) levied directly on qualified scheduling entities,
or their successor entities;
(ii) charged consistent with other charges imposed on
qualified scheduling entities as a fee on energy used
by the load-serving entities; and
(iii) collected and remitted by ERCOT to the
Corporation in the amounts and in the same manner as
set forth in subsection (d).
(B) The assessment amounts referred to in subparagraph (A)
shall be--
(i) determined by the amount and types of fossil
fuel-based electricity delivered directly to all retail
customers in the prior calendar year beginning with the
year ending immediately prior to the period described
in subsection (b)(2); and
(ii) take into account the number of renewable energy
credits retired by the load-serving entities
represented by a qualified scheduling entity within the
prior calendar year.
(2) Administration expenses.--Up to 1 percent of the funds
collected in any fiscal year by ERCOT under the provisions of
this subsection may be used for the administrative expenses
incurred in the determination, collection and remittance of the
assessments to the Corporation.
(3) Audit.--ERCOT shall provide a copy of its annual audit
pertaining to the administration of the provisions of this
subsection to the Corporation.
(4) Definitions.--For the purposes of this subsection:
(A) The term ``ERCOT'' means the Electric Reliability
Council of Texas.
(B) The term ``load-serving entities'' has the
meaning adopted by ERCOT Protocols and in effect on the
date of enactment of this Act.
(C) The term ``qualified scheduling entities'' has
the meaning adopted by ERCOT Protocols and in effect on
the date of enactment of this Act.
(D) The term ``renewable energy credit'' has the
meaning as promulgated and adopted by the Public
Utility Commission of Texas pursuant to section
39.904(b) of the Public Utility Regulatory Act of 1999,
and in effect on the date of enactment of this Act.
(f) Determination of Fossil Fuel-Based Electricity Deliveries.--
(1) Findings.--The Congress finds that:
(A) The assessments under subsection (d) are to be
collected based on the amount of fossil fuel-based
electricity delivered by each distribution utility.
(B) Since many distribution utilities purchase all or
part of their retail consumer's electricity needs from
other entities, it may not be practical to determine
the precise fuel mix for the power sold by each
individual distribution utility.
(C) It may be necessary to use average data, often on
a regional basis with reference to Regional
Transmission Organization (``RTO'') or NERC regions, to
make the determinations necessary for making
assessments.
(2) DOE proposed rule.--The Secretary, acting in close
consultation with the Energy Information Administration, shall
issue for notice and comment a proposed rule to determine the
level of fossil fuel electricity delivered to retail customers
by each distribution utility in the United States during the
most recent calendar year or other period determined to be most
appropriate. Such proposed rule shall balance the need to be
efficient, reasonably precise, and timely, taking into account
the nature and cost of data currently available and the nature
of markets and regulation in effect in various regions of the
country. Different methodologies may be applied in different
regions if appropriate to obtain the best balance of such
factors.
(3) Final rule.--Within 6 months after the date of enactment
of this Act, and after opportunity for comment, the Secretary
shall issue a final rule under this subsection for determining
the level and type of fossil fuel-based electricity delivered
to retail customers by each distribution utility in the United
States during the appropriate period. In issuing such rule, the
Secretary may consider opportunities and costs to develop new
data sources in the future and issue recommendations for the
Energy Information Administration or other entities to collect
such data. After notice and opportunity for comment the
Secretary may, by rule, subsequently update and modify the
methodology for making such determinations.
(4) Annual determinations.--Pursuant to the final rule issued
under paragraph (3), the Secretary shall make annual
determinations of the amounts and types for each such utility
and publish such determinations in the Federal Register. Such
determinations shall be used to conduct the referendum under
subsection (b) and by the Corporation in applying any
assessment under this subsection.
(5) Rehearing and judicial review.--The owner or operator of
any distribution utility that believes that the Secretary has
misapplied the methodology in the final rule in determining the
amount and types of fossil fuel electricity delivered by such
distribution utility may seek rehearing of such determination
within 30 days of publication of the determination in the
Federal Register. The Secretary shall decide such rehearing
petitions within 30 days. The Secretary's determinations
following rehearing shall be final and subject to judicial
review in the United States Court of Appeals for the District
of Columbia.
(g) Compliance With Corporation Assessments.--The Corporation may
bring an action in the appropriate court of the United States to compel
compliance with an assessment levied by the Corporation under this
section. A successful action for compliance under this subsection may
also require payment by the defendant of the costs incurred by the
Corporation in bringing such action.
(h) Midcourse Review.--Not later than 5 years following establishment
of the Corporation, the Comptroller General of the United States shall
prepare an analysis, and report to Congress, assessing the
Corporation's activities, including project selection and methods of
disbursement of assessed fees, impacts on the prospects for
commercialization of carbon capture and storage technologies, adequacy
of funding, and administration of funds. The report shall also make
such recommendations as may be appropriate in each of these areas. The
Corporation shall reimburse the Government Accountability Office for
the costs associated with performing this midcourse review.
(i) Recovery of Costs.--
(1) In general.--A distribution utility whose transmission,
delivery, or sales of electric energy are subject to any form
of rate regulation shall not be denied the opportunity to
recover the full amount of the prudently incurred costs
associated with complying with this section, consistent with
applicable State or Federal law.
(2) Ratepayer rebates.--Regulatory authorities that approve
cost recovery pursuant to paragraph (1) may order rebates to
ratepayers to the extent that distribution utilities are
reimbursed undedicated or unassigned balances pursuant to
subsection (d)(3).
(j) Technical Advisory Committee.--
(1) Establishment.--There is established an advisory
committee, to be known as the ``Technical Advisory Committee''.
(2) Membership.--The Technical Advisory Committee shall be
comprised of not less than 7 members appointed by the Board
from among academic institutions, national laboratories,
independent research institutions, and other qualified
institutions. No member of the Committee shall be affiliated
with EPRI or with any organization having members serving on
the Board. At least one member of the Committee shall be
appointed from among officers or employees of the Department of
Energy recommended to the Board by the Secretary of Energy.
(3) Chairperson and vice chairperson.--The Board shall
designate one member of the Technical Advisory Committee to
serve as Chairperson of the Committee and one to serve as Vice
Chairperson of the Committee.
(4) Compensation.--The Board shall provide compensation to
members of the Technical Advisory Committee for travel and
other incidental expenses and such other compensation as the
Board determines to be necessary.
(5) Purpose.--The Technical Advisory Committee shall provide
independent assessments and technical evaluations, as well as
make non-binding recommendations to the Board, concerning
Corporation activities, including but not limited to the
following:
(A) Reviewing and evaluating the Corporation's plans
and budgets described in subsection (c)(9), as well as
any other appropriate areas, which could include
approaches to prioritizing technologies,
appropriateness of engineering techniques, monitoring
and verification technologies for storage, geological
site selection, and cost control measures.
(B) Making annual non-binding recommendations to the
Board concerning any of the matters referred to in
subparagraph (A), as well as what types of investments,
scientific research, or engineering practices would
best further the goals of the Corporation.
(6) Public availability.--All reports, evaluations, and other
materials of the Technical Advisory Committee shall be made
available to the public by the Board, without charge, at time
of receipt by the Board.
(k) Lobbying Restrictions.--No funds collected by the Corporation
shall be used in any manner for influencing legislation or elections,
except that the Corporation may recommend to the Secretary and the
Congress changes in this section or other statutes that would further
the purposes of this section.
(l) Davis-Bacon Compliance.--The Corporation shall ensure that
entities receiving grants, contracts, or other financial support from
the Corporation for the project activities authorized by this section
are in compliance with the Davis-Bacon Act (40 U.S.C. 276a-276a-5).
SEC. 115. COMMERCIAL DEPLOYMENT OF CARBON CAPTURE AND SEQUESTRATION
TECHNOLOGIES.
Part H of title VII of the Clean Air Act (as added by section 321 of
this Act) is amended by adding the following new section after section
785:
``SEC. 786. COMMERCIAL DEPLOYMENT OF CARBON CAPTURE AND SEQUESTRATION
TECHNOLOGIES.
``(a) Regulations.--Not later than 2 years after the date of
enactment of this title, the Administrator shall promulgate regulations
providing for the distribution of emission allowances allocated
pursuant to section 782(f), pursuant to the requirements of this
section, to support the commercial deployment of carbon capture and
sequestration technologies in both electric power generation and
industrial operations.
``(b) Eligibility Criteria.--To be eligible to receive emission
allowances under this section, the owner or operator of a project
must--
``(1) implement carbon capture and sequestration technology--
``(A) at an electric generating unit that--
``(i) has a nameplate capacity of 200
megawatts or more;
``(ii) in the case of a retrofit application,
applies the carbon capture and sequestration
technology to the flue gas from at least 200
megawatts of the total nameplate generating
capacity of the unit, provided that clause (i)
shall apply without exception;
``(iii) derives at least 50 percent of its
annual fuel input from coal, petroleum coke, or
any combination of these 2 fuels; and
``(iv) upon implementation of capture and
sequestration technology, will achieve an
emission limit that is at least a 50 percent
reduction in emissions of the carbon dioxide
produced by--
``(I) the unit, measured on an annual
basis, determined in accordance with
section 812(b)(2); or
``(II) in the case of retrofit
applications under clause (ii), the
treated portion of flue gas from the
unit, measured on an annual basis,
determined in accordance with section
812(b)(2); or
``(B) at an industrial source that--
``(i) absent carbon capture and
sequestration, would emit greater than 50,000
tons per year of carbon dioxide;
``(ii) upon implementation, will achieve an
emission limit that is at least a 50 percent
reduction in emissions of the carbon dioxide
produced by the emission point, measured on an
annual basis, determined in accordance with
section 812(b)(2); and
``(iii) does not produce a liquid
transportation fuel from a solid fossil-based
feedstock;
``(2) geologically sequester carbon dioxide at a site that
meets all applicable permitting and certification requirements
for geologic sequestration, or, pursuant to such requirements
as the Administrator may prescribe by regulation, convert
captured carbon dioxide to a stable form that will safely and
permanently sequester such carbon dioxide;
``(3) meet all other applicable State and Federal permitting
requirements; and
``(4) be located in the United States.
``(c) Phase I Distribution to Electric Generating Units.--
``(1) Application.--This subsection shall apply only to
projects at the first 6 gigawatts of electric generating units,
measured in cumulative generating capacity of such units.
``(2) Distribution.--The Administrator shall distribute
emission allowances allocated under section 782(f) to the owner
or operator of each eligible project at an electric generating
unit in a quantity equal to the quotient obtained by dividing--
``(A) the product obtained by multiplying--
``(i) the number of metric tons of carbon
dioxide emissions avoided through capture and
sequestration of emissions by the project, as
determined pursuant to such methodology as the
Administrator shall prescribe by regulation;
and
``(ii) a bonus allowance value, pursuant to
paragraph (3); by
``(B) the average fair market value of an emission
allowance during the preceding year.
``(3) Bonus allowance values.--
``(A) For a generating unit achieving the capture and
sequestration of 85 percent or more of the carbon
dioxide that otherwise would be emitted by such unit,
the bonus allowance value shall be $90.
``(B) The Administrator shall by regulation establish
a bonus allowance value for each rate of lower capture
and sequestration achieved by a generating unit, from a
minimum of $50 per ton for a 50 percent rate and
varying directly with increasing rates of capture and
sequestration up to $90 per ton for an 85 percent rate.
``(C) For a generating unit that achieves the capture
and sequestration of at least 50 percent of the carbon
dioxide that otherwise would be emitted by such unit by
not later than January 1, 2017, the otherwise
applicable bonus allowance value under this paragraph
shall be increased by $10, provided that the owner of
such unit notifies the Administrator of its intent to
achieve such rate of capture and sequestration by not
later than January 1, 2012.
``(D) For a carbon capture and sequestration project
sequestering in a geological formation for purposes of
enhanced hydrocarbon recovery, the Administrator shall,
by regulation, reduce the applicable bonus allowance
value under this paragraph to reflect the lower net
cost of the project when compared to sequestration into
geological formations solely for purposes of
sequestration.
``(E) All monetary values in this section shall be
adjusted annually for inflation.
``(d) Phase II Distribution to Electric Generating Units.--
``(1) Application.--This subsection shall apply only to the
distribution of emission allowances to carbon capture and
sequestration projects at electric generating units after the
capacity threshold identified in subsection (c)(1) is reached.
``(2) Regulations.--Not later than 2 years prior to the date
on which the capacity threshold identified in subsection (c)(1)
is projected to be reached, the Administrator shall promulgate
regulations to govern the distribution of emission allowances
to the owners or operators of eligible projects under this
subsection.
``(3) Reverse auctions.--
``(A) In general.--Except as provided in paragraph
(4), the regulations promulgated under paragraph (2)
shall provide for the distribution of emission
allowances to the owners or operators of eligible
projects under this subsection through reverse
auctions, which shall be held no less frequently than
once each calendar year. The Administrator may
establish a separate auction for each of no more than 5
different project categories, defined on the basis of
coal type, capture technology, geological formation
type, new unit versus retrofit application, such other
factors as the Administrator may prescribe, or any
combination thereof. The Administrator may establish
appropriate minimum rates of capture and sequestration
in implementing this paragraph.
``(B) Auction process.--At each reverse auction--
``(i) the Administrator shall solicit bids
from eligible projects;
``(ii) eligible projects participating in the
auction shall submit a bid including the
desired level of carbon dioxide sequestration
incentive per ton and the estimated quantity of
carbon dioxide that the project will
permanently sequester over 10 years; and
``(iii) the Administrator shall select bids,
within each auction, for the sequestration
amount submitted, beginning with the eligible
project submitting the bid for the lowest level
of sequestration incentive on a per ton basis
and meeting such other requirements as the
Administrator may specify, until the amount of
funds available for the reverse auction is
committed.
``(C) Form of distribution.--The Administrator shall
provide deployment incentives to the owners or
operators of eligible projects selected through a
reverse auction under this paragraph pursuant to a
formula equivalent to that described in subsection
(c)(2), except that the incentive level that is bid by
the entity shall be substituted for the bonus allowance
value.
``(4) Alternative distribution method.--
``(A) In general.--If the Administrator determines
that reverse auctions would not provide for efficient
and cost-effective commercial deployment of carbon
capture and sequestration technologies, the
Administrator may instead, through regulations
promulgated under paragraph (2) or (5), prescribe a
schedule for the award of bonus allowances to the
owners or operators of eligible projects under this
subsection, in accordance with the requirements of this
paragraph.
``(B) Multiple tranches.--The Administrator shall
divide emission allowances available for distribution
to the owners or operators of eligible projects into a
series of tranches, each supporting the deployment of a
specified quantity of cumulative electric generating
capacity utilizing carbon capture and sequestration
technology, each of which shall not be greater than 6
gigawatts.
``(C) Method of distribution.--The Administrator
shall distribute emission allowances within each
tranche, on a first-come, first-served basis--
``(i) based on the date of full-scale
operation of capture and sequestration
technology; and
``(ii) pursuant to a formula, similar to that
set forth in subsection (c)(2) (except that the
Administrator shall prescribe bonus allowance
values different than those set forth in
subsection (c)(2)), establishing the number of
allowances to be distributed per ton of carbon
dioxide sequestered by the project.
``(D) Requirements.--For each tranche established
pursuant to subparagraph (A), the Administrator shall
establish a schedule for distributing emission
allowances that--
``(i) is based on a sliding scale that
provides higher bonus allowance values for
projects achieving higher rates of capture and
sequestration;
``(ii) for each capture and sequestration
rate, establishes a bonus allowance value that
is lower than that established for such rate in
the previous tranche (or, in the case of the
first tranche, than that established for such
rate under subsection (c)(3)); and
``(iii) may establish different bonus
allowance levels for no more than 5 different
project categories, defined by coal type,
capture technology, geological formation type,
new unit versus retrofit application, such
other factors as the Administrator may
prescribe, or any combination thereof.
``(E) Criteria for establishing bonus allowance
values.--In setting bonus allowance values under this
paragraph, the Administrator shall seek to cover no
more than the reasonable incremental capital and
operating costs of a project that are attributable to
implementation of carbon capture, transportation, and
sequestration technologies, taking into account--
``(i) the reduced cost of compliance with
section 722 of this Act;
``(ii) the reduced cost associated with
sequestering in a geological formation for
purposes of enhanced hydrocarbon recovery when
compared to sequestration into geological
formations solely for purposes of
sequestration;
``(iii) the relevant factors defining the
project category; and
``(iv) such other factors as the
Administrator determines are appropriate.
``(5) Revision of regulations.--The Administrator shall
review, and as appropriate revise, the applicable regulations
under this subsection no less frequently than every 8 years.
``(e) Limits for Certain Electric Generating Units.--
``(1) Definitions.--For purposes of this subsection, the
terms `covered EGU' and `initially permitted' shall have the
meaning given those terms in section 812 of this Act.
``(2) Covered egus initially permitted from 2009 through
2014.--For a covered EGU that is initially permitted on or
after January 1, 2009, and before January 1, 2015, the
Administrator shall reduce the quantity of emission allowances
that the owner or operator of such covered EGU would otherwise
be eligible to receive under this section as follows:
``(A) In the case of a unit commencing operation on
or before January 1, 2019, if the date in clause
(ii)(I) is earlier than the date in clause (ii)(II), by
the product of--
``(i) 20 percent; and
``(ii) the number of years, if any, that have
elapsed between--
``(I) the earlier of January 1, 2020,
or the date that is 5 years after the
commencement of operation of such
covered EGU; and
``(II) the first year that such
covered EGU achieves (and thereafter
maintains) an emission limit that is at
least a 50 percent reduction in
emissions of the carbon dioxide
produced by the unit, measured on an
annual basis, as determined in
accordance with section 812(b)(2).
``(B) In the case of a unit commencing operation
after January 1, 2019, by the product of--
``(i) 20 percent; and
``(ii) the number of years between--
``(I) the commencement of operation
of such covered EGU; and
``(II) the first year that such
covered EGU achieves (and thereafter
maintains) an emission limit that is at
least a 50 percent reduction in
emissions of the carbon dioxide
produced by the unit, measured on an
annual basis, as determined in
accordance with section 812(b)(2).
``(3) Covered egus initially permitted from 2015 through
2019.--The owner or operator of a covered EGU that is initially
permitted on or after January 1, 2015, and before January 1,
2020, shall be ineligible to receive emission allowances
pursuant to this section if such unit, upon commencement of
operations (and thereafter), does not achieve and maintain an
emission limit that is at least a 50 percent reduction in
emissions of the carbon dioxide produced by the unit, measured
on an annual basis, as determined in accordance with section
812(b)(2).
``(f) Industrial Sources.--
``(1) Allowances.--The Administrator may distribute not more
than 15 percent of the allowances allocated under section
782(a) for any vintage year to the owners or operators of
eligible industrial sources to support the commercial-scale
deployment of carbon capture and sequestration technologies at
such sources.
``(2) Distribution.--The Administrator shall, by regulation,
prescribe requirements for the distribution of emission
allowances to the owners or operators of industrial sources
under this subsection, based on a bonus allowance formula that
awards allowances to qualifying projects on the basis of tons
of carbon dioxide captured and permanently sequestered. The
Administrator may provide for the distribution of emission
allowances pursuant to--
``(A) a reverse auction method, similar to that
described under subsection (d)(3), including the use of
separate auctions for different project categories; or
``(B) an incentive schedule, similar to that
described under subsection (d)(4), which shall ensure
that incentives are set so as to satisfy the
requirement described in subsection (d)(4)(E).
``(3) Revision of regulations.--The Administrator shall
review, and as appropriate revise, the applicable regulations
under this subsection no less frequently than every 8 years.
``(g) Limitations.--Allowances may be distributed under this section
only for tons of carbon dioxide emissions that have already been
captured and sequestered. A qualifying project may receive annual
emission allowances under this section only for the first 10 years of
operation. No greater than 72 gigawatts of total cumulative generating
capacity (including industrial applications, measured by such
equivalent metric as the Administrator may designate) may receive
emission allowances under this section. Upon reaching the limit
described in the preceding sentence, any emission allowances that are
allocated for carbon capture and sequestration deployment under section
782(f) and are not yet obligated under this section shall be treated as
allowances not designated for distribution for purposes of section
782(r).
``(h) Exhaustion of Account and Annual Roll-Over of Surplus
Allowances.--
``(1) In distributing bonus allowances under this subsection,
the Administrator shall ensure that qualifying projects
receiving allowances receive distributions for 10 years.
``(2) If the Administrator determines that the allowances
allocated under section 782(f) with a vintage year that matches
the year of distribution will be exhausted once the estimated
full 10-year distributions will be provided to current eligible
participants, the Administrator shall provide to new eligible
projects allowances from vintage years after the year of the
distribution.
``(i) Retrofit Applications.--(1) In calculating bonus allowance
values for retrofit applications eligible under subsections
(b)(1)(A)(ii) and (b)(1)(A)(iv)(II), the Administrator shall apply the
required capture rates with respect to the treated portion of flue gas
from the unit.
``(2) No additional projects shall be eligible for allowances under
subsections (b)(1)(A)(ii) and (b)(1)(A)(iv)(II) as of such time as the
Administrator reports, pursuant to section 812(d), that carbon capture
and sequestration retrofit projects at electric generating units that
are eligible for allowances under this section have been applied, in
the aggregate, to the flue gas generated by 1 gigawatt of total
cumulative generating capacity.
``(j) Davis-Bacon Compliance.--All laborers and mechanics employed on
projects funded directly by or assisted in whole or in part by this
section through the use of bonus allowances shall be paid wages at
rates not less than those prevailing on projects of a character similar
in the locality as determined by the Secretary of Labor in accordance
with subchapter IV, chapter 31, part A of subtitle II of title 40,
United States Code. With respect to the labor standards specified in
this section, the Secretary of Labor shall have the authority and
functions set forth in Reorganization Plan Numbered 14 of 1950 (64
Stat. 1267; 5 U.S.C. App.) and section 3145 of title 40, United States
Code.''.
SEC. 116. PERFORMANCE STANDARDS FOR COAL-FUELED POWER PLANTS.
(a) In General.--Title VIII of the Clean Air Act (as added by section
331 of this Act) is amended by adding the following new section after
section 811:
``SEC. 812. PERFORMANCE STANDARDS FOR NEW COAL-FIRED POWER PLANTS.
``(a) Definitions.--For purposes of this section:
``(1) Covered egu.--The term `covered EGU' means a utility
unit that is required to have a permit under section 503(a) and
is authorized under state or federal law to derive at least 30
percent of its annual heat input from coal, petroleum coke, or
any combination of these fuels.
``(2) Initially permitted.--The term `initially permitted'
means that the owner or operator has received a Clean Air Act
preconstruction approval or permit, for the covered EGU as a
new (not a modified) source, but administrative review or
appeal of such approval or permit has not been exhausted. A
subsequent modification of any such approval or permits,
ongoing administrative or court review, appeals, or challenges,
or the existence or tolling of any time to pursue further
review, appeals, or challenges shall not affect the date on
which a covered EGU is considered to be initially permitted
under this paragraph.
``(b) Standards.--(1) A covered EGU that is initially permitted on or
after January 1, 2020, shall achieve an emission limit that is a 65
percent reduction in emissions of the carbon dioxide produced by the
unit, as measured on an annual basis, or meet such more stringent
standard as the Administrator may establish pursuant to subsection (c).
``(2) A covered EGU that is initially permitted after January 1,
2009, and before January 1, 2020, shall, by the applicable compliance
date established under this paragraph, achieve an emission limit that
is a 50 percent reduction in emissions of the carbon dioxide produced
by the unit, as measured on an annual basis. Compliance with the
requirement set forth in this paragraph shall be required by the
earliest of the following:
``(A) Four years after the date the Administrator has
published pursuant to subsection (d) a report that there are in
commercial operation in the United States electric generating
units or other stationary sources equipped with carbon capture
and sequestration technology that, in the aggregate--
``(i) have a total of at least 4 gigawatts of
nameplate generating capacity of which--
``(I) at least 3 gigawatts must be electric
generating units; and
``(II) up to 1 gigawatt may be industrial
applications, for which capture and
sequestration of 3 million tons of carbon
dioxide per year on an aggregate annualized
basis shall be considered equivalent to 1
gigawatt;
``(ii) include at least 2 electric generating units,
each with a nameplate generating capacity of 250
megawatts or greater, that capture, inject, and
sequester carbon dioxide into geologic formations other
than oil and gas fields; and
``(iii) are capturing and sequestering in the
aggregate at least 12 million tons of carbon dioxide
per year, calculated on an aggregate annualized basis.
``(B) January 1, 2025.
``(3) If the deadline for compliance with paragraph (2) is January 1,
2025, the Administrator may extend the deadline for compliance by a
covered EGU by up to 18 months if the Administrator makes a
determination, based on a showing by the owner or operator of the unit,
that it will be technically infeasible for the unit to meet the
standard by the deadline. The owner or operator must submit a request
for such an extension by no later than January 1, 2022, and the
Administrator shall provide for public notice and comment on the
extension request.
``(c) Review and Revision of Standards.--Not later than 2025 and at
5-year intervals thereafter, the Administrator shall review the
standards for new covered EGUs under this section and shall, by rule,
reduce the maximum carbon dioxide emission rate for new covered EGUs to
a rate which reflects the degree of emission limitation achievable
through the application of the best system of emission reduction which
(taking into account the cost of achieving such reduction and any
nonair quality health and environmental impact and energy requirements)
the Administrator determines has been adequately demonstrated.
``(d) Reports.--Not later than the date 18 months after the date of
enactment of this title and semiannually thereafter, the Administrator
shall publish a report on the nameplate capacity of units (determined
pursuant to subsection (b)(2)(A)) in commercial operation in the United
States equipped with carbon capture and sequestration technology,
including the information described in subsection (b)(2)(A) (including
the cumulative generating capacity to which carbon capture and
sequestration retrofit projects meeting the criteria described in
section 786(b)(1)(A)(ii) and (b)(1)(A)(iv)(II) has been applied and the
quantities of carbon dioxide captured and sequestered by such
projects).
``(e) Regulations.--Not later than 2 years after the date of
enactment of this title, the Administrator shall promulgate regulations
to carry out the requirements of this section.''.
Subtitle C--Clean Transportation
SEC. 121. ELECTRIC VEHICLE INFRASTRUCTURE.
(a) Amendment of PURPA.--Section 111(d) of the Public Utility
Regulatory Policies Act of 1978 (16 U.S.C. 2621(d)) is amended by
adding at the end the following:
``(20) Plug-in electric drive vehicle infrastructure.--
``(A) Utility plan for infrastructure.--Each electric
utility shall develop a plan to support the use of
plug-in electric drive vehicles, including heavy-duty
hybrid electric vehicles. The plan may provide for
deployment of electrical charging stations in public or
private locations, including street parking, parking
garages, parking lots, homes, gas stations, and highway
rest stops. Any such plan may also include--
``(i) battery exchange, fast charging
infrastructure and other services;
``(ii) triggers for infrastructure deployment
based upon market penetration of plug-in
electric drive vehicles; and
``(iii) such other elements as the State
determines necessary to support plug-in
electric drive vehicles.
Each plan under this paragraph shall provide for the
deployment of the charging infrastructure or other
infrastructure necessary to adequately support the use
of plug-in electric drive vehicles.
``(B) Support requirements.--Each State regulatory
authority (in the case of each electric utility for
which it has ratemaking authority) and each utility (in
the case of a nonregulated utility) shall--
``(i) require that charging infrastructure
deployed is interoperable with products of all
auto manufacturers to the extent possible; and
``(ii) consider adopting minimum requirements
for deployment of electrical charging
infrastructure and other appropriate
requirements necessary to support the use of
plug-in electric drive vehicles.
``(C) Cost recovery.--Each State regulatory authority
(in the case of each electric utility for which it has
ratemaking authority) and each utility (in the case of
a nonregulated utility) shall consider whether, and to
what extent, to allow cost recovery for plans and
implementation of plans.
``(D) Smart grid integration.--The State regulatory
authority (in the case of each electric utility for
which it has ratemaking authority) and each utility (in
the case of a nonregulated utility) shall, in
accordance with regulations issued by the Federal
Energy Regulatory Commission pursuant to section
1305(d) of the Energy Independence and Security Act of
2007--
``(i) establish any appropriate protocols and
standards for integrating plug-in electric
drive vehicles into an electrical distribution
system, including Smart Grid systems and
devices as described in title XIII of the
Energy Independence and Security Act of 2007;
``(ii) include, to the extent feasible, the
ability for each plug-in electric drive vehicle
to be identified individually and to be
associated with its owner's electric utility
account, regardless of the location that the
vehicle is plugged in, for purposes of
appropriate billing for any electricity
required to charge the vehicle's batteries as
well as any crediting for electricity provided
to the electric utility from the vehicle's
batteries; and
``(iii) review the determination made in
response to section 1252 of the Energy Policy
Act of 2005 in light of this section, including
whether time-of-use pricing should be employed
to enable the use of plug-in electric drive
vehicles to contribute to meeting peak-load and
ancillary service power needs.''.
(b) Compliance.--
(1) Time limitations.--Section 112(b) of the Public Utility
Regulatory Policies Act of 1978 (16 U.S.C. 2622(b)) is amended
by adding the following at the end thereof:
``(7)(A) Not later than 3 years after the date of enactment of this
paragraph, each State regulatory authority (with respect to each
electric utility for which it has ratemaking authority) and each
nonregulated utility shall commence the consideration referred to in
section 111, or set a hearing date for consideration, with respect to
the standard established by paragraph (20) of section 111(d).
``(B) Not later than 4 years after the date of enactment of the this
paragraph, each State regulatory authority (with respect to each
electric utility for which it has ratemaking authority), and each
nonregulated electric utility, shall complete the consideration, and
shall make the determination, referred to in section 111 with respect
to the standard established by paragraph (20) of section 111(d).''.
(2) Failure to comply.--Section 112(c) of the Public Utility
Regulatory Policies Act of 1978 (16 U.S.C. 2622(c)) is amended
by adding the following at the end: ``In the case of the
standards established by paragraph (20) of section 111(d), the
reference contained in this subsection to the date of enactment
of this Act shall be deemed to be a reference to the date of
enactment of such paragraph.''.
(3) Prior state actions.--Section 112(d) of the Public
Utility Regulatory Policies Act of 1978 (16 U.S.C. 2622(d)) is
amended by striking ``(19)'' and inserting ``(20)'' before ``of
section 111(d)''.
SEC. 122. LARGE-SCALE VEHICLE ELECTRIFICATION PROGRAM.
(a) Deployment Program.--The Secretary of Energy shall establish a
program to deploy and integrate plug-in electric drive vehicles into
the electricity grid in multiple regions. In carrying out the program,
the Secretary may provide financial assistance described under
subsection (d), consistent with the goals under subsection (b). The
Secretary shall select regions based upon applications for assistance
received pursuant to subsection (c).
(b) Goals.--The goals of the program established pursuant to
subsection (a) shall be--
(1) to demonstrate the viability of a vehicle-based
transportation system that is not overly dependent on petroleum
as a fuel and contributes to lower carbon emissions than a
system based on conventional vehicles;
(2) to facilitate the integration of advanced vehicle
technologies into electricity distribution areas to improve
system performance and reliability;
(3) to demonstrate the potential benefits of coordinated
investments in vehicle electrification on personal mobility and
a regional grid;
(4) to demonstrate protocols and standards that facilitate
vehicle integration into the grid; and
(5) to investigate differences in each region and regulatory
environment regarding best practices in implementing vehicle
electrification.
(c) Applications.--Any State, Indian tribe, or local government (or
group of State, Indian tribe, or local governments) may apply to the
Secretary of Energy for financial assistance in furthering the regional
deployment and integration into the electricity grid of plug-in
electric drive vehicles. Such applications may be jointly sponsored by
electric utilities, automobile manufacturers, technology providers, car
sharing companies or organizations, or other persons or entities.
(d) Use of Funds.--Pursuant to applications received under subsection
(c), the Secretary may make financial assistance available to any
applicant or joint sponsor of the application to be used for any of the
following:
(1) Assisting persons located in the regional deployment
area, including fleet owners, in the purchase of new plug-in
electric drive vehicles by offsetting in whole or in part the
incremental cost of such vehicles above the cost of comparable
conventionally fueled vehicles.
(2) Supporting the use of plug-in electric drive vehicles by
funding projects for the deployment of any of the following:
(A) Electrical charging infrastructure for plug-in
electric drive vehicles, including battery exchange,
fast charging infrastructure, and other services, in
public or private locations, including street parking,
parking garages, parking lots, homes, gas stations, and
highway rest stops.
(B) Smart Grid equipment and infrastructure, as
described in title XIII of the Energy Independence and
Security Act of 2007, to facilitate the charging and
integration of plug-in electric drive vehicles.
(3) Such other projects as the Secretary determines
appropriate to support the large-scale deployment of plug-in
electric drive vehicles in regional deployment areas.
(e) Program Requirements.--The Secretary, in consultation with the
Administrator and the Secretary of Transportation, shall determine
design elements and requirements of the program established pursuant to
subsection (a), including--
(1) the type of financial mechanism with which to provide
financial assistance;
(2) criteria for evaluating applications submitted under
subsection (c), including the anticipated ability to promote
deployment and market penetration of vehicles that are less
dependent on petroleum as a fuel source; and
(3) reporting requirements for entities that receive
financial assistance under this section, including a
comprehensive set of performance data characterizing the
results of the deployment program.
(f) Information Clearinghouse.--The Secretary shall, as part of the
program established pursuant to subsection (a), collect and make
available to the public information regarding the cost, performance,
and other technical data regarding the deployment and integration of
plug-in electric drive vehicles.
(g) Authorization.--There are authorized to be appropriated to carry
out this section such sums as may be necessary.
SEC. 123. PLUG-IN ELECTRIC DRIVE VEHICLE MANUFACTURING.
(a) Vehicle Manufacturing Assistance Program.--The Secretary of
Energy shall establish a program to provide financial assistance to
automobile manufacturers to facilitate the manufacture of plug-in
electric drive vehicles, as defined in section 131(a)(5) of the Energy
Independence and Security Act of 2007, that are developed and produced
in the United States.
(b) Financial Assistance.--The Secretary of Energy may provide
financial assistance to an automobile manufacturer under the program
established pursuant to subsection (a) for--
(1) the reconstruction or retooling of facilities for the
manufacture of plug-in electric drive vehicles that are
developed and produced in the United States; and
(2) if appropriate, the purchase of domestically produced
vehicle batteries to be used in the manufacture of vehicles
manufactured pursuant to paragraph (1).
(c) Coordination With Regional Deployment.--The Secretary may provide
financial assistance under subsection (b) in conjunction with the award
of financial assistance under the large scale vehicle electrification
program established pursuant to section 122 of this Act.
(d) Program Requirements.--The Secretary shall determine design
elements and requirements of the program established pursuant to
subsection (a), including--
(1) the type of financial mechanism with which to provide
financial assistance;
(2) criteria, in addition to the criteria described under
subsection (e), for evaluating applications for financial
assistance; and
(3) reporting requirements for automobile manufacturers that
receive financial assistance under this section.
(e) Criteria.--In selecting recipients of financial assistance from
among applicant automobile manufacturers, the Secretary shall give
preference to proposals that--
(1) are most likely to be successful; and
(2) are located in local markets that have the greatest need
for the facility.
(f) Reports.--The Secretary shall annually submit to Congress a
report on the program established pursuant to this section.
(g) Authorization of Appropriations.--There are authorized to be
appropriated such sums as are necessary to carry out this section.
SEC. 124. INVESTMENT IN CLEAN VEHICLES.
(a) Definitions.--In this section:
(1) Advanced technology vehicles and qualifying components.--
The terms ``advanced technology vehicles'' and ``qualifying
components'' shall have the definition of such terms in section
136 of the Energy Independence and Security Act of 2007, except
that for purposes of this section, the average base year as
described in such section 136(a)(1)(C) shall be the following:
(A) In each of the years 2012 through 2016, model
year 2009.
(B) In 2017, the Administrator shall, notwithstanding
such section 136(a)(1)(C), determine an appropriate
baseline based on technological and economic
feasibility.
(2) Plug-in electric drive vehicle.--The term ``plug-in
electric drive vehicle'' shall have the definition of such term
in section 131 of the Energy Independence and Security Act of
2007.
(b) Distribution of Allowances.--The Administrator shall, in
accordance with this section, distribute emission allowances allocated
pursuant to section 782(i) of the Clean Air Act not later than
September 30 of 2012 and each calendar year thereafter through 2025.
(c) Plug-in Electric Drive Vehicle Manufacturing and Deployment.--
(1) In general.--The Administrator shall, at the direction of
the Secretary of Energy, provide emission allowances allocated
pursuant to section 782(i) to applicants, joint sponsors and
automobile manufacturers pursuant to sections 122 and 123 of
this Act.
(2) Annual amount.--In each of the years 2012 through 2017,
one-quarter of the portion of the emission allowances allocated
pursuant to section 782(i) of the Clean Air Act shall be
available to carry out paragraph (1) such that--
(A) one-eighth of the portion shall be available to
carry out section 122; and,
(B) one-eighth of the portion shall be available to
carry out section 123.
(3) Preference.--In directing the provision of emission
allowances under this subsection to carry out section 122, the
Secretary shall give preference to applications under section
122(c) that are jointly sponsored by one or more automobile
manufacturers.
(4) Multi-year commitments.--The Administrator shall commit
to providing emission allowances to an applicant, joint
sponsor, or automobile manufacturer for up to five consecutive
years if--
(A) an application under section 122 or 123 of this
Act requests a multi-year commitment;
(B) such application meets the criteria for support
established by the Secretary of Energy under sections
122 or 123 of this Act;
(C) the Administrator confirms to the Secretary that
emission allowances will be available for a multi-year
commitment;
(D) the Secretary of Energy determines that a multi-
year commitment for such application will advance the
goals of section 122 or 123; and
(E) the Secretary of Energy directs the Administrator
to make a multi-year commitment.
(5) Insufficient applications.--If, in any year, emission
allowances available under paragraph (2) cannot be provided
because of insufficient numbers of submitted applications that
meet the criteria for support established by the Secretary of
Energy under sections 122 or 123 of this Act, the remaining
emission allowances shall be distributed according to
subsection (d).
(d) Advanced Technology Vehicles.--
(1) In general.--The Administrator shall, at the direction of
the Secretary of Energy, provide any emission allowances
allocated pursuant to section 782(i) of the Clean Air Act that
are not provided under subsection (c) to automobile
manufacturers and component suppliers to pay not more than 30
percent of the cost of--
(A) reequipping, expanding, or establishing a
manufacturing facility in the United States to
produce--
(i) qualifying advanced technology vehicles;
or
(ii) qualifying components; and
(B) engineering integration performed in the United
States of qualifying vehicles and qualifying
components.
(2) Preference.--In directing the provision of emission
allowances under this subsection during the years 2012 through
2017, the Secretary shall give preference to applications for
projects that save the maximum number of gallons of fuel.
SEC. 125. ADVANCED TECHNOLOGY VEHICLE MANUFACTURING INCENTIVE LOANS.
Section 136(d)(1) of the Energy Independence and Security Act of 2007
(42 U.S.C. 17013(d)(1)) is amended by striking ``$25,000,000,000'' and
inserting ``$50,000,000,000''.
SEC. 126. AMENDMENT TO RENEWABLE FUELS STANDARD.
(a) Definition of Renewable Biomass.--Section 211(o)(1)(I) of the
Clean Air Act (42 U.S.C. 7545(o)) is amended to read as follows:
``(I) Renewable biomass.--The term `renewable
biomass' means any of the following:
``(i) Plant material, including waste
material, harvested or collected from actively
managed agricultural land that was in
cultivation, cleared, or fallow and nonforested
on January 1, 2009.
``(ii) Plant material, including waste
material, harvested or collected from
pastureland that was nonforested on January 1,
2009.
``(iii) Nonhazardous vegetative matter
derived from waste, including separated yard
waste, landscape right-of-way trimmings,
construction and demolition debris or food
waste (but not recyclable waste paper, painted,
treated or pressurized wood, or wood
contaminated with plastic or metals).
``(iv) Animal waste or animal byproducts,
including products of animal waste digesters.
``(v) Algae.
``(vi) Trees, brush, slash, residues, or any
other vegetative matter removed from within 600
feet of any building, campground, or route
designated for evacuation by a public official
with responsibility for emergency preparedness,
or from within 300 feet of a paved road,
electric transmission line, utility tower, or
water supply line.
``(vii) Residues from or byproducts of milled
logs.
``(viii) Any of the following removed from
forested land that is not Federal and is not
high conservation priority land:
``(I) Trees, brush, slash, residues,
interplanted energy crops, or any other
vegetative matter removed from an
actively managed tree plantation
established--
``(aa) prior to January 1,
2009; or
``(bb) on land that, as of
January 1, 2009, was cultivated
or fallow and non-forested.
``(II) Trees, logging residue,
thinnings, cull trees, pulpwood, and
brush removed from naturally-
regenerated forests or other non-
plantation forests, including for the
purposes of hazardous fuel reduction or
preventative treatment for reducing or
containing insect or disease
infestation.
``(III) Logging residue, thinnings,
cull trees, pulpwood, brush and species
that are non-native and noxious, from
stands that were planted and managed
after January 1, 2009, to restore or
maintain native forest types.
``(IV) Dead or severely damaged trees
removed within 5 years of fire,
blowdown, or other natural disaster,
and badly infested trees.
``(ix) Materials, pre-commercial thinnings,
or removed invasive species from National
Forest System land and public lands (as defined
in section 103 of the Federal Land Policy and
Management Act of 1976 (43 U.S.C. 1702)),
including those that are byproducts of
preventive treatments (such as trees, wood,
brush, thinnings, chips, and slash), that are
removed as part of a federally recognized
timber sale, or that are removed to reduce
hazardous fuels, to reduce or contain disease
or insect infestation, or to restore ecosystem
health, and that are--
``(I) not from components of the
National Wilderness Preservation
System, Wilderness Study Areas,
Inventoried Roadless Areas, old growth
or mature forest stands, components of
the National Landscape Conservation
System, National Monuments, National
Conservation Areas, Designated
Primitive Areas, or Wild and Scenic
Rivers corridors;
``(II) harvested in environmentally
sustainable quantities, as determined
by the appropriate Federal land
manager; and
``(III) harvested in accordance with
Federal and State law and applicable
land management plans.''.
(b) Definition of High Conservation Priority Land.--Section 211(o)(1)
of the Clean Air Act (42 U.S.C. 7545(o)) is amended by inserting the
following at the end thereof:
``(M) High conservation priority land.--The term
`high conservation priority land' means land that is
not Federal land and is--
``(i) globally or State ranked as critically
imperiled or imperiled under a State Natural
Heritage Program; or
``(ii) old-growth or late-successional
forest, as identified by the office of the
State Forester or relevant State agency with
regulatory jurisdiction over forestry
activities.''.
SEC. 127. OPEN FUEL STANDARD.
(a) Findings.--The Congress finds that--
(1) the status of oil as a strategic commodity, which derives
from its domination of the transportation sector, presents a
clear and present danger to the United States;
(2) in a prior era, when salt was a strategic commodity, salt
mines conferred national power and wars were fought over the
control of such mines;
(3) technology, in the form of electricity and refrigeration,
decisively ended salt's monopoly of meat preservation and
greatly reduced its strategic importance;
(4) fuel competition and consumer choice would similarly
serve to end oil's monopoly in the transportation sector and
strip oil of its strategic status;
(5) the current closed fuel market has allowed a cartel of
petroleum exporting countries to inflate fuel prices,
effectively imposing a harmful tax on the economy of the United
States;
(6) much of the inflated petroleum revenues the oil cartel
earns at the expense of the people of the United States are
used for purposes antithetical to the interests of the United
States and its allies;
(7) alcohol fuels, including ethanol and methanol, could
potentially provide significant supplies of additional fuels
that could be produced in the United States and in many other
countries in the Western Hemisphere that are friendly to the
United States;
(8) alcohol fuels can only play a major role in securing the
energy independence of the United States if a substantial
portion of vehicles in the United States are capable of
operating on such fuels;
(9) it is not in the best interest of United States consumers
or the United States Government to be constrained to depend
solely upon petroleum resources for vehicle fuels if alcohol
fuels are potentially available;
(10) existing technology, in the form of flexible fuel
vehicles, allows internal combustion engine cars and trucks to
be produced at little or no additional cost, which are capable
of operating on conventional gasoline, alcohol fuels, or any
combination of such fuels, as availability or cost advantage
dictates, providing a platform on which fuels can compete;
(11) the necessary distribution system for such alcohol fuels
will not be developed in the United States until a substantial
fraction of the vehicles in the United States are capable of
operating on such fuels;
(12) the establishment of such a vehicle fleet and
distribution system would provide a large market that would
mobilize private resources to substantially advance the
technology and expand the production of alcohol fuels in the
United States and abroad;
(13) the United States has an urgent national security
interest to develop alcohol fuels technology, production, and
distribution systems as rapidly as possible;
(14) new cars sold in the United States that are equipped
with an internal combustion engine should allow for fuel
competition by being flexible fuel vehicles, and new diesel
cars should be capable of operating on biodiesel; and
(15) such an open fuel standard would help to protect the
United States economy from high and volatile oil prices and
from the threats caused by global instability, terrorism, and
natural disaster.
(b) Open Fuel Standard for Transportation.--(1) Chapter 329 of title
49, United States Code, is amended by adding at the end the following:
``Sec. 32920. Open fuel standard for transportation
``(a) Definitions.--In this section:
``(1) E85.--The term `E85' means a fuel mixture containing 85
percent ethanol and 15 percent gasoline by volume.
``(2) Flexible fuel automobile.--The term `flexible fuel
automobile' means an automobile that has been warranted by its
manufacturer to operate on gasoline, E85, and M85.
``(3) Fuel choice-enabling automobile.--The term `fuel
choice-enabling automobile' means--
``(A) a flexible fuel automobile; or
``(B) an automobile that has been warranted by its
manufacturer to operate on biodiesel.
``(4) Light-duty automobile.--The term `light-duty
automobile' means--
``(A) a passenger automobile; or
``(B) a non-passenger automobile.
``(5) Light-duty automobile manufacturer's annual covered
inventory.--The term `light-duty automobile manufacturer's
annual covered inventory' means the number of light-duty
automobiles powered by an internal combustion engine that a
manufacturer, during a given calendar year, manufactures in the
United States or imports from outside of the United States for
sale in the United States.
``(6) M85.--The term `M85' means a fuel mixture containing 85
percent methanol and 15 percent gasoline by volume.
``(b) Open Fuel Standard for Transportation.--
``(1) In general.--The Secretary may promulgate regulations
to require each light-duty automobile manufacturer's annual
covered inventory to be comprised of a minimum percentage of
fuel-choice enabling automobiles, with sufficient lead time, if
the Secretary, in coordination with the Secretary of Energy and
the Administrator of the Environmental Protection Agency,
determines such requirement is a cost-effective way to achieve
the Nation's energy independence and environmental objectives.
The cost-effective determination shall consider the future
availability of both alternative fuel supply and infrastructure
to deliver the alternative fuel to the fuel-choice enabling
vehicles.
``(2) Temporary exemption from requirements.--
``(A) Application.--A manufacturer may request an
exemption from the requirement described in paragraph
(1) by submitting an application to the Secretary, at
such time, in such manner, and containing such
information as the Secretary may require by regulation.
Each such application shall specify the models, lines,
and types of automobiles affected.
``(B) Evaluation.--After evaluating an application
received from a manufacturer, the Secretary may at any
time, under such terms and conditions, and to such
extent as the Secretary considers appropriate,
temporarily exempt, or renew the exemption of, a light-
duty automobile from the requirement described in
paragraph (1) if the Secretary determines that
unavoidable events not under the control of the
manufacturer prevent the manufacturer of such
automobile from meeting its required production volume
of fuel choice-enabling automobiles, including--
``(i) a disruption in the supply of any
component required for compliance with the
regulations;
``(ii) a disruption in the use and
installation by the manufacturer of such
component; or
``(iii) application to plug-in electric drive
vehicles causing such vehicles to fail to meet
State air quality requirements.
``(C) Consolidation.--The Secretary may consolidate
applications received from multiple manufacturers under
subparagraph (A) if they are of a similar nature.
``(D) Conditions.--Any exemption granted under
subparagraph (B) shall be conditioned upon the
manufacturer's commitment to recall the exempted
automobiles for installation of the omitted components
within a reasonable time proposed by the manufacturer
and approved by the Secretary after such components
become available in sufficient quantities to satisfy
both anticipated production and recall volume
requirements.
``(E) Notice.--The Secretary shall publish in the
Federal Register--
``(i) notice of each application received
from a manufacturer;
``(ii) notice of each decision to grant or
deny a temporary exemption; and
``(iii) the reasons for granting or denying
such exemptions.''.
(2) The table of contents in chapter 329 of such title is amended
adding at the end the following:
``32920. Open fuel standard for transportation.''.
SEC. 128. TEMPORARY VEHICLE TRADE-IN PROGRAM.
(a) Establishment.--There is established in the National Highway
Traffic Safety Administration a program to be known as the ``Cash for
Clunkers Temporary Vehicle Trade-in Program'' through which the
Secretary, in accordance with this section and the regulations
promulgated under subsection (d), shall--
(1) authorize the issuance of an electronic voucher, subject
to the specifications set forth in subsection (c), to offset
the purchase price or lease price for a qualifying lease of a
new fuel efficient automobile upon the surrender of an eligible
trade-in vehicle to a dealer participating in the Program;
(2) certify dealers for participation in the Program and
require that all certified dealers--
(A) accept vouchers as provided in this section as
partial payment or down payment for the purchase or
qualifying lease of any new fuel efficient automobile
offered for sale or lease by that dealer; and
(B) in accordance with subsection (c)(2), dispose of
each eligible trade-in vehicle surrendered to the
dealer under the Program;
(3) in consultation with the Secretary of the Treasury, make
payments to dealers for vouchers accepted by such dealers prior
to April 1, 2010, in accordance with the regulations issued
under subsection (d);
(4) in consultation with the Secretary of the Treasury,
provide for the payment of rebates to persons who qualify for a
rebate under subsection (c)(3); and
(5) in consultation with the Secretary of the Treasury and
the Inspector General of the Department of Transportation,
establish and provide for the enforcement of measures to
prevent and penalize fraud under the Program.
(b) Qualifications for and Value of Vouchers.--A voucher issued under
the Program shall have a value that may be applied to offset the
purchase price or lease price for a qualifying lease of a new fuel
efficient automobile as follows:
(1) $3,500 value.--The voucher may be used to offset the
purchase price or lease price of the new fuel efficient
automobile by $3,500 if--
(A) the new fuel efficient automobile is a passenger
automobile and the combined fuel economy value of such
automobile is at least 4 miles per gallon higher than
the combined fuel economy value of the eligible trade-
in vehicle;
(B) the new fuel efficient automobile is a category 1
truck and the combined fuel economy value of such truck
is at least 2 miles per gallon higher than the combined
fuel economy value of the eligible trade-in vehicle;
(C) the new fuel efficient automobile is a category 2
truck that has a combined fuel economy value of at
least 15 miles per gallon and--
(i) the eligible trade-in vehicle is a
category 2 truck and the combined fuel economy
value of the new fuel efficient automobile is
at least 1 mile per gallon higher than the
combined fuel economy value of the eligible
trade-in vehicle; or
(ii) the eligible trade-in vehicle is a
category 3 truck of model year 2001 or earlier;
or
(D) the new fuel efficient automobile is a category 3
truck and the eligible trade-in vehicle is a category 3
truck of model year of 2001 or earlier and is of
similar size or larger than the new fuel efficient
automobile as determined in a manner prescribed by the
Secretary.
(2) $4,500 value.--The voucher may be used to offset the
purchase price or lease price of the new fuel efficient
automobile by $4,500 if--
(A) the new fuel efficient automobile is a passenger
automobile and the combined fuel economy value of such
automobile is at least 10 miles per gallon higher than
the combined fuel economy value of the eligible trade-
in vehicle;
(B) the new fuel efficient automobile is a category 1
truck and the combined fuel economy value of such truck
is at least 5 miles per gallon higher than the combined
fuel economy value of the eligible trade-in vehicle; or
(C) the new fuel efficient automobile is a category 2
truck that has a combined fuel economy value of at
least 15 miles per gallon and the combined fuel economy
value of such truck is at least 2 miles per gallon
higher than the combined fuel economy value of the
eligible trade-in vehicle and the eligible trade-in
vehicle is a category 2 truck.
(c) Program Specifications.--
(1) Limitations.--
(A) General period of eligibility.--A voucher issued
under the Program shall be used only for the purchase
or qualifying lease of new fuel efficient automobiles
that occur between March 30, 2009, and March 31, 2010.
(B) Number of vouchers per person and per trade-in
vehicle.--Not more than 1 voucher may be issued for a
single person and not more than 1 voucher may be issued
for the joint registered owners of a single eligible
trade-in vehicle.
(C) No combination of vouchers.--Only 1 voucher
issued under the Program may be applied toward the
purchase or qualifying lease of a single new fuel
efficient automobile.
(D) Cap on funds for category 3 trucks.--Not more
than 7.5 percent of the total funds made available for
the Program shall be used for vouchers for the purchase
or qualifying lease of category 3 trucks.
(E) Combination with other incentives permitted.--The
availability or use of a Federal, State, or local
incentive or a State-issued voucher for the purchase or
lease of a new fuel efficient automobile shall not
limit the value or issuance of a voucher under the
Program to any person otherwise eligible to receive
such a voucher.
(F) No additional fees.--A dealer participating in
the program may not charge a person purchasing or
leasing a new fuel efficient automobile any additional
fees associated with the use of a voucher under the
Program.
(G) Number and amount.--The total number and value of
vouchers issued under the Program may not exceed the
amounts appropriated for such purpose.
(2) Disposition of eligible trade-in vehicles.--
(A) In general.--For each eligible trade-in vehicle,
the title of which is transferred to a dealer under the
Program, the dealer shall certify to the Secretary, in
such manner as the Secretary shall prescribe by rule,
that the vehicle, including the engine and drive
train--
(i) will be crushed or shredded within such
period and in such manner as the Secretary
prescribes, or will be transferred to an entity
that will ensure that the vehicle will be
crushed or shredded within such period and in
such manner as the Secretary prescribes; and
(ii) has not been, and will not be, sold,
leased, exchanged, or otherwise disposed of for
use as an automobile in the United States or in
any other country, or has been or will be
transferred, in such manner as the Secretary
prescribes, to an entity that will ensure that
the vehicle has not been, and will not be,
sold, leased, exchanged, or otherwise disposed
of for use as an automobile in the United
States or in any other country.
(B) Savings provision.--Nothing in subparagraph (A)
may be construed to preclude a person who dismantles or
disposes of the vehicle from--
(i) selling any parts of the disposed vehicle
other than the engine block and drive train
(unless the engine or drive train has been
crushed or shredded); or
(ii) retaining the proceeds from such sale.
(C) Coordination.--The Secretary shall coordinate
with the Attorney General to ensure that the National
Motor Vehicle Title Information System and other
publicly accessible and commercially available systems
are appropriately updated to reflect the crushing or
shredding of vehicles under this section and
appropriate re-classification of the vehicles' titles.
(3) Eligible purchases or leases prior to date of
enactment.--A person who purchased or leased a new fuel
efficient vehicle after March 30, 2009, and before the date of
enactment of this section is eligible for a cash rebate
equivalent to the amount described in subsection (b)(1) if the
person provides proof satisfactory to the Secretary that--
(A) the person was the registered owner of an
eligible trade-in vehicle; and
(B) such vehicle has been disposed of in accordance
with clauses (i) and (ii) of paragraph (2)(A).
(d) Regulations.--Notwithstanding the requirements of section 553 of
title 5, United States Code, the Secretary shall promulgate final
regulations to implement the Program not later than 30 days after the
date of the enactment of this section. Such regulations shall--
(1) provide for a means of certifying dealers for
participation in the program;
(2) establish procedures for the reimbursement of dealers
participating in the Program to be made through electronic
transfer of funds for both the amount of the vouchers and any
reasonable administrative costs incurred by the dealer as soon
as practicable but no longer than 10 days after the submission
of a voucher for the new fuel efficient automobile to the
Secretary;
(3) prohibit a dealer from using the voucher to offset any
other rebate or discount offered by that dealer or the
manufacturer of the new fuel efficient automobile;
(4) require dealers to disclose to the person trading in an
eligible trade in vehicle the best estimate of the scrappage
value of such vehicle and to permit the dealer to retain $50 of
any amounts paid to the dealer for scrappage of the automobile
as payment for any administrative costs to the dealer
associated with participation in the Program;
(5) establish a process by which persons who qualify for a
rebate under subsection (c)(3) may apply for such rebate;
(6) consistent with subsection (c)(2), establish requirements
and procedures for the disposal of eligible trade-in vehicles
and provide such information as may be necessary to entities
engaged in such disposal to ensure that such vehicles are
disposed of in accordance with such requirements and
procedures, including--
(A) requirements for the removal and appropriate
disposition of refrigerants, antifreeze, lead products,
mercury switches, and such other toxic or hazardous
vehicle components prior to the crushing or shredding
of an eligible trade-in vehicle, in accordance with
rules established by the Secretary in consultation with
the Administrator, and in accordance with other
applicable Federal or State requirements; and
(B) a mechanism for dealers to certify to the
Secretary that eligible trade-in vehicles are disposed
of, or transferred to an entity that will ensure that
the vehicle is disposed of, in accordance with such
requirements and procedures and to submit the vehicle
identification numbers of the vehicles disposed of and
the new fuel efficient automobile purchased with each
voucher;
(7) consistent with subsection (c)(2), establish requirements
and procedures for the disposal of eligible trade-in vehicles
and provide such information as may be necessary to entities
engaged in such disposal to ensure that such vehicles are
disposed of in accordance with such requirements and
procedures; and
(8) provide for the enforcement of the penalties described in
subsection (e).
(e) Anti-Fraud Provisions.--
(1) Violation.--It shall be unlawful for any person to
violate any provision under this section or any regulations
issued pursuant to subsection (d).
(2) Penalties.--Any person who commits a violation described
in paragraph (1) shall be liable to the United States
Government for a civil penalty of not more than $25,000 for
each violation.
(f) Information to Consumers and Dealers.--Not later than 30 days
after the date of enactment of this section, and promptly upon the
update of any relevant information, the Secretary shall make available
on an Internet website and through other means determined by the
Secretary information about the Program, including--
(1) how to determine if a vehicle is an eligible trade-in
vehicle;
(2) how to participate in the Program, including how to
determine participating dealers; and
(3) a comprehensive list, by make and model, of new fuel
efficient automobiles meeting the requirements of the Program.
Once such information is available, the Secretary shall conduct a
public awareness campaign to inform consumers about the Program and
where to obtain additional information.
(g) Recordkeeping and Report.--
(1) Database.--The Secretary shall maintain a database of the
vehicle identification numbers of all new fuel efficient
vehicles purchased or leased and all eligible trade-in vehicles
disposed of under the Program.
(2) Report.--Not later than June 30, 2010, the Secretary
shall submit a report to the Committee on Energy and Commerce
of the House of Representatives and the Committee on Commerce,
Science, and Transportation of the Senate describing the
efficacy of the Program, including--
(A) a description of program results, including--
(i) the total number and amount of vouchers
issued for purchase or lease of new fuel
efficient automobiles by manufacturer
(including aggregate information concerning the
make, model, model year) and category of
automobile;
(ii) aggregate information regarding the
make, model, model year, and manufacturing
location of vehicles traded in under the
Program; and
(iii) the location of sale or lease;
(B) an estimate of the overall increase in fuel
efficiency in terms of miles per gallon, total annual
oil savings, and total annual greenhouse gas
reductions, as a result of the Program; and
(C) an estimate of the overall economic and
employment effects of the Program.
(h) Definitions.--As used in this section--
(1) the term ``passenger automobile'' means a passenger
automobile, as defined in section 32901(a)(18) of title 49,
United States Code, that has a combined fuel economy value of
at least 22 miles per gallon;
(2) the term ``category 1 truck'' means a nonpassenger
automobile, as defined in section 32901(a)(17) of title 49,
United States Code, that has a combined fuel economy value of
at least 18 miles per gallon, except that such term does not
include a category 2 truck;
(3) the term ``category 2 truck'' means a large van or a
large pickup, as categorized by the Secretary using the method
used by the Environmental Protection Agency and described in
the report entitled ``Light-Duty Automotive Technology and Fuel
Economy Trends: 1975 through 2008'';
(4) the term ``category 3 truck'' means a work truck, as
defined in section 32901(a)(19) of title 49, United States
Code;
(5) the term ``combined fuel economy value'' means--
(A) with respect to a new fuel efficient automobile,
the number, expressed in miles per gallon, centered
below the words ``Combined Fuel Economy'' on the label
required to be affixed or caused to be affixed on a new
automobile pursuant to subpart D of part 600 of title
40 Code of Federal Regulations;
(B) with respect to an eligible trade-in vehicle, the
equivalent of the number described in subparagraph (A),
and posted under the words ``Estimated New EPA MPG''
and above the word ``Combined'' for vehicles of model
year 1984 through 2007, or posted under the words ``New
EPA MPG'' and above the word ``Combined'' for vehicles
of model year 2008 or later on the fueleconomy.gov
website of the Environmental Protection Agency for the
make, model, and year of such vehicle; or
(C) with respect to an eligible trade-in vehicle
manufactured between model years 1978 through 1984, the
equivalent of the number described in subparagraph (A)
as determined by the Secretary (and posted on the
website of the National Highway Traffic Safety
Administration) using data maintained by the
Environmental Protection Agency for the make, model,
and year of such vehicle;
(6) the term ``dealer'' means a person licensed by a State
who engages in the sale of new automobiles to ultimate
purchasers;
(7) the term ``eligible trade-in vehicle'' means an
automobile or a work truck (as such terms are defined in
section 32901(a) of title 49, United States Code) that, at the
time it is presented for trade-in under this section--
(A) is in drivable condition;
(B) has been continuously insured consistent with the
applicable State law and registered to the same owner
for a period of not less than 1 year immediately prior
to such trade-in; and
(C) has a combined fuel economy value of 18 miles per
gallon or less;
(8) the term ``new fuel efficient automobile'' means an
automobile described in paragraph (1), (2), (3), or (4)--
(A) the equitable or legal title of which has not
been transferred to any person other than the ultimate
purchaser;
(B) that carries a manufacturer's suggested retail
price of $45,000 or less;
(C) that--
(i) for new fuel efficient automobiles
weighing up to 8,500 pounds, is certified to
applicable standards under section 86.1811-04
of title 40, Code of Federal Regulations; or
(ii) for category 3 trucks, is certified to
the applicable vehicle or engine standards
under section 86.1816-08, 86-007-11, or 86.008-
10 of title 40, Code of Federal Regulations;
and
(D) that has the combined fuel economy value of--
(i) 22 miles per gallon for a passenger
automobile;
(ii) 18 miles per gallon for a category 1
truck; and
(iii) 15 miles per gallon for a category 2
truck;
(9) the term ``Program'' means the Cash for Clunkers
Temporary Vehicle Trade-in Program established by this section;
(10) the term ``qualifying lease'' means a lease of an
automobile for a period of not less than 5 years;
(11) the term ``scrappage value'' means the amount received
by the dealer for a vehicle upon transferring title of such
vehicle to the person responsible for ensuring the dismantling
and destroying the vehicle;
(12) the term ``Secretary'' means the Secretary of
Transportation acting through the National Highway Traffic
Safety Administration;
(13) the term ``ultimate purchaser'' means, with respect to
any new automobile, the first person who in good faith
purchases such automobile for purposes other than resale; and
(14) the term ``vehicle identification number'' means the 17
character number used by the automobile industry to identify
individual automobiles.
(i) Authorization of Appropriations.--There is authorized to be
appropriated to the Secretary $4,000,000,000 to carry out this section.
SEC. 129. DIESEL EMISSIONS REDUCTION.
Subtitle G of title VII of the Energy Policy Act of 2005 (42 U.S.C.
16131 et seq.) is amended--
(1) in the matter preceding clause (i) in section 791(3)(B),
by inserting ``in any State'' after ``nonprofit organization or
institution'';
(2) in section 791(9), by striking ``The term `State'
includes the District of Columbia.'' and inserting ``The term
`State' includes the District of Columbia, American Samoa,
Guam, the Commonwealth of the Northern Mariana Islands, Puerto
Rico, and the Virgin Islands.''; and
(3) in section 793(c)--
(A) in paragraph (2)(A), by striking ``51 States''
and inserting ``56 States'';
(B) in paragraph (2)(A), by striking ``1.96 percent''
and inserting ``1.785 percent'';
(C) in paragraph (2)(B), by striking ``51 States''
and inserting ``56 States''; and
(D) in paragraph (2)(B), by amending clause (ii) to
read as follows:
``(ii) the amount of funds remaining after
each State described in paragraph (1) receives
the 1.785-percent allocation under this
paragraph.''.
SEC. 130. LOAN GUARANTEES FOR PROJECTS TO CONSTRUCT RENEWABLE FUEL
PIPELINES.
(a) Definitions.--Section 1701 of the Energy Policy Act of 2005 (42
U.S.C. 16511) is amended by adding at the end the following:
``(6) Renewable fuel.--The term `renewable fuel' has the
meaning given the term in section 211(o)(1) of the Clean Air
Act (42 U.S.C. 7545(o)(1)), except that the term shall include
all ethanol and biodiesel.
``(7) Renewable fuel pipeline.--The term `renewable fuel
pipeline' means a common carrier pipeline for transporting
renewable fuel.''.
(b) Renewable Fuel Pipeline Eligibility.--Section 1703(b) the Energy
Policy Act of 2005 (42 U.S.C. 16513) is amended by adding at the end
the following:
``(11) Renewable fuel pipelines.''.
Subtitle D--State Energy and Environment Development Accounts
SEC. 131. ESTABLISHMENT OF SEED ACCOUNTS.
(a) Definitions.--In this section:
(1) SEED account.--The term ``SEED Account'' means a State
Energy and Environment Development Account established pursuant
to this section.
(2) State energy office.--The term ``State Energy Office''
means a State entity eligible for grants under part D of title
III of the Energy Policy and Conservation Act (42 U.S.C. 6321
et seq.).
(b) Establishment of Program.--The Administrator shall establish a
program under which a State, through its State Energy Office or other
State agency designated by the State, may operate a State Energy and
Environment Development Account.
(c) Purpose.--The purpose of each SEED Account is to serve as a
common State-level repository for managing and accounting for emission
allowances provided to States designated for renewable energy and
energy efficiency purposes.
(d) Regulations.--Not later than one year after the date of enactment
of this Act, the Administrator shall promulgate regulations to carry
out this section, including regulations--
(1) to ensure that each State operates its SEED Account and
any subaccounts thereof efficiently and in accordance with this
Act and applicable State and Federal laws;
(2) to prevent waste, fraud, and abuse;
(3) to indicate the emission allowances that may be deposited
in a State's SEED Account pending distribution or use;
(4) to indicate the programs and objectives authorized by
Federal law for which emission allowances in a SEED Account may
be distributed or used;
(5) to identify the forms of financial assistance and
incentives that States may provide through distribution or use
of SEED Accounts; and
(6) to prescribe the form and content of reports that the
States are required to submit under this section on the use of
SEED Accounts.
(e) Operation.--
(1) Deposits.--
(A) In general.--In the allowance tracking system
established pursuant to section 724(d) of the Clean Air
Act, the Administrator shall establish a SEED Account
for each State and place in it the allowances allocated
pursuant to section 782(g) of the Clean Air Act to be
distributed to States pursuant to sections 132 and 201
of this Act.
(B) Financial account.--A State may create a
financial account associated with its SEED Account to
deposit, retain, and manage any proceeds of any sale of
any allowance provided pursuant to this Act pending
expenditure or disbursement of those proceeds for
purposes permitted under this section. The funds in
such an account shall not be commingled with other
funds not derived from the sale of allowances provided
to the State; however, loans made by the State from
such funds pursuant to paragraph (2)(C)(i) may be
repaid into such a financial account, including any
interest charged.
(2) Withdrawals.--
(A) In general.--All allowances distributed pursuant
to sections 132 and 201, including the proceeds of any
sale of such allowances, shall support renewable energy
and energy efficiency programs authorized or approved
by the Federal Government.
(B) Dedicated allowances.--Allowances distributed
pursuant to sections 132 and 201 that are required by
law to be used for specific purposes for a specified
period shall be used according to those requirements
during that period.
(C) Undedicated allowances.--To the extent that
allowances distributed pursuant to sections 132 and 201
are not required by law to be used for specific
purposes for a specified period as described in
subparagraph (B), such allowances or the proceeds of
their sale may be used for any of the following
purposes:
(i) Loans.--Loans of allowances, or the
proceeds from the sale of allowances, may be
provided, interest on commercial loans may be
subsidized at an interest rate as low as zero,
and other credit support may be provided to
support programs authorized to use SEED Account
allowance value or any other renewable energy
or energy efficiency purpose authorized or
approved by the Federal Government.
(ii) Grants.--Grants of allowances or the
proceeds of their sale may be provided to
support programs authorized to use SEED Account
allowance value or any other renewable energy
or energy efficiency purpose authorized or
approved by the Federal Government.
(iii) Other forms of support.--Allowances or
the proceeds of the sale of allowances may be
provided for other forms of support for
programs authorized to use SEED Account
allowance value or any other renewable energy
or energy efficiency purpose authorized or
approved by the Federal Government.
(iv) Administrative costs.--Except to the
extent provided in Federal law authorizing or
allocating allowances deposited in a SEED
Account, not more than 5 percent of the
allowance value in a SEED Account in any year
may be used to cover administrative expenses of
the SEED Account.
(D) Subaccounts.--A State may request that the
Administrator establish accounts for local governments
that request such subaccounts to hold allowances
distributed to local governments for renewable energy
or energy efficiency programs authorized or approved by
the Federal Government.
(E) Intended use plans.--
(i) In general.--After providing for public
review and comment, each State administering a
SEED Account shall annually prepare a plan that
identifies the intended uses of the allowances
or proceeds from the sale of allowances in its
SEED Account.
(ii) Contents.--An intended use plan shall
include--
(I) a list of the projects or
programs for which withdrawals from the
SEED Account are intended in the next
fiscal year that begins after the date
of the plan, including a description of
each project;
(II) the relationship of each of the
projects or programs to an identified
Federal purpose authorized by this Act,
or any other Federal statute;
(III) the expected terms of use of
allowance value to provide assistance;
(IV) the criteria and methods
established for the distribution of
allowances or allowance value;
(V) a description of the equivalent
financial value and status of the SEED
Account; and
(VI) a statement of the mid-term and
long-term goals of the State for use of
its SEED Account.
(3) Accountability and transparency.--
(A) Controls and procedures.--Any State that has a
SEED Account shall establish fiscal controls and
recordkeeping and accounting procedures for the SEED
Account sufficient to ensure proper accounting during
appropriate accounting periods for distributions into
the SEED Account, transfers from the SEED Account, and
SEED Account balances, including any related financial
accounts. Such controls and procedures shall conform to
generally accepted government accounting principles.
Any State that has a SEED Account shall retain records
for a period of at least 5 years.
(B) Audits.--Any State that has a SEED Account shall
have an annual audit conducted of the SEED Account by
an independent public accountant in accordance with
generally accepted auditing standards, and shall
transmit the results of that audit to the
Administrator.
(C) State report.--Each State administering a SEED
Account shall make publicly available and submit to the
Administrator a report every 2 years on its activities
related to its SEED Account.
(D) Public information.--Any--
(i) controls and procedures established under
subparagraph (A); and
(ii) information obtained through audits
conducted under subparagraph (B), except to the
extent that it would be protected from
disclosure, if it were information held by the
Federal Government, under section 552(b) of
title 5, United States Code,
shall be made publicly available.
(E) Other protections.--The Administrator shall
require such additional procedures and protections as
are necessary to ensure that any State that has a SEED
Account will operate the SEED Account in an accountable
and transparent manner.
(f) Requirements for Eligibility.--A State's eligibility to receive
allowances in its SEED Account shall depend on that State's compliance
with the requirements of this Act (and the amendments made by this
Act).
(g) Authorization of Appropriations.--There are authorized to be
appropriated to the Administrator such sums as may be necessary for
SEED Account operations.
SEC. 132. SUPPORT OF STATE RENEWABLE ENERGY AND ENERGY EFFICIENCY
PROGRAMS.
(a) Definitions.--For purposes of this section:
(1) Cost-effective.--The term ``cost-effective'', with
respect to an energy efficiency program, means that the program
meets the Total Resource Cost Test, which requires that the net
present value of economic benefits over the life of the program
or measure, including avoided supply and delivery costs and
deferred or avoided investments, is greater than the net
present value of the economic costs over the life of the
program, including program costs and incremental costs borne by
the energy consumer.
(2) Renewable energy resource.--The term ``renewable energy
resource'' shall have the meaning given that term in section
610 of the Public Utility Regulatory Policies Act of 1978 (as
added by section 101 of this Act).
(b) Distribution Among States.--For each vintage year from 2012
through 2050, the Administrator shall, in accordance with this section,
distribute emission allowances allocated pursuant to section 782(g)(1)
of the Clean Air Act not later than September 30 of the year preceding
the vintage year. The Administrator shall distribute the emission
allowances to States for renewable energy and energy efficiency
programs to be deposited in and administered through the State Energy
and Environment Development (SEED) Accounts established pursuant to
section 131. The Administrator shall distribute allowances among the
States under this section each year in accordance with the following
formula:
(1) One third of the allowances shall be divided equally
among the States.
(2) One third of the allowances shall be distributed ratably
among the States based on the population of each State, as
contained in the most recent reliable census data available
from the Bureau of the Census, Department of Commerce, for all
States at the time the Administrator calculates the formula for
distribution.
(3) One third of the allowances for shall be distributed
ratably among the States on the basis of the energy consumption
of each State as contained in the most recent State Energy Data
Report available from the Energy Information Administration (or
such alternative reliable source as the Administrator may
designate).
(c) Uses.--The allowances distributed to each State pursuant to this
section shall be used exclusively for the purposes listed in this
subsection, as set forth below:
(1) Not less than 12.5 percent shall be distributed by the
State to units of local government within such State to be used
exclusively to support the energy efficiency and renewable
energy purposes listed in paragraphs (2), (3), and (4).
(2) Not less than 15 percent shall be used exclusively for
the following energy efficiency purposes:
(A) Implementation and enforcement of building codes
adopted in compliance with section 201.
(B) Implementation of the energy efficient
manufactured homes program established pursuant to
section 203.
(C) Implementation of the building energy performance
labeling program established pursuant to section 204.
(D) Enabling the development of a Smart Grid (as
described in section 1301 of the Energy Independence
and Security Act of 2007 (42 U.S.C. 17381)) for State,
local government, and other public buildings and
facilities, including integration of renewable energy
resources and distributed generation, demand response,
demand side management, and systems analysis.
(E) Transportation planning pursuant to section 841
of the Clean Air Act.
(F) Low-income community energy efficiency programs
that are consistent with the grant program established
under section 264 of this Act.
(G) Other cost-effective energy efficiency programs
for end-use consumers of electricity, natural gas, home
heating oil, or propane, including, where appropriate,
programs or mechanisms administered by local
governments and entities other than the State.
(3) Not less than 5 percent shall be used exclusively for
implementation of the Retrofit for Energy and Environmental
Performance (REEP) program established pursuant to section 202.
(4) Not less than 20 percent shall be used exclusively for
capital grants, tax credits, production incentives, loans, loan
guarantees, forgivable loans, and interest rate buy-downs for--
(A) re-equipping, expanding, or establishing a
manufacturing facility that receives certification from
the Secretary of Energy pursuant to section 1302 of the
American Recovery and Reinvestment Act of 2009 for the
production of--
(i) property designed to be used to produce
energy from renewable energy sources; and
(ii) electricity storage systems;
(B) deployment of technologies to generate
electricity from renewable energy sources; and
(C) deployment of facilities or equipment, such as
solar panels, to generate electricity or thermal energy
from renewable energy resources in and on buildings in
an urban environment.
(5) The remaining 47.5 percent shall be used exclusively for
any of the purposes described in subparagraphs (A) through (F)
of paragraph (2) and in paragraphs (3) and (4), provided that
each State receiving emission allowances under this section
shall use not less than 1 percent of such allowances for the
purpose described in paragraph (2)(F).
(d) Reporting.--Each State receiving emission allowances under this
section shall include in its biennial reports required under section
131, in accordance with such requirements as the Administrator may
prescribe--
(1) a list of entities receiving allowances or allowance
value under this section;
(2) the amount and nature of allowances or allowance value
received by each recipient;
(3) the specific purposes for which such allowances or
allowance value was conveyed;
(4) the amount of energy savings, emission reductions,
renewable energy deployment, or new or retooled manufacturing
capacity resulting from such allowances or allowance value; and
(5) an assessment of the cost-effectiveness of any energy
efficiency program supported under subsection (c)(2)(F).
(e) Enforcement.--If the Administrator determines that a State is not
in compliance with this section, the Administrator may withhold up to
twice the number of allowances that the State failed to use in
accordance with the requirements of this section, that such State would
otherwise be eligible to receive under this section in later years.
Allowances withheld pursuant to this subsection shall be distributed
among the remaining States in accordance with the requirements of
subsection (b).
Subtitle E--Smart Grid Advancement
SEC. 141. DEFINITIONS.
For purposes of this subtitle:
(1) The term ``applicable baseline'' means the average of the
highest three annual peak demands a load-serving entity has
experienced during the 5 years immediately prior to the date of
enactment of this Act.
(2) The term ``Commission'' means Federal Energy Regulatory
Commission.
(3) The term ``load-serving entity'' means an entity that
provides electricity directly to retail consumers with the
responsibility to assure power quality and reliability,
including such entities that are investor-owned, publicly
owned, owned by rural electric cooperatives, or other entities.
(4) The term ``peak demand'' means the highest point of
electricity demand, net of any distributed electricity
generation or storage from sources on the load-serving entity's
customers' premises, during any hour on the system of a load
serving entity during a calendar year, expressed in Megawatts
(MW), or more than one such high point as a function of
seasonal demand changes.
(5) The term ``peak demand reduction'' means the reduction in
annual peak demand as compared to a previous baseline year or
period, expressed in Megawatts (MW), whether accomplished by
diminishing the end-use requirements for electricity or by use
of locally stored or generated electricity to meet those
requirements from distributed resources on the load-serving
entity's customers' premises and without use of high-voltage
transmission.
(6) The term ``peak demand reduction plan'' means a plan
developed by or for a load-serving entity that it will
implement to meet its peak demand reduction goals.
(7) The term ``peak period'' means the time period on the
system of a load-serving entity relative to peak demand that
may warrant special measures or electricity resources to
maintain system reliability while meeting peak demand.
(8) The term ``Secretary'' means the Secretary of Energy.
(9) The term ``Smart Grid'' has the meaning provided by
section 1301 of the Energy Independence and Security Act of
2007 (15 U.S.C. 17381).
SEC. 142. ASSESSMENT OF SMART GRID COST EFFECTIVENESS IN PRODUCTS.
(a) Assessment.--Within one year after the date of enactment of this
Act, the Secretary and the Administrator shall each assess the
potential for cost-effective integration of Smart Grid technologies and
capabilities in all products that are reviewed by the Department of
Energy and the Environmental Protection Agency, respectively, for
potential designation as Energy Star products.
(b) Analysis.--(1) Within 2 years after the date of enactment of this
Act, the Secretary and the Administrator shall each prepare an analysis
of the potential energy savings, greenhouse gas emission reductions,
and electricity cost savings that could accrue for each of the products
identified by the assessment in subsection (a) in the following optimal
circumstances:
(A) The products possessed Smart Grid capability and
interoperability that is tested and proven reliable.
(B) The products were utilized in an electricity utility
service area which had Smart Grid capability and offered
customers rate or program incentives to use the products.
(C) The utility's rates reflected national average costs,
including average peak and valley seasonal and daily
electricity costs.
(D) Consumers using such products took full advantage of such
capability.
(E) The utility avoided incremental investments and rate
increases related to such savings.
(2) The analysis under paragraph (1) shall be considered the ``best
case'' Smart Grid analysis. On the basis of such an analysis for each
product, the Secretary and the Administrator shall determine whether
the installation of Smart Grid capability for such a product would be
cost effective. For purposes of this paragraph, the term ``cost
effective'' means that the cumulative savings from using the product
under the best case Smart Grid circumstances for a period of one-half
of the product's expected useful life will be greater than the
incremental cost of the Smart Grid features included in the product.
(3) To the extent that including Smart Grid capability in any
products analyzed under paragraph (2) is found to be cost effective in
the best case, the Secretary and the Administrator shall, not later
than 3 years after the date of enactment of this Act take each of the
following actions:
(A) Inform the manufacturer of such product of such finding
of cost effectiveness.
(B) Assess the potential contributions the development and
use of products with Smart Grid technologies bring to reducing
peak demand and promoting grid stability.
(C) Assess the potential national energy savings and
electricity cost savings that could be realized if Smart Grid
potential were installed in the relevant products reviewed by
the Energy Star program.
(D) Assess and identify options for providing consumers
information on products with Smart Grid capabilities, including
the necessary conditions for cost-effective savings.
(E) Submit a report to Congress summarizing the results of
the assessment for each class of products, and presenting the
potential energy and greenhouse gas savings that could result
if Smart Grid capability were installed and utilized on such
products.
SEC. 143. INCLUSIONS OF SMART GRID CAPABILITY ON APPLIANCE ENERGY GUIDE
LABELS.
Section 324(a)(2) of the Energy Policy and Conservation Act (42
U.S.C. 6294(a)(2)) is amended by adding the following at the end:
``(J)(i) Not later than 3 years after the date of
enactment of this subparagraph, the Federal Trade
Commission shall initiate a rulemaking to consider
making a special note in a prominent manner on any
ENERGY GUIDE label for any product actually including
Smart Grid capability that--
``(I) Smart Grid capability is a feature of
that product;
``(II) the use and value of that feature
depended on the Smart Grid capability of the
utility system in which the product was
installed and the active utilization of that
feature by the customer; and
``(III) on a utility system with Smart Grid
capability, the use of the product's Smart Grid
capability could reduce the customer's cost of
the product's annual operation by an estimated
dollar amount range representing the result of
incremental energy and electricity cost savings
that would result from the customer taking full
advantage of such Smart Grid capability.
``(ii) Not later than 3 years after the date of
enactment of this subparagraph, the Commission shall
complete the rulemaking initiated under clause (i).''.
SEC. 144. SMART GRID PEAK DEMAND REDUCTION GOALS.
(a) Goals.--Not later than one year after the date of enactment of
this Act, load-serving entities, or, at their option, States with
respect to load-serving entities that they regulate, shall determine
and publish peak demand reduction goals for any load-serving entities
that have an applicable baseline in excess of 250 megawatts.
(b) Baselines.--(1) The Commission, in consultation with the
Secretary and the Administrator, shall develop and publish, after an
opportunity for public comment, a methodology to provide for
adjustments or normalization to a load-serving entity's applicable
baseline over time to reflect changes in the number of customers
served, weather conditions, general economic conditions, and any other
appropriate factors external to peak demand management, as determined
by the Commission.
(2) The Commission shall support load-serving entities (including any
load-serving entities with an applicable baseline of less than 250
megawatts that volunteer to participate in achieving the purposes of
this section) in determining their applicable baselines, and in
developing their peak demand reduction goals.
(3) The Secretary, in consultation with the Commission, the
Administrator, and the North American Electric Reliability Corporation,
shall develop a system and rules for measurement and verification of
demand reductions.
(c) Peak Demand Reduction Goals.--(1) Peak demand reduction goals may
be established for an individual load-serving entity, or, at the
determination of a State or regional entity, by that State or regional
entity for a larger region that shares a common system peak demand and
for which peak demand reduction measures would offer regional benefit.
(2) A State or regional entity establishing peak demand reduction
goals shall cooperate, as necessary and appropriate, with the
Commission, the Secretary, State regulatory commissions, State energy
offices, the North American Electric Reliability Corporation, and other
relevant authorities.
(3) In determining the applicable peak demand reduction goals, States
and other jurisdictional entities may utilize the results of the 2009
National Demand Response Potential Assessment, as authorized by section
571 of the National Energy Conservation Policy Act (42 U.S.C. 8279).
(4) The applicable peak demand reduction goals shall provide that--
(A) load-serving entities will reduce or mitigate peak demand
by a minimum percentage amount from the applicable baseline to
a lower peak demand during calendar year 2012;
(B) load-serving entities will reduce or mitigate peak demand
by a minimum percentage greater amount from the applicable
baseline to a lower peak demand during calendar year 2015; and
(C) the minimum percentage reductions established as peak
demand reduction goals shall be the maximum reductions that are
realistically achievable with an aggressive effort to deploy
Smart Grid and peak demand reduction technologies and methods,
including but not limited to those listed in subsection (d).
(d) Plan.--Each load-serving entity shall prepare a peak demand
reduction plan that demonstrates its ability to meet each applicable
goal by any or a combination of the following options:
(1) Direct reduction in megawatts of peak demand through
energy efficiency measures (including efficient transmission
wire technologies which significantly reduce line loss compared
to traditional wire technology) with reliable and continued
application during peak demand periods.
(2) Demonstration that an amount of megawatts equal to a
stated portion of the applicable goal is contractually
committed to be available for peak reduction through one or
more of the following:
(A) Megawatts enrolled in demand response programs.
(B) Megawatts subject to the ability of a load-
serving entity to call on demand response programs,
smart appliances, smart electricity storage devices,
distributed generation resources on the entity's
customers' premises, or other measures directly capable
of actively, controllably, reliably, and dynamically
reducing peak demand (``dynamic peak management
control'').
(C) Megawatts available from distributed dynamic
electricity storage under agreement with the owner of
that storage.
(D) Megawatts committed from dispatchable distributed
generation demonstrated to be reliable under peak
period conditions and in compliance with air quality
regulations.
(E) Megawatts available from smart appliances and
equipment with Smart Grid capability available for
direct control by the utility through agreement with
the customer owning the appliances or equipment.
(F) Megawatts from a demonstrated and assured minimum
of distributed solar electric generation capacity in
instances where peak period and peak demand conditions
are directly related to solar radiation and
accompanying heat.
(3) If any of the methods listed in subparagraph (C), (D), or
(E) of paragraph (2) are relied upon to meet its peak demand
reduction goals, the load-serving entity must demonstrate this
capability by operating a test during the applicable calendar
year.
(4) Nothing in this section shall require the publication in
peak demand reduction goals or in any peak demand reduction
plan of any information that is confidential for competitive or
other reasons or that identifies individual customers.
(e) Existing Authority and Requirements.--Nothing in this section
diminishes or supersedes any authority of a State or political
subdivision of a State to adopt or enforce any law or regulation
respecting peak demand management, demand response, distributed
storage, use of distributed generation, or the regulation of load-
serving entities. The Commission, in consultation with States having
such peak management, demand response and distributed storage programs,
shall to the maximum extent practicable, facilitate coordination
between the Federal program and such State programs.
(f) Relief.--The Commission may, for good cause, grant relief to
load-serving entities from the requirements of this section.
(g) Other Laws.--Except as provided in subsections (e) and (f), no
law or regulation shall relieve any person of any requirement otherwise
applicable under this section.
(h) Compliance.--(1) The Commission shall within one year after the
date of enactment of this Act establish a public website where the
Commission will provide information and data demonstrating compliance
by States, regional entities, and load-serving entities with this
section, including the success of load-serving entities in meeting
applicable peak demand reduction goals.
(2) The Commission shall, by April 1 of each year beginning in 2012,
provide a report to Congress on compliance with this section and
success in meeting applicable peak demand reduction goals and, as
appropriate, shall make recommendations as to how to increase peak
demand reduction efforts.
(3) The Commission shall note in each such report any State,
political subdivision of a State, or load-serving entity that has
failed to comply with this section, or is not a part of any region or
group of load-serving entities serving a region that has complied with
this section.
(4) The Commission shall have and exercise the authority to take
reasonable steps to modify the process of establishing peak demand
reduction goals and to accept adjustments to them as appropriate when
sought by load-serving entities.
(i) Assistance to States and Funding.--
(1) Assistance to states.--Any costs incurred by States for
activities undertaken pursuant to this section shall be
supported by the use of emission allowances allocated to the
States' SEED Accounts pursuant to section 132 of this Act. To
the extent that a State provides allowances to local
governments within the State to implement this program, that
shall be deemed a distribution of such allowances to units of
local government pursuant to subsection (c)(1) of that section.
(2) Funding.--There are authorized to be appropriated such
sums as may be necessary to the Commission, the Secretary, and
the Administrator to carry out the provisions of this section.
SEC. 145. REAUTHORIZATION OF ENERGY EFFICIENCY PUBLIC INFORMATION
PROGRAM TO INCLUDE SMART GRID INFORMATION.
(a) In General.--Section 134 of the Energy Policy Act of 2005 (42
U.S.C. 15832) is amended as follows:
(1) By amending the section heading to read as follows:
``ENERGY EFFICIENCY AND SMART GRID PUBLIC INFORMATION
INITIATIVE''.
(2) In paragraph (1) of subsection (a) by striking ``reduce
energy consumption during the 4-year period beginning on the
date of enactment of this Act'' and inserting ``increase energy
efficiency and to adopt Smart Grid technology and practices''.
(3) In paragraph (2) of subsection (a) by striking ``benefits
to consumers of reducing'' and inserting ``economic and
environmental benefits to consumers and the United States of
optimizing''.
(4) In subsection (a) by inserting at the beginning of
paragraph (3) ``the effect of energy efficiency and Smart Grid
capability in reducing energy and electricity prices throughout
the economy, together with''.
(5) In subsection (a)(4) by redesignating subparagraph (D) as
(E), by striking ``and'' at the end of subparagraph (C), and by
inserting after subparagraph (C) the following:
``(D) purchasing and utilizing equipment that
includes Smart Grid features and capability; and''.
(6) In subsection (c), by striking ``Not later than July 1,
2009,'' and inserting, ``For each year when appropriations
pursuant to the authorization in this section exceed
$10,000,000,''.
(7) In subsection (d) by striking ``2010'' and inserting
``2020''.
(8) In subsection (e) by striking ``2010'' and inserting
``2020''.
(b) Table of Contents.--The item relating to section 134 in the table
of contents for the Energy Policy Act of 2005 (42 U.S.C. 15801 and
following) is amended to read as follows:
``Sec. 134. Energy efficiency and Smart Grid public information
initiative.''.
SEC. 146. INCLUSION OF SMART GRID FEATURES IN APPLIANCE REBATE PROGRAM.
(a) Amendments.--Section 124 of the Energy Policy Act of 2005 (42
U.S.C. 15821) is amended as follows:
(1) By amending the section heading to read as follows:
``ENERGY EFFICIENT AND SMART APPLIANCE REBATE PROGRAM.''.
(2) By redesignating paragraphs (4) and (5) of subsection (a)
as paragraphs (5) and (6), respectively, and inserting after
paragraph (3) the following:
``(4) Smart appliance.--The term `smart appliance' means a
product that the Administrator of the Environmental Protection
Agency or the Secretary of Energy has determined qualifies for
such a designation in the Energy Star program pursuant to
section 142 of the American Clean Energy and Security Act of
2009, or that the Secretary or the Administrator has separately
determined includes the relevant Smart Grid capabilities listed
in section 1301 of the Energy Independence and Security Act of
2007 (15 U.S.C. 17381).''.
(3) In subsection (b)(1) by inserting ``and smart'' after
``efficient'' and by inserting after ``products'' the first
place it appears ``, including products designated as being
smart appliances''.
(4) In subsection (b)(3), by inserting ``the administration
of'' after ``carry out''.
(5) In subsection (d), by inserting ``the administration of''
after ``carrying out'' and by inserting ``, and up to 100
percent of the value of the rebates provided pursuant to this
section'' before the period at the end.
(6) In subsection (e)(3), by inserting ``, with separate
consideration as applicable if the product is also a smart
appliance,'' after ``Energy Star product'' the first place it
appears and by inserting ``or smart appliance'' before the
period at the end.
(7) In subsection (f), by striking ``$50,000,000'' through
the period at the end and inserting ``$100,000,000 for each
fiscal year from 2010 through 2015.''.
(b) Table of Contents.--The item relating to section 124 in the table
of contents for the Energy Policy Act of 2005 (42 U.S.C. 15801 and
following) is amended to read as follows:
``Sec. 124. Energy efficient and smart appliance rebate program.''.
Subtitle F--Transmission Planning
SEC. 151. TRANSMISSION PLANNING.
Part II of the Federal Power Act (16 U.S.C. 824 et seq.) is amended
by adding after section 216 the following new section:
``SEC. 216A. TRANSMISSION PLANNING.
``(a) Federal Policy.--
``(1) Objectives.--It is the policy of the United States that
regional electric grid planning should facilitate the
deployment of renewable and other zero-carbon energy sources
for generating electricity to reduce greenhouse gas emissions
while ensuring reliability, reducing congestion, ensuring
cyber-security, and providing for cost-effective electricity
services throughout the United States.
``(2) Options.--In addition to the policy under paragraph
(1), it is the policy of the United States that regional
electric grid planning to meet these objectives should take
into account all significant demand-side and supply-side
options, including energy efficiency, distributed generation,
renewable energy and zero-carbon electricity generation
technologies, smart-grid technologies and practices, demand
response, electricity storage, voltage regulation technologies,
high capacity conductors with at least 25 percent greater
efficiency than traditional ACSR (aluminum stranded conductors
steel reinforced) conductors, superconductor technologies,
underground transmission technologies, and new conventional
electric transmission capacity and corridors.
``(b) Planning.--
``(1) Planning principles.--Not later than 1 year after the
date of enactment of this section, the Commission shall adopt,
after notice and opportunity for comment, national electricity
grid planning principles derived from the Federal policy
established under subsection (a) to be applied in ongoing and
future transmission planning that may implicate interstate
transmission of electricity.
``(2) Regional planning entities.--Not later than 3 months
after the date of adoption by the Commission of national
electricity grid planning principles pursuant to paragraph (1),
entities that conduct or may conduct transmission planning
pursuant to State or Federal law or regulation, including
States, entities designated by States, public utility
transmission providers, operators and owners, regional
organizations, and electric utilities, and that are willing to
incorporate the national electricity grid planning principles
adopted by the Commission in their electric grid planning,
shall identify themselves and the regions for which they
propose to develop plans to the Commission.
``(3) Coordination of regional planning entities.--The
Commission shall encourage regional planning entities described
under paragraph (2) to cooperate and coordinate across regions
and to harmonize regional electric grid planning with planning
in adjacent or overlapping jurisdictions to the maximum extent
feasible. The Commission shall work with States, public
utilities transmission providers, load-serving entities,
transmission operators, and other organizations to resolve any
conflict or competition among proposed planning entities in
order to build consensus and promote the Federal policy
established under subsection (a). The Commission shall seek to
ensure that planning that is consistent with the national
electricity grid planning principles adopted pursuant to
paragraph (1) is conducted in all regions of the United States
and the territories.
``(4) Relation to existing planning policy.--In implementing
the Federal policy established under subsection (a), the
Commission shall--
``(A) incorporate any ongoing planning efforts
undertaken pursuant to section 217; and
``(B) consult with and invite the participation of
the Secretary of Energy in relationship to the
Secretary's duties pursuant to section 216.
``(5) Assistance.--
``(A) In general.--The Commission shall provide
support to and participate in the regional grid
planning processes conducted by regional planning
entities. The Commission may provide planning resources
and assistance as required or as requested by regional
planning entities, including system data, cost
information, system analysis, technical expertise,
modeling support, dispute resolution services, and
other assistance to regional planning entities, as
appropriate.
``(B) Authorization.--There are authorized to be
appropriated such sums as may be necessary to carry out
this paragraph.
``(6) Conflict resolution.--In the event that regional grid
plans conflict, the Commission shall assist the regional
planning entities in resolving such conflicts in order to
achieve the objectives of the Federal policy established under
subsection (a).
``(7) Submission of plans.--The Commission shall require
regional planning entities to submit initial regional electric
grid plans to the Commission not later than 18 months after the
date the Commission promulgates national electricity grid
planning principles pursuant to paragraph (1). Regional
electric grid plans should, in general, be developed from sub-
regional requirements and plans, including planning input
reflecting individual utility service areas. Regional plans may
then in turn be combined into larger regional plans, up to
interconnection-wide and national plans, as appropriate and
necessary as determined by the Commission. The Commission shall
review such plans for consistency with the national grid
planning principles and may return a plan to one or more
planning entities for further consideration, along with the
Commission's own recommendations for resolution of any conflict
or for improvement. To the extent practicable, all plans
submitted to the Commission shall be public documents and
available on the Commission's website.
``(8) Multi-regional meetings.--As regional grid plans are
submitted to the Commission, the Commission may convene multi-
regional meetings to discuss regional grid plan consistency and
integration, including requirements for multi-regional
projects, and to resolve any conflicts that emerge from such
multi-regional projects. The Commission shall provide its
recommendations for eliminating any inter-regional conflicts.
``(9) Report to congress.--Not later than 3 years after the
date of enactment of this section, the Commission shall provide
a report to Congress containing the results of the regional
grid planning process, including summaries of the adopted
regional plans. The Commission shall provide an electronic
version of its report on its website with links to all regional
and sub-regional plans taken into account. The Commission shall
note and provide its recommended resolution for any conflicts
not resolved during the planning process. The Commission shall
make any recommendations to Congress on the appropriate Federal
role or support required to address the needs of the electric
grid, including recommendations for addressing any needs that
are beyond the reach of existing State and Federal
authority.''.
SEC. 152. NET METERING FOR FEDERAL AGENCIES.
(a) Standard.--Subsection (b) of section 113 of the Public Utility
Regulatory Policies Act of 1978 (16 U.S.C. 2623) is amended by adding
the following new paragraph at the end thereof:
``(6) Net metering for federal agencies.--Each electric
utility shall offer to arrange (either directly or through a
third party) to make interconnection and net metering available
to Federal Government agencies, offices, or facilities in
accordance with the requirements of section 115(j). The
standard under this paragraph shall apply only to electric
utilities that sold over 4,000,000 megawatt hours of
electricity in the preceding year to the ultimate consumers
thereof. In the case of a standard under this paragraph, a
period of 1 year after the date of the enactment of this
section shall be substituted for the 2-year period referred to
in other provisions of this section.''.
(b) Special Rules.--Section 115 of the Public Utility Regulatory
Policies Act of 1978 (16 U.S.C. 2625) is amended by adding the
following new subsection at the end thereof:
``(j) Net Metering for Federal Agencies.--(1) The standard under
paragraph (6) of section 113(b) shall require that rates and charges
and contract terms and conditions for the sale of electric energy to
the Federal Government or agency shall be the same as the rates and
charges and contract terms and conditions that would be applicable if
the agency did not own or operate a qualified generation unit and use a
net metering system.
``(2)(A) The standard under paragraph (6) of section 113(b) shall
require that each electric utility shall arrange to provide to the
Government office or agency that qualifies for net metering an
electrical energy meter capable of net metering and measuring, to the
maximum extent practicable, the flow of electricity to or from the
customer, using a single meter and single register, the cost of which
shall be recovered from the customer.
``(B) In a case in which it is not practicable to provide a meter
under subparagraph (A), the utility (either directly or through a third
party) shall, at the expense of the utility install 1 or more of those
electric energy meters.
``(3)(A) The standard under paragraph (6) of section 113(b) shall
require that each electric utility shall calculate the electric energy
consumption for the Government office or agency using a net metering
system that meets the requirements of this subsection and paragraph (6)
of section 113(b) and shall measure the net electricity produced or
consumed during the billing period using the metering installed in
accordance with this paragraph.
``(B) If the electricity supplied by the retail electric supplier
exceeds the electricity generated by the Government office or agency
during the billing period, the Government office or agency shall be
billed for the net electric energy supplied by the retail electric
supplier in accordance with normal billing practices.
``(C) If electric energy generated by the Government office or agency
exceeds the electric energy supplied by the retail electric supplier
during the billing period, the Government office or agency shall be
billed for the appropriate customer charges for that billing period and
credited for the excess electric energy generated during the billing
period, with the credit appearing as a kilowatt-hour credit on the bill
for the following billing period.
``(D) Any kilowatt-hour credits provided to the Government office or
agency as provided in this subsection shall be applied to the
Government office or agency electric energy consumption on the
following billing period bill (except for a billing period that ends in
the next calendar year). At the beginning of each calendar year, any
unused kilowatt-hour credits remaining from the preceding year will
carry over to the new year.
``(4) The standard under paragraph (6) of section 113(b) shall
require that each electric utility shall offer a meter and retail
billing arrangement that has time-differentiated rates. The kilowatt-
hour credit shall be based on the ratio representing the difference in
retail rates for each time-of-use rate, or the credits shall be
reflected on the bill of the Government office or agency as a monetary
credit reflecting retail rates at the time of generation of the
electric energy by the customer-generator.
``(5) The standard under paragraph (6) of section 113(b) shall
require that the qualified generation unit, interconnection standards,
and net metering system used by the Government office or agency shall
meet all applicable safety and performance and reliability standards
established by the National Electrical Code, the Institute of
Electrical and Electronics Engineers, Underwriters Laboratories, and
the American National Standards Institute.
``(6) The standard under paragraph (6) of section 113(b) shall
require that electric utilities shall not make additional charges,
including standby charges, for equipment or services for safety or
performance that are in addition to those necessary to meet the other
standards and requirements of this subsection and paragraph (6) of
section 113(b).
``(7) For purposes of this subsection and paragraph (6) of section
113(b):
``(A) The term `Government' means any office, facility, or
agency of the Federal Government.
``(B) The term `customer-generator' means the owner or
operator of a electricity generation unit.
``(C) The term `electric generation unit' means any renewable
electric generation unit that is owned, operated, or sited on a
Federal Government facility.
``(D) The term `net metering' means the process of--
``(i) measuring the difference between the
electricity supplied to a customer-generator and the
electricity generated by the customer-generator that is
delivered to a utility at the same point of
interconnection during an applicable billing period;
and
``(ii) providing an energy credit to the customer-
generator in the form of a kilowatt-hour credit for
each kilowatt-hour of electricity produced by the
customer-generator from an electric generation unit.''.
(c) Savings Provision.--If this section or a portion of this section
is determined to be invalid or unenforceable, that shall not affect the
validity or enforceability of any other provision of this Act.
SEC. 153. SUPPORT FOR QUALIFIED ADVANCED ELECTRIC TRANSMISSION
MANUFACTURING PLANTS, QUALIFIED HIGH EFFICIENCY
TRANSMISSION PROPERTY, AND QUALIFIED ADVANCED
ELECTRIC TRANSMISSION PROPERTY.
(a) Loan Guarantees Prior to September 30, 2011.--Section 1705(a) of
the Energy Policy Act of 2005 (42 U.S.C. 16515(a)), as added by section
406 of the American Recovery and Reinvestment Act of 2009 (Public Law
109-58; 119 Stat. 594) is amended by adding the following new paragraph
at the end thereof:
``(5) The development, construction, acquisition,
retrofitting, or engineering integration of a qualified
advanced electric transmission manufacturing plant or the
construction of a qualified high efficiency transmission
property or a qualified advanced electric transmission property
(whether by construction of new facilities or the modification
of existing facilities). For purposes of this paragraph:
``(A) The term `qualified advanced electric
transmission property' means any high voltage electric
transmission cable, related substation, converter
station, or other integrated facility that--
``(i) utilizes advanced ultra low resistance
superconductive material or other advanced
technology that has been determined by the
Secretary of Energy as--
``(I) reasonably likely to become
commercially viable within 10 years
after the date of enactment of this
paragraph;
``(II) capable of reliably
transmitting at least 5 gigawatts of
high-voltage electric energy for
distances greater than 300 miles with
energy losses not exceeding 3 percent
of the total power transported; and
``(III) not creating an
electromagnetic field;
``(ii) has been determined by an appropriate
energy regulatory body, upon application, to be
in the public interest and thereby eligible for
inclusion in regulated rates; and
``(iii) can be located safely and
economically in a permanent underground right
of way not to exceed 25 feet in width.
The term `qualified advanced electric transmission
property' shall not include any property placed in
service after December 31, 2016.
``(B)(i) The term `qualified high efficiency
transmission property' means any high voltage overhead
electric transmission line, related substation, or
other integrated facility that--
``(I) utilizes advanced conductor core
technology that--
``(aa) has been determined by the
Secretary of Energy as reasonably
likely to become commercially viable
within 10 years after the date of
enactment of this paragraph;
``(bb) is suitable for use on
transmission lines up to 765kV; and
``(cc) exhibits power losses at least
30 percent lower than that of
transmission lines using conventional
`ACSR' conductors;
``(II) has been determined by an appropriate
energy regulatory body, upon application, to be
in the public interest and thereby eligible for
inclusion in regulated rates; and
``(III) can be located safely and
economically in a right of way not to exceed
that used by conventional `ACSR' conductors;
and
``(ii) The term `qualified high efficiency
transmission property' shall not include any property
placed in service after December 31, 2016.
``(C) The term `qualified advanced electric
transmission manufacturing plant' means any industrial
facility located in the United States which can be
equipped, re-equipped, expanded, or established to
produce in whole or in part qualified advanced electric
transmission property.''.
(b) Additional Loan Guarantee Authority.--Section 1703 of the Energy
Policy Act of 2005 (42 U.S.C. 16513) is amended by adding the following
new paragraph at the end of subsection (b):
``(12) The development, construction, acquisition,
retrofitting, or engineering integration of a qualified
advanced electric transmission manufacturing plant or the
construction of a qualified advanced electric transmission
property (whether by construction of new facilities or the
modification of existing facilities). For purposes of this
paragraph, the terms `qualified advanced electric transmission
property' and `qualified advanced electric transmission
manufacturing plant' have the meanings provided by section
1705(a)(5).''.
(c) Grants.--The Secretary of Energy is authorized to provide grants
for up to 50 percent of costs incurred in connection with the
development, construction, acquisition of components for, or
engineering of a qualified advanced electric transmission property
defined in paragraph (5) of section 1705(a) of the Energy Policy Act of
2005 (42 U.S.C. 16515(a)). Such grants may only be made to the first
project which qualifies under that paragraph. There are authorized to
be appropriated for purposes of this subsection not more than
$100,000,000 for fiscal year 2010. The United States shall take no
equity or other ownership interest in the qualified advanced electric
transmission manufacturing plant or qualified advanced electric
transmission property for which funding is provided under this
subsection.
Subtitle G--Technical Corrections to Energy Laws
SEC. 161. TECHNICAL CORRECTIONS TO ENERGY INDEPENDENCE AND SECURITY ACT
OF 2007.
(a) Title III--Energy Savings Through Improved Standards for
Appliance and Lighting.--(1) Section 325(u) of the Energy Policy and
Conservation Act (42 U.S.C. 6295(u)) (as amended by section 301(c) of
the Energy Independence and Security Act of 2007 (121 Stat. 1550)) is
amended--
(A) by redesignating paragraph (7) as paragraph (4);
and
(B) in paragraph (4) (as so redesignated), by
striking ``supplies is'' and inserting ``supply is''.
(2) Section 302 of the Energy Independence and Security Act of 2007
(121 Stat. 1551)) is amended--
(A) in subsection (a), by striking ``end of the paragraph''
and inserting ``end of subparagraph (A)''; and
(B) in subsection (b), by striking ``6313(a)'' and inserting
``6314(a)''.
(3) Section 343(a)(1) of the Energy Policy and Conservation Act (42
U.S.C. 6313(a)(1)) (as amended by section 302(b) of the Energy
Independence and Security Act of 2007 (121 Stat. 1551)) is amended--
(A) by striking ``Test procedures'' and all that follows
through ``At least once'' and inserting ``Test procedures.--At
least once''; and
(B) by redesignating clauses (i) and (ii) as subparagraphs
(A) and (B), respectively (and by moving the margins of such
subparagraphs 2 ems to the left).
(4) Section 342(a)(6) of the Energy Policy and Conservation Act (42
U.S.C. 6313(a)(6)) (as amended by section 305(b)(2) of the Energy
Independence and Security Act of 2007 (121 Stat. 1554)) is amended--
(A) in subparagraph (B)--
(i) by striking ``If the Secretary'' and inserting
the following:
``(i) In general.--If the Secretary'';
(ii) by striking ``clause (ii)(II)'' and inserting
``subparagraph (A)(ii)(II)'';
(iii) by striking ``clause (i)'' and inserting
``subparagraph (A)(i)''; and
(iv) by adding at the end the following:
``(ii) Factors.--In determining whether a
standard is economically justified for the
purposes of subparagraph (A)(ii)(II), the
Secretary shall, after receiving views and
comments furnished with respect to the proposed
standard, determine whether the benefits of the
standard exceed the burden of the proposed
standard by, to the maximum extent practicable,
considering--
``(I) the economic impact of the
standard on the manufacturers and on
the consumers of the products subject
to the standard;
``(II) the savings in operating costs
throughout the estimated average life
of the product in the type (or class)
compared to any increase in the price
of, or in the initial charges for, or
maintenance expenses of, the products
that are likely to result from the
imposition of the standard;
``(III) the total projected quantity
of energy savings likely to result
directly from the imposition of the
standard;
``(IV) any lessening of the utility
or the performance of the products
likely to result from the imposition of
the standard;
``(V) the impact of any lessening of
competition, as determined in writing
by the Attorney General, that is likely
to result from the imposition of the
standard;
``(VI) the need for national energy
conservation; and
``(VII) other factors the Secretary
considers relevant.
``(iii) Administration.--
``(I) Energy use and efficiency.--The
Secretary may not prescribe any amended
standard under this paragraph that
increases the maximum allowable energy
use, or decreases the minimum required
energy efficiency, of a covered
product.
``(II) Unavailability.--
``(aa) In general.--The
Secretary may not prescribe an
amended standard under this
subparagraph if the Secretary
finds (and publishes the
finding) that interested
persons have established by a
preponderance of the evidence
that a standard is likely to
result in the unavailability in
the United States in any
product type (or class) of
performance characteristics
(including reliability,
features, sizes, capacities,
and volumes) that are
substantially the same as those
generally available in the
United States at the time of
the finding of the Secretary.
``(bb) Other types or
classes.--The failure of some
types (or classes) to meet the
criterion established under
this subclause shall not affect
the determination of the
Secretary on whether to
prescribe a standard for the
other types or classes.''; and
(B) in subparagraph (C)(iv), by striking ``An amendment
prescribed under this subsection'' and inserting
``Notwithstanding subparagraph (D), an amendment prescribed
under this subparagraph''.
(5) Section 342(a)(6)(B)(iii) of the Energy Policy and Conservation
Act (as added by section 306(c) of the Energy Independence and Security
Act of 2007) is transferred and redesignated as clause (vi) of section
342(a)(6)(C) of the Energy Policy and Conservation Act (as amended by
section 305(b)(2) of the Energy Independence and Security Act of 2007).
(6) Section 340 of the Energy Policy and Conservation Act (42 U.S.C.
6311) (as amended by sections 312(a)(2) and 314(a) of the Energy
Independence and Security Act of 2007 (121 Stat. 1564, 1569)) is
amended by redesignating paragraphs (22) and (23) (as added by section
314(a) of that Act) as paragraphs (23) and (24), respectively.
(7) Section 345 of the Energy Policy and Conservation Act (42 U.S.C.
6316) (as amended by section 312(e) of the Energy Independence and
Security Act of 2007 (121 Stat. 1567)) is amended--
(A) by striking ``subparagraphs (B) through (G)'' each place
it appears and inserting ``subparagraphs (B), (C), (D), (I),
(J), and (K)'';
(B) by striking ``part A'' each place it appears and
inserting ``part B''; and
(C) in subsection (h)(3), by striking ``section 342(f)(3)''
and inserting ``section 342(f)(4)''.
(8) Section 340(13) of the Energy Policy and Conservation Act (42
U.S.C. 6311(13)) (as amended by section 313(a) of the Energy
Independence and Security Act of 2007 (121 Stat. 1568)) is amended--
(A) by striking subparagraphs (A) and (B) and inserting the
following:
``(A) In general.--The term `electric motor' means
any motor that is--
``(i) a general purpose T-frame, single-
speed, foot-mounting, polyphase squirrel-cage
induction motor of the National Electrical
Manufacturers Association, Design A and B,
continuous rated, operating on 230/460 volts
and constant 60 Hertz line power as defined in
NEMA Standards Publication MG1-1987; or
``(ii) a motor incorporating the design
elements described in clause (i), but is
configured to incorporate one or more of the
following variations--
``(I) U-frame motor;
``(II) NEMA Design C motor;
``(III) close-coupled pump motor;
``(IV) footless motor;
``(V) vertical solid shaft normal
thrust motor (as tested in a horizontal
configuration);
``(VI) 8-pole motor; or
``(VII) poly-phase motor with a
voltage rating of not more than 600
volts (other than 230 volts or 460
volts, or both, or can be operated on
230 volts or 460 volts, or both).'';
and
(B) by redesignating subparagraphs (C) through (I) as
subparagraphs (B) through (H), respectively.
(9)(A) Section 342(b) of the Energy Policy and Conservation Act (42
U.S.C. 6313(b)) is amended--
(i) in paragraph (1), by striking ``paragraph (2)'' and inserting
``paragraph (3)'';
(ii) by redesignating paragraphs (2) and (3) as paragraphs (3) and
(4);
(iii) by inserting after paragraph (1) the following:
``(2) Standards effective beginning december 19, 2010.--
``(A) In general.--Except for definite purpose
motors, special purpose motors, and those motors
exempted by the Secretary under paragraph (3) and
except as provided for in subparagraphs (B), (C), and
(D), each electric motor manufactured with power
ratings from 1 to 200 horsepower (alone or as a
component of another piece of equipment) on or after
December 19, 2010, shall have a nominal full load
efficiency of not less than the nominal full load
efficiency described in NEMA MG-1 (2006) Table 12-12.
``(B) Fire pump electric motors.--Except for those
motors exempted by the Secretary under paragraph (3),
each fire pump electric motor manufactured with power
ratings from 1 to 200 horsepower (alone or as a
component of another piece of equipment) on or after
December 19, 2010, shall have a nominal full load
efficiency that is not less than the nominal full load
efficiency described in NEMA MG-1 (2006) Table 12-11.
``(C) NEMA design b electric motors.--Except for
those motors exempted by the Secretary under paragraph
(3), each NEMA Design B electric motor with power
ratings of more than 200 horsepower, but not greater
than 500 horsepower, manufactured (alone or as a
component of another piece of equipment) on or after
December 19, 2010, shall have a nominal full load
efficiency of not less than the nominal full load
efficiency described in NEMA MG-1 (2006) Table 12-11.
``(D) Motors incorporating certain design elements.--
Except for those motors exempted by the Secretary under
paragraph (3), each electric motor described in section
340(13)(A)(ii) manufactured with power ratings from 1
to 200 horsepower (alone or as a component of another
piece of equipment) on or after December 19, 2010,
shall have a nominal full load efficiency of not less
than the nominal full load efficiency described in NEMA
MG-1 (2006) Table 12-11.''; and
(iv) in paragraph (3) (as redesignated by clause (ii)), by striking
``paragraph (1)'' each place it appears in subparagraphs (A) and (D)
and inserting ``paragraphs (1) and (2)''.
(B) Section 313 of the Energy Independence and Security Act of 2007
(121 Stat. 1568) is repealed.
(C) The amendments made by--
(i) subparagraph (A) shall take effect on December 19, 2010;
and
(ii) subparagraph (B) shall take effect on December 19, 2007.
(10) Section 321(30)(D)(i)(III) of the Energy Policy and Conservation
Act (42 U.S.C. 6291(30)(D)(i)(III)) (as amended by section 321(a)(1)(A)
of the Energy Independence and Security Act of 2007 (121 Stat. 1574))
is amended by inserting before the semicolon the following: ``or, in
the case of a modified spectrum lamp, not less than 232 lumens and not
more than 1,950 lumens''.
(11) Section 321(30)(T) of the Energy Policy and Conservation Act (42
U.S.C. 6291(30)(T) (as amended by section 321(a)(1)(B) of the Energy
Independence and Security Act of 2007 (121 Stat. 1574)) is amended--
(A) in clause (i)--
(i) by striking the comma after ``household
appliance'' and inserting ``and''; and
(ii) by striking ``and is sold at retail,''; and
(B) in clause (ii), by inserting ``when sold at retail,''
before ``is designated''.
(12) Section 325 of the Energy Policy and Conservation Act (42 U.S.C.
6295) (as amended by sections 321(a)(3)(A) and 322(b) of the Energy
Independence and Security Act of 2007 (121 Stat. 1577, 1588)) is
amended by striking subsection (i) and inserting the following:
``(i) General Service Fluorescent Lamps, General Service Incandescent
Lamps, Intermediate Base Incandescent Lamps, Candelabra Base
Incandescent Lamps, and Incandescent Reflector Lamps.--
``(1) Energy efficiency standards.--
``(A) In general.--Each of the following general
service fluorescent lamps, general service incandescent
lamps, intermediate base incandescent lamps, candelabra
base incandescent lamps, and incandescent reflector
lamps manufactured after the effective date specified
in the tables listed in this subparagraph shall meet or
exceed the following lamp efficacy, new maximum
wattage, and CRI standards:
``FLUORESCENT LAMPS
----------------------------------------------------------------------------------------------------------------
Effective Date
Lamp Type Nominal Lamp Minimum CRI Minimum Average Lamp (Period of
Wattage Efficacy (LPW) Months)
----------------------------------------------------------------------------------------------------------------
4-foot medium bi-pin........... >35 W 69 75.0 36
35 W 45 75.0 36
2-foot U-shaped................ >35 W 69 68.0 36
35 W 45 64.0 36
8-foot slimline................ 65 W 69 80.0 18
65 W 45 80.0 18
8-foot high output............. >100 W 69 80.0 18
100 W 45 80.0 18
----------------------------------------------------------------------------------------------------------------
``INCANDESCENT REFLECTOR LAMPS
------------------------------------------------------------------------
Effective Date
Nominal Lamp Wattage Minimum Average Lamp (Period of
Efficacy (LPW) Months)
------------------------------------------------------------------------
40-50....................... 10.5 36
51-66....................... 11.0 36
67-85....................... 12.5 36
86-115...................... 14.0 36
116-155...................... 14.5 36
156-205...................... 15.0 36
------------------------------------------------------------------------
``GENERAL SERVICE INCANDESCENT LAMPS
----------------------------------------------------------------------------------------------------------------
Minimum
Rated Lumen Ranges Maximum Rated Rated Effective
Wattage Lifetime Date
----------------------------------------------------------------------------------------------------------------
1490-2600 72 1,000 hrs 1/1/2012
1050-1489 53 1,000 hrs 1/1/2013
750-1049 43 1,000 hrs 1/1/2014
310-749 29 1,000 hrs 1/1/2014
----------------------------------------------------------------------------------------------------------------
``MODIFIED SPECTRUM GENERAL SERVICE INCANDESCENT LAMPS
----------------------------------------------------------------------------------------------------------------
Minimum
Rated Lumen Ranges Maximum Rated Rated Effective
Wattage Lifetime Date
----------------------------------------------------------------------------------------------------------------
1118-1950 72 1,000 hrs 1/1/2012
788-1117 53 1,000 hrs 1/1/2013
563-787 43 1,000 hrs 1/1/2014
232-562 29 1,000 hrs 1/1/2014
----------------------------------------------------------------------------------------------------------------
``(B) Application.--
``(i) Application criteria.--This
subparagraph applies to each lamp that--
``(I) is intended for a general
service or general illumination
application (whether incandescent or
not);
``(II) has a medium screw base or any
other screw base not defined in ANSI
C81.61-2006;
``(III) is capable of being operated
at a voltage at least partially within
the range of 110 to 130 volts; and
``(IV) is manufactured or imported
after December 31, 2011.
``(ii) Requirement.--For purposes of this
paragraph, each lamp described in clause (i)
shall have a color rendering index that is
greater than or equal to--
``(I) 80 for nonmodified spectrum
lamps; or
``(II) 75 for modified spectrum
lamps.
``(C) Candelabra incandescent lamps and intermediate
base incandescent lamps.--
``(i) Candelabra base incandescent lamps.--
Effective beginning January 1, 2012, a
candelabra base incandescent lamp shall not
exceed 60 rated watts.
``(ii) Intermediate base incandescent
lamps.--Effective beginning January 1, 2012, an
intermediate base incandescent lamp shall not
exceed 40 rated watts.
``(D) Exemptions.--
``(i) Statutory exemptions.--The standards
specified in subparagraph (A) shall not apply
to the following types of incandescent
reflector lamps:
``(I) Lamps rated at 50 watts or less
that are ER30, BR30, BR40, or ER40
lamps.
``(II) Lamps rated at 65 watts that
are BR30, BR40, or ER40 lamps.
``(III) R20 incandescent reflector
lamps rated 45 watts or less.
``(ii) Administrative exemptions.--
``(I) Petition.--Any person may
petition the Secretary for an exemption
for a type of general service lamp from
the requirements of this subsection.
``(II) Criteria.--The Secretary may
grant an exemption under subclause (I)
only to the extent that the Secretary
finds, after a hearing and opportunity
for public comment, that it is not
technically feasible to serve a
specialized lighting application (such
as a military, medical, public safety,
or certified historic lighting
application) using a lamp that meets
the requirements of this subsection.
``(III) Additional criterion.--To
grant an exemption for a product under
this clause, the Secretary shall
include, as an additional criterion,
that the exempted product is unlikely
to be used in a general service
lighting application.
``(E) Extension of coverage.--
``(i) Petition.--Any person may petition the
Secretary to establish standards for lamp
shapes or bases that are excluded from the
definition of general service lamps.
``(ii) Increased sales of exempted lamps.--
The petition shall include evidence that the
availability or sales of exempted incandescent
lamps have increased significantly since the
date on which the standards on general service
incandescent lamps were established.
``(iii) Criteria.--The Secretary shall grant
a petition under clause (i) if the Secretary
finds that--
``(I) the petition presents evidence
that demonstrates that commercial
availability or sales of exempted
incandescent lamp types have increased
significantly since the standards on
general service lamps were established
and likely are being widely used in
general lighting applications; and
``(II) significant energy savings
could be achieved by covering exempted
products, as determined by the
Secretary based in part on sales data
provided to the Secretary from
manufacturers and importers.
``(iv) No presumption.--The grant of a
petition under this subparagraph shall create
no presumption with respect to the
determination of the Secretary with respect to
any criteria under a rulemaking conducted under
this section.
``(v) Expedited proceeding.--If the Secretary
grants a petition for a lamp shape or base
under this subparagraph, the Secretary shall--
``(I) conduct a rulemaking to
determine standards for the exempted
lamp shape or base; and
``(II) complete the rulemaking not
later than 18 months after the date on
which notice is provided granting the
petition.
``(F) Effective dates.--
``(i) In general.--In this paragraph, except
as otherwise provided in a table contained in
subparagraph (A) or in clause (ii), the term
`effective date' means the last day of the
month specified in the table that follows
October 24, 1992.
``(ii) Special effective dates.--
``(I) ER, br, and bpar lamps.--The
standards specified in subparagraph (A)
shall apply with respect to ER
incandescent reflector lamps, BR
incandescent reflector lamps, BPAR
incandescent reflector lamps, and
similar bulb shapes on and after
January 1, 2008, or the date that is
180 days after the date of enactment of
the Energy Independence and Security
Act of 2007.
``(II) Lamps between 2.25-2.75 inches
in diameter.--The standards specified
in subparagraph (A) shall apply with
respect to incandescent reflector lamps
with a diameter of more than 2.25
inches, but not more than 2.75 inches,
on and after the later of January 1,
2008, or the date that is 180 days
after the date of enactment of the
Energy Independence and Security Act of
2007.
``(2) Compliance with existing law.--Notwithstanding section
332(a)(5) and section 332(b), it shall not be unlawful for a
manufacturer to sell a lamp that is in compliance with the law
at the time the lamp was manufactured.
``(3) Rulemaking before october 24, 1995.--
``(A) In general.--Not later than 36 months after
October 24, 1992, the Secretary shall initiate a
rulemaking procedure and shall publish a final rule not
later than the end of the 54-month period beginning on
October 24, 1992, to determine whether the standards
established under paragraph (1) should be amended.
``(B) Administration.--The rule shall contain the
amendment, if any, and provide that the amendment shall
apply to products manufactured on or after the 36-month
period beginning on the date on which the final rule is
published.
``(4) Rulemaking before october 24, 2000.--
``(A) In general.--Not later than 8 years after
October 24, 1992, the Secretary shall initiate a
rulemaking procedure and shall publish a final rule not
later than 9 years and 6 months after October 24, 1992,
to determine whether the standards in effect for
fluorescent lamps and incandescent lamps should be
amended.
``(B) Administration.--The rule shall contain the
amendment, if any, and provide that the amendment shall
apply to products manufactured on or after the 36-month
period beginning on the date on which the final rule is
published.
``(5) Rulemaking for additional general service fluorescent
lamps.--
``(A) In general.--Not later than the end of the 24-
month period beginning on the date labeling
requirements under section 324(a)(2)(C) become
effective, the Secretary shall--
``(i) initiate a rulemaking procedure to
determine whether the standards in effect for
fluorescent lamps and incandescent lamps should
be amended so that the standards would be
applicable to additional general service
fluorescent lamps; and
``(ii) publish, not later than 18 months
after initiating the rulemaking, a final rule
including the amended standards, if any.
``(B) Administration.--The rule shall provide that
the amendment shall apply to products manufactured
after a date which is 36 months after the date on which
the rule is published.
``(6) Standards for general service lamps.--
``(A) Rulemaking before january 1, 2014.--
``(i) In general.--Not later than January 1,
2014, the Secretary shall initiate a rulemaking
procedure to determine whether--
``(I) standards in effect for general
service lamps should be amended; and
``(II) the exclusions for certain
incandescent lamps should be maintained
or discontinued based, in part, on
excluded lamp sales collected by the
Secretary from manufacturers.
``(ii) Scope.--The rulemaking--
``(I) shall not be limited to
incandescent lamp technologies; and
``(II) shall include consideration of
a minimum standard of 45 lumens per
watt for general service lamps.
``(iii) Amended standards.--If the Secretary
determines that the standards in effect for
general service lamps should be amended, the
Secretary shall publish a final rule not later
than January 1, 2017, with an effective date
that is not earlier than 3 years after the date
on which the final rule is published.
``(iv) Phased-in effective dates.--The
Secretary shall consider phased-in effective
dates under this subparagraph after
considering--
``(I) the impact of any amendment on
manufacturers, retiring and repurposing
existing equipment, stranded
investments, labor contracts, workers,
and raw materials; and
``(II) the time needed to work with
retailers and lighting designers to
revise sales and marketing strategies.
``(v) Backstop requirement.--If the Secretary
fails to complete a rulemaking in accordance
with clauses (i) through (iv) or if the final
rule does not produce savings that are greater
than or equal to the savings from a minimum
efficacy standard of 45 lumens per watt,
effective beginning January 1, 2020, the
Secretary shall prohibit the manufacture of any
general service lamp that does not meet a
minimum efficacy standard of 45 lumens per
watt.
``(vi) State preemption.--Neither section
327(c) nor any other provision of law shall
preclude California or Nevada from adopting,
effective beginning on or after January 1,
2018--
``(I) a final rule adopted by the
Secretary in accordance with clauses
(i) through (iv);
``(II) if a final rule described in
subclause (I) has not been adopted, the
backstop requirement under clause (v);
or
``(III) in the case of California, if
a final rule described in subclause (I)
has not been adopted, any California
regulations relating to these covered
products adopted pursuant to State
statute in effect as of the date of
enactment of the Energy Independence
and Security Act of 2007.
``(B) Rulemaking before january 1, 2020.--
``(i) In general.--Not later than January 1,
2020, the Secretary shall initiate a rulemaking
procedure to determine whether--
``(I) standards in effect for general
service lamps should be amended; and
``(II) the exclusions for certain
incandescent lamps should be maintained
or discontinued based, in part, on
excluded lamp sales data collected by
the Secretary from manufacturers.
``(ii) Scope.--The rulemaking shall not be
limited to incandescent lamp technologies.
``(iii) Amended standards.--If the Secretary
determines that the standards in effect for
general service lamps should be amended, the
Secretary shall publish a final rule not later
than January 1, 2022, with an effective date
that is not earlier than 3 years after the date
on which the final rule is published.
``(iv) Phased-in effective dates.--The
Secretary shall consider phased-in effective
dates under this subparagraph after
considering--
``(I) the impact of any amendment on
manufacturers, retiring and repurposing
existing equipment, stranded
investments, labor contracts, workers,
and raw materials; and
``(II) the time needed to work with
retailers and lighting designers to
revise sales and marketing strategies.
``(7) Federal actions.--
``(A) Comments of secretary.--
``(i) In general.--With respect to any lamp
to which standards are applicable under this
subsection or any lamp specified in section
346, the Secretary shall inform any Federal
entity proposing actions that would adversely
impact the energy consumption or energy
efficiency of the lamp of the energy
conservation consequences of the action.
``(ii) Consideration.--The Federal entity
shall carefully consider the comments of the
Secretary.
``(B) Amendment of standards.--Notwithstanding
section 325(n)(1), the Secretary shall not be
prohibited from amending any standard, by rule, to
permit increased energy use or to decrease the minimum
required energy efficiency of any lamp to which
standards are applicable under this subsection if the
action is warranted as a result of other Federal action
(including restrictions on materials or processes) that
would have the effect of either increasing the energy
use or decreasing the energy efficiency of the product.
``(8) Compliance.--
``(A) In general.--Not later than the date on which
standards established pursuant to this subsection
become effective, or, with respect to high-intensity
discharge lamps covered under section 346, the
effective date of standards established pursuant to
that section, each manufacturer of a product to which
the standards are applicable shall file with the
Secretary a laboratory report certifying compliance
with the applicable standard for each lamp type.
``(B) Contents.--The report shall include the lumen
output and wattage consumption for each lamp type as an
average of measurements taken over the preceding 12-
month period.
``(C) Other lamp types.--With respect to lamp types
that are not manufactured during the 12-month period
preceding the date on which the standards become
effective, the report shall--
``(i) be filed with the Secretary not later
than the date that is 12 months after the date
on which manufacturing is commenced; and
``(ii) include the lumen output and wattage
consumption for each such lamp type as an
average of measurements taken during the 12-
month period.''.
(13) Section 325(l)(4)(A) of the Energy Policy and Conservation Act
(42 U.S.C. 6295(l)(4)(A)) (as amended by section 321(a)(3)(B) of the
Energy Independence and Security Act of 2007 (121 Stat. 1581)) is
amended by striking ``only''.
(14) Section 327(b)(1)(B) of the Energy Policy and Conservation Act
(42 U.S.C. 6297(b)(1)(B)) (as amended by section 321(d)(3) of the
Energy Independence and Security Act of 2007 (121 Stat. 1585)) is
amended--
(A) in clause (i), by inserting ``and'' after the semicolon
at the end;
(B) in clause (ii), by striking ``; and'' and inserting a
period; and
(C) by striking clause (iii).
(15) Section 321(e) of the Energy Independence and Security Act of
2007 (121 Stat. 1586) is amended--
(A) in the matter preceding paragraph (1), by striking ``is
amended'' and inserting ``(as amended by section 306(b)) is
amended''; and
(B) by striking paragraphs (1) and (2) and inserting the
following:
``(1) in paragraph (5), by striking `or' after the semicolon
at the end;
``(2) in paragraph (6), by striking the period at the end and
inserting `; or'; and''.
(16) Section 332(a) of the Energy Policy and Conservation Act (42
U.S.C. 6302(a)) (as amended by section 321(e) of the Energy
Independence and Security Act of 2007 (121 Stat. 1586)) is amended by
redesignating the second paragraph (6) as paragraph (7).
(17) Section 321(30)(C)(ii) of the Energy Policy and Conservation Act
(42 U.S.C. 6291(30)(C)(ii)) (as amended by section 322(a)(1)(B) of the
Energy Independence and Security Act of 2007 (121 Stat. 1587)) is
amended by inserting a period after ``40 watts or higher''.
(18) Section 322(b) of the Energy Independence and Security Act of
2007 (121 Stat. 1588)) is amended by striking ``6995(i)'' and inserting
``6295(i)''.
(19) Section 327(c) of the Energy Policy and Conservation Act (42
U.S.C. 6297(c)) (as amended by sections 324(f) of the Energy
Independence and Security Act of 2007 (121 Stat. 1594)) is amended--
(A) in paragraph (6), by striking ``or'' after the semicolon
at the end;
(B) in paragraph (8)(B), by striking ``and'' after the
semicolon at the end;
(C) in paragraph (9)--
(i) by striking ``except that--'' and all that
follows through ``if the Secretary fails to issue'' and
inserting ``except that if the Secretary fails to
issue'';
(ii) by redesignating clauses (i) and (ii) as
subparagraphs (A) and (B), respectively (and by moving
the margins of such subparagraphs 2 ems to the left);
and
(iii) by striking the period at the end and inserting
a semicolon; and
(D) by adding at the end the following:
``(10) is a regulation for general service lamps that
conforms with Federal standards and effective dates;
``(11) is an energy efficiency standard for general service
lamps enacted into law by the State of Nevada prior to December
19, 2007, if the State has not adopted the Federal standards
and effective dates pursuant to subsection (b)(1)(B)(ii); or''.
(20) Section 325(b) of the Energy Independence and Security Act of
2007 (121 Stat. 1596)) is amended by striking ``6924(c)'' and inserting
``6294(c)''.
(b) Title IV--Energy Savings in Buildings and Industry.--(1) Section
401 of the Energy Independence and Security Act of 2007 (42 U.S.C.
17061) is amended--
(A) in paragraph (2), by striking ``484'' and inserting
``494''; and
(B) in paragraph (13), by striking ``Agency'' and inserting
``Administration''.
(2) Section 422 of the Energy Conservation and Production Act (42
U.S.C. 6872) (as amended by section 411(a) of the Energy Independence
and Security Act of 2007 (121 Stat. 1600)) is amended by striking 1 of
the 2 periods at the end of paragraph (5).
(3) Section 305(a)(3)(D)(i) of the Energy Conservation and Production
Act (42 U.S.C. 6834(a)(3)(D)(i)) (as amended by section 433(a) of the
Energy Independence and Security Act of 2007 (121 Stat. 1612)) is
amended--
(A) in subclause (I)--
(i) by striking ``in fiscal year 2003 (as measured by
Commercial Buildings Energy Consumption Survey or
Residential Energy Consumption Survey data from the
Energy Information Agency'' and inserting ``as measured
by the calendar year 2003 Commercial Buildings Energy
Consumption Survey or the calendar year 2005
Residential Energy Consumption Survey data from the
Energy Information Administration''; and
(ii) in the table at the end, by striking ``Fiscal
Year'' and inserting ``Calendar Year''; and
(B) in subclause (II)--
(i) by striking ``(II) Upon petition'' and inserting
the following:
``(II) Downward adjustment of numeric
requirement.--
``(aa) In general.--On
petition''; and
(ii) by striking the last sentence and inserting the
following:
``(bb) Exceptions to
requirement for concurrence of
secretary.--
``(AA) In general.--
The requirement to
petition and obtain the
concurrence of the
Secretary under this
subclause shall not
apply to any Federal
building with respect
to which the
Administrator of
General Services is
required to transmit a
prospectus to Congress
under section 3307 of
title 40, United States
Code, or to any other
Federal building
designed, constructed,
or renovated by the
Administrator if the
Administrator
certifies, in writing,
that meeting the
applicable numeric
requirement under
subclause (I) with
respect to the Federal
building would be
technically
impracticable in light
of the specific
functional needs for
the building.
``(BB) Adjustment.--
In the case of a
building described in
subitem (AA), the
Administrator may
adjust the applicable
numeric requirement of
subclause (I) downward
with respect to the
building.''.
(4) Section 436(c)(3) of the Energy Independence and Security Act of
2007 (42 U.S.C. 17092(c)(3)) is amended by striking ``474'' and
inserting ``494''.
(5) Section 440 of the Energy Independence and Security Act of 2007
(42 U.S.C. 17096) is amended by striking ``and 482''.
(6) Section 373(c) of the Energy Policy and Conservation Act (42
U.S.C. 6343(c)) (as amended by section 451(a) of the Energy
Independence and Security Act of 2007 (121 Stat. 1628)) is amended by
striking ``Administrator'' and inserting ``Secretary''.
(c) Date of Enactment.--Section 1302 of the Energy Independence and
Security Act of 2007 (42 U.S.C. 17382) is amended in the first sentence
by striking ``enactment'' and inserting ``the date of enactment of this
Act''.
(d) Reference.--Section 1306(c)(3) of the Energy Independence and
Security Act of 2007 (42 U.S.C. 17386(c)(3)) is amended by striking
``section 1307 (paragraph (17) of section 111(d) of the Public Utility
Regulatory Policies Act of 1978)'' and inserting ``paragraph (19) of
section 111(d) of the Public Utility Regulatory Policies Act of 1978
(16 U.S.C. 2621(d))''.
(e) Effective Date.--This section and the amendments made by this
section take effect as if included in the Energy Independence and
Security Act of 2007 (Public Law 110-140; 121 Stat. 1492).
SEC. 162. TECHNICAL CORRECTIONS TO ENERGY POLICY ACT OF 2005.
(a) Title I--Energy Efficiency.--Section 325(g)(8)(C)(ii) of the
Energy Policy and Conservation Act (42 U.S.C. 6295(g)(8)(C)(ii)) (as
added by section 135(c)(2)(B) of the Energy Policy Act of 2005) is
amended by striking ``20F'' and inserting ``-20F''.
(b) Effective Date.--This section and the amendments made by this
section take effect as if included in the Energy Policy Act of 2005
(Public Law 109-58; 119 Stat. 594).
Subtitle H--Energy and Efficiency Centers
SEC. 171. CLEAN ENERGY INNOVATION CENTERS.
(a) Purpose.--The Secretary shall carry out a program to establish
Clean Energy Innovation Centers to enhance the Nation's economic,
environmental, and energy security by promoting commercial deployment
of clean, indigenous energy alternatives to oil and other fossil fuels,
reducing greenhouse gas emissions, and ensuring that the United States
maintains a technological lead in developing and deploying state-of-
the-art energy technologies. To achieve these purposes the program
shall--
(1) leverage the expertise and resources of the university
and private research communities, industry, venture capital,
national laboratories, and other participants in energy
innovation to support cross-disciplinary research and
development in areas not being served by the private sector in
order to develop and transfer innovative clean energy
technologies into the marketplace;
(2) expand the knowledge base and human capital necessary to
transition to a low-carbon economy; and
(3) promote regional economic development by cultivating
clusters of clean energy technology firms, private research
organizations, suppliers, and other complementary groups and
businesses.
(b) Definitions.--For purposes of this section:
(1) Allowance.--The term ``allowance'' means an emission
allowance established under section 721 of the Clean Air Act.
(2) Center.--The term ``Center'' means a Clean Energy
Innovation Center established in accordance with this section.
(3) Clean energy technology.--The term ``clean energy
technology'' means a technology that--
(A) produces energy from solar, wind, geothermal,
biomass, tidal, wave, ocean, and other renewable energy
resources (as such term is defined in section 610 of
the Public Utility Regulatory Policies Act of 1978);
(B) more efficiently transmits, distributes, or
stores energy;
(C) enhances energy efficiency for buildings and
industry, including combined heat and power;
(D) enables the development of a Smart Grid (as
described in section 1301 of the Energy Independence
and Security Act of 2007 (42 U.S.C. 17381)), including
integration of renewable energy resources and
distributed generation, demand response, demand side
management, and systems analysis;
(E) produces an advanced or sustainable material with
energy or energy efficiency applications;
(F) enhances water security through improved water
management, conservation, distribution, and end use
applications; or
(G) improves energy efficiency for transportation,
including electric vehicles.
(4) Cluster.--The term ``cluster'' means a concentration of
firms directly involved in the research, development, finance,
and commercialization of clean energy technologies whose
geographic proximity facilitates utilization and sharing of
skilled human resources, infrastructure, research facilities,
educational and training institutions, venture capital, and
input suppliers.
(5) Project.--The term ``project'' means an activity with
respect to which a Center provides support under subsection
(e).
(6) Qualifying entity.--The term ``qualifying entity'' means
each of the following:
(A) A research university.
(B) A State institution with a focus on the
advancement of clean energy technologies.
(C) A nongovernmental organization with research or
commercialization expertise in clean energy technology
development.
(7) Secretary.--The term ``Secretary'' means the Secretary of
Energy.
(8) Technology focus.--The term ``technology focus'' means
the unique technology area in which a Center will specialize,
and may include solar electricity, fuels from solar energy,
batteries and energy storage, electricity grid systems and
devices, energy efficient building systems and design, advanced
materials, modeling and simulation, and other clean energy
technology areas designated by the Secretary.
(9) Translational research.--The term ``translational
research'' means clean energy technology research to coordinate
basic or applied research with technical and commercial
applications to enable promising discoveries or inventions to
attract investment sufficient for market penetration and
diffusion.
(c) Role of the Secretary.--The Secretary shall--
(1) have ultimate responsibility for, and oversight of, all
aspects of the program under this section;
(2) provide for the distribution of allowances to consortia
for the establishment of 8 Centers pursuant to this section,
with each Center designated a unique technology focus area;
(3) coordinate the innovation activities of Centers with
those occurring through other Department of Energy entities,
including the National Laboratories, the Advanced Research
Projects Agency--Energy, and Energy Frontier Research Centers,
and within industry, and to avoid duplication of research, by
annually--
(A) issuing guidance regarding national energy
research and development priorities and strategic
objectives; and
(B) convening a conference of staff of the Department
of Energy and representatives from such other entities
to share research results, program plans, and
opportunities for collaboration.
(d) Consortium.--A consortium shall be eligible to receive allowances
to support the establishment of a Center under this section if--
(1) it is composed of--
(A) 2 research universities with a combined annual
research budget of $500,000,000; and
(B) no fewer than 1 additional qualifying entity;
(2) its members have established a binding agreement that
documents--
(A) the structure of the partnership agreement;
(B) the governance and management structure to enable
cost-effective implementation of the program;
(C) an intellectual property management policy;
(D) a conflicts of interest policy consistent with
subsection (e)(4);
(E) an accounting structure that meets the
requirements of the Department and can be audited under
subsection (f)(3); and
(F) that it has an Advisory Board consistent with
subsection (e)(3);
(3) it receives financial contributions from States,
consortium participants, or other non-Federal sources, to be
used pursuant to subsection (e)(2);
(4) it is part of an existing cluster or demonstrates high
potential to develop a new cluster; and
(5) it operates as a nonprofit organization.
(e) Clean Energy Innovation Centers.--
(1) Role.--Centers shall provide support to activities
leading to commercial deployment of clean energy technologies
pursuant to the purposes of this section through issuance of
awards to projects managed by qualifying entities and other
entities meeting the Center's project criteria, including
national laboratories. Each Center shall--
(A) develop and publish for public review and comment
proposed plans, programs, and project selection
criteria;
(B) submit an annual report to the Secretary
summarizing the Center's activities, organizational
expenditures, and Board members, which shall include a
certification of compliance with conflict of interest
policies and a description of each project in the
research portfolio;
(C) establish policies--
(i) regarding intellectual property developed
as a result of Center awards and other forms of
technology support that encourage individual
ingenuity and invention while speeding
knowledge transfer and facilitating the
establishment of rapid commercialization
pathways;
(ii) to prevent resources provided to the
Center from being used to displace private
sector investment likely to otherwise occur,
including investment from private sector
entities which are members of the consortium;
(iii) to facilitate the participation of
private investment firms or other private
entities that invest in clean energy
technologies to perform due diligence on award
proposals, to participate in the award review
process, and to provide guidance to projects
supported by the Center; and
(iv) to facilitate the participation of
entrepreneurs with a demonstrated history of
commercializing clean energy technologies;
(D) oversee project solicitations, review proposed
projects, and select projects for awards; and
(E) monitor project implementation.
(2) Use and distribution of awards by centers.--A Center
shall allocate awards and other support for--
(A) clean energy technology projects conducting
translational research and related activities, at least
40 percent of which shall be utilized for projects
related to the Center's technology focus; and
(B) administrative expenses, which may constitute no
more than 10 percent of the award.
(3) Advisory boards.--
(A) In general.--Each Center shall establish an
Advisory Board whose members shall have extensive and
relevant scientific, technical, industry, financial, or
research management expertise. The Advisory Board shall
review the Center's proposed plans, programs, project
selection criteria, and projects and shall ensure that
projects selected for awards meet the conflict of
interest policies of the Center. Advisory Board members
other than those representing consortium members shall
serve for no more than three years and must comply with
conflict of interest provisions.
(B) Members.--Each Advisory Board shall consist of--
(i) 5 members selected by the consortium's
research universities;
(ii) 2 members selected by the consortium's
other qualifying entities; and
(iii) 2 members selected at large by other
Board members to represent the entrepreneur and
venture capital communities.
Individuals appointed under clause (iii) shall not be
State or Federal employees or affiliated with the
consortium's qualified entities.
(C) Nonvoting members.--The Board shall also include
1 nonvoting member appointed by the Secretary.
(D) Compensation.--Members of an Advisory Board may
receive reimbursement for travel expenses and a
reasonable stipend.
(4) Conflict of interest.--
(A) Procedures.--Centers shall establish procedures
to ensure that employees or consortia designees for
Center activities who are in decisionmaking capacities
shall--
(i) disclose any financial interests in, or
financial relationships with, applicants for or
recipients of awards under paragraph (1),
including those of his or her spouse or minor
child, unless such relationships or interests
would be considered to be remote or
inconsequential; and
(ii) recuse himself or herself from any
funding decision for projects in which he or
she has a personal financial interest.
(B) Disqualification and revocation.--The Secretary
may disqualify an application or revoke allowances
distributed to the Center or awards provided under
paragraph (1), if cognizant officials of the Center
fail to comply with procedures required under
subparagraph (A).
(f) Distribution of Allowances to Clean Energy Innovation Centers.--
(1) Selection and schedule.--Allowances to support the
establishment of a Center shall be distributed through a
competitive process. Not later than 120 days after the date of
enactment of this Act, the Secretary shall solicit proposals
from eligible consortia to establish Centers, which shall be
submitted not later than 180 days after the date of enactment
of this Act. The Secretary shall select the program consortia
not later than 270 days after the date of enactment of this Act
pursuant to subsection (d). The Secretary shall award 3 grants
for the establishment of 3 Centers to be located on the campus
of 1890 Land Grant Institution (as defined in section 2 of the
Agricultural Research, Extension, and Education Reform Act of
1998 (7 U.S.C. 7061)).
(2) Term and use of allowances.--Allowances distributed to
Centers shall be used to provide awards pursuant to subsection
(e)(1). The amount of allowances distributed to support the
establishment of a Center under this section shall not be less
than 10 and not more than 30 percent of the allowances
allocated under section 782(h) of the Clean Air Act, each year
for a 6 year period. Centers shall be eligible to compete for
additional allowance distribution after the expiration of the
initial period. Centers shall establish award periods for
individual awards. The transfer of allowances to a Center shall
occur at the start of each calendar year.
(3) Audit.--Each Center shall conduct an annual audit to
determine the extent to which allowances distributed to the
Center, and awards under subsection (e) have been utilized in a
manner consistent with this section. The auditor shall transmit
a report of the results of the audit to the Secretary and to
the Government Accountability Office. The Secretary shall
include such report in the annual report to Congress, along
with a plan to remedy any deficiencies cited in the report. The
Government Accountability Office may review such audits as
appropriate and shall have full access to the books, records,
and personnel of the Center to ensure that allowances
distributed to the Center, and awards made under subsection
(e), have been utilized in a manner consistent with this
section.
SEC. 172. BUILDING ASSESSMENT CENTERS.
(a) In General.--The Secretary of Energy (in this section referred to
as the ``Secretary'') shall provide funding to institutions of higher
education for Building Assessment Centers to--
(1) identify opportunities for optimizing energy efficiency
and environmental performance in existing buildings;
(2) promote high-efficiency building construction techniques
and materials options;
(3) promote applications of emerging concepts and
technologies in commercial and institutional buildings;
(4) train engineers, architects, building scientists, and
building technicians in energy-efficient design and operation;
(5) assist local community colleges, trade schools,
registered apprenticeship programs and other accredited
training programs in training building technicians;
(6) promote research and development for the use of
alternative energy sources to supply heat and power, for
buildings, particularly energy-intensive buildings; and
(7) coordinate with and assist State-accredited technical
training centers and community colleges, while ensuring
appropriate services to all regions of the United States.
(b) Coordination With Regional Centers for Energy and Environmental
Knowledge and Outreach.--A Building Assessment Center may serve as a
Center for Energy and Environmental Knowledge and Outreach established
pursuant to section 173.
(c) Coordination and Duplication.--The Secretary shall coordinate
efforts under this section with other programs of the Department of
Energy and other Federal agencies to avoid duplication of effort.
(d) Authorization of Appropriations.--There are authorized to be
appropriated to the Secretary to carry out this section $50,000,000 for
fiscal year 2010 and each fiscal year thereafter.
SEC. 173. CENTERS FOR ENERGY AND ENVIRONMENTAL KNOWLEDGE AND OUTREACH.
(a) Regional Centers for Energy and Environmental Knowledge and
Outreach.--
(1) Establishment.--The Secretary shall establish not more
than 10 regional Centers for Energy and Environmental Knowledge
and Outreach at institutions of higher education to coordinate
with and advise industrial research and assessment centers,
Building Assessment Centers, and Clean Energy Application
Centers located in the region of such Center for Energy and
Environmental Knowledge and Outreach.
(2) Technical assistance programs.--Each Center for Energy
and Environmental Knowledge and Outreach shall consist of at
least one, new or existing, high performing, of the following:
(A) An industrial research and assessment center.
(B) A Clean Energy Application Center.
(C) A Building Assessment Center.
(3) Selection criteria.--The Secretary shall select Centers
for Energy and Environmental Knowledge and Outreach through a
competitive process, based on the following:
(A) Identification of the highest performing
industrial research and assessment centers, Clean
Energy Application Centers, and Building Assessment
Centers.
(B) The degree to which an institution of higher
education maintains credibility among regional private
sector organizations such as trade associations,
engineering associations, and environmental
organizations.
(C) The degree to which an institution of higher
education is providing or has provided technical
assistance, academic leadership, and market leadership
in the energy arena in a manner that is consistent with
the areas of focus of industrial research and
assessment centers, Clean Energy Application Centers,
and Building Assessment Centers.
(D) The presence of an additional industrial research
and assessment center, Clean Energy Application Center,
or Building Assessment Center at the institution of
higher education.
(4) Geographic diversity.--In selecting Centers for Energy
and Environmental Knowledge and Outreach under this subsection,
the Secretary shall ensure such Centers are distributed
geographically in a relatively uniform manner to ensure all
regions of the Nation are represented.
(5) Regional leadership.--Each Center for Energy and
Environmental Knowledge and Outreach shall, to the extent
possible, provide leadership to all other industrial research
and assessment centers, Clean Energy Application Centers, and
Building Assessment Centers located in the Center's geographic
region, as determined by the Secretary. Such leadership shall
include--
(A) developing regional goals specific to the purview
of the industrial research and assessment centers,
Clean Energy Application Centers, and Building
Assessment Centers programs;
(B) developing regionally specific technical
resources; and
(C) outreach to interested parties in the region to
inform them of the information, resources, and services
available through the associated industrial research
and assessment centers, Clean Energy Application
Centers, and Building Assessment Centers.
(6) Further coordination.--To increase the value and
capabilities of the regionally associated industrial research
and assessment centers, Clean Energy Application Centers, and
Building Assessment Centers programs, Centers for Energy and
Environmental Knowledge and Outreach shall--
(A) coordinate with Manufacturing Extension
Partnership Centers of the National Institute of
Science and Technology;
(B) coordinate with the relevant programs in the
Department of Energy, including the Building Technology
Program and Industrial Technologies Program;
(C) increase partnerships with the National
Laboratories of the Department of Energy to leverage
the expertise and technologies of the National
Laboratories to achieve the goals of the industrial
research and assessment centers, Clean Energy
Application Centers, and Building Assessment Centers;
(D) work with relevant municipal, county, and State
economic development entities to leverage relevant
financial incentives for capital investment and other
policy tools for the protection and growth of local
business and industry;
(E) partner with local professional and private trade
associations and business development interests to
leverage existing knowledge of local business
challenges and opportunities;
(F) work with energy utilities and other
administrators of publicly funded energy programs to
leverage existing energy efficiency and clean energy
programs;
(G) identify opportunities for reducing greenhouse
gas emissions; and
(H) promote sustainable business practices for those
served by the industrial research and assessment
centers, Clean Energy Application Centers, and Building
Assessment Centers.
(7) Workforce training.--
(A) In general.--The Secretary shall require each
Center for Energy and Environmental Knowledge and
Outreach to establish or maintain an internship program
for the region of such Center, designed to encourage
students who perform energy assessments to continue
working with a particular company, building, or
facility to help implement the recommendations
contained in any such assessment provided to such
company, building, or facility. Each Center for Energy
and Environmental Knowledge and Outreach shall act as
internship coordinator to help match students to
available opportunities.
(B) Federal share.--The Federal share of the cost of
carrying out internship programs described under
subparagraph (A) shall be 50 percent.
(C) Funding.--Subject to the availability of
appropriations, of the funds made available to carry
out this subsection, the Secretary shall use to carry
out this paragraph not less than $5,000,000 for fiscal
year 2010 and each fiscal year thereafter.
(8) Small business loans.--The Administrator of the Small
Business Administration shall, to the maximum practicable,
expedite consideration of applications from eligible small
business concerns for loans under the Small Business Act (15
U.S.C. 631 et seq.) for loans to implement recommendations of
any industrial research and assessment center, Clean Energy
Application Center, or Building Assessment Center.
(9) Definitions.--In this subsection:
(A) Industrial research and assessment center.--The
term ``industrial research and assessment center''
means a center established or maintained pursuant to
section 452(e) of the Energy Independence and Security
Act of 2007 (42 U.S.C. 17111(e)).
(B) Clean energy application center.--The term
``Clean Energy Application Center'' means a center
redesignated and described section under section 375 of
the Energy Policy and Conservation Act (42 U.S.C.
6345).
(C) Building assessment center.--The term ``Building
Assessment Center'' means an institution of higher
education-based center established pursuant to section
172.
(D) Secretary.--The term ``Secretary'' means the
Secretary of Energy.
(10) Funding.--There are authorized to be appropriated to the
Secretary to carry out this subsection $10,000,000 for fiscal
year 2010 and each fiscal year thereafter. Subject to the
availability of appropriations, of the funds made available to
carry out this subsection, the Secretary shall provide to each
Center for Energy and Environmental Knowledge and Outreach not
less than $500,000 for fiscal year 2010 and each fiscal year
thereafter.
(b) Integration of Other Technical Assistance Programs.--
(1) Clean energy application centers.--Section 375 of the
Energy Policy and Conservation Act (42 U.S.C. 6345) is
amended--
(A) by redesignating subsection (f) as subsection
(g); and
(B) by adding after subsection (e) the following new
subsection:
``(f) Coordination With Centers for Energy and Environmental
Knowledge and Outreach.--A Clean Energy Application Center may serve as
a Center for Energy and Environmental Knowledge and Outreach
established pursuant to section 173 of the American Clean Energy and
Security Act of 2009.''.
(2) Industrial research and assessment centers.--Section
452(e) of the Energy Independence and Security Act of 2007 (42
U.S.C. 17111(e)) is amended--
(A) by striking ``The Secretary'' and all that
follows through ``shall be--'' and inserting the
following:
``(1) In general.--The Secretary shall provide funding to
institution of higher education-based industrial research and
assessment centers, whose purposes shall be--'';
(B) by redesignating paragraphs (1) through (5) as
subparagraphs (A) through (E), respectively (and by
moving the margins of such subparagraphs 2 ems to the
right); and
(C) by adding at the end the following new paragraph:
``(2) Coordination with centers for energy and environmental
knowledge and outreach.--An industrial research and assessment
center may serve as a Center for Energy and Environmental
Knowledge and Outreach established pursuant to section 173 of
the American Clean Energy and Security Act of 2009.''.
(c) Additional Funding for Clean Energy Application Centers.--
Subsection (g) of section 375 of the Energy Policy and Conservation Act
(42 U.S.C. 6345(f)), as redesignated by subsection (b)(1) of this
section, is amended by striking ``$10,000,000 for each of fiscal years
2008 through 2012'' and inserting ``$30,000,000 for fiscal year 2010
and each fiscal year thereafter''.
Subtitle I--Nuclear and Advanced Technologies
SEC. 181. REVISIONS TO LOAN GUARANTEE PROGRAM AUTHORITY.
(a) Definition of Conditional Commitment.--Section 1701 of the Energy
Policy Act of 2005 (42 U.S.C. 16511), as amended by section 130(a) of
this Act, is amended by adding after paragraph (7) the following:
``(8) Conditional commitment.--The term `conditional
commitment' means a final term sheet negotiated between the
Secretary and a project sponsor or sponsors, which term sheet
shall be binding on both parties and become a final loan
guarantee agreement if all conditions precedent established in
the term sheet, which shall include the acquisition of all
necessary permits and licenses, are satisfied.''.
(b) Specific Appropriation or Contribution.--Section 1702 of the
Energy Policy Act of 2005 (42 U.S.C. 16512) is amended by striking
subsection (b) and inserting the following:
``(b) Specific Appropriation or Contribution.--
``(1) In general.--No guarantee shall be made unless--
``(A) an appropriation for the cost has been made;
``(B) the Secretary has received from the borrower a
payment in full for the cost of the obligation and
deposited the payment into the Treasury; or
``(C) a combination of appropriations or payments
from the borrower has been made sufficient to cover the
cost of the obligation.
``(2) Limitation.--The source of payments received from a
borrower under paragraph (1)(B) shall not be a loan or other
debt obligation that is made or guaranteed by the Federal
Government.''.
(c) Fees.--Section 1702(h) of the Energy Policy Act of 2005 (42
U.S.C. 16512(h)) is amended by striking paragraph (2) and inserting the
following:
``(2) Availability.--Fees collected under this subsection
shall--
``(A) be deposited by the Secretary into a special
fund in the Treasury to be known as the `Incentives For
Innovative Technologies Fund'; and
``(B) remain available to the Secretary for
expenditure, without further appropriation or fiscal
year limitation, for administrative expenses incurred
in carrying out this title.''.
(d) Wage Rate Requirements.--Section 1702 of the Energy Policy Act of
2005 (42 U.S.C. 16512) is amended by adding at the end the following
new subsection:
``(k) Wage Rate Requirements.--No loan guarantee shall be made under
this title unless the borrower has provided to the Secretary reasonable
assurances that all laborers and mechanics employed by contractors and
subcontractors in the performance of construction work financed in
whole or in part by the guaranteed loan will be paid wages at rates not
less than those prevailing on projects of a character similar to the
contract work in the civil subdivision of the State in which the
contract work is to be performed as determined by the Secretary of
Labor in accordance with subchapter IV of chapter 31 of part A of
subtitle II of title 40, United States Code. With respect to the labor
standards specified in this subsection, the Secretary of Labor shall
have the authority and functions set forth in Reorganization Plan
Numbered 14 of 1950 (64 Stat. 1267; 5 U.S.C. App.) and section 3145 of
title 40, United States Code.''.
SEC. 182. PURPOSE.
The purpose of sections 183 through 189 of this subtitle is to
promote the domestic development and deployment of clean energy
technologies required for the 21st century through the establishment of
a self-sustaining Clean Energy Deployment Administration that will
provide for an attractive investment environment through partnership
with and support of the private capital market in order to promote
access to affordable financing for accelerated and widespread
deployment of--
(1) clean energy technologies;
(2) advanced or enabling energy infrastructure technologies;
(3) energy efficiency technologies in residential,
commercial, and industrial applications, including end-use
efficiency in buildings; and
(4) manufacturing technologies for any of the technologies or
applications described in this section.
SEC. 183. DEFINITIONS.
In this subtitle:
(1) Administration.--The term ``Administration'' means the
Clean Energy Deployment Administration established by section
186.
(2) Advisory council.--The term ``Advisory Council'' means
the Energy Technology Advisory Council of the Administration.
(3) Breakthrough technology.--The term ``breakthrough
technology'' means a clean energy technology that--
(A) presents a significant opportunity to advance the
goals developed under section 185, as assessed under
the methodology established by the Advisory Council;
but
(B) has generally not been considered a commercially
ready technology as a result of high perceived
technology risk or other similar factors.
(4) Clean energy technology.--The term ``clean energy
technology'' means a technology related to the production, use,
transmission, storage, control, or conservation of energy--
(A) that will contribute to a stabilization of
atmospheric greenhouse gas concentrations thorough
reduction, avoidance, or sequestration of energy-
related emissions and--
(i) reduce the need for additional energy
supplies by using existing energy supplies with
greater efficiency or by transmitting,
distributing, or transporting energy with
greater effectiveness through the
infrastructure of the United States; or
(ii) diversify the sources of energy supply
of the United States to strengthen energy
security and to increase supplies with a
favorable balance of environmental effects if
the entire technology system is considered; and
(B) for which, as determined by the Administrator,
insufficient commercial lending is available to allow
for widespread deployment.
(5) Cost.--The term ``cost'' has the meaning given the term
in section 502 of the Federal Credit Reform Act of 1990 (2
U.S.C. 661a).
(6) Direct loan.--The term ``direct loan'' has the meaning
given the term in section 502 of the Federal Credit Reform Act
of 1990 (2 U.S.C. 661a).
(7) Fund.--The term ``Fund'' means the Clean Energy
Investment Fund established by section 184(a).
(8) Loan guarantee.--The term ``loan guarantee'' has the
meaning given the term in section 502 of the Federal Credit
Reform Act of 1990 (2 U.S.C. 661a).
(9) National laboratory.--The term ``National Laboratory''
has the meaning given the term in section 2 of the Energy
Policy Act of 2005 (42 U.S.C. 15801).
(10) Secretary.--The term ``Secretary'' means the Secretary
of Energy.
(11) State.--The term ``State'' means--
(A) a State;
(B) the District of Columbia;
(C) the Commonwealth of Puerto Rico; and
(D) any other territory or possession of the United
States.
(12) Technology risk.--The term ``technology risk'' means the
risks during construction or operation associated with the
design, development, and deployment of clean energy
technologies (including the cost, schedule, performance,
reliability and maintenance, and accounting for the perceived
risk), from the perspective of commercial lenders, that may be
increased as a result of the absence of adequate historical
construction, operating, or performance data from commercial
applications of the technology.
SEC. 184. CLEAN ENERGY INVESTMENT FUND.
(a) Establishment.--There is established in the Treasury of the
United States a revolving fund, to be known as the ``Clean Energy
Investment Fund'', consisting of--
(1) such amounts as are deposited in the Fund under this
subtitle; and
(2) such sums as may be appropriated to supplement the Fund.
(b) Authorization of Appropriations.--There are authorized to be
appropriated to the Fund such sums as are necessary to carry out this
subtitle.
(c) Expenditures From Fund.--
(1) In general.--Amounts in the Fund shall be available to
the Administrator of the Administration for obligation without
fiscal year limitation, to remain available until expended.
(2) Administrative expenses.--
(A) Fees.--Fees collected for administrative expenses
shall be available without limitation to cover
applicable expenses.
(B) Fund.--To the extent that administrative expenses
are not reimbursed through fees, an amount not to
exceed 1.5 percent of the amounts in the Fund as of the
beginning of each fiscal year shall be available to pay
the administrative expenses for the fiscal year
necessary to carry out this subtitle.
(d) Transfers of Amounts.--
(1) In general.--The amounts required to be transferred to
the Fund under this section shall be transferred at least
monthly from the general fund of the Treasury to the Fund on
the basis of estimates made by the Secretary of the Treasury.
(2) Adjustments.--Proper adjustment shall be made in amounts
subsequently transferred to the extent prior estimates were in
excess of or less than the amounts required to be transferred.
SEC. 185. ENERGY TECHNOLOGY DEPLOYMENT GOALS.
(a) Goals.--Not later than 1 year after the date of enactment of this
Act, the Secretary, after consultation with the Advisory Council, shall
develop and publish for review and comment in the Federal Register
near-, medium-, and long-term goals (including numerical performance
targets at appropriate intervals to measure progress toward those
goals) for the deployment of clean energy technologies through the
credit support programs established by section 187 to promote--
(1) sufficient electric generating capacity using clean
energy technologies to meet the energy needs of the United
States;
(2) clean energy technologies in vehicles and fuels that will
substantially reduce the reliance of the United States on
foreign sources of energy and insulate consumers from the
volatility of world energy markets;
(3) a domestic commercialization and manufacturing capacity
that will establish the United States as a world leader in
clean energy technologies across multiple sectors;
(4) installation of sufficient infrastructure to allow for
the cost-effective deployment of clean energy technologies
appropriate to each region of the United States;
(5) the transformation of the building stock of the United
States to zero net energy consumption;
(6) the recovery, use, and prevention of waste energy;
(7) domestic manufacturing of clean energy technologies on a
scale that is sufficient to achieve price parity with
conventional energy sources;
(8) domestic production of commodities and materials (such as
steel, chemicals, polymers, and cement) using clean energy
technologies so that the United States will become a world
leader in environmentally sustainable production of the
commodities and materials;
(9) a robust, efficient, and interactive electricity
transmission grid that will allow for the incorporation of
clean energy technologies, distributed generation, and demand-
response in each regional electric grid;
(10) sufficient availability of financial products to allow
owners and users of residential, retail, commercial, and
industrial buildings to make energy efficiency and distributed
generation technology investments with reasonable payback
periods; and
(11) such other goals as the Secretary, in consultation with
the Advisory Council, determines to be consistent with the
purpose stated in section 182.
(b) Revisions.--The Secretary shall revise the goals established
under subsection (a), from time to time as appropriate, to account for
advances in technology and changes in energy policy.
SEC. 186. CLEAN ENERGY DEPLOYMENT ADMINISTRATION.
(a) Establishment.--
(1) In general.--There is established in the Department of
Energy an administration to be known as the Clean Energy
Deployment Administration, under the direction of the
Administrator of the Administration and the Board of Directors.
(2) Status.--
(A) In general.--The Administration (including
officers, employees, and agents of the Administration)
shall not be responsible to, or subject to the
authority, direction, or control of, any other officer,
employee, or agent of the Department of Energy other
than the Secretary, acting through the Administrator of
the Administration.
(B) Exemption from reorganization.--The
Administration shall be exempt from the reorganization
authority provided under section 643 of the Department
of Energy Reorganization Act (42 U.S.C. 7253).
(C) Inspector general.--Section 12 of the Inspector
General Act of 1978 (5 U.S.C. App.) is amended--
(i) in paragraph (1), by inserting ``the
Administrator of the Clean Energy Deployment
Administration;'' after ``Export-Import
Bank;''; and
(ii) in paragraph (2), by inserting ``the
Clean Energy Deployment Administration,'' after
``Export-Import Bank,''.
(3) Offices.--
(A) Principal office.--The Administration shall--
(i) maintain the principal office of the
Administration in the District of Columbia; and
(ii) for purposes of venue in civil actions,
be considered to be a resident of the District
of Columbia.
(B) Other offices.--The Administration may establish
other offices in such other places as the
Administration considers necessary or appropriate for
the conduct of the business of the Administration.
(b) Administrator.--
(1) In general.--The Administrator of the Administration
shall be--
(A) appointed by the President, with the advice and
consent of the Senate, for a 5-year term; and
(B) compensated at the annual rate of basic pay
prescribed for level II of the Executive Schedule under
section 5313 of title 5, United States Code.
(2) Duties.--The Administrator of the Administration shall--
(A) serve as the Chief Executive Officer of the
Administration and Chairman of the Board;
(B) ensure that--
(i) the Administration operates in a safe and
sound manner, including maintenance of adequate
capital and internal controls (consistent with
section 404 of the Sarbanes-Oxley Act of 2002
(15 U.S.C. 7262));
(ii) the operations and activities of the
Administration foster liquid, efficient,
competitive, and resilient energy and energy
efficiency finance markets;
(iii) the Administration carries out the
purpose stated in section 182 only through
activities that are authorized under and
consistent with sections 182 through 189; and
(iv) the activities of the Administration and
the manner in which the Administration is
operated are consistent with the public
interest;
(C) develop policies and procedures for the
Administration that will--
(i) promote a self-sustaining portfolio of
investments that will maximize the value of
investments to effectively promote clean energy
technologies;
(ii) promote transparency and openness in
Administration operations;
(iii) afford the Administration with
sufficient flexibility to meet the purpose
stated in section 182; and
(iv) provide for the efficient processing of
applications; and
(D) with the concurrence of the Board, set expected
loss reserves for the support provided by the
Administration consistent with section 187(c).
(c) Board of Directors.--
(1) In general.--The Board of Directors of the Administration
shall consist of--
(A) the Secretary or the designee of the Secretary,
who shall serve as an ex-officio voting member of the
Board of Directors;
(B) the Administrator of the Administration, who
shall serve as the Chairman of the Board of Directors;
and
(C) 7 additional members who shall--
(i) be appointed by the President, with the
advice and consent of the Senate, for staggered
5-year terms; and
(ii) have experience in banking, financial
services, technology assessment, energy
regulation, or risk management, including
individuals with substantial experience in the
development of energy projects, the electricity
generation sector, the transportation sector,
the manufacturing sector, and the energy
efficiency sector.
(2) Duties.--The Board of Directors shall--
(A) oversee the operations of the Administration and
ensure industry best practices are followed in all
financial transactions involving the Administration;
(B) consult with the Administrator of the
Administration on the general policies and procedures
of the Administration to ensure the interests of the
taxpayers are protected;
(C) ensure the portfolio of investments are
consistent with purpose stated in section 182 and with
the long-term financial stability of the
Administration;
(D) ensure that the operations and activities of the
Administration are consistent with the development of a
robust private sector that can provide commercial loans
or financing products; and
(E) not serve on a full-time basis, except that the
Board of Directors shall meet at least quarterly to
review, as appropriate, applications for credit support
and set policies and procedures as necessary.
No member of the Board shall take part in any review or
decision of any project as to which that member or member's
immediate family has a financial or other interest.
(3) Removal.--An appointed member of the Board of Directors
may be removed from office by the President for good cause.
(4) Vacancies.--An appointed seat on the Board of Directors
that becomes vacant shall be filled by appointment by the
President, but only for the unexpired portion of the term of
the vacating member.
(5) Compensation of members.--An appointed member of the
Board of Directors shall be compensated at a rate equal to the
daily equivalent of the annual rate of basic pay prescribed for
level III of the Executive Schedule under section 5314 of title
5, United States Code, for each day (including travel time)
during which the member is engaged in the performance of the
duties of the Board of Directors.
(d) Energy Technology Advisory Council.--
(1) In general.--The Administration shall have an Energy
Technology Advisory Council consisting of--
(A) 5 members selected by the Secretary; and
(B) 3 members selected by the Board of Directors of
the Administration.
(2) Qualifications.--The members of the Advisory Council
shall--
(A) have relevant scientific expertise; and
(B) in the case of the members selected by the
Secretary under paragraph (1)(A), include
representatives of--
(i) the academic community;
(ii) the private research community;
(iii) National Laboratories;
(iv) the technology or project development
community; and
(v) the commercial energy financing and
operations sector.
(3) Duties.--The Advisory Council shall--
(A) develop and publish for comment in the Federal
Register a methodology for assessment of clean energy
technologies that will allow the Administration to
evaluate projects based on the progress likely to be
achieved per-dollar invested in maximizing the
attributes of the definition of clean energy
technology, taking into account the extent to which
support for a clean energy technology is likely to
accrue subsequent benefits that are attributable to a
commercial scale deployment taking place earlier than
that which otherwise would have occurred without the
support; and
(B) advise on the technological approaches that
should be supported by the Administration to meet the
technology deployment goals established by the
Secretary pursuant to section 185.
(4) Term.--
(A) In general.--Members of the Advisory Council
shall have 5-year staggered terms, as determined by the
Secretary and the Administrator of the Administration.
(B) Reappointment.--A member of the Advisory Council
may be reappointed.
(5) Compensation.--A member of the Advisory Council, who is
not otherwise compensated as a Federal employee, shall be
compensated at a rate equal to the daily equivalent of the
annual rate of basic pay prescribed for level IV of the
Executive Schedule under section 5315 of title 5, United States
Code, for each day (including travel time) during which the
member is engaged in the performance of the duties of the
Advisory Council.
(e) Staff.--
(1) In general.--The Administrator of the Administration, in
consultation with the Board of Directors, may--
(A) appoint and terminate such officers, attorneys,
employees, and agents as are necessary to carry out
this subtitle; and
(B) vest those personnel with such powers and duties
as the Administrator of the Administration may
determine.
(2) Direct hire authority.--
(A) In general.--Notwithstanding section 3304 and
sections 3309 through 3318 of title 5, United States
Code, the Administrator of the Administration may, on a
determination that there is a severe shortage of
candidates or a critical hiring need for particular
positions, recruit and directly appoint highly
qualified critical personnel with specialized knowledge
important to the function of the Administration into
the competitive service.
(B) Exception.--The authority granted under
subparagraph (A) shall not apply to positions in the
excepted service or the Senior Executive Service.
(C) Requirements.--In exercising the authority
granted under subparagraph (A), the Administrator of
the Administration shall ensure that any action taken
by the Administrator of the Administration--
(i) is consistent with the merit principles
of section 2301 of title 5, United States Code;
and
(ii) complies with the public notice
requirements of section 3327 of title 5, United
States Code.
(D) Termination of effectiveness.--The authority
provided by this paragraph terminates effective on the
date that is 2 years after the date of enactment of
this Act.
(3) Critical pay authority.--
(A) In general.--Notwithstanding section 5377 of
title 5, United States Code, and without regard to the
provisions of that title governing appointments in the
competitive service or the Senior Executive Service and
chapters 51 and 53 of that title (relating to
classification and pay rates), the Administrator of the
Administration may establish, fix the compensation of,
and appoint individuals to critical positions needed to
carry out the functions of the Administration, if the
Administrator of the Administration certifies that--
(i) the positions require expertise of an
extremely high level in a financial, technical,
or scientific field;
(ii) the Administration would not
successfully accomplish an important mission
without such an individual; and
(iii) exercise of the authority is necessary
to recruit an individual who is exceptionally
well qualified for the position.
(B) Limitations.--The authority granted under
subparagraph (A) shall be subject to the following
conditions:
(i) The number of critical positions
authorized by subparagraph (A) may not exceed
20 at any 1 time in the Administration.
(ii) The term of an appointment under
subparagraph (A) may not exceed 4 years.
(iii) An individual appointed under
subparagraph (A) may not have been an
Administration employee at any time during the
2-year period preceding the date of
appointment.
(iv) Total annual compensation for any
individual appointed under subparagraph (A) may
not exceed the highest total annual
compensation payable at the rate determined
under section 104 of title 3, United States
Code.
(v) An individual appointed under
subparagraph (A) may not be considered to be an
employee for purposes of subchapter II of
chapter 75 of title 5, United States Code.
(C) Notification.--Each year, the Administrator of
the Administration shall submit to Congress a
notification that lists each individual appointed under
this paragraph.
SEC. 187. DIRECT SUPPORT.
(a) In General.--The Administration may issue direct loans, letters
of credit, and loan guarantees to deploy clean energy technologies if
the Administrator of the Administration has determined that deployment
of the technologies would benefit or be accelerated by the support.
(b) Eligibility Criteria.--In carrying out this section and awarding
credit support to projects, the Administrator of the Administration
shall account for--
(1) how the technology rates based on an evaluation
methodology established by the Advisory Council;
(2) how the project fits with the goals established under
section 185; and
(3) the potential for the applicant to successfully complete
the project.
(c) Risk.--
(1) Expected loan loss reserve.--The Administrator of the
Administration shall establish an expected loan loss reserve to
account for estimated losses attributable to activities under
this section that is consistent with the purposes of--
(A) developing breakthrough technologies to the point
at which technology risk is largely mitigated;
(B) achieving widespread deployment and advancing the
commercial viability of clean energy technologies; and
(C) advancing the goals established under section
185.
(2) Initial expected loan loss reserve.--Until such time as
the Administrator of the Administration determines sufficient
data exist to establish an expected loan loss reserve that is
appropriate, the Administrator of the Administration shall
consider establishing an initial rate of 10 percent for the
portfolio of investments under this subtitle.
(3) Portfolio investment approach.--The Administration
shall--
(A) use a portfolio investment approach to mitigate
risk and diversify investments across technologies and
ensure that no particular technology is provided more
than 30 percent of the financial support available;
(B) to the maximum extent practicable and consistent
with long-term self-sufficiency, weigh the portfolio of
investments in projects to advance the goals
established under section 185;
(C) consistent with the expected loan loss reserve
established under this subsection, the purpose stated
in section 182, and section 186(b)(2)(B), provide the
maximum practicable percentage of support to promote
breakthrough technologies; and
(D) give the highest priority to investments that
promote technologies that will achieve the maximum
greenhouse gas emission reductions within a reasonable
period of time per dollar invested and the earliest
reductions in greenhouse gas emissions.
(4) Loss rate review.--
(A) In general.--The Board of Directors shall review
on an annual basis the loss rates of the portfolio to
determine the adequacy of the reserves.
(B) Report.--Not later than 90 days after the date of
the initiation of the review, the Administrator of the
Administration shall submit to the Committee on Energy
and Natural Resources of the Senate and the Committee
on Energy and Commerce of the House of Representatives
a report describing the results of the review and any
recommended policy changes.
(5) Federal cost share.--A loan guarantee by the
Administration shall not exceed an amount equal to 80 percent
of the project cost of the facility that is the subject of the
guarantee, as estimated at the time at which the guarantee is
issued.
(d) Application Review.--
(1) In general.--To the maximum extent practicable and
consistent with sound business practices, the Administration
shall seek to consolidate reviews of applications for credit
support under this subtitle such that final decisions on
applications can generally be issued not later than 180 days
after the date of submission of a completed application.
(2) Environmental review.--In carrying out this subtitle, the
Administration shall, to the maximum extent practicable--
(A) avoid duplicating efforts that have already been
undertaken by other agencies (including State agencies
acting under Federal programs); and
(B) with the advice of the Council on Environmental
Quality and any other applicable agencies, use the
administrative records of similar reviews conducted
throughout the executive branch to develop the most
expeditious review process practicable.
(e) Wage Rate Requirements.--
(1) In general.--No credit support shall be issued under this
section unless the borrower has provided to the Administrator
of the Administration reasonable assurances that all laborers
and mechanics employed by contractors and subcontractors in the
performance of construction work financed in whole or in part
by the Administration will be paid wages at rates not less than
those prevailing on projects of a character similar to the
contract work in the civil subdivision of the State in which
the contract work is to be performed as determined by the
Secretary of Labor in accordance with subchapter IV of chapter
31 of part A of subtitle II of title 40, United States Code.
(2) Labor standards.--With respect to the labor standards
specified in this subsection, the Secretary of Labor shall have
the authority and functions set forth in Reorganization Plan
Numbered 14 of 1950 (64 Stat. 1267; 5 U.S.C. App.) and section
3145 of title 40, United States Code.
SEC. 188. FEDERAL CREDIT AUTHORITY.
(a) Payments of Liabilities.--
(1) In general.--Any payment made to discharge liabilities
arising from agreements under this subtitle shall be paid out
of the Fund or the associated credit account, as appropriate.
(2) Security.--The full faith and credit of the United States
is pledged to the payment of all obligations entered into by
the Administration pursuant to this subtitle.
(b) Fees.--
(1) In general.--Consistent with achieving the purpose stated
in section 182, the Administrator of the Administration shall
charge fees or collect compensation generally in accordance
with commercial rates.
(2) Availability of fees.--All fees collected by the
Administration may be retained by the Administration and placed
in the Fund and may remain available to the Administration,
without further appropriation or fiscal year limitation, for
use in carrying out the purpose stated in section 182.
(3) Breakthrough technologies.--The Administration shall
charge the minimum amount in fees or compensation practicable
for breakthrough technologies, consistent with the long-term
viability of the Administration, unless the Administration
first determines that a higher charge will not impede the
development of the technology.
(4) Alternative fee arrangements.--The Administration may use
such alternative arrangements (such as profit participation,
contingent fees, and other valuable contingent interests) as
the Administration considers appropriate to compensate the
Administration for the expenses of the Administration and the
risk inherent in the support of the Administration.
(c) Cost Transfer Authority.--Amounts collected by the Administration
for the cost of a loan or loan guarantee shall be transferred by the
Administration to the respective credit accounts.
SEC. 189. GENERAL PROVISIONS.
(a) Immunity From Impairment, Limitation, or Restriction.--
(1) In general.--All rights and remedies of the
Administration (including any rights and remedies of the
Administration on, under, or with respect to any mortgage or
any obligation secured by a mortgage) shall be immune from
impairment, limitation, or restriction by or under--
(A) any law (other than a law enacted by Congress
expressly in limitation of this paragraph) that becomes
effective after the acquisition by the Administration
of the subject or property on, under, or with respect
to which the right or remedy arises or exists or would
so arise or exist in the absence of the law; or
(B) any administrative or other action that becomes
effective after the acquisition.
(2) State law.--The Administrator of the Administration may
conduct the business of the Administration without regard to
any qualification or law of any State relating to
incorporation.
(b) Use of Other Agencies.--With the consent of a department,
establishment, or instrumentality (including any field office), the
Administration may--
(1) use and act through any department, establishment, or
instrumentality; and
(2) use, and pay compensation for, information, services,
facilities, and personnel of the department, establishment, or
instrumentality.
(c) Procurement.--The Administrator of the Administration shall be
the senior procurement officer for the Administration for purposes of
section 16(a) of the Office of Federal Procurement Policy Act (41
U.S.C. 414(a)).
(d) Financial Matters.--
(1) Investments.--Funds of the Administration may be invested
in such investments as the Board of Directors may prescribe.
(2) Fiscal agents.--Any Federal Reserve bank or any bank as
to which at the time of the designation of the bank by the
Administrator of the Administration there is outstanding a
designation by the Secretary of the Treasury as a general or
other depository of public money, may be designated by the
Administrator of the Administration as a depositary or
custodian or as a fiscal or other agent of the Administration.
(e) Jurisdiction.--Notwithstanding section 1349 of title 28, United
States Code, or any other provision of law--
(1) the Administration shall be considered a corporation
covered by sections 1345 and 1442 of title 28, United States
Code;
(2) all civil actions to which the Administration is a party
shall be considered to arise under the laws of the United
States, and the district courts of the United States shall have
original jurisdiction of all such actions, without regard to
amount or value; and
(3) any civil or other action, case or controversy in a court
of a State, or in any court other than a district court of the
United States, to which the Administration is a party may at
any time before trial be removed by the Administration, without
the giving of any bond or security and by following any
procedure for removal of causes in effect at the time of the
removal--
(A) to the district court of the United States for
the district and division embracing the place in which
the same is pending; or
(B) if there is no such district court, to the
district court of the United States for the district in
which the principal office of the Administration is
located.
(f) Periodic Reports.--Not later than 1 year after commencement of
operation of the Administration and at least biannually thereafter, the
Administrator of the Administration shall submit to the Committee on
Energy and Natural Resources of the Senate and the Committee on Energy
and Commerce of the House of Representatives a report that includes a
description of--
(1) the technologies supported by activities of the
Administration and how the activities advance the purpose
stated in section 182; and
(2) the performance of the Administration on meeting the
goals established under section 185.
(g) Audits by the Comptroller General.--
(1) In general.--The programs, activities, receipts,
expenditures, and financial transactions of the Administration
shall be subject to audit by the Comptroller General of the
United States under such rules and regulations as may be
prescribed by the Comptroller General.
(2) Access.--The representatives of the Government
Accountability Office shall--
(A) have access to the personnel and to all books,
accounts, documents, records (including electronic
records), reports, files, and all other papers,
automated data, things, or property belonging to, under
the control of, or in use by the Administration, or any
agent, representative, attorney, advisor, or consultant
retained by the Administration, and necessary to
facilitate the audit;
(B) be afforded full facilities for verifying
transactions with the balances or securities held by
depositories, fiscal agents, and custodians;
(C) be authorized to obtain and duplicate any such
books, accounts, documents, records, working papers,
automated data and files, or other information relevant
to the audit without cost to the Comptroller General;
and
(D) have the right of access of the Comptroller
General to such information pursuant to section 716(c)
of title 31, United States Code.
(3) Assistance and cost.--
(A) In general.--For the purpose of conducting an
audit under this subsection, the Comptroller General
may, in the discretion of the Comptroller General,
employ by contract, without regard to section 3709 of
the Revised Statutes (41 U.S.C. 5), professional
services of firms and organizations of certified public
accountants for temporary periods or for special
purposes.
(B) Reimbursement.--
(i) In general.--On the request of the
Comptroller General, the Administration shall
reimburse the Government Accountability Office
for the full cost of any audit conducted by the
Comptroller General under this subsection.
(ii) Crediting.--Such reimbursements shall--
(I) be credited to the appropriation
account entitled ``Salaries and
Expenses, Government Accountability
Office'' at the time at which the
payment is received; and
(II) remain available until expended.
(h) Annual Independent Audits.--
(1) In general.--The Administrator of the Administration
shall--
(A) have an annual independent audit made of the
financial statements of the Administration by an
independent public accountant in accordance with
generally accepted auditing standards; and
(B) submit to the Secretary the results of the audit.
(2) Content.--In conducting an audit under this subsection,
the independent public accountant shall determine and report on
whether the financial statements of the Administration--
(A) are presented fairly in accordance with generally
accepted accounting principles; and
(B) comply with any disclosure requirements imposed
under this subtitle.
(i) Financial Reports.--
(1) In general.--The Administrator of the Administration
shall submit to the Secretary annual and quarterly reports of
the financial condition and operations of the Administration,
which shall be in such form, contain such information, and be
submitted on such dates as the Secretary shall require.
(2) Contents of annual reports.--Each annual report shall
include--
(A) financial statements prepared in accordance with
generally accepted accounting principles;
(B) any supplemental information or alternative
presentation that the Secretary may require; and
(C) an assessment (as of the end of the most recent
fiscal year of the Administration), signed by the chief
executive officer and chief accounting or financial
officer of the Administration, of--
(i) the effectiveness of the internal control
structure and procedures of the Administration;
and
(ii) the compliance of the Administration
with applicable safety and soundness laws.
(3) Special reports.--The Secretary may require the
Administrator of the Administration to submit other reports on
the condition (including financial condition), management,
activities, or operations of the Administration, as the
Secretary considers appropriate.
(4) Accuracy.--Each report of financial condition shall
contain a declaration by the Administrator of the
Administration or any other officer designated by the Board of
Directors of the Administration to make the declaration, that
the report is true and correct to the best of the knowledge and
belief of the officer.
(5) Availability of reports.--Reports required under this
section shall be published and made publicly available as soon
as is practicable after receipt by the Secretary.
(j) Scope and Termination of Authority.--
(1) New obligations.--The Administrator of the Administration
shall not initiate any new obligations under this subtitle on
or after January 1, 2029.
(2) Reversion to secretary.--The authorities and obligations
of the Administration shall revert to the Secretary on January
1, 2029.
Subtitle J--Miscellaneous
SEC. 191. STUDY OF OCEAN RENEWABLE ENERGY AND TRANSMISSION PLANNING AND
SITING.
(a) Definitions.--In this section:
(1) Marine spatial plan.--The term ``marine spatial plan''
means the analysis and allocation of ocean space for various
uses to achieve ecological, economic, and social objectives,
based on the principle of ecosystem-based management.
(2) Marine spatial planning.--The term ``marine spatial
planning'' means the process of developing a marine spatial
plan.
(3) Ecosystem-based management.--The term ``ecosystem-based
management'' means a management approach that ensures the
future ecological and economic sustainability of natural
resources by--
(A) accounting for all ecosystem interactions and
direct, indirect, and cumulative impacts of human
activities on the ecosystem;
(B) emphasizing protection of ecosystem structure,
functions, patterns, and processes; and
(C) maintaining ecosystems in a healthy and resilient
condition.
(4) Offshore renewable energy.--The term ``offshore renewable
energy'' means energy generated from offshore wind or offshore
hydrokinetic (wave, tidal, ocean current, and tidal-current)
energy technologies.
(5) Offshore renewable energy facility.--The term ``offshore
renewable energy facility'' means a facility that generates
offshore renewable energy or any offshore transmission line
associated with such facility.
(b) Study.--
(1) In general.--As soon as practicable after the date of
enactment of this section, the Federal Energy Regulatory
Commission, the Secretary of the Interior, and the National
Oceanic and Atmospheric Administration, in consultation with
the Council on Environmental Quality and, as appropriate,
coastal States, regional organizations of coastal States, and
relevant nongovernmental organizations, shall jointly conduct a
study of the potential for marine spatial planning to
facilitate the development of offshore renewable energy
facilities in a manner that protects and maintains coastal and
marine ecosystem health.
(2) Requirements.--The study under paragraph (1) shall
include--
(A) identification of the steps involved in regional
marine spatial planning for the siting of offshore
renewable energy facilities;
(B) a recommended approach for the development of
regional marine spatial plans for the siting of
offshore renewable energy facilities that provides
for--
(i) the participation of relevant Federal
agencies and State governments;
(ii) coordination, to the maximum extent
practicable, with any marine spatial planning
undertaken by States;
(iii) public input; and
(iv) the periodic revision of such plans as
necessary to account for significant new
information and ensure achievement of plan
objectives;
(C) identification of required elements of such
regional marine spatial plans, including rules that
Federal agencies shall apply to applications for any
authorizations required under existing Federal law to
construct or operate offshore renewable energy
facilities within areas covered by such plans;
(D) an assessment of the adequacy of existing data,
including baseline environmental data, to support such
marine spatial planning and identification of gaps in
such data and the studies needed to fill such gaps;
(E) an assessment of the resources required to carry
out such marine spatial planning;
(F) recommended mechanisms for the formal adoption
and implementation of regional marine spatial plans for
the development of offshore renewable energy facilities
by relevant Federal agencies;
(G) identification of any additional authority
relevant Federal agencies would need to adopt and
implement regional marine spatial plans for the
development of offshore renewable energy facilities;
and
(H) such other recommendations as appropriate.
(3) Report.--Not later than 6 months after the date of
enactment of this section, the Federal Energy Regulatory
Commission, the Secretary of the Interior, and the National
Oceanic and Atmospheric Administration shall jointly publish
the findings and recommendations of the study conducted
pursuant to this subsection and shall accept public comment for
at least 30 days after such publication. Following
consideration of any public comments, and not later than 8
months after the date of enactment of this section, the Federal
Energy Regulatory Commission, the Secretary of the Interior,
and the National Oceanic and Atmospheric Administration shall
jointly submit to Congress and the Council on Environmental
Quality the findings and recommendations of the study conducted
pursuant to this subsection.
(c) Assessment of Report.--
(1) In general.--Not later than 4 months after the date of
submission of the report required under subsection (b)(3), the
Council on Environmental Quality shall assess the
recommendations of such report, issue a written determination
as to whether the recommended approach to marine spatial
planning should be implemented, and transmit such written
determination to the relevant Federal agencies and Congress.
(2) Coordination for recommended approach.--If the Council on
Environmental Quality determines that the recommended approach
to marine spatial planning should be implemented, the relevant
Federal agencies shall implement such approach and complete the
development of marine spatial plans pursuant to that approach
no later than 18 months after the written determination
required by paragraph (1), and the Council on Environmental
Quality shall coordinate such implementation. At the time of
the written determination required by paragraph (1), the
Council on Environmental Quality shall notify Congress if the
relevant Federal agencies lack authority to carry out any
aspect of the recommended approach.
(3) Alternative approach.--If the Council on Environmental
Quality determines that the recommended approach to marine
spatial planning should not be implemented, the Council on
Environmental Quality shall formulate an alternative approach
and submit such alternative approach to the relevant Federal
agencies and Congress at the time of the written determination
required by paragraph (1).
(d) Relationship to Existing Law.--Nothing in this section shall
affect or be construed to affect any law, regulation, or memoranda of
understanding governing the development of offshore renewable energy
facilities in effect prior to the implementation of the recommended or
alternative approach pursuant to subsection (c).
(e) Authorization.--There are authorized to be appropriated such sums
as may be necessary to carry out this section.
SEC. 192. CLEAN TECHNOLOGY BUSINESS COMPETITION GRANT PROGRAM.
(a) In General.--The Secretary of Energy is authorized to provide
grants to organizations to conduct business competitions that provide
incentives, training, and mentorship to entrepreneurs and early stage
start-up companies throughout the United States to meet high priority
economic, environmental, and energy security goals in areas to include
energy efficiency, renewable energy, air quality, water quality and
conservation, transportation, smart grid, green building, and waste
management. Such competitions shall have the purpose of accelerating
the development and deployment of clean technology businesses and green
jobs; stimulating green economic development; providing business
training and mentoring to early stage clean technology companies; and
strengthening the competitiveness of United States clean technology
industry in world trade markets. Priority shall be given to business
competitions that are private sector led, encourage regional and
interregional cooperation, and can demonstrate market-driven practices
and show the creation of cost-effective green jobs through an annual
publication of competition activities and directory of companies.
(b) Eligibility.--An organization eligible for a grant under
subsection (a) is--
(1) any organization described in section 501(c)(3) of the
Internal Revenue Code of 1986 and exempt from tax under section
501(a) of such Code; and
(2) any sponsored entity of an organization described in
paragraph (1) that is operated as a nonprofit entity.
(c) Priority.--In making grants under this section, the Secretary
shall give priority to those organizations that can demonstrate broad
funding support from private and other non-Federal funding sources to
leverage Federal investment.
(d) Authorization of Appropriations.--For the purpose of carrying out
this section, there are authorized to be appropriated $20,000,000.
SEC. 193. NATIONAL BIOENERGY PARTNERSHIP.
(a) In General.--The Secretary of Energy shall establish a National
Bioenergy Partnership to provide coordination among programs of State
governments, the Federal Government, and the private sector that
support the institutional and physical infrastructure necessary to
promote the deployment of sustainable biomass fuels and bioenergy
technologies for the United States.
(b) Program.--The National Bioenergy Partnership shall consist of
five regions, to be administered by the CONEG Policy Research Center,
the Council of Great Lakes Governors, the Southern States Energy Board,
the Western Governors Association, and the Pacific Regional Biomass
Energy Partnership led by the Washington State University Energy
Program.
(c) Authorization of Appropriations.--There are authorized to be
appropriated for each of fiscal years 2010 through 2014 to carry out
this section--
(1) $5,000,000, to be allocated among the 5 regions described
in subsection (b) on the basis of the number of States in each
region, for distribution among the member States of that region
based on procedures developed by the member States of the
region; and
(2) $2,500,000, to be allocated equally among the 5 regions
described in subsection (b) for region-wide activities,
including technical assistance and regional studies and
coordination.
SEC. 194. OFFICE OF CONSUMER ADVOCACY.
(a) Office.--
(1) Establishment.--There is an Office of Consumer Advocacy
established within the Commission to serve as an advocate for
the public interest.
(2) Director.--The Office shall be headed by a Director to be
appointed by the President, who is admitted to the Federal Bar,
with experience in public utility proceedings, and by and with
the advice and consent of the Senate.
(3) Duties.--The Office may--
(A) represent, and appeal on behalf of, energy
customers on matters concerning rates or service of
public utilities and natural gas companies under the
jurisdiction of the Commission--
(i) at hearings of the Commission;
(ii) in judicial proceedings in the courts of
the United States; and
(iii) at hearings or proceedings of other
Federal regulatory agencies and commissions;
(B) monitor and review energy customer complaints and
grievances on matters concerning rates or service of
public utilities and natural gas companies under the
jurisdiction of the Commission;
(C) investigate independently, or within the context
of formal proceedings, the services provided by, the
rates charged by, and the valuation of the properties
of, public utilities and natural gas companies under
the jurisdiction of the Commission;
(D) develop means, such as public dissemination of
information, consultative services, and technical
assistance, to ensure, to the maximum extent
practicable, that the interests of energy consumers are
adequately represented in the course of any hearing or
proceeding described in subparagraph (A);
(E) collect data concerning rates or service of
public utilities and natural gas companies under the
jurisdiction of the Commission; and
(F) prepare and issue reports and recommendations.
(4) Compensation and powers.--The Director may--
(A) employ and fix the compensation of such staff
personnel as is deemed necessary; and
(B) procure temporary and intermittent services as
needed.
(5) Access to information.--Each department, agency, and
instrumentality of the Federal Government is authorized and
directed to furnish to the Director such reports and other
information as he deems necessary to carry out his functions
under this section.
(b) Consumer Advocacy Advisory Committee.--
(1) Establishment.--The Director shall establish an advisory
committee to be known as Consumer Advocacy Advisory Committee
(in this section referred to as the ``Advisory Committee'') to
review rates, services, and disputes and to make
recommendations to the Director.
(2) Composition.--The Director shall appoint 5 members to the
Advisory Committee including--
(A) 2 individuals representing State Utility Consumer
Advocates; and
(B) 1 individual, from a nongovernmental
organization, representing consumers.
(3) Meetings.--The Advisory Committee shall meet at such
frequency as may be required to carry out its duties.
(4) Reports.--The Director shall provide for publication of
recommendations of the Advisory Committee on the public website
established for the Office.
(5) Duration.--Notwithstanding any other provision of law,
the Advisory Committee shall continue in operation during the
period in which the Office exists.
(6) Application of faca.--Except as otherwise specifically
provided, the Advisory Committee shall be subject to the
Federal Advisory Committee Act.
(c) Definitions.--
(1) Commission.--The term ``Commission'' means the Federal
Energy Regulatory Commission.
(2) Energy customer.--The term ``energy customer'' means a
residential customer or a small commercial customer that
receives products or services from a public utility or natural
gas company under the jurisdiction of the Commission.
(3) Natural gas company.--The term ``natural gas company''
has the meaning given the term in section 2 of the Natural Gas
Act (15 U.S.C. 717a), as modified by section 601(a) of the
Natural Gas Policy Act of 1978 (15 U.S.C. 3431(a)).
(4) Office.--The term ``Office'' means the Office of Consumer
Advocacy established by subsection (a)(1).
(5) Public utility.--The term ``public utility'' has the
meaning given the term in section 201(e) of the Federal Power
Act (16 U.S.C. 824(e)).
(6) Small commercial customer.--The term ``small commercial
customer'' means a commercial customer that has a peak demand
of not more than 1,000 kilowatts per hour.
(d) Authorization of Appropriations.--There are authorized such sums
as necessary to carry out this section.
(e) Savings Clause.--Nothing in this section affects the rights or
obligations of State Utility Consumer Advocates.
TITLE II--ENERGY EFFICIENCY
Subtitle A--Building Energy Efficiency Programs
SEC. 201. GREATER ENERGY EFFICIENCY IN BUILDING CODES.
Section 304 of the Energy Conservation and Production Act (42 U.S.C.
6833) is amended to read as follows:
``SEC. 304. GREATER ENERGY EFFICIENCY IN BUILDING CODES.
``(a) Energy Efficiency Targets.--
``(1) In general.--Except as provided in paragraph (2) or
(3), the national building code energy efficiency target for
the national average percentage improvement of a building's
energy performance when built to a code meeting the target
shall be--
``(A) effective on the date of enactment of the
American Clean Energy and Security Act of 2009, 30
percent reduction in energy use relative to a
comparable building constructed in compliance with the
baseline code;
``(B) effective January 1, 2014, for residential
buildings, and January 1, 2015, for commercial
buildings, 50 percent reduction in energy use relative
to the baseline code; and
``(C) effective January 1, 2017, for residential
buildings, and January 1, 2018, for commercial
buildings, and every 3 years thereafter, respectively,
through January 1, 2029, and January 1, 2030, 5 percent
additional reduction in energy use relative to the
baseline code.
``(2) Consensus-based codes.--If on any effective date
specified in paragraph (1)(A), (B), or (C) a successor code to
the baseline codes provides for greater reduction in energy use
than is required under paragraph (1), the overall percentage
reduction in energy use provided by that successor code shall
be the national building code energy efficiency target.
``(3) Targets established by secretary.--The Secretary may by
rule establish a national building code energy efficiency
target for residential or commercial buildings achieving
greater reductions in energy use than the targets prescribed in
paragraph (1) or (2) if the Secretary determines that such
greater reductions in energy use can be achieved with a code
that is life cycle cost-justified and technically feasible. The
Secretary may by rule establish a national building code energy
efficiency target for residential or commercial buildings
achieving a reduction in energy use that is greater than zero
but less than the targets prescribed in paragraph (1) or (2) if
the Secretary determines that such lesser target is the maximum
reduction in energy use that can be achieved through a code
that is life cycle cost-justified and technically feasible.
``(4) Additional reductions in energy use.--Effective on
January 1, 2033, and once every 3 years thereafter, the
Secretary shall determine, after notice and opportunity for
comment, whether further energy efficiency building code
improvements for residential or commercial buildings,
respectively, are life cycle cost-justified and technically
feasible, and shall establish updated national building code
energy efficiency targets that meet such criteria.
``(5) Zero-net-energy buildings.--In setting targets under
this subsection, the Secretary shall consider ways to support
the deployment of distributed renewable energy technology, and
shall seek to achieve the goal of zero-net-energy commercial
buildings established in section 422 of the Energy Independence
and Security Act of 2007 (42 U.S.C. 17082).
``(6) Baseline code.--For purposes of this section, the term
`baseline code' means--
``(A) for residential buildings, the 2006
International Energy Conservation Code (IECC) published
by the International Code Council; and
``(B) for commercial buildings, the code published in
ASHRAE Standard 90.1-2004.
``(7) Consultation.--In establishing the targets required by
this section, the Secretary shall consult with the Director of
the National Institute of Standards and Technology.
``(b) National Energy Efficiency Building Codes.--
``(1) Requirement.--
``(A) In general.--There shall be established
national energy efficiency building codes under this
subsection, for residential and commercial buildings,
sufficient to meet each of the national building code
energy efficiency targets established under subsection
(a), not later than the date that is one year after the
deadline for establishment of each such target.
``(B) Existing code.--If the Secretary finds prior to
the date one year after the deadline for establishing a
target that one or more energy efficiency building
codes published by a recognized consensus-based code
development organization meet or exceed the established
target, the Secretary shall select the code that meets
the target with the highest efficiency in the most
cost-effective manner, and such code shall be the
national energy efficiency building code.
``(C) Requirement to establish code.--If the
Secretary does not make a finding under subparagraph
(B), the national energy efficiency building code shall
be established by rule by the Secretary under paragraph
(2).
``(2) Establishment by secretary.--
``(A) Procedure.--In order to establish a national
energy efficiency building code as required under
paragraph (1)(C), the Secretary shall--
``(i) not later than six months prior to the
effective date for each target, review existing
and proposed codes published or under review by
recognized consensus-based code development
organizations;
``(ii) determine the percentage of energy
efficiency improvements that are or would be
achieved in such published or proposed code
versions relative to the target;
``(iii) propose improvements to such
published or proposed code versions sufficient
to meet or exceed the target; and
``(iv) unless a finding is made under
paragraph (1)(B) with respect to a code
published by a recognized consensus-based code
development organization, adopt a code that
meets or exceeds the relevant national building
code energy efficiency target by not later than
one year after the effective date of such
target.
``(B) Calculations.--Each code established by the
Secretary under this paragraph shall be set at the
maximum level the Secretary determines is life cycle
cost-justified and technically feasible, in accordance
with the following:
``(i) Savings calculations.--Calculations of
energy savings shall take into account the
typical lifetimes of different products,
measures, and system configurations.
``(ii) Cost-effectiveness calculations.--
Calculations of life cycle cost-effectiveness
shall be based on life cycle cost methods and
procedures under section 544 of the National
Energy Conservation Policy Act (42 U.S.C.
8254), but shall incorporate to the extent
feasible externalities such as impacts on
climate change and on peak energy demand that
are not already incorporated in assumed energy
costs.
``(C) Considerations.--In developing a national
energy efficiency building code under this paragraph,
the Secretary shall consider--
``(i) for residential codes--
``(I) residential building standards
published or proposed by ASHRAE;
``(II) residential building codes
published or proposed in the
International Energy Conservation Code
(IECC);
``(III) data from the Residential
Energy Services Network (RESNET) on
compliance measures utilized by
consumers to qualify for the
residential energy efficiency tax
credits established under the Energy
Policy Act of 2005;
``(IV) data and information from the
Department of Energy's Building America
Program;
``(V) data and information from the
Energy Star New Homes program;
``(VI) data and information from the
New Building Institute and similar
organizations; and
``(VII) standards for practices and
materials to achieve cool roofs in
residential buildings, taking into
consideration reduced air conditioning
energy use as a function of cool roofs,
the potential reduction in global
warming from increased solar
reflectance from buildings, and cool
roofs criteria in State and local
building codes and in national and
local voluntary programs; and
``(ii) for commercial codes--
``(I) commercial building standards
proposed by ASHRAE;
``(II) commercial building codes
proposed in the International Energy
Conservation Code (IECC);
``(III) the Core Performance Criteria
published by the New Buildings
Institute;
``(IV) data and information developed
by the Director of the Commercial High-
Performance Green Building Office of
the Department of Energy and any
public-private partnerships established
under that Office;
``(V) data and information from the
Energy Star for Buildings program;
``(VI) data and information from the
New Building Institute, RESNET, and
similar organizations; and
``(VII) standards for practices and
materials to achieve cool roofs in
commercial buildings, taking into
consideration reduced air conditioning
energy use as a function of cool roofs,
the potential reduction in global
warming from increased solar
reflectance from buildings, and cool
roofs criteria in State and local
building codes and in national and
local voluntary programs.
``(D) Consultation.--In establishing any national
energy efficiency building code required by this
section, the Secretary shall consult with the Director
of the National Institute of Standards and Technology.
``(3) Consensus standard assistance.--(A) To support the
development of consensus standards that may provide the basis
for national energy efficiency building codes, minimize
duplication of effort, encourage progress through consensus,
and facilitate the development of greater building efficiency,
the Secretary shall provide assistance to recognized consensus-
based code development organizations to develop, and where the
relevant code has been adopted as the national code,
disseminate consensus based energy efficiency building codes as
provided in this paragraph.
``(B) Upon a finding by the Secretary that a code developed
by such an organization meets a target established under
subsection (a), the Secretary shall--
``(i) send notice of the Secretary's finding to all
duly authorized or appointed State and local code
agencies; and
``(ii) provide sufficient support to such an
organization to make the code available on the
Internet, or to accomplish distribution of such code to
all such State and local code agencies at no cost to
the State and local code agencies.
``(C) The Secretary may contract with such an organization
and with other organizations with expertise on codes to provide
training for State and local code officials and building
inspectors in the implementation and enforcement of such code.
``(D) The Secretary may provide grants and other support to
such an organization to--
``(i) develop appropriate refinements to such code;
and
``(ii) support analysis of options for improvements
in the code to meet the next scheduled target.
``(4) Code developed by secretary.--If the Secretary
establishes a national energy efficiency building code under
paragraph (2), the Secretary shall--
``(A) to the extent that such code is based on a
prior code developed by a recognized consensus-based
code development organization, negotiate and provide
appropriate compensation to such organization for the
use of the code materials that remain in the code
established by the Secretary; and
``(B) disseminate the national energy efficiency
building codes to State and local code officials, and
support training and provide guidance and technical
assistance to such officials as appropriate.
``(c) State Adoption of Energy Efficiency Building Codes.--
``(1) Requirement.--Not later than 1 year after a national
energy efficiency building code for residential or commercial
buildings is established or revised under subsection (b), each
State--
``(A) shall--
``(i) review and update the provisions of its
building code regarding energy efficiency to
meet or exceed the target met in the new
national code, to achieve equivalent or greater
energy savings;
``(ii) document, where local governments
establish building codes, that local
governments representing not less than 80
percent of the State's urban population have
adopted the new national code, or have adopted
local codes that meet or exceed the target met
in the new national code to achieve equivalent
or greater energy savings; or
``(iii) adopt the new national code; and
``(B) shall provide a certification to the Secretary
demonstrating that energy efficiency building code
provisions that apply throughout the State meet or
exceed the target met by the new national code, to
achieve equivalent or greater energy savings.
``(2) Confirmation.--
``(A) Requirement.--Not later than 90 days after a
State certification is provided under paragraph (1)(B),
the Secretary shall determine whether the State's
energy efficiency building code provisions meet the
requirements of this subsection.
``(B) Acceptance by secretary.--If the Secretary
determines under subparagraph (A) that the State's
energy efficiency building code or codes meet the
requirements of this subsection, the Secretary shall
accept the certification.
``(C) Deficiency notice.--If the Secretary determines
under subparagraph (A) that the State's building code
or codes do not meet the requirements of this
subsection, the Secretary shall identify the deficiency
in meeting the national building code energy efficiency
target, and, to the extent possible, indicate areas
where further improvement in the State's code
provisions would allow the deficiency to be eliminated.
``(D) Revision of code and recertification.--A State
may revise its code or codes and submit a
recertification under paragraph (1)(B) to the Secretary
at any time.
``(3) Compliant code.--For the purposes of meeting the target
described in subsection (a)(1)(A) for residential buildings, a
State that adopts the code represented in California's Title
24-2009 by the date two years after the date of enactment of
the American Clean Energy and Security Act of 2009 shall be
considered to have met the requirements of this subsection for
the applicable period.
``(d) Application of National Code to State and Local
Jurisdictions.--
``(1) In general.--Upon the expiration of 1 year after a
national energy efficiency building code is established under
subsection (b), in any jurisdiction where the State has not had
a certification relating to that code accepted by the Secretary
under subsection (c)(2)(B), and the local government has not
had a certification relating to that code accepted by the
Secretary under subsection (e)(6)(B), the national code shall
become the applicable energy efficiency building code for such
jurisdiction.
``(2) State legislative adoption.--In a State in which the
relevant building energy code is adopted legislatively, the
deadline in paragraph (1) shall not be earlier than 1 year
after the first day that the legislature meets following
establishment of a national energy efficiency building code.
``(3) Violations.--Violations of this section shall be
defined as follows:
``(A) If the building is subject to the requirements
of a State energy efficiency building code with respect
to which a certification has been accepted by the
Secretary under subsection (c)(2)(B) or a local energy
efficiency building code with respect to which a
certification has been accepted by the Secretary
pursuant to subsection (e)(6)(B), a violation shall be
determined pursuant to the relevant provisions of the
State or local code.
``(B) If the building is subject to the requirements
of a national energy efficiency building code adopted
under subsection (c)(1)(A)(i) or made applicable under
paragraph (1) of this subsection, a violation shall be
defined by the Secretary pursuant to subsection (g).
``(e) State Enforcement of Energy Efficiency Building Codes.--
``(1) In general.--Each State, or where applicable under
State law each local government, shall implement and enforce
applicable State or local codes with respect to which a
certification was accepted by the Secretary under subsection
(c)(2)(B) or paragraph (6)(B) of this subsection, or the
national energy efficiency building codes, as provided in this
subsection.
``(2) State certification.--Not later than 2 years after the
date of a certification under subsection (c)(1) or the
establishment of a national energy efficiency building code
under subsection (b), each State shall certify that it has--
``(A) achieved compliance with--
``(i) State codes, or, as provided under
State law, local codes, with respect to which a
certification was accepted by the Secretary
under subsection (c)(2)(B); or
``(ii) the national energy efficiency
building code, as applicable; or
``(B) for any certification submitted within 7 years
after the date of enactment of the American Clean
Energy and Security Act of 2009, made significant
progress toward achieving such compliance.
``(3) Achieving compliance.--A State shall be considered to
achieve compliance with a code described in paragraph (2)(A) if
at least 90 percent of new and substantially renovated building
space in that State in the preceding year upon inspection meets
the requirements of the code. A certification under paragraph
(2) shall include documentation of the rate of compliance based
on--
``(A) independent inspections of a random sample of
the new and substantially renovated buildings covered
by the code in the preceding year; or
``(B) an alternative method that yields an accurate
measure of compliance as determined by the Secretary.
``(4) Significant progress.--A State shall be considered to
have made significant progress toward achieving compliance with
a code described in paragraph (2)(A) if--
``(A) the State has developed a plan, including for
hiring enforcement staff, providing training, providing
manuals and checklists, and instituting enforcement
programs, designed to achieve full compliance within 5
years after the date of the adoption of the code;
``(B) the State is taking significant, timely, and
measurable action to implement that plan;
``(C) the State has not reduced its expenditures for
code enforcement; and
``(D) at least 50 percent of new and substantially
renovated building space in the State in the preceding
year upon inspection meets the requirements of the
code.
``(5) Secretary's determination.--Not later than 90 days
after a State certification under paragraph (2), the Secretary
shall determine whether the State has demonstrated that it has
complied with the requirements of this subsection, including
accurate measurement of compliance, or that it has made
significant progress toward compliance. If such determination
is positive, the Secretary shall accept the certification. If
the determination is negative, the Secretary shall identify the
areas of deficiency.
``(6) Out of compliance.--
``(A) In general.--Any State for which the Secretary
has not accepted a certification under paragraph (5) by
a deadline established under this subsection is out of
compliance with this section.
``(B) Local compliance.--In any State that is out of
compliance with this section as provided in
subparagraph (A), a local government may be in
compliance with this section by meeting all
certification requirements applicable to the State.
``(C) Noncompliance.--Any State that is not in
compliance with this section, as provided in
subparagraph (A), shall, until the State regains such
compliance, be ineligible to receive--
``(i) emission allowances pursuant to
subsection (h)(1);
``(ii) Federal funding in excess of that
State's share (calculated according to the
allocation formula in section 363 of the Energy
Policy and Conservation Act (42 U.S.C. 6323))
of $125,000,000 each year; and
``(iii) for--
``(I) the first year for which the
State is out of compliance, 25 percent
of any additional funding or other
items of monetary value otherwise
provided under the American Clean
Energy and Security Act of 2009;
``(II) the second year for which the
State is out of compliance, 50 percent
of any additional funding or other
items of monetary value otherwise
provided under the American Clean
Energy and Security Act of 2009;
``(III) the third year for which the
State is out of compliance, 75 percent
of any additional funding or other
items of monetary value otherwise
provided under the American Clean
Energy and Security Act of 2009; and
``(IV) the fourth and subsequent
years for which the State is out of
compliance, 100 percent of any
additional funding or other items of
monetary value otherwise provided under
the American Clean Energy and Security
Act of 2009.
``(f) Federal Enforcement.--Where a State fails and local governments
in that State also fail to enforce the applicable State or national
energy efficiency building codes, the Secretary shall enforce such
codes, as follows:
``(1) The Secretary shall establish, by rule, within 2 years
after the date of enactment of the American Clean Energy and
Security Act of 2009, an energy efficiency building code
enforcement capability.
``(2) Such enforcement capability shall be designed to
achieve 90 percent compliance with such code in any State
within 1 year after the date of the Secretary's determination
that such State is out of compliance with this section.
``(3) The Secretary may set and collect reasonable inspection
fees to cover the costs of inspections required for such
enforcement. Revenue from fees collected shall be available to
the Secretary to carry out the requirements of this section
upon appropriation.
``(g) Enforcement Procedures.--The Secretary shall propose and, not
later than three years after the date of enactment of the American
Clean Energy and Security Act of 2009, shall determine and adopt by
rule what shall constitute violations of the energy efficiency building
codes to be enforced pursuant to this section, and the penalties that
shall apply to violators. To the extent that the Secretary determines
that the authority to adopt and impose such violations and penalties by
rule requires further statutory authority, the Secretary shall report
such determination to Congress as soon as such determination is made,
but not later than one year after the enactment of the American Clean
Energy and Security Act of 2009.
``(h) Federal Support.--
``(1) Allowance allocation for state compliance.--For each
vintage year from 2012 through 2050, the Administrator shall
distribute allowances allocated pursuant to section 782(g)(2)
of the Clean Air Act to the SEED Account for each State that
the Secretary identifies as a State from which he has accepted
the State's certification under subsection (e)(5) for
compliance with the then current national energy efficiency
building codes. Such allowances shall be distributed according
to a formula established by the Secretary as follows:
``(A) One-fifth in an equal amount to each of the 50
States and United States territories.
``(B) Two-fifths as a function of the relative energy
use in all buildings in each State in the most recent
year for which data is available.
``(C) Two-fifths based on the number of building
construction starts recorded in each State, the number
of new building permits applied for in each State, or
other relevant available data indicating building
activity in each State, in the judgment of the
Secretary, for the year prior to the year of the
distribution.
``(2) Allowance allocation to local governments.--In the
instance that the Secretary certifies that one or more local
governments are in compliance with this section pursuant to
subsection (e)(6)(B), the Administrator shall provide to each
such local government the portion of the emission allowances
that would have been provided to that State as a function of
the population of that locality as a proportion of the
population of that State as a whole.
``(3) Unallocated allowances.--To the extent that allowances
are not provided to State or local governments for lack of
certification in any year, those allowances shall be added to
the amount provided to those States and local governments that
are certified as eligible in that year.
``(4) Use of allowances.--Each State or each local government
shall use such emission allowances as it receives pursuant to
this section exclusively for the purposes of this section,
including covering a reasonable portion of the costs of the
development, adoption, implementation, and enforcement of a
State or local energy efficiency building code with respect to
which a certification is accepted by the Secretary under
subsection (c)(2)(B) or subsection (e)(6)(B), or the national
energy efficiency building code. In a State where local
governments provide building code enforcement, a minimum of 50
percent of the allowance value received pursuant to this
section shall be distributed to local governments as a function
of the relative populations of such localities.
``(i) Authorization of Appropriations.--There are authorized to be
appropriated to the Secretary of Energy $100,000,000 for each of fiscal
years 2010 through 2020 and such sums thereafter as may be necessary to
support the purposes of this section.
``(j) Annual Reports by Secretary.--The Secretary shall annually
submit to Congress, and publish in the Federal Register, a report on--
``(1) the status of national building energy efficiency
codes;
``(2) the status of energy efficiency building code adoption
and compliance in the States;
``(3) the implementation of this section; and
``(4) impacts of past action under this section, and
potential impacts of further action, on lifetime energy use by
buildings, including resulting energy and cost savings.''.
SEC. 202. BUILDING RETROFIT PROGRAM.
(a) Definitions.--For purposes of this section:
(1) Nonresidential building.--The term ``nonresidential
building'' means a building with a primary use or purpose other
than residential housing, including commercial offices,
schools, academic and other public and private institutions,
nonprofit organizations, hospitals, hotels, and houses of
worship. Such buildings shall include mixed-use properties used
for both residential and nonresidential purposes in which more
than half of building floor space is nonresidential.
(2) Performance-based building retrofit program.--The term
``performance-based building retrofit program'' means a program
that determines building energy efficiency success based on
actual measured savings after a retrofit is complete, as
evidenced by energy invoices or evaluation protocols.
(3) Prescriptive building retrofit program.--The term
``prescriptive building retrofit program'' means a program that
projects building retrofit energy efficiency success based on
the known effectiveness of measures prescribed to be included
in a retrofit.
(4) Recommissioning; retrocommissioning.--The terms
``recommissioning'' and ``retrocommissioning'' have the meaning
given those terms in section 543(f)(1) of the National Energy
Conservation Policy Act (42 U.S.C. 8253(f)(1)).
(5) Residential building.--The term ``residential building''
means a building whose primary use is residential. Such
buildings shall include single-family homes (both attached and
detached), owner-occupied units in larger buildings with their
own dedicated space-conditioning systems, and buildings used
for both residential and nonresidential purposes in which more
than half of building floor space is residential.
(6) State energy program.--The term ``State Energy Program''
means the program under part D of title III of the Energy
Policy and Conservation Act (42 U.S.C. 6321 et seq.).
(b) Establishment.--The Administrator shall develop and implement, in
consultation with the Secretary of Energy, standards for a national
energy and environmental building retrofit policy for single-family and
multifamily residences. The Administrator shall develop and implement,
in consultation with the Secretary of Energy and the Director of
Commercial High-Performance Green Buildings, standards for a national
energy and environmental building retrofit policy for nonresidential
buildings. The programs to implement the residential and nonresidential
policies based on the standards developed under this section shall
together be known as the Retrofit for Energy and Environmental
Performance (REEP) program.
(c) Purpose.--The purpose of the REEP program is to facilitate the
retrofitting of existing buildings across the United States to achieve
maximum cost-effective energy efficiency improvements and significant
improvements in water use and other environmental attributes.
(d) Federal Administration.--
(1) Existing programs.-- In creating and operating the REEP
program--
(A) the Administrator shall make appropriate use of
existing programs, including the Energy Star program
and in particular the Environmental Protection Agency
Energy Star for Buildings program; and
(B) the Secretary of Energy shall make appropriate
use of existing programs, including delegating
authority to the Director of Commercial High-
Performance Green Buildings appointed under section 421
of the Energy Independence and Security Act of 2007 (42
U.S.C. 17081), who shall designate and provide funding
to support a high-performance green building
partnership consortium pursuant to subsection (f) of
such section to support efforts under this section.
(2) Consultation and coordination.--The Administrator and the
Secretary of Energy shall consult with and coordinate with the
Secretary of Housing and Urban Development in carrying out the
REEP program.
(3) Assistance.--The Administrator and the Secretary of
Energy shall provide consultation and assistance to State and
local agencies for the establishment of revolving loan funds,
loan guarantees, or other forms of financial assistance under
this section.
(e) State and Local Administration.--
(1) Designation and delegation.--A State may designate one or
more agencies or entities, including those regulated by the
State, to carry out the purposes of this section, but shall
designate one entity or individual as the principal point of
contact for the Administrator regarding the REEP Program. The
designated State agency, agencies, or entities may delegate
performance of appropriate elements of the REEP program, upon
their request and subject to State law, to counties,
municipalities, appropriate public agencies, and other
divisions of local government, as well as to entities regulated
by the State. In making any such designation or delegation, a
State shall give priority to entities that administer existing
comprehensive retrofit programs, including those under the
supervision of State utility regulators. States shall maintain
responsibility for meeting the standards and requirements of
the REEP program. In any State that elects not to administer
the REEP program, a unit of local government may propose to do
so within its jurisdiction, and if the Administrator finds that
such local government is capable of administering the program,
the Administrator may provide allowances to that local
government, prorated according to the population of the local
jurisdiction relative to the population of the State, for
purposes of the REEP program.
(2) Employment.--States and local government entities may
administer a REEP program in a manner that authorizes public or
regulated investor-owned utilities, building auditors and
inspectors, contractors, nonprofit organizations, for-profit
companies, and other entities to perform audits and retrofit
services under this section. A State may provide incentives for
retrofits without direct participation by the State or its
agents, so long as the resulting savings are measured and
verified. A State or local administrator of a REEP program
shall seek to ensure that sufficient qualified entities are
available to support retrofit activities so that building
owners have a competitive choice among qualified auditors,
raters, contractors, and providers of services related to
retrofits. Nothing in this section is intended to preclude or
preempt the right of a building owner to choose the specific
providers of retrofit services to engage for a retrofit project
in that owner's building.
(3) Equal incentives for equal improvement.--In general, the
States should strive to offer the same levels of incentives for
retrofits that meet the same efficiency improvement goals,
regardless of whether the State, its agency or entity, or the
building owner has conducted the retrofit achieving the
improvement, provided the improvement is measured and verified.
(f) Elements of REEP Program.--The Administrator, in consultation
with the Secretary of Energy, shall establish goals, guidelines,
practices, and standards for accomplishing the purpose stated in
subsection (c), and shall annually review and, as appropriate, revise
such goals, guidelines, practices, and standards. The program under
this section shall include the following:
(1) Residential Energy Services Network (RESNET) or Building
Performance Institute (BPI) analyst certification of
residential building energy and environment auditors,
inspectors, and raters, or an equivalent certification system
as determined by the Administrator.
(2) BPI certification or licensing by States of residential
building energy and environmental retrofit contractors, or an
equivalent certification or licensing system as determined by
the Administrator.
(3) Provision of BPI, RESNET, or other appropriate
information on equipment and procedures, as determined by the
Administrator, that contractors can use to test the energy and
environmental efficiency of buildings effectively (such as
infrared photography and pressurized testing, and tests for
water use and indoor air quality).
(4) Provision of clear and effective materials to describe
the testing and retrofit processes for typical buildings.
(5) Guidelines for offering and managing prescriptive
building retrofit programs and performance-based building
retrofit programs for residential and nonresidential buildings.
(6) Guidelines for applying recommissioning and
retrocommissioning principles to improve a building's
operations and maintenance procedures.
(7) A requirement that building retrofits conducted pursuant
to a REEP program utilize, especially in all air-conditioned
buildings, roofing materials with high solar energy
reflectance, unless inappropriate due to green roof management,
solar energy production, or for other reasons identified by the
Administrator, in order to reduce energy consumption within the
building, increase the albedo of the building's roof, and
decrease the heat island effect in the area of the building.
(8) Determination of energy savings in a performance-based
building retrofit program through--
(A) for residential buildings, comparison of before
and after retrofit scores on the Home Energy Rating
System (HERS) Index, where the final score is produced
by an objective third party;
(B) for nonresidential buildings, Environmental
Protection Agency Portfolio Manager benchmarks; or
(C) for either residential or nonresidential
buildings, use of an Administrator-approved simulation
program by a contractor with the appropriate
certification, subject to appropriate software
standards and verification of at least 15 percent of
all work done, or such other percentage as the
Administrator may determine.
(9) Guidelines for utilizing the Energy Star Portfolio
Manager, the Home Energy Rating System (HERS) rating system,
Home Performance with Energy Star program approvals, and any
other tools associated with the retrofit program.
(10) Requirements and guidelines for post-retrofit inspection
and confirmation of work and energy savings.
(11) Detailed descriptions of funding options for the benefit
of State and local governments, along with model forms,
accounting aids, agreements, and guides to best practices.
(12) Guidance on opportunities for--
(A) rating or certifying retrofitted buildings as
Energy Star buildings, or as green buildings under a
recognized green building rating system;
(B) assigning Home Energy Rating System (HERS) or
similar ratings; and
(C) completing any applicable building performance
labels.
(13) Sample materials for publicizing the program to building
owners, including public service announcements and
advertisements.
(14) Processes for tracking the numbers and locations of
buildings retrofitted under the REEP program, with information
on projected and actual savings of energy and its value over
time.
(g) Requirements.--As a condition of receiving allowances for the
REEP program pursuant to this Act, a State or qualifying local
government shall--
(1) adopt the standards for training, certification of
contractors, certification of buildings, and post-retrofit
inspection as developed by the Administrator for residential
and nonresidential buildings, respectively, except as necessary
to match local conditions, needs, efficiency opportunities, or
other local factors, or to accord with State laws or
regulations, and then only after the Administrator approves
such a variance; and
(2) establish fiscal controls and accounting procedures
(which conform to generally accepted government accounting
principles) sufficient to ensure proper accounting during
appropriate accounting periods for payments received and
disbursements, and for fund balances.
The Administrator shall conduct or require each State to have such
independent financial audits of REEP-related funding as the
Administrator considers necessary or appropriate to carry out the
purposes of this section.
(h) Options to Support REEP Program.--The emission allowances
provided pursuant to this Act to the States' SEED Accounts shall
support the implementation through State REEP programs of alternate
means of creating incentives for, or reducing financial barriers to,
improved energy and environmental performance in buildings, consistent
with this section, including--
(1) implementing prescriptive building retrofit programs and
performance-based building retrofit programs;
(2) providing credit enhancement, interest rate subsidies,
loan guarantees, or other credit support;
(3) providing initial capital for public revolving fund
financing of retrofits, with repayments by beneficiary building
owners over time through their tax payments, calibrated to
create net positive cash flow to the building owner;
(4) providing funds to support utility-operated retrofit
programs with repayments over time through utility rates,
calibrated to create net positive cash flow to the building
owner, and transferable from one building owner to the next
with the building's utility services;
(5) providing funds to local government programs to provide
REEP services and financial assistance; and
(6) other means proposed by State and local agencies, subject
to the approval of the Administrator.
(i) Support for Program.--
(1) Use of allowances.--Direct Federal support for the REEP
program is provided through the emission allowances allocated
to the States' SEED Accounts pursuant to section 132 of this
Act. To the extent that a State provides allowances to local
governments within the State to implement elements of the REEP
Program, that shall be deemed a distribution of such allowances
to units of local government pursuant to subsection (c)(1) of
that section.
(2) Initial award limits.--Except as provided in paragraph
(3), State and local REEP programs may make per-building direct
expenditures for retrofit improvements, or their equivalent in
indirect or other forms of financial support, from funds
derived from the sale of allowances received directly from the
Administrator in amounts not to exceed the following:
(A) Residential building program.--
(i) Awards.--For residential buildings--
(I) support for a free or low-cost
detailed building energy audit that
prescribes, as part of a energy-
reducing measures sufficient to achieve
at least a 20 percent reduction in
energy use, by providing an incentive
equal to the documented cost of such
audit, but not more than $200, in
addition to any earned by achieving a
20 percent or greater efficiency
improvement;
(II) a total of $1,000 for a
combination of measures, prescribed in
an audit conducted under subclause (I),
designed to reduce energy consumption
by more than 10 percent, and $2,000 for
a combination of measures prescribed in
such an audit, designed to reduce
energy consumption by more than 20
percent;
(III) $3,000 for demonstrated savings
of 20 percent, pursuant to a
performance-based building retrofit
program; and
(IV) $1,000 for each additional 5
percentage points of energy savings
achieved beyond savings for which
funding is provided under subclause
(II) or (III).
Funding shall not be provided under clauses
(II) and (III) for the same energy savings.
(ii) Maximum percentage.--Awards under clause
(i) shall not exceed 50 percent of retrofit
costs for each building. For buildings with
multiple residential units, awards under clause
(i) shall not be greater than 50 percent of the
total cost of retrofitting the building,
prorated among individual residential units on
the basis of relative costs of the retrofit.
(iii) Additional awards.--Additional awards
may be provided for purposes of increasing
energy efficiency, for buildings achieving at
least 20 percent energy savings using funding
provided under clause (i), in the form of
grants of not more than $600 for measures
projected or measured (using an appropriate
method approved by the Administrator) to
achieve at least 35 percent potable water
savings through equipment or systems with an
estimated service life of not less than seven
years, and not more than an additional $20 may
be provided for each additional one percent of
such savings, up to a maximum total grant of
$1,200.
(B) Nonresidential building program.--
(i) Awards.--For nonresidential buildings--
(I) support for a free or low-cost
detailed building energy audit that
prescribes, as part of a energy-
reducing measures sufficient to achieve
at least a 20 percent reduction in
energy use, by providing an incentive
equal to the documented cost of such
audit, but not more than $500, in
addition to any award earned by
achieving a 20 percent or greater
efficiency improvement;
(II) $0.15 per square foot of
retrofit area for demonstrated energy
use reductions from 20 percent to 30
percent;
(III) $0.75 per square foot for
demonstrated energy use reductions from
30 percent to 40 percent;
(IV) $1.60 per square foot for
demonstrated energy use reductions from
40 percent to 50 percent; and
(V) $2.50 per square foot for
demonstrated energy use reductions
exceeding 50 percent.
(ii) Maximum percentage.--Amounts provided
under subclauses (II) through (V) of clause (i)
combined shall not exceed 50 percent of the
total retrofit cost of a building. In
nonresidential buildings with multiple units,
such awards shall be prorated among individual
units on the basis of relative costs of the
retrofit.
(iii) Additional awards.--Additional awards
may be provided, for buildings achieving at
least 20 percent energy savings using funding
provided under clause (i), as follows:
(I) Water.--For purposes of
increasing energy efficiency, grants
may be made for whole building potable
water use reduction (using an
appropriate method approved by the
Secretary of Energy) for up to 50
percent of the total retrofit cost,
including amounts up to--
(aa) $24.00 per thousand
gallons per year of potable
water savings of 40 percent or
more;
(bb) $27.00 per thousand
gallons per year of potable
water savings of 50 percent or
more; and
(cc) $30.00 per thousand
gallons per year of potable
water savings of 60 percent or
more.
(II) Environmental improvements.--
Additional awards of up to $1,000 may
be granted for the inclusion of other
environmental attributes that the
Secretary, in consultation with the
Administrator, identifies as
contributing to energy efficiency. Such
attributes may include, but are not
limited to waste diversion and the use
of environmentally preferable materials
(including salvaged, renewable, or
recycled materials, and materials with
no or low-VOC content). The
Administrator may recommend that States
develop such standards as are necessary
to account for local or regional
conditions that may affect the
feasibility or availability of
identified resources and attributes.
(iv) Indoor air quality minimum.--
Nonresidential buildings receiving incentives
under this section must satisfy at a minimum
the most recent version of ASHRAE Standard 62.1
for ventilation, or the equivalent as
determined by the Administrator. A State may
issue a waiver from this requirement to a
building project on a showing that such
compliance is infeasible due to the physical
constraints of the building's existing
ventilation system, or such other limitations
as may be specified by the Administrator.
(C) Historic buildings.--Notwithstanding
subparagraphs (A) and (B), a building in or eligible
for the National Register of Historic Places shall be
eligible for awards under this paragraph in amounts up
to 120 percent of the amounts set forth in
subparagraphs (A) and (B).
(D) Supplemental support.--State and local
governments may supplement the per-building
expenditures under this paragraph with funding from
other sources.
(3) Adjustment.--The Administrator may adjust the specific
dollar limits funded by the sale of allowances pursuant to
paragraph (2) in years subsequent to the second year after the
date of enactment of this Act, and every 2 years thereafter, as
the Administrator determines necessary to achieve optimum cost-
effectiveness and to maximize incentives to achieve energy
efficiency within the total building award amounts provided in
that paragraph, and shall publish and hold constant such
revised limits for at least 2 years.
(j) Report to Congress.--The Administrator shall conduct an annual
assessment of the achievements of the REEP program in each State, shall
prepare an annual report of such achievements and any recommendations
for program modifications, and shall provide such report to Congress at
the end of each fiscal year during which funding or other resources
were made available to the States for the REEP Program.
(k) Other Sources of Federal Support.--
(1) Additional state energy program funds.--Any Federal
funding provided to a State Energy Program that is not required
to be expended for a different federally designated purpose may
be used to support a REEP program.
(2) Program administration.--State Energy Offices or
designated State agencies may expend up to 10 percent of
available allowance value provided under this section for
program administration.
(3) Authorization of appropriations.--There are authorized to
be appropriated for the purposes of this section, for each of
fiscal years 2010, 2011, 2012, and 2013--
(A) $50,000,000 to the Administrator for program
administration costs; and
(B) $20,000,000 to the Secretary of Energy for
program administration costs.
SEC. 203. ENERGY EFFICIENT MANUFACTURED HOMES.
(a) Definitions.--In this section:
(1) Manufactured home.--The term ``manufactured home'' has
the meaning given such term in section 603 of the National
Manufactured Housing Construction and Safety Standards Act of
1974 (42 U.S.C. 5402).
(2) Energy star qualified manufactured home.--The term
``Energy Star qualified manufactured home'' means a
manufactured home that has been designed, produced, and
installed in accordance with Energy Star's guidelines by an
Energy Star certified plant.
(b) Purpose.--The purpose of this section is to assist low-income
households residing in manufactured homes constructed prior to 1976 to
save energy and energy expenditures by providing support toward the
purchase of new Energy Star qualified manufactured homes.
(c) State Implementation of Program.--
(1) Manufactured home replacement program.--Any State may
provide to the owner of a manufactured home constructed prior
to 1976 a rebate to use toward the purchase of a new Energy
Star qualified manufactured home pursuant to this section.
(2) Use of allowances.--Direct Federal support for the
program established in this section is provided through the
emission allowances allocated to the States' SEED Accounts
pursuant to section 132 of this Act. To the extent that a State
provides allowances to local governments within the State to
implement this program, that shall be deemed a distribution of
such allowances to units of local government pursuant to
subsection (c)(1) of that section.
(3) Rebates.--
(A) Primary residence requirement.--A rebate
described under paragraph (1) may only be made to an
owner of a manufactured home constructed prior to 1976
that is used on a year-round basis as a primary
residence.
(B) Dismantling and replacement.--A rebate described
under paragraph (1) may be made only if the
manufactured home constructed prior to 1976 will be--
(i) rendered unusable for human habitation
(including appropriate recycling); and
(ii) replaced, in the same general location,
as determined by the applicable State agency,
with an Energy Star qualified manufactured
home.
(C) Single rebate.--A rebate described under
paragraph (1) may not be provided to any owner of a
manufactured home constructed prior to 1976 that was or
is a member of a household for which any other member
of the household was provided a rebate pursuant to this
section.
(D) Eligible households.--To be eligible to receive a
rebate described under paragraph (1), an owner of a
manufactured home constructed prior to 1976 shall
demonstrate to the applicable State agency that the
total income of all members the owner's household does
not exceed 200 percent of the Federal poverty level for
income in the applicable area.
(E) Advance availability.--A rebate may be provided
under this section in a manner to facilitate the
purchase of a new Energy Star qualified manufactured
home.
(4) Rebate limitation.--Rebates provided by States under this
section shall not exceed $7,500 per manufactured home from any
value derived from the use of emission allowances provided to
the State pursuant to section 132.
(5) Use of state funds.--A State providing rebates under this
section may supplement the amount of such rebates under
paragraph (4) by any additional amount is from State funds and
other sources, including private donations or grants from
charitable organizations.
(6) Coordination with similar programs.--
(A) State programs.--A State conducting an existing
program that has the purpose of replacing manufactured
homes constructed prior to 1976 with Energy Star
qualified manufactured homes, may use allowance value
provided under section 782 of the Clean Air Act to
support such a program, provided such funding does not
exceed the rebate limitation amount under paragraph
(4).
(B) Federal programs.--The Secretary of Energy shall
coordinate with and seek to achieve the purpose of this
section through similar Federal programs including--
(i) the Weatherization Assistance Program
under part A of title IV of the Energy
Conservation and Production Act (42 U.S.C. 6861
et seq.); and
(ii) the program under part D of title III of
the Energy Policy and Conservation Act (42
U.S.C. 6321 et seq.).
(C) Coordination with other state agencies.--A State
agency using allowance value to administer the program
under this section may coordinate its efforts, and
share funds for administration, with other State
agencies involved in low-income housing programs.
(7) Administrative expenses.--A State using allowance value
under this section may expend not more than 10 percent of such
value for administrative expenses related to this program.
SEC. 204. BUILDING ENERGY PERFORMANCE LABELING PROGRAM.
(a) Establishment.--
(1) Purpose.--The Administrator shall establish a building
energy performance labeling program with broad applicability to
the residential and commercial markets to enable and encourage
knowledge about building energy performance by owners and
occupants and to inform efforts to reduce energy consumption
nationwide.
(2) Components.--In developing such program, the
Administrator shall--
(A) consider existing programs, such as Environmental
Protection Agency's Energy Star program, the Home
Energy Rating System (HERS) Index, and programs at the
Department of Energy;
(B) support the development of model performance
labels for residential and commercial buildings; and
(C) utilize incentives and other means to spur use of
energy performance labeling of public and private
sector buildings nationwide.
(b) Data Assessment for Building Energy Performance.--
(1) Initial report.--Not later than 90 days after the date of
enactment of this Act, the Administrator shall provide to
Congress, as well as to the Secretary of Energy and the Office
of Management and Budget, a report identifying--
(A) all principal building types for which
statistically significant energy performance data
exists to serve as the basis of measurement protocols
and labeling requirements for achieved building energy
performance; and
(B) those building types for which additional data
are required to enable the development of such
protocols and requirements.
(2) Additional reports.--Additional updated reports shall be
provided under this subsection as often as The Administrator
considers practicable, but not less than every 2 years.
(c) Building Data Acquisition.--
(1) Resource requirements.--For all principal building types
identified under subsection (b), the Secretary of Energy, not
later than 90 days after a report by the Administrator under
subsection (b), shall provide to Congress, the Administrator,
and the Office of Management and Budget a statement of
additional resources needed, if any, to fully develop the
relevant data, as well as the anticipated timeline for data
development.
(2) Consultation.--The Secretary of Energy shall consult with
the Administrator concerning the Administrator's ability to use
data series for these additional building types to support the
achieved performance component in the labeling program.
(3) Improvements to building energy consumption databases.--
(A) Commercial database.--The Secretary of Energy
shall support improvements to the Commercial Buildings
Energy Consumption Survey (CBECS) as authorized by
section 205(k) of the Department of Energy Organization
Act (42 U.S.C. 7135(k))--
(i) to enable complete and robust data for
the actual energy performance of principal
building types currently covered by survey;
(ii) to cover additional building types as
identified by the Administrator under
subsection (b)(1)(B), to enable the development
of achieved performance measurement protocols
are developed for at least 90 percent of all
major commercial building types within 5 years
after the date of enactment of this Act; and
(iii) to include third-party audits of random
data samplings to ensure the quality and
accuracy of survey information.
(B) Residential databases.--The Administrator, in
consultation with the Energy Information Administration
and the Secretary of Energy, shall support improvements
to the Residential Energy Consumption Survey (RECS) as
authorized by section 205(k) of the Department of
Energy Organization Act (42 U.S.C. 7135(k)), or such
other residential energy performance databases as the
Administrator considers appropriate, to aid the
development of achieved performance measurement
protocols for residential building energy use for at
least 90 percent of the residential market within 5
years after the date of enactment of this Act.
(C) Consultation.--The Secretary of Energy and the
Administrator shall consult with public, private, and
nonprofit sector representatives from the building
industry and real estate industry to assist in the
evaluation and improvement of building energy
performance databases and labeling programs.
(d) Identification of Measurement Protocols for Achieved
Performance.--
(1) Proposed protocols and requirements.--At the earliest
practicable date, but not later than 1 year after identifying a
building type under subsection (b)(1)(A), the Administrator
shall propose a measurement protocol for that building type and
a requirement detailing how to use that protocol in completing
applicable commercial or residential performance labels created
pursuant to this section.
(2) Final rule.--After providing for notice and comment, the
Administrator shall publish a final rule containing a
measurement protocol and the corresponding requirements for
applying that protocol. Such a rule--
(A) shall define the minimum period for measurement
of energy use by buildings of that type and other
details for determining achieved performance, to
include leased buildings or parts thereof;
(B) shall identify necessary data collection and
record retention requirements; and
(C) may specify transition rules and exemptions for
classes of buildings within the building type.
(e) Procedures for Evaluating Designed Performance.--The
Administrator shall develop protocols for evaluating the designed
performance of individual building types. The Administrator may conduct
such feasibility studies and demonstration projects as are necessary to
evaluate the sufficiency of proposed protocols for designed
performance.
(f) Creation of Building Energy Performance Labeling Program.--
(1) Model label.--Not later than 1 year after the date of
enactment of this Act, the Administrator shall propose a model
building energy label that provides a format--
(A) to display achieved performance and designed
performance data;
(B) that may be tailored for residential and
commercial buildings, and for single-occupancy and
multitenanted buildings; and
(C) to display other appropriate elements identified
during the development of measurement protocols under
subsections (d) and (e).
(2) Inclusions.--Nothing in this section shall require the
inclusion on such a label of designed performance data where
impracticable or not cost effective, or to preclude the display
of both achieved performance and designed performance data for
a particular building where both such measures are available,
practicable, and cost effective.
(3) Existing programs.--In developing the model label, the
Administrator shall consider existing programs, including--
(A) the Environmental Protection Agency's Energy Star
Portfolio Manager program and the California HERS II
Program Custom Approach for the achieved performance
component of the label;
(B) the Home Energy Rating System (HERS) Index system
for the designed performance component of the label;
and
(C) other Federal and State programs, including the
Department of Energy's related programs on building
technologies and those of the Federal Energy Management
Program.
(4) Final rule.--After providing for notice and comment, the
Administrator shall publish a final rule containing the label
applicable to covered building types.
(g) Demonstration Projects for Labeling Program.--
(1) In general.--The Administrator shall conduct building
energy performance labeling demonstration projects for
different building types--
(A) to ensure the sufficiency of the current
Commercial Buildings Energy Consumption Survey and
other data to serve as the basis for new measurement
protocols for the achieved performance component of the
building energy performance labeling program;
(B) to inform the development of measurement
protocols for building types not currently covered by
the Commercial Buildings Energy Consumption Survey; and
(C) to identify any additional information that needs
to be developed to ensure effective use of the model
label.
(2) Participation.--Such demonstration projects shall include
participation of--
(A) buildings from diverse geographical and climate
regions;
(B) buildings in both urban and rural areas;
(C) single-family residential buildings;
(D) multihousing residential buildings with more than
50 units, including at least one project that provides
affordable housing to individuals of diverse incomes;
(E) single-occupant commercial buildings larger than
30,000 square feet;
(F) multitenanted commercial buildings larger than
50,000 square feet; and
(G) buildings from both the public and private
sectors.
(3) Priority.--Priority in the selection of demonstration
projects shall be given to projects that facilitate large-scale
implementation of the labeling program for samples of buildings
across neighborhoods, geographic regions, cities, or States.
(4) Findings.--The Administrator shall report any findings
from demonstration projects under this subsection, including an
identification of any areas of needed data improvement, to the
Department of Energy's Energy Information Administration and
Building Technologies Program.
(5) Coordination.--The Administrator and the Secretary of
Energy shall coordinate demonstration projects undertaken
pursuant to this subsection with those undertaken as part of
the Zero-Net-Energy Commercial Buildings Initiative adopted
under section 422 of the Energy Independence and Security Act
of 2007 (42 U.S.C. 17082).
(h) Implementation of Labeling Program.--
(1) In general.--The Administrator, in consultation with the
Secretary of Energy, shall work with all State Energy Offices
established pursuant to part D of title III of the Energy
Policy and Conservation Act (42 U.S.C. 6321 et seq.) or other
State authorities as necessary for the purpose of implementing
the labeling program established under this section for
commercial and residential buildings.
(2) Outreach to local authorities.--The Administrator shall,
acting in consultation and coordination with the respective
States, encourage use of the labeling program by counties and
other localities to broaden access to information about
building energy use, for example, through disclosure of
building label contents in tax, title, and other records those
localities maintain. For this purpose, the Administrator shall
develop an electronic version of the label and information that
can be readily transmitted and read in widely-available
computer programs but is protected from unauthorized
manipulation.
(3) Means of implementation.--In adopting the model labeling
program established under this section, a State shall seek to
ensure that labeled information be made accessible to the
public in a manner so that owners, lenders, tenants, occupants,
or other relevant parties can utilize it. Such accessibility
may be accomplished through--
(A) preparation, and public disclosure of the label
through filing with tax and title records at the time
of--
(i) a building audit conducted with support
from Federal or State funds;
(ii) a building energy-efficiency retrofit
conducted in response to such an audit;
(iii) a final inspection of major renovations
or additions made to a building in accordance
with a building permit issued by a local
government entity;
(iv) a sale that is recorded for title and
tax purposes consistent with paragraph (8);
(v) a new lien recorded on the property for
more than a set percentage of the assessed
value of the property, if that lien reflects
public financial assistance for energy-related
improvements to that building; or
(vi) a change in ownership or operation of
the building for purposes of utility billing;
or
(B) other appropriate means.
(4) State implementation of program.--
(A) Eligibility.--A State may become eligible to
utilize allowance value to implement this program by--
(i) adopting by statute or regulation a
requirement that buildings be assessed and
labeled, consistent with the labeling
requirements of the program established under
this section; or
(ii) adopting a plan to implement a model
labeling program consistent with this section
within one year of enactment of this Act,
including the establishment of that program
within 3 years after the date of enactment of
this Act, and demonstrating continuous progress
under that plan.
(B) Use of allowances.--Direct Federal support for
the program established in this section is provided
through the emission allowances allocated to the
States' SEED Accounts pursuant to section 132 of this
Act. To the extent that a State provides allowances to
local governments within the State to implement this
program, that shall be deemed a distribution of such
allowances to units of local government pursuant to
subsection (c)(1) of that section.
(5) Guidance.--The Administrator may create or identify model
programs and resources to provide guidance to offer to States
and localities for creating labeling programs consistent with
the model program established under this section.
(6) Progress report.--The Administrator, in consultation with
the Secretary of Energy, shall provide a progress report to
Congress not later than 3 years after the date of enactment of
this Act that--
(A) evaluates the effectiveness of efforts to advance
use of the model labeling program by States and
localities;
(B) recommends any legislative changes necessary to
broaden the use of the model labeling program; and
(C) identifies any changes to broaden the use of the
model labeling program that the Administrator has made
or intends to make that do not require additional
legislative authority.
(7) State information.--The Administrator may require States
to report to the Administrator information that the
Administrator requires to provide the report required under
paragraph (6).
(8) Prevention of disruption of sales transactions.--No State
shall implement a new labeling program pursuant to this section
in a manner that requires the labeling of a building to occur
after a contract has been executed for the sale of that
building and before the sales transaction is completed.
(i) Implementation of Labeling Program in Federal Buildings.--
(1) Use of labeling program.--The Secretary of Energy and the
Administrator shall use the labeling program established under
this section to evaluate energy performance in the facilities
of the Department of Energy and the Environmental Protection
Agency, respectively, to the extent practicable, and shall
encourage and support implementation efforts in other Federal
agencies.
(2) Annual progress report.--The Secretary of Energy and
Administrator shall provide an annual progress report to
Congress and the Office of Management and Budget detailing
efforts to implement this subsection, as well as any best
practices or needed resources identified as a result of such
efforts.
(j) Public Outreach.--The Secretary of Energy and the Administrator,
in consultation with nonprofit and industry stakeholders with
specialized expertise, and in conjunction with other energy efficiency
public awareness efforts, shall establish a business and consumer
education program to increase awareness about the importance of
building energy efficiency and to facilitate widespread use of the
labeling program established under this section.
(k) Definitions.--In this section:
(1) Building type.--The term ``building type'' means a
grouping of buildings as identified by their principal building
activities, or as grouped by their use, including office
buildings, laboratories, libraries, data centers, retail
establishments, hotels, warehouses, and educational buildings.
(2) Measurement protocol.--The term ``measurement protocol''
means the methodology, prescribed by the Administrator, for
defining a benchmark for building energy performance for a
specific building type and for measuring that performance
against the benchmark.
(3) Achieved performance.--The term ``achieved performance''
means the actual energy consumption of a building as compared
to a baseline building of the same type and size, determined by
actual consumption data normalized for appropriate variables.
(4) Designed performance.--The term ``designed performance''
means the energy consumption performance a building would
achieve if operated consistent with its design intent for
building energy use, utilizing a standardized set of
operational conditions informed by data collected or confirmed
during an energy audit.
(l) Authorization of Appropriations.--There are authorized to be
appropriated--
(1) to the Administrator $50,000,000 for implementation of
this section for each fiscal year from 2010 through 2020; and
(2) to the Secretary of Energy $20,000,000 for implementation
of this section for fiscal year 2010 and $10,000,000 for fiscal
years 2011 through 2020.
SEC. 205. TREE PLANTING PROGRAMS.
(a) Findings.--The Congress finds that--
(1) the utility sector is the largest single source of
greenhouse gas emissions in the United States today, producing
approximately one-third of the country's emissions;
(2) heating and cooling homes accounts for nearly 60 percent
of residential electricity usage in the United States;
(3) shade trees planted in strategic locations can reduce
residential cooling costs by as much as 30 percent;
(4) shade trees have significant clean-air benefits
associated with them;
(5) every 100 healthy large trees removes about 300 pounds of
air pollution (including particulate matter and ozone) and
about 15 tons of carbon dioxide from the air each year;
(6) tree cover on private property and on newly-developed
land has declined since the 1970s, even while emissions from
transportation and industry have been rising; and
(7) in over a dozen test cities across the United States,
increasing urban tree cover has generated between two and five
dollars in savings for every dollar invested in such tree
planting.
(b) Definitions.--As used in this section:
(1) The term ``Secretary'' refers to the Secretary of Energy.
(2) The term ``retail power provider'' means any entity
authorized under applicable State or Federal law to generate,
distribute, or provide retail electricity, natural gas, or fuel
oil service.
(3) The term ``tree-planting organization'' means any
nonprofit or not-for-profit group which exists, in whole or in
part, to--
(A) expand urban and residential tree cover;
(B) distribute trees for planting;
(C) increase awareness of the environmental and
energy-related benefits of trees;
(D) educate the public about proper tree planting,
care, and maintenance strategies; or
(E) carry out any combination of the foregoing
activities.
(4) The term ``tree-siting guidelines'' means a comprehensive
list of science-based measurements outlining the species and
minimum distance required between trees planted pursuant to
this section, in addition to the minimum required distance to
be maintained between such trees and--
(A) building foundations;
(B) air conditioning units;
(C) driveways and walkways;
(D) property fences;
(E) preexisting utility infrastructure;
(F) septic systems;
(G) swimming pools; and
(H) other infrastructure as deemed appropriate.
(5) The terms ``small office'', ``small office buildings'',
and ``small office settings'' means nonresidential buildings or
structures zoned for business purposes that are 20,000 square
feet or less in total area.
(c) Purposes.--The purpose of this section is to establish a grant
program to assist retail power providers with the establishment and
operation of targeted tree-planting programs in residential and small
office settings, for the following purposes:
(1) Reducing the peak-load demand for electricity from
residences and small office buildings during the summer months
through direct shading of buildings provided by strategically
planted trees.
(2) Reducing wintertime demand for energy from residences and
small office buildings by blocking cold winds from reaching
such structures, which lowers interior temperatures and drives
heating demand.
(3) Protecting public health by removing harmful pollution
from the air.
(4) Utilizing the natural photosynthetic and transpiration
process of trees to lower ambient temperatures and absorb
carbon dioxide, thus mitigating the effects of climate change.
(5) Lowering electric bills for residential and small office
ratepayers by limiting electricity consumption without reducing
benefits.
(6) Relieving financial and demand pressure on retail power
providers that stems from large peak-load energy demand.
(7) Protecting water quality and public health by reducing
stormwater runoff and keeping harmful pollutants from entering
waterways.
(8) Ensuring that trees are planted in locations that limit
the amount of public money needed to maintain public and
electric infrastructure.
(d) General Authority.--
(1) Assistance.--The Secretary is authorized to provide
financial, technical, and related assistance to retail power
providers to assist with the establishment of new, or continued
operation of existing, targeted tree-planting programs for
residences and small office buildings.
(2) Public recognition initiative.--In carrying out the
authority provided under this section, the Secretary shall also
create a national public recognition initiative to encourage
participation in tree-planting programs by retail power
providers.
(3) Eligibility.--Only those programs which utilize targeted,
strategic tree-siting guidelines to plant trees in relation to
building location, sunlight, and prevailing wind direction
shall be eligible for assistance under this section.
(4) Requirements.--In order to qualify for assistance under
this section, a tree-planting program shall meet each of the
following requirements:
(A) The program shall provide free or discounted
shade-providing or wind-reducing trees to residential
and small office consumers interested in lowering their
home energy costs.
(B) The program shall optimize the electricity-
consumption reduction benefit of each tree by planting
in strategic locations around a given residence or
small office.
(C) The program shall either--
(i) provide maximum amounts of shade during
summer intervals when residences and small
offices are exposed to the most sun intensity;
or
(ii) provide maximum amounts of wind
protection during fall and winter intervals
when residences and small offices are exposed
to the most wind intensity.
(D) The program shall use the best available science
to create tree siting guidelines which dictate where
the optimum tree species are best planted in locations
that achieve maximum reductions in consumer energy
demand while causing the least disruption to public
infrastructure, considering overhead and underground
facilities.
(E) The program shall receive certification from the
Secretary that it is designed to achieve the goals set
forth in subparagraphs (A) through (D). In designating
criteria for such certification, the Secretary shall
collaborate with the United States Forest Service's
Urban and Community Forestry Program to ensure that
certification requirements are consistent with such
above goals.
(5) New program funding share.--The Secretary shall ensure
that no less than 30 percent of the funds made available under
this section are distributed to retail power providers which--
(A) have not previously established or operated
qualified tree-planting programs; or
(B) are operating qualified tree-planting programs
which were established no more than three years prior
to the date of enactment of this section.
(e) Agreements Between Electricity Providers and Tree-Planting
Organizations.--
(1) Grant authorization.--In providing assistance under this
section, the Secretary is authorized to award grants only to
retail power providers that have entered into binding legal
agreements with nonprofit tree-planting organizations.
(2) Conditions of agreement.--Those agreements between retail
power providers and tree-planting organizations shall set forth
conditions under which nonprofit tree-planting organizations
shall provide targeted tree-planting programs which may require
these organizations to--
(A) participate in local technical advisory
committees responsible for drafting general tree-siting
guidelines and choosing the most effective species of
trees to plant in given locations;
(B) coordinate volunteer recruitment to assist with
the physical act of planting trees in residential
locations;
(C) undertake public awareness campaigns to educate
local residents about the benefits, cost savings, and
availability of free shade trees;
(D) establish education and information campaigns to
encourage recipients to maintain their shade trees over
the long term;
(E) serve as the point of contact for existing and
potential residential participants who have questions
or concerns regarding the tree-planting program;
(F) require tree recipients to sign agreements
committing to voluntary stewardship and care of
provided trees;
(G) monitor and report on the survival, growth,
overall health, and estimated energy savings of
provided trees up until the end of their establishment
period which shall be no less than five years; and
(H) ensure that trees planted near existing power
lines will not interfere with energized electricity
distribution lines when mature, and that no new trees
will be planted under or adjacent to high-voltage
electric transmission lines without prior consultation
with the applicable retail power provider receiving
assistance under this section.
(3) Lack of nonprofit organization.--If qualified nonprofit
or not-for-profit tree planting organizations do not exist or
operate within areas served by retail power providers applying
for assistance under this section, the requirements of this
section shall apply to binding legal agreements entered into by
such retail power providers and one of the following entities:
(A) Local municipal governments with jurisdiction
over the urban or suburban forest.
(B) The State Forester for the State in which the
tree planting program will operate.
(C) The United States Forest Service's Urban and
Community Forestry representative for the State in
which the tree-planting program will operate.
(D) A landscaping services company that is--
(i) identified in consultation with a
national or State nonprofit or not-for-profit
tree-planting organization;
(ii) licensed to operate in the State in
which the tree-planting program will operate;
and
(iii) a business as defined by the United
States Census Bureau's 2007 North American
Industry Classification System Code 561730.
(f) Technical Advisory Committees.--
(1) Description.--In order to qualify for assistance under
this section, the retail power provider shall establish and
consult with a local technical advisory committee which shall
provide advice and consultation to the program, and may--
(A) design and adopt an approved plant list that
emphasizes the use of hardy, noninvasive tree species
and, where geographically appropriate, the use of
native, or site-adapted, or low water-use shade trees;
(B) design and adopt planting, installation, and
maintenance specifications and create a process for
inspection and quality control;
(C) ensure that tree recipients are educated to care
for and maintain their trees over the long term;
(D) help the public become more engaged and educated
in the planting and care of shade trees;
(E) prioritize which sites receive trees, giving
preference to locations with the most potential for
energy conservation and secondary preference to areas
where the average annual income is below the regional
median; and
(F) assist with monitoring and collection of data on
tree health, tree survival, and energy conservation
benefits generated under this section.
(2) Compensation.--Individuals serving on local technical
advisory committees shall not receive compensation for their
service.
(3) Composition.--Local technical advisory committees shall
be composed of representatives from public, private, and
nongovernmental agencies with expertise in demand-side energy
efficiency management, urban forestry, or arboriculture, and
shall be composed of the following:
(A) Up to 4 persons, but no less than one person,
representing the retail power provider receiving
assistance under this section.
(B) Up to 4 persons, but no less than one person,
representing the local tree-planting organization which
will partner with the retail power provider to carry
out this section.
(C) Up to 3 persons representing local nonprofit
conservation or environmental organizations. Preference
shall be given to those entities which are organized
under section 501(c)(3) of the Internal Revenue Code of
1986, and which have demonstrated expertise engaging
the public in energy conservation, energy efficiency,
or green building practices or a combination thereof,
such that no single organization is represented by more
than one individual under this paragraph.
(D) Up to 2 persons representing a local affordable
housing agency, affordable housing builder, or
community development corporation.
(E) Up to 3, but no less than one, persons
representing local city or county government for each
municipality where a shade tree-planting program will
take place; at least one of these representatives shall
be the city or county forester, city or county
arborist, or functional equivalent.
(F) Up to one person representing the local
government agency responsible for management of roads,
sewers, and infrastructure, including but not limited
to public works departments, transportation agencies,
or equivalents.
(G) Up to 3 persons representing the nursery and
landscaping industry.
(H) Up to 3 persons representing the research
community or academia with expertise in natural
resources or energy management issues.
(4) Chairperson.--Each local technical advisory committee
shall elect a chairperson to preside over Committee meetings,
act as a liaison to governmental and other outside entities,
and direct the general operation of the committee; only
committee representatives from paragraph (3)(A) or paragraph
(3)(B) of this subsection shall be eligible to act as local
technical advisory committee chairpersons.
(5) Credentials.--At least one of the members of each local
technical advisory committee shall be certified with one or
more of the following credentials: International Society of
Arboriculture; Certified Arborist, ISA; Certified Arborist
Municipal Specialist, ISA; Certified Arborist Utility
Specialist, ISA; Board Certified Master Arborist; or Registered
Landscape Architect recommended by the American Society of
Landscape Architects.
(g) Cost-Share Program.--
(1) Federal share.--The Federal share of support for projects
funded under this section shall not exceed 50 percent of the
cost of such project and shall be provided on a matching basis.
(2) Non-federal share.--The non-Federal share of such costs
may be paid or contributed by any governmental or
nongovernmental entity other than from funds derived directly
or indirectly from an agency or instrumentality of the United
States.
(h) Rulemaking.--
(1) Rulemaking period.--The Secretary shall be authorized to
solicit comments and initiate a rulemaking period that shall
last no more than 6 months after the date of enactment of this
section.
(2) Competitive grant rule.--At the conclusion of the
rulemaking period under paragraph (1), the Secretary shall
promulgate a rule governing a public, competitive grants
process through which retail power providers may apply for
Federal support under this section.
(i) Nonduplicity.--Nothing in this section shall be construed to
supersede, duplicate, cancel, or negate the programs or authorities
provided under section 9 of the Cooperative Forestry Assistance Act of
1978 (92 Stat. 369; Public Law 95-313; 16 U.S.C. 2105).
(j) Authorization of Appropriations.--There are hereby authorized to
be appropriated such sums as may be necessary for the implementation of
this section.
SEC. 206. ENERGY EFFICIENCY FOR DATA CENTER BUILDINGS.
Section 453(c)(1) of the Energy Independence and Security Act of 2007
(42 U.S.C. 17112(c)(1)) is amended by inserting ``but not later than 2
years after the date of enactment of this Act'' after ``described in
subsection (b)''.
Subtitle B--Lighting and Appliance Energy Efficiency Programs
SEC. 211. LIGHTING EFFICIENCY STANDARDS.
(a) Outdoor Lighting.--
(1) Definitions.--
(A) Section 340(1) of the Energy Policy and
Conservation Act (42 U.S.C. 6311(1)) is amended by
striking subparagraph (L) and inserting the following:
``(L) Outdoor luminaires.
``(M) Outdoor high light output lamps.
``(N) Any other type of industrial equipment which
the Secretary classifies as covered equipment under
section 341(b).''.
(B) Section 340 of the Energy Policy and Conservation
Act (42 U.S.C. 6311) is amended as adding at the end
the following:
``(25) The term `luminaire' means a complete lighting unit
consisting of one or more light sources and ballast(s),
together with parts designed to distribute the light, to
position and protect such lamps, and to connect such light
sources to the power supply.
``(26) The term `outdoor luminaire' means a luminaire that is
listed as suitable for wet locations pursuant to Underwriters
Laboratories Inc. standard UL 1598 and is labeled as `Suitable
for Wet Locations' consistent with section 410.4(A) of the
National Electrical Code 2005, or is designed for roadway
illumination and meets the requirements of Addendum A for IESNA
TM-15-07: Backlight, Uplight, and Glare (BUG) Ratings, except
for--
``(A) luminaires designed for outdoor video display
images that cannot be used in general lighting
applications;
``(B) portable luminaires designed for use at
construction sites;
``(C) luminaires designed for continuous immersion in
swimming pools and other water features;
``(D) seasonal luminaires incorporating solely
individual lamps rated at 10 watts or less;
``(E) luminaires designed to be used in emergency
conditions that incorporate a means of charging a
battery and a device to switch the power supply to
emergency lighting loads automatically upon failure of
the normal power supply;
``(F) components used for repair of installed
luminaries and that meet the requirements of section
342(h);
``(G) a luminaire utilizing an electrode-less
fluorescent lamp as the light source;
``(H) decorative gas lighting systems;
``(I) luminaires designed explicitly for lighting for
theatrical purposes, including performance, stage, film
production, and video production;
``(J) luminaires designed as theme elements in theme/
amusement parks and that cannot be used in most general
lighting applications;
``(K) luminaires designed explicitly for vehicular
roadway tunnels designed to comply with ANSI/IESNA RP-
22-05;
``(L) luminaires designed explicitly for hazardous
locations meeting UL Standard 844;
``(M) searchlights;
``(N) luminaires that are designed to be recessed
into a building, and that cannot be used in most
general lighting applications;
``(O) a luminaire rated only for residential
applications utilizing a light source or sources
regulated under the amendments made by section 321 of
the Energy Independence and Security Act of 2007 and
with a light output no greater than 2,600 lumens;
``(P) a residential pole-mounted luminaire that is
not rated for commercial use utilizing a light source
or sources meeting the efficiency requirements of
section 231 of the Energy Independence and Security Act
of 2007 and mounted on a post or pole not taller than
10.5 feet above ground and with a light output not
greater than 2,600 lumens;
``(Q) a residential fixture with E12 (Candelabra)
bases that is rated for not more than 300 watts total;
or
``(R) a residential fixture with medium screw bases
that is rated for not more than 145 watts.
``(27) The term `outdoor high light outputlamp' means a lamp
that--
``(A) has a rated lumen output not less than 2601
lumens;
``(B) is capable of being operated at a voltage not
less than 110 volts and not greater than 300 volts, or
driven at a constant current of 6.6 amperes;
``(C) is not a Parabolic Aluminized Reflector lamp;
and
``(D) is not a J-type double-ended (T-3) halogen
quartz lamp, utilizing R-7S bases, that is manufactured
before January 1, 2015.
``(28) The term `outdoor lighting control' means a device
incorporated in a luminaire that receives a signal, from either
a sensor (such as an occupancy sensor, motion sensor, or
daylight sensor) or an input signal (including analog or
digital signals communicated through wired or wireless
technology), and can adjust the light level according to the
signal.''.
(2) Standards.-- Section 342 of the Energy Policy and
Conservation Act (42 U.S.C. 6313) is amended by adding at the
end the following:
``(g) Outdoor Luminaires.--
``(1) Each outdoor luminaire manufactured on or after January
1, 2011, shall--
``(A) have an initial luminaire efficacy of at least
50 lumens per watt; and
``(B) be designed to use a light source with a lumen
maintenance, calculated as mean rated lumens divided by
initial lumens, of at least 0.6.
``(2) Each outdoor luminaire manufactured on or after January
1, 2013, shall--
``(A) have an initial luminaire efficacy of at least
70 lumens per watt; and
``(B) be designed to use a light source with a lumen
maintenance, calculated as mean rated lumens divided by
initial lumens, of at least 0.6.
``(3) Each outdoor luminaire manufactured on or after January
1, 2015, shall--
``(A) have an initial luminaire efficacy of at least
80 lumens per watt; and
``(B) be designed to use a light source with a lumen
maintenance, calculated as mean rated lumens divided by
initial lumens, of at least 0.65.
``(4) In addition to the requirements of paragraphs (1)
through (3), each outdoor luminaire manufactured on or after
January 1, 2011, shall have the capability of producing at
least two different light levels, including 100 percent and 60
percent of full lamp output as tested with the maximum rated
lamp per UL1598 or the manufacturer's maximum specified for the
luminaire under test.
``(5)(A) Not later than January 1, 2017, the Secretary shall
issue a final rule amending the applicable standards
established in paragraphs (3) and (4) if technologically
feasible and economically justified.
``(B) A final rule issued under subparagraph (A) shall
establish efficiency standards at the maximum level that is
technically feasible and economically justified, as provided in
subsections (o) and (p) of section 325. The Secretary may also,
in such rulemaking, amend or discontinue the product exclusions
listed in section 340(26)(A) through (P), or amend the lumen
maintenance requirements in paragraph (3) if the Secretary
determines that such amendments are consistent with the
purposes of this Act.
``(C) If the Secretary issues a final rule under subparagraph
(A) establishing amended standards, the final rule shall
provide that the amended standards apply to products
manufactured on or after January 1, 2020, or one year after the
date on which the final amended standard is published,
whichever is later.
``(h) Outdoor High Light Output Lamps.--Each outdoor high light
output lamp manufactured on or after January 1, 2012, shall have a
lighting efficiency of at least 45 lumens per watt.''.
(3) Test procedures.-- Section 343(a) of the Energy Policy
and Conservation Act (42 U.S.C. 6314(a)) is amended by adding
at the end the following:
``(10) Outdoor lighting.--
``(A) With respect to outdoor luminaires and outdoor
high light output lamps, the test procedures shall be
based upon the test procedures specified in
illuminating engineering society procedures LM-79 as of
March 1, 2009, and LM-31, and/or other appropriate
consensus test procedures developed by the Illuminating
Engineering Society or other appropriate consensus
standards bodies.
``(B) If illuminating engineering society procedure
LM--79 is amended, the Secretary shall amend the test
procedures established in subparagraph (A) as necessary
to be consistent with the amended LM-79 test procedure,
unless the Secretary determines, by rule, published in
the Federal Register and supported by clear and
convincing evidence, that to do so would not meet the
requirements for test procedures under paragraph (2).
``(C) The Secretary may revise the test procedures
for outdoor luminaires or outdoor high light output
lamps by rule consistent with paragraph (2), and may
incorporate as appropriate consensus test procedures
developed by the Illuminating Engineering Society or
other appropriate consensus standards bodies.''.
(4) Preemption.-- Section 345 of the Energy Policy and
Conservation Act (42 U.S.C. 6316) is amended by adding at the
end the following:
``(i)(1) Except as provided in paragraph (2), section 327 shall apply
to outdoor luminaires to the same extent and in the same manner as the
section applies under part B.
``(2) Any State standard that is adopted on or before January 1,
2015, pursuant to a statutory requirement to adopt efficiency standards
for reducing outdoor lighting energy use enacted prior to January 31,
2008, shall not be preempted.''.
(5) Energy efficiency standards for certain luminaires.--Not
later than 1 year after the date of enactment of this Act, the
Secretary of Energy shall, in consultation with the National
Electrical Manufacturers Association, collect data for United
States sales of luminaires described in section 340(26)(H) and
(M) of the Energy Policy and Conservation Act, to determine the
historical growth rate. If the Secretary finds that the growth
in market share of such luminaires exceeds twice the year to
year rate of the average of the previous three years, then the
Secretary shall within 12 months initiate a rulemaking to
determine if such exclusion should be eliminated, if substitute
products exist that perform more efficiently and fulfill the
performance functions of these luminaires.
(b) Portable Lighting.--
(1) Portable light fixtures.--
(A) Definitions.--Section 321 of the Energy Policy
and Conservation Act (42 U.S.C. 6291) is amended by
adding at the end the following:
``(67) Art work light fixture.--The term `art work light
fixture' means a light fixture designed only to be mounted
directly to an art work and for the purpose of illuminating
that art work.
``(68) LED light engine.--The term `LED light engine' or `LED
light engine with integral heat sink' means a subsystem of an
LED light fixture that--
``(A) includes 1 or more LED components, including--
``(i) an LED driver power source with
electrical and mechanical interfaces; and
``(ii) an integral heat sink to provide
thermal dissipation; and
``(B) may be designed to accept additional components
that provide aesthetic, optical, and environmental
control.
``(69) LED light fixture.--The term `LED light fixture' means
a complete lighting unit consisting of--
``(A) an LED light source with 1 or more LED lamps or
LED light engines; and
``(B) parts--
``(i) to distribute the light;
``(ii) to position and protect the light
source; and
``(iii) to connect the light source to
electrical power.
``(70) Light fixture.--The term `light fixture' means a
product designed to provide light that includes--
``(A) at least 1 lamp socket; and
``(B) parts--
``(i) to distribute the light;
``(ii) position and protect 1 or more lamps;
and
``(iii) to connect 1 or more lamps to a power
supply.
``(71) Portable light fixture.--
``(A) In general.--The term `portable light fixture'
means a light fixture that has a flexible cord and an
attachment plug for connection to a nominal 120-volt
circuit that--
``(i) allows the user to relocate the product
without any rewiring; and
``(ii) typically can be controlled with a
switch located on the product or the power cord
of the product.
``(B) Exclusions.--The term `portable light fixture'
does not include--
``(i) direct plug-in night lights, sun or
heat lamps, medical or dental lights, portable
electric hand lamps, signs or commercial
advertising displays, photographic lamps,
germicidal lamps, or light fixtures for marine
use or for use in hazardous locations (as those
terms are defined in ANSI/NFPA 70 of the
National Electrical Code); or
``(ii) decorative lighting strings,
decorative lighting outfits, or electric
candles or candelabra without lamp shades that
are covered by Underwriter Laboratories (UL)
standard 588, `Seasonal and Holiday Decorative
Products'.''.
(B) Coverage.--
(i) In general.--Section 322(a) of the Energy
Policy and Conservation Act (42 U.S.C. 6292(a))
is amended--
(I) by redesignating paragraph (20)
as paragraph (24); and
(II) by inserting after paragraph
(19) the following:
``(20) Portable light fixtures.''.
(ii) Conforming amendments.--Section 325(l)
of the Energy Policy and Conservation Act (42
U.S.C. 6295(l)) is amended by striking
``paragraph (19)'' each place it appears in
paragraphs (1) and (2) and inserting
``paragraph (24)''.
(C) Test procedures.--Section 323(b) of the Energy
Policy and Conservation Act (42 U.S.C. 6293(b)) is
amended by adding at the end the following:
``(19) LED fixtures and led light engines.--Test procedures
for LED fixtures and LED light engines shall be based on
Illuminating Engineering Society of North America (IESNA) test
procedure LM-79, Approved Method for Electrical and Photometric
Testing of Solid-State Lighting Devices, and IESNA-approved
test procedure for testing LED light engines.''.
(D) Standards.--Section 325 of the Energy Policy and
Conservation Act (42 U.S.C. 6295) is amended--
(i) by redesignating subsection (ii) as
subsection (oo);
(ii) in subsection (oo)(2), as redesignated
in clause (i) of this subparagraph, by striking
``(hh)'' each place it appears and inserting
``(mm)''; and
(iii) by inserting after subsection (hh) the
following:
``(ii) Portable Light Fixtures.--
``(1) In general.--Subject to paragraphs (2) and (3),
portable light fixtures manufactured on or after January 1,
2012, shall meet 1 or more of the following requirements:
``(A) Be a fluorescent light fixture that meets the
requirements of the Energy Star Program for Residential
Light Fixtures, Version 4.2.
``(B) Be equipped with only 1 or more GU-24 line-
voltage sockets, not be rated for use with incandescent
lamps of any type (as defined in ANSI standards), and
meet the requirements of version 4.2 of the Energy Star
program for residential light fixtures.
``(C) Be an LED light fixture or a light fixture with
an LED light engine and comply with the following
minimum requirements:
``(i) Minimum light output: 200 lumens
(initial).
``(ii) Minimum LED light engine efficacy: 40
lumens/watt installed in fixtures that meet the
minimum light fixture efficacy of 29 lumens/
watt or, alternatively, a minimum LED light
engine efficacy of 60 lumens/watt for fixtures
that do not meet the minimum light fixture
efficacy of 29 lumens/watt.
``(iii) All portable fixtures shall have a
minimum LED light fixture efficacy of 29
lumens/watt and a minimum LED light engine
efficacy of 60 lumens/watt by January 1, 2016.
``(iv) Color Correlated Temperature (CCT):
2700K through 4000K.
``(v) Minimum Color Rendering Index (CRI):
75.
``(vi) Power factor equal to or greater than
0.70.
``(vii) Portable luminaries that have
internal power supplies shall have zero standby
power when the luminaire is turned off.
``(viii) LED light sources shall deliver at
least 70 percent of initial lumens for at least
25,000 hours.
``(D)(i) Be equipped with an ANSI-designated E12,
E17, or E26 screw-based socket and be prepackaged and
sold together with 1 screw-based compact fluorescent
lamp or screw-based LED lamp for each screw-based
socket on the portable light fixture.
``(ii) The compact fluorescent or LED lamps
prepackaged with the light fixture shall be fully
compatible with any light fixture controls incorporated
into the light fixture (for example, light fixtures
with dimmers shall be packed with dimmable lamps).
``(iii) Compact fluorescent lamps prepackaged with
light fixtures shall meet the requirements of the
Energy Star Program for CFLs Version 4.0.
``(iv) Screw-based LED lamps shall comply with the
minimum requirements described in subparagraph (C).
``(E) Be equipped with 1 or more single-ended, non-
screw based halogen lamp sockets (line or low voltage),
a dimmer control or high-low control, and be rated for
a maximum of 100 watts.
``(2) Review.--
``(A) Review.--The Secretary shall review the
criteria and standards established under paragraph (1)
to determine if revised standards are technologically
feasible and economically justified.
``(B) Components.--The review shall include
consideration of--
``(i) whether a separate compliance procedure
is still needed for halogen fixtures described
in subparagraph (E) and, if necessary, what an
appropriate standard for halogen fixtures shall
be;
``(ii) whether the specific technical
criteria described in subparagraphs (A), (C),
and (D)(iii) should be modified; and
``(iii) which fixtures should be exempted
from the light fixture efficacy standard as of
January 1, 2016, because the fixtures are
primarily decorative in nature (as defined by
the Secretary) and, even if exempted, are
likely to be sold in limited quantities.
``(C) Timing.--
``(i) Determination.--Not later than January
1, 2014, the Secretary shall publish amended
standards, or a determination that no amended
standards are justified, under this subsection.
``(ii) Standards.--Any standards under this
paragraph shall take effect on January 1, 2016.
``(3) Art work light fixtures.--Art work light fixtures
manufactured on or after January 1, 2012, shall--
``(A) comply with paragraph (1); or
``(B)(i) contain only ANSI-designated E12 screw-based
line-voltage sockets;
``(ii) have not more than 3 sockets;
``(iii) be controlled with an integral high/low
switch;
``(iv) be rated for not more than 25 watts if fitted
with 1 socket; and
``(v) be rated for not more than 15 watts per socket
if fitted with 2 or 3 sockets.
``(4) Exception from preemption.--Notwithstanding section
327, Federal preemption shall not apply to a regulation
concerning portable light fixtures adopted by the California
Energy Commission on or before January 1, 2014.''.
(2) GU-24 base lamps.--
(A) Definitions.--Section 321 of the Energy Policy
and Conservation Act (42 U.S.C. 6291) (as amended by
paragraph (1)(A)) is amended by adding at the end the
following:
``(72) GU-24.--The term `GU-24' means the designation of a
lamp socket, based on a coding system by the International
Electrotechnical Commission, under which--
``(A) `G' indicates a holder and socket type with 2
or more projecting contacts, such as pins or posts;
``(B) `U' distinguishes between lamp and holder
designs of similar type that are not interchangeable
due to electrical or mechanical requirements; and
``(C) 24 indicates the distance in millimeters
between the electrical contact posts.
``(73) GU-24 adaptor.--
``(A) In general.--The term `GU-24 Adaptor' means a
1-piece device, pig-tail, wiring harness, or other such
socket or base attachment that--
``(i) connects to a GU-24 socket on 1 end and
provides a different type of socket or
connection on the other end; and
``(ii) does not alter the voltage.
``(B) Exclusion.--The term `GU-24 Adaptor' does not
include a fluorescent ballast with a GU-24 base.
``(74) GU-24 base lamp.--`GU-24 base lamp' means a light bulb
designed to fit in a GU-24 socket.''.
(B) Standards.--Section 325 of the Energy Policy and
Conservation Act (42 U.S.C. 6295) (as amended by
paragraph (1)(D)) is amended by inserting after
subsection (ii) the following:
``(jj) GU-24 Base Lamps.--
``(1) In general.--A GU-24 base lamp shall not be an
incandescent lamp as defined by ANSI.
``(2) GU-24 adaptors.--GU-24 adaptors shall not adapt a GU-24
socket to any other line voltage socket.''.
(3) Standards for certain incandescent reflector lamps.--
Section 325(i) of the Energy Policy and Conservation Act (42
U.S.C. 6295(i)), as amended by section 161(a)(12) of this Act,
is amended by adding at the end the following:
``(9) Certain incandescent reflector lamps.--(A) No later
than 12 months after enactment of this paragraph, the Secretary
shall publish a final rule establishing standards for
incandescent reflector lamp types described in paragraph
(1)(D). Such standards shall be effective on July 1, 2013.
``(B) Any rulemaking for incandescent reflector lamps
completed after enactment of this section shall consider
standards for all incandescent reflector lamps, inclusive of
those specified in paragraph (1)(C).
``(10) Reflector lamps.--No later than January 1, 2015, the
Secretary shall publish a final rule establishing and amending
standards for reflector lamps, including incandescent reflector
lamps. Such standards shall be effective no sooner than three
years after publication of the final rule. Such rulemaking
shall consider incandescent and nonincandescent technologies.
Such rulemaking shall consider a new metric other than lumens-
per-watt based on the photometric distribution of light from
such lamps.''.
SEC. 212. OTHER APPLIANCE EFFICIENCY STANDARDS.
(a) Standards for Water Dispensers, Hot Food Holding Cabinets, and
Portable Electric Spas.--
(1) Definitions.--Section 321 of the Energy Policy and
Conservation Act (42 U.S.C. 6291), as amended by section 211 of
this Act, is further amended by adding at the end the
following:
``(75) The term `water dispenser' means a factory-made
assembly that mechanically cools and heats potable water and
that dispenses the cooled or heated water by integral or remote
means.
``(76) The term `bottle-type water dispenser' means a
drinking water dispenser designed for dispensing both hot and
cold water that uses a removable bottle or container as the
source of potable water.
``(77) The term `commercial hot food holding cabinet' means a
heated, fully-enclosed compartment with one or more solid or
glass doors that is designed to maintain the temperature of hot
food that has been cooked in a separate appliance. Such term
does not include heated glass merchandizing cabinets, drawer
warmers, commercial hot food holding cabinets with interior
volumes of less than 8 cubic feet, or cook-and-hold appliances.
``(78) The term `portable electric spa' means a factory-built
electric spa or hot tub, supplied with equipment for heating
and circulating water.''.
(2) Coverage.--Section 322(a) of the Energy Policy and
Conservation Act (42 U.S.C. 6292(a)), as amended by section
211(b)(1)(B) of this Act, is further amended by inserting after
paragraph (20) the following new paragraphs:
``(21) Bottle type water dispensers.
``(22) Commercial hot food holding cabinets.
``(23) Portable electric spas.''.
(3) Test procedures.--Section 323(b) of the Energy Policy and
Conservation Act (42 U.S.C. 6293(b)), as amended by section
211(b)(1)(C) of this Act, is further amended by adding at the
end the following:
``(20) Bottle type water dispensers.--Test procedures for
bottle type water dispensers shall be based on `Energy Star
Program Requirements for Bottled Water Coolers version 1.1'
published by the Environmental Protection Agency. Units with an
integral, automatic timer shall not be tested using section 4D,
`Timer Usage,' of the test criteria.
``(21) Commercial hot food holding cabinets.--Test procedures
for commercial hot food holding cabinets shall be based on the
test procedures described in ANSI/ASTM F2140-01 (Test for idle
energy rate-dry test). Interior volume shall be based on the
method shown in the Environmental Protection Agency's `Energy
Star Program Requirements for Commercial Hot Food Holding
Cabinets' as in effect on August 15, 2003.
``(22) Portable electric spas.--Test procedures for portable
electric spas shall be based on the test method for portable
electric spas contained in section 1604, title 20, California
Code of Regulations as amended on December 3, 2008. When the
American National Standards Institute publishes a test
procedure for portable electric spas, the Secretary shall
revise the Department of Energy's procedure.''.
(4) Standards.--Section 325 of the Energy Policy and
Conservation Act (42 U.S.C. 6295), as amended by section 211 of
this Act, is further amended by adding after subsection (jj)
the following:
``(kk) Bottle Type Water Dispensers.--Effective January 1, 2012,
bottle-type water dispensers designed for dispensing both hot and cold
water shall not have standby energy consumption greater than 1.2
kilowatt-hours per day.
``(ll) Commercial Hot Food Holding Cabinets.--Effective January 1,
2012, commercial hot food holding cabinets with interior volumes of 8
cubic feet or greater shall have a maximum idle energy rate of 40 watts
per cubic foot of interior volume.
``(mm) Portable Electric Spas.--Effective January 1, 2012, portable
electric spas shall not have a normalized standby power greater than
5(V\2/3\) Watts where V=the fill volume in gallons.
``(nn) Revisions.--The Secretary of Energy shall consider revisions
to the standards in subsections (kk), (ll), and (mm) in accordance with
subsection (o) and publish a final rule no later than January 1, 2013
establishing such revised standards, or make a finding that no
revisions are technically feasible and economically justified. Any such
revised standards shall take effect January 1, 2016.''.
(b) Commercial Furnace Efficiency Standards.--Section 342(a) of the
Energy Policy and Conservation Act (42 U.S.C. 6312(a)) is amended by
inserting after paragraph (10) the following new paragraph:
``(11) Warm air furnaces.--Each warm air furnace with an
input rating of 225,000 Btu per hour or more and manufactured
after January 1, 2011, shall meet the following standard
levels:
``(A) Gas-fired units.--
``(i) Minimum thermal efficiency of 80
percent.
``(ii) Include an interrupted or intermittent
ignition device.
``(iii) Have jacket losses not exceeding 0.75
percent of the input rating.
``(iv) Have either power venting or a flue
damper.
``(B) Oil-fired units.--
``(i) Minimum thermal efficiency of 81
percent.
``(ii) Have jacket losses not exceeding 0.75
percent of the input rating.
``(iii) Have either power venting or a flue
damper.''.
SEC. 213. APPLIANCE EFFICIENCY DETERMINATIONS AND PROCEDURES.
(a) Definition of Energy Conservation Standard.--Section 321(6) of
the Energy Policy and Conservation Act (42 U.S.C. 6291(6)) is amended
to read as follows:
``(6) Energy conservation standard.--
``(A) In general.--The term `energy conservation
standard' means 1 or more performance standards that--
``(i) for covered products (excluding clothes
washers, dishwashers, showerheads, faucets,
water closets, and urinals), prescribe a
minimum level of energy efficiency or a maximum
quantity of energy use, determined in
accordance with test procedures prescribed
under section 323;
``(ii) for showerheads, faucets, water
closets, and urinals, prescribe a minimum level
of water efficiency or a maximum quantity of
water use, determined in accordance with test
procedures prescribed under section 323; and
``(iii) for clothes washers and dishwashers--
``(I) prescribe a minimum level of
energy efficiency or a maximum quantity
of energy use, determined in accordance
with test procedures prescribed under
section 323; and
``(II) may include a minimum level of
water efficiency or a maximum quantity
of water use, determined in accordance
with those test procedures.
``(B) Inclusions.--The term `energy conservation
standard' includes--
``(i) 1 or more design requirements, if the
requirements were established--
``(I) on or before the date of
enactment of this subclause;
``(II) as part of a direct final rule
under section 325(p)(4); or
``(III) as part of a final rule
published on or after January 1, 2012,
and
``(ii) any other requirements that the
Secretary may prescribe under section 325(r).
``(C) Exclusion.--The term `energy conservation
standard' does not include a performance standard for a
component of a finished covered product, unless
regulation of the component is specifically authorized
or established pursuant to this title.''.
(b) Adopting Consensus Test Procedures and Test Procedures in Use
Elsewhere.--Section 323(b) of the Energy Policy and Conservation Act
(42 U.S.C. 6293(b)), as amended by sections 211 and 212 of this Act, is
further amended by adding the following new paragraph after paragraph
(22):
``(23) Consensus and alternate test procedures.--
``(A) Receipt of joint recommendation or alternate
testing procedure.--On receipt of--
``(i) a statement that is submitted jointly
by interested persons that are fairly
representative of relevant points of view
(including representatives of manufacturers of
covered products, States, and efficiency
advocates), as determined by the Secretary, and
contains recommendations with respect to the
testing procedure for a covered product; or
``(ii) a submission of a testing procedure
currently in use for a covered product by a
State, nation, or group of nations--
``(I) if the Secretary determines
that the recommended testing procedure
contained in the statement or
submission is in accordance with
subsection (b)(3), the Secretary may
issue a final rule that establishes an
energy or water conservation testing
procedure that is published
simultaneously with a notice of
proposed rulemaking that proposes a new
or amended energy or water conservation
testing procedure that is identical to
the testing procedure established in
the final rule to establish the
recommended testing procedure (referred
to in this paragraph as a `direct final
rule'); or
``(II) if the Secretary determines
that a direct final rule cannot be
issued based on the statement or
submission, the Secretary shall publish
a notice of the determination, together
with an explanation of the reasons for
the determination.
``(B) Public comment.--The Secretary shall solicit
public comment for a period of at least 110 days with
respect to each direct final rule issued by the
Secretary under subparagraph (A)(ii)(I).
``(C) Withdrawal of direct final rules.--
``(i) In general.--Not later than 120 days
after the date on which a direct final rule
issued under subparagraph (A)(ii)(I) is
published in the Federal Register, the
Secretary shall withdraw the direct final rule
if--
``(I) the Secretary receives 1 or
more adverse public comments relating
to the direct final rule under
subparagraph (B)or any alternative
joint recommendation; and
``(II) based on the rulemaking record
relating to the direct final rule, the
Secretary determines that such adverse
public comments or alternative joint
recommendation may provide a reasonable
basis for withdrawing the direct final
rule under paragraph (3) or any other
applicable law.
``(ii) Action on withdrawal.--On withdrawal
of a direct final rule under clause (i), the
Secretary shall--
``(I) proceed with the notice of
proposed rulemaking published
simultaneously with the direct final
rule as described in subparagraph
(A)(ii)(I); and
``(II) publish in the Federal
Register the reasons why the direct
final rule was withdrawn.
``(iii) Treatment of withdrawn direct final
rules.--A direct final rule that is withdrawn
under clause (i) shall not be considered to be
a final rule for purposes of subsection (b).
``(D) Effect of paragraph.--Nothing in this paragraph
authorizes the Secretary to issue a direct final rule
based solely on receipt of more than 1 statement
containing recommended test procedures relating to the
direct final rule.''.
(c) Updating Television Test Methods.--Section 323(b) of the Energy
Policy and Conservation Act (42 U.S.C. 6293(b)), as amended by sections
211 and 212 of this Act, and subsection (b) of this section, is further
amended by adding at the end the following new paragraph:
``(24) Televisions.--(A) On the date of enactment of this
paragraph, Appendix H to Subpart B of Part 430 of the United
States Code of Federal Regulations, `Uniform Test Method for
Measuring the Energy Consumption of Television Sets', is
repealed.
``(B) No later than 12 months after the date of enactment of
this paragraph the Secretary shall publish in the Federal
Register a final rule prescribing a new test method for
televisions.''.
(d) Criteria for Prescribing New or Amended Standards.--(1) Section
325(o)(2)(B)(i) of the Energy Policy and Conservation Act (42 U.S.C.
6295(o)(2)(B)(i)) is amended as follows:
(A) By striking ``and'' at the end of subclause (VI).
(B) By redesignating subclause (VII) as subclause (XI).
(C) By inserting the following new subclauses after subclause
(VI):
``(VII) the estimated value of the carbon dioxide and other
emission reductions that will be achieved by virtue of the
higher energy efficiency of the covered products resulting from
the imposition of the standard;
``(VIII) the estimated impact of standards for a particular
product on average consumer energy prices;
``(IX) the increased energy efficiency that may be
attributable to the installation of Smart Grid technologies or
capabilities in the covered products, if applicable in the
determination of the Secretary;
``(X) the availability in the United States or in other
nations of examples or prototypes of covered products that
achieve significantly higher efficiency standards for energy or
for water; and''.
(2) Section 325(o)(2)(B)(iii) of such Act is amended as follows:
(A) By striking ``three'' and inserting ``5''.
(B) By inserting after the first sentence the following ``For
products with an average expected useful life of less than 5
years, such rebuttable presumption shall be determined
utilizing 75 percent of the product's average expected useful
life as a multiplier instead of 5.''.
(C) By striking the last sentence and inserting the
following: ``Such a presumption may be rebutted only if the
Secretary finds, based on clear, convincing, and reliable
evidence, that--
``(I) such standard level would cause serious and unavoidable
hardship to the average consumer of the product, or to
manufacturers supplying a significant portion of the market for
the product, that substantially outweighs the standard level's
benefits;
``(II) the standard and implementing regulations cannot be
designed to avoid or mitigate the hardship identified under
subclause (I), through the adoption of regional standards
consistent with paragraph (6) of this subsection, or other
reasonable means consistent with this part;
``(III) the same or substantially similar hardship would not
occur under a standard adopted in the absence of the
presumption, but that otherwise meets the requirements of this
section; and
``(IV) the hardship cannot be avoided or mitigated pursuant
the procedures specified in section 504 of the Department of
Energy Organization Act (42 U.S.C. 7194).
A determination by the Secretary that the criteria triggering such
presumption are not met, or that the criterion for rebutting the
presumption are met shall not be taken into consideration in the
Secretary's determination of whether a standard is economically
justified.''.
(e) Obtaining Appliance Information From Manufacturers.--Section
326(d) of the Energy Policy and Conservation Act (42 U.S.C. 6295(d)) is
amended to read as follows:
``(d) Information Requirements.--(1) For purposes of carrying out
this part, the Secretary shall publish proposed regulations not later
than one year after the date of enactment of the American Clean Energy
and Security Act of 2009, and after receiving public comment, final
regulations not later than 18 months from such date of enactment under
this part or other provision of law administered by the Secretary,
which shall require each manufacturer of a covered product to submit
information or reports to the Secretary on an annual basis in a form
adopted by the Secretary. Such reports shall include information or
data with respect to--
``(A) the manufacturers' compliance with all requirements
applicable pursuant to this part;
``(B) the economic impact of any proposed energy conservation
standard;
``(C) the manufacturers' annual shipments of each class or
category of covered products, organized, to the maximum extent
practicable, by--
``(i) energy efficiency, energy use, and, if
applicable, water use;
``(ii) the presence or absence of such efficiency
related or energy consuming operational characteristics
or components as the Secretary determines are relevant
for the purposes of carrying out this part; and
``(iii) the State or regional location of sale, for
covered products for which the Secretary may adopt
regional standards; and
``(D) such other categories of information as the Secretary
deems relevant to carry out this part, including such other
information as may be necessary to establish and revise test
procedures, labeling rules, and energy conservation standards
and to insure compliance with the requirements of this part.
``(2) In adopting regulations under this subsection, the Secretary
shall consider existing public sources of information, including
nationally recognized certification programs of trade associations.
``(3) The Secretary shall exercise authority under this section in a
manner designed to minimize unnecessary burdens on manufacturers of
covered products.
``(4) To the extent that they do not conflict with the duties of the
Secretary in carrying out this part, the provisions of section 11(d) of
the Energy Supply and Environmental Coordination Act of 1974 (15 U.S.C.
796(d)) shall apply with respect to information obtained under this
subsection to the same extent and in the same manner as they apply with
respect to other energy information obtained under such section.''.
(f) State Waiver.--Section 327(c) of the Energy Policy and
Conservation Act (42 U.S.C. 6297(c)), as amended by section 161(a)(19)
of this Act, is further amended by adding at the end the following:
``(12) is a regulation concerning standards for hot food
holding cabinets, drinking water dispensers and portable
electric spas adopted by the California Energy Commission on or
before January 1, 2013.''.
(g) Waiver of Federal Preemption.--Paragraph (1) of section 327(d) of
the Energy Policy and Conservation Act (42 U.S.C. 6297(d)) is amended
as follows:
(1) In subparagraph (A) by striking ``State regulation'' each
place it appears and inserting ``State statute or regulation''.
(2) In subparagraph (B) by adding at the end the following
new sentence: ``In making such a finding, the Secretary may not
reject a petition for failure of the petitioning State or river
basin commission to produce confidential information maintained
by any manufacturer or distributor, or group or association of
manufacturers or distributors, and which the petitioning party
does not have the legal right to obtain.''.
(3) In clause (ii) of subparagraph (C) by striking ``costs''
each place it appears and inserting ``estimated costs''.
(4) In subparagraph (C) by striking ``within the context of
the State's energy plan and forecast, and,''.
(h) Inclusion of Carbon Output on Appliance ``Energyguide'' Labels.--
(1) Section 324(a)(2) of the Energy Policy and Conservation Act (42
U.S.C. 6294(a)(2)) is amended by adding the following at the end:
``(I)(i) Not later than 90 days after the date of enactment of this
subparagraph, the Commission shall initiate a rulemaking to implement
the additional labeling requirements specified in subsection (c)(1)(C)
of this section with an effective date for the revised labeling
requirement not later than 12 months from issuance of the final rule.
``(ii) Not later than 24 months after the date of enactment of this
subparagraph, the Commission shall complete the rulemaking initiated
under clause (i).
``(iii) Not later than 90 days after issuance of the final rule as
provided in this subparagraph, the Secretary shall issue calculation
methods required to effectuate the labeling requirements specified in
subsection (c)(1)(C) of this section.''.
(2) Section 324(c)(1) of the Energy Policy and Conservation Act (42
U.S.C. 6294(c)(1)) is amended--
(A) by striking ``and'' at the end of subparagraph (A);
(B) by striking the period at the end of subparagraph (B) and
inserting a semicolon; and
(C) by adding at the end the following new subparagraphs:
``(C) for products or groups of products providing a
comparable function (including the group of products comprising
the heating function of heat pumps and furnaces) among covered
products listed in paragraphs (3), (4), (5), (8), (9), (10),
and (11) of section 322(a) of this part, and others designated
by the Secretary, the estimated total annual atmospheric carbon
dioxide emissions (or their equivalent in other greenhouse
gases) associated with, or caused by, the product, calculated
utilizing--
``(i) national average energy use for the product
including energy consumed at the point of end use based
on test procedures developed under section 323 of this
part;
``(ii) national average energy consumed or lost in
the production, generation, transportation, storage,
and distribution of energy to the point of end use; and
``(iii) any direct emissions of greenhouse gases from
the product during normal use;
``(D) in determining the national average energy
consumption and total annual atmospheric carbon dioxide
emissions, the Secretary shall utilize Federal
Government sources, including the Energy Information
Administration Annual Energy Review, the Environmental
Protection Agency eGRID data base, Environmental
Protection Agency AP-42 Emission Factors as amended,
and other sources determined to be appropriate by the
Secretary; and
``(E) information presenting, for each product (or
group of products providing the comparable function)
identified in section (c)(1)(C) of this section, the
estimated annual carbon dioxide emissions calculated
within the range of emissions calculated for all models
of the product or group according to its function,
including those models consuming fuels and those models
not consuming fuels.''.
(i) Permitting States to Seek Injunctive Enforcement.--(1) Section
334 of the Energy Policy and Conservation Act (42 U.S.C. 6304) is
amended to read as follows:
``SEC. 334. JURISDICTION AND VENUE.
``(a) Jurisdiction.--The United States district courts shall have
jurisdiction to restrain--
``(1) any violation of section 332; and
``(2) any person from distributing in commerce any covered
product which does not comply with an applicable rule under
section 324 or 325.
``(b) Authority.--Any action referred to in subsection (a) shall be
brought by the Commission or by the attorney general of a State in the
name of the State, except that--
``(1) any such action to restrain any violation of section
332(a)(3) which relates to requirements prescribed by the
Secretary or any violation of section 332(a)(4) which relates
to request of the Secretary under section 326(b)(2) shall be
brought by the Secretary; and
``(2) any violation of section 332(a)(5) or 332(a)(7) shall
be brought by the Secretary or by the attorney general of a
State in the name of the State.
``(c) Venue and Service of Process.--Any such action may be brought
in the United States district court for a district wherein any act,
omission, or transaction constituting the violation occurred, or in
such court of the district wherein the defendant is found or transacts
business. In any action under this section, process may be served on a
defendant in any other district in which the defendant resides or may
be found.''.
(2) The item relating to section 334 in the table of contents for
such Act is amended to read as follows:
``Sec. 334. Jurisdiction and venue.''.
(j) Treatment of Appliances Within Building Codes.--(1) Section
327(f)(3) of the Energy Policy and Conservation Act (42 U.S.C.
6297(f)(3)) is amended by striking subparagraphs (B) through (G) and
inserting the following:
``(B) The code meets at least one of the following
requirements:
``(i) The code does not require that the covered
product have an energy efficiency exceeding--
``(I) the applicable energy conservation
standard established in or prescribed under
section 325;
``(II) the level required by a regulation of
that State for which the Secretary has issued a
rule granting a waiver under subsection (d) of
this section; or
``(III) the required level established in the
International Energy Conservation Code or in a
standard of the American Society of Heating,
Refrigerating and Air-Conditioning Engineers,
or by the Secretary pursuant to section 304 of
the Energy Conservation and Production Act.
``(ii) If the code uses one or more baseline building
designs against which all submitted building designs
are to be evaluated and such baseline building designs
contain a covered product subject to an energy
conservation standard established in or prescribed
under section 325, the baseline building designs are
based on an efficiency level for such covered product
which meets but does not exceed one of the levels
specified in clause (i).
``(iii) If the code sets forth one or more optional
combinations of items which meet the energy consumption
or conservation objective, in at least one combination
that the State has found to be reasonably achievable
using commercially available technologies the
efficiency of the covered product meets but does not
exceed one of the levels specified in clause (i).
``(C) The credit to the energy consumption or conservation
objective allowed by the code for installing covered products
having energy efficiencies exceeding one of the levels
specified in subparagraph (B)(i) is on a one-for-one equivalent
energy use or equivalent energy cost basis, taking into account
the typical lifetime of the product.
``(D) The energy consumption or conservation objective is
specified in terms of an estimated total consumption of energy
(which may be calculated from energy loss- or gain-based codes)
utilizing an equivalent amount of energy (which may be
specified in units of energy or its equivalent cost) and
equivalent lifetimes.
``(E) The estimated energy use of any covered product
permitted or required in the code, or used in calculating the
objective, is determined using the applicable test procedures
prescribed under section 323, except that the State may permit
the estimated energy use calculation to be adjusted to reflect
the conditions of the areas where the code is being applied if
such adjustment is based on the use of the applicable test
procedures prescribed under section 323 or other technically
accurate documented procedure.''.
(2) Section 327(f)(4)(B) of the Energy Policy and
Conservation Act (42 U.S.C. 6297(f)(4)(B)) is amended to read
as follows:
``(B) If a building code requires the installation of covered
products with efficiencies exceeding the levels and requirements
specified in paragraph (3)(B), such requirement of the building code
shall not be applicable unless the Secretary has granted a waiver for
such requirement under subsection (d) of this section.''.
SEC. 214. BEST-IN-CLASS APPLIANCES DEPLOYMENT PROGRAM.
(a) In General.--Not later than 1 year after the date of enactment of
this Act, the Secretary of Energy, in consultation with the
Administrator, shall establish a program to be known as the ``Best-in-
Class Appliances Deployment Program'' to--
(1) provide bonus payments to retailers or distributors under
subsection (c) for sales of best-in-class high-efficiency
household appliance models, high-efficiency installed building
equipment, and high-efficiency consumer electronics, with the
goal of reducing life-cycle costs for consumers, encouraging
innovation, and maximizing energy savings and public benefit;
(2) provide bounties under subsection (d) to retailers for
the replacement, retirement, and recycling of old, inefficient,
and environmentally harmful products; and
(3) provide premium awards under subsection (e) to
manufacturers for developing and producing new Superefficient
Best-in-Class Products.
(b) Designation of Best-in-Class Product Models.--
(1) In general.--The Secretary of Energy shall designate
product models of appliances, equipment, or electronics as
Best-in-Class Product models. The Secretary shall publicly
announce the Best-in-Class Product models designated under this
subsection. The Secretary shall define product classes broadly
and, except as provided in paragraph (2), shall designate as
Best-in-Class Product models no more than the most efficient 10
percent of the commercially available product models in a class
that demonstrate, as a group, a distinctly greater energy
efficiency than the average energy efficiency of that class of
appliances, equipment, or electronics. In designating models,
the Secretary shall--
(A) identify commercially available models in the
relevant class of products;
(B) identify the subgroup of those models that share
the distinctly higher energy-efficiency characteristics
that warrant designation as best-in-class; and
(C) add other models in that class to the list of
Best-in-Class Product models as they demonstrate their
ability to meet the higher-efficiency characteristics
on which the designation was made.
(2) Percentage exception.--If there are fewer than 10 product
models in a class of products, the Secretary may designate one
or more of such models as Best-in-Class Products.
(3) Review of best-in-class standards.--The Secretary shall
review annually the product-specific criteria for designating,
and the product models that qualify as, Best-in-Class Products
and, after notice and a 30-day comment period, make upwards
adjustments in the efficiency criteria as necessary to maintain
an appropriate ratio of such product models to the total number
of product models in the product class.
(c) Bonuses for Sales of Best-in-Class Products.--
(1) In general.--The Secretary of Energy shall make bonus
payments to retailers or, as provided in paragraph (5)(B),
distributors for the sale of Best-in-Class Products.
(2) Bonus program.--The Secretary shall--
(A) publicly announce the availability and amount of
the bonus to be paid for each sale of a Best-in-Class
Product of a model designated under subsection (b); and
(B) make bonus payments in at least that amount for
each Best-in-Class Product of that model sold during
the 3-year period beginning on the date the model is
designated under subsection (b).
(3) Upgrade of best-in-class product eligibility.--In
conducting a review under subsection (b)(3), the Secretary
shall--
(A) consider designating as a Best-in-Class Product
model a Superefficient Best-in-Class Product model that
has been designated pursuant to subsection (e);
(B) announce any change in the bonus payment as
necessary to increase the market share of Best-in-Class
Product models;
(C) list models that will be eligible for bonuses in
the new amount; and
(D) continue paying bonus payments at the original
level, for the sale of any models that previously
qualified as Best-in-Class Products but do not qualify
at the new level, for the remainder of the 3-year
period announced with the original designation.
(4) Size of individual bonus payments.--(A) The size of each
bonus payment under this subsection shall be the product of--
(i) an amount determined by the Secretary;
and
(ii) the difference in energy consumption
between the Best-in-Class Product and the
average product in the product class.
(B) The Secretary shall determine the amount under
subparagraph (A)(i) for each product type, in consultation with
State and utility efficiency program administrators as well as
the Administrator, based on estimates of the amount of bonus
payment that would provide significant incentive to increase
the market share of Best-in-Class Products.
(5) Eligible bonus recipient.--(A) The Secretary shall ensure
that not more than 1 bonus payment is provided under this
subsection for each Best-in-Class Product.
(B) The Secretary may make distributors eligible to receive
bonus payments under this subsection for sales that are not to
the final end-user, to the extent that the Secretary determines
that for a particular product category distributors are well
situated to increase sales of Best-in-Class Products.
(d) Bounties for Replacement, Retirement, and Recycling of Existing
Low-Efficiency Products.--
(1) In general.--The Secretary of Energy shall make bounty
payments to retailers for the replacement, retirement, and
recycling of older operating low-efficiency products that might
otherwise continue in operation.
(2) Bounties.--Bounties shall be payable upon documentation
that the sale of a Best-in-Class Product was accompanied by the
replacement, retirement, and recycling of--
(A) an inefficient but still-functioning product; or
(B) a nonfunctioning product containing a
refrigerant,
by the consumer to whom the Best-in-Class Product was sold.
(3) Amount.--
(A) Functioning products.--The bounty payment payable
under this subsection for a product described in
paragraph (2)(A) shall be based on the difference
between the estimated energy use of the product
replaced and the energy use of an average new product
in the product class, over the estimated remaining
lifetime of the product that was replaced.
(B) Nonfunctioning products containing
refrigerants.--The bounty payment payable under this
subsection for a product described in paragraph (2)(B)
shall be in the amount that the Secretary of Energy, in
consultation with the Administrator, determines is
sufficient to promote the recycling of such products,
up to the amount of bounty for a comparable product
described in paragraph (2)(A).
(4) Retirement.--The Secretary shall ensure that no product
for which a bounty is paid under this subsection is returned to
active service, but that it is instead destroyed, and recycled
to the extent feasible.
(5) Recycling appliances containing refrigerants.--
Exclusively for the purpose of implementing the bounty payment
program for products containing a refrigerant under this
section, the Administrator shall establish standards for
environmentally responsible methods of recycling and disposal
of refrigerant-containing appliances that, at a minimum, meet
the requirements set by the Responsible Appliance Disposal
(RAD) Program for refrigerant disposal. The Secretary shall
ensure that such standards are met before a bounty payment is
made under this subsection for a product containing a
refrigerant. Nothing in this section shall be interpreted to
alter the requirements of section 608 of the Clean Air Act or
to relieve any person from complying with those requirements.
(e) Premium Awards for Development and Production of Superefficient
Best-in-Class Products.--
(1) In general.--(A) The Secretary of Energy shall provide
premium awards to manufacturers for the development and
production of Superefficient Best-in-Class Products. The
Secretary shall set and periodically revise standards for
eligibility of products for designation as a Superefficient
Best-in-Class Product.
(B) The Secretary may establish a standard for a
Superefficient Best-in-Class Product even if no product meeting
that standard exists, if the Secretary has reasonable grounds
to conclude that a mass-producible product could be made to
meet that standard.
(C) The Secretary may also establish a Superefficient Best-
in-Class Product standard that is met by one or more existing
Best-in-Class Product models, if those product models have
distinct energy efficiency attributes and performance
characteristics that make them significantly better than other
product models qualifying as best-in-class. The Secretary may
not designate as Superefficient Best-in-Class Products under
this subparagraph models that represent more than 10 percent of
the currently qualifying Best-in-Class Product models.
(2) Premium awards.--(A) The premium award payment provided
to a manufacturer under this subsection shall be in addition to
any bonus payments made under subsection (c).
(B) The amount of the premium award paid per unit of
Superefficient Best-in-Class Products sold to retailers or
distributors shall be the product of--
(i) an amount determined by the Secretary; and
(ii) the difference in energy consumption between the
Superefficient Best-in-Class Product and the average
product in the product class.
(C) The Secretary shall determine the amount under
subparagraph (B)(i) for each product type, in consultation with
State and utility efficiency program administrators as well as
the Administrator, based on consideration of the present value
to the Nation of the energy (and water or other resources or
inputs) saved over the useful life of the product. The
Secretary may also take into consideration the methods used to
increase sales of qualifying products in determining such
amount.
(D) The Secretary may adjust the value described in
subparagraph (C) upward or downward as appropriate, including
based on the effect of the premium awards on the sales of
products in different classes that may be affected by the
program under this subsection.
(E) Premium award payments shall be applied to sales of any
Superefficient Best-in-Class Product for the first 3 years
after designation as a Superefficient Best-in-Class Product.
(3) Coordination of incentives.--No product for which Federal
tax credit is received under section 45M of the Internal
Revenue Code of 1986 shall be eligible to receive premium award
payments pursuant to this subsection.
(f) Reporting.--The Secretary of Energy shall require, as a condition
of receiving a bonus, bounty, or premium award under this section, that
a report containing the following documentation be provided:
(1) For retailers and distributors, the number of units sold
within each product type, and model-specific wholesale purchase
prices and retail sale prices, on a monthly basis.
(2) For manufacturers, model-specific energy consumption
data.
(3) For manufacturers, on an immediate basis, information
concerning any product design or function changes that affect
the energy consumption of the unit.
(4) The methods used to increase the sales of qualifying
products.
(g) Monitoring and Verification Protocols.--The Secretary of Energy
shall establish monitoring and verification protocols for energy
consumption tests for each product model and for sales of energy-
efficient models.
(h) Disclosure.--The Secretary of Energy may require that retailers
and distributors disclose publicly and to consumers their participation
in the program under this section.
(i) Cost-Effectiveness Requirement.--
(1) Requirement.--The Secretary of Energy shall make cost-
effectiveness a top priority in designing the program under,
and administering, this section, except that the cost-
effectiveness of providing premium awards to manufacturers
under subsection (e), in aggregate, may be lower by this
measure than that of the bonuses and bounties to retailers and
distributors under subsections (c) and (d).
(2) Definitions.--In this subsection:
(A) Cost-effectiveness.--The term ``cost-
effectiveness'' means a measure of aggregate savings in
the cost of energy over the lifetime of a product in
relation to the cost to the Secretary of the bonuses,
bounties, and premium awards provided under this
section for a product.
(B) Savings.--The term ``savings'' means the
cumulative megawatt-hours of electricity or million
British thermal units of other fuels saved by a product
during the projected useful life of the product, in
comparison to projected energy consumption of the
average product in the same class, taking into
consideration the impact of any documented measures to
replace, retire, and recycle low-efficiency products at
the time of purchase of highly-efficient substitutes.
(j) Definitions.--In this section--
(1) the term ``distributor'' mean an individual,
organization, or company that sells products in multiple lots
and not directly to end-users;
(2) the term ``retailer'' means an individual, organization,
or company that sells products directly to end-users; and
(3) the term ``Superefficient Best-in-Class Product'' means a
product that--
(A) can be mass produced; and
(B) achieves the highest level of efficiency that the
Secretary of Energy finds can, given the current state
of technology, be produced and sold commercially to
mass-market consumers.
(k) Authorization of Appropriations.--There are authorized to be
appropriated $300,000,000 for each of the fiscal years 2010 through
2014 to the Secretary of Energy for purposes of this section, of which
not more than 10 percent for any fiscal year may be expended on program
administration.
SEC. 215. WATERSENSE.
(a) In General.--There is established within the Environmental
Protection Agency a WaterSense program to identify and promote water
efficient products, buildings and landscapes, and services in order--
(1) to reduce water use;
(2) to reduce the strain on water, wastewater, and stormwater
infrastructure;
(3) to conserve energy used to pump, heat, transport, and
treat water; and
(4) to preserve water resources for future generations,
through voluntary labeling of, or other forms of communications about,
products, buildings and landscapes, and services that meet the highest
water efficiency and performance standards.
(b) Duties.--The Administrator shall--
(1) promote WaterSense labeled products, buildings and
landscapes, and services in the market place as the preferred
technologies and services for--
(A) reducing water use; and
(B) ensuring product and service performance;
(2) work to enhance public awareness of the WaterSense label
through public outreach, education, and other means;
(3) establish and maintain performance standards so that
products, buildings and landscapes, and services labeled with
the WaterSense label perform as well or better than their less
efficient counterparts;
(4) publicize the need for proper installation and
maintenance of WaterSense products by a licensed, and where
certification guidelines exist, WaterSense-certified
professional to ensure optimal performance;
(5) preserve the integrity of the WaterSense label;
(6) regularly review and, when appropriate, update WaterSense
criteria for categories of products, buildings and landscapes,
and services, at least once every four years;
(7) to the extent practical, regularly estimate and make
available to the public the production and relative market
shares of WaterSense labeled products, buildings and
landscapes, and services, at least annually;
(8) to the extent practical, regularly estimate and make
available to the public the water and energy savings
attributable to the use of WaterSense labeled products,
buildings and landscapes, and services, at least annually;
(9) solicit comments from interested parties and the public
prior to establishing or revising a WaterSense category,
specification, installation criterion, or other criterion (or
prior to effective dates for any such category, specification,
installation criterion, or other criterion);
(10) provide reasonable notice to interested parties and the
public of any changes (including effective dates), on the
adoption of a new or revised category, specification,
installation criterion, or other criterion, along with--
(A) an explanation of changes; and
(B) as appropriate, responses to comments submitted
by interested parties;
(11) provide appropriate lead time (as determined by the
Administrator) prior to the applicable effective date for a new
or significant revision to a category, specification,
installation criterion, or other criterion, taking into account
the timing requirements of the manufacturing, marketing,
training, and distribution process for the specific product,
building and landscape, or service category addressed; and
(12) identify and, where appropriate, implement other
voluntary approaches in commercial, institutional, residential,
municipal, and industrial sectors to encourage reuse and
recycling technologies, improve water efficiency, or lower
water use while meeting, where applicable, the performance
standards established under paragraph (3).
(c) Authorization of Appropriations.--There are authorized to be
appropriated $7,500,000 for fiscal year 2010, $10,000,000 for fiscal
year 2011, $20,000,000 for fiscal year 2012, and $50,000,000 for fiscal
year 2013 and each year thereafter, adjusted for inflation, to carry
out this section.
SEC. 216. FEDERAL PROCUREMENT OF WATER EFFICIENT PRODUCTS.
(a) Definitions.--In this section:
(1) Agency.--The term ``agency'' has the meaning given that
term in section 7902(a) of title 5, United States Code.
(2) Watersense product or service.--The term ``WaterSense
product or service'' means a product or service that is rated
for water efficiency under the WaterSense program.
(3) Watersense program.--The term ``WaterSense program''
means the program established by section 215 of this Act.
(4) FEMP designated product.--The term ``FEMP designated
product'' means a product that is designated under the Federal
Energy Management Program of the Department of Energy as being
among the highest 25 percent of equivalent products for
efficiency.
(5) Product and service.--The terms ``product'' and
``service'' do not include any water consuming product or
service designed or procured for combat or combat-related
missions. The terms also exclude products or services already
covered by the Federal procurement regulations established
under section 553 of the National Energy Conservation Policy
Act (42 U.S.C. 8259b).
(b) Procurement of Water Efficient Products.--
(1) Requirement.--To meet the requirements of an agency for a
water consuming product or service, the head of the agency
shall, except as provided in paragraph (2), procure--
(A) a WaterSense product or service; or
(B) a FEMP designated product.
A WaterSense plumbing product should preferably, when possible,
be installed by a licensed and, when WaterSense certification
guidelines exist, WaterSense-certified plumber or mechanical
contractor, and a WaterSense irrigation system should
preferably, when possible, be installed, maintained, and
audited by a WaterSense-certified irrigation professional to
ensure optimal performance.
(2) Exceptions.--The head of an agency is not required to
procure a WaterSense product or service or FEMP designated
product under paragraph (1) if the head of the agency finds in
writing that--
(A) a WaterSense product or service or FEMP
designated product is not cost-effective over the life
of the product, taking energy and water cost savings
into account; or
(B) no WaterSense product or service or FEMP
designated product is reasonably available that meets
the functional requirements of the agency.
(3) Procurement planning.--The head of an agency shall
incorporate into the specifications for all procurements
involving water consuming products and systems, including guide
specifications, project specifications, and construction,
renovation, and services contracts that include provision of
water consuming products and systems, and into the factors for
the evaluation of offers received for the procurement, criteria
used for rating WaterSense products and services and FEMP
designated products. The head of an agency shall consider, to
the maximum extent practicable, additional measures for
reducing agency water consumption, including water reuse
technologies, leak detection and repair, and use of waterless
products that perform similar functions to existing water-
consuming products.
(c) Regulations.--Not later than 180 days after the date of enactment
of this Act, the Secretary of Energy, working in coordination with the
Administrator, shall issue guidelines to carry out this section.
SEC. 217. WATER EFFICIENT PRODUCT REBATE PROGRAMS.
(a) Definitions.--In this section:
(1) Eligible state.--The term ``eligible State'' means a
State that meets the requirements of subsection (b).
(2) Residential water efficient product or service.--The term
``residential water efficient product or service'' means a
product or service for a residence or its landscape that is
rated for water efficiency and performance--
(A) by the WaterSense program, where a WaterSense
specification does not exist; or
(B) by a State program and approved by the
Administrator.
Categories of water efficient products and services may include
faucets, irrigation technologies and services, point-of-use
water treatment devices, reuse and recycling technologies,
toilets, and showerheads.
(3) State program.--The term ``State program'' means a State
program for administering rebates or vouchers for consumer
purchase of water efficient products and services as described
in subsection (b)(1).
(4) Watersense program.--The term ``WaterSense program''
means the program established by section 215 of this Act.
(b) Eligible States.--A State shall be eligible to receive an
allocation under subsection (c) if the State--
(1) establishes (or has established) a State program to
provide rebates or vouchers to residential consumers for the
purchase of residential water efficient products or services to
replace used products of the same type;
(2) submits an application for the allocation at such time,
in such form, and containing such information as the
Administrator may require; and
(3) provides assurances satisfactory to the Administrator
that the State will use the allocation to supplement, but not
supplant, funds made available to carry out the State program.
(c) Amount of Allocations.--
(1) In general.--Subject to paragraph (2), for each fiscal
year, the Administrator shall allocate to each eligible State
to carry out subsection (d) an amount equal to the product
obtained by multiplying the amount made available under
subsection (g) for the fiscal year by the ratio that the
population of the State in the most recent calendar year for
which data are available bears to the total population of all
eligible States in that calendar year.
(2) Minimum allocations.--For each fiscal year, the amounts
allocated under this subsection shall be adjusted
proportionately so that no eligible State is allocated a sum
that is less than an amount determined by the Administrator.
(d) Use of Allocated Funds.--Funds allocated to a State under
subsection (c) may be used to pay up to 50 percent of the cost of
establishing and carrying out a State program.
(e) Fixture Recycling.--States are encouraged to promote or implement
fixture recycling programs to manage the disposal of older fixtures
replaced due to the rebate program under this section.
(f) Issuance of Rebates.--Rebates or vouchers may be provided to
residential consumers that meet the requirements of the State program.
The State may issue all rebates or vouchers directly to residential
consumers or, with approval of the Administrator, delegate some or all
rebate and voucher administration to other organizations including, but
not limited to, local governments, municipal water authorities, and
water utilities. The amount of a rebate or voucher shall be determined
by the State, taking into consideration--
(1) the amount of the allocation to the State under
subsection (c);
(2) the amount of any Federal or State tax incentive
available for the purchase of the residential water efficient
product or service;
(3) the amount necessary to change consumer behavior to
purchase water efficient products and services; and
(4) the consumer expenditures for onsite preparation,
assembly, and original installation of the product.
(g) Authorization of Appropriations.--There are authorized to be
appropriated to the Administrator to carry out this section $50,000,000
for each of the fiscal years 2010 and 2011, $75,000,000 for fiscal year
2012, $100,000,000 for fiscal year 2013, and $150,000,000 for fiscal
year 2014 and each year thereafter, adjusted for inflation.
SEC. 218. CERTIFIED STOVES PROGRAM.
(a) Definitions.--In this section:
(1) Agency.--The term ``Agency'' means the Environmental
Protection Agency.
(2) Wood stove or pellet stove.--The term ``wood stove or
pellet stove'' means a wood stove, pellet stove, or fireplace
insert that uses wood or pellets for fuel.
(3) Certified stove.--The term ``certified stove'' means a
wood stove or pellet stove that meets the standards of
performance for new residential wood heaters under subpart AAA
of part 60 of subchapter C of chapter I of title 40, Code of
Federal Regulations (or successor regulations), as certified by
the Administrator. Pellet stoves and fireplace inserts using
pellets for fuel that are exempt from testing by the
Administrator but meet the same standards of performance as
wood stoves are considered certified for the purposes of this
section.
(4) Eligible entity.--The term ``eligible entity'' means--
(A) a State, a local government, or a federally
recognized Indian tribe;
(B) Alaskan Native villages or regional or village
corporations (as defined in, or established under, the
Alaskan Native Claims Settlement Act (43 U.S.C. 1601 et
seq.)); and
(C) a nonprofit organization or institution that--
(i) represents or provides pollution
reduction or educational services relating to
wood smoke minimization to persons,
organizations, or communities; or
(ii) has, as its principal purpose, the
promotion of air quality or energy efficiency.
(b) Establishment.--The Administrator shall establish and carry out a
program to assist in the replacement of wood stoves or pellet stoves
that do not meet the standards of performance referred to in subsection
(a)(4) by--
(1) requiring that each wood stove or pellet stove sold in
the United States on and after the date of enactment of this
Act meet the standards of performance referred to in subsection
(a)(4);
(2) requiring that no wood stove or pellet stove replaced
under this program is sold or returned to active service, but
that it is instead destroyed and recycled to the maximum extent
feasible;
(3) providing funds to an eligible entity to replace a wood
stove or pellet stove that does not meet the standards of
performance in subsection (a)(4) with a certified stove,
including funds to pay for--
(A) installation of a replacement certified stove;
and
(B) necessary replacement of or repairs to
ventilation, flues, chimneys, or other relevant items
necessary for safe installation of a replacement
certified stove;
(4) in addition to any funds that may be appropriated for the
program under this subsection, using existing Federal, State,
and local programs and incentives, to the greatest extent
practicable;
(5) prioritizing the replacement of wood stoves or pellet
stoves manufactured before July 1, 1990; and
(6) carrying out such other activities as the Administrator
determines appropriate to facilitate the replacement of wood
stoves or pellet stoves that do not meet the standards of
performance referred to in subsection (a)(3).
(c) Regulations.--The Administrator may promulgate such regulations
as are necessary to carry out the program established under subsection
(b).
(d) Funding.--
(1) Authorization of appropriations.--There are authorized to
be appropriated to carry out the program under this section
$20,000,000 for the period of fiscal years 2010 through 2014.
(2) Designated use.--Of amounts appropriated pursuant to this
subsection--
(A) 25 percent shall be designated for use to carry
out the program under this section on lands held in
trust for the benefit of a federally recognized Indian
tribe;
(B) 3 percent shall be designated for use to carry
out the program under this section in Alaskan Native
villages or regional or village corporations (as
defined in, or established under, the Alaskan Native
Claims Settlement Act (43 U.S.C. 1601 et seq.)); and
(C) 72 percent shall be designated for use to carry
out the program under this section nationwide.
(3) Regulatory programs.--
(A) In general.--No grant or loan provided under this
section shall be used to fund the costs of emissions
reductions that are mandated under Federal, State, or
local law.
(B) Mandated.--For purposes of subparagraph (A),
voluntary or elective emission reduction measures shall
not be considered ``mandated'', regardless of whether
the reductions are included in the implementation plan
of a State.
(e) EPA Authority to Accept Wood Stove or Pellet Stove Replacement
Supplemental Environmental Projects.--
(1) In general.--The Administrator may accept
(notwithstanding sections 3302 and 1301 of title 31, United
States Code) wood stove or pellet stove replacement
Supplemental Environmental Projects if such projects, as part
of a settlement of any alleged violation of environmental law--
(A) protect human health or the environment;
(B) are related to the underlying alleged violation;
(C) do not constitute activities that the defendant
would otherwise be legally required to perform; and
(D) do not provide funds for the staff of the Agency
or for contractors to carry out the Agency's internal
operations.
(2) Certification.--In any settlement agreement regarding an
alleged violation of environmental law in which a defendant
agrees to perform a wood stove or pellet stove replacement
Supplemental Environmental Project, the Administrator shall
require the defendant to include in the settlement documents a
certification under penalty of law that the defendant would
have agreed to perform a comparably valued, alternative project
other than a wood stove or pellet stove replacement
Supplemental Environmental Project if the Administrator were
precluded by law from accepting a wood stove or pellet stove
replacement Supplemental Environmental Project. A failure by
the Administrator to include this language in such a settlement
agreement shall not create a cause of action against the United
States under the Clean Air Act or any other law or create a
basis for overturning a settlement agreement entered into by
the United States.
SEC. 219. ENERGY STAR STANDARDS.
(a) Energy Star.--Section 324A(c) of the Energy Policy and
Conservation Act is amended--
(1) in paragraph (6)(B), by striking ``and'' after the
semicolon at the end;
(2) in paragraph (7), by striking the period at the end and
inserting a semicolon; and
(3) by adding at the end the following:
``(8) in establishing and revising an Energy Star product
category, specification, or criterion, require inclusion of
developmental products planned for sale within 2 years in the
testing or evaluation of products proposed for purposes of such
establishment or revision;
``(9) not later than 18 months after the date of enactment of
this paragraph, establish and implement a rating system for
products identified as Energy Star products pursuant to this
section to provide consumers with the most helpful information
on the relative energy efficiency of those products, unless the
Administrator and the Secretary communicate to Congress that
establishing such a system would diminish the value of the
Energy Star brand to consumers;
``(10)(A) review the Energy Star product criteria for the 10
products in each product category with the greatest energy
consumption at least once every 3 years; and
``(B) based on the review, update and publish the Energy Star
product criteria for each such category, as necessary; and
``(11) require periodic verification of compliance with the
Energy Star product criteria by products identified as Energy
Star products pursuant to this section, including--
``(A) purchase and testing of products from the
market; or
``(B) other appropriate testing and compliance
approaches.''.
(b) Authorization of Appropriations.--There are authorized to be
appropriated to carry out the amendments made by this section
$5,000,000 for fiscal year 2010 and for each fiscal year thereafter.
Subtitle C--Transportation Efficiency
SEC. 221. EMISSIONS STANDARDS.
Title VIII of the Clean Air Act, as added by section 331 of this Act,
is amended by inserting after part A the following new part:
``PART B--MOBILE SOURCES
``SEC. 821. GREENHOUSE GAS EMISSION STANDARDS FOR MOBILE SOURCES.
``(a) New Motor Vehicles and New Motor Vehicle Engines.--(1) Pursuant
to section 202(a)(1), by December 31, 2010, the Administrator shall
promulgate standards applicable to emissions of greenhouse gases from
new heavy-duty motor vehicles or new heavy-duty motor vehicle engines,
excluding such motor vehicles covered by the Tier II standards (as
established by the Administrator as of the date of the enactment of
this section). The Administrator may revise these standards from time
to time.
``(2) Regulations issued under section 202(a)(1) applicable to
emissions of greenhouse gases from new heavy-duty motor vehicles or new
heavy-duty motor vehicle engines, excluding such motor vehicles covered
by the Tier II standards (as established by the Administrator as of the
date of the enactment of this section), shall contain standards that
reflect the greatest degree of emissions reduction achievable through
the application of technology which the Administrator determines will
be available for the model year to which such standards apply, giving
appropriate consideration to cost, energy, and safety factors
associated with the application of such technology. Any such
regulations shall take effect after such period as the Administrator
finds necessary to permit the development and application of the
requisite technology, and, at a minimum, shall apply for a period no
less than 3 model years beginning no earlier than the model year
commencing 4 years after such regulations are promulgated.
``(3) Regulations issued under section 202(a)(1) applicable to
emissions of greenhouse gases from new heavy-duty motor vehicles or new
heavy-duty motor vehicle engines, excluding such motor vehicles covered
by the Tier II standards (as established by the Administrator as of the
date of the enactment of this section), shall supersede and satisfy any
and all of the rulemaking and compliance requirements of section
32902(k) of title 49, United States Code.
``(4) Other than as specifically set forth in paragraph (3) of this
subsection, nothing in this section shall affect or otherwise increase
or diminish the authority of the Secretary of Transportation to adopt
regulations to improve the overall fuel efficiency of the commercial
goods movement system.
``(b) Nonroad Vehicles and Engines.--(1) Pursuant to section
213(a)(4) and (5), the Administrator shall identify those classes or
categories of new nonroad vehicles or engines, or combinations of such
classes or categories, that, in the judgment of the Administrator, both
contribute significantly to the total emissions of greenhouse gases
from nonroad engines and vehicles, and provide the greatest potential
for significant and cost-effective reductions in emissions of
greenhouse gases. The Administrator shall promulgate standards
applicable to emissions of greenhouse gases from these new nonroad
engines or vehicles by December 31, 2012. The Administrator shall also
promulgate standards applicable to emissions of greenhouse gases for
such other classes and categories of new nonroad vehicles and engines
as the Administrator determines appropriate and in the timeframe the
Administrator determines appropriate. The Administrator shall base such
determination, among other factors, on the relative contribution of
greenhouse gas emissions, and the costs for achieving reductions, from
such classes or categories of new nonroad engines and vehicles. The
Administrator may revise these standards from time to time.
``(2) Standards under section 213(a)(4) and (5) applicable to
emissions of greenhouse gases from those classes or categories of new
nonroad engines or vehicles identified in the first sentence of
paragraph (1) of this subsection, shall achieve the greatest degree of
emissions reduction achievable based on the application of technology
which the Administrator determines will be available at the time such
standards take effect, taking into consideration cost, energy, and
safety factors associated with the application of such technology. Any
such regulations shall take effect after such period as the
Administrator finds necessary to permit the development and application
of the requisite technology.
``(3) For purposes of this section and standards under section
213(a)(4) or (5) applicable to emissions of greenhouse gases, the term
`nonroad engines and vehicles' shall include non-internal combustion
engines and the vehicles these engines power (such as electric engines
and electric vehicles), for those non-internal combustion engines and
vehicles which would be in the same category and have the same uses as
nonroad engines and vehicles that are powered by internal combustion
engines.
``(c) Aircraft and Aircraft Engines.--
``(1) Pursuant to section 231(a), the Administrator shall
promulgate standards applicable to emissions of greenhouse
gases from new aircraft and new engines used in aircraft by
December 31, 2012. Notwithstanding any requirement in section
231(a), the Administrator, in consultation with the
Administrator of the Federal Aviation Administration, shall
also promulgate standards applicable to emissions of greenhouse
gases from other classes and categories of aircraft and
aircraft engines for such classes and categories as the
Administrator determines appropriate and in the timeframe the
Administrator determines appropriate. The Administrator may
revise these standards from time to time.
``(2) Standards under section 231(a) applicable to emissions
of greenhouse gases from new aircraft and new engines used in
aircraft, and any later revisions or additional standards,
shall achieve the greatest degree of emissions reduction
achievable based on the application of technology which the
Administrator determines will be available at the time such
standards take effect, taking into consideration cost, energy,
and safety factors associated with the application of such
technology. Any such standards shall take effect after such
period as the Administrator finds necessary to permit the
development and application of the requisite technology.
``(d) Averaging, Banking, and Trading of Emissions Credits.--In
establishing standards applicable to emissions of greenhouse gases
pursuant to this section and sections 202(a), 213(a)(4) and (5), and
231(a), the Administrator may establish provisions for averaging,
banking, and trading of greenhouse gas emissions credits within or
across classes or categories of motor vehicles and motor vehicle
engines, nonroad vehicles and engines (including marine vessels), and
aircraft and aircraft engines, to the extent the Administrator
determines appropriate and considering the factors appropriate in
setting standards under those sections. Such provisions may include
reasonable and appropriate provisions concerning generation, banking,
trading, duration, and use of credits.
``(e) Reports.--The Administrator shall, from time to time, submit a
report to Congress that projects the amount of greenhouse gas emissions
from the transportation sector, including transportation fuels, for the
years 2030 and 2050, based on the standards adopted under this section.
``(f) Greenhouse Gases.--Notwithstanding the provisions of section
711, hydrofluorocarbons shall be considered a greenhouse gas for
purposes of this section.''.
SEC. 222. GREENHOUSE GAS EMISSIONS REDUCTIONS THROUGH TRANSPORTATION
EFFICIENCY.
Title VIII of the Clean Air Act, as added by section 331 of this Act,
is further amended by inserting after part C the following new part:
``PART D--PLANNING REQUIREMENTS
``SEC. 841. GREENHOUSE GAS EMISSIONS REDUCTIONS THROUGH TRANSPORTATION
EFFICIENCY.
``(a) In General.--Each State shall--
``(1) not later than 3 years after the date of enactment of
this section, submit to the Administrator goals for
transportation-related greenhouse gas emissions reductions,
which goals shall be reasonably commensurate with the targets
for overall greenhouse gas emissions reduction established by
this Act; and
``(2) as part of each transportation plan or transportation
improvement program developed under title 23 or title 49,
United States Code, ensure that a plan to achieve such goals,
or an updated version of such a plan, is submitted to the
Administrator and to the Secretary of Transportation (in this
section referred to as the `Secretary') by each metropolitan
planning organization in the State for an area with a
population exceeding 200,000.
``(b) Models and Methodologies.--
``(1) In general.--The Administrator shall promulgate
regulations to establish standards for use in developing goals,
plans, and strategies under this section and for monitoring
progress toward such goals. Such standards shall include--
``(A) data collection techniques for assessing State
and regional transportation-related greenhouse gas
emissions;
``(B) methodologies for determining transportation-
related greenhouse gas emissions baselines;
``(C) models and methodologies for scenario analysis;
and
``(D) models and methodologies for estimating
transportation-related greenhouse gas emissions
reductions from the strategies considered under this
section.
Such regulations may approve or improve existing models and
methodologies
``(2) Timing.--The Administrator shall--
``(A) publish proposed regulations under paragraph
(1) not later than 1 year after the date of enactment
of this section; and
``(B) promulgate final regulations under paragraph
(1) not later than 2 years after such date of
enactment.
``(3) Assessment.--At least every 6 years after promulgating
final regulations under paragraph (1), the Administrator, in
coordination with the Secretary, shall assess current and
projected progress in reducing transportation-related
greenhouse gas emissions. The assessment shall examine the
contributions to emissions reductions attributable to
improvements in vehicle efficiency, greenhouse gas performance
of transportation fuels, and increased efficiency in utilizing
transportation systems.
``(c) Greenhouse Gas Reduction Goals.--
``(1) Consultation.--Each State shall develop the goals
referred to in subsection (a)(1)--
``(A) in concurrence with State agencies responsible
for air quality and transportation;
``(B) in consultation with each metropolitan planning
organization for an area in the State with a population
exceeding 200,000 and applicable local air quality and
transportation agencies; and
``(C) with public involvement, including public
comment periods and meetings.
``(2) Period.--The goals referred to in subsection (a)(1)
shall be for 4-, 10-, and 20-year periods.
``(3) Targets; designated year.--The goals referred to in
subsection (a)(1) shall establish targets to reduce
transportation-related greenhouse gas emissions in the covered
area. The targets shall be designed to ensure that the levels
of such emissions stabilize and decrease after a designated
year. The State shall consider designating 2010 as such
designated year.
``(4) Covered area.--The goals referred to in subsection
(a)(1)--
``(A) shall be established on a statewide basis;
``(B) shall be established for each metropolitan
planning organization in the State for an area with a
population exceeding 200,000; and
``(C) may be established on a voluntary basis, in
accordance with the provisions of this section, for any
metropolitan planning organization not described in
subparagraph (B).
``(5) Revised goals.--Every 4 years, each State shall update
and revise, as appropriate, the goals referred to in subsection
(a)(1).
``(d) Planning.--A plan submitted under subsection (a)(2) shall--
``(1) be based upon the models and methodologies established
by the Administrator under subsection (b);
``(2) use transportation and land use scenario analysis to
address transportation-related greenhouse gas emissions and
economic development impacts; and
``(3) be developed--
``(A) with public involvement, including public
comment periods and meetings that provide opportunities
for comment from a variety of stakeholders based on
age, race, income, and disability;
``(B) with regional coordination, including with
respect to--
``(i) metropolitan planning organizations;
``(ii) the localities comprising the
metropolitan planning organization;
``(iii) the State in which the metropolitan
planning organization is located; and
``(iv) air quality, environmental health, and
transportation agencies for the State and
region involved; and
``(C) in consultation with the State and local
housing, public health, economic development, land use,
environment, and public transportation agencies.
``(e) Strategies.--In developing goals under subsection (a)(1) and a
plan under subsection (a)(2), the State or metropolitan planning
organization, as applicable, shall consider transportation and land use
planning strategies to reduce transportation-related greenhouse gas
emissions, including the following:
``(1) Efforts to increase or improve public transportation,
including--
``(A) new public transportation systems, including
new commuter rail systems;
``(B) expansion of existing public transportation
systems;
``(C) employer-based subsidies;
``(D) cleaner locomotive technologies;
``(E) quality of service improvements, including
improved frequency of service; and
``(F) use of transit buses that are powered by
alternative fuels.
``(2) Updates to zoning and other land use regulations and
plans to support development that--
``(A) coordinates transportation and land use
planning;
``(B) focuses future growth close to existing and
planned job centers and public facilities;
``(C) uses existing infrastructure;
``(D) promotes walking, bicycling, and public
transportation use; and
``(E) mixes land uses such as housing, retail, and
schools.
``(3) Implementation of a policy (referred to as a `complete
streets policy') that--
``(A) ensures adequate accommodation of all users of
transportation systems, including pedestrians,
bicyclists, public transportation users, motorists,
children, the elderly, and individuals with
disabilities; and
``(B) adequately addresses the safety and convenience
of all users of the transportation system.
``(4) Construction of bicycle and pedestrian infrastructure
facilities, including facilities that improve the connections
with networks that provide access to human services,
employment, schools, and retail.
``(5) Projects to promote telecommuting, flexible work
schedules, or satellite work centers.
``(6) Pricing measures, including tolling, congestion
pricing, and pay-as-you-drive insurance.
``(7) Intermodal freight system strategies, including
enhanced rail services, short sea shipping, and other
strategies.
``(8) Parking policies.
``(9) Intercity rail service, including high speed rail.
``(10) Travel demand management projects.
``(11) Restriction of the use of certain roads, or lanes, by
vehicles other than passenger buses and high-occupancy
vehicles.
``(12) Reduction of vehicle idling, including idling
associated with freight management, construction,
transportation, and commuter operations.
``(13) Policies to encourage the use of retrofit technologies
and early replacement of vehicles, engines and equipment to
reduce transportation-related greenhouse gas emissions from
existing mobile sources.
``(14) Other projects that the Administrator finds reduce
transportation-related greenhouse gas emissions.
``(f) Public Availability.--The Administrator shall publish,
including by posting on the Environmental Protection Agency's website--
``(1) the goals and plans submitted under subsection (a); and
``(2) for each plan submitted under subsection (a)(2), an
analysis of the anticipated effects of the plan on greenhouse
gas emissions and oil consumption.
``(g) Certification.--The Administrator, in consultation with the
Secretary, shall certify a State or metropolitan planning organization
greenhouse gas reduction plan submitted under subsection (a)(2) if the
plan's implementation is likely to meet the corresponding greenhouse
gas reduction goal referred to in subsection (a)(1). If the
Administrator, in consultation with the Secretary, determines that a
submitted plan cannot be certified, the State or metropolitan planning
organization shall revise and resubmit the plan within 1 year.
``(h) Enforcement.--If the Administrator finds that a State has
failed to submit goals under subsection (a)(1), has failed to ensure
the submission of a plan under subsection (a)(2), or has failed to
submit a revised plan under subsection (g), for any area in the State
(irrespective of whether the area is a nonattainment area), the
Administrator shall impose a prohibition in accordance with section
179(b)(1) applicable to the area within 2 years of such a finding. The
Administrator may not impose a prohibition under the preceding
sentence, and no action may be brought by the Administrator or any
other entity alleging a violation of this section, based on the content
or adequacy of a goal or plan submitted under subsection (a)(1) or
(a)(2) or failure to achieve the goal submitted under subsection
(a)(1).
``(i) Competitive Grants.--
``(1) Grants.--The Administrator, in consultation with the
Secretary, may award grants to States or metropolitan planning
organizations--
``(A) to support activities related to improving data
collection, modeling, and monitoring systems to assess
transportation-related greenhouse gas emissions and the
effects of plans, policies, and strategies referenced
in this section;
``(B) for the development of goals and plans to be
submitted under sections (a)(1) or (a)(2); and
``(C) to implement plans certified under subsection
(g) or elements thereof, provided that each project
thus funded includes a measurement and evaluation
component that meets the regulations promulgated under
subsection (b).
``(2) Priority.--In making grants under paragraph (1)(C), the
Administrator shall give priority to applicants based upon--
``(A) the amount of total greenhouse gas emissions to
be reduced as a result of implementation of a certified
plan, within the covered area, as determined by methods
established under subsection (b);
``(B) the amount of per capita greenhouse gas
emissions to be reduced as a result of implementation
of a certified plan, within the covered area, as
determined by methods established under subsection (b);
``(C) the cost effectiveness, in terms of dollars per
tons of greenhouse gas reductions, to be achieved as a
result of the implementation of a certified plan;
``(D) the potential for both short- and long-term
reductions; and
``(E) such other factors as the Administrator
determines appropriate.
``(3) Authorization of appropriations.--To carry out this
subsection, there are authorized to be appropriated such sums
as may be necessary.
``(j) Definitions.--In this section:
``(1) The term `metropolitan planning organization' means a
metropolitan planning organization, as such term is used in
section 176.
``(2) The term `scenario analysis' means an analysis that is
conducted by identifying different trends and making
projections based on those trends to develop a range of
scenarios and estimates of how each scenario could improve
access to goods and services, including access to employment,
education, and health care (especially for elderly and
economically disadvantaged communities), and could affect rates
of--
``(A) vehicle miles traveled;
``(B) vehicle hours traveled;
``(C) use of mobile source fuel by type, including
electricity; and
``(D) transportation-related greenhouse gas
emissions.
``(k) Land Use Authority.--Nothing in this section may be construed
to--
``(1) infringe upon the existing authority of State or local
governments to plan or control land use; or
``(2) provide or transfer authority over land use to any
other entity.''.
SEC. 223. SMARTWAY TRANSPORTATION EFFICIENCY PROGRAM.
Part B of title VIII of the Clean Air Act, as added by section 221 of
this Act is amended by adding after section 821 the following section:
``SEC. 822. SMARTWAY TRANSPORTATION EFFICIENCY PROGRAM.
``(a) In General.--There is established within the Environmental
Protection Agency a SmartWay Transport Program to quantify,
demonstrate, and promote the benefits of technologies, products, fuels,
and operational strategies that reduce petroleum consumption, air
pollution, and greenhouse gas emissions from the mobile source sector.
``(b) General Duties.--Under the program established under this
section, the Administrator shall carry out each of the following:
``(1) Development of measurement protocols to evaluate the
energy consumption and greenhouse gas impacts from technologies
and strategies in the mobile source sector, including those for
passenger transport and goods movement.
``(2) Development of qualifying thresholds for certifying,
verifying, or designating energy-efficient, low-greenhouse gas
SmartWay technologies and strategies for each mode of passenger
transportation and goods movement.
``(3) Development of partnership and recognition programs to
promote best practices and drive demand for energy-efficient,
low-greenhouse gas transportation performance.
``(4) Promotion of the availability of, and encouragement of
the adoption of, SmartWay certified or verified technologies
and strategies, and publication of the availability of
financial incentives, such as assistance from loan programs and
other Federal and State incentives.
``(c) Smartway Transport Freight Partnership.--The Administrator
shall establish a SmartWay Transport Partnership program with shippers
and carriers of goods to promote energy-efficient, low-greenhouse gas
transportation. In carrying out such partnership, the Administrator
shall undertake each of the following:
``(1) Certification of the energy and greenhouse gas
performance of participating freight carriers, including those
operating rail, trucking, marine, and other goods movement
operations.
``(2) Publication of a comprehensive energy and greenhouse
gas performance index of freight modes (including rail,
trucking, marine, and other modes of transporting goods) and
individual freight companies so that shippers can choose to
deliver their goods more efficiently.
``(3) Development of tools for--
``(A) carriers to calculate their energy and
greenhouse gas performance; and
``(B) shippers to calculate the energy and greenhouse
gas impacts of moving their products and to evaluate
the relative impacts from transporting their goods by
different modes and corporate carriers.
``(4) Provision of recognition opportunities for
participating shipper and carrier companies demonstrating
advanced practices and achieving superior levels of greenhouse
gas performance.
``(d) Improving Freight Greenhouse Gas Performance Databases.--The
Administrator shall, in coordination with other appropriate agencies,
define and collect data on the physical and operational characteristics
of the Nation's truck population, with special emphasis on data related
to energy efficiency and greenhouse gas performance to inform the
performance index published under subsection (c)(2) of this section,
and other means of goods transport as necessary, at least every 5
years.
``(e) Establishment of Financing Program.--The Administrator shall
establish a SmartWay Financing Program to competitively award funding
to eligible entities identified by the Administrator in accordance with
the program requirements in subsection (g).
``(f) Purpose.--Under the SmartWay Financing Program, eligible
entities shall--
``(1) use funds awarded by the Administrator to provide
flexible loan and lease terms that increase approval rates or
lower the costs of loans and leases in accordance with guidance
developed by the Administrator; and
``(2) make such loans and leases available to public and
private entities for the purpose of adopting low-greenhouse gas
technologies or strategies for the mobile source sector that
are designated by the Administrator.
``(g) Program Requirements.--The Administrator shall determine
program design elements and requirements, including--
``(1) the type of financial mechanism with which to award
funding, in the form of grants or contracts;
``(2) the designation of eligible entities to receive
funding, including State, tribal, and local governments,
regional organizations comprised of governmental units,
nonprofit organizations, or for-profit companies;
``(3) criteria for evaluating applications from eligible
entities, including anticipated--
``(A) cost-effectiveness of loan or lease program on
a metric-ton-of-greenhouse gas-saved-per-dollar basis;
``(B) ability to promote the loan or lease program
and associated technologies and strategies to the
target audience; and
``(4) reporting requirements for entities that receive
awards, including--
``(A) actual cost-effectiveness and greenhouse gas
savings from the loan or lease program based on a
methodology designated by the Administrator;
``(B) the total number of applications and number of
approved applications; and
``(C) terms granted to loan and lease recipients
compared to prevailing market practices.
``(h) Authorization of Appropriations.--Such sums as necessary are
authorized to be appropriated to the Administrator to carry out this
section.''.
SEC. 224. STATE VEHICLE FLEETS.
Section 507(o) of the Energy Policy Act of 1992 (42 U.S.C. 13257) is
amended by adding the following new paragraph at the end thereof:
``(3) The Secretary shall revise the rules under this subsection with
respect to the types of alternative fueled vehicles required for
compliance with this subsection to ensure those rules are consistent
with any guidance issued pursuant to section 303 of this Act.''.
Subtitle D--Industrial Energy Efficiency Programs
SEC. 241. INDUSTRIAL PLANT ENERGY EFFICIENCY STANDARDS.
The Secretary of Energy shall continue to support the development of
the American National Standards Institute (ANSI) voluntary industrial
plant energy efficiency certification program, pending International
Standards Organization (ISO) consensus standard 50001, and other
related ANSI/ISO standards. In addition, the Department shall undertake
complementary activities through the Department of Energy's Industry
Technologies Program that support the voluntary implementation of such
standards by manufacturing firms. There are authorized to be
appropriated to the Secretary such sums as are necessary to carry out
these activities. The Secretary shall report to Congress on the status
of standards development and plans for further standards development
pursuant to this section by not later than 18 months after the date of
enactment of this Act, and shall prepare a second such report 18 months
thereafter.
SEC. 242. ELECTRIC AND THERMAL WASTE ENERGY RECOVERY AWARD PROGRAM.
(a) Electric and Thermal Waste Energy Recovery Awards.--The Secretary
of Energy shall establish a program to make monetary awards to the
owners and operators of new and existing electric energy generation
facilities or thermal energy production facilities using fossil or
nuclear fuel, to encourage them to use innovative means of recovering
any thermal energy that is a potentially useful byproduct of electric
power generation or other processes to--
(1) generate additional electric energy; or
(2) make sales of thermal energy not used for electric
generation, in the form of steam, hot water, chilled water, or
desiccant regeneration, or for other commercially valid
purposes.
(b) Amount of Awards.--
(1) Eligibility.--Awards shall be made under subsection (a)
only for the use of innovative means that achieve net energy
efficiency at the facility concerned significantly greater than
the current standard technology in use at similar facilities.
(2) Amount.--The amount of an award made under subsection (a)
shall equal an amount up to the value of 25 percent of the
energy projected to be recovered or generated during the first
5 years of operation of the facility using the innovative
energy recovery method, or such lesser amount that the
Secretary determines to be the minimum amount that can cost-
effectively stimulate such innovation.
(3) Limitation.--No person may receive an award under this
section if a grant under the waste energy incentive grant
program under section 373 of the Energy Policy and Conservation
Act (42 U.S.C. 6343) is made for the same energy savings
resulting from the same innovative method.
(c) Regulatory Status.--The Secretary of Energy shall--
(1) assist State regulatory commissions to identify and make
changes in State regulatory programs for electric utilities to
provide appropriate regulatory status for thermal energy
byproduct businesses of regulated electric utilities to
encourage those utilities to enter businesses making the sales
referred to in subsection (a)(2); and
(2) encourage self-regulated utilities to enter businesses
making the sales referred to in subsection (a)(2).
(d) Authorization of Appropriations.--There are authorized to be
appropriated to the Secretary of Energy such sums as are necessary for
the purposes of this section.
SEC. 243. CLARIFYING ELECTION OF WASTE HEAT RECOVERY FINANCIAL
INCENTIVES.
Section 373(e) of the Energy Policy and Conservation Act (42 U.S.C.
6343(e)) is amended--
(1) by striking ``that qualifies for'' and inserting ``who
elects to claim''; and
(2) by inserting ``from that project'' after ``for waste heat
recovery''.
SEC. 244. MOTOR MARKET ASSESSMENT AND COMMERCIAL AWARENESS PROGRAM.
(a) Findings.--Congress finds that--
(1) electric motor systems account for about half of the
electricity used in the United States;
(2) electric motor energy use is determined by both the
efficiency of the motor and the system in which the motor
operates;
(3) Federal Government research on motor end use and
efficiency opportunities is more than a decade old; and
(4) the Census Bureau has discontinued collection of data on
motor and generator importation, manufacture, shipment, and
sales.
(b) Definitions.--In this section:
(1) Department.--The term ``Department'' means the Department
of Energy.
(2) Interested parties.--The term ``interested parties''
includes--
(A) trade associations;
(B) motor manufacturers;
(C) motor end users;
(D) electric utilities; and
(E) individuals and entities that conduct energy
efficiency programs.
(3) Secretary.--The term ``Secretary'' means the Secretary of
Energy, in consultation with interested parties.
(c) Assessment.--The Secretary shall conduct an assessment of
electric motors and the electric motor market in the United States that
shall--
(1) include important subsectors of the industrial and
commercial electric motor market (as determined by the
Secretary), including--
(A) the stock of motors and motor-driven equipment;
(B) efficiency categories of the motor population;
and
(C) motor systems that use drives, servos, and other
control technologies;
(2) characterize and estimate the opportunities for
improvement in the energy efficiency of motor systems by market
segment, including opportunities for--
(A) expanded use of drives, servos, and other control
technologies;
(B) expanded use of process control, pumps,
compressors, fans or blowers, and material handling
components; and
(C) substitution of existing motor designs with
existing and future advanced motor designs, including
electronically commutated permanent magnet, interior
permanent magnet, and switched reluctance motors; and
(3) develop an updated profile of motor system purchase and
maintenance practices, including surveying the number of
companies that have motor purchase and repair specifications,
by company size, number of employees, and sales.
(d) Recommendations; Update.--Based on the assessment conducted under
subsection (c), the Secretary shall--
(1) develop--
(A) recommendations to update the detailed motor
profile on a periodic basis;
(B) methods to estimate the energy savings and market
penetration that is attributable to the Save Energy Now
Program of the Department; and
(C) recommendations for the Director of the Census
Bureau on market surveys that should be undertaken in
support of the motor system activities of the
Department; and
(2) prepare an update to the Motor Master+ program of the
Department.
(e) Program.--Based on the assessment, recommendations, and update
required under subsections (c) and (d), the Secretary shall establish a
proactive, national program targeted at motor end-users and delivered
in cooperation with interested parties to increase awareness of--
(1) the energy and cost-saving opportunities in commercial
and industrial facilities using higher efficiency electric
motors;
(2) improvements in motor system procurement and management
procedures in the selection of higher efficiency electric
motors and motor-system components, including drives, controls,
and driven equipment; and
(3) criteria for making decisions for new, replacement, or
repair motor and motor system components.
SEC. 245. MOTOR EFFICIENCY REBATE PROGRAM.
(a) In General.--Part C of title III of the Energy Policy and
Conservation Act (42 U.S.C. 6311 et seq.) is amended by adding at the
end the following:
``SEC. 347. MOTOR EFFICIENCY REBATE PROGRAM.
``(a) Establishment.--Not later than January 1, 2010, in accordance
with subsection (b), the Secretary shall establish a program to provide
rebates for expenditures made by entities--
``(1) for the purchase and installation of a new electric
motor that has a nominal full load efficiency that is not less
than the nominal full load efficiency as defined in--
``(A) table 12-12 of NEMA Standards Publication MG 1-
2006 for random wound motors rated 600 volts or lower;
or
``(B) table 12-13 of NEMA Standards Publication MG 1-
2006 for form wound motors rated 5000 volts or lower;
and
``(2) to replace an installed motor of the entity the
specifications of which are established by the Secretary by a
date that is not later than 90 days after the date of enactment
of this section.
``(b) Requirements.--
``(1) Application.--To be eligible to receive a rebate under
this section, an entity shall submit to the Secretary an
application in such form, at such time, and containing such
information as the Secretary may require, including--
``(A) demonstrated evidence that the entity purchased
an electric motor described in subsection (a)(1) to
replace an installed motor described in subsection
(a)(2);
``(B) demonstrated evidence that the entity--
``(i) removed the installed motor of the
entity from service; and
``(ii) properly disposed the installed motor
of the entity; and
``(C) the physical nameplate of the installed motor
of the entity.
``(2) Authorized amount of rebate.--The Secretary may provide
to an entity that meets each requirement under paragraph (1) a
rebate the amount of which shall be equal to the product
obtained by multiplying--
``(A) the nameplate horsepower of the electric motor
purchased by the entity in accordance with subsection
(a)(1); and
``(B) $25.00.
``(3) Payments to distributors of qualifying electric
motors.--To assist in the payment for expenses relating to
processing and motor core disposal costs, the Secretary shall
provide to the distributor of an electric motor described in
subsection (a)(1), the purchaser of which received a rebate
under this section, an amount equal to the product obtained by
multiplying--
``(A) the nameplate horsepower of the electric motor;
and
``(B) $5.00.
``(c) Authorization of Appropriations.--There are authorized to be
appropriated to carry out this section, to remain available until
expended--
``(1) $80,000,000 for fiscal year 2011;
``(2) $75,000,000 for fiscal year 2012;
``(3) $70,000,000 for fiscal year 2013;
``(4) $65,000,000 for fiscal year 2014; and
``(5) $60,000,000 for fiscal year 2015.''.
(b) Table of Contents.--The table of contents of the Energy Policy
and Conservation Act (42 U.S.C. prec. 6201) is amended by adding at the
end of the items relating to part C of title III the following:
``Sec. 347. Motor efficiency rebate program.''.
Subtitle E--Improvements in Energy Savings Performance Contracting
SEC. 251. ENERGY SAVINGS PERFORMANCE CONTRACTS.
(a) Competition Requirements for Task or Delivery Orders Under Energy
Savings Performance Contracts.--
(1) Competition requirements.--Subsection (a) of section 801
of the National Energy Conservation Policy Act (42 U.S.C.
8287(a)) is amended by adding at the end the following
paragraph:
``(3)(A) The head of a Federal agency may issue a task or delivery
order under an energy savings performance contract by--
``(i) notifying all contractors that have received an award
under such contract that the agency proposes to discuss energy
savings performance services for some or all of its facilities,
soliciting an expression of interest in performing site surveys
or investigations and feasibility designs and studies and the
submission of qualifications from such contractors, and
including in such notice summary information concerning energy
use for any facilities that the agency has specific interest in
including in such contract;
``(ii) reviewing all expressions of interest and
qualifications submitted pursuant to the notice under clause
(i);
``(iii) selecting two or more contractors (from among those
reviewed under clause (ii)) to conduct discussions concerning
the contractors' respective qualifications to implement
potential energy conservation measures, including requesting
references demonstrating experience on similar efforts and the
resulting energy savings of such similar efforts;
``(iv) selecting and authorizing--
``(I) more than one contractor (from among those
selected under clause (iii)) to conduct site surveys,
investigations, feasibility designs and studies or
similar assessments for the energy savings performance
contract services (or for discrete portions of such
services), for the purpose of allowing each such
contractor to submit a firm, fixed-price proposal to
implement specific energy conservation measures; or
``(II) one contractor (from among those selected
under clause (iii)) to conduct a site survey,
investigation, a feasibility design and study or
similar for the purpose of allowing the contractor to
submit a firm, fixed-price proposal to implement
specific energy conservation measures;
``(v) negotiating a task or delivery order for energy savings
performance contracting services with the contractor or
contractors selected under clause (iv) based on the energy
conservation measures identified; and
``(vi) issuing a task or delivery order for energy savings
performance contracting services to such contractor or
contractors.
``(B) The issuance of a task or delivery order for energy savings
performance contracting services pursuant to subparagraph (A) is deemed
to satisfy the task and delivery order competition requirements in
section 2304c(d) of title 10, United States Code, and section 303J(d)
of the Federal Property and Administrative Services Act of 1949 (41
U.S.C. 253j(d)).
``(C) The Secretary may issue guidance as necessary to agencies
issuing task or delivery orders pursuant to subparagraph (A).''.
(2) Effective date.--The amendment made by paragraph (1) is
inapplicable to task or delivery orders issued before the date
of enactment of this section.
(b) Inclusion of Thermal Renewable Energy.--Section 203 of the Energy
Policy Act of 2005 (42 U.S.C. 15852) is amended--
(1) in subsection (a), by striking ``electric''; and
(2) in subsection (b)(2), by inserting ``or thermal'' after
``means electric''.
(c) Credit for Renewable Energy Produced and Used on Site.--
Subsection (c) of section 203 of the Energy Policy Act of 2005 (42
U.S.C. 15852) is amended to read as follows:
``(c) Calculation.--Renewable energy produced at a Federal facility,
on Federal lands, or on Indian lands (as defined in title XXVI of the
Energy Policy Act of 1992 (25 U.S.C. 3501 et seq.)) shall be calculated
separately from renewable energy consumed at a Federal facility, and
each may be used to comply with the consumption requirement under
subsection (a).''.
(d) Financing Flexibility.--Section 801(a)(2)(E) of the National
Energy Conservation Policy Act (42 U.S.C. 8287(a)(2)(E)) is amended by
striking ``In'' and inserting ``Notwithstanding any other provision of
law, in''.
Subtitle F--Public Institutions
SEC. 261. PUBLIC INSTITUTIONS.
Section 399A of the Energy Policy and Conservation Act (42 U.S.C.
6371h-1) is amended--
(1) in subsection (a)(5), by striking ``or a designee'' and
inserting ``a not-for-profit hospital or not-for-profit
inpatient health care facility, or a designated agent'';
(2) in subsection (c)(1), by striking subparagraph (C);
(3) in subsection (f)(3)(A), by striking ``$1,000,000'' and
inserting ``$2,500,000''; and
(4) in subsection (i)(1), by striking ``$250,000,000 for each
of fiscal years 2009 through 2013'' and inserting
``$250,000,000 for each of fiscal years 2010 through 2015''.
SEC. 262. COMMUNITY ENERGY EFFICIENCY FLEXIBILITY.
Section 545(b)(3) of the Energy Independence and Security Act of 2007
(42 U.S.C. 17155(b)(3)) is amended--
(1) by striking ``Indian tribe may use'' and all that follows
through ``for administrative expenses'' and inserting ``Indian
tribe may use for administrative expenses'';
(2) by striking subparagraphs (B) and (C);
(3) by redesignating the remaining clauses (i) and (ii) as
subparagraphs (A) and (B), respectively and adjusting the
margin of those subparagraphs accordingly; and
(4) by striking the semicolon at the end and inserting a
period.
SEC. 263. SMALL COMMUNITY JOINT PARTICIPATION.
(a) Section 541(3)(A) of the Energy Independence and Security Act of
2007 is amended in clause (i) by striking ``and'' at the end of
subclause (II), in clause (ii) by striking the period at the end of
subclause (II) and inserting ``; or'', and by inserting the following
new clause (iii):
``(iii) a group of adjacent, contiguous, or
geographically proximate units of local government that
reach agreement to act jointly for purposes of this
section and that represent a combined population of not
less than 35,000.''.
(b) Section 541(3)(B) of the Energy Independence and Security Act of
2007 is amended in clause (i) by striking ``or'', in clause (ii) by
striking the period at the end and inserting ``; or'', and by inserting
the following new clause (iii):
``(iii) a group of adjacent, contiguous, or
geographically proximate units of local government that
reach agreement to act jointly for purposes of this
section and that represent a combined population of not
less than 50,000.''.
SEC. 264. LOW INCOME COMMUNITY ENERGY EFFICIENCY PROGRAM.
(a) In General.--The Secretary of Energy is authorized to make grants
to private, nonprofit, mission-driven community development
organizations including community development corporations and
community development financial institutions to provide financing to
businesses and projects that improve energy efficiency; identify and
develop alternative, renewable, and distributed energy supplies;
provide technical assistance and promote job and business opportunities
for low-income residents; and increase energy conservation in low
income rural and urban communities.
(b) Grants.--The purpose of such grants is to increase the flow of
capital and benefits to low income communities, minority-owned and
woman-owned businesses and entrepreneurs and other projects and
activities located in low income communities in order to reduce
environmental degradation, foster energy conservation and efficiency
and create job and business opportunities for local residents. The
Secretary may make grants on a competitive basis for--
(1) investments that develop alternative, renewable, and
distributed energy supplies;
(2) capitalizing loan funds that lend to energy efficiency
projects and energy conservation programs;
(3) technical assistance to plan, develop, and manage an
energy efficiency financing program; and
(4) technical and financial assistance to assist small-scale
businesses and private entities develop new renewable and
distributed sources of power or combined heat and power
generation.
(c) Authorization of Appropriations.--For the purposes of this
section there is authorized to be appropriated $50,000,000 for each of
the fiscal years 2010 through 2015.
Subtitle G--Miscellaneous
SEC. 271. ENERGY EFFICIENT INFORMATION AND COMMUNICATIONS TECHNOLOGIES.
Section 543 of the National Energy Conservation Policy Act (42 U.S.C.
8253) is amended to read as follows:
``SEC. 543. ENERGY EFFICIENT INFORMATION AND COMMUNICATIONS
TECHNOLOGIES.
``(a) In General.--Not later than 1 year after the date of enactment
of the American Clean Energy and Security Act of 2009, each Federal
agency shall collaborate with the Director of the Office of Management
and Budget (referred to in this section as the `Director') to create an
implementation strategy, including best practices and measurement and
verification techniques, for the purchase and use of energy efficient
information and communications technologies and practices. Wherever
possible, existing standards, specifications, performance metrics, and
best management practices that have been or are being developed in open
collaboration and with broad stakeholder input and review should be
incorporated. In addition, agency strategies shall be flexible, cost-
effective, and based on the specific operating requirements and
statutory mission of each agency.
``(b) Energy Efficient Information and Communications Technologies.--
In developing an implementation strategy, each agency shall--
``(1) consider information and communications technologies
and infrastructure, including, but not limited to, advanced
metering infrastructure, information and communications
technology services and products, efficient data center
strategies, applications modernization and rationalization,
building systems energy efficiency, and telework; and
``(2) ensure that agencies are eligible to realize the
savings and rewards brought about through increased
efficiencies.
``(c) Performance Goals.--Not later than 6 months after the date of
enactment of the American Clean Energy and Security Act of 2009, the
Director shall establish performance goals for evaluating the efforts
of the agencies in improving the maintenance, purchase and use of
energy efficiency of information and communications technology systems.
These performance goals should measure information technology costs
over a specific time horizon (3 to 5 years), providing a complete
picture of all costs, including energy.
``(d) Report.--Not later than 18 months after the date of enactment
of the American Clean Energy and Security Act of 2009, and annually
thereafter, the Director shall submit a report to Congress on--
``(1) the progress of each agency in reducing energy use
through its implementation strategy; and
``(2) new and emerging technologies that would help achieve
increased energy efficiency.''.
SEC. 272. NATIONAL ENERGY EFFICIENCY GOALS.
(a) Goals.--The energy efficiency goals of the United States are--
(1) to achieve an improvement in the overall energy
productivity of the United States (measured in gross domestic
product per unit of energy input) of at least 2.5 percent per
year by the year 2012; and
(2) to maintain that annual rate of improvement each year
through 2030.
(b) Strategic Plan.--
(1) In general.--Not later than 1 year after the date of
enactment of this Act, the Secretary of Energy (referred to in
this section as the ``Secretary''), in cooperation with the
Administrator and the heads of other appropriate Federal
agencies, shall develop a strategic plan to achieve the
national goals for improvement in energy productivity
established under subsection (a).
(2) Public input and comment.--The Secretary shall develop
the plan in a manner that provides appropriate opportunities
for public input and comment.
(c) Plan Contents.--The strategic plan shall--
(1) identify future regulatory, funding, and policy
priorities that would assist the United States in meeting the
national goals;
(2) include energy savings estimates for each sector; and
(3) include data collection methodologies and compilations
used to establish baseline and energy savings data.
(d) Plan Updates.--
(1) In general.--The Secretary shall--
(A) update the strategic plan biennially; and
(B) include the updated strategic plan in the
national energy policy plan required by section 801 of
the Department of Energy Organization Act (42 U.S.C.
7321).
(2) Contents.--In updating the plan, the Secretary shall--
(A) report on progress made toward implementing
efficiency policies to achieve the national goals
established under subsection (a); and
(B) verify, to the maximum extent practicable, energy
savings resulting from the policies.
(e) Report to Congress and the Public.--The Secretary shall submit to
Congress, and make available to the public, the initial strategic plan
developed under subsection (b) and each updated plan.
SEC. 273. AFFILIATED ISLAND ENERGY INDEPENDENCE TEAM.
(a) Definitions.--In this section:
(1) Affiliated island.--The term ``affiliated island''
means--
(A) the Commonwealth of Puerto Rico;
(B) Guam;
(C) American Samoa;
(D) the Commonwealth of the Northern Mariana Islands;
(E) the Federated States of Micronesia;
(F) the Republic of the Marshall Islands;
(G) the Republic of Palau; and
(H) the United States Virgin Islands.
(2) Secretary.--The term ``Secretary'' means the Secretary of
Energy (acting through the Assistant Secretary of Energy
Efficiency and Renewable Energy), in consultation with the
Secretary of the Interior and the Secretary of State.
(3) Team.--The term ``team'' means the team established by
the Secretary under subsection (b).
(b) Establishment.--As soon as practicable after the date of
enactment of this Act, the Secretary shall assemble a team of
technical, policy, and financial experts to address the energy needs of
each affiliated island--
(1) to reduce the reliance and expenditure of each affiliated
island on imported fossil fuels;
(2) to increase the use by each affiliated island of
indigenous, nonfossil fuel energy sources;
(3) to improve the performance of the energy infrastructure
of the affiliated island through projects--
(A) to improve the energy efficiency of power
generation, transmission, and distribution; and
(B) to increase consumer energy efficiency;
(4) to improve the performance of the energy infrastructure
of each affiliated island through enhanced planning, education,
and training;
(5) to adopt research-based and public-private partnership-
based approaches as appropriate;
(6) to stimulate economic development and job creation; and
(7) to enhance the engagement by the Federal Government in
international efforts to address island energy needs.
(c) Duties of Team.--
(1) Energy action plans.--
(A) In general.--In accordance with subparagraph (B),
the team shall provide technical, programmatic, and
financial assistance to each utility of each affiliated
island, and the government of each affiliated island,
as appropriate, to develop and implement an energy
Action Plan for each affiliated island to reduce the
reliance of each affiliated island on imported fossil
fuels through increased efficiency and use of
indigenous clean-energy resources.
(B) Requirements.--Each Action Plan described in
subparagraph (A) for each affiliated island shall
require and provide for--
(i) the conduct of 1 or more studies to
assess opportunities to reduce fossil fuel use
through--
(I) the improvement of the energy
efficiency of the affiliated island;
and
(II) the increased use by the
affiliated island of indigenous clean-
energy resources;
(ii) the identification and implementation of
the most cost-effective strategies and projects
to reduce the dependence of the affiliated
island on fossil fuels;
(iii) the promotion of education and training
activities to improve the capacity of the local
utilities of the affiliated island, and the
government of the affiliated island, as
appropriate, to plan for, maintain, and operate
the energy infrastructure of the affiliated
island through the use of local or regional
institutions, as appropriate;
(iv) the coordination of the activities
described in clause (iii) to leverage the
expertise and resources of international
entities, the Department of Energy, the
Department of the Interior, and the regional
utilities of the affiliated island;
(v) the identification, and development, as
appropriate, of research-based and private-
public, partnership approaches to implement the
Action Plan; and
(vi) any other component that the Secretary
determines to be necessary to reduce
successfully the use by each affiliated island
of fossil fuels.
(2) Reports to secretary.--Not later than 1 year after the
date on which the Secretary establishes the team and biennially
thereafter, the team shall submit to the Secretary a report
that contains a description of the progress of each affiliated
island in--
(A) implementing the Action Plan of the affiliated
island developed under paragraph (1)(A); and
(B) reducing the reliance of the affiliated island on
fossil fuels.
(d) Use of Regional Utility Organizations.--To provide expertise to
affiliated islands to assist the affiliated islands in meeting the
purposes of this section, the Secretary shall consider--
(1) including regional utility organizations in the
establishment of the team; and
(2) providing assistance through regional utility
organizations.
(e) Annual Reports to Congress.--Not later than 30 days after the
date on which the Secretary receives a report submitted by the team
under subsection (c)(2), the Secretary shall submit to the appropriate
committees of Congress a report that contains a summary of the report
of the team.
(f) Authorization of Appropriations.--There are authorized to be
appropriated such sums as are necessary to carry out this section.
SEC. 274. PRODUCT CARBON DISCLOSURE PROGRAM.
(a) EPA Study.--The Administrator shall conduct a study to determine
the feasibility of establishing a national program for measuring,
reporting, publicly disclosing, and labeling products or materials sold
in the United States for their carbon content, and shall, not later
than 18 months after the date of enactment of this Act, transmit a
report to Congress which shall include the following:
(1) A determination of whether a national product carbon
disclosure program and labeling program would be effective in
achieving the intended goals of achieving greenhouse gas
reductions and an examination of existing programs globally and
their strengths and weaknesses.
(2) Criteria for identifying and prioritizing sectors and
products and processes that should be covered in such program
or programs.
(3) An identification of products, processes, or sectors
whose inclusion could have a substantial carbon impact
(prioritizing industrial products such as iron and steel,
aluminum, cement, chemicals, and paper products, and also
including food, beverage, hygiene, cleaning, household
cleaners, construction, metals, clothing, semiconductor, and
consumer electronics).
(4) Suggested methodology and protocols for measuring the
carbon content of the products across the entire carbon
lifecycle of such products for use in a carbon disclosure
program and labeling program.
(5) A review of existing greenhouse gas product accounting
standards, methodologies, and practices including the
Greenhouse Gas Protocol, ISO 14040/44, ISO 14067, and
Publically Available Specification 2050, and including a review
of the strengths and weaknesses of each.
(6) A survey of secondary databases including the
Manufacturing Energy Consumption Survey and evaluate the
quality of data for use in a product carbon disclosure program
and product carbon labeling program and an identification of
gaps in the data relative to the potential purposes of a
national product carbon disclosure program and product carbon
labeling program and development of recommendations for
addressing these data gaps.
(7) An assessment of the utility of comparing products and
the appropriateness of product carbon standards.
(8) An evaluation of the information needed on a label for
clear and accurate communication, including what pieces of
quantitative and qualitative information needs to be disclosed.
(9) An evaluation of the appropriate boundaries of the carbon
lifecycle analysis for different sectors and products.
(10) An analysis of whether default values should be
developed for products whose producer does not participate in
the program or does not have data to support a disclosure or
label and determine best ways to develop such default values.
(11) A recommendation of certification and verification
options necessary to assure the quality of the information and
avoid greenwashing or the use of insubstantial or meaningless
environmental claims to promote a product.
(12) An assessment of options for educating consumers about
product carbon content and the product carbon disclosure
program and product carbon labeling program.
(13) An analysis of the costs and timelines associated with
establishing a national product carbon disclosure program and
product carbon labeling program, including options for a phased
approach. Costs should include those for businesses associated
with the measurement of carbon footprints and those associated
with creating a product carbon label and managing and operating
a product carbon labeling program, and options for minimizing
these costs.
(14) An evaluation of incentives (such as financial
incentives, brand reputation, and brand loyalty) to determine
whether reductions in emissions can be accelerated through
encouraging more efficient manufacturing or by encouraging
preferences for lower-emissions products to substitute for
higher-emissions products whose level of performance is no
better.
(b) Development of National Carbon Disclosure Program.--Upon
conclusion of the study, and not more than 36 months after the date of
enactment of this Act, the Administrator shall establish a national
product carbon disclosure program, participation in which shall be
voluntary, and which may involve a product carbon label with broad
applicability to the wholesale and consumer markets to enable and
encourage knowledge about carbon content by producers and consumers and
to inform efforts to reduce energy consumption (carbon dioxide
equivalent emissions) nationwide. In developing such a program, the
Administrator shall--
(1) consider the results of the study conducted under
subsection (a);
(2) consider existing and planned programs and proposals and
measurement standards (including the Publicly Available
Specification 2050, standards to be developed by the World
Resource Institute/World Business Council for Sustainable
Development, the International Standards Organization, and the
bill AB19 pending in the California legislature);
(3) consider the compatibility of a national product carbon
disclosure program with existing programs;
(4) utilize incentives and other means to spur the adoption
of product carbon disclosure and product carbon labeling;
(5) develop protocols and parameters for a product carbon
disclosure program, including a methodology and formula for
assessing, verifying, and potentially labeling a product's
greenhouse gas content, and for data quality requirements to
allow for product comparison;
(6) create a means to--
(A) document best practices;
(B) ensure clarity and consistency;
(C) work with suppliers, manufacturers, and retailers
to encourage participation;
(D) ensure that protocols are consistent and
comparable across like products; and
(E) evaluate the effectiveness of the program;
(7) make publicly available information on product carbon
content to ensure transparency;
(8) provide for public outreach, including a consumer
education program to increase awareness;
(9) develop training and education programs to help
businesses learn how to measure and communicate their carbon
footprint and easy tools and templates for businesses to use to
reduce cost and time to measure their products' carbon
lifecycle;
(10) consult with the Secretary of Energy, the Secretary of
Commerce, the Federal Trade Commission, and other Federal
agencies, as necessary;
(11) gather input from stakeholders through consultations,
public workshops or hearings with representatives of consumer
product manufacturers, consumer groups, and environmental
groups;
(12) utilize systems for verification and product
certification that will ensure that claims manufacturers make
about their products are valid;
(13) create a process for reviewing the accuracy of product
carbon label information and protecting the product carbon
label in the case of a change in the product's energy source,
supply chain, ingredients, or other factors, and specify the
frequency to which data should be updated; and
(14) develop a standardized, easily understandable carbon
label, if appropriate, and create a process for responding to
inaccuracies and misuses of such a label.
(c) Report to Congress.--Not later than 5 years after the program is
established pursuant to subsection (b), the Administrator shall report
to Congress on the effectiveness and impact of the program, the level
of voluntary participation, and any recommendations for additional
measures.
(d) Definitions.--As used in this section--
(1) the term ``carbon content'' means the amount of
greenhouse gas emissions and their warming impact on the
atmosphere expressed in carbon dioxide equivalent associated
with a product's value chain;
(2) the term ``carbon footprint'' means the level of
greenhouse gas emissions produced by a particular activity,
service, or entity; and
(3) the term ``carbon lifecycle'' means the greenhouse gas
emissions that are released as part of the processes of
creating, producing, processing or manufacturing, modifying,
transporting, distributing, storing, using, recycling, or
disposing of goods and services.
(e) Authorization of Appropriations.--There is authorized to be
appropriated to the Administrator $5,000,000 for the study required by
subsection (a) and $25,000,000 for each of fiscal years 2010 through
2025 for the program required under subsection (b).
TITLE III--REDUCING GLOBAL WARMING POLLUTION
SEC. 301. SHORT TITLE.
This title, and sections 112, 116, 221, 222, 223, and 401 of this
Act, may be cited as the ``Safe Climate Act''.
Subtitle A--Reducing Global Warming Pollution
SEC. 311. REDUCING GLOBAL WARMING POLLUTION.
The Clean Air Act (42 U.S.C. and following) is amended by adding
after title VI the following new title:
``TITLE VII--GLOBAL WARMING POLLUTION REDUCTION PROGRAM
``PART A--GLOBAL WARMING POLLUTION REDUCTION GOALS AND TARGETS
``SEC. 701. FINDINGS AND PURPOSE.
``(a) Findings.--The Congress finds as follows:
``(1) Global warming poses a significant threat to the
national security, economy, public health and welfare, and
environment of the United States, as well as of other nations.
``(2) Reviews of scientific studies, including by the
Intergovernmental Panel on Climate Change and the National
Academy of Sciences, demonstrate that global warming is the
result of the combined anthropogenic greenhouse gas emissions
from numerous sources of all types and sizes. Each increment of
emission, when combined with other emissions, causes or
contributes materially to the acceleration and extent of global
warming and its adverse effects for the lifetime of such gas in
the atmosphere. Accordingly, controlling emissions in small as
well as large amounts is essential to prevent, slow the pace
of, reduce the threats from, and mitigate global warming and
its adverse effects.
``(3) Because they induce global warming, greenhouse gas
emissions cause or contribute to injuries to persons in the
United States, including--
``(A) adverse health effects such as disease and loss
of life;
``(B) displacement of human populations;
``(C) damage to property and other interests related
to ocean levels, acidification, and ice changes;
``(D) severe weather and seasonal changes;
``(E) disruption, costs, and losses to business,
trade, employment, farms, subsistence, aesthetic
enjoyment of the environment, recreation, culture, and
tourism;
``(F) damage to plants, forests, lands, and waters;
``(G) harm to wildlife and habitat;
``(H) scarcity of water and the decreased abundance
of other natural resources;
``(I) worsening of tropospheric air pollution;
``(J) substantial threats of similar damage; and
``(K) other harm.
``(4) That many of these effects and risks of future effects
of global warming are widely shared does not minimize the
adverse effects individual persons have suffered, will suffer,
and are at risk of suffering because of global warming.
``(5) That some of the adverse and potentially catastrophic
effects of global warming are at risk of occurring and not a
certainty does not negate the harm persons suffer from actions
that increase the likelihood, extent, and severity of such
future impacts.
``(6) Nations of the world look to the United States for
leadership in addressing the threat of and harm from global
warming. Full implementation of the Safe Climate Act is
critical to engage other nations in an international effort to
mitigate the threat of and harm from global warming.
``(7) Global warming and its adverse effects are occurring
and are likely to continue and increase in magnitude, and to do
so at a greater and more harmful rate, unless the Safe Climate
Act is fully implemented and enforced in an expeditious manner.
``(b) Purpose.--It is the general purpose of the Safe Climate Act to
help prevent, reduce the pace of, mitigate, and remedy global warming
and its adverse effects. To fulfill such purpose, it is necessary to--
``(1) require the timely fulfillment of all governmental acts
and duties, both substantive and procedural, and the prompt
compliance of covered entities with the requirements of the
Safe Climate Act;
``(2) establish and maintain an effective, transparent, and
fair market for emission allowances and preserve the integrity
of the cap on emissions and of offset credits;
``(3) advance the production and deployment of clean energy
and energy efficiency technologies; and
``(4) ensure effective enforcement of the Safe Climate Act by
citizens, States, Indian tribes, and all levels of government
because each violation of the Safe Climate Act is likely to
result in an additional increment of greenhouse gas emission
and will slow the pace of implementation of the Safe Climate
Act and delay the achievement of the goals set forth in section
702, and cause or contribute to global warming and its adverse
effects.
``SEC. 702. ECONOMY-WIDE REDUCTION GOALS.
``The goals of the Safe Climate Act are to reduce steadily the
quantity of United States greenhouse gas emissions such that--
``(1) in 2012, the quantity of United States greenhouse gas
emissions does not exceed 97 percent of the quantity of United
States greenhouse gas emissions in 2005;
``(2) in 2020, the quantity of United States greenhouse gas
emissions does not exceed 80 percent of the quantity of United
States greenhouse gas emissions in 2005;
``(3) in 2030, the quantity of United States greenhouse gas
emissions does not exceed 58 percent of the quantity of United
States greenhouse gas emissions in 2005; and
``(4) in 2050, the quantity of United States greenhouse gas
emissions does not exceed 17 percent of the quantity of United
States greenhouse gas emissions in 2005.
``SEC. 703. REDUCTION TARGETS FOR SPECIFIED SOURCES.
``(a) In General.--The regulations issued under section 721 shall cap
and reduce annually the greenhouse gas emissions of capped sources each
calendar year beginning in 2012 such that--
``(1) in 2012, the quantity of greenhouse gas emissions from
capped sources does not exceed 97 percent of the quantity of
greenhouse gas emissions from such sources in 2005;
``(2) in 2020, the quantity of greenhouse gas emissions from
capped sources does not exceed 83 percent of the quantity of
greenhouse gas emissions from such sources in 2005;
``(3) in 2030, the quantity of greenhouse gas emissions from
capped sources does not exceed 58 percent of the quantity of
greenhouse gas emissions from such sources in 2005; and
``(4) in 2050, the quantity of greenhouse gas emissions from
capped sources does not exceed 17 percent of the quantity of
greenhouse gas emissions from such sources in 2005.
``(b) Definition.--For purposes of this section, the term `greenhouse
gas emissions from such sources in 2005' means emissions to which
section 722 would have applied if the requirements of this title for
the specified year had been in effect for 2005.
``SEC. 704. SUPPLEMENTAL POLLUTION REDUCTIONS.
``For the purposes of decreasing the likelihood of catastrophic
climate change, preserving tropical forests, building capacity to
generate offset credits, and facilitating international action on
global warming, the Administrator shall set aside the percentage
specified in section 781 of the quantity of emission allowances
established under section 721(a) for each year, to be used to achieve a
reduction of greenhouse gas emissions from deforestation in developing
countries in accordance with part E. In 2020, activities supported
under part E shall provide greenhouse gas reductions in an amount equal
to an additional 10 percentage points of reductions from United States
greenhouse gas emissions in 2005. The Administrator shall distribute
these allowances with respect to activities in countries that enter
into and implement agreements or arrangements relating to reduced
deforestation as described in section 754(a)(2).
``SEC. 705. REVIEW AND PROGRAM RECOMMENDATIONS.
``(a) In General.--The Administrator shall, in consultation with
appropriate Federal agencies, submit to Congress a report not later
than July 1, 2013, and every 4 years thereafter, that includes--
``(1) an analysis of key findings based on the latest
scientific information and data relevant to global climate
change;
``(2) an analysis of capabilities to monitor and verify
greenhouse gas reductions on a worldwide basis, including for
the United States, as required under the Safe Climate Act; and
``(3) an analysis of the status of worldwide greenhouse gas
reduction efforts, including implementation of the Safe Climate
Act and other policies, both domestic and international, for
reducing greenhouse gas emissions, preventing dangerous
atmospheric concentrations of greenhouse gases, preventing
significant irreversible consequences of climate change, and
reducing vulnerability to the impacts of climate change.
``(b) Exception.--Paragraph (3) of subsection (a) shall not apply to
the first report submitted under such subsection.
``(c) Latest Scientific Information.--The analysis required under
subsection (a)(1) shall--
``(1) address existing scientific information and reports,
considering, to the greatest extent possible, the most recent
assessment report of the Intergovernmental Panel on Climate
Change, reports by the United States Global Change Research
Program, the Natural Resources Climate Change Adaptation Panel
established under section 475 of the American Clean Energy and
Security Act of 2009, and Federal agencies, and the European
Union's global temperature data assessment; and
``(2) review trends and projections for--
``(A) global and country-specific annual emissions of
greenhouse gases, and cumulative greenhouse gas
emissions produced between 1850 and the present,
including--
``(i) global cumulative emissions of
anthropogenic greenhouse gases;
``(ii) global annual emissions of
anthropogenic greenhouse gases; and
``(iii) by country, annual total, annual per
capita, and cumulative anthropogenic emissions
of greenhouse gases for the top 50 emitting
nations;
``(B) significant changes, both globally and by
region, in annual net non-anthropogenic greenhouse gas
emissions from natural sources, including permafrost,
forests, or oceans;
``(C) global atmospheric concentrations of greenhouse
gases, expressed in annual concentration units as well
as carbon dioxide equivalents based on 100-year global
warming potentials;
``(D) major climate forcing factors, such as
aerosols;
``(E) global average temperature, expressed as
seasonal and annual averages in land, ocean, and land-
plus-ocean averages; and
``(F) sea level rise;
``(3) assess the current and potential impacts of global
climate change on--
``(A) human populations, including impacts on public
health, economic livelihoods, subsistence, human
infrastructure, and displacement or permanent
relocation due to flooding, severe weather, extended
drought, erosion, or other ecosystem changes;
``(B) freshwater systems, including water resources
for human consumption and agriculture and natural and
managed ecosystems, flood and drought risks, and
relative humidity;
``(C) the carbon cycle, including impacts related to
the thawing of permafrost, the frequency and intensity
of wildfire, and terrestrial and ocean carbon sinks;
``(D) ecosystems and animal and plant populations,
including impacts on species abundance, phenology, and
distribution;
``(E) oceans and ocean ecosystems, including effects
on sea level, ocean acidity, ocean temperatures, coral
reefs, ocean circulation, fisheries, and other
indicators of ocean ecosystem health;
``(F) the cryosphere, including effects on ice sheet
mass balance, mountain glacier mass balance, and sea-
ice extent and volume;
``(G) changes in the intensity, frequency, or
distribution of severe weather events, including
precipitation, tropical cyclones, tornadoes, and severe
heat waves;
``(H) agriculture and forest systems; and
``(I) any other indicators the Administrator deems
appropriate;
``(4) summarize any significant socio-economic impacts of
climate change in the United States, including the territories
of the United States, drawing on work by Federal agencies and
the academic literature, including impacts on--
``(A) public health;
``(B) economic livelihoods and subsistence;
``(C) displacement or permanent relocation due to
flooding, severe weather, extended drought, or other
ecosystem changes;
``(D) human infrastructure, including coastal
infrastructure vulnerability to extreme events and sea
level rise, river floodplain infrastructure, and sewer
and water management systems;
``(E) agriculture and forests, including effects on
potential growing season, distribution, and yield;
``(F) water resources for human consumption,
agriculture and natural and managed ecosystems, flood
and drought risks, and relative humidity;
``(G) energy supply and use; and
``(H) transportation;
``(5) in assessing risks and impacts, use a risk management
framework, including both qualitative and quantitative
measures, to assess the observed and projected impacts of
current and future climate change, accounting for--
``(A) both monetized and non-monetized losses;
``(B) potential nonlinear, abrupt, or essentially
irreversible changes in the climate system;
``(C) potential nonlinear increases in the cost of
impacts;
``(D) potential low-probability, high impact events;
and
``(E) whether impacts are transitory or essentially
permanent; and
``(6) based on the findings of the Administrator under this
section, as well as assessments produced by the
Intergovernmental Panel on Climate Change, the United States
Global Change Research program, and other relevant scientific
entities--
``(A) describe increased risks to natural systems and
society that would result from an increase in global
average temperature 3.6 degrees Fahrenheit (2 degrees
Celsius) above the pre-industrial average or an
increase in atmospheric greenhouse gas concentrations
above 450 parts per million carbon dioxide equivalent;
and
``(B) identify and assess--
``(i) significant residual risks not avoided
by the thresholds described in subparagraph
(A);
``(ii) alternative thresholds or targets that
may more effectively limit the risks identified
pursuant to clause (i); and
``(iii) thresholds above those described in
subparagraph (A) which significantly increase
the risk of certain impacts or render them
essentially permanent.
``(d) Status of Monitoring and Verification Capabilities to Evaluate
Greenhouse Gas Reduction Efforts.--The analysis required under
subsection (a)(2) shall evaluate the capabilities of the monitoring,
reporting, and verification systems used to quantify progress in
achieving reductions in greenhouse gas emissions both globally and in
the United States (as described in section 702), including--
``(1) quantification of emissions and emission reductions by
entities participating in the cap and trade program under this
title;
``(2) quantification of emissions and emission reductions by
entities participating in the offset program under this title;
``(3) quantification of emission and emissions reductions by
entities regulated by performance standards;
``(4) quantification of aggregate net emissions and emissions
reductions by the United States; and
``(5) quantification of global changes in net emissions and
in sources and sinks of greenhouse gases.
``(e) Status of Greenhouse Gas Reduction Efforts.--The analysis
required under subsection (a)(3) shall address--
``(1) whether the programs under Safe Climate Act and other
Federal statutes are resulting in sufficient United States
greenhouse gas emissions reductions to meet the emissions
reduction goals described in section 702, taking into account
the use of offsets; and
``(2) whether United States actions, taking into account
international actions, commitments, and trends, and considering
the range of plausible emissions scenarios, are sufficient to
avoid--
``(A) atmospheric greenhouse gas concentrations above
450 parts per million carbon dioxide equivalent;
``(B) global average surface temperature 3.6 degrees
Fahrenheit (2 degrees Celsius) above the pre-industrial
average, or such other temperature thresholds as the
Administrator deems appropriate; and
``(C) other temperature or greenhouse gas thresholds
identified pursuant to subsection (c)(6)(B).
``(f) Recommendations.--
``(1) Latest scientific information.--Based on the analysis
described in subsection (a)(1), each report under subsection
(a) shall identify actions that could be taken to--
``(A) improve the characterization of changes in the
earth-climate system and impacts of global climate
change;
``(B) better inform decision making and actions
related to global climate change;
``(C) mitigate risks to natural and social systems;
and
``(D) design policies to better account for climate
risks.
``(2) Monitoring, reporting and verification.--Based on the
analysis described in subsection (a)(2), each report under
subsection (a) shall identify key gaps in measurement,
reporting, and verification capabilities and make
recommendations to improve the accuracy and reliability of
those capabilities.
``(3) Status of greenhouse gas reduction efforts.--Based on
the analysis described in subsection (a)(3), taking into
account international actions, commitments, and trends, and
considering the range of plausible emissions scenarios, each
report under subsection (a) shall identify--
``(A) the quantity of additional reductions required
to meet the emissions reduction goals in section 702;
``(B) the quantity of additional reductions in global
greenhouse gas emissions needed to avoid the
concentration and temperature thresholds identified in
subsection (e); and
``(C) possible strategies and approaches for
achieving additional reductions.
``(g) Authorization of Appropriations.--There are authorized to be
appropriated to carry out this section such sums as may be necessary.
``SEC. 706. NATIONAL ACADEMY REVIEW.
``(a) In General.--Not later than 1 year after the date of enactment
of this title, the Administrator shall offer to enter into a contract
with the National Academy of Sciences (in this section referred to as
the `Academy') under which the Academy shall, not later than July 1,
2014, and every 4 years thereafter, submit to Congress and the
Administrator a report that includes--
``(1) a review of the most recent report and recommendations
issued under section 705; and
``(2) an analysis of technologies to achieve reductions in
greenhouse gas emissions.
``(b) Failure to Issue a Report.--In the event that the Administrator
has not issued all or part of the most recent report required under
section 705, the Academy shall conduct its own review and analysis of
the required information.
``(c) Technological Information.--The analysis required under
subsection (a)(2) shall--
``(1) review existing technological information and reports,
including the most recent reports by the Department of Energy,
the United States Global Change Research Program, the
Intergovernmental Panel on Climate Change, and the
International Energy Agency and any other relevant information
on technologies or practices that reduce or limit greenhouse
gas emissions;
``(2) include the participation of technical experts from
relevant private industry sectors;
``(3) review the current and future projected deployment of
technologies and practices in the United States that reduce or
limit greenhouse gas emissions, including--
``(A) technologies for capture and sequestration of
greenhouse gases;
``(B) technologies to improve energy efficiency;
``(C) low- or zero-greenhouse gas emitting energy
technologies;
``(D) low- or zero-greenhouse gas emitting fuels;
``(E) biological sequestration practices and
technologies; and
``(F) any other technologies the Academy deems
relevant; and
``(4) review and compare the emissions reduction potential,
commercial viability, market penetration, investment trends,
and deployment of the technologies described in paragraph (3),
including--
``(A) the need for additional research and
development, including publicly funded research and
development;
``(B) the extent of commercial deployment, including,
where appropriate, a comparison to the cost and level
of deployment of conventional fossil fuel-fired energy
technologies and devices; and
``(C) an evaluation of any substantial technological,
legal, or market-based barriers to commercial
deployment.
``(d) Recommendations.--
``(1) Latest scientific information.--Based on the review
described in subsection (a)(1), the Academy shall identify
actions that could be taken to--
``(A) improve the characterization of changes in the
earth-climate system and impacts of global climate
change;
``(B) better inform decision making and actions
related to global climate change;
``(C) mitigate risks to natural and social systems;
``(D) design policies to better account for climate
risks; and
``(E) improve the accuracy and reliability of
capabilities to monitor, report, and verify greenhouse
gas emissions reduction efforts.
``(2) Technological information.--Based on the analysis
described in subsection (a)(2), the Academy shall identify--
``(A) additional emissions reductions that may be
possible as a result of technologies described in the
analysis;
``(B) barriers to the deployment of such
technologies; and
``(C) actions that could be taken to speed deployment
of such technologies.
``(3) Status of greenhouse gas reduction efforts.--Based on
the review described in subsection (a)(1), the Academy shall
identify--
``(A) the quantity of additional reductions required
to meet the emissions reduction goals described in
section 702; and
``(B) the quantity of additional reductions in global
greenhouse gas emissions needed to avoid the
concentration and temperature thresholds described in
section 705(c)(6)(A) or identified pursuant to section
705(c)(6)(B).
``(e) Authorization of Appropriations.--There are authorized to be
appropriated to carry out this section such sums as may be necessary.
``SEC. 707. PRESIDENTIAL RESPONSE AND RECOMMENDATIONS.
``Not later than July 1, 2015, and every 4 years thereafter--
``(1) the President shall direct relevant Federal agencies to
use existing statutory authority to take appropriate actions
identified in the reports submitted under sections 705 and 706
and to address any shortfalls identified in such reports; and
``(2) in the event that the National Academy of Sciences has
concluded, in the most recent report submitted under section
706, that the United States will not achieve the necessary
domestic greenhouse gas emissions reductions, or that global
actions will not maintain safe global average surface
temperature and atmospheric greenhouse gas concentration
thresholds, the President shall submit to Congress a plan
identifying domestic and international actions that will
achieve necessary additional greenhouse gas reductions,
including any recommendations for legislative action.
``PART B--DESIGNATION AND REGISTRATION OF GREENHOUSE GASES
``SEC. 711. DESIGNATION OF GREENHOUSE GASES.
``(a) Greenhouse Gases.--For purposes of this title, the following
are greenhouse gases:
``(1) Carbon dioxide.
``(2) Methane.
``(3) Nitrous oxide.
``(4) Sulfur hexafluoride.
``(5) Hydrofluorocarbons from a chemical manufacturing
process at an industrial stationary source.
``(6) Any perfluorocarbon.
``(7) Nitrogen trifluoride.
``(8) Any other anthropogenic gas designated as a greenhouse
gas by the Administrator under this section.
``(b) Determination on Administrator's Initiative.--The Administrator
shall, by rule--
``(1) determine whether 1 metric ton of another anthropogenic
gas makes the same or greater contribution to global warming
over 100 years as 1 metric ton of carbon dioxide;
``(2) determine the carbon dioxide equivalent value for each
gas with respect to which the Administrator makes an
affirmative determination under paragraph (1);
``(3) for each gas with respect to which the Administrator
makes an affirmative determination under paragraph (1) and that
is used as a substitute for a class I or class II substance
under title VI, determine the extent to which to regulate that
gas under section 619 and specify appropriate compliance
obligations under section 619;
``(4) designate as a greenhouse gas for purposes of this
title each gas for which the Administrator makes an affirmative
determination under paragraph (1), to the extent that it is not
regulated under section 619; and
``(5) specify the appropriate compliance obligations under
this title for each gas designated as a greenhouse gas under
paragraph (4).
``(c) Petitions to Designate a Greenhouse Gas.--
``(1) In general.--Any person may petition the Administrator
to designate as a greenhouse gas any anthropogenic gas 1 metric
ton of which makes the same or greater contribution to global
warming over 100 years as 1 metric ton of carbon dioxide.
``(2) Contents of petition.--The petitioner shall provide
sufficient data, as specified by rule by the Administrator, to
demonstrate that the gas is likely to be a greenhouse gas and
is likely to be produced, imported, used, or emitted in the
United States. To the extent practicable, the petitioner shall
also identify producers, importers, distributors, users, and
emitters of the gas in the United States.
``(3) Review and action by the administrator.--Not later than
90 days after receipt of a petition under paragraph (2), the
Administrator shall determine whether the petition is complete
and notify the petitioner and the public of the decision.
``(4) Additional information.--The Administrator may require
producers, importers, distributors, users, or emitters of the
gas to provide information on the contribution of the gas to
global warming over 100 years compared to carbon dioxide.
``(5) Treatment of petition.--For any substance used as a
substitute for a class I or class II substance under title VI,
the Administrator may elect to treat a petition under this
subsection as a petition to list the substance as a class II,
group II substance under section 619, and may require the
petition to be amended to address listing criteria promulgated
under that section.
``(6) Determination.--Not later than 2 years after receipt of
a complete petition, the Administrator shall, after notice and
an opportunity for comment--
``(A) issue and publish in the Federal Register--
``(i) a determination that 1 metric ton of
the gas does not make a contribution to global
warming over 100 years that is equal to or
greater than that made by 1 metric ton of
carbon dioxide; and
``(ii) an explanation of the decision; or
``(B) determine that 1 metric ton of the gas makes a
contribution to global warming over 100 years that is
equal to or greater than that made by 1 metric ton of
carbon dioxide, and take the actions described in
subsection (b) with respect to such gas.
``(7) Grounds for denial.--The Administrator may not deny a
petition under this subsection solely on the basis of
inadequate Environmental Protection Agency resources or time
for review.
``(d) Science Advisory Board Consultation.--
``(1) Consultation.--The Administrator shall--
``(A) give notice to the Science Advisory Board prior
to making a determination under subsection (b)(1),
(c)(6), or (e)(2)(B);
``(B) consider the written recommendations of the
Science Advisory Board under paragraph (2) regarding
the determination; and
``(C) consult with the Science Advisory Board
regarding such determination, including consultation
subsequent to receipt of such written recommendations.
``(2) Formulation of recommendations.--Upon receipt of notice
under paragraph (1)(A) regarding a pending determination under
subsection (b)(1), (c)(6), or (e)(2)(B), the Science Advisory
Board shall--
``(A) formulate recommendations regarding such
determination, subject to a peer review process; and
``(B) submit such recommendations in writing to the
Administrator.
``(e) Manufacturing and Emission Notices.--
``(1) Notice requirement.--
``(A) In general.--Effective 24 months after the date
of enactment of this title, no person may manufacture
or introduce into interstate commerce a fluorinated
gas, or emit a significant quantity, as determined by
the Administrator, of any fluorinated gas that is
generated as a byproduct during the production or use
of another fluorinated gas, unless--
``(i) the gas is designated as a greenhouse
gas under this section or is an ozone-depleting
substance listed as a class I or class II
substance under title VI;
``(ii) the Administrator has determined that
1 metric ton of such gas does not make a
contribution to global warming that is equal to
or greater than that made by 1 metric ton of
carbon dioxide; or
``(iii) the person manufacturing or importing
the gas for distribution into interstate
commerce, or emitting the gas, has submitted to
the Administrator, at least 90 days before the
start of such manufacture, introduction into
commerce, or emission, a notice of such
person's manufacture, introduction into
commerce, or emission of such gas, and the
Administrator has not determined that notice or
a substantially similar notice is incomplete.
``(B) Alternative compliance.--For a gas that is a
substitute for a class I or class II substance under
title VI and either has been listed as acceptable for
use under section 612 or is currently subject to
evaluation under section 612, the Administrator may
accept the notice and information provided pursuant to
that section as fulfilling the obligation under clause
(iii) of subparagraph (A).
``(2) Review and action by the administrator.--
``(A) Completeness.--Not later than 90 days after
receipt of notice under paragraph (1)(A)(iii) or (B),
the Administrator shall determine whether the notice is
complete.
``(B) Determination.-- If the Administrator
determines that the notice is complete, the
Administrator shall, after notice and an opportunity
for comment, not later than 12 months after receipt of
the notice--
``(i) issue and publish in the Federal
Register a determination that 1 metric ton of
the gas does not make a contribution to global
warming over 100 years that is equal to or
greater than that made by 1 metric ton of
carbon dioxide and an explanation of the
decision; or
``(ii) determine that 1 metric ton of the gas
makes a contribution to global warming over 100
years that is equal to or greater than that
made by 1 metric ton of carbon dioxide, and
take the actions described in subsection (b)
with respect to such gas.
``(f) Regulations.--Not later than one year after the date of
enactment of this title, the Administrator shall promulgate regulations
to carry out this section. Such regulations shall include--
``(1) requirements for the contents of a petition submitted
under subsection (c);
``(2) requirements for the contents of a notice required
under subsection (e); and
``(3) methods and standards for evaluating the carbon dioxide
equivalent value of a gas.
``(g) Gases Regulated Under Title VI.--The Administrator shall not
designate a gas as a greenhouse gas under this section to the extent
that the gas is regulated under title VI.
``(h) Savings Clause.--Nothing in this section shall be interpreted
to relieve any person from complying with the requirements of section
612.
``SEC. 712. CARBON DIOXIDE EQUIVALENT VALUE OF GREENHOUSE GASES.
``(a) Measure of Quantity of Greenhouse Gases.--Any provision of this
title or title VIII that refers to a quantity or percentage of a
quantity of greenhouse gases shall mean the quantity or percentage of
the greenhouse gases expressed in carbon dioxide equivalents.
``(b) Initial Value.--Except as provided by the Administrator under
this section or section 711--
``(1) the carbon dioxide equivalent value of greenhouse gases
for purposes of this Act shall be as follows:
``CARBON DIOXIDE EQUIVALENT OF 1 TON OF LISTED GREENHOUSE GASES
----------------------------------------------------------------------------------------------------------------
Greenhouse gas (1 metric ton) Carbon dioxide equivalent (metric tons)
----------------------------------------------------------------------------------------------------------------
Carbon dioxide 1
----------------------------------------------------------------------------------------------------------------
Methane 25
----------------------------------------------------------------------------------------------------------------
Nitrous oxide 298
----------------------------------------------------------------------------------------------------------------
HFC-23 14,800
----------------------------------------------------------------------------------------------------------------
HFC-125 3,500
----------------------------------------------------------------------------------------------------------------
HFC-134a 1,430
----------------------------------------------------------------------------------------------------------------
HFC-143a 4,470
----------------------------------------------------------------------------------------------------------------
HFC-152a 124
----------------------------------------------------------------------------------------------------------------
HFC-227ea 3,220
----------------------------------------------------------------------------------------------------------------
HFC-236fa 9,810
----------------------------------------------------------------------------------------------------------------
HFC-4310mee 1,640
----------------------------------------------------------------------------------------------------------------
CF4 7,390
----------------------------------------------------------------------------------------------------------------
C2F6 12,200
----------------------------------------------------------------------------------------------------------------
C4F10 8,860
----------------------------------------------------------------------------------------------------------------
C6F14 9,300
----------------------------------------------------------------------------------------------------------------
SF6 22,800
----------------------------------------------------------------------------------------------------------------
NF3 17,200
----------------------------------------------------------------------------------------------------------------
; and
``(2) the carbon dioxide equivalent value for purposes of
this Act for any greenhouse gas not listed in the table under
paragraph (1) shall be the 100-year Global Warming Potentials
provided in the Intergovernmental Panel on Climate Change
Fourth Assessment Report.
``(c) Periodic Review.--
``(1) Not later than February 1, 2017, and (except as
provided in paragraph (3)) not less than every 5 years
thereafter, the Administrator shall--
``(A) review and, if appropriate, revise the carbon
dioxide equivalent values established under this
section or section 711(b)(2), based on a determination
of the number of metric tons of carbon dioxide that
makes the same contribution to global warming over 100
years as 1 metric ton of each greenhouse gas; and
``(B) publish in the Federal Register the results of
that review and any revisions.
``(2) A revised determination published in the Federal
Register under paragraph (1)(B) shall take effect for
greenhouse gas emissions starting on January 1 of the first
calendar year starting at least 9 months after the date on
which the revised determination was published.
``(3) The Administrator may decrease the frequency of review
and revision under paragraph (1) if the Administrator
determines that such decrease is appropriate in order to
synchronize such review and revision with any similar review
process carried out pursuant to the United Nations Framework
Convention on Climate Change, done at New York on May 9, 1992,
or to an agreement negotiated under that convention, except
that in no event shall the Administrator carry out such review
and revision any less frequently than every 10 years.
``(d) Methodology.--In setting carbon dioxide equivalent values, for
purposes of this section or section 711, the Administrator shall take
into account publications by the Intergovernmental Panel on Climate
Change or a successor organization under the auspices of the United
Nations Environmental Programme and the World Meteorological
Organization.
``SEC. 713. GREENHOUSE GAS REGISTRY.
``(a) Definitions.--For purposes of this section:
``(1) Climate registry.--The term `Climate Registry' means
the greenhouse gas emissions registry jointly established and
managed by more than 40 States and Indian tribes in 2007 to
collect high-quality greenhouse gas emission data from
facilities, corporations, and other organizations to support
various greenhouse gas emission reporting and reduction
policies for the member States and Indian tribes.
``(2) Reporting entity.--The term `reporting entity' means--
``(A) a covered entity;
``(B) an entity that--
``(i) would be a covered entity if it had
emitted, produced, imported, manufactured, or
delivered in 2008 or any subsequent year more
than the applicable threshold level in the
definition of covered entity in paragraph (13)
of section 700; and
``(ii) has emitted, produced, imported,
manufactured, or delivered in 2008 or any
subsequent year more than the applicable
threshold level in the definition of covered
entity in paragraph (13) of section 700,
provided that the figure of 25,000 tons of
carbon dioxide equivalent is read instead as
10,000 tons of carbon dioxide equivalent and
the figure of 460,000,000 cubic feet is read
instead as 184,000,000 cubic feet;
``(C) any other entity that emits a greenhouse gas,
or produces, imports, manufactures, or delivers
material whose use results or may result in greenhouse
gas emissions if the Administrator determines that
reporting under this section by such entity will help
achieve the purposes of this title or title VIII;
``(D) any vehicle fleet with emissions of more than
25,000 tons of carbon dioxide equivalent on an annual
basis, if the Administrator determines that the
inclusion of such fleet will help achieve the purposes
of this title or title VIII; or
``(E) any entity that delivers electricity to an
energy-intensive facility in an industrial sector that
meets the energy or greenhouse gas intensity criteria
in section 764(b)(2)(A)(i).
``(b) Regulations.--
``(1) In general.--Not later than 6 months after the date of
enactment of this title, the Administrator shall issue
regulations establishing a Federal greenhouse gas registry.
Such regulations shall--
``(A) require reporting entities to submit to the
Administrator data on--
``(i) greenhouse gas emissions in the United
States;
``(ii) the production and manufacture in the
United States, importation into the United
States, and, at the discretion of the
Administrator, exportation from the United
States, of fuels and industrial gases the uses
of which result or may result in greenhouse gas
emissions;
``(iii) deliveries in the United States of
natural gas, and any other gas meeting the
specifications for commingling with natural gas
for purposes of delivery, the combustion of
which result or may result in greenhouse gas
emissions; and
``(iv) the capture and sequestration of
greenhouse gases;
``(B) require covered entities and, where
appropriate, other reporting entities to submit to the
Administrator data sufficient to ensure compliance with
or implementation of the requirements of this title;
``(C) require reporting of electricity delivered to
industrial sources in energy-intensive industries;
``(D) ensure the completeness, consistency,
transparency, accuracy, precision, and reliability of
such data;
``(E) take into account the best practices from the
most recent Federal, State, tribal, and international
protocols for the measurement, accounting, reporting,
and verification of greenhouse gas emissions, including
protocols from the Climate Registry and other mandatory
State or multistate authorized programs;
``(F) take into account the latest scientific
research;
``(G) require that, for covered entities with respect
to greenhouse gases to which section 722 applies, and,
to the extent determined to be appropriate by the
Administrator, for covered entities with respect to
other greenhouse gases and for other reporting
entities, submitted data are based on--
``(i) continuous monitoring systems for fuel
flow or emissions, such as continuous emission
monitoring systems;
``(ii) alternative systems that are
demonstrated as providing data with the same
precision, reliability, accessibility, and
timeliness, or, to the extent the Administrator
determines is appropriate for reporting small
amounts of emissions, the same precision,
reliability, and accessibility and similar
timeliness, as data provided by continuous
monitoring systems for fuel flow or emissions;
or
``(iii) alternative methodologies that are
demonstrated to provide data with precision,
reliability, accessibility, and timeliness, or,
to the extent the Administrator determines is
appropriate for reporting small amounts of
emissions, precision, reliability, and
accessibility, as similar as is technically
feasible to that of data generally provided by
continuous monitoring systems for fuel flow or
emissions, if the Administrator determines
that, with respect to a reporting entity, there
is no continuous monitoring system or
alternative system described in clause (i) or
(ii) that is technically feasible;
``(H) require that the Administrator, in determining
the extent to which the requirement to use systems or
methodologies in accordance with subparagraph (G) is
appropriate for reporting entities other than covered
entities or for greenhouse gases to which section 722
does not apply, consider the cost of using such systems
and methodologies, and of using other systems and
methodologies that are available and suitable, for
quantifying the emissions involved in light of the
purposes of this title, including the goal of
collecting consistent entity-wide data;
``(I) include methods for minimizing double reporting
and avoiding irreconcilable double reporting of
greenhouse gas emissions;
``(J) establish measurement protocols for carbon
capture and sequestration systems, taking into
consideration the regulations promulgated under section
813;
``(K) require that reporting entities provide the
data required under this paragraph in reports submitted
electronically to the Administrator, in such form and
containing such information as may be required by the
Administrator;
``(L) include requirements for keeping records
supporting or related to, and protocols for auditing,
submitted data;
``(M) establish consistent policies for calculating
carbon content and greenhouse gas emissions for each
type of fossil fuel with respect to which reporting is
required;
``(N) subsequent to implementation of policies
developed under subparagraph (M), provide for immediate
dissemination, to States, Indian tribes, and on the
Internet, of all data reported under this section as
soon as practicable after electronic audit by the
Administrator and any resulting correction of data,
except that data shall not be disseminated under this
subparagraph if--
``(i) its nondissemination is vital to the
national security of the United States, as
determined by the President; or
``(ii) it is confidential business
information that cannot be derived from
information that is otherwise publicly
available and that would cause significant
calculable competitive harm if published,
except that--
``(I) data relating to greenhouse gas
emissions, including any upstream or
verification data from reporting
entities, shall not be considered to be
confidential business information; and
``(II) data that is confidential
business information shall be provided
to a State or Indian tribe within whose
jurisdiction the reporting entity is
located, if the Administrator
determines that such State or Indian
tribe has in effect protections for
confidential business information that
are equivalent to protections
applicable to the Federal Government;
``(O) prescribe methods by which the Administrator
shall, in cases in which satisfactory data are not
submitted to the Administrator for any period of time,
estimate emission, production, importation,
manufacture, or delivery levels--
``(i) for covered entities with respect to
greenhouse gas emissions, production,
importation, manufacture, or delivery regulated
under this title to ensure that emissions,
production, importation, manufacture, or
deliveries are not underreported, and to create
a strong incentive for meeting data monitoring
and reporting requirements--
``(I) with a conservative estimate of
the highest emission, production,
importation, manufacture, or delivery
levels that may have occurred during
the period for which data are missing;
or
``(II) to the extent the
Administrator considers appropriate,
with an estimate of such levels
assuming the unit is emitting,
producing, importing, manufacturing, or
delivering at a maximum potential level
during the period, in order to ensure
that such levels are not underreported
and to create a strong incentive for
meeting data monitoring and reporting
requirements; and
``(ii) for covered entities with respect to
greenhouse gas emissions to which section 722
does not apply and for other reporting
entities, with a reasonable estimate of the
emission, production, importation, manufacture,
or delivery levels that may have occurred
during the period for which data are missing;
``(P) require the designation of a designated
representative for each reporting entity;
``(Q) require an appropriate certification, by the
designated representative for the reporting entity, of
accurate and complete accounting of greenhouse gas
emissions, as determined by the Administrator; and
``(R) include requirements for other data necessary
for accurate and complete accounting of greenhouse gas
emissions, as determined by the Administrator,
including data for quality assurance of monitoring
systems, monitors and other measurement devices, and
other data needed to verify reported emissions,
production, importation, manufacture, or delivery.
``(2) Timing.--
``(A) Calendar years 2007 through 2010.--For a base
period of calendar years 2007 through 2010, each
reporting entity shall submit annual data required
under this section to the Administrator not later than
March 31, 2011. The Administrator may waive or modify
reporting requirements for calendar years 2007 through
2010 for categories of reporting entities to the extent
that the Administrator determines that the reporting
entities did not keep data or records necessary to meet
reporting requirements. The Administrator may, in
addition to or in lieu of such requirements, collect
information on energy consumption and production.
``(B) Subsequent calendar years.--For calendar year
2011 and each subsequent calendar year, each reporting
entity shall submit quarterly data required under this
section to the Administrator not later than 60 days
after the end of the applicable quarter, except when
the data is already being reported to the Administrator
on an earlier timeframe for another program.
``(3) Waiver of reporting requirements.--The Administrator
may waive reporting requirements under this section for
specific entities to the extent that the Administrator
determines that sufficient and equally or more reliable
verified and timely data are available to the Administrator and
the public on the Internet under other mandatory statutory
requirements.
``(4) Alternative threshold.--The Administrator may, by rule,
establish applicability thresholds for reporting under this
section using alternative metrics and levels, provided that
such metrics and levels are easier to administer and cover the
same size and type of sources as the threshold defined in this
section.
``(c) Interrelationship With Other Systems.--In developing the
regulations issued under subsection (b), the Administrator shall take
into account the work done by the Climate Registry and other mandatory
State or multistate programs. Such regulations shall include an
explanation of any major differences in approach between the system
established under the regulations and such registries and programs.
``PART C--PROGRAM RULES
``SEC. 721. EMISSION ALLOWANCES.
``(a) In General.--The Administrator shall establish a separate
quantity of emission allowances for each calendar year starting in
2012, in the amounts prescribed under subsection (e).
``(b) Identification Numbers.--The Administrator shall assign to each
emission allowance established under subsection (a) a unique
identification number that includes the vintage year for that emission
allowance.
``(c) Legal Status of Emission Allowances.--
``(1) In general.--An allowance established by the
Administrator under this title does not constitute a property
right.
``(2) Termination or limitation.--Nothing in this Act or any
other provision of law shall be construed to limit or alter the
authority of the United States, including the Administrator
acting pursuant to statutory authority, to terminate or limit
allowances or offset credits.
``(3) Other provisions unaffected.--Except as otherwise
specified in this Act, nothing in this Act relating to
allowances or offset credits established or issued under this
title shall affect the application of any other provision of
law to a covered entity, or the responsibility for a covered
entity to comply with any such provision of law.
``(d) Savings Provision.--Nothing in this part shall be construed as
requiring a change of any kind in any State law regulating electric
utility rates and charges, or as affecting any State law regarding such
State regulation, or as limiting State regulation (including any
prudency review) under such a State law. Nothing in this part shall be
construed as modifying the Federal Power Act or as affecting the
authority of the Federal Energy Regulatory Commission under that Act.
Nothing in this part shall be construed to interfere with or impair any
program for competitive bidding for power supply in a State in which
such program is established.
``(e) Allowances for Each Calendar Year.--
``(1) In general.--Except as provided in paragraph (2), the
number of emission allowances established by the Administrator
under subsection (a) for each calendar year shall be as
provided in the following table:
----------------------------------------------------------------------------------------------------------------
``Calendar year Emission allowances (in millions)
----------------------------------------------------------------------------------------------------------------
2012 4,627
----------------------------------------------------------------------------------------------------------------
2013 4,544
----------------------------------------------------------------------------------------------------------------
2014 5,099
----------------------------------------------------------------------------------------------------------------
2015 5,003
----------------------------------------------------------------------------------------------------------------
2016 5,482
----------------------------------------------------------------------------------------------------------------
2017 5,375
----------------------------------------------------------------------------------------------------------------
2018 5,269
----------------------------------------------------------------------------------------------------------------
2019 5,162
----------------------------------------------------------------------------------------------------------------
2020 5,056
----------------------------------------------------------------------------------------------------------------
2021 4,903
----------------------------------------------------------------------------------------------------------------
2022 4,751
----------------------------------------------------------------------------------------------------------------
2023 4,599
----------------------------------------------------------------------------------------------------------------
2024 4,446
----------------------------------------------------------------------------------------------------------------
2025 4,294
----------------------------------------------------------------------------------------------------------------
2026 4,142
----------------------------------------------------------------------------------------------------------------
2027 3,990
----------------------------------------------------------------------------------------------------------------
2028 3,837
----------------------------------------------------------------------------------------------------------------
2029 3,685
----------------------------------------------------------------------------------------------------------------
2030 3,533
----------------------------------------------------------------------------------------------------------------
2031 3,408
----------------------------------------------------------------------------------------------------------------
2032 3,283
----------------------------------------------------------------------------------------------------------------
2033 3,158
----------------------------------------------------------------------------------------------------------------
2034 3,033
----------------------------------------------------------------------------------------------------------------
2035 2,908
----------------------------------------------------------------------------------------------------------------
2036 2,784
----------------------------------------------------------------------------------------------------------------
2037 2,659
----------------------------------------------------------------------------------------------------------------
2038 2,534
----------------------------------------------------------------------------------------------------------------
2039 2,409
----------------------------------------------------------------------------------------------------------------
2040 2,284
----------------------------------------------------------------------------------------------------------------
2041 2,159
----------------------------------------------------------------------------------------------------------------
2042 2,034
----------------------------------------------------------------------------------------------------------------
2043 1,910
----------------------------------------------------------------------------------------------------------------
2044 1,785
----------------------------------------------------------------------------------------------------------------
2045 1,660
----------------------------------------------------------------------------------------------------------------
2046 1,535
----------------------------------------------------------------------------------------------------------------
2047 1,410
----------------------------------------------------------------------------------------------------------------
2048 1,285
----------------------------------------------------------------------------------------------------------------
2049 1,160
----------------------------------------------------------------------------------------------------------------
2050 and each year thereafter 1,035
----------------------------------------------------------------------------------------------------------------
``(2) Revision.--
``(A) In general.--The Administrator may adjust, in
accordance with subparagraph (B), the number of
emission allowances established pursuant to paragraph
(1) if, after notice and an opportunity for public
comment, the Administrator determines that--
``(i) United States greenhouse gas emissions
in 2005 were other than 7,206 million metric
tons carbon dioxide equivalent;
``(ii) if the requirements of this title for
2012 had been in effect in 2005, section 722
would have required emission allowances to be
held for other than 66.2 percent of United
States greenhouse gas emissions in 2005;
``(iii) if the requirements of this title for
2014 had been in effect in 2005, section 722
would have required emission allowances to be
held for other than 75.7 percent of United
States greenhouse gas emissions in 2005; or
``(iv) if the requirements of this title for
2016 had been in effect in 2005, section 722
would have required emission allowances to be
held for other than 84.5 percent United States
greenhouse gas emissions in 2005.
``(B) Adjustment formula.--
``(i) In general.--If the Administrator
adjusts under this paragraph the number of
emission allowances established pursuant to
paragraph (1), the number of emission
allowances the Administrator establishes for
any given calendar year shall equal the product
of--
``(I) United States greenhouse gas
emissions in 2005, expressed in tons of
carbon dioxide equivalent;
``(II) the percent of United States
greenhouse gas emissions in 2005,
expressed in tons of carbon dioxide
equivalent, that would have been
subject to section 722 if the
requirements of this title for the
given calendar year had been in effect
in 2005; and
``(III) the percentage set forth for
that calendar year in section 703(a),
or determined under clause (ii) of this
subparagraph.
``(ii) Targets.--In applying the portion of
the formula in clause (i)(III) of this
subparagraph, for calendar years for which a
percentage is not listed in section 703(a), the
Administrator shall use a uniform annual
decline in the amount of emissions between the
years that are specified.
``(iii) Carbon dioxide equivalent value.--If
the Administrator adjusts under this paragraph
the number of emission allowances established
pursuant to paragraph (1), the Administrator
shall use the carbon dioxide equivalent values
established pursuant to section 712.
``(iv) Limitation on adjustment timing.--Once
a calendar year has started, the Administrator
may not adjust the number of emission
allowances to be established for that calendar
year.
``(C) Limitation on adjustment authority.--The
Administrator may adjust under this paragraph the
number of emission allowances to be established
pursuant to paragraph (1) only once.
``(f) Compensatory Allowance.--
``(1) In general.--The regulations promulgated under
subsection (h) shall provide for the establishment and
distribution of compensatory allowances for--
``(A) the destruction, in 2012 or later, of
fluorinated gases that are greenhouse gases if--
``(i) allowances or offset credits were
retired for their production or importation;
and
``(ii) such gases are not required to be
destroyed under any other provision of law;
``(B) the nonemissive use, in 2012 or later, of
petroleum-based or coal-based liquid or gaseous fuel,
petroleum coke, natural gas liquid, or natural gas as a
feedstock, if allowances or offset credits were retired
for the greenhouse gases that would have been emitted
from their combustion; and
``(C) the conversionary use, in 2012 or later, of
fluorinated gases in a manufacturing process, including
semiconductor research or manufacturing, if allowances
or offset credits were retired for the production or
importation of such gas.
``(2) Establishment and distribution.--
``(A) In general.--Not later than 90 days after the
end of each calendar year, the Administrator shall
establish and distribute to the entity taking the
actions described in subparagraph (A), (B), or (C) of
paragraph (1) a quantity of compensatory allowances
equivalent to the number of tons of carbon dioxide
equivalent of avoided emissions achieved through such
actions. In establishing the quantity of compensatory
allowances, the Administrator shall take into account
the carbon dioxide equivalent value of any greenhouse
gas resulting from such action.
``(B) Source of allowances.--Compensatory allowances
established under this subsection shall not be emission
allowances established under subsection (a).
``(C) Identification numbers.--The Administrator
shall assign to each compensatory allowance established
under subparagraph (A) a unique identification number.
``(3) Definitions.--For purposes of this subsection--
``(A) the term `destruction' means the conversion of
a greenhouse gas by thermal, chemical, or other means
to another gas or set of gases with little or no carbon
dioxide equivalent value;
``(B) the term `nonemissive use' means the use of
fossil fuel as a feedstock in an industrial or
manufacturing process to the extent that greenhouse
gases are not emitted from such process, and to the
extent that the products of such process are not
intended for use as, or to be contained in, a fuel; and
``(C) the term `conversionary use' means the
conversion during research or manufacturing of a
fluorinated gas into another greenhouse gas or set of
gases with a lower carbon dioxide equivalent value.
``(4) Feedstock emissions study.--
``(A) The Administrator may conduct a study to
determine the extent to which petroleum-based or coal-
based liquid or gaseous fuel, petroleum coke, natural
gas liquid, or natural gas are used as feedstocks in
manufacturing processes to produce products and the
greenhouse gas emissions resulting from such uses.
``(B) If as a result of such a study, the
Administrator determines that the use of such products
by noncovered sources results in substantial emissions
of greenhouse gases or their precursors and that such
emissions have not been adequately addressed under
other requirements of this Act, the Administrator may,
after notice and comment rulemaking, promulgate a
regulation reducing compensatory allowances
commensurately if doing so will not result in leakage.
``(g) Fluorinated Gases Assessment.--No later than March 31, 2014,
the Administrator shall conduct an assessment of the regulation of non-
HFC fluorinated gases under this title to determine whether the most
appropriate point of regulation is at the gas manufacturer or importer
level, or at the source of emissions downstream. If the Administrator
determines, based on consideration of environmental effectiveness, cost
effectiveness, administrative feasibility, extent of coverage of
emissions, and competitiveness considerations, that emissions of non-
HFC fluorinated gases can best be regulated by designating downstream
emission sources as covered entities with compliance obligations under
section 722, the Administrator shall, after notice and comment
rulemaking, change the definition of covered entity with respect to
fluorinated gases (other than HFCs) accordingly and establish such
requirements as are necessary to ensure compliance for such entities
with the requirements of this title.
``(h) Regulations.--Not later than 24 months after the date of
enactment of this title, the Administrator shall promulgate regulations
to carry out the provisions of this title.
``SEC. 722. PROHIBITION OF EXCESS EMISSIONS.
``(a) Prohibition.--Except as provided in subsection (c), effective
January 1, 2012, each covered entity is prohibited from emitting
greenhouse gases, and having attributable greenhouse gas emissions, in
combination, in excess of its allowable emissions level. A covered
entity's allowable emissions level for each calendar year is the number
of emission allowances (or credits or other allowances as provided in
subsection (d)) it holds as of 12:01 a.m. on April 1 (or a later date
established by the Administrator under subsection (j)) of the following
calendar year.
``(b) Methods of Demonstrating Compliance.--Except as otherwise
provided in this section, the owner or operator of a covered entity
shall not be considered to be in compliance with the prohibition in
subsection (a) unless, as of 12:01 a.m. on April 1 (or a later date
established by the Administrator under subsection (j)) of each calendar
year starting in 2013, the owner or operator holds a quantity of
emission allowances (or credits or other allowances as provided in
subsection (d)) at least as great as the quantity calculated as
follows:
``(1) Electricity sources.--For a covered entity described in
section 700(13)(A), 1 emission allowance for each ton of carbon
dioxide equivalent of greenhouse gas that such covered entity
emitted in the previous calendar year, excluding emissions
resulting from the combustion of--
``(A) petroleum-based or coal-based liquid fuel;
``(B) natural gas liquid;
``(C) renewable biomass or gas derived from renewable
biomass; or
``(D) petroleum coke or gas derived from petroleum
coke.
``(2) Fuel producers and importers.--For a covered entity
described in section 700(13)(B), 1 emission allowance for each
ton of carbon dioxide equivalent of greenhouse gas that would
be emitted from the combustion of any petroleum-based or coal-
based liquid fuel, petroleum coke, or natural gas liquid,
produced or imported by such covered entity during the previous
calendar year for sale or distribution in interstate commerce,
assuming no capture and sequestration of any greenhouse gas
emissions.
``(3) Industrial gas producers and importers.--For a covered
entity described in section 700(13)(C), 1 emission allowance
for each ton of carbon dioxide equivalent of fossil fuel-based
carbon dioxide, nitrous oxide, or any other fluorinated gas
that is a greenhouse gas (except for nitrogen trifluoride), or
any combination thereof, produced or imported by such covered
entity during the previous calendar year for sale or
distribution in interstate commerce or released as fugitive
emissions in the production of fluorinated gas.
``(4) Nitrogen trifluoride sources.--For a covered entity
described in section 700(13)(D), 1 emission allowance for each
ton of carbon dioxide equivalent of nitrogen trifluoride that
such covered entity emitted in the previous calendar year.
``(5) Geological sequestration sites.--For a covered entity
described in section 700(13)(E), 1 emission allowance for each
ton of carbon dioxide equivalent of greenhouse gas that such
covered entity emitted in the previous calendar year.
``(6) Industrial stationary sources.--For a covered entity
described in section 700(13)(F), (G), or (H), 1 emission
allowance for each ton of carbon dioxide equivalent of
greenhouse gas that such covered entity emitted in the previous
calendar year, excluding emissions resulting from--
``(A) the combustion of petroleum-based or coal-based
liquid fuel;
``(B) the combustion of natural gas liquid;
``(C) the combustion of renewable biomass or gas
derived from renewable biomass;
``(D) the combustion of petroleum coke or gas derived
from petroleum coke; or
``(E) the use of any fluorinated gas that is a
greenhouse gas purchased for use at that covered
entity, except for nitrogen trifluoride.
``(7) Industrial fossil fuel-fired combustion devices.--For a
covered entity described in section 700(13)(I), 1 emission
allowance for each ton of carbon dioxide equivalent of
greenhouse gas that the devices emitted in the previous
calendar year, excluding emissions resulting from the
combustion of--
``(A) petroleum-based or coal-based liquid fuel;
``(B) natural gas liquid;
``(C) renewable biomass or gas derived from renewable
biomass; or
``(D) petroleum coke or gas derived from petroleum
coke.
``(8) Natural gas local distribution companies.--For a
covered entity described in section 700(13)(J), 1 emission
allowance for each ton of carbon dioxide equivalent of
greenhouse gas that would be emitted from the combustion of the
natural gas, and any other gas meeting the specifications for
commingling with natural gas for purposes of delivery, that
such entity delivered during the previous calendar year to
customers that are not covered entities, assuming no capture
and sequestration of that greenhouse gas.
``(9) Algae-based fuels.--Where carbon dioxide (or another
greenhouse gas) is used as an input in the production of algae-
based fuels, the Administrator shall ensure that allowances are
required to be held either for the carbon dioxide used to grow
the algae or for the carbon dioxide emitted from combustion of
the fuel produced from such algae, but not for both.
``(10) Fugitive emissions.--The greenhouse gas emissions to
which paragraphs (1), (4), (6), and (7) apply shall not include
fugitive emissions of greenhouse gas, except to the extent the
Administrator determines that data on the carbon dioxide
equivalent value of greenhouse gas in the fugitive emissions
can be provided with sufficient precision, reliability,
accessibility, and timeliness to ensure the integrity of
emission allowances, the allowance tracking system, and the cap
on emissions.
``(11) Export exemption.--This section shall not apply to any
petroleum-based or coal-based liquid fuel, petroleum coke,
natural gas liquid, fossil fuel-based carbon dioxide, nitrous
oxide, or fluorinated gas that is exported for sale or use.
``(12) Natural gas liquids.--Notwithstanding subsection (a),
if the owner or operator of a covered entity described in
section 700(13)(B) that produces natural gas liquids does not
take ownership of the liquids, and is not responsible for the
distribution or use of the liquids in commerce, the owner of
the liquids shall be responsible for compliance with this
section, section 723, and other relevant sections of this title
with respect to such liquids. In the regulations promulgated
under section 721, the Administrator shall include such
provisions with respect to such liquids as the Administrator
determines are appropriate to determine and ensure compliance,
and to penalize noncompliance. In such a case, the owner of the
covered entity shall provide to the Administrator, in a manner
to be determined by the Administrator, information regarding
the quantity and ownership of liquids produced at the covered
entity.
``(13) Application of multiple paragraphs.--For a covered
entity to which more than 1 of paragraphs (1) through (8)
apply, all applicable paragraphs shall apply, except that not
more than 1 emission allowance shall be required for the same
emission.
``(c) Phase-in of Prohibition.--
``(1) Industrial stationary sources.--The prohibition under
subsection (a) shall first apply to a covered entity described
in section 700(13)(D), (F), (G), (H), or (I), with respect to
emissions occurring during calendar year 2014.
``(2) Natural gas local distribution companies.--The
prohibition under subsection (a) shall first apply to a covered
entity described in section 700(13)(J) with respect to
deliveries occurring during calendar year 2016.
``(d) Additional Methods.--In addition to using the method of
compliance described in subsection (b), a covered entity may do the
following:
``(1) Offset credits.--
``(A) In general.--Covered entities collectively may,
in accordance with this paragraph, use offset credits
to demonstrate compliance for up to a maximum of 2
billion tons of greenhouse gas emissions annually. The
ability to demonstrate compliance with offset credits
shall be divided pro rata among covered entities by
allowing each covered entity to satisfy a percentage of
the number of allowances required to be held under
subsection (b) to demonstrate compliance by holding 1
domestic offset credit or 1.25 international offset
credits in lieu of an emission allowance, except as
provided in subparagraph (D).
``(B) Applicable percentage.--The percentage referred
to in subparagraph (A) for a given calendar year shall
be determined by dividing 2 billion by the sum of 2
billion plus the number of emission allowances
established under section 721(a) for the previous year,
and multiplying that number by 100. Not more than one
half of the applicable percentage under this paragraph
may be used by holding domestic offset credits, and not
more than one half of the applicable percentage under
this paragraph may be used by holding international
offset credits, except as provided in subparagraph (C).
``(C) Modified percentages.--If the Administrator
determines that domestic offset credits available for
use in demonstrating compliance in any calendar year at
domestic offset prices generally equal to or less than
allowance prices, are likely to offset less than 0.9
billion tons of greenhouse gas emissions (measured in
tons of carbon dioxide equivalents), the Administrator
shall increase the percent of emissions that can be
offset through the use of international offset credits
(and decrease the percent of emissions that can be
allowed through the use of domestic offset credits by
the same amount) to reflect the amount that 1.0 billion
exceeds the number of domestic offset credits the
Administrator determines is available for that year, up
to a maximum of 0.5 billion tons of greenhouse gas
emissions.
``(D) International offset credits.--Notwithstanding
subparagraph (A), to demonstrate compliance prior to
calendar year 2018, a covered entity may use 1
international offset credit in lieu of an emission
allowance up to the amount permitted under this
paragraph.
``(E) President's recommendation.--The President may
make a recommendation to Congress as to whether the
number 2 billion specified in subparagraphs (A) and (B)
should be increased or decreased.
``(2) International emission allowances.--To demonstrate
compliance, a covered entity may hold an international emission
allowance in lieu of an emission allowance, except as modified
under section 728(d).
``(3) Compensatory allowances.--To demonstrate compliance, a
covered entity may hold a compensatory allowance obtained under
section 721(f) in lieu of an emission allowance.
``(e) Retirement of Allowances and Credits.--As soon as practicable
after a deadline established for covered entities to demonstrate
compliance with this title, the Administrator shall retire the quantity
of allowances or credits required to be held under this title.
``(f) Alternative Metrics.--For categories of covered entities
described in subparagraph (B), (C), (D), (G), (H), or (I) of section
700(13), the Administrator may, by rule, establish an applicability
threshold for inclusion under those subparagraphs using an alternative
metric and level, provided that such metric and level are easier to
administer and cover the same size and type of sources as the threshold
defined in such subparagraphs.
``(g) Threshold Review.--For each category of covered entities
described in subparagraph (B), (C), (D), (G), (H), or (I) of section
700(13), the Administrator shall, in 2020 and once every 8 years
thereafter, review the carbon dioxide equivalent emission thresholds
that are used to define covered entities. After consideration of--
``(1) emissions from covered entities in each such category,
and from other entities of the same type that emit less than
the threshold amount for the category (including emission
sources that commence operation after the date of enactment of
this title that are not covered entities); and
``(2) whether greater greenhouse gas emission reductions can
be cost-effectively achieved by lowering the applicable
threshold,
the Administrator may by rule lower such threshold to not less than
10,000 tons of carbon dioxide equivalent emissions. In determining the
cost effectiveness of potential reductions from lowering the threshold
for covered entities, the Administrator shall consider alternative
regulatory greenhouse gas programs, including setting standards under
other titles of this Act.
``(h) Designated Representatives.--The regulations promulgated under
section 721(h) shall require that each covered entity, and each entity
holding allowances or credits or receiving allowances or credits from
the Administrator under this title, select a designated representative.
``(i) Education and Outreach.--
``(1) In general.--The Administrator shall establish and
carry out a program of education and outreach to assist covered
entities, especially entities having little experience with
environmental regulatory requirements similar or comparable to
those under this title, in preparing to meet the compliance
obligations of this title. Such program shall include education
with respect to using markets to effectively achieve such
compliance.
``(2) Failure to receive information.--A failure to receive
information or assistance under this subsection may not be used
as a defense against an allegation of any violation of this
title.
``(j) Adjustment of Deadline.--The Administrator may, by rule,
establish a deadline for demonstrating compliance, for a calendar year,
later than the date provided in subsection (a), as necessary to ensure
the availability of emissions data, but in no event shall the deadline
be later than June 1.
``(k) Notice Requirement for Covered Entities Receiving Natural Gas
From Natural Gas Local Distribution Companies.--The owner or operator
of a covered entity that takes delivery of natural gas from a natural
gas local distribution company shall, not later than September 1 of
each calendar year, notify such natural gas local distribution company
in writing that such entity will qualify as a covered entity under this
title for that calendar year.
``(l) Compliance Obligation.--For purposes of this title, the year of
a compliance obligation is the year in which compliance is determined,
not the year in which the greenhouse gas emissions occur or the covered
entity has attributable greenhouse gas emissions.
``SEC. 723. PENALTY FOR NONCOMPLIANCE.
``(a) Enforcement.--A violation of any prohibition of, requirement
of, or regulation promulgated pursuant to this title shall be a
violation of this Act. It shall be a violation of this Act for a
covered entity to emit greenhouse gases, and have attributable
greenhouse gas emissions, in combination, in excess of its allowable
emissions level as provided in section 722(a). Each ton of carbon
dioxide equivalent for which a covered entity fails to demonstrate
compliance under section 722(b) shall be a separate violation.
``(b) Excess Emissions Penalty.--
``(1) In general.--The owner or operator of any covered
entity that fails for any year to comply, on the deadline
described in section 722(a) or (j), shall be liable for payment
to the Administrator of an excess emissions penalty in the
amount described in paragraph (2).
``(2) Amount.--The amount of an excess emissions penalty
required to be paid under paragraph (1) shall be equal to the
product obtained by multiplying--
``(A) the tons of carbon dioxide equivalent of
greenhouse gas emissions or attributable greenhouse gas
emissions for which the owner or operator of a covered
entity failed to comply under section 722(b) on the
deadline; by
``(B) twice the fair market value of emission
allowances established for emissions occurring in the
calendar year for which the emission allowances were
due.
``(3) Timing.--An excess emissions penalty required under
this subsection shall be immediately due and payable to the
Administrator, without demand, in accordance with regulations
promulgated by the Administrator, which shall be issued not
later than 2 years after the date of enactment of this title.
``(4) No effect on liability.--An excess emissions penalty
due and payable by the owners or operators of a covered entity
under this subsection shall not diminish the liability of the
owners or operators for any fine, penalty, or assessment
against the owners or operators for the same violation under
any other provision of this Act or any other law.
``(c) Excess Emissions Allowances.--The owner or operator of a
covered entity that fails for any year to comply on the deadline
described in section 722(a) or (j) shall be liable to offset the
covered entity's excess combination of greenhouse gases emitted and
attributable greenhouse gas emissions by an equal quantity of emission
allowances during the following calendar year, or such longer period as
the Administrator may prescribe. During the year in which the covered
entity failed to comply, or any year thereafter, the Administrator may
deduct the emission allowances required under this subsection to offset
the covered entity's excess actual or attributable emissions.
``SEC. 724. TRADING.
``(a) Permitted Transactions.--Except as otherwise provided in this
title, the lawful holder of an emission allowance, compensatory
allowance, or offset credit may, without restriction, sell, exchange,
transfer, hold for compliance in accordance with section 722, or
request that the Administrator retire the emission allowance,
compensatory allowance, or offset credit.
``(b) No Restriction on Transactions.--The privilege of purchasing,
holding, selling, exchanging, transferring, and requesting retirement
of emission allowances, compensatory allowances, or offset credits
shall not be restricted to the owners and operators of covered
entities, except as otherwise provided in this title.
``(c) Effectiveness of Allowance Transfers.--No transfer of an
allowance or offset credit shall be effective for purposes of this
title until a certification of the transfer, signed by the designated
representative of the transferor, is received and recorded by the
Administrator in accordance with regulations promulgated under section
721(h).
``(d) Allowance Tracking System.--The regulations promulgated under
section 721(h) shall include a system for issuing, recording, holding,
and tracking allowances and offset credits that shall specify all
necessary procedures and requirements for an orderly and competitive
functioning of the allowance and offset credit markets. Such
regulations shall provide for appropriate publication of the
information in the system on the Internet.
``SEC. 725. BANKING AND BORROWING.
``(a) Banking.--An emission allowance may be used to comply with
section 722 or section 723 for emissions in--
``(1) the vintage year for the allowance; or
``(2) any calendar year subsequent to the vintage year for
the allowance.
``(b) Expiration.--
``(1) Regulations.--The Administrator may establish by
regulation criteria and procedures for determining whether, and
for implementing a determination that, the expiration of an
allowance or credit established or issued by the Administrator
under this title, or expiration of the ability to use an
international emission allowance to comply with section 722, is
necessary to ensure the authenticity and integrity of
allowances or credits or the allowance tracking system.
``(2) General rule.--An allowance or credit established or
issued by the Administrator under this title shall not expire
unless--
``(A) it is retired by the Administrator as required
under this title; or
``(B) it is determined to expire or to have expired
by a specific date by the Administrator in accordance
with regulations promulgated under paragraph (1).
``(3) International emission allowances.--The ability to use
an international emission allowance to comply with section 722
shall not expire unless--
``(A) the allowance is retired by the Administrator
as required by this title; or
``(B) the ability to use such allowance to meet such
compliance obligation requirements is determined to
expire or to have expired by a specific date by the
Administrator in accordance with regulations
promulgated under paragraph (1).
``(c) Borrowing Future Vintage Year Allowances.--
``(1) Borrowing without interest.--In addition to the uses
described in subsection (a), an emission allowance may be used
to comply with section 722(a) or section 723 for emissions,
production, importation, manufacture, or deliveries in the
calendar year immediately preceding the vintage year for the
allowance.
``(2) Borrowing with interest.--
``(A) In general.--A covered entity may demonstrate
compliance under subsection (b) in a specific calendar
year for up to 15 percent of its emissions by holding
emission allowances with a vintage year 1 to 5 years
later than that calendar year.
``(B) Limitations.--An emission allowance borrowed
pursuant to this paragraph shall be an emission
allowance that is established by the Administrator for
a specific future calendar year under section 721(a)
and that is held by the borrower.
``(C) Prepayment of interest.--For each emission
allowance that an owner or operator of a covered entity
borrows pursuant to this paragraph, such owner or
operator shall, at the time it borrows the allowance,
hold for retirement by the Administrator a quantity of
emission allowances that is equal to the product
obtained by multiplying--
``(i) 0.08; by
``(ii) the number of years between the
calendar year in which the allowance is being
used to satisfy a compliance obligation and the
vintage year of the allowance.
``SEC. 726. STRATEGIC RESERVE.
``(a) Strategic Reserve Auctions.--
``(1) In general.--Once each quarter of each calendar year
for which allowances are established under section 721(a), the
Administrator shall auction strategic reserve allowances.
``(2) Restriction to covered entities.--In each auction
conducted under paragraph (1), only covered entities that the
Administrator expects will be required to comply with section
722 in the following calendar year shall be eligible to make
purchases.
``(b) Pool of Emission Allowances for Strategic Reserve Auctions.--
``(1) Filling the strategic reserve initially.--
``(A) In general.--The Administrator shall, not later
than 2 years after the date of enactment of this title,
establish a strategic reserve account, and shall place
in that account an amount of emission allowances
established under section 721(a) for each calendar year
from 2012 through 2050 in the amounts specified in
subparagraph (B) of this paragraph.
``(B) Amount.--The amount referred to in subparagraph
(A) shall be--
``(i) for each of calendar years 2012 through
2019, 1 percent of the quantity of emission
allowances established for that year pursuant
to section 721(e)(1);
``(ii) for each of calendar years 2020
through 2029, 2 percent of the quantity of
emission allowances established for that year
pursuant to section 721(e)(1); and
``(iii) for each of calendar years 2030
through 2050, 3 percent of the quantity of
emission allowances established for that year
pursuant to section 721(e)(1).
``(C) Effect on other provisions.--Any provision in
this title (except for subparagraph (B) of this
paragraph) that refers to a quantity or percentage of
the emission allowances established for a calendar year
under section 721(a) shall be considered to refer to
the amount of emission allowances as determined
pursuant to section 721(e), less any emission
allowances established for that year that are placed in
the strategic reserve account under this paragraph.
``(2) Supplementing the strategic reserve.--The Administrator
shall also--
``(A) at the end of each calendar year, transfer to
the strategic reserve account each emission allowance
that was offered for sale but not sold at any auction
conducted under section 791; and
``(B) transfer emission allowances established under
subsection (g) from auction proceeds, and deposit them
into the strategic reserve, to the extent necessary to
maintain the reserve at its original size.
``(c) Minimum Strategic Reserve Auction Price.--
``(1) In general.--At each strategic reserve auction, the
Administrator shall offer emission allowances for sale
beginning at a minimum price per emission allowance, which
shall be known as the `minimum strategic reserve auction
price'.
``(2) Initial minimum strategic reserve auction prices.--The
minimum strategic reserve auction price shall be $28 (in
constant 2009 dollars) for the strategic reserve auctions held
in 2012. For the strategic reserve auctions held in 2013 and
2014, the minimum strategic reserve auction price shall be the
strategic reserve auction price for the previous year increased
by 5 percent plus the rate of inflation (as measured by the
Consumer Price Index for All Urban Consumers).
``(3) Minimum strategic reserve auction price in subsequent
years.--For each strategic reserve auction held in 2015 and
each year thereafter, the minimum strategic reserve auction
price shall be 60 percent above a rolling 36-month average of
the daily closing price for that year's emission allowance
vintage as reported on registered carbon trading facilities,
calculated using constant dollars.
``(d) Quantity of Emission Allowances Released From the Strategic
Reserve.--
``(1) Initial limits.--For each of calendar years 2012
through 2016, the annual limit on the number of emission
allowances from the strategic reserve account that may be
auctioned is an amount equal to 5 percent of the emission
allowances established for that calendar year under section
721(a). This limit does not apply to international offset
credits sold on consignment pursuant to subsection (h).
``(2) Limits in subsequent years.--For calendar year 2017 and
each year thereafter, the annual limit on the number of
emission allowances from the strategic reserve account that may
be auctioned is an amount equal to 10 percent of the emission
allowances established for that calendar year under section
721(a). This limit does not apply to international offset
credits sold on consignment pursuant to subsection (h).
``(3) Allocation of limitation.--One-fourth of each year's
annual strategic reserve auction limit under this subsection
shall be made available for auction in each quarter. Any
allowances from the strategic reserve account that are made
available for sale in a quarterly auction and not sold shall be
rolled over and added to the quantity available for sale in the
following quarter, except that allowances not sold at auction
in the fourth quarter of a year shall not be rolled over to the
following calendar year's auctions, but shall be returned to
the strategic reserve account.
``(e) Purchase Limit.--
``(1) In general.--Except as provided in paragraph (2) or
(3), the annual number of emission allowances that a covered
entity may purchase at the strategic reserve auctions in each
calendar year shall not exceed 20 percent of the covered
entity's emissions during the most recent year for which
allowances or credits were retired under section 722.
``(2) 2012 Limit.--For calendar year 2012, the maximum
aggregate number of emission allowances that a covered entity
may purchase from that year's strategic reserve auctions shall
be 20 percent of the covered entity's greenhouse gas emissions
that the covered entity reported to the registry established
under section 713 for 2011 and that would be subject to section
722(a) if occurring in later calendar years.
``(3) New entrants.--The Administrator shall, by regulation,
establish a separate purchase limit applicable to entities that
expect to become a covered entity in the year of the auction,
permitting them to purchase emission allowances at the
strategic reserve auctions in their first calendar year of
operation in an amount of at least 20 percent of their expected
combined emissions and attributable greenhouse gas emissions
for that year.
``(f) Delegation or Contract.--Pursuant to regulations under this
section, the Administrator may, by delegation or contract, provide for
the conduct of strategic reserve auctions under the Administrator's
supervision by other departments or agencies of the Federal Government
or by nongovernmental agencies, groups, or organizations.
``(g) Use of Auction Proceeds.--
``(1) Deposit in strategic reserve fund.--The proceeds from
strategic reserve auctions shall be placed in the Strategic
Reserve Fund established under section 793(1), and shall be
available without further appropriation or fiscal year
limitation for the purposes described in this subsection.
``(2) International offset credits for reduced
deforestation.--The Administrator shall use the proceeds from
each strategic reserve auction to purchase international offset
credits issued for reduced deforestation activities pursuant to
section 743(e). The Administrator shall retire those
international offset credits and establish a number of emission
allowances equal to 80 percent of the number of international
offset credits so retired. Emission allowances established
under this paragraph shall be in addition to those established
under section 721(a).
``(3) Emission allowances.--The Administrator shall deposit
emission allowances established under paragraph (2) in the
strategic reserve, except that, with respect to any such
emission allowances in excess of the amount necessary to fill
the strategic reserve to its original size, the Administrator
shall--
``(A) except as provided in subparagraph (B), assign
a vintage year to the emission allowance, which shall
be no earlier than the year in which the allowance is
established under paragraph (2) and shall treat such
allowances as ones that are not designated for
distribution or auction for purposes of section 782(q)
and (r); and
``(B) to the extent any such allowances cannot be
assigned a vintage year because of the limitation in
paragraph (4), retire the allowances.
``(4) Limitation.--In no case may the Administrator assign
under paragraph (3)(A) more emission allowances to a vintage
year than the number of emission allowances from that vintage
year that were placed in the strategic reserve account under
subsection (b)(1).
``(h) Availability of International Offset Credits for Auction.--
``(1) In general.--The regulations promulgated under section
721(h) shall allow any entity holding international offset
credits from reduced deforestation issued under section 743(e)
to request that the Administrator include such offset credits
in an upcoming strategic reserve auction. The regulations shall
provide that--
``(A) such international offset credits will be used
to fill bid orders only after the supply of strategic
reserve allowances available for sale at that auction
has been depleted;
``(B) international offset credits may be sold at a
strategic reserve auction under this subsection only if
the Administrator determines that it is highly likely
that covered entities will, to cover emissions
occurring in the year the auction is held, use offset
credits to demonstrate compliance under section 722 for
emissions equal to or greater than 80 percent of 2
billion tons of carbon dioxide equivalent;
``(C) upon sale of such international offset credits,
the Administrator shall retire those international
offset credits, and establish and provide to the
purchasers a number of emission allowances equal to 80
percent of the number of international offset credits
so retired, which allowances shall be in addition to
those established under section 721(a); and
``(D) for international offset credits sold pursuant
to this subsection, the proceeds for the entity that
offered the international offset credits for sale shall
be the lesser of--
``(i) the average daily closing price for
international offset credits sold on registered
exchanges (or if such price is unavailable, the
average price as determined by the
Administrator) during the six months prior to
the strategic reserve auction at which they
were auctioned, with the remaining funds
collected upon the sale of the international
offset credits deposited in the Treasury; and
``(ii) the amount received for the
international offset credits at the auction.
``(2) Proceeds.--For international offset credits sold
pursuant to this subsection, notwithstanding section 3302 of
title 31, United States Code, or any other provision of law,
within 90 days of receipt, the United States shall transfer the
proceeds from the auction, as defined in paragraph (1)(D), to
the entity that offered the international offset credits for
sale. No funds transferred from a purchaser to a seller of
international offset credits under this paragraph shall be held
by any officer or employee of the United States or treated for
any purpose as public monies.
``(3) Pricing.--When the Administrator acts under this
subsection as the agent of an entity in possession of
international offset credits, the Administrator is not
obligated to obtain the highest price possible for the
international offset credits, and instead shall auction such
international offset credits in the same manner and pursuant to
the same rules (except as modified in paragraph (1)) as set
forth for auctioning strategic reserve allowances. Entities
requesting that such international offset credits be offered
for sale at a strategic reserve auction may not set a minimum
reserve price for their international offset credits that is
different than the minimum strategic reserve auction price set
pursuant to subsection (c).
``(i) Initial Regulations.--Not later than 24 months after the date
of enactment of this title, the Administrator shall promulgate
regulations, in consultation with other appropriate agencies, governing
the auction of allowances under this section. Such regulations shall
include the following requirements:
``(1) Frequency; first auction.--Auctions shall be held four
times per year at regular intervals, with the first auction to
be held no later than March 31, 2012.
``(2) Auction format.--Auctions shall follow a single-round,
sealed-bid, uniform price format.
``(3) Participation; financial assurance.--Auctions shall be
open to any covered entity eligible to purchase emission
allowances at the auction under subsection (a)(2), except that
the Administrator may establish financial assurance
requirements to ensure that auction participants can and will
perform on their bids.
``(4) Disclosure of beneficial ownership.--Each bidder in an
auction shall be required to disclose the person or entity
sponsoring or benefitting from the bidder's participation in
the auction if such person or entity is, in whole or in part,
other than the bidder.
``(5) Purchase limits.--No person may, directly or in concert
with another participant, purchase more than 20 percent of the
allowances offered for sale at any quarterly auction.
``(6) Publication of information.--After the auction, the
Administrator shall, in a timely fashion, publish the
identities of winning bidders, the quantity of allowances
obtained by each winning bidder, and the auction clearing
price.
``(7) Other requirements.--The Administrator may include in
the regulations such other requirements or provisions as the
Administrator, in consultation with other agencies as
appropriate, considers appropriate to promote effective,
efficient, transparent, and fair administration of auctions
under this section.
``(j) Revision of Regulations.--The Administrator may, at any time,
in consultation with other agencies as appropriate, revise the initial
regulations promulgated under subsection (i). Such revised regulations
need not meet the requirements identified in subsection (i) if the
Administrator determines that an alternative auction design would be
more effective, taking into account factors including costs of
administration, transparency, fairness, and risks of collusion or
manipulation. In determining whether and how to revise the initial
regulations under this subsection, the Administrator shall not consider
maximization of revenues to the Federal Government.
``SEC. 727. PERMITS.
``(a) Permit Program.--For stationary sources subject to title V of
this Act, that are covered entities, the provisions of this title shall
be implemented by permits issued to such covered entities (and
enforced) in accordance with the provisions of title V, as modified by
this title. Any such permit issued by the Administrator, or by a State
with an approved permit program, shall require the owner or operator of
a covered entity to hold emission allowances or offset credits at least
equal to the total annual amount of carbon dioxide equivalents for its
combined emissions and attributable greenhouse gas emissions to which
section 722 applies. No such permit shall be issued that is
inconsistent with the requirements of this title, and title V as
applicable. Nothing in this section regarding compliance plans or in
title V shall be construed as affecting allowances or offset credits.
Submission of a statement by the owner or operator, or the designated
representative of the owners and operators, of a covered entity that
the owners and operators will hold emission allowances or offset
credits for the entity's combined emissions and attributable greenhouse
gas emissions to which section 722 applies shall be deemed to meet the
proposed and approved planning requirements of title V. Recordation by
the Administrator of transfers of emission allowances shall amend
automatically all applicable proposed or approved permit applications,
compliance plans, and permits.
``(b) Multiple Owners.--No permit shall be issued under this section
and no allowances or offset credits shall be disbursed under this title
to a covered entity or any other person until the designated
representative of the owners or operators has filed a certificate of
representation with regard to matters under this title, including the
holding and distribution of emission allowances and the proceeds of
transactions involving emission allowances. Where there are multiple
holders of a legal or equitable title to, or a leasehold interest in,
such a covered entity or other entity or where a utility or industrial
customer purchases power under a long-term power purchase contract from
an independent power production facility that is a covered entity, the
certificate shall state--
``(1) that emission allowances and the proceeds of
transactions involving emission allowances will be deemed to be
held or distributed in proportion to each holder's legal,
equitable, leasehold, or contractual reservation or
entitlement; or
``(2) if such multiple holders have expressly provided for a
different distribution of emission allowances by contract, that
emission allowances and the proceeds of transactions involving
emission allowances will be deemed to be held or distributed in
accordance with the contract.
A passive lessor, or a person who has an equitable interest through
such lessor, whose rental payments are not based, either directly or
indirectly, upon the revenues or income from the covered entity or
other entity shall not be deemed to be a holder of a legal, equitable,
leasehold, or contractual interest for the purpose of holding or
distributing emission allowances as provided in this subsection, during
either the term of such leasehold or thereafter, unless expressly
provided for in the leasehold agreement. Except as otherwise provided
in this subsection, where all legal or equitable title to or interest
in a covered entity, or other entity, is held by a single person, the
certificate shall state that all emission allowances received by the
entity are deemed to be held for that person.
``(c) Prohibition.--It shall be unlawful for any person to operate
any stationary source subject to the requirements of this section
except in compliance with the terms and requirements of a permit issued
by the Administrator or a State with an approved permit program in
accordance with this section. For purposes of this subsection,
compliance, as provided in section 504(f), with a permit issued under
title V which complies with this title for covered entities shall be
deemed compliance with this subsection as well as section 502(a).
``(d) Reliability.--Nothing in this section or title V shall be
construed as requiring termination of operations of a stationary source
that is a covered entity for failure to have an approved permit, or
compliance plan, that is consistent with the requirements in the second
and fifth sentences of subsection (a) concerning the holding of
emission allowances, compensatory allowances, international emission
allowances, or offset allowances, except that any such covered entity
may be subject to the applicable enforcement provision of section 113.
``(e) Regulations.--The Administrator shall promulgate regulations to
implement this section. To provide for permits required under this
section, each State in which one or more stationary sources and that
are covered entities are located shall submit, in accordance with this
section and title V, revised permit programs for approval.
``SEC. 728. INTERNATIONAL EMISSION ALLOWANCES.
``(a) Qualifying Programs.--The Administrator, in consultation with
the Secretary of State, may by rule designate an international climate
change program as a qualifying international program if--
``(1) the program is run by a national or supranational
foreign government, and imposes a mandatory absolute tonnage
limit on greenhouse gas emissions from 1 or more foreign
countries, or from 1 or more economic sectors in such a country
or countries; and
``(2) the program is at least as stringent as the program
established by this title, including provisions to ensure at
least comparable monitoring, compliance, enforcement, quality
of offsets, and restrictions on the use of offsets.
``(b) Disqualified Allowances.--An international emission allowance
may not be held under section 722(d)(2) if it is in the nature of an
offset instrument or allowance awarded based on the achievement of
greenhouse gas emission reductions or avoidance, or greenhouse gas
sequestration, that are not subject to the mandatory absolute tonnage
limits referred to in subsection (a)(1).
``(c) Retirement.--
``(1) Entity certification.--The owner or operator of an
entity that holds an international emission allowance under
section 722(d)(2) shall certify to the Administrator that such
international emission allowance has not previously been used
to comply with any foreign, international, or domestic
greenhouse gas regulatory program.
``(2) Retirement.--
``(A) Foreign and international regulatory
entities.--The Administrator, in consultation with the
Secretary of State, shall seek, by whatever means
appropriate, including agreements and technical
cooperation on allowance tracking, to ensure that any
relevant foreign, international, and domestic
regulatory entities--
``(i) are notified of the use, for purposes
of compliance with this title, of any
international emission allowance; and
``(ii) provide for the disqualification of
such international emission allowance for any
subsequent use under the relevant foreign,
international, or domestic greenhouse gas
regulatory program, regardless of whether such
use is a sale, exchange, or submission to
satisfy a compliance obligation.
``(B) Disqualification from further use.--The
Administrator shall ensure that, once an international
emission allowance has been disqualified or otherwise
used for purposes of compliance with this title, such
allowance shall be disqualified from any further use
under this title.
``(d) Use Limitations.--The Administrator may, by rule, modify the
percentage applicable to international emission allowances under
section 722(d)(2), consistent with the purposes of the Safe Climate
Act.
``PART D--OFFSETS
``SEC. 731. OFFSETS INTEGRITY ADVISORY BOARD.
``(a) Establishment.--Not later than 30 days after the date of
enactment of this title, the Administrator shall establish an
independent Offsets Integrity Advisory Board. The Advisory Board shall
make recommendations to the Administrator for use in promulgating and
revising regulations under this part and part E, and for ensuring the
overall environmental integrity of the programs established pursuant to
those regulations.
``(b) Membership.--The Advisory Board shall be comprised of at least
nine members. Each member shall be qualified by education, training,
and experience to evaluate scientific and technical information on
matters referred to the Board under this section. The Administrator
shall appoint Advisory Board members, including a chair and vice-chair
of the Advisory Board. Terms shall be 3 years in length, except for
initial terms, which may be up to 5 years in length to allow
staggering. Members may be reappointed only once for an additional 3-
year term, and such second term may follow directly after a first term.
``(c) Activities.--The Advisory Board established pursuant to
subsection (a) shall--
``(1) provide recommendations, not later than 90 days after
the Advisory Board's establishment and periodically thereafter,
to the Administrator regarding offset project types that should
be considered for eligibility under section 733, taking into
consideration relevant scientific and other issues, including--
``(A) the availability of a representative data set
for use in developing the activity baseline;
``(B) the potential for accurate quantification of
greenhouse gas reduction, avoidance, or sequestration
for an offset project type;
``(C) the potential level of scientific and
measurement uncertainty associated with an offset
project type; and
``(D) any beneficial or adverse environmental, public
health, welfare, social, economic, or energy effects
associated with an offset project type;
``(2) make available to the Administrator its advice and
comments on offset methodologies that should be considered
under regulations promulgated pursuant to section 734(a) and
(b), including methodologies to address the issues of
additionality, activity baselines, measurement, leakage,
uncertainty, permanence, and environmental integrity;
``(3) make available to the Administrator, and other relevant
Federal agencies, its advice and comments regarding scientific,
technical, and methodological issues specific to the issuance
of international offset credits under section 743;
``(4) make available to the Administrator, and other relevant
Federal agencies, its advice and comments regarding scientific,
technical, and methodological issues associated with the
implementation of part E;
``(5) make available to the Administrator its advice and
comments on areas in which further knowledge is required to
appraise the adequacy of existing, revised, or proposed
methodologies for use under this part and part E, and describe
the research efforts necessary to provide the required
information; and
``(6) make available to the Administrator its advice and
comments on other ways to improve or safeguard the
environmental integrity of programs established under this part
and part E.
``(d) Scientific Review of Offset and Deforestation Reduction
Programs.--Not later than January 1, 2017, and at five-year intervals
thereafter, the Advisory Board shall submit to the Administrator and
make available to the public an analysis of relevant scientific and
technical information related to this part and part E. The Advisory
Board shall review approved and potential methodologies, scientific
studies, offset project monitoring, offset project verification
reports, and audits related to this part and part E, and evaluate the
net emissions effects of implemented offset projects. The Advisory
Board shall recommend changes to offset methodologies, protocols, or
project types, or to the overall offset program under this part, to
ensure that offset credits issued by the Administrator do not
compromise the integrity of the annual emission reductions established
under section 703, and to avoid or minimize adverse effects to human
health or the environment.
``SEC. 732. ESTABLISHMENT OF OFFSETS PROGRAM.
``(a) Regulations.--Not later than 2 years after the date of
enactment of this title, the Administrator, in consultation with
appropriate Federal agencies and taking into consideration the
recommendations of the Advisory Board, shall promulgate regulations
establishing a program for the issuance of offset credits in accordance
with the requirements of this part. The Administrator shall
periodically revise these regulations as necessary to meet the
requirements of this part.
``(b) Requirements.--The regulations described in subsection (a)
shall--
``(1) authorize the issuance of offset credits with respect
to qualifying offset projects that result in reductions or
avoidance of greenhouse gas emissions, or sequestration of
greenhouse gases;
``(2) ensure that such offset credits represent verifiable
and additional greenhouse gas emission reductions or avoidance,
or increases in sequestration;
``(3) ensure that offset credits issued for sequestration
offset projects are only issued for greenhouse gas reductions
that are permanent;
``(4) provide for the implementation of the requirements of
this part; and
``(5) include as reductions in greenhouse gases reductions
achieved through the destruction of methane and its conversion
to carbon dioxide.
``(c) Coordination to Minimize Negative Effects.--In promulgating and
implementing regulations under this part, the Administrator shall act
(including by rejecting projects, if necessary) to avoid or minimize,
to the maximum extent practicable, adverse effects on human health or
the environment resulting from the implementation of offset projects
under this part.
``(d) Offset Registry.--The Administrator shall establish within the
allowance tracking system established under section 724(d) an Offset
Registry for qualifying offset projects and offset credits issued with
respect thereto under this part.
``(e) Legal Status of Offset Credit.--An offset credit does not
constitute a property right.
``(f) Fees.--The Administrator shall assess fees payable by offset
project developers in an amount necessary to cover the administrative
costs to the Environmental Protection Agency of carrying out the
activities under this part. Amounts collected for such fees shall be
available to the Administrator for carrying out the activities under
this part to the extent provided in advance in appropriations Acts.
``SEC. 733. ELIGIBLE PROJECT TYPES.
``(a) List of Eligible Project Types.--
``(1) In general.--As part of the regulations promulgated
under section 732(a), the Administrator shall establish, and
may periodically revise, a list of types of projects eligible
to generate offset credits, including international offset
credits, under this part.
``(2) Advisory board recommendations.--In determining the
eligibility of project types, the Administrator shall take into
consideration the recommendations of the Advisory Board. If a
list established under this section differs from the
recommendations of the Advisory Board, the regulations
promulgated under section 732(a) shall include a justification
for the discrepancy.
``(3) Initial determination.--The Administrator shall
establish the initial eligibility list under paragraph (1) not
later than one year after the date of enactment of this title.
The Administrator shall add additional project types to the
list not later than 2 years after the date of enactment of this
title. In determining the initial list, the Administrator shall
give priority to consideration of offset project types that are
recommended by the Advisory Board and for which there are well
developed methodologies that the Administrator determines would
meet the criteria of section 734, with such modifications as
the Administrator deems appropriate. In issuing methodologies
pursuant to section 734, the Administrator shall give priority
to methodologies for offset types included on the initial
eligibility list.
``(b) Modification of List.--The Administrator--
``(1) may at any time, by rule, add a project type to the
list established under subsection (a) if the Administrator, in
consultation with appropriate Federal agencies and taking into
consideration the recommendations of the Advisory Board,
determines that the project type can generate additional
reductions or avoidance of greenhouse gas emissions, or
sequestration of greenhouse gases, subject to the requirements
of this part;
``(2) may at any time, by rule, determine that a project type
on the list does not meet the requirements of this part, and
remove a project type from the list established under
subsection (a), in consultation with appropriate Federal
agencies and taking into consideration any recommendations of
the Advisory Board; and
``(3) shall consider adding to or removing from the list
established under subsection (a), at a minimum, project types
proposed to the Administrator--
``(A) by petition pursuant to subsection (c); or
``(B) by the Advisory Board.
``(c) Petition Process.--Any person may petition the Administrator to
modify the list established under subsection (a) by adding or removing
a project type pursuant to subsection (b). Any such petition shall
include a showing by the petitioner that there is adequate data to
establish that the project type does or does not meet the requirements
of this part. Not later than 12 months after receipt of such a
petition, the Administrator shall either grant or deny the petition and
publish a written explanation of the reasons for the Administrator's
decision. The Administrator may not deny a petition under this
subsection on the basis of inadequate Environmental Protection Agency
resources or time for review.
``SEC. 734. REQUIREMENTS FOR OFFSET PROJECTS.
``(a) Methodologies.--As part of the regulations promulgated under
section 732(a), the Administrator shall establish, for each type of
offset project listed as eligible under section 733, the following:
``(1) Additionality.--A standardized methodology for
determining the additionality of greenhouse gas emission
reductions or avoidance, or greenhouse gas sequestration,
achieved by an offset project of that type. Such methodology
shall ensure, at a minimum, that any greenhouse gas emission
reduction or avoidance, or any greenhouse gas sequestration, is
considered additional only to the extent that it results from
activities that--
``(A) are not required by or undertaken to comply
with any law, including any regulation or consent
order;
``(B) were not commenced prior to January 1, 2009,
except in the case of--
``(i) offset project activities that
commenced after January 1, 2001, and were
registered as of the date of enactment of this
title under an offset program with respect to
which the Administrator has made an affirmative
determination under section 740(a)(2); or
``(ii) activities that are readily
reversible, with respect to which the
Administrator may set an alternative earlier
date under this subparagraph that is not
earlier than January 1, 2001, where the
Administrator determines that setting such an
alternative date may produce an environmental
benefit by removing an incentive to cease and
then reinitiate activities that began prior to
January 1, 2009;
``(C) are not receiving support under part E of this
title or title IV, subtitle D of the American Clean
Energy and Security Act of 2009; and
``(D) exceed the activity baseline established under
paragraph (2).
``(2) Activity baselines.--A standardized methodology for
establishing activity baselines for offset projects of that
type. The Administrator shall set activity baselines to reflect
a conservative estimate of business-as-usual performance or
practices for the relevant type of activity such that the
baseline provides an adequate margin of safety to ensure the
environmental integrity of offsets calculated in reference to
such baseline.
``(3) Quantification methods.--A standardized methodology for
determining the extent to which greenhouse gas emission
reductions or avoidance, or greenhouse gas sequestration,
achieved by an offset project of that type exceed a relevant
activity baseline, including protocols for monitoring and
accounting for uncertainty.
``(4) Leakage.--A standardized methodology for accounting for
and mitigating potential leakage, if any, from an offset
project of that type, taking uncertainty into account.
``(b) Accounting for Reversals.--
``(1) In general.--For each type of sequestration project
listed under section 733, the Administrator shall establish
requirements to account for and address reversals, including--
``(A) a requirement to report any reversal with
respect to an offset project for which offset credits
have been issued under this part;
``(B) provisions to require emission allowances to be
held in amounts to fully compensate for greenhouse gas
emissions attributable to reversals, and to assign
responsibility for holding such emission allowances;
and
``(C) any other provisions the Administrator
determines necessary to account for and address
reversals.
``(2) Mechanisms.--The Administrator shall prescribe
mechanisms to ensure that any sequestration with respect to
which an offset credit is issued under this part results in a
permanent net increase in sequestration, and that full account
is taken of any actual or potential reversal of such
sequestration, with an adequate margin of safety. The
Administrator shall prescribe at least one of the following
mechanisms to meet the requirements of this paragraph:
``(A) An offsets reserve, pursuant to paragraph (3).
``(B) Insurance that provides for purchase and
provision to the Administrator for retirement of an
amount of offset credits or emission allowances equal
in number to the tons of carbon dioxide equivalents of
greenhouse gas emissions released due to reversal.
``(C) Another mechanism that the Administrator
determines satisfies the requirements of this part.
``(3) Offsets reserve.--
``(A) In general.--An offsets reserve referred to in
paragraph (2)(A) is a program under which, before
issuance of offset credits under this part, the
Administrator shall subtract and reserve from the
quantity to be issued a quantity of offset credits
based on the risk of reversal. The Administrator
shall--
``(i) hold these reserved offset credits in
the offsets reserve; and
``(ii) register the holding of the reserved
offset credits in the Offset Registry
established under section 732(d).
``(B) Project reversal.--
``(i) In general.--If a reversal has occurred
with respect an offset project for which offset
credits are reserved under this paragraph, the
Administrator shall remove offset credits from
the offsets reserve and cancel them to fully
account for the tons of carbon dioxide
equivalent that are no longer sequestered.
``(ii) Intentional reversals.--If the
Administrator determines that a reversal was
intentional, the offset project developer for
the relevant offset project shall place into
the offsets reserve a quantity of offset
credits, or combination of offset credits and
emission allowances, equal in number to the
number of reserve offset credits that were
canceled due to the reversal pursuant to clause
(i).
``(iii) Unintentional reversals.--If the
Administrator determines that a reversal was
unintentional, the offset project developer for
the relevant offset project shall place into
the offsets reserve a quantity of offset
credits, or combination of offset credits and
emission allowances, equal in number to half
the number of offset credits that were reserved
for that offset project, or half the number of
reserve offset credits that were canceled due
to the reversal pursuant to clause (i),
whichever is less.
``(C) Use of reserved offset credits.--Offset credits
placed into the offsets reserve under this paragraph
may not be used to comply with section 722.
``(c) Crediting Periods.--
``(1) In general.--For each offset project type, the
Administrator shall specify a crediting period, and establish
provisions for petitions for new crediting periods, in
accordance with this subsection.
``(2) Duration.--The crediting period shall be no less than 5
and no greater than 10 years for any project type other than
those involving sequestration.
``(3) Eligibility.--An offset project shall be eligible to
generate offset credits under this part only during the
project's crediting period. During such crediting period, the
project shall remain eligible to generate offset credits,
subject to the methodologies and project type eligibility list
that applied as of the date of project approval under section
735, except as provided in paragraph (4) of this subsection.
``(4) Petition for new crediting period.--An offset project
developer may petition for a new crediting period to commence
after termination of a crediting period, subject to the
methodologies and project type eligibility list in effect at
the time when such petition is submitted. A petition may not be
submitted under this paragraph more than 18 months before the
end of the pending crediting period. The Administrator may
limit the number of new crediting periods available for
projects of particular project types.
``(d) Environmental Integrity.--In establishing the requirements
under this section, the Administrator shall apply conservative
assumptions or methods to maximize the certainty that the environmental
integrity of the cap established under section 703 is not compromised.
``(e) Pre-Existing Methodologies.--In promulgating requirements under
this section, the Administrator shall give due consideration to
methodologies for offset projects existing as of the date of enactment
of this title.
``(f) Added Project Types.--The Administrator shall establish
methodologies described in subsection (a), and, as applicable,
requirements and mechanisms for reversals as described in subsection
(b), for any project type that is added to the list pursuant to section
733.
``SEC. 735. APPROVAL OF OFFSET PROJECTS.
``(a) Approval Petition.--An offset project developer shall submit an
offset project approval petition providing such information as the
Administrator requires to determine whether the offset project is
eligible for issuance of offset credits under rules promulgated
pursuant to this part.
``(b) Timing.--An approval petition shall be submitted to the
Administrator under subsection (a) no later than the time at which an
offset project's first verification report is submitted under section
736.
``(c) Approval Petition Requirements.--As part of the regulations
promulgated under section 732, the Administrator shall include
provisions for, and shall specify, the required components of an offset
project approval petition required under subsection (a), which shall
include--
``(1) designation of an offset project developer; and
``(2) any other information that the Administrator considers
to be necessary to achieve the purposes of this part.
``(d) Approval and Notification.--Not later than 90 days after
receiving a complete approval petition under subsection (a), the
Administrator shall approve or deny the petition in writing and, if the
petition is denied, provide the reasons for denial. After an offset
project is approved, the offset project developer shall not be required
to resubmit an approval petition during the offset project's crediting
period, except as provided in section 734(c)(4).
``(e) Appeal.--The Administrator shall establish procedures for
appeal and review of determinations made under subsection (d).
``(f) Voluntary Preapproval Review.--The Administrator may establish
a voluntary preapproval review procedure, to allow an offset project
developer to request the Administrator to conduct a preliminary
eligibility review for an offset project. Findings of such reviews
shall not be binding upon the Administrator. The voluntary preapproval
review procedure--
``(1) shall require the offset project developer to submit
such basic project information as the Administrator requires to
provide a meaningful review; and
``(2) shall require a response from the Administrator not
later than 6 weeks after receiving a request for review under
this subsection.
``SEC. 736. VERIFICATION OF OFFSET PROJECTS.
``(a) In General.--As part of the regulations promulgated under
section 732(a), the Administrator shall establish requirements,
including protocols, for verification of the quantity of greenhouse gas
emission reductions or avoidance, or sequestration of greenhouse gases,
resulting from an offset project. The regulations shall require that an
offset project developer shall submit a report, prepared by a third-
party verifier accredited under subsection (d), providing such
information as the Administrator requires to determine the quantity of
greenhouse gas emission reductions or avoidance, or sequestration of
greenhouse gas, resulting from the offset project.
``(b) Schedule.--The Administrator shall prescribe a schedule for the
submission of verification reports under subsection (a).
``(c) Verification Report Requirements.--The Administrator shall
specify the required components of a verification report required under
subsection (a), which shall include--
``(1) the name and contact information for a designated
representative for the offset project developer;
``(2) the quantity of greenhouse gas reduced, avoided, or
sequestered;
``(3) the methodologies applicable to the project pursuant to
section 734;
``(4) a certification that the project meets the applicable
requirements;
``(5) a certification establishing that the conflict of
interest requirements in the regulations promulgated under
subsection (d)(1) have been complied with; and
``(6) any other information that the Administrator considers
to be necessary to achieve the purposes of this part.
``(d) Verifier Accreditation.--
``(1) In general.--As part of the regulations promulgated
under section 732(a), the Administrator shall establish a
process and requirements for periodic accreditation of third-
party verifiers to ensure that such verifiers are
professionally qualified and have no conflicts of interest.
``(2) Standards.--
``(A) American national standards institute
accreditation.--The Administrator may accredit, or
accept for purposes of accreditation under this
subsection, verifiers accredited under the American
National Standards Institute (ANSI) accreditation
program in accordance with ISO 14065. The Administrator
shall accredit, or accept for accreditation, verifiers
under this subparagraph only if the Administrator finds
that the American National Standards Institute
accreditation program provides sufficient assurance
that the requirements of this part will be met.
``(B) EPA accreditation.--As part of the regulations
promulgated under section 732(a), the Administrator may
establish accreditation standards for verifiers under
this subsection, and may establish related training and
testing programs and requirements.
``(3) Public accessibility.--Each verifier meeting the
requirements for accreditation in accordance with this
subsection shall be listed in a publicly accessible database,
which shall be maintained and updated by the Administrator.
``SEC. 737. ISSUANCE OF OFFSET CREDITS.
``(a) Determination and Notification.--Not later than 90 days after
receiving a complete verification report under section 736, the
Administrator shall--
``(1) make the report publicly available;
``(2) make a determination of the quantity of greenhouse gas
emissions reduced or avoided, or greenhouse gases sequestered,
resulting from an offset project approved under section 735;
and
``(3) notify the offset project developer in writing of such
determination.
``(b) Issuance Of Offset Credits.--The Administrator shall issue one
offset credit to an offset project developer for each ton of carbon
dioxide equivalent that the Administrator has determined has been
reduced, avoided, or sequestered during the period covered by a
verification report submitted in accordance with section 736, only if--
``(1) the Administrator has approved the offset project
pursuant to section 735; and
``(2) the relevant emissions reduction, avoidance, or
sequestration has--
``(A) already occurred, during the offset project's
crediting period; and
``(B) occurred after January 1, 2009.
``(c) Appeal.--The Administrator shall establish procedures for
appeal and review of determinations made under subsection (a).
``(d) Timing.--Offset credits meeting the criteria established in
subsection (b) shall be issued not later than 2 weeks following the
verification determination made by the Administrator under subsection
(a).
``(e) Registration.--The Administrator shall assign a unique serial
number to and register each offset credit to be issued in the Offset
Registry established under section 732(d).
``SEC. 738. AUDITS.
``(a) In General.--The Administrator shall, on an ongoing basis,
conduct random audits of offset projects, offset credits, and practices
of third-party verifiers. In each year, the Administrator shall conduct
audits, at minimum, for a representative sample of project types and
geographic areas.
``(b) Delegation.--The Administrator may delegate to a State or
tribal government the responsibility for conducting audits under this
section if the Administrator finds that the program proposed by the
State or tribal government provides assurances equivalent to those
provided by the auditing program of the Administrator, and that the
integrity of the offset program under this part will be maintained.
Nothing in this subsection shall prevent the Administrator from
conducting any audit the Administrator considers necessary and
appropriate.
``SEC. 739. PROGRAM REVIEW AND REVISION.
``At least once every 5 years, the Administrator shall review and,
based on new or updated information and taking into consideration the
recommendations of the Advisory Board, update and revise--
``(1) the list of eligible project types established under
section 733;
``(2) the methodologies established, including specific
activity baselines, under section 734(a);
``(3) the reversal requirements and mechanisms established or
prescribed under section 734(b);
``(4) measures to improve the accountability of the offsets
program; and
``(5) any other requirements established under this part to
ensure the environmental integrity and effective operation of
this part.
``SEC. 740. EARLY OFFSET SUPPLY.
``(a) Projects Registered Under Other Government-Recognized
Programs.--Except as provided in subsection (b) or (c), the
Administrator shall issue one offset credit for each ton of carbon
dioxide equivalent emissions reduced, avoided, or sequestered--
``(1) under an offset project that was started after January
1, 2001;
``(2) for which a credit was issued under any regulatory or
voluntary greenhouse gas emission offset program that the
Administrator determines--
``(A) was established under State or tribal law or
regulation prior to January 1, 2009, or has been
approved by the Administrator pursuant to subsection
(e);
``(B) has developed offset project type standards,
methodologies, and protocols through a public
consultation process or a peer review process;
``(C) has made available to the public standards,
methodologies, and protocols that require that credited
emission reductions, avoidance, or sequestration are
permanent, additional, verifiable, and enforceable;
``(D) requires that all emission reductions,
avoidance, or sequestration be verified by a State
regulatory agency or an accredited third-party
independent verification body;
``(E) requires that all credits issued are registered
in a publicly accessible registry, with individual
serial numbers assigned for each ton of carbon dioxide
equivalent emission reductions, avoidance, or
sequestration; and
``(F) ensures that no credits are issued for
activities for which the entity administering the
program, or a program administrator or representative,
has funded, solicited, or served as a fund
administrator for the development of, the project or
activity that caused the emission reduction, avoidance,
or sequestration; and
``(3) for which the credit described in paragraph (2) is
transferred to the Administrator.
``(b) Ineligible Credits.--Subsection (a) shall not apply to offset
credits that have expired or have been retired, canceled, or used for
compliance under a program established under State or tribal law or
regulation.
``(c) Limitation.--Notwithstanding subsection (a)(1), offset credits
shall be issued under this section--
``(1) only for reductions or avoidance of greenhouse gas
emissions, or sequestration of greenhouse gases, that occur
after January 1, 2009; and
``(2) only until the date that is 3 years after the date of
enactment of this title, or the date that regulations
promulgated under section 732(a) take effect, whichever occurs
sooner.
``(d) Retirement of Credits.--The Administrator shall seek to ensure
that offset credits described in subsection (a)(2) are retired for
purposes of use under a program described in subsection (b).
``(e) Other Programs.--(1) Offset programs that either--
``(A) were not established under State or tribal law; or
``(B) were not established prior to January 1, 2009,
but that otherwise meet all of the criteria of subsection
(a)(2) may apply to the Administrator to be approved under this
subsection as an eligible program for early offset credits
under this section.
``(2) The Administrator shall approve any such program that the
Administrator determines has criteria and methodologies of at least
equal stringency to the criteria and methodologies of the programs
established under State or tribal law that the Administrator determines
meet the criteria of subsection (a)(2). The Administrator may approve
types of offsets under any such program that are subject to criteria
and methodologies of at least equal stringency to the criteria and
methodologies for such types of offsets applied under the programs
established under State or tribal law that the Administrator determines
meet the criteria of subsection (a)(2). The Administrator shall make a
determination on any application received under this subsection by no
later than 180 days from the date of receipt of the application.
``SEC. 741. ENVIRONMENTAL CONSIDERATIONS.
``If the Administrator lists forestry projects as eligible offset
project types under section 733, the Administrator, in consultation
with appropriate Federal agencies, shall promulgate regulations for the
selection and use of species in forestry and other relevant land
management-related offset projects--
``(1) to ensure that native species are given primary
consideration in such projects;
``(2) to enhance biological diversity in such projects;
``(3) to prohibit the use of federally designated or State-
designated noxious weeds;
``(4) to prohibit the use of a species listed by a regional
or State invasive plant authority within the applicable region
or State; and
``(5) in accordance with widely accepted, environmentally
sustainable forestry practices.
``SEC. 742. TRADING.
``Section 724 shall apply to the trading of offset credits.
``SEC. 743. INTERNATIONAL OFFSET CREDITS.
``(a) In General.--The Administrator, in consultation with the
Secretary of State and the Administrator of the United States Agency
for International Development, may issue, in accordance with this
section, international offset credits based on activities that reduce
or avoid greenhouse gas emissions, or increase sequestration of
greenhouse gases, in a developing country. Such credits may be issued
for projects pursuant to the requirements of this part or as provided
in subsection (c), (d), or (e).
``(b) Issuance.--
``(1) Regulations.--Not later than 2 years after the date of
enactment of this title, the Administrator, in consultation
with the Secretary of State, the Administrator of the United
States Agency for International Development, and any other
appropriate Federal agency, and taking into consideration the
recommendations of the Advisory Board, shall promulgate
regulations for implementing this section. Except as otherwise
provided in this section, the issuance of international offset
credits under this section shall be subject to the requirements
of this part.
``(2) Requirements for international offset credits.--The
Administrator may issue international offset credits only if--
``(A) the United States is a party to a bilateral or
multilateral agreement or arrangement that includes the
country in which the project or measure achieving the
relevant greenhouse gas emission reduction or
avoidance, or greenhouse gas sequestration, has
occurred;
``(B) such country is a developing country; and
``(C) such agreement or arrangement--
``(i) ensures that all of the requirements of
this part apply to the issuance of
international offset credits under this
section; and
``(ii) provides for the appropriate
distribution of international offset credits
issued.
``(c) Sector-Based Credits.--
``(1) In general.--In order to minimize the potential for
leakage and to encourage countries to take nationally
appropriate mitigation actions to reduce or avoid greenhouse
gas emissions, or sequester greenhouse gases, the
Administrator, in consultation with the Secretary of State and
the Administrator of the United States Agency for International
Development, shall--
``(A) identify sectors of specific countries with
respect to which the issuance of international offset
credits on a sectoral basis is appropriate; and
``(B) issue international offset credits for such
sectors only on a sectoral basis.
``(2) Identification of sectors.--
``(A) General rule.--For purposes of paragraph
(1)(A), a sectoral basis shall be appropriate for
activities--
``(i) in countries that have comparatively
high greenhouse gas emissions, or comparatively
greater levels of economic development; and
``(ii) that, if located in the United States,
would be within a sector subject to the
compliance obligation under section 722.
``(B) Factors.--In determining the sectors and
countries for which international offset credits should
be awarded only on a sectoral basis, the Administrator,
in consultation with the Secretary of State and the
Administrator of the United States Agency for
International Development, shall consider the following
factors:
``(i) The country's gross domestic product.
``(ii) The country's total greenhouse gas
emissions.
``(iii) Whether the comparable sector of the
United States economy is covered by the
compliance obligation under section 722.
``(iv) The heterogeneity or homogeneity of
sources within the relevant sector.
``(v) Whether the relevant sector provides
products or services that are sold in
internationally competitive markets.
``(vi) The risk of leakage if international
offset credits were issued on a project-level
basis, instead of on a sectoral basis, for
activities within the relevant sector.
``(vii) The capability of accurately
measuring, monitoring, reporting, and verifying
the performance of sources across the relevant
sector.
``(viii) Such other factors as the
Administrator, in consultation with the
Secretary of State and the Administrator of the
United States Agency for International
Development, determines are appropriate to--
``(I) ensure the integrity of the
United States greenhouse gas emissions
cap established under section 703; and
``(II) encourage countries to take
nationally appropriate mitigation
actions to reduce or avoid greenhouse
gas emissions, or sequester greenhouse
gases.
``(3) Sectoral basis.--
``(A) Definition.--In this subsection, the term
`sectoral basis' means the issuance of international
offset credits only for the quantity of sector-wide
reductions or avoidance of greenhouse gas emissions, or
sector-wide increases in sequestration of greenhouse
gases, achieved across the relevant sector of the
economy relative to a baseline level of performance
established in an agreement or arrangement described in
subsection (b)(2)(A) for the sector.
``(B) Baseline.--The baseline for a sector shall be
established at levels of greenhouse gas emissions lower
than would occur under a business-as-usual scenario
taking into account relevant domestic or international
policies or incentives to reduce greenhouse gas
emissions, among other factors, and additionality and
performance shall be determined on the basis of such
baseline.
``(d) Credits Issued by an International Body.--
``(1) In general.--The Administrator, in consultation with
the Secretary of State, may issue international offset credits
in exchange for instruments in the nature of offset credits
that are issued by an international body established pursuant
to the United Nations Framework Convention on Climate Change,
to a protocol to such Convention, or to a treaty that succeeds
such Convention. The Administrator may issue international
offset credits under this subsection only if, in addition to
the requirements of subsection (b), the Administrator has
determined that the international body that issued the
instruments has implemented substantive and procedural
requirements for the relevant project type that provide equal
or greater assurance of the integrity of such instruments as is
provided by the requirements of this part.
``(2) Retirement.--The Administrator, in consultation with
the Secretary of State, shall seek, by whatever means
appropriate, including agreements, arrangements, or technical
cooperation with the international issuing body described in
paragraph (1), to ensure that such body--
``(A) is notified of the Administrator's issuance,
under this subsection, of an international offset
credit in exchange for an instrument issued by such
international body; and
``(B) provides, to the extent feasible, for the
disqualification of the instrument issued by such
international body for subsequent use under any
relevant foreign or international greenhouse gas
regulatory program, regardless of whether such use is a
sale, exchange, or submission to satisfy a compliance
obligation.
``(e) Offsets From Reduced Deforestation.--
``(1) Requirements.--The Administrator, in accordance with
the regulations promulgated under subsection (b)(1) and an
agreement or arrangement described in subsection (b)(2)(A),
shall issue international offset credits for greenhouse gas
emission reductions achieved through activities to reduce
deforestation only if, in addition to the requirements of
subsection (b)--
``(A) the activity occurs in--
``(i) a country listed by the Administrator
pursuant to paragraph (2);
``(ii) a state or province listed by the
Administrator pursuant to paragraph (5); or
``(iii) a country listed by the Administrator
pursuant to paragraph (6);
``(B) except as provided in paragraph (5) or (6), the
quantity of the international offset credits is
determined by comparing the national emissions from
deforestation relative to a national deforestation
baseline for that country established, in accordance
with an agreement or arrangement described in
subsection (b)(2)(A), pursuant to paragraph (4);
``(C) the reduction in emissions from deforestation
has occurred before the issuance of the international
offset credit and, taking into consideration relevant
international standards, has been demonstrated using
ground-based inventories, remote sensing technology,
and other methodologies to ensure that all relevant
carbon stocks are accounted;
``(D) the Administrator has made appropriate
adjustments, such as discounting for any additional
uncertainty, to account for circumstances specific to
the country, including its technical capacity described
in paragraph (2)(A);
``(E) the activity is designed, carried out, and
managed--
``(i) in accordance with widely accepted,
environmentally sustainable forest management
practices;
``(ii) to promote or restore native forest
species and ecosystems where practicable, and
to avoid the introduction of invasive nonnative
species;
``(iii) in a manner that gives due regard to
the rights and interests of local communities,
indigenous peoples, forest-dependent
communities, and vulnerable social groups;
``(iv) with consultations with, and full
participation of, local communities, indigenous
peoples, and forest-dependent communities, in
affected areas, as partners and primary
stakeholders, prior to and during the design,
planning, implementation, and monitoring and
evaluation of activities; and
``(v) with equitable sharing of profits and
benefits derived from offset credits with local
communities, indigenous peoples, and forest-
dependent communities; and
``(F) the reduction otherwise satisfies and is
consistent with any relevant requirements established
by an agreement reached under the auspices of the
United Nations Framework Convention on Climate Change.
``(2) Eligible countries.--The Administrator, in consultation
with the Secretary of State and the Administrator of the United
States Agency for International Development, and in accordance
with an agreement or arrangement described in subsection
(b)(2)(A), shall establish, and periodically review and update,
a list of the developing countries that have the capacity to
participate in deforestation reduction activities at a national
level, including--
``(A) the technical capacity to monitor, measure,
report, and verify forest carbon fluxes for all
significant sources of greenhouse gas emissions from
deforestation with an acceptable level of uncertainty,
as determined taking into account relevant
internationally accepted methodologies, such as those
established by the Intergovernmental Panel on Climate
Change;
``(B) the institutional capacity to reduce emissions
from deforestation, including strong forest governance
and mechanisms to equitably distribute deforestation
resources for local actions; and
``(C) a land use or forest sector strategic plan
that--
``(i) assesses national and local drivers of
deforestation and forest degradation and
identifies reforms to national policies needed
to address them;
``(ii) estimates the country's emissions from
deforestation and forest degradation;
``(iii) identifies improvements in data
collection, monitoring, and institutional
capacity necessary to implement a national
deforestation reduction program; and
``(iv) establishes a timeline for
implementing the program and transitioning to
low-emissions development.
``(3) Protection of interests.--With respect to an agreement
or arrangement described in subsection (b)(2)(A) with a country
that addresses international offset credits under this
subsection, the Administrator, in consultation with the
Secretary of State and the Administrator of the United States
Agency for International Development, shall seek to ensure the
establishment and enforcement by such country of legal regimes,
processes, standards, and safeguards that--
``(A) give due regard to the rights and interests of
local communities, indigenous peoples, forest-dependent
communities, and vulnerable social groups;
``(B) promote consultations with, and full
participation of, forest-dependent communities and
indigenous peoples in affected areas, as partners and
primary stakeholders, prior to and during the design,
planning, implementation, and monitoring and evaluation
of activities; and
``(C) encourage equitable sharing of profits and
benefits derived from international offset credits with
local communities, indigenous peoples, and forest-
dependent communities.
``(4) National deforestation baseline.--A national
deforestation baseline established under this subsection
shall--
``(A) be national in scope;
``(B) be consistent with nationally appropriate
mitigation commitments or actions with respect to
deforestation, taking into consideration the average
annual historical deforestation rates of the country
during a period of at least 5 years, the applicable
drivers of deforestation, and other factors to ensure
additionality;
``(C) establish a trajectory that would result in
zero net deforestation by not later than 20 years after
the national deforestation baseline has been
established;
``(D) be adjusted over time to take account of
changing national circumstances;
``(E) be designed to account for all significant
sources of greenhouse gas emissions from deforestation
in the country; and
``(F) be consistent with the national deforestation
baseline, if any, established for such country under
section 754(d)(1).
``(5) State-level or province-level activities.--
``(A) Eligible states or provinces.--The
Administrator, in consultation with the Secretary of
State and the Administrator of the United States Agency
for International Development, shall establish, and
periodically review and update, a list of states or
provinces in developing countries where--
``(i) the developing country is not included
on the list of countries established pursuant
to paragraph (6)(A);
``(ii) the state or province by itself is a
major emitter of greenhouse gases from tropical
deforestation on a scale commensurate to the
emissions of other countries; and
``(iii) the state or province meets the
eligibility criteria in paragraphs (2) and (3)
for the geographic area under its jurisdiction.
``(B) Activities.--The Administrator may issue
international offset credits for greenhouse gas
emission reductions achieved through activities to
reduce deforestation at a state or provincial level
that meet the requirements of this section. Such
credits shall be determined by comparing the emissions
from deforestation within that state or province
relative to the state or province deforestation
baseline for that state or province established, in
accordance with an agreement or arrangement described
in subsection (b)(2)(A), pursuant to subparagraph (C)
of this paragraph.
``(C) State-level or province-level deforestation
baseline.--A state-level or province-level
deforestation baseline shall--
``(i) be consistent with any existing
nationally appropriate mitigation commitments
or actions for the country in which the
activity is occurring, taking into
consideration the average annual historical
deforestation rates of the state or province
during a period of at least 5 years, relevant
drivers of deforestation, and other factors to
ensure additionality;
``(ii) establish a trajectory that would
result in zero net deforestation by not later
than 20 years after the state-level or
province-level deforestation baseline has been
established; and
``(iii) be designed to account for all
significant sources of greenhouse gas emissions
from deforestation in the state or province and
adjusted to fully account for emissions leakage
outside the state or province.
``(D) Phase out.--Beginning 5 years after the first
calendar year for which a covered entity must
demonstrate compliance with section 722(a), the
Administrator shall issue no further international
offset credits for eligible state-level or province-
level activities to reduce deforestation pursuant to
this paragraph.
``(6) Projects and programs to reduce deforestation.--
``(A) Eligible countries.--The Administrator, in
consultation with the Secretary of State and the
Administrator of the United States Agency for
International Development, shall establish, and
periodically review and update, a list of developing
countries that--
``(i) the Administrator determines, based on
recent, credible, and reliable emissions data,
account for less than 1 percent of global
greenhouse gas emissions and less than 3
percent of global forest-sector and land use
change greenhouse gas emissions; and
``(ii) have, or in the determination of the
Administrator are making a good faith effort to
develop, a land use or forest sector strategic
plan that meets the criteria described in
paragraph (2)(C).
``(B) Activities.--The Administrator may issue
international offset credits for greenhouse gas
emission reductions achieved through project or program
level activities to reduce deforestation in countries
listed under subparagraph (A) that meet the
requirements of this section. The quantity of
international offset credits shall be determined by
comparing the project-level or program-level emissions
from deforestation to a deforestation baseline for such
project or program established pursuant to subparagraph
(C).
``(C) Project-level or program-level baseline.--A
project-level or program-level deforestation baseline
shall--
``(i) be consistent with any existing
nationally appropriate mitigation commitments
or actions for the country in which the project
or program is occurring, taking into
consideration the average annual historical
deforestation rates in the project or program
boundary during a period of at least 5 years,
applicable drivers of deforestation, and other
factors to ensure additionality;
``(ii) be designed to account for all
significant sources of greenhouse gas emissions
from deforestation in the project or program
boundary; and
``(iii) be adjusted to fully account for
emissions leakage outside the project or
program boundary.
``(D) Phase out.--(i) Beginning 5 years after the
first calendar year for which a covered entity must
demonstrate compliance with section 722(a), the
Administrator shall issue no further international
offset credits for project-level or program-level
activities as described in this paragraph, except as
provided in clause (ii).
``(ii) The Administrator may extend the phase out
deadline for the issuance of international offset
credits under this section by up to 8 years with
respect to eligible activities taking place in a least
developed nation, which is a foreign country that the
United Nations has identified as among the least
developed of developing countries at the time that the
Administrator determines to provide an extension,
provided that the Administrator, in consultation with
the Secretary of State and the Administrator of the
United States Agency for International Development,
determines the nation--
``(I) lacks sufficient capacity to adopt and
implement effective programs to achieve
reductions in deforestation measured against
national baselines;
``(II) is receiving support under part E to
develop such capacity; and
``(III) has developed and is working to
implement a credible national strategy or plan
to reduce deforestation.
``(7) Deforestation.--In implementing this subsection, the
Administrator, taking into consideration the recommendations of
the Advisory Board, may include forest degradation, or soil
carbon losses associated with forested wetlands or peatlands,
within the meaning of deforestation.
``(f) Modification of Requirements.--In promulgating regulations
under subsection (b)(1) with respect to the issuance of international
offset credits under subsection (c), (d), or (e), the Administrator, in
consultation with the Secretary of State and the Administrator of the
United States Agency for International Development, may modify or omit
a requirement of this part (excluding the requirements of this section)
if the Administrator determines that the application of that
requirement to such subsection is not feasible. In modifying or
omitting such a requirement on the basis of infeasibility, the
Administrator, in consultation with the Secretary of State and the
Administrator of the United States Agency for International
Development, shall ensure, with an adequate margin of safety, the
integrity of international offset credits issued under this section and
of the greenhouse gas emissions cap established pursuant to section
703.
``(g) Avoiding Double Counting.--The Administrator, in consultation
with the Secretary of State, shall seek, by whatever means appropriate,
including agreements, arrangements, or technical cooperation, to ensure
that activities on the basis of which international offset credits are
issued under this section are not used for compliance with an
obligation to reduce or avoid greenhouse gas emissions, or increase
greenhouse gas sequestration, under a foreign or international
regulatory system. In addition, no international offset credits shall
be issued for emission reductions from activities with respect to which
emission allowances were allocated under section 781 for distribution
under part E.
``(h) Limitation.--The Administrator shall not issue international
offset credits generated by projects based on the destruction of
hydrofluorocarbons.
``PART E--SUPPLEMENTAL EMISSIONS REDUCTIONS FROM REDUCED DEFORESTATION
``SEC. 751. DEFINITIONS.
``In this part:
``(1) Leakage prevention activities.--The term `leakage
prevention activities' means activities in developing countries
that are directed at preserving existing forest carbon stocks,
including forested wetlands and peatlands, that might, absent
such activities, be lost through leakage.
``(2) National deforestation reduction activities.--The term
`national deforestation reduction activities' means activities
in developing countries that reduce a quantity of greenhouse
gas emissions from deforestation that is calculated by
measuring actual emissions against a national deforestation
baseline established pursuant to section 754(d)(1) and (2).
``(3) Subnational deforestation reduction activities.--The
term `subnational deforestation reduction activities' means
activities in developing countries that reduce a quantity of
greenhouse gas emissions from deforestation that are calculated
by measuring actual emissions using an appropriate baseline
established by the Administrator that is less than national in
scope.
``(4) Supplemental emissions reductions.--The term
`supplemental emissions reductions' means greenhouse gas
emissions reductions achieved from reduced or avoided
deforestation under this part.
``(5) USAID.--The term `USAID' means the United States Agency
for International Development.
``SEC. 752. FINDINGS.
``Congress finds that--
``(1) as part of a global effort to mitigate climate change,
it is in the national interest of the United States to assist
developing countries to reduce and ultimately halt emissions
from deforestation;
``(2) deforestation is one of the largest sources of
greenhouse gas emissions in developing countries, amounting to
roughly 20 percent of overall emissions globally;
``(3) recent scientific analysis shows that it will be
substantially more difficult to limit the increase in global
temperatures to less than 2 degrees centigrade above
preindustrial levels without reducing and ultimately halting
net emissions from deforestation;
``(4) reducing emissions from deforestation is highly cost-
effective, compared to many other sources of emissions
reductions;
``(5) in addition to contributing significantly to worldwide
efforts to address global warming, this assistance will
generate significant environmental and social cobenefits,
including protection of biodiversity, ecosystem services, and
forest-related livelihoods; and
``(6) Under the Bali Action Plan, developed country parties
to the United Nations Framework Convention on Climate Change,
including the United States, committed to `enhanced action on
the provision of financial resources and investment to support
action on mitigation and adaptation and technology
cooperation,' including, inter alia, consideration of `improved
access to adequate, predictable, and sustainable financial
resources and financial and technical support, and the
provision of new and additional resources, including official
and concessional funding for developing country parties' .
``SEC. 753. SUPPLEMENTAL EMISSIONS REDUCTIONS THROUGH REDUCED
DEFORESTATION.
``(a) Regulations.--Not later than 2 years after the date of
enactment of this title, the Administrator, in consultation with the
Administrator of USAID and any other appropriate agencies, shall
promulgate regulations establishing a program to use emission
allowances set aside for this purpose under section 781 to achieve the
reduction of greenhouse gas emissions from deforestation in developing
countries in accordance with the requirements of this part.
``(b) Objectives.--The objectives of the program established under
this section shall be to--
``(1) achieve supplemental emissions reductions of at least
720,000,000 tons of carbon dioxide equivalent in 2020, a
cumulative amount of at least 6,000,000,000 tons of carbon
dioxide equivalent by December 31, 2025, and additional
supplemental emissions reductions in subsequent years;
``(2) build capacity to reduce deforestation in developing
countries experiencing deforestation, including preparing
developing countries to participate in international markets
for international offset credits for reduced emissions from
deforestation; and
``(3) preserve existing forest carbon stocks in countries
where such forest carbon may be vulnerable to international
leakage, particularly in developing countries with largely
intact native forests.
``SEC. 754. REQUIREMENTS FOR INTERNATIONAL DEFORESTATION REDUCTION
PROGRAM.
``(a) Eligible Countries.--The Administrator may support activities
under this part only with respect to a developing country that--
``(1) the Administrator, in consultation with the
Administrator of USAID, determines is experiencing
deforestation or forest degradation or has standing forest
carbon stocks that may be at risk of deforestation or
degradation; and
``(2) has entered into a bilateral or multilateral agreement
or arrangement with the United States establishing the
conditions of its participation in the program established
under this part, which shall include an agreement to meet the
standards established under subsection (d) for the activities
to which those standards apply.
``(b) Activities.--(1) Subject to the requirements of this part, the
Administrator, in consultation with the Administrator of USAID, may
support activities to achieve the objectives identified in section
753(b), including--
``(A) national deforestation reduction activities;
``(B) subnational deforestation reduction activities,
including pilot activities that reduce greenhouse gas
emissions but are subject to significant uncertainty;
``(C) activities to measure, monitor, and verify
deforestation, avoided deforestation, and deforestation
rates;
``(D) leakage prevention activities;
``(E) development of measurement, monitoring, and
verification capacities to enable a country to quantify
supplemental emissions reductions and to generate for
sale offset credits from reduced or avoided
deforestation;
``(F) development of governance structures to reduce
deforestation and illegal logging;
``(G) enforcement of requirements for reduced
deforestation or forest conservation;
``(H) efforts to combat illegal logging and increase
enforcement cooperation;
``(I) providing incentives for policy reforms to
achieve the objectives identified in section 753(b);
and
``(J) monitoring and evaluation of the results of the
activities conducted under this section.
``(2) Activities selected by usaid.--
``(A) The Administrator of USAID, in consultation
with the Administrator, may select for support and
implementation pursuant to subsection (c) any of the
activities described in paragraph (1), consistent with
this part and the regulations promulgated under
subsection (d), and subject to the requirement to
achieve the objectives listed in section 753(b)(1).
``(B) With respect to the activities listed in
subparagraphs (D) through (J) of paragraph (1), the
Administrator of USAID, in consultation with the
Administrator, shall have primary but not exclusive
responsibility for selecting the activities to be
supported and implemented.
``(3) Interagency coordination.--The Administrator and the
Administrator of USAID shall jointly develop and biennially
update a strategic plan for meeting the objectives listed in
section 753(b) and shall execute a memorandum of understanding
delineating the agencies' respective roles in implementing this
part.
``(c) Mechanisms.--
``(1) In general.--The Administrator may support activities
to achieve the objectives identified in section 753(b) by--
``(A) developing and implementing programs and
projects that achieve such objectives; and
``(B) distributing emission allowances to a country
that is eligible under subsection (a), to any private
or public group (including international
organizations), or to an international fund established
by an international agreement to which the United
States is a party, to carry out activities to achieve
such objectives.
``(2) USAID activities.--With respect to activities selected
and implemented by the Administrator of USAID pursuant to
(b)(2), the Administrator shall distribute emission allowances
as provided in subparagraph (1) based upon the direction of the
Administrator of USAID, subject to the availability of
allowances for such activities.
``(3) Implementation through international organizations.--If
support is distributed through an international organization,
the agency responsible for selecting activities in accordance
with subparagraph (b)(1) or (2), in consultation with the
Secretary of State, shall ensure the establishment and
implementation of adequate mechanisms to apply and enforce the
eligibility requirements and other requirements of this
section.
``(4) Role of the secretary of state.--The Administrator may
not distribute emission allowances to the government of another
country or to an international organization or international
fund unless the Secretary of State has concurred with such
distribution.
``(d) Standards.--The Administrator, in consultation with the
Administrator of USAID, shall promulgate standards to ensure that
supplemental emissions reductions achieved through supported activities
are additional, measurable, verifiable, permanent, monitored, and
account for leakage and uncertainty. In addition, such standards
shall--
``(1) require the establishment of a national deforestation
baseline for each country with national deforestation reduction
activities that is used to account for reductions achieved from
such activities;
``(2) provide that a national deforestation baseline
established under paragraph (1) shall--
``(A) be national in scope;
``(B) be consistent with nationally appropriate
mitigation commitments or actions with respect to
deforestation, taking into consideration the average
annual historical deforestation rates of the country
during a period of at least 5 years and other factors
to ensure additionality;
``(C) establish a trajectory that would result in
zero net deforestation by not later than 20 years from
the date the baseline is established;
``(D) be adjusted over time to take account of
changing national circumstances;
``(E) be designed to account for all significant
sources of greenhouse gas emissions from deforestation
in the country; and
``(F) be consistent with the national deforestation
baseline, if any, established for such country under
section 743(e)(4);
``(3) with respect to support provided pursuant to subsection
(b)(1)(A) or (B), require supplemental emissions reductions to
be achieved and verified prior to compensation through the
distribution of emission allowances under this part;
``(4) with respect to accounting for subnational
deforestation reduction activities that lack the standardized
or precise measurement and monitoring techniques needed for a
full accounting of changes in emissions or baselines, or are
subject to other sources of uncertainty, apply a conservative
discount factor to reflect the uncertainty regarding the levels
of reductions achieved;
``(5) ensure that activities under this part shall be
designed, carried out, and managed--
``(A) in accordance with widely accepted,
environmentally sustainable forestry practices;
``(B) to promote native species and conservation or
restoration of native forests, if practicable, and to
avoid the introduction of invasive nonnative species;
``(C) in a manner that gives due regard to the rights
and interests of local communities, indigenous peoples,
forest-dependent communities, and vulnerable social
groups;
``(D) with consultations with, and full participation
of, local communities, indigenous peoples, and forest-
dependent communities in affected areas, as partners
and primary stakeholders, prior to and during the
design, planning, implementation, and monitoring and
evaluation of activities; and
``(E) with equitable sharing of profits and benefits
derived from the activities with local communities,
indigenous peoples, and forest-dependent communities;
and
``(6) with respect to support for all activities under this
part, seek to ensure the establishment and enforcement by the
recipient country of legal regimes, standards, processes, and
safeguards that--
``(A) give due regard to the rights and interests of
local communities, indigenous peoples, forest-dependent
communities, and vulnerable social groups;
``(B) promote consultations with local communities
and indigenous peoples and forest-dependent communities
in affected areas, as partners and primary
stakeholders, prior to and during the design, planning,
implementation, monitoring, and evaluation of
activities under this part; and
``(C) encourage equitable sharing of profits and
benefits from incentives for emissions reductions or
leakage prevention with local communities, indigenous
peoples, and forest-dependent communities.
``(e) Expansion of Scope.--The Administrator, in consultation with
the Administrator of USAID, may decide, taking into account any advice
from the Advisory Board, to expand, where appropriate, the scope of
activities under this part to include--
``(1) reduced emissions from forest degradation; or
``(2) reduced soil carbon-derived emissions associated with
deforestation and degradation of forested wetlands and
peatlands.
``(f) Accounting.--The Administrator shall establish a publicly
accessible registry of the supplemental emissions reductions achieved
through support provided under this part each year, after appropriately
discounting for uncertainty and other relevant factors as required by
the standards established under subsection (d).
``(g) Transition to National Reductions.--Beginning 5 years after the
date that a country entered into the agreement or arrangement required
under subsection (a)(2), the Administrator shall provide no further
compensation through emission allowances to that country under this
part for any subnational deforestation reduction activities, except
that the Administrator may extend this period by an additional 5 years
if the Administrator, in consultation with the Administrator of USAID,
determines that--
``(1) the country is making substantial progress towards
adopting and implementing a program to achieve reductions in
deforestation measured against a national baseline;
``(2) the greenhouse gas emissions reductions achieved are
not resulting in significant leakage; and
``(3) the greenhouse gas emissions reductions achieved are
being appropriately discounted to account for any leakage that
is occurring.
The limitation under this subsection shall not apply to support for
activities to further the objectives listed in section 753(b)(2) or
(3).
``(h) Coordination With U.S. Foreign Assistance.--Subject to the
direction of the President, the Administrator and the Administrator of
USAID shall, to the extent practicable and consistent with the
objectives of this program, seek to align activities under this section
with broader development, poverty alleviation, or natural resource
management objectives and initiatives in the recipient country.
``(i) Support as Supplement.--The provision of support for activities
under this part shall be used to supplement, and not to supplant, any
other Federal, State, or local support available to carry out such
qualifying activities under this part.
``SEC. 755. REPORTS AND REVIEWS.
``(a) Reports.--Not later than January 1, 2014, and annually
thereafter, the Administrator and the Administrator of USAID shall
submit to the Committee on Energy and Commerce and the Committee on
Foreign Affairs of the House of Representatives, and the Committee on
Environment and Public Works and the Committee on Foreign Relations of
the Senate, and make available to the public, a report on the support
provided under this part during the prior fiscal year. The report shall
include--
``(1) a statement of the quantity of supplemental emissions
reductions for which compensation in the form of emission
allowances was provided under this part during the prior fiscal
year, as registered by the Administrator under section 754(f);
and
``(2) a description of the national and subnational
deforestation reduction activities, capacity-building
activities, and leakage prevention activities supported under
this part, including a statement of the quantity of emission
allowances distributed to each recipient for each activity
during the prior fiscal year, and a description of what was
accomplished through each of the activities.
``(b) Reviews.--Not later than 4 years after the date of enactment of
this title and every 5 years thereafter, the Administrator and the
Administrator of USAID and taking into consideration any evaluation by
or recommendations from the Advisory Board established under section
731, shall conduct a review of the activities undertaken pursuant to
this part and make any appropriate changes in the program established
under this part based on the findings of the review. The review shall
include the effects of the activities on--
``(1) total documented carbon stocks of each country that
directly or indirectly received support under this part
compared with such country's national deforestation baseline
established under section 754(d)(1);
``(2) the number of countries with the capacity to generate
for sale instruments in the nature of offset credits from
forest-related activities, and the amount of such activities;
``(3) forest governance in each country that directly or
indirectly received support under this part;
``(4) indigenous peoples and forest-dependent communities
residing in areas affected by such activities;
``(5) biodiversity and ecosystem services within forested
areas associated with the activities;
``(6) international leakage; and
``(7) any program or mechanism established under the United
Nations Framework Convention on Climate Change related to
greenhouse gas emissions from deforestation.
``SEC. 756. LEGAL EFFECT OF PART.
``(1) In general.--Nothing in this part supersedes, limits,
or otherwise affects any restriction imposed by Federal law
(including regulations) on any interaction between an entity
located in the United States and an entity located in a foreign
country.
``(2) Role of the secretary of state.--Nothing in this part
shall be construed as affecting the role of the Secretary of
State or the responsibilities of the Secretary under section
622 (c) of the Foreign Assistance Act of 1961.''.
SEC. 312. DEFINITIONS.
Title VII of the Clean Air Act, as added by section 311 of this Act,
is amended by inserting before part A the following new section:
``SEC. 700. DEFINITIONS.
``In this title:
``(1) Additional.--The term `additional', when used with
respect to reductions or avoidance of greenhouse gas emissions,
or to sequestration of greenhouse gases, means reductions,
avoidance, or sequestration that result in a lower level of net
greenhouse gas emissions or atmospheric concentrations than
would occur in the absence of an offset project.
``(2) Additionality.--The term `additionality' means the
extent to which reductions or avoidance of greenhouse gas
emissions, or sequestration of greenhouse gases, are
additional.
``(3) Advisory board.--The term `Advisory Board' means the
Offsets Integrity Advisory Board established under section 731.
``(4) Affiliated.--The term `affiliated'--
``(A) when used in relation to an entity means owned
or controlled by, or under common ownership or control
with, another entity, as determined by the
Administrator; and
``(B) when used in relation to a natural gas local
distribution company, means owned or controlled by, or
under common ownership or control with, another natural
gas local distribution company, as determined by the
Administrator.
``(5) Allowance.--The term `allowance' means a limited
authorization to emit, or have attributable greenhouse gas
emissions in an amount of, 1 ton of carbon dioxide equivalent
of a greenhouse gas in accordance with this title; it includes
an emission allowance, a compensatory allowance, or an
international emission allowance.
``(6) Attributable greenhouse gas emissions.--The term
`attributable greenhouse gas emissions' means--
``(A) for a covered entity that is a fuel producer or
importer described in paragraph (13)(B), greenhouse
gases that would be emitted from the combustion of any
petroleum-based or coal-based liquid fuel, petroleum
coke, or natural gas liquid, produced or imported by
that covered entity for sale or distribution in
interstate commerce, assuming no capture and
sequestration of any greenhouse gas emissions;
``(B) for a covered entity that is an industrial gas
producer or importer described in paragraph (13)(C),
the tons of carbon dioxide equivalent of fossil fuel-
based carbon dioxide, nitrous oxide, any fluorinated
gas, other than nitrogen trifluoride, that is a
greenhouse gas, or any combination thereof--
``(i) produced or imported by such covered
entity during the previous calendar year for
sale or distribution in interstate commerce; or
``(ii) released as fugitive emissions in the
production of fluorinated gas; and
``(C) for a natural gas local distribution company
described in paragraph (13)(J), greenhouse gases that
would be emitted from the combustion of the natural
gas, and any other gas meeting the specifications for
commingling with natural gas for purposes of delivery,
that such entity delivered during the previous calendar
year to customers that are not covered entities,
assuming no capture and sequestration of that
greenhouse gas.
``(7) Biological sequestration; biologically sequestered.--
The terms `biological sequestration' and `biologically
sequestered' mean the removal of greenhouse gases from the
atmosphere by terrestrial biological means, such as by growing
plants, and the storage of those greenhouse gases in plants or
soils.
``(8) Capped emissions.--The term `capped emissions' means
greenhouse gas emissions to which section 722 applies,
including emissions from the combustion of natural gas,
petroleum-based or coal-based liquid fuel, petroleum coke, or
natural gas liquid to which section 722(b)(2) or (8) applies.
``(9) Capped source.--The term `capped source' means a source
that directly emits capped emissions.
``(10) Carbon dioxide equivalent.--The term `carbon dioxide
equivalent' means the unit of measure, expressed in metric
tons, of greenhouse gases as provided under section 711 or 712.
``(11) Carbon stock.--The term `carbon stock' means the
quantity of carbon contained in a biological reservoir or
system which has the capacity to accumulate or release carbon.
``(12) Compensatory allowance.--The term `compensatory
allowance' means an allowance issued under section 721(f).
``(13) Covered entity.--The term `covered entity' means each
of the following:
``(A) Any electricity source.
``(B) Any stationary source that produces, and any
entity that (or any group of two or more affiliated
entities that, in the aggregate) imports, for sale or
distribution in interstate commerce in 2008 or any
subsequent year, petroleum-based or coal-based liquid
fuel, petroleum coke, or natural gas liquid, the
combustion of which would emit more than 25,000 tons of
carbon dioxide equivalent, as determined by the
Administrator.
``(C) Any stationary source that produces, and any
entity that (or any group of two or more affiliated
entities that, in the aggregate) imports, for sale or
distribution in interstate commerce, in bulk, or in
products designated by the Administrator, in 2008 or
any subsequent year more than 25,000 tons of carbon
dioxide equivalent of--
``(i) fossil fuel-based carbon dioxide;
``(ii) nitrous oxide;
``(iii) perfluorocarbons;
``(iv) sulfur hexafluoride;
``(v) any other fluorinated gas, except for
nitrogen trifluoride, that is a greenhouse gas,
as designated by the Administrator under
section 711(b) or (c); or
``(vi) any combination of greenhouse gases
described in clauses (i) through (vi).
``(D) Any stationary source that has emitted 25,000
or more tons of carbon dioxide equivalent of nitrogen
trifluoride in 2008 or any subsequent year.
``(E) Any geologic sequestration site.
``(F) Any stationary source in the following
industrial sectors:
``(i) Adipic acid production.
``(ii) Primary aluminum production.
``(iii) Ammonia manufacturing.
``(iv) Cement production, excluding grinding-
only operations.
``(v) Hydrochlorofluorocarbon production.
``(vi) Lime manufacturing.
``(vii) Nitric acid production.
``(viii) Petroleum refining.
``(ix) Phosphoric acid production.
``(x) Silicon carbide production.
``(xi) Soda ash production.
``(xii) Titanium dioxide production.
``(xiii) Coal-based liquid or gaseous fuel
production.
``(G) Any stationary source in the chemical or
petrochemical sector that, in 2008 or any subsequent
year--
``(i) produces acrylonitrile, carbon black,
ethylene, ethylene dichloride, ethylene oxide,
or methanol; or
``(ii) produces a chemical or petrochemical
product if producing that product results in
annual combustion plus process emissions of
25,000 or more tons of carbon dioxide
equivalent.
``(H) Any stationary source that--
``(i) is in one of the following industrial
sectors: ethanol production; ferroalloy
production; fluorinated gas production; food
processing; glass production; hydrogen
production; iron and steel production; lead
production; pulp and paper manufacturing; and
zinc production; and
``(ii) has emitted 25,000 or more tons of
carbon dioxide equivalent in 2008 or any
subsequent year.
``(I) Any fossil fuel-fired combustion device (such
as a boiler) or grouping of such devices that--
``(i) is all or part of an industrial source
not specified in subparagraph (D), (F), (G), or
(H); and
``(ii) has emitted 25,000 or more tons of
carbon dioxide equivalent in 2008 or any
subsequent year.
``(J) Any natural gas local distribution company that
(or any group of 2 or more affiliated natural gas local
distribution companies that, in the aggregate) in 2008
or any subsequent year, delivers 460,000,000 cubic feet
or more of natural gas to customers that are not
covered entities.
``(14) Crediting period.--The term `crediting period' means
the period with respect to which an offset project is eligible
to earn offset credits under part D, as determined under
section 734(c).
``(15) Designated representative.--The term `designated
representative' means, with respect to a covered entity, a
reporting entity, an offset project developer, or any other
entity receiving or holding allowances or offset credits under
this title, an individual authorized, through a certificate of
representation submitted to the Administrator by the owners and
operators or similar entity official, to represent the owners
and operators or similar entity official in all matters
pertaining to this title (including the holding, transfer, or
disposition of allowances or offset credits), and to make all
submissions to the Administrator under this title.
``(16) Developing country.--The term `developing country'
means a country eligible to receive official development
assistance according to the income guidelines of the
Development Assistance Committee of the Organization for
Economic Cooperation and Development.
``(17) Domestic offset credit.--The term `domestic offset
credit' means an offset credit issued under part D, other than
an international offset credit.
``(18) Electricity source.--The term `electricity source'
means a stationary source that includes one or more utility
units.
``(19) Emission.--The term `emission' means the release of a
greenhouse gas into the ambient air. Such term does not include
gases that are captured and sequestered, except to the extent
that they are later released into the atmosphere, in which case
compliance must be demonstrated pursuant to section 722(b)(5).
``(20) Emission allowance.--The term `emission allowance'
means an allowance established under section 721(a) or section
726(g)(2) or (h)(1)(C).
``(21) Fair market value.--The term `fair market value' means
the average daily closing price on registered exchanges or, if
such a price is unavailable, the average price as determined by
the Administrator, during a specified time period, of an
emission allowance.
``(22) Federal land.--The term `Federal land' means land that
is owned by the United States, other than land held in trust
for an Indian or Indian tribe.
``(23) Fossil fuel.--The term `fossil fuel' means natural
gas, petroleum, or coal, or any form of solid, liquid, or
gaseous fuel derived from such material, including consumer
products that are derived from such materials and are
combusted.
``(24) Fossil fuel-fired.--The term `fossil fuel-fired' means
powered by combustion of fossil fuel, alone or in combination
with any other fuel, regardless of the percentage of fossil
fuel consumed.
``(25) Fugitive emissions.--The term `fugitive emissions'
means emissions from leaks, valves, joints, or other small
openings in pipes, ducts, or other equipment, or from vents.
``(26) Geologic sequestration; geologically sequestered.--The
terms `geologic sequestration' and `geologically sequestered'
mean the sequestration of greenhouse gases in subsurface
geologic formations for purposes of permanent storage.
``(27) Geologic sequestration site.--The term `geologic
sequestration site' means a site where carbon dioxide is
geologically sequestered.
``(28) Greenhouse gas.--The term `greenhouse gas' means any
gas described in section 711(a) or designated under section
711(b), (c), or (e), except to the extent that it is regulated
under title VI.
``(29) High conservation priority land.--The term `high
conservation priority land' means land that is not Federal land
and is--
``(A) globally or State ranked as critically
imperiled or imperiled under a State Natural Heritage
Program; or
``(B) old-growth or late-successional forest, as
identified by the office of the State Forester or
relevant State agency with regulatory jurisdiction over
forestry activities.
``(30) Hold.--The term `hold' means, with respect to an
allowance or offset credit, to have in the appropriate account
in the allowance tracking system, or submit to the
Administrator for recording in such account.
``(31) Industrial source.--The term `industrial source' means
any stationary source that--
``(A) is not an electricity source; and
``(B) is in--
``(i) the manufacturing sector (as defined in
North American Industrial Classification System
codes 31, 32, and 33); or
``(ii) the natural gas processing or natural
gas pipeline transportation sector (as defined
in North American Industrial Classification
System codes 211112 or 486210).
``(32) International emission allowance.--The term
`international emission allowance' means a tradable
authorization to emit 1 ton of carbon dioxide equivalent of
greenhouse gas that is issued by a national or supranational
foreign government pursuant to a qualifying international
program designated by the Administrator pursuant to section
728(a).
``(33) International offset credit.--The term `international
offset credit' means an offset credit issued by the
Administrator under section 743.
``(34) Leakage.--The term `leakage' means a significant
increase in greenhouse gas emissions, or significant decrease
in sequestration, which is caused by an offset project and
occurs outside the boundaries of the offset project.
``(35) Mineral sequestration.--The term `mineral
sequestration' means sequestration of carbon dioxide from the
atmosphere by capturing carbon dioxide into a permanent
mineral, such as the aqueous precipitation of carbonate
minerals that results in the storage of carbon dioxide in a
mineral form.
``(36) Natural gas liquid.--The term `natural gas liquid'
means ethane, butane, isobutane, natural gasoline, and propane
which is ready for commercial sale or use.
``(37) Natural gas local distribution company.--The term
`natural gas local distribution company' has the meaning given
the term `local distribution company' in section 2(17) of the
Natural Gas Policy Act of 1978 (15 U.S.C. 3301(17)).
``(38) Offset credit.--The term `offset credit' means a
credit issued under part D.
``(39) Offset project.--The term `offset project' means a
project or activity that reduces or avoids greenhouse gas
emissions, or sequesters greenhouse gases, and for which offset
credits are issued under part D.
``(40) Offset project developer.--The term `offset project
developer' means the individual or entity designated as the
offset project developer in an offset project approval petition
under section 735(c)(1).
``(41) Petroleum.--The term `petroleum' includes crude oil,
tar sands, oil shale, and heavy oils.
``(42) Renewable biomass.--The term `renewable biomass' means
any of the following:
``(A) Plant material, including waste material,
harvested or collected from actively managed
agricultural land that was in cultivation, cleared, or
fallow and nonforested on January 1, 2009.
``(B) Plant material, including waste material,
harvested or collected from pastureland that was
nonforested on January 1, 2009.
``(C) Nonhazardous vegetative matter derived from
waste, including separated yard waste, landscape right-
of-way trimmings, construction and demolition debris or
food waste (but not municipal solid waste, recyclable
waste paper, painted, treated or pressurized wood, or
wood contaminated with plastic or metals).
``(D) Animal waste or animal byproducts, including
products of animal waste digesters.
``(E) Algae.
``(F) Trees, brush, slash, residues, or any other
vegetative matter removed from within 600 feet of any
building, campground, or route designated for
evacuation by a public official with responsibility for
emergency preparedness, or from within 300 feet of a
paved road, electric transmission line, utility tower,
or water supply line.
``(G) Residues from or byproducts of milled logs.
``(H) Any of the following removed from forested land
that is not Federal and is not high conservation
priority land:
``(i) Trees, brush, slash, residues,
interplanted energy crops, or any other
vegetative matter removed from an actively
managed tree plantation established--
``(I) prior to January 1, 2009; or
``(II) on land that, as of January 1,
2009, was cultivated or fallow and non-
forested.
``(ii) Trees, logging residue, thinnings,
cull trees, pulpwood, and brush removed from
naturally-regenerated forests or other non-
plantation forests, including for the purposes
of hazardous fuel reduction or preventative
treatment for reducing or containing insect or
disease infestation.
``(iii) Logging residue, thinnings, cull
trees, pulpwood, brush and species that are
non-native and noxious, from stands that were
planted and managed after January 1, 2009, to
restore or maintain native forest types.
``(iv) Dead or severely damaged trees removed
within 5 years of fire, blowdown, or other
natural disaster, and badly infested trees.
``(I) Materials, pre-commercial thinnings, or removed
invasive species from National Forest System land and
public lands (as defined in section 103 of the Federal
Land Policy and Management Act of 1976 (43 U.S.C.
1702)), including those that are byproducts of
preventive treatments (such as trees, wood, brush,
thinnings, chips, and slash), that are removed as part
of a federally recognized timber sale, or that are
removed to reduce hazardous fuels, to reduce or contain
disease or insect infestation, or to restore ecosystem
health, and that are--
``(i) not from components of the National
Wilderness Preservation System, Wilderness
Study Areas, Inventoried Roadless Areas, old
growth or mature forest stands, components of
the National Landscape Conservation System,
National Monuments, National Conservation
Areas, Designated Primitive Areas; or Wild and
Scenic Rivers corridors;
``(ii) harvested in environmentally
sustainable quantities, as determined by the
appropriate Federal land manager; and
``(iii) are harvested in accordance with
Federal and State law, and applicable land
management plans.
``(43) Retire.--The term `retire', with respect to an
allowance or offset credit established or issued under this
title, means to disqualify such allowance or offset credit for
any subsequent use under this title, regardless of whether the
use is a sale, exchange, or submission of the allowance or
offset credit to satisfy a compliance obligation.
``(44) Reversal.--The term `reversal' means an intentional or
unintentional loss of sequestered greenhouse gases to the
atmosphere.
``(45) Sequestered and sequestration.--The terms
`sequestered' and `sequestration' mean the separation,
isolation, or removal of greenhouse gases from the atmosphere,
as determined by the Administrator. The terms include
biological, geologic, and mineral sequestration, but do not
include ocean fertilization techniques.
``(46) Stationary source.--The term `stationary source' means
any integrated operation comprising any plant, building,
structure, or stationary equipment, including support buildings
and equipment, that is located within one or more contiguous or
adjacent properties, is under common control of the same person
or persons, and emits or may emit a greenhouse gas.
``(47) Strategic reserve allowance.--The term `strategic
reserve allowance' means an emission allowance reserved for,
transferred to, or deposited in the strategic reserve, or
established, under section 726.
``(48) Uncapped emissions.--The term `uncapped emissions'
means emissions of greenhouse gases emitted after December 31,
2011, that are not capped emissions.
``(49) United states greenhouse gas emissions.--The term
`United States greenhouse gas emissions' means the total
quantity of annual greenhouse gas emissions from the United
States, as calculated by the Administrator and reported to the
United Nations Framework Convention on Climate Change
Secretariat.
``(50) Utility unit.--The term `utility unit' means a
combustion device that, on January 1, 2009, or any date
thereafter, is fossil fuel-fired and serves a generator that
produces electricity for sale, unless such combustion device,
during the 12-month period starting the later of January 1,
2009, or the commencement of commercial operation and each
calendar year starting after such later date--
``(A) is part of an integrated cycle system that
cogenerates steam and electricity during normal
operation and that supplies one-third or less of its
potential electric output capacity and 25 MW or less of
electrical output for sale; or
``(B) combusts materials of which more than 95
percent is municipal solid waste on a heat input basis.
``(51) Vintage year.--The term `vintage year' means the
calendar year for which an emission allowance is established
under section 721(a) or which is assigned to an emission
allowance under section 726(g)(3)(A), except that the vintage
year for a strategic reserve allowance shall be the year in
which such allowance is purchased at auction.''.
Subtitle B--Disposition of Allowances
SEC. 321. DISPOSITION OF ALLOWANCES FOR GLOBAL WARMING POLLUTION
REDUCTION PROGRAM.
Title VII of the Clean Air Act, as added by section 311 of this Act,
is amended by adding at the end the following part:
``PART H--DISPOSITION OF ALLOWANCES
``SEC. 781. ALLOCATION OF ALLOWANCES FOR SUPPLEMENTAL REDUCTIONS.
``(a) In General.--The Administrator shall allocate for each vintage
year the following percentage of the emission allowances established
under section 721(a), for distribution in accordance with part E:
``(1) For vintage years 2012 through 2025, 5 percent.
``(2) For vintage years 2026 through 2030, 3 percent.
``(3) For vintage years 2031 through 2050, 2 percent.
``(b) Adjustment.--The Administrator shall modify the percentages set
forth in subsection (a) as necessary to ensure the achievement of the
annual supplemental emission reduction objective for 2020, and the
cumulative reduction objective through 2025, set forth in section
753(b)(1).
``(c) Carryover.--If the Administrator has not distributed all of the
allowances allocated pursuant to this section for a given vintage year
by the end of that year, the Administrator shall--
``(1) auction the remaining emission allowances under section
791 not later than March 31 of the year following that vintage
year; and
``(2) increase the allocation for the vintage year after the
vintage year for which emission allowances were undistributed
by the amount of undistributed emission allowances.
``SEC. 782. ALLOCATION OF EMISSION ALLOWANCES.
``(a) Electricity Consumers.--The Administrator shall allocate
emission allowances for the benefit of electricity consumers, to be
distributed in accordance with section 783 in the following amounts:
``(1) For vintage years 2012 and 2013, 43.75 percent of the
emission allowances established for each year under section
721(a).
``(2) For vintage years 2014 and 2015, 38.89 percent of the
emission allowances established for each year under section
721(a).
``(3) For vintage years 2016 through 2025, 35.00 percent of
the emission allowances established for each year under section
721(a).
``(4) For vintage year 2026, 28 percent of the emission
allowances established for each year under section 721(a).
``(5) For vintage year 2027, 21 percent of the emission
allowances established for each year under section 721(a).
``(6) For vintage year 2028, 14 percent of the emission
allowances established for each year under section 721(a).
``(7) For vintage year 2029, 7 percent of the emission
allowances established for each year under section 721(a).
``(b) Natural Gas Consumers.--The Administrator shall allocate
emission allowances for the benefit of natural gas consumers to be
distributed in accordance with section 784 in the following amounts:
``(1) For vintage years 2016 through 2025, 9 percent of the
emission allowances established for each year under section
721(a).
``(2) For vintage year 2026, 7.2 percent of the emission
allowances established for each year under section 721(a).
``(3) For vintage year 2027, 5.4 percent of the emission
allowances established for each year under section 721(a).
``(4) For vintage year 2028, 3.6 percent of the emission
allowances established for each year under section 721(a).
``(5) For vintage year 2029, 1.8 percent of the emission
allowances established for each year under section 721(a).
``(c) Home Heating Oil and Propane Consumers.--The Administrator
shall allocate emission allowances for the benefit of home heating oil
and propane consumers to be distributed in accordance with section 785
in the following amounts:
``(1) For vintage years 2012 and 2013, 1.875 percent of the
emission allowances established for each year under section
721(a).
``(2) For vintage years 2014 and 2015, 1.67 percent of the
emission allowances established for each year under section
721(a).
``(3) For vintage years 2016 through 2025, 1.5 percent of the
emission allowances established for each year under section
721(a).
``(4) For vintage year 2026, 1.2 percent of the emission
allowances established for each year under section 721(a).
``(5) For vintage year 2027, 0.9 percent of the emission
allowances established for each year under section 721(a).
``(6) For vintage year 2028, 0.6 percent of the emission
allowances established for each year under section 721(a).
``(7) For vintage year 2029, 0.3 percent of the emission
allowances established for each year under section 721(a).
``(d) Low Income Consumers.--For each vintage year starting in 2012,
the Administrator shall auction pursuant to section 791 15 percent of
the emission allowances established for each year under section 721(a),
with the proceeds used for the benefit of low income consumers to fund
the program set forth in subtitle C of title IV of American Clean
Energy and Security Act of 2009.
``(e) Trade-Vulnerable Industries.--The Administrator shall allocate
emission allowances to energy-intensive, trade-exposed entities, to be
distributed in accordance with section 765, in the following amounts:
``(1) For vintage years 2012 and 2013, up to 2.0 percent of
the emission allowances established for each year under section
721(a).
``(2) For vintage year 2014, up to 15 percent of the emission
allowances established for that year under section 721(a).
``(3) For vintage year 2015, up to the product of the amount
specified in paragraph (2), multiplied by the quantity of
emission allowances established for 2015 under section 721(a)
divided by the quantity of emission allowances established for
2014 under section 721(a).
``(4) For vintage year 2016, up to the product of the amount
specified in paragraph (3), multiplied by the quantity of
emission allowances established for 2015 under section 721(a)
divided by the quantity of emission allowances established for
2014 under section 721(a).
``(5) For vintage years 2017 through 2025, up to the product
of the amount specified in paragraph (4), multiplied by the
quantity of emission allowances established for that year under
section 721(a) divided by the quantity of emission allowances
established for 2016 under section 721(a).
``(6) For vintage years 2026 through 2050, up to the product
of the amount specified in paragraph (4)--
``(A) multiplied by the quantity of emission
allowances established for the applicable year during
2026 through 2050 under section 721(a) divided by the
quantity of emission allowances established for 2016
under section 721(a); and
``(B) multiplied by a factor, not exceeding 100
percent, that shall equal 90 percent for 2026 and
decline 10 percent for each year thereafter until
reaching zero,
except that, if the President sets one or more factors for a
year under section 767(c)(3)(A), the highest factor set (not
exceeding 100 percent) shall be used for that year instead of
the factor specified in subparagraph (B).
``(f) Deployment of Carbon Capture and Sequestration Technology.--
``(1) Annual allocation.--The Administrator shall allocate
emission allowances for the deployment of carbon capture and
sequestration technology to be distributed in accordance with
section 786 in the following amounts:
``(A) For vintage years 2014 through 2017, 1.75
percent of the emission allowances established for each
year under section 721(a).
``(B) For vintage years 2018 and 2019, 4.75 percent
of the emission allowances established for each year
under section 721(a).
``(C) For vintage years 2020 through 2050, 5 percent
of the emission allowances established for each year
under section 721(a).
``(2) Carryover.--If the Administrator has not distributed
all of the allowances allocated pursuant to this subsection for
a given vintage year by the end of that year, the Administrator
shall--
``(A) auction those emission allowances under section
791 not later than March 31 of the year following that
vintage year; and
``(B) increase the allocation under this subsection
for the vintage year after the vintage year for which
emission allowances were undisbursed by the amount of
undisbursed emission allowances, but only to the extent
that allowances for that later year are to be
auctioned.
``(g) Investment in Energy Efficiency and Renewable Energy.--The
Administrator shall allocate emission allowances to invest in energy
efficiency and renewable energy as follows:
``(1) To be distributed in accordance with section 132 of the
American Clean Energy and Security Act of 2009 in the following
amounts:
``(A) For vintage years 2012 through 2015, 9.5
percent of the emission allowances established for each
year under section 721(a).
``(B) For vintage years 2016 through 2017, 6.5
percent of the emission allowances established for each
year under section 721(a).
``(C) For vintage years 2018 through 2021, 5.5
percent of the emission allowances established for each
year under section 721(a).
``(D) For vintage years 2022 through 2025, 1.0
percent of the emission allowances established for each
year under section 721(a).
``(E) For vintage years 2026 through 2050, 4.5
percent of the emission allowances established for each
year under section 721(a).
``(F) At the same time the vintage year 2022 through
2025 allowances are distributed, 3.55 percent of
emission allowances established under section 721(a)
for the vintage year four years greater shall also be
distributed (which shall be in addition to the emission
allowances in subparagraph (E)).
``(2) To be distributed in accordance with section 201 of the
American Clean Energy and Security Act of 2009, for each
vintage year from 2012 through 2050, 0.5 percent of emission
allowances established under section 721(a).
``(h) Clean Energy Innovation Centers.--For each vintage year from
2012 through 2050, the Administrator shall allocate for Clean Energy
Innovation Centers, 1.5 percent of emission allowances established
under section 721(a), to be distributed in accordance with section 171
of the American Clean Energy and Security Act of 2009.
``(i) Investment in Clean Vehicle Technology.--The Administrator
shall allocate emission allowances to invest in the development and
deployment of clean vehicles, to be distributed in accordance with
section 124 of the American Clean Energy and Security Act of 2009 in
the following amounts:
``(1) For vintage years 2012 through 2017, 3 percent of the
emission allowances established for each year under section
721(a).
``(2) For vintage years 2018 through 2025, 1 percent of the
emission allowances established for each year under section
721(a).
``(j) Domestic Fuel Production.--For vintage years 2014 through 2026,
the Administrator shall allocate 2.0 percent of the emission allowances
established under section 721(a) to domestic refiners, to be
distributed in accordance with section 787.
``(k) Investment in Workers.--The Administrator shall auction
pursuant to section 791 emission allowances for workers in the
following amounts and shall report to the Secretary of Labor the amount
of proceeds from the sale of these allowances:
``(1) For vintage years 2012 through 2021, 0.5 percent of the
emission allowances established for each year under section
721(a).
``(2) For vintage years 2022 through 2050, 1.0 percent of the
emission allowances established for each year under section
721(a).
``(l) Domestic Adaptation.--The Administrator shall allocate emission
allowances for domestic adaptation as follows:
``(1) To be distributed in accordance with section 453 of the
American Clean Energy and Security Act of 2009 in the following
amounts:
``(A) For vintage years 2012 through 2021, 0.9
percent of the emission allowances established for each
year under section 721(a).
``(B) For vintage years 2022 through 2026, 1.9
percent of the emission allowances established for each
year under section 721(a).
``(C) For vintage years 2027 through 2050, 3.9
percent of the emission allowances established for each
year under section 721(a).
``(2) For vintage year 2012 and thereafter, the Administrator
shall auction, pursuant to section 791, 0.1 percent of the
emission allowances established for each year under section
721(a), and shall deposit the proceeds in the Climate Change
Health Protection and Promotion Fund established by section 467
of the American Clean Energy and Security Act of 2009.
``(m) Wildlife and Natural Resource Adaptation.--The Administrator
shall allocate emission allowances for wildlife and natural resource
adaptation as follows:
``(1) To be distributed to State agencies in accordance with
section 480(c)(1) of the American Clean Energy and Security Act
of 2009 in the following amounts:
``(A) For vintage years 2012 through 2021, 0.385
percent of the emission allowances established for each
year under section 721(a).
``(B) For vintage years 2022 through 2026, 0.77
percent of the emission allowances established for each
year under section 721(a).
``(C) For vintage years 2027 through 2050, 1.54
percent of the emission allowances established for each
year under section 721(a).
``(2) To be auctioned pursuant to section 791, with the
proceeds to be deposited in the Natural Resources Climate
Change Adaptation Fund established pursuant to section 480(a),
in the following amounts:
``(A) For vintage years 2012 through 2021, 0.615
percent of the emission allowances established for each
year under section 721(a).
``(B) For vintage years 2022 through 2026, 1.23
percent of the emission allowances established for each
year under section 721(a).
``(C) For vintage years 2027 through 2050, 2.46
percent of the emission allowances established for each
year under section 721(a).
``(n) International Adaptation.--The Administrator shall allocate
emission allowances for international adaptation to be distributed in
accordance with part 2 of subtitle E of title IV of the American Clean
Energy and Security Act of 2009 in the following amounts:
``(1) For vintage years 2012 through 2021, 1.0 percent of the
emission allowances established for each year under section
721(a).
``(2) For vintage years 2022 through 2026, 2.0 percent of the
emission allowances established for each year under section
721(a).
``(3) For vintage years 2027 through 2050, 4.0 percent of the
emission allowances established for each year under section
721(a).
``(o) International Clean Technology Deployment.--The Administrator
shall allocate emission allowances for international clean technology
deployment for distribution in accordance with subtitle D of title IV
of the American Clean Energy and Security Act of 2009 in the following
amounts:
``(1) For vintage years 2012 through 2021, 1.0 percent of the
emission allowances established for each year under section
721(a).
``(2) For vintage years 2022 through 2026, 2.0 percent of the
emission allowances established for each year under section
721(a).
``(3) For vintage years 2027 through 2050, 4.0 percent of the
emission allowances established for each year under section
721(a).
``(p) Release of Future Allowances.--The Administrator shall make
future year allowances available by auctioning allowances, pursuant to
section 791, in the following amounts:
``(1) In each of calendar years 2014 through 2019, a string
of 0.70 billion allowances with vintage years 12 to 17 years
after the year of the auction, with an equal number of
allowances from each vintage year in the string.
``(2) In each of calendar years 2020 through 2025, a string
of 0.50 billion allowances with vintage years 12 to 17 years
after the year of the auction, with an equal number of
allowances from each vintage year in the string.
``(3) In each of calendar years 2026 through 2030, a string
of 0.3 billion allowances with vintage years 12 to 17 years
after the year of the auction, with an equal number of
allowances from each vintage year in the string.
``(q) Deficit Reduction.--
``(1) For each of vintage years 2012 through 2025, any
allowances not designated for distribution or auction pursuant
to section 781, subsections (a) through (o) of this section, or
section 790 shall be auctioned by the Administrator pursuant to
section 791 and the proceeds shall be deposited into the
Treasury.
``(2) Unless otherwise specified, any allowances allocated
pursuant to subsections (a) through (o) and not distributed by
March 31 of the calendar year following the allowance's vintage
year, shall be auctioned by the Administrator and the proceeds
shall be deposited into the Treasury.
``(3) For auctions conducted through calendar year 2020
pursuant to subsection (p), the auction proceeds shall be
deposited into the Treasury.
``(r) Climate Change Consumer Refund.--
``(1) For each of vintage years 2026 through 2050, the
Administrator shall auction the following allowances
established under section 721(a) and deposit the proceeds into
the Climate Change Consumer Refund Account:
``(A) Any allowances not designated for distribution
or auction pursuant to section 781, subsections (a)
through (p) of this section, or section 790.
``(B) Unless otherwise specified, any allowances
allocated pursuant to subsections (a) through (o) and
not distributed by March 31 of the calendar year
following the allowance's vintage year.
``(2) For auctions conducted pursuant to subsection (p) in
calendar years 2021 and thereafter, the Administrator shall
place the proceeds from the sales of the these allowances into
the Climate Change Consumer Refund Account. Funds deposited
into the Climate Change Consumer Refund Account shall be used
as specified in section 789 and shall be available for
expenditure, without further appropriation or fiscal year
limitation.
``SEC. 783. ELECTRICITY CONSUMERS.
``(a) Definitions.--For purposes of this section:
``(1) Electricity local distribution company.--The term
`electricity local distribution company' means an electric
utility--
``(A) that has a legal, regulatory, or contractual
obligation to deliver electricity directly to retail
consumers in the United States, regardless of whether
that entity or another entity sells the electricity as
a commodity to those retail consumers; and
``(B) the retail rates of which, except in the case
of a registered electric cooperative, are regulated by
a State regulatory authority, regulatory commission,
municipality, public utility, or by an Indian tribe
pursuant to tribal law.
``(2) Long-term contract generator.--The term `long-term
contract generator' means a qualifying small power production
facility or a qualifying cogeneration facility (within the
meaning of section 3(17)(C) or 3(18)(B) of the Federal Power
Act), or a new independent power production facility (within
the meaning of section 416(a)(2) of this Act, except that
subparagraph (C) of such definition shall not apply for
purposes of this paragraph), that is--
``(A) a covered entity;
``(B) as of the commencement of operation, a facility
consisting of one or more utility units with total
installed net output capacity (in MWe) of no more than
130 percent of the facility's total planned net output
capacity (in MWe);
``(C) as of the date of enactment of this title, a
facility with a power sales agreement executed before
January 1, 2007, that governs the facility's
electricity sales and provides for sales at a price
(whether a fixed price or a price formula) for
electricity that does not allow for recovery of the
costs of compliance with the limitation on greenhouse
gas emissions under this title; and
``(D) not a merchant coal generator.
``(3) Merchant coal generator.--The term `merchant coal
generator' means an electric generation facility that--
``(A) is a covered entity;
``(B) derives at least 85 percent of its heat input
from coal, petroleum coke, or any combination of these
2 fuels;
``(C) is not owned by a Federal, State, or regional
agency or power authority; and
``(D) generates electricity for sale to others,
provided that such sales are not subject to--
``(i) retail rate regulation by a State
public utility commission; or
``(ii) self-regulation of rates by a local
government, State agency, or electric
cooperative.
``(4) State regulatory authority.--The term `State regulatory
authority' has the meaning given that term in section 3(17) of
the Public Utility Regulatory Policies Act of 1978 (16 U.S.C.
2602(17)).
``(b) Electricity Local Distribution Companies.--
``(1) Allocation.--Not later than June 30 of 2011 and each
calendar year thereafter through 2028, the Administrator shall
distribute to electricity local distribution companies for the
benefit of retail ratepayers the quantity of emission
allowances allocated for the electricity sector for the
following vintage year pursuant to section 782(a), provided
that the Administrator shall first subtract from such quantity
and distribute or reserve for distribution the quantity of
emission allowances for the relevant vintage year that are
required for distribution under subsections (c) and (d) of this
section.
``(2) Distribution of allowances based on emissions.--
``(A) In general.--For each vintage year, 50 percent
of the emission allowances available for distribution
under paragraph (1) shall be distributed by the
Administrator among individual electricity local
distribution companies ratably based on the annual
average carbon dioxide emissions attributable to
generation of electricity delivered at retail by each
such company during the base period determined under
subparagraph (B).
``(B) Base period.--
``(i) Vintage years 2012 and 2013.--For
vintage years 2012 and 2013, an electricity
local distribution company's base period shall
be--
``(I) calendar years 2006 through
2008; or
``(II) any 3 consecutive calendar
years between 1999 and 2008, inclusive,
that such company selects, provided
that the company timely informs the
Administrator of such selection.
``(ii) Vintage years 2014 and thereafter.--
For vintage years 2014 and thereafter, the base
period shall be--
``(I) the base period selected under
clause (i); or
``(II) any 3 consecutive calendar
years between 2009 through 2012,
inclusive, or, for local distribution
companies with new units that are not
fully operational before 2012, solely
calendar year 2012, provided that such
company selects a period from among
these options and timely informs the
Administrator of such selection.
``(C) Determination of emissions.--As part of the
regulations promulgated pursuant to subsection (e), the
Administrator, after consultation with the Energy
Information Administration, shall determine the average
amount of carbon dioxide emissions attributable to
generation of electricity delivered at retail by each
electricity local distribution company for each of the
years 1999 through 2009 or the most recent calendar
year for which appropriate data are available, taking
into account entities' electricity generation,
electricity purchases, and electricity sales. Not later
than March 31, 2013, the Administrator, after
consultation with the Energy Information
Administration, shall update such determination to
include emissions for any additional calendar years
through 2012. Such determinations shall be as precise
as practicable, taking into account the nature of data
currently available and the nature of markets and
regulation in effect in various regions of the country.
The following requirements shall apply to such
determinations:
``(i) The Administrator shall determine the
amount of fossil fuel-based electricity
delivered at retail by each electricity local
distribution company, and shall use appropriate
emission factors to calculate carbon dioxide
emissions associated with the generation of
such electricity.
``(ii) Where it is not practical to determine
the precise fuel mix for the electricity
delivered at retail by an individual
electricity local distribution company, the
Administrator may use the best available data,
including average data on a regional basis with
reference to Regional Transmission
Organizations or regional entities (as that
term is defined in section 215(a)(7) of the
Federal Power Act (16 U.S.C. 824o(a)(7)), to
estimate fuel mix and emissions. Different
methodologies may be applied in different
regions if appropriate to obtain the most
accurate estimate.
``(3) Distribution of allowances based on deliveries.--
``(A) Initial allocation formula.--Except as provided
in subparagraph (B), for each vintage year, the
Administrator shall distribute 50 percent of the
emission allowances allocated under paragraph (1) of
this subsection among individual electricity local
distribution companies ratably based on each
electricity local distribution company's annual average
retail electricity deliveries for 2006 through 2008,
unless the owner or operator of the company selects 3
other consecutive years between 1999 and 2008,
inclusive, and timely notifies the Administrator of its
selection.
``(B) Updating.--Prior to distributing 2015 vintage
emission allowances under this subparagraph and at 3-
year intervals thereafter, the Administrator shall
update the distribution formula under this subparagraph
to reflect changes in each electricity local
distribution company's service territory since the most
recent formula was established. For each successive 3-
year period, the Administrator shall distribute
allowances ratably among individual electricity local
distribution companies based on the product of--
``(i) each electricity local distribution
company's average annual deliveries per
customer during calendar years 2006 through
2008, or during the 3 alternative consecutive
years selected by such company under
subparagraph (A); and
``(ii) the number of customers of such
electricity local distribution company in the
most recent year in which the formula is
updated under this clause.
``(4) Use of allowances.--
``(A) Ratepayer benefit.--Emission allowances
distributed to an electricity local distribution
company under this subsection shall be used exclusively
for the benefit of retail ratepayers of such
electricity local distribution company and may not be
used to support electricity sales or deliveries to
entities or persons other than such ratepayers.
``(B) Ratepayer classes.--In using emission
allowances distributed under this section for the
benefit of ratepayers, an electricity local
distribution company shall ensure that ratepayer
benefits are distributed--
``(i) among ratepayer classes ratably based
on electricity deliveries to each class; and
``(ii) equitably among individual ratepayers
within each ratepayer class, including entities
that receive emission allowances pursuant to
part F.
``(C) Limitation.--An electricity local distribution
company shall not use the value of emission allowances
distributed under this subsection to provide to any
ratepayer a rebate that is based solely on the quantity
of electricity delivered to such ratepayer. To the
extent an electricity local distribution company uses
the value of emission allowances distributed under this
subsection to provide rebates, it shall, to the maximum
extent practicable, provide such rebates with regard to
the fixed portion of ratepayers' bills or as a fixed
credit or rebate on electricity bills.
``(D) Guidelines.--As part of the regulations
promulgated under subsection (e), the Administrator
shall prescribe specific guidelines for the
implementation of the requirements of this paragraph.
``(5) Regulatory proceedings.--
``(A) Requirement.--No electricity local distribution
company shall be eligible to receive emission
allowances under this subsection unless the State
regulatory authority with authority over such company,
or the entity with authority to regulate retail
electricity rates of an electricity local distribution
company not regulated by a State regulatory authority,
has--
``(i) promulgated a regulation or completed a
rate proceeding (or the equivalent, in the case
of a ratemaking entity other than a State
regulatory authority) that provides for the
full implementation of the requirements of
paragraph (4) of this subsection; and
``(ii) made available to the Administrator
and the public a report describing, in adequate
detail, the manner in which the requirements of
paragraph (4) will be implemented.
``(B) Updating.--The Administrator shall require, as
a condition of continued receipt of emission allowances
under this subsection by an electricity local
distribution company, that a new regulation be
promulgated or rate proceeding be completed, and a new
report be made available to the Administrator and the
public, pursuant to subparagraph (A), not less
frequently than every 5 years.
``(6) Plans and reporting.--
``(A) Regulations.--As part of the regulations
promulgated under subsection (e), the Administrator
shall prescribe requirements governing plans and
reports to be submitted in accordance with this
paragraph.
``(B) Plans.--Not later than April 30 of 2011 and
every 5 years thereafter through 2026, each electricity
local distribution company shall submit to the
Administrator a plan, approved by the State regulatory
authority or other entity charged with regulating the
retail rates of such company, describing such company's
plans for the disposition of the value of emission
allowances to be received pursuant to this subsection,
in accordance with the requirements of this subsection.
``(C) Reports.--Not later than June 30 of 2013 and
each calendar year thereafter through 2031, each
electricity local distribution company shall submit a
report to the Administrator, and to the relevant State
regulatory authority or other entity charged with
regulating the retail electricity rates of such
company, describing the disposition of the value of any
emission allowances received by such company in the
prior calendar year pursuant to this subsection,
including--
``(i) a description of sales, transfer,
exchange, or use by the company for compliance
with obligations under this title, of any such
emission allowances;
``(ii) the monetary value received by the
company, whether in money or in some other
form, from the sale, transfer, or exchange of
emission allowances received by the company
under this subsection;
``(iii) the manner in which the company's
disposition of emission allowances received
under this subsection complies with the
requirements of this subsection, including each
of the requirements of paragraph (4); and
``(iv) such other information as the
Administrator may require pursuant to
subparagraph (A).
``(D) Publication.--The Administrator shall make
available to the public all plans and reports submitted
under this subsection, including by publishing such
plans and reports on the Internet.
``(7) Audits.--Each year, the Administrator shall audit a
representative sample of electricity local distribution
companies to ensure that emission allowances distributed under
this subsection have been used exclusively for the benefit of
retail ratepayers and that such companies are complying with
the requirements of this subsection. In selecting companies for
audit, the Administrator shall take into account any credible
evidence of noncompliance with such requirements. The
Administrator shall make available to the public a report
describing the results of each such audit, including by
publishing such report on the Internet.
``(8) Enforcement.--A violation of any requirement of this
subsection shall be a violation of this Act. Each emission
allowance the value of which is used in violation of the
requirements of this subsection shall be a separate violation.
``(c) Merchant Coal Generators.--
``(1) Qualifying emissions.--The qualifying emissions for a
merchant coal generator for a given calendar year shall be the
product of the number of megawatt hours of electricity
generated by such generator in such calendar year and the
average carbon dioxide emissions per megawatt hour generated by
such generator during calendar years 2006 through 2008,
provided that the number of megawatt hours in a given calendar
year for purposes of such calculation shall be reduced in
proportion to the portion of such generator's carbon dioxide
emissions that are either--
``(A) captured and sequestered in such calendar year;
or
``(B) attributable to the combustion or gasification
of renewable biomass, such that the generator is not
required to hold emission allowances for such
emissions.
``(2) Phase-down schedule.--The Administrator shall identify
an annual phase-down factor, applicable to distributions to
merchant coal generators for each of vintage years 2012 through
2029, that corresponds to the overall decline in the amount of
emission allowances to be allocated to the electricity sector
in such years pursuant to section 782(a). Such factor shall--
``(A) for vintage year 2012, be equal to 1.0;
``(B) for each of vintage years 2013 through 2029,
correspond to the quotient of--
``(i) the quantity of emission allowances
allocated to the electricity sector under
section 782(a) for such vintage year; divided
by
``(ii) the quantity of emission allowances
allocated to the electricity sector under
section 782(a) for vintage year 2012.
``(3) Distribution of emission allowances.--Not later than
March 1 of 2013 and each calendar year through 2030, the
Administrator shall distribute emission allowances of the
preceding vintage year to the owner or operator of each
merchant coal generator equal to the product of--
``(A) 0.5;
``(B) the qualifying emissions for such merchant coal
generator for the preceding year, as determined under
paragraph (1); and
``(C) the phase-down factor for the preceding
calendar year, as identified under paragraph (2).
``(4) Adjustment.--
``(A) Study.--Not later than July 1, 2014, the
Administrator, in consultation with the Federal Energy
Regulatory Commission, shall complete a study to
determine whether the allocation formula under
paragraph (3) is resulting in, or is likely to result
in, windfall profits to merchant coal generators or
substantially disparate treatment of merchant coal
generators operating in different markets or regions.
``(B) Regulation.--If the Administrator, in
consultation with the Federal Energy Regulatory
Commission, makes an affirmative finding of windfall
profits or disparate treatment under subparagraph (A),
the Administrator shall, not later than 18 months after
the completion of the study described in subparagraph
(A), promulgate regulations providing for the
adjustment of the allocation formula under paragraph
(3) to mitigate, to the extent practicable, such
windfall profits, if any, and such disparate treatment,
if any.
``(5) Limitation on allowances.--Notwithstanding paragraph
(3) or (4), for any vintage year the Administrator shall
distribute under this subsection no more than 10 percent of the
total quantity of emission allowances available for such
vintage year for distribution to the electricity sector under
section 782(a). If the quantity of emission allowances that
would otherwise be distributed pursuant to paragraph (3) or (4)
for any vintage year would exceed such limit, the Administrator
shall distribute 10 percent of the total emission allowances
available for distribution under section 782(a) for such
vintage year ratably among merchant coal generators based on
the applicable formula under paragraph (3) or (4).
``(d) Generators With Long-Term Power Purchase Agreements.--
``(1) Reserved allowances.--Notwithstanding subsections (b)
and (c) of this section, the Administrator shall withhold from
distribution to electricity local distribution companies a
number of emission allowances equal to 105 percent of the
emission allowances the Administrator anticipates will be
distributed to long-term contract generators under this
subsection. If not required to distribute all of these reserved
allowances under this subsection, the Administrator shall
distribute any remaining emission allowances to the electricity
local distribution companies in accordance with subsection (b).
``(2) Distribution.--Not later than March 1 of 2013 and each
calendar year through 2030, the Administrator shall distribute
to the owner or operator of each long-term contract generator
the number of emission allowances of the preceding vintage year
that are equal to the number of tons of carbon dioxide emitted
as a result of a qualifying long-term power purchase agreement
referred to in subsection (a)(2)(C).
``(3) Duration.--A long-term contract generator shall cease
to be eligible to receive allocations under this subsection
upon the earliest of the following dates:
``(A) The date when the facility no longer qualifies
as a qualifying small power production facility or a
qualifying cogeneration facility (within the meaning of
section 3(17)(C) or 3(18)(B) of the Federal Power Act),
or a new independent power production facility (within
the meaning of section 416(a)(2) of this Act, except
that subparagraph (C) of such definition shall not
apply for purposes of this clause).
``(B) The date when the facility no longer meets the
total installed net output capacity criterion required
to be met as of the commencement of operation in
subsection (a)(2)(B).
``(C) The date when the power purchase agreement
referred to in subsection (a)(2)(C)--
``(i) expires;
``(ii) is terminated; or
``(iii) is amended in any way that changes
the location of the facility, the price
(whether a fixed price or price formula) for
electricity sold under such agreement, the
quantity of electricity sold under the
agreement, or the expiration or termination
date of the agreement.
``(4) Eligibility.--To be eligible to receive allowance
distributions under this subsection, the owner or operator of a
long-term contract generator shall submit each of the following
in writing to the Administrator within 180 days after the date
of enactment of this title, and not later than September 30 of
each vintage year for which such generator wishes to receive
emission allowances:
``(A) A certificate of representation described in
section 700(15).
``(B) An identification of each owner and each
operator of the facility.
``(C) An identification of the units at the facility
and the location of the facility.
``(D) A written certification by the designated
representative that the facility meets all the
requirements of the definition of a long-term contract
generator.
``(E) The expiration date of the power purchase
agreement referred to in subsection (a)(2)(C).
``(F) A copy of the power purchase agreement referred
to in subsection (a)(2)(C).
``(5) Notification.--Not later than 30 days after a facility
loses, in accordance with paragraph (3), its eligibility for
emission allowances distributed pursuant to this subsection,
the designated representative of such facility shall notify the
Administrator in writing when, and on what basis, the facility
lost its eligibility to receive emission allowances.
``(e) Regulations.--Not later than 2 years after the date of
enactment of this title, the Administrator, in consultation with the
Federal Energy Regulatory Commission, shall promulgate regulations to
implement the requirements of this section.
``SEC. 784. NATURAL GAS CONSUMERS.
``(a) Definitions.--For purposes of this section:
``(1) Natural gas local distribution company.--The term
`natural gas local distribution company' means a natural gas
local distribution company that is a covered entity.
``(2) Cost-effective.--The term `cost-effective', with
respect to an energy efficiency program, means that the program
meets the Total Resource Cost Test, which requires that the net
present value of economic benefits over the life of the
program, including avoided supply and delivery costs and
deferred or avoided investments, is greater than the net
present value of the economic costs over the life of the
program, including program costs and incremental costs borne by
the energy consumer.
``(b) Allocation.--Not later than June 30 of 2015 and each calendar
year thereafter through 2028, the Administrator shall distribute to
natural gas local distribution companies for the benefit of retail
ratepayers the quantity of emission allowances allocated for the
following vintage year pursuant to section 782(b). Such allowances
shall be distributed among local natural gas distribution companies
based on the following formula:
``(1) Initial formula.--Except as provided in paragraph (2),
for each vintage year, the Administrator shall distribute
emission allowances among natural gas local distribution
companies ratably based on each such company's annual average
retail natural gas deliveries for 2006 through 2008, unless the
owner or operator of the company selects 3 other consecutive
years between 1999 and 2008, inclusive, and timely notifies the
Administrator of its selection.
``(2) Updating.--Prior to distributing 2019 vintage emission
allowances and at 3-year intervals thereafter, the
Administrator shall update the distribution formula under this
subsection to reflect changes in each natural gas local
distribution company's service territory since the most recent
formula was established. For each successive 3-year period, the
Administrator shall distribute allowances ratably among natural
gas local distribution companies based on the product of--
``(A) each natural gas local distribution company's
average annual natural gas deliveries per customer
during calendar years 2006 through 2008, or during the
3 alternative consecutive years selected by such
company under paragraph (1); and
``(B) the number of customers of such natural gas
local distribution company in the most recent year in
which the formula is updated under this paragraph.
``(c) Use of Allowances.--
``(1) Ratepayer benefit.--Emission allowances distributed to
a natural gas local distribution company under this section
shall be used exclusively for the benefit of retail ratepayers
of such natural gas local distribution company and may not be
used to support natural gas sales or deliveries to entities or
persons other than such ratepayers.
``(2) Ratepayer classes.--In using emission allowances
distributed under this section for the benefit of ratepayers, a
natural gas local distribution company shall ensure that
ratepayer benefits are distributed--
``(A) among ratepayer classes ratably based on
natural gas deliveries to each class; and
``(B) equitably among individual ratepayers within
each ratepayer class.
``(3) Limitation.--A natural gas local distribution company
shall not use the value of emission allowances distributed
under this section to provide to any ratepayer a rebate that is
based solely on the quantity of natural gas delivered to such
ratepayer. To the extent a natural gas local distribution
company uses the value of emission allowances distributed under
this section to provide rebates, it shall, to the maximum
extent practicable, provide such rebates with regard to the
fixed portion of ratepayers' bills or as a fixed creditor
rebate on natural gas bills.
``(4) Energy efficiency programs.--The value of no less than
one third of the emission allowances distributed to natural gas
local distribution companies pursuant to this section in any
calendar year shall be used for cost-effective energy
efficiency programs for natural gas consumers. Such programs
must be authorized and overseen by the State regulatory
authority, or by the entity with regulatory authority over
retail natural gas rates in the case of a natural gas local
distribution company that is not regulated by a State
regulatory authority.
``(5) Guidelines.--As part of the regulations promulgated
under subsection (h), the Administrator shall prescribe
specific guidelines for the implementation of the requirements
of this subsection.
``(d) Regulatory Proceedings.--
``(1) Requirement.--No natural gas local distribution company
shall be eligible to receive emission allowances under this
section unless the State regulatory authority with authority
over such company, or the entity with authority to regulate
retail rates of a natural gas local distribution company not
regulated by a State regulatory authority, has--
``(A) promulgated a regulation or completed a rate
proceeding (or the equivalent, in the case of a
ratemaking entity other than a State regulatory
authority) that provides for the full implementation of
the requirements of subsection (c); and
``(B) made available to the Administrator and the
public a report describing, in adequate detail, the
manner in which the requirements of subsection (c) will
be implemented.
``(2) Updating.--The Administrator shall require, as a
condition of continued receipt of emission allowances under
this section, that a new regulation be promulgated or rate
proceeding be completed, and a new report be made available to
the Administrator and the public, pursuant to paragraph (1),
not less frequently than every 5 years.
``(e) Plans and Reporting.--
``(1) Regulations.--As part of the regulations promulgated
under subsection (h), the Administrator shall prescribe
requirements governing plans and reports to be submitted in
accordance with this subsection.
``(2) Plans.--Not later than April 30 of 2015 and every 5
years thereafter through 2025, each natural gas local
distribution company shall submit to the Administrator a plan,
approved by the State regulatory authority or other entity
charged with regulating the retail rates of such company,
describing such company's plans for the disposition of the
value of emission allowances to be received pursuant to this
section, in accordance with the requirements of this section.
``(3) Reports.--Not later than June 30 of 2017 and each
calendar year thereafter through 2031, each natural gas local
distribution company shall submit a report to the
Administrator, approved by the relevant State regulatory
authority or other entity charged with regulating the retail
natural gas rates of such company, describing the disposition
of the value of any emission allowances received by such
company in the prior calendar year pursuant to this subsection,
including--
``(A) a description of sales, transfer, exchange, or
use by the company for compliance with obligations
under this title, of any such emission allowances;
``(B) the monetary value received by the company,
whether in money or in some other form, from the sale,
transfer, or exchange of emission allowances received
by the company under this section;
``(C) the manner in which the company's disposition
of emission allowances received under this subsection
complies with the requirements of this section,
including each of the requirements of subsection (c);
``(D) the cost-effectiveness of, and energy savings
achieved by, energy efficiency programs supported
through such emission allowances; and
``(E) such other information as the Administrator may
require pursuant to paragraph (1).
``(4) Publication.--The Administrator shall make available to
the public all plans and reports submitted by natural gas local
distribution companies under this subsection, including by
publishing such plans and reports on the Internet.
``(f) Audits.--Each year, the Administrator shall audit a
representative sample of natural gas local distribution companies to
ensure that emission allowances distributed under this section have
been used exclusively for the benefit of retail ratepayers and that
such companies are complying with the requirements of this section. In
selecting companies for audit, the Administrator shall take into
account any credible evidence of noncompliance with such requirements.
The Administrator shall make available to the public a report
describing the results of each such audit, including by publishing such
report on the Internet.
``(g) Enforcement.--A violation of any requirement of this section
shall be a violation of this Act. Each emission allowance the value of
which is used in violation of the requirements of this section shall be
a separate violation.
``(h) Regulations.--Not later than January 1, 2014, the
Administrator, in consultation with the Federal Energy Regulatory
Commission, shall promulgate regulations to implement the requirements
of this section.
``SEC. 785. HOME HEATING OIL AND PROPANE CONSUMERS.
``(a) Definitions.--For purposes of this section:
``(1) Carbon content.--The term `carbon content' means the
amount of carbon dioxide that would be emitted as a result of
the combustion of a fuel.
``(2) Cost-effective.--The term `cost-effective' has the
meaning given that term in section 784(a)(2).
``(b) Allocation.--Not later than September 30 of each of calendar
years 2012 through 2029, the Administrator shall distribute among the
States, in accordance with this section, the quantity of emission
allowances allocated pursuant to section 782(c).
``(c) Distribution Among States.--The Administrator shall distribute
emission allowances among the States under this section each year
ratably based on the ratio of--
``(1) the carbon content of home heating oil and propane sold
to consumers within each State in the preceding year for
residential or commercial uses; to
``(2) the carbon content of home heating oil and propane sold
to consumers within the United States in the preceding year for
residential or commercial uses.
``(d) Use of Allowances.--
``(1) In general.--States shall use emission allowances
distributed under this section exclusively for the benefit of
consumers of home heating oil or propane for residential or
commercial purposes. Such proceeds shall be used exclusively
for--
``(A) cost-effective energy efficiency programs for
consumers that use home heating oil or propane for
residential or commercial purposes; or
``(B) rebates or other direct financial assistance
programs for consumers of home heating oil or propane
used for residential or commercial purposes.
``(2) Administration and delivery mechanisms.--In
administering programs supported by this section, States
shall--
``(A) use no less than 50 percent of the value of
emission allowances received under this section for
cost-effective energy efficiency programs to reduce
consumers' overall fuel costs;
``(B) to the extent practicable, deliver consumer
support under this section through existing energy
efficiency and consumer energy assistance programs or
delivery mechanisms, including, where appropriate,
programs or mechanisms administered by parties other
than the State; and
``(C) seek to coordinate the administration and
delivery of energy efficiency and consumer energy
assistance programs supported under this section, with
one another and with existing programs for various fuel
types, so as to deliver comprehensive, fuel-blind,
coordinated programs to consumers.
``(e) Reporting.--Each State receiving emission allowances under this
section shall submit to the Administrator, within 12 months of each
receipt of such allowances, a report, in accordance with such
requirements as the Administrator may prescribe, that--
``(1) describes the State's use of emission allowances
distributed under this section, including a description of the
energy efficiency and consumer assistance programs supported
with such allowances;
``(2) demonstrates the cost-effectiveness of, and the energy
savings achieved by, energy efficiency programs supported under
this section; and
``(3) includes a report prepared by an independent third
party, in accordance with such regulations as the Administrator
may promulgate, evaluating the performance of the energy
efficiency and consumer assistance programs supported under
this section.
``(f) Enforcement.--If the Administrator determines that a State is
not in compliance with this section, the Administrator may withhold a
portion of the emission allowances, the quantity of which is equal to
up to twice the quantity of the allowances that the State failed to use
in accordance with the requirements of this section, that such State
would otherwise be eligible to receive under this section in later
years. Allowances withheld pursuant to this subsection shall be
distributed among the remaining States ratably in accordance with the
formula in subsection (c).
``SEC. 787. ALLOCATIONS TO REFINERIES.
``(a) Purpose.--To provide emission allowance rebates to petroleum
refiners in the United States in a manner that promotes energy
efficiency and a reduction in greenhouse gas emissions at such
facilities.
``(b) Definitions.--In this section:
``(1) Emissions.--The term `emissions' means the greenhouse
gas emissions in the calendar year preceding the calendar year
in which emission allowances are being distributed. The term
includes direct emissions from fuel combustion, process
emissions, and indirect emissions from the generation of
electricity used to produce the output of the petroleum
refinery or sector.
``(2) Intensity.--The term `intensity' means tons of carbon
dioxide equivalent emissions per unit of output in a given
year.
``(3) Intensity factor.--The term `intensity factor' means
the intensity of the petroleum refining sector divided by the
intensity for an individual petroleum refinery.
``(4) Output.--The term `output' means the average annual
number of gallons of refined fuel produced in the three
calendar years preceding the calendar year in which emission
allowances are being distributed.
``(5) Petroleum refinery.--The term `petroleum refinery'
means a facility classified under 324110 of the North American
Industrial Classification System of 2002.
``(6) Production factor.--The term `production factor' means
the output of an individual petroleum refinery divided by the
output of the petroleum refining sector.
``(c) In General.--For each vintage year between 2014 and 2026, the
Administrator shall distribute allowances pursuant to this section to
owners and operators of petroleum refineries in the United States.
``(d) Distribution Schedule.--The Administrator shall distribute
emission allowances of each vintage year no later than October 31 of
the preceding calendar year.
``(e) Calculation of Emission Allowance Rebates.--
``(1) For each petroleum refinery, the Administrator shall
calculate an individual allocation factor for each vintage
year, based upon the product of the intensity factor for such
refinery multiplied by the production factor for such refinery.
``(2) The Administrator shall also calculate a total
allocation factor for each vintage year, based upon the sum of
all of the individual allocation factors.
``(3) The Administrator shall calculate the number of
emission allowances to be provided to each petroleum refinery
in each vintage year by dividing the individual allocation
factor for such refinery by the total allocation factor, then
multiplying the result by the number of emission allowances
allocated to the program under this section for that vintage
year.
``(f) Data Sources.--
``(1) The Administrator shall use data from the greenhouse
gas registry, established under section 713, where it is
available.
``(2) The Administrator shall determine, by rule, the
methodology by which to calculate indirect emissions for a
refinery. The Administrator shall also determine, by rule, the
methodology by which to take into account the value of
allowances provided at no cost to local distribution companies
that is passed through to a refinery. Each person selling
electricity to the owner or operator of a petroleum refinery
shall provide the owner or operator and the Administrator, on
an annual basis, such data as the Administrator determines is
necessary to implement this section.
``SEC. 788. [SECTION RESERVED].
``SEC. 789. CLIMATE CHANGE CONSUMER REFUNDS.
``(a) Refund.--In each year after deposits are made to the Climate
Change Consumer Refund Account, the Secretary of the Treasury shall
provide tax refunds on a per capita basis to each household in the
United States that shall collectively equal the amount deposited into
the Climate Change Consumer Refund Account.
``(b) Limitations.--The Secretary of the Treasury shall establish
procedures to ensure that individuals who are not--
``(1) citizens or nationals of the United States; or
``(2) immigrants lawfully residing in the United States,
are excluded for the purpose of calculating and distributing refunds
under this section.
``SEC. 790. EXCHANGE FOR STATE-ISSUED ALLOWANCES.
``(a) In General.--Not later than one year after the date of
enactment of this title, the Administrator shall issue regulations
allowing any person in the United States to exchange greenhouse gas
emission allowances issued before December 31, 2011, by the State of
California or for the Regional Greenhouse Gas Initiative, or the
Western Climate Initiative (in this section referred to as `State
allowances') for emission allowances established by the Administrator
under section 721(a).
``(b) Regulations.--Regulations issued under subsection (a) shall--
``(1) provide that a person exchanging State allowances under
this section receive emission allowances established under
section 721(a) in the amount that is sufficient to compensate
for the cost of obtaining and holding such State allowances;
``(2) establish a deadline by which persons must exchange the
State allowances; and
``(3) provide that the Federal emission allowances disbursed
pursuant to this section shall be deducted from the allowances
to be auctioned pursuant to section 782(b).
``(c) Cost of Obtaining State Allowance.--For purposes of this
section, the cost of obtaining a State allowance shall be the average
auction price, for emission allowances issued in the year in which the
State allowance was issued, under the program under which the State
allowance was issued.
``SEC. 791. AUCTION PROCEDURES.
``(a) In General.--To the extent that auctions of emission allowances
by the Administrator are authorized by this part, such auctions shall
be carried out pursuant to this section and the regulations established
hereunder.
``(b) Initial Regulations.--Not later than 12 months after the date
of enactment of this title, the Administrator, in consultation with
other agencies, as appropriate, shall promulgate regulations governing
the auction of allowances under this section. Such regulations shall
include the following requirements:
``(1) Frequency; first auction.--Auctions shall be held four
times per year at regular intervals, with the first auction to
be held no later than March 31, 2011.
``(2) Auction schedule; current and future vintages.--The
Administrator shall, at each quarterly auction under this
section, offer for sale both a portion of the allowances with
the same vintage year as the year in which the auction is being
conducted and a portion of the allowances with vintage years
from future years. The preceding sentence shall not apply to
auctions held before 2012, during which period, by necessity,
the Administrator shall auction only allowances with a vintage
year that is later than the year in which the auction is held.
Beginning with the first auction and at each quarterly auction
held thereafter, the Administrator may offer for sale
allowances with vintage years of up to four years after the
year in which the auction is being conducted, except as
provided in section 782(p).
``(3) Auction format.--Auctions shall follow a single-round,
sealed-bid, uniform price format.
``(4) Participation; financial assurance.--Auctions shall be
open to any person, except that the Administrator may establish
financial assurance requirements to ensure that auction
participants can and will perform on their bids.
``(5) Disclosure of beneficial ownership.--Each bidder in the
auction shall be required to disclose the person or entity
sponsoring or benefitting from the bidder's participation in
the auction if such person or entity is, in whole or in part,
other than the bidder.
``(6) Purchase limits.--No person may, directly or in concert
with another participant, purchase more than 5 percent of the
allowances offered for sale at any quarterly auction.
``(7) Publication of information.--After the auction, the
Administrator shall, in a timely fashion, publish the
identities of winning bidders, the quantity of allowances
obtained by each winning bidder, and the auction clearing
price.
``(8) Other requirements.--The Administrator may include in
the regulations such other requirements or provisions as the
Administrator, in consultation with other agencies, as
appropriate, considers appropriate to promote effective,
efficient, transparent, and fair administration of auctions
under this section.
``(c) Revision of Regulations.--The Administrator may, in
consultation with other agencies, as appropriate, at any time, revise
the initial regulations promulgated under subsection (b). Such revised
regulations need not meet the requirements identified in subsection (b)
if the Administrator determines that an alternative auction design
would be more effective, taking into account factors including costs of
administration, transparency, fairness, and risks of collusion or
manipulation. In determining whether and how to revise the initial
regulations under this subsection, the Administrator shall not consider
maximization of revenues to the Federal Government.
``(d) Reserve Auction Price.--The minimum reserve auction price shall
be $10 (in constant 2009 dollars) for auctions occurring in 2012. The
minimum reserve price for auctions occurring in years after 2012 shall
be the minimum reserve auction price for the previous year increased by
5 percent plus the rate of inflation (as measured by the Consumer Price
Index for all urban consumers).
``(e) Delegation or Contract.--Pursuant to regulations under this
section, the Administrator may by delegation or contract provide for
the conduct of auctions under the Administrator's supervision by other
departments or agencies of the Federal Government or by nongovernmental
agencies, groups, or organizations.
``SEC. 792. AUCTIONING ALLOWANCES FOR OTHER ENTITIES.
``(a) Consignment.--Any entity holding emission allowances or
compensatory allowances may request that the Administrator auction,
pursuant to section 791, the allowances on consignment.
``(b) Pricing.--When the Administrator acts under this section as the
agent of an entity in possession of emission allowances, the
Administrator is not obligated to obtain the highest price possible for
the emission allowances, and instead shall auction consignment
allowances in the same manner and pursuant to the same rules as
auctions of other allowances under section 791. The Administrator may
permit the entity offering the allowance for sale to condition the sale
of its allowances pursuant to this section on a minimum reserve price
that is different than the reserve auction price set pursuant to
section 791(d).
``(c) Proceeds.--For emission allowances and compensatory allowances
auctioned pursuant to this section, notwithstanding section 3302 of
title 31, United States Code, or any other provision of law, within 90
days of receipt, the United States shall transfer the proceeds from the
auction to the entity which held the allowances auctioned. No funds
transferred from a purchaser to a seller of emission allowances or
compensatory allowances under this subsection shall be held by any
officer or employee of the United States or treated for any purpose as
public monies.
``(d) Regulations.--The Administrator shall issue regulations within
24 months after the date of enactment of this title to implement this
section.
``SEC. 793. ESTABLISHMENT OF FUNDS.
``There is established in the Treasury of the United States the
following funds:
``(1) The Strategic Reserve Fund.
``(2) The Climate Change Consumer Refund Fund.
``SEC. 794. OVERSIGHT OF ALLOCATIONS.
``(a) In General.--Not later than January 1, 2014, and every 2 years
thereafter, the Comptroller General of the United States shall carry
out a review of programs administered by the Federal Government that
distribute emission allowances or funds from any Federal auction of
allowances.
``(b) Contents.--Each such report shall include a comprehensive
evaluation of the administration and effectiveness of each program,
including--
``(1) the efficiency, transparency, and soundness of the
administration of each program;
``(2) the performance of activities receiving assistance
under each program;
``(3) the cost-effectiveness of each program in achieving the
stated purposes of the program; and
``(4) recommendations, if any, for regulatory or
administrative changes to each program to improve its
effectiveness.
``(c) Focus.--In evaluating program performance, each review under
this section review shall address the effectiveness of such programs
in--
``(1) creating and preserving jobs;
``(2) ensuring a manageable transition for working families
and workers;
``(3) reducing the emissions, or enhancing sequestration, of
greenhouse gases;
``(4) developing clean technologies; and
``(5) building resilience to the impacts of climate
change.''.
Subtitle C--Additional Greenhouse Gas Standards
SEC. 331. GREENHOUSE GAS STANDARDS.
The Clean Air Act (42 U.S.C. 7401 and following), as amended by
subtitles A and B of this title, is further amended by adding the
following new title after title VII:
``TITLE VIII--ADDITIONAL GREENHOUSE GAS STANDARDS
``SEC. 801. DEFINITIONS.
``For purposes of this title, terms that are defined in title VII,
except for the term `stationary source', shall have the meaning given
those terms in title VII.
``PART A--STATIONARY SOURCE STANDARDS
``SEC. 811. STANDARDS OF PERFORMANCE.
``(a) Uncapped Stationary Sources.--
``(1) Inventory of source categories.--(A) Within 12 months
after the date of enactment of this title, the Administrator
shall publish under section 111(b)(1)(A) an inventory of
categories of stationary sources that consist of those
categories that contain sources that individually had uncapped
greenhouse gas emissions greater than 10,000 tons of carbon
dioxide equivalent and that, in the aggregate, were responsible
for emitting at least 20 percent annually of the uncapped
greenhouse gas emissions.
``(B) The Administrator shall include in the inventory under
this paragraph each source category that is responsible for at
least 10 percent of the uncapped methane emissions in 2005.
Notwithstanding any other provision, the inventory required by
this section shall not include sources of enteric fermentation.
The list under this paragraph shall include industrial sources,
the emissions from which, when added to the capped emissions
from industrial sources, constitute at least 95 percent of the
greenhouse gas emissions of the industrial sector.
``(C) For purposes of this subsection, emissions shall be
calculated using tons of carbon dioxide equivalents. In
promulgating the inventory required by this paragraph and the
schedule required under by paragraph (2)(C), the Administrator
shall use the most current emissions data available at the time
of promulgation, except as provided in subparagraph (B).
``(D) Notwithstanding any other provisions, the Administrator
may list under 111(b) any source category identified in the
inventory required by this subsection without making a finding
that the source category causes or contributes significantly
to, air pollution with may be reasonably anticipated to
endanger public health or welfare.
``(2) Standards and schedule.--(A) For each category
identified as provided in paragraph (1), the Administrator
shall promulgate standards of performance under section 111 for
the uncapped emissions of greenhouse gases from stationary
sources in that category and shall promulgate corresponding
regulations under section 111(d).
``(B) The Administrator shall promulgate standards as
required by this subsection for stationary sources in
categories identified as provided in paragraph (1) as
expeditiously as practicable, assuring that--
``(i) standards for identified source categories
that, combined, emitted 80 percent or more of the
greenhouse gas emissions of the identified source
categories shall be promulgated not later than 3 years
after the date of enactment of this title and shall
include standards for natural gas extraction; and
``(ii) for all other identified source categories--
``(I) standards for not less than an
additional 25 percent of the identified
categories shall be promulgated not later than
5 years after the date of enactment of this
title;
``(II) standards for not less than an
additional 25 percent of the identified
categories shall be promulgated not later than
7 years after the date of enactment of this
title; and
``(III) standards for all the identified
categories shall be promulgated not later than
10 years after the date of enactment of this
title.
``(C) Not later than 24 months after the date of enactment of
this title and after notice and opportunity for comment, the
Administrator shall publish a schedule establishing a date for
the promulgation of standards for each category of sources
identified pursuant to paragraph (1). The date for each
category shall be consistent with the requirements of
subparagraph (B). The determination of priorities for the
promulgation of standards pursuant to this paragraph is not a
rulemaking and shall not be subject to judicial review, except
that failure to promulgate any standard pursuant to the
schedule established by this paragraph shall be subject to
review under section 304(a)(2).
``(D) Notwithstanding section 307, no action of the
Administrator listing a source category under paragraph (1)
shall be a final agency action subject to judicial review,
except that any such action may be reviewed under section 307
when the Administrator issues performance standards for such
category.
``(b) Capped Sources.--No standard of performance shall be
established under section 111 for capped greenhouse gas emissions from
a capped source unless the Administrator determines that such standards
are appropriate because of effects that do not include climate change
effects. In promulgating a standard of performance under section 111
for the emission from capped sources of any air pollutant that is not a
greenhouse gas, the Administrator shall treat the emission of any
greenhouse gas by those entities as a nonair quality public health and
environmental impact within the meaning of section 111(a)(1).
``(c) Performance Standards.--For purposes of setting a performance
standard for source categories identified pursuant to subsection (a)--
``(1) The Administrator shall take into account the goal of
reducing total United States greenhouse gas emissions as set
forth in section 702.
``(2) The Administrator may promulgate a design, equipment,
work practice, or operational standard, or any combination
thereof, under section 111 in lieu of a standard of performance
under that section without regard to any determination of
feasibility that would otherwise be required under section
111(h).
``(3) Notwithstanding any other provision, in setting the
level of each standard required by this section, the
Administrator shall take into account projections of allowance
prices, such that the marginal cost of compliance (expressed as
dollars per ton of carbon dioxide equivalent reduced) imposed
by the standard would not, in the judgement of the
Administrator, be expected to exceed the Administrator's
projected allowance prices over the time period spanning from
the date of initial compliance to the date that the next
revisions of the standard would come into effect pursuant to
the schedule under section 111(b)(1)(B).
``(d) Definitions.--In this section, the terms `uncapped greenhouse
gas emissions' and `uncapped methane emissions' mean those greenhouse
gas or methane emissions, respectively, to which section 722 would not
have applied if the requirements of this title had been in effect for
the same year as the emissions data upon which the list is based.
``(e) Study of the Effects of Performance Standards.--
``(1) Study.--The Administrator shall conduct a study of the
impacts of performance standards required under this section,
which shall evaluate the effect of such standards on the--
``(A) costs of achieving compliance with the economy-
wide reduction goals specified in section 702 and the
reduction targets specified in section 703;
``(B) available supply of offset credits; and
``(C) ability to achieve the economy-wide reduction
goals specified in section 702 and any other benefits
of such standards.
``(2) Report.--The Administrator shall submit to the House
Energy and Commerce Committee a report that describes the
results of the study not later than 18 months after the
publication of the standards required under subsection
(a)(2)(B)(i).
``PART C--EXEMPTIONS FROM OTHER PROGRAMS
``SEC. 831. CRITERIA POLLUTANTS.
``As of the date of the enactment of the Safe Climate Act, no
greenhouse gas may be added to the list under section 108(a) on the
basis of its effect on global climate change.
``SEC. 832. INTERNATIONAL AIR POLLUTION.
``Section 115 shall not apply to an air pollutant with respect to
that pollutant's contribution to global warming.
``SEC. 833. HAZARDOUS AIR POLLUTANTS.
``No greenhouse gas may be added to the list of hazardous air
pollutants under section 112 unless such greenhouse gas meets the
listing criteria of section 112(b) independent of its effects on global
climate change.
``SEC. 834. NEW SOURCE REVIEW.
``The provisions of part C of title I shall not apply to a major
emitting facility that is initially permitted or modified after January
1, 2009, on the basis of its emissions of any greenhouse gas.
``SEC. 835. TITLE V PERMITS.
``Notwithstanding any provision of title III or V, no stationary
source shall be required to apply for, or operate pursuant to, a permit
under title V, solely because the source emits any greenhouse gases
that are regulated solely because of their effect on global climate
change.''.
SEC. 332. HFC REGULATION.
(a) In General.--Title VI of the Clean Air Act (42 U.S.C. 7671 et
seq.) (relating to stratospheric ozone protection) is amended by adding
at the end the following:
``SEC. 619. HYDROFLUOROCARBONS (HFCS).
``(a) Treatment as Class II, Group II Substances.--Except as
otherwise provided in this section, hydrofluorocarbons shall be treated
as class II substances for purposes of applying the provisions of this
title. The Administrator shall establish two groups of class II
substances. Class II, group I substances shall include all
hydrochlorofluorocarbons (HCFCs) listed pursuant to section 602(b).
Class II, group II substances shall include each of the following:
``(1) Hydrofluorocarbon-23 (HFC-23).
``(2) Hydrofluorocarbon-32 (HFC-32).
``(3) Hydrofluorocarbon-41 (HFC-41).
``(4) Hydrofluorocarbon-125 (HFC-125).
``(5) Hydrofluorocarbon-134 (HFC-134).
``(6) Hydrofluorocarbon-134a (HFC-134a).
``(7) Hydrofluorocarbon-143 (HFC-143).
``(8) Hydrofluorocarbon-143a (HFC-143a).
``(9) Hydrofluorocarbon-152 (HFC-152).
``(10) Hydrofluorocarbon-152a (HFC-152a).
``(11) Hydrofluorocarbon-227ea (HFC-227ea).
``(12) Hydrofluorocarbon-236cb (HFC-236cb).
``(13) Hydrofluorocarbon-236ea (HFC-236ea).
``(14) Hydrofluorocarbon-236fa (HFC-236fa).
``(15) Hydrofluorocarbon-245ca (HFC-245ca).
``(16) Hydrofluorocarbon-245fa (HFC-245fa).
``(17) Hydrofluorocarbon-365mfc (HFC-365mfc).
``(18) Hydrofluorocarbon-43-10mee (HFC-43-10mee).
``(19) Hydrofluoroolefin-1234yf (HFO-1234yf).
``(20) Hydrofluoroolefin-1234ze (HFO-1234ze).
Not later than 6 months after the date of enactment of this title, the
Administrator shall publish an initial list of class II, group II
substances, which shall include the substances listed in this
subsection. The Administrator may add to the list of class II, group II
substances any other substance used as a substitute for a class I or II
substance if the Administrator determines that 1 metric ton of the
substance makes the same or greater contribution to global warming over
100 years as 1 metric ton of carbon dioxide. Within 24 months after the
date of enactment of this section, the Administrator shall amend the
regulations under this title (including the regulations referred to in
sections 603, 608, 609, 610, 611, 612, and 613) to apply to class II,
group II substances.
``(b) Consumption and Production of Class II, Group II Substances.--
``(1) In general.--
``(A) Consumption phase down.--In the case of class
II, group II substances, in lieu of applying section
605 and the regulations thereunder, the Administrator
shall promulgate regulations phasing down the
consumption of class II, group II substances in the
United States, and the importation of products
containing any class II, group II substance, in
accordance with this subsection within 18 months after
the date of enactment of this section. Effective
January 1, 2012, it shall be unlawful for any person to
produce any class II, group II substance, import any
class II, group II substance, or import any product
containing any class II, group II substance without
holding one consumption allowance or one destruction
offset credit for each carbon dioxide equivalent ton of
the class II, group II substance. Any person who
exports a class II, group II substance for which a
consumption allowance was retired may receive a refund
of that allowance from the Administrator following the
export.
``(B) Production.--If the United States becomes a
party or otherwise adheres to a multilateral agreement,
including any amendment to the Montreal Protocol on
Substances That Deplete the Ozone Layer, that restricts
the production of class II, group II substances, the
Administrator shall promulgate regulations establishing
a baseline for the production of class II, group II
substances in the United States and phasing down the
production of class II, group II substances in the
United States, in accordance with such multilateral
agreement and subject to the same exceptions and other
provisions as are applicable to the phase down of
consumption of class II, group II substances under this
section (except that the Administrator shall not
require a person who obtains production allowances from
the Administrator to make payment for such allowances
if the person is making payment for a corresponding
quantity of consumption allowances of the same vintage
year). Upon the effective date of such regulations, it
shall be unlawful for any person to produce any class
II, group II substance without holding one consumption
allowance and one production allowance, or one
destruction offset credit, for each carbon dioxide
equivalent ton of the class II, group II substance.
``(C) Integrity of cap.--To maintain the integrity of
the class II, group II cap, the Administrator may,
through rulemaking, limit the percentage of each
person's compliance obligation that may be met through
the use of destruction offset credits or banked
allowances.
``(D) Counting of violations.--Each emission
allowance or destruction offset credit not held as
required by this section shall be a separate violation
of this section.
``(2) Schedule.--Pursuant to the regulations promulgated
pursuant to paragraph (1), the number of class II, group II
consumption allowances established by the Administrator for
each calendar year beginning in 2012 shall be the following
percentage of the baseline, as established by the Administrator
pursuant to paragraph (3):
----------------------------------------------------------------------------------------------------------------
``Calendar year Percent of baseline
----------------------------------------------------------------------------------------------------------------
2012 90
----------------------------------------------------------------------------------------------------------------
2013 87.5
----------------------------------------------------------------------------------------------------------------
2014 85
----------------------------------------------------------------------------------------------------------------
2015 82.5
----------------------------------------------------------------------------------------------------------------
2016 80
----------------------------------------------------------------------------------------------------------------
2017 77.5
----------------------------------------------------------------------------------------------------------------
2018 75
----------------------------------------------------------------------------------------------------------------
2019 71
----------------------------------------------------------------------------------------------------------------
2020 67
----------------------------------------------------------------------------------------------------------------
2021 63
----------------------------------------------------------------------------------------------------------------
2022 59
----------------------------------------------------------------------------------------------------------------
2023 54
----------------------------------------------------------------------------------------------------------------
2024 50
----------------------------------------------------------------------------------------------------------------
2025 46
----------------------------------------------------------------------------------------------------------------
2026 42
----------------------------------------------------------------------------------------------------------------
2027 38
----------------------------------------------------------------------------------------------------------------
2028 34
----------------------------------------------------------------------------------------------------------------
2029 30
----------------------------------------------------------------------------------------------------------------
2030 25
----------------------------------------------------------------------------------------------------------------
2031 21
----------------------------------------------------------------------------------------------------------------
2032 17
----------------------------------------------------------------------------------------------------------------
after 2032 15
----------------------------------------------------------------------------------------------------------------
``(3) Baseline.--(A) Within 12 months after the date of
enactment of this section, the Administrator shall promulgate
regulations to establish the baseline for purposes of paragraph
(2). The baseline shall be the sum, expressed in tons of carbon
dioxide equivalents, of--
``(i) the annual average consumption of all class II
substances in calendar years 2004, 2005, and 2006; plus
``(ii) the annual average quantity of all class II
substances contained in imported products in calendar
years 2004, 2005, and 2006.
``(B) Notwithstanding subparagraph (A), if the Administrator
determines that the baseline is higher than 370 million metric
tons of carbon dioxide equivalents, then the Administrator
shall establish the baseline at 370 million metric tons of
carbon dioxide equivalents.
``(C) Notwithstanding subparagraph (A), if the Administrator
determines that the baseline is lower than 280 million metric
tons of carbon dioxide equivalents, then the Administrator
shall establish the baseline at 280 million metric tons of
carbon dioxide equivalents.
``(4) Distribution of allowances.--
``(A) In general.--Pursuant to the regulations
promulgated under paragraph (1), for each calendar year
beginning in 2012, the Administrator shall sell
consumption allowances in accordance with this
paragraph.
``(B) Establishment of pools.--The Administrator
shall establish two allowance pools. Eighty percent of
the consumption allowances available for a calendar
year shall be placed in the producer-importer pool, and
20 percent of the consumption allowances available for
a calendar year shall be placed in the secondary pool.
``(C) Producer-importer pool.--
``(i) Auction.--(I) For each calendar year,
the Administrator shall offer for sale at
auction the following percentage of the
consumption allowances in the producer-importer
pool:
----------------------------------------------------------------------------------------------------------------
``Calendar year Percent available for auction
----------------------------------------------------------------------------------------------------------------
2012 10
----------------------------------------------------------------------------------------------------------------
2013 20
----------------------------------------------------------------------------------------------------------------
2014 30
----------------------------------------------------------------------------------------------------------------
2015 40
----------------------------------------------------------------------------------------------------------------
2016 50
----------------------------------------------------------------------------------------------------------------
2017 60
----------------------------------------------------------------------------------------------------------------
2018 70
----------------------------------------------------------------------------------------------------------------
2019 80
----------------------------------------------------------------------------------------------------------------
2020 and thereafter 90
----------------------------------------------------------------------------------------------------------------
``(II) Any person who produced or imported
any class II substance during calendar year
2004, 2005, or 2006 may participate in the
auction. No other persons may participate in
the auction unless permitted to do so pursuant
to subclause (III).
``(III) Not later than three years after the
date of the initial auction and from time to
time thereafter, the Administrator shall
determine through rulemaking whether any
persons who did not produce or import a class
II substance during calendar year 2004, 2005,
or 2006 will be permitted to participate in
future auctions. The Administrator shall base
this determination on the duration,
consistency, and scale of such person's
purchases of consumption allowances in the
secondary pool under subparagraph (D), as well
as economic or technical hardship and other
factors deemed relevant by the Administrator.
``(IV) The Administrator shall set a minimum
bid per consumption allowance of the following:
``(aa) For vintage year 2012, $1.00.
``(bb) For vintage year 2013, $1.20.
``(cc) For vintage year 2014, $1.40.
``(dd) For vintage year 2015, $1.60.
``(ee) For vintage year 2016, $1.80.
``(ff) For vintage year 2017, $2.00.
``(gg) For vintage year 2018 and
thereafter, $2.00 adjusted for
inflation after vintage year 2017 based
upon the producer price index as
published by the Department of
Commerce.
``(ii) Non-auction sale.--(I) For each
calendar year, as soon as practicable after
auction, the Administrator shall offer for sale
the remaining consumption allowances in the
producer-importer pool at the following prices:
``(aa) A fee of $1.00 per vintage
year 2012 allowance.
``(bb) A fee of $1.20 per vintage
year 2013 allowance.
``(cc) A fee of $1.40 per vintage
year 2014 allowance.
``(dd) For each vintage year 2015
allowance, a fee equal to the average
of $1.10 and the auction clearing price
for vintage year 2014 allowances.
``(ee) For each vintage year 2016
allowance, a fee equal to the average
of $1.30 and the auction clearing price
for vintage year 2015 allowances.
``(ff) For each vintage year 2017
allowance, a fee equal to the average
of $1.40 and the auction clearing price
for vintage year 2016 allowances.
``(gg) For each allowance of vintage
year 2018 and subsequent vintage years,
a fee equal to the auction clearing
price for that vintage year.
``(II) The Administrator shall offer to sell
the remaining consumption allowances in the
producer-importer pool to producers of class
II, group II substances and importers of class
II, group II substances in proportion to their
relative allocation share.
``(III) Such allocation share for such sale
shall be determined by the Administrator using
such producer's or importer's annual average
data on class II substances from calendar years
2004, 2005, and 2006, on a carbon dioxide
equivalent basis, and--
``(aa) shall be based on a producer's
production, plus importation, plus
acquisitions and purchases from persons
who produced class II substances in the
United States during calendar years
2004, 2005, or 2006, less exportation,
less transfers and sales to persons who
produced class II substances in the
United States during calendar years
2004, 2005, or 2006; and
``(bb) for an importer of class II
substances that did not produce in the
United States any class II substance
during calendar years 2004, 2005, and
2006, shall be based on the importer's
importation less exportation.
For purposes of item (aa), the Administrator
shall account for 100 percent of class II,
group II substances and 60 percent of class II,
group I substances. For purposes of item (bb),
the Administrator shall account for 100 percent
of class II, group II substances and 100
percent of class II, group I substances.
``(IV) Any consumption allowances made
available for nonauction sale to a specific
producer or importer of class II, group II
substances but not purchased by the specific
producer or importer shall be made available
for sale to any producer or importer of class
II substances during calendar years 2004, 2005,
or 2006. If demand for such consumption
allowances exceeds supply of such consumption
allowances, the Administrator shall develop and
utilize criteria for the sale of such
consumption allowances that may include pro
rata shares, historic production and
importation, economic or technical hardship, or
other factors deemed relevant by the
Administrator. If the supply of such
consumption allowances exceeds demand, the
Administrator may offer such consumption
allowances for sale in the secondary pool as
set forth in subparagraph (D).
``(D) Secondary pool.--(i) For each calendar year, as
soon as practicable after the auction required in
subparagraph (C), the Administrator shall offer for
sale the consumption allowances in the secondary pool
at the prices listed in subparagraph (C)(ii).
``(ii) The Administrator shall accept applications
for purchase of secondary pool consumption allowances
from--
``(I) importers of products containing class
II, group II substances;
``(II) persons who purchased any class II,
group II substance directly from a producer or
importer of class II, group II substances for
use in a product containing a class II, group
II substance, a manufacturing process, or a
reclamation process;
``(III) persons who did not produce or import
a class II substance during calendar year 2004,
2005, or 2006, but who the Administrator
determines have subsequently taken significant
steps to produce or import a substantial
quantity of any class II, group II substance;
and
``(IV) persons who produced or imported any
class II substance during calendar year 2004,
2005, or 2006.
``(iii) If the supply of consumption allowances in
the secondary pool equals or exceeds the demand for
consumption allowances in the secondary pool as
presented in the applications for purchase, the
Administrator shall sell the consumption allowances in
the secondary pool to the applicants in the amounts
requested in the applications for purchase. Any
consumption allowances in the secondary pool not
purchased in a calendar year may be rolled over and
added to the quantity available in the secondary pool
in the following year.
``(iv) If the demand for consumption allowances in
the secondary pool as presented in the applications for
purchase exceeds the supply of consumption allowances
in the secondary pool, the Administrator shall sell the
consumption allowances as follows:
``(I) The Administrator shall first sell the
consumption allowances in the secondary pool to
any importers of products containing class II,
group II substances in the amounts requested in
their applications for purchase. If the demand
for such consumption allowances exceeds supply
of such consumption allowances, the
Administrator shall develop and utilize
criteria for the sale of such consumption
allowances among importers of products
containing class II, group II substances that
may include pro rata shares, historic
importation, economic or technical hardship, or
other factors deemed relevant by the
Administrator.
``(II) The Administrator shall next sell any
remaining consumption allowances to persons
identified in subclauses (II) and (III) of
clause (ii) in the amounts requested in their
applications for purchase. If the demand for
such consumption allowances exceeds remaining
supply of such consumption allowances, the
Administrator shall develop and utilize
criteria for the sale of such consumption
allowances among subclauses (II) and (III)
applicants that may include pro rata shares,
historic use, economic or technical hardship,
or other factors deemed relevant by the
Administrator.
``(III) The Administrator shall then sell any
remaining consumption allowances to persons who
produced or imported any class II substance
during calendar year 2004, 2005, or 2006 in the
amounts requested in their applications for
purchase. If demand for such consumption
allowances exceeds remaining supply of such
consumption allowances, the Administrator shall
develop and utilize criteria for the sale of
such consumption allowances that may include
pro rata shares, historic production and
importation, economic or technical hardship, or
other factors deemed relevant by the
Administrator.
``(IV) Each person who purchases consumption
allowances in a non-auction sale under this
subparagraph shall be required to disclose the
person or entity sponsoring or benefitting from
the purchases if such person or entity is, in
whole or in part, other than the purchaser or
the purchaser's employer.
``(E) Discretion to withhold allowances.--Nothing in
this paragraph prevents the Administrator from
exercising discretion to withhold and retire
consumption allowances that would otherwise be
available for auction or nonauction sale. Not later
than 18 months after the date of enactment of this
section, the Administrator shall promulgate regulations
establishing criteria for withholding and retiring
consumption allowances.
``(5) Banking.--A consumption allowance or destruction offset
credit may be used to meet the compliance obligation
requirements of paragraph (1) in--
``(A) the vintage year for the allowance or
destruction offset credit; or
``(B) any calendar year subsequent to the vintage
year for the allowance or destruction offset credit.
``(6) Auctions.--
``(A) Initial regulations.--Not later than 18 months
after the date of enactment of this section, the
Administrator shall promulgate regulations governing
the auction of allowances under this section. Such
regulations shall include the following requirements:
``(i) Frequency; first auction.--Auctions
shall be held one time per year at regular
intervals, with the first auction to be held no
later than October 31, 2011.
``(ii) Auction format.--Auctions shall follow
a single-round, sealed-bid, uniform price
format.
``(iii) Financial assurance.--The
Administrator may establish financial assurance
requirements to ensure that auction
participants can and will perform on their
bids.
``(iv) Disclosure of beneficial ownership.--
Each bidder in the auction shall be required to
disclose the person or entity sponsoring or
benefitting from the bidder's participation in
the auction if such person or entity is, in
whole or in part, other than the bidder or the
bidder's employer.
``(v) Publication of information.--After the
auction, the Administrator shall, in a timely
fashion, publish the number of bidders, number
of winning bidders, the quantity of allowances
sold, and the auction clearing price.
``(vi) Bidding limits in 2012.--In the
vintage year 2012 auction, no auction
participant may, directly or in concert with
another participant, bid for or purchase more
allowances offered for sale at the auction than
the greater of--
``(I) the number of allowances which,
when added to the number of allowances
available for purchase by the
participant in the producer-importer
pool non-auction sale, would equal the
participant's annual average
consumption of class II, group II
substances in calendar years 2004,
2005, and 2006; or
``(II) the number of allowances equal
to the product of--
``(aa) 1.20 multiplied by the
participant's allocation share
of the producer-importer pool
non-auction sale as determined
under paragraph (4)(C)(ii); and
``(bb) the number of vintage
year 2012 allowances offered at
auction.
``(vii) Bidding limits in 2013.--In the
vintage year 2013 auction, no auction
participant may, directly or in concert with
another participant, bid for or purchase more
allowances offered for sale at the auction than
the product of--
``(I) 1.15 multiplied by the ratio of
the total number of vintage year 2012
allowances purchased by the participant
from the auction and from the producer-
importer pool non-auction sale to the
total number of vintage year 2012
allowances in the producer-importer
pool; and
``(II) the number of vintage year
2013 allowances offered at auction.
``(viii) Bidding limits in subsequent
years.--In the auctions for vintage year 2014
and subsequent vintage years, no auction
participant may, directly or in concert with
another participant, bid for or purchase more
allowances offered for sale at the auction than
the product of--
``(I) 1.15 multiplied by the ratio of
the highest number of allowances held
by the participant in any of the three
prior vintage years to meet its
compliance obligation under paragraph
(1) to the total number of allowances
in the producer-importer pool for such
vintage year; and
``(II) the number of allowances
offered at auction for that vintage
year.
``(ix) Other requirements.--The Administrator
may include in the regulations such other
requirements or provisions as the Administrator
considers necessary to promote effective,
efficient, transparent, and fair administration
of auctions under this section.
``(B) Revision of regulations.--The Administrator
may, at any time, revise the initial regulations
promulgated under subparagraph (A) based on the
Administrator's experience in administering allowance
auctions. Such revised regulations need not meet the
requirements identified in subparagraph (A) if the
Administrator determines that an alternative auction
design would be more effective, taking into account
factors including costs of administration,
transparency, fairness, and risks of collusion or
manipulation. In determining whether and how to revise
the initial regulations under this paragraph, the
Administrator shall not consider maximization of
revenues to the Federal Government.
``(C) Delegation or contract.--Pursuant to
regulations under this section, the Administrator may,
by delegation or contract, provide for the conduct of
auctions under the Administrator's supervision by other
departments or agencies of the Federal Government or by
nongovernmental agencies, groups, or organizations.
``(7) Payments for allowances.--
``(A) Initial regulations.--Not later than 18 months
after the date of enactment of this section, the
Administrator shall promulgate regulations governing
the payment for allowances purchased in auction and
non-auction sales under this section. Such regulations
shall include the requirement that, in the event that
full payment for purchased allowances is not made on
the date of purchase, equal payments shall be made one
time per calendar quarter with all payments for
allowances of a vintage year made by the end of that
vintage year.
``(B) Revision of regulations.-- The Administrator
may, at any time, revise the initial regulations
promulgated under subparagraph (A) based on the
Administrator's experience in administering collection
of payments. Such revised regulations need not meet the
requirements identified in subparagraph (A) if the
Administrator determines that an alternative payment
structure or frequency would be more effective, taking
into account factors including cost of administration,
transparency, and fairness. In determining whether and
how to revise the initial regulations under this
paragraph, the Administrator shall not consider
maximization of revenues to the Federal Government.
``(C) Penalties for non-payment.--Failure to pay for
purchased allowances in accordance with the regulations
promulgated pursuant to this paragraph shall be a
violation of the requirements of subsection (b).
Section 113(c)(3) shall apply in the case of any person
who knowingly fails to pay for purchased allowances in
accordance with the regulations promulgated pursuant to
this paragraph.
``(8) Imported products.--If the United States becomes a
party or otherwise adheres to a multilateral agreement,
including any amendment to the Montreal Protocol on Substances
That Deplete the Ozone Layer, which restricts the production
and consumption of class II, group II substances--
``(A) as of the date on which such agreement or
amendment enters into force, it shall no longer be
unlawful for any person to import from a party to such
agreement or amendment any product containing any class
II, group II substance whose production and consumption
are regulated by such agreement or amendment without
holding one consumption allowance or one destruction
offset credit for each carbon dioxide equivalent ton of
the class II, group II substance;
``(B) the Administrator shall promulgate regulations
within 12 months of the date the United States becomes
a party or otherwise adheres to such agreement or
amendment, or the date on which such agreement or
amendment enters into force, whichever is later, to
establish a new baseline for purposes of paragraph (2),
which new baseline shall be the original baseline less
the carbon dioxide equivalent of the annual average
quantity of any class II substances regulated by such
agreement or amendment contained in products imported
from parties to such agreement or amendment in calendar
years 2004, 2005, and 2006;
``(C) as of the date on which such agreement or
amendment enters into force, no person importing any
product containing any class II, group II substance
may, directly or in concert with another person,
purchase any consumption allowances for sale by the
Administrator for the importation of products from a
party to such agreement or amendment that contain any
class II, group II substance restricted by such
agreement or amendment; and
``(D) the Administrator may adjust the two allowance
pools established in paragraph (4) such that up to 90
percent of the consumption allowances available for a
calendar year are placed in the producer-importer pool
with the remaining consumption allowances placed in the
secondary pool.
``(9) Offsets.--
``(A) Chlorofluorocarbon destruction.--Within 18
months after the date of enactment of this section, the
Administrator shall promulgate regulations to provide
for the issuance of offset credits for the destruction,
in the calendar year 2012 or later, of
chlorofluorocarbons in the United States. The
Administrator shall establish and distribute to the
destroying entity a quantity of destruction offset
credits equal to 0.8 times the number of tons of carbon
dioxide equivalents of reduction achieved through the
destruction. No destruction offset credits shall be
established for the destruction of a class II, group II
substance.
``(B) Definition.--For purposes of this paragraph,
the term `destruction' means the conversion of a
substance by thermal, chemical, or other means to
another substance with little or no carbon dioxide
equivalent value and no ozone depletion potential.
``(C) Regulations.--The regulations promulgated under
this paragraph shall include standards and protocols
for project eligibility, certification of destroyers,
monitoring, tracking, destruction efficiency,
quantification of project and baseline emissions and
carbon dioxide equivalent value, and verification. The
Administrator shall ensure that destruction offset
credits represent real and verifiable destruction of
chlorofluorocarbons or other class I or class II, group
I, substances authorized under subparagraph (D).
``(D) Other substances.--The Administrator may
promulgate regulations to add to the list of class I
and class II, group I, substances that may be destroyed
for destruction offset credits, taking into account a
candidate substance's carbon dioxide equivalent value,
ozone depletion potential, prevalence in banks in the
United States, and emission rates, as well as the need
for additional cost containment under the class II,
group II cap and the integrity of the class II, group
II cap. The Administrator shall not add a class I or
class II, group I substance to the list if the
consumption of the substance has not been completely
phased-out internationally (except for essential use
exemptions or other similar exemptions) pursuant to the
Montreal Protocol.
``(E) Extension of offsets.--(i) At any time after
the Administrator promulgates regulations pursuant to
subparagraph (A), the Administrator may add the types
of destruction projects authorized to receive
destruction offset credits under this paragraph to the
list of types of projects eligible for offset credits
under section 733. Nothing in this paragraph shall
affect the issuance of offset credits under section
740.
``(ii) The Administrator shall not make the addition
under clause (i) unless the Administrator finds that
insufficient destruction is occurring or is projected
to occur under this paragraph and that the addition
would increase destruction.
``(iii) In no event shall more than one destruction
offset credit be issued under title VII and this
section for the destruction of the same quantity of a
substance.
``(10) Legal status of allowances and credits.--None of the
following constitutes a property right:
``(A) A production or consumption allowance.
``(B) A destruction offset credit.
``(c) Deadlines for Compliance.--Notwithstanding the deadlines
specified for class II substances in sections 608, 609, 610, 612, and
613 that occur prior to January 1, 2009, the deadline for promulgating
regulations under those sections for class II, group II substances
shall be January 1, 2012.
``(d) Exceptions for Essential Uses.--Notwithstanding any phase down
of production and consumption required by this section, to the extent
consistent with any applicable multilateral agreement to which the
United States is a party or otherwise adheres, the Administrator may
provide the following exceptions for essential uses:
``(1) Medical devices.--The Administrator, after notice and
opportunity for public comment, and in consultation with the
Commissioner of the Food and Drug Administration, may provide
an exception for the production and consumption of class II,
group II substances solely for use in medical devices.
``(2) Aviation safety.--The Administrator, after notice and
opportunity for public comment, may authorize the production
and consumption of limited quantities of class II, group II
substances solely for the purposes of aviation safety if the
Administrator of the Federal Aviation Administration, in
consultation with the Administrator, determines that no safe
and effective substitute has been developed and that such
authorization is necessary for aviation safety purposes.
``(e) Developing Countries.--Notwithstanding any phase down of
production required by this section, the Administrator, after notice
and opportunity for public comment, may authorize the production of
limited quantities of class II, group II substances in excess of the
amounts otherwise allowable under this section solely for export to,
and use in, developing countries. Any production authorized under this
subsection shall be solely for purposes of satisfying the basic
domestic needs of such countries as provided in applicable
international agreements, if any, to which the United States is a party
or otherwise adheres.
``(f) National Security; Fire Suppression, etc.--The provisions of
subsection (f) and paragraphs (1) and (2) of subsection (g) of section
604 shall apply to any consumption and production phase down of class
II, group II substances in the same manner and to the same extent,
consistent with any applicable international agreement to which the
United States is a party or otherwise adheres, as such provisions apply
to the substances specified in such subsection.
``(g) Accelerated Schedule.--In lieu of section 606, the provisions
of paragraphs (1), (2), and (3) of this subsection shall apply in the
case of class II, group II substances.
``(1) In general.--The Administrator shall promulgate initial
regulations not later than 18 months after the date of
enactment of this section, and revised regulations any time
thereafter, which establish a schedule for phasing down the
consumption (and, if the condition in subsection (b)(1)(B) is
met, the production) of class II, group II substances that is
more stringent than the schedule set forth in this section if,
based on the availability of substitutes, the Administrator
determines that such more stringent schedule is practicable,
taking into account technological achievability, safety, and
other factors the Administrator deems relevant, or if the
Montreal Protocol, or any applicable international agreement to
which the United States is a party or otherwise adheres, is
modified or established to include a schedule or other
requirements to control or reduce production, consumption, or
use of any class II, group II substance more rapidly than the
applicable schedule under this section.
``(2) Petition.--Any person may submit a petition to
promulgate regulations under this subsection in the same manner
and subject to the same procedures as are provided in section
606(b).
``(3) Inconsistency.--If the Administrator determines that
the provisions of this section regarding banking, allowance
rollover, or destruction offset credits create a significant
potential for inconsistency with the requirements of any
applicable international agreement to which the United States
is a party or otherwise adheres, the Administrator may
promulgate regulations restricting the availability of banking,
allowance rollover, or destruction offset credits to the extent
necessary to avoid such inconsistency.
``(h) Exchange.--Section 607 shall not apply in the case of class II,
group II substances. Production and consumption allowances for class
II, group II substances may be freely exchanged or sold but may not be
converted into allowances for class II, group I substances.
``(i) Labeling.--(1) In applying section 611 to products containing
or manufactured with class II, group II substances, in lieu of the
words `destroying ozone in the upper atmosphere' on labels required
under section 611 there shall be substituted the words `contributing to
global warming'.
``(2) The Administrator may, through rulemaking, exempt from the
requirements of section 611 products containing or manufactured with
class II, group II substances determined to have little or no carbon
dioxide equivalent value compared to other substances used in similar
products.
``(j) Nonessential Products.--For the purposes of section 610, class
II, group II substances shall be regulated under section 610(b), except
that in applying section 610(b) the word `hydrofluorocarbon' shall be
substituted for the word `chlorofluorocarbon' and the term `class II,
group II' shall be substituted for the term `class I'. Class II, group
II substances shall not be subject to the provisions of section 610(d).
``(k) International Transfers.--In the case of class II, group II
substances, in lieu of sections 616(a) and 616(b), this subsection
shall apply. To the extent consistent with any applicable international
agreement to which the United States is a party or otherwise adheres,
including any amendment to the Montreal Protocol, the United States may
engage in transfers with other parties to such agreement or amendment
under the following conditions:
``(1) The United States may transfer production allowances to
another party to such agreement or amendment if, at the time of
the transfer, the Administrator establishes revised production
limits for the United States accounting for the transfer in
accordance with regulations promulgated pursuant to this
subsection.
``(2) The United States may acquire production allowances
from another party to such agreement or amendment if, at the
time of the transfer, the Administrator finds that the other
party has revised its domestic production limits in the same
manner as provided with respect to transfers by the United
States in the regulations promulgated pursuant to this
subsection.
``(l) Relationship to Other Laws.--
``(1) State laws.--For purposes of section 116, the
requirements of this section for class II, group II substances
shall be treated as requirements for the control and abatement
of air pollution.
``(2) Multilateral agreements.--Section 614 shall apply to
the provisions of this section concerning class II, group II
substances, except that for the words `Montreal Protocol' there
shall be substituted the words `Montreal Protocol, or any
applicable multilateral agreement to which the United States is
a party or otherwise adheres that restricts the production or
consumption of class II, group II substances,' and for the
words `Article 4 of the Montreal Protocol' there shall be
substituted `any provision of such multilateral agreement
regarding trade with non-parties'.
``(3) Federal facilities.--For purposes of section 118, the
requirements of this section for class II, group II substances
and corresponding State, interstate, and local requirements,
administrative authority, and process and sanctions shall be
treated as requirements for the control and abatement of air
pollution within the meaning of section 118.
``(m) Carbon Dioxide Equivalent Value.--(1) In lieu of section
602(e), the provisions of this subsection shall apply in the case of
class II, group II substances. Simultaneously with establishing the
list of class II, group II substances, and simultaneously with any
addition to that list, the Administrator shall publish the carbon
dioxide equivalent value of each listed class II, group II substance,
based on a determination of the number of metric tons of carbon dioxide
that makes the same contribution to global warming over 100 years as 1
metric ton of each class II, group II substance.
``(2) Not later than February 1, 2017, and not less than every 5
years thereafter, the Administrator shall--
``(A) review, and if appropriate, revise the carbon dioxide
equivalent values established for class II, group II substances
based on a determination of the number of metric tons of carbon
dioxide that makes the same contributions to global warming
over 100 years as 1 metric ton of each class II, group II
substance; and
``(B) publish in the Federal Register the results of that
review and any revisions.
``(3) A revised determination published in the Federal Register under
paragraph (2)(B) shall take effect for production of class II, group II
substances, consumption of class II, group II substances, and
importation of products containing class II, group II substances
starting on January 1 of the first calendar year starting at least 9
months after the date on which the revised determination was published.
``(4) The Administrator may decrease the frequency of review and
revision under paragraph (2) if the Administrator determines that such
decrease is appropriate in order to synchronize such review and
revisions with any similar review process carried out pursuant to the
United Nations Framework Convention on Climate Change, an agreement
negotiated under that convention, The Vienna Convention for the
Protection of the Ozone Layer, or an agreement negotiated under that
convention, except that in no event shall the Administrator carry out
such review and revision any less frequently than every 10 years.
``(n) Reporting Requirements.--In lieu of subsections (b) and (c) of
section 603, paragraphs (1) and (2) of this subsection shall apply in
the case of class II, group II substances:
``(1) In general.--On a quarterly basis, or such other basis
(not less than annually) as determined by the Administrator,
each person who produced, imported, or exported a class II,
group II substance, or who imported a product containing a
class II, group II substance, shall file a report with the
Administrator setting forth the carbon dioxide equivalent
amount of the substance that such person produced, imported, or
exported, as well as the amount that was contained in products
imported by that person, during the preceding reporting period.
Each such report shall be signed and attested by a responsible
officer. If all other reporting is complete, no such report
shall be required from a person after April 1 of the calendar
year after such person permanently ceases production,
importation, and exportation of the substance, as well as
importation of products containing the substance, and so
notifies the Administrator in writing. If the United States
becomes a party or otherwise adheres to a multilateral
agreement, including any amendment to the Montreal Protocol on
Substances That Deplete the Ozone Layer, that restricts the
production and consumption of class II, group II substances,
then, if all other reporting is complete, no such report shall
be required from a person with respect to importation from
parties to such agreement or amendment of products containing
any class II, group II substance restricted by such agreement
or amendment, after April 1 of the calendar year following the
year during which such agreement or amendment enters into
force.
``(2) Baseline reports for class ii, group ii substances.--
``(A) In general.--Unless such information has been
previously reported to the Administrator, on the date
on which the first report under paragraph (1) of this
subsection is required to be filed, each person who
produced, imported, or exported a class II, group II
substance, or who imported a product containing a class
II substance, (other than a substance added to the list
of class II, group II substances after the publication
of the initial list of such substances under this
section), shall file a report with the Administrator
setting forth the amount of such substance that such
person produced, imported, exported, or that was
contained in products imported by that person, during
each of calendar years 2004, 2005, and 2006.
``(B) Producers.--In reporting under subparagraph
(A), each person who produced in the United States a
class II substance during calendar years 2004, 2005, or
2006 shall--
``(i) report all acquisitions or purchases of
class II substances during each of calendar
years 2004, 2005, and 2006 from all other
persons who produced in the United States a
class II substance during calendar years 2004,
2005, or 2006, and supply evidence of such
acquisitions and purchases as deemed necessary
by the Administrator; and
``(ii) report all transfers or sales of class
II substances during each of calendar years
2004, 2005, and 2006 to all other persons who
produced in the United States a class II
substance during calendar years 2004, 2005, or
2006, and supply evidence of such transfers and
sales as deemed necessary by the Administrator.
``(C) Added substances.--In the case of a substance
added to the list of class II, group II substances
after publication of the initial list of such
substances under this section, each person who
produced, imported, exported, or imported products
containing such substance in calendar year 2004, 2005,
or 2006 shall file a report with the Administrator
within 180 days after the date on which such substance
is added to the list, setting forth the amount of the
substance that such person produced, imported, and
exported, as well as the amount that was contained in
products imported by that person, in calendar years
2004, 2005, and 2006.
``(o) Stratospheric Ozone and Climate Protection Fund.--
``(1) In general.--There is established in the Treasury of
the United States a Stratospheric Ozone and Climate Protection
Fund.
``(2) Deposits.--The Administrator shall deposit all proceeds
from the auction and non-auction sale of allowances under this
section into the Stratospheric Ozone and Climate Protection
Fund.
``(3) Use.--Amounts deposited into the Stratospheric Ozone
and Climate Protection Fund shall be available, subject to
appropriations, exclusively for the following purposes:
``(A) Recovery, recycling, and reclamation.--The
Administrator may utilize funds to establish a program
to incentivize the recovery, recycling, and reclamation
of any Class II substances in order to reduce emissions
of such substances.
``(B) Multilateral fund.--If the United States
becomes a party or otherwise adheres to a multilateral
agreement, including any amendment to the Montreal
Protocol on Substances That Deplete the Ozone Layer,
which restricts the production and consumption of class
II, group II substances, the Administrator may utilize
funds to meet any related contribution obligation of
the United States to the Multilateral Fund for the
Implementation of the Montreal Protocol or similar
multilateral fund established under such multilateral
agreement.
``(C) Best-in-class appliances deployment program.--
The Secretary of Energy is authorized to utilize funds
to carry out the purposes of section 214 of the
American Clean Energy and Security Act of 2009.
``(D) Low global warming product transition
assistance program.--
``(i) In general.--The Administrator, in
consultation with the Secretary of Energy, may
utilize funds in fiscal years 2012 through 2022
to establish a program to provide financial
assistance to manufacturers of products
containing class II, group II substances to
facilitate the transition to products that
contain or utilize alternative substances with
no or low carbon dioxide equivalent value and
no ozone depletion potential.
``(ii) Definition.--In this subparagraph, the
term `products' means refrigerators, freezers,
dehumidifiers, air conditioners, foam
insulation, technical aerosols, fire protection
systems, and semiconductors.
``(iii) Financial assistance.--The
Administrator may provide financial assistance
to manufacturers pursuant to clause (i) for--
``(I) the design and configuration of
new products that use alternative
substances with no or low carbon
dioxide equivalent value and no ozone
depletion potential; and
``(II) the redesign and retooling of
facilities for the manufacture of
products in the United States that use
alternative substances with no or low
carbon dioxide equivalent value and no
ozone depletion potential.
``(iv) Reports.--For any fiscal year during
which the Administrator provides financial
assistance pursuant to this subparagraph, the
Administrator shall submit a report to the
Congress within 3 months of the end of such
fiscal year detailing the amounts, recipients,
specific purposes, and results of the financial
assistance provided.''.
(b) Table of Contents.--The table of contents of title VI of the
Clean Air Act (42 U.S.C. 7671 et seq.) is amended by adding the
following new item at the end thereof:
``Sec. 619. Hydrofluorocarbons (HFCs).''.
(c) Fire Suppression Agents.--Section 605(a) of the Clean Air Act (42
U.S.C. 7671(a)) is amended--
(1) by striking ``or'' at the end of paragraph (2);
(2) by striking the period at the end of paragraph (3) and
inserting ``; or''; and
(3) by adding the following new paragraph after paragraph
(3):
``(4) is listed as acceptable for use as a fire suppression
agent for nonresidential applications in accordance with
section 612(c).''.
(d) Motor Vehicle Air Conditioners.--
(1) Section 609(e) of the Clean Air Act (42 U.S.C. 7671h(e))
is amended by inserting ``, group I'' after each reference to
``class II'' in the text and heading.
(2) Section 609 of the Clean Air Act (42 U.S.C. 7671h) is
amended by adding the following new subsection after subsection
(e):
``(f) Class II, Group II Substances.--
``(1) Repair.--The Administrator may promulgate regulations
establishing requirements for repair of motor vehicle air
conditioners prior to adding a class II, group II substance.
``(2) Small containers.--(A) The Administrator may promulgate
regulations establishing servicing practices and procedures for
recovery of class II, group II substances from containers which
contain less than 20 pounds of such class II, group II
substances.
``(B) Not later than 18 months after enactment of this
subsection, the Administrator shall either promulgate
regulations requiring that containers which contain less than
20 pounds of a class II, group II substance be equipped with a
device or technology that limits refrigerant emissions and
leaks from the container and limits refrigerant emissions and
leaks during the transfer of refrigerant from the container to
the motor vehicle air conditioner or issue a determination that
such requirements are not necessary or appropriate.
``(C) Not later than 18 months after enactment of this
subsection, the Administrator shall promulgate regulations
establishing requirements for consumer education materials on
best practices associated with the use of containers which
contain less than 20 pounds of a class II, group II substance
and prohibiting the sale or distribution, or offer for sale or
distribution, of any class II, group II substance in any
container which contains less than 20 pounds of such class II,
group II substance, unless consumer education materials
consistent with such requirements are displayed and available
at point-of-sale locations, provided to the consumer, or
included in or on the packaging of the container which contain
less than 20 pounds of a class II, group II substance.
``(D) The Administrator may, through rulemaking, extend the
requirements established under this paragraph to containers
which contain 30 pounds or less of a class II, group II
substance if the Administrator determines that such action
would produce significant environmental benefits.
``(3) Restriction of sales.--Effective January 1, 2014, no
person may sell or distribute or offer to sell or distribute or
otherwise introduce into interstate commerce any motor vehicle
air conditioner refrigerant in any size container unless the
substance has been found acceptable for use in a motor vehicle
air conditioner under section 612.''.
(e) Safe Alternatives Policy.--Section 612(e) of the Clean Air Act
(42 U.S.C. 7671k(e)) is amended by inserting ``or class II'' after each
reference to ``class I''.
SEC. 333. BLACK CARBON.
(a) Definition.--As used in this section, the term ``black carbon''
means primary light absorbing aerosols, as defined by the
Administrator, based on the best available science.
(b) Black Carbon Abatement Report.--Not later than one year after the
date of enactment of this section, the Administrator shall, in
consultation with other appropriate Federal agencies, submit to
Congress a report regarding black carbon emissions. The report shall
include the following:
(1) A summary of the current information and research that
identifies--
(A) an inventory of the major sources of black carbon
emissions in the United States and throughout the
world, including--
(i) an estimate of the quantity of current
and projected future emissions; and
(ii) the net climate forcing of the emissions
from such sources, including consideration of
co-emissions of other pollutants;
(B) effective and cost-effective control
technologies, operations, and strategies for additional
domestic and international black carbon emissions
reductions, such as diesel retrofit technologies on
existing on-road, non-road, and stationary engines and
programs to address residential cookstoves, and forest
and agriculture-based burning;
(C) potential metrics and approaches for quantifying
the climatic effects of black carbon emissions,
including its radiative forcing and warming effects,
that may be used to compare the climate benefits of
different mitigation strategies, including an
assessment of the uncertainty in such metrics and
approaches; and
(D) the public health and environmental benefits
associated with additional controls for black carbon
emissions.
(2) Recommendations regarding--
(A) development of additional emissions monitoring
techniques and capabilities, modeling, and other black
carbon-related areas of study;
(B) areas of focus for additional study of
technologies, operations, and strategies with the
greatest potential to reduce emissions of black carbon
and associated public health, economic, and
environmental impacts associated with these emissions;
and
(C) actions, in addition to those identified by the
Administrator under section 851 of the Clean Air Act
(as added by subsection (c)), the Federal Government
may take to encourage or require reductions in black
carbon emissions.
(c) Black Carbon Mitigation.--Title VIII of the Clean Air Act, as
added by section 331 of this Act, and amended by section 222 of this
Act, is further amended by adding after part D the following new part:
``PART E--BLACK CARBON
``SEC. 851. BLACK CARBON.
``(a) Domestic Black Carbon Mitigation.--Not later than 18 months
after the date of enactment of this section, the Administrator, taking
into consideration the public health and environmental impacts of black
carbon emissions, including the effects on global and regional warming,
the Arctic, and other snow and ice-covered surfaces, shall propose
regulations under the existing authorities of this Act to reduce
emissions of black carbon or propose a finding that existing
regulations promulgated pursuant to this Act adequately regulate black
carbon emissions. Not later than two years after the date of enactment
of this section, the Administrator shall promulgate final regulations
under the existing authorities of this Act or finalize the proposed
finding.
``(b) International Black Carbon Mitigation.--
``(1) Report.--Not later than one year after the date of
enactment of this section, the Administrator, in coordination
with the Secretary of State and other appropriate Federal
agencies, shall transmit a report to Congress on the amount,
type, and direction of all present United States financial,
technical, and related assistance to foreign countries to
reduce, mitigate, and otherwise abate black carbon emissions.
``(2) Other opportunities.--The report required under
paragraph (1) shall also identify opportunities and
recommendations, including action under existing authorities,
to achieve significant black carbon emission reductions in
foreign countries through technical assistance or other
approaches to--
``(A) promote sustainable solutions to bring clean,
efficient, safe, and affordable stoves, fuels, or both
stoves and fuels to residents of developing countries
that are reliant on solid fuels such as wood, dung,
charcoal, coal, or crop residues for home cooking and
heating, so as to help reduce the public health,
environmental, and economic impacts of black carbon
emissions from these sources by--
``(i) identifying key regions for large-scale
demonstration efforts, and key partners in each
such region; and
``(ii) developing for each such region a
large-scale implementation strategy with a goal
of collectively reaching 20,000,000 homes over
5 years with interventions that will--
``(I) increase stove efficiency by
over 50 percent (or such other goal as
determined by the Administrator);
``(II) reduce emissions of black
carbon by over 60 percent (or such
other goal as determined by the
Administrator); and
``(III) reduce the incidence of
severe pneumonia in children under 5
years old by over 30 percent (or such
other goal as determined by the
Administrator);
``(B) make technological improvements to diesel
engines and provide greater access to fuels that emit
less or no black carbon;
``(C) reduce unnecessary agricultural or other
biomass burning where feasible alternatives exist;
``(D) reduce unnecessary fossil fuel burning that
produces black carbon where feasible alternatives
exist;
``(E) reduce other sources of black carbon emissions;
and
``(F) improve capacity to achieve greater compliance
with existing laws to address black carbon
emissions.''.
(d) Authorization of Appropriations.--There are authorized to be
appropriated such sums as are necessary to carry out this section.
SEC. 334. STATES.
Section 116 of the Clean Air Act (42 U.S.C. 7416) is amended by
adding the following at the end thereof: ``For the purposes of this
section, the phrases `standard or limitation respecting emissions of
air pollutants' and `requirements respecting control or abatement of
air pollution' shall include any provision to: cap greenhouse gas
emissions, require surrender to the State or a political subdivision
thereof of emission allowances or offset credits established or issued
under this Act, and require the use of such allowances or credits as a
means of demonstrating compliance with requirements established by a
State or political subdivision thereof.''.
SEC. 335. STATE PROGRAMS.
Title VIII of the Clean Air Act, as added by section 331 of this Act
and amended by several sections of this Act, is further amended by
adding after part E (as added by section 333(c) of this Act) the
following new part:
``PART F--MISCELLANEOUS
``SEC. 861. STATE PROGRAMS.
``Notwithstanding section 116, no State or political subdivision
thereof shall implement or enforce a cap and trade program that covers
any capped emissions emitted during the years 2012 through 2017. For
purposes of this section, the term `cap and trade program' means a
system of greenhouse gas regulation under which a State or political
subdivision issues a limited number of tradable instruments in the
nature of emission allowances and requires that sources within its
jurisdiction surrender such tradeable instruments for each unit of
greenhouse gases emitted during a compliance period. For purposes of
this section, a `cap-and-trade program' does not include a target or
limit on greenhouse gas emissions adopted by a State or political
subdivision that is implemented other than through the issuance and
surrender of a limited number of tradable instruments in the nature of
emission allowances, nor does it include any other standard, limit,
regulation, or program to reduce greenhouse gas emissions that is not
implemented through the issuance and surrender of a limited number of
tradeable instruments in the nature of emission allowances. For
purposes of this section, the term `cap and trade program' does not
include, among other things, fleet-wide motor vehicle emission
requirements that allow greater emissions with increased vehicle
production, or requirements that fuels, or other products, meet an
average pollution emission rate or lifecycle greenhouse gas standard.
``SEC. 862. GRANTS FOR SUPPORT OF AIR POLLUTION CONTROL PROGRAMS.
``The Administrator is authorized to make grants to air pollution
control agencies pursuant to section 105 for purposes of assisting in
the implementation of programs to address global warming established
under the Safe Climate Act.''.
SEC. 336. ENFORCEMENT.
(a) Remand.--Section 307(b) of the Clean Air Act (42 U.S.C. 7607(b))
is amended by adding the following new paragraph at the end thereof:
``(3) If the court determines that any action of the
Administrator is arbitrary, capricious, or otherwise unlawful,
the court may remand such action, without vacatur, if vacatur
would impair or delay protection of the environment or public
health or otherwise undermine the timely achievement of the
purposes of this Act.''.
(b) Petition for Reconsideration.--Section 307(d)(7)(B) of the Clean
Air Act (42 U.S.C. 7607(d)(7)(B)) is amended as follows:
(1) By inserting after the second sentence ``If a petition
for reconsideration is filed, the Administrator shall take
final action on such petition, including promulgation of final
action either revising or determining not to revise the action
for which reconsideration is sought, within 150 days after the
petition is received by the Administrator or the petition shall
be deemed denied for the purpose of judicial review.''.
(2) By amending the third sentence to read as follows: ``Such
person may seek judicial review of such denial, or of any other
final action, by the Administrator, in response to a petition
for reconsideration, in the United States court of appeals for
the appropriate circuit (as provided in subsection (b)).''.
SEC. 337. CONFORMING AMENDMENTS.
(a) Federal Enforcement.--Section 113 of the Clean Air Act (42 U.S.C.
7413) is amended as follows:
(1) In subsection (a)(3), by striking ``or title VI,'' and
inserting ``title VI, title VII, or title VIII''.
(2) In subsection (b), by striking ``or a major stationary
source'' and inserting ``a major stationary source, or a
covered EGU under title VIII'' in the material preceding
paragraph (1).
(3) In paragraph (2) of subsection (b), by striking ``or
title VI'' and inserting ``title VI, title VII, or title
VIII''.
(4) In subsection (c)--
(A) in the first sentence of paragraph (1), by
striking ``or title VI (relating to stratospheric ozone
control),'' and inserting ``title VI, title VII, or
title VIII,''; and
(B) in the first sentence of paragraph (3), by
striking ``or VI'' and inserting ``VI, VII, or VIII''.
(5) In subsection (d)(1)(B), by striking ``or VI'' and
inserting ``VI, VII, or VIII''.
(6) In subsection (f), in the first sentence, by striking
``or VI'' and inserting ``VI, VII, or VIII''.
(b) Retention of State Authority.--Section 116 of the Clean Air Act
(42 U.S.C. 7416) is amended as follows:
(1) By striking ``and 233'' and inserting ``233''.
(2) By striking ``of moving sources)'' and inserting ``of
moving sources), and 861 (preempting certain State greenhouse
gas programs for a limited time)''.
(c) Inspections, Monitoring, and Entry.--Section 114(a) of the Clean
Air Act (42 U.S.C. 7414(a)) is amended by striking ``section 112,'' and
all that follows through ``(ii)'' and inserting the following:
``section 112, or any regulation of greenhouse gas emissions under
title VII or VIII, (ii)''.
(d) Enforcement.--Subsection (f) of section 304 of the Clean Air Act
(42 U.S.C. 7604(f)) is amended as follows:
(1) By striking ``; or'' at the end of paragraph (3) thereof
and inserting a comma.
(2) By striking the period at the end of paragraph (4)
thereof and inserting ``, or''.
(3) By adding the following after paragraph (4) thereof:
``(5) any requirement of title VII or VIII.''.
(e) Administrative Proceedings and Judicial Review.--Section 307 of
the Clean Air Act (42 U.S.C. 7607) is amended as follows:
(1) In subsection (a), by striking ``, or section 306'' and
inserting ``section 306, or title VII or VIII''.
(2) In subsection (b)(1)--
(A) by striking ``,,'' and inserting ``,'' in each
place such punctuation appears; and
(B) by striking ``section 120,'' in the first
sentence and inserting ``section 120, any final action
under title VII or VIII,''.
(3) In subsection (d)(1) by amending subparagraph (S) to read
as follows:
``(S) the promulgation or revision of any regulation
under title VII or VIII,''.
SEC. 338. DAVIS-BACON COMPLIANCE.
(a) In General.--Notwithstanding any other provision of law and in a
manner consistent with other provisions in this Act, to receive
emission allowances or funding under this Act the recipient shall
provide reasonable assurances that all laborers and mechanics employed
by contractors and subcontractors on projects funded directly by or
assisted in whole or in part by and through the Federal Government
pursuant to this Act, or by any entity established in accordance with
this Act, including the Carbon Storage Research Corporation, will be
paid wages at rates not less than those prevailing on projects of a
character similar in the locality as determined by the Secretary of
Labor in accordance with subchapter IV of chapter 31 of title 40,
United States Code (commonly known as the ``Davis-Bacon Act''). With
respect to the labor standards specified in this section, the Secretary
of Labor shall have the authority and functions set forth in
Reorganization Plan Numbered 14 of 1950 (64 Stat. 1267; 5 U.S.C. App.)
and section 3145 of title 40, United States Code.
(b) Exemption.--Neither subsection (a) nor the requirements of
subchapter IV of chapter 31 of title 40, United States Code, shall
apply to retrofitting of any residential building (as defined in
section 202(a)(5)), or to retrofitting of a nonresidential building (as
defined in section 202(a)(1)) if the net interior space of such
nonresidential building is less than 6,500 square feet, or if such
nonresidential building is designed for residential use for less than 4
families.
Subtitle D--Carbon Market Assurance
SEC. 341. CARBON MARKET ASSURANCE.
The Federal Power Act (16 U.S.C. 791a and following) is amended by
adding at the end the following:
``PART IV--CARBON MARKET ASSURANCE
``SEC. 401. OVERSIGHT AND ASSURANCE OF CARBON MARKETS.
``(a) Definitions.--In this section:
``(1) Contract of sale.--The term `contract of sale' includes
sales, agreements of sale, and agreements to sell.
``(2) Covered entity.--The term `covered entity' shall have
the meaning given in section 700 of the Clean Air Act.
``(3) Future delivery.--The term `future delivery' does not
include any sale of any cash commodity for deferred shipment or
delivery.
``(4) Offset creation contract.--The term `offset creation
contract' mean a written agreement for the origination and
development of an offset project, and the related issuance of
offset credits, pursuant to title VII of the Clean Air Act.
``(5) Regulated allowance.--The term `regulated allowance'
means any emission allowance, compensatory allowance, offset
credit, or Federal renewable electricity credit established or
issued under the American Clean Energy and Security Act of
2009.
``(6) Regulated allowance derivative.--The term `regulated
allowance derivative' means an instrument that is, or includes,
an instrument--
``(A) which--
``(i) is of the character of, or is commonly
known to the trade as, a `put option', `call
option', `privilege', `indemnity', `advance
guaranty', `decline guaranty', or `swap
agreement'; or
``(ii) is a contract of sale for future
delivery other than an offset creation
contract; and
``(B) the value of which, in whole or in part, is
expressly linked to the price of a regulated allowance
or another regulated allowance derivative.
``(7) Regulated instrument.--The term `regulated instrument'
means a regulated allowance or a regulated allowance
derivative.
``(b) Regulated Allowance Market.--
``(1) Authority.--The Commission shall promulgate regulations
for the establishment, operation, and oversight of markets for
regulated allowances not later than 18 months after the date of
the enactment of this section, and from time to time thereafter
as may be appropriate.
``(2) Regulations.--The regulations promulgated pursuant to
paragraph (1) shall--
``(A) provide for effective and comprehensive market
oversight;
``(B) prohibit fraud, market manipulation (including
an entity's fraudulent or manipulative conduct with
respect to regulated allowance derivatives that
benefits the entity in regulated allowance markets),
and excess speculation, and provide measures to limit
unreasonable fluctuation in the prices of regulated
allowances;
``(C) facilitate compliance with title VII of the
Clean Air Act by covered entities;
``(D) ensure market transparency and recordkeeping
deemed necessary and appropriate by the Commission to
provide for efficient price discovery; prevention of
fraud, market manipulation, and excess speculation; and
compliance with title VII of the Clean Air Act and
section 610 of the Public Utility Regulatory Policies
Act of 1978;
``(E) as necessary, ensure that position limitations
for individual market participants are established with
respect to each class of regulated allowances;
``(F) as necessary, ensure that margin requirements
are established for each class of regulated allowances;
``(G) provide for the formation and operation of a
fair, orderly and liquid national market system that
allows for the best execution in the trading of
regulated allowances;
``(H) limit or eliminate counterparty risks, market
power concentration risks, and other risks associated
with over-the-counter trading; and
``(I) establish standards for qualification as, and
operation of, trading facilities for regulated
allowances;
``(J) establish standards for qualification as, and
operation of, clearing organizations for trading
facilities for regulated allowances; and
``(K) include such other requirements as necessary to
preserve market integrity and facilitate compliance
with title VII of the Clean Air Act and section 610 of
the Public Utility Regulatory Policies Act of 1978 and
the regulations promulgated under such title and such
section.
``(3) Enforcement.--
``(A) In general.--If the Commission determines,
after notice and an opportunity for a hearing on the
record, that any entity has violated any rule or order
issued by the Commission under this subsection, the
Commission may issue an order--
``(i) prohibiting the entity from trading on
a trading facility for regulated allowances
registered with the Commission, and requiring
all such facilities to refuse the entity all
privileges for such period as may be specified
in the order;
``(ii) if the entity is registered with the
Commission in any capacity, suspending for a
period of not more than 6 months, or revoking,
the registration of the entity;
``(iii) assessing the entity a civil penalty
of not more than $1,000,000 per day per
violation for as long as the violation
continues (and in determining the amount of a
civil penalty, the Commission shall take into
account the nature and seriousness of the
violation and the efforts to remedy the
violation); and
``(iv) requiring disgorgement of unjust
profits, restitution to entities harmed by the
violation as determined by the Commission, or
both.
``(B) Authority to suspend or revoke registration.--
The Commission may suspend for a period of not more
than 6 months, or revoke, the registration of a trading
facility for regulated allowances or of a clearing
organization registered by the Commission if, after
notice and opportunity for a hearing on the record, the
Commission finds that--
``(i) the entity violated any rule or order
issued by the Commission under this subsection;
or
``(ii) a director, officer, employee, or
agent of the entity has violated any rule or
order issued by the Commission under this
subsection.
``(C) Cease and desist proceedings.--
``(i) In general.--If the Commission
determines that any entity may be violating,
may have violated, or may be about to violate
any provision of this part, or any regulation
promulgated by, or any restriction, condition,
or order made or imposed by, the Commission
under this Act, and if the Commission finds
that the alleged violation or threatened
violation, or the continuation of the
violation, is likely to result in significant
harm to covered entities or market
participants, or significant harm to the public
interest, the Commission may issue a temporary
order requiring the entity--
``(I) to cease and desist from the
violation or threatened violation;
``(II) to take such action as is
necessary to prevent the violation or
threatened violation; and
``(III) to prevent, as the Commission
determines to be appropriate--
``(aa) significant harm to
covered entities or market
participants;
``(bb) significant harm to
the public interest; and
``(cc) frustration of the
ability of the Commission to
conduct the proceedings or to
redress the violation at the
conclusion of the proceedings.
``(ii) Timing of entry.--An order issued
under clause (i) shall be entered only after
notice and opportunity for a hearing, unless
the Commission determines that notice and
hearing before entry would be impracticable or
contrary to the public interest.
``(iii) Effective date.--A temporary order
issued under clause (i) shall--
``(I) become effective upon service
upon the entity; and
``(II) unless set aside, limited, or
suspended by the Commission or a court
of competent jurisdiction, remain
effective and enforceable pending the
completion of the proceedings.
``(D) Proceedings regarding dissipation or conversion
of assets.--
``(i) In general.--In a proceeding involving
an alleged violation of a regulation or order
promulgated or issued by the Commission, if the
Commission determines that the alleged
violation or related circumstances are likely
to result in significant dissipation or
conversion of assets, the Commission may issue
a temporary order requiring the respondent to
take such action as is necessary to prevent the
dissipation or conversion of assets.
``(ii) Timing of entry.--An order issued
under clause (i) shall be entered only after
notice and opportunity for a hearing, unless
the Commission determines that notice and
hearing before entry would be impracticable or
contrary to the public interest.
``(iii) Effective date.--A temporary order
issued under clause (i) shall--
``(I) become effective upon service
upon the respondent; and
``(II) unless set aside, limited, or
suspended by the Commission or a court
of competent jurisdiction, remain
effective and enforceable pending the
completion of the proceedings.
``(E) Review of temporary orders.--
``(i) Application for review.--At any time
after a respondent has been served with a
temporary cease-and-desist order pursuant to
subparagraph (C) or order regarding the
dissipation or conversion of assets pursuant to
subparagraph (D), the respondent may apply to
the Commission to have the order set aside,
limited, or suspended.
``(ii) No prior hearing.--If a respondent has
been served with a temporary order entered
without a prior hearing of the Commission--
``(I) the respondent may, not later
than 10 days after the date on which
the order was served, request a hearing
on the application; and
``(II) the Commission shall hold a
hearing and render a decision on the
application at the earliest practicable
time.
``(iii) Judicial review.--
``(I) In general.--An entity shall
not be required to submit a request for
rehearing of a temporary order before
seeking judicial review in accordance
with this subparagraph.
``(II) Timing of review.--Not later
than 10 days after the date on which a
respondent is served with a temporary
cease-and-desist order entered with a
prior hearing of the Commission, or 10
days after the date on which the
Commission renders a decision on an
application and hearing under clause
(i) with respect to any temporary order
entered without such a prior hearing--
``(aa) the respondent may
obtain a review of the order in
a United States circuit court
having jurisdiction over the
circuit in which the respondent
resides or has a principal
place of business, or in the
United States Court of Appeals
for the District of Columbia
Circuit, for an order setting
aside, limiting, or suspending
the effectiveness or
enforcement of the order; and
``(bb) the court shall have
jurisdiction to enter such an
order.
``(III) No prior hearing.--A
respondent served with a temporary
order entered without a prior hearing
of the Commission may not apply to the
applicable court described in subclause
(II) except after a hearing and
decision by the Commission on the
application of the respondent under
clauses (i) and (ii).
``(iv) Procedures.--Section 222 and Part III
shall apply to--
``(I) an application for review of an
order under clause (i); and
``(II) an order subject to review
under clause (iii).
``(v) No automatic stay of temporary order.--
The commencement of proceedings under clause
(iii) shall not, unless specifically ordered by
the court, operate as a stay of the order of
the Commission.
``(F) Actions to collect civil penalties.--If any
person fails to pay a civil penalty assessed under this
subsection after an order assessing the penalty has
become final and unappealable, the Commission shall
bring an action to recover the amount of the penalty in
any appropriate United States district court. In any
such action, the validity or appropriateness of the
final assessment order or judgment shall not be subject
to review.
``(4) Transaction fees.--
``(A) In general.--The Commission shall, in
accordance with this paragraph, establish and collect
transaction fees designed to recover the costs to the
Federal Government of the supervision and regulation of
regulated allowance markets and market participants,
including related costs for enforcement activities,
policy and rulemaking activities, administration, legal
services, and international regulatory activities.
``(B) Initial fee rate.--Each trading facility on or
through which regulated allowances are transacted shall
pay to the Commission a fee at a rate of not more than
$15 per $1,000,000 of the aggregate dollar amount of
sales of regulated allowances transacted through the
facility.
``(C) Annual adjustment of fee rate.--The Commission
shall, on an annual basis--
``(i) assess the rate at which fees are to be
collected as necessary to meet the cost
recovery requirement in subparagraph (A); and
``(ii) consistent with subparagraph (B),
adjust the rate as necessary in order to meet
the requirement.
``(D) Report on adequacy of fees in recovering
costs.--The Commission, shall, on an annual basis,
report to the Committee on Energy and Commerce of the
House of Representatives and the Committee on Energy
and Natural Resources of the Senate on the adequacy of
the transaction fees in providing funding for the
Commission to regulate the regulated allowance markets.
``(5) Judicial review.--Judicial review of actions taken by
the Commission under this subsection shall be pursuant to part
III.
``(6) Information-sharing.--Within 6 months after a Federal
agency with jurisdiction over regulated allowance derivatives
is delegated authority pursuant to subsection (c)(1), the
agency shall enter into a memorandum of understanding with the
Commission relating to information sharing, which shall include
provisions ensuring that information requests to markets within
the respective jurisdiction of the agency are properly
coordinated to facilitate, among other things, effective
information-sharing while minimizing duplicative information
requests, and provisions regarding the treatment of proprietary
information.
``(7) Additional employees report and appointment.--Within 18
months after the date of the enactment of this section, the
Commission shall submit to the President, the Committee on
Energy and Commerce of the House of Representatives, and the
Committee on Energy and Natural Resources of the Senate, a
report that contains recommendations as to how many additional
employees would be necessary to provide robust oversight and
enforcement of the regulations promulgated under this
subsection. As soon as practicable after the completion of the
report, subject to appropriations, the Commission shall appoint
the recommended number of additional employees for such
purposes.
``(c) Delegation of Authority by the President.--
``(1) Delegation.--The President, taking into consideration
the recommendations of the interagency working group
established in subsection (d), shall delegate to members of the
working group and the heads of other appropriate Federal
agencies the authority to promulgate regulations for the
establishment, operation, and oversight of all markets for
regulated allowance derivatives.
``(2) Regulations.--The regulations promulgated pursuant to
paragraph (1) shall--
``(A) provide for effective and comprehensive market
oversight;
``(B) prohibit fraud, market manipulation, and excess
speculation, and provide measures to limit unreasonable
fluctuation in the prices of regulated allowance
derivatives;
``(C) facilitate compliance with title VII of the
Clean Air Act by covered entities;
``(D) ensure market transparency and recordkeeping
necessary to provide for efficient price discovery;
prevention of fraud, market manipulation, and excess
speculation; and compliance with title VII of the Clean
Air Act and section 610 of the Public Utility
Regulatory Policies Act of 1978;
``(E) ensure that position limitations for individual
market participants are established with respect to
each regulated allowance derivative and aggregate
position limitations for individual market participants
are established with respect to all regulated allowance
derivative markets;
``(F) ensure that margin requirements are established
for each regulated allowance derivative;
``(G) provide for the formation and operation of a
market system that allows for best execution in the
trading of regulated allowance derivatives;
``(H) to the extent the regulations deviate from the
rule set forth in paragraph (4)(B), limit or eliminate
counterparty risks, market power concentration risks,
and other risks associated with over-the-counter
trading, and promulgate reporting and market
transparency rules for large traders;
``(I) ensure that market participants do not evade
position limits or otherwise undermine the integrity
and effectiveness of the regulations promulgated under
subparagraph (C) through participation in markets not
subject to the position limits and regulations;
``(J) establish standards, as necessary, for
qualification as, and operation of, trading facilities
for regulated allowance derivatives;
``(K) establish standards, as necessary, for
qualification as, and operation of, clearing
organizations for trading facilities for regulated
allowance derivatives;
``(L) provide boards of trade designated as contract
markets under the Commodity Exchange Act, and market
participants, with an adequate transition period for
compliance with any new regulatory requirements
established under this paragraph;
``(M) determine whether and to what extent offset
creation contracts, to the extent incorporating
regulated allowance derivatives, should be governed by
the same regulations that apply to other regulated
allowance derivatives; and
``(N) include such other requirements as necessary to
preserve market integrity and facilitate compliance
with title VII of the Clean Air Act and section 610 of
the Public Utility Regulatory Policies Act of 1978 and
the regulations promulgated under such title and such
section.
``(3) Deadline.--The agencies authorized to promulgate
regulations for the establishment, operation, and oversight of
markets for regulated allowance derivatives pursuant to
paragraph (1) shall promulgate such regulations not later than
18 months after the date of the enactment of this section, and
from time to time thereafter as may be appropriate.
``(4) Default rules.--
``(A) An individual market participant, directly or
in concert with another participant, shall not control
more than 10 percent of the open interest in any
regulated allowance derivative.
``(B) All contracts for the purchase or sale of any
regulated allowance derivative shall be executed on or
through a board of trade designated as a contract
market under the Commodity Exchange Act.
``(C) To the extent that regulations promulgated
under this subsection provide different rules with
respect to the matters described in subparagraph (A) or
(B), the regulations shall supersede subparagraph (A)
or (B), as the case may be.
``(d) Working Group.--
``(1) Establishment.--Not later than 30 days after the date
of the enactment of this section, the President shall establish
an interagency working group on carbon market oversight, which
shall include the Administrator of the Environmental Protection
Agency and representatives of other relevant agencies, to make
recommendations to the President regarding proposed regulations
for the establishment, operation, and oversight of markets for
regulated allowance derivatives.
``(2) Report.--Not later than 180 days after the date of the
enactment of this section, and biennially thereafter, the
interagency working group shall submit a written report to the
President and Congress that includes its recommendations to the
President regarding proposed regulations for the establishment,
operation, and oversight of markets for regulated allowance
derivatives and any recommendations to Congress for statutory
changes needed to ensure the establishment, operation, and
oversight of transparent, fair, stable, and efficient markets
for regulated allowance derivatives.
``(e) Enforcement of Regulations.--Each Federal agency that
promulgates under subsection (c) a regulation of conduct with respect
to a regulated allowance derivative shall have the same authority to
enforce compliance with the regulation as the Commodity Futures Trading
Commission has to enforce compliance with any regulation of similar
conduct with respect to a contract, agreement, or transaction over
which the Commodity Futures Trading Commission has jurisdiction, except
that any enforcement by the Federal Energy Regulatory Commission shall
be pursuant to section 222 and Part III.
``(f) Prohibition on Price or Market Manipulation, Fraud, and False
or Misleading Statements or Reports.--(1) It shall be a felony
punishable by a fine of not more than $25,000,000 (or $5,000,000 in the
case of a person who is an individual) or imprisonment for not more
than 20 years, or both, together with the costs of prosecution for any
person, directly or indirectly--
``(A) in connection with a transaction involving a regulated
instrument, to knowingly--
``(i) use any manipulative or deceptive device or
contrivance in violation of regulations promulgated
pursuant to this section;
``(ii) corner or attempt to corner the regulated
instrument; or
``(iii) cheat or defraud, or attempt to cheat or
defraud, any other person;
``(B) to knowingly deliver or cause to be delivered a false,
misleading, or inaccurate report concerning information or
conditions that affect or tend to affect the price of a
regulated instrument;
``(C) to knowingly make, or cause to be made, in an
application, report, or document required to be filed under any
regulation promulgated pursuant to this section, a statement
which is false or misleading with respect to a material fact,
or to omit any material fact required to be stated therein or
necessary to make the statements therein not misleading; or
``(D) to knowingly falsify, conceal, or cover up by any
trick, scheme, or artifice a material fact, make any false,
fictitious, or fraudulent statements or representations, or
make or use any false writing or document that contains a
false, fictitious, or fraudulent statement or entry, to an
entity on or through which transactions in regulated
instruments occur, or are settled or cleared, acting in
furtherance of its official duties under this section or
regulations promulgated under this section.
``(2) If a person is found guilty of a felony established in
paragraph (1), the person may be prohibited from holding or trading
regulated instruments for a period of not more than 5 years pursuant to
the regulations promulgated under this section, except that, if the
person is a covered entity, the person shall be allowed to hold
sufficient regulated allowances to meet its compliance obligations.
``(g) Relation to State Law.--Nothing in this section shall preclude,
diminish or qualify any authority of a State or political subdivision
thereof to adopt or enforce any unfair competition, antitrust, consumer
protection, securities, commodities or any other law or regulation,
except that no such State law or regulation may relieve any person of
any requirement otherwise applicable under this section.
``(h) Market Reports.--
``(1) Collection and analysis of information.--The
Commission, in conjunction with the Federal agency with
jurisdiction over regulated allowance derivatives pursuant to
subsection (c)(1), shall, on a continuous basis, collect and
analyze the following information on the functioning of the
markets for regulated instruments established under this part:
``(A) The status of, and trends in, the markets,
including prices, trading volumes, transaction types,
and trading channels and mechanisms.
``(B) Spikes, collapses, and volatility in prices of
regulated instruments, and the causes therefor.
``(C) The relationship between the market for
regulated allowances and allowance derivatives, and the
spot and futures markets for energy commodities,
including electricity.
``(D) Evidence of fraud or manipulation in any such
market, the effects on any such market of any such
fraud or manipulation (or threat of fraud or
manipulation) that the Commission, in conjunction with
the Federal agency, has identified, and the
effectiveness of corrective measures undertaken by the
Commission, in conjunction with the Federal agency, to
address the fraud, manipulation, or threat.
``(E) The economic effects of the markets, including
to macro- and micro-economic effects of unexpected
significant increases and decreases in the price of
regulated instruments.
``(F) Any changes in the roles, activities, or
strategies of various market participants.
``(G) Regional, industrial, and consumer responses to
the markets, and energy investment responses to the
markets.
``(H) Any other issue related to the markets that the
Commission, in conjunction with the entities, deems
appropriate.
``(2) Annual reports to the congress.-- Not later than 1
month after the end of each calendar year, the Commission, in
conjunction with the Federal agency, shall submit to the
President, the Committee on Energy and Commerce of the House of
Representatives, and the Committee on Energy and Natural
Resources of the Senate, and make available to the public, a
report on the matters described in paragraph (1) with respect
to the year, including recommendations for any administrative
or statutory measures the Commission, in conjunction with the
Federal agency, considers necessary to address any threats to
the transparency, fairness, or integrity of the markets in
regulated instruments.
``SEC. 402. APPLICABILITY OF PART III PROVISIONS.
``(a) Sections 301, 304, and 306.--Sections 301, 304, and 306 shall
not apply to this part.
``(b) Sections 307, 309, and 314.--Sections 307, 309, and 314 shall
only apply to section 401(c) to the extent that the Commission is
delegated authority to promulgate regulations for the establishment,
operation, and oversight of markets for regulated allowance derivatives
(as defined in section 401). If the Commission is not delegated
authority to promulgate regulations for the establishment, operation,
and oversight of markets for regulated allowance derivatives, sections
307, 309, and 314 shall not apply to section 401(f) in the case of
regulated allowance derivatives.
``(c) Section 315.--In applying section 315(a) to this part, the
words ``person or entity'' shall be substituted for the words
``licensee or public utility''. In applying section 315(b) to this
part, the words ``an entity'' shall be substituted for the words ``a
licensee or public utility'' and the words ``such entity'' shall be
substituted for the words ``such licensee or public utility.''
``(d) Section 316.--Section 316(a) shall not apply to section
401(f).''.
Subtitle E--Additional Market Assurance
SEC. 351. REGULATION OF CERTAIN TRANSACTIONS IN DERIVATIVES INVOLVING
ENERGY COMMODITIES.
(a) Energy Commodity Defined.--Section 1a of the Commodity Exchange
Act (7 U.S.C. 1a) is amended--
(1) in paragraph (14), by inserting ``, an energy
commodity,'' after ``excluded commodity'';
(2) by redesignating paragraphs (13) through (21) and
paragraphs (22) through (34) as paragraphs (14) through (22)
and paragraphs (24) through (36), respectively;
(3) by inserting after paragraph (12) the following:
``(13) Energy commodity.--The term `energy commodity' means--
``(A) coal;
``(B) crude oil, gasoline, diesel fuel, jet fuel,
heating oil, and propane;
``(C) electricity (excluding financial transmission
rights which are subject to regulation and oversight by
the Federal Energy Regulatory Commission);
``(D) natural gas; and
``(E) any other substance (other than an excluded
commodity, a metal, or an agricultural commodity) that
is used as a source of energy, as the Commission, in
its discretion, deems appropriate.''; and
(4) by inserting after paragraph (22) (as so redesignated by
paragraph (2) of this subsection) the following:
``(23) Included energy transaction.--The term `included
energy transaction' means a contract, agreement, or transaction
in an energy commodity for future delivery that provides for a
delivery point of the energy commodity in the United States or
a territory or possession of the United States, or that is
offered or transacted on or through a computer terminal located
in the United States.''.
(b) Extension of Regulatory Authority to Swaps Involving Energy
Transactions.--Section 2(g) of such Act (7 U.S.C. 2(g)) is amended by
inserting ``or an energy commodity'' after ``agricultural commodity''.
(c) Elimination of Exemption for Over-the-Counter Swaps Involving
Energy Commodities.--Section 2(h)(1) of such Act (7 U.S.C. 2(h)(1)) is
amended by inserting ``(other than an energy commodity)'' after
``exempt commodity''.
(d) Extension of Regulatory Authority to Included Energy Transactions
on Foreign Boards of Trade.--Section 4 of such Act (7 U.S.C. 6) is
amended--
(1) in subsection (a), by inserting ``, and which is not an
included energy transaction'' after ``territories or
possessions'' the 2nd place it appears; and
(2) in subsection (b), by adding at the end the following:
``The preceding sentence shall not apply with respect to
included energy transactions.''.
(e) Limitation of General Exemptive Authority of the CFTC With
Respect to Included Energy Transactions.--
(1) In general.--Section 4(c) of such Act (7 U.S.C. 6(c)) is
amended by adding at the end the following:
``(6) The Commission may not exempt any included energy transaction
from the requirements of subsection (a), unless the Commission provides
60 days advance notice to the Congress and the Position Limit Energy
Advisory Group and solicits public comment about the exemption request
and any proposed Commission action.''.
(2) Nullification of no-action letter exemptions to certain
requirements applicable to included energy transactions.--
Beginning 180 days after the date of the enactment of this Act,
any exemption provided by the Commodity Futures Trading
Commission that has allowed included energy transactions (as
defined in section 1a(13) of the Commodity Exchange Act) to be
conducted without regard to the requirements of section 4(a) of
such Act shall be null and void.
(f) Requirement to Establish Uniform Speculative Position Limits for
Energy Transactions.--
(1) In general.--Section 4a(a) of such Act (7 U.S.C. 6a(a))
is amended--
(A) by inserting ``(1)'' after ``(a)'';
(B) by inserting after the 2nd sentence the
following: ``With respect to energy transactions, the
Commission shall fix limits on the aggregate number of
positions which may be held by any person for each
month across all markets subject to the jurisdiction of
the Commission.'';
(C) in the 4th sentence by inserting ``, consistent
with the 3rd sentence,'' after ``Commission''; and
(D) by adding after and below the end the following:
``(2)(A) Not later than 60 days after the date of the enactment of
this paragraph, the Commission shall convene a Position Limit Energy
Advisory Group consisting of representatives from--
``(i) 7 predominantly commercial short hedgers of the actual
energy commodity for future delivery;
``(ii) 7 predominantly commercial long hedgers of the actual
energy commodity for future delivery;
``(iii) 4 non-commercial participants in markets for energy
commodities for future delivery; and
``(iv) each designated contract market or derivatives
transaction execution facility upon which a contract in the
energy commodity for future delivery is traded, and each
electronic trading facility that has a significant price
discovery contract in the energy commodity.
``(B) Not later than 60 days after the date on which the advisory
group is convened under subparagraph (A), and annually thereafter, the
advisory group shall submit to the Commission advisory recommendations
regarding the position limits to be established in paragraph (1).
``(C) The Commission shall have exclusive authority to grant
exemptions for bona fide hedging transactions and positions from
position limits imposed under this Act on energy transactions.''.
(2) Conforming amendments.--
(A) Significant price discovery contracts.--Section
2(h)(7) of such Act (7 U.S.C. 2(h)(7)) is amended--
(i) in subparagraph (A)--
(I) by inserting ``of this paragraph
and section 4a(a)'' after ``(B) through
(D)''; and
(II) by inserting ``of this
paragraph'' before the period; and
(ii) in subparagraph (C)(ii)(IV)--
(I) in the heading, by striking
``limitations or''; and
(II) by striking ``position
limitations or''.
(B) Contracts traded on or through designated
contract markets.--Section 5(d)(5) of such Act (7
U.S.C. 7(d)(5)) is amended--
(i) in the heading by striking ``limitations
or''; and
(ii) by striking ``position limitations or''.
(C) Contracts traded on or through derivatives
transaction execution facilities.--Section 5a(d)(4) of
such Act (7 U.S.C. 7a(d)(4)) is amended--
(i) in the heading by striking ``limitations
or''; and
(ii) by striking ``position limits or''.
(g) Elimination of the Swaps Loophole.--Section 4a(c) of such Act (7
U.S.C. 6a(c)) is amended--
(1) by inserting ``(1)'' after ``(c)''; and
(2) by adding after and below the end the following:
``(2) For the purposes of contracts of sale for future delivery and
options on such contracts or commodities, the Commission shall define
what constitutes a bona fide hedging transaction or position as a
transaction or position that--
``(A)(i) represents a substitute for transactions made or to
be made or positions taken or to be taken at a later time in a
physical marketing channel;
``(ii) is economically appropriate to the reduction of risks
in the conduct and management of a commercial enterprise; and
``(iii) arises from the potential change in the value of--
``(I) assets that a person owns, produces,
manufactures, processes, or merchandises or anticipates
owning, producing, manufacturing, processing, or
merchandising;
``(II) liabilities that a person owns or anticipates
incurring; or
``(III) services that a person provides, purchases,
or anticipates providing or purchasing; or
``(B) reduces risks attendant to a position resulting from a
transaction that--
``(i) was executed pursuant to subsection (d), (g),
(h)(1), or (h)(2) of section 2, or an exemption issued
by the Commission by rule, regulation or order; and
``(ii) was executed opposite a counterparty for which
the transaction would qualify as a bona fide hedging
transaction pursuant to paragraph (2)(A) of this
subsection.''.
(h) Detailed Reporting and Disaggregation of Market Data.--Section 4
of such Act (7 U.S.C. 6) is amended by adding at the end the following:
``(e) Detailed Reporting and Disaggregation of Market Data.--
``(1) Index traders and swap dealers reporting.--The
Commission shall issue a proposed rule defining and classifying
index traders and swap dealers (as those terms are defined by
the Commission) for purposes of data reporting requirements and
setting routine detailed reporting requirements for any
positions of such entities in contracts traded on designated
contract markets, over-the-counter markets, derivatives
transaction execution facilities, foreign boards of trade
subject to section 4(f), and electronic trading facilities with
respect to significant price discovery contracts not later than
120 days after the date of the enactment of this subsection,
and issue a final rule within 180 days after such date of
enactment.
``(2) Disaggregation of index funds and other data in
markets.--Subject to section 8 and beginning within 60 days of
the issuance of the final rule required by paragraph (1), the
Commission shall disaggregate and make public weekly--
``(A) the number of positions and total notional
value of index funds and other passive, long-only and
short-only positions (as defined by the Commission) in
all markets to the extent such information is
available; and
``(B) data on speculative positions relative to bona
fide physical hedgers in those markets to the extent
such information is available.
``(3) Disclosure of identity of holders of positions in
indexes in excess of position limits.--The Commission shall
include in its weekly Commitment of Trader reports the identity
of each person who holds a position in an index in excess of a
limit imposed under section 4i.''.
(i) Authority to Set Limits to Prevent Excessive Speculation in
Indexes.--
(1) In general.--Section 4a of such Act (7 U.S.C. 6a) is
amended by adding at the end the following:
``(f) The provisions of this section shall apply to the amounts of
trading which may be done or positions which may be held by any person
under contracts of sale of an index for future delivery on or subject
to the rules of any contract market, derivatives transaction execution
facility, or over-the-counter market, or on an electronic trading
facility with respect to a significant price discovery contract, in the
same manner in which this section applies to contracts of sale of a
commodity for future delivery.''.
(2) Regulations.--The Commodity Futures Trading Commission
shall issue regulations under section 4a(f) of the Commodity
Exchange Act within 180 days after the date of the enactment of
this Act.
SEC. 352. NO EFFECT ON AUTHORITY OF THE FEDERAL ENERGY REGULATORY
COMMISSION.
Section 2 of the Commodity Exchange Act (7 U.S.C. 2) is amended by
adding at the end the following:.
``(j) This Act shall not be interpreted to affect the jurisdiction of
the Federal Energy Regulatory Commission with respect to the authority
of the Federal Energy Regulatory Commission under the Federal Power Act
(16 U.S.C. 791a et seq.), the Natural Gas Act (15 U.S.C. 717 et seq.),
or other law to obtain information, carry out enforcement actions, or
otherwise carry out the responsibilities of the Federal Energy
Regulatory Commission.''.
SEC. 353. INSPECTOR GENERAL OF THE COMMODITY FUTURES TRADING
COMMISSION.
(a) Elevation of Office.--
(1) Inclusion of cftc in definition of establishment.--
(A) Section 12(1) of the Inspector General Act of
1978 (5 U.S.C. App.) is amended by striking ``or the
Federal Cochairpersons of the Commissions established
under section 15301 of title 40, United States Code;''
and inserting ``the Federal Cochairpersons of the
Commissions established under section 15301 of title
40, United States Code; or the Chairman of the
Commodity Futures Trading Commission;''.
(B) Section 12(2) of the Inspector General Act of
1978 (5 U.S.C. App.) is amended by striking ``or the
Commissions established under section 15301 of title
40, United States Code,'' and inserting ``the
Commissions established under section 15301 of title
40, United States Code, or the Commodity Futures
Trading Commission,''.
(2) Exclusion of cftc from definition of designated federal
entity.--Section 8G(a)(2) of the Inspector General Act of 1978
(5 U.S.C. App.) is amended by striking ``the Commodity Futures
Trading Commission,''.
(b) Effective Date; Transition Rule.--
(1) Effective date.--The amendments made by this section
shall take effect 30 days after the date of the enactment of
this Act.
(2) Transition rule.--An individual serving as Inspector
General of the Commodity Futures Trading Commission on the
effective date of this section pursuant to an appointment made
under section 8G of the Inspector General Act of 1978 (5 U.S.C.
App.)--
(A) may continue so serving until the President makes
an appointment under section 3(a) of such Act
consistent with the amendments made by this section;
and
(B) shall, while serving under subparagraph (A),
remain subject to the provisions of section 8G of such
Act which apply with respect to the Commodity Futures
Trading Commission.
SEC. 354. SETTLEMENT AND CLEARING THROUGH REGISTERED DERIVATIVES
CLEARING ORGANIZATIONS.
(a) In General.--
(1) Application to excluded derivative transactions.--
(A) Section 2(d)(1) of the Commodity Exchange Act (7
U.S.C. 2(d)(1)) is amended--
(i) by striking ``and'' at the end of
subparagraph (A);
(ii) by striking the period at the end of
subparagraph (B) and inserting ``; and''; and
(iii) by adding at the end the following:
``(C) except as provided in section 4(f), the
agreement, contract, or transaction is settled and
cleared through a derivatives clearing organization
registered with the Commission.''.
(B) Section 2(d)(2) of such Act (7 U.S.C. 2(d)(2)) is
amended--
(i) by striking ``and'' at the end of
subparagraph (B);
(ii) by striking the period at the end of
subparagraph (C) and inserting ``; and''; and
(iii) by adding at the end the following:
``(D) except as provided in section 4(f), the
agreement, contract, or transaction is settled and
cleared through a derivatives clearing organization
registered with the Commission.''.
(2) Application to certain swap transactions.--Section 2(g)
of such Act (7 U.S.C. 2(g)) is amended--
(A) by striking ``and'' at the end of paragraph (2);
(B) by striking the period at the end of paragraph
(3) and inserting ``; and''; and
(C) by adding at the end the following:
``(4) except as provided in section 4(f), settled and cleared
through a derivatives clearing organization registered with the
Commission.''.
(3) Application to certain transactions in exempt
commodities.--
(A) Section 2(h)(1) of such Act ( 7 U.S.C. 2(h)(1))
is amended--
(i) by striking ``and'' at the end of
subparagraph (A);
(ii) by striking the period at the end of
subparagraph (B) and inserting ``; and''; and
(iii) by adding at the end the following:
``(C) except as provided in section 4(f), is settled
and cleared through a derivatives clearing organization
registered with the Commission.''.
(B) Section 2(h)(3) of such Act (7 U.S.C. 2(h)(3)) is
amended--
(i) by striking ``and'' at the end of
subparagraph (A);
(ii) by striking the period at the end of
subparagraph (B) and inserting ``; and''; and
(iii) by adding at the end the following:
``(C) except as provided in section 4(f), settled and
cleared through a derivatives clearing organization
registered with the Commission.''.
(4) General exemptive authority.--Section 4(c)(1) of such Act
(7 U.S.C. 6(c)(1)) is amended by inserting ``the agreement,
contract, or transaction, except as provided in section 4(h),
will be settled and cleared through a derivatives clearing
organization registered with the Commission and'' before ``the
Commission determines''.
(5) Conforming amendment relating to significant price
discovery contracts.--Section 2(h)(7)(D) of such Act (7 U.S.C.
2(h)(7)(D)) is amended by striking the designation and heading
for the subparagraph and all that follows through ``As part
of'' and inserting the following:
``(D) Review of implementation.--As part of''.
(b) Alternatives to Clearing Through Designated Clearing
Organizations.--Section 4 of such Act (7 U.S.C. 6), as amended by
section 351(h) of this Act, is amended by adding at the end the
following:
``(f) Alternatives to Clearing Through Designated Clearing
Organizations.--
``(1) Settlement and clearing through certain other regulated
entities.--An agreement, contract, or transaction, or class
thereof, relating to an excluded commodity, that would
otherwise be required to be settled and cleared by section
2(d)(1)(C), 2(d)(2)(D), 2(g)(4), 2(h)(1)(C), or 2(h)(3)(C) of
this Act, or subsection (c)(1) of this section may be settled
and cleared through an entity listed in subsections (a) or (b)
of section 409 of the Federal Deposit Insurance Corporation
Improvement Act of 1991.
``(2) Waiver of clearing requirement.--
``(A) The Commission, in its discretion, may exempt
an agreement, contract, or transaction, or class
thereof, that would otherwise be required by section
2(d)(1)(C), 2(d)(2)(D), 2(g)(4), 2(h)(1)(C), or
2(h)(3)(C) of this Act, or subsection (c)(1) of this
section to be settled and cleared through a derivatives
clearing organization registered with the Commission
from such requirement.
``(B) In granting exemptions pursuant to subparagraph
(A), the Commission shall consult with the Securities
and Exchange Commission and the Board of Governors of
the Federal Reserve System regarding exemptions that
relate to excluded commodities or entities for which
the Securities Exchange Commission or the Board of
Governors of the Federal Reserve System serve as the
primary regulator.
``(C) Before granting an exemption pursuant to
subparagraph (A), the Commission shall find that the
agreement, contract, or transaction, or class thereof--
``(i) is highly customized as to its material
terms and conditions;
``(ii) is transacted infrequently;
``(iii) does not serve a significant price-
discovery function in the marketplace; and
``(iv) is being entered into by parties who
can demonstrate the financial integrity of the
agreement, contract, or transaction and their
own financial integrity, as such terms and
standards are determined by the Commission. The
standards may include, with respect to any
federally regulated financial entity for which
net capital requirements are imposed, a net
capital requirement associated with any
agreement, contract, or transaction subject to
an exemption from the clearing requirement that
is higher than the net capital requirement that
would be associated with such a transaction
were it cleared
``(D) Any agreement, contract, or transaction, or
class thereof, which is exempted pursuant to
subparagraph (A) shall be reported to the Commission in
a manner designated by the Commission, or to such other
entity the Commission deems appropriate.
``(E) The Commission, the Securities and Exchange
Commission and the Board of Governors of the Federal
Reserve System shall enter into a memorandum of
understanding by which the information reported to the
Commission pursuant to subparagraph (D) with regard to
excluded commodities or entities for which the
Securities Exchange Commission or the Board of
Governors of the Federal Reserve System serve as the
primary regulator may be provided to the other
agencies.
``(g) Spot and Forward Exclusion.--The settlement and clearing
requirements of section 2(d)(1)(C), 2(d)(2)(D), 2(g)(4), 2(h)(1)(C),
2(h)(3)(C), or 4(c)(1) shall not apply to an agreement, contract, or
transaction of any cash commodity for immediate or deferred shipment or
delivery, as defined by the Commission.''.
(c) Additional Requirements Applicable to Applicants for Registration
as a Derivative Clearing Organization.--Section 5b(c)(2) of such Act (7
U.S.C. 7a-1(c)(2)) is amended by adding at the end the following:
``(O) Disclosure of general information.--The
applicant shall disclose publicly and to the Commission
information concerning--
``(i) the terms and conditions of contracts,
agreements, and transactions cleared and
settled by the applicant;
``(ii) the conventions, mechanisms, and
practices applicable to the contracts,
agreements, and transactions;
``(iii) the margin-setting methodology and
the size and composition of the financial
resource package of the applicant; and
``(iv) other information relevant to
participation in the settlement and clearing
activities of the applicant.
``(P) Daily publication of trading information.--The
applicant shall make public daily information on
settlement prices, volume, and open interest for
contracts settled or cleared pursuant to the
requirements of section 2(d)(1)(C), 2(d)(2)(D),
2(g)(4), 2(h)(1)(C), 2(h)(3)(C) or 4(c)(1) of this Act
by the applicant if the Commission determines that the
contracts perform a significant price discovery
function for transactions in the cash market for the
commodity underlying the contracts.
``(Q) Fitness standards.--The applicant shall
establish and enforce appropriate fitness standards for
directors, members of any disciplinary committee, and
members of the applicant, and any other persons with
direct access to the settlement or clearing activities
of the applicant, including any parties affiliated with
any of the persons described in this subparagraph.''.
(d) Amendments.--
(1) Section 409 of the Federal Deposit Insurance Corporation
Improvement Act of 1991 (12 U.S.C. 4422) is amended by adding
at the end the following:
``(c) Clearing Requirement.--A multilateral clearing organization
described in subsections (a) or (b) of this section shall comply with
requirements similar to the requirements of sections 5b and 5c of the
Commodity Exchange Act.''.
(2) Section 407 of the Legal Certainty for Bank Products Act
of 2000 (7 U.S.C. 27e) is amended by inserting ``and the
settlement and clearing requirements of sections 2(d)(1)(C),
2(d)(2)(D), 2(g)(4), 2(h)(1)(C), 2(h)(3)(C), and 4(c)(1) of
such Act'' after ``the clearing of covered swap agreements''.
(e) Effective Date.--The amendments made by this section shall take
effect 150 days after the date of the enactment of this Act.
(f) Transition Rule.--Any agreement, contract, or transaction entered
into before the date of the enactment of this Act or within 150 days
after such date of enactment, in reliance on subsection (d), (g),
(h)(1), or (h)(3) of section 2 of the Commodity Exchange Act or any
other exemption issued by the Commission Futures Trading Commission by
rule, regulation, or order shall, within 90 days after such date of
enactment, unless settled and cleared through an entity registered with
the Commission as a derivatives clearing organization or another
clearing entity pursuant to section 4(f) of such Act, be reported to
the Commission in a manner designated by the Commission, or to such
other entity as the Commission deems appropriate.
SEC. 355. LIMITATION ON ELIGIBILITY TO PURCHASE A CREDIT DEFAULT SWAP.
(a) In General.--Section 4c of the Commodity Exchange Act (7 U.S.C.
6c) is amended by adding at the end the following:
``(h) Limitation on Eligibility to Purchase a Credit Default Swap.--
It shall be unlawful for any person to enter into a credit default swap
unless the person--
``(1) owns a credit instrument which is insured by the credit
default swap;
``(2) would experience financial loss if an event that is the
subject of the credit default swap occurs with respect to the
credit instrument; and
``(3) meets such minimum capital adequacy standards as may be
established by the Commission, in consultation with the Board
of Governors of the Federal Reserve System, or such more
stringent minimum capital adequacy standards as may be
established by or under the law of any State in which the swap
is originated or entered into, or in which possession of the
contract involved takes place.''.
(b) Elimination of Preemption of State Bucketing Laws Regarding Naked
Credit Default Swaps.--Section 12(e)(2)(B) of such Act (7 U.S.C.
16(e)(2)(B)) is amended by inserting ``(other than a credit default
swap in which the purchaser of the swap would not experience financial
loss if an event that is the subject of the swap occurred)'' before
``that is excluded''.
(c) Definition of Credit Default Swap.--Section 1a of such Act (7
U.S.C. 1a), as amended by section 351(a) of this Act, is amended by
adding at the end the following:
``(37) Credit default swap.--The term `credit default swap'
means a contract which insures a party to the contract against
the risk that an entity may experience a loss of value as a
result of an event specified in the contract, such as a default
or credit downgrade. A credit default swap that is traded on or
cleared by a registered entity shall be excluded from the
definition of a security as defined in this Act and in section
2(a)(1) of the Securities Act of 1933 or section 3(a)(10) of
the Securities Exchange Act of 1934, except it shall be deemed
a security solely for purpose of enforcing prohibitions against
insider trading in sections 10 and 16 of the Securities
Exchange Act of 1934.''.
(d) Effective Date.--The amendments made by this section shall be
effective for credit default swaps (as defined in section 1a(37) of the
Commodity Exchange Act) entered into after 60 days after the date of
the enactment of this section.
SEC. 356. TRANSACTION FEES.
(a) In General.--Section 12 of the Commodity Exchange Act (7 U.S.C.
16) is amended by redesignating subsections (e), (f), and (g) as
subsections (f), (g), and (h), respectively, and inserting after
subsection (d) the following:
``(e) Clearing Fees.--
``(1) In general.--The Commission shall, in accordance with
this subsection, charge and collect from each registered
clearing organization, and each such organization shall pay to
the Commission, transaction fees at a rate calculated to
recover the costs to the Federal Government of the supervision
and regulation of futures markets, except those directly
related to enforcement.
``(2) Fees assessed per side of cleared contracts.--
``(A) In general.--The Commission shall determine the
fee rate referred to in paragraph (1), and shall apply
the fee rate per side of any transaction cleared.
``(B) Authority to delegate.-- The Commission may
determine the procedures by which the fee rate is to be
applied on the transactions subject to the fee, or
delegate the authority to make the determination to any
appropriate derivatives clearing organization.
``(3) Exemptions.--The Commission may not impose a fee under
paragraph (1) on--
``(A) a class of contracts or transactions if the
Commission finds that it is in the public interest to
exempt the class from the fee; or
``(B) a contract or transaction cleared by a
registered derivatives clearing organization that is--
``(i) subject to fees under section 31 of the
Securities Exchange Act of 1934; or
``(ii) a security as defined in the
Securities Act of 1933 or the Securities
Exchange Act of 1934.
``(4) Dates for payment of fees.--The fees imposed under
paragraph (1) shall be paid on or before--
``(A) March 15 of each year, with respect to
transactions occurring on or after the preceding
September 1 and on or before the preceding December 31;
and
``(B) September 15 of each year, with respect to
transactions occurring on or after the preceding
January 1 and on or before the preceding August 31.
``(5) Annual adjustment of fee rates.--
``(A) In general.--Not later than April 30 of each
fiscal year , the Commission shall, by order, adjust
each fee rate determined under paragraph (2) for the
fiscal year to a uniform adjusted rate that, when
applied to the estimated aggregate number of cleared
sides of transactions for the fiscal year, is
reasonably likely to produce aggregate fee receipts
under this subsection for the fiscal year equal to the
target offsetting receipt amount for the fiscal year.
``(B) Definitions.--In subparagraph (A):
``(i) Estimated aggregate number of cleared
sides of transactions.--The term `estimated
aggregate number of cleared sides of
transactions' means, with respect to a fiscal
year, the aggregate number of cleared sides of
transactions to be cleared by registered
derivatives clearing organizations during the
fiscal year, as estimated by the Commission,
after consultation with the Office of
Management and Budget, using the methodology
required for making projections pursuant to
section 257 of the Balanced Budget and
Emergency Deficit Control Act of 1985.
``(ii) Target offsetting receipt amount.--The
term `target offsetting receipt amount' means,
with respect to a fiscal year, the total level
of Commission budget authority for all non-
enforcement activities of the Commission, as
contained in the regular appropriations Acts
for the fiscal year.
``(C) No judicial review.--An adjusted fee rate
prescribed under subparagraph (A) shall not be subject
to judicial review.
``(6) Publication.--Not later than April 30 of each fiscal
year, the Commission shall cause to be published in the Federal
Register notices of the fee rates applicable under this
subsection for the succeeding fiscal year, and any estimate or
projection on which the fee rates are based.
``(7) Inapplicability of certain procedural rules.--Section
553 of title 5, United States Code, shall not apply with
respect to any exercise of authority under this subsection.
``(8) Establishment of futures and options transaction fee
account; deposit of fees.--There is established in the Treasury
of the United States an account which shall be known as the
`Futures and Options Transaction Fee Account'. All fees
collected under this subsection for a fiscal year shall be
deposited in the account. Amounts in the account are authorized
to be appropriated to fund the expenditures of the
Commission.''.
(b) Effective Date.--The amendments made by subsection (a) shall
apply to fiscal years beginning 30 or more days after the date of the
enactment of this Act.
(c) Transition Rule.--If this section becomes law after March 31 and
before September 1 of a fiscal year, then paragraphs (5)(A) and (6) of
section 12(e) of the Commodity Exchange Act shall be applied, in the
case of the 1st fiscal year beginning after the date of the enactment
of this Act, by substituting ``August 31'' for ``April 30''.
SEC. 357. NO EFFECT ON AUTHORITY OF THE FEDERAL TRADE COMMISSION.
Nothing in this subtitle shall be interpreted to affect or diminish
the jurisdiction or authority of the Federal Trade Commission with
respect to its authorities under the Federal Trade Commission Act (15
U.S.C. 41 et seq.) or the Energy Independence and Security Act of 2007
(Public Law 110-140) to obtain information, to carry out enforcement
activities or otherwise carry out the responsibilities of the Federal
Trade Commission.
SEC. 358. REGULATION OF CARBON DERIVATIVES MARKETS.
(a) Default Rule.--Section 2 of the Commodity Exchange Act (7 U.S.C.
2), as amended by section 352 of this Act, is amended by adding at the
end the following:
``(k) The Commission shall have jurisdiction over the establishment,
operations, and oversight of markets for regulated allowance
derivatives (as defined in section 401 of the Federal Power Act (16
U.S.C. 791a and following)), and shall provide for the establishment,
operation, and oversight of the markets in accordance with the same
regulations that apply under this Act to included energy
transactions.''.
(b) Presidential Determinations.--To the extent that the President
delegates the authority to promulgate regulations for the
establishment, operation, and oversight of all markets for regulated
allowance derivatives to a Federal agency other than the Commodity
Futures Trading Commission pursuant to section 401 of the Federal Power
Act, such determination shall supersede subsection (a). To the extent
that the President determines that regulations promulgated pursuant to
section 401(c)(2) of the Federal Power Act would provide for more
stringent and effective market oversight, such regulations shall
supersede subsection (a). Nothing in this section shall be construed to
affect the operation of the default rules established in section
401(c)(4) of the Federal Power Act.
SEC. 359. CEASE-AND-DESIST AUTHORITY.
(a) Natural Gas Act.--Section 20 of the Natural Gas Act (15 U.S.C.
717s) is amended by adding the following at the end:
``(e) Cease-and-Desist Proceedings; Temporary Orders; Authority of
the Commission.--
``(1) In general.--If the Commission finds, after notice and
opportunity for hearing, that any entity may be violating, may
have violated, or may be about to violate any provision of this
Act, or any rule, regulation, restriction, condition, or order
made or imposed by the Commission under the authority of this
Act, the Commission may publish its findings and issue an order
requiring such entity, and any other entity that is, was, or
would be a cause of the violation, due to an act or omission
the entity knew or should have known would contribute to such
violation, to cease and desist from committing or causing such
violation and any future violation of the same provision, rule,
or regulation. Such order may, in addition to requiring an
entity to cease and desist from committing or causing a
violation, require such entity to comply, to provide an
accounting and disgorgement, or to take steps to effect
compliance, with such provision, rule, or regulation, upon such
terms and conditions and within such time as the Commission may
specify in such order. Any such order may, as the Commission
deems appropriate, require future compliance or steps to effect
future compliance, either permanently or for such period of
time as the Commission may specify.
``(2) Timing of entry.--An order issued under this subsection
shall be entered only after notice and opportunity for a
hearing, unless the Commission determines that notice and
hearing prior to entry would be impracticable or contrary to
the public interest.
``(f) Hearing.--The notice instituting proceedings pursuant to
subsection (e) shall fix a hearing date not earlier than 30 days nor
later than 60 days after service of the notice unless an earlier or a
later date is set by the Commission with the consent of any respondent
so served.
``(g) Temporary Order.--Whenever the Commission determines that---
``(1) a respondent may take actions to dissipate or convert
assets prior to the completion of the proceedings referred to
in subsection (e), and such assets would be necessary to comply
with or otherwise satisfy a final enforcement order of the
Commission pursuant to alleged violations or threatened
violations specified in the notice instituting proceedings; or
``(2) a respondent is engaged in actual or threatened
violations of this Act or a Commission rule, regulation,
restriction or order referred to in subsection (e),
the Commission may issue a temporary order requiring the respondent to
take such action to prevent dissipation or conversion of assets,
significant harm to energy consumers, or substantial harm to the public
interest, frustration of the Commission's ability to conduct the
proceedings, or frustration of the Commission's ability to redress said
violation at the conclusion of the proceedings, as the Commission deems
appropriate pending completion of such proceedings.
``(h) Review of Temporary Orders.--
``(1) Commission review.--At any time after the respondent
has been served with a temporary cease-and-desist order
pursuant to subsection (g), the respondent may apply to the
Commission to have the order set aside, limited, or suspended.
If the respondent has been served with a temporary cease-and-
desist order entered without a prior Commission hearing, the
respondent may, within 10 days after the date on which the
order was served, request a hearing on such application and the
Commission shall hold a hearing and render a decision on such
application at the earliest possible time.
``(2) Judicial review.--Within--
``(A) 10 days after the date the respondent was
served with a temporary cease-and-desist order entered
with a prior Commission hearing; or
``(B) 10 days after the Commission renders a decision
on an application and hearing under paragraph (1),
with respect to any temporary cease-and-desist order entered
without a prior Commission hearing, the respondent may apply to
the United States district court for the district in which the
respondent resides or has its principal place of business, or
for the District of Columbia, for an order setting aside,
limiting, or suspending the effectiveness or enforcement of the
order, and the court shall have jurisdiction to enter such an
order. A respondent served with a temporary cease-and-desist
order entered without a prior Commission hearing may not apply
to the court except after hearing and decision by the
Commission on the respondent's application under paragraph (1)
of this subsection.
``(3) No automatic stay of temporary order.--The commencement
of proceedings under paragraph (2) of this subsection shall
not, unless specifically ordered by the court, operate as a
stay of the Commission's order.
``(4) Exclusive review.--Sections 19(d) and 24 shall not
apply to a temporary order entered pursuant to this section.
``(i) Implementation.--The Commission is authorized to adopt rules,
regulations, and orders as it deems appropriate to implement this
section.''.
(c) Natural Gas Policy Act of 1978.--Section 504 of the Natural Gas
Policy Act of 1978 (15 U.S.C. 3414) is amended by adding the following
at the end:
``(d) Cease-and-Desist Proceedings; Temporary Orders; Authority of
the Commission.--
``(1) In general.--If the Commission finds, after notice and
opportunity for hearing, that any entity may be violating, may
have violated, or may be about to violate any provision of this
Act, or any rule, regulation, restriction, condition, or order
made or imposed by the Commission under the authority of this
Act, the Commission may publish its findings and issue an order
requiring such entity, and any other entity that is, was, or
would be a cause of the violation, due to an act or omission
the entity knew or should have known would contribute to such
violation, to cease and desist from committing or causing such
violation and any future violation of the same provision, rule,
or regulation. Such order may, in addition to requiring an
entity to cease and desist from committing or causing a
violation, require such entity to comply, to provide an
accounting and disgorgement, or to take steps to effect
compliance, with such provision, rule, or regulation, upon such
terms and conditions and within such time as the Commission may
specify in such order. Any such order may, as the Commission
deems appropriate, require future compliance or steps to effect
future compliance, either permanently or for such period of
time as the Commission may specify.
``(2) Timing of entry.--An order issued under this subsection
shall be entered only after notice and opportunity for a
hearing, unless the Commission determines that notice and
hearing prior to entry would be impracticable or contrary to
the public interest.
``(3) Hearing.--The notice instituting proceedings pursuant
to paragraph (1) shall fix a hearing date not earlier than 30
days nor later than 60 days after service of the notice unless
an earlier or a later date is set by the Commission with the
consent of any respondent so served.
``(4) Temporary order.--Whenever the Commission determines
that--
``(A) a respondent may take actions to dissipate or
convert assets prior to the completion of the
proceedings referred to in paragraph (1) and such
assets would be necessary to comply with or otherwise
satisfy a final enforcement order of the Commission
pursuant to alleged violations or threatened violations
specified in the notice instituting proceedings; or
``(B) a respondent is engaged in actual or threatened
violations of this Act or a Commission rule,
regulation, restriction or order referred to in
paragraph (1),
the Commission may issue a temporary order requiring the
respondent to take such action to prevent dissipation or
conversion of assets, significant harm to energy consumers, or
substantial harm to the public interest, frustration of the
Commission's ability to conduct the proceedings, or frustration
of the Commission's ability to redress said violation at the
conclusion of the proceedings, as the Commission deems
appropriate pending completion of such proceedings.
``(5) Review of temporary orders.--
``(A) Commission review.--At any time after the
respondent has been served with a temporary cease-and-
desist order pursuant to paragraph (4), the respondent
may apply to the Commission to have the order set
aside, limited, or suspended. If the respondent has
been served with a temporary cease-and-desist order
entered without a prior Commission hearing, the
respondent may, within 10 days after the date on which
the order was served, request a hearing on such
application and the Commission shall hold a hearing and
render a decision on such application at the earliest
possible time.
``(B) Judicial review.--Within--
``(i) 10 days after the date the respondent
was served with a temporary cease-and-desist
order entered with a prior Commission hearing;
or
``(ii) 10 days after the Commission renders a
decision on an application and hearing under
subparagraph (A), with respect to any temporary
cease-and-desist order entered without a prior
Commission hearing, the respondent may apply to
the United States district court for the
district in which the respondent resides or has
its principal place of business, or for the
District of Columbia, for an order setting
aside, limiting, or suspending the
effectiveness or enforcement of the order, and
the court shall have jurisdiction to enter such
an order. A respondent served with a temporary
cease-and-desist order entered without a prior
Commission hearing may not apply to the court
except after hearing and decision by the
Commission on the respondent's application
under paragraph (1) of this subsection.
``(C) No automatic stay of temporary order.--The
commencement of proceedings under subparagraph (B) of
this paragraph shall not, unless specifically ordered
by the court, operate as a stay of the Commission's
order.
``(6) Implementation.--The Commission is authorized to adopt
rules, regulations, and orders as it deems appropriate to
implement this subsection.''.
TITLE IV--TRANSITIONING TO A CLEAN ENERGY ECONOMY
Subtitle A--Ensuring Real Reductions in Industrial Emissions
SEC. 401. ENSURING REAL REDUCTIONS IN INDUSTRIAL EMISSIONS.
Title VII of the Clean Air Act is amended by inserting after part E
the following new part:
``PART F--ENSURING REAL REDUCTIONS IN INDUSTRIAL EMISSIONS
``SEC. 761. PURPOSES.
``(a) Purpose of Part.--The purposes of this part are--
``(1) to promote a strong global effort to significantly
reduce greenhouse gas emissions, and, through this global
effort, stabilize greenhouse gas concentrations in the
atmosphere at a level that will prevent dangerous anthropogenic
interference with the climate system; and
``(2) to prevent an increase in greenhouse gas emissions in
countries other than the United States as a result of direct
and indirect compliance costs incurred under this title.
``(b) Purposes of Subpart 1.--The purposes of subpart 1 are
additionally--
``(1) to rebate the owners and operators of entities in
domestic eligible industrial sectors for their greenhouse gas
emission costs incurred under this title, but not for costs
associated with other related or unrelated market dynamics;
``(2) to design such rebates in a way that will prevent
carbon leakage while also rewarding innovation and facility-
level investments in energy efficiency performance
improvements; and
``(3) to eliminate or reduce distribution of emission
allowances under this part when such distribution is no longer
necessary to prevent carbon leakage from eligible industrial
sectors.
``SEC. 762. INTERNATIONAL NEGOTIATIONS.
``(a) Finding.--Congress finds that the purposes of this part, as set
forth in section 761, can be most effectively addressed and achieved
through agreements negotiated between the United States and foreign
countries.
``(b) Statement of Policy.--It is the policy of the United States to
work proactively under the United Nations Framework Convention on
Climate Change, and in other appropriate forums, to establish binding
agreements, including sectoral agreements, committing all major
greenhouse gas-emitting nations to contribute equitably to the
reduction of global greenhouse gas emissions.
``(c) Notification of Foreign Countries.--Not later than January 1,
2020, the President shall notify foreign countries that an
International Reserve Allowance Program, as described in subpart 2, may
apply to primary products produced in a foreign country by a sector for
which the President has made a determination described in section
767(c).
``SEC. 763. DEFINITIONS.
``In this part:
``(1) Carbon leakage.--The term `carbon leakage' means any
substantial increase (as determined by the Administrator) in
greenhouse gas emissions by industrial entities located in
other countries if such increase is caused by an incremental
cost of production increase in the United States resulting from
the implementation of this title.
``(2) Eligible industrial sector.--The term `eligible
industrial sector' means an industrial sector determined by the
Administrator under section 764(b) to be eligible to receive
emission allowance rebates under subpart 1.
``(3) Industrial sector.--The term `industrial sector' means
any sector that is in the manufacturing sector (as defined in
NAICS codes 31, 32, and 33).
``(4) NAICS.--The term `NAICS' means the North American
Industrial Classification System of 2002.
``(5) Output.--The term `output' means the total tonnage or
other standard unit of production (as determined by the
Administrator) produced by an entity in an industrial sector.
The output of the cement sector is hydraulic cement, and not
clinker.
``(6) Primary product.--The term `primary product' means a
product manufactured by an eligible industrial sector that is--
``(A) iron, steel, steel mill products (including
pipe and tube), aluminum, cement, glass (including
flat, container, and specialty glass and fiberglass),
pulp, paper, chemicals, or industrial ceramics; or
``(B) any other manufactured product that is sold in
bulk for purposes of further manufacture or inclusion
in a finished product.
``Subpart 1--Emission Allowance Rebate Program
``SEC. 764. ELIGIBLE INDUSTRIAL SECTORS.
``(a) List.--
``(1) Initial list.--Not later than June 30, 2011, the
Administrator shall publish in the Federal Register a list of
eligible industrial sectors pursuant to subsection (b). Such
list shall include the amount of the emission allowance rebate
per unit of production that shall be provided to entities in
each eligible industrial sector in the following two calendar
years pursuant to section 765.
``(2) Subsequent lists.--Not later than February 1, 2013, and
every four years thereafter, the Administrator shall publish in
the Federal Register an updated version of the list published
under paragraph (1).
``(b) Eligible Industrial Sectors.--
``(1) In general.--Not later than June 30, 2011, the
Administrator shall promulgate a rule designating, based on the
criteria under paragraph (2), the industrial sectors eligible
for emission allowance rebates under this subpart.
``(2) Presumptively eligible industrial sectors.--
``(A) Eligibility criteria.--An owner or operator of
an entity shall be eligible to receive emission
allowance rebates under this subpart if such entity is
in an industrial sector that is included in a six-digit
classification of the NAICS that meets the criteria in
both clauses (i) and (ii), or the criteria in clause
(iii).
``(i) Energy or greenhouse gas intensity.--As
determined by the Administrator, the industrial
sector had--
``(I) an energy intensity of at least
5 percent, calculated by dividing the
cost of purchased electricity and fuel
costs of the sector by the value of the
shipments of the sector, based on data
described in subparagraph (E); or
``(II) a greenhouse gas intensity of
at least 5 percent, calculated by
dividing--
``(aa) the number 20
multiplied by the number of
tons of carbon dioxide
equivalent greenhouse gas
emissions (including direct
emissions from fuel combustion,
process emissions, and indirect
emissions from the generation
of electricity used to produce
the output of the sector) of
the sector based on data
described in subparagraph (E);
by
``(bb) the value of the
shipments of the sector, based
on data described in
subparagraph (E).
``(ii) Trade intensity.--As determined by the
Administrator, the industrial sector had a
trade intensity of at least 15 percent,
calculated by dividing the value of the total
imports and exports of such sector by the value
of the shipments plus the value of imports of
such sector, based on data described in
subparagraph (E).
``(iii) Very high energy or greenhouse gas
intensity.--As determined by the Administrator,
the industrial sector had an energy or
greenhouse gas intensity, as calculated under
clause (i)(I) or (II), of at least 20 percent.
``(B) Iron and steel sector.--For purposes of this
subpart, in carrying out this section and section 765,
the Administrator shall consider as in different
industrial sectors--
``(i) entities using integrated iron and
steelmaking technologies (including coke ovens,
blast furnaces, and other iron-making
technologies); and
``(ii) entities using electric arc furnace
technologies.
``(C) Metal and phosphate production classified under
more than one naics code.--For purposes of this
subpart, in carrying out this section and section 765,
the Administrator shall--
``(i) aggregate data for the beneficiation or
other processing of iron and copper ores and
phosphate with subsequent steps in the process
of metal and phosphate manufacturing regardless
of the NAICS code under which such activity is
classified; and
``(ii) aggregate data for the manufacturing
of steel with the manufacturing of steel pipe
and tube made from purchased steel in a
nonintegrated process.
``(D) Exclusion.--The petroleum refining sector shall
not be an eligible industrial sector.
``(E) Data sources.--
``(i) Electricity and fuel costs, value of
shipments.--The Administrator shall determine
electricity and fuel costs and the value of
shipments under this subsection from data from
the United States Census of Mineral Industries
and the United States Census Annual Survey of
Manufacturers. The Administrator shall take the
average of data from as many of the years of
2004, 2005, and 2006 for which such data are
available. If such data are unavailable, the
Administrator shall make a determination based
upon 2002 or 2006 data from the most detailed
industrial classification level of Energy
Information Agency's Manufacturing Energy
Consumption Survey (using 2006 data if it is
available) and the 2002 or 2007 Economic Census
of the United States (using 2007 data if it is
available). If data from the Manufacturing
Energy Consumption Survey are unavailable for
any sector at the six-digit classification
level in the NAICS, then the Administrator may
extrapolate the information necessary to
determine the eligibility of a sector under
this paragraph from available Manufacturing
Energy Consumption Survey data pertaining to a
broader industrial category classified in the
NAICS. Fuel cost data shall not include the
cost of fuel used as feedstock by an industrial
sector.
``(ii) Imports and exports.--The
Administrator shall base the value of imports
and exports under this subsection on United
States International Trade Commission data. The
Administrator shall take the average of data
from as many of the years of 2004, 2005, and
2006 for which such data are available.
``(iii) Percentages.--The Administrator shall
round the energy intensity, greenhouse gas
intensity, and trade intensity percentages
under subparagraph (A) to the nearest whole
number.
``(iv) Greenhouse gas emission
calculations.--When calculating the tons of
carbon dioxide equivalent greenhouse gas
emissions for each sector under subparagraph
(A)(i)(II)(aa), the Administrator--
``(I) shall use the best available
data from as many of the years 2004,
2005, and 2006 for which such data is
available; and
``(II) may, to the extent necessary
with respect to a sector, use economic
and engineering models and the best
available information on technology
performance levels for such sector.
``(3) Administrative determination of additional eligible
industrial sectors.--
``(A) Individual showing petition.--
``(i) Petition.--The owner or operator of an
entity in an industrial sector may petition the
Administrator to designate as eligible
industrial sectors under this subpart an entity
or a group of entities that--
``(I) represent a subsector of a six-
digit section of the NAICS code; and
``(II) meet the eligibility criteria
in both clauses (i) and (ii) of
paragraph (2)(A), or the eligibility
criteria in clause (iii) of paragraph
(2)(A).
``(ii) Data.--In making a determination under
this subparagraph, the Administrator shall
consider data submitted by the petitioner that
is specific to the entity, data solicited by
the Administrator from other entities in the
subsector, if such other entities exist, and
data specified in paragraph (2)(E).
``(iii) Basis of subsector determination.--
The Administrator shall determine an entity or
group of entities to be a subsector of a six-
digit section of the NAICS code based only upon
the products manufactured and not the
industrial process by which the products are
manufactured, except that the Administrator may
determine an entity or group of entities that
manufacture a product from a virgin material to
be a separate subsector from another entity or
group of entities that manufacture the same
product from recycled material.
``(iv) Final action.--The Administrator shall
take final action on such petition no later
than 6 months after the petition is received by
the Administrator.
``(B) Updated trade intensity data.--The
Administrator shall designate as eligible to receive
emission allowance rebates under this subpart an
industrial sector that--
``(i) met the energy or greenhouse gas
intensity criteria in paragraph (2)(A)(i) as of
the date of promulgation of the rule under
paragraph (1); and
``(ii) meets the trade intensity criteria in
paragraph (2)(A)(ii), using data from any year
after 2006.
``(C) Use of most recent data.--In determining
whether to designate a sector or subsector as an
eligible industrial sector under this paragraph, the
Administrator shall use the most recent data available
from the sources described in paragraph (2)(E), rather
than the data from the years specified in paragraph
(2)(E), to determine the trade intensity of such sector
or subsector, but only for determining such trade
intensity.
``SEC. 765. DISTRIBUTION OF EMISSION ALLOWANCE REBATES.
``(a) Distribution Schedule.--
``(1) In general.--For each vintage year, the Administrator
shall distribute allowances pursuant to this section no later
than October 31 of the preceding calendar year. The
Administrator shall make such annual distributions to the
owners and operators of each entity in an eligible industrial
sector in the amount of emission allowances calculated under
subsection (b), except that--
``(A) for vintage years 2012 and 2013, the
distribution for a covered entity shall be the entity's
indirect carbon factor as calculated under subsection
(b)(3); and
``(B) for vintage year 2026 and thereafter, the
distribution shall be the amount calculated under
subsection (b) multiplied by, except as modified by the
President pursuant to section 767(c)(3)(A) for a
sector--
``(i) 90 percent for vintage year 2026;
``(ii) 80 percent for vintage year 2027;
``(iii) 70 percent for vintage year 2028;
``(iv) 60 percent for vintage year 2029;
``(v) 50 percent for vintage year 2030;
``(vi) 40 percent for vintage year 2031;
``(vii) 30 percent for vintage year 2032;
``(viii) 20 percent for vintage year 2033;
``(ix) 10 percent for vintage year 2034; and
``(x) 0 percent for vintage year 2035 and
thereafter.
``(2) Resumption of reduction.--If the President has modified
the percentage stated in paragraph (1)(B) under section
767(c)(3)(A), and the President subsequently makes a
determination under section 767(b) for an eligible industrial
sector that more than 70 percent of global output for that
sector is produced or manufactured in countries that have met
at least one of the criteria in that subsection, then the
reduction schedule set forth in paragraph (1)(B) of this
subsection shall begin in the next vintage year, with the
percentage reduction based on the amount of the distribution of
emission allowances under this section in the previous year.
``(3) Newly eligible sectors.--In addition to receiving a
distribution of emission allowances under this section in the
first distribution occurring after an industrial sector is
designated as eligible under section 764(b)(3), the owner or
operator of an entity in that eligible industrial sector may
receive a prorated share of any emission allowances made
available for distribution under this section that were not
distributed for the year in which the petition for eligibility
was granted under section 764(b)(3)(A).
``(b) Calculation of Direct and Indirect Carbon Factors.--
``(1) In general.--
``(A) Covered entities.--Except as provided in
subsection (a), for covered entities that are in
eligible industrial sectors, the amount of emission
allowance rebates shall be based on the sum of the
covered entity's direct and indirect carbon factors.
``(B) Other eligible entities.--For entities that are
in eligible industrial sectors but are not covered
entities, the amount of emission allowance rebates
shall be based on the entity's indirect carbon factor.
``(C) New entities.--Not later than 2 years after the
date of enactment of this title, the Administrator
shall issue regulations governing the distribution of
emission allowance rebates for the first and second
years of operation of a new entity in an eligible
industrial sector. These regulations shall provide
for--
``(i) the distribution of emission allowance
rebates to such entities based on comparable
entities in the same sector; and
``(ii) an adjustment in the third and fourth
years of operation to reconcile the total
amount of emission allowance rebates received
during the first and second years of operation
to the amount the entity would have received
during the first and second years of operation
had the appropriate data been available.
``(2) Direct carbon factor.--The direct carbon factor for a
covered entity for a vintage year is the product of--
``(A) the average output of the covered entity for
the two years preceding the year of the distribution;
and
``(B) the most recent calculation of the average
direct greenhouse gas emissions (expressed in tons of
carbon dioxide equivalent) per unit of output for all
covered entities in the sector, as determined by the
Administrator under paragraph (4).
``(3) Indirect carbon factor.--
``(A) In general.--The indirect carbon factor for an
entity for a vintage year is the product obtained by
multiplying the average output of the entity for the
two years preceding the years of the distribution by
both the electricity emissions intensity factor
determined pursuant to subparagraph (B) and the
electricity efficiency factor determined pursuant to
subparagraph (C) for the year concerned.
``(B) Electricity emissions intensity factor.--Each
person selling electricity to the owner or operator of
an entity in any sector designated as an eligible
industrial sector under section 764(b) shall provide
the owner or operator of the entity and the
Administrator, on an annual basis, the electricity
emissions intensity factor for the entity. The
electricity emissions intensity factor for the entity,
expressed in tons of carbon dioxide equivalents per
kilowatt hour, is determined by dividing--
``(i) the annual sum of the hourly product
of--
``(I) the electricity purchased by
the entity from that person in each
hour (expressed in kilowatt hours),
multiplied by
``(II) the marginal or weighted
average tons of carbon dioxide
equivalent per kilowatt hour that the
person selling the electricity charges
to the entity, taking into account the
entity's retail rate arrangements, by
``(ii) the total kilowatt hours of
electricity purchased by the entity from that
person during that year.
``(C) Electricity efficiency factor.--The electricity
efficiency factor is the average amount of electricity
(in kilowatt hours) used per unit of output for all
entities in the relevant sector, as determined by the
Administrator based on the best available data,
including data provided under paragraph (6).
``(D) Indirect carbon factor reduction.--If an
electricity provider received a free allocation of
emission allowances pursuant to section 782(a), the
Administrator shall adjust the indirect carbon factor
to avoid rebates to the eligible entity for costs that
the Administrator determines were not incurred by the
industrial entity because the allowances were freely
allocated to the eligible entity's electricity provider
and used for the benefit of industrial consumers.
``(4) Greenhouse gas intensity calculations.--The
Administrator shall calculate the average direct greenhouse gas
emissions (expressed in tons of carbon dioxide equivalent) per
unit of output for all covered entities in each eligible
industrial sector every four years using an average of the two
most recent years of the best available data.
``(5) Ensuring efficiency improvements.--When making
greenhouse gas calculations, the Administrator shall--
``(A) limit the average direct greenhouse gas
emissions per unit of output, calculated under
paragraph (4), for any eligible industrial sector to an
amount that is not greater than it was in any previous
calculation under this subsection; and
``(B) limit the electricity emissions intensity
factor, calculated under paragraph (3)(B) and resulting
from a change in electricity supply, for any entity to
an amount that is not greater than it was during any
previous year.
``(6) Data sources.--For the purposes of this subsection--
``(A) the Administrator shall use data from the
greenhouse gas registry, established under section 713,
where it is available; and
``(B) each owner or operator of an entity in an
eligible industrial sector and each department, agency,
and instrumentality of the United States shall provide
the Administrator with such information as the
Administrator finds necessary to determine the direct
carbon factor and the indirect carbon factor for each
entity subject to this section.
``(c) Total Maximum Distribution.--Notwithstanding subsections (a)
and (b), the Administrator shall not distribute more allowances for any
vintage year pursuant to this section than are allocated for use under
this part pursuant to section 782 for that vintage year. For any
vintage year for which the total emission allowance rebates calculated
pursuant to this section exceed the number of allowances allocated
pursuant to section 782, the Administrator shall reduce each entity's
distribution on a pro rata basis so that the total distribution under
this section equals the number of allowances allocated under section
782.
``Subpart 2--International Reserve Allowance Program
``SEC. 766. INTERNATIONAL RESERVE ALLOWANCE PROGRAM.
``(a) Establishment.--
``(1) In general.--If the President takes an action described
in section 767(c)(3)(B) with respect to a sector then, not
later than 24 months after that determination, the
Administrator shall issue regulations--
``(A) determining an appropriate price for and
offering for sale to United States importers
international reserve allowances;
``(B) requiring the submission of appropriate amounts
of such allowances in conjunction with the importation
into the United States of a primary product produced or
manufactured by that sector;
``(C) exempting from the requirements of subparagraph
(B) primary products produced in--
``(i) foreign countries that the United
Nations has identified as among the least
developed of developing countries; or
``(ii) foreign countries that the President
has determined to be responsible for less than
0.5 percent of total global greenhouse gas
emissions; and
``(D) prohibiting the introduction into interstate
commerce of a primary product without submitting the
required number of international reserve allowances in
accordance with such regulations, unless the product
was produced by a covered entity under this title, or
by an entity that is or could be regulated under this
title.
``(2) Purpose of program.--The Administrator shall establish
the program under paragraph (1) in a manner that addresses,
consistent with international agreements to which the United
States is a party, the competitive imbalance in the costs of
producing or manufacturing primary products in industrial
sectors resulting from the difference between--
``(A) the direct and indirect costs of complying with
this title; and
``(B) the direct and indirect costs, if any, of
complying in other countries with greenhouse gas
regulatory programs, requirements, export tariffs, or
other measures adopted or imposed to reduce greenhouse
gas emissions.
``(3) Emission allowance rebates.--The Administrator shall
take into account the value of emission allowance rebates
distributed under subpart 1 when making calculations under
paragraph (2).
``(4) Limitation.--The International Reserve Allowance
Program may not begin before January 1, 2025.
``(b) Covered Entities.--International reserve allowances may not be
held by covered entities to comply with section 722.
``Subpart 3--Presidential Determination
``SEC. 767. PRESIDENTIAL REPORTS AND DETERMINATIONS.
``(a) Report.--Not later than January 1, 2018, the President shall
submit a report to Congress on the effectiveness of the distribution of
emission allowance rebates under subpart 1 in mitigating carbon leakage
in industrial sectors. Such report shall also include--
``(1) recommendations on how to better achieve the purposes
of this part, including an assessment of the feasibility and
usefulness of an International Reserve Allowance Program; and
``(2) an assessment of the amount and duration of assistance,
including distribution of free allowances, being provided to
eligible industrial sectors in other developed countries to
mitigate costs of compliance with domestic greenhouse gas
reduction programs in such countries.
``(b) Presidential Determination.--Not later than June 30, 2022, and
every four years thereafter, the President, in consultation with the
Administrator and other appropriate agencies, shall determine, for each
eligible industrial sector, whether more than 70 percent of global
output for that sector is produced or manufactured in countries that
have met at least one of the following criteria:
``(1) The country is a party to an international agreement to
which the United States is a party that includes a nationally
enforceable greenhouse gas emissions reduction commitment for
that country that is at least as stringent as that of the
United States.
``(2) The country is a party to a multilateral or bilateral
emission reduction agreement for that sector to which the
United States is a party.
``(3) The country has an annual energy or greenhouse gas
intensity, as described in section 764(b)(2)(A)(i), for the
sector that is equal to or less than the energy or greenhouse
gas intensity for such sector in the United States in the most
recent calendar year for which data are available.
``(4) The country has implemented policies, including
sectoral caps, export tariffs, production fees, electricity
generation regulations, or greenhouse gas emissions fees, that
individually or collectively impose an incremental increase on
the cost of production associated with greenhouse gas emissions
from the sector that is at least 60 percent of the cost of
complying with this title in the United States for such sector,
averaged over a two-year period.
``(c) Effect of Presidential Determination.--If the President makes a
determination under subsection (b) with respect to an eligible
industrial sector that 70 percent or less of the global output for the
sector is produced or manufactured in countries that have met one or
more of the criteria in subsection (b), then the President shall, not
later than June 30, 2022, and every four years thereafter--
``(1) assess the extent to which the emission allowance
rebates provided pursuant to subpart 1 have mitigated or
addressed, or could mitigate or address, carbon leakage in that
sector;
``(2) assess the extent to which an International Reserve
Allowance Program has mitigated or addressed, or could mitigate
or address, carbon leakage in that sector and the feasibility
of establishing such a program; and
``(3) with respect to that sector--
``(A) modify the percentage by which direct and
indirect carbon factors will be multiplied under
section 765(a)(1)(B);
``(B) implement an International Reserve Allowance
Program under section 766 for the products of the
sector; or
``(C) take the actions in both subparagraph (A) and
(B).
``(d) Report to Congress.--Not later than June 30, 2022, and every
four years thereafter, the President shall transmit to the Congress a
report providing notice of any determination made under subsection (b),
explaining the reasons for such determination, and identifying the
actions taken by the President under subsection (c).
``(e) Limitation.--The President may only implement an International
Reserve Allowance Program for sectors producing primary products.
``(f) Iron and Steel Sector.--For the purposes of this subpart, the
Administrator shall consider to be in the same industrial sector--
``(1) entities using integrated iron and steelmaking
technologies (including coke ovens, blast furnaces, and other
iron-making technologies); and
``(2) entities using electric arc furnace technologies.''.
Subtitle B--Green Jobs and Worker Transition
PART 1--GREEN JOBS
SEC. 421. CLEAN ENERGY CURRICULUM DEVELOPMENT GRANTS.
(a) Authorization.--The Secretary of Education is authorized to award
grants, on a competitive basis, to eligible partnerships to develop
programs of study (containing the information described in section
122(c)(1)(A) of the Carl D. Perkins Career and Technical Education Act
of 2006 (20 U.S.C. 2342), that are focused on emerging careers and jobs
in renewable energy, energy efficiency, and climate change mitigation.
The Secretary of Education shall consult with the Secretary of Labor
and the Secretary of Energy prior to the issuance of a solicitation for
grant applications.
(b) Eligible Partnerships.--For purposes of this section, an eligible
partnership shall include--
(1) at least 1 local educational agency eligible for funding
under section 131 of the Carl D. Perkins Career and Technical
Education Act of 2006 (20 U.S.C. 2351) or an area career and
technical education school or education service agency
described in such section;
(2) at least 1 postsecondary institution eligible for funding
under section 132 of such Act (20 U.S.C. 2352); and
(3) representatives of the community including business,
labor organizations, and industry that have experience in clean
energy.
(c) Application.--An eligible partnership seeking a grant under this
section shall submit an application to the Secretary at such time and
in such manner as the Secretary may require. Applications shall
include--
(1) a description of the eligible partners and partnership,
the roles and responsibilities of each partner, and a
demonstration of each partner's capacity to support the
program;
(2) a description of the career area or areas within the
field of clean energy to be developed, the reason for the
choice, and evidence of the labor market need to prepare
students in that area;
(3) a description of the new or existing program of study and
both secondary and postsecondary components;
(4) a description of the students to be served by the new
program of study;
(5) a description of how the program of study funded by the
grant will be replicable and disseminated to schools outside of
the partnership, including urban and rural areas;
(6) a description of applied learning that will be
incorporated into the program of study and how it will
incorporate or reinforce academic learning;
(7) a description of how the program of study will be
delivered;
(8) a description of how the program will provide
accessibility to students, especially economically
disadvantaged, low performing, and urban and rural students;
(9) a description of how the program will address placement
of students in nontraditional fields as described in section
3(20) of the Carl D. Perkins Career and Technical Education Act
of 2006 (20 U.S.C. 2302(20)); and
(10) a description of how the applicant proposes to consult
or has consulted with a labor organization, labor management
partnership, apprenticeship program, or joint apprenticeship
and training program that provides education and training in
the field of study for which the applicant proposes to develop
a curriculum.
(d) Priority.--The Secretary shall give priority to applications
that--
(1) use online learning or other innovative means to deliver
the program of study to students, educators, and instructors
outside of the partnership; and
(2) focus on low performing students and special populations
as defined in section 3(29) of the Carl D. Perkins Career and
Technical Education Act of 2006 (20 U.S.C. 2302(29)).
(e) Peer Review.--The Secretary shall convene a peer review process
to review applications for grants under this section and to make
recommendations regarding the selection of grantees. Members of the
peer review committee shall include--
(1) educators who have experience implementing curricula with
comparable purposes; and
(2) business and industry experts in clean energy-related
fields.
(f) Uses of Funds.--Grants awarded under this section shall be used
for the development, implementation, and dissemination of programs of
study (as described in section 122(c)(1)(A) of the Carl D. Perkins
Career and Technical Education Act (20 U.S.C. 342(c)(1)(A))) in career
areas related to clean energy, renewable energy, energy efficiency, and
climate change mitigation.
SEC. 422. INCREASED FUNDING FOR ENERGY WORKER TRAINING PROGRAM.
Section 171(e)(8) of the Workforce Investment Act of 1998 (29 U.S.C.
2916(e)(8)) is amended by striking ``$125,000,000'' and inserting
``$150,000,000''.
PART 2--CLIMATE CHANGE WORKER ADJUSTMENT ASSISTANCE
SEC. 425. PETITIONS, ELIGIBILITY REQUIREMENTS, AND DETERMINATIONS.
(a) Petitions.--
(1) Filing.--A petition for certification of eligibility to
apply for adjustment assistance for a group of workers under
this part may be filed by any of the following:
(A) The group of workers.
(B) The certified or recognized union or other duly
authorized representative of such workers.
(C) Employers of such workers, one-stop operators or
one-stop partners (as defined in section 101 of the
Workforce Investment Act of 1998 (29 U.S.C. 2801)),
including State employment security agencies, or the
State dislocated worker unit established under title I
of such Act, on behalf of such workers.
The petition shall be filed simultaneously with the Secretary
of Labor and with the Governor of the State in which such
workers' employment site is located.
(2) Action by governors.--Upon receipt of a petition filed
under paragraph (1), the Governor shall--
(A) ensure that rapid response activities and
appropriate core and intensive services (as described
in section 134 of the Workforce Investment Act of 1998
(29 U.S.C. 2864)) authorized under other Federal laws
are made available to the workers covered by the
petition to the extent authorized under such laws; and
(B) assist the Secretary in the review of the
petition by verifying such information and providing
such other assistance as the Secretary may request.
(3) Action by the secretary.--Upon receipt of the petition,
the Secretary shall promptly publish notice in the Federal
Register and on the website of the Department of Labor that the
Secretary has received the petition and initiated an
investigation.
(4) Hearings.--If the petitioner, or any other person found
by the Secretary to have a substantial interest in the
proceedings, submits not later than 10 days after the date of
the Secretary's publication under paragraph (3) a request for a
hearing, the Secretary shall provide for a public hearing and
afford such interested persons an opportunity to be present, to
produce evidence, and to be heard.
(b) Eligibility.--
(1) In general.--A group of workers shall be certified by the
Secretary as eligible to apply for adjustment assistance under
this part pursuant to a petition filed under subsection (a)
if--
(A) the group of workers is employed in--
(i) energy producing and transforming
industries;
(ii) industries dependent upon energy
industries;
(iii) energy-intensive manufacturing
industries;
(iv) consumer goods manufacturing; or
(v) other industries whose employment the
Secretary determines has been adversely
affected by any requirement of title VII of the
Clean Air Act;
(B) the Secretary determines that a significant
number or proportion of the workers in such workers'
employment site have become totally or partially
separated, or are threatened to become totally or
partially separated from employment; and
(C) the sales, production, or delivery of goods or
services have decreased as a result of any requirement
of title VII of the Clean Air Act, including--
(i) the shift from reliance upon fossil fuels
to other sources of energy, including renewable
energy, that results in the closing of a
facility or layoff of employees at a facility
that mines, produces, processes, or utilizes
fossil fuels to generate electricity;
(ii) a substantial increase in the cost of
energy required for a manufacturing facility to
produce items whose prices are competitive in
the marketplace, to the extent the cost is not
offset by allowance allocation to the facility
pursuant to title VII of the Clean Air Act; or
(iii) other documented occurrences that the
Secretary determines are indicators of an
adverse impact on an industry described in
subparagraph (A) as a result of any requirement
of title VII of the Clean Air Act.
(2) Workers in public agencies.--A group of workers in a
public agency shall be certified by the Secretary as eligible
to apply for climate change adjustment assistance pursuant to a
petition filed if the Secretary determines that a significant
number or proportion of the workers in the public agency have
become totally or partially separated from employment, or are
threatened to become totally or partially separated as a result
of any requirement of title VII of the Clean Air Act.
(3) Adversely affected service workers.--A group of workers
shall be certified as eligible to apply for climate change
adjustment assistance pursuant to a petition filed if the
Secretary determines that--
(A) a significant number or proportion of the service
workers at an employment site where a group of workers
has been certified by the Secretary as eligible to
apply for adjustment assistance under this part
pursuant to paragraph (1) have become totally or
partially separated from employment, or are threatened
to become totally or partially separated; and
(B) a loss of business in the firm providing service
workers to an employment site is directly attributable
to one or more of the documented occurrences listed in
paragraph (1)(C).
(c) Authority to Investigate and Collect Information.--
(1) In general.--The Secretary shall, in determining whether
to certify a group of workers under subsection (d), obtain
information the Secretary determines to be necessary to make
the certification, through questionnaires and in such other
manner as the Secretary determines appropriate from--
(A) the workers' employer;
(B) officials of certified or recognized unions or
other duly authorized representatives of the group of
workers; or
(C) one-stop operators or one-stop partners (as
defined in section 101 of the Workforce Investment Act
of 1998 (29 U.S.C. 2801)); or
(2) Verification of information.--The Secretary shall require
an employer, union, or one-stop operator or partner to certify
all information obtained under paragraph (1) from the employer,
union, or one-stop operator or partner (as the case may be) on
which the Secretary relies in making a determination under
subsection (d), unless the Secretary has a reasonable basis for
determining that such information is accurate and complete
without being certified.
(3) Protection of confidential information.--The Secretary
may not release information obtained under paragraph (1) that
the Secretary considers to be confidential business information
unless the employer submitting the confidential business
information had notice, at the time of submission, that the
information would be released by the Secretary, or the employer
subsequently consents to the release of the information.
Nothing in this paragraph shall be construed to prohibit the
Secretary from providing such confidential business information
to a court in camera or to another party under a protective
order issued by a court.
(d) Determination by the Secretary of Labor.--
(1) In general.--As soon as possible after the date on which
a petition is filed under subsection (a), but in any event not
later than 40 days after that date, the Secretary, in
consultation with the Secretary of Energy and the
Administrator, as necessary, shall determine whether the
petitioning group meets the requirements of subsection (b) and
shall issue a certification of eligibility to apply for
assistance under this part covering workers in any group which
meets such requirements. Each certification shall specify the
date on which the total or partial separation began or
threatened to begin. Upon reaching a determination on a
petition, the Secretary shall promptly publish a summary of the
determination in the Federal Register and on the website of the
Department of Labor, together with the Secretary's reasons for
making such determination.
(2) One year limitation.--A certification under this section
shall not apply to any worker whose last total or partial
separation from the employment site before the worker's
application under section 426(a) occurred more than 1 year
before the date of the petition on which such certification was
granted.
(3) Revocation of certification.--Whenever the Secretary
determines, with respect to any certification of eligibility of
the workers of an employment site, that total or partial
separations from such site are no longer a result of the
factors specified in subsection (b)(1), the Secretary shall
terminate such certification and promptly have notice of such
termination published in the Federal Register and on the
website of the Department of Labor, together with the
Secretary's reasons for making such determination. Such
termination shall apply only with respect to total or partial
separations occurring after the termination date specified by
the Secretary.
(e) Industry Notification of Assistance.--Upon receiving a
notification of a determination under subsection (d) with respect to a
domestic industry the Secretary of Labor shall notify the
representatives of the domestic industry affected by the determination,
employers publicly identified by name during the course of the
proceeding relating to the determination, and any certified or
recognized union or, to the extent practicable, other duly authorized
representative of workers employed by such representatives of the
domestic industry, of--
(1) the adjustment allowances, training, and other benefits
available under this part;
(2) the manner in which to file a petition and apply for such
benefits; and
(3) the availability of assistance in filing such petitions;
(4) notify the Governor of each State in which one or more
employers in such industry are located of the Secretary's
determination and the identity of the employers; and
(5) upon request, provide any assistance that is necessary to
file a petition under subsection (a).
(f) Benefit Information to Workers, Providers of Training.--
(1) In general.--The Secretary shall provide full information
to workers about the adjustment allowances, training, and other
benefits available under this part and about the petition and
application procedures, and the appropriate filing dates, for
such allowances, training and services. The Secretary shall
provide whatever assistance is necessary to enable groups of
workers to prepare petitions or applications for program
benefits. The Secretary shall make every effort to insure that
cooperating State agencies fully comply with the agreements
entered into under section 426(a) and shall periodically review
such compliance. The Secretary shall inform the State Board for
Vocational Education or equivalent agency, the one-stop
operators or one-stop partners (as defined in section 101 of
the Workforce Investment Act of 1998 (29 U.S.C. 2801), and
other public or private agencies, institutions, and employers,
as appropriate, of each certification issued under subsection
(d) and of projections, if available, of the needs for training
under as a result of such certification.
(2) Notice by mail.--The Secretary shall provide written
notice through the mail of the benefits available under this
part to each worker whom the Secretary has reason to believe is
covered by a certification made under subsection (d)--
(A) at the time such certification is made, if the
worker was partially or totally separated from the
adversely affected employment before such
certification, or--
(B) at the time of the total or partial separation of
the worker from the adversely affected employment, if
subparagraph (A) does not apply.
(3) Newspapers; website.--The Secretary shall publish notice
of the benefits available under this part to workers covered by
each certification made under subsection (d) in newspapers of
general circulation in the areas in which such workers reside
and shall make such information available on the website of the
Department of Labor.
SEC. 426. PROGRAM BENEFITS.
(a) Climate Change Adjustment Allowance.--
(1) Eligibility.--Payment of a climate change adjustment
allowance shall be made to an adversely affected worker covered
by a certification under section 425(b) who files an
application for such allowance for any week of unemployment
which begins on or after the date of such certification, if the
following conditions are met:
(A) Such worker's total or partial separation before
the worker's application under this part occurred--
(i) on or after the date, as specified in the
certification under which the worker is
covered, on which total or partial separation
began or threatened to begin in the adversely
affected employment;
(ii) before the expiration of the 2-year
period beginning on the date on which the
determination under section 425(d) was made;
and
(iii) before the termination date, if any,
determined pursuant to section 425(d)(3).
(B) Such worker had, in the 52-week period ending
with the week in which such total or partial separation
occurred, at least 26 weeks of full-time employment or
1,040 hours of part time employment in adversely
affected employment, or, if data with respect to weeks
of employment are not available, equivalent amounts of
employment computed under regulations prescribed by the
Secretary. For the purposes of this paragraph, any week
in which such worker--
(i) is on employer-authorized leave for
purposes of vacation, sickness, injury,
maternity, or inactive duty or active duty
military service for training;
(ii) does not work because of a disability
that is compensable under a workmen's
compensation law or plan of a State or the
United States;
(iii) had his employment interrupted in order
to serve as a full-time representative of a
labor organization in such firm; or
(iv) is on call-up for purposes of active
duty in a reserve status in the Armed Forces of
the United States, provided such active duty is
``Federal service'' as defined in section
8521(a)(1) of title 5, United States Code,
shall be treated as a week of employment.
(C) Such worker is enrolled in a training program
approved by the Secretary under subsection (b)(2).
(2) Ineligibility for certain other benefits.--An adversely
affected worker receiving a payment under this section shall be
ineligible to receive any other form of unemployment insurance
for the period in which such worker is receiving a climate
change adjustment allowance under this section.
(3) Revocation.--If--
(A) the Secretary determines that--
(i) the adversely affected worker--
(I) has failed to begin participation
in the training program the enrollment
in which meets the requirement of
paragraph (1)(C); or
(II) has ceased to participate in
such training program before completing
such training program; and
(ii) there is no justifiable cause for such
failure or cessation; or
(B) the certification made with respect to such
worker under section 425(d) is revoked under paragraph
(3) of such section,
no adjustment allowance may be paid to the adversely affected
worker under this part for the week in which such failure,
cessation, or revocation occurred, or any succeeding week,
until the adversely affected worker begins or resumes
participation in a training program approved by the Secretary
under section (b)(2).
(4) Waivers of training requirements.--The Secretary may
issue a written statement to an adversely affected worker
waiving the requirement to be enrolled in training described in
subsection (b)(2) if the Secretary determines that it is not
feasible or appropriate for the worker, because of 1 or more of
the following reasons:
(A) Recall.--The worker has been notified that the
worker will be recalled by the employer from which the
separation occurred.
(B) Marketable skills.--
(i) In general.--The worker possesses
marketable skills for suitable employment (as
determined pursuant to an assessment of the
worker, which may include the profiling system
under section 303(j) of the Social Security Act
(42 U.S.C. 503(j)), carried out in accordance
with guidelines issued by the Secretary) and
there is a reasonable expectation of employment
at equivalent wages in the foreseeable future.
(ii) Marketable skills defined.--For purposes
of clause (i), the term ``marketable skills''
may include the possession of a postgraduate
degree from an institution of higher education
(as defined in section 102 of the Higher
Education Act of 1965 (20 U.S.C. 1002)) or an
equivalent institution, or the possession of an
equivalent postgraduate certification in a
specialized field.
(C) Retirement.--The worker is within 2 years of
meeting all requirements for entitlement to either--
(i) old-age insurance benefits under title II
of the Social Security Act (42 U.S.C. 401 et
seq.) (except for application therefor); or
(ii) a private pension sponsored by an
employer or labor organization.
(D) Health.--The worker is unable to participate in
training due to the health of the worker, except that a
waiver under this subparagraph shall not be construed
to exempt a worker from requirements relating to the
availability for work, active search for work, or
refusal to accept work under Federal or State
unemployment compensation laws.
(E) Enrollment unavailable.--The first available
enrollment date for the training of the worker is
within 60 days after the date of the determination made
under this paragraph, or, if later, there are
extenuating circumstances for the delay in enrollment,
as determined pursuant to guidelines issued by the
Secretary.
(F) Training not available.--Training described in
subsection (b)(2) is not reasonably available to the
worker from either governmental agencies or private
sources (which may include area career and technical
education schools, as defined in section 3 of the Carl
D. Perkins Career and Technical Education Act of 2006
(20 U.S.C. 2302), and employers), no training that is
suitable for the worker is available at a reasonable
cost, or no training funds are available.
(5) Weekly amounts.--The climate change adjustment allowance
payable to an adversely affected worker for a week of
unemployment shall be an amount equal to 70 percent of the
average weekly wage of such worker, but in no case shall such
amount exceed the average weekly wage for all workers in the
State where the adversely affected worker resides.
(6) Maximum duration of benefits.--An eligible worker may
receive a climate change adjustment allowance under this
subsection for a period of not longer than 156 weeks.
(b) Employment Services and Training.--
(1) Information and employment services.--The Secretary shall
make available, directly or through agreements with the States
under section 427(a) to adversely affected workers covered by a
certification under section 425(a) the following information
and employment services:
(A) Comprehensive and specialized assessment of skill
levels and service needs, including through--
(i) diagnostic testing and use of other
assessment tools; and
(ii) in-depth interviewing and evaluation to
identify employment barriers and appropriate
employment goals.
(B) Development of an individual employment plan to
identify employment goals and objectives, and
appropriate training to achieve those goals and
objectives.
(C) Information on training available in local and
regional areas, information on individual counseling to
determine which training is suitable training, and
information on how to apply for such training.
(D) Information on training programs and other
services provided by a State pursuant to title I of the
Workforce Investment Act of 1998 and available in local
and regional areas, information on individual
counseling to determine which training is suitable
training, and information on how to apply for such
training.
(E) Information on how to apply for financial aid,
including referring workers to educational opportunity
centers described in section 402F of the Higher
Education Act of 1965 (20 U.S.C. 1070a-16), where
applicable, and notifying workers that the workers may
request financial aid administrators at institutions of
higher education (as defined in section 102 of such Act
(20 U.S.C. 1002)) to use the administrators' discretion
under section 479A of such Act (20 U.S.C. 1087tt) to
use current year income data, rather than preceding
year income data, for determining the amount of need of
the workers for Federal financial assistance under
title IV of such Act (20 U.S.C. 1070 et seq.).
(F) Short-term prevocational services, including
development of learning skills, communications skills,
interviewing skills, punctuality, personal maintenance
skills, and professional conduct to prepare individuals
for employment or training.
(G) Individual career counseling, including job
search and placement counseling, during the period in
which the individual is receiving a climate change
adjustment allowance or training under this part, and
after receiving such training for purposes of job
placement.
(H) Provision of employment statistics information,
including the provision of accurate information
relating to local, regional, and national labor market
areas, including--
(i) job vacancy listings in such labor market
areas;
(ii) information on jobs skills necessary to
obtain jobs identified in job vacancy listings
described in subparagraph (A);
(iii) information relating to local
occupations that are in demand and earnings
potential of such occupations; and
(iv) skills requirements for local
occupations described in subparagraph (C).
(I) Information relating to the availability of
supportive services, including services relating to
child care, transportation, dependent care, housing
assistance, and need-related payments that are
necessary to enable an individual to participate in
training.
(2) Training.--
(A) Approval of and payment for training.--If the
Secretary determines, with respect to an adversely
affected worker that--
(i) there is no suitable employment (which
may include technical and professional
employment) available for an adversely affected
worker;
(ii) the worker would benefit from
appropriate training;
(iii) there is a reasonable expectation of
employment following completion of such
training;
(iv) training approved by the Secretary is
reasonably available to the worker from either
governmental agencies or private sources
(including area career and technical education
schools, as defined in section 3 of the Carl D.
Perkins Career and Technical Education Act of
2006, and employers);
(v) the worker is qualified to undertake and
complete such training; and
(vi) such training is suitable for the worker
and available at a reasonable cost,
the Secretary shall approve such training for the
worker. Upon such approval, the worker shall be
entitled to have payment of the costs of such training
(subject to the limitations imposed by this section)
paid on the worker's behalf by the Secretary directly
or through a voucher system.
(B) Distribution.--The Secretary shall establish
procedures for the distribution of the funds to States
to carry out the training programs approved under this
paragraph, and shall make an initial distribution of
the funds made available as soon as practicable after
the beginning of each fiscal year.
(C) Additional rules regarding approval of and
payment for training.--
(i) For purposes of applying subparagraph
(A)(iii), a reasonable expectation of
employment does not require that employment
opportunities for a worker be available, or
offered, immediately upon the completion of
training approved under such subparagraph.
(ii) If the costs of training an adversely
affected worker are paid by the Secretary under
subparagraph (A), no other payment for such
costs may be made under any other provision of
Federal law. No payment may be made under
subparagraph (A) of the costs of training an
adversely affected worker or an adversely
affected incumbent worker if such costs--
(I) have already been paid under any
other provision of Federal law; or
(II) are reimbursable under any other
provision of Federal law and a portion
of such costs have already been paid
under such other provision of Federal
law.
The provisions of this clause shall not apply
to, or take into account, any funds provided
under any other provision of Federal law which
are used for any purpose other than the direct
payment of the costs incurred in training a
particular adversely affected worker, even if
such use has the effect of indirectly paying or
reducing any portion of the costs involved in
training the adversely affected worker.
(D) Training programs.--The training programs that
may be approved under subparagraph (A) include--
(i) employer-based training, including--
(I) on-the-job training if approved
by the Secretary under subsection (c);
and
(II) joint labor-management
apprenticeship programs;
(ii) any training program provided by a State
pursuant to title I of the Workforce Investment
Act of 1998;
(iii) any training program approved by a
private industry council established under
section 102 of such Act;
(iv) any programs in career and technical
education described in section 3(5) of the Carl
D. Perkins Career and Technical Education Act
of 2006;
(v) any program of remedial education;
(vi) any program of prerequisite education or
coursework required to enroll in training that
may be approved under this paragraph;
(vii) any training program for which all, or
any portion, of the costs of training the
worker are paid--
(I) under any Federal or State
program other than this part; or
(II) from any source other than this
part;
(viii) any training program or coursework at
an accredited institution of higher education
(described in section 102 of the Higher
Education Act of 1965 (20 U.S.C. 1002)),
including a training program or coursework for
the purpose of--
(I) obtaining a degree or
certification; or
(II) completing a degree or
certification that the worker had
previously begun at an accredited
institution of higher education; and
(ix) any other training program approved by
the Secretary.
(3) Supplemental assistance.--The Secretary may, as appropriate,
authorize supplemental assistance that is necessary to defray
reasonable transportation and subsistence expenses for separate
maintenance in a case in which training for a worker is provided in a
facility that is not within commuting distance of the regular place of
residence of the worker.
(c) On-the-Job Training Requirements.--
(1) In general.--The Secretary may approve on-the-job
training for any adversely affected worker if--
(A) the Secretary determines that on-the-job
training--
(i) can reasonably be expected to lead to
suitable employment with the employer offering
the on-the-job training;
(ii) is compatible with the skills of the
worker;
(iii) includes a curriculum through which the
worker will gain the knowledge or skills to
become proficient in the job for which the
worker is being trained; and
(iv) can be measured by benchmarks that
indicate that the worker is gaining such
knowledge or skills; and
(B) the State determines that the on-the-job training
program meets the requirements of clauses (iii) and
(iv) of subparagraph (A).
(2) Monthly payments.--The Secretary shall pay the costs of
on-the-job training approved under paragraph (1) in monthly
installments.
(3) Contracts for on-the-job training.--
(A) In general.--The Secretary shall ensure, in
entering into a contract with an employer to provide
on-the-job training to a worker under this subsection,
that the skill requirements of the job for which the
worker is being trained, the academic and occupational
skill level of the worker, and the work experience of
the worker are taken into consideration.
(B) Term of contract.--Training under any such
contract shall be limited to the period of time
required for the worker receiving on-the-job training
to become proficient in the job for which the worker is
being trained, but may not exceed 156 weeks in any
case.
(4) Exclusion of certain employers.--The Secretary shall not
enter into a contract for on-the-job training with an employer
that exhibits a pattern of failing to provide workers receiving
on-the-job training from the employer with--
(A) continued, long-term employment as regular
employees; and
(B) wages, benefits, and working conditions that are
equivalent to the wages, benefits, and working
conditions provided to regular employees who have
worked a similar period of time and are doing the same
type of work as workers receiving on-the-job training
from the employer.
(d) Administrative and Employment Services Funding.--
(1) Administrative funding.--In addition to any funds made
available to a State to carry out this section for a fiscal
year, the State shall receive for the fiscal year a payment in
an amount that is equal to 15 percent of the amount of such
funds and shall--
(A) use not more than \2/3\ of such payment for the
administration of the climate change adjustment
assistance for workers program under this part,
including for--
(i) processing waivers of training
requirements under subsection (a)(4); and
(ii) collecting, validating, and reporting
data required under this part; and
(B) use not less than \1/3\ of such payment for
information and employment services under subsection
(b)(1).
(2) Employment services funding.--
(A) In general.--In addition to any funds made
available to a State to carry out subsection (b)(2) and
the payment under paragraph (1) for a fiscal year, the
Secretary shall provide to the State for the fiscal
year a reasonable payment for the purpose of providing
employment and services under subsection (b)(1).
(B) Voluntary return of funds.--A State that receives
a payment under subparagraph (A) may decline or
otherwise return such payment to the Secretary.
(e) Job Search Allowances.--The Secretary of Labor may provide
adversely affected workers a one-time job search allowance in
accordance with regulations prescribed by the Secretary. Any job search
allowance provided shall be available only under the following
circumstances and conditions:
(1) The worker is no longer eligible for the climate change
adjustment allowance under subsection (a) and has completed the
training program required by subsection (a)(1)(E).
(2) The Secretary determines that the worker cannot
reasonably be expected to secure suitable employment in the
commuting area in which the worker resides.
(3) An allowance granted shall provide reimbursement to the
worker of all necessary job search expenses as prescribed by
the Secretary in regulations. Such reimbursement under this
subsection may not exceed $1,500 for any worker.
(f) Relocation Allowance Authorized.--
(1) In general.--Any adversely affected worker covered by a
certification issued under section 425 may file an application
for a relocation allowance with the Secretary, and the
Secretary may grant the relocation allowance, subject to the
terms and conditions of this subsection.
(2) Conditions for granting allowance.--A relocation
allowance may be granted if all of the following terms and
conditions are met:
(A) Assist an adversely affected worker.--The
relocation allowance will assist an adversely affected
worker in relocating within the United States.
(B) Local employment not available.--The Secretary
determines that the worker cannot reasonably be
expected to secure suitable employment in the commuting
area in which the worker resides.
(C) Total separation.--The worker is totally
separated from employment at the time relocation
commences.
(D) Suitable employment obtained.--The worker--
(i) has obtained suitable employment
affording a reasonable expectation of long-term
duration in the area in which the worker wishes
to relocate; or
(ii) has obtained a bona fide offer of such
employment.
(E) Application.--The worker filed an application
with the Secretary at such time and in such manner as
the Secretary shall specify by regulation.
(3) Amount of allowance.--The relocation allowance granted to
a worker under paragraph (1) includes--
(A) all reasonable and necessary expenses (including,
subsistence and transportation expenses at levels not
exceeding amounts prescribed by the Secretary in
regulations) incurred in transporting the worker, the
worker's family, and household effects; and
(B) a lump sum equivalent to 3 times the worker's
average weekly wage, up to a maximum payment of $1,500.
(4) Limitations.--A relocation allowance may not be granted
to a worker unless--
(A) the relocation occurs within 182 days after the
filing of the application for relocation assistance; or
(B) the relocation occurs within 182 days after the
conclusion of training, if the worker entered a
training program approved by the Secretary under
subsection (b)(2).
(g) Health Insurance Continuation.--Not later than 1 year after the
date of enactment of this part, the Secretary of Labor shall prescribe
regulations to provide, for the period in which an adversely affected
worker is participating in a training program described in subsection
(b)(2), 80 percent of the monthly premium of any health insurance
coverage that an adversely affected worker was receiving from such
worker's employer prior to the separation from employment described in
section 425(b), to be paid to any health care insurance plan designated
by the adversely affected worker receiving an allowance under this
section.
SEC. 427. GENERAL PROVISIONS.
(a) Agreements With States.--
(1) In general.--The Secretary is authorized on behalf of the
United States to enter into an agreement with any State, or
with any State agency (referred to in this section as
``cooperating States'' and ``cooperating States agencies''
respectively). Under such an agreement, the cooperating State
agency--
(A) as agent of the United States, shall receive
applications for, and shall provide, payments on the
basis provided in this part;
(B) in accordance with paragraph (6), shall make
available to adversely affected workers covered by a
certification under section 425(d) the employment
services described in section 426(b)(1);
(C) shall make any certifications required under
section 425(d);
(D) shall otherwise cooperate with the Secretary and
with other State and Federal agencies in providing
payments and services under this part.
Each agreement under this section shall provide the terms and
conditions upon which the agreement may be amended, suspended,
or terminated.
(2) Form and manner of data.--Each agreement under this
section shall--
(A) provide the Secretary with the authority to
collect any data the Secretary determines necessary to
meet the requirements of this part; and
(B) specify the form and manner in which any such
data requested by the Secretary shall be reported.
(3) Relationship to unemployment insurance.--Each agreement
under this section shall provide that an adversely affected
worker receiving a climate change adjustment allowance under
this part shall not be eligible for unemployment insurance
otherwise payable to such worker under the laws of the State.
(4) Review.--A determination by a cooperating State agency
with respect to entitlement to program benefits under an
agreement is subject to review in the same manner and to the
same extent as determinations under the applicable State law
and only in that manner and to that extent.
(5) Coordination.--Any agreement entered into under this
section shall provide for the coordination of the
administration of the provisions for employment services,
training, and supplemental assistance under section 426 and
under title I of the Workforce Investment Act of 1998 upon such
terms and conditions as are established by the Secretary in
consultation with the States and set forth in such agreement.
Any agency of the State jointly administering such provisions
under such agreement shall be considered to be a cooperating
State agency for purposes of this part.
(6) Responsibilities of cooperating agencies.--Each
cooperating State agency shall, in carrying out paragraph
(1)(B)--
(A) advise each worker who applies for unemployment
insurance of the benefits under this part and the
procedures and deadlines for applying for such
benefits;
(B) facilitate the early filing of petitions under
section 425(a) for any workers that the agency
considers are likely to be eligible for benefits under
this part;
(C) advise each adversely affected worker to apply
for training under section 426(b) before, or at the
same time, the worker applies for climate change
adjustment allowances under section 426(a);
(D) perform outreach to, intake of, and orientation
for adversely affected workers and adversely affected
incumbent workers covered by a certification under
section 426(a) with respect to assistance and benefits
available under this part;
(E) make employment services described in section
426(b)(1) available to adversely affected workers and
adversely affected incumbent workers covered by a
certification under section 425(d) and, if funds
provided to carry out this part are insufficient to
make such services available, make arrangements to make
such services available through other Federal programs;
and
(F) provide the benefits and reemployment services
under this part in a manner that is necessary for the
proper and efficient administration of this part,
including the use of state agency personnel employed in
accordance with a merit system of personnel
administration standards, including--
(i) making determinations of eligibility for,
and payment of, climate change readjustment
allowances and health care benefit replacement
amounts;
(ii) developing recommendations regarding
payments as a bridge to retirement and lump sum
payments to pension plans in accordance with
this subsection; and
(iii) the provision of reemployment services
to eligible workers, including referral to
training services.
(7) In order to promote the coordination of workforce
investment activities in each State with activities carried out
under this part, any agreement entered into under this section
shall provide that the State shall submit to the Secretary, in
such form as the Secretary may require, the description and
information described in paragraphs (8) and (14) of section
112(b) of the Workforce Investment Act of 1998 (29 U.S.C.
2822(b)) and a description of the State's rapid response
activities under section 221(a)(2)(A).
(8) Control measures.--
(A) In general.--The Secretary shall require each
cooperating State and cooperating State agency to
implement effective control measures and to effectively
oversee the operation and administration of the climate
change adjustment assistance program under this part,
including by means of monitoring the operation of
control measures to improve the accuracy and timeliness
of the data being collected and reported.
(B) Definition.--For purposes of subparagraph (A),
the term ``control measures'' means measures that--
(i) are internal to a system used by a State
to collect data; and
(ii) are designed to ensure the accuracy and
verifiability of such data.
(9) Data reporting.--
(A) In general.--Any agreement entered into under
this section shall require the cooperating State or
cooperating State agency to report to the Secretary on
a quarterly basis comprehensive performance
accountability data, to consist of--
(i) the core indicators of performance
described in subparagraph (B)(i);
(ii) the additional indicators of performance
described in subparagraph (B)(ii), if any; and
(iii) a description of efforts made to
improve outcomes for workers under the climate
change adjustment assistance program.
(B) Core indicators described.--
(i) In general.--The core indicators of
performance described in this subparagraph
are--
(I) the percentage of workers
receiving benefits under this part who
are employed during the second calendar
quarter following the calendar quarter
in which the workers cease receiving
such benefits;
(II) the percentage of such workers
who are employed in each of the third
and fourth calendar quarters following
the calendar quarter in which the
workers cease receiving such benefits;
and
(III) the earnings of such workers in
each of the third and fourth calendar
quarters following the calendar quarter
in which the workers cease receiving
such benefits.
(ii) Additional indicators.--The Secretary
and a cooperating State or cooperating State
agency may agree upon additional indicators of
performance for the climate change adjustment
assistance program under this part, as
appropriate.
(C) Standards with respect to reliability of data.--
In preparing the quarterly report required by
subparagraph (A), each cooperating State or cooperating
State agency shall establish procedures that are
consistent with guidelines to be issued by the
Secretary to ensure that the data reported are valid
and reliable.
(10) Verification of eligibility for program benefits.--
(A) In general.--An agreement under this section
shall provide that the State shall periodically
redetermine that a worker receiving benefits under this
part who is not a citizen or national of the United
States remains in a satisfactory immigration status.
Once satisfactory immigration status has been initially
verified through the immigration status verification
system described in section 1137(d) of the Social
Security Act (42 U.S.C. 1320b-7(d)) for purposes of
establishing a worker's eligibility for unemployment
compensation, the State shall reverify the worker's
immigration status if the documentation provided during
initial verification will expire during the period in
which that worker is potentially eligible to receive
benefits under this part. The State shall conduct such
redetermination in a timely manner, utilizing the
immigration status verification system described in
section 1137(d) of the Social Security Act (42 U.S.C.
1320b-7(d)).
(B) Procedures.--The Secretary shall establish
procedures to ensure the uniform application by the
States of the requirements of this paragraph.
(b) Administration Absent State Agreement.--
(1) In any State where there is no agreement in force between
a State or its agency under subsection (a), the Secretary shall
promulgate regulations for the performance of all necessary
functions under section 426, including provision for a fair
hearing for any worker whose application for payments is
denied.
(2) A final determination under paragraph (1) with respect to
entitlement to program benefits under section 426 is subject to
review by the courts in the same manner and to the same extent
as is provided by section 205(g) of the Social Security Act (42
U.S.C. 405(g)).
(c) Prohibition on Contracting With Private Entities.--Neither the
Secretary nor a State may contract with any private for-profit or
nonprofit entity for the administration of the climate change
adjustment assistance program under this part.
(d) Payment to the States.--
(1) In general.--The Secretary shall from time to time
certify to the Secretary of the Treasury for payment to each
cooperating State the sums necessary to enable such State as
agent of the United States to make payments provided for by
this part.
(2) Restriction.--All money paid a State under this
subsection shall be used solely for the purposes for which it
is paid; and money so paid which is not used for such purposes
shall be returned, at the time specified in the agreement under
this section, to the Secretary of the Treasury.
(3) Bonds.--Any agreement under this section may require any
officer or employee of the State certifying payments or
disbursing funds under the agreement or otherwise participating
in the performance of the agreement, to give a surety bond to
the United States in such amount as the Secretary may deem
necessary, and may provide for the payment of the cost of such
bond from funds for carrying out the purposes of this part.
(e) Labor Standards.--
(1) Prohibition on displacement.--An individual in an
apprenticeship program or on-the-job training program under
this part shall not displace (including a partial displacement,
such as a reduction in the hours of non-overtime work, wages,
or employment benefits) any employed employee.
(2) Prohibition on impairment of contracts.--An
apprenticeship program or on-the-job raining program under this
Act shall not impair an existing contract for services or
collective bargaining agreement, and no such activity that
would be inconsistent with the terms of a collective bargaining
agreement shall be undertaken without the written concurrence
of the labor organization and employer concerned.
(3) Additional standards.--The Secretary, or a State acting
under an agreement described in subsection (a) may pay the
costs of on-the-job training, notwithstanding any other
provision of this section, only if--
(A) in the case of training which would be
inconsistent with the terms of a collective bargaining
agreement, the written concurrence of the labor
organization concerned has been obtained;
(B) the job for which such adversely affected worker
is being trained is not being created in a promotional
line that will infringe in any way upon the promotional
opportunities of currently employed individuals;
(C) such training is not for the same occupation from
which the worker was separated and with respect to
which such worker's group was certified pursuant to
section 425(d);
(D) the employer is provided reimbursement of not
more than 50 percent of the wage rate of the
participant, for the cost of providing the training and
additional supervision related to the training; and
(E) the employer has not received payment under with
respect to any other on-the-job training provided by
such employer which failed to meet the requirements of
subparagraphs (A) through (D).
(f) Definitions.--As used in this part the following definitions
apply:
(1) The term ``adversely affected employment'' means
employment at an employment site, if workers at such site are
eligible to apply for adjustment assistance under this part.
(2) The term ``adversely affected worker'' means an
individual who has been totally or partially separated from
employment and is eligible to apply for adjustment assistance
under this part.
(3) The term ``average weekly wage'' means \1/13\ of the
total wages paid to an individual in the quarter in which the
individual's total wages were highest among the first 4 of the
last 5 completed calendar quarters immediately before the
quarter in which occurs the week with respect to which the
computation is made. Such week shall be the week in which total
separation occurred, or, in cases where partial separation is
claimed, an appropriate week, as defined in regulations
prescribed by the Secretary.
(4) The term ``average weekly hours'' means the average hours
worked by the individual (excluding overtime) in the employment
from which he has been or claims to have been separated in the
52 weeks (excluding weeks during which the individual was sick
or on vacation) preceding the week specified in the last
sentence of paragraph (4).
(5) The term ``benefit period'' means, with respect to an
individual--
(A) the benefit year and any ensuing period, as
determined under applicable State law, during which the
individual is eligible for regular compensation,
additional compensation, or extended compensation; or
(B) the equivalent to such a benefit year or ensuing
period provided for under the applicable Federal
unemployment insurance law.
(6) The term ``consumer goods manufacturing'' means the
electrical equipment, appliance, and component manufacturing
industry and transportation equipment manufacturing.
(7) The term ``employment site'' means a single facility or
site of employment.
(8) The term ``energy-intensive manufacturing industries''
means all industrial sectors, entities, or groups of entities
that meet the energy or greenhouse gas intensity criteria in
section 765(b)(2)(A)(i) of the Clean Air Act based on the most
recent data available.
(9) The term ``energy producing and transforming industries''
means the coal mining industry, oil and gas extraction,
electricity power generation, transmission and distribution,
and natural gas distribution.
(10) The term ``industries dependent on energy industries''
means rail transportation and pipeline transportation.
(11) The term ``on-the-job training'' means training provided
by an employer to an individual who is employed by the
employer.
(12) The terms ``partial separation'' and ``partially
separated'' refer, with respect to an individual who has not
been totally separated, that such individual has had--
(A) his or her hours of work reduced to 80 percent or
less of his average weekly hours in adversely affected
employment; and
(B) his or her wages reduced to 80 percent or less of
his average weekly wage in such adversely affected
employment.
(13) The term ``public agency'' means a department or agency
of a State or political subdivision of a State or of the
Federal government.
(14) The term ``Secretary'' means the Secretary of Labor.
(15) The term ``service workers'' means workers supplying
support or auxiliary services to an employment site.
(16) The term ``State'' includes the District of Columbia and
the Commonwealth of Puerto Rico: and the term ``United States''
when used in the geographical sense includes such Commonwealth.
(17) The term ``State agency'' means the agency of the State
which administers the State law.
(18) The term ``State law'' means the unemployment insurance
law of the State approved by the Secretary of Labor under
section 3304 of the Internal Revenue Code of 1954.
(19) The terms ``total separation'' and ``totally separated''
refer to the layoff or severance of an individual from
employment with an employer in which adversely affected
employment exists.
(20) The term ``unemployment insurance'' means the
unemployment compensation payable to an individual under any
State law or Federal unemployment compensation law, including
chapter 85 of title 5, United States Code, and the Railroad
Unemployment Insurance Act. The terms ``regular compensation'',
``additional compensation'', and ``extended compensation'' have
the same respective meanings that are given them in section
205(2), (3), and (4) of the Federal-State Extended Unemployment
Compensation Act of 1970 (26 U.S.C. 3304 note.)
(21) The term ``week'' means a week as defined in the
applicable State law.
(22) The term ``week of unemployment'' means a week of total,
part-total, or partial unemployment as determined under the
applicable State law or Federal unemployment insurance law.
(g) Special Rule With Respect to Military Service.--
(1) In general.--Notwithstanding any other provision of this
part, the Secretary may waive any requirement of this part that
the Secretary determines is necessary to ensure that an
adversely affected worker who is a member of a reserve
component of the Armed Forces and serves a period of duty
described in paragraph (2) is eligible to receive a climate
change adjustment allowance, training, and other benefits under
this part in the same manner and to the same extent as if the
worker had not served the period of duty.
(2) Period of duty described.--An adversely affected worker
serves a period of duty described in this paragraph if, before
completing training under this part, the worker--
(A) serves on active duty for a period of more than
30 days under a call or order to active duty of more
than 30 days; or
(B) in the case of a member of the Army National
Guard of the United States or Air National Guard of the
United States, performs full-time National Guard duty
under section 502(f) of title 32, United States Code,
for 30 consecutive days or more when authorized by the
President or the Secretary of Defense for the purpose
of responding to a national emergency declared by the
President and supported by Federal funds.
(h) Fraud and Recovery of Overpayments.--
(1) Recovery of payments to which an individual was not
entitled.--If the Secretary or a court of competent
jurisdiction determines that any person has received any
payment under this part to which the individual was not
entitled, such individual shall be liable to repay such amount
to the Secretary, as the case may be, except that the Secretary
shall waive such repayment if such agency or the Secretary
determines that--
(A) the payment was made without fault on the part of
such individual; and
(B) requiring such repayment would cause a financial
hardship for the individual (or the individual's
household, if applicable) when taking into
consideration the income and resources reasonably
available to the individual (or household) and other
ordinary living expenses of the individual (or
household).
(2) Means of recovery.--Unless an overpayment is otherwise
recovered, or waived under paragraph (1), the Secretary shall
recover the overpayment by deductions from any sums payable to
such person under this part, under any Federal unemployment
compensation law or other Federal law administered by the
Secretary which provides for the payment of assistance or an
allowance with respect to unemployment. Any amount recovered
under this section shall be returned to the Treasury of the
United States.
(3) Penalties for fraud.--Any person who--
(A) makes a false statement of a material fact
knowing it to be false, or knowingly fails to disclose
a material fact, for the purpose of obtaining or
increasing for that person or for any other person any
payment authorized to be furnished under this part; or
(B) makes a false statement of a material fact
knowing it to be false, or knowingly fails to disclose
a material fact, when providing information to the
Secretary during an investigation of a petition under
section 425(c),
shall be imprisoned for not more than one year, or fined under title
18, United States Code, or both, and be ineligible for any further
payments under this part.
(i) Regulations.--The Secretary shall prescribe such regulations as
may be necessary to carry out the provisions of this part.
(j) Study on Older Workers.--The Secretary shall conduct a study
examine the circumstances of older adversely affected workers and the
ability of such workers to access their retirement benefits. The
Secretary shall transmit a report to Congress not later than 2 years
after the date of enactment of this part on the findings of the study
and the Secretary's recommendations on how to ensure that adversely
affected workers within 2 years of retirement are able to access their
retirement benefits.
[(k) Spending Limit.--For each fiscal year, the total amount of funds
disbursed for the purposes described in section 426 shall not exceed
the amount deposited in that fiscal year into the Climate Change Worker
Assistance Fund established under section [782(j)] of the Clean Air
Act. The annual spending limit for any succeeding year shall be
increased by the difference, if any, between the amount of the prior
year's disbursements and the spending limitation for that year. The
Secretary shall promulgate rules to ensure that this spending limit is
not exceeded. Such rules shall provide that workers who receive any of
the benefits described in section 426 receive full benefits, and shall
include the establishment of a waiting list for workers in the event
that the requests for assistance exceed the spending limit.]
Subtitle C--Consumer Assistance
SEC. 431. ENERGY TAX CREDIT.
Subpart C of part IV of subchapter A of chapter 1 of the Internal
Revenue Code of 1986 is amended by inserting after section 36A the
following new section:
``SEC. 36B. ENERGY TAX CREDIT.
``(a) Allowance of Credit.--In the case of an eligible individual,
there shall be allowed as a credit against the tax imposed by this
subtitle for the taxable year an amount equal to--
``(1) for an eligible individual with applicable income of
less than $6,000, the phase in rate times the applicable
income;
``(2) for an eligible individual with applicable income that
is greater than or equal to $6,000 and is less than or equal to
the phase down amount, the maximum energy tax credit; and
``(3) for an individual with applicable income that exceeds
the phase down amount, an amount equal to--
``(A) the maximum energy tax credit minus; or
``(B) the difference between the individual's
applicable income and the phase down amount multiplied
by .2.
``(b) Coordination With Energy Refund Received Through State Human
Service Agencies.--The amount described in subsection (a) shall be
reduced by \1/12\ for each month in which the individual or his or her
spouse received a refund under section 432 of the American Clean Energy
and Security Act of 2009.
``(1) The Secretary of the Treasury shall promulgate
regulations that instruct States on how to inform adult
individuals who receive a refund under section 432 of the
American Clean Energy and Security Act of 2009 of the number of
months he or she received a refund and how such information
shall be provided to the Internal Revenue Service.
``(2) The Secretary of the Treasury shall establish a
telephone and online system that allows an individual to
inquire about the number of months she or he received such a
refund.
``(3) In the case of an individual that does not report the
number of months a refund was provided under section 432 of the
American Clean Energy and Security Act of 2009 or recorded an
incorrect number of months, the Secretary of the Treasury shall
adjust the energy tax credit based on the information received
from States, provided that the Secretary of the Treasury has
made a determination that the information meets a sufficient
standard for accuracy.
``(c) Definitions and Special Rules.--For purposes of this section:
``(1) Eligible individual.--
``(A) In general.--The term `eligible individual'
means any individual other than--
``(i) any nonresident alien individual;
``(ii) any individual with respect to whom a
deduction under section 151 is allowable to
another taxpayer for a taxable year beginning
in the calendar year in which the individual's
taxable year begins; and
``(iii) an estate or trust.
``(B) Identification number requirement.--Such term
shall not include any individual who--
``(i) in the case of a return that is not a
joint return, does not include the social
security number of the individual; and
``(ii) in the case of joint return, does not
include the social security number of at least
one of the taxpayers on such return.
For purposes of the preceding sentence, the social
security number shall not include a TIN issued by the
Internal Revenue Service.
``(2) Applicable income.--Applicable income means the larger
of--
``(A) earned income as defined in section 32(c)(2),
except that such term shall not include net earnings
from self-employment which are not taken into account
in computing taxable income; and
``(B) adjusted gross income.
``(3) Phase in rate.--The Secretary of the Treasury shall
compute the phase in rates each year for the energy credit for
joint returns and for returns that are not filed jointly with
respect to each relevant number of qualifying individuals such
that the phase in rate equals the maximum energy tax credit
divided by $6,000.
``(4) Maximum energy tax credit.--
``(A) In general.--
``(i) The maximum energy tax credit shall
vary based on the number of individuals in the
tax filing unit.
``(ii) The maximum energy tax credit for a
filing unit of a particular size shall be equal
to the average annual reduction in purchasing
power for low-income households of that
household size, as calculated by the
Environmental Protection Agency, that results
from the regulation of greenhouse gas emissions
under title VII of the Clean Air Act.
``(iii) The Environmental Protection Agency,
in consultation with other appropriate Federal
agencies, shall calculate the maximum energy
tax credit by August 31 of each year for the
following calendar year using the most recent,
reliable data available.
``(B) Energy tax credit calculation.--
``(i) Distribution.--For each calendar year,
the Environmental Protection Agency shall
determine pursuant to subparagraph (B)(iii) the
aggregate reduction in purchasing power among
all United States households that results from
the regulation of greenhouse gas emissions
under title VII of the Clean Air Act and
distribute that aggregate reduction in
purchasing power among all United States
households based on--
``(I) households' share of total
consumption by all households;
``(II) the carbon intensity and
covered-emissions intensity of
households' consumption; and
``(III) the share of households'
carbon and covered-emissions
consumption that is not financed by
Federal benefits subject to a cost of
living adjustment that offsets
increased carbon costs.
``(ii) Maximum energy tax credit.--The
maximum energy tax credit shall be equal to the
arithmetic mean value of the amount allocated
under clause (i) to households of a specified
household size in the lowest income quintile.
Tax filing units that include 5 or more
individuals shall be eligible for the
arithmetic mean value of the amount allocated
under clause (i) to households that includes 5
or more individuals.
``(iii) Aggregate reduction in purchasing
power.--For purposes of this section, the
aggregate reduction in purchasing power shall
be based on the projected total market value of
the emissions allowances used to demonstrate
compliance with title VII of the Clean Air Act
in that year, adjusted to reflect costs that
were not incurred by households as a result of
allowances freely allocated pursuant to section
782 of the Clean Air Act, as estimated by the
Environmental Protection Agency, and calculated
in a way generally recognized as suitable by
experts in evaluating such purchasing power
impacts.
``(iv) Income quintiles.--Income quintiles
shall be determined by ranking households
according to income adjusted for household
size, and shall be constructed so that each
quintile contains an equal number of people.
``(5) Phase down amount.--
``(A) In the case of an eligible individual who has
no qualifying individuals, the phase down amount shall
be--
``(i) $20,000 in the case of an individual
who does not file a joint return; and
``(ii) $25,000 in the case of a joint return.
``(B) In the case of an eligible individual who files
a joint return and has at least one qualifying
individual--
``(i) If the eligible individual has one
qualifying individual, the lowest income level
that exceeds the phaseout amount as defined in
section 32(b)(2) at which a married couple with
one qualifying child is ineligible for the
earned income credit for the taxable year.
``(ii) If the eligible individual has two
qualifying individuals, the lowest income level
that exceeds the phaseout amount as defined in
section 32(b)(2) at which a married couple with
two qualifying children is ineligible for the
earned income credit for the taxable year.
``(iii) If the eligible individual claims
three or more qualifying individuals, the
lowest income level that exceeds the phaseout
amount as defined in section 32(b)(2) at which
a married couple with three or more qualifying
children is ineligible for the earned income
credit for the taxable year.
``(C) In the case of an eligible individual who does
not file a joint return and has at least one individual
qualifying individual--
``(i) If the eligible individual has one
qualifying individual, the lowest income level
that exceeds the phaseout amount as defined in
section 32(b)(2) at which a single individual
with one qualifying child is ineligible for the
earned income credit for the taxable year.
``(ii) If the eligible individual has two
qualifying individuals, the lowest income level
that exceeds the phaseout amount as defined in
section 32(b)(2) at which a single individual
with two qualifying children is ineligible for
the earned income credit for the taxable year.
``(iii) If the eligible individual has three
or more qualifying individuals, the lowest
income level that exceeds the phaseout amount
as defined in section 32(b)(2) at which a
single individual with three or more qualifying
children is ineligible for the earned income
credit for the taxable year.
``(6) Qualifying individual.--A qualifying individual is an
individual whom the eligible individual claims as a dependent
under section 151, or as a qualifying child for the earned
income credit under section 32(c)(3) or the child tax credit
under section 24, or both. The term qualifying individual does
not include--
``(A) someone claimed as a dependent under section
151 if that dependent is claimed as a qualifying child
for the earned income tax credit or the child tax
credit on a tax form by someone other than the eligible
individual; and
``(B) the eligible individual and, if a joint return,
his or her spouse.
``(7) Number of people in the tax filing unit.--The number of
people in the tax filing unit shall equal the sum of the number
of qualifying individuals plus--
``(A) in the case of a joint return, 2; and
``(B) in the case of a return that is not filed
jointly, 1.
``(d) Treatment of Possessions.--
``(1) Payments to possessions.--
``(A) Mirror code possession.--The Secretary of the
Treasury shall pay to each possession of the United
States with a mirror code tax system amounts equal to
the loss to that possession by reason of the amendments
made by this section. Such amounts shall be determined
by the Secretary of the Treasury based on information
provided by the Government of the respective
possession.
``(B) Other possessions.--The Secretary of the
Treasury shall pay to each possession of the United
States which does not have a mirror code tax system
amounts estimated by the Secretary of the Treasury as
being equal to the aggregate benefits that would have
been provided to residents of such possession by reason
of the amendments made by this section if a mirror code
tax system had been in effect in such possession. The
preceding sentence shall not apply for a given taxable
year with respect to any possession of the United
States unless such possession has a plan, which has
been approved by the Secretary of the Treasury, under
which such possession will promptly distribute such
payments to residents of such possession.
``(2) Coordination with credit allowed against united states
income taxes.--No credit shall be allowed against United States
income taxes for any taxable year under this section to any
person--
``(A) to whom a credit is allowed against taxes
imposed by the possession by reason of the amendments
made by this section for such taxable year; or
``(B) who is eligible for a payment under a plan
described in paragraph (1)(B) with respect to such
taxable year.
``(e) Amount of Credit to Be Determined Under Tables.--The amount of
the credit allowed by this section shall be determined under tables
prescribed by the Secretary.
``(f) Inflation Adjustments.-- In the case of any taxable year
beginning after 2009, dollar amounts in subsection (c)(4)(A) shall be
increased by an amount equal to such dollar amount, multiplied by the
cost-of-living adjustment determined under section 1(f)(3) of the
Internal Revenue Code of 1986.
``(g) Treatment in Other Programs.--The energy tax credit provided
under this section shall not be considered income or resources for any
purpose under any Federal, State, or local laws, including, but not
limited to, laws relating to an income tax or public assistance program
(including, but not limited to, health care, cash aid, child care,
nutrition programs, and housing assistance), and no participating State
or political subdivision thereof shall decrease any assistance
otherwise provided an individual or individuals because of the receipt
of an energy tax credit under this Act.''.
SEC. 432. ENERGY REFUND PROGRAM FOR LOW-INCOME CONSUMERS.
(a) Energy Refund Program.--
(1) The Administrator of the Environmental Protection Agency,
or the agency designated by the Administrator shall formulate
and administer the ``Energy Refund Program''.
(2) At the request of the State agency, eligible low-income
households within the State shall receive a monthly cash energy
refund equal to the estimated loss in purchasing power
resulting from this Act.
(b) Eligibility.--
(1) Eligible households.--Participation in the Energy Refund
Program shall be limited to a household that--
(A) the State agency determines to be participating
in (i) the Supplemental Nutrition Assistance Program
authorized by the Food and Nutrition Act of 2008 (7
U.S.C. 2011 et seq.); (ii) the Food Distribution
Program on Indian Reservations authorized by section
4(b) of such Act (7 U.S.C. 2013(b)); or (iii) the
program for nutrition assistance in Puerto Rico or
American Samoa under section 19 of the such Act (7
U.S.C. 2028);
(B) has gross income that does not exceed 150 percent
of the poverty line; or
(C) consists of a single individual or a married
couple and (i) receives the subsidy described in
section 1860D-14 of the Social Security Act (42 U.S.C.
1395w-114); or (ii)(I) participates in the program
under section XVIII of the Social Security Act; and
(II) meets the income requirements described in section
1860D-14(a)(1) or (a)(2) of such Act (42 U.S.C. 1395w-
114(a)(1) or (a)(2)).
(2) Streamlined eligibility for certain beneficiaries.--The
Administrator, in consultation with the Secretary of Health and
Human Services, the Commissioner of Social Security, the
Railroad Retirement Board, the Secretary of Veterans Affairs,
and the State agencies shall develop procedures to ensure that
low-income beneficiaries of the benefit programs they
administer receive the energy refund for which they are
eligible.
(3) Limitation.--Notwithstanding any provision of law, the
Administrator shall establish procedures to ensure that
individuals that qualify for the refund under paragraph (1)(B)
and that do not participate in the Supplemental Nutrition
Assistance Program are United States citizens, United States
nationals, or individuals lawfully residing in the United
States.
(4) National standards.--The Administrator shall establish
uniform national standards of eligibility in accordance with
the provisions of this section. No State agency shall impose
any other standard or requirement as a condition of eligibility
or refund receipt under the program. Assistance in the Energy
Refund Program shall be furnished promptly to all eligible
households who make application for such participation.
(c) Monthly Energy Refund Amount.--
(1) Monthly energy refund.--The monthly refund under this
subsection for households of 1, 2, 3, 4, and 5 or more members
shall be equal to the maximum energy tax credit amount
calculated under section 36B(c)(4) of the Internal Revenue Code
of 1986 for each household size, divided by 12 and rounded to
the nearest whole dollar amount.
(2) Monthly eligibility.--A household shall not be eligible
for the refund under this section for months that the household
has not established eligibility under subsection (b).
(d) Delivery Mechanism.--
(1) Subject to standards and an implementation schedule set
by the Administrator, the energy refund shall be provided in
monthly installments via--
(A) direct deposit into the eligible household's
designated bank account;
(B) the State's electronic benefit transfer system;
or
(C) another Federal or State mechanism, if such a
mechanism is approved by the Administrator.
(2) Such standards shall include--
(A)(i) defining the required level of recipient
protection regarding privacy;
(ii) guidance on how recipients are offered choices,
when relevant, about the delivery mechanism;
(iii) guidance on ease of use and access to the
refund, including the prohibition of fees charged to
recipients for withdrawals or other services; and
(iv) cost-effective protections against improper
accessing of the energy refund;
(B) operating standards that provide for
interoperability between States and law enforcement
monitoring; and
(C) other standards, as determined by the
Administrator or the Administrator's designee.
(e) Information About Refund Provided to Households and Internal
Revenue Service.--
(1) By January 31 of each year, for each adult that was a
member of a household that received an energy refund under this
section in the State during the prior calendar year, each State
shall issue a form that conforms to standards established by
the Secretary of the Treasury under section 36B(b) of the
Internal Revenue Code of 1986, containing--
(A) the name, address, and social security number of
the adult household member; and
(B) the number of months the individual was a member
of a household that received an energy refund under
this section.
(2) States shall provide this information to the Internal
Revenue Service in accordance to standards and regulations set
forth by the Secretary of the Treasury.
(f) Administration.--
(1) In general.--The State agency of each participating State
shall assume responsibility for the certification of applicant
households and for the issuance of refunds and the control and
accountability thereof.
(2) Procedures.--Under standards established by the
Administrator, the State agency shall establish procedures
governing the administration of the Energy Refund Program that
the State agency determines best serve households in the State,
including households with special needs, such as households
with elderly or disabled members, households in rural areas,
homeless individuals, and households residing on reservations
as defined in the Indian Child Welfare Act of 1978 and the
Indian Financing Act of 1974. In carrying out this paragraph, a
State agency--
(A) shall provide timely, accurate, and fair service
to applicants for, and participants in, the Energy
Refund Program;
(B) shall permit an applicant household to apply to
participate in the program at the time that the
household first contacts the State agency, and shall
consider an application that contains the name,
address, and signature of the applicant to be
sufficient to constitute an application for
participation;
(C) shall screen any applicant household for the
Supplemental Nutrition Assistance Program, the State's
medical assistance program under section XIX of the
Social Security Act, State Childrens Health Insurance
Program under section XXI of the Social Security Act,
and a State program that provides basic assistance
under a State program funded under title IV of the
Social Security Act or with qualified State
expenditures as defined in section 409(a)(7) of the
Social Security Act for eligibility for the Energy
Refund Program and, if eligible, shall enroll such
applicant household in the Energy Refund Program;
(D) shall complete certification of and provide a
refund to any eligible household not later than thirty
days following its filing of an application;
(E) shall use appropriate bilingual personnel and
materials in the administration of the program in those
portions of the State in which a substantial number of
members of low-income households speak a language other
than English; and
(F) shall utilize State agency personnel who are
employed in accordance with the current standards for a
Merit System of Personnel Administration or any
standards later prescribed by the Office of Personnel
Management pursuant to section 208 of the
Intergovernmental Personnel Act of 1970 (42 U.S.C.
4728) modifying or superseding such standards relating
to the establishment and maintenance of personnel
standards on a merit basis to make all tentative and
final determinations of eligibility and ineligibility.
(3) Regulations.--
(A) Except as provided in subparagraph (B) the
Administrator shall issue such regulations consistent
with this section as the Administrator deems necessary
or appropriate for the effective and efficient
administration of the Energy Refund Program and shall
promulgate all such regulations in accordance with the
procedures set forth in section 553 of title 5, United
States Code.
(B) Without regard to section 553 of title 5 of such
Code, the Administrator may, during the period
beginning with the effective date of this section and
ending two years after such date, by rule promulgate as
final any procedures that are substantially the same as
the procedures governing the Supplemental Nutrition
Assistance Program at 7 C.F.R. 273.2, 273.12.273.15.
(g) Treatment.--The value of the refund provided under this Act shall
not be considered income or resources for any purpose under any
Federal, State, or local laws, including, but not limited to, laws
relating to an income tax, or public assistance programs (including,
but not limited to, health care, cash aid, child care, nutrition
programs, and housing assistance) and no participating State or
political subdivision thereof shall decrease any assistance otherwise
provided an individual or individuals because of the receipt of a
refund under this Act.
(h) Program Integrity.--For purposes of ensuring program integrity
and complying with the requirements of the Improper Payment Information
Act of 2002, the Administrator shall--
(1) to the maximum extent possible rely on and coordinate
with the quality control sample and review procedures of
section 16(c)(2), (3), (4), and (5) of the Supplemental
Nutrition Assistance Program; and
(2) develop procedures to monitor the compliance with and
accuracy of State agencies in providing forms to household
members and the Internal Revenue Service under subsection (f).
(i) Definitions.--
(1) Administrator.--The term ``Administrator'' means the
Administrator of the Environmental Protection Agency or the
head of another agency designated by the Administrator.
(2) Electronic benefit transfer system.--The term
``electronic benefit transfer system'' means a system by which
household benefits or refunds defined under subsection (d) are
issued from and stored in a central databank via electronic
benefit transfer cards.
(3) Gross income.--The term ``gross income'' means the gross
income of a household that is determined in accordance with
standards and procedures established under section 5 of the
Food and Nutrition Act of 2008 (7 U.S.C. 2014) and its
implementing regulations.
(4) Household.--The term ``household'' means--
(A)(i) except as provided in subparagraph (C), an
individual or a group of individuals who are a
household under section 3(n) of the Food and Nutrition
Act of 2008 (7 U.S.C. 2012(n)); and
(ii) a single individual or married couple that
receive benefits under section 1860D-14 of the Social
Security Act (42 U.S.C. 1395w-114).
(B) The Administrator shall establish rules for
providing the energy refund in an equitable and
administratively simple manner to households where the
group of individuals who live together includes a
combination of members described in clauses (i) and
(ii) of subparagraph (A), or includes additional
members not described in clause (i) or clause (ii) of
subparagraph (A).
(C) The Administrator shall establish rules regarding
the eligibility and delivery of the energy refund to
groups of individuals described in section 3(n)(4) or
(5) of the Food and Nutrition Act of 2008 (7 U.S.C.
2012(n)).
(5) Poverty line.--The term ``poverty line'' has the meaning
given the term in section 673(2) of the Community Services
Block Grant Act (42 U.S.C. 9902(2)), including any revision
required by that section.
(6) State.--The term ``State'' means the 50 States, the
District of Columbia, the Commonwealth of Puerto Rico, American
Samoa, the United States Virgin Islands, Guam, and the
Commonwealth of the Northern Mariana Islands.
(7) State agency.--The term ``State agency'' means an agency
of State government, including the local offices thereof, that
has responsibility for administration of the 1 or more
federally aided public assistance programs within the State,
and in those States where such assistance programs are operated
on a decentralized basis, the term shall include the
counterpart local agencies administering such programs.
(8) Other terms.--Other terms not defined in this Act shall
have the same meaning applied in the Supplemental Nutrition
Assistance Program unless the Administrator finds for good
cause that application of a particular definition would be
detrimental to the purposes of the Energy Refund Program.
Subtitle D--Exporting Clean Technology
SEC. 441. FINDINGS AND PURPOSES.
(a) Findings.--Congress finds the following:
(1) Protecting Americans from the impacts of climate change
requires global reductions in greenhouse gas emissions.
(2) Although developing countries are historically least
responsible for the cumulative greenhouse gas emissions that
are causing climate change and continue to have very low per
capita greenhouse gas emissions, their overall greenhouse gas
emissions are increasing as they seek to grow their economies
and reduce energy poverty for their populations.
(3) Many developing countries lack the financial and
technical resources to adopt clean energy technologies and
absent assistance their greenhouse gas emissions will continue
to increase.
(4) Investments in clean energy technology cooperation can
substantially reduce global greenhouse gas emissions while
providing developing countries with incentives to adopt
policies that will address competitiveness concerns related to
regulation of United States greenhouse gas emissions.
(5) Investments in clean technology in developing countries
will increase demand for clean energy products, open up new
markets for United States companies, spur innovation, and lower
costs.
(6) Under Article 4 of the United Nations Framework
Convention on Climate Change, developed country parties,
including the United States, committed to ``take all
practicable steps to promote, facilitate, and finance, as
appropriate, the transfer of, or access to, environmentally
sound technologies and know-how to other parties, particularly
developing country parties, to enable them to implement the
provisions of the Convention''.
(7) Under the Bali Action Plan, developed country parties to
the United Nations Framework Convention on Climate Change,
including the United States, committed to ``enhanced action on
the provision of financial resources and investment to support
action on mitigation and adaptation and technology
cooperation,'' including, inter alia, consideration of
``improved access to adequate, predictable, and sustainable
financial resources and financial and technical support, and
the provision of new and additional resources, including
official and concessional funding for developing country
parties''.
(b) Purposes.--The purposes of this subtitle are--
(1) to provide United States assistance and leverage private
resources to encourage widespread implementation, in developing
countries, of activities that reduce, sequester, or avoid
greenhouse gas emissions; and
(2) to provide such assistance in a manner that--
(A) encourages such countries to adopt policies and
measures, including sector-based and cross-sector
policies and measures, that substantially reduce,
sequester, or avoid greenhouse gas emissions; and
(B) promotes the successful negotiation of a global
agreement to reduce greenhouse gas emissions under the
United Nations Framework Convention on Climate Change.
SEC. 442. DEFINITIONS.
In this subtitle:
(1) Allowance.--The term ``allowance'' means an emission
allowance established under section 721 of the Clean Air Act.
(2) Appropriate congressional committees.--The term
``appropriate congressional committees'' means--
(A) the Committees on Energy and Commerce, Foreign
Affairs, and Financial Services of the House of
Representatives; and
(B) the Committees on Environment and Public Works,
Energy and Natural Resources, and Foreign Relations of
the Senate.
(3) Convention.--The term ``Convention'' means the United
Nations Framework Convention on Climate Change, done at New
York on May 9, 1992, and entered into force on March 21, 1994.
(4) Developing country.--The term ``developing country''
means a country eligible to receive official development
assistance according to the income guidelines of the
Development Assistance Committee of the Organization for
Economic Cooperation and Development.
(5) Eligible country.--The term ``eligible country'' means a
developing country that is determined by the interagency group
under section 444 to be eligible to receive assistance from the
International Clean Technology Account.
(6) Interagency group.--The term ``interagency group'' means
the group established by the President under section 443 to
administer distributions from the International Clean
Technology Account.
(7) International clean technology account.--The term
``International Clean Technology Account'' means the account to
which the Administrator allocates allowances under section
782(o) of the Clean Air Act.
(8) Least developed country.--The term ``least developed
country'' means a foreign country the United Nations has
identified as among the least developed of developing
countries.
(9) Qualifying activity.--The term ``qualifying activity''
means an activity that meets the criteria in section 445.
(10) Qualifying entity.--The term ``qualifying entity'' means
a national, regional, or local government in, or a
nongovernmental organization or private entity located or
operating in, an eligible country.
SEC. 443. GOVERNANCE.
(a) Oversight.--The Secretary of State, or such other Federal agency
head as the President may designate, in consultation with the
interagency group established under subsection (b), shall oversee
distributions of allowances from the International Clean Technology
Account.
(b) Interagency Group.--The President shall establish an interagency
group to administer the International Clean Technology Account. The
Members of the interagency group shall include--
(1) the Secretary of State;
(2) the Administrator of the Environmental Protection Agency;
(3) the Secretary of Energy;
(4) the Secretary of the Treasury;
(5) the Administrator of the United States Agency for
International Development; and
(6) any other head of a Federal agency or executive branch
appointee that the President may designate.
(c) Chairperson.--The Secretary of State shall serve as the
chairperson of the interagency group.
(d) Supplement Not Supplant.--Allowances distributed from the
International Clean Technology Account shall be used to supplement, and
not to supplant, any other Federal, State, or local resources available
to carry out activities that are qualifying activities under this
subtitle.
SEC. 444. DETERMINATION OF ELIGIBLE COUNTRIES.
(a) In General.--The interagency group shall determine a country to
be an eligible country for the purposes of this subtitle if a country
meets the following criteria:
(1) The country is a developing country that--
(A) has entered into an international agreement to
which the United States is a party, under which such
country agrees to take actions to produce measurable,
reportable, and verifiable greenhouse gas emissions
mitigation; or
(B) is determined by the interagency group to have in
force national policies and measures that are capable
of producing measurable, reportable, and verifiable
greenhouse gas emissions mitigation.
(2) The country has developed a nationally appropriate
mitigation strategy that seeks to achieve substantial
reductions, sequestration, or avoidance of greenhouse gas
emissions, relative to business-as-usual levels.
(3) Subject to subsection (b)(1), such other criteria as the
President determines will serve the purposes of this subtitle
or other United States national security, foreign policy,
environmental, or economic objectives.
(b) Exceptions.--
(1) Subsection (a)(3) applies only to bilateral assistance
under section 446(c).
(2) The eligibility criteria in this section do not apply in
the case of least developed countries receiving assistance
under section 445(7) for the purpose of building capacity to
meet such eligibility criteria.
SEC. 445. QUALIFYING ACTIVITIES.
Assistance under this subtitle may be provided only to qualifying
entities for clean technology activities (including building relevant
technical and institutional capacity) that contribute to substantial,
measurable, reportable, and verifiable reductions, sequestration, or
avoidance of greenhouse gas emissions including--
(1) deployment of technologies to capture and sequester
carbon dioxide emissions from electric generating units or
large industrial sources (except that assistance under this
subtitle for such deployment shall be limited to the cost of
retrofitting existing facilities with such technologies or the
incremental cost of purchasing and installing such technologies
at new facilities);
(2) deployment of renewable electricity generation from wind,
solar, sustainably-produced biomass, geothermal, marine, or
hydrokinetic sources;
(3) substantial increases in the efficiency of electricity
transmission, distribution, and consumption;
(4) deployment of low- or zero emissions technologies that
are facing financial or other barriers to their widespread
deployment which could be addressed through support under this
subtitle in order to reduce, sequester, or avoid emission;
(5) reduction in transportation sector emissions through
increased transportation system and vehicle efficiency or use
of transportation fuels that have lifecycle greenhouse gas
emissions that are substantially lower than those attributable
to fossil fuel-based alternatives;
(6) reduction in black carbon emissions; or
(7) capacity building activities, including--
(A) developing and implementing methodologies and
programs for measuring and quantifying greenhouse gas
emissions and verifying emissions mitigation;
(B) assessing, developing, and implementing
technology and policy options for greenhouse gas
emissions mitigation and avoidance of future emissions,
including sector and cross-sector mitigation
strategies; and
(C) providing other forms of technical assistance to
facilitate the qualification for, and receipt of,
assistance under this Act.
SEC. 446. ASSISTANCE.
(a) In General.--The Secretary of State, or such other Federal agency
head as the President may designate, is authorized to provide
assistance, through the distribution of allowances, from the
International Clean Technology Account for qualifying activities that
take place in eligible countries.
(b) Distribution of Allowances.--
(1) In general.--The Secretary of State, or such other
Federal agency head as the President may designate, after
consultation with the interagency group, shall distribute
allowances from the International Clean Technology Account--
(A) in the form of bilateral assistance in accordance
with paragraph (4);
(B) to multilateral funds or institutions pursuant to
the Convention or an agreement negotiated under the
Convention; or
(C) through some combination of the mechanisms
identified in subparagraphs (A) and (B).
(2) Global environment facility.--For any allowances provided
to the Global Environment Facility pursuant to paragraph
(1)(B), the President shall designate the Secretary of the
Treasury to distribute those allowances to the Global
Environment Facility.
(3) Distribution through international fund or institution.--
If allowances are distributed to a multilateral fund or
institution, as authorized in paragraph (1), the Secretary of
State, or such other Federal agency head as the President may
designate, shall seek to ensure the establishment and
implementation of adequate mechanisms to--
(A) apply and enforce the criteria for determination
of eligible countries and qualifying activities under
sections 444 and 445, respectively; and
(B) require public reporting describing the process
and methodology for selecting the ultimate recipients
of assistance and a description of each activity that
received assistance, including the amount of
obligations and expenditures for assistance.
(4) Bilateral assistance.--
(A) In general.--Bilateral assistance under paragraph
(1) shall be carried out by the Administrator of the
United States Agency for International Development, in
consultation with the interagency group.
(B) Limitations.--Not more than 15 percent of
allowances made available to carry out bilateral
assistance under this subtitle in any year shall be
distributed to support activities in any single
country.
(C) Selection criteria.--Not later than 2 years after
the date of enactment of this subtitle, the
Administrator of the United States Agency for
International Development, after consultation with the
interagency group, shall develop and publish a set of
criteria to be used in evaluating activities within
eligible countries for bilateral assistance under this
subtitle.
(D) Criteria requirements.--The criteria under
subparagraph (C) shall require that--
(i) the activity is a qualifying activity;
(ii) the activity will be conducted as part
of an eligible country's nationally appropriate
mitigation strategy or as part of an eligible
country's actions towards providing a
nationally appropriate mitigation strategy to
reduce, sequester, or avoid emissions being
implemented by the eligible country;
(iii) the activity will not have adverse
effects on human health, safety, or welfare,
the environment, or natural resources;
(iv) any technologies deployed through
bilateral assistance under this subtitle will
be properly implemented and maintained;
(v) the activity will not cause any net loss
of United States jobs or displacement of United
States production;
(vi) costs of the activity will be shared by
the host country government, private sector
parties, or a multinational development bank,
except that this clause does not apply to least
developed countries; and
(vii) the activity meets such other
requirements as the interagency group
determines appropriate to further the purposes
of this subtitle.
(E) Criteria preferences.--The criteria under
subparagraph (C) shall give preference to activities
that--
(i) promise to achieve large-scale greenhouse
gas reductions, sequestration, or avoidance at
a national, sectoral or cross-sectoral level;
(ii) have the potential to catalyze a shift
within the host country towards widespread
deployment of low- or zero-carbon energy
technologies;
(iii) build technical and institutional
capacity and other activities that are unlikely
to be attractive to private sector funding; or
(iv) maximize opportunities to leverage other
sources of assistance and catalyze private-
sector investment.
(c) Monitoring, Evaluation, and Enforcement.--The Secretary of State,
or such other Federal agency head as the President may designate, in
consultation with the interagency group, shall establish and implement
a system to monitor and evaluate the performance of activities
receiving assistance under this subtitle. The Secretary of State, or
such other Federal agency head as the President may designate, shall
have the authority to suspend or terminate assistance in whole or in
part for an activity if it is determined that the activity is not
operating in compliance with the approved proposal.
(d) Coordination With U.S. Foreign Assistance.--Subject to the
direction of the President, the Secretary of State shall, to the extent
practicable, seek to align activities under this section with broader
development, poverty alleviation, or natural resource management
objectives and initiatives in the recipient country.
(e) Annual Reports.--Not later than March 1, 2012, and annually
thereafter, the President shall submit to the appropriate congressional
committees a report on the assistance provided under this subtitle
during the prior fiscal year. Such report shall include--
(1) a description of the amount and value of allowances
distributed during the prior fiscal year;
(2) a description of each activity that received assistance
during the prior fiscal year, and a description of the
anticipated and actual outcomes;
(3) an assessment of any adverse effects to human health,
safety, or welfare, the environment, or natural resources as a
result of activities supported under this subtitle;
(4) an assessment of the success of the assistance provided
under this subtitle to improving the technical and
institutional capacity to implement substantial emissions
reductions; and
(5) an estimate of the greenhouse gas emissions reductions,
sequestration, or avoidance achieved by assistance provided
under this subtitle during the prior fiscal year.
Subtitle E--Adapting to Climate Change
PART 1--DOMESTIC ADAPTATION
Subpart A--National Climate Change Adaptation Program
SEC. 451. NATIONAL CLIMATE CHANGE ADAPTATION PROGRAM.
The President shall establish within the United States Global Change
Research Program a National Climate Change Adaptation Program for the
purpose of increasing the overall effectiveness of Federal climate
change adaptation efforts.
SEC. 452. CLIMATE SERVICES.
The Secretary of Commerce, acting through the Administrator of the
National Oceanic and Atmospheric Administration (NOAA), shall establish
within NOAA a National Climate Service to develop climate information,
data, forecasts, and warnings at national and regional scales, and to
distribute information related to climate impacts to State, local, and
tribal governments and the public to facilitate the development and
implementation of strategies to reduce society's vulnerability to
climate variability and change.
SEC. 453. STATE PROGRAMS TO BUILD RESILIENCE TO CLIMATE CHANGE IMPACTS.
(a) Distribution of Allowances.--
(1) In general.--Not later than September 30, 2012, and
annually thereafter through 2050, the Administrator shall
distribute allowances allocated for purposes of this subpart
pursuant to section 782 of the Clean Air Act ratably among the
State governments based on the product of--
(A) each State's population; and
(B) each State's allocation factor as determined
under paragraph (2).
(2) State allocation factors.--
(A) In general.--Except as provided in subparagraph
(B), the allocation factor for a State shall be the
quotient of--
(i) the per capita income of all individuals
in the United States, divided by
(ii) the per capita income of all individuals
in such State.
(B) Limitation.--If the allocation factor for a State
as calculated under subparagraph (A) would exceed 1.2,
then the allocation factor for such State shall be 1.2.
If the allocation factor for a State as calculated
under subparagraph (A) would be less than 0.8, then the
allocation factor for such State shall be 0.8.
(C) Per capita income.--For purposes of this
paragraph, per capita income shall be--
(i) determined at 2-year intervals; and
(ii) subject to subparagraph (D), equal to
the average of the annual per capita incomes
for the most recent period of 3 consecutive
years for which satisfactory data are available
from the Department of Commerce at the time
such determination is made.
(D) Revenue directly resulting from a presidentially
declared major disaster.--For purposes of this
paragraph, per capita income from one or more of the
following sources shall be reduced or excluded if the
Secretary of Commerce (in consultation with the
Administrator and the secretaries or administrators of
the departments or agencies involved) determines that
the income accrues to persons as the result of a Major
Disaster (as declared by the President of the United
States) and if the Secretary finds that the inclusion
of one or more of these income sources, in whole or in
part, results in a transitory, rather than a
sustainable, increase in a State's per capita income
level relative to the national average:
(i) Property and casualty insurance
(including homeowners and renters insurance).
(ii) The National Flood Insurance Program of
the Federal Emergency Management Agency .
(iii) The Individual and Family Grants
Program of the Federal Emergency Management
Agency.
(iv) The Disaster Housing Program of the
Federal Emergency Management Agency.
(v) The Community Development Block Grant
Program of the Department of Housing and Urban
Development.
(vi) The Disaster Unemployment Assistance
Program of the Department of Labor.
(vii) Any other source determined appropriate
by the Administrator.
(b) Sale of Allowances.--Each State receiving emission allowances
under this section shall sell such allowances within 1 year of receipt,
either directly or through consignment to the Administrator for
auction. States shall deposit the proceeds of such sales within the
State Energy and Environment Development (SEED) Fund established
pursuant to section 131 of this Act . Emission allowances distributed
under this section that are not sold within 1 year of receipt by a
State shall be returned to the Administrator, who shall distribute such
allowances to the remaining States ratably in accordance with the
formula in subsection (a).
(c) Use of Proceeds.--States shall, in accordance with a State
climate adaptation plan approved pursuant to subsection (e), use the
proceeds of sales of emission allowances distributed under this section
exclusively for the implementation of projects, programs, or measures
to build resilience to the impacts of climate change, including--
(1) extreme weather events such as flooding and tropical
cyclones;
(2) more frequent heavy precipitation events;
(3) water scarcity and adverse impacts on water quality;
(4) stronger and longer heat waves;
(5) more frequent and severe droughts;
(6) rises in sea level;
(7) ecosystem disruption;
(8) increased air pollution; and
(9) effects on public health.
(d) Priority in Projects to Reduce Flood Events.--When implementing
any project, program, or measure funded under this section and designed
to reduce flood events, a State should consider prioritizing projects
that seek to--
(1) mitigate the destructive impacts of climate-related
increases in the duration, frequency, or magnitude of rainfall
or runoff, including snowmelt runoff, as well as hurricanes;
(2) improve flood protection for densely populated urban
areas; and
(3) mitigate the destructive impact of ocean-related climate
change effects, including effects on bays, estuaries, populated
barrier islands and other ocean-related features, through a
variety of means and measures, including the construction of
jetties, levies, and other coastal structures in densely
populated coastal areas impacted by climate change.
(e) State Climate Adaptation Plans.--
(1) In general.--Not later than 2 years after the date of
enactment of this Act, the Administrator, or such other Federal
agency head or heads as the President may designate, shall
promulgate regulations establishing requirements for submission
and approval of State climate adaptation plans under this
section. Receipt of emission allowances pursuant to this
section shall be contingent on approval of a State climate
adaptation plan meeting the requirements of such guidelines.
(2) Requirements.--Regulations promulgated under this
subsection shall require, at minimum, that--
(A) State climate adaptation plans assess and
prioritize the State's vulnerability to a broad range
of impacts of climate change, based on the best
available science;
(B) State climate adaptation plans include an
assessment of potential for carbon reduction through
changes to land management policies (including
enhancement, or protection, of forest carbon sinks);
(C) State climate adaptation plans identify and
prioritize specific cost-effective projects, programs,
and measures to build resilience to predicted impacts
of climate change;
(D) State climate adaptation plans ensure that the
State fully considers and undertakes, to the maximum
extent practicable, initiatives that--
(i) protect or enhance natural ecosystem
functions, including protection, maintenance,
or restoration of natural infrastructure such
as wetlands, reefs, and barrier islands to
buffer communities from floodwaters or storms,
watershed protection to maintain water quality
and groundwater recharge, or floodplain
restoration to improve natural flood control
capacity; or
(ii) use non-structural approaches including
practices that utilize, enhance, or mimic the
natural hydrologic cycle processes of
infiltration, evapotranspiration, and reuse;
(E) in order to be eligible to receive emission
allowances under this section, a State shall submit a
revised State climate adaptation plan for approval not
less frequently than every 5 years; and
(F) State climate adaptation plans be consistent with
Federal conservation and environmental laws and, to the
maximum extent practicable, avoid environmental
degradation.
(3) Coordination with prior planning efforts.--In
promulgating regulations under this subsection, the
Administrator, or such other Federal agency head or heads as
the President may designate, shall--
(A) draw upon lessons learned and best practices from
preexisting State climate adaptation planning efforts;
(B) seek to avoid duplication of such efforts; and
(C) ensure that the plans developed under this
section reflect and are fully consistent with State
natural resources adaptation plans developed under
section 479.
(f) Reporting.--Each State receiving emission allowances under this
section shall submit to the Administrator, or such other Federal agency
head or heads as the President may designate, within 12 months after
each receipt of such allowances and once every 2 years thereafter until
the proceeds from the sale of emission allowances received under this
section are fully expended, a report that--
(1) provides a full accounting for the State's use of
proceeds of sales of emission allowances distributed under this
section, including a description of the projects, programs, or
measures funded through such proceeds;
(2) includes a report prepared by an independent third party,
in accordance with such regulations as are promulgated by the
Administrator or such other Federal agency head or heads as the
President may designate, evaluating the performance of the
projects, programs, or measures funded under this section; and
(3) identifies any use by the State of proceeds of sales of
emission allowances distributed under this section for the
reduction of flood and storm damage and the effects of climate
change on water and flood protection infrastructure.
(g) Enforcement.--If the Administrator, or such other Federal agency
head or heads as the President may designate, determines that a State
is not in compliance with this section, the Administrator may withhold
a portion of the allowances, the value of which is equal to up to twice
the value of the allowances that the State failed to use in accordance
with the requirements of this section, that such State would otherwise
be eligible to receive under this section in 1 or more later years.
Allowances withheld pursuant to this subsection shall be distributed
among the remaining States ratably in accordance with the formula in
subsection (a).
(h) Supplement, Not Supplant.--It is the intent of the Congress that
emission allowances distributed to carry out this subpart should be
used to supplement, and not replace, existing sources of funding used
to build resilience to the impacts of climate change identified in
subsection (c).
Subpart B--Public Health and Climate Change
SEC. 461. SENSE OF CONGRESS ON PUBLIC HEALTH AND CLIMATE CHANGE.
It is the sense of the Congress that the Federal Government, in
cooperation with international, State, tribal, and local governments,
concerned public and private organizations, and citizens, should use
all practicable means and measures--
(1) to assist the efforts of public health and health care
professionals, first responders, States, tribes,
municipalities, and local communities to incorporate measures
to prepare health systems to respond to the impacts of climate
change;
(2) to ensure--
(A) that the Nation's health professionals have
sufficient information to prepare for and respond to
the adverse health impacts of climate change;
(B) the utility and value of scientific research in
advancing understanding of--
(i) the health impacts of climate change; and
(ii) strategies to prepare for and respond to
the health impacts of climate change;
(C) the identification of communities vulnerable to
the health effects of climate change and the
development of strategic response plans to be carried
out by health professionals for those communities;
(D) the improvement of health status and health
equity through efforts to prepare for and respond to
climate change; and
(E) the inclusion of health policy in the development
of climate change responses;
(3) to encourage further research, interdisciplinary
partnership, and collaboration among stakeholders in order to--
(A) understand and monitor the health impacts of
climate change; and
(B) improve public health knowledge and response
strategies to climate change;
(4) to enhance preparedness activities, and public health
infrastructure, relating to climate change and health;
(5) to encourage each and every American to learn about the
impacts of climate change on health; and
(6) to assist the efforts of developing nations to
incorporate measures to prepare health systems to respond to
the impacts of climate change.
SEC. 462. RELATIONSHIP TO OTHER LAWS.
Nothing in this subpart in any manner limits the authority provided
to or responsibility conferred on any Federal department or agency by
any provision of any law (including regulations) or authorizes any
violation of any provision of any law (including regulations),
including any health, energy, environmental, transportation, or any
other law or regulation.
SEC. 463. NATIONAL STRATEGIC ACTION PLAN.
(a) Requirement.--
(1) In general.--The Secretary of Health and Human Services,
within 2 years after the date of the enactment of this Act, on
the basis of the best available science, and in consultation
pursuant to paragraph (2), shall publish a strategic action
plan to assist health professionals in preparing for and
responding to the impacts of climate change on public health in
the United States and other nations, particularly developing
nations.
(2) Consultation.--In developing or making any revision to
the national strategic action plan, the Secretary shall--
(A) consult with the Director of the Centers for
Disease Control and Prevention, the Administrator of
the Environmental Protection Agency, the Director of
the National Institutes of Health, the Secretary of
Energy, other appropriate Federal agencies, Indian
tribes, State and local governments, public health
organizations, scientists, and other interested
stakeholders; and
(B) provide opportunity for public input.
(b) Contents.--
(1) In general.--The Secretary, acting through the Director
of the Centers for Disease Control and Prevention and other
appropriate Federal agencies, shall assist health professionals
in preparing for and responding effectively and efficiently to
the health effects of climate change through measures
including--
(A) developing, improving, integrating, and
maintaining domestic and international disease
surveillance systems and monitoring capacity to respond
to health-related effects of climate change, including
on topics addressing--
(i) water, food, and vector borne infectious
diseases and climate change;
(ii) pulmonary effects, including responses
to aeroallergens;
(iii) cardiovascular effects, including
impacts of temperature extremes;
(iv) air pollution health effects, including
heightened sensitivity to air pollution;
(v) hazardous algal blooms;
(vi) mental and behavioral health impacts of
climate change;
(vii) the health of refugees, displaced
persons, and vulnerable communities;
(viii) the implications for communities
vulnerable to health effects of climate change,
as well as strategies for responding to climate
change within these communities; and
(ix) local and community-based health
interventions for climate-related health
impacts;
(B) creating tools for predicting and monitoring the
public health effects of climate change on the
international, national, regional, State, and local
levels, and providing technical support to assist in
their implementation;
(C) developing public health communications
strategies and interventions for extreme weather events
and disaster response situations;
(D) identifying and prioritizing communities and
populations vulnerable to the health effects of climate
change, and determining actions and communication
strategies that should be taken to inform and protect
these communities and populations from the health
effects of climate change;
(E) developing health communication, public
education, and outreach programs aimed at public health
and health care professionals, as well as the general
public, to promote preparedness and response strategies
relating to climate change and public health, including
the identification of greenhouse gas reduction
behaviors that are health-promoting; and
(F) developing academic and regional centers of
excellence devoted to--
(i) researching relationships between climate
change and health;
(ii) expanding and training the public health
workforce to strengthen the capacity of such
workforce to respond to and prepare for the
health effects of climate change;
(iii) creating and supporting academic
fellowships focusing on the health effects of
climate change; and
(iv) training senior health ministry
officials from developing nations to strengthen
the capacity of such nations to--
(I) prepare for and respond to the
health effects of climate change; and
(II) build an international network
of public health professionals with the
necessary climate change knowledge
base;
(G) using techniques, including health impact
assessments, to assess various climate change public
health preparedness and response strategies on
international, national, State, regional, tribal, and
local levels, and make recommendations as to those
strategies that best protect the public health;
(H)(i) assisting in the development, implementation,
and support of State, regional, tribal, and local
preparedness, communication, and response plans
(including with respect to the health departments of
such entities) to anticipate and reduce the health
threats of climate change; and
(ii) pursuing collaborative efforts to develop,
integrate, and implement such plans;
(I) creating a program to advance research as it
relates to the effects of climate change on public
health across Federal agencies, including research to--
(i) identify and assess climate change health
effects preparedness and response strategies;
(ii) prioritize critical public health
infrastructure projects related to potential
climate change impacts that affect public
health; and
(iii) coordinate preparedness for climate
change health impacts, including the
development of modeling and forecasting tools;
(J) providing technical assistance for the
development, implementation, and support of
preparedness and response plans to anticipate and
reduce the health threats of climate change in
developing nations; and
(K) carrying out other activities determined
appropriate by the Secretary to plan for and respond to
the impacts of climate change on public health.
(c) Revision.--The Secretary shall revise the national strategic
action plan not later than July 1, 2014, and every 4 years thereafter,
to reflect new information collected pursuant to implementation of the
national strategic action plan and otherwise, including information
on--
(1) the status of critical environmental health parameters
and related human health impacts;
(2) the impacts of climate change on public health; and
(3) advances in the development of strategies for preparing
for and responding to the impacts of climate change on public
health.
(d) Implementation.--
(1) Implementation through hhs.--The Secretary shall exercise
the Secretary's authority under this subpart and other
provisions of Federal law to achieve the goals and measures of
the national strategic action plan.
(2) Other public health programs and initiatives.--The
Secretary and Federal officials of other relevant Federal
agencies shall administer public health programs and
initiatives authorized by provisions of law other than this
subpart, subject to the requirements of such statutes, in a
manner designed to achieve the goals of the national strategic
action plan.
(3) CDC.--In furtherance of the national strategic action
plan, the Secretary, acting through the Director of the Centers
for Disease Control and Prevention and the head of any other
appropriate Federal agency, shall--
(A) conduct scientific research to assist health
professionals in preparing for and responding to the
impacts of climate change on public health; and
(B) provide funding for--
(i) research on the health effects of climate
change; and
(ii) preparedness planning on the
international, national, State, regional, and
local levels to respond to or reduce the burden
of health effects of climate change; and
(C) carry out other activities determined appropriate
by the Director or the head of such agency to prepare
for and respond to the impacts of climate change on
public health.
SEC. 464. ADVISORY BOARD.
(a) Establishment.--The Secretary shall establish a permanent science
advisory board comprised of not less than 10 and not more than 20
members.
(b) Appointment of Members.--The Secretary shall appoint the members
of the science advisory board from among individuals--
(1) who have expertise in public health and human services,
climate change, and other relevant disciplines; and
(2) at least \1/2\ of whom are recommended by the President
of the National Academy of Sciences.
(c) Functions.--The science advisory board shall--
(1) provide scientific and technical advice and
recommendations to the Secretary on the domestic and
international impacts of climate change on public health,
populations and regions particularly vulnerable to the effects
of climate change, and strategies and mechanisms to prepare for
and respond to the impacts of climate change on public health;
and
(2) advise the Secretary regarding the best science available
for purposes of issuing the national strategic action plan.
SEC. 465. REPORTS.
(a) Needs Assessment.--
(1) In general.--The Secretary shall seek to enter into, by
not later than 6 months after the date of the enactment of this
Act, an agreement with the National Research Council and the
Institute of Medicine to complete a report that--
(A) assesses the needs for health professionals to
prepare for and respond to climate change impacts on
public health; and
(B) recommends programs to meet those needs.
(2) Submission.--The agreement under paragraph (1) shall
require the completed report to be submitted to the Congress
and the Secretary and made publicly available not later than 1
year after the date of the agreement.
(b) Climate Change Health Protection and Promotion Reports.--
(1) In general.--The Secretary, in consultation with the
advisory board established under section 464, shall ensure the
issuance of reports to aid health professionals in preparing
for and responding to the adverse health effects of climate
change that--
(A) review scientific developments on health impacts
of climate change; and
(B) recommend changes to the national strategic
action plan.
(2) Submission.--The Secretary shall submit the reports
required by paragraph (1) to the Congress and make such reports
publicly available not later than July 1, 2013, and every 4
years thereafter.
SEC. 466. DEFINITIONS.
In this subpart:
(1) Health impact assessment.--The term ``health impact
assessment'' means a combination of procedures, methods, and
tools by which a policy, program, or project may be judged as
to its potential effects on the health of a population, and the
distribution of those effects within the population.
(2) National strategic action plan.--The term ``national
strategic action plan'' means the plan issued and revised under
section 463.
(3) Secretary.--Unless otherwise specified, the term
``Secretary'' means the Secretary of Health and Human Services.
SEC. 467. CLIMATE CHANGE HEALTH PROTECTION AND PROMOTION FUND.
(a) Establishment of Fund.--There is hereby established in the
Treasury a separate account that shall be known as the Climate Change
Health Protection and Promotion Fund.
(b) Availability of Amounts.--All amounts deposited into the Climate
Change Health Protection and Promotion Fund shall be available to the
Secretary to carry out this subpart subject to further appropriation.
(c) Distribution of Funds by HHS.--In carrying out this subpart, the
Secretary may make funds deposited in the Climate Change Health
Protection and Promotion Fund available to--
(1) other departments, agencies, and offices of the Federal
Government;
(2) foreign, State, tribal, and local governments; and
(3) such other entities as the Secretary determines
appropriate.
(d) Supplement, Not Replace.--It is the intent of Congress that funds
made available to carry out this subpart should be used to supplement,
and not replace, existing sources of funding for public health.
Subpart C--Natural Resource Adaptation
SEC. 471. PURPOSES.
The purposes of this subpart are to--
(1) establish an integrated Federal program to protect,
restore, and conserve the Nation's natural resources in
response to the threats of climate change and ocean
acidification; and
(2) provide financial support and incentives for programs,
strategies, and activities that protect, restore, and conserve
the Nation's natural resources in response to the threats of
climate change and ocean acidification.
SEC. 472. NATURAL RESOURCES CLIMATE CHANGE ADAPTATION POLICY.
It is the policy of the Federal Government, in cooperation with State
and local governments, Indian tribes, and other interested stakeholders
to use all practicable means and measures to protect, restore, and
conserve natural resources to enable them to become more resilient,
adapt to, and withstand the impacts of climate change and ocean
acidification.
SEC. 473. DEFINITIONS.
In this subpart:
(1) Coastal state.--The term ``coastal State'' has the
meaning given the term in section 304 of the Coastal Zone
Management Act of 1972 (16 U.S.C. 1453).
(2) Corridors.--The term ``corridors'' means areas that
provide connectivity, over different time scales (including
seasonal or longer), of habitat or potential habitat and that
facilitate the ability of terrestrial, marine, estuarine, and
freshwater fish, wildlife, or plants to move within a landscape
as needed for migration, gene flow, or dispersal, or in
response to the impacts of climate change and ocean
acidification or other impacts.
(3) Ecological processes.--The term ``ecological processes''
means biological, chemical, or physical interaction between the
biotic and abiotic components of an ecosystem and includes--
(A) nutrient cycling;
(B) pollination;
(C) predator-prey relationships;
(D) soil formation;
(E) gene flow;
(F) disease epizootiology;
(G) larval dispersal and settlement;
(H) hydrological cycling;
(I) decomposition; and
(J) disturbance regimes such as fire and flooding.
(4) Habitat.--The term ``habitat'' means the physical,
chemical, and biological properties that are used by fish,
wildlife, or plants for growth, reproduction, survival, food,
water, and cover, on a tract of land, in a body of water, or in
an area or region.
(5) Indian tribe.--The term ``Indian tribe'' has the meaning
given the term in section 4 of the Indian Self-Determination
and Education Assistance Act (25 U.S.C. 450b).
(6) Natural resources.--The term ``natural resources'' means
the terrestrial, freshwater, estuarine, and marine fish,
wildlife, plants, land, water, habitats, and ecosystems of the
United States.
(7) Natural resources adaptation.--The term ``natural
resources adaptation'' means the protection, restoration, and
conservation of natural resources to enable them to become more
resilient, adapt to, and withstand the impacts of climate
change and ocean acidification.
(8) Resilience.--Each of the terms ``resilience'' and
``resilient'' means the ability to resist or recover from
disturbance and preserve diversity, productivity, and
sustainability.
(9) State.--The term ``State'' means--
(A) a State of the United States;
(B) the District of Columbia; and
(C) the Commonwealth of Puerto Rico, Guam, the United
States Virgin Islands, the Northern Mariana Islands,
and American Samoa.
SEC. 474. COUNCIL ON ENVIRONMENTAL QUALITY.
The Chair of the Council on Environmental Quality shall--
(1) advise the President on implementation and development
of--
(A) a Natural Resources Climate Change Adaptation
Strategy required under section 476; and
(B) Federal natural resource agency adaptation plans
required under section 478;
(2) serve as the Chair of the Natural Resources Climate
Change Adaptation Panel established under section 475; and
(3) coordinate Federal agency strategies, plans, programs,
and activities related to protecting, restoring, and
maintaining natural resources to become more resilient, adapt
to, and withstand the impacts of climate change and ocean
acidification.
SEC. 475. NATURAL RESOURCES CLIMATE CHANGE ADAPTATION PANEL.
(a) Establishment.--Not later than 90 days after the date of the
enactment of this subpart, the President shall establish a Natural
Resources Climate Change Adaptation Panel, consisting of--
(1) the head, or their designee, of each of--
(A) the National Oceanic and Atmospheric
Administration;
(B) the Forest Service;
(C) the National Park Service;
(D) the United States Fish and Wildlife Service;
(E) the Bureau of Land Management;
(F) the United States Geological Survey;
(G) the Bureau of Reclamation;
(H) the Bureau of Indian Affairs;
(I) the Environmental Protection Agency; and
(J) the Army Corps of Engineers;
(2) the Chair of the Council on Environmental Quality; and
(3) the heads of such other Federal agencies or departments
with jurisdiction over natural resources of the United States,
as determined by the President.
(b) Functions.--The Panel shall serve as a forum for interagency
consultation on and the coordination of the development and
implementation of a national Natural Resources Climate Change
Adaptation Strategy required under section 476.
(c) Chair.--The Chair of the Council on Environmental Quality shall
serve as the Chair of the Panel.
SEC. 476. NATURAL RESOURCES CLIMATE CHANGE ADAPTATION STRATEGY.
(a) In General.--Not later than one year after the date of the
enactment of this subpart, the President, through the Natural Resources
Climate Change Adaptation Panel established under section 475, shall
develop a Natural Resources Climate Change Adaptation Strategy to
protect, restore, and conserve natural resources to enable them to
become more resilient, adapt to, and withstand the impacts of climate
change and ocean acidification and to identify opportunities to
mitigate those impacts.
(b) Development and Revision.--In developing and revising the
Strategy, the Panel shall--
(1) base the strategy on the best available science;
(2) develop the strategy in close cooperation with States and
Indian tribes;
(3) coordinate with other Federal agencies as appropriate;
(4) consult with local governments, conservation
organizations, scientists, and other interested stakeholders;
(5) provide public notice and opportunity for comment; and
(6) review and revise the Strategy every 5 years to
incorporate new information regarding the impacts of climate
change and ocean acidification on natural resources and
advances in the development of strategies for becoming more
resilient and adapting to those impacts.
(c) Contents.--The National Resources Adaptation Strategy shall
include--
(1) an assessment of the vulnerability of natural resources
to climate change and ocean acidification, including the short-
term, medium-term, long-term, cumulative, and synergistic
impacts;
(2) a description of current research, observation, and
monitoring activities at the Federal, State, tribal, and local
level related to the impacts of climate change and ocean
acidification on natural resources, as well as identification
of research and data needs and priorities;
(3) identification of natural resources that are likely to
have the greatest need for protection, restoration, and
conservation because of the adverse effects of climate change
and ocean acidification;
(4) specific protocols for integrating climate change and
ocean acidification adaptation strategies and activities into
the conservation and management of natural resources by Federal
departments and agencies to ensure consistency across agency
jurisdictions and resources;
(5) specific actions that Federal departments and agencies
shall take to protect, conserve, and restore natural resources
to become more resilient, adapt to, and withstand the impacts
of climate change and ocean acidification, including a timeline
to implement those actions;
(6) specific mechanisms for ensuring communication and
coordination among Federal departments and agencies, and
between Federal departments and agencies and State natural
resource agencies, United States territories, Indian tribes,
private landowners, conservation organizations, and other
nations that share jurisdiction over natural resources with the
United States;
(7) specific actions to develop and implement consistent
natural resources inventory and monitoring protocols through
interagency coordination and collaboration; and
(8) a process for guiding the development of detailed agency-
and department-specific adaptation plans required under section
478 to address the impacts of climate change and ocean
acidification on the natural resources in the jurisdiction of
each agency.
(d) Implementation.--Consistent with its authorities under other laws
and with Federal trust responsibilities with respect to Indian lands,
each Federal department or agency with representation on the National
Resources Climate Change Adaptation Panel shall consider the impacts of
climate change and ocean acidification and integrate the elements of
the strategy into agency plans, environmental reviews, programs, and
activities related to the conservation, restoration, and management of
natural resources.
SEC. 477. NATURAL RESOURCES ADAPTATION SCIENCE AND INFORMATION.
(a) Coordination.--Not later than 90 days after the date of the
enactment of this subpart, the Secretary of Commerce, acting through
the Administrator of the National Oceanic and Atmospheric
Administration, and the Secretary of the Interior, acting through the
Director of the United States Geological Survey, shall establish a
coordinated process for developing and providing science and
information needed to assess and address the impacts of climate change
and ocean acidification on natural resources. The process shall be led
by the National Climate Change and Wildlife Science Center established
within the United States Geological Survey under subsection (d) and the
National Climate Service of the National Oceanic and Atmospheric
Administration.
(b) Functions.--The Secretaries shall ensure that such process avoids
duplication and that the National Oceanic and Atmospheric
Administration and the United States Geological Survey shall--
(1) provide technical assistance to Federal departments and
agencies, State and local governments, Indian tribes, and
interested private landowners in their efforts to assess and
address the impacts of climate change and ocean acidification
on natural resources;
(2) conduct and sponsor research and provide Federal
departments and agencies, State and local governments, Indian
tribes, and interested private landowners with research
products, decision and monitoring tools and information, to
develop strategies for assisting natural resources to become
more resilient, adapt to, and withstand the impacts of climate
change and ocean acidification; and
(3) assist Federal departments and agencies in the
development of the adaptation plans required under section 478.
(c) Survey.--Not later than one year after the date of enactment of
this subpart and every 5 years thereafter, the Secretary of Commerce
and the Secretary of the Interior shall undertake a climate change and
ocean acidification impact survey that--
(1) identifies natural resources considered likely to be
adversely affected by climate change and ocean acidification;
(2) includes baseline monitoring and ongoing trend analysis;
(3) uses a stakeholder process to identify and prioritize
needed monitoring and research that is of greatest relevance to
the ongoing needs of natural resource managers to address the
impacts of climate change and ocean acidification; and
(4) identifies decision tools necessary to develop strategies
for assisting natural resources to become more resilient and
adapt to and withstand the impacts of climate change and ocean
acidification.
(d) National Climate Change and Wildlife Science Center.--
(1) Establishment.--The Secretary of the Interior shall
establish the National Climate Change and Wildlife Science
Center within the United States Geological Survey.
(2) Functions.--The Center shall, in collaboration with
Federal and State natural resources agencies and departments,
Indian tribes, universities, and other partner organizations--
(A) assess and synthesize current physical and
biological knowledge and prioritize scientific gaps in
such knowledge in order to forecast the ecological
impacts of climate change on fish and wildlife at the
ecosystem, habitat, community, population, and species
levels;
(B) develop and improve tools to identify, evaluate,
and, where appropriate, link scientific approaches and
models for forecasting the impacts of climate change
and adaptation on fish, wildlife, plants, and their
habitats, including monitoring, predictive models,
vulnerability analyses, risk assessments, and decision
support systems to help managers make informed
decisions;
(C) develop and evaluate tools to adaptively manage
and monitor the effects of climate change on fish and
wildlife at national, regional, and local scales; and
(D) develop capacities for sharing standardized data
and the synthesis of such data.
(e) Science Advisory Board.--
(1) Establishment.--Not later than 180 days after the date of
enactment of this subpart, the Secretary of Commerce and the
Secretary of the Interior shall establish and appoint the
members of a Science Advisory Board, to be comprised of not
fewer than 10 and not more than 20 members--
(A) who have expertise in fish, wildlife, plant,
aquatic, and coastal and marine biology, ecology,
climate change, ocean acidification, and other relevant
scientific disciplines;
(B) who represent a balanced membership among
Federal, State, Indian tribes, and local
representatives, universities, and conservation
organizations; and
(C) at least \1/2\ of whom are recommended by the
President of the National Academy of Sciences.
(2) Duties.--The Science Advisory Board shall--
(A) advise the Secretaries on the state-of-the-
science regarding the impacts of climate change and
ocean acidification on natural resources and scientific
strategies and mechanisms for protecting, restoring,
and conserving natural resources to enable them to
become more resilient, adapt to, and withstand the
impacts of climate change and ocean acidification; and
(B) identify and recommend priorities for ongoing
research needs on such issues.
(3) Collaboration.--The Science Advisory Board shall
collaborate with other climate change and ecosystem research
entities in other Federal agencies and departments.
(4) Availability to the public.--The advice and
recommendations of the Science Advisory Board shall be made
available to the public.
SEC. 478. FEDERAL NATURAL RESOURCE AGENCY ADAPTATION PLANS.
(a) Development.--Not later than 1 year after the date of the
development of a Natural Resources Climate Change Adaptation Strategy
under section 476, each department or agency that has a representative
on the Natural Resources Climate Change Adaptation Panel established
under section 475 shall--
(1) complete an adaptation plan for that department or
agency, respectively, implementing the Natural Resources
Climate Change Adaptation Strategy under section 476 and
consistent with the Natural Resources Climate Change Adaptation
Policy under section 472, detailing the department's or
agency's current and projected efforts to address the potential
impacts of climate change and ocean acidification on natural
resources within the department's or agency's jurisdiction and
necessary additional actions, including a timeline for
implementation of those actions;
(2) provide opportunities for review and comment on that
adaptation plan by the public, including in the case of a plan
by the Bureau of Indian Affairs, review by Indian tribes; and
(3) submit such plan to the President for approval.
(b) Review by President and Submission to Congress.--
(1) Review by president.--The President shall--
(A) approve an adaptation plan submitted under
subsection (a)(3) if the plan meets the requirements of
subsection (c) and is consistent with the strategy
developed under section 476;
(B) decide whether to approve the plan within 60 days
after submission; and
(C) if the President disapproves a plan, direct the
department or agency to submit a revised plan to the
President under subsection (a)(3) within 60 days after
such disapproval.
(2) Submission to congress.--Not later than 30 days after the
date of approval of such adaptation plan by the President, the
department or agency shall submit the approved plan to the
Committee on Natural Resources of the House of Representatives,
the Committee on Energy and Natural Resources of the Senate,
and the committees of the House of Representatives and the
Senate with principal jurisdiction over the department or
agency.
(c) Requirements.--Each adaptation plan shall--
(1) establish programs for assessing the current and future
impacts of climate change and ocean acidification on natural
resources within the department's or agency's, respectively,
jurisdiction, including cumulative and synergistic effects, and
for identifying and monitoring those natural resources that are
likely to be adversely affected and that have need for
conservation;
(2) identify and prioritize the department's or agency's
strategies and specific conservation actions to address the
current and future impacts of climate change and ocean
acidification on natural resources within the scope of the
department's or agency's jurisdiction and to develop and
implement strategies to protect, restore, and conserve such
resources to become more resilient, adapt to, and better
withstand those impacts, including--
(A) the protection, restoration, and conservation of
terrestrial, marine, estuarine, and freshwater habitats
and ecosystems;
(B) the establishment of terrestrial, marine,
estuarine, and freshwater habitat linkages and
corridors;
(C) the restoration and conservation of ecological
processes;
(D) the protection of a broad diversity of native
species of fish, wildlife, and plant populations across
their range; and
(E) the protection of fish, wildlife, and plant
health, recognizing that climate can alter the
distribution and ecology of parasites, pathogens, and
vectors;
(3) describe how the department or agency will integrate such
strategies and conservation activities into plans, programs,
activities, and actions of the department or agency, related to
the conservation and management of natural resources and
establish new plans, programs, activities, and actions as
necessary;
(4) establish methods for assessing the effectiveness of
strategies and conservation actions taken to protect, restore,
and conserve natural resources to enable them to become more
resilient, adapt to, and withstand the impacts of climate
change and ocean acidification, and for updating those
strategies and actions to respond to new information and
changing conditions;
(5) include a description of current and proposed mechanisms
to enhance cooperation and coordination of natural resources
adaptation efforts with other Federal agencies, State and local
governments, Indian tribes, and nongovernmental stakeholders;
(6) include specific written guidance to resource managers
to--
(A) explain how managers are expected to address the
effects of climate change and ocean acidification;
(B) identify how managers are to obtain any site-
specific information that may be necessary; and
(C) reflect best practices shared among relevant
agencies, while also recognizing the unique missions,
objectives, and responsibilities of each agency; and
(7) identify and assess data and information gaps necessary
to develop natural resources adaptation plans and strategies.
(d) Implementation.--
(1) In general.--Upon approval by the President, each
department or agency that serves on the Natural Resources
Climate Change Adaptation Panel shall implement its adaptation
plan through existing and new plans, policies, programs,
activities, and actions to the extent not inconsistent with
existing authority.
(2) Consideration of impacts.--
(A) In general.--To the maximum extent practicable
and consistent with applicable law, every natural
resource management decision made by the department or
agency shall consider the impacts of climate change and
ocean acidification on those natural resources.
(B) Guidance.--The Council on Environmental Quality
shall issue guidance for Federal departments and
agencies for considering those impacts.
(e) Revision and Review.--Not less than every 5 years, each
adaptation plan under this section shall be reviewed and revised to
incorporate the best available science and other information regarding
the impacts of climate change and ocean acidification on natural
resources.
SEC. 479. STATE NATURAL RESOURCES ADAPTATION PLANS.
(a) Requirement.--In order to be eligible for funds under section
480, not later than 1 year after the development of a Natural Resources
Climate Change Adaptation Strategy required under section 476 each
State shall prepare a State natural resources adaptation plan detailing
the State's current and projected efforts to address the potential
impacts of climate change and ocean acidification on natural resources
and coastal areas within the State's jurisdiction.
(b) Review or Approval.--
(1) In general.--Each State adaptation plan shall be reviewed
and approved or disapproved by the Secretary of the Interior
and, as applicable, the Secretary of Commerce. Such approval
shall be granted if the plan meets the requirements of
subsection (c) and is consistent with the Natural Resources
Climate Change Adaptation Strategy required under section 476.
(2) Approval or disapproval.--Within 180 days after
transmittal of such a plan, or a revision to such a plan, the
Secretary of the Interior and, as applicable, the Secretary of
Commerce shall approve or disapprove the plan by written
notice.
(3) Resubmittal.--Within 90 days after transmittal of a
resubmitted adaptation plan as a result of disapproval under
paragraph (3), the Secretary of the Interior and, as
applicable, the Secretary of Commerce, shall approve or
disapprove the plan by written notice.
(c) Contents.--A State natural resources adaptation plan shall--
(1) include a strategy for addressing the impacts of climate
change and ocean acidification on terrestrial, marine,
estuarine, and freshwater fish, wildlife, plants, habitats,
ecosystems, wildlife health, and ecological processes, that--
(A) describes the impacts of climate change and ocean
acidification on the diversity and health of the fish,
wildlife and plant populations, habitats, ecosystems,
and associated ecological processes;
(B) establishes programs for monitoring the impacts
of climate change and ocean acidification on fish,
wildlife, and plant populations, habitats, ecosystems,
and associated ecological processes;
(C) describes and prioritizes proposed conservation
actions to assist fish, wildlife, plant populations,
habitats, ecosystems, and associated ecological
processes in becoming more resilient, adapting to, and
better withstanding those impacts;
(D) includes strategies, specific conservation
actions, and a time frame for implementing conservation
actions for fish, wildlife, and plant populations,
habitats, ecosystems, and associated ecological
processes;
(E) establishes methods for assessing the
effectiveness of strategies and conservation actions
taken to assist fish, wildlife, and plant populations,
habitats, ecosystems, and associated ecological
processes in becoming more resilient, adapt to, and
better withstand the impacts of climate changes and
ocean acidification and for updating those strategies
and actions to respond appropriately to new information
or changing conditions;
(F) is incorporated into a revision of the State
wildlife action plan (also known as the State
comprehensive wildlife strategy)--
(i) that has been submitted to the United
States Fish and Wildlife Service; and
(ii) that has been approved by the Service or
on which a decision on approval is pending; and
(G) is developed--
(i) with the participation of the State fish
and wildlife agency, the State coastal agency,
the State agency responsible for administration
of Land and Water Conservation Fund grants, the
State Forest Legacy program coordinator, and
other State agencies considered appropriate by
the Governor of such State; and
(ii) in coordination with the Secretary of
the Interior, and where applicable, the
Secretary of Commerce and other States that
share jurisdiction over natural resources with
the State; and
(2) include, in the case of a coastal State, a strategy for
addressing the impacts of climate change and ocean
acidification on the coastal zone that--
(A) identifies natural resources that are likely to
be impacted by climate change and ocean acidification
and describes those impacts;
(B) identifies and prioritizes continuing research
and data collection needed to address those impacts
including--
(i) acquisition of high resolution coastal
elevation and nearshore bathymetry data;
(ii) historic shoreline position maps,
erosion rates, and inventories of shoreline
features and structures;
(iii) measures and models of relative rates
of sea level rise or lake level changes,
including effects on flooding, storm surge,
inundation, and coastal geological processes;
(iv) habitat loss, including projected losses
of coastal wetlands and potentials for inland
migration of natural shoreline habitats;
(v) ocean and coastal species and ecosystem
migrations, and changes in species population
dynamics;
(vi) changes in storm frequency, intensity,
or rainfall patterns;
(vii) saltwater intrusion into coastal rivers
and aquifers;
(viii) changes in chemical or physical
characteristics of marine and estuarine
systems;
(ix) increased harmful algal blooms; and
(x) spread of invasive species;
(C) identifies and prioritizes adaptation strategies
to protect, restore, and conserve natural resources to
enable them to become more resilient, adapt to, and
withstand the impacts of climate change and ocean
acidification, including--
(i) protection, maintenance, and restoration
of ecologically important coastal lands,
coastal and ocean ecosystems, and species
biodiversity and the establishment of habitat
buffer zones, migration corridors, and climate
refugia; and
(ii) improved planning, siting policies, and
hazard mitigation strategies;
(D) establishes programs for the long-term monitoring
of the impacts of climate change and ocean
acidification on the ocean and coastal zone and to
assess and adjust, when necessary, such adaptive
management strategies;
(E) establishes performance measures for assessing
the effectiveness of adaptation strategies intended to
improve resilience and the ability of natural resources
in the coastal zone to adapt to and withstand the
impacts of climate change and ocean acidification and
of adaptation strategies intended to minimize those
impacts on the coastal zone and to update those
strategies to respond to new information or changing
conditions; and
(F) is developed with the participation of the State
coastal agency and other appropriate State agencies and
in coordination with the Secretary of Commerce and
other appropriate Federal agencies.
(d) Public Input.--States shall provide for solicitation and
consideration of public and independent scientific input in the
development of their plans.
(e) Coordination With Other Plans.--The State plan shall take into
consideration research and information contained in, and coordinate
with and integrate the goals and measures identified in, as
appropriate, other natural resources conservation strategies,
including--
(1) the national fish habitat action plan;
(2) plans under the North American Wetlands Conservation Act
(16 U.S.C. 4401 et seq.);
(3) the Federal, State, and local partnership known as
``Partners in Flight'';
(4) federally approved coastal zone management plans under
the Coastal Zone Management Act of 1972 (16 U.S.C. 1451 et
seq.);
(5) federally approved regional fishery management plants and
habitat conservation activities under the Magnuson-Stevens
Fishery Conservation and Management Act (16 U.S.C. 1801 et
seq.);
(6) the national coral reef action plan;
(7) recovery plans for threatened species and endangered
species under section 4(f) of the Endangered Species Act of
1973 (16 U.S.C. 1533(f));
(8) habitat conservation plans under section 10 of that Act
(16 U.S.C. 1539);
(9) other Federal, State, and tribal plans for imperiled
species;
(10) State or tribal hazard mitigation plans;
(11) State or tribal water management plans; and
(12) other State-based strategies that comprehensively
implement adaptation activities to remediate the effects of
climate change and ocean acidification on terrestrial, marine,
and freshwater fish, wildlife, plants, and other natural
resources.
(f) Updating.--Each State plan shall be updated not less than every 5
years.
(g) Funding.--
(1) In general.--Funds allocated to States under section 480
shall be used only for activities that are consistent with a
State natural resources adaptation plan that has been approved
by the Secretaries of Interior and Commerce.
(2) Funding prior to the approval of a state plan.--Until the
earlier of the date that is 3 years after the date of the
enactment of this subpart or the date on which a State receives
approval for the State strategy, a State shall be eligible to
receive funding under section 480 for adaptation activities
that are--
(A) consistent with the comprehensive wildlife
strategy of the State and, where appropriate, other
natural resources conservation strategies; and
(B) in accordance with a workplan developed in
coordination with--
(i) the Secretary of the Interior; and
(ii) the Secretary of Commerce, for any
coastal State subject to the condition that
coordination with the Secretary of Commerce
shall be required only for those portions of
the strategy relating to activities affecting
the coastal zone.
(3) Pending approval.--During the period for which approval
by the applicable Secretary of a State plan is pending, the
State may continue receiving funds under section 480 pursuant
to the workplan described in paragraph (2)(B).
SEC. 480. NATURAL RESOURCES CLIMATE CHANGE ADAPTATION FUND.
(a) Allocations to States.--100 percent of the emission allowances
made available for each year to carry out this subpart shall be
provided to States to carry out natural resources adaptation activities
in accordance with State natural resources adaptation plans approved
under section 479. Specifically--
(1) 84.4 percent shall be available to State wildlife
agencies in accordance with the apportionment formula
established under the second subsection (c) of section 4 of the
Pittman-Robertson Wildlife Restoration Act (16 U.S.C. 669c), as
added by section 902(e) of H.R. 5548 as introduced in the 106th
Congress and enacted into law by section 1(a)(2) of Public Law
106-553 (114 Stat. 2762A-119); and
(2) 15.6 percent shall be available to State coastal agencies
pursuant to the formula established by the Secretary of
Commerce under section 306(c) of the Coastal Management Act of
1972 (16 U.S.C. 1455(c)).
(b) Establishment of Fund.--
(1) Establishment.--There is hereby established in the
Treasury a separate account that shall be known as the Natural
Resources Climate Change Adaptation Fund.
(2) Authorization of appropriations.--There are authorized to
be appropriated for section 480(c) such sums as are deposited
in the Natural Resources Climate Change Fund, and the amounts
appropriated for section 480(c) shall be no less than the total
estimated annual deposits in the Natural Resources Climate
Change Adaptation Fund. Such appropriations shall be offset by
the amounts deposited in such fund pursuant to section 782(m).
(c) Allocations to Federal Agencies.--
(1) Department of the interior.--Of the amounts made
available for each fiscal year to carry out this subpart--
(A) 27.6 percent shall be allocated to the Secretary
of the Interior for use in funding--
(i) natural resources adaptation activities
carried out--
(I) under endangered species,
migratory species, and other fish and
wildlife programs administered by the
National Park Service, the United
States Fish and Wildlife Service, the
Bureau of Indian Affairs, and the
Bureau of Land Management;
(II) on wildlife refuges, National
Park Service land, and other public
land under the jurisdiction of the
United States Fish and Wildlife
Service, the Bureau of Land Management,
the Bureau of Indian Affairs, or the
National Park Service; or
(III) within Federal water managed by
the Bureau of Reclamation and the
National Park Service; and
(ii) for the implementation of the National
Fish and Wildlife Habitat and Corridors
Identification Program pursuant to section 481;
(B) 8.1 percent shall be allocated to the Secretary
of the Interior for natural resources adaptation
activities carried out under cooperative grant
programs, including--
(i) the cooperative endangered species
conservation fund authorized under section 6 of
the Endangered Species Act of 1973 (16 U.S.C.
1535);
(ii) programs under the North American
Wetlands Conservation Act (16 U.S.C. 4401 et
seq.);
(iii) the Neotropical Migratory Bird
Conservation Fund established by section 478(a)
of the Neotropical Migratory Bird Conservation
Act (16 U.S.C. 6108(a));
(iv) the Coastal Program of the United States
Fish and Wildlife Service;
(v) the National Fish Habitat Action Plan;
(vi) the Partners for Fish and Wildlife
Program;
(vii) the Landowner Incentive Program;
(viii) the Wildlife Without Borders Program
of the United States Fish and Wildlife Service;
and
(ix) the Migratory Species Program and Park
Flight Migratory Bird Program of the National
Park Service; and
(C) 4.9 percent shall be allocated to the Secretary
of the Interior to provide financial assistance to
Indian tribes to carry out natural resources adaptation
activities through the Tribal Wildlife Grants Program
of the United States Fish and Wildlife Service.
(2) Land and water conservation fund.--
(A) Deposits.--
(i) In general.--Of the amounts made
available for each fiscal year to carry out
this subpart, 19.5 percent shall be deposited
into the Land and Water Conservation Fund
established under section 2 of the Land and
Water Conservation Fund Act of 1965 (16 U.S.C.
460l-5).
(ii) Use of deposits.-- (I) Deposits into the
Land and Water Conservation Fund under this
paragraph shall be supplemental to
authorizations provided under section 3 of the
Land and Water Conservation Fund Act of 1965
(16 U.S.C. 460l-6), which shall remain
available for nonadaptation needs.
(II) There are authorized to be appropriated
for activities in this subpart such sums as are
deposited in the Land and Water Conservation
Fund pursuant to section 480(c)(3)(A)(ii), and
the amounts appropriated for this paragraph
shall be no less than the total estimated
annual deposits in the Land and Water
Conservation Fund. Such appropriations shall be
offset by the amounts deposited in such Fund
pursuant to section 782(m).
(B) Allocations.--Of the amounts deposited under this
paragraph into the Land and Water Conservation Fund--
(i) \1/6\ shall be allocated to the Secretary
of the Interior and made available on a
competitive basis to carry out natural
resources adaptation activities through the
acquisition of land and interests in land under
section 6 of the Land and Water Conservation
Fund Act of 1965 (16 U.S.C. 460l-8)--
(I) to States in accordance with
their natural resources adaptation
plans, and to Indian tribes;
(II) notwithstanding section 5 of
that Act (16 U.S.C. 460l-7); and
(III) in addition to any funds
provided pursuant to annual
appropriations Acts, the Energy Policy
Act of 2005 (42 U.S.C. 15801 et seq.),
or any other authorization for
nonadaptation needs;
(ii) \1/3\ shall be allocated to the
Secretary of the Interior to carry out natural
resources adaptation activities through the
acquisition of lands and interests in land
under section 7 of the Land and Water
Conservation Fund Act of 1965 (16 U.S.C. 460l-
9);
(iii) \1/6\ shall be allocated to the
Secretary of Agriculture and made available to
the States and Indian tribes to carry out
natural resources adaptation activities through
the acquisition of land and interests in land
under section 7 of the Forest Legacy Program
under the Cooperative Forestry Assistance Act
of 1978 (16 U.S.C. 2103c); and
(iv) \1/3\ shall be allocated to the
Secretary of Agriculture to carry out natural
resources adaptation activities through the
acquisition of land and interests in land under
section 7 of the Land and Water Conservation
Fund Act of 1965 (16 U.S.C. 460l-9).
(C) Expenditure of funds.--In allocating funds under
subparagraph (B), the Secretary of the Interior and the
Secretary of Agriculture shall take into consideration
factors including--
(i) the availability of non-Federal
contributions from State, local, or private
sources;
(ii) opportunities to protect fish and
wildlife corridors or otherwise to link or
consolidate fragmented habitats;
(iii) opportunities to reduce the risk of
catastrophic wildfires, drought, extreme
flooding, or other climate-related events that
are harmful to fish and wildlife and people;
and
(iv) the potential for conservation of
species or habitat types at serious risk due to
climate change, ocean acidification, and other
stressors.
(3) Forest service.--Of the amounts made available for each
fiscal year to carry out this subpart, 8.1 percent shall be
allocated to the Secretary of Agriculture for use in funding
natural resources adaptation activities carried out on national
forests and national grasslands under the jurisdiction of the
Forest Service.
(4) Department of commerce.--Of the amounts made available
for each fiscal year to carry out this subpart, 11.5 percent
shall be allocated to the Secretary of Commerce for use in
funding natural resources adaptation activities to protect,
maintain, and restore coastal, estuarine, and marine resources,
habitats, and ecosystems, including such activities carried out
under--
(A) the coastal and estuarine land conservation
program;
(B) the community-based restoration program;
(C) the Coastal Zone Management Act of 1972 (16
U.S.C. 1451 et seq.), that are specifically designed to
strengthen the ability of coastal, estuarine, and
marine resources, habitats, and ecosystems to adapt to
and withstand the impacts of climate change and ocean
acidification;
(D) the Open Rivers Initiative;
(E) the Magnuson-Stevens Fishery Conservation and
Management Act (16 U.S.C. 1801 et seq.);
(F) the Marine Mammal Protection Act of 1972 (16
U.S.C. 1361 et seq.);
(G) the Endangered Species Act of 1973 (16 U.S.C.
1531 et seq.);
(H) the Marine Protection, Research, and Sanctuaries
Act of 1972 (33 U.S.C. 1401 et seq.);
(I) the Coral Reef Conservation Act of 2000 (16
U.S.C. 6401 et seq.); and
(J) the Estuary Restoration Act of 2000 (33 U.S.C.
2901 et seq.).
(5) Environmental protection agency.--Of the amounts made
available each fiscal year to carry out this section, 12.2
percent shall be allocated to the Administrator for use in
natural resources adaptation activities restoring and
protecting--
(A) large-scale freshwater aquatic ecosystems, such
as the Everglades, the Great Lakes, Flathead Lake, the
Missouri River, the Mississippi River, the Colorado
River, the Sacramento-San Joaquin Rivers, the Ohio
River, the Columbia-Snake River System, the
Apalachicola, Chattahoochee, and Flint River System,
the Connecticut River, and the Yellowstone River;
(B) large-scale estuarine ecosystems, such as
Chesapeake Bay, Long Island Sound, Puget Sound, the
Mississippi River Delta, the San Francisco Bay Delta,
Narragansett Bay, and Albemarle-Pamlico Sound; and
(C) freshwater and estuarine ecosystems, watersheds,
and basins identified as priorities by the
Administrator, working in cooperation with other
Federal agencies, States, Indian tribes, local
governments, scientists, and other conservation
partners.
(6) Corps of engineers.--Of the amounts made available each
fiscal year to carry out this section, 8.1 percent shall be
available to the Secretary of the Army for use by the Corps of
Engineers to carry out natural resources adaptation activities
restoring--
(A) large-scale freshwater aquatic ecosystems, such
as the ecosystems described in paragraph (5)(A);
(B) large-scale estuarine ecosystems, such as the
ecosystems described in paragraph (5)(B);
(C) freshwater and estuarine ecosystems, watersheds,
and basins identified as priorities by the Corps of
Engineers, working in cooperation with other Federal
agencies, States, Indian tribes, local governments,
scientists, and other conservation partners; and
(D) habitats and ecosystems through the
implementation of estuary habitat restoration projects
authorized by the Estuary Restoration Act of 2000 (33
U.S.C. 2901 et seq.), project modifications for
improvement of the environment, aquatic restoration and
protection projects authorized by section 206 of the
Water Resources Development Act of 1996 (33 U.S.C.
2330), and other appropriate programs and activities.
(d) Use of Funds by Federal Departments and Agencies.--Funds
allocated to Federal departments and agencies under this section shall
only be used for natural resources adaptation activities that are
consistent with an adaptation plan developed and approved by the
President under section 478.
(e) State Cost Sharing.--Notwithstanding any other provision of law,
a State that receives a grant with amounts allocated under this section
shall use funds from non-Federal sources to pay 10 percent of the costs
of each activity carried out using amounts provided under the grant.
SEC. 481. NATIONAL WILDLIFE HABITAT AND CORRIDORS INFORMATION PROGRAM.
(a) Establishment.--Within 6 months of the date of enactment of this
subpart, the Secretary of the Interior, in cooperation with the States
and Indian tribes, shall establish a National Fish and Wildlife Habitat
and Corridors Information Program in accordance with the requirements
of this section.
(b) Purpose.--The purpose of this program is to--
(1) support States and Indian tribes in the development of a
geographic information system database of fish and wildlife
habitat and corridors that would inform planning and
development decisions within each State, enable each State to
model climate impacts and adaptation, and provide
geographically specific enhancements of State wildlife action
plans;
(2) ensure the collaborative development, with the States and
Indian tribes, of a comprehensive, national geographic
information system database of maps, models, data, surveys,
informational products, and other geospatial information
regarding fish and wildlife habitat and corridors, that--
(A) is based on consistent protocols for sampling and
mapping across landscapes that take into account
regional differences; and
(B) that utilizes--
(i) existing and planned State- and tribal-
based geographic information system databases;
and
(ii) existing databases, analytical tools,
metadata activities, and other information
products available through the National
Biological Information Infrastructure
maintained by the Secretary and nongovernmental
organizations; and
(3) facilitate the use of such databases by Federal, State,
local, and tribal decisionmakers to incorporate qualitative
information on fish and wildlife habitat and corridors at the
earliest possible stage to--
(A) prioritize and target natural resources
adaptation strategies and activities;
(B) avoid, minimize, and mitigate the impacts on fish
and wildlife habitat and corridors in siting energy
development, water, transmission, transportation, and
other land use projects;
(C) assess the impacts of existing development on
habitats and corridors; and
(D) develop management strategies to enhance the
ability of fish, wildlife, and plant species to migrate
or respond to shifting habitats within existing
habitats and corridors.
(c) Habitat and Corridors Information System.--
(1) In general.--The Secretary, in cooperation with the
States and Indian tribes, shall develop a Habitat and Corridors
Information System.
(2) Contents.--The System shall--
(A) include maps, data, and descriptions of fish and
wildlife habitat and corridors, that--
(i) have been developed by Federal agencies,
State wildlife agencies and natural heritage
programs, Indian tribes, local governments,
nongovernmental organizations, and industry;
(ii) meet accepted Geospatial
Interoperability Framework data and metadata
protocols and standards;
(B) include maps and descriptions of projected shifts
in habitats and corridors of fish and wildlife species
in response to climate change;
(C) assure data quality and make the data, models,
and analyses included in the System available at scales
useful to decisionmakers--
(i) to prioritize and target natural
resources adaptation strategies and activities;
(ii) to assess the impacts of proposed energy
development, water, transmission,
transportation, and other land use projects and
avoid, minimize, and mitigate those impacts on
habitats and corridors;
(iii) to assess the impacts of existing
development on habitats and corridors; and
(iv) to develop management strategies to
enhance the ability of fish, wildlife, and
plant species to migrate or respond to shifting
habitats within existing habitats and
corridors;
(D) establish a process for updating maps and other
information as landscapes, habitats, corridors, and
wildlife populations change or as other information
becomes available;
(E) encourage the development of collaborative plans
by Federal and State agencies and Indian tribes to
monitor and evaluate the efficacy of the System to meet
the needs of decisionmakers;
(F) identify gaps in habitat and corridor
information, mapping, and research that should be
addressed to fully understand and assess current data
and metadata, and to prioritize research and future
data collection activities for use in updating the
System and provide support for those activities;
(G) include mechanisms to support collaborative
research, mapping, and planning of habitats and
corridors by Federal and State agencies, Indian tribes,
and other interested stakeholders;
(H) incorporate biological and geospatial data on
species and corridors found in energy development and
transmission plans, including renewable energy
initiatives, transportation, and other land use plans;
(I) be based on the best scientific information
available; and
(J) identify, prioritize, and describe key parcels of
non-Federal land located within the boundaries of units
of the National Park System, National Wildlife Refuge
System, National Forest System, or National Grassland
System that are critical to maintenance of wildlife
habitat and migration corridors.
(d) Financial and Other Support.--The Secretary may provide support
to the States and Indian tribes, including financial and technical
assistance, for activities that support the development and
implementation of the System.
(e) Coordination.--The Secretary, in cooperation with the States and
Indian tribes, shall make recommendations on how the information
developed in the System may be incorporated into existing relevant
State and Federal plans affecting fish and wildlife, including land
management plans, the State Comprehensive Wildlife Conservation
Strategies, and appropriate tribal conservation plans, to ensure that
they--
(1) prevent unnecessary habitat fragmentation and disruption
of corridors;
(2) promote the landscape connectivity necessary to allow
wildlife to move as necessary to meet biological needs, adjust
to shifts in habitat, and adapt to climate change; and
(3) minimize the impacts of energy, development, water,
transportation, and transmission projects and other activities
expected to impact habitat and corridors.
(f) Definitions.--In this section:
(1) Geospatial interoperability framework.--The term
``Geospatial Interoperability Framework'' means the strategy
utilized by the National Biological Information Infrastructure
that is based upon accepted standards, specifications, and
protocols adopted through the International Standards
Organization, the Open Geospatial Consortium, and the Federal
Geographic Data Committee, to manage, archive, integrate,
analyze, and make accessible geospatial and biological data and
metadata.
(2) Secretary.--The term ``Secretary'' means the Secretary of
the Interior.
SEC. 482. ADDITIONAL PROVISIONS REGARDING INDIAN TRIBES.
(a) Federal Trust Responsibility.--Nothing in this subpart is
intended to amend, alter, or give priority over the Federal trust
responsibility to Indian tribes.
(b) Exemption From FOIA.--If a Federal department or agency receives
any information related to sacred sites or cultural activities
identified by an Indian tribe as confidential, such information shall
be exempt from disclosure under section 552 of title 5, United States
Code, popularly known as the Freedom of Information Act (5 U.S.C. 552).
(c) Application of Other Law.--The Secretary of the Interior may
apply the provisions of Public Law 93-638 where appropriate in the
implementation of this subpart.
PART 2--INTERNATIONAL CLIMATE CHANGE ADAPTATION PROGRAM
SEC. 491. FINDINGS AND PURPOSES.
(a) Findings.--Congress finds the following:
(1) Global climate change is a potentially significant
national and global security threat multiplier and is likely to
exacerbate competition and conflict over agricultural,
vegetative, marine, and water resources and to result in
increased displacement of people, poverty, and hunger within
developing countries.
(2) The strategic, social, political, economic, cultural, and
environmental consequences of global climate change are likely
to have disproportionate adverse impacts on developing
countries, which have less economic capacity to respond to such
impacts.
(3) The countries most vulnerable to climate change, due both
to greater exposure to harmful impacts and to lower capacity to
adapt, are developing countries with very low industrial
greenhouse gas emissions that have contributed less to climate
change than more affluent countries.
(4) To a much greater degree than developed countries,
developing countries rely on the natural and environmental
systems likely to be affected by climate change for sustenance,
livelihoods, and economic growth and stability.
(5) Within developing countries there may be varying climate
change adaptation and resilience needs among different
communities and populations, including impoverished
communities, children, women, and indigenous peoples.
(6) The consequences of global climate change, including
increases in poverty and destabilization of economies and
societies, are likely to pose long-term challenges to the
national security, foreign policy, and economic interests of
the United States.
(7) It is in the national security, foreign policy, and
economic interests of the United States to recognize, plan for,
and mitigate the international strategic, social, political,
cultural, environmental, health, and economic effects of
climate change and to assist developing countries to increase
their resilience to those effects.
(8) Under Article 4 of the United Nations Framework
Convention on Climate Change, developed country parties,
including the United States, committed to ``assist the
developing country parties that are particularly vulnerable to
the adverse effects of climate change in meeting costs of
adaptation to those adverse effects''.
(9) Under the Bali Action Plan, developed country parties to
the United Nations Framework Convention on Climate Change,
including the United States, committed to ``enhanced action on
the provision of financial resources and investment to support
action on mitigation and adaptation and technology
cooperation,'' including, inter alia, consideration of
``improved access to adequate, predictable, and sustainable
financial resources and financial and technical support, and
the provision of new and additional resources, including
official and concessional funding for developing country
parties''.
(b) Purposes.--The purposes of this part are--
(1) to provide new and additional assistance from the United
States to the most vulnerable developing countries, including
the most vulnerable communities and populations therein, in
order to support the development and implementation of climate
change adaptation programs and activities that reduce the
vulnerability and increase the resilience of communities to
climate change impacts, including impacts on water
availability, agricultural productivity, flood risk, coastal
resources, timing of seasons, biodiversity, economic
livelihoods, health and diseases, and human migration; and
(2) to provide such assistance in a manner that protects and
promotes the national security, foreign policy, environmental,
and economic interests of the United States to the extent such
interests may be advanced by minimizing, averting, or
increasing resilience to climate change impacts.
SEC. 492. DEFINITIONS.
In this part:
(1) Allowance.--The term ``allowance'' means an emission
allowance established under section 721 of the Clean Air Act.
(2) Appropriate congressional committees.--The term
``appropriate congressional committees'' means--
(A) the Committees on Energy and Commerce, Financial
Services, and Foreign Affairs of the House of
Representatives; and
(B) the Committees on Environment and Public Works
and Foreign Relations of the Senate.
(3) Developing country.--The term ``developing country''
means a country eligible to receive official development
assistance according to the income guidelines of the
Development Assistance Committee of the Organization for
Economic Cooperation and Development.
(4) Most vulnerable developing countries.--The term ``most
vulnerable developing countries'' means, as determined by the
Administrator of USAID, developing countries that are at risk
of substantial adverse impacts of climate change and have
limited capacity to respond to such impacts, considering the
approaches included in any international treaties and
agreements.
(5) Most vulnerable communities and populations.--The term
``most vulnerable communities and populations'' means
communities and populations that are at risk of substantial
adverse impacts of climate change and have limited capacity to
respond to such impacts, including impoverished communities,
children, women, and indigenous peoples.
(6) Program.--The term ``Program'' means the International
Climate Change Adaptation Program established under section
493.
(7) USAID.--The term ``USAID'' means the United States Agency
for International Development.
(8) United nations framework convention on climate change.--
The term ``United Nations Framework Convention on Climate
Change'' or ``Convention'' means the United Nations Framework
Convention on Climate Change done at New York on May 9, 1992,
and entered into force on March 21, 1994.
SEC. 493. INTERNATIONAL CLIMATE CHANGE ADAPTATION PROGRAM.
(a) Establishment.--The Secretary of State, in consultation with the
Administrator of USAID, the Secretary of the Treasury, and the
Administrator of the Environmental Protection Agency, shall establish
an International Climate Change Adaptation Program in accordance with
the requirements of this part.
(b) Allowance Account.--Allowances allocated pursuant to section
782(n) of the Clean Air Act shall be available for distribution to
carry out the Program established under subsection (a).
(c) Supplement Not Supplant.--Assistance provided under this part
shall be used to supplement, and not to supplant, any other Federal,
State, or local resources available to carry out activities of the type
carried out under the Program.
SEC. 494. DISTRIBUTION OF ALLOWANCES.
(a) In General.--The Secretary of State, or such other Federal agency
head as the President may designate, after consultation with the
Secretary of the Treasury, the Administrator of USAID, and the
Administrator of the Environmental Protection Agency, shall direct the
distribution of allowances to carry out the Program--
(1) in the form of bilateral assistance pursuant to the
requirements under section 495;
(2) to multilateral funds or international institutions
pursuant to the Convention or an agreement negotiated under the
Convention; or
(3) through a combination of the mechanisms identified under
paragraphs (1) and (2).
(b) Limitation.--
(1) Conditional distribution to multilateral funds or
international institutions.--In any fiscal year, the Secretary
of State, or such other Federal agency head as the President
may designate, in consultation with the Administrator of USAID,
the Secretary of the Treasury, and the Administrator of the
Environmental Protection Agency, shall distribute at least 40
percent and up to 60 percent of the allowances available to
carry out the Program to one or more multilateral funds or
international institutions that meet the requirements of
paragraph (2), if any such fund or institution exists, and
shall annually certify in a report to the appropriate
congressional committees that any multilateral fund or
international institution receiving allowances under this
section meets the requirements of paragraph (2) or that no
multilateral fund or international institution that meets the
requirements of paragraph (2) exists, as the case may be. The
Secretary of State shall notify the appropriate congressional
committees not less than 15 days prior to any transfer of
allowances to a multilateral fund or international institution
pursuant to this section.
(2) Multilateral fund or international institution
eligibility.--A multilateral fund or international institution
is eligible to receive allowances available to carry out the
Program--
(A) if--
(i) such fund or institution is established
pursuant to--
(I) the Convention; or
(II) an agreement negotiated under
the Convention; or
(ii) the allowances are directed to one or
more multilateral development banks or
international development institutions,
pursuant to an agreement negotiated under such
Convention; and
(B) if such fund or institution--
(i) specifies the terms and conditions under
which the United States is to provide
allowances to the fund or institution, and
under which the fund or institution is to
provide assistance to recipient countries;
(ii) ensures that assistance from the United
States to the fund or institution and the
principal and income of the fund or institution
are disbursed only for purposes that are
consistent with those described in section
491(b)(1);
(iii) requires a regular meeting of a
governing body of the fund or institution that
includes representation from countries among
the most vulnerable developing countries and
provides public access;
(iv) requires that local communities and
indigenous peoples in areas where any
activities or programs are planned are engaged
through adequate disclosure of information,
public participation, and consultation; and
(v) prepares and makes public an annual
report that--
(I) describes the process and
methodology for selecting the
recipients of assistance from the fund
or institution, including assessments
of vulnerability;
(II) describes specific programs and
activities supported by the fund or
institution and the extent to which the
assistance is addressing the adaptation
needs of the most vulnerable developing
countries, and the most vulnerable
communities and populations therein;
(III) describes the performance goals
for assistance authorized under the
fund or institution and expresses such
goals in an objective and quantifiable
form, to the extent practicable;
(IV) describes the performance
indicators to be used in measuring or
assessing the achievement of the
performance goals described in
subclause (III);
(V) provides a basis for
recommendations for adjustments to
assistance authorized under this part
to enhance the impact of such
assistance; and
(VI) describes the participation of
other nations and international
organizations in supporting and
governing the fund or institution.
(c) Oversight.--
(1) Distribution to multilateral funds or international
institutions.--The Secretary of State, or such other Federal
agency head as the President may designate, in consultation
with the Administrator of USAID, shall oversee the distribution
of allowances available to carry out the Program to a
multilateral fund or international institution under subsection
(b).
(2) Bilateral assistance.--The Administrator of USAID, in
consultation with the Secretary of State, shall oversee the
distribution of allowances available to carry out the Program
for bilateral assistance under section 495.
SEC. 495. BILATERAL ASSISTANCE.
(a) Activities and Foreign Aid.--
(1) In general.--In order to achieve the purposes of this
part, the Administrator of USAID may carry out programs and
activities and distribute allowances to any private or public
group (including international organizations and faith-based
organizations), association, or other entity engaged in
peaceful activities to--
(A) provide assistance to the most vulnerable
developing countries for--
(i) the development of national or regional
climate change adaptation plans, including a
systematic assessment of socioeconomic
vulnerabilities in order to identify the most
vulnerable communities and populations;
(ii) associated national policies; and
(iii) planning, financing, and execution of
adaptation programs and activities;
(B) support investments, capacity-building
activities, and other assistance, to reduce
vulnerability and promote community-level resilience
related to climate change and its impacts in the most
vulnerable developing countries, including impacts on
water availability, agricultural productivity, flood
risk, coastal resources, timing of seasons,
biodiversity, economic livelihoods, health, human
migration, or other social, economic, political,
cultural, or environmental matters;
(C) support climate change adaptation research in or
for the most vulnerable developing countries;
(D) reduce vulnerability and provide increased
resilience to climate change for local communities and
livelihoods in the most vulnerable developing countries
by encouraging--
(i) the protection and rehabilitation of
natural systems;
(ii) the enhancement and diversification of
agricultural, fishery, and other livelihoods;
and
(iii) the reduction of disaster risks;
(E) support the deployment of technologies to help
the most vulnerable developing countries respond to the
destabilizing impacts of climate change and encourage
the identification and adoption of appropriate
renewable and efficient energy technologies that are
beneficial in increasing community-level resilience to
the impacts of global climate change in those
countries; and
(F) encourage the engagement of local communities
through disclosure of information, consultation, and
the communities' informed participation relating to the
development of plans, programs, and activities to
increase community-level resilience to climate change
impacts.
(2) Limitations.--Not more than 10 percent of the allowances
made available to carry out bilateral assistance under this
part in any year shall be distributed to support activities in
any single country.
(3) Prioritizing assistance.--In providing assistance under
this section, the Administrator of USAID shall give priority to
countries, including the most vulnerable communities and
populations therein, that are most vulnerable to the adverse
impacts of climate change, determined by the likelihood and
severity of such impacts and the country's capacity to adapt to
such impacts.
(b) Community Engagement.--
(1) In general.--The Administrator of USAID shall ensure that
local communities, including the most vulnerable communities
and populations therein, in areas where any programs or
activities are carried out pursuant to this section are engaged
in, through disclosure of information, public participation,
and consultation, the design, implementation, monitoring, and
evaluation of such programs and activities.
(2) Consultation and disclosure.--For each country receiving
assistance under this section, the Administrator of USAID shall
establish a process for consultation with, and disclosure of
information to, local, national, and international stakeholders
regarding any programs and activities carried out pursuant to
this section.
(c) Coordination.--
(1) Alignment of activities.--Subject to the direction of the
President and the Secretary of State, the Administrator of
USAID shall, to the extent practicable, seek to align
activities under this section with broader development, poverty
alleviation, or natural resource management objectives and
initiatives in the recipient country.
(2) Coordination of activities.--The Administrator of USAID
shall ensure that there is coordination among the activities
under this section, subtitle D of this title, and part E of
title VII of the Clean Air Act, in order to maximize the
effectiveness of United States assistance to developing
countries.
(d) Reporting.--
(1) Initial report.--Not later than 180 days after the date
of enactment of this part, the Administrator of USAID, in
consultation with the Secretary of State, shall submit to the
President and the appropriate congressional committees an
initial report that--
(A) based on the most recent information available
from reliable public sources or knowledge obtained by
USAID on a reliable basis, as determined by the
Administrator of USAID, identifies the developing
countries, including the most vulnerable communities
and populations therein, that are most vulnerable to
climate change impacts and in which assistance may have
the greatest and most sustainable benefit in reducing
vulnerability to climate change; and
(B) describes the process and methodology for
selecting the recipients of assistance under subsection
(a)(1).
(2) Annual reports.--Not later than 18 months after the date
on which the initial report is submitted pursuant to paragraph
(1), and annually thereafter, the Administrator of USAID, in
consultation with the Secretary of State, shall submit to the
President and the appropriate congressional committees a report
that--
(A) describes the extent to which global climate
change, through its potential negative impacts on
sensitive populations and natural resources in the most
vulnerable developing countries, may threaten, cause,
or exacerbate political, economic, environmental,
cultural, or social instability or international
conflict in those regions;
(B) describes the ramifications of any potentially
destabilizing impacts climate change may have on the
national security, foreign policy, and economic
interests of the United States, including--
(i) the creation of environmental migrants
and internally displaced peoples;
(ii) international or internal armed
conflicts over water, food, land, or other
resources;
(iii) loss of agricultural and other
livelihoods, cultural stability, and other
causes of increased poverty and economic
destabilization;
(iv) decline in availability of resources
needed for survival, including water;
(v) increased impact of natural disasters
(including droughts, flooding, and other severe
weather events);
(vi) increased prevalence or virulence of
climate-related diseases; and
(vii) intensified urban migration;
(C) describes how allowances available under this
section were distributed during the previous fiscal
year to enhance the national security, foreign policy,
and economic interests of the United States and assist
in avoiding the economically, politically,
environmentally, culturally, and socially destabilizing
impacts of climate change in most vulnerable developing
countries;
(D) identifies and recommends the developing
countries, including the most vulnerable communities
and populations therein, that are most vulnerable to
climate change impacts and in which assistance may have
the greatest and most sustainable benefit in reducing
vulnerability to climate change, including in the form
of deploying technologies, investments, capacity-
building activities, and other types of assistance for
adaptation to climate change impacts and approaches to
reduce greenhouse gases in ways that may also provide
community-level resilience to climate change impacts;
and
(E) describes cooperation undertaken with other
nations and international organizations to carry out
this part.
(e) Monitoring and Evaluation.--
(1) In general.--The Administrator of USAID shall establish
and implement a system to monitor and evaluate the
effectiveness and efficiency of assistance provided under this
section in order to maximize the long-term sustainable
development impact of such assistance, including the extent to
which such assistance is meeting the purposes of this part and
addressing the adaptation needs of developing countries.
(2) Requirements.--In carrying out paragraph (1), the
Administrator of USAID shall--
(A) in consultation with national governments in
recipient countries, establish performance goals for
assistance authorized under this section and express
such goals in an objective and quantifiable form, to
the extent practicable;
(B) establish performance indicators to be used in
measuring or assessing the achievement of the
performance goals described in subparagraph (A),
including an evaluation of--
(i) the extent to which assistance under this
section provided for disclosure of information
to, consultation with, and informed
participation by local communities;
(ii) the extent to which local communities
participated in the design, implementation, and
evaluation of programs and activities
implemented pursuant to this section; and
(iii) the impacts of such participation on
the goals and objectives of the programs and
activities implemented under this section;
(C) provide a basis for recommendations for
adjustments to assistance authorized under this section
to enhance the impact of such assistance; and
(D) include, in the annual report to the appropriate
congressional committees and other relevant agencies
required under subsection (d)(2), findings resulting
from the monitoring and evaluation of programs and
activities under this section.
Purpose and Summary
H.R. 2454, the ``American Clean Energy and Security Act of
2009'' (ACES) was introduced by Rep. Henry A. Waxman and Rep.
Edward J. Markey on May 15, 2009. The purpose of the
legislation is to create clean energy jobs, achieve energy
independence, reduce global warming pollution and transition to
a clean energy economy.
Key provisions in the bill:
Require electric utilities to meet 20 percent of
their electricity demand through renewable energy sources and
energy efficiency by 2020.
Invest in new clean energy technologies and energy
efficiency, including energy efficiency and renewable energy,
carbon capture and sequestration, electric and other advanced
technology vehicles, and basic scientific research and
development.
Mandate new energy-saving standards for buildings
and appliances, as well as promote efficiency in the industrial
sectors.
Reduce carbon emissions from major U.S. sources by
17 percent by 2020 and over 80 percent by 2050 compared to 2005
levels. Complementary measures in the legislation, such as
investments in preventing tropical deforestation, will achieve
significant additional reductions in carbon emissions.
Protect consumers from energy price increases.
Background and Need for Legislation
This may prove to be a watershed moment in the history of
energy production and consumption. Between now and 2030, an
estimated $1.5 trillion will be invested in energy
infrastructure in the United States and more than $26 trillion
will be invested worldwide.\1\ How these investments are made
will have dramatic and consequential effects on the national
security and economic future of the United States. How these
investments are made may also determine the fate of our
planet's climate.
---------------------------------------------------------------------------
\1\International Energy Agency, World Energy Outlook 2008:
Executive Summary, at 5 (2008).
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ECONOMY
The U.S. economy is not doing well. In April 2009, the
national unemployment rate rose to 8.9 percent, with a loss of
5.7 million jobs since the recession began.\2\ Foreclosure
filings in 2008 rose 81 percent to 2.3 million.\3\ Congress has
taken steps to help the economy recover, but more aid is
needed.
---------------------------------------------------------------------------
\2\Bureau of Labor Statistics, Employment Situation Summary (May 8,
2009) (online at http://www.bls.gov/news.release/empsit.nr0.htm).
\3\Foreclosures in U.S. Rose 81 percent, Topping 2.3 Million Last
Year, Bloomberg News (Jan. 15, 2009) (online at http://
www.bloomberg.com/apps/news?pid=20601110&sid=asgBXeQ.u5Lg).
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Investments in clean energy offer an important opportunity
to spur economic growth. However, uncertainty about federal
policies regarding energy and global warming pollution is
impeding investors and CEOs in making investments in the energy
sector. The Committee received testimony from numerous CEOs on
this topic. Jim Rogers, Chairman, President and Chief Executive
Officer of Duke Energy testified
And let me quickly say, for our company, we plan to
invest $25 billion in infrastructure over the next 5
years. It is critical we know the rules of the road of
climate change as soon as possible to make sure that we
are making the right investments. Regulatory
uncertainty is postponing investments and renewables in
other green technologies. It's postponing the creation
of jobs from apprentices to engineers to Ph.Ds. Our one
fear--and I will leave this with you--is that many in
Congress will look for reasons to postpone action on
climate legislation this year.\4\
---------------------------------------------------------------------------
\4\House Committee on Energy and Commerce, Hearing on the U.S.
Climate Action Partnership (Jan. 15, 2009).
Jeffrey Immelt, Chairman and Chief Executive Officer of General
---------------------------------------------------------------------------
Electric, similarly testified that
Certainty in the investment world is critical to
success. And what we lack today is certainty in terms
of what is going to happen and when it is going to
happen . . . [T]oday, we have almost the worst of all
worlds. We have 17 States that are developing their own
programs. We have RPS in some areas, not in others. The
fact is that the last 40-plus coal plants haven't been
permitted. You know, so we have an energy policy, it is
just that nobody knows what it is. And it shows up in
terms of those consequences. So, look, I am not--I say
this with great respect to my colleagues--I didn't come
to this as an environmentalist. I come to it as an
industrialist. I am a capitalist, pure, plain and
simple. And I just think the system we have today is
untenable over the long term, insofar as, you know, the
science is so compelling on global warming.\5\
---------------------------------------------------------------------------
\5\House Committee on Energy and Commerce, Hearing on the U.S.
Climate Action Partnership, 111th Cong. (Jan. 15, 2009).
David Crane, President and Chief Executive Officer of NRG
---------------------------------------------------------------------------
Energy, informed the Committee that
If climate change legislation is passed . . . the first
thing it will do is it will unleash additional
investment by us in various technologies designed to
prepare for the cap-and-trade system that is coming.
So, you know, this may be counterintuitive, but I think
quite the contrary, in the near term it will actually
unleash investment and create jobs. And we and many of
the companies that sit here, we have very substantial
capital. I think my company and Jeff's are the two
smallest at this panel. We sit with $1.5 billion in
investment capital ready to invest, but we need to know
in what direction.\6\
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\6\House Committee on Energy and Commerce, Hearing on the U.S.
Climate Action Partnership, 111th Cong. (Jan. 15, 2009).
Steve Kline, vice president of corporate environmental and
federal affairs for PG&E Corporation stated
We also see an incredible lost opportunity if we
don't act now . . . there are these amazing, developing
new technology centers across the United States, and we
see those jobs going overseas and that technology
superiority going overseas. And so, in terms of our
service territory, where Silicon Valley is putting a
lot of time and energy into these technologies, we are
going to lose that if we don't act now.\7\
---------------------------------------------------------------------------
\7\House Committee on Energy and Commerce, Hearing on the U.S.
Climate Action Partnership, 111th Cong. (Jan. 15, 2009).
By establishing an energy policy that provides certainty
with respect to both support for clean energy and regulatory
obligations for global warming pollution, we can free up
investments that have been on hold. By unleashing billions of
dollars of private and public investment in new power
generation, retrofits of existing capacity, energy efficiency,
and offsets for global warming pollution, clean energy
legislation can be an engine for both economic growth and job
creation.
Recent experience and economic analyses indicate the scope
of the economic opportunities that these investments could
create. Over the last few years, renewable electricity projects
and companies have created tens of thousands of high-paying
jobs. The wind industry in particular has been an engine of job
growth. Last year, there were about 35,000 new wind jobs.\8\
Many of these jobs involve the construction of wind turbines
and turbine components, and these new manufacturing jobs are
located here in the United States.\9\
---------------------------------------------------------------------------
\8\American Wind Energy Association, Wind Energy Grows by Record
8,300 MW in 2008 (Jan. 27, 2009) (online at http://www.awea.org/
newsroom/releases/wind_energy_growth2008_27Jan09.html).
\9\American Wind Energy Association, U.S. Wind Energy Industry
Praises Congress and President for Adopting Stimulus Bill (Feb. 17,
2009) (online at http://www.awea.org/newsroom/releases/
awea_statement_on_stimulus_bill_17Feb09.html).
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The solar industry is also producing clean energy jobs.
More than 3,000 companies employ between 25,000 and 35,000
workers.\10\ As demand for solar power increases, there are
more jobs for solar panel installers, manufacturers,
distributors, and material suppliers. The Solar Energy
Industries Association predicts that the United States solar
sector will be employing more than 110,000 American workers by
2016.\11\
---------------------------------------------------------------------------
\10\Up on the Roof, New Jobs in Solar, New York Times (Dec. 13,
2008) (online at http://www.nytimes.com/2008/12/14/jobs/
14starts.html?_r=3&8dpc).
\11\Solar Energy Industries Association, Solar Industry Recommends
Steps to Implement Economic Stimulus, Continue to Grow Solar Industry
(May 6, 2009) (online at http://www.seia.org/cs/
news_detail?pressrelease.id=407).
---------------------------------------------------------------------------
Applying new technologies to traditional fuels can also
drive job creation. It has been estimated that construction of
the first 20 gigawatts of coal plants with carbon capture and
storage will generate 1.4 million job-years of construction
work and 47,500 jobs for operations and maintenance.
Construction of 65 gigawatts of plants using CCS could create
4.5 million job-years of construction work and 152,500 jobs
running those plants.\12\ Promotion of clean power construction
and deployment of energy efficiency measures also does not risk
making investments in jobs that will later be shifted to other
countries, as these activities must be done domestically.
---------------------------------------------------------------------------
\12\BBC Research and Consulting, Employment and Other Economic
Benefits from AdvancedCoal Electric Generation with Carbon Capture and
Storage, (Feb. 2009).
---------------------------------------------------------------------------
Clean energy solutions, developed by American workers,
present an unprecedented opportunity for innovation-driven
economic revival. The clean technology sector is booming
despite the economic downturn. Venture capital investments in
the clean energy sector rose to more than $4 billion in 2008, a
54 percent increase from 2007 levels.\13\ Globally, about 56%
of investment dollars in new power capacity went to renewable
sources, about $140 billion in 2008. Again, investment grew
even as the global economic crisis drove markets down;
investments in clean energy rose 5% in 2008 from 2007
levels.\14\
---------------------------------------------------------------------------
\13\National Venture Capital Association, Venture Capital Industry
Joins President Obama in Support of Investing In Clean Energy Economy
(Mar. 24, 2009) (online at http://www.nvca.org/
index.php?option=com_docman&task=doc_download&gid=414&Itemid=93_).
\14\Clean Energy Funding Trumps Fossil Fuels, New York Times (June
3, 2009) (online at http://greeninc.blogs.nytimes.com/2009/06/03/clean-
energy-funding-trumps-fossil-fuels/?ref=global).
---------------------------------------------------------------------------
The renewable energy and energy efficiency technology
sectors have already become a major engine of job creation, and
numerous studies confirm that adoption of public policies to
support these sectors will yield substantial job growth.
Research commissioned by the American Solar Energy Society
found that in 2007 the energy efficiency and renewable energy
industries had revenues of $1 trillion and created more than 9
million jobs. Aggressive investment in energy efficiency would
result in the creation of 37 million new jobs and nearly $4.3
trillion in revenues by 2030.\15\ Investments in renewable
energy create, on average, three to five times as many jobs as
similar investments in fossil-fuel energy systems. A Union of
Concerned Scientists analysis found that if utilities generated
an average of 20 percent of their electricity from renewable
sources, 185,000 new jobs would be created by 2020.\16\ The
Center for American Progress and the University of
Massachusetts--Amherst's Political Economy Research Institute
have found that $100 billion targeted investment in five energy
efficiency and renewable energy production strategies could
generate 2 million new jobs, roughly 800,000 of which would be
in the construction sector.\17\ Such an approach would
outperform an economic stimulus approach focused on increasing
household spending, such as through rebate checks, which would
create only 300,000 more jobs.
---------------------------------------------------------------------------
\15\American Solar Energy Society, Green Collar Jobs in the U.S.
and Colorado: Economic Drivers for the 21st Century (Jan. 2009) (online
at http://www.ases.org/images/stories/ASES/pdfs/
CO_Jobs_Rpt_Jan2009_summary.pdf).
\16\Union of Concerned Scientists, Cashing in on Clean Energy (July
2007) (online at http://ucsusa.org/assets/documents/clean_energy/
cashing-in-national.pdf).
\17\Center for American Progress and Political Economy Research
Institute, Green Recovery: A Program to Create Good Jobs and Start
Building a Low-Carbon Economy (Sept. 2008) (online at http://
www.americanprogress.org/issues/2008/09/pdf/green_recovery.pdf).
---------------------------------------------------------------------------
The long-term health of the economy also depends upon the
leadership of the United States in the technology sector. The
United States risks losing its leadership in clean energy
technology. Federal funding for energy research and development
has fallen to $3-4 billion a year, which is one-third of the
funding levels in the late 1970s, in constant dollars. In the
1990s, the United States was the world leader in solar energy
technology, but the leading manufacturers are now China, Japan
and Europe.\18\ Similarly, China is expected to take the lead
in the production of wind turbines in 2009.\19\
---------------------------------------------------------------------------
\18\World Watch Institute, Another Sunny Year for Solar Power, (May
8, 2008) (online at http://www.worldwatch.org/node/5449).
\19\China Seen Surging to Top Wind Turbine Maker in 09, Reuters
(Jan. 8 2009).
---------------------------------------------------------------------------
Other nations are taking aggressive steps to lead on clean
energy technology. China's proposed stimulus plan will invest
$221 billion over two years in clean energy and other
environmentally friendly technologies. As a percentage of GDP,
this is six times the level of investments made in the American
Recovery and Reinvestment Act.\20\ The United States must take
aggressive steps if we want to maintain leadership on the
development and production of clean energy technologies and
seize the economic opportunities presented by the global shift
to cleaner forms of energy.
---------------------------------------------------------------------------
\20\Center for American Progress, We Must Seize the Energy
Opportunity or Slip Further Behind (Apr. 2009) (online at http://
www.americanprogress.org/issues/2009/04/pdf/china_energy.pdf).
---------------------------------------------------------------------------
ENERGY
The United States is facing a deepening energy crisis. The
most critical aspect of that crisis is our growing dependence
on foreign oil, coupled with the volatility of oil and gasoline
prices. But in a range of other key areas, including natural
gas and electricity generation and transmission, the United
States is facing challenges arising from growing demand, limits
on supply, and rising global prices. At the same time, we find
ourselves on the cusp of an unprecedented wave of investment in
infrastructure and technology, which will benefit those workers
and companies positioned to answer the challenge. Between now
and 2030, more than $26 trillion will be invested in energy
infrastructure worldwide, and an estimated $1.5 trillion will
be invested in the United States power sector alone. This
places us at a critical decision point in the development of
the United States and global energy economies.
DEPENDENCE ON OIL
The single greatest energy security challenge facing the
United States in the 21st century is our growing dependence on
foreign oil. The United States imported more than 4 billion
barrels of oil in 2008, or 57 percent of its total oil
consumption. This represents an increase in imports compared to
2000, when the U.S. imported 53 percent of the oil it consumed
and 1990, when imports stood at 42 percent.\21\ Our dependence
on oil makes us vulnerable to price spikes and market
manipulation. Because oil accounts for nearly a third of
domestic global warming pollution, oil dependence is also a
cause of significant environmental harm.
---------------------------------------------------------------------------
\21\Energy Information Administration, Table 3.3a, Petroleum Trade:
Overview (May 2009) (online at http://www.eia.doe.gov/emeu/mer/pdf/
pages/sec3_7.pdf).
---------------------------------------------------------------------------
Oil and gasoline prices have been extremely volatile over
the past several years. The price of oil rose from $18 per
barrel in January 2002 to $147 per barrel in July 2008, an
increase of more than 700 percent.\22\ Prices doubled in just
12 months between July 2007 and July 2008 before declining in
the face of an expanding global financial crisis.\23\
Similarly, gasoline prices soared from under $1.50 per gallon
in January 2001 to more than $4.11 in July 2008.\24\ By June
2009, oil prices had more than doubled from their December lows
and were back around $70 per barrel, while average gasoline
prices had climbed back to more than $2.50 per gallon. The EIA
projects oil prices will climb from $61 per barrel in 2009 to
$110 per barrel in 2015.\25\
---------------------------------------------------------------------------
\22\Energy Information Administration, Daily Cushing, OK WTI Spot
Price FOB (online at http://tonto.eia.doe.gov/dnav/pet/hist/rwtcd.htm).
\23\Energy Information Administration, Daily Cushing, OK WTI Spot
Price FOB (online at http://tonto.eia.doe.gov/dnav/pet/hist/rwtcd.htm).
\24\Energy Information Administration, Weekly U.S. Regular All
Formulations Retail Gasoline Prices (online at http://
tonto.eia.doe.gov/dnav/pet/hist/mg_rt_usw.htm).
\25\Energy Information Administration, International Energy
Outlook: Highlights (May 27, 2009) (online at http://www.eia.doe.gov/
oiaf/ieo/pdf/highlights.pdf).
---------------------------------------------------------------------------
By 2030, global demand for oil is expected to grow to 107
million barrels per day (mbd) compared to current levels of 84
mbd,\26\ largely due to demand increases in the developing
world. And, despite significant petroleum savings that will
result from the fuel economy standard increases and biofuel
mandates included in the Energy Independence and Security Act
of 2007 (EISA), demand for oil in the United States is expected
to continue to grow, from 20.8 mbd today to 21.6 mbd in
2030.\27\
---------------------------------------------------------------------------
\26\Energy Information Administration, International Energy
Outlook: Highlights (May 27, 2009) (online at http://www.eia.doe.gov/
oiaf/ieo/pdf/highlights.pdf).
\27\Energy Information Administration, Annual Energy Outlook 2009,
at 139 (Mar. 2009) online at http://www.eia.doe.gov/oiaf/aeo/pdf/
0383(2009).pdf).
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Oil dependence imposes a significant cost on the United
States economy. Oil imports cost the United States a staggering
$342 billion in 2008.\28\ Dr. David L. Greene of the Oak Ridge
National Laboratory estimates that the full cost of dependence
on foreign oil to the United States economy is much higher--
$750 billion in 2008, including a loss of potential GDP of $352
billion (about 2 percent of total GDP).\29\
---------------------------------------------------------------------------
\28\U.S. Census Bureau, FT 900: U.S. International Trade in Goods
and Services, Exhibit 17 (Imports of Energy-Related Petroleum Products,
Including Crude Oil) (July 2008) (online at http://www.census.gov/
foreign-trade/Press-Release/current_press_release/exh17.pdf); U.S.
Census Bureau, FT 900: U.S. International Trade in Goods and Services,
Exhibit 17 (Imports of Energy-Related Petroleum Products, Including
Crude Oil) (July 2003) (online at http://www.census.gov/foreign-trade/
Press-Release/2003pr/07/exh17.pdf).
\29\Oak Ridge National Laboratory, Costs of Oil Dependence Update
2008: Summary (Aug. 8, 2008).
---------------------------------------------------------------------------
This growing dependence on foreign oil has dire
implications for United States national security and economic
stability. Dependence on imported oil makes the United States
increasingly vulnerable to foreign governments' manipulation of
supply and prices. Although Canada and Mexico supply a
substantial proportion of United States imports, OPEC countries
control virtually all of the world's marginal production
capacity and therefore have the ability to set the global price
for this commodity.
While many are calling for increased domestic production as
the solution, the facts make clear that we cannot drill our way
out of this problem. More drilling will have minimal impact on
prices consumers pay for oil or gasoline and will not
substantially reduce U.S. dependence on foreign oil. While
nearly 83 percent of technically recoverable offshore oil
reserves in the United States are located in areas already
available for leasing and drilling prior to the October 1, 2008
expiration of the Congressional moratoria,\30\ the Department
of Energy's Energy Information Administration (EIA) estimates
that, even if drilling were permitted in the OCS of the entire
continental United States, this would increase cumulative U.S.
oil production by only 1.6 percent by 2030 and would have an
``insignificant'' impact on prices.\31\ EIA estimates that if
the Arctic National Wildlife Refuge were opened for drilling,
production would likely peak in 2027 at just 0.78 million
barrels per day--reducing world oil prices by 75 cents per
barrel in EIA's average price and resource case.\32\ In
addition, EIA notes that ``the Organization of Petroleum
Exporting Countries (OPEC) could neutralize any potential price
impact of ANWR oil production by reducing its oil exports by an
equal amount.''\33\
---------------------------------------------------------------------------
\30\U.S. Mineral Management Service, Report to Congress:
Comprehensive Inventory of U.S. OCS Oil and Natural Gas Resources (Feb.
2006) (online at http://www.mms.gov/revaldiv/PDFs/
FinalInvRptToCongress050106.pdf). Figures are adjusted to account for
the estimated 1.26 billion barrels of oil and 79.96 trillion cubic feet
of gas in the Gulf of Mexico that were made accessible following this
inventory by the Gulf of Mexico Energy Security Act of 2006.
\31\U.S. Mineral Management Service, Report to Congress:
Comprehensive Inventory of U.S. OCS Oil and Natural Gas Resources (Feb.
2006) (online at http://www.mms.gov/revaldiv/PDFs/
FinalInvRptToCongress050106.pdf).
\32\Energy Information Administration, Analysis of Crude Oil
Production in the Arctic National Wildlife Refuge (May 2008) (online at
http://www.eia.doe.gov/oiaf/servicerpt/anwr/index.html).
\33\Energy Information Administration, Analysis of Crude Oil
Production in the Arctic National Wildlife Refuge, at 11 (May 2008)
(online at http://www.eia.doe.gov/oiaf/servicerpt/anwr/index.html).
---------------------------------------------------------------------------
Finally, regardless of U.S. oil production trends there are
serious questions about whether increasing global demand can be
met. Estimates of the total petroleum resource currently in the
ground--both conventional and unconventional\34\--vary from 14
to 24 trillion barrels.\35\ However, ``proven reserves,'' those
that have already been discovered and are expected to be
economically producible are only estimated to produce between
1.1 trillion and 1.4 trillion barrels worldwide. At the same
time, generating new oil supply is proving increasingly
difficult. New oil fields are generally in expensive and hard-
to-reach places like deep water areas in the Gulf of
Mexico.\36\ Even with advances in technology, the average size
of discoveries per exploratory well is around 10 million
barrels, which is half the output of wells dug between 1965 and
1979.\37\
---------------------------------------------------------------------------
\34\Conventional oil is crude oil and natural gas liquids produced
from underground reservoirs by means of conventional wells. Non-
conventional oil includes oil shales, oil sands, and extra-heavy crude.
\35\Energy Information Administration, Long-term Global Oil
Scenarios: Looking Beyond 2030 (Presentation to the EIA 2008 Energy
Conference, Apr. 7, 2008). EIA uses 20.6 trillion barrels as its base
case.
\36\Simmons & Company International, The 21st Century Energy Crisis
Has Arrived (Presentation to the CFA Society of Atlanta, Apr. 16,
2008).
\37\International Energy Agency, World Energy Outlook 2006 at 90
(2006).
---------------------------------------------------------------------------
The shrinking margin between stagnant supply and soaring
demand provides yet another reason that the United States and
the world need to begin to look beyond oil to meet our growing
energy needs.
SOLUTIONS TO THE OIL DEPENDENCE
Addressing our dependence on oil is primarily a
transportation challenge. The U.S. transportation sector
produces roughly a third of total U.S. greenhouse gas
emissions, accounts for approximately 69 percent of total U.S.
oil consumption, and is 95 percent dependent upon petroleum.
Reducing both oil consumption and global warming pollution in
the transportation sector will require the United States to
address three interrelated issues--the efficiency of our
vehicles, the fuels that power them, and how much we drive
them.
VEHICLES AND FUEL--INCREASE FUEL ECONOMY AND TRANSITION TO ELECTRIC
DRIVE
Implementing higher fuel economy standards is one of the
most important means to increase energy independence of the
United States. The Energy Independence and Security Act of 2007
(EISA) mandated that fuel economy standards increase by at
least 40 percent, to 35 mpg, by 2020. On May 19, 2009,
President Obama announced his Administration's intent to
harmonize fuel economy standards set by the U.S. Department of
Transportation, tailpipe standards set by the Environmental
Protection Agency and California's clean car regulations, such
that the automotive fleet would achieve the equivalent of 35.5
miles per gallon by 2016.
EISA also authorized a number of research, development,
demonstration, and deployment programs for plug-in hybrid,
advanced vehicle battery, and other advanced vehicle
technologies. Section 136 of EISA authorized $25 billion in
loans to support retooling of U.S. auto manufacturing
facilities to produce more fuel efficient vehicles--a program
that was fully funded under H.R. 2638, the continuing
resolution enacted September 30, 2008.
The development of plug-in hybrid electric vehicles (PHEVs)
and all-electric vehicles holds great potential to enhance
America's energy independence and reduce greenhouse gas
emissions. Electric motors are three to four times more
efficient at turning their fuel into useful work than either
gasoline or diesel engines. They also consume no energy while
idling and utilize regenerative braking to recharge the
vehicle's battery. Every major automaker has announced plans to
produce all-electric vehicles or PHEVs for the U.S. market, to
be made available as soon as 2010.
The electric grid is an important and readily available
piece of infrastructure that could power the transport sector
in the United States. The electricity infrastructure is
currently designed to meet the highest expected demand for
power, which only occurs for a few hundred hours a year. During
the night more than 50 percent of generating capacity lies
idle. By utilizing this idle generating capacity, the
Department of Energy's Pacific Northwest National Laboratory
found that up to 84 percent of U.S. cars, pickup trucks, and
sport utility vehicles can be transitioned to electricity
without building a single new power plant.\38\ An 84 percent
level of electric vehicle penetration is estimated to eliminate
the consumption of 6.5 million barrels of oil equivalent per
day, more than all the oil currently imported from OPEC
countries.\39\ With the national average cost of electricity of
8.5 cents per kilowatt hour, an electric vehicle runs on an
equivalent of around 75 cents per gallon.\40\
---------------------------------------------------------------------------
\38\Pacific Northwest National Laboratory, Impacts Assessment of
Plug-In Hybrid Vehicles on Electric Utilities and Regional U.S. Power
Grids, Part 1: Technical Analysis, (2006) (online at http://
energytech.pnl.gov/publications/pdf/
PHEV_Feasibility_Analysis_Part1.pdf).
\39\Electric Cars--How Much Does It Cost per Charge?, Scientific
American (March 13, 2009) (online at http://www.scientificamerican.com/
article.cfm?id=electric-cars-cost-per-charge).
\40\Id.
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PHEVs slash greenhouse gas emissions, even with our current
electricity fuel mix. Even given the current U.S. electricity
generation profile, almost half of which is comprised of
carbon-intensive coal combustion, the nationwide deployment of
battery-powered electric vehicles would still reduce greenhouse
gas emissions by as much as 27 percent as compared to
equivalent gasoline-powered vehicles.\41\ Greenhouse gas
benefits will improve in the future as renewable and other low-
or no-carbon electricity generation increases.
---------------------------------------------------------------------------
\41\Pacific Northwest National Laboratory, Impacts Assessment of
Plug-in Hybrid Vehicles on Electric Utilities and Regional U.S. Power
Grids Part I: Technical Analysis, at 13 (2007).
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The American Recovery and Reinvestment Act included
substantial funding to advance the development of batteries for
electric vehicles.
REDUCE VEHICLE MILES TRAVELED WHILE IMPROVING QUALITY OF LIFE
To meet our energy security and global warming pollution
reduction goals, we must provide options for individuals who
wish to get from place to place without driving. Americans
drive much more than individuals in other advanced industrial
countries--5,700 miles a year compared with 2,368 in Japan and
3,961 in Germany as of 1997.\42\ The number of vehicle miles
traveled (VMT) nearly quadrupled between 1960 and 2000\43\ and
is projected to increase another 60 percent by 2030.\44\ If
left unchecked, this projected VMT growth will substantially
reduce the oil consumption and global warming pollution
benefits of increased fuel economy and cleaner fuels.
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\42\Federal Highway Administration, Our Nation's Highways--2000
(2000) (online at http://www.fhwa.dot.gov/ohim/onh00/bar4.htm).
\43\Federal Highway Administration, Our Nation's Highways--2000, at
24 (2000) (online at http://www.fhwa.dot.gov/ohim/onh00/bar4.htm).
\44\U.S. Department of Transportation, Transportation Vision 2030
at 5 (Jan. 2008) (online at http://www.rita.dot.gov/publications/
transportation_vision_2030/pdf/entire.pdf).
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A broad array of policies can help communities to ``grow
smarter,'' while reducing VMT. Increasing public transit and
creating more pedestrian and bicycle-friendly infrastructure
can encourage people to travel without using a car. Planning
roads and pathways to create shorter, direct links to
destinations can limit car distances. Communities that
implement such improvements reduce global warming pollution,
balance local budgets by avoiding infrastructure costs, and
reduce family gasoline bills.\45\
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\45\The Brookings Institution, Investing in a Better Future: A
Review of the Fiscal and Competitive Advantages of Smarter Growth
Development Patterns (March 2004) (online at http://www.brookings.edu//
media/Files/rc/reports/2004/03metropolitanpolicy_muro/
200403_smartgrowth.pdf).
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Although most of these policies are implemented at the
local, State, or regional level, federal policy can play a
substantial role in supporting them.
THE ELECTRICITY CHALLENGE
The overall fuel mix for power generation in the United
States has remained relatively stable over the past decade. In
2007, coal remained the leading fuel source, accounting for 49
percent of generation, followed by natural gas with 21 percent,
and nuclear with 19 percent. Hydroelectric power accounted for
6 percent, and non-hydro renewables provided 3 percent.\46\ New
capacity is shifting from reliance on coal to natural gas and
wind energy. In 2008, natural gas accounted for 48 percent of
all new generating capacity, wind accounted for 42 percent, and
coal accounted for less than 6 percent--with solar, biomass,
and geothermal making up most of the balance.\47\
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\46\Energy Information Administration, Annual Energy Review 2007,
at 224-26 (2008).
\47\Energy Information Administration, Electric Power Annual with
data for 2007, Table 2.4 (Planned Nameplate Capacity Additions from New
Generators, by Energy Source, 2008 through 2012) (2009) (online at
http://www.eia.doe.gov/cneaf/electricity/epa/epat2p4.html).
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COAL
Coal is a key fuel for the electric power sector, both for
the United States and the rest of the world. The United States
has the largest coal reserves in the world (28% of global
reserves) and produces more than a billion short tons of coal
annually.\48\ More than 90% of U.S. coal consumption is used
for electricity generation, and coal powers nearly 50% of all
U.S. electricity generation.\49\ China and India, two of the
largest, fastest growing economies in the world, both have
large coal reserves and rely on coal for the majority of their
electricity generation (78% for China and 69% for India).\50\
---------------------------------------------------------------------------
\48\Energy Information Administration, Annual Coal Report (2007)
(online at www.eia.doe.gov/neic/infosheets/coalreserves.html and
www.eia.doe.gov/cneaf/coal/page/acr/acr_sum.html).
\49\U.S. Environmental Protection Agency, Draft U.S. Greenhouse Gas
Inventory Report (2009) (online at www.epa.gov/climatechange/emissions/
downloads09/07ES.pdf).
\50\World Coal Institute, Coal Facts 2008 (online at http://
www.worldcoal.org/pages/content/index.asp?PageID=188).
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Greenhouse gas emissions from coal use present a serious
challenge in addressing global climate change. Because of
coal's high carbon content, coal-fired power plants emit
roughly twice as much carbon dioxide (CO2) per unit
of electricity as natural gas-fired plants. Existing coal-fired
plants account for almost a third of U.S. CO2
emissions. Globally, CO2 emissions from coal have
grown from 39% in 1990 to 41% in 2005, and are projected to
reach 44% by 2030 absent an international agreement to limit
emissions.\51\
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\51\Energy Information Administration, International Energy Outlook
(2008) (online at www.eia.doe.gov/oiaf/ieo/emissions.html).
---------------------------------------------------------------------------
Regulatory uncertainty concerning both State and federal
approaches to controlling greenhouse gas emissions has already
had an impact on the construction of new coal-fired electric
generating capacity. Multiple coal-based projects have been
canceled or delayed over the past two years, and uncertainty
over climate policy has played a role.\52\ With respect to
future capacity expansion, the Energy Information
Administration (EIA), in its preliminary 2009 Annual Energy
Outlook, projects that a total of 46,000 megawatts of coal-
fired generating capacity will be added in the United States
from 2007 to 2030.\53\ This represents less than half of the
projected expansion (103,000 megawatts) forecast in the 2008
reference case. EIA states:
\52\National Energy Technology Laboratory, Tracking New Coal-Fired
Power Plants (Jan. 5, 2009) (online at www.netl.doe.gov/coal/refshelf/
ncp.pdf).
\53\Energy Information Administration, Annual Energy Outlook Early
Release Overview (2009) (online at www.eia.doe.gov/oiaf/aeo/
overview.html).
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Beyond the well-known uncertainties with respect to
future demand growth and fuel, labor, and new plant
costs, [energy companies] also must consider the
potential impact of concerns surrounding energy-related
GHG [greenhouse gas] emissions. Even without the
enactment of Federal laws and policies limiting U.S.
GHG emissions, regulators and the investment community
are beginning to push energy companies to shift their
investments towards less GHG-intensive
technologies.\54\
---------------------------------------------------------------------------
\54\Energy Information Administration, Annual Energy Outlook Early
Release Overview (2009) (online at www.eia.doe.gov/oiaf/aeo/
overview.html).
A central element in discussions concerning federal climate
change policy is how to reconcile the continued use of coal
with the objective of achieving significant reductions in
greenhouse gas emissions. While multiple strategies exist to
reduce coal-related greenhouse gas emissions, a consensus has
emerged that carbon capture and storage (CCS) technologies,
involving physical capture of CO2 at power plants
and other major point sources and compression and injection of
CO2 into deep geological reservoirs, provide a
likely path forward.
CARBON CAPTURE AND SEQUESTRATION
There are three principal technology options for capturing
CO2 emissions at coal-based power plants: (1) pre-
combustion capture using integrated gasification combined cycle
(``IGCC'') technology; (2) pre-combustion capture using oxy-
fuel combustion; and (3) post-combustion capture using solvents
or membranes.\55\
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\55\See, e.g., Intergovernmental Panel on Climate Change, Special
Report on Carbon Capture and Storage (IPCC CCS Report)(2005) (online at
http://arch.rivm.nl/env/int/ipcc/pages_media/SRCCS-final/
IPCCSpecialReportonCarbondioxideCaptureandStorage.htm).
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In an IGCC plant, coal is processed in a reactor with steam
and oxygen before combustion to produce a mixture consisting
mainly of carbon monoxide and hydrogen known as ``synthesis
gas'' or ``syngas.'' The carbon monoxide is then mixed with
steam to produce CO2 and more hydrogen. The hydrogen
becomes a carbon-free fuel to power the plant, while the
CO2 can be compressed for transport and ultimate
storage. There are four IGCC plants in operation worldwide,
including two in the United States.
Oxy-fuel combustion eliminates nitrogen from exhaust gases
by burning the fuel in pure oxygen or a mixture of pure oxygen
and CO2-rich recycled flue gas. The main emissions
from this process are CO2 and water. Once
compressed, dried, and purified, the CO2 is ready
for transport and storage. Although the key elements of oxy-
fuel combustion technology are currently in commercial use, it
has not yet been deployed for CO2 capture on a
commercial scale.
Post-combustion capture systems use a solvent or a membrane
to separate CO2 from the power plant's flue gases.
Post-combustion capture technologies are already commercially
available and are used to capture CO2 from coal- and
gas-fired plants in the food and beverage and chemical-
production industries. They would have to be significantly
scaled up from current applications to be used in large
commercial power plants.
After CO2 is captured, it is compressed into a
dense fluid (supercritical) state for transport via pipeline to
an injection site. Three types of geologic formations are well-
suited to long-term storage of injected CO2:
depleted oil and gas fields, saline formations, and deep coal
seams. Surveys indicate that both global and U.S. storage
capacity is potentially vast.\56\ The Department of Energy
projects that U.S. domestic geologic formations ``have at least
enough capacity to store several centuries' worth of point
source emissions'' from the United States.\57\ There appears to
be a good correlation between emissions sources and geological
basins suitable for long-term storage, and preliminary
assessments suggest that risks to human health and the
environment from large-scale injection of CO2 are
limited.\58\ Underground injection of naturally produced
CO2 has been used since the early 1970s as part of
enhanced oil recovery projects, and there are several major
commercial projects around the world that inject captured
CO2 for underground storage. A variety of new
projects are now under development.
---------------------------------------------------------------------------
\56\See, e.g., National Energy Technology Laboratory, Carbon
Sequestration Atlas of the United States and Canada (2007) (online at
www.netl.doe.gov/technologies/carbon_seq/refshelf/atlas/).
\57\U.S. Department of Energy, Carbon Sequestration: Technology
Roadmap and Program Plan 2005, at 4 (2005) available at http://
fossil.energy.gov/programs/sequestration/publications/programplans/
2005/sequestration_roadmap_2005.pdf.
\58\IPCC CCS Report; Massachusetts Institute of Technology, The
Future of Coal: Options for a Carbon-Constrained Economy (2007) (online
at http://web.mit.edu/coal/) (MIT Future of Coal Report).
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Although most of the technologies on which CCS is based are
already demonstrated, they have not yet been integrated or
implemented at the scale needed to mitigate power plant
emissions. Applying CCS to a single 500 megawatt coal-fired
plant, for example, could involve capture and injection of 2-3
million metric tons of CO2 annually.
In addition to technical concerns, there are economic
obstacles to widespread deployment of CCS. For example, carbon
capture technologies typically require significant amounts of
power to operate; the energy penalty imposed and consequent
requirement for ``makeup'' power carry a cost. The overall
capital and operating costs to capture and sequester carbon are
also substantial, though such costs are expected to decrease
over time as technologies mature.
Such costs, in the absence of appropriate regulatory
drivers, will impede commercial-scale deployment of CCS
technologies. While current cost estimates for CCS are highly
uncertain, they provide some sense of the point at which CCS
will become a feasible mitigation strategy for coal-fired
plants and other industrial emitters. A 2008 McKinsey study
estimated between $38-57 per ton of CO2 abated for
its reference plants, though it put the cost for early
demonstration projects at $77-115 per ton.\59\ Other studies
estimate that CO2 allowance prices would have to
range anywhere from $30-60 per ton in order to make CCS
economically viable.\60\ Because State utility regulation would
likely prevent recovery of this cost differential between
controlled and uncontrolled plants, utilities are unlikely to
invest in CCS in the absence of a regulatory requirement to do
so.
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\59\McKinsey & Company, Carbon Capture & Storage: Assessing the
Economics (Sept. 2008) (online at www.mckinsey.com/clientservice/ccsi/
pdf/CCS_Assessing_ the_Economics.pdf).
\60\See, e.g., MIT Future of Coal Report; and McKinsey & Company,
Reducing U.S. Greenhouse Gas Emissions: How Much at What Cost? (Dec.
2007) (online at www.mckinsey.com/clientservice/ccsi/pdf/
US_ghg_final_report.pdf).
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Large-scale underground injection and storage of
CO2 also presents a series of legal and regulatory
questions. EPA has issued a proposed rulemaking addressing the
subsurface aspects of sequestration under the Safe Drinking
Water Act's Underground Injection Control program, but as yet
there is no comprehensive regulatory regime for commercial-
scale injection either at the federal or State level.\61\ Some
of these questions--such as those related to subsurface
property rights--will likely be answered at the State level.
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\61\Environmental Protection Agency, Federal Requirements Under the
Underground Injection Control Program for Carbon Dioxide Geologic
Sequestration Wells (Jul. 25, 2008) (online at www.epa.gov/fedrgstr/
EPA-WATER/2008/July/Day-25/w16626.htm).
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Congress has taken some steps to promote development of
CCS-related technologies. The Energy Independence and Security
Act of 2007 authorized a research, development, and
demonstration program for CCS technologies and directed the
Department of the Interior to gather detailed data on potential
geologic storage capacity. The American Recovery and
Reinvestment Act of 2009 provided funds of $3.4 billion to the
Department of Energy for use in fossil energy projects,
portions of which will likely be used to support CCS
demonstration projects.
NATURAL GAS
The United States accounts for more than 22 percent of
global consumption of natural gas, but has only 3.4 percent of
global reserves. Domestic production satisfies 80 percent of
U.S. demand--and more than 80 percent of U.S. imports come from
Canada.\62\
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\62\Energy Information Administration, International Energy Outlook
2008, at 44 (Table 6) (June 2008) (online at http://www.eia.doe.gov/
oiaf/ieo/pdf/nat_gas.pdf).
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Natural gas has become the fuel of choice for new power
plants in the United States. Natural gas accounted for nearly
half of new generating capacity built in the United States in
2008. In addition, natural gas is a critical feedstock and fuel
for U.S. manufacturing, accounting for 29 percent of U.S.
natural gas use. Natural gas prices have been highly volatile
in recent years, with large swings driven by high demand in
some years, and more recently, downward pressure on prices due
to reduced demand and increased domestic production.
NUCLEAR POWER
Electric utilities have recently filed 17 applications with
the Nuclear Regulatory Commission for 26 new reactor operating
licenses. In recent years, the projected cost of a new 1,000
megawatt reactor has increased from approximately $2 billion to
$6-8 billion.\63\ In light of these costs and risks, it is
unclear whether private financing would be available for new
nuclear facilities without the assurance of federal government
loan guarantees.
---------------------------------------------------------------------------
\63\Letter from the Nuclear Energy Institute to Rep. Edward J.
Markey (Oct. 21, 2008).
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The existing Department of Energy Title XVII loan guarantee
program has authority to provide up to $51 billion in loan
guarantees, $18.5 billion of which is specifically set aside
for nuclear power. The Department has received applications for
federal loan guarantees from 21 proposed nuclear power plants,
totaling $122 billion in requested assistance.\64\
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\64\Nuclear Power: 17 Apply for DOE Loan Guarantees, Far Exceeding
Available Cash, Greenwire (Oct. 2, 2008).
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Nuclear power faces a challenge in remaining competitive in
electricity markets where low cost generation has priority
dispatch to the grid. While the operating costs of nuclear
power are comparatively low, it continues to be an expensive
investment for electricity ratepayers due to large up-front
capital costs.
RENEWABLE ENERGY
Renewable electricity currently generates 8.4 percent of
the country's electricity, with non-hydroelectric renewables
responsible for just 2.5 percent.\65\ Reaching 20 percent of
total generation by 2020 is an ambitious, but achievable,
target for renewable electricity.
---------------------------------------------------------------------------
\65\Energy Information Administration, Annual Energy Review 2007:
Table 8.2b Electricity Net Generation: Electric Power Sector, Selected
Years, 1949-2007 (June 23, 2008).
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The Committee believes that adoption of a national
renewable electricity standard (RES) should be a centerpiece of
our national energy strategy. State-level RES requirements have
been a key driver of renewable energy growth in the U.S.
Seventy-one percent of the population now lives in one of the
28 states with these mandatory policies in place. More than
half of the non-hydroelectric renewable electricity capacity
added in the U.S. over the last decade has occurred in States
with RES programs, with little or no impact on consumer
electricity rates.\66\ During the 110th Congress, the House
twice passed a national RES of 15 percent by 2020--with the
option to meet up to 4 percent with efficiency--but the measure
failed to pass the Senate.
---------------------------------------------------------------------------
\66\Lawrence Berkeley National Laboratory, Renewables Portfolio
Standards in the United States: A Status Report with Data Through 2007
(Apr. 2008) (online at http://eetd.lbl.gov/ea/EMS/reports/lbnl_154e-
revised.pdf).
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The renewable resources outlined below are among the most
likely to contribute significantly to the U.S. and global
electricity supply over the next two to three decades.
WIND
More than 27,000 megawatts of new wind capacity was
installed worldwide in 2008, nearly a quarter of which was
installed in the United States.\67\ Department of Energy
research suggests generating 20 percent of electricity from
wind in the United States is an ambitious yet feasible scenario
if certain challenges are overcome.\68\ With policy support,
the United States is projected to have more than 60,000
megawatts of wind installed by 2012 and by 2016 it could reach
112,000 megawatts, surpassing nuclear capacity in the United
States.
---------------------------------------------------------------------------
\67\World Wind Energy Association, World Wind Energy Report 2008
(Feb. 2009) (online at http://www.wwindea.org/home/images/stories/
worldwindenergyreport2008_s.pdf).
\68\U.S. Department of Energy, 20 percent Wind Energy By 2030:
Increasing Wind Energy's Contribution to the U.S. Electricity Supply
(July 2008) (online at http://www1.eere.energy.gov/windandhydro/pdfs/
41869.pdf).
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As wind technology continues to improve, prices are falling
and capacity factors are increasing. The cost of wind energy
over the past 20 years has dropped from 40 cents per kWh to 4
to 6 cents per kWh at good sites. While most new wind turbines
in the United States produce 1.5 to 2 megawatts of power,
superconducting materials may enable the construction of 10
megawatt turbines in the near future. Increases in the capacity
factor of the turbines or the percentage of time in which they
are producing at their full capacity--have grown 11 percent
over the past two years and will continue to increase as the
technology improves.
SOLAR
With more energy in the form of solar radiation striking
the Earth's surface in an hour than humanity uses in an entire
year, the available solar energy resource is enormous.
Capturing this energy and converting it into electricity is
primarily done through photovoltaic cells that convert sunlight
into direct electrical current and concentrating solar power,
which concentrates the sun's energy using huge mirrors or
lenses and then uses this heat to run a conventional turbine.
Solar photovoltaics (PV) have experienced explosive growth
over the last several years. World capacity grew 62 percent in
2007 alone\69\ and solar PV installations in the United States
grew by more than 80 percent in 2007.\70\ Over the next two
decades, solar PV will become a major source of power--both
here in the United States and globally. Solar PV is projected
to grow from a $20 billion industry in 2007 to a $74 billion
industry within a decade. A study from the National Renewable
Energy Laboratory found that installed capacity in the United
States could climb to 10,000 megawatts by 2015, 26,000
megawatts by 2020, and ultimately more than 100,000 megawatts
by 2030 with the passage of the critical 8-year extension of
the investment tax credits included in the financial rescue
package enacted in October, 2008.\71\
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\69\Solarbuzz, Marketbuzz 2008: Annual World Solar Photovoltaic
industry Report (2008).
\70\Earth Policy Institute, Solar Cell Production Jumps 50 Percent
in 2007 (Dec. 27, 2007) (online at http://www.earth-policy.org/
Indicators/Solar/2007.htm).
\71\National Renewable Energy Laboratory, Quantifying the Benefits
of Extending the Solar ITC (Feb. 2008).
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Concentrating solar power (CSP) systems deliver large-
scale, centralized electricity generation from solar energy.
CSP systems are generally utility-scale projects with many
acres of mirrors and lenses that can produce dozens to hundreds
of megawatts of electrical power. The National Renewable Energy
Laboratory has identified the potential for nearly 7,000,000
megawatts of solar thermal power generation in the southwestern
United States, roughly seven times current U.S. electric
generating capacity. More than 4,000 megawatts of solar thermal
projects are currently in development nationwide, and
Environment America has projected 80,000 megawatts could be
built by 2030 with investment tax credit support.\72\ The cost
of energy from solar thermal power plants is estimated to be
approximately 14 to 16 cents/kWh.\73\
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\72\Solar Energy Industries Association, U.S. Solar Industry: 2007
Year in Review (2007) (online at http://seia.org/galleries/pdf/
Year_in_Review_2007_sm.pdf).
\73\Environment America Research and Policy Center, On the Rise:
Solar Thermal Power and the Fight Against Global Warming (Spring 2008)
(online at http://www.environmentcalifornia.org/uploads/EX/qu/
EXqur2dJBZQbJESwUtulZA/On-The-Rise.pdf).
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GEOTHERMAL
The United States has about 35 percent of the world's
installed capacity of geothermal energy, with about 2,500
megawatts connected to the grid across six States. While
several new facilities are in construction around the country,
the amount of electricity produced from geothermal energy has
essentially been flat for the past two decades. New facilities
are estimated to be able to produce base load electricity for 5
to 7 cents/kWh.\74\
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\74\California Energy Commission, Comparative Cost of California
Central Station Electricity Generation Technologies: Final Staff Report
(June 2003) (online at http://www.energy.ca.gov/reports/2003-06-06_100-
03-001F.PDF).
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The United States has massive, untapped geothermal energy
resources. Scientists with the U.S. Geological Survey (USGS)
recently found that the electric generation potential from
currently identified geothermal systems distributed over 13
U.S. states is more than 9,000 megawatts. Their estimated power
production potential from yet to be discovered geothermal
resources is more than 30,000 megawatts. An additional 500,000
megawatts may be available by harnessing geothermal reservoirs
characterized by high temperature, but low permeability, rock
formations.\75\
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\75\U.S. Geological Survey, Fact Sheet: Assessment of Moderate- and
High-Temperature Geothermal Resources of the United States (2008)
(online at http://pubs.usgs.gov/fs/2008/3082/pdf/fs2008-3082.pdf).
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An MIT study estimated that recovering a small fraction of
the available resources using conventional geothermal as well
as enhanced (or engineered) geothermal systems, could feasibly
yield 100,000 megawatts of electrical power in the United
States by 2050.\76\ And a study sponsored by the Western
Governors Association found 5,600 megawatts of new geothermal
capacity could be added through 2015 and 13,000 megawatts
within the next 20 years in their 13-State region.\77\
---------------------------------------------------------------------------
\76\Massachusetts Institute of Technology, The Future of Geothermal
Energy: Impact of Enhanced Geothermal Systems on the United States in
the 21st Century, at 1-3 (2006) (online at http://www1.eere.energy.gov/
geothermal/pdfs/future_geo_energy.pdf).
\77\American Solar Energy Society, Tackling Climate Change in the
U.S., at 153 (Jan. 2007) (online at http://ases.org/images/stories/
file/ASES/climate_change.pdf).
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BIOMASS
Biomass currently supplies more electricity in the United
States than wind, solar, and geothermal power combined, and the
potential for additional generation from this energy source is
vast. Biomass available for electricity generation includes
residues from forests, primary mills, and agriculture, as well
as dedicated energy crops and urban wood wastes. Biomass can be
used as the sole fuel source for power plants, or it can be
used in conventional power plants to substitute for a portion
of the traditional fuel, typically coal, in a process called
co-firing. While most co-firing plants use biomass for between
1 and 8 percent of heat input,\78\ biomass can effectively
substitute for up to 20 percent of the coal used in the
boiler.\79\ Certain biomass can have important greenhouse gas
benefits, and co-firing with biomass also lowers fuel costs,
avoids landfilling, and reduces emissions of sulfur oxide and
nitrogen oxide.
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\78\Energy Information Administration, Biomass for Electricity
Generation (online at http://www.eia.doe.gov/oiaf/analysispaper/
biomass/).
\79\Federal Energy Management Program, Biomass Cofiring in Coal-
fired Boilers (May 2004) (online at http://www1.eere.energy.gov/femp/
pdfs/fta_biomass_cofiring.pdf).
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An EIA analysis of the impacts of a 15 percent national
renewable electricity requirement found that electricity
production from biomass could grow by a factor of eight between
2005 and 2030.\80\ Most of this generation would come in the
southeastern United States, where nearly a third of the
country's biomass feedstock potential exists.\81\ The EIA found
that the Southeast region could meet nearly its entire 15
percent renewable requirement through 2020 with indigenous
biomass resources.\82\
---------------------------------------------------------------------------
\80\Energy Information Administration, Impacts of a 15-Percent
Renewable Portfolio Standard (Table 2: Summary Results), at 9 (June
2007) (online at http://www.eia.doe.gov/oiaf/servicerpt/prps/pdf/
sroiaf(2007)03.pdf).
\81\Oak Ridge National Laboratory, Biomass Feedstock Availability
in the United States: 1999 State Level Analysis (Jan. 2000) (online at
http://bioenergy.ornl.gov/resourcedata/index.html).
\82\Energy Information Administration, Regional Generation Impacts
of a 15-Percent Renewable Portfolio Standard (June 2007) (online at
http://www.eia.doe.gov/oiaf/servicerpt/prps/pdf/
regional_generation.pdf).
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TRANSMISSION PLANNING
Lack of adequate transmission capacity is a barrier to the
wide-scale deployment of renewable electricity. Transmission
lines must be constructed to move renewable electricity from
rural areas and offshore, where it is most abundant and most
reliably generated, to population centers where it can be used.
Federal leadership will be critical in helping to ensure that
efficient transmission is built.
BOOSTING EFFICIENCY
The largest and least expensive way to expand energy
resources and reduce global warming pollution is by improving
energy efficiency. Numerous studies have confirmed the basic
notion that the best and cheapest power plant is the one we
never have to build--because greater efficiency reduces demand
for power. These efficiency investments would yield positive
economic returns over their lifecycles because savings on the
cost of energy would exceed the cost of the initial investment.
Historically, energy efficiency has been an important
positive factor in the U.S. energy situation. The amount of
energy consumed per dollar of gross domestic product (GDP) fell
to about 58 per cent in 2006 of the amount of energy required
per dollar of GDP in 1980.\83\ A recent study by the American
Council for an Energy-Efficient Economy (ACEEE) found that
approximately three-quarters of the incremental energy demand
projected in the 1970s was met by greater energy efficiency
rather than actual energy supply increases.\84\
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\83\Energy Information Administration, Annual Energy Review 2007
(2008); U.S. Department of Commerce, Gross Domestic Product Data (in
constant 2000 dollars) from Bureau of Economic Analysis, (May, 2009).
\84\Ehrhardt-Martinez, Karen, and Laitner, John A. ``Skip'', The
Size of the U.S. Energy Efficiency Market: Generating a More Complete
Picture, ACEEE Report Number E083 (May 2008).
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Efficiency measures can reduce demand for electricity by
nearly 25 percent over the next 20 years. A 2004 survey by the
American Council for an Energy Efficiency Economy (ACEEE) of 11
different studies showed that the median achievable potential
for electricity efficiency gains was 24 percent over the next
20 years (an average improvement of 1.2 percent per year).\85\
The same study found that a 9 percent reduction of natural gas
consumption is achievable through efficiency measures in the
next 15 to 20 years.\86\
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\85\Steven Nadel et al., The Technical, Economic and Achievable
Potential for Energy-Efficiency in the U.S.--A Meta-Analysis of Recent
Studies, Proceedings of the 2004 ACEEE Summer Study on Energy
Efficiency in Buildings (2004).
\86\Steven Nadel et al., The Technical, Economic and Achievable
Potential for Energy-Efficiency in the U.S.--A Meta-Analysis of Recent
Studies, Proceedings of the 2004 ACEEE Summer Study on Energy
Efficiency in Buildings (2004).
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Efficiency is the cheapest way of meeting demand for
electricity. Efficiency measures are already available at a
cost of roughly $0.03/kWh, compared to nearly $0.07/kWh for
coal- or gas-fired generation. This differential will only grow
when generators of fossil fuel-powered electricity must pay to
emit global warming pollution. Energy efficiency also offers a
number of other advantages compared to meeting demand through
additional generation, including shorter lead-times, no energy
conversion losses, a greatly reduced environmental footprint,
and economic stimulus and job creation benefits.
Several studies have shown that investment in complementary
efficiency programs can substantially reduce the overall cost
of climate legislation. A 2006 ACEEE analysis of the Northeast
Regional Greenhouse Gas Initiative (RGGI) showed that, by
doubling current efficiency investments in the region,
wholesale power market prices could be kept flat through
2020.\87\ A doubling of energy efficiency investment would also
reduce carbon allowance prices by about one-third below
baseline allowance prices in 2024, and would increase regional
economic growth by 0.6 percent in 2021 relative to the base
case. Modeling by Resources for the Future predicted that
devoting 100 percent of RGGI auction proceeds to energy
efficiency measures, instead of 25 percent, would reduce
allowance prices by 25 to 30 percent.
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\87\Steven Nadel et al., The Technical, Economic and Achievable
Potential for Energy-Efficiency in the U.S.--A Meta-Analysis of Recent
Studies, Proceedings of the 2004 ACEEE Summer Study on Energy
Efficiency in Buildings (2004).
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Market barriers prevent optimal adoption of energy
efficiency measures. For example, the buildings and appliances
sectors are characterized by split incentives. While home
buyers or users of appliances would achieve lifecycle cost
savings from more efficient homes or appliances, builders and
manufacturers avoid energy efficiency improvements that would
increase up-front costs. In addition, consumers generally lack
adequate information to distinguish among buildings and
products on the basis of efficiency. In addition, consumers may
apply irrationally high discount rates in making purchasing
decisions--requiring that a more efficient home or product
``pay back'' the increased cost within a very short time frame,
even though the consumer would be financially better off in the
medium- to long-term with the more efficient home or product.
In the power sector, electric utilities often are the actor
best positioned to increase demand-side efficiency, but have a
disincentive to do so because revenues are based on the volume
of electricity sold. Because a price on global warming
pollution does not address these and other market barriers,
additional policies are necessary to achieve the full cost-
saving benefits of efficiency measures.
INCREASING EFFICIENCY OF BUILDINGS AND APPLIANCES
Buildings and appliances represent the areas of greatest
emission abatement and energy- and cost-saving potential.
Efficiency improvements in this category include lighting
retrofits, higher performance for appliances, improvements in
heating, ventilation and air conditioning systems, as well as
better building envelopes and building control systems. Over
the next 30 years, the built environment in the United States
is expected to increase by an amount roughly equal to 70
percent of today's existing building stock--providing a crucial
opportunity for energy savings and emission reductions.\88\
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\88\Pew Center on Global Climate Change, Toward a Climate Friendly
Built Environment, at 3-4 (June 2005).
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Buildings contribute up to 48 percent of U.S. global
warming pollution, the single largest source of emissions.\89\
In 2007 more than three-quarters of the electricity generated
by U.S. power plants was used in commercial, residential, and
industrial buildings,\90\ and roughly one-third of the natural
gas consumed was used for residential and commercial use.\91\
Most of this energy consumption, and resulting emissions, stem
from the energy used to operate lighting, heating, and cooling
in buildings, and could be considerably decreased.
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\89\American Institute of Architects, Architects and Climate Change
(online at http://www.aia.org/aiaucmp/groups/aia/documents/pdf/
aias078740.pdf).
\90\Energy Information Administration, Annual Energy Review 2007,
Table 2.1a (Energy Consumption by Sector, Selected Years, 1949-2007)
(June 23, 2008) (online at http://www.eia.doe.gov/aer/pdf/aer.pdf).
Approximately 40 percent of energy consumed in 2007 was used in
residential and commercial buildings alone.
\91\Energy Information Administration, Natural Gas Consumption by
End Use 2007 (online at http://tonto.eia.doe.gov/dnav/ng/
ng_cons_sum_dcu_nus_a.htm).
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Building codes are critically important in driving energy
efficiency. In the 110th Congress, the House passed H.R. 6899,
which included provisions to encourage states and localities to
adopt updated codes that include requirements for increased
energy efficiency. Specifically, these provisions would have
required DOE and States to adopt energy codes for new buildings
that improve efficiency by 30 percent by 2010 and 50 percent by
2020. Incentive funding would have been offered for adopting
the code and training officials to implement the codes. Such
codes are estimated to avoid 1.5 billion metric tons of
CO2 per year by 2030 and reduce the need to build
more than 30 new large coal-fired power plants over the coming
decades. The Senate did not act on this legislation before the
110th Congress adjourned.
SMART GRID
Modernization of the electricity transmission and
distribution system--particularly through Smart Grid
investments--promises substantial benefits in increased system
efficiency, reliability, and flexibility, and reduced peak
loads and electricity prices. Smart Grid technologies pair
digital communications and information technology with a
variety of grid functions, including monitoring, measuring, and
responding to electricity demand and congestion; sensing and
locating system disruptions or security threats and deploying
automated protective responses; implementing ``smart'' meters
in homes and businesses that allow consumers to receive time-
of-use pricing information and to communicate consumer
preferences to the grid; and installing ``smart'' appliances
that can be programmed to respond to communications from the
grid regarding pricing or load. Collectively, these
technologies can substantially increase the efficiency of the
grid and can reduce peak load demand, both of which reduce the
need for construction of new generation.\92\ In addition, an
array of other grid modernization technologies--such as the
deployment of high-efficiency superconductor power distribution
cables--can further enhance grid efficiency and reliability.
---------------------------------------------------------------------------
\92\See, e.g, House Committee on Energy and Commerce, Hearing on
Facilitating the Transition to a Smart Electric Grid (110th Cong.) (May
3, 2007).
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GLOBAL WARMING
A clear scientific consensus now holds that global warming
is happening, that manmade greenhouse gas emissions are largely
responsible, and that the consequences of failing to reduce
such emissions will be catastrophic.
THE SCIENTIFIC CONSENSUS ON CLIMATE CHANGE
Global warming refers to the global temperature rise and
subsequent impacts from the increase of heat-trapping pollution
in the atmosphere as a result of human activities, primarily
the combustion of fossil fuels. This additional pollution
enhances the so-called ``greenhouse effect'' and warms the
Earth. The IPCC declared in its Fourth Assessment Report,
released in 2007, that the evidence for warming is
``unequivocal''\93\ and that most of the observed warming is
very likely--greater than 90 percent certainty--due to the
increase of global warming pollution from human activities.\94\
Over the last century, the global average temperature has
increased 1.4 +F, with almost 90 percent of the warming
occurring over the last 50 years.\95\
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\93\Intergovernmental Panel on Climate Change, Climate Change 2007:
The Physical Science Basis, Summary for Policymakers, at 5 (2007).
\94\Intergovernmental Panel on Climate Change, Climate Change 2007:
The Physical Science Basis, Summary for Policymakers, at 3 (2007).
\95\Intergovernmental Panel on Climate Change, Climate Change 2007:
The Physical Science Basis, Summary for Policymakers, at 5 (2007).
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Certain gases in the atmosphere trap heat that would
otherwise escape into space. There are a number of such
anthropogenic greenhouse gases: carbon dioxide
(CO2), methane (CH4), nitrous oxide
(N2O), high-altitude ozone, and certain man-made
industrial gases, including chlorofluorocarbons,
hydrofluorocarbons (HFCs), perfluorocarbons (PFCs), sulfur
hexafluoride (SF6), and nitrogen trifluoride
(NF3).
The impact of each gas on global warming is a combination
of its ability to trap heat, its concentration in the
atmosphere, and how long it stays in the atmosphere. For
example, while one molecule of methane traps more heat than one
molecule of CO2, the higher concentration and longer
atmospheric lifetime of CO2 means it has contributed
more to global warming than methane has. Most efforts to
control global warming pollution have focused on the
CO2 emissions from the burning of fossil fuels
because they have the greatest effect and we have the greatest
control over them.
Since the Industrial Revolution, the concentration of
CO2 in the atmosphere has increased from 280 parts
per million (ppm) to more than 380 ppm.\96\ This 100 ppm change
is the same increase as the world experienced from the last ice
age about 20,000 years ago until just before the 1800s.\97\
Human activities have changed the atmosphere as much in 200
years as natural variations changed it over 20,000 years. The
current level is higher than any level seen in the last 650
thousand years.\98\
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\96\The total CO2-equivalent concentration of all
greenhouse gases is 455 ppm. Intergovernmental Panel on Climate Change,
Climate Change 2007: Mitigation of Climate Change, Summary for
Policymakers, at 27 (2007).
\97\Intergovernmental Panel on Climate Change, Climate Change 2007:
The Physical Science Basis, Summary for Policymakers, at 112 (2007).
\98\Urs Siegenthaler, et al., Stable Carbon Cycle--Climate
Relationship During the Late Pleistocene, 310 Science 1313 (2005).
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Scientists can model the temperature effects of natural and
human-induced, or anthropogenic, changes in the global
temperature. The results show that natural variations alone
cannot explain the observed temperature rise of the last
decades. The changes from human activities are necessary to
fully explain the observed warming. Indeed, the IPCC has
estimated that of the processes that can change global
temperature, what they call ``radiative forcings,'' the
components from human activities are cumulatively ten times
larger than the best estimates of the changes from solar
activity.\99\ A 2007 study found that all the trends in the
sun's activity that could influence the temperature of the
Earth have been in the opposite direction needed to explain the
rise in temperature over the last 20 years.\100\
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\99\Intergovernmental Panel on Climate Change, Climate Change 2007:
The Physical Science Basis, Summary for Policymakers, at 4 (2007).
\100\Lockwood and Froehlich, Recent Oppositely Directed Trends in
Solar Climate Forcings and the Global Mean Surface Air Temperature, 463
Proceedings of the Royal Society, 24427 (2007).
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Scientists predict that if global warming pollution
continues to grow unchecked, climate changes will accelerate.
The IPCC's estimate of the likely increase in global average
surface temperature by 2100 ranges from 2 +F to 11.5 +F above
2000 levels, depending on the scenario for greenhouse gas
emissions growth.\101\ It should be emphasized, however, that
current trends in emissions growth are consistent with or
higher than the scenarios on the high end of this range.
Business-as-usual emissions growth could result in atmospheric
CO2 concentrations of well above 700 ppm by
2100,\102\ yielding a likely temperature increase of 8.8 +F to
11 +F.\103\ These levels of warming will result in disastrous
impacts for the planet.
---------------------------------------------------------------------------
\101\Intergovernmental Panel on Climate Change, 2007, Climate
Change 2007: The Physical Science Basis, Summary for Policymakers, at
13, 69-70 (2007).
\102\See, e.g., Environmental Protection Agency, EPA Analysis of
Bingaman-Specter Request on Global CO2 Concentrations, at 7
(Oct. 1, 2007) (online at http://www.epa.gov/climatechange/downloads/
s1766analysispart1.pdf).
\103\See Intergovernmental Panel on Climate Change, Climate Change
2007: Mitigation of Climate Change, Summary for Policymakers, at 39
(Table TS.2) (2007).
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Many scientists are increasingly concerned that, because of
``positive feedback'' mechanisms associated with climate
change, we are approaching a ``tipping point'' beyond which
climate change will accelerate and will become increasingly
difficult to reverse. For example, the global warming potential
of the methane stored in frozen arctic soils likely exceeds by
five times the amount of global warming pollution that humans
have released into the atmosphere from the burning of fossil
fuels since the Industrial Revolution.\104\ As these soils warm
and release this stored methane, temperatures will increase,
causing more melting and increased methane releases.
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\104\Sergey A. Zimov, et al., Permafrost and the Global Carbon
Budget, 312 Science 1612 (2006).
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GREENHOUSE GAS EMISSIONS SOURCES AND TRENDS
The United States accounts for roughly 20 percent of global
CO2 emissions, and U.S. emissions have grown over
the past two decades at a rate of roughly 1 percent per year.
In 2007 (the most recent year for which data is available), the
United States emitted 7,150 million metric tons CO2
equivalent in greenhouse gases--a 17 percent increase since
1990. Net emissions, including sources and sinks, similarly
increased from 1990 to 2007, from 5,257 to 6,088 million metric
tons CO2 equivalent.\105\ Absent policy
interventions, U.S. emissions are expected to increase between
20 and 52 percent by 2025 from 2000 levels.\106\
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\105\Environmental Protection Agency, Inventory of U.S. Greenhouse
Gas Emissions and Sinks:1990-2007, at ES-3 to ES-6 (April 2009) (online
at http://www.epa.gov/climatechange/emissions/downloads09/
ExecutiveSummary.pdf).
\106\World Resources Institute, Navigating the Numbers: Greenhouse
Gas Data and International Policy, at 18 (2005) (online at http://
pdf.wri.org/navigating_numbers.pdf).
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In 2007, U.S. emissions were dominated by emissions from
the electric power sector (comprising 34 percent of total U.S.
emissions), transportation sector (28 percent), and industrial
sector (20 percent). The remaining emissions were due to the
agricultural (7 percent), commercial (6 percent), and
residential (5 percent) sectors. Emissions from the electric
power, transportation, and agricultural sectors have increased
since1990, while emissions from the industrial, commercial, and
residential sectors have held steady or declined over the same
period. If emissions from the generation of electric power are
instead attributed to the end-use sectors, these proportions
shift somewhat: the industrial (30 percent), commercial (17
percent), and residential (17 percent) sectors play an
increasing role, while contributions from the transportation
(28 percent) and agriculture (7 percent) sectors remain
relatively constant.\107\
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\107\Environmental Protection Agency, Inventory of U.S. Greenhouse
Gas Emissions and Sinks: 1990-2007, at ES-3 to ES-6 (April 2009)
(online at http://www.epa.gov/climatechange/emissions/downloads09/
ExecutiveSummary.pdf).
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In 2007, roughly 80 percent of U.S. emissions were
CO2 from the combustion of fossil fuels. Additional
CO2 emissions (representing 5 percent total U.S.
emissions) were generated from other activities, such as the
manufacture of iron and steel and cement. Remaining emissions
were comprised of methane (8 percent) and nitrous oxide (4
percent)--largely from agricultural activities, landfills,
natural gas systems, and coal mines--and HFCs (2 percent) used
as a substitute for ozone-depleting substances. PFCs and
SF6 each comprised less than 1 percent of U.S.
emissions. Net carbon sequestration (primarily in U.S. forests
and agricultural soils) was 1063 million metric tons
CO2 equivalent--offsetting 15 percent of total U.S.
emissions.\108\
---------------------------------------------------------------------------
\108\Environmental Protection Agency, Inventory of U.S. Greenhouse
Gas Emissions and Sinks: 1990-2007, at ES-3 to ES-6 (April 2009)
(online at http://www.epa.gov/climatechange/emissions/downloads09/
ExecutiveSummary.pdf).
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Global greenhouse gas emissions increased by 24 percent
between 1990 and 2004.\109\ Emissions growth has accelerated
since then, and is now above the IPCC's high emissions (A1F1)
scenario.\110\ In 2006, China and the United States each
emitted more than 20 percent of total global warming
pollution.\111\ The EU-25 countries accounted for 15 percent of
emissions. When the United Nations Framework Convention on
Climate Change was drafted in 1992, the 38 countries initially
agreeing to limit their greenhouse gas emissions were
responsible for 62 percent of all carbon dioxide emissions.
Rapid emissions growth occurring in the developing world has
reduced these developed nations contribution to global warming
pollution to only 47 percent of the global total.\112\
---------------------------------------------------------------------------
\109\Intergovernmental Panel on Climate Change, Climate Change
2007: Mitigation of Climate Change, Summary for Policymakers at 27
(2007).
\110\Global Carbon Project, Carbon budget and trends 2007 (Sept.
26, 2008), (online at http://www.globalcarbonproject.org/carbontrends/
index.htm).
\111\International Energy Agency, Key World Energy Statistics 2008,
at 45, 50, 56 (2008) (online at http://www.iea.org/textbase/nppdf/free/
2008/key_stats_2008.pdf).
\112\International Energy Agency, Key World Energy Statistics 2008,
at 45, 50, 56 (2008) (online at http://www.iea.org/textbase/nppdf/free/
2008/key_stats_2008.pdf).
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Electricity and heat account for 25 percent of global
emissions, followed by industry (21 percent), land use change
and forestry (18 percent), buildings (15 percent), agriculture
(15 percent), transport (14 percent), and waste (4
percent).\113\ The International Energy Agency's (IEA's)
Reference Scenario projects global greenhouse gas emissions to
increase 45 percent between 2006 and 2030. Emissions from China
and India are expected to grow by 86 and104 percent,
respectively, while emissions from the United States are
expected to grow by 25 percent over the same time period.\114\
Emissions from the EU have stayed relatively flat since 1990,
and the EU has unilaterally committed to reduce emissions by 20
percent by 2020--and up to 30 percent with cooperation from the
international community.
---------------------------------------------------------------------------
\113\World Resources Institute, Navigating the Numbers: Greenhouse
Gas Data and International Policy, at 57 (2005) (online at http://
pdf.wri.org/navigating_numbers.pdf).
\114\International Energy Agency, World Energy Outlook 2008 (2008);
and International Energy Agency, Key World Energy Statistics 2008
(2008).
---------------------------------------------------------------------------
While China has now overtaken the United States as the
largest greenhouse gas emitter on an annual basis, the United
States continues to have one of the highest per capita emission
rates. In 2005, the United States emitted 20 tons of
CO2 per capita annually, compared to 12 tons per
capita in Russia, 10 tons in Japan and the United Kingdom, and
8 tons per capita for the EU. The worldwide average per capita
CO2 emissions level is 4.3 tons, and the average
person in China and India is responsible for 4 tons and 1 ton
of CO2 emissions per year, respectively.\115\
---------------------------------------------------------------------------
\115\Energy Information Administration, International Energy Annual
2005, Table H.1cco2 World Per Capita Carbon Dioxide Emissions from the
Consumption and Flaring of Fossil Fuels,1980-2005 (2007) (online at
http://www.eia.doe.gov/pub/international/iealf/tableh1cco2.xls).
---------------------------------------------------------------------------
Moreover, the United States is responsible for nearly a
third of the cumulative greenhouse gas emissions in the
atmosphere--nearly four times as much as China and more than 14
times as much as India. Developing countries with 80 percent of
the world's population still account for only 20 percent of the
cumulative emissions since 1751. The poorest countries in the
world--where 800 million people live--have contributed less
than 1 percent of these cumulative emissions.\116\ For most
industrialized countries, their historic (i.e., cumulative)
share of global emissions is much higher than their current
(i.e., annual) share. For the period between 1850 and 2002, the
United States contributed 29 percent world's CO2
emissions, leading all other countries. EU-25 follows closely
behind, with a contribution of 27 percent world's
CO2 emissions, but no other country contributes more
than 10 percent. For example, China's cumulative contribution
is 8 percent, and India's is only 2 percent.\117\
---------------------------------------------------------------------------
\116\Global Carbon Project, Carbon budget and trends 2007 (Sept.
26, 2008), (online at http://www.globalcarbonproject.org/carbontrends/
index.htm).
\117\World Resources Institute, Navigating the Numbers: Greenhouse
Gas Data and International Policy, at 32 (2005) (online at http://
pdf.wri.org/navigating_numbers.pdf).
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The IPCC has concluded that, to have even a 50-50 chance of
avoiding the dangerous climate change associated with a 3.6+ F
increase in global average surface temperature, global
emissions must be reduced by 50-85 percent by 2050. This
requires the United States and other developed countries to
reduce emissions by at least 80 percent by 2050.\118\ Given the
current trajectory of rapidly rising greenhouse gas emissions,
both in the United States and globally, a substantial change of
course is required in the very near term to avoid the
catastrophic impacts outlined below.
---------------------------------------------------------------------------
\118\Intergovernmental Panel on Climate Change, Climate Change
2007: Mitigation of Climate Change, Summary for Policymakers, at 38-39
(Table TS.2) (2007); Union of Concerned Scientists, How to Avoid
Dangerous Climate Change: A Target for U.S. Emission Reductions (Sept.
2007) (online at http://www.ucsusa.org/global_warming/solutions/
big_picture_solutions/a-target-for-us-emissions.html).
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THE IMPACTS OF CLIMATE CHANGE
The current and anticipated impacts of climate change have
been increasingly well documented in the scientific
literature.\119\ These impacts include effects on water
scarcity and quality, the Arctic and Antarctic, warming and
acidification of the world's oceans, sea level rise and coastal
impacts, extreme weather events, public health, forests and
wildfires, wildlife and endangered species, and national
security.
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\119\In addition to the other sources cited in this report, the
Committee considered the following sources that provide information
regarding effects of global warming: Environmental Protection Agency,
Technical support Document for Endangerment and Cause or Contribute
findings for Greenhouse Gases (Apr.17, 2009); Intergovernmental Panel
on Climate Change, IPCC Special Report: The Regional Impacts of Climate
Change: An Assessment of Vulnerability (1997); National Assessment
Synthesis Team, Climate Change Impacts on the United States: The
Potential Consequences of Climate Variability and Change (2001);
Committee on Environment and Natural Resources, National Science and
Technology Council, Scientific assessment of the effects of global
change in the United States (2008); U.S. Climate Change Science
Program, Abrupt Climate Change, Synthesis and Assessment Product 3.4
(2008); U.S. Climate Change Science Program, Thresholds of Climate
Change in Ecosystems, Synthesis and Assessment Product 4.2 (2009); U.S.
Climate Change Science Program, Coastal Sensitivity to Sea Level Rise:
a Focus on the Mid-Atlantic Region, Synthesis and Assessment Product
4.1 (2009); U.S. Climate Change Science Program, Effects of Climate
Change on Energy Production and Use in the United States, Synthesis and
Assessment Product 4.5. (2008); National Academy of Sciences, National
Academy of Engineering, Institute of Medicine National Research
Council, Understanding & Responding to Climate Change (2008);
Environmental Protection Agency, Preliminary Review of Adaptation
Options for Climate-sensitive Ecosystems and Resources, Synthesis and
Assessment Product 4.4 (2008); Environmental Protection Agency, Climate
Ready Estuaries Program, Synthesis of Adaptation Options for Coastal
Areas (2009); Environmental Protection Agency, Analyses of the Effects
of Global Change on Human Health and Welfare and Human System,
Synthesis and Assessment Product 4.6 (2008); National Research Council,
Potential Impacts of Climate Change on U.S. Transportation,
Transportation Research Board Special Report (2008); United Nations
Foundation, Confronting Climate Change: Avoiding the Unmanageable and
Managing the Unavoidable, Scientific Expert Group Report (2007);
Congressional Budget Office, Potential Impacts of Climate Change in the
United States (2009); U.S. Department of State, Fourth U.S. Climate
Action Report (2006); U.S. Climate Change Science Program, The Effects
of Climate Change on Agriculture, Land Resources, Water Resources, and
Biodiversity in the United States, Synthesis and Assessment Product 4.3
(2008); National Academy of Sciences, Board on Life Sciences, Division
on Earth and Life Studies, National Research Council, Ecological
Impacts of Climate Change (2008); National Academy of Sciences,
National Research Council, Abrupt Climate Change: Inevitable Surprises
(2002); Arctic Climate Impact Assessment, Arctic Climate Impact
Assessment (2005); Government of Canada, From Impacts to Adaptation:
Canada in a Changing Climate 2007 (2008). Note that this list includes
scientific sources relied upon in whole or in part.
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INCREASING WATER SCARCITY AND DECLINING WATER QUALITY
One of the most dramatic impacts of global warming in the
21st century will be the exacerbation of already severe water
scarcity--both in the United States and abroad. Freshwater
scarcity and threats to water quality are increasing
dramatically both in the United States and across the world.
More than a billion people currently lack access to safe
drinking water.\120\ By 2025, 1.8 billion people are expected
to be living in regions experiencing water scarcity and ``two-
thirds of the world's population could be living under water
stressed conditions.''\121\ Climate change will greatly
exacerbate current and future water stress. For example, the
IPCC projects that by 2020, between 75 and 250 million people
in Africa alone will experience an increase of water stress due
to climate change.\122\ For Asia, the number is between 120
million and 1.2 billion people, and for Latin American it is 12
to 81 million.\123\
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\120\German Advisory Council on Global Change, Climate Change as a
Security Risk Summary for Policy-makers, at 2 (2007).
\121\United Nations Commission on Sustainable Development, The Food
Crisis and Sustainable Development (May 2008) (online at http://
www.un.org/esa/sustdev/csd/csd16/documents/bgrounder_foodcrisis.pdf).
\122\Intergovernmental Panel on Climate Change, Climate Change
2007: Impacts, Adaptation and Vulnerability, Summary for Policy Makers,
at 13 (2007).
\123\Intergovernmental Panel on Climate Change, Climate Change and
Water, at 36 (2008).
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Global warming is leading to rapid melting of land ice,
glaciers, ice caps, and snow fields which over time will
exacerbate water scarcity in many regions of the globe. One-
sixth of the world population currently relies on meltwater
from glaciers and snow cover for drinking water and irrigation
for agriculture.\124\ The IPCC's 2008 Climate Change and Water
report projects widespread reductions in snow cover throughout
the 21st Century, and a 60 percent volume loss in glaciers in
various regions.\125\ The melting of these ice reservoirs,
which store 75 percent of the world's freshwater, will
exacerbate water scarcity conditions.\126\ While melting will
temporarily increase freshwater supply, more winter
precipitation falling as rain rather than snow, and an earlier
snowmelt season will deplete frozen freshwater reserves.
---------------------------------------------------------------------------
\124\Intergovernmental Panel on Climate Change, Climate Change
2007: Impacts, Adaptation, and Vulnerability, Summary for Policymakers,
at 11 (2007).
\125\Intergovernmental Panel on Climate Change, Climate Change and
Water, at 28 (2008).
\126\Intergovernmental Panel on Climate Change, Climate Change and
Water, at 19-26 (2008).
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Increased water stress due to climate change will
disproportionately affect the dry tropics and dry regions at
lower mid-latitudes--notably Southeast Asia, southern Africa,
Brazil, and the American Southwest.\127\ According to the 2008
IPCC Climate Change and Water Report, semi-arid and arid areas
in Southeast Asia, Southern Africa, Brazil, and the western
United States are ``projected to suffer a decrease of water
resources due to climate change.''\128\ In Asia, decreasing
precipitation and rising temperatures result in increasing
frequency and intensity of droughts.\129\ In northwestern China
and Mongolia, snow and glacier melt will cause floods in the
spring in the near term but result in freshwater shortages by
the end of the century.\130\ Global warming of 5.4 +F to 7.2 +F
may result in more persistent El Nino conditions that would
shift the Amazon rainforest from ``tropical forest to dry
savannah''\131\--imperiling an ecosystem that sustains
thousands of people and is one of the greatest concentrations
of biodiversity on Earth.\132\
---------------------------------------------------------------------------
\127\Intergovernmental Panel on Climate Change, Climate Change and
Water, at 3 (2008).
\128\Intergovernmental Panel on Climate Change, Climate Change and
Water, at 88 (2008).
\129\Intergovernmental Panel on Climate Change, Climate Change and
Water, at 86 (2008).
\130\Intergovernmental Panel on Climate Change, Climate Change and
Water, at 87 (2008).
\131\Timothy M. Lenton et al., Tipping Elements in the Earth's
climate system, 105 Proceedings of the National Academy of Sciences
1790 (2008).
\132\WWF Climate Change Programme, Climate Change Impacts in the
Amazon: Review of Scientific Literature (online at
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The United States is already experiencing water stress,
which will worsen severely in the coming decades due to climate
change. In the American West, the Sierra Nevada snowpack is at
its lowest level in 20 years and threatens most of the water
supply to Northern California.\133\ Experts warn that ``even
the most optimistic climate models for the second half of this
century suggest that 30 to 70 percent of this snowpack will
disappear.''\134\ The Southwest is already experiencing a
severely reduced flow in the Colorado River--upon which 30
million people depend for water--as a consequence to decreasing
snowmelt from the Rocky Mountains.\135\ The Midwest is expected
to experience ``drought-like conditions resulting from elevated
temperatures, which increases levels of evaporation,
contributing to decreases in soil moisture and reductions in
lake and river beds'' as a result of climate change.\136\ In
addition to a range of other costs, agriculture in the Great
Plains and the Southwest is likely to suffer massive economic
losses due to increasing water scarcity.\137\ A recent study
led by NOAA found that if CO2 is allowed to peak
above 450 parts per million, the impacts would include
``irreversible dry season rainfall reductions . . . comparable
to those of the `dust bowl' era'' in the southwestern U.S.\138\
---------------------------------------------------------------------------
\133\The Future is Drying Up, New York Times (Oct. 21, 2008)
(online at http://www.nytimes.com/2007/10/21/magazine/21water-
t.html?_r=1&ref=todayspaper&oref=slogin).
\134\The Future is Drying Up, New York Times (Oct. 21, 2008)
(online at http://www.nytimes.com/2007/10/21/magazine/21water-
t.html?_r=1&ref=todayspaper&oref=slogin).
\135\The Future is Drying Up, New York Times (Oct. 21, 2008)
(online at http://www.nytimes.com/2007/10/21/magazine/21water-
t.html?_r=1&ref=todayspaper&oref=slogin).
\136\The Future is Drying Up, New York Times (Oct. 21, 2008)
(online at http://www.nytimes.com/2007/10/21/magazine/21water-
t.html?_r=1&ref=todayspaper&oref=slogin).
\137\University of Maryland Center for Integrative Environmental
Research, The U.S. Economic Impacts of Climate Change and the Costs of
Inaction at 24, 27 (October 2007) (online at http://dl.klima2008.net/
ccsl/us_economic.pdf).
\138\Susan Solomon et al., Irreversible climate change due to
carbon dioxide emissions, Proceedings of the National Academy of
Sciences 1704 (2009).
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Climate change will also negatively impact the quality of
freshwater resources. For example, reduced flows will reduce
rivers' ability to dilute effluent, leading to increased
pathogen or chemical loading.\139\ In addition, increased heavy
precipitation events due to climate change--discussed below--
``may increase the total microbial load in watercourses and
drinking-water reservoirs.''\140\ And warmer water temperature
combined with higher phosphorus concentrations will increase
the occurrence of freshwater algal blooms, with adverse impacts
on freshwater ecosystems and fisheries. Fish habitat may also
be compromised because altered water chemistry will promote the
intrusion of invasive species.\141\ These impacts will
exacerbate the precarious state of freshwater fish species in
North America, nearly 40 percent of which are already at
risk.\142\
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\139\Intergovernmental Panel on Climate Change, Climate Change and
Water, at 67 (2008).
\140\Intergovernmental Panel on Climate Change, Climate Change and
Water, at 68 (2008).
\141\Environmental Protection Agency, National Water Program
Strategy: Response to Climate Change, at ii (Mar. 2008) (online at
http://www.epa.gov/water/climatechange/docs/TO5_DRAFT_CCR_Revised_10-
16.pdf).
\142\Fisheries: Freshwater species in steep decline--USGS,
Greenwire (Sept. 10, 2008).
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IMPACTS ON THE ARCTIC AND ANTARCTIC
The Arctic is one of the hotspots of global warming. Over
the past 50 years average temperatures in the Arctic have
increased as much as 7 +F, five times the global average.\143\
In the next 100 years, some areas in the Arctic may see an
increase in average temperatures as high as 13 +F.\144\
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\143\Arctic Climate Impact Assessment, Impacts of a Warming Arctic:
Highlights, at 4 (2004) (online at http://www.amap.no/acia/
Highlights.pdf).
\144\Arctic Climate Impact Assessment, Impacts of a Warming Arctic:
Highlights, at 4 (2004) (online at http://www.amap.no/acia/
Highlights.pdf).
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As temperatures rise in the Arctic, sea ice and glaciers
are melting at an unprecedented and alarming rate. In 2007, a
record 386,000 square miles of Arctic sea ice melted away, an
area larger than Texas and Arizona combined and as big a
decline in one year as has occurred over the last decade.\145\
In 2008, the sea ice extent was only slightly greater than in
2007, but the sea ice volume is likely the lowest on record due
to the decline in multiyear old ice and the thinness of the
remaining ice.\146\ Recent observations suggest that Arctic sea
ice could completely disappear during the summer as early as
2020.\147\
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\145\European Space Agency, Satellites Witness Lowest Arctic Ice
Coverage in History (Sept. 14, 2007) (online at http://www.esa.int/
esaCP/SEMYTC13J6F_index_0.html).
\146\National Snow and Ice Data Center, Arctic Sea Ice Down to
Second-Lowest Extent; Likely Record-Low Volume (Oct. 2, 2008) (online
at http://nsidc.org/news/press/20081002_seaice_pressrelease.html).
\147\Julienne Stroeve et al. Arctic Sea Ice Decline: Faster Than
Forecast, 34 Geophysical Research Letters L09501 (2007).
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The Greenland ice sheet is melting at an alarming rate.
Between 1979 and 2002, the extent of melting in Greenland has
increased on average by 16 percent--an area roughly the size of
Sweden.\148\ In the record-breaking year of 2005, parts of
Greenland melted that have never melted during the 27-year-long
satellite record.\149\
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\148\Arctic Climate Impact Assessment, Impacts of a Warming Arctic:
Highlights, at 6 (2004) (online at http://www.amap.no/acia/
Highlights.pdf).
\149\Sebastian H. Mernild et al., Surface Melt Area and Water
Balance Modeling on the Greenland Ice Sheet 1995-2005, Journal of
Hydrometeorology: In Press (2008).
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A complete melting of Greenland would result in a rise in
global sea level of more than 20 feet,\150\ with catastrophic
consequences for coastal regions around the world. Furthermore,
melting Arctic glaciers would contribute large amounts of fresh
water into the ocean, potentially changing oceanic currents,
damaging eco-systems and altering current weather conditions.
---------------------------------------------------------------------------
\150\United States Geological Survey, Sea Level and Climate (2000)
(online at http://pubs.usgs.gov/fs/fs2-00/).
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At the opposite end of world, massive amounts of water are
stored in the two ice sheets of Antarctica. The larger East
Antarctic ice sheet covers the majority of the continent, while
the West Antarctic ice sheet has significant ice shelves
partially floating in the ocean. In the spring of 2002,
scientists were shocked to discover that an ice shelf the size
of Rhode Island had disintegrated from the West Antarctica ice
sheet in just over a month,\151\ rather than the millennium
previously assumed. Until recently, it was believed that only
coastal areas of the West Antarctic were vulnerable to melting.
Satellite analysis has now revealed that large inland regions
are also showing signs of the impacts of warming. NASA and
university researchers have found clear evidence that an area
the size of California melted in January 2005 in response to
warm temperatures.\152\
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\151\N. F. Glasser & T.A. Scambos, A structural glaciological
analysis of the 2002 Larsen B ice shelf collapse, 54 Journal of
Glaciology 316 (2008).
\152\S. V. Nghiem et al., Snow Accumulation and Snowmelt Monitoring
in Greenland and Antarctica, in Dynamic Planet (2007).
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WARMING AND ACIDIFICATION OF THE WORLD'S OCEANS
The world's oceans will suffer devastating impacts as a
result of global climate change.
The oceans are already warming due to climate change. The
oceans cover 70 percent of the Earth's surface and are critical
components of the climate system for redistributing heat around
the world and absorbing CO2 from the atmosphere.
According to the IPCC, global ocean temperature has risen by
0.18+ F from 1961 to 2003.\153\ Since the ocean has a heat
capacity 1,000 times greater than that of the atmosphere, it
has taken up 20 times more heat than the atmosphere during this
same period.\154\ As a result of the ocean's relatively large
heat capacity, it has a great effect on the Earth's heat
balance and how energy from solar radiation is distributed
throughout the global environment.
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\153\Intergovernmental Panel on Climate Change, Climate Change
2007: The Physical Science Basis at 387 (2007).
\154\Intergovernmental Panel on Climate Change, Climate Change
2007: The Physical Science Basis, at 389 (2007).
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Increasing atmospheric CO2 concentrations are
causing acidification of the oceans. Elevated atmospheric
CO2 concentrations lead to higher absorption of
CO2 into the upper ocean, which makes the surface
waters more acidic and reduces the concentration of carbonate
ions. According to the National Oceanic and Atmospheric
Administration (NOAA), ocean chemistry currently is changing at
least 100 times more rapidly than it has changed during the
650,000 years preceding our industrial era.\155\ If current
emission trends continue, the ocean will experience
acidification to an extent and at rates that have not occurred
for tens of millions of years. Ocean acidification has serious
implications for the calcification rates of organisms living at
all levels within the global ocean, from corals to zooplankton
that serve as the foundation of many ocean food chains.
According to NOAA, when dissolved carbon dioxide was increased
to two times pre-industrial levels, a decrease in the
calcification rate by 5 to 50 percent was observed.\156\
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\155\Pacific Marine Environmental Laboratory, National Oceanic and
Atmospheric Administration, Carbon Dioxide and Our Ocean Legacy (April
2006) (online at http://www.pmel.noaa.gov/pubs/PDF/feel2899/
feel2899.pdf).
\156\National Oceanic and Atmospheric Administration, Impacts of
Anthropogenic CO2 on Ocean Chemistry and Biology (Oct. 20,
2008) (online at http://www.oar.noaa.gov/spotlite/spot_gcc.html).
---------------------------------------------------------------------------
Warming and acidification of ocean waters due to climate
change are contributing to the collapse of coral reefs around
the globe. Coral reefs are habitat for about a quarter of
marine species, are the most diverse among marine ecosystems,
and are already in a state of decline. Recent studies indicate
that more than a third of all coral species are already
endangered.\157\ When key temperature thresholds are exceeded,
mass bleaching and complete coral mortality often result. By
mid-century, these temperature thresholds are expected to be
exceeded on an annual or bi-annual basis for the majority of
reefs worldwide. After bleaching, algae quickly colonize dead
corals and may make future coral growth and restoration more
difficult. Other factors that influence the health of reefs are
impacted by climate change, including sea level rise, storm
severity and dust and mineral aerosols.\158\ These, together
with non-climate factors such as over-fishing, invasion of non-
native species, pollution, and increased nutrient and sediment
loads, add multiple stresses, increasing coral reefs'
vulnerability to climate change. Corals could become rare on
tropical and subtropical reefs by 2050 due to the combined
effects of acidification and increasing frequency of extreme
temperature events that cause bleaching.
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\157\One-Third of Reef-Building Corals Face Elevated Extinction
Risk from Climate Change and Local Impacts, Science Express (July 10,
2008).
\158\R.A. Cropp and A.J. Gabric, Evidence for Global Coupling of
Phytoplankton and Atmospheric Aerosols, 4 Oceans 2003. Proceedings 2341
(2003).
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NOAA estimates the commercial value of United States
fisheries from coral reefs is more than $100 million,\159\ and
the total economic value of coral is estimated to be $30
billion.\160\ Coastal states, like Florida, would be especially
harmed where reef-based tourism in the Florida Keys generates
$1.2 billion in annual revenue.\161\ Healthy coral reefs
provide other benefits, as well, including shoreline
protection, beach sand supply, potential pharmaceuticals,
biodiversity, and fish habitat.
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\159\National Oceanic and Atmospheric Administration, Importance of
Coral Reefs (March 25, 2008) (online at http://oceanservice.noaa.gov/
education/kits/corals/coral07_importance.html).
\160\Scientists: Global Warming could kill coral reefs by 2050, USA
Today (Dec. 13, 2007) (online at http://www.usatoday.com/weather/
climate/globalwarming/2007-12-13-coral-reefs_N.htm).
\161\World Resources Institute, The Value of Ecosystems (Dec. 5,
2006) (online at http://www.wri.org/stories/2006/12/value-coastal-
ecosystems).
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Climate change threatens global fisheries. Warmer water and
acidification not only harm coral reefs that function as fish
hatcheries, but could also change the circulation of the
world's ocean currents. Most fish species have a fairly narrow
range of optimum temperatures due to temperature effects on
their basic metabolism and the availability of food sources
that have their own optimum temperature ranges.\162\ A given
species' geographic range may expand, shrink, or be relocated
with changes in ocean conditions caused by climate change.\163\
The United Nations Environment Programme found that ``climate
change may slow down ocean thermohaline circulation crucial to
coastal water quality and nutrient cycling in more than 75
percent of the world's fishing grounds.''\164\ Less hospitable
waters would have a significant effect on the global fishing
industry. In the United States alone, commercial and
recreational fisheries contribute $60 billion to the economy
each year and employ more than 500,000 people.\165\
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\162\Pacific Fisheries and Environmental Laboratory, National
Oceanic and Atmospheric Administration, Climate Variability and Marine
Fisheries: How Does Climate Affect Fish Populations? (online at http://
www.pfeg.noaa.gov/research/climatemarine/cmffish/cmffishery.html).
\163\James R. McGoodwin, Effects of Climate Variability on Three
Fisheries Economies in High-Altitude Regions: Implications for
Fisheries Policies, 31 Marine Policy 40-55 (2007).
\164\United Nations Environmental Programme, Warmer World May Mean
Less Fish (Feb. 22, 2008) (online at http://www.unep.org/
Documents.Multilingual/Default.asp?DocumentID=528&ArticleID=5751).
\165\Senate Committee on Commerce, Science, and Transportation,
Testimony of James L. Connaughton, Hearing on Magnuson-Stevens
Reauthorization (109th Cong.) (Nov. 16, 2005).
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SEA LEVEL RISE AND COASTAL IMPACTS
Sea levels are already rising, and are predicted to rise by
at least 1-2 feet by 2100--with the potential for a nearly 40-
foot rise in sea level if the Greenland and West Antarctica ice
sheets were to melt completely. The IPCC predicts that sea
levels will rise by 8 to 24 inches above current levels by
2100, primarily due to thermal expansion from rising ocean
temperatures\166\--with current emissions trends more
consistent with the higher end of this range. However, how much
and how quickly the polar ice sheets will melt in response to
global warming is a critical question. Many scientists are
increasingly concerned that the Greenland and West Antarctic
ice sheets are melting at a greater rate than previously
predicted. Because scientists do not fully understand the
dynamics of ice sheet melting, the IPCC found that larger
values of sea level rise could not be excluded.\167\ A complete
melting of the Greenland ice sheet alone would cause a 20-foot
rise in sea level, and complete melting of the West Antarctic
ice sheet would cause a 16-foot sea level rise.\168\
---------------------------------------------------------------------------
\166\Intergovernmental Panel on Climate Change, Climate Change
2007: The Physical Science Basis, Summary for Policymakers, at 70
(2007).
\167\Intergovernmental Panel on Climate Change, Climate Change
2007: The Physical Science Basis, Summary for Policymakers, at 14
(2007).
\168\United States Geological Survey, Sea Level and Climate (2000)
(online at http://pubs.usgs.gov/fs/fs2-00/); United States Geological
Survey, Coastal Change and Glaciological Maps of Antarctica (2007)
(online at http://pubs.usgs.gov/fs/2005/3055/index.html).
---------------------------------------------------------------------------
Sea level rise will have severe impacts on the world's
coastal populations, including in the United States. Rising sea
levels are already causing inundation of low-lying lands,
erosion of wetlands and beaches, exacerbation of storm surges
and flooding, and increases in the salinity of coastal
estuaries and aquifers. The most dramatic near-term effects of
sea level rise are being felt by inhabitants of small island
states, the very existence of which is now endangered. Further,
about one billion people live in areas within 75 feet elevation
of today's sea level, including many U.S. cities on the East
Coast and Gulf of Mexico, almost all of Bangladesh, and areas
occupied by more than 250 million people in China.\169\ In
total, more than 70 percent of the world's population lives on
coastal plains, and 11 of the world's 15 largest cities are on
the coast.
---------------------------------------------------------------------------
\169\Intergovernmental Panel on Climate Change, Climate Change
2007: The Physical Science Basis, Summary for Policymakers, at 12
(2007).
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In addition, rising sea level due to climate change will
threaten drinking water supplies in coastal areas--causing
intrusion of saltwater into both surface water and ground
water.\170\ If sea level rise pushes salty water further
upstream, existing water intakes might draw on salty water
during dry periods. The freshwater Everglades currently
recharge Florida's Biscayne aquifer, the primary water supply
to the most populous counties in South Florida, including the
cities of Miami and Fort Lauderdale. As rising water levels
submerge low-lying portions of the Everglades, portions of the
aquifer would become saline.\171\ Aquifers in New Jersey east
of Philadelphia are recharged by the Delaware River which also
may become saline in parts in the future, leading to a
degradation of drinking water quality.\172\
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\170\Environmental Protection Agency, Coastal Zones and Sea Level
Rise (Feb. 20, 2009) (online at http://www.epa.gov/climatechange/
effects/coastal/index.html).
\171\Environmental Protection Agency, Coastal Zones and Sea Level
Rise (Feb. 20, 2009) (online at http://www.epa.gov/climatechange/
effects/coastal/index.html).
\172\Environmental Protection Agency, Coastal Zones and Sea Level
Rise (Feb. 20, 2009) (online at http://www.epa.gov/climatechange/
effects/coastal/index.html).
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EXTREME WEATHER EVENTS
Global warming has already changed the intensity, duration,
frequency, and geographic range of a variety of weather
patterns and will continue to do so--with potentially severe
impacts on the United States and the world.\173\ There is a
broad scientific consensus that the United States is vulnerable
to weather hazards that will be exacerbated by climate change.
The cost of damages from weather disasters has increased
markedly from the 1980s, rising to more than 100 billion
dollars in 2007. In addition to a rise in total cost, the
frequency of weather disasters costing more than one billion
dollars has increased.\174\
---------------------------------------------------------------------------
\173\Intergovernmental Panel on Climate Change, Climate Change
2007: The Physical Science Basis, at 8 (2007); see generally U.S.
Climate Change Science Program, Synthesis Assessment Product 3.3,
Weather and Climate Extremes in a Changing Climate: Regions of Focus:
North America, Hawaii, Caribbean, and U.S. Pacific Islands, at 8 (June
2008).
\174\See National Climatic Data Center, Billion Dollar U.S. Weather
Disasters, (Jan. 29, 2009) (online at http://www.ncdc.noaa.gov/oa/
reports/billionz.html).
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Global warming will lead to more extreme precipitation
events and flooding. The IPCC has found that ``[t]he frequency
of heavy precipitation events has increased over most land
areas, consistent with warming and observed increases of
atmospheric water vapor.''\175\ The U.S. Climate Change Science
Program has concluded that heavy precipitation events averaged
over North America have increased over the past 50 years.\176\
---------------------------------------------------------------------------
\175\Intergovernmental Panel on Climate Change, Climate Change
2007: The Physical Science Basis, Summary for Policymakers, at 8
(2007).
\176\U.S. Climate Change Science Program, Synthesis Assessment
Product 3.3, Weather and Climate Extremes in a Changing Climate:
Regions of Focus: North America, Hawaii, Caribbean, and U.S. Pacific
Islands, at 4 (June 2008).
---------------------------------------------------------------------------
Flooding and extreme precipitation events cost lives and
can cause massive damages to infrastructure, property, and
agricultural lands, as was highlighted by the flooding in the
Midwestern United States in the summer of 2008. Those floods
washed away nearly 2 percent of the nation's corn crop. The
American Farm Bureau Federation estimated there were crop
losses in excess of $8 billion across the Midwest, with half of
the total occurring in Iowa.\177\ An additional $1.5 billion in
property damage occurred in Iowa\178\ and $1 billion in
Indiana.\179\
---------------------------------------------------------------------------
\177\National Climatic Data Center, Climate of 2008: Midwestern
U.S. Flood Overview (July 9, 2008) (online at http://www.ncdc.noaa.gov/
oa/climate/research/2008/flood08.html#impacts).
\178\National Climatic Data Center, Climate of 2008: Midwestern
U.S. Flood Overview (July 9, 2008) (online at http://www.ncdc.noaa.gov/
oa/climate/research/2008/flood08.html#impacts).
\179\Purdue researchers to assess damage from Midwestern floods,
Lafayette Online (Sept. 29, 2008) (online at http://www.lafayette-
online.com/purdue-news/2008/09/purdue-researchers-assess-flood-impact/
).
---------------------------------------------------------------------------
Increased sea surface temperatures are a critical
determining factor in the strength of hurricanes, and some
scientists predict that global warming will result in an
increase in hurricane and tropical cyclone frequency and
intensity. The IPCC has found observational evidence for the
increase in intense hurricanes in the North Atlantic since the
1970s, correlated with increasing sea surface
temperatures.\180\ Some researchers have argued that there is
evidence for increased hurricane intensity around the world and
emerging evidence for an increase in frequency of hurricanes in
the Atlantic.\181\ Stronger hurricanes lead to more destructive
winds and higher storm surges, increasing the risk to coastal
communities in their paths. As sea level rises and storm surges
increase, the vulnerability of cities to flooding, and the
related impacts, increases significantly.
---------------------------------------------------------------------------
\180\Intergovernmental Panel on Climate Change, Climate Change
2007: The Physical Science Basis, Summary for Policymakers, at 9
(2007).
\181\Intergovernmental Panel on Climate Change, Climate Change
2007: Impacts, Adapatation, and Vulnerability, at 110 (2007).
---------------------------------------------------------------------------
Severe thunderstorms, hail, tornados, and winter storms may
also increase. The current observational record for these
smaller scale storms is insufficient to determine whether there
are trends correlated to warming temperatures.\182\ However,
these phenomena are often associated with heavy precipitation
events and hurricanes; as the latter storms become more
frequent and possibly increase in intensity, then the
probability of thunderstorms, hail, and tornadoes should also
increase. Warming temperatures may also expand the range over
which tornados occur. Over the last few years, tornados have
occurred earlier in the year and further north than what is
typically thought of as ``tornado alley.''\183\ Finally, strong
cold season storms are also likely to become more frequent,
with stronger winds and more extreme wave heights.\184\
---------------------------------------------------------------------------
\182\Intergovernmental Panel on Climate Change, Climate Change
2007: The Physical Science Basis, Summary for Policymakers, at 9
(2007); U.S. Climate Change Science Program, Synthesis Assessment
Product 3.3, Weather and Climate Extremes in a Changing Climate:
Regions of Focus: North America, Hawaii, Caribbean, and U.S. Pacific
Islands, at 7 (June 2008)..
\183\Twisters `on a record pace', L.A. Times (May 13, 2008) (online
at http://articles.latimes.com/2008/may/13/nation/na-tornado13).
\184\U.S. Climate Change Science Program, Synthesis Assessment
Product 3.3, Weather and Climate Extremes in a Changing Climate:
Regions of Focus: North America, Hawaii, Caribbean, and U.S. Pacific
Islands, at 7 (June 2008)
---------------------------------------------------------------------------
PUBLIC HEALTH
There is a broad consensus among experts within the
worldwide public health community that climate change poses a
serious risk to public health. The IPCC's Fourth Assessment
report concluded that climate change's likely impacts on public
health include:
More frequent and more intense heat waves, leading
to marked short-term increases in mortality.
Increased numbers of people suffering from death,
disease, and injury from floods, storms, fires and droughts.
Increased cardio-respiratory morbidity and
mortality associated with ground-level ozone pollution.
Changes in the range of some infectious disease
vectors.
Increased malnutrition and consequent disorders,
including those relating to child growth and development.\185\
---------------------------------------------------------------------------
\185\Intergovernmental Panel on Climate Change, Climate Change
2007: Synthesis Report, Summary for Policymakers, at 48 (2007).
---------------------------------------------------------------------------
This assessment included a specific analysis of regional
impacts to health, including in the United States.\186\ In
addition, EPA,\187\ the Centers for Disease Control and
Prevention (CDC),\188\ and NOAA have all concluded climate
change poses a serious public health risk. The World Health
Organization (WHO) released a quantitative assessment
concluding that the effects of climate change may have caused
more than 150,000 deaths in 2000 and that these impacts are
likely to increase in the future.\189\ According to the IPCC,
climate change contributes to the global burden of disease,
premature death and other adverse health impacts.\190\
---------------------------------------------------------------------------
\186\Intergovernmental Panel on Climate Change, Climate Change
2007: Impacts, Adaptation and Vulnerability, at 617-652 (2007).
\187\Environmental Protection Agency, Climate Change--Health and
Environmental Effects (Feb. 18, 2009) (online at http://www.epa.gov/
climatechange/effects/health.html).
\188\Centers for Disease Control and Prevention, CDC Policy on
Climate Change and Public Health (online at http://www.cdc.gov/
climatechange/pubs/Climate_Change_Policy.pdf).
\189\World Health Organization, Climate and Health (Aug. 2007)
(online at http://www.who.int/globalchange/en/).
\190\Intergovernmental Panel on Climate Change, Climate Change
2007: Impacts, Adaptation and Vulnerability, at 391-431 (2007).
---------------------------------------------------------------------------
There is consensus that heat waves ``have become more
frequent over most land areas'' and there is confidence that
climate change will result in the ``very likely increase in
frequency of hot extremes.''\191\ There is evidence that
present day heat waves over Europe and North America ``coincide
with a specific atmospheric circulation pattern that is
intensified by ongoing increases in greenhouse gasses.''\192\
The intensity, duration and frequency of heat waves will
increase in western and southern regions of the United States
and in the Mediterranean region.\193\ Other areas not currently
as susceptible, such as northwest North America, France,
Germany, and the Balkans will also experience ``increased heat
wave severity in the 21st century.''\194\ With continued
warming by 2100, Washington, D.C. will experience the
temperatures that Houston does today, Denver will be as warm as
Memphis is today, and Anchorage will be as warm as New York
City is today.\195\ The populations most at risk of dying in a
heat wave are the elderly and people in underserved
communities, and as growth in the U.S. population over the age
of 65 coincides with warmer temperatures, more deaths can be
anticipated.
---------------------------------------------------------------------------
\191\Intergovernmental Panel on Climate Change, Climate Change
2007: Synthesis Report, Summary for Policymakers, at 2, 8 (2007).
\192\Gerald A. Meehl & Claudia Tebaldi, More Intense, More
Frequent, and Longer Lasting Heat Waves in the 21st Century, 305
Science 994 (2004).
\193\Gerald A. Meehl & Claudia Tebaldi, More Intense, More
Frequent, and Longer Lasting Heat Waves in the 21st Century, 305
Science 994 (2004).
\194\Gerald A. Meehl & Claudia Tebaldi, More Intense, More
Frequent, and Longer Lasting Heat Waves in the 21st Century, 305
Science 994 (2004).
\195\Natural Resources Defense Council, The Cost of Climate Change:
What We'll Pay if Global Warming Continues Unchecked at vi (May 2008)
(online at http://www.nrdc.org/globalwarming/cost/cost.pdf).
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Global warming will exacerbate ground-level ozone
pollution, leading to substantial increases in deaths and
respiratory illness. The ozone forming reaction occurs at a
higher rate with more intense sunlight and higher temperatures.
Thus, as temperatures rise from global warming, ground level
ozone is expected to increase. Ozone is a known public health
threat that can damage lung tissue causing respiratory illness,
and exacerbate pre-existing respiratory conditions. The IPCC
predicts increased levels of ozone across the eastern United
States, ``with the cities most polluted today experiencing the
greatest increase in ozone pollution.''\196\ The increase in
temperature in urban areas specifically and increases in ozone
can increase rates of cardiovascular and pulmonary illnesses as
well as temperature-related morbidity and mortality for
children and the elderly.\197\ Similar impacts will be felt in
urban areas around the globe. By mid-century, ozone related
deaths from climate change are predicted to increase by
approximately 4.5 percent from the 1990s levels.\198\ Even
modest exposure to ozone may encourage the development of
asthma in children.\199\ Recently, an analysis linking
CO2 emissions to mortality revealed that for each
increase of 1.8 +F caused by CO2, the resulting air
pollution would lead annually to about a thousand additional
deaths and many more cases of respiratory illness and asthma in
the United States.\200\
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\196\Intergovernmental Panel on Climate Change, Climate Change
2007: Impacts, Adaptation and Vulnerability at 632 (2007).
\197\U.S. Climate Change Science Program, Analyses of the Effects
of Global Change on Human Health and Welfare and Human Systems at ES-6
(Sept. 2008) (online at http://downloads.climatescience.gov/sap/sap4-6/
sap4-6-final-report-all.pdf).
\198\Intergovernmental Panel on Climate Change, Climate Change
2007: Impacts, Adaptation and Vulnerability at 632 (2007).
\199\R. K. McConnell et al., Asthma in exercising children exposed
to ozone: A cohort study, 359 The Lancet 386 (2002); J.F. Gent et al.,
Association of low-level ozone and fine particles with respiratory
symptoms in children with asthma, 29 J. Am. Med. Assoc. 1859 (2003).
\200\Mark Jacobson, On the Causal Link Between Carbon Dioxide and
Air Pollution Mortality, 35 Geophysical Research Letters L03809 (2008).
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Climate change is predicted to lead to changes in
geographic distribution of infectious diseases, with
potentially serious impacts on public health in the United
States and globally. According to EPA, ``Climate change may
increase the risk of some infectious diseases, particularly
those diseases that appear in warm areas and are spread by
mosquitoes and other insects.''\201\ For example, the IPCC has
concluded that the global population at risk from vector-borne
malaria will increase by between 220 million and 400 million in
the next century.\202\ Similarly, the IPCC predicts that
climate change is likely to increase risk and geographic spread
of the West Nile virus--another mosquito-borne disease.\203\
West Nile virus was first identified in the United States
during the summer of 1999, and has since killed 1,112
people.\204\ Shifting patterns of temperature may also
redistribute ticks that transmit pathogens causing Lyme
disease.\205\
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\201\Environmental Protection Agency, Climate Change Health and
Environment Effects: Health, (online at http://www.epa.gov/
climatechange/effects/health.html#climate).
\202\Intergovernmental Panel on Climate Change, Climate Change
2007: Impacts, Adaptation and Vulnerability at 409 (2007).
\203\Intergovernmental Panel on Climate Change, Climate Change
2007: Impacts, Adaptation and Vulnerability at 619 (2007).
\204\Centers for Disease Control and Prevention, West Nile Virus
Human Case Counts for 1999-2008, (online at http://www.cdc.gov/ncidod/
dvbid/westnile/surv&control.htm).
\205\U.S. Climate Change Science Program, Analyses of the Effects
of Global Change on Human Health and Welfare and Human Systems, at 53
(Sept. 2008) (online at http://downloads.climatescience.gov/sap/sap4-6/
sap4-6-final-report-all.pdf).
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FORESTS AND WILDFIRES
The clearing and degradation of tropical forests is a major
driver of global climate change. Forests cover about 30 percent
of the Earth's land surface and hold almost half of the world's
terrestrial carbon.\206\ They can act both as a source of
carbon emissions to the atmosphere when cut, burned, or
otherwise degraded and as a sink when they grow, removing
carbon dioxide from the air through photosynthesis.
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\206\Richard A. Houghton, ``Tropical Deforestation as a source of
greenhouse gas emissions,'' in Tropical Deforestation and Climate
Change at 13 (2005) (online at http://www.edf.org/documents/
4930_TropicalDeforestation_and_ClimateChange.pdf).
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Since the 1950s, greenhouse gas emissions from land use
change, including deforestation and degradation, have been
significant, on the order of 20 to 50 percent of fossil fuel
emissions.\207\ Deforestation and degradation currently account
for 20 to 25 percent of global anthropogenic greenhouse gas
emissions, roughly equivalent to the total fossil fuel
emissions from the United States.\208\ These emissions come
predominantly from deforestation of tropical rainforests.
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\207\Richard A. Houghton, Carbon Flux to the Atmosphere from Land-
Use Changes: 1850-2005 in TRENDS: A Compendium of Data on Global Change
(2008) (online at http://cdiac.ornl.gov/trends/landuse/houghton/
houghton.html).
\208\Richard A. Houghton, ``Tropical Deforestation as a source of
greenhouse gas emissions,'' in Tropical Deforestation and Climate
Change at 13 (2005) (online at http://www.edf.org/documents/
4930_TropicalDeforestation_and_ClimateChange.pdf).
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Tropical forests play an especially crucial role. When
forests are destroyed by fire, much of the carbon they store
returns to the atmosphere, enhancing global warming. When a
forest is cleared for crop or grazing land, the soils can
become a large source of global warming emissions, depending on
how farmers and ranchers manage the land. In places such as
Indonesia, the soils of swampy lowland forests are rich in
partially decayed organic matter, known as peat. During
extended droughts, such as during El Nino events, the forests
and the peat become flammable, especially if they have been
degraded by logging or accidental fire. When they burn, they
release huge volumes of CO2 and other greenhouse
gases.
There is growing scientific consensus that climate change
is already increasing the frequency and intensity of wildfires
in the United States, and this trend is likely to worsen in the
coming decades. Scientists have concluded that from 1986 to
2006, longer, warmer summers have resulted in a four-fold
increase in major wildfires and a six-fold increase in the area
of forest burned, compared to the period from 1970-1986.\209\
Similar results were published regarding wildfire activity in
Canada from 1920-1999.\210\ In addition to more intense and
more frequent fires, the length of the fire season and the burn
duration of large fires have also increased. Models of future
climate have consistently concluded that the areas burned will
increase in the coming years and decades. For example, wildfire
burn areas in Canada are expected to increase by 74 to 118
percent in the next century,\211\ and similar increases are
predicted for the western United States. With more wildfires
come more greenhouse gas emissions. Although estimates vary
widely, wildfires may represent up to 10 percent of total U.S.
greenhouse gas emissions.\212\
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\209\Anthony L. Westerling et al., Warming and Earlier Spring
Increase Western U.S. Forest Wildfire Activity, 313 Science 940 (2006).
\210\N. P. Gillett et al., Detecting the Effect of Climate Change
on Canadian Forest Fires, 31 Geophysical Research Letters L18211
(2004).
\211\M. D. Flannigan et al., Future Area Burned in Canada, 72
Climatic Change 1 (2005).
\212\Guido R. Van der Werf et al, Continental-Scale Partitioning of
Fire Emissions During the 1997 to 2001 El Nino/La Nina Period, 303
Science 73 (2004).
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Global warming is also exacerbating insect infestations
(most notably bark beetles), which in turn make forests more
susceptible to wildfire. Drought stress makes trees and
vegetation more susceptible to attack by insects, and warmer
winter temperatures allow a higher number of insects to survive
and increase their populations. Warmer temperatures can also
increase reproductive rates of insects, resulting in two
generations in a single year. Finally, warmer temperatures
allow insects to invade areas previously outside their natural
range, as has happened with the mountain pine beetle in the
western United States.\213\ Research has also demonstrated
links between warmer temperatures and drought on extensive
insect outbreaks in southwestern forests and Alaska.\214\
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\213\U.S. Climate Change Science Program, Synthesis and Assessment
Product 4.3, The Effects of Climate Change on Agriculture, Land
Resources, Water Resources, and Biodiversity in the United States, at
81-82 (May 2008).
\214\U.S. Global Change Research Program, The Potential
Consequences of Climate Variability and Change: Foundation Report, at
620 (2001) (online at http://www.usgcrp.gov/usgcrp/Library/
nationalassessment/foundation.htm).
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WILDLIFE AND ENDANGERED SPECIES
If climate change goes unchecked, it could lead to the
extinction of up to 40 percent of the world's species by the
latter half of this century. The International Union for the
Conservation of Nature's 2008 annual report lists 38 percent of
catalogued species as already threatened with extinction--
including nearly 25 percent of all mammals.\215\ According to
the IPCC's Fourth Assessment Report, ``the resilience of many
ecosystems is likely to be exceeded this century by an
unprecedented combination of climate change, associated
disturbances, (e.g. flooding, drought, wildfire, insects, ocean
acidification), and other global change drivers.''\216\
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\215\International Union for the Conservation of Nature, IUCN Red
List Reveals World's Mammals in Crisis (Oct. 6, 2008) (online at http:/
/www.iucn.org/news_events/events/congress/index.cfm?uNewsID=1695).
\216\Intergovernmental Panel on Climate Change, Climate Change
2007: Impacts, Adaptation and Vulnerability, Summary for Policy Makers
at 11 (2007).
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According to the IPCC: ``Approximately 20-30 percent of
plant and animal species assessed so far are likely to be at an
increased risk of extinction if increases in global average
temperature exceed 1.5 - 2.5 +C [2.7 - 4.5 +F].''\217\
Additional warming could lead to ``significant extinctions
around the globe,'' including the loss of more than 40 percent
of all plant and animal species.\218\
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\217\Intergovernmental Panel on Climate Change, Climate Change
2007: Impacts, Adaptation and Vulnerability, Summary for Policy Makers
at 11 (2007).
\218\Intergovernmental Panel on Climate Change, Climate Change
2007: Impacts, Adaptation and Vulnerability, Summary for Policy Makers
at 16 (2007).
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The species most vulnerable to climate change have a
specialized habitat, a narrow environmental tolerance that is
likely to be exceeded due to climate change, and dependence on
specific environmental triggers or interactions that are likely
to be disrupted by climate change. The IPCC identifies ``coral
reefs, the sea-ice biome, and other high-latitude ecosystems
(e.g. boreal forests), mountain ecosystems and mediterranean-
climate ecosystems'' as the systems most vulnerable to the
impacts of climate change.\219\ One tragic and iconic example
is the polar bear. Polar bear populations are expected to
decline by 30 percent in the next 35 to 50 years--and to
disappear from Alaska altogether--due to disappearing habitat
resulting from global warming.\220\
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\219\Intergovernmental Panel on Climate Change, Climate Change
2007: Impacts, Adaptation and Vulnerability, Summary for Policymakers
at 214 (2007).
\220\See, e.g., Experts Predict Polar Bear Decline, Washington Post
(July 7, 2005) (online at http://www.washingtonpost.com/wp-dyn/content/
article/2005/07/06/AR2005070601899.html).
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NATIONAL SECURITY IMPACTS
The current and projected impacts of global warming have
serious national security consequences for the United States
and our allies, in many cases acting as ``threat multipliers.''
The security issues raised by global warming have received
increasing scrutiny in the last few years both in Congress and
in international venues, including a debate at the UN Security
Council in April 2007. The first-ever U.S. government analysis
of the security threats posed by global climate change was
issued in June 2008 as the National Intelligence Assessment
(NIA), National Security Implications of Global Climate Change
to 2030. The 2008 NIA was the result of a process initiated, in
part, by the introduction of H.R. 1961, the ``Climate Change
Security Oversight Act,'' which required the U.S. Intelligence
Community to analyze the national security implications of
global climate change. In addition, U.S. and European military
and security policy analysts have issued a number of public
reports exploring the security consequences of global warming
and potential responses. All of these reports emphasize
concerns over a few key security impacts, including migration,
water scarcity, infrastructure at risk from extreme weather,
and new economic routes and access to new energy resources. In
most cases, global warming is not creating ``new'' security
threats, but rather is acting as a ``threat multiplier.''\221\
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\221\House Committee on Energy and Commerce, Subcommittee on Energy
and Environment, Hearing on The American Clean Energy and Security Act
of 2009 (111th Cong.) (April 24, 2009) (online at http://
energycommerce.house.gov/Press_111/20090424/testimony_warner.pdf ).
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Numerous impacts of global warming could ultimately
increase both the temporary and permanent migration of people
inside and across existing national borders--increasing risks
of geopolitical instability. Nations dealing with an influx may
have neither the resources nor the desire to support climate
migrants. As in the past, movement of people into new territory
can increase the likelihood of conflict and the potential need
for intervention from U.S. and allied military forces.
Rising sea levels threaten low-lying island nations and
populous coastal areas. Even if not totally inundated, rising
sea levels can render these areas uninhabitable due to sea
water incursion into fresh water resources and increased
exposure to storms. For example, the risk of coastal flooding
in Bangladesh is growing and could force 30 million people to
search for higher ground in a country already known for
political violence. India is already building a wall along its
border with Bangladesh.\222\ The densely-populated and oil-rich
Niger Delta is already the scene of conflict over the sharing
of oil revenues. Land loss and increased risk of storms will
exacerbate these tensions as well as the challenge of
maintaining the existing oil infrastructure. Other important
economic and agricultural coastal areas, like Egypt's Nile
Delta and China's southeast coast, are also threatened from
rising sea-levels and severe storms. Similar impacts in Central
America and the Caribbean could add pressure to pre-existing
migration patterns from those areas to the United States.
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\222\The Gathering Storm, OnEarth (Summer 2008) (online at http://
www.onearth.org/article/the-gathering-storm?page=all).
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Increased water scarcity due to climate change exacerbates
the risk of conflict over water resources. As discussed above,
changing precipitation patterns and increasing temperatures are
likely to increase the risk of water scarcity and degraded
water quality in many areas. Security experts have long been
concerned about the prospects for conflict over water resources
in many regions of the developing world, which will be
exacerbated by climate change. Water scarcity will also
increase the pressure on groups to migrate to areas perceived
to have more resources.
Global warming is predicted to directly impact U.S.
military infrastructure at risk of damage from extreme weather
and melting permafrost. Infrastructure upgrades, repair and
replacement to increase resilience to global warming impacts,
and rebuilding after extreme weather events will be costly. For
example, the East and Gulf Coasts will be at increased risk
from storm surge, and U.S. naval shipbuilding facilities have
already been damaged by Hurricanes Katrina and Rita. Many
active U.S. coastal military installations around the world are
at a significant and increasing risk of damage from storm
surges and associated flooding and damages. For example, the
U.S. airbase at Diego Garcia in the Indian Ocean, which is
critical to operations in Iraq and the surrounding region, is
an average of four feet above sea level and is threatened by
sea level rise and storm surges.\223\
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\223\The CNA Corporation, National Security and the Threat of
Climate Change at 37 (2007) (online at http://
securityandclimate.cna.org/report/National percent20Security
percent20and percent20the percent20Threat percent20of percent20Climate
percent20Change.pdf).
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Changes in severe weather can also threaten energy
supplies, as demonstrated in the devastating hurricane season
in 2005. The paths of Hurricane Katrina and Hurricane Rita
passed through three-quarters of the oil platforms and two-
thirds of the natural gas platforms in the Gulf of Mexico and a
major concentration of refining capacity on land. Together they
destroyed more than a hundred offshore platforms and damaged
183 pipelines. More than 1.5 million barrels of oil and 10
billion cubic feet of natural gas production per day were taken
off-line for both hurricanes. Katrina also significantly
affected electricity supply with 2.7 million customers and
other critical infrastructure losing power.\224\ In Alaska,
melting permafrost and fewer days with
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\224\Senate Committee on Energy and Natural Resources, Testimony of
Secretary of Energy Samuel Bodman, Hurricanes Katrina and Rita, 109th
Cong. (Oct. 27, 2005). an adequate amount of snow for exploration
purposes could hinder oil production and transport of oil from fields
on the North Slope.
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Finally, accelerating melting of Arctic sea ice is
impacting the United States' strategic interests in the region.
Russia has moved to stake claim to more than 460,000 square
miles of territory, including areas with potential oil and
natural gas resources.\225\ With the opening of the Northwest
Passage for the first time in recorded history, the Prime
Minister of Canada announced his intention to increase his
country's military presence in the Arctic.\226\ Other
circumpolar nations, including the United States, have begun to
examine their potential claims on Arctic territory and identify
necessary preparations for increased maritime traffic in the
area.
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\225\Scott Borgerson, Arctic Meltdown: The Economic and Security
Implications of Global Warming, Foreign Affairs (Mar./Apr. 2008).
\226\Scott Borgerson, Arctic Meltdown: The Economic and Security
Implications of Global Warming, Foreign Affairs (Mar./Apr. 2008).
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THE ECONOMIC COSTS OF CLIMATE CHANGE
Climate change impacts of the types described above will
have staggering economic impacts in the United States and the
rest of the world in the coming decades. Measuring these
impacts in dollars is a unique challenge, requiring analysis of
local and global impacts, long time horizons, quantification of
risk and uncertainty, and capturing the possibility of tipping
points that induce major, catastrophic change. While the
variables are many and complex, estimates of potential economic
impacts are massive. The Stern Review--one of the most in-depth
and respected economic impact analyses on climate change
conducted thus far--used formal economic models to estimate
that unabated climate change will cost at least 5 percent of
global gross domestic product (GDP) each year.\227\ This
amounts to around $3.3 trillion per year at the current value
of the global economy.\228\ If a wider range of risks and
impacts is taken into account, the damages could rise to 20
percent of GDP or more annually over the next two centuries.
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\227\Nicholas Stern, Stern Review on The Economics of Climate
Change (2007) (online at http://www.hm-treasury.gov.uk/
stern_review_report.htm).
\228\CIA World Fact Book (online at https://www.cia.gov/library/
publications/the-world-factbook/geos/xx.html#Econ).
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In the United States, the economic impacts of climate
change are predicted to be felt throughout the country and
within all sectors of the economy. The greatest economic
impacts are predicted to stem from stress to fresh water supply
networks, changes to the agricultural sector, threats to
coastal infrastructure from storms and sea level rise, effects
on energy supply and demand, increased risk to human health,
and more frequent and extensive forest fires.\229\ Tourism and
other weather-dependent industries may be hit especially hard.
Modeling results from a recent Tufts University and Natural
Resources Defense Council study show that if present trends
continue, the total cost of four global warming impacts alone--
hurricane damage, real estate losses, energy costs, and water
costs--could cost the United States nearly $1.9 trillion
annually by 2100 (in constant 2008 dollars), or 1.8 percent of
U.S. GDP. Factoring in a wider range of harms such as health
impacts and wildlife damages, these costs could reach 3.6
percent of GDP annually in the United States by 2100.\230\
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\229\University of Maryland Center for Integrative Environmental
Research, The U.S. Economic Impacts of Climate Change and the Costs of
Inaction at 10-15 (October 2007) (online at http://dl.klima2008.net/
ccsl/us_economic.pdf).
\230\Natural Resources Defense Council, The Cost of Climate Change:
What We'll Pay if Global Warming Continues Unchecked at vi (May 2008)
(online at http://www.nrdc.org/globalwarming/cost/cost.pdf).
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IMPACTS ON VULNERABLE COMMUNITIES
Climate change is predicted to have devastating impacts on
the developing world, reversing gains in poverty reduction,
food security and nutrition, health, and basic services and
putting millions of lives at risk. Poor communities are
especially vulnerable because they have less capacity to adapt
to changes in climate and are more dependent on climate-
sensitive resources such as local water and food supplies.\231\
Increased exposure to drought and water scarcity, more intense
storms, floods, and other environmental pressures are projected
to reverse many of the recent gains in poverty alleviation
around the world, adding to the total of 2.6 billion people now
living on $2 a day or less. By the end of the century, an
additional 145-220 million people in South Asia and Sub Saharan
Africa could fall below the $2 per day poverty level as a
result of climate change impacts.\232\
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\231\Intergovernmental Panel on Climate Change, Climate Change
2007: Impacts, Adaptation and Vulnerability, Summary for Policymakers
at 7, 22 (2007).
\232\Nicholas Stern, Stern Review on The Economics of Climate
Change at 55 (2007) (online at http://www.hm-treasury.gov.uk/
stern_review_report.htm).
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Poor communities and communities of color within the United
States are vulnerable to climate change impacts as well, and
suffer disproportionately from illnesses due to the social
determinants of health. As Hurricane Katrina demonstrated,
poorer communities are especially vulnerable to extreme weather
events. Poorer communities and communities of color are also
more vulnerable to public health impacts of climate change.
Today, more than 70 percent of African Americans live in
counties in violation of federal air pollution standards.\233\
As a result, African Americans are nearly three times as likely
to be hospitalized or killed by asthma.\234\ In Harlem, New
York, 25 percent of children now have asthma.\235\ Latinos--66
percent of whom live in areas that violate federal air quality
standards--face disproportionate health impacts as well.\236\
These impacts are exacerbated by their disproportionate lack of
health insurance and lower utilization of health services
compared with both non-Hispanic whites and African Americans.
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\233\Congressional Black Caucus Foundation, Climate Change and
Extreme Weather Events: An Unequal Burden on African Americans (Sept.
2005) (online at http://www.cbcfinc.org/pdf/
climatechange_issuebrf.pdf).
\234\Environmental Justice and Climate Change Initiative, Climate
of Change: African Americans, Global Warming, and a Just Climate Policy
for the U.S. at 2 (2008) (online at http://www.ejcc.org/
climateofchange.pdf).
\235\Study Finds Asthma in 25 percent of Children in Central
Harlem, New York Times (April 19, 2003).
\236\Natural Resources Defense Council, Hidden Danger:
Environmental Health Threats in the Latino Community, at vii, 14 (Oct.
2004) (online at http://www.nrdc.org/health/effects/latino_english/
latino--en.pdf).
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Vulnerable Alaskans are already dealing with the harsh
reality of global warming. According to the U.S. Army Corps of
Engineers, at least three Alaskan villages--Shishmaref,
Kivalina, and Newtok--will be lost to coastal erosion due to
rising sea levels in the next 8 to 13 years.\237\ With flooding
and erosion currently affecting 184 out of 213, or 86 percent,
of Alaska Native villages to some extent,\238\ the number of
villages needing major assistance is likely to increase. The
cost of saving these villages through either man-made erosion
protection or total community relocation could be up to $200
million or more per village.\239\
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\237\U.S. Army Corps of Engineers, Alaska Village Erosion Technical
Assistance Program (April 2006) (online at http://housemajority.org/
coms/cli/AVETA_Report.pdf).
\238\Government Accountability Office, Alaska Native Villages (June
29, 2004) (GAO-04-895T) (online at http://www.gao.gov/new.items/
d04895t.pdf).
\239\U.S. Army Corps of Engineers, Alaska Village Erosion Technical
Assistance Program (April 2006) (online at http://housemajority.org/
coms/cli/AVETA_Report.pdf).
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International Climate Negotiations
Because a global effort will be required to protect the
planet from the looming climate crisis, the Committee crafted
this legislation with an international treaty in mind. A
December 2007 meeting in Bali, Indonesia in December 2007
established a ``roadmap'' for future negotiations, which calls
for the completion of such an agreement to govern international
global warming pollution reduction efforts at the Fifteenth
Conference of the Parties to the United Nations Framework
Convention on Climate Change at Copenhagen in December 2009.
UNITED NATIONS FRAMEWORK CONVENTION ON CLIMATE CHANGE
In 1992, the United Nations convened 172 nations at the
Earth Summit in Rio de Janeiro for the first attempt of
governments to fundamentally address global warming. From the
summit, the United Nations Framework Convention on Climate
Change (UNFCCC) emerged. It came into effect in 1994 and was
ultimately ratified by 192 nations, including the United
States. The Convention set the ultimate objective of
stabilizing atmospheric greenhouse gas concentrations at safe
levels and incorporated a voluntary initial goal that
industrialized countries should take the lead in tackling the
problem by cutting their emissions to 1990 levels by 2000.
THE KYOTO PROTOCOL
In 1995, the first meeting of the Conference of the Parties
(COP) to the UNFCCC adopted the Berlin Mandate, which called
for the negotiation of a new agreement that would augment the
UNFCCC with stricter demands for reducing emissions. This led
to the development of the Kyoto Protocol, which was signed in
1997 by 84 countries. The Protocol set mandatory targets for
the reduction of greenhouse gas emissions from the world's
developed countries by an average of 5.2 percent below 1990
levels between 2008 and 2012. Ultimately 175 countries--
including virtually all developed countries other than the
United States and Australia--ratified the Protocol, which
officially entered into force in February 2005. Australia
ratified the Protocol in December 2007, leaving the United
States as the only industrialized country that has not done so.
Kyoto establishes a cap-and-trade system that allows
developed countries to meet their commitments through trading
of marketable credits under the International Emissions Trading
System (IET). Kyoto's other ``flexibility mechanisms''--Joint
Implementation (JI) and the Clean Development Mechanism (CDM)--
allow developed countries to meet their emissions targets in
part through the purchase of tradable offset credits generated
by emission reduction projects in other countries. Through this
array of market-based mechanisms, the Kyoto Protocol laid the
groundwork for what has become known as the global ``carbon
market.''
UNITED NATIONS CLIMATE CHANGE CONFERENCE IN BALI, INDONESIA
From December 3-15, 2007, representatives from more than
180 countries met in Bali, Indonesia for the thirteenth
conference of the parties to the UNFCCC. The principal item on
the agenda was the development of a ``roadmap'' for the
negotiation of a new global climate change agreement governing
the period after 2012, when the Kyoto Protocol's commitment
period ends.
The Bali Action Plan--the ``roadmap'' agreement reached at
the conference--calls upon the parties to negotiate a new
agreement to be adopted at the Fifteenth Conference of the
Parties, to be held in Copenhagen, Denmark in December
2009.\240\ The roadmap recognizes the findings of the IPCC's
2007 Fourth Assessment Report that global warming is
unequivocal and that delay in reducing emissions increases the
risk of severe climate change impacts and decreases the
opportunity to achieve lower stabilization levels of greenhouse
gases. The agreement further recognizes that ``deep cuts in
global emissions will be required'' to avoid dangerous impacts
from climate change and emphasizes the IPCC's findings
regarding the ``urgency to address climate change''--referring
in a footnote to the IPCC's conclusions regarding the range of
emission reductions required to meet certain atmospheric
greenhouse gas stabilization targets.
---------------------------------------------------------------------------
\240\Decision 1/CP.13, ``Bali Action Plan,'' available at http://
unfccc.int/resource/docs/2007/cop13/eng/06a01.pdf#page=3.
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The roadmap identifies four major pillars of climate policy
as the basis for future negotiations: mitigation, adaptation,
technology development and transfer, and financial resources
and investment. With regard to mitigation, the agreement calls
for consideration of actions by both developed and developing
countries. For developed countries, the roadmap calls for
consideration of ``measurable, reportable, and verifiable
nationally appropriate mitigation commitments or actions,
including quantified emission limitation and reduction
objectives.'' The roadmap also included developing countries in
the mitigation agreement for the first time. Developing nations
agreed to consider ``nationally appropriate mitigation
actions'' that are ``measurable, reportable and verifiable'' so
long as they are supported by ``measurable, reportable and
verifiable'' support in the form of technology transfer,
financing, and capacity-building. In addition, the roadmap
calls, among other things, for consideration of enhanced action
on adaptation to climate change, technology transfer to
developing countries, and financial support for mitigation and
adaptation activities in developing countries.
Legislative History
During the 110th Congress, the House Committee on Energy
and Commerce held dozens of hearings on energy and climate
change policy that have built a detailed, factual record
regarding the need for energy and climate change legislation.
These hearings examined the scientific understanding of climate
change, the views of various stakeholders, promising clean
energy and environmental technologies and other policy-relevant
issues.\241\ The Committee also released four white papers
discussing various aspects of climate legislation.\242\ In
October 2008, Chairman John D. Dingell and Subcommittee on
Environment and Air Quality Chairman Rick Boucher released a
discussion draft of climate legislation.
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\241\Subcommittee on Energy and Air Quality, Hearing on Addressing
Climate Change--Views from Private Sector Panels (Feb. 13, 2007);
Subcommittee on Energy and Air Quality, Hearing on A Review of the
Administration's Proposal for the Transportation Sector (Feb. 28,
2007); Subcommittee on Energy and Air Quality, Hearing on Carbon
Capture and Sequestration: An Overview (Mar. 6, 2007); Subcommittee on
Energy and Air Quality, Hearing on Climate Change: Are Greenhouse Gas
Emissions from Human Activities Contributing to a Warming of the
Planet? (Mar. 7, 2007); Subcommittee on Energy and Air Quality, The
Environmental Protection Agency's Fiscal Year 2008 Budget Request (Mar.
8, 2007); Subcommittee on Energy and Air Quality, Hearing on Climate
Change and Energy Security: Perspectives from the Automobile Industry
(Mar. 14, 2007); Subcommittee on Energy and Air Quality, Hearing on
Climate Change: State and Local Perspectives (Mar. 15, 2007);
Subcommittee on Energy and Air Quality, Hearing on Climate Change:
Perspectives of Utility CEOs (Mar. 20, 2007); Subcommittee on Energy
and Air Quality, Hearing on Perspectives on Climate Change (Mar. 21,
2007); Subcommittee on Energy and Air Quality, Hearing on Climate
Change--International Issues, Engaging Developing Countries (Mar. 27,
2007); Subcommittee on Energy and Air Quality, Hearing on Climate
Change--Lessons Learned from Existing Cap-and-Trade Programs (Mar. 29,
2007); Subcommittee on Energy and Air Quality, Hearing on Alternative
Transportation Fuels: An Overview (Apr. 18, 2007); Subcommittee on
Energy and Air Quality, Hearing on Implementation of the EPACT 2005
Loan Guarantee Programs by the Department of Energy (Apr. 24, 2007);
Subcommittee on Energy and Air Quality, Hearing on Achieving--At Long
Last--Appliance Efficiency Standards (May 1, 2007); Subcommittee on
Energy and Air Quality, Hearing on Facilitating the Transition to a
Smart Electric Grid (May 3, 2007); Subcommittee on Energy and Air
Quality, Hearing on Alternative Fuels: Current Status, Proposals for
New Standards, and Related Infrastructure Issues (May 8, 2007);
Subcommittee on Energy and Air Quality, Hearing on Legislative Hearing
on Discussion Drafts concerning Energy Efficiency, Smart Electricity
Grid, Energy Policy Act of 2005 Title XVII Loan Guarantees, and Standby
Loans for Coal-to-Liquids Projects (May 24, 2007); Subcommittee on
Energy and Air Quality, Hearing on Legislative Hearing on Discussion
Draft Concerning Alternative Fuels, Infrastructure, and Vehicles (June
7, 2007); Subcommittee on Energy and Air Quality, Hearing on
Administration Perspectives on United Nations Climate Change Conference
in Bali (Jan. 17, 2008); Subcommittee on Energy and Air Quality,
Hearing on Climate Change: Competitiveness Concerns and Prospects for
Engaging Developing Countries (Mar. 5, 2008); Subcommittee on Energy
and Air Quality, Hearing on Strengths and Weaknesses of Regulating
Greenhouse Gas Emissions Using Existing Clean Air Act Authorities (Apr.
10, 2008); Subcommittee on Energy and Air Quality, Hearing on The
Renewable Fuels Standard: Issues, Implementation, and Opportunities
(May 6, 2008); Subcommittee on Energy and Air Quality, Hearing on
Legislative Proposals to Reduce Greenhouse Gas Emissions: An Overview
(June 19, 2008); Subcommittee on Energy and Air Quality, Hearing on
Climate Change: Costs of Inaction (June 26, 2008); Subcommittee on
Energy and Air Quality, Hearing on H.R. 6258, the Carbon Capture and
Storage Early Deployment Act (July 10, 2008); Subcommittee on Energy
and Air Quality, Hearing on Climate Benefits of Improved Building
Energy Efficiency (July 17, 2008); Subcommittee on Environment and
Hazardous Materials, Carbon Sequestration: Risks, Opportunities, and
Protection of Drinking Water (July 24, 2008).
\242\Committee on Energy and Commerce, Scope of a Cap-and-Trade
Program (Oct. 3, 2007); Committee on Energy and Commerce,
Competitiveness Concerns/Engaging Developing Countries (Jan. 31, 2008);
Committee on Energy and Commerce, Appropriate Roles for Different
Levels of Government (Feb. 25, 2008); Committee on Energy and Commerce,
Getting the Most Greenhouse Gas Reductions for Our Money (May 27,
2008).
---------------------------------------------------------------------------
The first hearing held by the Committee in the 111th
Congress focused on climate change and a legislative proposal
put forward by the U.S. Climate Action Partnership, a coalition
of industry and environmental organizations.\243\ The
Subcommittee on Energy and Environment had an aggressive
hearing schedule--holding eight hearings in a six-week period:
---------------------------------------------------------------------------
\243\Committee on Energy and Commerce, Hearing on the U.S. Climate
Action Partnership (Jan. 15, 2009).
---------------------------------------------------------------------------
Subcommittee on Energy and the Environment,
Hearing on The Climate Crisis: National Security, Economic, and
Public Health Threats (Feb. 12, 2009);
Subcommittee on Energy and the Environment,
Hearing on Energy Efficiency: Complementary Policies for
Climate Legislation (Feb. 24, 2009);
Subcommittee on Energy and the Environment,
Hearing on Renewable Energy: Complementary Policies for Climate
Legislation (Feb. 26, 2009);
Subcommittee on Energy and the Environment,
Hearing on the Role of Offsets in Climate Legislation (Mar. 5,
2009);
Subcommittee on Energy and the Environment,
Hearing on the Future of Coal Under Climate Legislation (Mar.
10, 2009);
Subcommittee on Energy and the Environment,
Hearing on Consumer Protection Provisions in Climate
Legislation (Mar. 12, 2009);
Subcommittee on Energy and the Environment,
Hearing on Competitiveness and Climate Policy: Avoiding Leakage
of Jobs and Emissions (Mar. 18, 2009); and
Subcommittee on Energy and the Environment,
Hearing on Preparing for Climate Change: Adaptation Policies
and Programs (Mar. 25, 2009).
The Subcommittee also convened informal sessions to engage
in discussion with leaders from the international community. On
March 4, 2009, the Subcommittee held a briefing on
international climate negotiations and policy with the U.K.
Minister of Energy and Climate Change Ed Miliband and the
Danish Minister of Climate and Energy Connie Hedegaard. Also,
on March 18, 2009, the Subcommittee hosted a briefing by the
Secretary-General of the United Nations Ban Ki-moon. The
Secretary-General informed the Subcommittee about his views on
the importance of addressing climate change and the status of
the international climate negotiations.
On March 31, 2009, Chairman Henry A. Waxman and
Subcommittee Chairman Edward J. Markey released a discussion
draft of the American Clean Energy and Security Act of 2009.
Committee staff subsequently briefed more than 300 diverse
entities and organizations about the legislation. Participants
in Committee briefings represented the broad array of
stakeholders interested in and affect by energy and climate
legislation, including representatives of the electricity
industry, manufacturers, refiners, agricultural and forestry
interests, labor, environmental advocacy groups, faith groups,
and state and local governments.
From April 21 to 24, 2009, the Committee held four days of
legislative hearings on the discussion draft. Nearly 70
witnesses testified, including former Vice President Al Gore
and former Speaker of the House Newt Gingrich. The legislation
was available for review by both majority and minority
Committee members, as well as outside experts and the public,
for nearly seven weeks prior to Committee markup. On May 15,
2009, Chairman Waxman and Subcommittee Chairman Markey
introduced H.R. 2454, the ``American Clean Energy and Security
Act of 2009''.
Committee Consideration
On Monday, May 18, 2009, Tuesday, May 19, 2009, Wednesday,
May 20, 2009, and Thursday, May 21, 2009, the full Committee
met in open markup session to consider H.R. 2454. During the 4
days of markup, there were 96 amendments offered of which 36
amendments were adopted. On May 21, 2009, the Committee ordered
H.R. 2454 favorably reported to the House, amended.
Committee Votes
Clause 3(b) of rule XIII of the Rules of the House of
Representatives requires the Committee to list the record votes
on the motion to report legislation and amendments thereto. A
motion by Mr. Markey to order H.R. 2454 favorably reported to
the House, amended, was agreed to by a record vote of 33 yeas
and 25 nays. The following is the recorded votes taken during
Committee consideration, including the names of those Members
voting for and against:
Application of Law to the Legislative Branch
The Committee finds that the legislation does not relate to
the terms and conditions of employment or access to public
services or accommodations within the meaning of section
102(b)(3) of the Congressional Accountability Act of 1985.
Statement of Oversight Findings and Recommendations of the Committee
In accordance with clause 3(c)(1) of rule XIII and clause
(2)(b)(1) of rule X of the Rules of the House of
Representatives, the Committee's oversight findings and
recommendations are reflected in the descriptive portions of
this report.
Statement of General Performance Goals and Objectives
In accordance with clause 3(c)(4) of rule XIII of the Rules
of the House of Representatives, the Committee's performance
goals and objectives are reflected in the descriptive portions
of this report.
Constitutional Authority Statement
Pursuant to 3(d)(1) of rule XIII of the Rules of the House
of Representatives, the Committee finds that the constitutional
authority for this legislation is provided in Article I,
Section 8, Clause 18 of the Constitution of the United States.
Advisory Committee Statement
The Committee finds that the legislation establishes or
authorizes the establishment of advisory committees within the
definition of 5 U.S.C. App., Section 5(b). Section 186 of the
bill establishes an Energy Technology Advisory Council to
advise the Clean Energy Deployment Administration established
by the bill. The Committee finds this advisory committee is
needed to assist the CEDA in evaluating clean energy technology
issues and deployment goals. Section 194 establishes a consumer
advocacy advisory board. The Committee finds this advisory
committee is needed to make recommendations on rates, services,
and disputes to the Director of the Federal Energy Regulatory
Commission Office of Consumer Advocacy. Section 464 establishes
a science advisory board that the Committee finds is necessary
to advise the Secretary of Health and Human Services on public
health issues relating to climate change and the best science
available for purposes of issuing a national strategic action
plan. Section 477 establishes a science advisory board that the
Committee finds is necessary to advise the Secretaries of
Commerce and the Interior on state of the science regarding the
impacts of climate change and ocean acidification on natural
resources.
Federal Mandates Statement
The Committee adopts as its own the estimate of Federal
mandates prepared by the Director of the Congressional Budget
Office pursuant to section 423 of the Unfunded Mandates Reform
Act.
Earmarks and Tax and Tariff Benefits
H.R. 2454 does not include any congressional earmarks,
limited tax benefits, or limited tariff benefits as defined in
clause 9(d), 9(e), or 9(f) of rule XXI.
Committee Cost Estimate
The Committee adopts as its own the cost estimate on H.R.
2454 prepared by the Director of the Congressional Budget
Office pursuant to section 402 of the Congressional Budget Act.
New Budget Authority, Entitlement Authority, and Tax Expenditures
Regarding compliance with clause 3(c)(2) of rule XIII of
the Rules of the House of Representatives, the Committee adopts
as its own the estimate prepared by the Director of the
Congressional Budget Office pursuant to section 402 of the
Congressional Budget Act of 1974.
Congressional Budget Office Cost Estimate
Pursuant to clause 3(c)(3) of rule XIII of the Rules of the
House of Representatives, the following is the cost estimate on
H.R. 2454 provided by the Congressional Budget Office pursuant
to section 402 of the Congressional Budget Act of 1974:
U.S. Congress,
Congressional Budget Office,
Washington, DC, June 5, 2009.
Hon. Henry A. Waxman,
Chairman, Committee on Energy and Commerce,
House of Representatives, Washington, DC.
Dear Mr. Chairman: The Congressional Budget Office has
prepared the enclosed cost estimate for H.R. 2454, the American
Clean Energy and Security Act of 2009.
If you wish further details on these estimates, we will be
pleased to provide them. The CBO staff contact is Susanne S.
Mehlman.
Sincerely,
Douglas W. Elmendorf.
Enclosure.
H.R. 2454--American Clean Energy and Security Act of 2009
Summary: H.R. 2454 would make a number of changes in energy
and environmental policies largely aimed at reducing emissions
of gases that contribute to global warming. The bill would
limit or cap the quantity of certain greenhouse gases (GHGs)
emitted from facilities that generate electricity and from
other industrial activities over the 2012-2050 period. The
Environmental Protection Agency (EPA) would establish two
separate regulatory initiatives known as cap-and-trade
programs--one covering emissions of most types of GHGs and one
covering hydrofluorocarbons (HFCs). EPA would issue allowances
to emit those gases under the cap-and-trade programs. Some of
those allowances would be auctioned by the federal government,
and the remainder would be distributed at no charge.
Other major provisions of the legislation would:
Provide energy tax credits or energy rebates
to certain low-income families to offset the impact of
higher energy-related prices from the cap-and-trade
programs;
Require certain retail electricity suppliers
to satisfy a minimum percentage of their electricity
sales with electricity generated by facilities that use
qualifying renewable fuels or energy sources;
Establish a Carbon Storage Research
Corporation to support research and development of
technologies related to carbon capture and
sequestration;
Increase, by $25 billion, the aggregate
amount of loans DOE is authorized to make to automobile
manufacturers and component suppliers under the
existing Advanced Technology Vehicle Manufacturing Loan
Program;
Establish a Clean Energy Deployment
Administration (CEDA) within the Department of Energy
(DOE), which would be authorized to provide direct
loans, loan guarantees, and letters of credit for clean
energy projects;
Authorize the Department of Transportation
(DOT) to provide individuals with vouchers to acquire
new vehicles that achieve greater fuel efficiency than
the existing qualifying vehicles owned by the
individuals; and
Authorize appropriations for various
programs under EPA, DOE, and other agencies.
CBO and the Joint Committee on Taxation (JCT) estimate that
over the 2010-2019 period enacting this legislation would:
Increase federal revenues by about $846
billion; and
Increase direct spending by about $821
billion.
In total, those changes would reduce budget deficits (or
increase future surpluses) by about $24 billion over the 2010-
2019 period.
In addition, assuming appropriation of the necessary
amounts, CBO estimates that implementing H.R. 2454 would
increase discretionary spending by about $50 billion over the
2010-2019 period. Most of that funding would stem from spending
auction proceeds from various funds established under this
legislation.
CBO has determined that the non-tax provisions of H.R. 2454
contain intergovernmental and private-sector mandates as
defined in the Unfunded Mandates Reform Act (UMRA). Several of
those mandates would require utilities, manufacturers, and
other entities to reduce greenhouse gas emissions through cap-
and-trade programs and performance standards. CBO estimates
that the cost of mandates in the bill would well exceed the
annual thresholds established in UMRA for intergovernmental and
private-sector mandates (in 2009, $69 million and $139 million
respectively, adjusted annually for inflation).
PAGE REFERENCE GUIDE TO CBO COST ESTIMATE FOR H.R. 2454
Sections
Page
Major Provisions................................................. 360
Basis of Estimate
Budgetary Treatment of Allowances, RECs, and Offset Credits.. 366
Revenues Resulting from Cap-and-Trade Programs............... 367
Other Revenues............................................... 374
Direct Spending.............................................. 377
Spending Subject to Appropriation............................ 382
Provisions with Budgetary Impacts That Begin After 2019.......... 388
Intergovernmental and Private-Sector Impact...................... 388
Tables
1. GHG Emission Allowances Under H.R. 2454 and the Percentage
Auctioned and Freely Allocated................................. 362
2. Estimated Budgetary Impact of H.R. 2454....................... 365
3. CBO Estimates of Allowance Prices Under H.R. 2454............. 368
4. Estimated Changes in Revenues and Direct Spending Under H.R.
2454........................................................... 379
5. Estimated Spending Subject to Appropriation Under H.R. 2454... 383
Common Abbreviations Used in the Cost Estimate
CCS = Carbon capture and sequestration
CO2 = Carbon dioxide
CEDA = Clean Energy Development Administration
CFC = Chlorofluorocarbon
mtCO2e = Metric ton of carbon dioxide equivalent
GHG = Greenhouse gas
HFC = Hydrofluorocarbon
MWh = Megawatt hour
REC = Renewable electricity credit
RES = Renewable electricity standard
MAJOR PROVISIONS
The major provisions of H.R. 2454 are described in the
following sections.
CAP-AND-TRADE PROGRAMS FOR GREENHOUSE GASES
This legislation would designate as GHGs: carbon dioxide,
methane, nitrous oxide, sulfur hexafluoride, perfluorocarbons,
nitrogen trifluoride, and HFCs from a chemical manufacturing
process at a stationary industrial source. EPA would be
required to establish two cap-and-trade programs aimed at
reducing the emission of GHGs in the United States over the
2012-2050 period. One program would cover emissions of GHGs
other than HFCs. A second program would cover the production
and importation of HFCs and the importation of products
containing HFCs. (Although HFCs are considered to be greenhouse
gases, this cost estimate will subsequently refer to the larger
program as the GHG cap-and-trade program and the smaller
program specific to HFCs as the HFC cap-and-trade program).
A cap-and-trade program is a regulatory policy aimed at
controlling pollution emissions from specific sources. The
legislation would set a limit on total emissions for each year
and would require regulated entities to hold rights, or
allowances, to the emissions permitted under that cap. Each
allowance would entitle companies to emit the equivalent of one
metric ton of carbon dioxide equivalent (mtCO2e).\1\
After the allowances for a given period were distributed,
entities would be free to buy and sell allowances.
---------------------------------------------------------------------------
\1\A carbon dioxide equivalent is defined for each GHG as the
quantity of that gas that makes the same contribution to global warming
as one metric ton of carbon dioxide, as determined by EPA.
---------------------------------------------------------------------------
ENTITIES COVERED BY CAP-AND-TRADE PROGRAMS
Based on information from EPA, CBO estimates that about
7,400 facilities would be affected by the cap-and-trade
programs established by the bill. The specific details
regarding coverage, attribution of emissions to covered
entities, and the timing of implementation vary by type of
entity and sector of the economy:
Beginning in 2012, all electricity
generators would be required to submit allowances for
all GHG emissions from their sites, with the exception
of emissions from the combustion of liquid fuels, coke,
and renewable biomass;
Also beginning in 2012, any facility or
entity that produces or imports petroleum- or coal-
based liquids, petroleum coke, or natural gas liquids
would be required to submit allowances for the GHG
emissions that would result from the combustion of
those fuels, if combustion of the fuel resulted in the
emission of more than 25,000 mtCO2e per
year. Similarly, all facilities or entities that
produce or import GHGs for direct use would be required
to submit allowances for the emissions that would
result when those gases were released into the
atmosphere. Emissions from sites that geologically
sequester CO2 also would be covered
beginning in 2012;
Beginning in 2014, industrial facilities
that manufacture a wide variety of products or that
burn fossil fuels would be required to submit
allowances for all GHG emissions from their sites--with
the exception of emissions from the combustion of
various types of liquid fuels, coke, and renewable
biomass--if their activities result in more than 25,000
mtCO2e of emissions;
Beginning in 2016, natural gas distributors
that deliver at least 460 million cubic feet of natural
gas to customers that are not covered by the cap-and-
trade provisions of the bill would need to submit
allowances for the GHG emissions that would result from
the combustion of the gas delivered to those customers;
and
Under a separate cap, beginning in 2012,
producers and importers of HFCs, and importers of
products containing HFCs, would be required to submit
allowances for the carbon dioxide-equivalent tons of
HFC they produce or import.
According to CBO's estimates, the programs would cover
about 72 percent of U.S. emissions of GHGs in 2012, about 78
percent in 2015, and about 86 percent in 2020.
OPERATION OF THE GHG CAP-AND-TRADE PROGRAM
H.R. 2454 would not restrict the types of entities or
individuals who could purchase, hold, exchange, or retire
emission allowances under the GHG cap-and-trade program. An
unlimited number of allowances obtained in one year could be
saved or ``banked'' by market participants indefinitely to be
used or sold in future years. Limited borrowing of allowances
(that is, the use in one year of an allowance that has been
established for use in a future year) also would be permitted.
The program would allocate to covered entities 4,627 million
mtCO2e allowances in 2012--about 97 percent of the
amount of such emissions by covered entities in 2005. The
number of allowances would increase to as high as 5,482 million
mtCO2e in 2016 to account for certain covered
entities that would not begin compliance until that time, and
then decline by 100 million to 150 million mtCO2e
per year--falling to 1,035 million mtCO2e in 2050,
about 14 percent of projected emissions from covered entities
in the absence of and regulation of such emissions.
The legislation also would require EPA to create a
``strategic reserve'' of about 2.7 billion allowances by
setting aside a small number of allowances authorized to be
issued each year. EPA would auction allowances from its
strategic reserve only if the market price of allowances rose
to unexpectedly high levels.
A portion of an entity's compliance obligation under the
bill could be met by purchasing domestic or international
``offsets'' in lieu of purchasing an allowance. An offset would
be created by activities (as certified by EPA) that are not
directly related to the emissions of the facilities covered
under the bill, but would reduce GHG emissions or increase the
amount of such gases that are captured from the atmosphere and
stored (this process is referred to as sequestration). Examples
of such offset activities include reducing emissions of methane
gas from solid waste landfills, sequestering GHGs on
agricultural lands, rangelands, and forests, altering
agricultural tillage practices, planting winter crops, and
reducing the use of nitrogen fertilizer. Under the bill, such
offsets could occur domestically or in another country if the
United States is a party to a bilateral or multilateral
agreement or arrangement with the relevant country. Those
international agreements or arrangements would specify the
types of qualifying projects and methods for verifying the
validity of offset activities. Covered entities could also
purchase GHG emission allowances established by other countries
or international organizations if approved by EPA.
The cap for the GHG cap-and-trade program would take effect
in 2012. Of the emission allowances established for this
program less the amount set aside for the strategic reserve
(4,581 million mtCO2e in 2012), 29.6 percent would
initially be auctioned for sale from that vintage year (that
is, the calendar year for which an allowance is established) to
covered industries and other entities that wish to purchase
them. Auctions would occur four times a year, with the first
auction occurring no later than March 31, 2011. Emission
allowances not specified for auction in the bill would be
distributed free of charge to covered entities, states, and
other specified recipients, who could then retire, sell, or use
such allowances to meet the annual obligation for their own
emissions. The percentage of emission allowances auctioned and
freely allocated by vintage years 2012 through 2019 is provided
in Table 1. By 2022, the percentage of allowances auctioned
would increase to 18.4 percent and gradually increase to about
70 percent in 2031 and remain at that level through 2050.
TABLE 1--GHG EMISSION ALLOWANCES UNDER H.R. 2454 AND THE PERCENTAGE AUCTIONED AND FREELY ALLOCATED
----------------------------------------------------------------------------------------------------------------
By vintage year--
---------------------------------------------------------------
2012 2013 2014 2015 2016 2017 2018 2019
----------------------------------------------------------------------------------------------------------------
Quantity of Emission Allowances Less Amount 4,581 4,499 5,048 4,953 5,427 5,321 5,216 5,110
Available for Strategic Reserve (In millions of
metric tons)...................................
Percentage Auctioned............................ 29.6 29.6 17.9 17.9 17.5 17.5 17.5 17.5
Percentage Freely Allocated..................... 70.4 70.4 82.1 82.1 82.5 82.5 82.5 82.5
----------------------------------------------------------------------------------------------------------------
Note: Vintage year is the calendar year for which an allowance is established.
Operation of the HFC cap-and-trade program
Beginning in 2012, producers and importers of HFCs as well
as importers of products containing HFCs would be required to
submit to EPA a consumption allowance or a destruction offset
credit for each carbon dioxide-equivalent ton of HFC. EPA would
be authorized to issue destruction offset credits to producers
and importers of HFCs if those entities perform or arrange for
the recovery and destruction of chlorofluorocarbons (CFCs) from
products or equipment already in use in the United States. The
allowances available would steadily decline from 90 percent of
the baseline use of HFCs (defined in the legislation as the
average annual consumption of HFCs plus the average annual
quantity of HFCs contained in imported products over the 2004-
2006 period) to 15 percent of that baseline after 2032.
Destruction offset credits could be used by producers and
importers to satisfy a portion of the requirement to submit
consumption allowances.
The bill would allow entities to bank an unlimited number
of HFC allowances for future use. In contrast to the GHG cap-
and-trade program, only those entities that produce and import
HFCs or import products containing HFCs would be permitted to
purchase an allowance directly from EPA, although EPA would
have the authority to establish certain exceptions. (The
legislation, however, would not restrict which entities could
hold, sell, transfer, exchange, or retire consumption
allowances in any secondary market for HFC allowances.)
All of the consumption allowances established for the HFC
cap-and-trade program would be either auctioned or offered
through a fixed-price sale to producers and importers of HFCs
and products containing HFCs. The legislation specifies how the
HFC allowance price would be calculated for certain auctions
and for all fixed-price sales.
Refundable low-income energy tax credit and energy rebate program
The bill would create a new refundable energy tax credit
and rebate program aimed at offsetting the impact of the GHG
cap-and-trade program on energy prices faced by low-income
families. The credit would be based on the average loss of
purchasing power for the poorest fifth of people caused by
higher prices for energy and other goods. The credit would vary
with family size, based on the average spending for families of
different sizes at the bottom of the income scale. The credit
amount would be calculated using the share of total
expenditures made by those families, the GHG intensity of that
spending, the amount of other relief provided to consumers
under the bill, and how much of recipients' reduced purchasing
power would be automatically offset by federal cost-of-living
adjustments in other federal benefit programs.
Combined energy efficiency and renewable electricity standard (RES)
H.R. 2454 would require that, starting in 2012, certain
retail electricity suppliers provide a minimum percentage of
their electricity sales from electricity generated by
facilities that use qualifying renewable fuels or energy
sources. That percentage would be measured relative to the
portion of a supplier's base sales of electricity generated
from sources specified in the bill and would need to equal or
exceed 6 percent of such sales by each covered supplier in 2012
and increase to 20 percent by 2020. To meet the RES
requirement, suppliers would have to generate their own
qualifying renewable power, purchase renewable energy credits
(RECs) from other firms, or make alternative compliance
payments to the state in which they operate. Upon request from
a state government, electricity suppliers in that state could
satisfy up to 40 percent of their RES compliance obligation by
demonstrating a reduction in their customers' electricity
consumption through qualified energy-efficiency projects
initiated after the date of the bill's enactment.
Under the bill, one federal REC would be created for each
megawatt hour (MWh) of electricity generated from a renewable
energy source (for example, wind, solar, or geothermal). RECs
could be traded on a secondary market, enabling firms in
regions where renewable energy sources are scarce or relatively
expensive to purchase credits generated in regions with an
excess supply of RECs. In the event an electricity supplier
does not have the requisite number of RECs or sufficient
reductions in customers' electricity consumption to comply with
the proposed standard, such entities could choose to remit, to
the state in which they operate, alternative compliance
payments equal to $25 per MWh needed to meet the suppliers'
compliance requirement (those payments would be adjusted
annually for inflation). The legislation would require states
to use any amounts received from alternative compliance
payments to support the deployment of technologies to generate
renewable energy and the implementation of energy-efficiency
programs.
Carbon Storage Research Corporation
The legislation would authorize utilities that distribute
electricity generated from fossil fuels to establish, subject
to approval in a referendum by members of the electricity
distribution industry, a Carbon Storage Research Corporation.
The corporation would levy annual assessments on distribution
utilities based on certain electricity deliveries to retail
consumers. Assessments would total between $1.0 billion and
$1.1 billion annually and would support research and
development of technologies related to carbon capture and
sequestration (CCS). Although formation of the corporation
would be voluntary, once it was created, assessments would be
compulsory, enforced by the federal government's sovereign
authority. Therefore, CBO believes the corporation should be
considered governmental in nature and all of its activities
should be included in the federal budget.
Loans to manufacturers of advanced technology vehicles
H.R. 2454 would increase the amount of direct loans the DOE
is authorized to provide under section 136 of the Energy
Independence and Security Act (EISA). That act authorizes DOE
to provide up to $25 billion in loans to automobile
manufacturers and component suppliers to support capital
investments in facilities designed to produce vehicles with
greater fuel efficiency and reduced emissions. H.R. 2454 would
amend EISA to authorize DOE to provide up to $50 billion in
loans. Under the Credit Reform Act of 1990, any spending for
the additional $25 billion in loans authorized under H.R. 2454
would be subject to appropriation.
Clean Energy Deployment Administration
H.R. 2454 would establish a Clean Energy Deployment
Administration (CEDA) within DOE, which would be authorized to
provide direct loans, loan guarantees, and letters of credit
for privately sponsored projects using clean energy
technologies. Such assistance would be available for
investments in the energy, transportation, manufacturing,
commodities, residential, commercial, and financial services
sectors. The bill also would modify the terms of an existing
loan-guarantee program administered by DOE.
Implementing this provision would affect discretionary
spending. Under the Credit Reform Act, commitments for direct
loans, loan guarantees, and similar credit assistance would be
contingent on future appropriation action.
Fuel-efficient vehicle vouchers
The bill would authorize a program within DOT that would
provide vouchers for the purchase or lease of a new car or
truck to individuals who trade in an eligible vehicle for one
that is more fuel efficient. The bill defines an eligible
vehicle as one that averages 18-miles-per-gallon or less and
would set minimum fuel-economy requirements for vehicles
purchased or leased with a voucher. The eligible vehicle would
have to be subsequently dismantled. The vouchers would range in
value from $3,500 to $4,500 depending on the characteristics of
both the old and the new vehicles. CBO estimates that this
provision would accelerate the rate at which some older, less
fuel-efficient vehicles are replaced, and cause the fleet of
new vehicles purchased under the program to be more fuel
efficient than it would otherwise be. As a result, fewer taxes
would be collected on the sale of fuel, reducing federal
revenues.
Estimated cost to the Federal Government: The estimated
budgetary impact of H.R. 2454 is shown in Table 2. The costs of
this legislation fall within budget functions 270 (energy), 300
(natural resources and environment), 350 (agriculture), 370
(commerce and housing credit), 400 (transportation), 500
(education, training, employment, and social services), 550
(health), and 600 (income security). For this estimate, CBO
assumes that H.R. 2454 will be enacted near the end of fiscal
year 2009, that the amounts necessary to implement the bill
will be appropriated each year, and that outlays will follow
historical spending patterns for similar programs.
TABLE 2.--ESTIMATED BUDGETARY IMPACT OF H.R. 2454
--------------------------------------------------------------------------------------------------------------------------------------------------------
By fiscal year, in billions of dollars--
-----------------------------------------------------------------------------------------------------
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2010-2014 2010-2019
--------------------------------------------------------------------------------------------------------------------------------------------------------
CHANGES IN REVENUES
Total Estimated Revenues.......................... 0.9 39.1 59.1 63.5 90.6 104.0 112.3 117.6 126.1 132.3 253.2 845.6
CHANGES IN DIRECT SPENDING
Estimated Budget Authority........................ 1.0 33.4 51.9 67.5 88.7 102.1 110.0 116.1 122.9 128.8 242.6 822.6
Estimated Outlays................................. 0.3 32.9 51.6 67.7 88.8 102.2 110.0 116.1 122.9 128.8 241.3 821.2
NET CHANGE IN THE BUDGET DEFICIT FROM
CHANGES IN REVENUES AND DIRECT SPENDING
Impact on Deficit\1\.............................. 0.6 6.1 7.5 -4.2 1.8 1.8 2.4 1.5 3.2 3.5 12.0 24.4
CHANGES IN SPENDING SUBJECT TO APPROPRIATION
Estimated Authorization Level..................... 5.5 9.3 3.0 3.6 4.4 5.4 6.0 6.9 8.2 8.7 25.8 61.1
Estimated Outlays................................. 3.4 1.6 2.7 3.8 4.9 5.8 6.6 6.5 6.8 7.8 16.4 49.9
--------------------------------------------------------------------------------------------------------------------------------------------------------
Note: Components may not sum to totals because of rounding.
\1\Positive numbers indicate decreases in deficits; negative numbers indicate increases in deficits.
Basis of estimate: CBO estimates that implementing this
legislation would result in additional revenues, net of income
and payroll tax offsets, of $253.2 billion over the 2010-2014
period and $845.6 billion over the 2010-2019 period. We
estimate that direct spending would increase by $241.3 billion
and $821.2 billion over the same periods, respectively. Those
changes in revenues and direct spending would mainly stem from
the process of auctioning and freely distributing allowances
under the cap-and-trade programs established under this
legislation. In addition, CBO estimates that implementing this
legislation would increase discretionary federal spending by
$49.9 billion over the 2010-2019 period, assuming appropriation
of the amounts estimated to be necessary.
Budgetary treatment of allowances, RECs, and offset credits
Efforts to control GHG emissions in this legislation would
be enforced through the federal government's sovereign powers
and would alter the use of scarce economic resources. While
similar in some ways to command-and-control approaches for
regulating economic activities, the cap-and-trade system that
would be established by the bill for GHG and HFC emissions is
fundamentally different because it would create cash-like
assets (allowances) whose supply and distribution would be
determined by the federal government. As such, CBO believes it
is appropriate to include all transactions involving GHG and
HFC allowances (including those distributed at no cost) in the
budget.
Under H.R. 2454, both firms and individuals would be
eligible to trade GHG and HFC allowances acquired from the
federal government in a secondary market that would exceed $60
billion in value in 2012, CBO estimates. Within such a large
and liquid market, allowances could be easily and immediately
traded for cash. In addition, the legislation would allow the
federal government to determine the supply of allowances by
defining the scope of covered emissions and limiting the number
of allowances to be issued. Under those circumstances, the free
distribution of allowances by the federal government would be
essentially equivalent to the distribution of cash grants, so
CBO believes that such transactions should be treated as
additional outlays. At the same time, those allowances would be
valuable financial instruments, so CBO thinks that the creation
of allowances by the federal government should be recorded as
an increase in revenues.
That logic does not hinge on whether the federal government
sells or, instead, gives away the allowances. Allowances would
have significant value even if given away because the
recipients could sell them or, in the case of a covered entity,
use them to avoid incurring the cost of compliance. In either
case, the recipient receives an asset of equivalent value with
no estimated change in the policy effect (i.e., total GHG
emissions). For example, the government could either raise $100
by selling allowances and then give that amount in cash to an
entity, or it could simply give $100 worth of allowances to
that same entity, which could immediately and easily transform
the allowances into cash through the secondary market. Sound
budgeting requires that the budget treat equivalent
transactions in the same way, in CBO's view. Therefore, this
estimate treats the creation of 11 allowances and their
disposition as budgetary transactions, regardless of whether
the allowances would be sold or distributed at no cost.
In contrast, CBO believes the creation and subsequent
allocation of federal RECs under the legislation's combined
efficiency and renewable electricity standard should not be
included within the federal budget. While a large and liquid
secondary market for RECs would make them cash-like in nature,
the supply of credits would be determined by the amount of
renewable energy generated, not by the federal government.
Unlike a GHG or HFC allowance, the creation of an REC, and thus
its value, would stem from actions undertaken by private
entities. The federal government would be unable to achieve the
same policy effect (in this case, a target percentage of energy
generation from renewable sources) through the sale of RECs
since the quantity of RECs needed to meet this target would be
a function of business decisions about how much electricity to
produce.
Domestic and international offset credits authorized to be
used within the GHG cap-and-trade program have similar
characteristics similar to those of RECs. Once created, such
credits would have value because the firms that are covered by
the cap could use them in lieu of allowances for a share of
their compliance obligation. Unlike allowances, however, the
government would not determine the supply of offsets; that
supply would depend on the actions of private entities.
Therefore, CBO believes offset credits should not be accounted
for in the federal budget.
Revenues resulting from cap-and-trade programs
The impact of H.R. 2454 on net federal revenues would
largely be determined by the value of allowances created by the
bill less the resulting reductions in receipts from income and
payroll taxes. Penalties for noncompliance and fees collected
to administer the legislation would add a small amount to total
revenues, and tax credits available to low-income individuals
would reduce federal revenues. The following sections discuss
how CBO estimated the allowance prices for GHG and HFC cap-and-
trade programs and detail other revenue impacts of the bill.
Estimating the Prices for Emission Allowances. CBO
estimates that the price of GHG allowances would rise from
about $15 per mtCO2e of emissions in 2011 to about
$26 per mtCO2e in 2019. Table 3 provides CBO's
estimate of annual allowance prices for the separate GHG and
HFC cap-and-trade programs that would be created by the bill.
TABLE 3.--CBO ESTIMATES OF ALLOWANCE PRICES UNDER H.R. 2454
----------------------------------------------------------------------------------------------------------------
By fiscal year, in dollars--
-----------------------------------------------------------------------
2011 2012 2013 2014 2015 2016 2017 2018 2019
----------------------------------------------------------------------------------------------------------------
Estimated GHG Allowance Price........... 15 16 17 18 19 21 22 24 26
Estimated HFC Allowance Price\1\........ n.a. 2 3 4 10 12 13 19 20
----------------------------------------------------------------------------------------------------------------
Note: n.a. = not applicable.
\1\Prices provided are the weighted average of the estimated auction prices and fixed-price sales.
To estimate the marginal cost of reducing GHG emissions--
which ultimately would determine the price of allowances--CBO
took several steps:
First, CBO constructed a base case that
includes projections of future GHG emissions in the
absence of any federal policies to control them, as
well as projections of future prices of fossil fuels,
electricity, and other products and services closely
associated with such emissions;
Next, we developed estimates of how firms
and households would respond to increases in prices for
fossil fuels and other sources of GHG emissions;
Finally, CBO assessed the impact of other
features of the legislation that would influence the
market price of allowances. Such other provisions
include regulations that would influence GHG emissions
and electricity consumption, subsidies for various GHG
emission-reducing activities, opportunities for firms
to bank allowances in one year and use them in another,
and the availability of domestic or international
offsets.\2\
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\2\For a more detailed discussion of the methods CBO used to
estimate the price for carbon allowances for previous legislation, see
How CBO Estimates the Costs of Reducing Greenhouse-Gas Emissions, CBO
Background Paper (April 2009).
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CBO began with its estimate of the emissions that would
occur in the absence of the bill and lowered that baseline to
reflect the extent to which the bill would require particular
methods of reducing emissions (such as using renewable energy
sources or increasing energy efficiency) to be used to a
greater extent than they otherwise would have under the cap-
and-trade program. We then estimate the price of allowances
that would be necessary to generate the remaining reduction in
emissions necessary to meet the cap. This estimate uses a
``middle of the road'' estimate of price responsiveness, which
indicates how much firms and households would reduce their
emissions for any given allowance price (and its implied effect
of fossil fuel energy prices). In making that calculation CBO
simultaneously estimated the extent to which firms would comply
by purchasing domestic or international offsets (in lieu of
purchasing allowances or reducing their emissions). Our
estimate of the allowance price accounts for the fact that
firms might find it profitable to exceed their emission
reductions in the early years of the policy and bank their
excess allowances to use in later years. To do so, we estimate
emissions reductions and allowance prices during the full
duration of the program through 2050.
Base Case Emission Projections. For its base case of GHG
emissions, CBO relied primarily on projections of energy use,
fossil fuel prices, and GHG emissions from the April 2009
update of the Annual Energy Outlook 2009 (AEO 2009) published
by the Energy Information Administration (EIA). EIA's inventory
of emissions is based on a slightly different methodology than
used by EPA, whose inventory is considered the official U.S.
estimate for purposes of international negotiations and
agreements.\3\ CBO adjusted the EIA data to align with EPA
estimates for the most recent year where actual data is
published, while retaining EIA's projected growth rates. CBO
assumes that emissions per dollar of the nation's gross
domestic product (GDP) will grow (or decline) at the same rate
beyond 2030 as they are projected to grow in the preceding
decade.\4\
---------------------------------------------------------------------------
\3\See U.S. Environmental Protection Agency, Inventory of U.S.
Greenhouse Gas Emissions and Sinks: 1990-2007 (EPA 430-R-09-004, April
2009). CBO also used information provided by EPA to project the
consumption of HFCs.
\4\EIA reports projections of GHG emissions in the AEO 2009 only
through 2030.
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Response by Firms and Households. A key factor in
determining the price of an allowance is how quickly and
cheaply firms and households can decrease CO2
emissions by reducing their use of fossil fuels (either
directly or indirectly via the goods and services that they
consume). The easier it is for firms and households to cut
their emissions, the lower the allowance price would need to be
to reach a given cap. Available economic models differ
considerably in their estimates of how much emissions would
decrease for a given allowance price (and its implied effect on
fossil fuel prices) because they make different assumptions
about the long-run ability of businesses to substitute low-
carbon fuels and more efficient technology for high-carbon
fuels; the long-run sensitivity of energy usage to higher
energy prices; and the speed at which those responses unfold.
CBO generated a ``middle of the road'' response to allowance
prices by examining available peer-reviewed models and
calculating an average response, measured across multiple
models and across different types of end users (households,
electric utilities, and manufacturers, for example).\5\
---------------------------------------------------------------------------
\5\The models analyzed include the EIA's National Energy Modeling
System (NEMS), the Emissions Prediction and Policy Analysis (EPPA)
model used by climate researchers at the Massachusetts Institute of
Technology, the Applied Dynamic Analysis of the Global Economy (ADAGE)
model developed at RTI International and used by EPA, the Second
Generation Model (SGM) and MiniCAM models developed and used by the
Joint Global Change Research Institute, the Model for Evaluating the
Regional and Global Effects of GHG Reduction Policies (MERGE) developed
by Stanford University and EPRI, and the Multi-region National-North
American Electricity and Environment (MRN-NEEM) model developed and
used by CRA International.
---------------------------------------------------------------------------
Using those models, CBO concludes that the response to
price increases (that is the decrease in emissions that would
result from any given allowance price) would rise substantially
over time as firms and households replace existing vehicles,
equipment, structures, and electricity-generating capacity with
newer items that use less energy or emit smaller quantities of
carbon emissions.\6\ CBO's approach provides an estimate of the
quantity of emission reductions that would occur at various
allowance prices but does not specify how they would occur.
That is, it does not provide detail about the timing or
magnitude of the adoption of specific technologies, such as
nuclear power or CCS, or the quantity of reductions in specific
parts of the economy, such as the transportation sector.
---------------------------------------------------------------------------
\6\For a more detailed discussion of the techniques CBO used to
develop this assessment, see Mark Lasky, The Economic Costs of Reducing
Emissions of Greenhouse Gases: A Survey of Economic Models, CBO
Technical Paper (May 2003). See also How CBO Estimates the Costs of
Reducing Greenhouse-Gas Emissions, CBO Background Paper (April 2009).
---------------------------------------------------------------------------
CBO estimates that, in 2015, a price on emissions of
CO2 that raised the average price of end-use energy
produced from fossil fuels by 10 percent would induce about a 5
percent reduction in such emissions. By 2025, a similar
increase in price would result in a 9 percent reduction in
emissions, with the response continuing to increase over time
at a gradually decreasing rate.
Response to Opportunities for Banking of Emission
Allowances. If covered entities were required to use all of
their emission allowances in the year for which they were
originally designated, the price of allowances would rise at a
rate that was dictated by the speed at which the cap became
more stringent (relative to the growth of emissions in the
absence of the policy). Given the rate at which the cap on
emissions would become more stringent over time under H.R.
2454, the inflation-adjusted price of allowances would rise at
a rate that is significantly greater than CBO's estimate of the
rate of return that firms might obtain on alternative
investments, which CBO assumed to be the after-tax long-run
inflation-adjusted rate of return to capital in the U.S.
nonfinancial corporate sector (5.6 percent) that CBO is
currently using to project the long-run budget outlook.
If firms were allowed to bank unlimited amounts of
allowances, as they are under H.R. 2454, then profit-maximizing
behavior by firms would cause the price of an allowance to
increase at the same rate as the return that firms might
receive on alternative investments. Specifically, firms would
have an incentive to exceed their emission reduction
requirements in the initial years of the program (when the cost
of meeting the annual caps would be relatively low) and to bank
their excess allowances to use in future years when the cost of
meeting the cap would be much higher. Because banking would
increase the demand for allowances in the early years (pushing
up the allowance price) and increase the supply of allowances
in later years (pushing down the allowance price), it would
reduce the rate of increase in the price of allowances. Firms
would continue to bank allowances up to the point where the
rate of increase in the price of allowances was 5.6 percent,
the rate of return that they might receive by making
alternative investments.
In the early years of the cap-and-trade program, the
banking provision included in the bill would have a significant
impact on the amount of emissions reductions, and thus on the
allowance price. CBO estimates that by 2019, covered entities
would undertake significantly more mitigation than necessary to
meet their annual emission caps, banking about 2 billion
mtCO2e of allowances and raising the allowance price
by 13 percent, compared with a policy that prohibited banking.
Response to Offset Credits. H.R. 2454 would allow covered
entities to substitute offset credits in lieu of up to two
billion GHG allowances each year. CBO expects covered entities
would take advantage of this provision when costs are less than
other methods of compliance. CBO finds that this provision
would have a significant effect on allowance prices. As
discussed below, by reducing the cost of complying with the
cap, offsets are likely to lower the price of allowances by a
substantial amount.
Under the bill, domestic offset credits could be used in
lieu of up to one billion allowances per year. Based on EPA
data on the available supply of domestic offsets at different
prices, CBO estimates that covered entities would use domestic
offsets to substitute for about 230 million allowances in 2012
and about 300 million allowances in 2020.
Covered entities may use international offsets in lieu of
either one billion allowances, or depending on whether or not
domestic offsets are used up to their full potential, up to 1.5
billion allowances in a given year. In no case could domestic
and international offsets substitute for more than two billion
allowances.
To calculate the supply of offsets from international
sources, CBO used information from EPA and made adjustments
based on provisions in the legislation, assumptions about
demand from other countries, and an estimate of the
transactions costs associated with creating and verifying
offsets. Based on information from the Department of State,
EPA, and outside experts, CBO expects that the agreements
necessary to generate offsets with certain countries would take
significant time to negotiate. Over the period covered by this
bill, the number of agreements and the scope of their coverage
is assumed to increase. CBO also assumed that other developed
countries (for example, those in the European Union) would seek
offsets for their own emissions reduction programs, thereby
reducing the supply available to U.S. entities.
CBO estimates that covered entities would use international
offsets in lieu of about 190 million allowances in 2012 and in
lieu of about 425 million allowances in 2020. Together, the
provisions allowing the use of domestic and international
offsets would decrease the price of GHG allowances by $35 (69
percent) in 2012.
Response to Emissions Allowances from Other Markets. H.R.
2454 also would allow covered entities to submit an unlimited
number of emissions allowances obtained from 16 other cap-and-
trade markets of ``comparable stringency'' in lieu of GHG
allowances issued by EPA. For this estimate, CBO assumed that a
market of ``comparable stringency'' would essentially be
equivalent to a cap-and-trade market where allowances sell for
a comparable price. Therefore, this provision would have no
effect on the U.S. GHG allowance price.
Sensitivity of the GHG Allowance Price Estimates to Changes
in Assumptions. In cap-and-trade systems such as the one
established by this legislation, the most important assumptions
affecting the price of allowances involve:
Base-case projections of GHG emissions and
energy prices;
The responsiveness of households and firms
to changes in the prices of goods and services
associated with emissions;
The discount rate that allowance holders
apply to decisions about whether to bank allowances and
how many to bank;
The availability of offsets from domestic
and international sources and the extent to which they
are allowed to meet compliance obligations; and
Other regulatory programs included as part
of an overall emissions-reduction policy.
CBO examined each of those parameters to evaluate how
sensitive the estimated allowance prices might be to
alternative assumptions about how the program might operate
into the future. Changes in the allowance prices under those
alternative assumptions are made by holding the other
parameters constant. (Note: it is not possible to determine the
effect of changing multiple parameters simultaneously by simply
adding together the independent effects of changing one
parameter assumption while keeping other parameters constant.)
Base-Case Projections. Energy-related emissions from the
U.S. economy are projected in the AEO 2009 to be almost 3
percent lower in 2012 and 7 percent lower in 2030 compared with
those made by EIA last year.\7\ All else constant, a lower
baseline for emissions from a covered sector will result in
lower allowance prices.
---------------------------------------------------------------------------
\7\See discussion of the differences in the EIA Annual Energy
Outlook (2009), available online at: http://www.eia.doe.gov/oiaf/aeo/
forecast.html.
---------------------------------------------------------------------------
Responsiveness. CBO's estimates of the responsiveness of
firms and households to changes in energy prices strongly
influences its estimates. If that responsiveness were 10
percent stronger (or weaker), on average, allowance prices
would be roughly 8 percent lower or 9 percent higher.\8\
---------------------------------------------------------------------------
\8\EPA's analysis of S. 2191 showed that initial allowance prices
were 80 percent higher when nuclear, biomass, and CCS technologies were
constrained. Such an effect would be equivalent to lowering the
projected sensitivity of the U.S. economy by more than 50 percent.
---------------------------------------------------------------------------
Discount Rate. The discount rate that firms would use when
deciding whether or not to bank allowances is important in
determining the allowance price because it affects the supply
and demand for allowances in a given year. A higher discount
rate would suggest that a firm would be more willing to put off
expenses in the near term and pay them in the future, causing
firms to bank fewer allowances. Assuming a lower discount rate
of 5 percent (the rate used by EPA), firms would choose to
lower emissions more in the near term (that is, bank more
allowances) and less in future years. Use of a 5 percent rate
would increase CBO's estimate of initial year prices by 13
percent and decrease projected prices in 2050 by 9 percent.
Availability of Offsets. Allowance prices would be lower if
firms were allowed to use more offset credits to meet the
bill's compliance obligations and if those offsets were cheaper
than the costs of lowering emissions. Under the bill, the use
of international offsets lowers the allowance price by about 70
percent. Doubling the extent to which international offsets
could be used in lieu of allowances in each year would decrease
the allowance price by about 30 percent more.
Regulatory Programs. Other programs or standards that
influence GHG emissions would affect the price of allowances by
affecting the magnitude of the emission reductions necessary to
meet the cap. For example, a regulatory program that requires
increasing amounts of electricity generation to come from
renewable energy sources (for example, wind, solar, and
biomass) could lower emissions from the electricity sector that
would be subject to the cap-and-trade program. Allowances
prices could therefore be lower than they otherwise might have
been in the absence of that regulation.
The effect that such programs and standards would have on
emissions will vary with the base price of allowances and the
stringency of those standards. If allowance prices are high,
consumers and firms would have more incentives to undertake
actions to lower emissions. In that case, it is less likely
that a separate regulatory program would affect the allowance
price because the behavior that the regulatory program is
intended to achieve would occur in any event as a result of the
relatively high allowance price. Conversely, when allowance
prices are relatively low, and/or regulatory standards are
relatively stringent, those standards would be more likely to
motivate additional emission reductions through the use of the
regulated technology (by using renewable energy, for example)
beyond those that would result under the cap. In that case, the
standards would reduce the emissions reductions that must be
achieved to meet the cap and the price of allowances would be
lower. Using one example from the legislation, CBO finds that
distributing allowances to those facilities that invest in CCS
technology, the price of allowances is reduced by 9 percent. In
other cases, such as the RES, CBO estimates that the response
to the GHG cap-and-trade program would result in enough
renewable electricity generation on a national level to satisfy
the new RES.
Estimating the Price of Consumption Allowances for HFCs.
CBO estimates that the average price of consumption allowances
for HFCs would be in the vicinity of $2 beginning in 2012 and
would rise to approximately $20 by 2019. The cap would reduce
HFC emissions by about 50 percent by 2020 from about 500
million mtCO2e to about 250 million
mtCO2e.
For this estimate, CBO constructed a base-case projection
of HFC consumption through 2025 similar to a base case produced
by EPA. After consulting with industry sources, CBO concluded
that the growth in HFC consumption after 2025 would be equal to
the population growth rate in the United States, an assumption
similar to that made by the International Panel on Climate
Change. Using engineering cost data for HFC alternatives
provided by EPA, CBO estimated the supply of HFC reductions as
a function of price and year. From this data, CBO concluded
that the ability to replace HFCs with lower-cost chemical
alternatives would increase over time.
As prices for HFC allowances increase, firms would find it
more profitable to recycle those chemicals and develop
alternatives to these products. To the extent those changes
occur, the price of HFC allowances would be different than
would otherwise occur.
Net Revenue Calculation. CBO estimates that gross receipts
to the federal government from the auction and free allocation
of allowances under the bill would total $298 billion over the
2010-2014 period and $973 billion over the 2010-2019 period.
This estimate is based on the projected prices of allowances
for both the GHG and HFC cap-and-trade programs.
However, the cost of purchasing allowances, whether from
the government or from other entities that would receive
allowances under the bill, would become an additional business
expense for companies that would have to comply with that cap
on emissions. Those additional expenses would result in a
decrease in taxable income, resulting in a loss of government
revenue from income and payroll taxes referred to as a
``revenue offset''. The amount of this revenue offset would be
equal to 25 percent--an approximate marginal tax rate on
overall economic activity--of the gross receipts from the
auction and free allocation of allowances.\9\
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\9\Two previous letters on this subject can be found on CBO's
website at: http://www.cbo.gov/ftpdocs/102xx/doc10236/
BartonCapnTradeLtr.pdf and http://www.cbo.gov/ftpdocs/102xx/doc10232/5-
15-WaxmanLetter.pdf.
---------------------------------------------------------------------------
Depending on the manner in which the proceeds or allowances
are used by the government or conveyed to private entities,
this reduction in taxable income (the revenue offset) might be
accompanied by a matching increase in taxable income elsewhere
in the economy. In such cases, CBO views the distribution of
allowances or allowance proceeds as offsetting the revenue
offset--that is, compensating for the initial loss of tax
revenues associated with the acquisition of the allowances. In
those cases, the distribution and use of the allowances or the
auction proceeds would be budget neutral. For this estimate,
CBO applied this offsetting offset to some of the revenues
arising from the distribution of allowances, depending on who
would receive those allowances (or auction proceeds) and what
they would be used for.
In general, allowances provided under section 321 to
businesses (merchant coal generators, generators with long-term
power purchase agreements, petroleum refiners), and some of the
allowances provided to natural gas distributors would fit in
the category of transactions that would be budget neutral
because they would generate taxable income. In contrast,
allowances provided to nonbusiness entities--such as states to
support specific activities, or to other countries to support
efforts to reduce greenhouse gases--would not be budget neutral
because they would not generate taxable income.
On balance, CBO estimates that the auction of GHG and HFC
allowances and distribution of GHG allowances at no cost would
generate revenues, net of income and payroll tax offsets, of
about $254 billion over the 2010-2014 period and $858 billion
over the next 10 years (see Table 4).
OTHER REVENUES
Refundable Low-Income Energy Tax Credit. H.R. 2454 would
create a refundable energy tax credit, aimed at offsetting the
impact of higher energy prices on low-income families. The
credit would be based on the average loss of purchasing power
for the poorest fifth of people caused by higher prices for
energy and other goods under the bill. The credit would vary
with family size, based on the average spending of different
size families at the bottom of the income scale. The credit
amount would be based on the share of total expenditures made
by those families, the GHG intensity of that spending, the
amount of other relief provided under the bill, and how much of
their reduced purchasing power would be automatically offset
with federal cost-of-living adjustments. In 2012, CBO estimates
that the credit would range from $161 for a single person to
$359 for a five-person household. By 2019, those credit amounts
would rise by roughly 75 percent.
Only taxpayers with income below certain levels would
receive the credit. The level at which a family would become
ineligible for the credit depends on the family structure. In
2012, CBO estimates that single people with no children would
be ineligible if their income exceeded $23,000, while families
with at least two children would be ineligible if their income
exceeded $42,000. The credit would be refundable, meaning that
taxpayers would not need to owe any tax in order to receive the
credit. Taxpayers who would participate in the energy rebate
program for low-income consumers would not be eligible for that
credit.
The Joint Committee on Taxation estimates that the credit
would cost $83 billion over the 2009-2019 period. Of that
amount, about $22 billion would be recorded in the budget as a
reduction in tax receipts and about $61 billion as an increase
in direct spending in the amount in excess of taxes owed.
In addition, people who participate in other federal
benefits programs could receive a cash rebate under another
provision (see Direct Spending section below).
Increased Use of Production Tax Credits. By increasing
electricity production through renewable sources, H.R. 2454
would result in businesses claiming increased business tax
credits for the renewable electricity production credit
(section 45 of the Internal Revenue Code) and the energy credit
which applies primarily to investments in solar and geothermal
energy production (section 48 of the Internal Revenue Code).
JCT estimates that increased use of those credits would reduce
revenues by $1.1 billion over the 2010-2019 period. This
estimate reflects one aspect of the revenue consequences of a
shift in economic activity away from use of fossil fuels.
Carbon Storage Research Corporation. Section 114 would
authorize utilities that distribute fossil fuels to establish,
by a referendum involving members of the electricity
distribution industry, a Carbon Storage Research Corporation.
The corporation would levy annual assessments on distribution
utilities based on the volume of certain electricity deliveries
to retail consumers. Assessments would amount to at least $1
billion, but not more than $1.1 billion each year. While
formation of the corporation would be voluntary, once it was
created, assessments would be compulsory, enforced by the
federal government's sovereign authority. As such, CBO believes
the corporation should be considered governmental in nature,
and all of its activities should be included in the federal
budget.
For this estimate, CBO assumes that the corporation would
be created and would collect assessments totaling $1 billion in
2010 and $1.1 billion each year thereafter through 2019. Those
amounts should be recorded in the budget as revenues, and
subsequent expenditures should be considered direct spending.
Additionally, the cost of those assessments would become an
additional business expense for utilities, resulting in a loss
of other federal tax revenue (primarily income and payroll
taxes). The amount of this revenue loss would be equal to about
25 percent of the assessments. However, half of the funds
collected by the corporation would go back to electric
utilities in the form of grants to subsidize the operations of
existing electricity generation units that use integrated CCS
or conversion. Those grants would generate new taxable income
which would increase federal revenues. Consequently, the net
loss in tax revenue would equal about one-eighth of the income
from the assessments, resulting in an overall increase in
revenues from this provision of $4.7 billion over the 2010-2014
period and $9.5 billion over the next 10 years.
Commodity Futures Trading Commission. H.R. 2454 would
authorize the Commodity Futures Trading Commission (CFTC) to
charge and collect fees on transactions executed on certain
exchanges. The fee would be calculated to recover the annual
cost of the commission's supervision and regulation of futures
markets (the cost of CFTC's enforcement activities would not be
included in this amount). Fees would be deposited into a
special account and would be authorized to be appropriated to
fund the commission's activities. CBO estimates that enacting
these provisions would increase revenues by about $400 million
over the 2010-2014 period, and by about $800 million over the
2010-2019 period, net of income and payroll tax losses.
Alternative Compliance Payments for the Renewable
Electricity Standard (RES). Section 101 would establish a new
federal standard requiring an increasing percentage of
electricity sold by certain retail electricity suppliers to be
generated from renewable sources beginning in 2012. Covered
suppliers of retail electricity would meet this requirement by
submitting a federal renewable energy credit (REC) or by making
an alternative compliance payment equal to $25 (in 2009,
adjusted for inflation) for each megawatt hour of renewable
electricity necessary to comply with the standard. Under the
bill, alternative compliance payments would be paid directly to
states; nevertheless, because they would result from an
exercise of the federal government's sovereign power to
regulate industry, CBO believes that collections and subsequent
expenditures of alternative compliance payments should be
considered governmental in nature and included in the federal
budget.
CBO estimates that the response to the GHG cap-and-trade
program would result in the generation of enough renewable
electricity, on a national level, to satisfy the federal
standard. However, based on information from DOE, CBO expects
that some regions of the country--particularly the southeast--
would probably not generate sufficient RECs to satisfy the
federal standard. Thus, covered electricity suppliers in those
areas would have to either purchase RECs generated elsewhere or
make alternative compliance payments to the states in which
they operate.
CBO expects that, in some cases, covered electricity
suppliers would choose to make alternative compliance payments
rather than purchase RECs. H.R. 2454 would require states to
use any alternative compliance payments received pursuant to
the federal RES to promote the development of renewable energy
resources. To the extent that electricity suppliers that are
subject to the RES would benefit from states' spending of
alternative compliance payments, H.R. 2454 might provide an
incentive for suppliers to favor those payments over REC
purchases as a means of complying with the federal RES.
CBO believes that this incentive would most likely affect
the behavior of electricity suppliers in instances where the
price of a REC is at or only slightly below the compliance
payment. Based on information from DOE about estimated prices
of RECs under H.R. 2454, however, CBO expects that most
suppliers would use RECs to comply with the federal RES. We
estimate that alternative compliance payments would probably
not exceed $500 million over the 2012-2019 period. The volume
of electricity associated with estimated payments is small--
less than one-tenth of one percent of all electricity
generation.
In addition, the cost of the alternative compliance
payments would become an additional business expense for
utilities, thus reducing federal tax revenue. The amount of
this revenue offset would be equal to 25 percent of the
payments, resulting in an overall increase in revenues from
this provision of about $100 million over the 2010-2014 period
and nearly $400 million over the next 10 years.
Fuel-Efficient Vehicle Vouchers. CBO expects that the
issuance of vouchers to individuals who replace existing
vehicles with new ones of greater fuel efficiency would result
in a slight increase in the overall fuel efficiency of the
domestic vehicle fleet. New vehicles purchased as a result of
the program would generally be more fuel efficient than ones
that would otherwise be purchased as replacements. This
increase in fuel efficiency would cause a slight decline in
gasoline consumption, thereby reducing federal revenues
generated by excise taxes on motor fuels. CBO estimates that
this provision of the legislation would reduce federal revenues
by $16 million over the 2010-2014 period and $28 million over
the 2010-2019 period.
Penalties. Under H.R. 2454, civil penalties would be
assessed on those owners and operators who fail to meet their
compliance obligation on time. The penalty would equal the
emissions generated by an entity in excess of the allowances
they held multiplied by twice the fair market value of emission
allowances in the relevant year. In addition, the covered
entities would be required to submit, in the following year or
other time period determined by EPA, emission allowances to
cover excess emissions from the previous year. The legislation
also would establish penalties for those entities that violate
any of the rules associated with the regulation of the
allowance market. Such penalties could be as high $1 million
per day under certain circumstances. This legislation also
includes various other penalties, including penalties for
nonpayment of allowances and for fraud.
Because many of the penalties could be substantial, CBO
expects most firms would comply with the requirements of the
bill. However, the number of entities covered by this
legislation is large, and thus it is likely that some entities
would not comply. Penalties collected on emissions of sulfur
dioxide and nitrogen oxides in excess of submitted allowances
under EPA's Acid Rain Program, a similar program, are usually
small, though there have been two large collections over the
past few years totaling about $4 million. Based on that
information, CBO estimates that penalty collections under H.R.
2454 would total between $25 million and $50 million dollars
annually, beginning in 2012.
Effect on Unemployment Compensation. The bill would create
a program to compensate workers who lose their jobs as a result
of the bill's provisions. That program would provide cash
benefits, job training, and a subsidy for health care costs.
Individuals who collect benefits under that program would not
be eligible to receive unemployment compensation; consequently,
outlays of that program would be reduced. Because such outlays
are paid from state employment taxes, CBO estimates that states
would reduce their taxes (which are recorded as revenues on the
federal budget) accordingly. Over the 2012-2019 period, CBO
estimates that the reduction in tax revenues to be less than
$100 million.
DIRECT SPENDING
CBO estimates that enacting this legislation would increase
direct spending by $821 billion over the 2010-2019 period.
Outlays would primarily stem from spending of auction proceeds
and giving GHG allowances to states and other entities free of
charge. Also, substantial amounts of auction proceeds would be
available for other spending programs that would be subject to
appropriation action. A more detailed description of those
programs is included under the discussion of spending subject
to appropriation.
Worker Assistance. A portion of the revenues from the
auction of emission allowances for the GHG cap-and-trade
program would fund a program for Climate Change Worker
Adjustment Assistance (CCWAA), which would be administered by
the Department of Labor (DOL). Under that program, workers who
lose their jobs as a result of measures their employers take to
comply with provisions of the bill could be certified to
receive up to 156 weeks of benefits, including cash benefits
equal to 70 percent of their average weekly wage, job training
and employment search assistance, and an 80 percent subsidy of
the cost of continuing health insurance. Funding for the
program would be capped at a specified portion of auction
proceeds actually received, which CBO estimates would total
$4.3 billion over the 2011-2019 period. Gross outlays for CCWAA
would total $4.2 billion over that period, CBO estimates.
Individuals receiving CCWAA would not be eligible to
receive unemployment compensation. Thus, CBO estimates outlays
for unemployment benefits would drop by about $0.1 billion over
the 2011-2012 period. (That drop in outlays would be offset
over time by a corresponding reduction in unemployment tax
revenues, as discussed in the revenue section of this
estimate.)
TABLE 4.--ESTIMATED CHANGES IN REVENUES AND DIRECT SPENDING UNDER H.R. 2454
--------------------------------------------------------------------------------------------------------------------------------------------------------
By fiscal year, in billions of dollars--
-----------------------------------------------------------------------------------------------------
2010- 2010-
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2014 2019
--------------------------------------------------------------------------------------------------------------------------------------------------------
CHANGES IN REVENUES
Net Revenues Resulting from Cap-and-Trade 0 38.0 58.6 64.8 92.2 105.9 114.4 120.1 128.6 134.9 253.6 857.6
Programs\a\......................................
Refundable Low-Income Energy Tax Credit........... 0 0 -0.6 -2.3 -2.5 -2.9 -3.1 -3.4 -3.5 -3.6 -5.5 -22.0
Increased Production Tax Credit Use............... 0 0 * -0.1 -0.1 -0.1 -0.1 -0.2 -0.2 -0.2 -0.2 -1.1
Carbon Storage Research Corporation............... 0.9 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0 4.7 9.5
Alternative Compliance Payments for the RES....... 0 0 * * * * * * 0.1 0.1 0.1 0.4
Commodity Futures Trading Commission.............. 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.4 0.8
Fuel-Efficient Vehicle Vouchers................... * * * * * * * * * * * *
Penalties and Other Revenue Changes............... 0 0 * * * * * * * * 0.1 0.2
Total Changes in Revenues..................... 0.9 39.1 59.1 63.5 90.6 104.0 112.3 117.6 126.1 132.3 253.2 845.6
CHANGES IN DIRECT SPENDING
Worker Assistance:\b\
Estimated Budget Authority.................... 0 0.2 0.3 0.4 0.4 0.5 0.5 0.6 0.6 0.6 1.3 4.2
Estimated Outlays............................. 0 0 0.1 0.6 0.5 0.5 0.6 0.6 0.6 0.6 1.3 4.1
Outlays Associated with Emission Allowances Freely
Allocated:
Estimated Budget Authority.................... 0 32.2 46.3 54.4 74.5 86.0 92.7 96.4 102.7 107.5 207.4 692.7
Estimated Outlays............................. 0 32.2 46.3 54.4 74.5 86.0 92.7 96.4 102.7 107.5 207.4 692.7
Refundable Low-Income Energy Tax Credit Payments:
Estimated Budget Authority.................... 0 0 0 6.1 6.5 8.0 8.4 10.4 10.5 11.2 12.6 61.1
Estimated Outlays............................. 0 0 0 6.1 6.5 8.0 8.4 10.4 10.5 11.2 12.6 61.1
Low-Income Energy Rebates:
Estimated Budget Authority.................... 0 0 4.1 5.4 6.1 6.4 7.2 7.5 7.8 8.2 15.7 52.8
Estimated Outlays............................. 0 0 4.1 5.4 6.1 6.4 7.2 7.5 7.8 8.2 15.7 52.8
Carbon Storage Research Corporation:
Estimated Budget Authority.................... 1.0 1.1 1.1 1.2 1.2 1.2 1.2 1.2 1.2 1.2 5.6 11.4
Estimated Outlays............................. 0.3 0.7 1.0 1.1 1.1 1.2 1.2 1.2 1.2 1.2 4.3 10.1
Spending of Alternative Compliance Payments:
Estimated Budget Authority.................... 0 0 * * * * 0.1 0.1 0.1 0.1 0.1 0.5
Estimated Outlays............................. 0 0 * * * * 0.1 0.1 0.1 0.1 0.1 0.5
Total Changes in Direct Spending:
Estimated Budget Authority............ 1.0 33.4 51.9 67.5 88.7 102.1 110.0 116.1 122.9 128.8 242.6 822.6
Estimated Outlays..................... 0.3 32.9 51.6 67.7 88.8 102.2 110.0 116.1 122.9 128.8 241.3 821.2
Net Change in the Budget Deficit
from Changes in Revenues and Direct Spending
Impact on Deficit:\c\............................. 0.6 6.1 7.5 -4.2 1.8 1.8 2.4 1.5 3.2 3.5 12.0 24.4
Memorandum--Details on Auction Revenues:
Gross Revenues from Auctioned Allowances.......... 0 9.9 21.5 19.7 30.1 33.7 37.0 39.6 42.9 45.4 81.2 279.9
Net Revenues from Auctioned Allowances............ 0 7.4 16.2 14.8 22.6 25.3 27.7 29.7 32.2 34.1 60.9 209.9
Gross Revenues from Allowances Freely Allocated... 0 32.2 46.3 54.4 74.5 86.0 92.7 96.4 102.7 107.5 207.4 692.7
Net Revenues from Allowances Freely Allocated..... 0 30.6 42.5 50.1 69.6 80.6 86.7 90.4 96.4 100.8 192.7 647.7
--------------------------------------------------------------------------------------------------------------------------------------------------------
Notes: RES = renewable electricity standard, * = between -$50 million and $50 million.
Numbers may not sum to totals because of rounding.
\a.\Revenues are net of income and payroll tax offsets.
\b.\Includes $0.1 billion reduction in other unemployment benefits over the 2010-2019 period.
\c.\Positive numbers indicate decreases in deficits; negative numbers indicate increases in deficits.
Outlays Associated with Emission Allowances Freely
Allocated. CBO estimates that direct spending would increase by
about $693 billion over the 2010-2019 period when the
government distributes emission allowances free of charge to
various recipients. Most of this distribution would begin in
2012. Recipients, such as states, natural gas distributers, and
federal agencies, would use the allowances to fund programs to
encourage energy efficiency and other types of government
initiatives.
Refundable Low-Income Energy Tax Credit Payments. H.R. 2454
would create a refundable energy tax credit for low-income
families. (See section on ``Other Revenues.'') Taxpayers would
receive any credit amount in excess of their income tax
liability as a direct payment. The JCT estimates that direct
spending would increase by $61 billion over the 2010-2019
period.
Low-Income Energy Rebates. The bill would create a new
energy rebate, aimed at offsetting the impact of the GHG cap-
and-trade program on energy prices for low-income families. The
rebate would complement the low-income energy tax credit
program, reaching families who may not file tax returns. The
rebate amount would be the same as the tax credit amount,
equaling the average loss of purchasing power caused by higher
prices for energy and other goods for the poorest fifth of
people. Like the credit, the rebate would vary with family
size. In 2012, CBO estimates the rebate would be $161 for a
single person, ranging up to $359 for a five-person household.
By 2019, those credit amounts would rise by roughly 75 percent.
Families who participate in the Supplemental Nutrition
Assistance Program or the Medicare Part D low-income subsidy
would automatically be enrolled in the rebate program. Other
families with income below 150 percent of the poverty level
could apply for the rebates through their state benefit
agencies. Enrolled families would receive one-twelfth of the
annual rebate amount each month. Families would not be eligible
to receive both the rebate and the tax credit. State benefit
agencies would notify both credit recipients and the Internal
Revenue Service of the amounts of rebate received each year,
and the amount of the tax credit a family receives would be
reduced by any rebate they receive.
CBO estimates that this rebate program would increase
direct spending by $53 billion over the 2012-2019 period. CBO
expects that all families receiving the low-income subsidy or
participating in the Supplemental Nutrition Assistance Program
would receive the rebate. CBO expects minimal participation
from eligible families not enrolled in those programs, as the
rebate amounts are not large enough to induce many to
participate in a new program. CBO also expects that the
coordination mechanism between the state benefit agencies and
the Internal Revenue Service would be effective in minimizing
the number of families that receive both the tax credit and the
rebate.
Carbon Storage Research Corporation. As previously
discussed in the section on revenues, H.R. 2454 would authorize
a governmental corporation to levy and spend assessments on
distribution utilities totaling between $1.0 billion and $1.1
billion a year over the 2010-2019 period. Under the bill, the
corporation could invest those assessments in interest-bearing
securities, thereby generating additional funding for its
activities. Expenditures of assessments and interest, which
would be considered direct spending, would support research and
development of technologies related to CCS. Based on historical
spending patterns for similar activities, CBO estimates that
expenditures by the proposed corporation would total about $300
million in 2010 and $10.1 billion over the 2010-2019 period.
Spending of Alternative Compliance Payments Under the RES.
The legislation would require states to use any amounts
received from alternative compliance payments under the
proposed RES to support the deployment of technologies to
generate renewable energy and to implement energy-efficiency
programs. Based on historical spending patterns for similar
activities, CBO estimates that such spending would total about
$500 million over the 2012-2019 period.
SPENDING SUBJECT TO APPROPRIATION
Assuming appropriation of the necessary amounts, CBO
estimates that implementing this legislation would increase
discretionary spending by $49.9 billion over the 2010-2019
period (see Table 5). Most of that amount would stem from
provisions that authorize spending of revenues from the auction
of emission and consumption allowances. These funds would be
used to support a variety of programs by federal agencies.
Additional spending would support:
Certain credit-related activities of the
proposed Clean Energy Deployment Administration;
Federal loans to manufacturers of certain
types of vehicles;
Federal agencies' costs to administer
programs established under the bill;
A wide array of activities to improve energy
efficiency throughout the nation;
Federal costs to provide vouchers to
individuals who purchase or lease certain fuel-
efficient vehicles; and
Programs to promote clean energy
technologies.
Table 5.--ESTIMATED SPENDING SUBJECT TO APPROPRIATION UNDER H.R. 2454
--------------------------------------------------------------------------------------------------------------------------------------------------------
By fiscal year, in billions of dollars--
-----------------------------------------------------------------------------------------------------
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2010-2014 2010-2019
--------------------------------------------------------------------------------------------------------------------------------------------------------
CHANGES IN SPENDING SUBJECT TO APPROPRIATION
Spending of Auction Proceeds:
Estimated Authorization Level................. 0 0.2 0.9 1.4 1.8 2.9 3.5 4.0 5.1 5.6 4.4 25.5
Estimated Outlays............................. 0 * 0.3 0.8 1.3 2.1 2.9 3.5 4.3 5.1 2.3 20.1
Clean Energy Deployment Administration:
Estimated Authorization Level................. * * 0.1 0.2 0.4 0.6 1.0 1.5 1.5 1.6 0.8 6.9
Estimated Outlays............................. * * * 0.1 0.1 0.2 0.4 0.6 0.9 1.2 0.3 3.6
DOE Loans to Manufacturers of Advanced Technology
Vehicles:
Estimated Authorization Level................. 0 7.5 * * * * * * * * 7.5 7.6
Estimated Outlays............................. 0 0.4 0.8 1.1 1.5 1.5 1.5 0.8 * * 3.8 7.5
Administrative Costs to Federal Agencies:
Estimated Authorization Level................. 0.5 0.5 0.8 0.8 0.8 0.8 0.9 0.9 0.9 1.0 3.3 7.8
Estimate Outlays.............................. 0.4 0.5 0.7 0.8 0.8 0.8 0.8 0.9 0.9 0.9 3.1 7.5
Energy-Efficiency Programs:
Estimated Authorization Level................. 0.7 0.8 0.8 0.9 1.1 0.8 0.4 0.4 0.4 0.4 4.3 6.7
Estimated Outlays............................. 0.3 0.6 0.7 0.8 0.9 0.9 0.7 0.5 0.5 0.4 3.2 6.2
Vouchers to Purchase or Lease Fuel-Efficient
Vehicles:
Authorization Level........................... 4.0 0 0 0 0 0 0 0 0 0 4.0 4.0
Estimated Outlays............................. 2.6 * 0 0 0 0 0 0 0 0 2.6 2.6
Clean Energy Programs:
Estimated Authorization Level................. 0.3 0.3 0.3 0.3 0.3 0.3 0.2 0.2 0.2 0.2 1.5 2.6
Estimated Outlays............................. 0.1 0.2 0.3 0.3 0.3 0.3 0.3 0.2 0.2 0.2 1.1 2.4
Total Changes:
Estimated Authorization Level................. 5.5 9.3 3.0 3.6 4.4 5.4 6.0 6.9 8.2 8.7 25.8 61.1
Estimated Outlays............................. 3.4 1.6 2.7 3.8 4.9 5.8 6.6 6.5 6.8 7.8 16.4 49.9
--------------------------------------------------------------------------------------------------------------------------------------------------------
Note. DOE = Department of Energy; * = between -$50 million and $50 million.
Numbers may not sum to totals because of rounding.
Spending of Auction Proceeds. Under the legislation, about
$25.5 billion in revenues from the auction of emission and
consumption allowances over the 2011-2019 period would be
deposited into three funds established by the Department of the
Treasury. Spending from those funds would require further
appropriation action. None of the amounts subject to
appropriation would be directly offset by revenues generated
under the bill. CBO's estimate of the spending by funds over
the 2010-2019 period is as follows:
$5.3 billion would be credited to the Natural
Resources Climate Change Adaptation Fund and used to
support adaptation activities, such as activities to
assist fish and wildlife in adapting to the impacts of
climate change, by various federal agencies, including
the Department of the Interior, the Department of
Commerce, and EPA;
$900 million would be credited to the Climate
Change Health Protection and Promotion Fund and would
primarily support efforts by the Department of Health
and Human Services to assist health professionals in
preparing for and responding to the impacts of climate
change on public health; and
$19.3 billion would be credited to the
Stratospheric Ozone and Climate Protection Fund and
would be used to support DOE's best-in-class appliances
deployment program, an EPA program to encourage the
recovery, recycling, and reclamation of HFCs, and any
multilateral agreement related to HFCs that includes
the United States.
Assuming appropriation of amounts estimated to be credited
to the proposed funds, CBO estimates that discretionary
spending of revenues from auctions would total $20.1 billion
over the 2010-2019 period. That estimate is based on historical
spending patterns in agencies that would administer the new
programs funded with auction proceeds.
Clean Energy Deployment Administration. The bill would
establish a Clean Energy Deployment Administration (CEDA)
within DOE, which would be authorized to provide direct loans,
loan guarantees, and letters of credit for clean energy
projects. Such assistance would be available for investments in
the energy, transportation, manufacturing, commodities,
residential, commercial, and financial services sectors.
The budgetary accounting for CEDA's activities would be
largely governed by the Federal Credit Reform Act of 1990,
which requires appropriations for subsidy costs in advance of
commitments for loans and loan guarantees. Under that act, the
subsidy cost is the estimated long-term cost to the government
of the transactions (excluding administrative expenses),
calculated on a present-value basis. Subsidy costs are
typically expressed as a percentage of the loan principal (the
subsidy rate) multiplied by the amounts being loaned or
guaranteed.
The potential budgetary impact of CEDA programs is
difficult to predict for several reasons. The amount and timing
of any spending would depend on investment decisions made by
private firms and nonfederal entities in response to market and
other conditions. The subsidy rate for participating projects
would vary depending on their particular technological and
market risks. Finally, some of the activities eligible for
assistance under this bill may also be eligible for federal
loan guarantees under existing law, especially those involving
advanced energy and automotive technologies.
CBO estimates that implementing this provision would
increase discretionary spending by $3.6 billion over the 2010-
2019 period, assuming appropriation of the amounts necessary to
cover the program's subsidy and administrative costs. According
to the Conference Board and other private-sector analysts,
approximately $1 trillion could be invested over the 2010-2030
period to achieve cost-effective reductions in carbon emissions
in the United States, over half of which could be spent by the
energy and transportation sectors. For this estimate, CBO
assumes that CEDA would provide direct loans or loan guarantees
for about 5 percent of those projected investments or a total
volume of about $50 billion through 2019. (Those amounts would
be in addition to the tens of billions of dollars authorized to
be guaranteed under existing law.) CBO estimates that the
subsidy rate for CEDA's portfolio would average 13 percent,
which is similar to the credit risk posed by speculative-grade
bonds.
Although certain letters of credit and changes to DOE's
existing loan guarantee program could affect direct spending,
CBO estimates that the net effect of those provisions would be
negligible over the 2010-2019 period.
DOE Loans to Manufacturers of Advanced Technology Vehicles.
Under the existing Advanced Technology Vehicles Manufacturing
(ATVM) loan program, DOE is currently authorized to provide up
to $25 billion in direct loans to automobile manufacturers and
component suppliers to support capital investments in
manufacturing facilities designed to produce vehicles with
greater fuel efficiency and reduced emissions. The agency
currently has $7.5 billion available to cover the anticipated
subsidy cost of such loans.
H.R. 2454 would increase, to $50 billion, the amount of
loans DOE is authorized to make under the ATVM loan program.
CBO estimates that funding an additional $25 billion in such
loans under that program would require appropriations totaling
$7.6 billion over the 2010-2019 period. That amount includes
$7.5 billion to cover anticipated subsidy costs of loans and
$0.1 billion for the agency's administrative costs. Estimated
subsidy costs take into account the financial condition of
borrowers and reflect factors such as default risk, anticipated
recoveries in the case of a default, and statutorily specified
terms and conditions of ATVM loans.
Based on information from DOE about the anticipated rate of
disbursement for ATVM loans that the agency can support with
existing funding as well as historical spending patterns for
other federal credit programs, CBO expects that DOE would not
approve any new loans pursuant to H.R. 2454 before 2011.
Starting in 2011, CBO estimates that expenditures for ATVM
loans would occur gradually, over several years, as loans are
disbursed. We further estimate that DOE's administrative costs
associated with additional loans authorized under the
legislation would amount to about $10 million annually over the
2011-2019 period.
Administrative Costs to Federal Agencies. Several federal
agencies, including EPA, the Federal Energy Regulatory
Commission (FERC), the Department of State, DOE, and others
would be responsible for administering programs under H.R.
2454. Major new initiatives--particularly the proposed GHG cap-
and-trade program and related activities, the proposed energy-
efficiency and renewable electricity standard, and rebates for
low-income individuals--would significantly expand agencies'
workloads. In addition, many other provisions of H.R. 2454
would require federal agencies to undertake a variety of
rulemakings, conduct studies and assessments, prepare reports,
and carry out other activities related to new programs
authorized under the bill. Finally, under the bill certain
agencies, particularly EPA and the Department of Labor, would
have to establish and administer programs to distribute
proceeds from auctions of emissions and consumption allowances
to state and local governments, private-sector firms, and
certain individuals.
In total, CBO estimates that fully funding federal
agencies' administrative costs would require gross
appropriations totaling $540 million in 2010 and $8.2 billion
over the 2010-2019 period. That estimate is based on historical
information on how large regulatory programs have been
implemented and on information provided by EPA, FERC, and other
agencies with significant administrative responsibilities under
the bill. Assuming appropriation of the necessary amounts, we
estimate that gross spending by affected agencies would total
$430 million in 2010 and $7.9 billion over the next 10 years.
In some cases, agencies would charge fees to offset a
portion of their administrative costs. In particular, FERC,
which has authority to offset 100 percent of its administrative
costs through fees on regulated entities, would levy additional
fees sufficient to offset any increased administrative costs
incurred under H.R. 2454. Based on information from FERC, CBO
estimates that increased user fees to that agency would offset
roughly $40 million of annual estimated costs under H.R. 2454.
Consistent with current budgetary treatment, such fees would be
recorded as offsetting collections, thus reducing the net
appropriations that would be necessary to implement the
legislation to roughly $7.8 billion over the next 10 years. CBO
estimates that net outlays resulting from that amount of
funding would total $390 million in 2010 and $7.5 billion over
the 2010-2019 period.
Energy-Efficiency Programs. H.R. 2454 would establish new
programs and requirements aimed at improving the energy
efficiency of major sectors of the economy. Most of those
activities would be administered by DOE and EPA. (Those
agencies' costs to implement energy-efficiency programs are
included in our estimate of funding for administrative costs.)
CBO estimates that fully funding programmatic elements of
energy efficiency programs under the bill--including a wide
array of grants and other forms of assistance to nonfederal
entities--would require $6.7 billion over the 2010-2019 period.
That amount includes:
$3.1 billion for activities to increase
lighting efficiency;
$2.1 billion to improve the energy
efficiency of federal and nonfederal buildings; and
$1.5 billion for energy-efficiency programs
aimed at industry and certain state and local
governments and for other related activities.
Assuming appropriation of the necessary amounts, CBO
estimates that implementing energy-efficiency programs under
H.R. 2454 would cost about $300 million in 2010 and $6.2
billion over the 2010-2019 period.
Vouchers to Purchase or Lease Fuel-Efficient Vehicles. H.R.
2454 would authorize the appropriation of $4 billion for DOT to
operate a one-year program to provide vouchers for the purchase
or lease of a new car or truck to individuals who trade in an
eligible vehicle for one that is more fuel efficient. The
eligible vehicle would have to be subsequently dismantled. The
vouchers would range in value from $3,500 to $4,500 depending
on the type of vehicle being purchased and the difference in
the fuel economy from the eligible vehicle.
Based on information from DOT, CBO estimates that up to 77
million vehicles sold over the 1990-2006 period could fall
below the 18-mile-per-gallon threshold specified in the bill.
Of those, CBO expects that fewer than 25 million would both
still be registered and be worth less than the voucher amounts.
The vast majority of those vehicles are trucks. Information
from the automotive industry suggests that most owners of those
vehicles are not currently in the market for a new vehicle and
that a relatively small voucher--the average light-duty truck
costs more than $25,000--is unlikely to induce them to purchase
or lease new vehicles. Current cash incentives from
manufacturers and dealers have not significantly increased car
sales. Sales of new vehicles in the United States are projected
to total about 10 million in calendar year 2009, down from 16
million in 2007, a portion of which are fleet sales and would
not be eligible for the program. In addition, financial
constraints in the form of credit availability and additional
monthly payments by the consumer would play a role in limiting
the use of the vouchers. At the same time, it is likely that
most vouchers would be used by individuals with eligible
vehicles who are currently in the market for a new vehicle or
soon will be.
Further, CBO does not expect a significant number of
vouchers to be used on purchases that occurred before the
enactment of the bill. As a result of the combination of these
factors and the limited time that the program would be
available, CBO estimates that about 625,000 vouchers would be
used, that it would cost DOT about $55 million to administer
the program, and that the program would cost about $2.6 billion
in 2010 and the same amount over the 2010-2014 period.
Clean Energy Programs. H.R. 2454 would establish new
programs and requirements aimed at promoting clean energy. CBO
estimates that fully funding those activities, which would be
implemented primarily by DOE, EPA, and the Department of
Education, would require appropriations totaling $2.6 billion
over the 2010-2019 period. That amount includes:
$1.5 billion for activities related to
modernizing the nation's electricity infrastructure,
including $550 million for rebates on purchases of
certain appliances;
$870 million to establish centers to focus
on research and development of clean energy
technologies;
$250 million for the Department of Education
to award grants to educational agencies, postsecondary
institutions, and representatives from the community to
develop programs of study focusing on emerging careers
and jobs in renewable energy, energy efficiency, and
climate-change mitigation; and
$22 million for other activities.
Assuming appropriation of the necessary amounts, CBO
estimates that implementing clean energy programs under H.R.
2454 would cost $92 million in 2010 and $2.4 billion over the
2010-2019 period, with additional spending occurring in later
years.
PROVISIONS WITH MAJOR BUDGETARY IMPACTS THAT BEGIN AFTER 2019
No later than 2022, the President would be required to
assess the extent to which the distribution of emission
allowances has mitigated or addressed carbon leakage. (Carbon
leakage is defined in the legislation as any substantial
increase in GHG emissions by industrial entities located in
other countries if such increase is caused by an incremental
cost of production increase in the United States resulting from
the implementation of the GHG cap-and-trade program.)
Specifically, if the President determines that more than 70
percent of global output for each eligible sector is produced
or manufactured in countries that meet certain criteria, such
as being a party to an international agreement to which the
United States is a party, then the President may implement an
International Reserve Allowance Program within two years of
that determination. Under such a program, foreign manufacturers
and importers would be required to pay for and hold allowances
to cover the carbon contained in U.S.-bound products. CBO
expects that revenues generated from this program could be
significant.
Under this legislation, starting in 2025 proceeds from
auctions of allowances would be deposited into the Climate
Change Consumer Rebate Fund. The Secretary of the Treasury
would provide tax refunds on a per-capita basis to each
household in the United States that would collectively equal
the amount deposited into that fund.
INTERGOVERNMENTAL AND PRIVATE-SECTOR IMPACT
CBO has determined that the non-tax provisions of H.R. 2454
contain intergovernmental and private-sector mandates as
defined in the Unfunded Mandates Reform Act. Several of those
mandates would require utilities, manufacturers, and other
entities to reduce greenhouse gas emissions through cap-and-
trade programs and performance standards. CBO estimates that
the aggregate cost of mandates in the bill would well exceed
the annual thresholds established in UMRA for intergovernmental
and private-sector mandates (in 2009, $69 million and $139
million respectively, adjusted annually for inflation). In some
cases, because of a lack of information about future
regulations, CBO has no basis for estimating the costs of the
mandates.
MANDATES THAT APPLY TO BOTH PUBLIC AND PRIVATE ENTITIES
Cap-and-Trade Program for Greenhouse Gases. The cap-and-
trade program for GHG emissions (excluding HFCs) would require
covered facilities to submit one allowance per metric ton of
carbon dioxide equivalent emitted beginning in 2012. The
compliance costs for covered facilities would be the
expenditures made in acquiring allowances, the cost of
purchasing offset credits, and the cost of directly reducing
their emissions of GHGs. Based on estimates of those costs and
accounting for the initial allocation of free allowances, CBO
estimates that the cost of this requirement would amount to
tens of billions of dollars annually for private-sector
entities and about $1 billion annually for public entities.
Although not available to cover the mandate costs of the
cap-and-trade requirements, about $50 billion in allowances
would be provided to states over the 2012-2016 period for
specific purposes, including programs for improving energy
efficiency, implementing regulations, and supporting other
climate change programs (see additional discussion under
``Other Impacts on State and Local Governments'' below).
Reporting Requirements. Public and private entities also
would be required to report information on greenhouse gases to
a federal registry. Assuming EPA's proposed rule for a federal
registry of greenhouse gases is adopted under current law, CBO
expects that most public entities and some private entities
would already be required to report, and therefore the public
sector would incur minimal costs. However, CBO expects that
additional private-sector entities would be required to report
information to the registry under the bill. Based on
information about compliance costs from EPA's impact analysis
of the proposed rule, CBO estimates that the reporting
requirements could increase costs to private entities by about
$50 million per year.
The bill also would impose reporting requirements on public
and private entities to assist with implementing the cap-and-
trade program. CBO expects that the cost to comply with those
mandates would be small.
Carbon Capture and Sequestration Assessments. Section 114
would authorize the Carbon Storage Research Corporation to
collect annual assessments on public and private utilities
following a referendum by the affected utilities. The funds
collected along with an allocation of emission allowances would
be used to support the development of technologies related to
CCS. The bill also would require state regulatory authorities
to indicate whether they support or oppose the creation of the
corporation. Assuming that the referendum is approved, all
utilities would be required to pay the assessments. The
assessments would be based on the amount of electricity
delivered to retail customers, and would generate between $1.0
billion and $1.1 billion annually. CBO estimates the annual
cost to be between $150 million and $175 million for public
utilities and $850 million and $925 million for private
utilities. The cost of the requirement to regulatory
authorities would be small.
Performance Standards for Coal-fueled Power Plants. Section
116 would establish performance standards for new sources of
power from coal power plants. Those requirements would compel
owners and operators of new units of electric generation (EGUs)
to reduce annual CO2 emissions and would apply to
both public and private power plants. Beginning in 2020 or
2025, at the latest, EGUs would be required to reduce annual
emissions of CO2 by 50 percent or 65 percent,
depending on when the EGU received a preconstruction permit.
The cost of the mandate would be either the cost of adopting
CCS or switching to a different fuel source. Because EGUs would
likely use CCS technology, along with other measures, to comply
with the cap-and-trade program established in the bill, CBO
cannot determine the extent to which EGUs would adopt
additional CCS technology due to the performance standard
alone. Consequently, the cost of the mandate is uncertain.
Emission Reduction Standards. Section 331 would direct EPA
to publish an inventory of stationary sources that emit
greenhouse gases that are not covered by the federal cap-and-
trade program. The inventory would include categories of
sources responsible for a certain percentage of uncapped
emissions. Based on information from EPA, those categories
could include landfills, natural gas systems, and small fuel
combustion sources. The bill would require EPA to establish
performance standards for those categories, which could include
standards for work practices as well as technological
standards. Section 333 would authorize EPA to propose
regulations to reduce emissions of black carbon or to publish a
finding that existing regulations adequately control such
emissions. Because the costs to comply with the new standards
established by sections 331 and 333 would depend on future
regulatory action, CBO has no basis for estimating the cost of
these mandates.
Limitations on Transactions in Commodities. Subtitle E of
Title III would impose several mandates on participants in
certain commodities markets. Those mandates would include
limits on the number of contracts that can be held (known as
``position limits'') as well as transaction and reporting
requirements, with respect to energy commodities, on public and
private entities such as pension funds and swap dealers. The
bill would impose other requirements on transactions, including
fees for transactions executed on certain exchanges. Because of
limited information about the transactions in the affected
markets, the position limits that would be established, and the
extent to which position limits would result in lower returns,
CBO has no basis for estimating the cost of the mandates to
public or private-sector entities.
Combined Energy Efficiency and Renewable Electricity
Standard. Section 101 would create a renewable portfolio
standard for certain electricity suppliers. Covered entities
would have to submit credits to certify that a minimum
percentage of their base sales came from renewable sources.
Approximately 21 public and 105 private utilities would be
subject to those requirements. As noted earlier in the
discussion of federal effects, CBO anticipates electricity
generated from renewable sources on a national level to be
greater than the amount that would be required by the standard
in the first five years that mandate is in effect. Therefore,
CBO expects the costs associated with this mandate to be small
in those years.
Other Mandates. The bill contains several mandates that
would affect both public and private entities, but CBO
estimates that the costs of those mandates would be small:
Sections 121 and 152 would require state
regulatory authorities and nonregulated utilities to
consider implementing certain standards relating to
electric vehicle infrastructure and the ability of
federal agencies to generate electricity and sell it
back to utilities;
Section 144 would require both public and
private electric utilities to publish goals for
reducing peak demand reduction and to prepare a plan
that demonstrates their ability to meet those goals;
and
Section 332 would authorize EPA to establish
new requirements governing the repair of air
conditioners in motor vehicles.
MANDATES THAT APPLY TO PUBLIC ENTITIES ONLY
The bill would impose some mandates solely on public
entities, some of which would be preemptions of state and local
authority. CBO estimates that the costs of those
intergovernmental mandates would be small:
Section 216 would require the District of
Columbia to purchase certain products and services
designated to be water efficient by EPA or DOE.
Section 224 would direct the Secretary of
Energy to revise the list of vehicles available for
states to comply with an existing mandate that a
certain percentage of fleet purchases be alternative
fueled vehicles.
Preemptions of State and Local Authority. In addition to
the mandates discussed above, H.R. 2454 contains several
preemptions of state and local authority. Because preemptions
limit the authority of state and local governments, they are
considered intergovernmental mandates under UMRA, but CBO
estimates that those preemptions would not impose significant
additional costs on state, local, or tribal governments as
regulators.
Section 161 would expand an existing
preemption of state laws that set energy standards for
appliances to include walk-in coolers and freezers as
well as commercial refrigerators, freezers, and ice
makers.
Section 211 would preempt state and local
laws governing the energy efficiency of certain outdoor
luminaires.
Section 619 would preempt state laws
relating to the production and import of certain
hydrofluorocarbons.
Section 861 would preempt state authority to
enforce a cap-and-trade program that covers any capped
emissions during the years 2012 through 2017.
OTHER IMPACTS ON STATE AND LOCAL GOVERNMENTS
The bill would provide allowances to states for a number of
specific purposes. States would create State Energy and
Environment Development (SEED) accounts for implementing
building regulations and programs to retrofit buildings. SEED
accounts could also be used to provide rebates to low-income
individuals for the purchase of energy efficient homes and to
fund grants to community development organizations for energy
efficiency programs. States could also use SEED allowances for
transportation planning, smart grid development, and financial
incentives to convert or construct manufacturing facilities and
expand renewable energy. Other allowance allocations would be
available for natural resource adaptation, infrastructure
improvements, and programs to benefit low-income consumers of
home heating oil or propane. CBO estimates that the allowances
would total about $50 billion through 2016.
In addition, the bill would authorize several grant
programs for workforce training, transportation planning,
environmental protection, research initiatives, and energy
efficiency. Those grant programs would benefit participating
state, local, and tribal governments, and any costs would be
incurred voluntarily as a condition of receiving federal
assistance.
MANDATES THAT APPLY TO PRIVATE ENTITIES ONLY
Hydrofluorocarbon Restrictions. The cap-and-trade program
for HFCs would require any entity that produces or imports
HFCs, or imports a product containing HFCs, to hold one
consumption allowance or destruction offset credit per metric
ton of carbon dioxide equivalent beginning in 2012. The direct
cost would be equal to the cost of purchasing allowances and
offset credits, and the cost of reducing the use of HFCs. The
bill also would impose several other requirements for the use
of HFCs including restrictions on HFCs used in refrigeration
and labeling and reporting requirements.
Based on the price of a consumption allowances established
in the bill, CBO estimates that the cost of this requirement
would amount to about $600 million in the first year the
mandates are in effect.
Lighting and Appliance Efficiency Standards. The bill would
establish new requirements for lighting and appliances. CBO
estimates that the aggregate cost of those mandates would
exceed the threshold in at least one of the first five years
the mandates are in effect. Those requirements include:
Efficiency standards for outdoor luminaries,
portable light fixtures, art work fixtures,
incandescent reflector lamps, and certain base lamps;
Efficiency standards for appliances
including commercial hot food holding cabinets, water
dispensers, portable electric spas, and commercial
furnaces; and
Inclusion of Smart Grid capability on Energy
Guide labels for appliances, if required by the Federal
Trade Commission.
Allowances for Carbon-Intensive Goods. The bill would
establish two programs to mitigate the costs to manufacturers
of carbon-intensive goods. The bill would provide rebates in
the form of allowances to those manufacturers and authorize EPA
to implement an international reserve allowance program. If
implemented, that program would require importers of carbon-
intensive goods to purchase and submit international reserve
allowances for those goods beginning in 2025. The cost of the
mandate would depend on the price of an international reserve
allowance and the number of international reserve allowances
required to be submitted for those goods.
Motor Vehicle Standards. The bill would authorize the
Secretary of Transportation to establish a standard for the
manufacture of vehicles capable of using alternative fuels such
as ethanol, methanol, and biodiesel. The bill also would direct
the EPA to establish emissions standards for new heavy-duty
vehicles and engines. Because both standards would depend on
future regulatory action, the costs of the mandates are
uncertain.
Estimate prepared by: Federal Revenues: Mark Booth, David
Weiner, Pamela Greene, Edward Harris, Kevin Perese, and Grant
Driessen. Federal Costs: Susanne S. Mehlman and Daniel Hoople
(cap-and-trade programs), Megan Carroll (RES, clean energy
programs, energy efficiency programs), Kathleen Gramp (CEDA),
Christi Hawley Anthony (Department of Labor), Sarah Puro and
Matthew Pickford (vouchers for fuel-efficient vehicles), and
Susan Willie (CFTC); Allowance Prices: Robert G. Shackleton
Jr., Rob Johansson, Terry Dinan, and Natalie Tawil; Impact on
state, local, and tribal governments: Ryan Miller; impact on
the private sector: Amy Petz.
Estimate approved by: Theresa Gullo, Deputy Assistant
Director for Budget Analysis; Frank J. Sammartino, Acting
Assistant Director for Tax Analysis; Joseph Kile, Assistant
Director for Microeconomic Studies; Robert A. Dennis, Assistant
Director for Macroeconomic Analysis.
Section-by-Section
TITLE I--CLEAN ENERGY
SUBTITLE A--COMBINED EFFICIENCY AND RENEWABLE ELECTRICITY STANDARD
Section 101, Combined Efficiency and Renewable Electricity
Standard: Amends the Public Utility Regulatory Policies Act to
require retail electric suppliers--defined as utilities that
sell more than 4 million megawatt hours (MWh) of electricity to
consumers for purposes other than resale--to meet a certain
percentage of their load with electricity generated from
renewable resources and electricity savings. The combined
renewable electricity and electricity savings requirement
begins at 6 percent in 2012 and gradually rises to 20 percent
in 2020. Up to one quarter of the 20 percent requirement
automatically may be met with electricity savings. Upon
petition of the governor of any state, the Federal Energy
Regulatory Commission is authorized to increase the proportion
of the requirement that can be met with electricity savings to
up to two fifths for electric suppliers located within that
state. This would reduce the renewable requirement for such
suppliers to a minimum of 12 percent renewables by 2020, with
the remaining 8 percent of the combined target satisfied
through electricity savings.
Defines renewable energy resources to include wind,
biomass, solar, geothermal, certain hydropower projects, marine
and hydrokinetic renewable energy, and biogas and biofuels
derived exclusively from eligible biomass. Other qualifying
energy resources include landfill gas, wastewater treatment
gas, coal mine methane, and qualified waste-to-energy. An
electric supplier's requirement is reduced in proportion to any
portion of its electricity sales that is generated from certain
existing hydroelectric facilities, new nuclear generating
units, and fossil-fueled units that capture and geologically
sequester greenhouse gas emissions.
Requires retail electric suppliers to submit Federal
renewable electricity credits and electricity savings each year
equal to the combined target for that year times the supplier's
retail sales. One renewable electricity credit is given for
each MWh of electricity produced from a renewable or other
qualifying energy resource. To encourage greater deployment of
distributed generation, like small wind and rooftop solar,
these projects meeting certain criteria are eligible for three
credits for each MWh produced. Retail electric suppliers may
submit, in lieu of a renewable electricity credits and
demonstrated electricity savings, an alternative compliance
payment equal to $25 per MWh (2.5 cents per kilowatt hour).
Electric suppliers choosing to use efficiency for a portion
of their compliance are required to demonstrate achievement of
electricity savings relative to business-as-usual projections
through efficiency measures, including savings achieved through
reductions in end-use electricity consumption attributable to
measures or technologies such as equipment or facility
upgrades, combined heat and power, energy recycling (waste heat
recovery), and fuel cells. Electric suppliers may meet the
efficiency standards either by achieving electricity savings
directly or by using bilateral contracts to acquire savings
achieved within the same state by other suppliers or
distribution companies, states, or third-party efficiency
providers.
Section 102, Clarifying State Authority to Adopt Renewable
Energy Incentives: Provides that, notwithstanding any provision
to the contrary in the Public Utility and Regulatory Policies
Act of 1978 (PURPA), any State may establish rates to be paid
by state-regulated utilities intended to provide incentives for
development of renewable energy. In the past, some have
interpreted PURPA to bar such incentive rates to the extent
they exceed the ``avoided cost'' of power a utility could
generate or procure from any other source, denying States the
ability to account for the additional benefits of renewable
energy.
SUBTITLE B--CARBON CAPTURE AND SEQUESTRATION
Section 111, National Strategy: Requires the EPA
Administrator, in consultation with the heads of other relevant
federal agencies, to submit to Congress a report setting forth
a unified and comprehensive strategy to address the key legal
and regulatory barriers to the commercial-scale deployment of
carbon capture and sequestration.
Section 112, Regulations for Geologic Sequestration Sites:
Amends the Clean Air Act to require the Administrator to
establish a coordinated approach to the certification and
permitting of sites where geologic sequestration of carbon
dioxide will occur. Requires the Administrator to promulgate
regulations to minimize the risk of escape to the atmosphere of
carbon dioxide injected for geologic sequestration and details
the requirements of such regulations. Such regulations will
apply in tandem with regulations promulgated under the Safe
Drinking Water Act. Together, these regulations will provide a
comprehensive, multi-media regulatory framework for geologic
sequestration activities.
Section 112 also amends the Safe Drinking Water Act to
establish a deadline for promulgation of regulations for carbon
dioxide geologic sequestration wells and to clarify financial
responsibility requirements to be established under such
regulations.
Injection of carbon dioxide for geologic sequestration can
take place either solely for the purpose of storing carbon
dioxide, or for the dual purposes of storing carbon dioxide and
conducting enhanced hydrocarbon recovery activities. For
example, carbon dioxide can be injected for permanent storage
in a saline aquifer, or it can be injected as part of enhanced
oil recovery operations and then be permanently stored in a
depleted oil field. Regulations promulgated under Section 112,
and under the Safe Drinking Water Act as amended, should apply
to all instances where carbon dioxide is injected for geologic
sequestration, regardless of whether or not the injection also
serves the purposes of enhancing hydrocarbon recovery
activities.
Section 113, Studies and Reports: Section 113(a) requires
the Administrator to establish a multi-stakeholder task force
to conduct a study of the legal framework for geologic
sequestration sites. Section 113(b) directs the Administrator
to conduct a study that examines how the multiple environmental
statutes that EPA administers, including but not limited to the
Comprehensive Environmental Response, Compensation, and
Liability Act and the Resource Conservation and Recovery Act,
would apply to geologic sequestration activities.
Section 114, Carbon Capture and Sequestration Demonstration
and Early Deployment Program: Establishes a program for the
demonstration and early deployment of carbon capture and
sequestration (CCS) technologies. Authorizes fossil-based
electricity distribution utilities to hold a referendum on the
establishment of a Carbon Storage Research Corporation. If
approved by entities representing two-thirds of the nation's
fossil fuel-based delivered electricity, the Corporation would
be established and would be authorized to collect assessments
on distribution utilities for all fossil fuel-based electricity
delivered directly to retail consumers. The Corporation would
be operated as a division or affiliate of the Electric Power
Research Institute and would assess fees totaling approximately
$1 billion annually for ten years, to be used by the
Corporation to fund the large-scale demonstration of CCS
technologies in order to accelerate the commercial availability
of the technologies.
Section 115, Commercial Deployment of Carbon Capture and
Sequestration Technologies: Amends the Clean Air Act to direct
the EPA Administrator to establish an incentive program to
distribute allowances to support the commercial deployment of
CCS technologies in both electric power generation and
industrial applications. Establishes eligibility requirements
for facilities to receive allowances based on the number of
tons of carbon dioxide sequestered. The allowance disbursement
program is structured to provide greater incentives for
facilities to deploy CCS technologies early in the program and
for facilities to capture and sequester larger amounts of
carbon dioxide.
Section 116, Performance Standards for Coal-Fueled Power
Plants: Amends the Clean Air Act to establish performance
standards for new coal-fired power plants permitted in 2009 or
thereafter. Describes eligibility criteria, applicable emission
standards, and the schedule upon which such standards must be
met. Plants permitted in 2020 or thereafter are required to
meet specified standards upon commencement of operations.
Plants permitted from 2009-2020 are required to meet the
specified standard within four years after certain technology
deployment criteria are met but no later than 2025.
SUBTITLE C--CLEAN TRANSPORTATION
Section 121, Electric Vehicle Infrastructure: Amends the
Public Utility Regulatory Policies Act to require utilities to
consider developing plans to support electric vehicle
infrastructure and to consider establishing protocols for
integration with smart grid systems.
Section 122, Large-Scale Vehicle Electrification Program:
Authorizes the Secretary of Energy to provide financial
assistance for regional deployment and integration of grid-
connected vehicles. Funds may be used for offsetting the
incremental cost of purchasing new plug-in electric drive
vehicles, deployment of electric charging stations or battery
exchange locations, or facilitating the integration of smart
grid equipment with plug-in electric drive vehicles. Makes data
and results from the regional deployments publicly available.
Section 123, Plug-In Electric Drive Vehicle Manufacturing:
Authorizes the Secretary of Energy to provide financial
assistance for retooling existing factories for the manufacture
of electric vehicles. Authorizes the Secretary of Energy to
provide financial assistance to help auto manufacturers
purchase batteries for first production vehicles.
Section 124, Investment in Clean Vehicles: Provides for
distribution of allowances for plug-in electric drive vehicle
manufacturing and deployment and advanced technology vehicles.
Section 125, Advanced Technology Vehicle Manufacturing
Incentive Loans: Increases the authorization for loan
guarantees under section 136 of the Energy Independence and
Security Act of 2007 to $50,000,000,000. Loan guarantees are
for reequipping, expanding or establishing manufacturing
facilities for advanced technology vehicles or their
components, as well as the engineering integration work for
such vehicles.
Section 126, Amendment to Renewable Fuels Standard: Amends
the definition of ``renewable biomass'' in section 211 of the
Clean Air Act to increase the types of biomass from Federal and
non-Federal lands that may be used to make renewable fuel the
qualifies for the Renewable Fuels Standard.
Section 127, Open Fuel Standard: Provides the Secretary of
Transportation with the authority to require light-duty
automobile manufacturers to make vehicles capable of operating
on ethanol and methanol-based fuels if the Secretary determines
that such requirements are a cost-effective way to achieve the
nation's energy independence and environmental objectives.
Section 128, Temporary Vehicle Trade-In Program:
Establishes a ``Cash for Clunkers'' program. Under this
program, consumers may trade in their old, gas-guzzling
vehicles and receive vouchers worth up to $4,500 to help pay
for new, more fuel efficient cars and trucks. The program is
authorized for $4 billion for one year, and providing for
approximately one million new car or truck purchases.
New passenger cars which achieve at least 22 mpg are
eligible for a $3,500 voucher if the performance of the new car
is at least 4 mpg higher than the old vehicle and a $4,500
voucher if the performance of the new car is at least 10 mpg
higher than the old vehicle. Light duty trucks which achieve at
least 18 mpg are eligible for a $3,500 voucher if the
performance of the new truck is at least 2 mpg higher than the
old vehicle and a $4,500 voucher if the performance of the new
truck is at least 5 mpg higher than the old vehicle. Large
light duty trucks which achieve at least 15 mpg are eligible
for a $3,500 voucher if the performance of the new truck is at
least 1 mpg higher than the old vehicle and a $4,500 voucher if
the performance of the new truck is at least 2 mpg higher than
the old vehicle. Consumers can also trade in a pre-2002 work
truck (defined as a pick-up truck or cargo van weighing from
8,500-10,000 pounds) and receive a voucher worth $3,500 for a
new work truck in the same or smaller weight class. Consumers
can also ``trade down,'' receiving a $3,500 voucher for trading
in an older work truck and purchasing a smaller light-duty
truck weighing from 6,000 8,500 pounds. Work truck purchases
are capped such that the total funds used to purchase work
trucks cannot exceed 7.5 percent of all program funds. The
section also includes important consumer protections and
protections against program fraud.
Section 129, Diesel Emissions Reduction: Amends the diesel
emission reduction grant program established by Subtitle G of
title VII of the Energy Policy Act of 2005 (42 U.S.C. 16131 et
seq.) by adding American Samoa, Guam, the Commonwealth of the
Northern Mariana Islands, Puerto Rico, and the Virgin Islands
to the list of States eligible to receive grants, and by
adjusting the grant distribution formula accordingly.
Section 130, Loan Guarantees for Projects to Construct
Renewable Fuel Pipelines: Amends title XXII of the Energy
Policy Act of 2005 to add renewable fuel pipelines to the list
of projects and technologies available for loan guarantees
under the title.
SUBTITLE D--STATE ENERGY AND ENVIRONMENT DEVELOPMENT ACCOUNTS
Section 131, Establishment of SEED Accounts: Creates a
program for each state to establish a State Energy and
Environment Development (SEED) Account, to serve as a state-
level repository for managing and accounting for all emission
allowances designated primarily for renewable energy and energy
efficiency purposes.
Section 132, Support of State Renewable Energy and Energy
Efficiency Programs: Distributes emission allowances among
states for energy efficiency programs and renewable energy
deployment and manufacturing support. At least 12.5 percent of
the allowances are distributed to local governments for these
purposes.
SUBTITLE E--SMART GRID ADVANCEMENT
Section 141, Definitions: Provides relevant definitions.
Section 142, Assessment of Smart Grid Cost Effectiveness in
Products: Instructs the Department of Energy and the
Environmental Protection Agency to assess products evaluated
for Energy Star ratings for benefits of Smart Grid capability.
Section 143, Inclusions of Smart Grid Capability on
Appliance ENERGY GUIDE Labels: Instructs Federal Trade
Commission to include relevant information on the ENERGY GUIDE
labels for those products that include cost-effective Smart
Grid capability.
Section 144, Smart Grid Peak Demand Reduction Goals:
Requires the Federal Energy Regulatory Commission to coordinate
and support a national program to reduce peak electric demand
for load-serving electric utilities with peak loads in excess
of 250 megawatts.
Section 145, Reauthorization of Energy Efficiency Public
Information Program to Include Smart Grid Information: Amends
the Energy Policy Act of 2005 to reauthorize the joint
Department of Energy and Environmental Protection Agency energy
efficiency public information initiative and expands the
initiative to include information on smart grid technologies,
practices, and benefits.
Section 146, Inclusion of Smart Grid Features in Appliance
Rebate Program: Amends the Energy Policy Act of 2005 to expand
energy efficient appliance rebate program to include rebates
for efficient appliances with smart grid features and
capability. Clarifies program cost-sharing requirements from
states.
SUBTITLE F--TRANSMISSION PLANNING
Section 151, Transmission Planning: Amends the Federal
Power Act to establish a federal policy on electric grid
planning that recognizes the need for new transmission capacity
to deploy renewable energy as well as the potential for more
efficient operation of the current grid through new technology,
demand-side management, and storage capacity. Enhances existing
regional transmission planning processes by incorporating this
federal policy. Charges the Federal Energy Regulatory
Commission with supporting, coordinating, and integrating
regional planning efforts.
Section 152, Net Metering for Federal Agencies: Adopts a
standard requiring utilities (that sell in excess of 4,000,000
megawatt hours of electricity) to interconnect with and to
provide net metering of power deliveries to and receipts from
Federal agencies that own, operate or site facilities
generating renewable energy. The net metering service is to be
offered to such Federal agencies on the basis of non-
discriminatory time-sensitive rates.
Section 153, Support for Qualified Advanced Electric
Transmission Manufacturing Plants, Qualified High Efficiency
Transmission Property, and Qualified Advanced Electric
Transmission Property: Amends Title XVII of the Energy Policy
Act of 2005 to extend the loan guarantee authority in that
Title to cover the development, construction, or integration of
high-efficiency or superconductive high-voltage electricity
transmission technologies. It also provides such loan
guarantees for manufacturing plants producing such
technologies. It separately authorizes the Secretary of Energy
to make grants for up to 50 percent of the cost of the first
project incorporating such technologies, up to a maximum of
$100,000,000.
SUBTITLE G--TECHNICAL CORRECTIONS TO ENERGY LAWS
Sections 161-162, Technical Corrections to Energy
Independence and Security Act of 2007 and Energy Policy Act of
2005: Makes technical corrections to the Energy Independence
and Security Act of 2007 and the Energy Policy Act of 2005.
SUBTITLE H--CLEAN ENERGY INNOVATION CENTERS
Section 171, Clean Energy Innovation Centers: Establishes a
program to support development and commercialization of clean
energy technologies through eight regional Clean Energy
Innovation Centers selected competitively by the Secretary of
Energy. Emission allowances to support the establishment of
Centers may be awarded to consortiums consisting of research
universities, private research entities, industry, and relevant
state institutions. Each Center has a unique technology focus
to which at least 40 percent of support would be directed.
Section 172, Building Assessment Centers: Requires the
Secretary of Energy to create building assessment centers at
institutions of higher education to identify opportunities to
optimize the energy and environmental performance of buildings.
The centers would also promote emerging technologies and
research and development to improve buildings' energy and
environmental performance. Additionally, the centers would
train engineers, architects, and building technicians in energy
efficient building design and operation.
Section 173, Centers for Energy and Environmental Knowledge
and Outreach: Provides for the establishment of not more than
10 regional centers for energy and environmental knowledge and
outreach (CEEKO) to coordinate various energy-related research
centers. Operating in coordination with each CEEKO would be one
or more industrial research and assessment center, building
assessment center, and clean energy application center located
in that CEEKO's region. Institutions of higher education would
compete to house such centers and would operate internship
programs to train students in energy efficiency with Federal
funding supporting up to 50 percent of the costs.
SUBTITLE I--NUCLEAR AND ADVANCED TECHNOLOGIES
Section 181-189: Establishes a self-sustaining Clean Energy
Deployment Administration (CEDA) within the Department of
Energy to promote the domestic development and deployment of
clean energy technologies. The Clean Energy Deployment
Administration would partner with and support private capital
markets to promote access to affordable financing for a range
of clean energy technologies that might otherwise be unable to
secure financing. CEDA ensures support for a variety of next
generation technologies by limiting to 30 percent the amount of
financial assistance provided to any one technology. This
subtitle also reforms the loan guarantee program established by
Title 17 of the Energy Policy Act of 2005.
SUBTITLE J--MISCELLANEOUS
Section 191, Study of Ocean Renewable Energy and
Transmission Planning and Siting: Requires the Federal Energy
Regulatory Commission, the Department of the Interior, and the
National Oceanic and Atmospheric Administration to jointly
recommend an approach for the development of regional marine
spatial plans for the siting of offshore renewable energy
facilities. The Council on Environmental Quality determines
whether the recommended approach should be implemented and
coordinates the implementation. The Committee intends that the
relevant agencies will continue to implement their existing
leasing, licensing, and permitting programs while the study is
underway and while marine spatial plans are being developed.
Section 192, Clean Technology Business Competition Grant
Program: Provides for grants by the Secretary of Energy to
nonprofit organizations that conduct competitive programs to
identify and support start-up businesses proposing products or
services in areas of energy efficiency, renewable energy, air
quality, water quality and conservation, transportation, smart
grid, green building, and waste management.
Section 193, National Bioenergy Partnership: Requires the
Secretary of Energy to establish a National Bioenergy
Partnership to support the institutional and physical
infrastructure necessary to promote the deployment of
sustainable biomass fuels and bioenergy technologies.
Section 194, Office of Consumer Advocacy: Establishes an
Office of Consumer Advocacy at the Federal Energy Regulatory
Commission to identify and defend the consumer interest in
proceedings before the Commission. The office would be headed
by a Presidentially-appointed Director, and would represent
energy customers through investigations of rates, in
complaints, and on appeal of Commission decisions concerning
such matters.
TITLE II--ENERGY EFFICIENCY
SUBTITLE A--BUILDING ENERGY EFFICIENCY PROGRAMS
Section 201, Greater Energy Efficiency in Building Codes:
Amends the Energy Conservation and Production Act to establish
upon enactment and in 2014 (or 2015 for new commercial
buildings), respectively, targets for improved energy
efficiency building codes to achieve 30 percent and 50 percent
reductions in energy use in new buildings. The Secretary of
Energy is required to support consensus code-setting
organizations in developing and publishing codes meeting those
targets; to adopt such codes directly if such organizations
fail to do so; to include cool roofs standards; to support
state and local adoption of such advanced codes by supporting
training and funding for energy efficiency code enforcement;
and to provide direct federal enforcement of such codes if
states and local governments decline to do so.
Section 202, Building Retrofit Program: Establishes a
program under which the Administrator of EPA, in consultation
with the Secretary of Energy, supports development of standards
and processes for retrofitting existing residential and
nonresidential buildings. Authorizes the Secretary of Energy to
provide funding to states to conduct cost-effective building
retrofits, using local governments, other agencies or entities
to carry out the work, through flexible forms of financial
assistance up to 50 percent of the costs of retrofits, with
funding increasing in proportion to efficiency achievement.
Also supports retrofits of historic buildings.
Section 203, Energy Efficient Manufactured Homes:
Establishes a program to provide federal rebates of up to
$7,500 toward purchases of new Energy Star-rated manufactured
homes for low-income families residing in pre-1976 manufactured
homes.
Section 204, Building Energy Performance Labeling Program:
Establishes an EPA program to develop procedures to label
buildings for their energy performance characteristics, using
building type and consumption data to be developed by the
Energy Information Administration. The program would be
implemented by states in a manner suited to increasing public
knowledge of building energy performance without hindering real
estate transactions.
Section 205, Tree Planting Programs: Authorizes a grant
program through the Department of Energy to provide technical
and financial assistance to retail power providers that carry
out targeted tree planting programs, which reduce energy use
and demand peaks in residential and small office settings.
Section 206, Energy Efficiency for Data Center Buildings:
Establishes a deadline for the designation by the Secretary of
Energy and the Administrator of the Environmental Protection
Agency of an information technology organization to consult and
coordinate with them on data center energy efficiency, as
called for--but without a deadline--in Section 453(c)(1) of the
Energy Independence and Security Act of 2007. The deadline
would effectively be set at December 19, 2009.
SUBTITLE B--LIGHTING AND APPLIANCE ENERGY EFFICIENCY PROGRAMS
Section 211, Lighting Efficiency Standards: Amends the
Energy Policy and Conservation Act to adopt negotiated
agreements on technical standards for lighting, including
outdoor lighting--street lights, parking lot lights, and
parking structure lights--and portable light fixtures such as
typical household and commercial plug-in lamps.
Section 212, Other Appliance Efficiency Standards: Amends
the Energy Policy and Conservation Act to adopt consensus
agreements on technical standards for hot food holding
cabinets, bottle-type drinking water dispensers, portable spas
(hot tubs), and commercial-grade natural gas furnaces.
Section 213, Appliance Efficiency Determinations and
Procedures: Amends the Energy Policy and Conservation Act to
improve the Department of Energy process for setting energy-
efficiency standards by enabling adoption of consensus testing
procedures; requiring the adoption of a new television
standard; improving standard-setting cost-effectiveness
formula; authorizing the Secretary to obtain product-specific
information as needed; authorizing state injunctive enforcement
of standards violations; changing the role of appliance
efficiency in building codes; and including greenhouse gas
emissions, smart grid capability, and availability of more-
efficient models among factors affecting efficiency standard
ratings.
Section 214, Best-in-Class Appliances Deployment Program:
Creates a Department of Energy program to provide rewards to
retailers for successful marketing of high-efficiency
appliances, designating top performers as ``best-in-class,''
and providing bonuses based on efficiency improvement compared
to average product. Provides additional rewards to retailers
when best-in-class sale includes return and recycling of
inefficient appliances. Creates program to reward manufacturers
of new high-efficiency best-in-class models representing
significant incremental energy efficiency gain.
The rewards programs for products in this section should
not in any way interfere with, discourage, or prevent DOE from
adopting minimum standards under the Energy Policy and
Conservation Act (42 U.S.C. 6291-6317) that require all
products to achieve the same or better efficiency levels as
products eligible for awards under this section, where such
standards are technologically feasible and economically
justified.
Section 215, Water Sense: Authorizes the EPA's WaterSense
program, a voluntary labeling program that labels water-
efficient high-performance products and services. This will
provide the same type of labeling for water efficient products
and services as is already done for energy efficient products
under the existing Energy Star program.
Section 216, Federal Procurement of Water Efficient
Products: Directs federal agencies to make cost-effective
water-efficient procurement decisions by purchasing WaterSense
or Federal Energy Management Program certified products
whenever possible.
Section 217, Water Efficient Product Rebate Programs:
Authorizes grants to state governments that establish programs
that offer financial incentives to consumers who purchase and
install water-efficient products and services such as those
labeled by WaterSense.
Section 218, Certified Stoves: This section directs the
Environmental Protection Agency (EPA) to establish a program to
assist in the replacement of old polluting inefficient wood
stoves or pellet stoves with cleaner burning units. It would
build on the successes of the EPA's voluntary partnership
program, known as the Great American Wood Stove Changeout
Program, by providing grants, incentives and loans for people
who rely on wood as a source of heat. It would improve air
quality in many communities and save money for those who heat
their homes with wood. Climate change benefits would occur from
reductions in methane and carbon dioxide from improved
combustion efficiency.
The Committee intends that, under section 218(a)(3), all
``certified stoves'' under the program will have been tested by
an EPA-accredited laboratory specified by the methods required
under the standards of performance for new residential wood
heaters under subpart AAA of part 60 of subchapter C of chapter
I of title 40, Code of Federal Regulations (or successor
regulations).
Section 218(b)(1) is meant to apply to sales of new wood
stoves or pellet stoves. Although the standards of performance
for new residential wood heaters under subpart AAA of part 60
of subchapter C of chapter I of title 40, Code of Federal
Regulations (or successor regulations) already apply to new
wood stoves, section 218(b)(1) additionally addresses pellet
stoves.
The requirement in section 218(b)(2) that ``no wood stove
or pellet stove replaced under this program is sold or returned
to active service, but that it is instead destroyed and
recycled to the maximum extent feasible'' should be implemented
as part of the Certified Stoves Program. This provision does
not require the promulgation of regulations.
Section 219, Energy Star Standards: Adds new requirements
to the administration by the Department of Energy and the
Environmental Protection Agency of the Energy Star program,
including consideration of prototype products, consideration of
ways of providing more detailed comparative information among
Energy Star products, review of product qualifications on a
regular basis, updating qualifications as necessary, and
providing proof of performance through testing of products
purchased in the market.
SUBTITLE C--TRANSPORTATION EFFICIENCY
Section 221, Emissions Standards: Amends Title VIII of the
Clean Air Act to require EPA to establish greenhouse gas
emissions standards for new heavy-duty vehicles and engines,
for nonroad vehicles and engines, and for aircraft and aircraft
engines.
Section 222, Greenhouse Gas Emissions Reductions through
Transportation Efficiency: Amends Title VIII of the Clean Air
Act to require states to establish goals for greenhouse gas
reductions from the transportation sector and requires the
submission of transportation plans to meet those goals by
Metropolitan Planning Organizations for areas with populations
exceeding 200,000 people. Imposes sanctions on states that fail
to submit goals or plans. Authorizes a competitive grant
program for development and implementation of plans.
Section 223, SmartWay Transportation Efficiency Program:
Amends Title VIII of the Clean Air Act to expand an existing
EPA loan and fuel saving technology deployment program, the
SmartWay Transport Partnership, to help American truckers
upgrade to more fuel efficient and less polluting vehicles.
Section 224, State Vehicle Fleets: Requires the Secretary
of Energy to update state fleet rules to be consistent with
current law.
SUBTITLE D--INDUSTRIAL ENERGY EFFICIENCY PROGRAMS
Section 241, Industrial Plant Energy Efficiency Standards:
Requires the Secretary of Energy to establish standards for
industrial energy efficiency and to seek recognition of result
by American National Standards Institute.
Section 242, Electric and Thermal Waste Energy Recovery
Award Programs: Creates an award program for innovation in
increasing the efficiency of thermal electric generation
processes, including encouragement for utilities to capture and
separately market excess thermal energy.
Section 243, Clarifying Election of Waste Heat Recovery
Financial Incentives: Clarifies Section 451 of the Energy
Independence and Security Act of 2007 to ensure that those who
recover waste energy can elect to receive the incentive grants
provided in that section, or tax credits provided for combined
heat and power, but not both.
Section 244, Motor Market Assessment and Commercial
Awareness Program: Provides for the Secretary of Energy to
conduct an assessment of the stock and usage of electric motors
and motor-driven equipment from an energy efficiency
perspective, and to identify opportunities for upgrading such
motors to improve energy efficiency. The Secretary is then
instructed to establish a national program targeted at motor
end-users to make them aware of the potential energy efficiency
gains that could be realized by using more efficient motors and
motor control equipment.
Section 245, Motor Efficiency Rebate Program: Establishes a
rebate program for replacement of low efficiency industrial-
scale electric motors with high-efficiency motors. The rebate
amount is $25 per unit of nameplate horsepower of the new motor
to the purchaser of that motor, and $5 to the distributor of
that motor.
SUBTITLE E--IMPROVEMENTS IN ENERGY SAVINGS PERFORMANCE CONTRACTING
Section 251, Energy Savings Performance Contracts: Amends
the National Energy Conservation Policy Act to establish
competition requirements for specific energy savings
performance contract task orders.
SUBTITLE F--PUBLIC INSTITUTIONS
Section 261, Public Institutions: Amends the Energy
Independence and Security Act to include non-profit hospitals
and public health facilities among public institutions eligible
for grants and loans and clarifies loan and cost-share
conditions.
Section 262, Community Energy Efficiency Flexibility:
Amends the Energy Independence and Security Act to remove
limits on funds received by communities through the Energy
Efficiency and Conservation Block Grant program that can be
used to fund revolving loan accounts or through sub-grants for
purposes of the program.
Section 263, Small Community Joint Participation: Amends
the Energy Independence and Security Act to allow small
communities to join with other neighboring small communities in
a joint program of sufficient size to be defined as an eligible
local government recipient under the Energy Efficiency and
Conservation Block Grant program.
Section 264, Low-Income Community Energy Efficiency
Program: Authorizes grants to community development
organizations to provide financing to improve energy
efficiency, develop alternative, renewable, and distributed
energy supplies, promote opportunities for low-income
residents, and increase energy conservation in low income rural
and urban communities.
SUBTITLE G--MISCELLANEOUS
Section 271, Energy Efficient Information and
Communications Technologies: Requires the Director of the
Office of Management and Budget to collaborate with each
Federal agency to create an implementation strategy for the
purchase and use of energy efficiency information and
communication technologies and practices, establishing
performance goals for each agency within 6 months of enactment.
Such technologies and practices include advanced metering,
efficient data center strategies, updated applications,
building systems, and telework.
Section 272, National Energy Efficiency Goals: Declares a
national energy efficiency goal of improving overall energy
productivity of the United States by 2.5 percent per year
beginning in 2012 and continuing through 2030. Instructs the
Secretary of Energy, the Administrator of the Environmental
Protection Agency, and other relevant federal agencies, with
public input, to collaborate on a strategic plan to achieve
such a national goal, detailing the regulatory, funding, and
policy priorities required to do so, and to update that plan
biennially.
Section 273, Affiliated Island Energy Independence Team:
Requires the Secretary of Energy to establish a team of
technical, policy, and financial experts to address the energy
needs of the islands that make up U.S. territories or otherwise
affiliated with the U.S. The team will assess the means of
reducing these islands' reliance on imported fossil energy,
increasing the use of indigenous energy, and increasing the
efficiency of energy use on the islands. The team will also
develop an energy action plan for each island based on that
assessment.
Section 274, Product Carbon Disclosure Program: Creates a
new product carbon disclosure program at EPA. Not later than 18
months after the date of enactment, EPA would be required to
issue a report to Congress regarding whether a national product
carbon disclosure program and labeling program would be
effective in reducing greenhouse gas emissions and other
related matters. No later than 36 months after the date of
enactment, EPA would be required to establish a national
product carbon disclosure program, participation in which shall
be voluntary. The national product carbon disclosure program
may include a product carbon labeling program.
TITLE III--REDUCING GLOBAL WARMING
Section 301, Short Title: Title III and sections 112, 115,
116, 221, 222, 223, and 401 of the American Clean Energy and
Security Act shall be known as the Safe Climate Act.
SUBTITLE A--REDUCING GLOBAL WARMING POLLUTION
Section 311, Section 312, and Section 321, Reducing Global
Warming Pollution: Establishes Title VII of the Clean Air Act
to provide a declining limit on global warming pollution and to
hold industries accountable for reducing global warming
pollution pursuant to this limit.
TITLE VII--GLOBAL WARMING POLLUTION REDUCTION PROGRAM
PART A--GLOBAL WARMING POLLUTION REDUCTION GOALS AND TARGETS
Section 701, Findings and Purposes.
Section 702, Economy-wide Reduction Goals: States that the
goals of Title VII and Title VIII are to reduce economy-wide
global warming pollution to 97 percent of 2005 levels by 2012,
80 percent by 2020, 58 percent by 2030, and 17 percent by 2050.
Section 703, Reduction Targets for Specified Sources:
Requires that the regulations issued under section 721 reduce
emissions of covered sources to 97 percent of 2005 levels by
2012, 83 percent by 2020, 58 percent by 2030, and 17 percent by
2050.
Section 704, Supplemental Pollution Reductions: Directs the
Administrator to achieve additional low-cost reductions in
global warming pollution by using a small portion of the
emissions allowances to provide incentives to reduce emissions
from international deforestation.
Section 705, Review and Program Recommendations: Directs
the Administrator to submit a report to Congress every four
years. These reports will include: an analysis of the latest
science relevant to climate change, an analysis of capacity to
monitor and verify greenhouse gas reductions, and an analysis
of worldwide and domestic progress in reducing global warming
pollution. The reports will identify steps that could be taken
to better improve our understanding of climate impacts, improve
monitoring and verification, and any additional reductions in
emissions that may be needed to avoid dangerous climate change.
Section 706, National Academy Review: Directs the
Administrator to commission reports from the National Academy
of Sciences every four years. These reports will include: an
update on the progress of various clean technologies, and an
evaluation of the most recent EPA report submitted under
Section 705. The reports will identify steps that could be
taken to better improve our understanding of climate impacts,
improve monitoring and verification, speed the deployment of
clean technology, and any additional reductions in emissions
that may be needed to avoid dangerous climate change.
Section 707, Presidential Response and Recommendations:
Directs the President to use existing authority to respond to
recommendations in the reports. If the National Academy review
confirms that further emissions reductions are needed, either
domestically or globally, the President must submit a report to
Congress recommending steps (including legislation) to achieve
those reductions.
PART B--DESIGNATION AND REGISTRATION OF GREENHOUSE GASES
Section 711, Designation of Greenhouse Gases: Establishes a
list of greenhouse gases regulated under this title: carbon
dioxide, methane, nitrous oxide, sulfur hexafluoride,
hydrofluorocarbons (HFCs) emitted as a byproduct,
perfluorocarbons, and nitrogen trifluoride. Section 711(a)(5)
is intended to address hydrofluorocarbons (HFCs) that are
emitted from a chemical manufacturing process at an industrial
stationary source. HFCs that are sold for an industrial or
commercial purpose after their initial production or
importation are covered under Title VI. This section includes
provisions for listing other anthropogenic gases as greenhouse
gases if 1 metric ton of the gas contributes as much as or more
to global warming over 100 years than does one metric ton of
carbon dioxide. Water vapor cannot be listed as a greenhouse
gas under this title because one metric ton of water vapor in
the troposphere does not contribute as much as or more to
global warming over 100 years than does one metric ton of
carbon dioxide.
Section 712, Carbon Dioxide Equivalent Value of Greenhouse
Gases: Lists carbon dioxide equivalents for each gas. Requires
periodic review of equivalence values by the Administrator.
Section 713, Greenhouse Gas Registry: Directs EPA to
establish a federal greenhouse gas registry and comprehensive
reporting system for greenhouse gas emissions.
PART C--PROGRAM RULES
Section 721, Emission Allowances: Establishes an annual
tonnage limit on greenhouse gas emissions from specified
activities. Directs the Administrator to establish allowances
equal to the tonnage limit for each year (with one allowance
representing the permission to emit one ton of greenhouse
gases, measured in tons of carbon dioxide equivalent).
Protecting the environmental integrity and economic value
of emission allowances and offsets are fundamental to achieving
the American Clean Energy and Security Act's broad economic,
energy, national security, environmental, and health objectives
and requirements. Consistent with this broad set of objectives
and requirements, ``the zone of interests to be protected or
regulated'' by the Act is broad and inclusive. See, e.g., Ass'n
of Data Processing Serv. Orgs., Inc. v. Camp, 397 U.S. 150,
153-56 (1970). For the Act to serve its purposes, the ``zone of
interests'' under this Act includes, among others, persons with
economic interests or competitive injury, such as holders of
allowances, holders of offsets, and entities engaged in
renewable energy, energy efficiency, or other advanced energy
or pollution control technologies.
Section 722, Prohibition of Excess Emissions: Prohibits
covered entities from emitting or having attributable
greenhouse gases in excess of their allowable emissions level,
which is determined by the number of emission allowances and
offset credits they hold on the specified date. Electricity
generators, refiners and importers of petroleum-based and other
specified liquid fuels, fluorinated gas manufacturers, and
emitters of nitrogen trifluoride are covered entities starting
with emissions in 2012. Specified industrial sources are
covered starting with emissions in 2014. Local distribution
companies that deliver natural gas are covered starting with
emissions in 2016.
Section 722(a) prohibits a covered entity from emitting
greenhouse gases, or having attributable greenhouse gas
emissions, in excess of its allowable emissions level in a
given year. The allowable emissions level is determined by the
number of allowances and offset credits a covered entity holds
on April 1 (or such other date as set by the Administrator).
Section 722(b) sets forth the number of emission allowances
that each type of covered entity must hold to demonstrate
compliance with title VII of the Clean Air Act.
Section 722(b)(9) provides that where carbon dioxide is
used as an input in the production of algae-based fuels, the
Administrator shall ensure that emission allowances are held
either for the carbon dioxide used to grow the algae or for the
carbon dioxide emitted from combustion of the fuel used to
produce the algae, but not for both. For example, a power plant
could capture its carbon dioxide and transfer it to an entity
that uses the carbon dioxide in the production of algae-based
transportation fuel. The carbon captured at the power plant
would not be emitted at the plant's stack, but would ultimately
be emitted to the atmosphere when the fuel is combusted. Under
this scenario, and pursuant to section 722(b)(9), EPA could
designate either the power plant or the fuel producer as the
entity with compliance obligations under Section 722 (to
require both would be double-counting).
Section 722(d) allows covered entities to use offset
credits in lieu of allowances to demonstrate compliance for a
portion of their emissions. Under this section, offset credits
may be used to demonstrate compliance for a maximum of two
billion tons of emissions from all covered entities combined. A
large number of offset credits are projected to be less
expensive than allowances for compliance in any given year. To
meet the twin goals of ensuring that offset credits are used to
demonstrate compliance for no more than two billion tons of
emissions and that all covered entities have an equal
opportunity to use this cheaper method of compliance, the bill
distributes the ability to use offset credits on a pro rata
basis among all covered entities. It does so by allowing each
covered entity to use offset credits to meet a specified
percentage of the allowances it must hold to demonstrate
compliance. For each year, the percentage is calculated by
dividing two billion by the sum of two billion plus the annual
tonnage limit for that year. For example, in 2012, when the
annual tonnage limit is 4.627 billion tons, the percentage
would be 30.20 percent (2 divided by 6.627 times 100 percent).
In that year, a source that emitted 100,000 tons of carbon
dioxide equivalent could use offset credits to demonstrate
compliance for 30,200 tons of emissions. In 2030, when the
annual tonnage limit is 3.533 billion tons, the percentage
would be 36.15 percent; and a source that emitted 100,000 tons
of carbon dioxide equivalent could use offset credits to
demonstrate compliance for 36,150 tons of emissions. (Although
these examples use percentages rounded to the second decimal
point, the Administrator has discretion to round to a different
decimal point.)
Section 722(d) also sets separate limits on the ability to
use domestic and international offsets. System-wide, compliance
can be demonstrated for up to one billion tons of emissions
using domestic offsets and up to one billion tons of emissions
using international offsets. This is accomplished by splitting
each covered entity's ability to use offsets equally between
international and domestic offsets. Using the example from
above, the source in 2030 could offset up to 18,075 tons of its
emissions with domestic offsets and up to the same amount with
international offsets. However, to address the concern that
there may be an insufficient supply of domestic offset credits
in any given year to offset 1 billion tons of emissions,
section 722(d)(1)(C) allows up to 1.5 billion tons of emissions
to be offset with international credits under certain
circumstances. This is accomplished by directing the
Administrator to change the balance between the percentages of
international and domestic offsets that may be used to
demonstrate compliance in certain circumstances. If, for
example, the Administrator determines that only 0.5 billion
tons of domestic offset credits will be available in any given
year, the Administrator shall allow a maximum of 1.5 billion
tons of emissions to be offset through international projects.
Using the 2030 example from above, this would mean that a
covered entity with 100,000 tons of emissions could use
international offsets to demonstrate compliance for \3/4\ of
36,150 tons of emissions (or 27,112 tons) and domestic offsets
for \1/4\ (or 9,038 tons). In assessing the availability of
domestic offset credits for purposes of determining whether to
increase the percentage that can be met using international
offsets, the Administrator shall only consider domestic offset
credits that are projected to cost no more than the projected
allowance price.
Section 722(d) requires that, starting with the 2018
compliance obligation, for every 4 tons of emissions that are
offset with international reductions, 5 international offset
credits must be used. This 5:4 turn-in ratio provides
greenhouse gas reductions and environmental benefits in
addition to those provided by the annual tonnage limits. Thus,
using the 2030 example from above in the situation where the
ability to offset emissions is split evenly between domestic
and international offsets, to demonstrate compliance for 36,150
tons of its emissions, the covered entity could rely on 18,075
domestic offset credits and 22,594 international offset
credits. (The Administrator has discretion to set appropriate
rounding conventions for fractions of allowances.)
Section 722(l) explains that the year of a compliance
obligation, as used in Title VII, refers to the year in which
compliance is determined. Thus, for emissions in 2013, the year
of the compliance obligation would be 2014.
Section 723, Penalty for Noncompliance: Establishes
penalties for parties that fail to comply with the requirements
of Title VII.
Section 724, Trading: Clarifies that the legislation does
not restrict who can hold an allowance, nor does it restrict
the purchase, sale, or other transaction involving allowances.
Section 725, Banking and Borrowing: Section 725 explains
the extent to which allowances may be banked or borrowed from
the future. Under section 725(a) and (b), allowances can be
banked for use at any time in the future, subject to
limitations set by the Administrator in a rulemaking pursuant
to section 725(b). Offset credits, once issued by the
Administrator pursuant to Part D of Title VII, may be banked
for future use. Neither allowances nor offset credits expire
unless retired, except pursuant to rules issued by the
Administrator necessary to ensure the authenticity and
integrity of allowances, credits, or the allowance tracking
system. Under section 725(c)(1), a covered entity can
``borrow'' an allowance from one year in the future (i.e., an
allowance with a vintage year one year greater than the
calendar year in which the emissions occurred), providing that
it is an allowance that the entity holds. Under section
725(c)(2), a covered entity can ``borrow'' an allowance that it
holds from two to six years in the future (i.e., an allowance
with a vintage year two to six years greater than the calendar
year in which the emissions occurred, or a vintage year one to
five years greater than the calendar year of the compliance
obligation), provided that it is an allowance the entity holds
and that the covered entity prepays a specified amount of
interest. A covered entity can only demonstrate compliance for
up to 15 percent of its emissions by using allowances borrowed
pursuant to section 725(c)(2). This section addresses borrowing
from the future, it does not address borrowing current or
earlier year vintage allowances from a private entity (which is
allowed).
As an example, under section 725, compliance for emissions
in 2016 could be demonstrated by holding on April 1 of 2017 (or
such later date as set by the Administrator), a sufficient
number of:
allowances with vintage years 2012 through 2016
(pursuant to section 725(a)); or
2017 vintage year allowances (under section
725(c)(1)).
In addition, compliance for up to 15 percent of emissions
in 2016 could be demonstrated by holding allowances with
vintage years 2018 through 2022 (pursuant to section
725(c)(2)).
Section 726, Strategic Reserve: Directs the Administrator
to create a ``strategic reserve'' of emission allowances that
will be available to help contain the costs of meeting the
annual tonnage limits.
At the start of the program, the Administrator is required
to fill the reserve with allowances that are taken from each
year of the program in amounts specified in section 726(b)(1).
Every quarter, the Administrator shall auction a specified
number of allowances from the reserve with a minimum reserve
price specified in the bill. Proceeds from such auctions, if
any, shall be used to refill the reserve. The Administrator
shall accomplish this by using any such proceeds to purchase
international offset credits for reduced deforestation. The
Administrator shall then retire those offset credits and
establish four new allowances (in addition to those established
under section 721) for every five tons of offset credits
retired. The Administrator shall then refill the strategic
reserve to its original level by placing the newly-established
allowances into the strategic reserve to the extent necessary
to return the reserve to its original size. Once the reserve
reaches its original size, if there are remaining newly-
established allowances, the Administrator shall use such
allowances to replace the allowances that were originally taken
(pursuant to section 726(b)(1)) from current or future vintage
years. Newly-established allowances shall be retired if they
are not needed to refill the reserve or to replace the
allowances taken from current or future years. For example, if
the Administrator sells 1,000,000 allowances in the strategic
reserve auction in 2018, and prices are such that the
Administrator uses the proceeds to buy 1,600,000 offset
credits, the Administrator would then be required to retire
those 1,600,000 offset credits and establish 1,280,000 newly-
established allowances. The Administrator would be required to
place 1,000,000 of the newly-established allowances into the
strategic reserve. The Administrator would then take the
remaining 600,000 newly-established allowances and use them to
replace allowances that had been used to fill the strategic
reserve initially. For example, the Administrator could
designate all of the 280,000 allowances as vintage year 2018
and add them to auctions of 2018 (or later) allowances. If the
Administrator had already returned to 2018 the same number of
allowances that was taken from 2018 to fill the reserve, the
Administrator could designate the allowances as 2019 vintage
and auction them with the 2019 allowances. The Administrator
has discretion to determine the best way to replace the
allowances that were taken to fill the reserve, except that the
Administrator cannot replace allowances that were taken from
years that have already ended (e.g., in 2018, the Administrator
could not replace allowances that were taken from 2017 or
earlier).
At the request of an international deforestation offset
credit holder, the Administrator can auction such credits in a
strategic reserve auction if specified criteria are met.
Section 727, Permits: Clarifies the obligations of
stationary sources under the Clean Air Act's Title V operating
permit program under the newly-established Title VII program.
Section 728, International Emission Allowances: Establishes
criteria that must be met before allowances from foreign
programs can be used for compliance by covered entities.
PART D--OFFSETS
Section 731, Offsets Integrity Advisory Board: Establishes
an independent Offsets Integrity Advisory Board composed of
scientists and others with relevant expertise. The Advisory
Board is charged with providing recommendations to the
Administrator on: the types of offset project types that should
be listed by EPA as eligible; potential levels of scientific
uncertainty associated with certain offset types; appropriate
quantification or other methodologies; and other areas of the
offsets and deforestation provisions in the draft. The Board is
also charged with conducting a regular review of all relevant
areas.
Section 732, Establishment of Offsets Program: Directs the
EPA Administrator to establish an offsets program and requires
that regulations ensure offsets are verifiable, additional, and
permanent.
Section 733, Eligible Project Types: Requires the
Administrator to establish a list of offset project types that
are eligible under the program, taking into account the
recommendations of the Offsets Integrity Advisory Board.
Provides guidelines for establishing and updating the list.
In implementing this provision, the Committee expects the
Administrator to fully evaluate each of the following
categories of activities for potential inclusion as eligible
offset project types:
(1) agricultural, grassland, and rangeland sequestration
and management practices, including--
(A) altered tillage practices;
(B) winter cover cropping, diversified rotations and
other means to increase biomass returned to soil in
lieu of planting followed by fallowing;
(C) conversion of cropland to rangeland or grassland,
on the condition that the land has been in nonforest
use for at least 10 years before the date of initiation
of the project;
(D) reduction of nitrogen use or increase in nitrogen
use efficiency;
(E) reduction in the frequency and duration of
flooding of rice paddies;
(F) reduction in carbon emissions from organic soils;
(G) reduction in greenhouse gas emissions from manure
and effluent; and
(H) reduction in greenhouse gas emissions due to
changes in animal management practices, including
dietary modifications;
(2) changes in carbon stocks attributed to land use change
and forestry activities, including--
(A) afforestation or reforestation of acreage not
forested as of January 1, 2007;
(B) forest management resulting in an increase in
forest carbon stores including but not limited to
harvested wood products;
(C) management of peatland or wetland;
(D) conservation of grassland and forested land;
(E) improved forest management, including accounting
for carbon stored in wood products;
(F) reduced deforestation or avoided forest
conversion;
(G) urban tree-planting and maintenance;
(H) agroforestry; and
(I) adaptation of plant traits or new technologies
that increase sequestration by forests;
(3) manure management and disposal, including--
(A) waste aeration; and
(B) biogas capture and combustion; and
(4) non-agriculture and forestry project types, including--
(A) recycling, reuse, and waste minimization;
(B) methane collection and combustion projects at
mines;
(C) methane collection and combustion projects at
landfills;
(D) methane collection and combustion projects at
natural gas systems;
(E) projects to reduce emissions from municipal or
industrial wastewater treatment systems;
(F) projects that capture and geologically sequester
uncapped greenhouse gas emissions with or without
enhanced oil or methane recovery in active or depleted
oil, carbon dioxide, or natural gas reservoirs; and
(G) projects to capture and destroy or avoid
emissions of greenhouse gases from industrial sources
for which entities do not have compliance obligations
under section 722 or other provisions of Title III.
In considering these potential project types, the
Administrator must take into account recommendations of the
Offsets Integrity Advisory Board.
The Committee expects the Administrator to issue an initial
list of offset project types and their associated methodologies
under section 734 as expeditiously as practicable, but in no
case later than one year from the date of enactment. The
Administrator should add additional project types, along with
their associated methodologies, to the list as expeditiously as
practicable, but in no case later than two years from the date
of enactment. In developing baselines, measurement, and
monitoring methodologies for a broad range of offset project
types as quickly as possible, EPA should build on its
experience in programs such as Natural Gas STAR, Climate
Leaders, and the Landfill Methane Outreach Program. The
Committee understands that EPA is already working with USDA and
DOE on the AgSTAR program to encourage the use of methane
recovery from manure digesters and is working on afforestation,
reforestation, and forest management protocols under the
Climate Leaders program.
The Committee strongly encourages the Administrator to
consult closely with the Secretary of Agriculture on all
elements of the offsets program related to agricultural and
forestry practices.
Section 734, Requirements for Offset Projects: Section
734(a) requires that for each offset project type, the
Administrator establish standardized methodologies for
determining additionality; establishing activity baselines;
measuring performance; accounting for and mitigating potential
leakage. It is the Committee's intent that the Administrator,
in establishing standardized methodologies for determining
additionality, may adopt an approach based on performance
standards. Section 734(b) requires that for each offsets
project type the Administrator establish requirements to
account for and address reversals from offset projects.
Sections 735, Approval of Offset Projects: Establishes
procedures to approve offset projects. It is the expectation of
the Committee that the requirements for standardized
methodologies under section 734 will result in a simple and
efficient approval process.
Section 736, Verification of Offset Projects: Directs the
Administrator to establish requirements for the verification of
offset project performance, and requires that verification
reports be prepared by accredited third-party verifiers.
Section 737, Issuance of Offset Credits: Establishes
procedures for the issuance of offset credits and directs the
Administrator to issue offset credits only if the emissions
reduction or sequestration has already occurred and other
specified conditions are met.
Section 738, Audits: Requires the Administrator to conduct,
on an on-going basis, random audits of offset projects, offset
credits, and practices of third-party verifiers.
Section 739, Program Review and Revision: Requires the
periodic evaluation and updating of specified areas and
components of the offsets program.
Section 740, Early Offset Supply: To ensure a supply of
offset credits in the early years of the program, allows for
the issuance of offset credits for offsets from programs that
meet specified criteria. Such credits may only be issued for a
limited timeframe and only for reductions achieved for a
specified time period.
Section 741, Environmental Considerations: Provides
requirements for additional environmental considerations for
forestry and other land management-related projects.
Section 742, Trading: Provides that the trading provisions
applicable to allowances are also applicable to offset credits.
Section 743, International Offset Credits: Allows the
Administrator to issue international offset credits for
activities that take place in developing countries. Requires
that all international offset credits meet the criteria
established for all offsets under sections 732-742, as well as
the requirements specific to international offsets established
under section 743. In addition, requires that the United States
be a party to a bilateral or multilateral agreement or
arrangement with the country where an offset activity would
take place before any international offset credits can be
issued.
Subsections 743(c), (d) and (e) provide additional
specifications for three potential categories of international
offset credits that are distinct from the issuance of
international offset credits for international offset project
types listed under section 733. Subsection 743(c) requires the
Administrator, in consultation with the Secretary of State, to
identify sectors in specific countries for which the issuance
of international offset credits on a sector-wide, rather than
project-specific, basis is appropriate.
Subsection 743(d) Establishes the terms under which the
Administrator may issue international offset credits in
exchange for other international instruments. These include a
requirement that the Administrator has determined that the
issuing international body has implemented substantive and
procedural requirements for the relevant project type that
provide equal or greater assurance of environmental integrity
as the requirements established under Part D.
Subsection 743(e) establishes procedures and requirements
regarding the issuance of international offset credits for
activities that reduce deforestation. For major emitting
nations, international offset credits may only be issued for
national-scale activities, or for state or province-level
activities in states or provinces that would themselves be
considered major emitters. Smaller-scale offset projects are
only allowed in countries that generate less than 1 percent of
global greenhouse gas emissions as well as less than 3 percent
of global forest sector and land use change emissions. After an
initial period, all countries must transition to national
baselines to continue generating credits.
PART E--SUPPLEMENTAL EMISSIONS REDUCTIONS FROM REDUCED DEFORESTATION
Section 751-752, Definitions and Findings: Defines forest
carbon activities and finds that land use change, primarily
deforestation, accounts for roughly 20 percent of global
greenhouse gas emissions.
Section 753, Supplemental Emissions Reductions through
Reduced Deforestation: Directs the Administrator of EPA, in
consultation with the Administrator of the U.S. Agency for
International Development (USAID), to establish a program to
build capacity in developing countries to reduce emissions from
deforestation (including preparation to participate in
international markets for deforestation reduction offset
credits), to achieve emissions reductions in addition to those
achieved under the domestic emissions limit, and to protect
intact forest from any shifts in land use as a result of
reduced deforestation in other areas. By building capacity and
providing powerful incentives to develop national efforts to
reduce deforestation, the Committee intends that this program
will both achieve significant reductions in emissions from
deforestation (more than 6 billion metric tons of emissions)
and allow many forest nations to participate in carbon markets,
which will expand the supply of available offset credits.
Section 754, Requirements for International Deforestation
Reduction Program: Directs the Administrators of EPA and USAID
to support a broad range of activities to reduce deforestation,
build capacity to measure, monitor and enforce reductions in
deforestation generate for sale deforestation reduction offset
credits for sale, and reduce the leakage of emissions.
Activities supported through this program must be
environmentally sound and should protect the rights of
indigenous peoples and local communities. Support for emissions
reductions must ensure that countries are transitioning to
nationwide accounting of reduced deforestation.
Section 755, Reports and Reviews: Directs the
Administrators of EPA and USAID to report annually to Congress
on progress in reducing deforestation through this program and
perform a review of the program every four years.
Section 756, Legal Effect of Part: Clarifies that this
program does not supersede or limit any other federal or
international law.
Section 312, Definitions
Section 700, Definitions: Defines key terms for Titles VII
and VIII of the Clean Air Act.
Section 700(13)(B) defines one type of covered entity as
``any stationary source that produces . . . petroleum-based or
coal-based liquid fuel, petroleum coke, or natural gas
liquid.'' Because there are multiple steps in the production of
natural gas liquids, additional language on natural gas liquid
regulation is included elsewhere in Title III to specify the
covered entity with respect to natural gas liquid production or
importation.
The term ``natural gas liquid'' is defined in section
700(36) to mean ``ethane, butane, isobutane, natural gasoline
and propane which is ready for commercial sale or use.'' The
Committee's intent in including the phrase ``ready for
commercial sale or use'' in the definition is to indicate that
the point of regulation for natural gas liquids is at the point
of fractionation. This step in the production of natural gas
liquids, where a mixture of multiple natural gas liquids is
separated (fractionated) into its constituent parts, occurs
after the separation of natural gas liquids from natural gas
(often done by natural gas processing facilities), but prior to
the sale or transfer of the individual natural gas liquids to
the petrochemical, refining, or propane sectors. Some natural
gas processing plants also fractionate; in other cases natural
gas processing facilities are separate from fractionating
facilities, and are owned by different entities.
The owner or operator of the covered entity that produces
or imports natural gas liquids under section 700(13)(B) in some
cases will own the natural gas liquids, but in other cases may
not. Section 722(b)(12) requires that in situations where the
covered entity described in section 700(13)(B) does not take
ownership of the liquids, the owner of the liquids shall be the
entity with compliance obligations under section 722, section
723, and other relevant sections of the title.
Section 700(45) defines the terms ``sequestered'' and
``sequestration'' to mean ``the separation, isolation, or
removal of greenhouse gases from the atmosphere, as determined
by the Administrator. The terms include biological, geologic,
and mineral sequestration, but do not include ocean
fertilization techniques.'' The Committee recognizes that new
sequestration technologies that do not exist today may develop
in the future, and the Committee intends the Administrator to
have discretion to define the types of sequestration
technologies or processes that are appropriate to include
within the definition, in light of the purposes of the Act.
SUBTITLE B--DISPOSITION OF ALLOWANCES
Section 321, Disposition of Allowances for Global Warming
Pollution Reduction Program: Provides for emission allowances
to be distributed for three primary goals: to protect consumers
from energy price increases, to assist industry in the
transition to a clean energy, and to spur energy efficiency and
the deployment of clean energy technology. Also allocates
allowances to prevent deforestation and support national and
international adaptation efforts and for other purposes.
PART H--DISPOSITION OF ALLOWANCES
Section 781, Allocation of Allowances for Supplemental
Reductions: Directs the Administrator to allocate allowances
for the program under part E to achieve supplemental emissions
reductions from reduced deforestation. Allocates 5 percent of
allowances for the years 2012-2025, 3 percent for 2026-2030,
and 2 percent for 2031-2050.
Section 782, Allocation of Emission Allowances: Provides
for allocation of allowances to electricity consumers; natural
gas consumers; home heating oil and propane consumers; low-
income consumers; trade-vulnerable industries; investment in
carbon capture and sequestration technologies; investment in
energy efficiency and renewable energy; Clean Energy Innovation
Centers; clean vehicle technology; domestic fuel production;
workers; domestic, wildlife, and natural resources adaptation;
international adaptation; international clean technology
transfer; deficit reduction; and consumer refunds.
Section 783, Electricity Consumers: Directs the
Administrator on how to distribute the approximately 30 percent
of allowances allocated for the benefit of consumers to local
electricity distribution companies, whose retail rates are
regulated by states or other entities. Directs the
Administrator on how to distribute the approximately 5 percent
of allowances for merchant coal generators and certain
generators with long-term power purchase agreements.
Section 784, Natural Gas Consumers: Directs the
Administrator on how to distribute the approximately 9 percent
allocated for the benefit of consumers to local natural gas
distribution companies, whose retail rates are regulated by
states or other entities.
Section 785, Home Heating Oil and Propane Consumers:
Directs the Administrator on how to distribute the
approximately 1.5 percent of allowances to states for programs
to benefit residential and commercial users of home heating oil
and propane.
Section 787, Allocations to Refineries: Directs the
Administrator on how to distribute the approximately 2 percent
of allowances to domestic refiners.
Section 786-788 [Reserved]
Section 789, Climate Change Consumer Refunds: Directs the
Secretary of the Treasury to use proceeds from the sales of
specified 2026 and later year allowances to provide rebates to
consumers.
Section 790, Exchange for State-Issued Allowances: Provides
for fair compensation and exchange of allowances issued by the
State of California, the Regional Greenhouse Gas Initiative and
the Western Climate Initiative prior to commencement of federal
program.
Section 791, Auction Procedures: Establishes single-round,
sealed-bid, uniform-price auction procedures, which may be
modified by the Administrator.
Section 792, Auctioning Allowances for Other Entities:
Establishes rules by which the Administrator may auction
allowances on behalf of other entities.
Section 793, Establishment of Funds: Establishes the
Strategic Reserve Fund and the Climate Change Consumer Rebate
Fund in the U.S. Treasury.
Section 794, Oversight of Allocations: Requires the
Comptroller General to prepare biannual reviews of the programs
administered by the Federal Government that distribute emission
allowances or funds from Federal auctions of allowances.
SUBTITLE C--ADDITIONAL GREENHOUSE GAS STANDARDS
Section 331, Greenhouse Gas Standards: Establishes Title
VIII of the Clean Air Act to achieve additional greenhouse gas
reductions outside of Title VII.
Title VIII--ADDITIONAL GREENHOUSE GAS STANDARDS
SECTION 801, DEFINITIONS
PART A--STATIONARY SOURCE STANDARDS
Section 811, Standards of Performance: Section 811 directs
the Administrator to establish minimum standards of performance
under section 111 of the Clean Air Act as an means of achieving
reductions of greenhouse gas emissions from certain stationary
sources of air pollution not subject to title III of the Clean
Air Act.
When authorizing the Administrator to consider greenhouse
gas emissions as ``nonair quality health and environmental
impacts'' under section 811(b), it is the Committee's intent to
allow the Administrator to require controls on non-greenhouse
gases that maximize greenhouse gas reduction benefits and to
allow, but not require, the Administrator to limit controls on
other pollutants that interfere significantly with greenhouse
gas control effectiveness. Thus where additional reductions in
emissions of non-greenhouse gases resulting from the use of
certain technologies may be relatively small, while associated
energy penalties may be significant, the Administrator would
have the discretion not to require such controls. However, any
such decisions must be wholly consistent with other health and
welfare considerations; where these considerations associated
with other non-greenhouse gas pollutants are found to outweigh
impacts on greenhouse gas emissions, the Administrator is
permitted to require further reductions of those pollutants
notwithstanding resulting energy penalties or greenhouse gas
emissions impacts.
Section 811(c)(2) allows the Administrator to establish
work practice standards without regard to any determination of
the feasibility of other forms of emissions control that would
otherwise be required under section 111(h) of the Clean Air
Act. Congress intends to allow the Administrator to require
improvements in process or energy efficiency that would reduce
greenhouse gas emissions directly or indirectly without first
having to find that other forms of capture or control are
infeasible. The Administrator is also allowed to require
efficiency improvements in lieu of capture or control
technologies that exceed the bill's cost limitations and may
also require such energy efficiency improvements in addition to
controls that meet the cost limiting criteria.
The cost-containment provisions provided in section
811(c)(3) are intended to keep the costs of requirements for
uncapped sources roughly in line with or below the costs of
requirements for those of capped sources when viewed on a
source category basis. That is, so long as costs are acceptable
when viewed on average for the source category, the provisions
do not provide a bar to enforcement of performance standards on
any individual source where the cost of compliance may exceed
the projected price of allowances during the applicable period.
The Administrator's analysis of selected technologies must
reflect a reasonable expectation that costs will not exceed
projected allowance prices, but is not required to provide
absolute certainty, nor shall actual costs in any individual
case provide a basis for exemption from any standards, as noted
above.
Under section 811(a), the Administrator may list under
section 111(b) the source categories identified in the
inventory without making an endangerment finding. The inventory
called for in this subsection is intended to identify the
specific source categories that meet the specific criteria
identified by Congress, and Congress has determined that the
Administrator must establish standards of performance for
greenhouse gas emissions from these categories. Therefore, the
Administrator may list new source categories under section
111(b), without making the required endangerment finding, as
necessary to ensure that every source category on the inventory
is properly listed under 111(b). Such listings may be
necessary, for example, if the category is not already listed
under section 111(b) or if the scope of the source category
identified in the inventory does not correspond with the scope
of the source category currently listed under section 111(b).
PART C--EXEMPTIONS FROM OTHER PROGRAMS
Section 831, Criteria Pollutants: Provides that greenhouse
gases may not be added to the list of criteria air pollutants
on the basis of their effect on climate change.
Section 832, International Air Pollution: Provides that
section 115 of the Clean Air Act shall not apply to an air
pollutant with respect to that pollutant's contribution to
global warming.
Section 833, Hazardous Air Pollutants: Provides that
greenhouse gases may not be listed as hazardous air pollutants
on the basis of their effect on climate change.
Section 834, New Source Review: Provides that New Source
Review shall not apply to a major emitting facility that is
initially permitted or modified after January 1, 2009, on the
basis of its emissions of any greenhouse gases. This language
is intended to make clear on a going forward basis that New
Source Review does not apply to greenhouse gases. It is not an
expression of congressional intent with respect to the
application of New Source Review to greenhouse gases prior to
that date.
Section 835, Title V Permits: Provides that greenhouse
gases shall not be considered when determining whether a
stationary source is required to operate pursuant to a permit
under Title V. Where sources are required to have a Title V
permit due to the sources' emissions of any pollutant that is
regulated for any reason other than its effect on global
climate change, this section does not alter the applicability
of title V for such sources, nor does it provide any exclusion
from any of the requirements of Title V (including but not
limited to reporting requirements and certification
requirements, as they would apply to such sources). Any
applicable requirements of the Safe Climate Act would be
considered applicable requirements of the Clean Air Act and
must be incorporated into Title V permits for such sources.
Additional provisions governing how the requirements of title
VII of this bill are to be addressed in title V permits for
such sources may be found in section 727.
Section 332, HFC Regulation: Section 332 amends Title VI of
the Clean Air Act by adding a new section 619 to phase down the
consumption of hydrofluorocarbons (HFCs), many of which are
extremely potent greenhouse gases, under a separate limit and
reduction schedule. Using a market-based regulatory approach
similar to the one that continues to be successful in
addressing substances that deplete the stratospheric ozone
layer, the bill requires HFC consumption to be phased-down to
15 percent of the baseline by 2032. Allowances would be
distributed through a combination of annual auctions and non-
auction sales.
This new section 619 includes numerous references to
existing sections of Title VI. Except as otherwise provided in
this section, EPA is expected to treat class II, group II
substances similarly to the way in which it has treated ozone
depleting substances in implementing and interpreting these
existing sections of Title VI.
In section 619, production of class II, group II substances
refers to production of such substances in the United States.
Importation of class II, group II substances refers to the
importation of such substances in bulk into the United States.
Importation of products containing any class II, group II
substances refers to the importation of such products into the
United States.
The bill provides for bidding limits in 2014 and beyond to
be based in part on the highest number of allowances required
to be held by the participant in the prior three years. The
number of allowances actually held by a participant may be
higher or lower than the number of allowances required to be
held (if allowances were banked or if destruction offset
credits were used to meet a portion of the compliance
obligation), but the number of allowances actually held by a
participant will not be used in determining the bidding limits.
It is the intent of this section to provide a financial
incentive for the recovery and destruction of
chlorofluorocarbons (and potentially other ozone depleting
substances that have been globally phased out of production
under the Montreal Protocol). Generation of destruction offset
credits through the destruction of CFCs (and potentially other
ozone depleting substances) offers an additional path to meet
compliance obligations under section 619(b). With the exception
of offset credits issued under section 740, offsets generated
pursuant to section 619(b)(9) may be used as offset credits
under Title VII only if the Administrator extends their use to
Title VII under section 619(b)(9)(E), pursuant to the
requirements of Part D of Title VII, and based on the carbon
dioxide equivalent value of the substance destroyed. In the
event of such an extension, destruction offset credits for the
destruction of a quantity of CFCs (or potentially other ozone
depleting substances) may be issued under either Title VI or
Title VII, but in no case may an offset credit be issued under
both titles for the destruction of the same quantity of a
substance.
The specific reporting provisions in section 619(n) do not
preclude EPA's use of the general authority under section 114
to obtain information for the purpose of carrying out any
provision of Title VI, including the provisions concerning
class II, group II substances.
Section 332(c)(4) amends section 605(a) of the Clean Air
Act to allow introduction into interstate commerce or use of
HCFCs that are listed as acceptable for use as fire suppression
agents for nonresidential applications under section 612. The
phrase ``listed as acceptable for use'' is intended to include
substances listed as acceptable for use ``subject to use
conditions'' or ``subject to narrowed use limits'' as well as
those listed as acceptable without qualification.
Section 333, Black Carbon: Directs the Administrator to
report on existing efforts to reduce domestic black carbon
pollution and use existing authority to achieve further
reductions. Directs the Administrator, in coordination with the
Secretary of State, to report to Congress on current and
potential future assistance to foreign nations to help reduce
black carbon pollution.
Section 334, States: Preserves states' existing authority
to adopt and enforce standards or limitations on air pollution
under the Clean Air Act, including greenhouse gas emissions.
Section 335, State Programs: Bars states from implementing
or enforcing a cap-and-trade program to control on greenhouse
gas emissions covered by Title VII between the years 2012 to
2017, but allows regulation of such emissions by other means
during this period.
Section 336, Enforcement: Provides that for petitions for
review under the Clean Air Act, the court may remand an action
of the Administrator without vacatur under specified
circumstances. Requires the Administrator to take final action
on a petition for reconsideration under the Clean Air Act
within 150 days of receipt.
Section 337, Conforming Amendments: Provides for conforming
amendments to Clean Air Act enforcement and administrative
provisions to incorporate titles VII and VIII.
Section 338, Davis-Bacon Compliance: Requires that
recipients of emission allowances or funding under this Act
provide reasonable assurances that all laborers and mechanics
employed by contractors and subcontractors on projects funded
directly by or assisted in whole or in part by the Federal
Government pursuant to this Act will be paid at least
prevailing wages as determined by the Secretary of Labor in
accordance with what is commonly known as the Davis-Bacon Act
(subchapter IV of chapter 31 of title 40, United States Code).
The provisions would not apply, however, to retrofitting of any
residential building or of specified nonresidential buildings.
SUBTITLE D--CARBON MARKET ASSURANCE
Section 341, Carbon Market Assurance: Amends the Federal
Power Act to provide for strict oversight and regulation of the
new markets for emission allowances, offset credits, and
Federal renewable electricity credits (RECs). Ensures market
transparency and liquidity and allows trading in allowance,
offset credit, and REC futures so that regulated entities can
protect themselves against future cost increases and obtain the
allowances or credits they need for compliance at a fair price.
The Federal Energy Regulatory Commission is charged with
regulating the cash market in allowances, offsets, and RECs.
The President is empowered to delegate regulatory
responsibility for the markets in derivatives if these
instruments to an appropriate agency, based on the advice of an
interagency working group. Protects market participants from
speculation and market manipulation, by including default
position limits of 10 percent on allowance, offset credit and
REC derivatives and a default ban on over-the-counter trading
of such derivatives, and other regulatory requirements for both
the cash and derivatives markets.
SUBTITLE E--ADDITIONAL MARKET ASSURANCE
Sections 351 through 358: Amends the Commodity Exchange Act
to provide greater oversight of energy commodity derivatives
and credit default swaps. Establishes default Commodity Futures
Trading Commission regulatory authority over and regulations of
allowance derivative markets.
Section 359, Cease-and-desist authority: Amends the Natural
Gas Act and Natural Gas Policy Act to grant the Federal Energy
Regulatory Commission cease-and-desist authority to prevent
violations of these Acts.
TITLE IV--TRANSITIONING TO A CLEAN ENERGY ECONOMY
SUBTITLE A--ENSURING REAL REDUCTIONS IN INDUSTRIAL EMISSIONS
Section 401, Ensuring Real Reductions in Industrial
Emissions: Creates a program within Title VII of the Clean Air
Act, as established by this Act, to ensure real reductions in
industrial greenhouse gas emissions through emission allowance
rebates and international reserve allowances.
Part F--Ensuring Real Reductions in Industrial Emissions
Section 761, Purposes: Outlines the purposes of Subtitle A
and the additional purposes of Part 1 of Subtitle A. The
purposes of Subtitle A include: promoting a strong global
effort to significantly reduce greenhouse gas emissions and
preventing an increase in greenhouse gas emissions in foreign
countries as a result of compliance costs incurred under title
VII of the Clean Air Act, as added by ACES of 2009. The
additional purposes of Part 1 include: compensating eligible
domestic industrial sectors and subsectors for costs incurred
under Title VII; limiting such compensation to amounts that
meet the goals of the program; and rewarding innovation and
facility-level investments in efficiency upgrades and
performance improvements.
Section 762, International Negotiations: Finds that the
purposes of this subtitle can be most effectively achieved
through international agreements and states that it is the
policy of the United States to work proactively under the
UNFCCC and in other forums to establish binding agreements
committing all major-emitting countries to contribute equitably
to the reduction of global greenhouse gas emissions.
Section 763, Definitions: Provides relevant definitions.
Subpart 1--Emission Allowance Rebate Program
Section 764, 765, Eligible Industrial Sectors, Distribution
of Emission Allowance Rebates: Establishes a program that
rebates allowances to eligible industrial sectors and
subsectors in an amount intended to compensate entities in
those sectors for the costs they incur as a result of complying
with the pollution limit established by Title VII.
Instructs the EPA Administrator to annually distribute
rebates to the owners and operators of entities in eligible
industrial sectors. The Administrator is required to determine
which facilities should be eligible for rebates through a rule
based on an assessment of economic factors, including (1) the
energy or greenhouse gas intensity in a sector and (2) the
trade intensity in such sectors. Sectors meeting the listed
criteria for both factors would be deemed eligible to receive
rebates.
Subsection (b)(3)(A) is designed to address an anomaly that
arises when an industrial subsector meets the eligibility
criteria of paragraph (2)(A), but its 6-digit NAICS code fails
to meet the eligibility criteria. The result is that an
otherwise eligible subsector does not presumptively qualify to
receive emission allowance rebates. For example, the industrial
subsector that manufactures ceramic substrates for mobile
source emissions control equipment may fall within a NAICS code
that includes manufacturers of a wide variety of products, and
the entire 6-digit NAICS code may not presumptively be eligible
for emission allowance rebates, even though the specific
industrial subsector would, if it was classified in its own
NAICS code, presumptively qualify for rebates. Recognizing this
anomaly, the Committee included Subsection (b)(3)(A) to give
firms in such subsectors an opportunity to petition the
Administrator for relief based upon evidence demonstrating that
the industrial subsector meets the criteria of paragraph (2)(A)
to be eligible to receive emission allowance rebates.
Rebates are distributed to eligible facilities on a product
output basis, with compensation provided for both direct and
indirect compliance costs. For direct compliance costs,
allowance distribution is calculated by multiplying a
facility's product output by the sector average tonnage of
greenhouse gas emissions per unit of product output. For
indirect costs passed on by electric utilities, allowance
distribution is calculated by multiplying a covered or
uncovered facility's product output (1) by the ``emissions
intensity'' of each facility's electric power supplier and (2)
by the sector average electricity use per unit of product
output.
Subpart 2--International Reserve Allowance Program
Section 766, International Reserve Allowance Program:
Establishes an international reserve allowance program, which
may be implemented by the President beginning in 2025 pursuant
to a determination under Part 3.
Subpart 3--Presidential Determination
Section 767, Presidential Reports and Determinations:
Requires the President to submit a report to Congress no later
than January 1, 2018, regarding the effectiveness of the
distribution of emission allowance rebates under Part 1 in
mitigating the risk of increased greenhouse gas emissions in
foreign countries resulting from compliance costs incurred
under title VII.
Requires the President to make a determination, no later
than June 30, 2022, and every four years thereafter, for each
sector eligible for rebates under Part 1, of whether more than
70 percent of global output of that sector is produced in
countries that meet at least one of the following criteria: (1)
party to an international treaty to which the U.S. is a party
that includes a nationally enforceable emissions reduction
commitment that is at least as stringent as that of the U.S.;
(2) party to an international sectoral agreement for that
sector to which the U.S. is a party; (3) energy or greenhouse
gas intensity for that sector that is equal or less than that
of the U.S.; or (4) implemented emissions reduction policies
that together impose a cost on that sector that is at least 60
percent of the cost of complying with Title VII for that sector
in the United States.
If the President determines that less than 70 percent of
global output of a sector is produced in countries that meet
one or more of the above criteria, then the President shall
continue emission allowance rebate program under Part 1 or
implement the International Reserve Allowance Program under
Part 2 or a combination of the two for that sector. In the
absence of such a determination, the emission allowance rebates
for entities in the sector will decline by 10 percent per year.
SUBTITLE B--GREEN JOBS AND WORKER TRANSITION
Part 1--Green Jobs
Section 421, Clean Energy Curriculum Development Grants:
Amends the Carl. D. Perkins Career and Technical Education Act
of 2006 to authorize the Secretary of Education to award grants
to universities and colleges to develop programs of study that
prepare students for careers in renewable energy, energy
efficiency, and other forms of global warming mitigation. These
grants are peer reviewed by experts with relevant experience in
the areas being considered for funding.
Section 422, Increased Funding for Energy Worker Training
Program: Increases the authorization for the Green Jobs Act,
authorized in the Energy Independence and Security Act, from
$125 million to $150 million.
Part 2--Climate Change Worker Adjustment Assistance
Section 425-427, Petitions, Eligibility Requirements, and
Determinations; Program Benefits; General Provisions:
Establishes a program pursuant to which any worker displaced as
a result of the Title VII of the Clean Air Act would be
entitled to 156 weeks of income supplement, 80 percent of their
monthly health care premium, up to $1,500 for job search
assistance, up to $1,500 for moving assistance, and additional
employment services for skills assessment, job counseling,
training, and other services. Payments under the program cannot
exceed the proceeds from the auction of allowances set aside
for this purpose.
SUBTITLE C--CONSUMER ASSISTANCE
Section 431, Energy Tax Credit: In the event of any reduced
purchasing power as a result of Title VII of the Clean Air Act,
provides tax credits to the lowest-income households to
compensate for such losses.
Section 432, Energy Refund Program for Low-Income
Consumers: Directs the EPA Administrator to administer an
``Energy Refund Program'' to provide monthly cash energy
refunds to low-income individuals to compensate for any reduced
purchasing power resulting from Title VII of this Act. Provides
that energy refunds shall not be considered taxable income.
The cost of this subtitle--including both the energy refund
program and the refundable tax credit--are offset by the set
aside of the proceeds from the auction sale of 15 percent of
the emission allowances. The proceeds from these allowances are
deposited into the U.S. Treasury. The amount of assistance
provided is not, however, limited by the auction proceeds
deposited into the Treasury.
SUBTITLE D--EXPORTING CLEAN TECHNOLOGY
Sections 441-443, Findings and Purposes, Definitions,
Governance: States that the purpose of this subtitle is to
provide U.S. resources to encourage widespread deployment of
clean technologies to developing countries. Establishes a Clean
Technology Account administered by the State Department in
consultation with an interagency group. The Account will
supplement and not supplant other federal funding.
Section 444, Determination of Eligible Countries:
Generally, only developing countries that have ratified an
international treaty or agreement or have undertaken nationally
appropriate mitigation activities achieving substantial
greenhouse gas reductions are eligible for bilateral
assistance. Least developed countries may use assistance to
build capacity toward meeting eligibility criteria.
Sections 445, Qualifying Activities: Eligible projects must
achieve substantial greenhouse gas reductions that are
substantial, measurable, reportable, and verifiable. Eligible
activities include deployment of carbon capture and storage,
renewable electricity, efficiency projects, deployment of low-
emissions technology, transportation reductions, black carbon
reductions, and capacity building activities.
Section 446, Assistance: The Secretary of State is
authorized to provide assistance through the distribution of
allowances bilaterally, through an international fund, or
through a multilateral institution pursuant to the UNFCCC.
Preference is given to projects that promise to achieve large-
scale greenhouse gas reductions, may catalyze widespread
deployment of clean technology, build institutional capacity,
and leverage private resources. To the extent practicable,
assistance should reinforce other foreign policy goals.
SUBTITLE E--ADAPTING TO CLIMATE CHANGE
Part 1--Domestic Adaptation
Subpart A--National Climate Change Adaptation Program
Section 451, National Climate Change Adaptation Program.
Establishes a climate change adaptation program within the U.S.
Global Change Research Program.
Section 452, Climate Services. Establishes a National
Climate Service within NOAA to develop climate information,
data, forecasts, and warnings at national and regional scales
and to distribute information on climate impacts to state and
local decisionmakers.
Section 453, State Programs to Build Resilience to Climate
Change Impacts: Distributes emission allowances to states for
implementation of adaptation projects, programs, or measures to
build resilience to the impacts of climate change, contingent
on the completion of an approved State Adaptation Plan.
Eligible projects include, but are not limited to, those
designed to respond to extreme weather events such as flooding
or hurricanes, changes in water availability, heat waves, sea
level rise, ecosystem disruption, and air pollution.
Subpart B--Public Health and Climate Change
Sections 461. Sense of Congress on Public Health and
Climate Change: States that it is the sense of Congress that
the federal government should take all means and measures to
prepare for and respond to the public health impacts of climate
change.
Section 462, Relationship to Other Laws: Clarifies that
nothing in the subpart limits authorities or responsibilities
conferred by other law.
Section 463. National Strategic Action Plan: Requires the
Secretary of Health and Human Services to prepare a strategic
plan to assist health professionals in preparing for and
responding to the impacts of climate change on public health
with disease surveillance, research, communications, education,
and training programs. Authorizes the Secretary to implement
these programs using authorities under this subpart and other
federal laws.
Sections 464-465, Advisory Board, Reports: Establishes a
science advisory board to advise the Secretary on science
related to the health effects of climate change. Requires a
needs assessment for health effects of climate change and
periodic reports on scientific developments and recommendations
for updating the national strategy.
Sections 466-467. Definitions, Climate Change Health
Protection and Promotion Fund: Establishes a fund in the
Treasury for carrying out this subpart. Funding will be
distributed by HHS but may be made available to other agencies
and state and local governments. Funding will supplement, not
replace other public health funding.
Subpart C--Natural Resource Adaptation
Section 471-475, Purposes, Policy, Definitions, CEQ,
Resources Adaptation Panel: States that it is the policy of the
federal government to use all practicable means and measures to
assist natural resources to adapt to climate change.
Establishes a Natural Resources Climate Change Adaptation
Panel, chaired by the White House Council on Environmental
Quality, as a forum for interagency coordination on natural
resources adaptation.
Section 476, Natural Resources Climate Change Adaptation
Strategy: Requires the Panel to develop a strategy for making
natural resources more resilient to the impacts of climate
change and ocean acidification. The strategy must assess likely
impacts to natural resources, strategies for helping wildlife
adapt, and specific actions that federal agencies should take.
Section 477, Natural Resources Adaptation Science and
Information: Establishes a process through NOAA and the U.S.
Geological Survey National Global Warming and Wildlife Science
Center to provide technical assistance, conduct research, and
furnish decision tools, monitoring, and strategies for
adaptation. Requires a survey of resources that are likely to
be adversely affected and the establishment of a Science
Advisory Board to advise the science program and recommend
research priorities.
Section 478, Federal Natural Resource Agency Adaptation
Plans: Requires federal agencies to develop natural resource
adaptation plans, consistent with the National Strategy,
including prioritized goals and a schedule for implementation
of adaptation programs within their respective jurisdictions.
Section 479, State Natural Resources Adaptation Plans:
Requires states to develop Natural Resources Adaptation Plans
as a condition for receiving funds under the programs in this
subtitle.
Section 480, Natural Resources Climate Change Adaptation
Fund: Establishes a Natural Resources Climate Change Adaptation
Fund. Allowances devoted to Natural Resources Adaptation are
distributed to the States--84.4 percent to State wildlife
agencies and 15.6 percent to State coastal agencies. Funds
placed in the Natural Resources Climate Change Adaptation Fund
are distributed to Federal agencies: 27.6 percent to the
Department of the Interior (DOI) for endangered species, bird,
and Fish and Wildlife Service programs, wildlife refuges, and
the Bureau of Reclamation; 8.1 percent to DOI for cooperative
grant programs; 4.9 percent to DOI for tribal programs; 19.5
percent to the Land and Water Conservation Fund (\1/6\ to DOI
for competitive grants, \1/3\ for land acquisition under Sec.
1A7 of the Land and Water Conservation Fund Act, \1/3\ to the
Department of Agriculture for land acquisition, \1/6\ to USDA
for the Forestry Assistance Act); 5 percent to USDA for the
Forest Service; 12.2 percent to EPA for freshwater ecosystems;
8.1 percent to the Army Corps of Engineers for freshwater
ecosystems; and 11.5 percent to NOAA for coastal and marine
ecosystems. All funds authorized must be used for adaptation
activities, consistent with federal plans.
Section 481, National Wildlife Habitat and Corridors
Information Program: Establishes a program in the Department of
the Interior to support States and tribes in the development of
a GIS database of fish and wildlife habitat corridors, and to
facilitate the use of database tools in wildlife management
programs.
Section 482, Additional Provisions Regarding Indian Tribes:
Clarifies that nothing in this subpart amends federal trust
responsibilities to tribes, exempts information on Indian tribe
sacred sites or cultural activities from FOIA, and clarifies
that the Department of the Interior may apply the provisions of
the Indian Self-Determination and Education Assistance Act as
appropriate.
Part 2--International Climate Change Adaptation Program
Sections 491-493, Findings and Purposes, Definitions,
International Climate Change Adaptation Program: Establishes an
International Climate Change Adaptation Program within USAID to
provide U.S. assistance to the most vulnerable developing
countries for adaptation to climate change. Resources allocated
to this program will supplement and not replace other
international adaptation assistance.
Section 494, Distribution of Allowances: The Administrator
of USAID shall distribute allowances bilaterally and through
multilateral funds or institutions pursuant to the UNFCCC.
Multilateral institutions must receive between 40 and 60
percent of allowances; multilateral fund eligibility is
contingent on developing world participation, transparency
requirements, and community engagement.
Sections 495, Bilateral Assistance. The Administrator of
USAID shall distribute allowances through public or private
organizations to provide assistance to the most vulnerable
developing countries for adaptation efforts. The Administrator
must prioritize assistance based on vulnerability to climate
change. The bilateral assistance program must ensure community
engagement and consultation, and will seek to align broader
U.S. foreign policy goals with its assistance. The program may
use its assistance to support projects, policies, or programs,
or to build program capacity in developing countries.
Explanation of Amendments
During full Committee consideration of H.R. 2454, there
were 94 amendments offered and 36 of those amendments were
adopted. An amendment in the nature of a substitute offered by
Mr. Waxman and Mr. Markey served as the markup vehicle for
consideration of H.R. 2454. The amendments offered were to the
Waxman-Markey substitute amendment, which was adopted by a
voice vote, amended.
The following is a brief explanation of each of the
amendments adopted by the Committee to H.R. 2454:
Tuesday, May 19, 2009. The Committee approved the following
11 amendments during consideration of H.R. 2454:
Amendment offered by Rep. Dingell: Agreed to by a recorded
vote, 51-6. This amendment establishes a self-sustaining Clean
Energy Deployment Administration within the Department of
Energy to promote the domestic development and deployment of
clean energy technologies. The Clean Energy Deployment
Administration would partner with and support private capital
markets to promote access to affordable financing for a range
of clean energy technologies that might otherwise be unable to
secure financing. The amendment ensures support for a variety
of next generation technologies by limiting to 30 percent the
amount of financial assistance provided to any one technology.
It also includes reforms to the loan guarantee program
established by Title 17 of the Energy Policy Act of 2005.
Amendment offered by Rep. Sutton: Agreed to by a recorded
vote, 50-4, 1 present. This amendment authorizes a new ``Cash
for Clunkers'' program. Under this program, consumers may trade
in their old, gas-guzzling vehicles and receive vouchers worth
up to $4,500 to help pay for new, more fuel efficient cars and
trucks. The program is authorized for $4 billion for one year,
providing for approximately one million new car or truck
purchases.
New passenger cars which achieve at least 22 mpg are
eligible for a $3,500 voucher if the performance of the new car
is at least 4 mpg higher than the old vehicle and a $4,500
voucher if the performance of the new car is at least 10 mpg
higher than the old vehicle. Light duty trucks which achieve at
least 18 mpg are eligible for a $3,500 voucher if the
performance of the new truck is at least 2 mpg higher than the
old vehicle and a $4,500 voucher if the performance of the new
truck is at least 5 mpg higher than the old vehicle. Large
light duty trucks which achieve at least 15 mpg are eligible
for a $3,500 voucher if the performance of the new truck is at
least 1 mpg higher than the old vehicle and a $4,500 voucher if
the performance of the new truck is at least 2 mpg higher than
the old vehicle. Consumers can also trade in a pre-2002 work
truck (defined as a pick-up truck or cargo van weighing from
8,500-10,000 pounds) and receive a voucher worth $3,500 for a
new work truck in the same or smaller weight class. Consumers
can also ``trade down,'' receiving a $3,500 voucher for trading
in an older work truck and purchasing a smaller light-duty
truck weighing from 6,000-8,500 pounds. Work truck purchases
are capped such that the total funds used to purchase work
trucks cannot exceed 7.5 percent of all program funds. The
section also includes important consumer protections and
protections against program fraud.
Amendment offered by Rep. Eshoo: Agreed to by a voice vote.
This amendment authorizes the Secretary of Energy to provide
grants to nonprofit organizations that conduct competitive
programs to identify and support start-up businesses proposing
products or services in areas of energy efficiency, renewable
energy, air quality, water quality and conservation,
transportation, smart grid, green building, and waste
management.
Amendment offered by Rep. Baldwin: Agreed to by a recorded
vote, 30-19. This amendment requires the Secretary of Energy to
create building assessment centers at institutions of higher
education to identify opportunities to optimize the energy and
environmental performance of buildings. The centers would also
promote emerging technologies and research and development to
improve buildings' energy and environmental performance.
Additionally, the centers would train engineers, architects,
and building technicians in energy efficient building design
and operation.
This amendment also provides for the establishment of not
more than 10 regional centers for energy and environmental
knowledge and outreach (CEEKO) to coordinate various energy-
related research centers. Operating in coordination with each
CEEKO would be one or more industrial research and assessment
center, building assessment center, and clean energy
application center located in that CEEKO's region. Institutions
of higher education would compete to house such centers and
would operate internship programs to train students in energy
efficiency with Federal funding supporting up to 50 percent of
the costs.
Amendment offered by Rep. Christensen: Agreed to by a voice
vote.
This amendment would amend the diesel emission reduction
grant program established by Subtitle G of title VII of the
Energy Policy Act of 2005 (42 U.S.C. 16131 et seq.) by adding
American Samoa, Guam, the Commonwealth of the Northern Mariana
Islands, Puerto Rico, and the Virgin Islands to the list of
States eligible to receive grants, and by adjusting the grant
distribution formula accordingly.
Amendment offered by Rep. Space: Agreed to by a voice vote.
This amendment modifies the eligibility criteria that owners or
operators of certain electric generating projects must meet in
order to receive allowances under section 786 (commercial
deployment of carbon capture and sequestration technologies).
The amendment establishes the conditions under which projects
that retrofit carbon capture and sequestration (CCS) equipment
onto a portion of a large, existing power plant's flue gas
stream would be eligible to receive allowances. It is likely
that at least some existing electric generating units would be
unable, for technical reasons, to retrofit CCS technologies
such that the entire flue gas stream of the electric generating
unit is treated by those technologies. Early retrofit
applications are likely only to treat a portion of a power
plant's flue gas stream, rather than all of it. Under the
amended language, retrofit projects that apply CCS technology
to the flue gas of at least 200 megawatts of the plant's
capacity would be eligible (though retrofits projects that
treat the full stream would still qualify under
786(b)(1)(A)(i)). Such projects would need to measure emission
reductions only for the relevant portion of the flue gas, not
for 100 percent of the plant's flue gas. The amendment limits
the eligibility of retrofit projects to receive allowances
under subsections (b)(1)(A)(ii) and ((b)(1)(A)(iv)(II) to the
first 1 gigawatt of treated flue gas (that is, the retrofit of
CCS technologies to the flue gas generated by 1 gigawatt in
cumulative generating capacity), as reported by the
Administrator.
En Bloc Amendment offered by Rep. Baldwin: Rep. Baldwin
offered en bloc an amendment offered by herself and Rep. Rush.
The Baldwin en bloc amendment was considered and agreed to by
voice vote.
1. Amendment offered by Rep. Baldwin: This amendment
requires Federal Energy Regulatory Commission regulations
implementing the Combined Efficiency and Renewable Electricity
Standard to include procedures for counting electricity savings
achieved by solar water heating and solar light pipe
technology.
2. Amendment offered by Rep. Rush: This amendment makes two
changes to section 132 of the Act, which governs the use of
emission allowances distributed to States to support energy
efficiency and renewable energy programs. First, the amendment
makes low-income community energy efficiency programs that are
consistent with the Department of Energy grant program
established under section 264 of the Act eligible for receipt
of support under section 132. Second, it requires that each
State use at least 1 percent of the emission allowances that it
receives under section 132 to support such programs.
En Bloc Amendment offered by Rep. Baldwin: Rep. Baldwin
offered en bloc an amendment offered by Reps. Inslee and
Schakowsky. The Inslee and Schakowsky amendments were agreed to
by a recorded vote, 36-20.
3. Amendment offered by Rep. Inslee: This amendment
requires the Secretary of Energy to establish a National
Bioenergy Partnership to support the institutional and physical
infrastructure necessary to promote the deployment of
sustainable biomass fuels and bioenergy technologies.
4. Amendment offered by Rep. Schakowsky: This amendment
establishes an Office of Consumer Advocacy at the Federal
Energy Regulatory Commission to identify and defend the
consumer interest in proceedings before the Commission. The
office would be headed by a Presidentially-appointed Director,
and would represent energy customers through investigations of
rates, in complaints, and on appeal of Commission decisions
concerning such matters.
Amendment offered by Rep. Castor: Agreed to by a recorded
vote, 32-18. This amendment provides that, notwithstanding any
provision in the Public Utility and Regulatory Policies Act of
1978 (PURPA), any State may establish rates to be paid by
state-regulated utilities intended to provide incentives for
development of renewable energy. In the past, some have
interpreted PURPA to bar such incentive rates to the extent
they exceed the ``avoided cost'' of power a utility could
generate or procure from any other source.
Wednesday, May 20, 2009. The Committee approved the
following 16 amendments during consideration of H.R. 2454:
Amendment offered by Rep. Green: Agreed to by a voice vote.
This amendment to section 786(b)(1)(B)(ii) changes the
applicable point of application for eligible industrial
projects under section 786 (commercial deployment of carbon
capture and sequestration technologies). The original text
referred to a ``50 percent reduction in emissions of the carbon
dioxide produced by the source''; the amendment strikes the
word ``source'' and replaces it with the term ``emission
point.'' This modification reflects the recognition that an
industrial facility may have many emission points, as opposed
to one large emission source, such as the flue gas stack of a
power plant. Under the amended language, a single emission
point at an industrial facility--for example, a particular
emission unit within a refinery, rather than the refinery as a
whole--would be the relevant point against which to measure
emission limits for an industrial source project under section
786.
Amendment offered by Rep. Shadegg: Modified by unanimous
consent, agreed to as modified by a voice vote. This amendment
requires the EPA Administrator, in consultation with the
Department of State and the United States Trade Representative,
to annually prepare a report to Congress on whether China and
India have adopted greenhouse gas emissions standards at least
as strict as the standards required under this Act. In the case
of a determination that China and India have not adopted such
standards, the Administrator is to notify the media and
Congress of the determination.
En Bloc Amendment offered by Rep. Matsui: Rep. Matsui
offered en bloc an amendment offered by Reps. Baldwin and
Eshoo. The amendments were agreed to by voice vote.
1. Amendment offered by Rep. Baldwin: This amendment
provides for the Secretary of Energy to conduct an assessment
of the stock and usage of electric motors and motor-driven
equipment from an energy efficiency perspective and to identify
opportunities for upgrading such motors to improve energy
efficiency. The Secretary is then instructed to establish a
national program targeted at motor end-users to make them aware
of the potential energy efficiency gains that could be realized
by using more efficient motors and motor control equipment.
2. Amendment offered by Rep. Eshoo: This amendment requires
the Director of the Office of Management and Budget to
collaborate with each Federal agency to create an
implementation strategy for the purchase and use of energy
efficient information and communication technologies and
practices, establishing performance goals for each agency
within 6 months of enactment. Such technologies and practices
include advanced metering, efficient data center strategies,
updated applications, building systems, and telework.
En Bloc Amendment offered by Rep. Matsui: Rep. Matsui
offered en bloc an amendment offered by herself and Reps.
Baldwin and Welch. The amendments were agreed to by voice vote.
3. Amendment offered by Rep. Baldwin: This amendment
establishes a rebate program for replacement of low efficiency
industrial-scale electric motors with high-efficiency motors.
The rebate amount is $25 per unit of nameplate horsepower of
the new motor to the purchaser of that motor, and $5 to the
distributor of that motor.
4. Amendment offered by Rep. Matsui: This amendment
authorizes a grant program through the Department of Energy to
provide technical and financial assistance to retail power
providers that carry out targeted tree planting programs, which
reduce energy use and demand peaks in residential and small
office settings.
5. Amendment offered by Rep. Welch: This amendment declares
a national energy efficiency goal of improving overall energy
productivity of the United States by 2.5 percent per year
beginning in 2012 and continuing through 2030. It instructs the
Secretary of Energy, the Administrator of the Environmental
Protection Agency, and other relevant federal agencies, with
public input, to collaborate on a strategic plan to achieve
such a national goal, detailing the regulatory, funding, and
policy priorities required to do so, and to update that plan
biennially.
Amendment offered by Rep. Matheson: Agreed to by a voice
vote. This amendment modifies the violation and enforcement
provisions of the building code provisions in section 201 of
the Act. The amendment directs the Secretary of Energy to
conduct a rulemaking to determine appropriate violations and
penalties within three years of enactment, thus allowing for
stakeholder input.
En Bloc Amendment offered by Rep. McNerney: Rep. McNerney
offered en bloc an amendment offered by Rep. Christensen. The
Christensen amendment was considered was agreed to by voice
vote.
1. Amendment offered by Rep. Christensen: This amendment
requires the Secretary of Energy to establish a team of
technical, policy, and financial experts to address the energy
needs of the islands that make up U.S. territories or are
otherwise affiliated with the U.S. The team will assess the
means of reducing these islands' reliance on imported fossil
energy, increasing the use of indigenous energy, and increasing
the efficiency of energy use on the islands. The team will also
develop an energy action plan for each island based on that
assessment.
En Bloc Amendment offered by Rep. McNerney: Rep. McNerney
offered en bloc an amendment offered by himself and Rep.
Baldwin. The McNerney and Baldwin amendments were agreed to by
a recorded vote, 34-21.
2. Amendment offered by Rep. McNerney: This amendment
authorizes the EPA's WaterSense program, a voluntary labeling
program that labels water-efficient high-performance products
and services. This will provide the same type of labeling for
water efficient products and services as is already done for
energy efficient products under the existing Energy Star
program. It also directs federal agencies to make cost-
effective water-efficient procurement decisions whenever
possible. Finally, it authorizes grants to state governments
that establish programs that offer financial incentives to
consumers who purchase and install water-efficient products and
services such as those labeled by WaterSense.
3. Amendment offered by Rep. Baldwin: This amendment would
create a new product carbon disclosure program at EPA. Not
later than 18 months after the date of enactment, EPA would be
required to issue a report to Congress regarding whether a
national product carbon disclosure program and labeling program
would be effective in reducing greenhouse gas emissions and
other related matters. No later than 36 months after the date
of enactment, EPA would be required to establish a national
product carbon disclosure program, participation in which shall
be voluntary. The national product carbon disclosure program
may include a product carbon labeling program.
Amendment offered by Rep. Sullivan: Agreed to by a voice
vote. This amendment adds use of alternative fuel transit buses
to the list of strategies to be considered when planning to
reduce greenhouse gas emissions from the transportation sector,
pursuant to section 222.
Amendment offered by Rep. Welch: Agreed to by a division
vote of, 25-4. This amendment would create and authorize funds
for an EPA program to replace wood stoves or pellet stoves that
do not meet specified EPA standards of performance for new
residential wood heaters with ones that do meet those
standards. The amendment would also allow EPA to continue to
accept wood stove or pellet stove replacement projects as
Supplemental Environmental Projects provided that certain
conditions are met.
Amendment offered by Rep. Eshoo: Agreed to by a division
vote of, 26-10. This amendment adds a new subsection 721(h)
that requires the Administrator to conduct, by no later than
March 31, 2014, an assessment of how non-HFC
(hydrofluorocarbon) fluorinated gases are regulated under Title
III. H.R. 2454 regulates non-HFC fluorinated gases in either of
two ways. Emissions of nitrogen trifluoride (NF3) are regulated
at the point of emission (or ``downstream''), meaning the
entity at which NF3 emissions occur is the same entity with
compliance obligations for those emissions under section
722(b)(4). Other non-HFC fluorinated gases are regulated at the
point of manufacture or importation (``upstream''), meaning the
entity that produces or imports the gas is the entity with
compliance obligations under section 722(b)(3). Section 721(h)
directs the Administrator to assess the regulation of non-HFC
fluorinated gases (other than NF3, which is addressed
separately) to determine whether regulation of such gases
should be moved downstream to the point of emission. The
Administrator is required to examine a number of factors,
including the environmental effectiveness, cost effectiveness,
and administrative feasibility of changing the point of
regulation. The amendment gives the Administrator discretion to
change the point of regulation for some or all non-HFC, non-NF3
fluorinated gases by rule if, based on the assessment, the
Administrator determines that such gases can be best regulated
downstream. This would be accomplished by changing the
definition of covered entity under section 700(13)(C) with
respect to such fluorinated gases and establishing other
requirements that may be necessary to ensure compliance by
relevant entities. Section 721(h) does not give the
Administrator authority to change the point of regulation with
respect to emissions of NF3.
Amendment offered by Rep. Stupak: Agreed to by a recorded
vote, 33-20. This amendment grants cease-and-desist authority
to the Federal Energy Regulatory Commission under the Federal
Power Act, Natural Gas Act, and Natural Gas Policy Act to
prevent violations of these Acts.
Amendment offered by Rep. Hill: Agreed to by a voice vote.
This amendment modifies new Clean Air Act section 711(d)
regarding the procedure the Administrator would be required to
follow in deciding whether to list a substance as a greenhouse
gas. As amended, prior to making a determination regarding the
listing of a substance as a greenhouse gas, section 711(d)
would require the Administrator to notify the Science Advisory
Board (SAB), consider written recommendations from the SAB, and
consult with the SAB. The SAB would be required to formulate
recommendations regarding such determination, subject to a peer
review process, and submit those recommendations to the
Administrator.
Thursday, May 21, 2009. The Committee approved the
following 9 amendments during consideration of H.R. 2454:
Amendment offered by Rep. Space: Agreed to by a voice vote.
This amendment modifies new Clean Air Act sections 783 and 784
regarding the allocation of allowances to electricity and
natural gas local distribution companies, clarifying and
strengthening provisions to ensure that the allowances are used
for the benefit of retail ratepayers. Changes to sections
783(b)(1) and 784(b)(1) clarify that allowances are distributed
to local distribution companies ``for the benefit of retail
ratepayers.'' Changes to sections 783(b)(7) and 784(b)(7)
require that the Administrator's audits of local distribution
companies' use of allowances ensure that the allowances have
been used exclusively for the benefit of retail ratepayers.
Amendment offered by Rep. Butterfield: Agreed to by a voice
vote. This amendment modifies the provisions governing emission
standards for heavy-duty motor vehicles and engines and non-
road vehicles and engines in section 221. With regard to heavy-
duty vehicles and engines, the amendment provides adequate
stability and lead-time for implementation of the standards,
ensuring that standards apply for a period no less than 3 model
years beginning no earlier than the model year commencing 4
years after such regulations are promulgated. The amendment
also included provisions to ensure that heavy-duty vehicles and
engines are not doubly regulated. With regard to nonroad
vehicles and engines, the amendment directs the Administrator
to focus initially on classes or categories of new nonroad
vehicles or engines that both contribute significantly to the
total emissions of greenhouse gases from nonroad engines and
vehicles and provide the greatest potential for significant and
cost-effective reductions in emissions of greenhouse gases.
Amendment offered by Rep. Braley: Agreed to by voice vote.
This amendment adds renewable fuel pipelines to the list of
projects and technologies available for loan guarantees under
Title XXII of the Energy Policy Act of 2005.
Amendment offered by Rep. Weiner: Agreed to by voice vote,
as amended. This amendment directs the Department of Energy and
the Environmental Protection Agency in carrying out the Energy
Star program to include consideration of prototype products,
consider ways of providing more detailed comparative
information among Energy Star products, review product
qualifications on a regular basis, update qualifications as
necessary, and provide proof of performance through testing of
products purchased in the market.
Amendment offered by Rep. Buyer: Agreed to by voice vote.
This amendment adopts a standard requiring utilities (that sell
in excess of 4,000,000 megawatt hours of electricity) to
interconnect with and to provide net metering of power
deliveries to and receipts from Federal agencies that own,
operate or site facilities generating renewable energy. The net
metering service is to be offered to such Federal agencies on
the basis of non-discriminatory time-sensitive rates.
Amendment offered by Rep. Sutton: Agreed to by a recorded
vote, 39-18. This amendment would require recipients of
emission allowances or funding under the Act to provide
reasonable assurances that all laborers and mechanics employed
by contractors and subcontractors on projects funded directly
by or assisted in whole or in part by the federal government
pursuant to this Act will be paid at least prevailing wages as
determined by the Secretary of Labor in accordance with what is
commonly known as the Davis-Bacon Act (subchapter IV of chapter
31 of title 40, United States Code). The provisions would not
apply, however, to retrofitting of any residential building or
of specified nonresidential buildings.
Amendment offered by Rep. Inslee: Agreed to by voice vote.
This amendment amends Title XVII of the Energy Policy Act of
2005 to extend the loan guarantee authority in that Title to
cover the development, construction, or integration of high-
efficiency or superconductive high-voltage electricity
transmission technologies. It also provides such loan
guarantees for manufacturing plants producing such
technologies. It separately authorizes the Secretary of Energy
to make grants for up to 50 percent of the cost of the first
project incorporating such technologies, up to a maximum of
$100,000,000 during Fiscal Year 2010.
Amendment offered by Rep. Space: Agreed to by voice vote.
This amendment modifies the criteria for determining whether
emissions reductions achieved by an offset project are
additional. The underlying text provides in part that a
reduction in greenhouse gas emissions or a sequestration of
greenhouse gases would be considered additional only if it
resulted from an activity that began after January 1, 2009, or
began after January 1, 2001, and had been registered under an
approved early offset program. The amendment adds a second
exception to the January 1, 2009, date by providing that with
respect to activities that are readily reversible, the
Administrator may set an alternative date between January 1,
2001, and January 1, 2009, if the Administrator determines that
setting an alternative date may produce an environmental
benefit by removing an incentive to cease and then reinitiate
activities that began prior to January 1, 2009.
Managers Amendment: Agreed to by voice vote. This amendment
includes a number of changes. It changes the mechanism for
distributing allowance proceeds to consumers by amending new
section 789 of the Clean Air Act and directing the Secretary of
the Treasury (rather than the President) to provide tax refunds
on a per capita basis using funds deposited in the Climate
Change Consumer Fund from the sale of allowances.
This amendment strikes section 432(j).
This amendment amends new section 782(m) of the Clean Air
Act and section 480 of ACES Act by modifying the method of
using allowance value to support Natural Resource Adaptation.
Instead of auctioning all allowances allocated to this purpose,
under the amendment, states will receive allowances directly
for specified purposes. The changes in percentages reflect the
division of allowance value into two components (direct
allocation to states and auctioning of other allowances), but
does not change the amount of total allowance value distributed
to specific purposes under this section. This amendment also
changes the provision in section 480 regarding appropriations.
This amendment amends section 453 in several ways,
including: adding a requirement for state climate adaptation
plans; adding section 453(d) and other provisions regarding
projects to reduce flood events; and adding section 453(g) to
state Congress's intent that emission allowances distributed
under subpart E of Title IV should be used to supplement, not
replace, existing sources of funding.
This amendment amends certain market oversight provisions
added to the Federal Power Act by this bill.
The amendment modifies the definition of ``distributed
renewable generation facility'' in section 101 of the Act (the
Combined Efficiency and Renewable Electricity Standard). The
amendment expands the definition to include facilities that are
no greater than 4 megawatts in capacity, are placed in service
after the date of enactment, and generate electricity from a
renewable energy resource other than by means of combustion.
This amendment modifies new section 786(e) of the Clean Air
Act regarding limitations on allowances provided for the
commercial deployment of carbon capture and storage technology.
This amendment makes technical modifications to new section
619 of the Clean Air Act.
This amendment makes technical modifications to new section
764 of the Clean Air Act and adds phosphate to a provision
regarding treatment of data for metals.
This amendment makes technical corrections to new section
782(e) regarding the allocation of allowances to trade-
vulnerable industries.
This amendment adds clarifying language to section
144(d)(1).
This amendment modifies new section 216A(a) of the Federal
Power Act to provide greater specificity regarding the type of
higher efficiency transmission conductors that should be
considered in the transmission planning process.
This amendment adds a new section 794 to the Clean Air Act
that requires the Comptroller General to prepare biannual
reviews of the programs administered by the Federal Government
that distribute emission allowances or funds from Federal
auctions of allowances.
This amendment makes minor modifications to allowance
allocation formulas in section 782(f) and (p).
This amendment adds section 205, which amends section
453(c)(1) of the Energy Independence and Security Act of 2007,
regarding energy efficiency for data center buildings.
This amendment makes technical corrections to new section
821 of the Clean Air Act.
This amendment modifies new section 32920 of title 49,
U.S.C., regarding open fuel standard for vehicles.
Changes in Existing Law Made by the Bill, as Reported
In compliance with clause 3(e) of rule XIII of the Rules of
the House of Representatives, changes in existing law made by
the bill, as reported, are shown as follows (existing law
proposed to be omitted is enclosed in black brackets, new
matter is printed in italic, existing law in which no change is
proposed is shown in roman):
PUBLIC UTILITY REGULATORY POLICIES ACT OF 1978
SECTION 1. SHORT TITLE AND TABLE OF CONTENTS.
(a) * * *
(b) Table of Contents.--
* * * * * * *
TITLE VI--MISCELLANEOUS PROVISIONS
* * * * * * *
Sec. 610. Combined efficiency and renewable electricity standard.
* * * * * * *
TITLE I--RETAIL REGULATORY POLICIES FOR ELECTRIC UTILITIES
* * * * * * *
Subtitle B--Standards For Electric Utilities
SEC. 111. CONSIDERATION AND DETERMINATION RESPECTING CERTAIN RATEMAKING
STANDARDS.
(a) * * *
* * * * * * *
(d) Establishment.--The following Federal standards are
hereby established:
(1) * * *
* * * * * * *
(20) Plug-in electric drive vehicle infrastructure.--
(A) Utility plan for infrastructure.--Each
electric utility shall develop a plan to
support the use of plug-in electric drive
vehicles, including heavy-duty hybrid electric
vehicles. The plan may provide for deployment
of electrical charging stations in public or
private locations, including street parking,
parking garages, parking lots, homes, gas
stations, and highway rest stops. Any such plan
may also include--
(i) battery exchange, fast charging
infrastructure and other services;
(ii) triggers for infrastructure
deployment based upon market
penetration of plug-in electric drive
vehicles; and
(iii) such other elements as the
State determines necessary to support
plug-in electric drive vehicles.
Each plan under this paragraph shall provide
for the deployment of the charging
infrastructure or other infrastructure
necessary to adequately support the use of
plug-in electric drive vehicles.
(B) Support requirements.--Each State
regulatory authority (in the case of each
electric utility for which it has ratemaking
authority) and each utility (in the case of a
nonregulated utility) shall--
(i) require that charging
infrastructure deployed is
interoperable with products of all auto
manufacturers to the extent possible;
and
(ii) consider adopting minimum
requirements for deployment of
electrical charging infrastructure and
other appropriate requirements
necessary to support the use of plug-in
electric drive vehicles.
(C) Cost recovery.--Each State regulatory
authority (in the case of each electric utility
for which it has ratemaking authority) and each
utility (in the case of a nonregulated utility)
shall consider whether, and to what extent, to
allow cost recovery for plans and
implementation of plans.
(D) Smart grid integration.--The State
regulatory authority (in the case of each
electric utility for which it has ratemaking
authority) and each utility (in the case of a
nonregulated utility) shall, in accordance with
regulations issued by the Federal Energy
Regulatory Commission pursuant to section
1305(d) of the Energy Independence and Security
Act of 2007--
(i) establish any appropriate
protocols and standards for integrating
plug-in electric drive vehicles into an
electrical distribution system,
including Smart Grid systems and
devices as described in title XIII of
the Energy Independence and Security
Act of 2007;
(ii) include, to the extent feasible,
the ability for each plug-in electric
drive vehicle to be identified
individually and to be associated with
its owner's electric utility account,
regardless of the location that the
vehicle is plugged in, for purposes of
appropriate billing for any electricity
required to charge the vehicle's
batteries as well as any crediting for
electricity provided to the electric
utility from the vehicle's batteries;
and
(iii) review the determination made
in response to section 1252 of the
Energy Policy Act of 2005 in light of
this section, including whether time-
of-use pricing should be employed to
enable the use of plug-in electric
drive vehicles to contribute to meeting
peak-load and ancillary service power
needs.
SEC. 112. OBLIGATIONS TO CONSIDER AND DETERMINE.
(a) * * *
(b) Time Limitations.--(1) * * *
* * * * * * *
(7)(A) Not later than 3 years after the date of enactment of
this paragraph, each State regulatory authority (with respect
to each electric utility for which it has ratemaking authority)
and each nonregulated utility shall commence the consideration
referred to in section 111, or set a hearing date for
consideration, with respect to the standard established by
paragraph (20) of section 111(d).
(B) Not later than 4 years after the date of enactment of the
this paragraph, each State regulatory authority (with respect
to each electric utility for which it has ratemaking
authority), and each nonregulated electric utility, shall
complete the consideration, and shall make the determination,
referred to in section 111 with respect to the standard
established by paragraph (20) of section 111(d).
(c) Failure To Comply.--Each State regulatory authority (with
respect to each electric utility for which it has ratemaking
authority) and each nonregulated electric utility shall
undertake the consideration, and make the determination,
referred to in section 111 with respect to each standard
established by section 111(d) in the first rate proceeding
commenced after the date three years after the date of
enactment of this Act respecting the rates of such utility if
such State regulatory authority or nonregulated electric
utility has not, before such date, complied with subsection
(b)(2) with respect to such standard. In the case of each
standard established by paragraphs (11) through (13) of section
111(d), the reference contained in this subsection to the date
of enactment of this Act shall be deemed to be a reference to
the date of enactment of such paragraphs (11) through (13). In
the case of the standard established by paragraph (14) of
section 111(d), the reference contained in this subsection to
the date of enactment of this Act shall be deemed to be a
reference to the date of enactment of such paragraph (14). In
the case of the standard established by paragraph (15), the
reference contained in this subsection to the date of enactment
of this Act shall be deemed to be a reference to the date of
enactment of paragraph (15). In the case of the standards
established by paragraphs (16) through (19) of section 111(d),
the reference contained in this subsection to the date of
enactment of this Act shall be deemed to be a reference to the
date of enactment of such paragraphs. In the case of the
standards established by paragraph (20) of section 111(d), the
reference contained in this subsection to the date of enactment
of this Act shall be deemed to be a reference to the date of
enactment of such paragraph.
(d) Prior State Actions.--Subsections (b) and (c) of this
section shall not apply to the standards established by
paragraphs (11) through (13) and paragraphs (16) through [(19)]
(20) of section 111(d) in the case of any electric utility in a
State if, before the enactment of this subsection--
(1) * * *
* * * * * * *
SEC. 113. ADOPTION OF CERTAIN STANDARDS.
(a) * * *
(b) Establishment.--The following Federal standards are
hereby established:
(1) * * *
* * * * * * *
(6) Net metering for federal agencies.--Each electric
utility shall offer to arrange (either directly or
through a third party) to make interconnection and net
metering available to Federal Government agencies,
offices, or facilities in accordance with the
requirements of section 115(j). The standard under this
paragraph shall apply only to electric utilities that
sold over 4,000,000 megawatt hours of electricity in
the preceding year to the ultimate consumers thereof.
In the case of a standard under this paragraph, a
period of 1 year after the date of the enactment of
this section shall be substituted for the 2-year period
referred to in other provisions of this section.
* * * * * * *
SEC. 115. SPECIAL RULES FOR STANDARDS.
(a) * * *
* * * * * * *
(j) Net Metering for Federal Agencies.--(1) The standard
under paragraph (6) of section 113(b) shall require that rates
and charges and contract terms and conditions for the sale of
electric energy to the Federal Government or agency shall be
the same as the rates and charges and contract terms and
conditions that would be applicable if the agency did not own
or operate a qualified generation unit and use a net metering
system.
(2)(A) The standard under paragraph (6) of section 113(b)
shall require that each electric utility shall arrange to
provide to the Government office or agency that qualifies for
net metering an electrical energy meter capable of net metering
and measuring, to the maximum extent practicable, the flow of
electricity to or from the customer, using a single meter and
single register, the cost of which shall be recovered from the
customer.
(B) In a case in which it is not practicable to provide a
meter under subparagraph (A), the utility (either directly or
through a third party) shall, at the expense of the utility
install 1 or more of those electric energy meters.
(3)(A) The standard under paragraph (6) of section 113(b)
shall require that each electric utility shall calculate the
electric energy consumption for the Government office or agency
using a net metering system that meets the requirements of this
subsection and paragraph (6) of section 113(b) and shall
measure the net electricity produced or consumed during the
billing period using the metering installed in accordance with
this paragraph.
(B) If the electricity supplied by the retail electric
supplier exceeds the electricity generated by the Government
office or agency during the billing period, the Government
office or agency shall be billed for the net electric energy
supplied by the retail electric supplier in accordance with
normal billing practices.
(C) If electric energy generated by the Government office or
agency exceeds the electric energy supplied by the retail
electric supplier during the billing period, the Government
office or agency shall be billed for the appropriate customer
charges for that billing period and credited for the excess
electric energy generated during the billing period, with the
credit appearing as a kilowatt-hour credit on the bill for the
following billing period.
(D) Any kilowatt-hour credits provided to the Government
office or agency as provided in this subsection shall be
applied to the Government office or agency electric energy
consumption on the following billing period bill (except for a
billing period that ends in the next calendar year). At the
beginning of each calendar year, any unused kilowatt-hour
credits remaining from the preceding year will carry over to
the new year.
(4) The standard under paragraph (6) of section 113(b) shall
require that each electric utility shall offer a meter and
retail billing arrangement that has time-differentiated rates.
The kilowatt-hour credit shall be based on the ratio
representing the difference in retail rates for each time-of-
use rate, or the credits shall be reflected on the bill of the
Government office or agency as a monetary credit reflecting
retail rates at the time of generation of the electric energy
by the customer-generator.
(5) The standard under paragraph (6) of section 113(b) shall
require that the qualified generation unit, interconnection
standards, and net metering system used by the Government
office or agency shall meet all applicable safety and
performance and reliability standards established by the
National Electrical Code, the Institute of Electrical and
Electronics Engineers, Underwriters Laboratories, and the
American National Standards Institute.
(6) The standard under paragraph (6) of section 113(b) shall
require that electric utilities shall not make additional
charges, including standby charges, for equipment or services
for safety or performance that are in addition to those
necessary to meet the other standards and requirements of this
subsection and paragraph (6) of section 113(b).
(7) For purposes of this subsection and paragraph (6) of
section 113(b):
(A) The term ``Government'' means any office,
facility, or agency of the Federal Government.
(B) The term ``customer-generator'' means the owner
or operator of a electricity generation unit.
(C) The term ``electric generation unit'' means any
renewable electric generation unit that is owned,
operated, or sited on a Federal Government facility.
(D) The term ``net metering'' means the process of--
(i) measuring the difference between the
electricity supplied to a customer-generator
and the electricity generated by the customer-
generator that is delivered to a utility at the
same point of interconnection during an
applicable billing period; and
(ii) providing an energy credit to the
customer-generator in the form of a kilowatt-
hour credit for each kilowatt-hour of
electricity produced by the customer-generator
from an electric generation unit.
* * * * * * *
TITLE II--CERTAIN FEDERAL ENERGY REGULATORY COMMISSION AND DEPARTMENT
OF ENERGY AUTHORITIES
* * * * * * *
SEC. 210. COGENERATION AND SMALL, POWER PRODUCTION.
(a) * * *
* * * * * * *
(o) Clarification of State Authority To Adopt Renewable
Energy Incentives.--Notwithstanding any other provision of this
Act or the Federal Power Act, a State legislature or regulatory
authority may set the rates for a sale of electric energy by a
facility generating electric energy from renewable energy
sources pursuant to a State-approved production incentive
program under which the facility voluntarily sells electric
energy. For purposes of this subsection, ``State-approved
production incentive program'' means a requirement imposed
pursuant to State law, or by a State regulatory authority
acting within its authority under State law, that an electric
utility purchase renewable energy (as defined in section 609 of
this Act) at a specified rate.
* * * * * * *
TITLE VI--MISCELLANEOUS PROVISIONS
* * * * * * *
SEC. 610. COMBINED EFFICIENCY AND RENEWABLE ELECTRICITY STANDARD.
(a) Definitions.--For purposes of this section:
(1) Chp savings.--The term ``CHP savings'' means--
(A) CHP system savings from a combined heat
and power system that commences operation after
the date of enactment of this section; and
(B) the increase in CHP system savings from,
at any time after the date of the enactment of
this section, upgrading, replacing, expanding,
or increasing the utilization of a combined
heat and power system that commenced operation
on or before the date of enactment of this
section.
(2) Chp system savings.--The term ``CHP system
savings'' means the electric output, and the
electricity saved due to the mechanical output, of a
combined heat and power system, adjusted to reflect any
increase in fuel consumption by that system as compared
to the fuel that would have been required to produce an
equivalent useful thermal energy output in a separate
thermal-only system.
(3) Combined heat and power system.--The term
``combined heat and power system'' means a system that
uses the same energy source both for the generation of
electrical or mechanical power and the production of
steam or another form of useful thermal energy,
provided that--
(A) the system meets such requirements
relating to efficiency and other operating
characteristics as the Commission may
promulgate by regulation; and
(B) the net sales of electricity by the
facility to customers not consuming the thermal
output from that facility will not exceed 50
percent of total annual electric generation by
the facility.
(4) Customer facility savings.--The term ``customer
facility savings'' means a reduction in end-use
electricity consumption (including recycled energy
savings) at a facility of an end-use consumer of
electricity served by a retail electric supplier, as
compared to--
(A) in the case of a new facility,
consumption at a reference facility of average
efficiency;
(B) in the case of an existing facility,
consumption at such facility during a base
period, except as provided in subparagraphs (C)
and (D);
(C) in the case of new equipment that
replaces existing equipment with remaining
useful life, the projected consumption of the
existing equipment for the remaining useful
life of such equipment, and thereafter,
consumption of new equipment of average
efficiency of the same equipment type; and
(D) in the case of new equipment that
replaces existing equipment at the end of the
useful life of the existing equipment,
consumption by new equipment of average
efficiency of the same equipment type.
(5) Distributed renewable generation facility.--The
term ``distributed renewable generation facility''
means a facility that--
(A) generates renewable electricity;
(B) primarily serves 1 or more electricity
consumers at or near the facility site; and
(C) is no greater than--
(i) 2 megawatts in capacity; or
(ii) 4 megawatts in capacity, in the
case of a facility that is placed in
service after the date of enactment of
this section and generates electricity
from a renewable energy resource other
than by means of combustion.
(6) Electricity savings.--The term ``electricity
savings'' means reductions in electricity consumption,
relative to business-as-usual projections, achieved
through measures implemented after the date of
enactment of this section, limited to--
(A) customer facility savings of electricity,
adjusted to reflect any associated increase in
fuel consumption at the facility;
(B) reductions in distribution system losses
of electricity achieved by a retail electricity
distributor, as compared to losses attributable
to new or replacement distribution system
equipment of average efficiency;
(C) CHP savings; and
(D) fuel cell savings.
(7) Federal land.--The term ``Federal land'' means
land owned by the United States, other than land held
in trust for an Indian or Indian tribe.
(8) Federal renewable electricity credit.--The term
``Federal renewable electricity credit'' means a
credit, representing one megawatt hour of renewable
electricity, issued pursuant to subsection (e).
(9) Fuel cell.--The term ``fuel cell'' means a device
that directly converts the chemical energy of a fuel
and an oxidant into electricity by electrochemical
processes occurring at separate electrodes in the
device.
(10) Fuel cell savings.--The term ``fuel cell
savings'' means the electricity saved by a fuel cell
that is installed after the date of enactment of this
section, or by upgrading a fuel cell that commenced
operation on or before the date of enactment of this
section, as a result of the greater efficiency with
which the fuel cell transforms fuel into electricity as
compared with sources of electricity delivered through
the grid, provided that--
(A) the fuel cell meets such requirements
relating to efficiency and other operating
characteristics as the Commission may
promulgate by regulation; and
(B) the net sales of electricity from the
fuel cell to customers not consuming the
thermal output from the fuel cell, if any, do
not exceed 50 percent of the total annual
electricity generation by the fuel cell.
(11) High conservation priority land.--The term
``high conservation priority land'' means land that is
not Federal land and is--
(A) globally or State ranked as critically
imperiled or imperiled under a State Natural
Heritage Program; or
(B) old-growth or late-successional forest,
as identified by the office of the relevant
State Forester or relevant State agency with
regulatory jurisdiction over forestry
activities.
(12) Other qualifying energy resource.--The term
``other qualifying energy resource'' means any of the
following:
(A) Landfill gas.
(B) Wastewater treatment gas.
(C) Coal mine methane used to generate
electricity at or near the mine mouth.
(D) Qualified waste-to-energy.
(13) Qualified hydropower.--The term ``qualified
hydropower'' means--
(A) energy produced from increased efficiency
achieved, or additions of capacity made, on or
after January 1, 1992, at a hydroelectric
facility that was placed in service before that
date and does not include additional energy
generated as a result of operational changes
not directly associated with efficiency
improvements or capacity additions; or
(B) energy produced from generating capacity
added to a dam on or after January 1, 1992,
provided that the Commission certifies that--
(i) the dam was placed in service
before the date of the enactment of
this section and was operated for flood
control, navigation, or water supply
purposes and was not producing
hydroelectric power prior to the
addition of such capacity;
(ii) the hydroelectric project
installed on the dam is licensed (or is
exempt from licensing) by the
Commission and is in compliance with
the terms and conditions of the license
or exemption, and with other applicable
legal requirements for the protection
of environmental quality, including
applicable fish passage requirements;
and
(iii) the hydroelectric project
installed on the dam is operated so
that the water surface elevation at any
given location and time that would have
occurred in the absence of the
hydroelectric project is maintained,
subject to any license or exemption
requirements that require changes in
water surface elevation for the purpose
of improving the environmental quality
of the affected waterway.
(14) Qualified waste-to-energy.--The term ``qualified
waste-to-energy'' means energy from the combustion of
municipal solid waste or construction, demolition, or
disaster debris, or from the gasification or
pyrolization of such waste or debris and the combustion
of the resulting gas at the same facility, provided
that--
(A) such term shall include only the energy
derived from the non-fossil biogenic portion of
such waste or debris;
(B) the Commission determines, with the
concurrence of the Administrator of the
Environmental Protection Agency, that the total
lifecycle greenhouse gas emissions attributable
to the generation of electricity from such
waste or debris are lower than those
attributable to the likely alternative method
of disposing of such waste or debris; and
(C) the owner or operator of the facility
generating electricity from such energy
provides to the Commission, on an annual
basis--
(i) a certification that the facility
is in compliance with all applicable
State and Federal environmental
permits;
(ii) in the case of a facility that
commenced operation before the date of
enactment of this section, a
certification that the facility meets
emissions standards promulgated under
sections 112 or 129 of the Clean Air
Act (42 U.S.C. 7412 or 7429) that apply
as of the date of enactment of this
section to new facilities within the
relevant source category; and
(iii) in the case of the combustion,
pyrolization, or gasification of
municipal solid waste, a certification
that each local government unit from
which such waste originates operates,
participates in the operation of,
contracts for, or otherwise provides
for, recycling services for its
residents.
(15) Recycled energy savings.--The term ``recycled
energy savings'' means a reduction in electricity
consumption that results from a modification of an
industrial or commercial system that commenced
operation before the date of enactment of this section,
in order to recapture electrical, mechanical, or
thermal energy that would otherwise be wasted.
(16) Renewable biomass.--The term ``renewable
biomass'' means any of the following:
(A) Plant material, including waste material,
harvested or collected from actively managed
agricultural land that was in cultivation,
cleared, or fallow and nonforested on January
1, 2009.
(B) Plant material, including waste material,
harvested or collected from pastureland that
was nonforested on January 1, 2009.
(C) Nonhazardous vegetative matter derived
from waste, including separated yard waste,
landscape right-of-way trimmings, construction
and demolition debris or food waste (but not
municipal solid waste, recyclable waste paper,
painted, treated or pressurized wood, or wood
contaminated with plastic or metals).
(D) Animal waste or animal byproducts,
including products of animal waste digesters.
(E) Algae.
(F) Trees, brush, slash, residues, or any
other vegetative matter removed from within 600
feet of any building, campground, or route
designated for evacuation by a public official
with responsibility for emergency preparedness,
or from within 300 feet of a paved road,
electric transmission line, utility tower, or
water supply line.
(G) Residues from or byproducts of milled
logs.
(H) Any of the following removed from
forested land that is not Federal and is not
high conservation priority land:
(i) Trees, brush, slash, residues,
interplanted energy crops, or any other
vegetative matter removed from an
actively managed tree plantation
established--
(I) prior to January 1, 2009;
or
(II) on land that, as of
January 1, 2009, was cultivated
or fallow and non-forested.
(ii) Trees, logging residue,
thinnings, cull trees, pulpwood, and
brush removed from naturally-
regenerated forests or other non-
plantation forests, including for the
purposes of hazardous fuel reduction or
preventative treatment for reducing or
containing insect or disease
infestation.
(iii) Logging residue, thinnings,
cull trees, pulpwood, brush and species
that are non-native and noxious, from
stands that were planted and managed
after January 1, 2009, to restore or
maintain native forest types.
(iv) Dead or severely damaged trees
removed within 5 years of fire,
blowdown, or other natural disaster,
and badly infested trees.
(I) Materials, pre-commercial thinnings, or
removed invasive species from National Forest
System land and public lands (as defined in
section 103 of the Federal Land Policy and
Management Act of 1976 (43 U.S.C. 1702)),
including those that are byproducts of
preventive treatments (such as trees, wood,
brush, thinnings, chips, and slash), that are
removed as part of a federally recognized
timber sale, or that are removed to reduce
hazardous fuels, to reduce or contain disease
or insect infestation, or to restore ecosystem
health, and that are--
(i) not from components of the
National Wilderness Preservation
System, Wilderness Study Areas,
Inventoried Roadless Areas, old growth
or mature forest stands, components of
the National Landscape Conservation
System, National Monuments, National
Conservation Areas, Designated
Primitive Areas, or Wild and Scenic
Rivers corridors;
(ii) harvested in environmentally
sustainable quantities, as determined
by the appropriate Federal land
manager; and
(iii) harvested in accordance with
Federal and State law and applicable
land management plans.
(17) Renewable electricity.--The term ``renewable
electricity'' means electricity generated (including by
means of a fuel cell) from a renewable energy resource
or other qualifying energy resources.
(18) Renewable energy resource.--The term ``renewable
energy resource'' means each of the following:
(A) Wind energy.
(B) Solar energy.
(C) Geothermal energy.
(D) Renewable biomass.
(E) Biogas derived exclusively from renewable
biomass.
(F) Biofuels derived exclusively from
renewable biomass.
(G) Qualified hydropower.
(H) Marine and hydrokinetic renewable energy,
as that term is defined in section 632 of the
Energy Independence and Security Act of 2007
(42 U.S.C. 17211).
(19) Retail electric supplier.--
(A) In general.--The term ``retail electric
supplier'' means, for any given year, an
electric utility that sold not less than
4,000,000 megawatt hours of electric energy to
electric consumers for purposes other than
resale during the preceding calendar year.
(B) Inclusions and limitations.--For purposes
of determining whether an electric utility
qualifies as a retail electric supplier under
subparagraph (A)--
(i) the sales of any affiliate of an
electric utility to electric consumers,
other than sales to the affiliate's
lessees or tenants, for purposes other
than resale shall be considered to be
sales of such electric utility; and
(ii) sales by any electric utility to
an affiliate, lessee, or tenant of such
electric utility shall not be treated
as sales to electric consumers.
(C) Affiliate.--For purposes of this
paragraph, the term ``affiliate'' when used in
relation to a person, means another person that
directly or indirectly owns or controls, is
owned or controlled by, or is under common
ownership or control with, such person, as
determined under regulations promulgated by the
Commission.
(20) Retail electric supplier's base amount.--The
term ``retail electric supplier's base amount'' means
the total amount of electric energy sold by the retail
electric supplier, expressed in megawatt hours, to
electric customers for purposes other than resale
during the relevant calendar year, excluding--
(A) electricity generated by a hydroelectric
facility that is not qualified hydropower;
(B) electricity generated by a nuclear
generating unit placed in service after the
date of enactment of this section; and
(C) the proportion of electricity generated
by a fossil-fueled generating unit that is
equal to the proportion of greenhouse gases
produced by such unit that are captured and
geologically sequestered.
(21) Retire and retirement.--The terms ``retire'' and
``retirement'' with respect to a Federal renewable
electricity credit, means to disqualify such credit for
any subsequent use under this section, regardless of
whether the use is a sale, transfer, exchange, or
submission in satisfaction of a compliance obligation.
(22) Third-party efficiency provider.--The term
``third-party efficiency provider'' means any retailer,
building owner, energy service company, financial
institution or other commercial, industrial or
nonprofit entity that is capable of providing
electricity savings in accordance with the requirements
of this section.
(23) Total annual electricity savings.--The term
``total annual electricity savings'' means electricity
savings during a specified calendar year from measures
that were placed into service since the date of the
enactment of this section, taking into account verified
measure lifetimes or verified annual savings attrition
rates, as determined in accordance with such
regulations as the Commission may promulgate and
measured in megawatt hours.
(b) Annual Compliance Obligation.--
(1) In general.--For each of calendar years 2012
through 2039, not later than March 31 of the following
calendar year, each retail electric supplier shall
submit to the Commission an amount of Federal renewable
electricity credits and demonstrated total annual
electricity savings that, in the aggregate, is equal to
such retail electric supplier's annual combined target
as set forth in subsection (d), except as otherwise
provided in subsection (g).
(2) Demonstration of savings.--For purposes of this
subsection, submission of demonstrated total annual
electricity savings means submission of a report that
demonstrates, in accordance with the requirements of
subsection (f), the total annual electricity savings
achieved by the retail electric supplier within the
relevant compliance year.
(3) Renewable electricity credits portion.--Except as
provided in paragraph (4), each retail electric
supplier must submit Federal renewable electricity
credits equal to at least three quarters of the retail
electric supplier's annual combined target.
(4) State petition.--
(A) In general.--Upon written request from
the Governor of any State (including, for
purposes of this paragraph, the Mayor of the
District of Columbia), the Commission shall
increase, to not more than two fifths, the
proportion of the annual combined targets of
retail electric suppliers located within such
State that may be met through submission of
demonstrated total annual electricity savings,
provided that such increase shall be effective
only with regard to the portion of a retail
electric supplier's annual combined target that
is attributable to electricity sales within
such State.
(B) Contents.--A Governor's request under
this paragraph shall include an explanation of
the Governor's rationale for determining, after
consultation with the relevant State regulatory
authority and other retail electricity
ratemaking authorities within the State, to
make such request. The request shall specify
the maximum proportion of annual combined
targets (not more than two fifths) that can be
met through demonstrated total annual
electricity savings, and the period for which
such proportion shall be effective.
(C) Revision.--The Governor of any State may,
after consultation with the relevant State
regulatory authority and other retail
electricity ratemaking authorities within the
State, submit a written request for revocation
or revision of a previous request submitted
under this paragraph. The Commission shall
grant such request, provided that--
(i) any revocation or revision shall
not apply to the combined annual target
for any year that is any earlier than 2
calendar years after the calendar year
in which such request is submitted, so
as to provide retail electric suppliers
with adequate notice of such change;
and
(ii) any revision shall meet the
requirements of subparagraph (A).
(c) Establishment of Program.--Not later than 1 year after
the date of enactment of this section, the Commission shall
promulgate regulations to implement and enforce the
requirements of this section. In promulgating such regulations,
the Commission shall, to the extent practicable--
(1) preserve the integrity, and incorporate best
practices, of existing State renewable electricity and
energy efficiency programs;
(2) rely upon existing and emerging State or regional
tracking systems that issue and track non-Federal
renewable electricity credits; and
(3) cooperate with the States to facilitate
coordination between State and Federal renewable
electricity and energy efficiency programs and to
minimize administrative burdens and costs to retail
electric suppliers.
(d) Annual Compliance Requirement.--
(1) Annual combined targets.--For each of calendar
years 2012 through 2039, a retail electric supplier's
annual combined target shall be the product of--
(A) the required annual percentage for such
year, as set forth in paragraph (2); and
(B) the retail electric supplier's base
amount for such year.
(2) Required annual percentage.--For each of calendar
years 2012 through 2039, the required annual percentage
shall be as follows:
Calendar year Required annual percentage
2012................................... 6.0
2013................................... 6.0
2014................................... 9.5
2015................................... 9.5
2016................................... 13.0
2017................................... 13.0
2018................................... 16.5
2019................................... 16.5
2020................................... 20.0
2021 through 2039...................... 20.0
(e) Federal Renewable Electricity Credits.--
(1) In general.--The regulations promulgated under
this section shall include provisions governing the
issuance, tracking, and verification of Federal
renewable electricity credits. Except as provided in
paragraphs (2), (3), and (4) of this subsection, the
Commission shall issue to each generator of renewable
electricity, 1 Federal renewable electricity credit for
each megawatt hour of renewable electricity generated
by such generator after December 31, 2011. The
Commission shall assign a unique serial number to each
Federal renewable electricity credit.
(2) Generation from certain state renewable
electricity programs.--Where renewable electricity is
generated with the support of payments from a retail
electric supplier pursuant to a State renewable
electricity program (whether through State alternative
compliance payments or through payments to a State
renewable electricity procurement fund or entity), the
Commission shall issue Federal renewable electricity
credits to such retail electric supplier for the
proportion of the relevant renewable electricity
generation that is attributable to the retail electric
supplier's payments, as determined pursuant to
regulations issued by the Commission. For any remaining
portion of the relevant renewable electricity
generation, the Commission shall issue Federal
renewable electricity credits to the generator, as
provided in paragraph (1), except that in no event
shall more than 1 Federal renewable electricity credit
be issued for the same megawatt hour of electricity. In
determining how Federal renewable electricity credits
will be apportioned among retail electric suppliers and
generators in such circumstances, the Commission shall
consider information and guidance furnished by the
relevant State or States.
(3) Certain power sales contracts.--When a generator
has sold renewable electricity to a retail electric
supplier under a contract for power from a facility
placed in service before the date of enactment of this
section, and the contract does not provide for the
determination of ownership of the Federal renewable
electricity credits associated with such generation,
the Commission shall issue such Federal renewable
electricity credits to the retail electric supplier for
the duration of the contract.
(4) Credit multiplier for distributed renewable
generation.--
(A) In general.--Except as provided in
subparagraph (B), the Commission shall issue 3
Federal renewable electricity credits for each
megawatt hour of renewable electricity
generated by a distributed renewable generation
facility.
(B) Adjustment.--Except as provided in
subparagraph (C), not later than January 1,
2014, and not less frequently than every 4
years thereafter, the Commission shall review
the effect of this paragraph and shall, as
necessary, reduce the number of Federal
renewable electricity credits per megawatt hour
issued under this paragraph for any given
energy source or technology, but not below 1,
to ensure that such number is no higher than
the Commission determines is necessary to make
distributed renewable generation facilities
using such source or technology cost
competitive with other sources of renewable
electricity generation.
(C) Facilities placed in service after
enactment.--For any distributed renewable
generation facility placed in service after the
date of enactment of this section, subparagraph
(B) shall not apply for the first 10 years
after the date on which the facility is placed
in service. For each year during such 10-year
period, the Commission shall issue to the
facility the same number of Federal renewable
electricity credits per megawatt hour as are
issued to that facility in the year in which
such facility is placed in service. After such
10-year period, the Commission shall issue
Federal renewable electricity credits to the
facility in accordance with the current
multiplier as determined pursuant to
subparagraph (B).
(5) Credits based on qualified hydropower.--For
purposes of this subsection, the number of Federal
renewable electricity credits issued for qualified
hydropower shall be calculated--
(A) based solely on the increase in average
annual generation directly resulting from the
efficiency improvements or capacity additions
described in subsection (a)(13)(A); and
(B) using the same water flow information
used to determine a historic average annual
generation baseline for the hydroelectric
facility, as certified by the Commission.
(6) Generation from mixed renewable and nonrenewable
resources.--If electricity is generated using both a
renewable energy resource or other qualifying energy
resource and an energy source that is not a renewable
energy resource or other qualifying energy resource
(as, for example, in the case of co-firing of renewable
biomass and fossil fuel), the Commission shall issue
Federal renewable electricity credits based on the
proportion of the electricity that is attributable to
the renewable energy resource or other qualifying
energy resource.
(7) Prohibition against double-counting.--Except as
provided in paragraph (4) of this subsection, the
Commission shall ensure that no more than 1 Federal
renewable electricity credit will be issued for any
megawatt hour of renewable electricity and that no
Federal renewable electricity credit will be used more
than once for compliance with this section.
(8) Trading.--The lawful holder of a Federal
renewable electricity credit may sell, exchange,
transfer, submit for compliance in accordance with
subsection (b), or submit such credit for retirement by
the Commission.
(9) Banking.--A Federal renewable electricity credit
may be submitted in satisfaction of the compliance
obligation set forth in subsection (b) for the
compliance year in which the credit was issued or for
any of the 3 immediately subsequent compliance years.
The Commission shall retire any Federal renewable
electricity credit that has not been retired by April 2
of the calendar year that is 3 years after the calendar
year in which the credit was issued.
(10) Retirement.--The Commission shall retire a
Federal renewable electricity credit immediately upon
submission by the lawful holder of such credit, whether
in satisfaction of a compliance obligation under
subsection (b) or on some other basis.
(f) Electricity Savings.--
(1) Standards for measurement of savings.--As part of
the regulations promulgated under this section, the
Commission shall prescribe standards and protocols for
defining and measuring electricity savings and total
annual electricity savings that can be counted towards
the compliance obligation set forth in subsection (b).
Such protocols and standards shall, at minimum--
(A) specify the types of energy efficiency
and energy conservation measures that can be
counted;
(B) require that energy consumption estimates
for customer facilities or portions of
facilities in the applicable base and current
years be adjusted, as appropriate, to account
for changes in weather, level of production,
and building area;
(C) account for the useful life of measures;
(D) include deemed savings values for
specific, commonly used measures;
(E) allow for savings from a program to be
estimated based on extrapolation from a
representative sample of participating
customers;
(F) include procedures for counting CHP
savings, recycled energy savings, and fuel cell
savings;
(G) include procedures for counting
electricity savings achieved by solar water
heating and solar light pipe technology that
has the capability to provide measureable data
on the amount of megawatt-hours displaced;
(H) avoid double-counting of savings used for
compliance with this section, including savings
that are transferred pursuant to paragraph (3);
(I) ensure that, except as provided in
subparagraph (K), the retail electric supplier
claiming the savings played a significant role
in achieving the savings (including through the
activities of a designated agent of the
supplier or through the purchase of transferred
savings);
(J) include savings from programs
administered by a retail electric supplier (or
a retail electricity distributor that is not a
retail electric supplier) that are funded by
State, Federal, or other sources;
(K) in any State in which the State
regulatory authority has designated 1 or more
entities to administer electric ratepayer-
funded efficiency programs approved by such
State regulatory authority, provide that
electricity savings achieved through such
programs shall be distributed equitably among
retail electric suppliers in accordance with
the direction of the relevant State regulatory
authority; and
(L) exclude savings achieved as a result of
compliance with mandatory appliance and
equipment efficiency standards or building
codes.
(2) Standards for third-party verification of
savings.--The regulations promulgated under this
section shall establish procedures and standards
requiring third-party verification of all reported
electricity savings, including requirements for
accreditation of third-party verifiers to ensure that
such verifiers are professionally qualified and have no
conflicts of interest.
(3) Transfers of savings.--
(A) Bilateral contracts for savings
transfers.--Subject to the limitations of this
paragraph, a retail electric supplier may use
electricity savings transferred, pursuant to a
bilateral contract, from another retail
electric supplier, an owner of an electric
distribution facility that is not a retail
electric supplier, a State, or a third-party
efficiency provider to meet the applicable
compliance obligation under subsection (b).
(B) Requirements.--Electricity savings
transferred and used for compliance pursuant to
this paragraph shall be--
(i) measured and verified in
accordance with the procedures
specified under this subsection;
(ii) reported in accordance with
paragraph (4) of this subsection; and
(iii) achieved within the same State
as is served by the retail electric
supplier.
(C) Regulatory approval.--Nothing in this
paragraph shall limit or affect the authority
of a State regulatory authority to require a
retail electric supplier that is regulated by
such authority to obtain such authority's
authorization or approval of a contract for
transfer of savings under this paragraph.
(4) Reporting savings.--
(A) Requirements.--The regulations
promulgated under this section shall establish
requirements governing the submission of
reports to demonstrate, in accordance with the
protocols and standards for measurement and
third-party verification established under this
subsection, the total annual electricity
savings achieved by a retail electric supplier
within the relevant year.
(B) Review and approval.--The Commission
shall review each report submitted to the
Commission by a retail electric supplier and
shall exclude any electricity savings that have
not been adequately demonstrated in accordance
with the requirements of this subsection.
(5) State administration.--
(A) Delegation of authority.--Upon receipt of
an application from the Governor of a State
(including, for purposes of this subsection,
the Mayor of the District of Columbia), the
Commission may delegate to the State the
authority to review and verify reported
electricity savings for purposes of determining
demonstrated total annual electricity savings
that may be counted towards a retail electric
supplier's compliance obligation under
subsection (b). The Commission shall make a
substantive determination approving or
disapproving a State application under this
subparagraph, after notice and comment, within
180 days of receipt of a complete application.
(B) Alternative measurement and verification
procedures and standards.--As part of an
application submitted under subparagraph (A), a
State may request to use alternative
measurement and verification procedures and
standards to those specified in paragraphs (1)
and (2), provided the State demonstrates that
such alternative procedures and standards
provide a level of accuracy of measurement and
verification at least equivalent to the Federal
procedures and standards promulgated under
paragraphs (1) and (2).
(C) Review of state implementation.--The
Commission shall, not less frequently than once
every 4 years, review each State's
implementation of delegated authority under
this paragraph to ensure conformance with the
requirements of this section. The Commission
may, at any time, revoke the delegation of
authority under this section upon a finding
that the State is not implementing its
delegated responsibilities in conformity with
this paragraph. As a condition of maintaining
its delegated authority under this paragraph,
the Commission may require a State to submit a
revised application under subparagraph (A) if
the Commission has--
(i) promulgated new or substantially
revised measurement and verification
procedures and standards under this
subsection; or
(ii) otherwise substantially revised
the program established under this
section.
(g) Alternative Compliance Payments.--
(1) In general.--A retail electric supplier may
satisfy the requirements of subsection (b) in whole or
in part by submitting in accordance with this
subsection, in lieu of each Federal renewable
electricity credit or megawatt hour of demonstrated
total annual electricity savings that would otherwise
be due, a payment equal to $25, adjusted for inflation
on January 1 of each year following calendar year 2009,
in accordance with such regulations as the Commission
may promulgate.
(2) Payment to state funds.--Except as otherwise
provided in this paragraph, payments made under this
subsection shall be made directly to the State or
States in which the retail electric supplier is
located, in proportion to the portion of the retail
electric supplier's base amount that is sold within
each relevant State, provided that such payments are
deposited directly into a fund in the State treasury
established for this purpose and that the State uses
such funds in accordance with paragraphs (3) and (4).
If the Commission determines at any time that a State
is in substantial noncompliance with paragraph (3) or
(4), the Commission shall direct that any future
alternative compliance payments that would otherwise be
paid to such State under this subsection shall instead
be paid to the Commission and deposited in the United
States Treasury.
(3) State use of funds.--As a condition of continued
receipt of alternative compliance payments pursuant to
this subsection, a State shall use such payments
exclusively for the purposes of--
(A) deploying technologies that generate
electricity from renewable energy resources; or
(B) implementing cost-effective energy
efficiency programs to achieve electricity
savings.
(4) Reporting.--As a condition of continued receipt
of alternative compliance payments pursuant to this
subsection, a State shall, within 12 months of receipt
of any such payments and at 12-month intervals
thereafter until such payments are expended, provide a
report to the Commission, in accordance with such
regulations as the Commission may prescribe, giving a
full accounting of the use of such payments, including
a detailed description of the activities funded
thereby.
(h) Information Collection.--The Commission may require any
retail electric supplier, renewable electricity generator, or
such other entities as the Commission deems appropriate, to
provide any information the Commission determines appropriate
to carry out this section. Failure to submit such information
or submission of false or misleading information under this
subsection shall be a violation of this section.
(i) Enforcement and Judicial Review.--
(1) Failure to submit credits or demonstrate
savings.--If any person fails to comply with the
requirements of subsection (b) or (g), such person
shall be liable to pay to the Commission a civil
penalty equal to the product of--
(A) double the alternative compliance payment
calculated under subsection (g)(1), and
(B) the aggregate quantity of Federal
renewable electricity credits, total annual
electricity savings, or equivalent alternative
compliance payments that the person failed to
submit in violation of the requirements of
subsections (b) and (g).
(2) Enforcement.--The Commission shall assess a civil
penalty under paragraph (1) in accordance with the
procedures described in section 31(d) of the Federal
Power Act (16 U.S.C. 823b(d)).
(3) Violation of requirement of regulations or
orders.--Any person who violates, or fails or refuses
to comply with, any requirement of a regulation
promulgated or order issued under this section shall be
subject to a civil penalty under section 316A(b) of the
Federal Power Act (16 U.S.C. 825o-1). Such penalty
shall be assessed by the Commission in the same manner
as in the case of a violation referred to in section
316A(b) of such Act.
(j) Judicial Review.--Any person aggrieved by a final action
taken by the Commission under this section, other than the
assessment of a civil penalty under subsection (i), may use the
procedures for review described in section 313 of the Federal
Power Act (16 U.S.C. 825l). For purposes of this paragraph,
references to an order in section 313 of such Act shall be
deemed to refer also to all other final actions of the
Commission under this section other than the assessment of a
civil penalty under subsection (i).
(k) Savings Provisions.--Nothing in this section shall--
(1) diminish or qualify any authority of a State or
political subdivision of a State to--
(A) adopt or enforce any law or regulation
respecting renewable electricity or energy
efficiency, including any law or regulation
establishing requirements more stringent than
those established by this section, provided
that no such law or regulation may relieve any
person of any requirement otherwise applicable
under this section; or
(B) regulate the acquisition and disposition
of Federal renewable electricity credits by
retail electric suppliers within the
jurisdiction of such State or political
subdivision, including the authority to require
such retail electric supplier to acquire and
submit to the Secretary for retirement Federal
renewable electricity credits in excess of
those submitted under this section; or
(2) affect the application of, or the responsibility
for compliance with, any other provision of law or
regulation, including environmental and licensing
requirements.
(l) Sunset.--This section expires on December 31, 2040.
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CLEAN AIR ACT
TITLE I--AIR POLLUTION PREVENTION AND CONTROL
Part A--Air Quality and Emission Limitations
* * * * * * *
SEC. 113. FEDERAL ENFORCEMENT.
(a) In General.--
(1) * * *
* * * * * * *
(3) EPA enforcement of other requirements.--Except
for a requirement or prohibition enforceable under the
preceding provisions of this subsection, whenever, on
the basis of any information available to the
Administrator, the Administrator finds that any person
has violated, or is in violation of, any other
requirement or prohibition of this title, section 303
of title III, title IV, title V, [or title VI,] title
VI, title VII, or title VIII including, but not limited
to, a requirement or prohibition of any rule, plan,
order, waiver, or permit promulgated, issued, or
approved under those provisions or titles, or for the
payment of any fee owed to the United States under this
Act (other than title II), the Administrator may--
(A) * * *
* * * * * * *
(b) Civil Judicial Enforcement.--The Administrator shall, as
appropriate, in the case of any person that is the owner or
operator of an affected source, a major emitting facility, [or
a major stationary source] a major stationary source, or a
covered EGU under title VIII, and may, in the case of any other
person, commence a civil action for a permanent or temporary
injunction, or to assess and recover a civil penalty of not
more than $25,000 per day for each violation, or both, in any
of the following instances:
(1) * * *
(2) Whenever such person has violated, or is in
violation of, any other requirement or prohibition of
this title, section 303 of title III, title IV, title
V, [or title VI] title VI, title VII, or title VIII,
including, but not limited to, a requirement or
prohibition of any rule, order, waiver or permit
promulgated, issued, or approved under this Act, or for
the payment of any fee owed the United States under
this Act (other than title II).
* * * * * * *
(c) Criminal Penalties.--(1) Any person who knowingly
violates any requirement or prohibition of an applicable
implementation plan (during any period of federally assumed
enforcement or more than 30 days after having been notified
under subsection (a)(1) by the Administrator that such person
is violating such requirement or prohibition), any order under
subsection (a) of this section, requirement or prohibition of
section 111(e) of this title (relating to new source
performance standards), section 112 of this title, section 114
of this title (relating to inspections, etc.), section 129 of
this title (relating to solid waste combustion), section 165(a)
of this title (relating to preconstruction requirements), an
order under section 167 of this title (relating to
preconstruction requirements), an order under section 303 of
title III (relating to emergency orders), section 502(a) or
503(c) of title V (relating to permits), or any requirement or
prohibition of title IV (relating to acid deposition control),
[or title VI (relating to stratospheric ozone control),] title
VI, title VII, or title VIII, including a requirement of any
rule, order, waiver, or permit promulgated or approved under
such sections or titles, and including any requirement for the
payment of any fee owed the United States under this Act (other
than title II) shall, upon conviction, be punished by a fine
pursuant to title 18 of the United States Code, or by
imprisonment for not to exceed 5 years, or both. If a
conviction of any person under this paragraph is for a
violation committed after a first conviction of such person
under this paragraph, the maximum punishment shall be doubled
with respect to both the fine and imprisonment.
* * * * * * *
(3) Any person who knowingly fails to pay any fee owed the
United States under this title, title III, IV, V, [or VI] VI,
VII, or VIII shall, upon conviction, be punished by a fine
pursuant to title 18 of the United States Code, or by
imprisonment for not more than 1 year, or both. If a conviction
of any person under this paragraph is for a violation committed
after a first conviction of such person under this paragraph,
the maximum punishment shall be doubled with respect to both
the fine and imprisonment.
* * * * * * *
(d) Administrative Assessment of Civil Penalties.--(1) The
Administrator may issue an administrative order against any
person assessing a civil administrative penalty of up to
$25,000, per day of violation, whenever, on the basis of any
available information, the Administrator finds that such
person--
(A) * * *
(B) has violated or is violating any other
requirement or prohibition of title I, III, IV, V, [or
VI] VI, VII, or VIII, including, but not limited to, a
requirement or prohibition of any rule, order, waiver,
permit, or plan promulgated, issued, or approved under
this Act, or for the payment of any fee owed the United
States under this Act (other than title II); or
* * * * * * *
(f) Awards.--The Administrator may pay an award, not to
exceed $10,000, to any person who furnishes information or
services which lead to a criminal conviction or a judicial or
administrative civil penalty for any violation of this title or
title III, IV, V, [or VI] VI, VII, or VIII of this Act enforced
under this section. Such payment is subject to available
appropriations for such purposes as provided in annual
appropriation Acts. Any officer, or employee of the United
States or any State or local government who furnishes
information or renders service in the performance of an
official duty is ineligible for payment under this subsection.
The Administrator may, by regulation, prescribe additional
criteria for eligibility for such an award.
* * * * * * *
INSPECTIONS, MONITORING, AND ENTRY
Sec. 114. (a) For the purpose (i) of developing or assisting
in the development of any implementation plan under section 110
or 111(d), any standard of performance under section 111, any
emission standard under [section 112,, or any regulation of
solid waste combustion under section 129, or any regulation
under section 129 (relating to solid waste combustion), (ii)]
section 112, or any regulation of greenhouse gas emissions
under title VII or VIII, (ii) of determining whether any person
is in violation of any such standard or any requirement of such
a plan, or (iii) carrying out any provision of this Act (except
a provision of title II with respect to a manufacturer of new
motor vehicles or new motor vehicle engines)--
(1) * * *
* * * * * * *
RETENTION OF STATE AUTHORITY
Sec. 116. Except as otherwise provided in sections 119 (c),
(e), and (f) (as in effect before the date of the enactment of
the Clean Air Act Amendments of 1977), 209, 211(c)(4), [and
233] 233 (preempting certain State regulation [of moving
sources)] of moving sources), and 861 (preempting certain State
greenhouse gas programs for a limited time) nothing in this Act
shall preclude or deny the right of any State or political
subdivision thereof to adopt or enforce (1) any standard or
limitation respecting emissions of air pollutants or (2) any
requirement respecting control or abatement of air pollution;
except that if an emission standard or limitation is in effect
under an applicable implementation plan or under section 111 or
112, such State or political subdivision may not adopt or
enforce any emission standard or limitation which is less
stringent than the standard or limitation under such plan or
section. For the purposes of this section, the phrases
``standard or limitation respecting emissions of air
pollutants'' and ``requirements respecting control or abatement
of air pollution'' shall include any provision to: cap
greenhouse gas emissions, require surrender to the State or a
political subdivision thereof of emission allowances or offset
credits established or issued under this Act, and require the
use of such allowances or credits as a means of demonstrating
compliance with requirements established by a State or
political subdivision thereof.
* * * * * * *
TITLE II--EMISSION STANDARDS FOR MOVING SOURCES
* * * * * * *
Part A--Motor Vehicle Emission and Fuel Standards
* * * * * * *
regulation of fuels
Sec. 211. (a) * * *
* * * * * * *
(o) Renewable Fuel Program.--
(1) Definitions.--In this section:
(A) * * *
* * * * * * *
[(I) Renewable biomass.--The term ``renewable
biomass'' means each of the following:
[(i) Planted crops and crop residue
harvested from agricultural land
cleared or cultivated at any time prior
to the enactment of this sentence that
is either actively managed or fallow,
and nonforested.
[(ii) Planted trees and tree residue
from actively managed tree plantations
on non-federal land cleared at any time
prior to enactment of this sentence,
including land belonging to an Indian
tribe or an Indian individual, that is
held in trust by the United States or
subject to a restriction against
alienation imposed by the United
States.
[(iii) Animal waste material and
animal byproducts.
[(iv) Slash and pre-commercial
thinnings that are from non-federal
forestlands, including forestlands
belonging to an Indian tribe or an
Indian individual, that are held in
trust by the United States or subject
to a restriction against alienation
imposed by the United States, but not
forests or forestlands that are
ecological communities with a global or
State ranking of critically imperiled,
imperiled, or rare pursuant to a State
Natural Heritage Program, old growth
forest, or late successional forest.
[(v) Biomass obtained from the
immediate vicinity of buildings and
other areas regularly occupied by
people, or of public infrastructure, at
risk from wildfire.
[(vi) Algae.
[(vii) Separated yard waste or food
waste, including recycled cooking and
trap grease.]
(I) Renewable biomass.--The term ``renewable
biomass'' means any of the following:
(i) Plant material, including waste
material, harvested or collected from
actively managed agricultural land that
was in cultivation, cleared, or fallow
and nonforested on January 1, 2009.
(ii) Plant material, including waste
material, harvested or collected from
pastureland that was nonforested on
January 1, 2009.
(iii) Nonhazardous vegetative matter
derived from waste, including separated
yard waste, landscape right-of-way
trimmings, construction and demolition
debris or food waste (but not
recyclable waste paper, painted,
treated or pressurized wood, or wood
contaminated with plastic or metals).
(iv) Animal waste or animal
byproducts, including products of
animal waste digesters.
(v) Algae.
(vi) Trees, brush, slash, residues,
or any other vegetative matter removed
from within 600 feet of any building,
campground, or route designated for
evacuation by a public official with
responsibility for emergency
preparedness, or from within 300 feet
of a paved road, electric transmission
line, utility tower, or water supply
line.
(vii) Residues from or byproducts of
milled logs.
(viii) Any of the following removed
from forested land that is not Federal
and is not high conservation priority
land:
(I) Trees, brush, slash,
residues, interplanted energy
crops, or any other vegetative
matter removed from an actively
managed tree plantation
established--
(aa) prior to January
1, 2009; or
(bb) on land that, as
of January 1, 2009, was
cultivated or fallow
and non-forested.
(II) Trees, logging residue,
thinnings, cull trees,
pulpwood, and brush removed
from naturally-regenerated
forests or other non-plantation
forests, including for the
purposes of hazardous fuel
reduction or preventative
treatment for reducing or
containing insect or disease
infestation.
(III) Logging residue,
thinnings, cull trees,
pulpwood, brush and species
that are non-native and
noxious, from stands that were
planted and managed after
January 1, 2009, to restore or
maintain native forest types.
(IV) Dead or severely damaged
trees removed within 5 years of
fire, blowdown, or other
natural disaster, and badly
infested trees.
(ix) Materials, pre-commercial
thinnings, or removed invasive species
from National Forest System land and
public lands (as defined in section 103
of the Federal Land Policy and
Management Act of 1976 (43 U.S.C.
1702)), including those that are
byproducts of preventive treatments
(such as trees, wood, brush, thinnings,
chips, and slash), that are removed as
part of a federally recognized timber
sale, or that are removed to reduce
hazardous fuels, to reduce or contain
disease or insect infestation, or to
restore ecosystem health, and that
are--
(I) not from components of
the National Wilderness
Preservation System, Wilderness
Study Areas, Inventoried
Roadless Areas, old growth or
mature forest stands,
components of the National
Landscape Conservation System,
National Monuments, National
Conservation Areas, Designated
Primitive Areas, or Wild and
Scenic Rivers corridors;
(II) harvested in
environmentally sustainable
quantities, as determined by
the appropriate Federal land
manager; and
(III) harvested in accordance
with Federal and State law and
applicable land management
plans.
* * * * * * *
(M) High conservation priority land.--The
term ``high conservation priority land'' means
land that is not Federal land and is--
(i) globally or State ranked as
critically imperiled or imperiled under
a State Natural Heritage Program; or
(ii) old-growth or late-successional
forest, as identified by the office of
the State Forester or relevant State
agency with regulatory jurisdiction
over forestry activities.
* * * * * * *
TITLE III--GENERAL
* * * * * * *
CITIZEN SUITS
Sec. 304. (a) * * *
* * * * * * *
(f) For purposes of this section, the term ``emission
standard or limitation under this Act'' means--
(1) * * *
* * * * * * *
(3) any condition or requirement of a permit under
part C of title I (relating to significant
deterioration of air quality) or part D of title I
(relating to nonattainment),, section 119 (relating to
primary nonferrous smelter orders), any condition or
requirement under an applicable implementation plan
relating to transportation control measures, air
quality maintenance plans, vehicle inspection and
maintenance programs or vapor recovery requirements,
section 211 (e) and (f) (relating to fuels and fuel
additives), section 169A (relating to visibility
protection), any condition or requirement under title
VI (relating to ozone protection), or any requirement
under section 111 or 112 (without regard to whether
such requirement is expressed as an emission standard
or otherwise)[; or],
(4) any other standard, limitation, or schedule
established under any permit issued pursuant to title V
or under any applicable State implementation plan
approved by the Administrator, any permit term or
condition, and any requirement to obtain a permit as a
condition of operations[.], or
(5) any requirement of title VII or VIII.
* * * * * * *
general provisions relating to administrative proceedings and judicial
review
Sec. 307. (a) In connection with any determination under
section 110(f), or for purposes of obtaining information under
section 202(b)(4) or 211(c)(3),, any investigation, monitoring,
reporting requirement, entry, compliance inspection, or
administrative enforcement proceeding under the Act (including
but not limited to section 113, section 114, section 120,
section 129, section 167, section 205, section 206, section
208, section 303[, or section 306] section 306, or title VII or
VIII), the Administrator may issue subpenas for the attendance
and testimony of witnesses and the production of relevant
papers, books, and documents, and he may administer oaths.
Except for emission data, upon a showing satisfactory to the
Administrator by such owner or operator that such papers,
books, documents, or information or particular part thereof, if
made public, would divulge trade secrets or secret processes of
such owner or operator, the Administrator shall consider such
record, report, or information or particular portion thereof
confidential in accordance with the purposes of section 1905 of
title 18 of the United States Code, except that such paper,
book, document, or information may be discussed to other
officers, employees, or authorized representatives of the
United States concerned with carrying out this Act, to persons
carrying out the National Academy of Sciences' study and
investigation provided for in section 202(c), or when relevant
in any proceeding under this Act. Witnesses summoned shall be
paid the same fees and mileage that are paid witnesses in the
courts of the United States. In cases of contumacy or refusal
to obey a subpena served upon any person under this
subparagraph, the district court of the United States for any
district in which such person is found or resides or transacts
business, upon application by the United States and after
notice to such person, shall have jurisdiction to issue an
order requiring such person to appear and give testimony before
the Administrator to appear and produce papers, books, and
documents before the Administrator, or both, and any failure to
obey such order of the court may be punished by such court as a
contempt thereof.
(b)(1) A petition for review of action of the Administrator
in promulgating any national primary or secondary ambient air
quality standard, any emission standard or requirement under
section 112, any standard of performance or requirement under
section 111[,,], any standard under section 202 (other than a
standard required to be prescribed under section 202(b)(1)),
any determination under section 202(b)(5), any control or
prohibition under section 211, any standard under section 231,
any rule issued under section 113, 119, or under [section 120,]
section 120, any final action under title VII or VIII, or any
other nationally applicable regulations promulgated, or final
action taken, by the Administrator under this Act may be filed
only in the United States Court of Appeals for the District of
Columbia. A petition for review of the Administrator's action
in approving or promulgating any implementation plan under
section 110 or section 111(d), any order under section 111(j),
under section 112[,,], under section 119, or under section 120,
or his action under section 119(c)(2) (A), (B), or (C) (as in
effect before the date of enactment of the Clean Air Act
Amendments of 1977) or under regulations thereunder, or
revising regulations for enhanced monitoring and compliance
certification programs under section 114(a)(3) of this Act, or
any other final action of the Administrator under this Act
(including any denial or disapproval by the Administrator under
title I) which is local or regionally applicable may be filed
only in the United States Court of Appeals for the appropriate
circuit. Notwithstanding the preceding sentence a petition for
review of any action referred to in such sentence may be filed
only in the United States Court of Appeals for the District of
Columbia if such action is based on a determination of
nationwide scope or effect and if in taking such action the
Administrator finds and publishes that such action is based on
such a determination. Any petition for review under this
subsection shall be filed within sixty days from the date
notice of such promulgation, approval, or action appears in the
Federal Register, except that if such petition is based solely
on grounds arising after such sixtieth day, then any petition
for review under this subsection shall be filed within sixty
days after such grounds arise. The filing of a petition for
reconsideration by the Administrator of any otherwise final
rule or action shall not affect the finality of such rule or
action for purposes of judicial review nor extend the time
within which a petition for judicial review of such rule or
action under this section may be filed, and shall not postpone
the effectiveness of such rule or action.
* * * * * * *
(3) If the court determines that any action of the
Administrator is arbitrary, capricious, or otherwise unlawful,
the court may remand such action, without vacatur, if vacatur
would impair or delay protection of the environment or public
health or otherwise undermine the timely achievement of the
purposes of this Act.
* * * * * * *
(d)(1) This subsection applies to--
(A) * * *
* * * * * * *
[(S) the promulgation or revision of any regulation
under title IV (relating to acid deposition),]
(S) the promulgation or revision of any regulation
under title VII or VIII,
* * * * * * *
(7)(A) * * *
(B) Only an objection to a rule or procedure which was raised
with reasonable specificity during the period for public
comment (including any public hearing) may be raised during
judicial review. If the person raising an objection can
demonstrate to the Administrator that it was impracticable to
raise such objection within such time or if the grounds for
such objection arose after the period for public comment (but
within the time specified for judicial review) and if such
objection is of central relevance to the outcome of the rule,
the Administrator shall convene a proceeding for
reconsideration of the rule and provide the same procedural
rights as would have been afforded had the information been
available at the time the rule was proposed. [If the
Administrator refuses to convene such a proceeding, such person
may seek review of such refusal in the United States court of
appeals for the appropriate circuit (as provided in subsection
(b)).] If a petition for reconsideration is filed, the
Administrator shall take final action on such petition,
including promulgation of final action either revising or
determining not to revise the action for which reconsideration
is sought, within 150 days after the petition is received by
the Administrator or the petition shall be deemed denied for
the purpose of judicial review. Such person may seek judicial
review of such denial, or of any other final action, by the
Administrator, in response to a petition for reconsideration,
in the United States court of appeals for the appropriate
circuit (as provided in subsection (b)). Such reconsideration
shall not postpone the effectiveness of the rule. The
effectiveness of the rule may be stayed during such
reconsideration, however, by the Administrator or the court for
a period not to exceed three months.
* * * * * * *
TITLE VI--STRATOSPHERIC OZONE PROTECTION
Table of Contents
Sec. 601. Definitions.
* * * * * * *
Sec. 619. Hydrofluorocarbons (HFCs).
* * * * * * *
SEC. 605. PHASE-OUT OF PRODUCTION AND CONSUMPTION OF CLASS II
SUBSTANCES.
(a) Restriction of Use of Class II Substances.--Effective
January 1, 2015, it shall be unlawful for any person to
introduce into interstate commerce or use any class II
substance unless such substance--
(1) * * *
(2) is used and entirely consumed (except for trace
quantities) in the production of other chemicals; [or]
(3) is used as a refrigerant in appliances
manufactured prior to January 1, 2020[.]; or
(4) is listed as acceptable for use as a fire
suppression agent for nonresidential applications in
accordance with section 612(c).
* * * * * * *
SEC. 609. SERVICING OF MOTOR VEHICLE AIR CONDITIONERS.
(a) * * *
* * * * * * *
(e) Small Containers of Class I or Class II, Group I
Substances.--Effective 2 years after the date of the enactment
of the Clean Air Act Amendments of 1990, it shall be unlawful
for any person to sell or distribute, or offer for sale or
distribution, in interstate commerce to any person (other than
a person performing service for consideration on motor vehicle
air-conditioning systems in compliance with this section) any
class I or class II, group I substance that is suitable for use
as a refrigerant in a motor vehicle air-conditioning system and
that is in a container which contains less than 20 pounds of
such refrigerant.
(f) Class II, Group II Substances.--
(1) Repair.--The Administrator may promulgate
regulations establishing requirements for repair of
motor vehicle air conditioners prior to adding a class
II, group II substance.
(2) Small containers.--(A) The Administrator may
promulgate regulations establishing servicing practices
and procedures for recovery of class II, group II
substances from containers which contain less than 20
pounds of such class II, group II substances.
(B) Not later than 18 months after enactment of this
subsection, the Administrator shall either promulgate
regulations requiring that containers which contain
less than 20 pounds of a class II, group II substance
be equipped with a device or technology that limits
refrigerant emissions and leaks from the container and
limits refrigerant emissions and leaks during the
transfer of refrigerant from the container to the motor
vehicle air conditioner or issue a determination that
such requirements are not necessary or appropriate.
(C) Not later than 18 months after enactment of this
subsection, the Administrator shall promulgate
regulations establishing requirements for consumer
education materials on best practices associated with
the use of containers which contain less than 20 pounds
of a class II, group II substance and prohibiting the
sale or distribution, or offer for sale or
distribution, of any class II, group II substance in
any container which contains less than 20 pounds of
such class II, group II substance, unless consumer
education materials consistent with such requirements
are displayed and available at point-of-sale locations,
provided to the consumer, or included in or on the
packaging of the container which contain less than 20
pounds of a class II, group II substance.
(D) The Administrator may, through rulemaking, extend
the requirements established under this paragraph to
containers which contain 30 pounds or less of a class
II, group II substance if the Administrator determines
that such action would produce significant
environmental benefits.
(3) Restriction of sales.--Effective January 1, 2014,
no person may sell or distribute or offer to sell or
distribute or otherwise introduce into interstate
commerce any motor vehicle air conditioner refrigerant
in any size container unless the substance has been
found acceptable for use in a motor vehicle air
conditioner under section 612.
* * * * * * *
SEC. 612. SAFE ALTERNATIVES POLICY.
(a) * * *
* * * * * * *
(e) Studies and Notification.--The Administrator shall
require any person who produces a chemical substitute for a
class I or class II substance to provide the Administrator with
such person's unpublished health and safety studies on such
substitute and require producers to notify the Administrator
not less than 90 days before new or existing chemicals are
introduced into interstate commerce for significant new uses as
substitutes for a class I or class II substance. This
subsection shall be subject to section 114(c).
* * * * * * *
SEC. 619. HYDROFLUOROCARBONS (HFCS).
(a) Treatment as Class II, Group II Substances.--Except as
otherwise provided in this section, hydrofluorocarbons shall be
treated as class II substances for purposes of applying the
provisions of this title. The Administrator shall establish two
groups of class II substances. Class II, group I substances
shall include all hydrochlorofluorocarbons (HCFCs) listed
pursuant to section 602(b). Class II, group II substances shall
include each of the following:
(1) Hydrofluorocarbon-23 (HFC-23).
(2) Hydrofluorocarbon-32 (HFC-32).
(3) Hydrofluorocarbon-41 (HFC-41).
(4) Hydrofluorocarbon-125 (HFC-125).
(5) Hydrofluorocarbon-134 (HFC-134).
(6) Hydrofluorocarbon-134a (HFC-134a).
(7) Hydrofluorocarbon-143 (HFC-143).
(8) Hydrofluorocarbon-143a (HFC-143a).
(9) Hydrofluorocarbon-152 (HFC-152).
(10) Hydrofluorocarbon-152a (HFC-152a).
(11) Hydrofluorocarbon-227ea (HFC-227ea).
(12) Hydrofluorocarbon-236cb (HFC-236cb).
(13) Hydrofluorocarbon-236ea (HFC-236ea).
(14) Hydrofluorocarbon-236fa (HFC-236fa).
(15) Hydrofluorocarbon-245ca (HFC-245ca).
(16) Hydrofluorocarbon-245fa (HFC-245fa).
(17) Hydrofluorocarbon-365mfc (HFC-365mfc).
(18) Hydrofluorocarbon-43-10mee (HFC-43-10mee).
(19) Hydrofluoroolefin-1234yf (HFO-1234yf).
(20) Hydrofluoroolefin-1234ze (HFO-1234ze).
Not later than 6 months after the date of enactment of this
title, the Administrator shall publish an initial list of class
II, group II substances, which shall include the substances
listed in this subsection. The Administrator may add to the
list of class II, group II substances any other substance used
as a substitute for a class I or II substance if the
Administrator determines that 1 metric ton of the substance
makes the same or greater contribution to global warming over
100 years as 1 metric ton of carbon dioxide. Within 24 months
after the date of enactment of this section, the Administrator
shall amend the regulations under this title (including the
regulations referred to in sections 603, 608, 609, 610, 611,
612, and 613) to apply to class II, group II substances.
(b) Consumption and Production of Class II, Group II
Substances.--
(1) In general.--
(A) Consumption phase down.--In the case of
class II, group II substances, in lieu of
applying section 605 and the regulations
thereunder, the Administrator shall promulgate
regulations phasing down the consumption of
class II, group II substances in the United
States, and the importation of products
containing any class II, group II substance, in
accordance with this subsection within 18
months after the date of enactment of this
section. Effective January 1, 2012, it shall be
unlawful for any person to produce any class
II, group II substance, import any class II,
group II substance, or import any product
containing any class II, group II substance
without holding one consumption allowance or
one destruction offset credit for each carbon
dioxide equivalent ton of the class II, group
II substance. Any person who exports a class
II, group II substance for which a consumption
allowance was retired may receive a refund of
that allowance from the Administrator following
the export.
(B) Production.--If the United States becomes
a party or otherwise adheres to a multilateral
agreement, including any amendment to the
Montreal Protocol on Substances That Deplete
the Ozone Layer, that restricts the production
of class II, group II substances, the
Administrator shall promulgate regulations
establishing a baseline for the production of
class II, group II substances in the United
States and phasing down the production of class
II, group II substances in the United States,
in accordance with such multilateral agreement
and subject to the same exceptions and other
provisions as are applicable to the phase down
of consumption of class II, group II substances
under this section (except that the
Administrator shall not require a person who
obtains production allowances from the
Administrator to make payment for such
allowances if the person is making payment for
a corresponding quantity of consumption
allowances of the same vintage year). Upon the
effective date of such regulations, it shall be
unlawful for any person to produce any class
II, group II substance without holding one
consumption allowance and one production
allowance, or one destruction offset credit,
for each carbon dioxide equivalent ton of the
class II, group II substance.
(C) Integrity of cap.--To maintain the
integrity of the class II, group II cap, the
Administrator may, through rulemaking, limit
the percentage of each person's compliance
obligation that may be met through the use of
destruction offset credits or banked
allowances.
(D) Counting of violations.--Each emission
allowance or destruction offset credit not held
as required by this section shall be a separate
violation of this section.
(2) Schedule.--Pursuant to the regulations
promulgated pursuant to paragraph (1), the number of
class II, group II consumption allowances established
by the Administrator for each calendar year beginning
in 2012 shall be the following percentage of the
baseline, as established by the Administrator pursuant
to paragraph (3):
----------------------------------------------------------------------------------------------------------------
Calendar Year Percent of Baseline
----------------------------------------------------------------------------------------------------------------
2012 90
2013 87.5
2014 85
2015 82.5
2016 80
2017 77.5
2018 75
2019 71
2020 67
2021 63
2022 59
2023 54
2024 50
2025 46
2026 42
2027 38
2028 34
2029 30
2030 25
2031 21
2032 17
after 2032 15
----------------------------------------------------------------------------------------------------------------
(3) Baseline.--(A) Within 12 months after the date of
enactment of this section, the Administrator shall
promulgate regulations to establish the baseline for
purposes of paragraph (2). The baseline shall be the
sum, expressed in tons of carbon dioxide equivalents,
of--
(i) the annual average consumption of all
class II substances in calendar years 2004,
2005, and 2006; plus
(ii) the annual average quantity of all class
II substances contained in imported products in
calendar years 2004, 2005, and 2006.
(B) Notwithstanding subparagraph (A), if the
Administrator determines that the baseline is higher
than 370 million metric tons of carbon dioxide
equivalents, then the Administrator shall establish the
baseline at 370 million metric tons of carbon dioxide
equivalents.
(C) Notwithstanding subparagraph (A), if the
Administrator determines that the baseline is lower
than 280 million metric tons of carbon dioxide
equivalents, then the Administrator shall establish the
baseline at 280 million metric tons of carbon dioxide
equivalents.
(4) Distribution of allowances.--
(A) In general.--Pursuant to the regulations
promulgated under paragraph (1), for each
calendar year beginning in 2012, the
Administrator shall sell consumption allowances
in accordance with this paragraph.
(B) Establishment of pools.--The
Administrator shall establish two allowance
pools. Eighty percent of the consumption
allowances available for a calendar year shall
be placed in the producer-importer pool, and 20
percent of the consumption allowances available
for a calendar year shall be placed in the
secondary pool.
(C) Producer-importer pool.--
(i) Auction.--(I) For each calendar
year, the Administrator shall offer for
sale at auction the following
percentage of the consumption
allowances in the producer-importer
pool:
----------------------------------------------------------------------------------------------------------------
Calendar Year Percent Available for Auction
----------------------------------------------------------------------------------------------------------------
2012 10
2013 20
2014 30
2015 40
2016 50
2017 60
2018 70
2019 80
2020 and thereafter 90
----------------------------------------------------------------------------------------------------------------
(II) Any person who produced or
imported any class II substance during
calendar year 2004, 2005, or 2006 may
participate in the auction. No other
persons may participate in the auction
unless permitted to do so pursuant to
subclause (III).
(III) Not later than three years
after the date of the initial auction
and from time to time thereafter, the
Administrator shall determine through
rulemaking whether any persons who did
not produce or import a class II
substance during calendar year 2004,
2005, or 2006 will be permitted to
participate in future auctions. The
Administrator shall base this
determination on the duration,
consistency, and scale of such person's
purchases of consumption allowances in
the secondary pool under subparagraph
(D), as well as economic or technical
hardship and other factors deemed
relevant by the Administrator.
(IV) The Administrator shall set a
minimum bid per consumption allowance
of the following:
(aa) For vintage year 2012,
$1.00.
(bb) For vintage year 2013,
$1.20.
(cc) For vintage year 2014,
$1.40.
(dd) For vintage year 2015,
$1.60.
(ee) For vintage year 2016,
$1.80.
(ff) For vintage year 2017,
$2.00.
(gg) For vintage year 2018
and thereafter, $2.00 adjusted
for inflation after vintage
year 2017 based upon the
producer price index as
published by the Department of
Commerce.
(ii) Non-auction sale.--(I) For each
calendar year, as soon as practicable
after auction, the Administrator shall
offer for sale the remaining
consumption allowances in the producer-
importer pool at the following prices:
(aa) A fee of $1.00 per
vintage year 2012 allowance.
(bb) A fee of $1.20 per
vintage year 2013 allowance.
(cc) A fee of $1.40 per
vintage year 2014 allowance.
(dd) For each vintage year
2015 allowance, a fee equal to
the average of $1.10 and the
auction clearing price for
vintage year 2014 allowances.
(ee) For each vintage year
2016 allowance, a fee equal to
the average of $1.30 and the
auction clearing price for
vintage year 2015 allowances.
(ff) For each vintage year
2017 allowance, a fee equal to
the average of $1.40 and the
auction clearing price for
vintage year 2016 allowances.
(gg) For each allowance of
vintage year 2018 and
subsequent vintage years, a fee
equal to the auction clearing
price for that vintage year.
(II) The Administrator shall offer to
sell the remaining consumption
allowances in the producer-importer
pool to producers of class II, group II
substances and importers of class II,
group II substances in proportion to
their relative allocation share.
(III) Such allocation share for such
sale shall be determined by the
Administrator using such producer's or
importer's annual average data on class
II substances from calendar years 2004,
2005, and 2006, on a carbon dioxide
equivalent basis, and--
(aa) shall be based on a
producer's production, plus
importation, plus acquisitions
and purchases from persons who
produced class II substances in
the United States during
calendar years 2004, 2005, or
2006, less exportation, less
transfers and sales to persons
who produced class II
substances in the United States
during calendar years 2004,
2005, or 2006; and
(bb) for an importer of class
II substances that did not
produce in the United States
any class II substance during
calendar years 2004, 2005, and
2006, shall be based on the
importer's importation less
exportation.
For purposes of item (aa), the
Administrator shall account for 100
percent of class II, group II
substances and 60 percent of class II,
group I substances. For purposes of
item (bb), the Administrator shall
account for 100 percent of class II,
group II substances and 100 percent of
class II, group I substances.
(IV) Any consumption allowances made
available for nonauction sale to a
specific producer or importer of class
II, group II substances but not
purchased by the specific producer or
importer shall be made available for
sale to any producer or importer of
class II substances during calendar
years 2004, 2005, or 2006. If demand
for such consumption allowances exceeds
supply of such consumption allowances,
the Administrator shall develop and
utilize criteria for the sale of such
consumption allowances that may include
pro rata shares, historic production
and importation, economic or technical
hardship, or other factors deemed
relevant by the Administrator. If the
supply of such consumption allowances
exceeds demand, the Administrator may
offer such consumption allowances for
sale in the secondary pool as set forth
in subparagraph (D).
(D) Secondary pool.--(i) For each calendar
year, as soon as practicable after the auction
required in subparagraph (C), the Administrator
shall offer for sale the consumption allowances
in the secondary pool at the prices listed in
subparagraph (C)(ii).
(ii) The Administrator shall accept
applications for purchase of secondary pool
consumption allowances from--
(I) importers of products containing
class II, group II substances;
(II) persons who purchased any class
II, group II substance directly from a
producer or importer of class II, group
II substances for use in a product
containing a class II, group II
substance, a manufacturing process, or
a reclamation process;
(III) persons who did not produce or
import a class II substance during
calendar year 2004, 2005, or 2006, but
who the Administrator determines have
subsequently taken significant steps to
produce or import a substantial
quantity of any class II, group II
substance; and
(IV) persons who produced or imported
any class II substance during calendar
year 2004, 2005, or 2006.
(iii) If the supply of consumption allowances
in the secondary pool equals or exceeds the
demand for consumption allowances in the
secondary pool as presented in the applications
for purchase, the Administrator shall sell the
consumption allowances in the secondary pool to
the applicants in the amounts requested in the
applications for purchase. Any consumption
allowances in the secondary pool not purchased
in a calendar year may be rolled over and added
to the quantity available in the secondary pool
in the following year.
(iv) If the demand for consumption allowances
in the secondary pool as presented in the
applications for purchase exceeds the supply of
consumption allowances in the secondary pool,
the Administrator shall sell the consumption
allowances as follows:
(I) The Administrator shall first
sell the consumption allowances in the
secondary pool to any importers of
products containing class II, group II
substances in the amounts requested in
their applications for purchase. If the
demand for such consumption allowances
exceeds supply of such consumption
allowances, the Administrator shall
develop and utilize criteria for the
sale of such consumption allowances
among importers of products containing
class II, group II substances that may
include pro rata shares, historic
importation, economic or technical
hardship, or other factors deemed
relevant by the Administrator.
(II) The Administrator shall next
sell any remaining consumption
allowances to persons identified in
subclauses (II) and (III) of clause
(ii) in the amounts requested in their
applications for purchase. If the
demand for such consumption allowances
exceeds remaining supply of such
consumption allowances, the
Administrator shall develop and utilize
criteria for the sale of such
consumption allowances among subclauses
(II) and (III) applicants that may
include pro rata shares, historic use,
economic or technical hardship, or
other factors deemed relevant by the
Administrator.
(III) The Administrator shall then
sell any remaining consumption
allowances to persons who produced or
imported any class II substance during
calendar year 2004, 2005, or 2006 in
the amounts requested in their
applications for purchase. If demand
for such consumption allowances exceeds
remaining supply of such consumption
allowances, the Administrator shall
develop and utilize criteria for the
sale of such consumption allowances
that may include pro rata shares,
historic production and importation,
economic or technical hardship, or
other factors deemed relevant by the
Administrator.
(IV) Each person who purchases
consumption allowances in a non-auction
sale under this subparagraph shall be
required to disclose the person or
entity sponsoring or benefitting from
the purchases if such person or entity
is, in whole or in part, other than the
purchaser or the purchaser's employer.
(E) Discretion to withhold allowances.--
Nothing in this paragraph prevents the
Administrator from exercising discretion to
withhold and retire consumption allowances that
would otherwise be available for auction or
nonauction sale. Not later than 18 months after
the date of enactment of this section, the
Administrator shall promulgate regulations
establishing criteria for withholding and
retiring consumption allowances.
(5) Banking.--A consumption allowance or destruction
offset credit may be used to meet the compliance
obligation requirements of paragraph (1) in--
(A) the vintage year for the allowance or
destruction offset credit; or
(B) any calendar year subsequent to the
vintage year for the allowance or destruction
offset credit.
(6) Auctions.--
(A) Initial regulations.--Not later than 18
months after the date of enactment of this
section, the Administrator shall promulgate
regulations governing the auction of allowances
under this section. Such regulations shall
include the following requirements:
(i) Frequency; first auction.--
Auctions shall be held one time per
year at regular intervals, with the
first auction to be held no later than
October 31, 2011.
(ii) Auction format.--Auctions shall
follow a single-round, sealed-bid,
uniform price format.
(iii) Financial assurance.--The
Administrator may establish financial
assurance requirements to ensure that
auction participants can and will
perform on their bids.
(iv) Disclosure of beneficial
ownership.--Each bidder in the auction
shall be required to disclose the
person or entity sponsoring or
benefitting from the bidder's
participation in the auction if such
person or entity is, in whole or in
part, other than the bidder or the
bidder's employer.
(v) Publication of information.--
After the auction, the Administrator
shall, in a timely fashion, publish the
number of bidders, number of winning
bidders, the quantity of allowances
sold, and the auction clearing price.
(vi) Bidding limits in 2012.--In the
vintage year 2012 auction, no auction
participant may, directly or in concert
with another participant, bid for or
purchase more allowances offered for
sale at the auction than the greater
of--
(I) the number of allowances
which, when added to the number
of allowances available for
purchase by the participant in
the producer-importer pool non-
auction sale, would equal the
participant's annual average
consumption of class II, group
II substances in calendar years
2004, 2005, and 2006; or
(II) the number of allowances
equal to the product of--
(aa) 1.20 multiplied
by the participant's
allocation share of the
producer-importer pool
non-auction sale as
determined under
paragraph (4)(C)(ii);
and
(bb) the number of
vintage year 2012
allowances offered at
auction.
(vii) Bidding limits in 2013.--In the
vintage year 2013 auction, no auction
participant may, directly or in concert
with another participant, bid for or
purchase more allowances offered for
sale at the auction than the product
of--
(I) 1.15 multiplied by the
ratio of the total number of
vintage year 2012 allowances
purchased by the participant
from the auction and from the
producer-importer pool non-
auction sale to the total
number of vintage year 2012
allowances in the producer-
importer pool; and
(II) the number of vintage
year 2013 allowances offered at
auction.
(viii) Bidding limits in subsequent
years.--In the auctions for vintage
year 2014 and subsequent vintage years,
no auction participant may, directly or
in concert with another participant,
bid for or purchase more allowances
offered for sale at the auction than
the product of--
(I) 1.15 multiplied by the
ratio of the highest number of
allowances held by the
participant in any of the three
prior vintage years to meet its
compliance obligation under
paragraph (1) to the total
number of allowances in the
producer-importer pool for such
vintage year; and
(II) the number of allowances
offered at auction for that
vintage year.
(ix) Other requirements.--The
Administrator may include in the
regulations such other requirements or
provisions as the Administrator
considers necessary to promote
effective, efficient, transparent, and
fair administration of auctions under
this section.
(B) Revision of regulations.--The
Administrator may, at any time, revise the
initial regulations promulgated under
subparagraph (A) based on the Administrator's
experience in administering allowance auctions.
Such revised regulations need not meet the
requirements identified in subparagraph (A) if
the Administrator determines that an
alternative auction design would be more
effective, taking into account factors
including costs of administration,
transparency, fairness, and risks of collusion
or manipulation. In determining whether and how
to revise the initial regulations under this
paragraph, the Administrator shall not consider
maximization of revenues to the Federal
Government.
(C) Delegation or contract.--Pursuant to
regulations under this section, the
Administrator may, by delegation or contract,
provide for the conduct of auctions under the
Administrator's supervision by other
departments or agencies of the Federal
Government or by nongovernmental agencies,
groups, or organizations.
(7) Payments for allowances.--
(A) Initial regulations.--Not later than 18
months after the date of enactment of this
section, the Administrator shall promulgate
regulations governing the payment for
allowances purchased in auction and non-auction
sales under this section. Such regulations
shall include the requirement that, in the
event that full payment for purchased
allowances is not made on the date of purchase,
equal payments shall be made one time per
calendar quarter with all payments for
allowances of a vintage year made by the end of
that vintage year.
(B) Revision of regulations.-- The
Administrator may, at any time, revise the
initial regulations promulgated under
subparagraph (A) based on the Administrator's
experience in administering collection of
payments. Such revised regulations need not
meet the requirements identified in
subparagraph (A) if the Administrator
determines that an alternative payment
structure or frequency would be more effective,
taking into account factors including cost of
administration, transparency, and fairness. In
determining whether and how to revise the
initial regulations under this paragraph, the
Administrator shall not consider maximization
of revenues to the Federal Government.
(C) Penalties for non-payment.--Failure to
pay for purchased allowances in accordance with
the regulations promulgated pursuant to this
paragraph shall be a violation of the
requirements of subsection (b). Section
113(c)(3) shall apply in the case of any person
who knowingly fails to pay for purchased
allowances in accordance with the regulations
promulgated pursuant to this paragraph.
(8) Imported products.--If the United States becomes
a party or otherwise adheres to a multilateral
agreement, including any amendment to the Montreal
Protocol on Substances That Deplete the Ozone Layer,
which restricts the production and consumption of class
II, group II substances--
(A) as of the date on which such agreement or
amendment enters into force, it shall no longer
be unlawful for any person to import from a
party to such agreement or amendment any
product containing any class II, group II
substance whose production and consumption are
regulated by such agreement or amendment
without holding one consumption allowance or
one destruction offset credit for each carbon
dioxide equivalent ton of the class II, group
II substance;
(B) the Administrator shall promulgate
regulations within 12 months of the date the
United States becomes a party or otherwise
adheres to such agreement or amendment, or the
date on which such agreement or amendment
enters into force, whichever is later, to
establish a new baseline for purposes of
paragraph (2), which new baseline shall be the
original baseline less the carbon dioxide
equivalent of the annual average quantity of
any class II substances regulated by such
agreement or amendment contained in products
imported from parties to such agreement or
amendment in calendar years 2004, 2005, and
2006;
(C) as of the date on which such agreement or
amendment enters into force, no person
importing any product containing any class II,
group II substance may, directly or in concert
with another person, purchase any consumption
allowances for sale by the Administrator for
the importation of products from a party to
such agreement or amendment that contain any
class II, group II substance restricted by such
agreement or amendment; and
(D) the Administrator may adjust the two
allowance pools established in paragraph (4)
such that up to 90 percent of the consumption
allowances available for a calendar year are
placed in the producer-importer pool with the
remaining consumption allowances placed in the
secondary pool.
(9) Offsets.--
(A) Chlorofluorocarbon destruction.--Within
18 months after the date of enactment of this
section, the Administrator shall promulgate
regulations to provide for the issuance of
offset credits for the destruction, in the
calendar year 2012 or later, of
chlorofluorocarbons in the United States. The
Administrator shall establish and distribute to
the destroying entity a quantity of destruction
offset credits equal to 0.8 times the number of
tons of carbon dioxide equivalents of reduction
achieved through the destruction. No
destruction offset credits shall be established
for the destruction of a class II, group II
substance.
(B) Definition.--For purposes of this
paragraph, the term ``destruction'' means the
conversion of a substance by thermal, chemical,
or other means to another substance with little
or no carbon dioxide equivalent value and no
ozone depletion potential.
(C) Regulations.--The regulations promulgated
under this paragraph shall include standards
and protocols for project eligibility,
certification of destroyers, monitoring,
tracking, destruction efficiency,
quantification of project and baseline
emissions and carbon dioxide equivalent value,
and verification. The Administrator shall
ensure that destruction offset credits
represent real and verifiable destruction of
chlorofluorocarbons or other class I or class
II, group I, substances authorized under
subparagraph (D).
(D) Other substances.--The Administrator may
promulgate regulations to add to the list of
class I and class II, group I, substances that
may be destroyed for destruction offset
credits, taking into account a candidate
substance's carbon dioxide equivalent value,
ozone depletion potential, prevalence in banks
in the United States, and emission rates, as
well as the need for additional cost
containment under the class II, group II cap
and the integrity of the class II, group II
cap. The Administrator shall not add a class I
or class II, group I substance to the list if
the consumption of the substance has not been
completely phased-out internationally (except
for essential use exemptions or other similar
exemptions) pursuant to the Montreal Protocol.
(E) Extension of offsets.--(i) At any time
after the Administrator promulgates regulations
pursuant to subparagraph (A), the Administrator
may add the types of destruction projects
authorized to receive destruction offset
credits under this paragraph to the list of
types of projects eligible for offset credits
under section 733. Nothing in this paragraph
shall affect the issuance of offset credits
under section 740.
(ii) The Administrator shall not make the
addition under clause (i) unless the
Administrator finds that insufficient
destruction is occurring or is projected to
occur under this paragraph and that the
addition would increase destruction.
(iii) In no event shall more than one
destruction offset credit be issued under title
VII and this section for the destruction of the
same quantity of a substance.
(10) Legal status of allowances and credits.--None of
the following constitutes a property right:
(A) A production or consumption allowance.
(B) A destruction offset credit.
(c) Deadlines for Compliance.--Notwithstanding the deadlines
specified for class II substances in sections 608, 609, 610,
612, and 613 that occur prior to January 1, 2009, the deadline
for promulgating regulations under those sections for class II,
group II substances shall be January 1, 2012.
(d) Exceptions for Essential Uses.--Notwithstanding any phase
down of production and consumption required by this section, to
the extent consistent with any applicable multilateral
agreement to which the United States is a party or otherwise
adheres, the Administrator may provide the following exceptions
for essential uses:
(1) Medical devices.--The Administrator, after notice
and opportunity for public comment, and in consultation
with the Commissioner of the Food and Drug
Administration, may provide an exception for the
production and consumption of class II, group II
substances solely for use in medical devices.
(2) Aviation safety.--The Administrator, after notice
and opportunity for public comment, may authorize the
production and consumption of limited quantities of
class II, group II substances solely for the purposes
of aviation safety if the Administrator of the Federal
Aviation Administration, in consultation with the
Administrator, determines that no safe and effective
substitute has been developed and that such
authorization is necessary for aviation safety
purposes.
(e) Developing Countries.--Notwithstanding any phase down of
production required by this section, the Administrator, after
notice and opportunity for public comment, may authorize the
production of limited quantities of class II, group II
substances in excess of the amounts otherwise allowable under
this section solely for export to, and use in, developing
countries. Any production authorized under this subsection
shall be solely for purposes of satisfying the basic domestic
needs of such countries as provided in applicable international
agreements, if any, to which the United States is a party or
otherwise adheres.
(f) National Security; Fire Suppression, etc.--The provisions
of subsection (f) and paragraphs (1) and (2) of subsection (g)
of section 604 shall apply to any consumption and production
phase down of class II, group II substances in the same manner
and to the same extent, consistent with any applicable
international agreement to which the United States is a party
or otherwise adheres, as such provisions apply to the
substances specified in such subsection.
(g) Accelerated Schedule.--In lieu of section 606, the
provisions of paragraphs (1), (2), and (3) of this subsection
shall apply in the case of class II, group II substances.
(1) In general.--The Administrator shall promulgate
initial regulations not later than 18 months after the
date of enactment of this section, and revised
regulations any time thereafter, which establish a
schedule for phasing down the consumption (and, if the
condition in subsection (b)(1)(B) is met, the
production) of class II, group II substances that is
more stringent than the schedule set forth in this
section if, based on the availability of substitutes,
the Administrator determines that such more stringent
schedule is practicable, taking into account
technological achievability, safety, and other factors
the Administrator deems relevant, or if the Montreal
Protocol, or any applicable international agreement to
which the United States is a party or otherwise
adheres, is modified or established to include a
schedule or other requirements to control or reduce
production, consumption, or use of any class II, group
II substance more rapidly than the applicable schedule
under this section.
(2) Petition.--Any person may submit a petition to
promulgate regulations under this subsection in the
same manner and subject to the same procedures as are
provided in section 606(b).
(3) Inconsistency.--If the Administrator determines
that the provisions of this section regarding banking,
allowance rollover, or destruction offset credits
create a significant potential for inconsistency with
the requirements of any applicable international
agreement to which the United States is a party or
otherwise adheres, the Administrator may promulgate
regulations restricting the availability of banking,
allowance rollover, or destruction offset credits to
the extent necessary to avoid such inconsistency.
(h) Exchange.--Section 607 shall not apply in the case of
class II, group II substances. Production and consumption
allowances for class II, group II substances may be freely
exchanged or sold but may not be converted into allowances for
class II, group I substances.
(i) Labeling.--(1) In applying section 611 to products
containing or manufactured with class II, group II substances,
in lieu of the words ``destroying ozone in the upper
atmosphere'' on labels required under section 611 there shall
be substituted the words ``contributing to global warming''.
(2) The Administrator may, through rulemaking, exempt from
the requirements of section 611 products containing or
manufactured with class II, group II substances determined to
have little or no carbon dioxide equivalent value compared to
other substances used in similar products.
(j) Nonessential Products.--For the purposes of section 610,
class II, group II substances shall be regulated under section
610(b), except that in applying section 610(b) the word
``hydrofluorocarbon'' shall be substituted for the word
``chlorofluorocarbon'' and the term ``class II, group II''
shall be substituted for the term ``class I''. Class II, group
II substances shall not be subject to the provisions of section
610(d).
(k) International Transfers.--In the case of class II, group
II substances, in lieu of sections 616(a) and 616(b), this
subsection shall apply. To the extent consistent with any
applicable international agreement to which the United States
is a party or otherwise adheres, including any amendment to the
Montreal Protocol, the United States may engage in transfers
with other parties to such agreement or amendment under the
following conditions:
(1) The United States may transfer production
allowances to another party to such agreement or
amendment if, at the time of the transfer, the
Administrator establishes revised production limits for
the United States accounting for the transfer in
accordance with regulations promulgated pursuant to
this subsection.
(2) The United States may acquire production
allowances from another party to such agreement or
amendment if, at the time of the transfer, the
Administrator finds that the other party has revised
its domestic production limits in the same manner as
provided with respect to transfers by the United States
in the regulations promulgated pursuant to this
subsection.
(l) Relationship to Other Laws.--
(1) State laws.--For purposes of section 116, the
requirements of this section for class II, group II
substances shall be treated as requirements for the
control and abatement of air pollution.
(2) Multilateral agreements.--Section 614 shall apply
to the provisions of this section concerning class II,
group II substances, except that for the words
``Montreal Protocol'' there shall be substituted the
words ``Montreal Protocol, or any applicable
multilateral agreement to which the United States is a
party or otherwise adheres that restricts the
production or consumption of class II, group II
substances,'' and for the words ``Article 4 of the
Montreal Protocol'' there shall be substituted ``any
provision of such multilateral agreement regarding
trade with non-parties''.
(3) Federal facilities.--For purposes of section 118,
the requirements of this section for class II, group II
substances and corresponding State, interstate, and
local requirements, administrative authority, and
process and sanctions shall be treated as requirements
for the control and abatement of air pollution within
the meaning of section 118.
(m) Carbon Dioxide Equivalent Value.--(1) In lieu of section
602(e), the provisions of this subsection shall apply in the
case of class II, group II substances. Simultaneously with
establishing the list of class II, group II substances, and
simultaneously with any addition to that list, the
Administrator shall publish the carbon dioxide equivalent value
of each listed class II, group II substance, based on a
determination of the number of metric tons of carbon dioxide
that makes the same contribution to global warming over 100
years as 1 metric ton of each class II, group II substance.
(2) Not later than February 1, 2017, and not less than every
5 years thereafter, the Administrator shall--
(A) review, and if appropriate, revise the carbon
dioxide equivalent values established for class II,
group II substances based on a determination of the
number of metric tons of carbon dioxide that makes the
same contributions to global warming over 100 years as
1 metric ton of each class II, group II substance; and
(B) publish in the Federal Register the results of
that review and any revisions.
(3) A revised determination published in the Federal Register
under paragraph (2)(B) shall take effect for production of
class II, group II substances, consumption of class II, group
II substances, and importation of products containing class II,
group II substances starting on January 1 of the first calendar
year starting at least 9 months after the date on which the
revised determination was published.
(4) The Administrator may decrease the frequency of review
and revision under paragraph (2) if the Administrator
determines that such decrease is appropriate in order to
synchronize such review and revisions with any similar review
process carried out pursuant to the United Nations Framework
Convention on Climate Change, an agreement negotiated under
that convention, The Vienna Convention for the Protection of
the Ozone Layer, or an agreement negotiated under that
convention, except that in no event shall the Administrator
carry out such review and revision any less frequently than
every 10 years.
(n) Reporting Requirements.--In lieu of subsections (b) and
(c) of section 603, paragraphs (1) and (2) of this subsection
shall apply in the case of class II, group II substances:
(1) In general.--On a quarterly basis, or such other
basis (not less than annually) as determined by the
Administrator, each person who produced, imported, or
exported a class II, group II substance, or who
imported a product containing a class II, group II
substance, shall file a report with the Administrator
setting forth the carbon dioxide equivalent amount of
the substance that such person produced, imported, or
exported, as well as the amount that was contained in
products imported by that person, during the preceding
reporting period. Each such report shall be signed and
attested by a responsible officer. If all other
reporting is complete, no such report shall be required
from a person after April 1 of the calendar year after
such person permanently ceases production, importation,
and exportation of the substance, as well as
importation of products containing the substance, and
so notifies the Administrator in writing. If the United
States becomes a party or otherwise adheres to a
multilateral agreement, including any amendment to the
Montreal Protocol on Substances That Deplete the Ozone
Layer, that restricts the production and consumption of
class II, group II substances, then, if all other
reporting is complete, no such report shall be required
from a person with respect to importation from parties
to such agreement or amendment of products containing
any class II, group II substance restricted by such
agreement or amendment, after April 1 of the calendar
year following the year during which such agreement or
amendment enters into force.
(2) Baseline reports for class ii, group ii
substances.--
(A) In general.--Unless such information has
been previously reported to the Administrator,
on the date on which the first report under
paragraph (1) of this subsection is required to
be filed, each person who produced, imported,
or exported a class II, group II substance, or
who imported a product containing a class II
substance, (other than a substance added to the
list of class II, group II substances after the
publication of the initial list of such
substances under this section), shall file a
report with the Administrator setting forth the
amount of such substance that such person
produced, imported, exported, or that was
contained in products imported by that person,
during each of calendar years 2004, 2005, and
2006.
(B) Producers.--In reporting under
subparagraph (A), each person who produced in
the United States a class II substance during
calendar years 2004, 2005, or 2006 shall--
(i) report all acquisitions or
purchases of class II substances during
each of calendar years 2004, 2005, and
2006 from all other persons who
produced in the United States a class
II substance during calendar years
2004, 2005, or 2006, and supply
evidence of such acquisitions and
purchases as deemed necessary by the
Administrator; and
(ii) report all transfers or sales of
class II substances during each of
calendar years 2004, 2005, and 2006 to
all other persons who produced in the
United States a class II substance
during calendar years 2004, 2005, or
2006, and supply evidence of such
transfers and sales as deemed necessary
by the Administrator.
(C) Added substances.--In the case of a
substance added to the list of class II, group
II substances after publication of the initial
list of such substances under this section,
each person who produced, imported, exported,
or imported products containing such substance
in calendar year 2004, 2005, or 2006 shall file
a report with the Administrator within 180 days
after the date on which such substance is added
to the list, setting forth the amount of the
substance that such person produced, imported,
and exported, as well as the amount that was
contained in products imported by that person,
in calendar years 2004, 2005, and 2006.
(o) Stratospheric Ozone and Climate Protection Fund.--
(1) In general.--There is established in the Treasury
of the United States a Stratospheric Ozone and Climate
Protection Fund.
(2) Deposits.--The Administrator shall deposit all
proceeds from the auction and non-auction sale of
allowances under this section into the Stratospheric
Ozone and Climate Protection Fund.
(3) Use.--Amounts deposited into the Stratospheric
Ozone and Climate Protection Fund shall be available,
subject to appropriations, exclusively for the
following purposes:
(A) Recovery, recycling, and reclamation.--
The Administrator may utilize funds to
establish a program to incentivize the
recovery, recycling, and reclamation of any
Class II substances in order to reduce
emissions of such substances.
(B) Multilateral fund.--If the United States
becomes a party or otherwise adheres to a
multilateral agreement, including any amendment
to the Montreal Protocol on Substances That
Deplete the Ozone Layer, which restricts the
production and consumption of class II, group
II substances, the Administrator may utilize
funds to meet any related contribution
obligation of the United States to the
Multilateral Fund for the Implementation of the
Montreal Protocol or similar multilateral fund
established under such multilateral agreement.
(C) Best-in-class appliances deployment
program.--The Secretary of Energy is authorized
to utilize funds to carry out the purposes of
section 214 of the American Clean Energy and
Security Act of 2009.
(D) Low global warming product transition
assistance program.--
(i) In general.--The Administrator,
in consultation with the Secretary of
Energy, may utilize funds in fiscal
years 2012 through 2022 to establish a
program to provide financial assistance
to manufacturers of products containing
class II, group II substances to
facilitate the transition to products
that contain or utilize alternative
substances with no or low carbon
dioxide equivalent value and no ozone
depletion potential.
(ii) Definition.--In this
subparagraph, the term ``products''
means refrigerators, freezers,
dehumidifiers, air conditioners, foam
insulation, technical aerosols, fire
protection systems, and semiconductors.
(iii) Financial assistance.--The
Administrator may provide financial
assistance to manufacturers pursuant to
clause (i) for--
(I) the design and
configuration of new products
that use alternative substances
with no or low carbon dioxide
equivalent value and no ozone
depletion potential; and
(II) the redesign and
retooling of facilities for the
manufacture of products in the
United States that use
alternative substances with no
or low carbon dioxide
equivalent value and no ozone
depletion potential.
(iv) Reports.--For any fiscal year
during which the Administrator provides
financial assistance pursuant to this
subparagraph, the Administrator shall
submit a report to the Congress within
3 months of the end of such fiscal year
detailing the amounts, recipients,
specific purposes, and results of the
financial assistance provided.
TITLE VII--GLOBAL WARMING POLLUTION REDUCTION PROGRAM
SEC. 700. DEFINITIONS.
In this title:
(1) Additional.--The term ``additional'', when used
with respect to reductions or avoidance of greenhouse
gas emissions, or to sequestration of greenhouse gases,
means reductions, avoidance, or sequestration that
result in a lower level of net greenhouse gas emissions
or atmospheric concentrations than would occur in the
absence of an offset project.
(2) Additionality.--The term ``additionality'' means
the extent to which reductions or avoidance of
greenhouse gas emissions, or sequestration of
greenhouse gases, are additional.
(3) Advisory board.--The term ``Advisory Board''
means the Offsets Integrity Advisory Board established
under section 731.
(4) Affiliated.--The term ``affiliated''--
(A) when used in relation to an entity means
owned or controlled by, or under common
ownership or control with, another entity, as
determined by the Administrator; and
(B) when used in relation to a natural gas
local distribution company, means owned or
controlled by, or under common ownership or
control with, another natural gas local
distribution company, as determined by the
Administrator.
(5) Allowance.--The term ``allowance'' means a
limited authorization to emit, or have attributable
greenhouse gas emissions in an amount of, 1 ton of
carbon dioxide equivalent of a greenhouse gas in
accordance with this title; it includes an emission
allowance, a compensatory allowance, or an
international emission allowance.
(6) Attributable greenhouse gas emissions.--The term
``attributable greenhouse gas emissions'' means--
(A) for a covered entity that is a fuel
producer or importer described in paragraph
(13)(B), greenhouse gases that would be emitted
from the combustion of any petroleum-based or
coal-based liquid fuel, petroleum coke, or
natural gas liquid, produced or imported by
that covered entity for sale or distribution in
interstate commerce, assuming no capture and
sequestration of any greenhouse gas emissions;
(B) for a covered entity that is an
industrial gas producer or importer described
in paragraph (13)(C), the tons of carbon
dioxide equivalent of fossil fuel-based carbon
dioxide, nitrous oxide, any fluorinated gas,
other than nitrogen trifluoride, that is a
greenhouse gas, or any combination thereof--
(i) produced or imported by such
covered entity during the previous
calendar year for sale or distribution
in interstate commerce; or
(ii) released as fugitive emissions
in the production of fluorinated gas;
and
(C) for a natural gas local distribution
company described in paragraph (13)(J),
greenhouse gases that would be emitted from the
combustion of the natural gas, and any other
gas meeting the specifications for commingling
with natural gas for purposes of delivery, that
such entity delivered during the previous
calendar year to customers that are not covered
entities, assuming no capture and sequestration
of that greenhouse gas.
(7) Biological sequestration; biologically
sequestered.--The terms ``biological sequestration''
and ``biologically sequestered'' mean the removal of
greenhouse gases from the atmosphere by terrestrial
biological means, such as by growing plants, and the
storage of those greenhouse gases in plants or soils.
(8) Capped emissions.--The term ``capped emissions''
means greenhouse gas emissions to which section 722
applies, including emissions from the combustion of
natural gas, petroleum-based or coal-based liquid fuel,
petroleum coke, or natural gas liquid to which section
722(b)(2) or (8) applies.
(9) Capped source.--The term ``capped source'' means
a source that directly emits capped emissions.
(10) Carbon dioxide equivalent.--The term ``carbon
dioxide equivalent'' means the unit of measure,
expressed in metric tons, of greenhouse gases as
provided under section 711 or 712.
(11) Carbon stock.--The term ``carbon stock'' means
the quantity of carbon contained in a biological
reservoir or system which has the capacity to
accumulate or release carbon.
(12) Compensatory allowance.--The term ``compensatory
allowance'' means an allowance issued under section
721(f).
(13) Covered entity.--The term ``covered entity''
means each of the following:
(A) Any electricity source.
(B) Any stationary source that produces, and
any entity that (or any group of two or more
affiliated entities that, in the aggregate)
imports, for sale or distribution in interstate
commerce in 2008 or any subsequent year,
petroleum-based or coal-based liquid fuel,
petroleum coke, or natural gas liquid, the
combustion of which would emit more than 25,000
tons of carbon dioxide equivalent, as
determined by the Administrator.
(C) Any stationary source that produces, and
any entity that (or any group of two or more
affiliated entities that, in the aggregate)
imports, for sale or distribution in interstate
commerce, in bulk, or in products designated by
the Administrator, in 2008 or any subsequent
year more than 25,000 tons of carbon dioxide
equivalent of--
(i) fossil fuel-based carbon dioxide;
(ii) nitrous oxide;
(iii) perfluorocarbons;
(iv) sulfur hexafluoride;
(v) any other fluorinated gas, except
for nitrogen trifluoride, that is a
greenhouse gas, as designated by the
Administrator under section 711(b) or
(c); or
(vi) any combination of greenhouse
gases described in clauses (i) through
(vi).
(D) Any stationary source that has emitted
25,000 or more tons of carbon dioxide
equivalent of nitrogen trifluoride in 2008 or
any subsequent year.
(E) Any geologic sequestration site.
(F) Any stationary source in the following
industrial sectors:
(i) Adipic acid production.
(ii) Primary aluminum production.
(iii) Ammonia manufacturing.
(iv) Cement production, excluding
grinding-only operations.
(v) Hydrochlorofluorocarbon
production.
(vi) Lime manufacturing.
(vii) Nitric acid production.
(viii) Petroleum refining.
(ix) Phosphoric acid production.
(x) Silicon carbide production.
(xi) Soda ash production.
(xii) Titanium dioxide production.
(xiii) Coal-based liquid or gaseous
fuel production.
(G) Any stationary source in the chemical or
petrochemical sector that, in 2008 or any
subsequent year--
(i) produces acrylonitrile, carbon
black, ethylene, ethylene dichloride,
ethylene oxide, or methanol; or
(ii) produces a chemical or
petrochemical product if producing that
product results in annual combustion
plus process emissions of 25,000 or
more tons of carbon dioxide equivalent.
(H) Any stationary source that--
(i) is in one of the following
industrial sectors: ethanol production;
ferroalloy production; fluorinated gas
production; food processing; glass
production; hydrogen production; iron
and steel production; lead production;
pulp and paper manufacturing; and zinc
production; and
(ii) has emitted 25,000 or more tons
of carbon dioxide equivalent in 2008 or
any subsequent year.
(I) Any fossil fuel-fired combustion device
(such as a boiler) or grouping of such devices
that--
(i) is all or part of an industrial
source not specified in subparagraph
(D), (F), (G), or (H); and
(ii) has emitted 25,000 or more tons
of carbon dioxide equivalent in 2008 or
any subsequent year.
(J) Any natural gas local distribution
company that (or any group of 2 or more
affiliated natural gas local distribution
companies that, in the aggregate) in 2008 or
any subsequent year, delivers 460,000,000 cubic
feet or more of natural gas to customers that
are not covered entities.
(14) Crediting period.--The term ``crediting period''
means the period with respect to which an offset
project is eligible to earn offset credits under part
D, as determined under section 734(c).
(15) Designated representative.--The term
``designated representative'' means, with respect to a
covered entity, a reporting entity, an offset project
developer, or any other entity receiving or holding
allowances or offset credits under this title, an
individual authorized, through a certificate of
representation submitted to the Administrator by the
owners and operators or similar entity official, to
represent the owners and operators or similar entity
official in all matters pertaining to this title
(including the holding, transfer, or disposition of
allowances or offset credits), and to make all
submissions to the Administrator under this title.
(16) Developing country.--The term ``developing
country'' means a country eligible to receive official
development assistance according to the income
guidelines of the Development Assistance Committee of
the Organization for Economic Cooperation and
Development.
(17) Domestic offset credit.--The term ``domestic
offset credit'' means an offset credit issued under
part D, other than an international offset credit.
(18) Electricity source.--The term ``electricity
source'' means a stationary source that includes one or
more utility units.
(19) Emission.--The term ``emission'' means the
release of a greenhouse gas into the ambient air. Such
term does not include gases that are captured and
sequestered, except to the extent that they are later
released into the atmosphere, in which case compliance
must be demonstrated pursuant to section 722(b)(5).
(20) Emission allowance.--The term ``emission
allowance'' means an allowance established under
section 721(a) or section 726(g)(2) or (h)(1)(C).
(21) Fair market value.--The term ``fair market
value'' means the average daily closing price on
registered exchanges or, if such a price is
unavailable, the average price as determined by the
Administrator, during a specified time period, of an
emission allowance.
(22) Federal land.--The term ``Federal land'' means
land that is owned by the United States, other than
land held in trust for an Indian or Indian tribe.
(23) Fossil fuel.--The term ``fossil fuel'' means
natural gas, petroleum, or coal, or any form of solid,
liquid, or gaseous fuel derived from such material,
including consumer products that are derived from such
materials and are combusted.
(24) Fossil fuel-fired.--The term ``fossil fuel-
fired'' means powered by combustion of fossil fuel,
alone or in combination with any other fuel, regardless
of the percentage of fossil fuel consumed.
(25) Fugitive emissions.--The term ``fugitive
emissions'' means emissions from leaks, valves, joints,
or other small openings in pipes, ducts, or other
equipment, or from vents.
(26) Geologic sequestration; geologically
sequestered.--The terms ``geologic sequestration'' and
``geologically sequestered'' mean the sequestration of
greenhouse gases in subsurface geologic formations for
purposes of permanent storage.
(27) Geologic sequestration site.--The term
``geologic sequestration site'' means a site where
carbon dioxide is geologically sequestered.
(28) Greenhouse gas.--The term ``greenhouse gas''
means any gas described in section 711(a) or designated
under section 711(b), (c), or (e), except to the extent
that it is regulated under title VI.
(29) High conservation priority land.--The term
``high conservation priority land'' means land that is
not Federal land and is--
(A) globally or State ranked as critically
imperiled or imperiled under a State Natural
Heritage Program; or
(B) old-growth or late-successional forest,
as identified by the office of the State
Forester or relevant State agency with
regulatory jurisdiction over forestry
activities.
(30) Hold.--The term ``hold'' means, with respect to
an allowance or offset credit, to have in the
appropriate account in the allowance tracking system,
or submit to the Administrator for recording in such
account.
(31) Industrial source.--The term ``industrial
source'' means any stationary source that--
(A) is not an electricity source; and
(B) is in--
(i) the manufacturing sector (as
defined in North American Industrial
Classification System codes 31, 32, and
33); or
(ii) the natural gas processing or
natural gas pipeline transportation
sector (as defined in North American
Industrial Classification System codes
211112 or 486210).
(32) International emission allowance.--The term
``international emission allowance'' means a tradable
authorization to emit 1 ton of carbon dioxide
equivalent of greenhouse gas that is issued by a
national or supranational foreign government pursuant
to a qualifying international program designated by the
Administrator pursuant to section 728(a).
(33) International offset credit.--The term
``international offset credit'' means an offset credit
issued by the Administrator under section 743.
(34) Leakage.--The term ``leakage'' means a
significant increase in greenhouse gas emissions, or
significant decrease in sequestration, which is caused
by an offset project and occurs outside the boundaries
of the offset project.
(35) Mineral sequestration.--The term ``mineral
sequestration'' means sequestration of carbon dioxide
from the atmosphere by capturing carbon dioxide into a
permanent mineral, such as the aqueous precipitation of
carbonate minerals that results in the storage of
carbon dioxide in a mineral form.
(36) Natural gas liquid.--The term ``natural gas
liquid'' means ethane, butane, isobutane, natural
gasoline, and propane which is ready for commercial
sale or use.
(37) Natural gas local distribution company.--The
term ``natural gas local distribution company'' has the
meaning given the term ``local distribution company''
in section 2(17) of the Natural Gas Policy Act of 1978
(15 U.S.C. 3301(17)).
(38) Offset credit.--The term ``offset credit'' means
a credit issued under part D.
(39) Offset project.--The term ``offset project''
means a project or activity that reduces or avoids
greenhouse gas emissions, or sequesters greenhouse
gases, and for which offset credits are issued under
part D.
(40) Offset project developer.--The term ``offset
project developer'' means the individual or entity
designated as the offset project developer in an offset
project approval petition under section 735(c)(1).
(41) Petroleum.--The term ``petroleum'' includes
crude oil, tar sands, oil shale, and heavy oils.
(42) Renewable biomass.--The term ``renewable
biomass'' means any of the following:
(A) Plant material, including waste material,
harvested or collected from actively managed
agricultural land that was in cultivation,
cleared, or fallow and nonforested on January
1, 2009.
(B) Plant material, including waste material,
harvested or collected from pastureland that
was nonforested on January 1, 2009.
(C) Nonhazardous vegetative matter derived
from waste, including separated yard waste,
landscape right-of-way trimmings, construction
and demolition debris or food waste (but not
municipal solid waste, recyclable waste paper,
painted, treated or pressurized wood, or wood
contaminated with plastic or metals).
(D) Animal waste or animal byproducts,
including products of animal waste digesters.
(E) Algae.
(F) Trees, brush, slash, residues, or any
other vegetative matter removed from within 600
feet of any building, campground, or route
designated for evacuation by a public official
with responsibility for emergency preparedness,
or from within 300 feet of a paved road,
electric transmission line, utility tower, or
water supply line.
(G) Residues from or byproducts of milled
logs.
(H) Any of the following removed from
forested land that is not Federal and is not
high conservation priority land:
(i) Trees, brush, slash, residues,
interplanted energy crops, or any other
vegetative matter removed from an
actively managed tree plantation
established--
(I) prior to January 1, 2009;
or
(II) on land that, as of
January 1, 2009, was cultivated
or fallow and non-forested.
(ii) Trees, logging residue,
thinnings, cull trees, pulpwood, and
brush removed from naturally-
regenerated forests or other non-
plantation forests, including for the
purposes of hazardous fuel reduction or
preventative treatment for reducing or
containing insect or disease
infestation.
(iii) Logging residue, thinnings,
cull trees, pulpwood, brush and species
that are non-native and noxious, from
stands that were planted and managed
after January 1, 2009, to restore or
maintain native forest types.
(iv) Dead or severely damaged trees
removed within 5 years of fire,
blowdown, or other natural disaster,
and badly infested trees.
(I) Materials, pre-commercial thinnings, or
removed invasive species from National Forest
System land and public lands (as defined in
section 103 of the Federal Land Policy and
Management Act of 1976 (43 U.S.C. 1702)),
including those that are byproducts of
preventive treatments (such as trees, wood,
brush, thinnings, chips, and slash), that are
removed as part of a federally recognized
timber sale, or that are removed to reduce
hazardous fuels, to reduce or contain disease
or insect infestation, or to restore ecosystem
health, and that are--
(i) not from components of the
National Wilderness Preservation
System, Wilderness Study Areas,
Inventoried Roadless Areas, old growth
or mature forest stands, components of
the National Landscape Conservation
System, National Monuments, National
Conservation Areas, Designated
Primitive Areas; or Wild and Scenic
Rivers corridors;
(ii) harvested in environmentally
sustainable quantities, as determined
by the appropriate Federal land
manager; and
(iii) are harvested in accordance
with Federal and State law, and
applicable land management plans.
(43) Retire.--The term ``retire'', with respect to an
allowance or offset credit established or issued under
this title, means to disqualify such allowance or
offset credit for any subsequent use under this title,
regardless of whether the use is a sale, exchange, or
submission of the allowance or offset credit to satisfy
a compliance obligation.
(44) Reversal.--The term ``reversal'' means an
intentional or unintentional loss of sequestered
greenhouse gases to the atmosphere.
(45) Sequestered and sequestration.--The terms
``sequestered'' and ``sequestration'' mean the
separation, isolation, or removal of greenhouse gases
from the atmosphere, as determined by the
Administrator. The terms include biological, geologic,
and mineral sequestration, but do not include ocean
fertilization techniques.
(46) Stationary source.--The term ``stationary
source'' means any integrated operation comprising any
plant, building, structure, or stationary equipment,
including support buildings and equipment, that is
located within one or more contiguous or adjacent
properties, is under common control of the same person
or persons, and emits or may emit a greenhouse gas.
(47) Strategic reserve allowance.--The term
``strategic reserve allowance'' means an emission
allowance reserved for, transferred to, or deposited in
the strategic reserve, or established, under section
726.
(48) Uncapped emissions.--The term ``uncapped
emissions'' means emissions of greenhouse gases emitted
after December 31, 2011, that are not capped emissions.
(49) United states greenhouse gas emissions.--The
term ``United States greenhouse gas emissions'' means
the total quantity of annual greenhouse gas emissions
from the United States, as calculated by the
Administrator and reported to the United Nations
Framework Convention on Climate Change Secretariat.
(50) Utility unit.--The term ``utility unit'' means a
combustion device that, on January 1, 2009, or any date
thereafter, is fossil fuel-fired and serves a generator
that produces electricity for sale, unless such
combustion device, during the 12-month period starting
the later of January 1, 2009, or the commencement of
commercial operation and each calendar year starting
after such later date--
(A) is part of an integrated cycle system
that cogenerates steam and electricity during
normal operation and that supplies one-third or
less of its potential electric output capacity
and 25 MW or less of electrical output for
sale; or
(B) combusts materials of which more than 95
percent is municipal solid waste on a heat
input basis.
(51) Vintage year.--The term ``vintage year'' means
the calendar year for which an emission allowance is
established under section 721(a) or which is assigned
to an emission allowance under section 726(g)(3)(A),
except that the vintage year for a strategic reserve
allowance shall be the year in which such allowance is
purchased at auction.
PART A--GLOBAL WARMING POLLUTION REDUCTION GOALS AND TARGETS
SEC. 701. FINDINGS AND PURPOSE.
(a) Findings.--The Congress finds as follows:
(1) Global warming poses a significant threat to the
national security, economy, public health and welfare,
and environment of the United States, as well as of
other nations.
(2) Reviews of scientific studies, including by the
Intergovernmental Panel on Climate Change and the
National Academy of Sciences, demonstrate that global
warming is the result of the combined anthropogenic
greenhouse gas emissions from numerous sources of all
types and sizes. Each increment of emission, when
combined with other emissions, causes or contributes
materially to the acceleration and extent of global
warming and its adverse effects for the lifetime of
such gas in the atmosphere. Accordingly, controlling
emissions in small as well as large amounts is
essential to prevent, slow the pace of, reduce the
threats from, and mitigate global warming and its
adverse effects.
(3) Because they induce global warming, greenhouse
gas emissions cause or contribute to injuries to
persons in the United States, including--
(A) adverse health effects such as disease
and loss of life;
(B) displacement of human populations;
(C) damage to property and other interests
related to ocean levels, acidification, and ice
changes;
(D) severe weather and seasonal changes;
(E) disruption, costs, and losses to
business, trade, employment, farms,
subsistence, aesthetic enjoyment of the
environment, recreation, culture, and tourism;
(F) damage to plants, forests, lands, and
waters;
(G) harm to wildlife and habitat;
(H) scarcity of water and the decreased
abundance of other natural resources;
(I) worsening of tropospheric air pollution;
(J) substantial threats of similar damage;
and
(K) other harm.
(4) That many of these effects and risks of future
effects of global warming are widely shared does not
minimize the adverse effects individual persons have
suffered, will suffer, and are at risk of suffering
because of global warming.
(5) That some of the adverse and potentially
catastrophic effects of global warming are at risk of
occurring and not a certainty does not negate the harm
persons suffer from actions that increase the
likelihood, extent, and severity of such future
impacts.
(6) Nations of the world look to the United States
for leadership in addressing the threat of and harm
from global warming. Full implementation of the Safe
Climate Act is critical to engage other nations in an
international effort to mitigate the threat of and harm
from global warming.
(7) Global warming and its adverse effects are
occurring and are likely to continue and increase in
magnitude, and to do so at a greater and more harmful
rate, unless the Safe Climate Act is fully implemented
and enforced in an expeditious manner.
(b) Purpose.--It is the general purpose of the Safe Climate
Act to help prevent, reduce the pace of, mitigate, and remedy
global warming and its adverse effects. To fulfill such
purpose, it is necessary to--
(1) require the timely fulfillment of all
governmental acts and duties, both substantive and
procedural, and the prompt compliance of covered
entities with the requirements of the Safe Climate Act;
(2) establish and maintain an effective, transparent,
and fair market for emission allowances and preserve
the integrity of the cap on emissions and of offset
credits;
(3) advance the production and deployment of clean
energy and energy efficiency technologies; and
(4) ensure effective enforcement of the Safe Climate
Act by citizens, States, Indian tribes, and all levels
of government because each violation of the Safe
Climate Act is likely to result in an additional
increment of greenhouse gas emission and will slow the
pace of implementation of the Safe Climate Act and
delay the achievement of the goals set forth in section
702, and cause or contribute to global warming and its
adverse effects.
SEC. 702. ECONOMY-WIDE REDUCTION GOALS.
The goals of the Safe Climate Act are to reduce steadily the
quantity of United States greenhouse gas emissions such that--
(1) in 2012, the quantity of United States greenhouse
gas emissions does not exceed 97 percent of the
quantity of United States greenhouse gas emissions in
2005;
(2) in 2020, the quantity of United States greenhouse
gas emissions does not exceed 80 percent of the
quantity of United States greenhouse gas emissions in
2005;
(3) in 2030, the quantity of United States greenhouse
gas emissions does not exceed 58 percent of the
quantity of United States greenhouse gas emissions in
2005; and
(4) in 2050, the quantity of United States greenhouse
gas emissions does not exceed 17 percent of the
quantity of United States greenhouse gas emissions in
2005.
SEC. 703. REDUCTION TARGETS FOR SPECIFIED SOURCES.
(a) In General.--The regulations issued under section 721
shall cap and reduce annually the greenhouse gas emissions of
capped sources each calendar year beginning in 2012 such that--
(1) in 2012, the quantity of greenhouse gas emissions
from capped sources does not exceed 97 percent of the
quantity of greenhouse gas emissions from such sources
in 2005;
(2) in 2020, the quantity of greenhouse gas emissions
from capped sources does not exceed 83 percent of the
quantity of greenhouse gas emissions from such sources
in 2005;
(3) in 2030, the quantity of greenhouse gas emissions
from capped sources does not exceed 58 percent of the
quantity of greenhouse gas emissions from such sources
in 2005; and
(4) in 2050, the quantity of greenhouse gas emissions
from capped sources does not exceed 17 percent of the
quantity of greenhouse gas emissions from such sources
in 2005.
(b) Definition.--For purposes of this section, the term
``greenhouse gas emissions from such sources in 2005'' means
emissions to which section 722 would have applied if the
requirements of this title for the specified year had been in
effect for 2005.
SEC. 704. SUPPLEMENTAL POLLUTION REDUCTIONS.
For the purposes of decreasing the likelihood of catastrophic
climate change, preserving tropical forests, building capacity
to generate offset credits, and facilitating international
action on global warming, the Administrator shall set aside the
percentage specified in section 781 of the quantity of emission
allowances established under section 721(a) for each year, to
be used to achieve a reduction of greenhouse gas emissions from
deforestation in developing countries in accordance with part
E. In 2020, activities supported under part E shall provide
greenhouse gas reductions in an amount equal to an additional
10 percentage points of reductions from United States
greenhouse gas emissions in 2005. The Administrator shall
distribute these allowances with respect to activities in
countries that enter into and implement agreements or
arrangements relating to reduced deforestation as described in
section 754(a)(2).
SEC. 705. REVIEW AND PROGRAM RECOMMENDATIONS.
(a) In General.--The Administrator shall, in consultation
with appropriate Federal agencies, submit to Congress a report
not later than July 1, 2013, and every 4 years thereafter, that
includes--
(1) an analysis of key findings based on the latest
scientific information and data relevant to global
climate change;
(2) an analysis of capabilities to monitor and verify
greenhouse gas reductions on a worldwide basis,
including for the United States, as required under the
Safe Climate Act; and
(3) an analysis of the status of worldwide greenhouse
gas reduction efforts, including implementation of the
Safe Climate Act and other policies, both domestic and
international, for reducing greenhouse gas emissions,
preventing dangerous atmospheric concentrations of
greenhouse gases, preventing significant irreversible
consequences of climate change, and reducing
vulnerability to the impacts of climate change.
(b) Exception.--Paragraph (3) of subsection (a) shall not
apply to the first report submitted under such subsection.
(c) Latest Scientific Information.--The analysis required
under subsection (a)(1) shall--
(1) address existing scientific information and
reports, considering, to the greatest extent possible,
the most recent assessment report of the
Intergovernmental Panel on Climate Change, reports by
the United States Global Change Research Program, the
Natural Resources Climate Change Adaptation Panel
established under section 475 of the American Clean
Energy and Security Act of 2009, and Federal agencies,
and the European Union's global temperature data
assessment; and
(2) review trends and projections for--
(A) global and country-specific annual
emissions of greenhouse gases, and cumulative
greenhouse gas emissions produced between 1850
and the present, including--
(i) global cumulative emissions of
anthropogenic greenhouse gases;
(ii) global annual emissions of
anthropogenic greenhouse gases; and
(iii) by country, annual total,
annual per capita, and cumulative
anthropogenic emissions of greenhouse
gases for the top 50 emitting nations;
(B) significant changes, both globally and by
region, in annual net non-anthropogenic
greenhouse gas emissions from natural sources,
including permafrost, forests, or oceans;
(C) global atmospheric concentrations of
greenhouse gases, expressed in annual
concentration units as well as carbon dioxide
equivalents based on 100-year global warming
potentials;
(D) major climate forcing factors, such as
aerosols;
(E) global average temperature, expressed as
seasonal and annual averages in land, ocean,
and land-plus-ocean averages; and
(F) sea level rise;
(3) assess the current and potential impacts of
global climate change on--
(A) human populations, including impacts on
public health, economic livelihoods,
subsistence, human infrastructure, and
displacement or permanent relocation due to
flooding, severe weather, extended drought,
erosion, or other ecosystem changes;
(B) freshwater systems, including water
resources for human consumption and agriculture
and natural and managed ecosystems, flood and
drought risks, and relative humidity;
(C) the carbon cycle, including impacts
related to the thawing of permafrost, the
frequency and intensity of wildfire, and
terrestrial and ocean carbon sinks;
(D) ecosystems and animal and plant
populations, including impacts on species
abundance, phenology, and distribution;
(E) oceans and ocean ecosystems, including
effects on sea level, ocean acidity, ocean
temperatures, coral reefs, ocean circulation,
fisheries, and other indicators of ocean
ecosystem health;
(F) the cryosphere, including effects on ice
sheet mass balance, mountain glacier mass
balance, and sea-ice extent and volume;
(G) changes in the intensity, frequency, or
distribution of severe weather events,
including precipitation, tropical cyclones,
tornadoes, and severe heat waves;
(H) agriculture and forest systems; and
(I) any other indicators the Administrator
deems appropriate;
(4) summarize any significant socio-economic impacts
of climate change in the United States, including the
territories of the United States, drawing on work by
Federal agencies and the academic literature, including
impacts on--
(A) public health;
(B) economic livelihoods and subsistence;
(C) displacement or permanent relocation due
to flooding, severe weather, extended drought,
or other ecosystem changes;
(D) human infrastructure, including coastal
infrastructure vulnerability to extreme events
and sea level rise, river floodplain
infrastructure, and sewer and water management
systems;
(E) agriculture and forests, including
effects on potential growing season,
distribution, and yield;
(F) water resources for human consumption,
agriculture and natural and managed ecosystems,
flood and drought risks, and relative humidity;
(G) energy supply and use; and
(H) transportation;
(5) in assessing risks and impacts, use a risk
management framework, including both qualitative and
quantitative measures, to assess the observed and
projected impacts of current and future climate change,
accounting for--
(A) both monetized and non-monetized losses;
(B) potential nonlinear, abrupt, or
essentially irreversible changes in the climate
system;
(C) potential nonlinear increases in the cost
of impacts;
(D) potential low-probability, high impact
events; and
(E) whether impacts are transitory or
essentially permanent; and
(6) based on the findings of the Administrator under
this section, as well as assessments produced by the
Intergovernmental Panel on Climate Change, the United
States Global Change Research program, and other
relevant scientific entities--
(A) describe increased risks to natural
systems and society that would result from an
increase in global average temperature 3.6
degrees Fahrenheit (2 degrees Celsius) above
the pre-industrial average or an increase in
atmospheric greenhouse gas concentrations above
450 parts per million carbon dioxide
equivalent; and
(B) identify and assess--
(i) significant residual risks not
avoided by the thresholds described in
subparagraph (A);
(ii) alternative thresholds or
targets that may more effectively limit
the risks identified pursuant to clause
(i); and
(iii) thresholds above those
described in subparagraph (A) which
significantly increase the risk of
certain impacts or render them
essentially permanent.
(d) Status of Monitoring and Verification Capabilities To
Evaluate Greenhouse Gas Reduction Efforts.--The analysis
required under subsection (a)(2) shall evaluate the
capabilities of the monitoring, reporting, and verification
systems used to quantify progress in achieving reductions in
greenhouse gas emissions both globally and in the United States
(as described in section 702), including--
(1) quantification of emissions and emission
reductions by entities participating in the cap and
trade program under this title;
(2) quantification of emissions and emission
reductions by entities participating in the offset
program under this title;
(3) quantification of emission and emissions
reductions by entities regulated by performance
standards;
(4) quantification of aggregate net emissions and
emissions reductions by the United States; and
(5) quantification of global changes in net emissions
and in sources and sinks of greenhouse gases.
(e) Status of Greenhouse Gas Reduction Efforts.--The analysis
required under subsection (a)(3) shall address--
(1) whether the programs under Safe Climate Act and
other Federal statutes are resulting in sufficient
United States greenhouse gas emissions reductions to
meet the emissions reduction goals described in section
702, taking into account the use of offsets; and
(2) whether United States actions, taking into
account international actions, commitments, and trends,
and considering the range of plausible emissions
scenarios, are sufficient to avoid--
(A) atmospheric greenhouse gas concentrations
above 450 parts per million carbon dioxide
equivalent;
(B) global average surface temperature 3.6
degrees Fahrenheit (2 degrees Celsius) above
the pre-industrial average, or such other
temperature thresholds as the Administrator
deems appropriate; and
(C) other temperature or greenhouse gas
thresholds identified pursuant to subsection
(c)(6)(B).
(f) Recommendations.--
(1) Latest scientific information.--Based on the
analysis described in subsection (a)(1), each report
under subsection (a) shall identify actions that could
be taken to--
(A) improve the characterization of changes
in the earth-climate system and impacts of
global climate change;
(B) better inform decision making and actions
related to global climate change;
(C) mitigate risks to natural and social
systems; and
(D) design policies to better account for
climate risks.
(2) Monitoring, reporting and verification.--Based on
the analysis described in subsection (a)(2), each
report under subsection (a) shall identify key gaps in
measurement, reporting, and verification capabilities
and make recommendations to improve the accuracy and
reliability of those capabilities.
(3) Status of greenhouse gas reduction efforts.--
Based on the analysis described in subsection (a)(3),
taking into account international actions, commitments,
and trends, and considering the range of plausible
emissions scenarios, each report under subsection (a)
shall identify--
(A) the quantity of additional reductions
required to meet the emissions reduction goals
in section 702;
(B) the quantity of additional reductions in
global greenhouse gas emissions needed to avoid
the concentration and temperature thresholds
identified in subsection (e); and
(C) possible strategies and approaches for
achieving additional reductions.
(g) Authorization of Appropriations.--There are authorized to
be appropriated to carry out this section such sums as may be
necessary.
SEC. 706. NATIONAL ACADEMY REVIEW.
(a) In General.--Not later than 1 year after the date of
enactment of this title, the Administrator shall offer to enter
into a contract with the National Academy of Sciences (in this
section referred to as the ``Academy'') under which the Academy
shall, not later than July 1, 2014, and every 4 years
thereafter, submit to Congress and the Administrator a report
that includes--
(1) a review of the most recent report and
recommendations issued under section 705; and
(2) an analysis of technologies to achieve reductions
in greenhouse gas emissions.
(b) Failure To Issue a Report.--In the event that the
Administrator has not issued all or part of the most recent
report required under section 705, the Academy shall conduct
its own review and analysis of the required information.
(c) Technological Information.--The analysis required under
subsection (a)(2) shall--
(1) review existing technological information and
reports, including the most recent reports by the
Department of Energy, the United States Global Change
Research Program, the Intergovernmental Panel on
Climate Change, and the International Energy Agency and
any other relevant information on technologies or
practices that reduce or limit greenhouse gas
emissions;
(2) include the participation of technical experts
from relevant private industry sectors;
(3) review the current and future projected
deployment of technologies and practices in the United
States that reduce or limit greenhouse gas emissions,
including--
(A) technologies for capture and
sequestration of greenhouse gases;
(B) technologies to improve energy
efficiency;
(C) low- or zero-greenhouse gas emitting
energy technologies;
(D) low- or zero-greenhouse gas emitting
fuels;
(E) biological sequestration practices and
technologies; and
(F) any other technologies the Academy deems
relevant; and
(4) review and compare the emissions reduction
potential, commercial viability, market penetration,
investment trends, and deployment of the technologies
described in paragraph (3), including--
(A) the need for additional research and
development, including publicly funded research
and development;
(B) the extent of commercial deployment,
including, where appropriate, a comparison to
the cost and level of deployment of
conventional fossil fuel-fired energy
technologies and devices; and
(C) an evaluation of any substantial
technological, legal, or market-based barriers
to commercial deployment.
(d) Recommendations.--
(1) Latest scientific information.--Based on the
review described in subsection (a)(1), the Academy
shall identify actions that could be taken to--
(A) improve the characterization of changes
in the earth-climate system and impacts of
global climate change;
(B) better inform decision making and actions
related to global climate change;
(C) mitigate risks to natural and social
systems;
(D) design policies to better account for
climate risks; and
(E) improve the accuracy and reliability of
capabilities to monitor, report, and verify
greenhouse gas emissions reduction efforts.
(2) Technological information.--Based on the analysis
described in subsection (a)(2), the Academy shall
identify--
(A) additional emissions reductions that may
be possible as a result of technologies
described in the analysis;
(B) barriers to the deployment of such
technologies; and
(C) actions that could be taken to speed
deployment of such technologies.
(3) Status of greenhouse gas reduction efforts.--
Based on the review described in subsection (a)(1), the
Academy shall identify--
(A) the quantity of additional reductions
required to meet the emissions reduction goals
described in section 702; and
(B) the quantity of additional reductions in
global greenhouse gas emissions needed to avoid
the concentration and temperature thresholds
described in section 705(c)(6)(A) or identified
pursuant to section 705(c)(6)(B).
(e) Authorization of Appropriations.--There are authorized to
be appropriated to carry out this section such sums as may be
necessary.
SEC. 707. PRESIDENTIAL RESPONSE AND RECOMMENDATIONS.
Not later than July 1, 2015, and every 4 years thereafter--
(1) the President shall direct relevant Federal
agencies to use existing statutory authority to take
appropriate actions identified in the reports submitted
under sections 705 and 706 and to address any
shortfalls identified in such reports; and
(2) in the event that the National Academy of
Sciences has concluded, in the most recent report
submitted under section 706, that the United States
will not achieve the necessary domestic greenhouse gas
emissions reductions, or that global actions will not
maintain safe global average surface temperature and
atmospheric greenhouse gas concentration thresholds,
the President shall submit to Congress a plan
identifying domestic and international actions that
will achieve necessary additional greenhouse gas
reductions, including any recommendations for
legislative action.
PART B--DESIGNATION AND REGISTRATION OF GREENHOUSE GASES
SEC. 711. DESIGNATION OF GREENHOUSE GASES.
(a) Greenhouse Gases.--For purposes of this title, the
following are greenhouse gases:
(1) Carbon dioxide.
(2) Methane.
(3) Nitrous oxide.
(4) Sulfur hexafluoride.
(5) Hydrofluorocarbons from a chemical manufacturing
process at an industrial stationary source.
(6) Any perfluorocarbon.
(7) Nitrogen trifluoride.
(8) Any other anthropogenic gas designated as a
greenhouse gas by the Administrator under this section.
(b) Determination on Administrator's Initiative.--The
Administrator shall, by rule--
(1) determine whether 1 metric ton of another
anthropogenic gas makes the same or greater
contribution to global warming over 100 years as 1
metric ton of carbon dioxide;
(2) determine the carbon dioxide equivalent value for
each gas with respect to which the Administrator makes
an affirmative determination under paragraph (1);
(3) for each gas with respect to which the
Administrator makes an affirmative determination under
paragraph (1) and that is used as a substitute for a
class I or class II substance under title VI, determine
the extent to which to regulate that gas under section
619 and specify appropriate compliance obligations
under section 619;
(4) designate as a greenhouse gas for purposes of
this title each gas for which the Administrator makes
an affirmative determination under paragraph (1), to
the extent that it is not regulated under section 619;
and
(5) specify the appropriate compliance obligations
under this title for each gas designated as a
greenhouse gas under paragraph (4).
(c) Petitions to Designate a Greenhouse Gas.--
(1) In general.--Any person may petition the
Administrator to designate as a greenhouse gas any
anthropogenic gas 1 metric ton of which makes the same
or greater contribution to global warming over 100
years as 1 metric ton of carbon dioxide.
(2) Contents of petition.--The petitioner shall
provide sufficient data, as specified by rule by the
Administrator, to demonstrate that the gas is likely to
be a greenhouse gas and is likely to be produced,
imported, used, or emitted in the United States. To the
extent practicable, the petitioner shall also identify
producers, importers, distributors, users, and emitters
of the gas in the United States.
(3) Review and action by the administrator.--Not
later than 90 days after receipt of a petition under
paragraph (2), the Administrator shall determine
whether the petition is complete and notify the
petitioner and the public of the decision.
(4) Additional information.--The Administrator may
require producers, importers, distributors, users, or
emitters of the gas to provide information on the
contribution of the gas to global warming over 100
years compared to carbon dioxide.
(5) Treatment of petition.--For any substance used as
a substitute for a class I or class II substance under
title VI, the Administrator may elect to treat a
petition under this subsection as a petition to list
the substance as a class II, group II substance under
section 619, and may require the petition to be amended
to address listing criteria promulgated under that
section.
(6) Determination.--Not later than 2 years after
receipt of a complete petition, the Administrator
shall, after notice and an opportunity for comment--
(A) issue and publish in the Federal
Register--
(i) a determination that 1 metric ton
of the gas does not make a contribution
to global warming over 100 years that
is equal to or greater than that made
by 1 metric ton of carbon dioxide; and
(ii) an explanation of the decision;
or
(B) determine that 1 metric ton of the gas
makes a contribution to global warming over 100
years that is equal to or greater than that
made by 1 metric ton of carbon dioxide, and
take the actions described in subsection (b)
with respect to such gas.
(7) Grounds for denial.--The Administrator may not
deny a petition under this subsection solely on the
basis of inadequate Environmental Protection Agency
resources or time for review.
(d) Science Advisory Board Consultation.--
(1) Consultation.--The Administrator shall--
(A) give notice to the Science Advisory Board
prior to making a determination under
subsection (b)(1), (c)(6), or (e)(2)(B);
(B) consider the written recommendations of
the Science Advisory Board under paragraph (2)
regarding the determination; and
(C) consult with the Science Advisory Board
regarding such determination, including
consultation subsequent to receipt of such
written recommendations.
(2) Formulation of recommendations.--Upon receipt of
notice under paragraph (1)(A) regarding a pending
determination under subsection (b)(1), (c)(6), or
(e)(2)(B), the Science Advisory Board shall--
(A) formulate recommendations regarding such
determination, subject to a peer review
process; and
(B) submit such recommendations in writing to
the Administrator.
(e) Manufacturing and Emission Notices.--
(1) Notice requirement.--
(A) In general.--Effective 24 months after
the date of enactment of this title, no person
may manufacture or introduce into interstate
commerce a fluorinated gas, or emit a
significant quantity, as determined by the
Administrator, of any fluorinated gas that is
generated as a byproduct during the production
or use of another fluorinated gas, unless--
(i) the gas is designated as a
greenhouse gas under this section or is
an ozone-depleting substance listed as
a class I or class II substance under
title VI;
(ii) the Administrator has determined
that 1 metric ton of such gas does not
make a contribution to global warming
that is equal to or greater than that
made by 1 metric ton of carbon dioxide;
or
(iii) the person manufacturing or
importing the gas for distribution into
interstate commerce, or emitting the
gas, has submitted to the
Administrator, at least 90 days before
the start of such manufacture,
introduction into commerce, or
emission, a notice of such person's
manufacture, introduction into
commerce, or emission of such gas, and
the Administrator has not determined
that notice or a substantially similar
notice is incomplete.
(B) Alternative compliance.--For a gas that
is a substitute for a class I or class II
substance under title VI and either has been
listed as acceptable for use under section 612
or is currently subject to evaluation under
section 612, the Administrator may accept the
notice and information provided pursuant to
that section as fulfilling the obligation under
clause (iii) of subparagraph (A).
(2) Review and action by the administrator.--
(A) Completeness.--Not later than 90 days
after receipt of notice under paragraph
(1)(A)(iii) or (B), the Administrator shall
determine whether the notice is complete.
(B) Determination.-- If the Administrator
determines that the notice is complete, the
Administrator shall, after notice and an
opportunity for comment, not later than 12
months after receipt of the notice--
(i) issue and publish in the Federal
Register a determination that 1 metric
ton of the gas does not make a
contribution to global warming over 100
years that is equal to or greater than
that made by 1 metric ton of carbon
dioxide and an explanation of the
decision; or
(ii) determine that 1 metric ton of
the gas makes a contribution to global
warming over 100 years that is equal to
or greater than that made by 1 metric
ton of carbon dioxide, and take the
actions described in subsection (b)
with respect to such gas.
(f) Regulations.--Not later than one year after the date of
enactment of this title, the Administrator shall promulgate
regulations to carry out this section. Such regulations shall
include--
(1) requirements for the contents of a petition
submitted under subsection (c);
(2) requirements for the contents of a notice
required under subsection (e); and
(3) methods and standards for evaluating the carbon
dioxide equivalent value of a gas.
(g) Gases Regulated Under Title VI.--The Administrator shall
not designate a gas as a greenhouse gas under this section to
the extent that the gas is regulated under title VI.
(h) Savings Clause.--Nothing in this section shall be
interpreted to relieve any person from complying with the
requirements of section 612.
SEC. 712. CARBON DIOXIDE EQUIVALENT VALUE OF GREENHOUSE GASES.
(a) Measure of Quantity of Greenhouse Gases.--Any provision
of this title or title VIII that refers to a quantity or
percentage of a quantity of greenhouse gases shall mean the
quantity or percentage of the greenhouse gases expressed in
carbon dioxide equivalents.
(b) Initial Value.--Except as provided by the Administrator
under this section or section 711--
(1) the carbon dioxide equivalent value of greenhouse
gases for purposes of this Act shall be as follows:
CARBON DIOXIDE EQUIVALENT OF 1 TON OF LISTED GREENHOUSE GASES
----------------------------------------------------------------------------------------------------------------
Greenhouse gas (1 metric ton) Carbon dioxide equivalent (metric tons)
----------------------------------------------------------------------------------------------------------------
Carbon dioxide 1
----------------------------------------------------------------------------------------------------------------
Methane 25
----------------------------------------------------------------------------------------------------------------
Nitrous oxide 298
----------------------------------------------------------------------------------------------------------------
HFC-23 14,800
----------------------------------------------------------------------------------------------------------------
HFC-125 3,500
----------------------------------------------------------------------------------------------------------------
HFC-134a 1,430
----------------------------------------------------------------------------------------------------------------
HFC-143a 4,470
----------------------------------------------------------------------------------------------------------------
HFC-152a 124
----------------------------------------------------------------------------------------------------------------
HFC-227ea 3,220
----------------------------------------------------------------------------------------------------------------
HFC-236fa 9,810
----------------------------------------------------------------------------------------------------------------
HFC-4310mee 1,640
----------------------------------------------------------------------------------------------------------------
CF4 7,390
----------------------------------------------------------------------------------------------------------------
C2F6 12,200
----------------------------------------------------------------------------------------------------------------
C4F10 8,860
----------------------------------------------------------------------------------------------------------------
C6F14 9,300
----------------------------------------------------------------------------------------------------------------
SF6 22,800
----------------------------------------------------------------------------------------------------------------
NF3 17,200
----------------------------------------------------------------------------------------------------------------
; and
(2) the carbon dioxide equivalent value for purposes
of this Act for any greenhouse gas not listed in the
table under paragraph (1) shall be the 100-year Global
Warming Potentials provided in the Intergovernmental
Panel on Climate Change Fourth Assessment Report.
(c) Periodic Review.--
(1) Not later than February 1, 2017, and (except as
provided in paragraph (3)) not less than every 5 years
thereafter, the Administrator shall--
(A) review and, if appropriate, revise the
carbon dioxide equivalent values established
under this section or section 711(b)(2), based
on a determination of the number of metric tons
of carbon dioxide that makes the same
contribution to global warming over 100 years
as 1 metric ton of each greenhouse gas; and
(B) publish in the Federal Register the
results of that review and any revisions.
(2) A revised determination published in the Federal
Register under paragraph (1)(B) shall take effect for
greenhouse gas emissions starting on January 1 of the
first calendar year starting at least 9 months after
the date on which the revised determination was
published.
(3) The Administrator may decrease the frequency of
review and revision under paragraph (1) if the
Administrator determines that such decrease is
appropriate in order to synchronize such review and
revision with any similar review process carried out
pursuant to the United Nations Framework Convention on
Climate Change, done at New York on May 9, 1992, or to
an agreement negotiated under that convention, except
that in no event shall the Administrator carry out such
review and revision any less frequently than every 10
years.
(d) Methodology.--In setting carbon dioxide equivalent
values, for purposes of this section or section 711, the
Administrator shall take into account publications by the
Intergovernmental Panel on Climate Change or a successor
organization under the auspices of the United Nations
Environmental Programme and the World Meteorological
Organization.
SEC. 713. GREENHOUSE GAS REGISTRY.
(a) Definitions.--For purposes of this section:
(1) Climate registry.--The term ``Climate Registry''
means the greenhouse gas emissions registry jointly
established and managed by more than 40 States and
Indian tribes in 2007 to collect high-quality
greenhouse gas emission data from facilities,
corporations, and other organizations to support
various greenhouse gas emission reporting and reduction
policies for the member States and Indian tribes.
(2) Reporting entity.--The term ``reporting entity''
means--
(A) a covered entity;
(B) an entity that--
(i) would be a covered entity if it
had emitted, produced, imported,
manufactured, or delivered in 2008 or
any subsequent year more than the
applicable threshold level in the
definition of covered entity in
paragraph (13) of section 700; and
(ii) has emitted, produced, imported,
manufactured, or delivered in 2008 or
any subsequent year more than the
applicable threshold level in the
definition of covered entity in
paragraph (13) of section 700, provided
that the figure of 25,000 tons of
carbon dioxide equivalent is read
instead as 10,000 tons of carbon
dioxide equivalent and the figure of
460,000,000 cubic feet is read instead
as 184,000,000 cubic feet;
(C) any other entity that emits a greenhouse
gas, or produces, imports, manufactures, or
delivers material whose use results or may
result in greenhouse gas emissions if the
Administrator determines that reporting under
this section by such entity will help achieve
the purposes of this title or title VIII;
(D) any vehicle fleet with emissions of more
than 25,000 tons of carbon dioxide equivalent
on an annual basis, if the Administrator
determines that the inclusion of such fleet
will help achieve the purposes of this title or
title VIII; or
(E) any entity that delivers electricity to
an energy-intensive facility in an industrial
sector that meets the energy or greenhouse gas
intensity criteria in section 764(b)(2)(A)(i).
(b) Regulations.--
(1) In general.--Not later than 6 months after the
date of enactment of this title, the Administrator
shall issue regulations establishing a Federal
greenhouse gas registry. Such regulations shall--
(A) require reporting entities to submit to
the Administrator data on--
(i) greenhouse gas emissions in the
United States;
(ii) the production and manufacture
in the United States, importation into
the United States, and, at the
discretion of the Administrator,
exportation from the United States, of
fuels and industrial gases the uses of
which result or may result in
greenhouse gas emissions;
(iii) deliveries in the United States
of natural gas, and any other gas
meeting the specifications for
commingling with natural gas for
purposes of delivery, the combustion of
which result or may result in
greenhouse gas emissions; and
(iv) the capture and sequestration of
greenhouse gases;
(B) require covered entities and, where
appropriate, other reporting entities to submit
to the Administrator data sufficient to ensure
compliance with or implementation of the
requirements of this title;
(C) require reporting of electricity
delivered to industrial sources in energy-
intensive industries;
(D) ensure the completeness, consistency,
transparency, accuracy, precision, and
reliability of such data;
(E) take into account the best practices from
the most recent Federal, State, tribal, and
international protocols for the measurement,
accounting, reporting, and verification of
greenhouse gas emissions, including protocols
from the Climate Registry and other mandatory
State or multistate authorized programs;
(F) take into account the latest scientific
research;
(G) require that, for covered entities with
respect to greenhouse gases to which section
722 applies, and, to the extent determined to
be appropriate by the Administrator, for
covered entities with respect to other
greenhouse gases and for other reporting
entities, submitted data are based on--
(i) continuous monitoring systems for
fuel flow or emissions, such as
continuous emission monitoring systems;
(ii) alternative systems that are
demonstrated as providing data with the
same precision, reliability,
accessibility, and timeliness, or, to
the extent the Administrator determines
is appropriate for reporting small
amounts of emissions, the same
precision, reliability, and
accessibility and similar timeliness,
as data provided by continuous
monitoring systems for fuel flow or
emissions; or
(iii) alternative methodologies that
are demonstrated to provide data with
precision, reliability, accessibility,
and timeliness, or, to the extent the
Administrator determines is appropriate
for reporting small amounts of
emissions, precision, reliability, and
accessibility, as similar as is
technically feasible to that of data
generally provided by continuous
monitoring systems for fuel flow or
emissions, if the Administrator
determines that, with respect to a
reporting entity, there is no
continuous monitoring system or
alternative system described in clause
(i) or (ii) that is technically
feasible;
(H) require that the Administrator, in
determining the extent to which the requirement
to use systems or methodologies in accordance
with subparagraph (G) is appropriate for
reporting entities other than covered entities
or for greenhouse gases to which section 722
does not apply, consider the cost of using such
systems and methodologies, and of using other
systems and methodologies that are available
and suitable, for quantifying the emissions
involved in light of the purposes of this
title, including the goal of collecting
consistent entity-wide data;
(I) include methods for minimizing double
reporting and avoiding irreconcilable double
reporting of greenhouse gas emissions;
(J) establish measurement protocols for
carbon capture and sequestration systems,
taking into consideration the regulations
promulgated under section 813;
(K) require that reporting entities provide
the data required under this paragraph in
reports submitted electronically to the
Administrator, in such form and containing such
information as may be required by the
Administrator;
(L) include requirements for keeping records
supporting or related to, and protocols for
auditing, submitted data;
(M) establish consistent policies for
calculating carbon content and greenhouse gas
emissions for each type of fossil fuel with
respect to which reporting is required;
(N) subsequent to implementation of policies
developed under subparagraph (M), provide for
immediate dissemination, to States, Indian
tribes, and on the Internet, of all data
reported under this section as soon as
practicable after electronic audit by the
Administrator and any resulting correction of
data, except that data shall not be
disseminated under this subparagraph if--
(i) its nondissemination is vital to
the national security of the United
States, as determined by the President;
or
(ii) it is confidential business
information that cannot be derived from
information that is otherwise publicly
available and that would cause
significant calculable competitive harm
if published, except that--
(I) data relating to
greenhouse gas emissions,
including any upstream or
verification data from
reporting entities, shall not
be considered to be
confidential business
information; and
(II) data that is
confidential business
information shall be provided
to a State or Indian tribe
within whose jurisdiction the
reporting entity is located, if
the Administrator determines
that such State or Indian tribe
has in effect protections for
confidential business
information that are equivalent
to protections applicable to
the Federal Government;
(O) prescribe methods by which the
Administrator shall, in cases in which
satisfactory data are not submitted to the
Administrator for any period of time, estimate
emission, production, importation, manufacture,
or delivery levels--
(i) for covered entities with respect
to greenhouse gas emissions,
production, importation, manufacture,
or delivery regulated under this title
to ensure that emissions, production,
importation, manufacture, or deliveries
are not underreported, and to create a
strong incentive for meeting data
monitoring and reporting requirements--
(I) with a conservative
estimate of the highest
emission, production,
importation, manufacture, or
delivery levels that may have
occurred during the period for
which data are missing; or
(II) to the extent the
Administrator considers
appropriate, with an estimate
of such levels assuming the
unit is emitting, producing,
importing, manufacturing, or
delivering at a maximum
potential level during the
period, in order to ensure that
such levels are not
underreported and to create a
strong incentive for meeting
data monitoring and reporting
requirements; and
(ii) for covered entities with
respect to greenhouse gas emissions to
which section 722 does not apply and
for other reporting entities, with a
reasonable estimate of the emission,
production, importation, manufacture,
or delivery levels that may have
occurred during the period for which
data are missing;
(P) require the designation of a designated
representative for each reporting entity;
(Q) require an appropriate certification, by
the designated representative for the reporting
entity, of accurate and complete accounting of
greenhouse gas emissions, as determined by the
Administrator; and
(R) include requirements for other data
necessary for accurate and complete accounting
of greenhouse gas emissions, as determined by
the Administrator, including data for quality
assurance of monitoring systems, monitors and
other measurement devices, and other data
needed to verify reported emissions,
production, importation, manufacture, or
delivery.
(2) Timing.--
(A) Calendar years 2007 through 2010.--For a
base period of calendar years 2007 through
2010, each reporting entity shall submit annual
data required under this section to the
Administrator not later than March 31, 2011.
The Administrator may waive or modify reporting
requirements for calendar years 2007 through
2010 for categories of reporting entities to
the extent that the Administrator determines
that the reporting entities did not keep data
or records necessary to meet reporting
requirements. The Administrator may, in
addition to or in lieu of such requirements,
collect information on energy consumption and
production.
(B) Subsequent calendar years.--For calendar
year 2011 and each subsequent calendar year,
each reporting entity shall submit quarterly
data required under this section to the
Administrator not later than 60 days after the
end of the applicable quarter, except when the
data is already being reported to the
Administrator on an earlier timeframe for
another program.
(3) Waiver of reporting requirements.--The
Administrator may waive reporting requirements under
this section for specific entities to the extent that
the Administrator determines that sufficient and
equally or more reliable verified and timely data are
available to the Administrator and the public on the
Internet under other mandatory statutory requirements.
(4) Alternative threshold.--The Administrator may, by
rule, establish applicability thresholds for reporting
under this section using alternative metrics and
levels, provided that such metrics and levels are
easier to administer and cover the same size and type
of sources as the threshold defined in this section.
(c) Interrelationship With Other Systems.--In developing the
regulations issued under subsection (b), the Administrator
shall take into account the work done by the Climate Registry
and other mandatory State or multistate programs. Such
regulations shall include an explanation of any major
differences in approach between the system established under
the regulations and such registries and programs.
PART C--PROGRAM RULES
SEC. 721. EMISSION ALLOWANCES.
(a) In General.--The Administrator shall establish a separate
quantity of emission allowances for each calendar year starting
in 2012, in the amounts prescribed under subsection (e).
(b) Identification Numbers.--The Administrator shall assign
to each emission allowance established under subsection (a) a
unique identification number that includes the vintage year for
that emission allowance.
(c) Legal Status of Emission Allowances.--
(1) In general.--An allowance established by the
Administrator under this title does not constitute a
property right.
(2) Termination or limitation.--Nothing in this Act
or any other provision of law shall be construed to
limit or alter the authority of the United States,
including the Administrator acting pursuant to
statutory authority, to terminate or limit allowances
or offset credits.
(3) Other provisions unaffected.--Except as otherwise
specified in this Act, nothing in this Act relating to
allowances or offset credits established or issued
under this title shall affect the application of any
other provision of law to a covered entity, or the
responsibility for a covered entity to comply with any
such provision of law.
(d) Savings Provision.--Nothing in this part shall be
construed as requiring a change of any kind in any State law
regulating electric utility rates and charges, or as affecting
any State law regarding such State regulation, or as limiting
State regulation (including any prudency review) under such a
State law. Nothing in this part shall be construed as modifying
the Federal Power Act or as affecting the authority of the
Federal Energy Regulatory Commission under that Act. Nothing in
this part shall be construed to interfere with or impair any
program for competitive bidding for power supply in a State in
which such program is established.
(e) Allowances for Each Calendar Year.--
(1) In general.--Except as provided in paragraph (2),
the number of emission allowances established by the
Administrator under subsection (a) for each calendar
year shall be as provided in the following table:
----------------------------------------------------------------------------------------------------------------
Calendar year Emission allowances (in millions)
----------------------------------------------------------------------------------------------------------------
2012 4,627
2013 4,544
2014 5,099
2015 5,003
2016 5,482
2017 5,375
2018 5,269
2019 5,162
2020 5,056
2021 4,903
2022 4,751
2023 4,599
2024 4,446
2025 4,294
2026 4,142
2027 3,990
2028 3,837
2029 3,685
2030 3,533
2031 3,408
2032 3,283
2033 3,158
2034 3,033
2035 2,908
2036 2,784
2037 2,659
2038 2,534
2039 2,409
2040 2,284
2041 2,159
2042 2,034
2043 1,910
2044 1,785
2045 1,660
2046 1,535
2047 1,410
2048 1,285
2049 1,160
2050 and each year thereafter 1,035
----------------------------------------------------------------------------------------------------------------
(2) Revision.--
(A) In general.--The Administrator may
adjust, in accordance with subparagraph (B),
the number of emission allowances established
pursuant to paragraph (1) if, after notice and
an opportunity for public comment, the
Administrator determines that--
(i) United States greenhouse gas
emissions in 2005 were other than 7,206
million metric tons carbon dioxide
equivalent;
(ii) if the requirements of this
title for 2012 had been in effect in
2005, section 722 would have required
emission allowances to be held for
other than 66.2 percent of United
States greenhouse gas emissions in
2005;
(iii) if the requirements of this
title for 2014 had been in effect in
2005, section 722 would have required
emission allowances to be held for
other than 75.7 percent of United
States greenhouse gas emissions in
2005; or
(iv) if the requirements of this
title for 2016 had been in effect in
2005, section 722 would have required
emission allowances to be held for
other than 84.5 percent United States
greenhouse gas emissions in 2005.
(B) Adjustment formula.--
(i) In general.--If the Administrator
adjusts under this paragraph the number
of emission allowances established
pursuant to paragraph (1), the number
of emission allowances the
Administrator establishes for any given
calendar year shall equal the product
of--
(I) United States greenhouse
gas emissions in 2005,
expressed in tons of carbon
dioxide equivalent;
(II) the percent of United
States greenhouse gas emissions
in 2005, expressed in tons of
carbon dioxide equivalent, that
would have been subject to
section 722 if the requirements
of this title for the given
calendar year had been in
effect in 2005; and
(III) the percentage set
forth for that calendar year in
section 703(a), or determined
under clause (ii) of this
subparagraph.
(ii) Targets.--In applying the
portion of the formula in clause
(i)(III) of this subparagraph, for
calendar years for which a percentage
is not listed in section 703(a), the
Administrator shall use a uniform
annual decline in the amount of
emissions between the years that are
specified.
(iii) Carbon dioxide equivalent
value.--If the Administrator adjusts
under this paragraph the number of
emission allowances established
pursuant to paragraph (1), the
Administrator shall use the carbon
dioxide equivalent values established
pursuant to section 712.
(iv) Limitation on adjustment
timing.--Once a calendar year has
started, the Administrator may not
adjust the number of emission
allowances to be established for that
calendar year.
(C) Limitation on adjustment authority.--The
Administrator may adjust under this paragraph
the number of emission allowances to be
established pursuant to paragraph (1) only
once.
(f) Compensatory Allowance.--
(1) In general.--The regulations promulgated under
subsection (h) shall provide for the establishment and
distribution of compensatory allowances for--
(A) the destruction, in 2012 or later, of
fluorinated gases that are greenhouse gases
if--
(i) allowances or offset credits were
retired for their production or
importation; and
(ii) such gases are not required to
be destroyed under any other provision
of law;
(B) the nonemissive use, in 2012 or later, of
petroleum-based or coal-based liquid or gaseous
fuel, petroleum coke, natural gas liquid, or
natural gas as a feedstock, if allowances or
offset credits were retired for the greenhouse
gases that would have been emitted from their
combustion; and
(C) the conversionary use, in 2012 or later,
of fluorinated gases in a manufacturing
process, including semiconductor research or
manufacturing, if allowances or offset credits
were retired for the production or importation
of such gas.
(2) Establishment and distribution.--
(A) In general.--Not later than 90 days after
the end of each calendar year, the
Administrator shall establish and distribute to
the entity taking the actions described in
subparagraph (A), (B), or (C) of paragraph (1)
a quantity of compensatory allowances
equivalent to the number of tons of carbon
dioxide equivalent of avoided emissions
achieved through such actions. In establishing
the quantity of compensatory allowances, the
Administrator shall take into account the
carbon dioxide equivalent value of any
greenhouse gas resulting from such action.
(B) Source of allowances.--Compensatory
allowances established under this subsection
shall not be emission allowances established
under subsection (a).
(C) Identification numbers.--The
Administrator shall assign to each compensatory
allowance established under subparagraph (A) a
unique identification number.
(3) Definitions.--For purposes of this subsection--
(A) the term ``destruction'' means the
conversion of a greenhouse gas by thermal,
chemical, or other means to another gas or set
of gases with little or no carbon dioxide
equivalent value;
(B) the term ``nonemissive use'' means the
use of fossil fuel as a feedstock in an
industrial or manufacturing process to the
extent that greenhouse gases are not emitted
from such process, and to the extent that the
products of such process are not intended for
use as, or to be contained in, a fuel; and
(C) the term ``conversionary use'' means the
conversion during research or manufacturing of
a fluorinated gas into another greenhouse gas
or set of gases with a lower carbon dioxide
equivalent value.
(4) Feedstock emissions study.--
(A) The Administrator may conduct a study to
determine the extent to which petroleum-based
or coal-based liquid or gaseous fuel, petroleum
coke, natural gas liquid, or natural gas are
used as feedstocks in manufacturing processes
to produce products and the greenhouse gas
emissions resulting from such uses.
(B) If as a result of such a study, the
Administrator determines that the use of such
products by noncovered sources results in
substantial emissions of greenhouse gases or
their precursors and that such emissions have
not been adequately addressed under other
requirements of this Act, the Administrator
may, after notice and comment rulemaking,
promulgate a regulation reducing compensatory
allowances commensurately if doing so will not
result in leakage.
(g) Fluorinated Gases Assessment.--No later than March 31,
2014, the Administrator shall conduct an assessment of the
regulation of non-HFC fluorinated gases under this title to
determine whether the most appropriate point of regulation is
at the gas manufacturer or importer level, or at the source of
emissions downstream. If the Administrator determines, based on
consideration of environmental effectiveness, cost
effectiveness, administrative feasibility, extent of coverage
of emissions, and competitiveness considerations, that
emissions of non-HFC fluorinated gases can best be regulated by
designating downstream emission sources as covered entities
with compliance obligations under section 722, the
Administrator shall, after notice and comment rulemaking,
change the definition of covered entity with respect to
fluorinated gases (other than HFCs) accordingly and establish
such requirements as are necessary to ensure compliance for
such entities with the requirements of this title.
(h) Regulations.--Not later than 24 months after the date of
enactment of this title, the Administrator shall promulgate
regulations to carry out the provisions of this title.
SEC. 722. PROHIBITION OF EXCESS EMISSIONS.
(a) Prohibition.--Except as provided in subsection (c),
effective January 1, 2012, each covered entity is prohibited
from emitting greenhouse gases, and having attributable
greenhouse gas emissions, in combination, in excess of its
allowable emissions level. A covered entity's allowable
emissions level for each calendar year is the number of
emission allowances (or credits or other allowances as provided
in subsection (d)) it holds as of 12:01 a.m. on April 1 (or a
later date established by the Administrator under subsection
(j)) of the following calendar year.
(b) Methods of Demonstrating Compliance.--Except as otherwise
provided in this section, the owner or operator of a covered
entity shall not be considered to be in compliance with the
prohibition in subsection (a) unless, as of 12:01 a.m. on April
1 (or a later date established by the Administrator under
subsection (j)) of each calendar year starting in 2013, the
owner or operator holds a quantity of emission allowances (or
credits or other allowances as provided in subsection (d)) at
least as great as the quantity calculated as follows:
(1) Electricity sources.--For a covered entity
described in section 700(13)(A), 1 emission allowance
for each ton of carbon dioxide equivalent of greenhouse
gas that such covered entity emitted in the previous
calendar year, excluding emissions resulting from the
combustion of--
(A) petroleum-based or coal-based liquid
fuel;
(B) natural gas liquid;
(C) renewable biomass or gas derived from
renewable biomass; or
(D) petroleum coke or gas derived from
petroleum coke.
(2) Fuel producers and importers.--For a covered
entity described in section 700(13)(B), 1 emission
allowance for each ton of carbon dioxide equivalent of
greenhouse gas that would be emitted from the
combustion of any petroleum-based or coal-based liquid
fuel, petroleum coke, or natural gas liquid, produced
or imported by such covered entity during the previous
calendar year for sale or distribution in interstate
commerce, assuming no capture and sequestration of any
greenhouse gas emissions.
(3) Industrial gas producers and importers.--For a
covered entity described in section 700(13)(C), 1
emission allowance for each ton of carbon dioxide
equivalent of fossil fuel-based carbon dioxide, nitrous
oxide, or any other fluorinated gas that is a
greenhouse gas (except for nitrogen trifluoride), or
any combination thereof, produced or imported by such
covered entity during the previous calendar year for
sale or distribution in interstate commerce or released
as fugitive emissions in the production of fluorinated
gas.
(4) Nitrogen trifluoride sources.--For a covered
entity described in section 700(13)(D), 1 emission
allowance for each ton of carbon dioxide equivalent of
nitrogen trifluoride that such covered entity emitted
in the previous calendar year.
(5) Geological sequestration sites.--For a covered
entity described in section 700(13)(E), 1 emission
allowance for each ton of carbon dioxide equivalent of
greenhouse gas that such covered entity emitted in the
previous calendar year.
(6) Industrial stationary sources.--For a covered
entity described in section 700(13)(F), (G), or (H), 1
emission allowance for each ton of carbon dioxide
equivalent of greenhouse gas that such covered entity
emitted in the previous calendar year, excluding
emissions resulting from--
(A) the combustion of petroleum-based or
coal-based liquid fuel;
(B) the combustion of natural gas liquid;
(C) the combustion of renewable biomass or
gas derived from renewable biomass;
(D) the combustion of petroleum coke or gas
derived from petroleum coke; or
(E) the use of any fluorinated gas that is a
greenhouse gas purchased for use at that
covered entity, except for nitrogen
trifluoride.
(7) Industrial fossil fuel-fired combustion
devices.--For a covered entity described in section
700(13)(I), 1 emission allowance for each ton of carbon
dioxide equivalent of greenhouse gas that the devices
emitted in the previous calendar year, excluding
emissions resulting from the combustion of--
(A) petroleum-based or coal-based liquid
fuel;
(B) natural gas liquid;
(C) renewable biomass or gas derived from
renewable biomass; or
(D) petroleum coke or gas derived from
petroleum coke.
(8) Natural gas local distribution companies.--For a
covered entity described in section 700(13)(J), 1
emission allowance for each ton of carbon dioxide
equivalent of greenhouse gas that would be emitted from
the combustion of the natural gas, and any other gas
meeting the specifications for commingling with natural
gas for purposes of delivery, that such entity
delivered during the previous calendar year to
customers that are not covered entities, assuming no
capture and sequestration of that greenhouse gas.
(9) Algae-based fuels.--Where carbon dioxide (or
another greenhouse gas) is used as an input in the
production of algae-based fuels, the Administrator
shall ensure that allowances are required to be held
either for the carbon dioxide used to grow the algae or
for the carbon dioxide emitted from combustion of the
fuel produced from such algae, but not for both.
(10) Fugitive emissions.--The greenhouse gas
emissions to which paragraphs (1), (4), (6), and (7)
apply shall not include fugitive emissions of
greenhouse gas, except to the extent the Administrator
determines that data on the carbon dioxide equivalent
value of greenhouse gas in the fugitive emissions can
be provided with sufficient precision, reliability,
accessibility, and timeliness to ensure the integrity
of emission allowances, the allowance tracking system,
and the cap on emissions.
(11) Export exemption.--This section shall not apply
to any petroleum-based or coal-based liquid fuel,
petroleum coke, natural gas liquid, fossil fuel-based
carbon dioxide, nitrous oxide, or fluorinated gas that
is exported for sale or use.
(12) Natural gas liquids.--Notwithstanding subsection
(a), if the owner or operator of a covered entity
described in section 700(13)(B) that produces natural
gas liquids does not take ownership of the liquids, and
is not responsible for the distribution or use of the
liquids in commerce, the owner of the liquids shall be
responsible for compliance with this section, section
723, and other relevant sections of this title with
respect to such liquids. In the regulations promulgated
under section 721, the Administrator shall include such
provisions with respect to such liquids as the
Administrator determines are appropriate to determine
and ensure compliance, and to penalize noncompliance.
In such a case, the owner of the covered entity shall
provide to the Administrator, in a manner to be
determined by the Administrator, information regarding
the quantity and ownership of liquids produced at the
covered entity.
(13) Application of multiple paragraphs.--For a
covered entity to which more than 1 of paragraphs (1)
through (8) apply, all applicable paragraphs shall
apply, except that not more than 1 emission allowance
shall be required for the same emission.
(c) Phase-in of Prohibition.--
(1) Industrial stationary sources.--The prohibition
under subsection (a) shall first apply to a covered
entity described in section 700(13)(D), (F), (G), (H),
or (I), with respect to emissions occurring during
calendar year 2014.
(2) Natural gas local distribution companies.--The
prohibition under subsection (a) shall first apply to a
covered entity described in section 700(13)(J) with
respect to deliveries occurring during calendar year
2016.
(d) Additional Methods.--In addition to using the method of
compliance described in subsection (b), a covered entity may do
the following:
(1) Offset credits.--
(A) In general.--Covered entities
collectively may, in accordance with this
paragraph, use offset credits to demonstrate
compliance for up to a maximum of 2 billion
tons of greenhouse gas emissions annually. The
ability to demonstrate compliance with offset
credits shall be divided pro rata among covered
entities by allowing each covered entity to
satisfy a percentage of the number of
allowances required to be held under subsection
(b) to demonstrate compliance by holding 1
domestic offset credit or 1.25 international
offset credits in lieu of an emission
allowance, except as provided in subparagraph
(D).
(B) Applicable percentage.--The percentage
referred to in subparagraph (A) for a given
calendar year shall be determined by dividing 2
billion by the sum of 2 billion plus the number
of emission allowances established under
section 721(a) for the previous year, and
multiplying that number by 100. Not more than
one half of the applicable percentage under
this paragraph may be used by holding domestic
offset credits, and not more than one half of
the applicable percentage under this paragraph
may be used by holding international offset
credits, except as provided in subparagraph
(C).
(C) Modified percentages.--If the
Administrator determines that domestic offset
credits available for use in demonstrating
compliance in any calendar year at domestic
offset prices generally equal to or less than
allowance prices, are likely to offset less
than 0.9 billion tons of greenhouse gas
emissions (measured in tons of carbon dioxide
equivalents), the Administrator shall increase
the percent of emissions that can be offset
through the use of international offset credits
(and decrease the percent of emissions that can
be allowed through the use of domestic offset
credits by the same amount) to reflect the
amount that 1.0 billion exceeds the number of
domestic offset credits the Administrator
determines is available for that year, up to a
maximum of 0.5 billion tons of greenhouse gas
emissions.
(D) International offset credits.--
Notwithstanding subparagraph (A), to
demonstrate compliance prior to calendar year
2018, a covered entity may use 1 international
offset credit in lieu of an emission allowance
up to the amount permitted under this
paragraph.
(E) President's recommendation.--The
President may make a recommendation to Congress
as to whether the number 2 billion specified in
subparagraphs (A) and (B) should be increased
or decreased.
(2) International emission allowances.--To
demonstrate compliance, a covered entity may hold an
international emission allowance in lieu of an emission
allowance, except as modified under section 728(d).
(3) Compensatory allowances.--To demonstrate
compliance, a covered entity may hold a compensatory
allowance obtained under section 721(f) in lieu of an
emission allowance.
(e) Retirement of Allowances and Credits.--As soon as
practicable after a deadline established for covered entities
to demonstrate compliance with this title, the Administrator
shall retire the quantity of allowances or credits required to
be held under this title.
(f) Alternative Metrics.--For categories of covered entities
described in subparagraph (B), (C), (D), (G), (H), or (I) of
section 700(13), the Administrator may, by rule, establish an
applicability threshold for inclusion under those subparagraphs
using an alternative metric and level, provided that such
metric and level are easier to administer and cover the same
size and type of sources as the threshold defined in such
subparagraphs.
(g) Threshold Review.--For each category of covered entities
described in subparagraph (B), (C), (D), (G), (H), or (I) of
section 700(13), the Administrator shall, in 2020 and once
every 8 years thereafter, review the carbon dioxide equivalent
emission thresholds that are used to define covered entities.
After consideration of--
(1) emissions from covered entities in each such
category, and from other entities of the same type that
emit less than the threshold amount for the category
(including emission sources that commence operation
after the date of enactment of this title that are not
covered entities); and
(2) whether greater greenhouse gas emission
reductions can be cost-effectively achieved by lowering
the applicable threshold,
the Administrator may by rule lower such threshold to not less
than 10,000 tons of carbon dioxide equivalent emissions. In
determining the cost effectiveness of potential reductions from
lowering the threshold for covered entities, the Administrator
shall consider alternative regulatory greenhouse gas programs,
including setting standards under other titles of this Act.
(h) Designated Representatives.--The regulations promulgated
under section 721(h) shall require that each covered entity,
and each entity holding allowances or credits or receiving
allowances or credits from the Administrator under this title,
select a designated representative.
(i) Education and Outreach.--
(1) In general.--The Administrator shall establish
and carry out a program of education and outreach to
assist covered entities, especially entities having
little experience with environmental regulatory
requirements similar or comparable to those under this
title, in preparing to meet the compliance obligations
of this title. Such program shall include education
with respect to using markets to effectively achieve
such compliance.
(2) Failure to receive information.--A failure to
receive information or assistance under this subsection
may not be used as a defense against an allegation of
any violation of this title.
(j) Adjustment of Deadline.--The Administrator may, by rule,
establish a deadline for demonstrating compliance, for a
calendar year, later than the date provided in subsection (a),
as necessary to ensure the availability of emissions data, but
in no event shall the deadline be later than June 1.
(k) Notice Requirement for Covered Entities Receiving Natural
Gas From Natural Gas Local Distribution Companies.--The owner
or operator of a covered entity that takes delivery of natural
gas from a natural gas local distribution company shall, not
later than September 1 of each calendar year, notify such
natural gas local distribution company in writing that such
entity will qualify as a covered entity under this title for
that calendar year.
(l) Compliance Obligation.--For purposes of this title, the
year of a compliance obligation is the year in which compliance
is determined, not the year in which the greenhouse gas
emissions occur or the covered entity has attributable
greenhouse gas emissions.
SEC. 723. PENALTY FOR NONCOMPLIANCE.
(a) Enforcement.--A violation of any prohibition of,
requirement of, or regulation promulgated pursuant to this
title shall be a violation of this Act. It shall be a violation
of this Act for a covered entity to emit greenhouse gases, and
have attributable greenhouse gas emissions, in combination, in
excess of its allowable emissions level as provided in section
722(a). Each ton of carbon dioxide equivalent for which a
covered entity fails to demonstrate compliance under section
722(b) shall be a separate violation.
(b) Excess Emissions Penalty.--
(1) In general.--The owner or operator of any covered
entity that fails for any year to comply, on the
deadline described in section 722(a) or (j), shall be
liable for payment to the Administrator of an excess
emissions penalty in the amount described in paragraph
(2).
(2) Amount.--The amount of an excess emissions
penalty required to be paid under paragraph (1) shall
be equal to the product obtained by multiplying--
(A) the tons of carbon dioxide equivalent of
greenhouse gas emissions or attributable
greenhouse gas emissions for which the owner or
operator of a covered entity failed to comply
under section 722(b) on the deadline; by
(B) twice the fair market value of emission
allowances established for emissions occurring
in the calendar year for which the emission
allowances were due.
(3) Timing.--An excess emissions penalty required
under this subsection shall be immediately due and
payable to the Administrator, without demand, in
accordance with regulations promulgated by the
Administrator, which shall be issued not later than 2
years after the date of enactment of this title.
(4) No effect on liability.--An excess emissions
penalty due and payable by the owners or operators of a
covered entity under this subsection shall not diminish
the liability of the owners or operators for any fine,
penalty, or assessment against the owners or operators
for the same violation under any other provision of
this Act or any other law.
(c) Excess Emissions Allowances.--The owner or operator of a
covered entity that fails for any year to comply on the
deadline described in section 722(a) or (j) shall be liable to
offset the covered entity's excess combination of greenhouse
gases emitted and attributable greenhouse gas emissions by an
equal quantity of emission allowances during the following
calendar year, or such longer period as the Administrator may
prescribe. During the year in which the covered entity failed
to comply, or any year thereafter, the Administrator may deduct
the emission allowances required under this subsection to
offset the covered entity's excess actual or attributable
emissions.
SEC. 724. TRADING.
(a) Permitted Transactions.--Except as otherwise provided in
this title, the lawful holder of an emission allowance,
compensatory allowance, or offset credit may, without
restriction, sell, exchange, transfer, hold for compliance in
accordance with section 722, or request that the Administrator
retire the emission allowance, compensatory allowance, or
offset credit.
(b) No Restriction on Transactions.--The privilege of
purchasing, holding, selling, exchanging, transferring, and
requesting retirement of emission allowances, compensatory
allowances, or offset credits shall not be restricted to the
owners and operators of covered entities, except as otherwise
provided in this title.
(c) Effectiveness of Allowance Transfers.--No transfer of an
allowance or offset credit shall be effective for purposes of
this title until a certification of the transfer, signed by the
designated representative of the transferor, is received and
recorded by the Administrator in accordance with regulations
promulgated under section 721(h).
(d) Allowance Tracking System.--The regulations promulgated
under section 721(h) shall include a system for issuing,
recording, holding, and tracking allowances and offset credits
that shall specify all necessary procedures and requirements
for an orderly and competitive functioning of the allowance and
offset credit markets. Such regulations shall provide for
appropriate publication of the information in the system on the
Internet.
SEC. 725. BANKING AND BORROWING.
(a) Banking.--An emission allowance may be used to comply
with section 722 or section 723 for emissions in--
(1) the vintage year for the allowance; or
(2) any calendar year subsequent to the vintage year
for the allowance.
(b) Expiration.--
(1) Regulations.--The Administrator may establish by
regulation criteria and procedures for determining
whether, and for implementing a determination that, the
expiration of an allowance or credit established or
issued by the Administrator under this title, or
expiration of the ability to use an international
emission allowance to comply with section 722, is
necessary to ensure the authenticity and integrity of
allowances or credits or the allowance tracking system.
(2) General rule.--An allowance or credit established
or issued by the Administrator under this title shall
not expire unless--
(A) it is retired by the Administrator as
required under this title; or
(B) it is determined to expire or to have
expired by a specific date by the Administrator
in accordance with regulations promulgated
under paragraph (1).
(3) International emission allowances.--The ability
to use an international emission allowance to comply
with section 722 shall not expire unless--
(A) the allowance is retired by the
Administrator as required by this title; or
(B) the ability to use such allowance to meet
such compliance obligation requirements is
determined to expire or to have expired by a
specific date by the Administrator in
accordance with regulations promulgated under
paragraph (1).
(c) Borrowing Future Vintage Year Allowances.--
(1) Borrowing without interest.--In addition to the
uses described in subsection (a), an emission allowance
may be used to comply with section 722(a) or section
723 for emissions, production, importation,
manufacture, or deliveries in the calendar year
immediately preceding the vintage year for the
allowance.
(2) Borrowing with interest.--
(A) In general.--A covered entity may
demonstrate compliance under subsection (b) in
a specific calendar year for up to 15 percent
of its emissions by holding emission allowances
with a vintage year 1 to 5 years later than
that calendar year.
(B) Limitations.--An emission allowance
borrowed pursuant to this paragraph shall be an
emission allowance that is established by the
Administrator for a specific future calendar
year under section 721(a) and that is held by
the borrower.
(C) Prepayment of interest.--For each
emission allowance that an owner or operator of
a covered entity borrows pursuant to this
paragraph, such owner or operator shall, at the
time it borrows the allowance, hold for
retirement by the Administrator a quantity of
emission allowances that is equal to the
product obtained by multiplying--
(i) 0.08; by
(ii) the number of years between the
calendar year in which the allowance is
being used to satisfy a compliance
obligation and the vintage year of the
allowance.
SEC. 726. STRATEGIC RESERVE.
(a) Strategic Reserve Auctions.--
(1) In general.--Once each quarter of each calendar
year for which allowances are established under section
721(a), the Administrator shall auction strategic
reserve allowances.
(2) Restriction to covered entities.--In each auction
conducted under paragraph (1), only covered entities
that the Administrator expects will be required to
comply with section 722 in the following calendar year
shall be eligible to make purchases.
(b) Pool of Emission Allowances for Strategic Reserve
Auctions.--
(1) Filling the strategic reserve initially.--
(A) In general.--The Administrator shall, not
later than 2 years after the date of enactment
of this title, establish a strategic reserve
account, and shall place in that account an
amount of emission allowances established under
section 721(a) for each calendar year from 2012
through 2050 in the amounts specified in
subparagraph (B) of this paragraph.
(B) Amount.--The amount referred to in
subparagraph (A) shall be--
(i) for each of calendar years 2012
through 2019, 1 percent of the quantity
of emission allowances established for
that year pursuant to section
721(e)(1);
(ii) for each of calendar years 2020
through 2029, 2 percent of the quantity
of emission allowances established for
that year pursuant to section
721(e)(1); and
(iii) for each of calendar years 2030
through 2050, 3 percent of the quantity
of emission allowances established for
that year pursuant to section
721(e)(1).
(C) Effect on other provisions.--Any
provision in this title (except for
subparagraph (B) of this paragraph) that refers
to a quantity or percentage of the emission
allowances established for a calendar year
under section 721(a) shall be considered to
refer to the amount of emission allowances as
determined pursuant to section 721(e), less any
emission allowances established for that year
that are placed in the strategic reserve
account under this paragraph.
(2) Supplementing the strategic reserve.--The
Administrator shall also--
(A) at the end of each calendar year,
transfer to the strategic reserve account each
emission allowance that was offered for sale
but not sold at any auction conducted under
section 791; and
(B) transfer emission allowances established
under subsection (g) from auction proceeds, and
deposit them into the strategic reserve, to the
extent necessary to maintain the reserve at its
original size.
(c) Minimum Strategic Reserve Auction Price.--
(1) In general.--At each strategic reserve auction,
the Administrator shall offer emission allowances for
sale beginning at a minimum price per emission
allowance, which shall be known as the ``minimum
strategic reserve auction price''.
(2) Initial minimum strategic reserve auction
prices.--The minimum strategic reserve auction price
shall be $28 (in constant 2009 dollars) for the
strategic reserve auctions held in 2012. For the
strategic reserve auctions held in 2013 and 2014, the
minimum strategic reserve auction price shall be the
strategic reserve auction price for the previous year
increased by 5 percent plus the rate of inflation (as
measured by the Consumer Price Index for All Urban
Consumers).
(3) Minimum strategic reserve auction price in
subsequent years.--For each strategic reserve auction
held in 2015 and each year thereafter, the minimum
strategic reserve auction price shall be 60 percent
above a rolling 36-month average of the daily closing
price for that year's emission allowance vintage as
reported on registered carbon trading facilities,
calculated using constant dollars.
(d) Quantity of Emission Allowances Released From the
Strategic Reserve.--
(1) Initial limits.--For each of calendar years 2012
through 2016, the annual limit on the number of
emission allowances from the strategic reserve account
that may be auctioned is an amount equal to 5 percent
of the emission allowances established for that
calendar year under section 721(a). This limit does not
apply to international offset credits sold on
consignment pursuant to subsection (h).
(2) Limits in subsequent years.--For calendar year
2017 and each year thereafter, the annual limit on the
number of emission allowances from the strategic
reserve account that may be auctioned is an amount
equal to 10 percent of the emission allowances
established for that calendar year under section
721(a). This limit does not apply to international
offset credits sold on consignment pursuant to
subsection (h).
(3) Allocation of limitation.--One-fourth of each
year's annual strategic reserve auction limit under
this subsection shall be made available for auction in
each quarter. Any allowances from the strategic reserve
account that are made available for sale in a quarterly
auction and not sold shall be rolled over and added to
the quantity available for sale in the following
quarter, except that allowances not sold at auction in
the fourth quarter of a year shall not be rolled over
to the following calendar year's auctions, but shall be
returned to the strategic reserve account.
(e) Purchase Limit.--
(1) In general.--Except as provided in paragraph (2)
or (3), the annual number of emission allowances that a
covered entity may purchase at the strategic reserve
auctions in each calendar year shall not exceed 20
percent of the covered entity's emissions during the
most recent year for which allowances or credits were
retired under section 722.
(2) 2012 limit.--For calendar year 2012, the maximum
aggregate number of emission allowances that a covered
entity may purchase from that year's strategic reserve
auctions shall be 20 percent of the covered entity's
greenhouse gas emissions that the covered entity
reported to the registry established under section 713
for 2011 and that would be subject to section 722(a) if
occurring in later calendar years.
(3) New entrants.--The Administrator shall, by
regulation, establish a separate purchase limit
applicable to entities that expect to become a covered
entity in the year of the auction, permitting them to
purchase emission allowances at the strategic reserve
auctions in their first calendar year of operation in
an amount of at least 20 percent of their expected
combined emissions and attributable greenhouse gas
emissions for that year.
(f) Delegation or Contract.--Pursuant to regulations under
this section, the Administrator may, by delegation or contract,
provide for the conduct of strategic reserve auctions under the
Administrator's supervision by other departments or agencies of
the Federal Government or by nongovernmental agencies, groups,
or organizations.
(g) Use of Auction Proceeds.--
(1) Deposit in strategic reserve fund.--The proceeds
from strategic reserve auctions shall be placed in the
Strategic Reserve Fund established under section
793(1), and shall be available without further
appropriation or fiscal year limitation for the
purposes described in this subsection.
(2) International offset credits for reduced
deforestation.--The Administrator shall use the
proceeds from each strategic reserve auction to
purchase international offset credits issued for
reduced deforestation activities pursuant to section
743(e). The Administrator shall retire those
international offset credits and establish a number of
emission allowances equal to 80 percent of the number
of international offset credits so retired. Emission
allowances established under this paragraph shall be in
addition to those established under section 721(a).
(3) Emission allowances.--The Administrator shall
deposit emission allowances established under paragraph
(2) in the strategic reserve, except that, with respect
to any such emission allowances in excess of the amount
necessary to fill the strategic reserve to its original
size, the Administrator shall--
(A) except as provided in subparagraph (B),
assign a vintage year to the emission
allowance, which shall be no earlier than the
year in which the allowance is established
under paragraph (2) and shall treat such
allowances as ones that are not designated for
distribution or auction for purposes of section
782(q) and (r); and
(B) to the extent any such allowances cannot
be assigned a vintage year because of the
limitation in paragraph (4), retire the
allowances.
(4) Limitation.--In no case may the Administrator
assign under paragraph (3)(A) more emission allowances
to a vintage year than the number of emission
allowances from that vintage year that were placed in
the strategic reserve account under subsection (b)(1).
(h) Availability of International Offset Credits for
Auction.--
(1) In general.--The regulations promulgated under
section 721(h) shall allow any entity holding
international offset credits from reduced deforestation
issued under section 743(e) to request that the
Administrator include such offset credits in an
upcoming strategic reserve auction. The regulations
shall provide that--
(A) such international offset credits will be
used to fill bid orders only after the supply
of strategic reserve allowances available for
sale at that auction has been depleted;
(B) international offset credits may be sold
at a strategic reserve auction under this
subsection only if the Administrator determines
that it is highly likely that covered entities
will, to cover emissions occurring in the year
the auction is held, use offset credits to
demonstrate compliance under section 722 for
emissions equal to or greater than 80 percent
of 2 billion tons of carbon dioxide equivalent;
(C) upon sale of such international offset
credits, the Administrator shall retire those
international offset credits, and establish and
provide to the purchasers a number of emission
allowances equal to 80 percent of the number of
international offset credits so retired, which
allowances shall be in addition to those
established under section 721(a); and
(D) for international offset credits sold
pursuant to this subsection, the proceeds for
the entity that offered the international
offset credits for sale shall be the lesser
of--
(i) the average daily closing price
for international offset credits sold
on registered exchanges (or if such
price is unavailable, the average price
as determined by the Administrator)
during the six months prior to the
strategic reserve auction at which they
were auctioned, with the remaining
funds collected upon the sale of the
international offset credits deposited
in the Treasury; and
(ii) the amount received for the
international offset credits at the
auction.
(2) Proceeds.--For international offset credits sold
pursuant to this subsection, notwithstanding section
3302 of title 31, United States Code, or any other
provision of law, within 90 days of receipt, the United
States shall transfer the proceeds from the auction, as
defined in paragraph (1)(D), to the entity that offered
the international offset credits for sale. No funds
transferred from a purchaser to a seller of
international offset credits under this paragraph shall
be held by any officer or employee of the United States
or treated for any purpose as public monies.
(3) Pricing.--When the Administrator acts under this
subsection as the agent of an entity in possession of
international offset credits, the Administrator is not
obligated to obtain the highest price possible for the
international offset credits, and instead shall auction
such international offset credits in the same manner
and pursuant to the same rules (except as modified in
paragraph (1)) as set forth for auctioning strategic
reserve allowances. Entities requesting that such
international offset credits be offered for sale at a
strategic reserve auction may not set a minimum reserve
price for their international offset credits that is
different than the minimum strategic reserve auction
price set pursuant to subsection (c).
(i) Initial Regulations.--Not later than 24 months after the
date of enactment of this title, the Administrator shall
promulgate regulations, in consultation with other appropriate
agencies, governing the auction of allowances under this
section. Such regulations shall include the following
requirements:
(1) Frequency; first auction.--Auctions shall be held
four times per year at regular intervals, with the
first auction to be held no later than March 31, 2012.
(2) Auction format.--Auctions shall follow a single-
round, sealed-bid, uniform price format.
(3) Participation; financial assurance.--Auctions
shall be open to any covered entity eligible to
purchase emission allowances at the auction under
subsection (a)(2), except that the Administrator may
establish financial assurance requirements to ensure
that auction participants can and will perform on their
bids.
(4) Disclosure of beneficial ownership.--Each bidder
in an auction shall be required to disclose the person
or entity sponsoring or benefitting from the bidder's
participation in the auction if such person or entity
is, in whole or in part, other than the bidder.
(5) Purchase limits.--No person may, directly or in
concert with another participant, purchase more than 20
percent of the allowances offered for sale at any
quarterly auction.
(6) Publication of information.--After the auction,
the Administrator shall, in a timely fashion, publish
the identities of winning bidders, the quantity of
allowances obtained by each winning bidder, and the
auction clearing price.
(7) Other requirements.--The Administrator may
include in the regulations such other requirements or
provisions as the Administrator, in consultation with
other agencies as appropriate, considers appropriate to
promote effective, efficient, transparent, and fair
administration of auctions under this section.
(j) Revision of Regulations.--The Administrator may, at any
time, in consultation with other agencies as appropriate,
revise the initial regulations promulgated under subsection
(i). Such revised regulations need not meet the requirements
identified in subsection (i) if the Administrator determines
that an alternative auction design would be more effective,
taking into account factors including costs of administration,
transparency, fairness, and risks of collusion or manipulation.
In determining whether and how to revise the initial
regulations under this subsection, the Administrator shall not
consider maximization of revenues to the Federal Government.
SEC. 727. PERMITS.
(a) Permit Program.--For stationary sources subject to title
V of this Act, that are covered entities, the provisions of
this title shall be implemented by permits issued to such
covered entities (and enforced) in accordance with the
provisions of title V, as modified by this title. Any such
permit issued by the Administrator, or by a State with an
approved permit program, shall require the owner or operator of
a covered entity to hold emission allowances or offset credits
at least equal to the total annual amount of carbon dioxide
equivalents for its combined emissions and attributable
greenhouse gas emissions to which section 722 applies. No such
permit shall be issued that is inconsistent with the
requirements of this title, and title V as applicable. Nothing
in this section regarding compliance plans or in title V shall
be construed as affecting allowances or offset credits.
Submission of a statement by the owner or operator, or the
designated representative of the owners and operators, of a
covered entity that the owners and operators will hold emission
allowances or offset credits for the entity's combined
emissions and attributable greenhouse gas emissions to which
section 722 applies shall be deemed to meet the proposed and
approved planning requirements of title V. Recordation by the
Administrator of transfers of emission allowances shall amend
automatically all applicable proposed or approved permit
applications, compliance plans, and permits.
(b) Multiple Owners.--No permit shall be issued under this
section and no allowances or offset credits shall be disbursed
under this title to a covered entity or any other person until
the designated representative of the owners or operators has
filed a certificate of representation with regard to matters
under this title, including the holding and distribution of
emission allowances and the proceeds of transactions involving
emission allowances. Where there are multiple holders of a
legal or equitable title to, or a leasehold interest in, such a
covered entity or other entity or where a utility or industrial
customer purchases power under a long-term power purchase
contract from an independent power production facility that is
a covered entity, the certificate shall state--
(1) that emission allowances and the proceeds of
transactions involving emission allowances will be
deemed to be held or distributed in proportion to each
holder's legal, equitable, leasehold, or contractual
reservation or entitlement; or
(2) if such multiple holders have expressly provided
for a different distribution of emission allowances by
contract, that emission allowances and the proceeds of
transactions involving emission allowances will be
deemed to be held or distributed in accordance with the
contract.
A passive lessor, or a person who has an equitable interest
through such lessor, whose rental payments are not based,
either directly or indirectly, upon the revenues or income from
the covered entity or other entity shall not be deemed to be a
holder of a legal, equitable, leasehold, or contractual
interest for the purpose of holding or distributing emission
allowances as provided in this subsection, during either the
term of such leasehold or thereafter, unless expressly provided
for in the leasehold agreement. Except as otherwise provided in
this subsection, where all legal or equitable title to or
interest in a covered entity, or other entity, is held by a
single person, the certificate shall state that all emission
allowances received by the entity are deemed to be held for
that person.
(c) Prohibition.--It shall be unlawful for any person to
operate any stationary source subject to the requirements of
this section except in compliance with the terms and
requirements of a permit issued by the Administrator or a State
with an approved permit program in accordance with this
section. For purposes of this subsection, compliance, as
provided in section 504(f), with a permit issued under title V
which complies with this title for covered entities shall be
deemed compliance with this subsection as well as section
502(a).
(d) Reliability.--Nothing in this section or title V shall be
construed as requiring termination of operations of a
stationary source that is a covered entity for failure to have
an approved permit, or compliance plan, that is consistent with
the requirements in the second and fifth sentences of
subsection (a) concerning the holding of emission allowances,
compensatory allowances, international emission allowances, or
offset allowances, except that any such covered entity may be
subject to the applicable enforcement provision of section 113.
(e) Regulations.--The Administrator shall promulgate
regulations to implement this section. To provide for permits
required under this section, each State in which one or more
stationary sources and that are covered entities are located
shall submit, in accordance with this section and title V,
revised permit programs for approval.
SEC. 728. INTERNATIONAL EMISSION ALLOWANCES.
(a) Qualifying Programs.--The Administrator, in consultation
with the Secretary of State, may by rule designate an
international climate change program as a qualifying
international program if--
(1) the program is run by a national or supranational
foreign government, and imposes a mandatory absolute
tonnage limit on greenhouse gas emissions from 1 or
more foreign countries, or from 1 or more economic
sectors in such a country or countries; and
(2) the program is at least as stringent as the
program established by this title, including provisions
to ensure at least comparable monitoring, compliance,
enforcement, quality of offsets, and restrictions on
the use of offsets.
(b) Disqualified Allowances.--An international emission
allowance may not be held under section 722(d)(2) if it is in
the nature of an offset instrument or allowance awarded based
on the achievement of greenhouse gas emission reductions or
avoidance, or greenhouse gas sequestration, that are not
subject to the mandatory absolute tonnage limits referred to in
subsection (a)(1).
(c) Retirement.--
(1) Entity certification.--The owner or operator of
an entity that holds an international emission
allowance under section 722(d)(2) shall certify to the
Administrator that such international emission
allowance has not previously been used to comply with
any foreign, international, or domestic greenhouse gas
regulatory program.
(2) Retirement.--
(A) Foreign and international regulatory
entities.--The Administrator, in consultation
with the Secretary of State, shall seek, by
whatever means appropriate, including
agreements and technical cooperation on
allowance tracking, to ensure that any relevant
foreign, international, and domestic regulatory
entities--
(i) are notified of the use, for
purposes of compliance with this title,
of any international emission
allowance; and
(ii) provide for the disqualification
of such international emission
allowance for any subsequent use under
the relevant foreign, international, or
domestic greenhouse gas regulatory
program, regardless of whether such use
is a sale, exchange, or submission to
satisfy a compliance obligation.
(B) Disqualification from further use.--The
Administrator shall ensure that, once an
international emission allowance has been
disqualified or otherwise used for purposes of
compliance with this title, such allowance
shall be disqualified from any further use
under this title.
(d) Use Limitations.--The Administrator may, by rule, modify
the percentage applicable to international emission allowances
under section 722(d)(2), consistent with the purposes of the
Safe Climate Act.
PART D--OFFSETS
SEC. 731. OFFSETS INTEGRITY ADVISORY BOARD.
(a) Establishment.--Not later than 30 days after the date of
enactment of this title, the Administrator shall establish an
independent Offsets Integrity Advisory Board. The Advisory
Board shall make recommendations to the Administrator for use
in promulgating and revising regulations under this part and
part E, and for ensuring the overall environmental integrity of
the programs established pursuant to those regulations.
(b) Membership.--The Advisory Board shall be comprised of at
least nine members. Each member shall be qualified by
education, training, and experience to evaluate scientific and
technical information on matters referred to the Board under
this section. The Administrator shall appoint Advisory Board
members, including a chair and vice-chair of the Advisory
Board. Terms shall be 3 years in length, except for initial
terms, which may be up to 5 years in length to allow
staggering. Members may be reappointed only once for an
additional 3-year term, and such second term may follow
directly after a first term.
(c) Activities.--The Advisory Board established pursuant to
subsection (a) shall--
(1) provide recommendations, not later than 90 days
after the Advisory Board's establishment and
periodically thereafter, to the Administrator regarding
offset project types that should be considered for
eligibility under section 733, taking into
consideration relevant scientific and other issues,
including--
(A) the availability of a representative data
set for use in developing the activity
baseline;
(B) the potential for accurate quantification
of greenhouse gas reduction, avoidance, or
sequestration for an offset project type;
(C) the potential level of scientific and
measurement uncertainty associated with an
offset project type; and
(D) any beneficial or adverse environmental,
public health, welfare, social, economic, or
energy effects associated with an offset
project type;
(2) make available to the Administrator its advice
and comments on offset methodologies that should be
considered under regulations promulgated pursuant to
section 734(a) and (b), including methodologies to
address the issues of additionality, activity
baselines, measurement, leakage, uncertainty,
permanence, and environmental integrity;
(3) make available to the Administrator, and other
relevant Federal agencies, its advice and comments
regarding scientific, technical, and methodological
issues specific to the issuance of international offset
credits under section 743;
(4) make available to the Administrator, and other
relevant Federal agencies, its advice and comments
regarding scientific, technical, and methodological
issues associated with the implementation of part E;
(5) make available to the Administrator its advice
and comments on areas in which further knowledge is
required to appraise the adequacy of existing, revised,
or proposed methodologies for use under this part and
part E, and describe the research efforts necessary to
provide the required information; and
(6) make available to the Administrator its advice
and comments on other ways to improve or safeguard the
environmental integrity of programs established under
this part and part E.
(d) Scientific Review of Offset and Deforestation Reduction
Programs.--Not later than January 1, 2017, and at five-year
intervals thereafter, the Advisory Board shall submit to the
Administrator and make available to the public an analysis of
relevant scientific and technical information related to this
part and part E. The Advisory Board shall review approved and
potential methodologies, scientific studies, offset project
monitoring, offset project verification reports, and audits
related to this part and part E, and evaluate the net emissions
effects of implemented offset projects. The Advisory Board
shall recommend changes to offset methodologies, protocols, or
project types, or to the overall offset program under this
part, to ensure that offset credits issued by the Administrator
do not compromise the integrity of the annual emission
reductions established under section 703, and to avoid or
minimize adverse effects to human health or the environment.
SEC. 732. ESTABLISHMENT OF OFFSETS PROGRAM.
(a) Regulations.--Not later than 2 years after the date of
enactment of this title, the Administrator, in consultation
with appropriate Federal agencies and taking into consideration
the recommendations of the Advisory Board, shall promulgate
regulations establishing a program for the issuance of offset
credits in accordance with the requirements of this part. The
Administrator shall periodically revise these regulations as
necessary to meet the requirements of this part.
(b) Requirements.--The regulations described in subsection
(a) shall--
(1) authorize the issuance of offset credits with
respect to qualifying offset projects that result in
reductions or avoidance of greenhouse gas emissions, or
sequestration of greenhouse gases;
(2) ensure that such offset credits represent
verifiable and additional greenhouse gas emission
reductions or avoidance, or increases in sequestration;
(3) ensure that offset credits issued for
sequestration offset projects are only issued for
greenhouse gas reductions that are permanent;
(4) provide for the implementation of the
requirements of this part; and
(5) include as reductions in greenhouse gases
reductions achieved through the destruction of methane
and its conversion to carbon dioxide.
(c) Coordination To Minimize Negative Effects.--In
promulgating and implementing regulations under this part, the
Administrator shall act (including by rejecting projects, if
necessary) to avoid or minimize, to the maximum extent
practicable, adverse effects on human health or the environment
resulting from the implementation of offset projects under this
part.
(d) Offset Registry.--The Administrator shall establish
within the allowance tracking system established under section
724(d) an Offset Registry for qualifying offset projects and
offset credits issued with respect thereto under this part.
(e) Legal Status of Offset Credit.--An offset credit does not
constitute a property right.
(f) Fees.--The Administrator shall assess fees payable by
offset project developers in an amount necessary to cover the
administrative costs to the Environmental Protection Agency of
carrying out the activities under this part. Amounts collected
for such fees shall be available to the Administrator for
carrying out the activities under this part to the extent
provided in advance in appropriations Acts.
SEC. 733. ELIGIBLE PROJECT TYPES.
(a) List of Eligible Project Types.--
(1) In general.--As part of the regulations
promulgated under section 732(a), the Administrator
shall establish, and may periodically revise, a list of
types of projects eligible to generate offset credits,
including international offset credits, under this
part.
(2) Advisory board recommendations.--In determining
the eligibility of project types, the Administrator
shall take into consideration the recommendations of
the Advisory Board. If a list established under this
section differs from the recommendations of the
Advisory Board, the regulations promulgated under
section 732(a) shall include a justification for the
discrepancy.
(3) Initial determination.--The Administrator shall
establish the initial eligibility list under paragraph
(1) not later than one year after the date of enactment
of this title. The Administrator shall add additional
project types to the list not later than 2 years after
the date of enactment of this title. In determining the
initial list, the Administrator shall give priority to
consideration of offset project types that are
recommended by the Advisory Board and for which there
are well developed methodologies that the Administrator
determines would meet the criteria of section 734, with
such modifications as the Administrator deems
appropriate. In issuing methodologies pursuant to
section 734, the Administrator shall give priority to
methodologies for offset types included on the initial
eligibility list.
(b) Modification of List.--The Administrator--
(1) may at any time, by rule, add a project type to
the list established under subsection (a) if the
Administrator, in consultation with appropriate Federal
agencies and taking into consideration the
recommendations of the Advisory Board, determines that
the project type can generate additional reductions or
avoidance of greenhouse gas emissions, or sequestration
of greenhouse gases, subject to the requirements of
this part;
(2) may at any time, by rule, determine that a
project type on the list does not meet the requirements
of this part, and remove a project type from the list
established under subsection (a), in consultation with
appropriate Federal agencies and taking into
consideration any recommendations of the Advisory
Board; and
(3) shall consider adding to or removing from the
list established under subsection (a), at a minimum,
project types proposed to the Administrator--
(A) by petition pursuant to subsection (c);
or
(B) by the Advisory Board.
(c) Petition Process.--Any person may petition the
Administrator to modify the list established under subsection
(a) by adding or removing a project type pursuant to subsection
(b). Any such petition shall include a showing by the
petitioner that there is adequate data to establish that the
project type does or does not meet the requirements of this
part. Not later than 12 months after receipt of such a
petition, the Administrator shall either grant or deny the
petition and publish a written explanation of the reasons for
the Administrator's decision. The Administrator may not deny a
petition under this subsection on the basis of inadequate
Environmental Protection Agency resources or time for review.
SEC. 734. REQUIREMENTS FOR OFFSET PROJECTS.
(a) Methodologies.--As part of the regulations promulgated
under section 732(a), the Administrator shall establish, for
each type of offset project listed as eligible under section
733, the following:
(1) Additionality.--A standardized methodology for
determining the additionality of greenhouse gas
emission reductions or avoidance, or greenhouse gas
sequestration, achieved by an offset project of that
type. Such methodology shall ensure, at a minimum, that
any greenhouse gas emission reduction or avoidance, or
any greenhouse gas sequestration, is considered
additional only to the extent that it results from
activities that--
(A) are not required by or undertaken to
comply with any law, including any regulation
or consent order;
(B) were not commenced prior to January 1,
2009, except in the case of--
(i) offset project activities that
commenced after January 1, 2001, and
were registered as of the date of
enactment of this title under an offset
program with respect to which the
Administrator has made an affirmative
determination under section 740(a)(2);
or
(ii) activities that are readily
reversible, with respect to which the
Administrator may set an alternative
earlier date under this subparagraph
that is not earlier than January 1,
2001, where the Administrator
determines that setting such an
alternative date may produce an
environmental benefit by removing an
incentive to cease and then reinitiate
activities that began prior to January
1, 2009;
(C) are not receiving support under part E of
this title or title IV, subtitle D of the
American Clean Energy and Security Act of 2009;
and
(D) exceed the activity baseline established
under paragraph (2).
(2) Activity baselines.--A standardized methodology
for establishing activity baselines for offset projects
of that type. The Administrator shall set activity
baselines to reflect a conservative estimate of
business-as-usual performance or practices for the
relevant type of activity such that the baseline
provides an adequate margin of safety to ensure the
environmental integrity of offsets calculated in
reference to such baseline.
(3) Quantification methods.--A standardized
methodology for determining the extent to which
greenhouse gas emission reductions or avoidance, or
greenhouse gas sequestration, achieved by an offset
project of that type exceed a relevant activity
baseline, including protocols for monitoring and
accounting for uncertainty.
(4) Leakage.--A standardized methodology for
accounting for and mitigating potential leakage, if
any, from an offset project of that type, taking
uncertainty into account.
(b) Accounting for Reversals.--
(1) In general.--For each type of sequestration
project listed under section 733, the Administrator
shall establish requirements to account for and address
reversals, including--
(A) a requirement to report any reversal with
respect to an offset project for which offset
credits have been issued under this part;
(B) provisions to require emission allowances
to be held in amounts to fully compensate for
greenhouse gas emissions attributable to
reversals, and to assign responsibility for
holding such emission allowances; and
(C) any other provisions the Administrator
determines necessary to account for and address
reversals.
(2) Mechanisms.--The Administrator shall prescribe
mechanisms to ensure that any sequestration with
respect to which an offset credit is issued under this
part results in a permanent net increase in
sequestration, and that full account is taken of any
actual or potential reversal of such sequestration,
with an adequate margin of safety. The Administrator
shall prescribe at least one of the following
mechanisms to meet the requirements of this paragraph:
(A) An offsets reserve, pursuant to paragraph
(3).
(B) Insurance that provides for purchase and
provision to the Administrator for retirement
of an amount of offset credits or emission
allowances equal in number to the tons of
carbon dioxide equivalents of greenhouse gas
emissions released due to reversal.
(C) Another mechanism that the Administrator
determines satisfies the requirements of this
part.
(3) Offsets reserve.--
(A) In general.--An offsets reserve referred
to in paragraph (2)(A) is a program under
which, before issuance of offset credits under
this part, the Administrator shall subtract and
reserve from the quantity to be issued a
quantity of offset credits based on the risk of
reversal. The Administrator shall--
(i) hold these reserved offset
credits in the offsets reserve; and
(ii) register the holding of the
reserved offset credits in the Offset
Registry established under section
732(d).
(B) Project reversal.--
(i) In general.--If a reversal has
occurred with respect an offset project
for which offset credits are reserved
under this paragraph, the Administrator
shall remove offset credits from the
offsets reserve and cancel them to
fully account for the tons of carbon
dioxide equivalent that are no longer
sequestered.
(ii) Intentional reversals.--If the
Administrator determines that a
reversal was intentional, the offset
project developer for the relevant
offset project shall place into the
offsets reserve a quantity of offset
credits, or combination of offset
credits and emission allowances, equal
in number to the number of reserve
offset credits that were canceled due
to the reversal pursuant to clause (i).
(iii) Unintentional reversals.--If
the Administrator determines that a
reversal was unintentional, the offset
project developer for the relevant
offset project shall place into the
offsets reserve a quantity of offset
credits, or combination of offset
credits and emission allowances, equal
in number to half the number of offset
credits that were reserved for that
offset project, or half the number of
reserve offset credits that were
canceled due to the reversal pursuant
to clause (i), whichever is less.
(C) Use of reserved offset credits.--Offset
credits placed into the offsets reserve under
this paragraph may not be used to comply with
section 722.
(c) Crediting Periods.--
(1) In general.--For each offset project type, the
Administrator shall specify a crediting period, and
establish provisions for petitions for new crediting
periods, in accordance with this subsection.
(2) Duration.--The crediting period shall be no less
than 5 and no greater than 10 years for any project
type other than those involving sequestration.
(3) Eligibility.--An offset project shall be eligible
to generate offset credits under this part only during
the project's crediting period. During such crediting
period, the project shall remain eligible to generate
offset credits, subject to the methodologies and
project type eligibility list that applied as of the
date of project approval under section 735, except as
provided in paragraph (4) of this subsection.
(4) Petition for new crediting period.--An offset
project developer may petition for a new crediting
period to commence after termination of a crediting
period, subject to the methodologies and project type
eligibility list in effect at the time when such
petition is submitted. A petition may not be submitted
under this paragraph more than 18 months before the end
of the pending crediting period. The Administrator may
limit the number of new crediting periods available for
projects of particular project types.
(d) Environmental Integrity.--In establishing the
requirements under this section, the Administrator shall apply
conservative assumptions or methods to maximize the certainty
that the environmental integrity of the cap established under
section 703 is not compromised.
(e) Pre-Existing Methodologies.--In promulgating requirements
under this section, the Administrator shall give due
consideration to methodologies for offset projects existing as
of the date of enactment of this title.
(f) Added Project Types.--The Administrator shall establish
methodologies described in subsection (a), and, as applicable,
requirements and mechanisms for reversals as described in
subsection (b), for any project type that is added to the list
pursuant to section 733.
SEC. 735. APPROVAL OF OFFSET PROJECTS.
(a) Approval Petition.--An offset project developer shall
submit an offset project approval petition providing such
information as the Administrator requires to determine whether
the offset project is eligible for issuance of offset credits
under rules promulgated pursuant to this part.
(b) Timing.--An approval petition shall be submitted to the
Administrator under subsection (a) no later than the time at
which an offset project's first verification report is
submitted under section 736.
(c) Approval Petition Requirements.--As part of the
regulations promulgated under section 732, the Administrator
shall include provisions for, and shall specify, the required
components of an offset project approval petition required
under subsection (a), which shall include--
(1) designation of an offset project developer; and
(2) any other information that the Administrator
considers to be necessary to achieve the purposes of
this part.
(d) Approval and Notification.--Not later than 90 days after
receiving a complete approval petition under subsection (a),
the Administrator shall approve or deny the petition in writing
and, if the petition is denied, provide the reasons for denial.
After an offset project is approved, the offset project
developer shall not be required to resubmit an approval
petition during the offset project's crediting period, except
as provided in section 734(c)(4).
(e) Appeal.--The Administrator shall establish procedures for
appeal and review of determinations made under subsection (d).
(f) Voluntary Preapproval Review.--The Administrator may
establish a voluntary preapproval review procedure, to allow an
offset project developer to request the Administrator to
conduct a preliminary eligibility review for an offset project.
Findings of such reviews shall not be binding upon the
Administrator. The voluntary preapproval review procedure--
(1) shall require the offset project developer to
submit such basic project information as the
Administrator requires to provide a meaningful review;
and
(2) shall require a response from the Administrator
not later than 6 weeks after receiving a request for
review under this subsection.
SEC. 736. VERIFICATION OF OFFSET PROJECTS.
(a) In General.--As part of the regulations promulgated under
section 732(a), the Administrator shall establish requirements,
including protocols, for verification of the quantity of
greenhouse gas emission reductions or avoidance, or
sequestration of greenhouse gases, resulting from an offset
project. The regulations shall require that an offset project
developer shall submit a report, prepared by a third-party
verifier accredited under subsection (d), providing such
information as the Administrator requires to determine the
quantity of greenhouse gas emission reductions or avoidance, or
sequestration of greenhouse gas, resulting from the offset
project.
(b) Schedule.--The Administrator shall prescribe a schedule
for the submission of verification reports under subsection
(a).
(c) Verification Report Requirements.--The Administrator
shall specify the required components of a verification report
required under subsection (a), which shall include--
(1) the name and contact information for a designated
representative for the offset project developer;
(2) the quantity of greenhouse gas reduced, avoided,
or sequestered;
(3) the methodologies applicable to the project
pursuant to section 734;
(4) a certification that the project meets the
applicable requirements;
(5) a certification establishing that the conflict of
interest requirements in the regulations promulgated
under subsection (d)(1) have been complied with; and
(6) any other information that the Administrator
considers to be necessary to achieve the purposes of
this part.
(d) Verifier Accreditation.--
(1) In general.--As part of the regulations
promulgated under section 732(a), the Administrator
shall establish a process and requirements for periodic
accreditation of third-party verifiers to ensure that
such verifiers are professionally qualified and have no
conflicts of interest.
(2) Standards.--
(A) American national standards institute
accreditation.--The Administrator may accredit,
or accept for purposes of accreditation under
this subsection, verifiers accredited under the
American National Standards Institute (ANSI)
accreditation program in accordance with ISO
14065. The Administrator shall accredit, or
accept for accreditation, verifiers under this
subparagraph only if the Administrator finds
that the American National Standards Institute
accreditation program provides sufficient
assurance that the requirements of this part
will be met.
(B) Epa accreditation.--As part of the
regulations promulgated under section 732(a),
the Administrator may establish accreditation
standards for verifiers under this subsection,
and may establish related training and testing
programs and requirements.
(3) Public accessibility.--Each verifier meeting the
requirements for accreditation in accordance with this
subsection shall be listed in a publicly accessible
database, which shall be maintained and updated by the
Administrator.
SEC. 737. ISSUANCE OF OFFSET CREDITS.
(a) Determination and Notification.--Not later than 90 days
after receiving a complete verification report under section
736, the Administrator shall--
(1) make the report publicly available;
(2) make a determination of the quantity of
greenhouse gas emissions reduced or avoided, or
greenhouse gases sequestered, resulting from an offset
project approved under section 735; and
(3) notify the offset project developer in writing of
such determination.
(b) Issuance Of Offset Credits.--The Administrator shall
issue one offset credit to an offset project developer for each
ton of carbon dioxide equivalent that the Administrator has
determined has been reduced, avoided, or sequestered during the
period covered by a verification report submitted in accordance
with section 736, only if--
(1) the Administrator has approved the offset project
pursuant to section 735; and
(2) the relevant emissions reduction, avoidance, or
sequestration has--
(A) already occurred, during the offset
project's crediting period; and
(B) occurred after January 1, 2009.
(c) Appeal.--The Administrator shall establish procedures for
appeal and review of determinations made under subsection (a).
(d) Timing.--Offset credits meeting the criteria established
in subsection (b) shall be issued not later than 2 weeks
following the verification determination made by the
Administrator under subsection (a).
(e) Registration.--The Administrator shall assign a unique
serial number to and register each offset credit to be issued
in the Offset Registry established under section 732(d).
SEC. 738. AUDITS.
(a) In General.--The Administrator shall, on an ongoing
basis, conduct random audits of offset projects, offset
credits, and practices of third-party verifiers. In each year,
the Administrator shall conduct audits, at minimum, for a
representative sample of project types and geographic areas.
(b) Delegation.--The Administrator may delegate to a State or
tribal government the responsibility for conducting audits
under this section if the Administrator finds that the program
proposed by the State or tribal government provides assurances
equivalent to those provided by the auditing program of the
Administrator, and that the integrity of the offset program
under this part will be maintained. Nothing in this subsection
shall prevent the Administrator from conducting any audit the
Administrator considers necessary and appropriate.
SEC. 739. PROGRAM REVIEW AND REVISION.
At least once every 5 years, the Administrator shall review
and, based on new or updated information and taking into
consideration the recommendations of the Advisory Board, update
and revise--
(1) the list of eligible project types established
under section 733;
(2) the methodologies established, including specific
activity baselines, under section 734(a);
(3) the reversal requirements and mechanisms
established or prescribed under section 734(b);
(4) measures to improve the accountability of the
offsets program; and
(5) any other requirements established under this
part to ensure the environmental integrity and
effective operation of this part.
SEC. 740. EARLY OFFSET SUPPLY.
(a) Projects Registered Under Other Government-Recognized
Programs.--Except as provided in subsection (b) or (c), the
Administrator shall issue one offset credit for each ton of
carbon dioxide equivalent emissions reduced, avoided, or
sequestered--
(1) under an offset project that was started after
January 1, 2001;
(2) for which a credit was issued under any
regulatory or voluntary greenhouse gas emission offset
program that the Administrator determines--
(A) was established under State or tribal law
or regulation prior to January 1, 2009, or has
been approved by the Administrator pursuant to
subsection (e);
(B) has developed offset project type
standards, methodologies, and protocols through
a public consultation process or a peer review
process;
(C) has made available to the public
standards, methodologies, and protocols that
require that credited emission reductions,
avoidance, or sequestration are permanent,
additional, verifiable, and enforceable;
(D) requires that all emission reductions,
avoidance, or sequestration be verified by a
State regulatory agency or an accredited third-
party independent verification body;
(E) requires that all credits issued are
registered in a publicly accessible registry,
with individual serial numbers assigned for
each ton of carbon dioxide equivalent emission
reductions, avoidance, or sequestration; and
(F) ensures that no credits are issued for
activities for which the entity administering
the program, or a program administrator or
representative, has funded, solicited, or
served as a fund administrator for the
development of, the project or activity that
caused the emission reduction, avoidance, or
sequestration; and
(3) for which the credit described in paragraph (2)
is transferred to the Administrator.
(b) Ineligible Credits.--Subsection (a) shall not apply to
offset credits that have expired or have been retired,
canceled, or used for compliance under a program established
under State or tribal law or regulation.
(c) Limitation.--Notwithstanding subsection (a)(1), offset
credits shall be issued under this section--
(1) only for reductions or avoidance of greenhouse
gas emissions, or sequestration of greenhouse gases,
that occur after January 1, 2009; and
(2) only until the date that is 3 years after the
date of enactment of this title, or the date that
regulations promulgated under section 732(a) take
effect, whichever occurs sooner.
(d) Retirement of Credits.--The Administrator shall seek to
ensure that offset credits described in subsection (a)(2) are
retired for purposes of use under a program described in
subsection (b).
(e) Other Programs.--(1) Offset programs that either--
(A) were not established under State or tribal law;
or
(B) were not established prior to January 1, 2009,
but that otherwise meet all of the criteria of subsection
(a)(2) may apply to the Administrator to be approved under this
subsection as an eligible program for early offset credits
under this section.
(2) The Administrator shall approve any such program that the
Administrator determines has criteria and methodologies of at
least equal stringency to the criteria and methodologies of the
programs established under State or tribal law that the
Administrator determines meet the criteria of subsection
(a)(2). The Administrator may approve types of offsets under
any such program that are subject to criteria and methodologies
of at least equal stringency to the criteria and methodologies
for such types of offsets applied under the programs
established under State or tribal law that the Administrator
determines meet the criteria of subsection (a)(2). The
Administrator shall make a determination on any application
received under this subsection by no later than 180 days from
the date of receipt of the application.
SEC. 741. ENVIRONMENTAL CONSIDERATIONS.
If the Administrator lists forestry projects as eligible
offset project types under section 733, the Administrator, in
consultation with appropriate Federal agencies, shall
promulgate regulations for the selection and use of species in
forestry and other relevant land management-related offset
projects--
(1) to ensure that native species are given primary
consideration in such projects;
(2) to enhance biological diversity in such projects;
(3) to prohibit the use of federally designated or
State-designated noxious weeds;
(4) to prohibit the use of a species listed by a
regional or State invasive plant authority within the
applicable region or State; and
(5) in accordance with widely accepted,
environmentally sustainable forestry practices.
SEC. 742. TRADING.
Section 724 shall apply to the trading of offset credits.
SEC. 743. INTERNATIONAL OFFSET CREDITS.
(a) In General.--The Administrator, in consultation with the
Secretary of State and the Administrator of the United States
Agency for International Development, may issue, in accordance
with this section, international offset credits based on
activities that reduce or avoid greenhouse gas emissions, or
increase sequestration of greenhouse gases, in a developing
country. Such credits may be issued for projects pursuant to
the requirements of this part or as provided in subsection (c),
(d), or (e).
(b) Issuance.--
(1) Regulations.--Not later than 2 years after the
date of enactment of this title, the Administrator, in
consultation with the Secretary of State, the
Administrator of the United States Agency for
International Development, and any other appropriate
Federal agency, and taking into consideration the
recommendations of the Advisory Board, shall promulgate
regulations for implementing this section. Except as
otherwise provided in this section, the issuance of
international offset credits under this section shall
be subject to the requirements of this part.
(2) Requirements for international offset credits.--
The Administrator may issue international offset
credits only if--
(A) the United States is a party to a
bilateral or multilateral agreement or
arrangement that includes the country in which
the project or measure achieving the relevant
greenhouse gas emission reduction or avoidance,
or greenhouse gas sequestration, has occurred;
(B) such country is a developing country; and
(C) such agreement or arrangement--
(i) ensures that all of the
requirements of this part apply to the
issuance of international offset
credits under this section; and
(ii) provides for the appropriate
distribution of international offset
credits issued.
(c) Sector-Based Credits.--
(1) In general.--In order to minimize the potential
for leakage and to encourage countries to take
nationally appropriate mitigation actions to reduce or
avoid greenhouse gas emissions, or sequester greenhouse
gases, the Administrator, in consultation with the
Secretary of State and the Administrator of the United
States Agency for International Development, shall--
(A) identify sectors of specific countries
with respect to which the issuance of
international offset credits on a sectoral
basis is appropriate; and
(B) issue international offset credits for
such sectors only on a sectoral basis.
(2) Identification of sectors.--
(A) General rule.--For purposes of paragraph
(1)(A), a sectoral basis shall be appropriate
for activities--
(i) in countries that have
comparatively high greenhouse gas
emissions, or comparatively greater
levels of economic development; and
(ii) that, if located in the United
States, would be within a sector
subject to the compliance obligation
under section 722.
(B) Factors.--In determining the sectors and
countries for which international offset
credits should be awarded only on a sectoral
basis, the Administrator, in consultation with
the Secretary of State and the Administrator of
the United States Agency for International
Development, shall consider the following
factors:
(i) The country's gross domestic
product.
(ii) The country's total greenhouse
gas emissions.
(iii) Whether the comparable sector
of the United States economy is covered
by the compliance obligation under
section 722.
(iv) The heterogeneity or homogeneity
of sources within the relevant sector.
(v) Whether the relevant sector
provides products or services that are
sold in internationally competitive
markets.
(vi) The risk of leakage if
international offset credits were
issued on a project-level basis,
instead of on a sectoral basis, for
activities within the relevant sector.
(vii) The capability of accurately
measuring, monitoring, reporting, and
verifying the performance of sources
across the relevant sector.
(viii) Such other factors as the
Administrator, in consultation with the
Secretary of State and the
Administrator of the United States
Agency for International Development,
determines are appropriate to--
(I) ensure the integrity of
the United States greenhouse
gas emissions cap established
under section 703; and
(II) encourage countries to
take nationally appropriate
mitigation actions to reduce or
avoid greenhouse gas emissions,
or sequester greenhouse gases.
(3) Sectoral basis.--
(A) Definition.--In this subsection, the term
``sectoral basis'' means the issuance of
international offset credits only for the
quantity of sector-wide reductions or avoidance
of greenhouse gas emissions, or sector-wide
increases in sequestration of greenhouse gases,
achieved across the relevant sector of the
economy relative to a baseline level of
performance established in an agreement or
arrangement described in subsection (b)(2)(A)
for the sector.
(B) Baseline.--The baseline for a sector
shall be established at levels of greenhouse
gas emissions lower than would occur under a
business-as-usual scenario taking into account
relevant domestic or international policies or
incentives to reduce greenhouse gas emissions,
among other factors, and additionality and
performance shall be determined on the basis of
such baseline.
(d) Credits Issued by an International Body.--
(1) In general.--The Administrator, in consultation
with the Secretary of State, may issue international
offset credits in exchange for instruments in the
nature of offset credits that are issued by an
international body established pursuant to the United
Nations Framework Convention on Climate Change, to a
protocol to such Convention, or to a treaty that
succeeds such Convention. The Administrator may issue
international offset credits under this subsection only
if, in addition to the requirements of subsection (b),
the Administrator has determined that the international
body that issued the instruments has implemented
substantive and procedural requirements for the
relevant project type that provide equal or greater
assurance of the integrity of such instruments as is
provided by the requirements of this part.
(2) Retirement.--The Administrator, in consultation
with the Secretary of State, shall seek, by whatever
means appropriate, including agreements, arrangements,
or technical cooperation with the international issuing
body described in paragraph (1), to ensure that such
body--
(A) is notified of the Administrator's
issuance, under this subsection, of an
international offset credit in exchange for an
instrument issued by such international body;
and
(B) provides, to the extent feasible, for the
disqualification of the instrument issued by
such international body for subsequent use
under any relevant foreign or international
greenhouse gas regulatory program, regardless
of whether such use is a sale, exchange, or
submission to satisfy a compliance obligation.
(e) Offsets From Reduced Deforestation.--
(1) Requirements.--The Administrator, in accordance
with the regulations promulgated under subsection
(b)(1) and an agreement or arrangement described in
subsection (b)(2)(A), shall issue international offset
credits for greenhouse gas emission reductions achieved
through activities to reduce deforestation only if, in
addition to the requirements of subsection (b)--
(A) the activity occurs in--
(i) a country listed by the
Administrator pursuant to paragraph
(2);
(ii) a state or province listed by
the Administrator pursuant to paragraph
(5); or
(iii) a country listed by the
Administrator pursuant to paragraph
(6);
(B) except as provided in paragraph (5) or
(6), the quantity of the international offset
credits is determined by comparing the national
emissions from deforestation relative to a
national deforestation baseline for that
country established, in accordance with an
agreement or arrangement described in
subsection (b)(2)(A), pursuant to paragraph
(4);
(C) the reduction in emissions from
deforestation has occurred before the issuance
of the international offset credit and, taking
into consideration relevant international
standards, has been demonstrated using ground-
based inventories, remote sensing technology,
and other methodologies to ensure that all
relevant carbon stocks are accounted;
(D) the Administrator has made appropriate
adjustments, such as discounting for any
additional uncertainty, to account for
circumstances specific to the country,
including its technical capacity described in
paragraph (2)(A);
(E) the activity is designed, carried out,
and managed--
(i) in accordance with widely
accepted, environmentally sustainable
forest management practices;
(ii) to promote or restore native
forest species and ecosystems where
practicable, and to avoid the
introduction of invasive nonnative
species;
(iii) in a manner that gives due
regard to the rights and interests of
local communities, indigenous peoples,
forest-dependent communities, and
vulnerable social groups;
(iv) with consultations with, and
full participation of, local
communities, indigenous peoples, and
forest-dependent communities, in
affected areas, as partners and primary
stakeholders, prior to and during the
design, planning, implementation, and
monitoring and evaluation of
activities; and
(v) with equitable sharing of profits
and benefits derived from offset
credits with local communities,
indigenous peoples, and forest-
dependent communities; and
(F) the reduction otherwise satisfies and is
consistent with any relevant requirements
established by an agreement reached under the
auspices of the United Nations Framework
Convention on Climate Change.
(2) Eligible countries.--The Administrator, in
consultation with the Secretary of State and the
Administrator of the United States Agency for
International Development, and in accordance with an
agreement or arrangement described in subsection
(b)(2)(A), shall establish, and periodically review and
update, a list of the developing countries that have
the capacity to participate in deforestation reduction
activities at a national level, including--
(A) the technical capacity to monitor,
measure, report, and verify forest carbon
fluxes for all significant sources of
greenhouse gas emissions from deforestation
with an acceptable level of uncertainty, as
determined taking into account relevant
internationally accepted methodologies, such as
those established by the Intergovernmental
Panel on Climate Change;
(B) the institutional capacity to reduce
emissions from deforestation, including strong
forest governance and mechanisms to equitably
distribute deforestation resources for local
actions; and
(C) a land use or forest sector strategic
plan that--
(i) assesses national and local
drivers of deforestation and forest
degradation and identifies reforms to
national policies needed to address
them;
(ii) estimates the country's
emissions from deforestation and forest
degradation;
(iii) identifies improvements in data
collection, monitoring, and
institutional capacity necessary to
implement a national deforestation
reduction program; and
(iv) establishes a timeline for
implementing the program and
transitioning to low-emissions
development.
(3) Protection of interests.--With respect to an
agreement or arrangement described in subsection
(b)(2)(A) with a country that addresses international
offset credits under this subsection, the
Administrator, in consultation with the Secretary of
State and the Administrator of the United States Agency
for International Development, shall seek to ensure the
establishment and enforcement by such country of legal
regimes, processes, standards, and safeguards that--
(A) give due regard to the rights and
interests of local communities, indigenous
peoples, forest-dependent communities, and
vulnerable social groups;
(B) promote consultations with, and full
participation of, forest-dependent communities
and indigenous peoples in affected areas, as
partners and primary stakeholders, prior to and
during the design, planning, implementation,
and monitoring and evaluation of activities;
and
(C) encourage equitable sharing of profits
and benefits derived from international offset
credits with local communities, indigenous
peoples, and forest-dependent communities.
(4) National deforestation baseline.--A national
deforestation baseline established under this
subsection shall--
(A) be national in scope;
(B) be consistent with nationally appropriate
mitigation commitments or actions with respect
to deforestation, taking into consideration the
average annual historical deforestation rates
of the country during a period of at least 5
years, the applicable drivers of deforestation,
and other factors to ensure additionality;
(C) establish a trajectory that would result
in zero net deforestation by not later than 20
years after the national deforestation baseline
has been established;
(D) be adjusted over time to take account of
changing national circumstances;
(E) be designed to account for all
significant sources of greenhouse gas emissions
from deforestation in the country; and
(F) be consistent with the national
deforestation baseline, if any, established for
such country under section 754(d)(1).
(5) State-level or province-level activities.--
(A) Eligible states or provinces.--The
Administrator, in consultation with the
Secretary of State and the Administrator of the
United States Agency for International
Development, shall establish, and periodically
review and update, a list of states or
provinces in developing countries where--
(i) the developing country is not
included on the list of countries
established pursuant to paragraph
(6)(A);
(ii) the state or province by itself
is a major emitter of greenhouse gases
from tropical deforestation on a scale
commensurate to the emissions of other
countries; and
(iii) the state or province meets the
eligibility criteria in paragraphs (2)
and (3) for the geographic area under
its jurisdiction.
(B) Activities.--The Administrator may issue
international offset credits for greenhouse gas
emission reductions achieved through activities
to reduce deforestation at a state or
provincial level that meet the requirements of
this section. Such credits shall be determined
by comparing the emissions from deforestation
within that state or province relative to the
state or province deforestation baseline for
that state or province established, in
accordance with an agreement or arrangement
described in subsection (b)(2)(A), pursuant to
subparagraph (C) of this paragraph.
(C) State-level or province-level
deforestation baseline.--A state-level or
province-level deforestation baseline shall--
(i) be consistent with any existing
nationally appropriate mitigation
commitments or actions for the country
in which the activity is occurring,
taking into consideration the average
annual historical deforestation rates
of the state or province during a
period of at least 5 years, relevant
drivers of deforestation, and other
factors to ensure additionality;
(ii) establish a trajectory that
would result in zero net deforestation
by not later than 20 years after the
state-level or province-level
deforestation baseline has been
established; and
(iii) be designed to account for all
significant sources of greenhouse gas
emissions from deforestation in the
state or province and adjusted to fully
account for emissions leakage outside
the state or province.
(D) Phase out.--Beginning 5 years after the
first calendar year for which a covered entity
must demonstrate compliance with section
722(a), the Administrator shall issue no
further international offset credits for
eligible state-level or province-level
activities to reduce deforestation pursuant to
this paragraph.
(6) Projects and programs to reduce deforestation.--
(A) Eligible countries.--The Administrator,
in consultation with the Secretary of State and
the Administrator of the United States Agency
for International Development, shall establish,
and periodically review and update, a list of
developing countries that--
(i) the Administrator determines,
based on recent, credible, and reliable
emissions data, account for less than 1
percent of global greenhouse gas
emissions and less than 3 percent of
global forest-sector and land use
change greenhouse gas emissions; and
(ii) have, or in the determination of
the Administrator are making a good
faith effort to develop, a land use or
forest sector strategic plan that meets
the criteria described in paragraph
(2)(C).
(B) Activities.--The Administrator may issue
international offset credits for greenhouse gas
emission reductions achieved through project or
program level activities to reduce
deforestation in countries listed under
subparagraph (A) that meet the requirements of
this section. The quantity of international
offset credits shall be determined by comparing
the project-level or program-level emissions
from deforestation to a deforestation baseline
for such project or program established
pursuant to subparagraph (C).
(C) Project-level or program-level
baseline.--A project-level or program-level
deforestation baseline shall--
(i) be consistent with any existing
nationally appropriate mitigation
commitments or actions for the country
in which the project or program is
occurring, taking into consideration
the average annual historical
deforestation rates in the project or
program boundary during a period of at
least 5 years, applicable drivers of
deforestation, and other factors to
ensure additionality;
(ii) be designed to account for all
significant sources of greenhouse gas
emissions from deforestation in the
project or program boundary; and
(iii) be adjusted to fully account
for emissions leakage outside the
project or program boundary.
(D) Phase out.--(i) Beginning 5 years after
the first calendar year for which a covered
entity must demonstrate compliance with section
722(a), the Administrator shall issue no
further international offset credits for
project-level or program-level activities as
described in this paragraph, except as provided
in clause (ii).
(ii) The Administrator may extend the phase
out deadline for the issuance of international
offset credits under this section by up to 8
years with respect to eligible activities
taking place in a least developed nation, which
is a foreign country that the United Nations
has identified as among the least developed of
developing countries at the time that the
Administrator determines to provide an
extension, provided that the Administrator, in
consultation with the Secretary of State and
the Administrator of the United States Agency
for International Development, determines the
nation--
(I) lacks sufficient capacity to
adopt and implement effective programs
to achieve reductions in deforestation
measured against national baselines;
(II) is receiving support under part
E to develop such capacity; and
(III) has developed and is working to
implement a credible national strategy
or plan to reduce deforestation.
(7) Deforestation.--In implementing this subsection,
the Administrator, taking into consideration the
recommendations of the Advisory Board, may include
forest degradation, or soil carbon losses associated
with forested wetlands or peatlands, within the meaning
of deforestation.
(f) Modification of Requirements.--In promulgating
regulations under subsection (b)(1) with respect to the
issuance of international offset credits under subsection (c),
(d), or (e), the Administrator, in consultation with the
Secretary of State and the Administrator of the United States
Agency for International Development, may modify or omit a
requirement of this part (excluding the requirements of this
section) if the Administrator determines that the application
of that requirement to such subsection is not feasible. In
modifying or omitting such a requirement on the basis of
infeasibility, the Administrator, in consultation with the
Secretary of State and the Administrator of the United States
Agency for International Development, shall ensure, with an
adequate margin of safety, the integrity of international
offset credits issued under this section and of the greenhouse
gas emissions cap established pursuant to section 703.
(g) Avoiding Double Counting.--The Administrator, in
consultation with the Secretary of State, shall seek, by
whatever means appropriate, including agreements, arrangements,
or technical cooperation, to ensure that activities on the
basis of which international offset credits are issued under
this section are not used for compliance with an obligation to
reduce or avoid greenhouse gas emissions, or increase
greenhouse gas sequestration, under a foreign or international
regulatory system. In addition, no international offset credits
shall be issued for emission reductions from activities with
respect to which emission allowances were allocated under
section 781 for distribution under part E.
(h) Limitation.--The Administrator shall not issue
international offset credits generated by projects based on the
destruction of hydrofluorocarbons.
PART E--SUPPLEMENTAL EMISSIONS REDUCTIONS FROM REDUCED DEFORESTATION
SEC. 751. DEFINITIONS.
In this part:
(1) Leakage prevention activities.--The term
``leakage prevention activities'' means activities in
developing countries that are directed at preserving
existing forest carbon stocks, including forested
wetlands and peatlands, that might, absent such
activities, be lost through leakage.
(2) National deforestation reduction activities.--The
term ``national deforestation reduction activities''
means activities in developing countries that reduce a
quantity of greenhouse gas emissions from deforestation
that is calculated by measuring actual emissions
against a national deforestation baseline established
pursuant to section 754(d)(1) and (2).
(3) Subnational deforestation reduction activities.--
The term ``subnational deforestation reduction
activities'' means activities in developing countries
that reduce a quantity of greenhouse gas emissions from
deforestation that are calculated by measuring actual
emissions using an appropriate baseline established by
the Administrator that is less than national in scope.
(4) Supplemental emissions reductions.--The term
``supplemental emissions reductions'' means greenhouse
gas emissions reductions achieved from reduced or
avoided deforestation under this part.
(5) Usaid.--The term ``USAID'' means the United
States Agency for International Development.
SEC. 752. FINDINGS.
Congress finds that--
(1) as part of a global effort to mitigate climate
change, it is in the national interest of the United
States to assist developing countries to reduce and
ultimately halt emissions from deforestation;
(2) deforestation is one of the largest sources of
greenhouse gas emissions in developing countries,
amounting to roughly 20 percent of overall emissions
globally;
(3) recent scientific analysis shows that it will be
substantially more difficult to limit the increase in
global temperatures to less than 2 degrees centigrade
above preindustrial levels without reducing and
ultimately halting net emissions from deforestation;
(4) reducing emissions from deforestation is highly
cost-effective, compared to many other sources of
emissions reductions;
(5) in addition to contributing significantly to
worldwide efforts to address global warming, this
assistance will generate significant environmental and
social cobenefits, including protection of
biodiversity, ecosystem services, and forest-related
livelihoods; and
(6) Under the Bali Action Plan, developed country
parties to the United Nations Framework Convention on
Climate Change, including the United States, committed
to ``enhanced action on the provision of financial
resources and investment to support action on
mitigation and adaptation and technology cooperation,''
including, inter alia, consideration of ``improved
access to adequate, predictable, and sustainable
financial resources and financial and technical
support, and the provision of new and additional
resources, including official and concessional funding
for developing country parties''.
SEC. 753. SUPPLEMENTAL EMISSIONS REDUCTIONS THROUGH REDUCED
DEFORESTATION.
(a) Regulations.--Not later than 2 years after the date of
enactment of this title, the Administrator, in consultation
with the Administrator of USAID and any other appropriate
agencies, shall promulgate regulations establishing a program
to use emission allowances set aside for this purpose under
section 781 to achieve the reduction of greenhouse gas
emissions from deforestation in developing countries in
accordance with the requirements of this part.
(b) Objectives.--The objectives of the program established
under this section shall be to--
(1) achieve supplemental emissions reductions of at
least 720,000,000 tons of carbon dioxide equivalent in
2020, a cumulative amount of at least 6,000,000,000
tons of carbon dioxide equivalent by December 31, 2025,
and additional supplemental emissions reductions in
subsequent years;
(2) build capacity to reduce deforestation in
developing countries experiencing deforestation,
including preparing developing countries to participate
in international markets for international offset
credits for reduced emissions from deforestation; and
(3) preserve existing forest carbon stocks in
countries where such forest carbon may be vulnerable to
international leakage, particularly in developing
countries with largely intact native forests.
SEC. 754. REQUIREMENTS FOR INTERNATIONAL DEFORESTATION REDUCTION
PROGRAM.
(a) Eligible Countries.--The Administrator may support
activities under this part only with respect to a developing
country that--
(1) the Administrator, in consultation with the
Administrator of USAID, determines is experiencing
deforestation or forest degradation or has standing
forest carbon stocks that may be at risk of
deforestation or degradation; and
(2) has entered into a bilateral or multilateral
agreement or arrangement with the United States
establishing the conditions of its participation in the
program established under this part, which shall
include an agreement to meet the standards established
under subsection (d) for the activities to which those
standards apply.
(b) Activities.--(1) Subject to the requirements of this
part, the Administrator, in consultation with the Administrator
of USAID, may support activities to achieve the objectives
identified in section 753(b), including--
(A) national deforestation reduction activities;
(B) subnational deforestation reduction activities,
including pilot activities that reduce greenhouse gas
emissions but are subject to significant uncertainty;
(C) activities to measure, monitor, and verify
deforestation, avoided deforestation, and deforestation
rates;
(D) leakage prevention activities;
(E) development of measurement, monitoring, and
verification capacities to enable a country to quantify
supplemental emissions reductions and to generate for
sale offset credits from reduced or avoided
deforestation;
(F) development of governance structures to reduce
deforestation and illegal logging;
(G) enforcement of requirements for reduced
deforestation or forest conservation;
(H) efforts to combat illegal logging and increase
enforcement cooperation;
(I) providing incentives for policy reforms to
achieve the objectives identified in section 753(b);
and
(J) monitoring and evaluation of the results of the
activities conducted under this section.
(2) Activities selected by usaid.--
(A) The Administrator of USAID, in consultation with
the Administrator, may select for support and
implementation pursuant to subsection (c) any of the
activities described in paragraph (1), consistent with
this part and the regulations promulgated under
subsection (d), and subject to the requirement to
achieve the objectives listed in section 753(b)(1).
(B) With respect to the activities listed in
subparagraphs (D) through (J) of paragraph (1), the
Administrator of USAID, in consultation with the
Administrator, shall have primary but not exclusive
responsibility for selecting the activities to be
supported and implemented.
(3) Interagency coordination.--The Administrator and the
Administrator of USAID shall jointly develop and biennially
update a strategic plan for meeting the objectives listed in
section 753(b) and shall execute a memorandum of understanding
delineating the agencies' respective roles in implementing this
part.
(c) Mechanisms.--
(1) In general.--The Administrator may support
activities to achieve the objectives identified in
section 753(b) by--
(A) developing and implementing programs and
projects that achieve such objectives; and
(B) distributing emission allowances to a
country that is eligible under subsection (a),
to any private or public group (including
international organizations), or to an
international fund established by an
international agreement to which the United
States is a party, to carry out activities to
achieve such objectives.
(2) Usaid activities.--With respect to activities
selected and implemented by the Administrator of USAID
pursuant to (b)(2), the Administrator shall distribute
emission allowances as provided in subparagraph (1)
based upon the direction of the Administrator of USAID,
subject to the availability of allowances for such
activities.
(3) Implementation through international
organizations.--If support is distributed through an
international organization, the agency responsible for
selecting activities in accordance with subparagraph
(b)(1) or (2), in consultation with the Secretary of
State, shall ensure the establishment and
implementation of adequate mechanisms to apply and
enforce the eligibility requirements and other
requirements of this section.
(4) Role of the secretary of state.--The
Administrator may not distribute emission allowances to
the government of another country or to an
international organization or international fund unless
the Secretary of State has concurred with such
distribution.
(d) Standards.--The Administrator, in consultation with the
Administrator of USAID, shall promulgate standards to ensure
that supplemental emissions reductions achieved through
supported activities are additional, measurable, verifiable,
permanent, monitored, and account for leakage and uncertainty.
In addition, such standards shall--
(1) require the establishment of a national
deforestation baseline for each country with national
deforestation reduction activities that is used to
account for reductions achieved from such activities;
(2) provide that a national deforestation baseline
established under paragraph (1) shall--
(A) be national in scope;
(B) be consistent with nationally appropriate
mitigation commitments or actions with respect
to deforestation, taking into consideration the
average annual historical deforestation rates
of the country during a period of at least 5
years and other factors to ensure
additionality;
(C) establish a trajectory that would result
in zero net deforestation by not later than 20
years from the date the baseline is
established;
(D) be adjusted over time to take account of
changing national circumstances;
(E) be designed to account for all
significant sources of greenhouse gas emissions
from deforestation in the country; and
(F) be consistent with the national
deforestation baseline, if any, established for
such country under section 743(e)(4);
(3) with respect to support provided pursuant to
subsection (b)(1)(A) or (B), require supplemental
emissions reductions to be achieved and verified prior
to compensation through the distribution of emission
allowances under this part;
(4) with respect to accounting for subnational
deforestation reduction activities that lack the
standardized or precise measurement and monitoring
techniques needed for a full accounting of changes in
emissions or baselines, or are subject to other sources
of uncertainty, apply a conservative discount factor to
reflect the uncertainty regarding the levels of
reductions achieved;
(5) ensure that activities under this part shall be
designed, carried out, and managed--
(A) in accordance with widely accepted,
environmentally sustainable forestry practices;
(B) to promote native species and
conservation or restoration of native forests,
if practicable, and to avoid the introduction
of invasive nonnative species;
(C) in a manner that gives due regard to the
rights and interests of local communities,
indigenous peoples, forest-dependent
communities, and vulnerable social groups;
(D) with consultations with, and full
participation of, local communities, indigenous
peoples, and forest-dependent communities in
affected areas, as partners and primary
stakeholders, prior to and during the design,
planning, implementation, and monitoring and
evaluation of activities; and
(E) with equitable sharing of profits and
benefits derived from the activities with local
communities, indigenous peoples, and forest-
dependent communities; and
(6) with respect to support for all activities under
this part, seek to ensure the establishment and
enforcement by the recipient country of legal regimes,
standards, processes, and safeguards that--
(A) give due regard to the rights and
interests of local communities, indigenous
peoples, forest-dependent communities, and
vulnerable social groups;
(B) promote consultations with local
communities and indigenous peoples and forest-
dependent communities in affected areas, as
partners and primary stakeholders, prior to and
during the design, planning, implementation,
monitoring, and evaluation of activities under
this part; and
(C) encourage equitable sharing of profits
and benefits from incentives for emissions
reductions or leakage prevention with local
communities, indigenous peoples, and forest-
dependent communities.
(e) Expansion of Scope.--The Administrator, in consultation
with the Administrator of USAID, may decide, taking into
account any advice from the Advisory Board, to expand, where
appropriate, the scope of activities under this part to
include--
(1) reduced emissions from forest degradation; or
(2) reduced soil carbon-derived emissions associated
with deforestation and degradation of forested wetlands
and peatlands.
(f) Accounting.--The Administrator shall establish a publicly
accessible registry of the supplemental emissions reductions
achieved through support provided under this part each year,
after appropriately discounting for uncertainty and other
relevant factors as required by the standards established under
subsection (d).
(g) Transition to National Reductions.--Beginning 5 years
after the date that a country entered into the agreement or
arrangement required under subsection (a)(2), the Administrator
shall provide no further compensation through emission
allowances to that country under this part for any subnational
deforestation reduction activities, except that the
Administrator may extend this period by an additional 5 years
if the Administrator, in consultation with the Administrator of
USAID, determines that--
(1) the country is making substantial progress
towards adopting and implementing a program to achieve
reductions in deforestation measured against a national
baseline;
(2) the greenhouse gas emissions reductions achieved
are not resulting in significant leakage; and
(3) the greenhouse gas emissions reductions achieved
are being appropriately discounted to account for any
leakage that is occurring.
The limitation under this subsection shall not apply to support
for activities to further the objectives listed in section
753(b)(2) or (3).
(h) Coordination With U.S. Foreign Assistance.--Subject to
the direction of the President, the Administrator and the
Administrator of USAID shall, to the extent practicable and
consistent with the objectives of this program, seek to align
activities under this section with broader development, poverty
alleviation, or natural resource management objectives and
initiatives in the recipient country.
(i) Support as Supplement.--The provision of support for
activities under this part shall be used to supplement, and not
to supplant, any other Federal, State, or local support
available to carry out such qualifying activities under this
part.
SEC. 755. REPORTS AND REVIEWS.
(a) Reports.--Not later than January 1, 2014, and annually
thereafter, the Administrator and the Administrator of USAID
shall submit to the Committee on Energy and Commerce and the
Committee on Foreign Affairs of the House of Representatives,
and the Committee on Environment and Public Works and the
Committee on Foreign Relations of the Senate, and make
available to the public, a report on the support provided under
this part during the prior fiscal year. The report shall
include--
(1) a statement of the quantity of supplemental
emissions reductions for which compensation in the form
of emission allowances was provided under this part
during the prior fiscal year, as registered by the
Administrator under section 754(f); and
(2) a description of the national and subnational
deforestation reduction activities, capacity-building
activities, and leakage prevention activities supported
under this part, including a statement of the quantity
of emission allowances distributed to each recipient
for each activity during the prior fiscal year, and a
description of what was accomplished through each of
the activities.
(b) Reviews.--Not later than 4 years after the date of
enactment of this title and every 5 years thereafter, the
Administrator and the Administrator of USAID and taking into
consideration any evaluation by or recommendations from the
Advisory Board established under section 731, shall conduct a
review of the activities undertaken pursuant to this part and
make any appropriate changes in the program established under
this part based on the findings of the review. The review shall
include the effects of the activities on--
(1) total documented carbon stocks of each country
that directly or indirectly received support under this
part compared with such country's national
deforestation baseline established under section
754(d)(1);
(2) the number of countries with the capacity to
generate for sale instruments in the nature of offset
credits from forest-related activities, and the amount
of such activities;
(3) forest governance in each country that directly
or indirectly received support under this part;
(4) indigenous peoples and forest-dependent
communities residing in areas affected by such
activities;
(5) biodiversity and ecosystem services within
forested areas associated with the activities;
(6) international leakage; and
(7) any program or mechanism established under the
United Nations Framework Convention on Climate Change
related to greenhouse gas emissions from deforestation.
SEC. 756. LEGAL EFFECT OF PART.
(1) In general.--Nothing in this part supersedes,
limits, or otherwise affects any restriction imposed by
Federal law (including regulations) on any interaction
between an entity located in the United States and an
entity located in a foreign country.
(2) Role of the secretary of state.--Nothing in this
part shall be construed as affecting the role of the
Secretary of State or the responsibilities of the
Secretary under section 622 (c) of the Foreign
Assistance Act of 1961.
PART F--ENSURING REAL REDUCTIONS IN INDUSTRIAL EMISSIONS
SEC. 761. PURPOSES.
(a) Purpose of Part.--The purposes of this part are--
(1) to promote a strong global effort to
significantly reduce greenhouse gas emissions, and,
through this global effort, stabilize greenhouse gas
concentrations in the atmosphere at a level that will
prevent dangerous anthropogenic interference with the
climate system; and
(2) to prevent an increase in greenhouse gas
emissions in countries other than the United States as
a result of direct and indirect compliance costs
incurred under this title.
(b) Purposes of Subpart 1.--The purposes of subpart 1 are
additionally--
(1) to rebate the owners and operators of entities in
domestic eligible industrial sectors for their
greenhouse gas emission costs incurred under this
title, but not for costs associated with other related
or unrelated market dynamics;
(2) to design such rebates in a way that will prevent
carbon leakage while also rewarding innovation and
facility-level investments in energy efficiency
performance improvements; and
(3) to eliminate or reduce distribution of emission
allowances under this part when such distribution is no
longer necessary to prevent carbon leakage from
eligible industrial sectors.
SEC. 762. INTERNATIONAL NEGOTIATIONS.
(a) Finding.--Congress finds that the purposes of this part,
as set forth in section 761, can be most effectively addressed
and achieved through agreements negotiated between the United
States and foreign countries.
(b) Statement of Policy.--It is the policy of the United
States to work proactively under the United Nations Framework
Convention on Climate Change, and in other appropriate forums,
to establish binding agreements, including sectoral agreements,
committing all major greenhouse gas-emitting nations to
contribute equitably to the reduction of global greenhouse gas
emissions.
(c) Notification of Foreign Countries.--Not later than
January 1, 2020, the President shall notify foreign countries
that an International Reserve Allowance Program, as described
in subpart 2, may apply to primary products produced in a
foreign country by a sector for which the President has made a
determination described in section 767(c).
SEC. 763. DEFINITIONS.
In this part:
(1) Carbon leakage.--The term ``carbon leakage''
means any substantial increase (as determined by the
Administrator) in greenhouse gas emissions by
industrial entities located in other countries if such
increase is caused by an incremental cost of production
increase in the United States resulting from the
implementation of this title.
(2) Eligible industrial sector.--The term ``eligible
industrial sector'' means an industrial sector
determined by the Administrator under section 764(b) to
be eligible to receive emission allowance rebates under
subpart 1.
(3) Industrial sector.--The term ``industrial
sector'' means any sector that is in the manufacturing
sector (as defined in NAICS codes 31, 32, and 33).
(4) Naics.--The term ``NAICS'' means the North
American Industrial Classification System of 2002.
(5) Output.--The term ``output'' means the total
tonnage or other standard unit of production (as
determined by the Administrator) produced by an entity
in an industrial sector. The output of the cement
sector is hydraulic cement, and not clinker.
(6) Primary product.--The term ``primary product''
means a product manufactured by an eligible industrial
sector that is--
(A) iron, steel, steel mill products
(including pipe and tube), aluminum, cement,
glass (including flat, container, and specialty
glass and fiberglass), pulp, paper, chemicals,
or industrial ceramics; or
(B) any other manufactured product that is
sold in bulk for purposes of further
manufacture or inclusion in a finished product.
Subpart 1--Emission Allowance Rebate Program
SEC. 764. ELIGIBLE INDUSTRIAL SECTORS.
(a) List.--
(1) Initial list.--Not later than June 30, 2011, the
Administrator shall publish in the Federal Register a
list of eligible industrial sectors pursuant to
subsection (b). Such list shall include the amount of
the emission allowance rebate per unit of production
that shall be provided to entities in each eligible
industrial sector in the following two calendar years
pursuant to section 765.
(2) Subsequent lists.--Not later than February 1,
2013, and every four years thereafter, the
Administrator shall publish in the Federal Register an
updated version of the list published under paragraph
(1).
(b) Eligible Industrial Sectors.--
(1) In general.--Not later than June 30, 2011, the
Administrator shall promulgate a rule designating,
based on the criteria under paragraph (2), the
industrial sectors eligible for emission allowance
rebates under this subpart.
(2) Presumptively eligible industrial sectors.--
(A) Eligibility criteria.--An owner or
operator of an entity shall be eligible to
receive emission allowance rebates under this
subpart if such entity is in an industrial
sector that is included in a six-digit
classification of the NAICS that meets the
criteria in both clauses (i) and (ii), or the
criteria in clause (iii).
(i) Energy or greenhouse gas
intensity.--As determined by the
Administrator, the industrial sector
had--
(I) an energy intensity of at
least 5 percent, calculated by
dividing the cost of purchased
electricity and fuel costs of
the sector by the value of the
shipments of the sector, based
on data described in
subparagraph (E); or
(II) a greenhouse gas
intensity of at least 5
percent, calculated by
dividing--
(aa) the number 20
multiplied by the
number of tons of
carbon dioxide
equivalent greenhouse
gas emissions
(including direct
emissions from fuel
combustion, process
emissions, and indirect
emissions from the
generation of
electricity used to
produce the output of
the sector) of the
sector based on data
described in
subparagraph (E); by
(bb) the value of the
shipments of the
sector, based on data
described in
subparagraph (E).
(ii) Trade intensity.--As determined
by the Administrator, the industrial
sector had a trade intensity of at
least 15 percent, calculated by
dividing the value of the total imports
and exports of such sector by the value
of the shipments plus the value of
imports of such sector, based on data
described in subparagraph (E).
(iii) Very high energy or greenhouse
gas intensity.--As determined by the
Administrator, the industrial sector
had an energy or greenhouse gas
intensity, as calculated under clause
(i)(I) or (II), of at least 20 percent.
(B) Iron and steel sector.--For purposes of
this subpart, in carrying out this section and
section 765, the Administrator shall consider
as in different industrial sectors--
(i) entities using integrated iron
and steelmaking technologies (including
coke ovens, blast furnaces, and other
iron-making technologies); and
(ii) entities using electric arc
furnace technologies.
(C) Metal and phosphate production classified
under more than one naics code.--For purposes
of this subpart, in carrying out this section
and section 765, the Administrator shall--
(i) aggregate data for the
beneficiation or other processing of
iron and copper ores and phosphate with
subsequent steps in the process of
metal and phosphate manufacturing
regardless of the NAICS code under
which such activity is classified; and
(ii) aggregate data for the
manufacturing of steel with the
manufacturing of steel pipe and tube
made from purchased steel in a
nonintegrated process.
(D) Exclusion.--The petroleum refining sector
shall not be an eligible industrial sector.
(E) Data sources.--
(i) Electricity and fuel costs, value
of shipments.--The Administrator shall
determine electricity and fuel costs
and the value of shipments under this
subsection from data from the United
States Census of Mineral Industries and
the United States Census Annual Survey
of Manufacturers. The Administrator
shall take the average of data from as
many of the years of 2004, 2005, and
2006 for which such data are available.
If such data are unavailable, the
Administrator shall make a
determination based upon 2002 or 2006
data from the most detailed industrial
classification level of Energy
Information Agency's Manufacturing
Energy Consumption Survey (using 2006
data if it is available) and the 2002
or 2007 Economic Census of the United
States (using 2007 data if it is
available). If data from the
Manufacturing Energy Consumption Survey
are unavailable for any sector at the
six-digit classification level in the
NAICS, then the Administrator may
extrapolate the information necessary
to determine the eligibility of a
sector under this paragraph from
available Manufacturing Energy
Consumption Survey data pertaining to a
broader industrial category classified
in the NAICS. Fuel cost data shall not
include the cost of fuel used as
feedstock by an industrial sector.
(ii) Imports and exports.--The
Administrator shall base the value of
imports and exports under this
subsection on United States
International Trade Commission data.
The Administrator shall take the
average of data from as many of the
years of 2004, 2005, and 2006 for which
such data are available.
(iii) Percentages.--The Administrator
shall round the energy intensity,
greenhouse gas intensity, and trade
intensity percentages under
subparagraph (A) to the nearest whole
number.
(iv) Greenhouse gas emission
calculations.--When calculating the
tons of carbon dioxide equivalent
greenhouse gas emissions for each
sector under subparagraph
(A)(i)(II)(aa), the Administrator--
(I) shall use the best
available data from as many of
the years 2004, 2005, and 2006
for which such data is
available; and
(II) may, to the extent
necessary with respect to a
sector, use economic and
engineering models and the best
available information on
technology performance levels
for such sector.
(3) Administrative determination of additional
eligible industrial sectors.--
(A) Individual showing petition.--
(i) Petition.--The owner or operator
of an entity in an industrial sector
may petition the Administrator to
designate as eligible industrial
sectors under this subpart an entity or
a group of entities that--
(I) represent a subsector of
a six-digit section of the
NAICS code; and
(II) meet the eligibility
criteria in both clauses (i)
and (ii) of paragraph (2)(A),
or the eligibility criteria in
clause (iii) of paragraph
(2)(A).
(ii) Data.--In making a determination
under this subparagraph, the
Administrator shall consider data
submitted by the petitioner that is
specific to the entity, data solicited
by the Administrator from other
entities in the subsector, if such
other entities exist, and data
specified in paragraph (2)(E).
(iii) Basis of subsector
determination.--The Administrator shall
determine an entity or group of
entities to be a subsector of a six-
digit section of the NAICS code based
only upon the products manufactured and
not the industrial process by which the
products are manufactured, except that
the Administrator may determine an
entity or group of entities that
manufacture a product from a virgin
material to be a separate subsector
from another entity or group of
entities that manufacture the same
product from recycled material.
(iv) Final action.--The Administrator
shall take final action on such
petition no later than 6 months after
the petition is received by the
Administrator.
(B) Updated trade intensity data.--The
Administrator shall designate as eligible to
receive emission allowance rebates under this
subpart an industrial sector that--
(i) met the energy or greenhouse gas
intensity criteria in paragraph
(2)(A)(i) as of the date of
promulgation of the rule under
paragraph (1); and
(ii) meets the trade intensity
criteria in paragraph (2)(A)(ii), using
data from any year after 2006.
(C) Use of most recent data.--In determining
whether to designate a sector or subsector as
an eligible industrial sector under this
paragraph, the Administrator shall use the most
recent data available from the sources
described in paragraph (2)(E), rather than the
data from the years specified in paragraph
(2)(E), to determine the trade intensity of
such sector or subsector, but only for
determining such trade intensity.
SEC. 765. DISTRIBUTION OF EMISSION ALLOWANCE REBATES.
(a) Distribution Schedule.--
(1) In general.--For each vintage year, the
Administrator shall distribute allowances pursuant to
this section no later than October 31 of the preceding
calendar year. The Administrator shall make such annual
distributions to the owners and operators of each
entity in an eligible industrial sector in the amount
of emission allowances calculated under subsection (b),
except that--
(A) for vintage years 2012 and 2013, the
distribution for a covered entity shall be the
entity's indirect carbon factor as calculated
under subsection (b)(3); and
(B) for vintage year 2026 and thereafter, the
distribution shall be the amount calculated
under subsection (b) multiplied by, except as
modified by the President pursuant to section
767(c)(3)(A) for a sector--
(i) 90 percent for vintage year 2026;
(ii) 80 percent for vintage year
2027;
(iii) 70 percent for vintage year
2028;
(iv) 60 percent for vintage year
2029;
(v) 50 percent for vintage year 2030;
(vi) 40 percent for vintage year
2031;
(vii) 30 percent for vintage year
2032;
(viii) 20 percent for vintage year
2033;
(ix) 10 percent for vintage year
2034; and
(x) 0 percent for vintage year 2035
and thereafter.
(2) Resumption of reduction.--If the President has
modified the percentage stated in paragraph (1)(B)
under section 767(c)(3)(A), and the President
subsequently makes a determination under section 767(b)
for an eligible industrial sector that more than 70
percent of global output for that sector is produced or
manufactured in countries that have met at least one of
the criteria in that subsection, then the reduction
schedule set forth in paragraph (1)(B) of this
subsection shall begin in the next vintage year, with
the percentage reduction based on the amount of the
distribution of emission allowances under this section
in the previous year.
(3) Newly eligible sectors.--In addition to receiving
a distribution of emission allowances under this
section in the first distribution occurring after an
industrial sector is designated as eligible under
section 764(b)(3), the owner or operator of an entity
in that eligible industrial sector may receive a
prorated share of any emission allowances made
available for distribution under this section that were
not distributed for the year in which the petition for
eligibility was granted under section 764(b)(3)(A).
(b) Calculation of Direct and Indirect Carbon Factors.--
(1) In general.--
(A) Covered entities.--Except as provided in
subsection (a), for covered entities that are
in eligible industrial sectors, the amount of
emission allowance rebates shall be based on
the sum of the covered entity's direct and
indirect carbon factors.
(B) Other eligible entities.--For entities
that are in eligible industrial sectors but are
not covered entities, the amount of emission
allowance rebates shall be based on the
entity's indirect carbon factor.
(C) New entities.--Not later than 2 years
after the date of enactment of this title, the
Administrator shall issue regulations governing
the distribution of emission allowance rebates
for the first and second years of operation of
a new entity in an eligible industrial sector.
These regulations shall provide for--
(i) the distribution of emission
allowance rebates to such entities
based on comparable entities in the
same sector; and
(ii) an adjustment in the third and
fourth years of operation to reconcile
the total amount of emission allowance
rebates received during the first and
second years of operation to the amount
the entity would have received during
the first and second years of operation
had the appropriate data been
available.
(2) Direct carbon factor.--The direct carbon factor
for a covered entity for a vintage year is the product
of--
(A) the average output of the covered entity
for the two years preceding the year of the
distribution; and
(B) the most recent calculation of the
average direct greenhouse gas emissions
(expressed in tons of carbon dioxide
equivalent) per unit of output for all covered
entities in the sector, as determined by the
Administrator under paragraph (4).
(3) Indirect carbon factor.--
(A) In general.--The indirect carbon factor
for an entity for a vintage year is the product
obtained by multiplying the average output of
the entity for the two years preceding the
years of the distribution by both the
electricity emissions intensity factor
determined pursuant to subparagraph (B) and the
electricity efficiency factor determined
pursuant to subparagraph (C) for the year
concerned.
(B) Electricity emissions intensity factor.--
Each person selling electricity to the owner or
operator of an entity in any sector designated
as an eligible industrial sector under section
764(b) shall provide the owner or operator of
the entity and the Administrator, on an annual
basis, the electricity emissions intensity
factor for the entity. The electricity
emissions intensity factor for the entity,
expressed in tons of carbon dioxide equivalents
per kilowatt hour, is determined by dividing--
(i) the annual sum of the hourly
product of--
(I) the electricity purchased
by the entity from that person
in each hour (expressed in
kilowatt hours), multiplied by
(II) the marginal or weighted
average tons of carbon dioxide
equivalent per kilowatt hour
that the person selling the
electricity charges to the
entity, taking into account the
entity's retail rate
arrangements, by
(ii) the total kilowatt hours of
electricity purchased by the entity
from that person during that year.
(C) Electricity efficiency factor.--The
electricity efficiency factor is the average
amount of electricity (in kilowatt hours) used
per unit of output for all entities in the
relevant sector, as determined by the
Administrator based on the best available data,
including data provided under paragraph (6).
(D) Indirect carbon factor reduction.--If an
electricity provider received a free allocation
of emission allowances pursuant to section
782(a), the Administrator shall adjust the
indirect carbon factor to avoid rebates to the
eligible entity for costs that the
Administrator determines were not incurred by
the industrial entity because the allowances
were freely allocated to the eligible entity's
electricity provider and used for the benefit
of industrial consumers.
(4) Greenhouse gas intensity calculations.--The
Administrator shall calculate the average direct
greenhouse gas emissions (expressed in tons of carbon
dioxide equivalent) per unit of output for all covered
entities in each eligible industrial sector every four
years using an average of the two most recent years of
the best available data.
(5) Ensuring efficiency improvements.--When making
greenhouse gas calculations, the Administrator shall--
(A) limit the average direct greenhouse gas
emissions per unit of output, calculated under
paragraph (4), for any eligible industrial
sector to an amount that is not greater than it
was in any previous calculation under this
subsection; and
(B) limit the electricity emissions intensity
factor, calculated under paragraph (3)(B) and
resulting from a change in electricity supply,
for any entity to an amount that is not greater
than it was during any previous year.
(6) Data sources.--For the purposes of this
subsection--
(A) the Administrator shall use data from the
greenhouse gas registry, established under
section 713, where it is available; and
(B) each owner or operator of an entity in an
eligible industrial sector and each department,
agency, and instrumentality of the United
States shall provide the Administrator with
such information as the Administrator finds
necessary to determine the direct carbon factor
and the indirect carbon factor for each entity
subject to this section.
(c) Total Maximum Distribution.--Notwithstanding subsections
(a) and (b), the Administrator shall not distribute more
allowances for any vintage year pursuant to this section than
are allocated for use under this part pursuant to section 782
for that vintage year. For any vintage year for which the total
emission allowance rebates calculated pursuant to this section
exceed the number of allowances allocated pursuant to section
782, the Administrator shall reduce each entity's distribution
on a pro rata basis so that the total distribution under this
section equals the number of allowances allocated under section
782.
Subpart 2--International Reserve Allowance Program
SEC. 766. INTERNATIONAL RESERVE ALLOWANCE PROGRAM.
(a) Establishment.--
(1) In general.--If the President takes an action
described in section 767(c)(3)(B) with respect to a
sector then, not later than 24 months after that
determination, the Administrator shall issue
regulations--
(A) determining an appropriate price for and
offering for sale to United States importers
international reserve allowances;
(B) requiring the submission of appropriate
amounts of such allowances in conjunction with
the importation into the United States of a
primary product produced or manufactured by
that sector;
(C) exempting from the requirements of
subparagraph (B) primary products produced in--
(i) foreign countries that the United
Nations has identified as among the
least developed of developing
countries; or
(ii) foreign countries that the
President has determined to be
responsible for less than 0.5 percent
of total global greenhouse gas
emissions; and
(D) prohibiting the introduction into
interstate commerce of a primary product
without submitting the required number of
international reserve allowances in accordance
with such regulations, unless the product was
produced by a covered entity under this title,
or by an entity that is or could be regulated
under this title.
(2) Purpose of program.--The Administrator shall
establish the program under paragraph (1) in a manner
that addresses, consistent with international
agreements to which the United States is a party, the
competitive imbalance in the costs of producing or
manufacturing primary products in industrial sectors
resulting from the difference between--
(A) the direct and indirect costs of
complying with this title; and
(B) the direct and indirect costs, if any, of
complying in other countries with greenhouse
gas regulatory programs, requirements, export
tariffs, or other measures adopted or imposed
to reduce greenhouse gas emissions.
(3) Emission allowance rebates.--The Administrator
shall take into account the value of emission allowance
rebates distributed under subpart 1 when making
calculations under paragraph (2).
(4) Limitation.--The International Reserve Allowance
Program may not begin before January 1, 2025.
(b) Covered Entities.--International reserve allowances may
not be held by covered entities to comply with section 722.
Subpart 3--Presidential Determination
SEC. 767. PRESIDENTIAL REPORTS AND DETERMINATIONS.
(a) Report.--Not later than January 1, 2018, the President
shall submit a report to Congress on the effectiveness of the
distribution of emission allowance rebates under subpart 1 in
mitigating carbon leakage in industrial sectors. Such report
shall also include--
(1) recommendations on how to better achieve the
purposes of this part, including an assessment of the
feasibility and usefulness of an International Reserve
Allowance Program; and
(2) an assessment of the amount and duration of
assistance, including distribution of free allowances,
being provided to eligible industrial sectors in other
developed countries to mitigate costs of compliance
with domestic greenhouse gas reduction programs in such
countries.
(b) Presidential Determination.--Not later than June 30,
2022, and every four years thereafter, the President, in
consultation with the Administrator and other appropriate
agencies, shall determine, for each eligible industrial sector,
whether more than 70 percent of global output for that sector
is produced or manufactured in countries that have met at least
one of the following criteria:
(1) The country is a party to an international
agreement to which the United States is a party that
includes a nationally enforceable greenhouse gas
emissions reduction commitment for that country that is
at least as stringent as that of the United States.
(2) The country is a party to a multilateral or
bilateral emission reduction agreement for that sector
to which the United States is a party.
(3) The country has an annual energy or greenhouse
gas intensity, as described in section 764(b)(2)(A)(i),
for the sector that is equal to or less than the energy
or greenhouse gas intensity for such sector in the
United States in the most recent calendar year for
which data are available.
(4) The country has implemented policies, including
sectoral caps, export tariffs, production fees,
electricity generation regulations, or greenhouse gas
emissions fees, that individually or collectively
impose an incremental increase on the cost of
production associated with greenhouse gas emissions
from the sector that is at least 60 percent of the cost
of complying with this title in the United States for
such sector, averaged over a two-year period.
(c) Effect of Presidential Determination.--If the President
makes a determination under subsection (b) with respect to an
eligible industrial sector that 70 percent or less of the
global output for the sector is produced or manufactured in
countries that have met one or more of the criteria in
subsection (b), then the President shall, not later than June
30, 2022, and every four years thereafter--
(1) assess the extent to which the emission allowance
rebates provided pursuant to subpart 1 have mitigated
or addressed, or could mitigate or address, carbon
leakage in that sector;
(2) assess the extent to which an International
Reserve Allowance Program has mitigated or addressed,
or could mitigate or address, carbon leakage in that
sector and the feasibility of establishing such a
program; and
(3) with respect to that sector--
(A) modify the percentage by which direct and
indirect carbon factors will be multiplied
under section 765(a)(1)(B);
(B) implement an International Reserve
Allowance Program under section 766 for the
products of the sector; or
(C) take the actions in both subparagraph (A)
and (B).
(d) Report to Congress.--Not later than June 30, 2022, and
every four years thereafter, the President shall transmit to
the Congress a report providing notice of any determination
made under subsection (b), explaining the reasons for such
determination, and identifying the actions taken by the
President under subsection (c).
(e) Limitation.--The President may only implement an
International Reserve Allowance Program for sectors producing
primary products.
(f) Iron and Steel Sector.--For the purposes of this subpart,
the Administrator shall consider to be in the same industrial
sector--
(1) entities using integrated iron and steelmaking
technologies (including coke ovens, blast furnaces, and
other iron-making technologies); and
(2) entities using electric arc furnace technologies.
PART H--DISPOSITION OF ALLOWANCES
SEC. 781. ALLOCATION OF ALLOWANCES FOR SUPPLEMENTAL REDUCTIONS.
(a) In General.--The Administrator shall allocate for each
vintage year the following percentage of the emission
allowances established under section 721(a), for distribution
in accordance with part E:
(1) For vintage years 2012 through 2025, 5 percent.
(2) For vintage years 2026 through 2030, 3 percent.
(3) For vintage years 2031 through 2050, 2 percent.
(b) Adjustment.--The Administrator shall modify the
percentages set forth in subsection (a) as necessary to ensure
the achievement of the annual supplemental emission reduction
objective for 2020, and the cumulative reduction objective
through 2025, set forth in section 753(b)(1).
(c) Carryover.--If the Administrator has not distributed all
of the allowances allocated pursuant to this section for a
given vintage year by the end of that year, the Administrator
shall--
(1) auction the remaining emission allowances under
section 791 not later than March 31 of the year
following that vintage year; and
(2) increase the allocation for the vintage year
after the vintage year for which emission allowances
were undistributed by the amount of undistributed
emission allowances.
SEC. 782. ALLOCATION OF EMISSION ALLOWANCES.
(a) Electricity Consumers.--The Administrator shall allocate
emission allowances for the benefit of electricity consumers,
to be distributed in accordance with section 783 in the
following amounts:
(1) For vintage years 2012 and 2013, 43.75 percent of
the emission allowances established for each year under
section 721(a).
(2) For vintage years 2014 and 2015, 38.89 percent of
the emission allowances established for each year under
section 721(a).
(3) For vintage years 2016 through 2025, 35.00
percent of the emission allowances established for each
year under section 721(a).
(4) For vintage year 2026, 28 percent of the emission
allowances established for each year under section
721(a).
(5) For vintage year 2027, 21 percent of the emission
allowances established for each year under section
721(a).
(6) For vintage year 2028, 14 percent of the emission
allowances established for each year under section
721(a).
(7) For vintage year 2029, 7 percent of the emission
allowances established for each year under section
721(a).
(b) Natural Gas Consumers.--The Administrator shall allocate
emission allowances for the benefit of natural gas consumers to
be distributed in accordance with section 784 in the following
amounts:
(1) For vintage years 2016 through 2025, 9 percent of
the emission allowances established for each year under
section 721(a).
(2) For vintage year 2026, 7.2 percent of the
emission allowances established for each year under
section 721(a).
(3) For vintage year 2027, 5.4 percent of the
emission allowances established for each year under
section 721(a).
(4) For vintage year 2028, 3.6 percent of the
emission allowances established for each year under
section 721(a).
(5) For vintage year 2029, 1.8 percent of the
emission allowances established for each year under
section 721(a).
(c) Home Heating Oil and Propane Consumers.--The
Administrator shall allocate emission allowances for the
benefit of home heating oil and propane consumers to be
distributed in accordance with section 785 in the following
amounts:
(1) For vintage years 2012 and 2013, 1.875 percent of
the emission allowances established for each year under
section 721(a).
(2) For vintage years 2014 and 2015, 1.67 percent of
the emission allowances established for each year under
section 721(a).
(3) For vintage years 2016 through 2025, 1.5 percent
of the emission allowances established for each year
under section 721(a).
(4) For vintage year 2026, 1.2 percent of the
emission allowances established for each year under
section 721(a).
(5) For vintage year 2027, 0.9 percent of the
emission allowances established for each year under
section 721(a).
(6) For vintage year 2028, 0.6 percent of the
emission allowances established for each year under
section 721(a).
(7) For vintage year 2029, 0.3 percent of the
emission allowances established for each year under
section 721(a).
(d) Low Income Consumers.--For each vintage year starting in
2012, the Administrator shall auction pursuant to section 791
15 percent of the emission allowances established for each year
under section 721(a), with the proceeds used for the benefit of
low income consumers to fund the program set forth in subtitle
C of title IV of American Clean Energy and Security Act of
2009.
(e) Trade-Vulnerable Industries.--The Administrator shall
allocate emission allowances to energy-intensive, trade-exposed
entities, to be distributed in accordance with section 765, in
the following amounts:
(1) For vintage years 2012 and 2013, up to 2.0
percent of the emission allowances established for each
year under section 721(a).
(2) For vintage year 2014, up to 15 percent of the
emission allowances established for that year under
section 721(a).
(3) For vintage year 2015, up to the product of the
amount specified in paragraph (2), multiplied by the
quantity of emission allowances established for 2015
under section 721(a) divided by the quantity of
emission allowances established for 2014 under section
721(a).
(4) For vintage year 2016, up to the product of the
amount specified in paragraph (3), multiplied by the
quantity of emission allowances established for 2015
under section 721(a) divided by the quantity of
emission allowances established for 2014 under section
721(a).
(5) For vintage years 2017 through 2025, up to the
product of the amount specified in paragraph (4),
multiplied by the quantity of emission allowances
established for that year under section 721(a) divided
by the quantity of emission allowances established for
2016 under section 721(a).
(6) For vintage years 2026 through 2050, up to the
product of the amount specified in paragraph (4)--
(A) multiplied by the quantity of emission
allowances established for the applicable year
during 2026 through 2050 under section 721(a)
divided by the quantity of emission allowances
established for 2016 under section 721(a); and
(B) multiplied by a factor, not exceeding 100
percent, that shall equal 90 percent for 2026
and decline 10 percent for each year thereafter
until reaching zero,
except that, if the President sets one or more factors
for a year under section 767(c)(3)(A), the highest
factor set (not exceeding 100 percent) shall be used
for that year instead of the factor specified in
subparagraph (B).
(f) Deployment of Carbon Capture and Sequestration
Technology.--
(1) Annual allocation.--The Administrator shall
allocate emission allowances for the deployment of
carbon capture and sequestration technology to be
distributed in accordance with section 786 in the
following amounts:
(A) For vintage years 2014 through 2017, 1.75
percent of the emission allowances established
for each year under section 721(a).
(B) For vintage years 2018 and 2019, 4.75
percent of the emission allowances established
for each year under section 721(a).
(C) For vintage years 2020 through 2050, 5
percent of the emission allowances established
for each year under section 721(a).
(2) Carryover.--If the Administrator has not
distributed all of the allowances allocated pursuant to
this subsection for a given vintage year by the end of
that year, the Administrator shall--
(A) auction those emission allowances under
section 791 not later than March 31 of the year
following that vintage year; and
(B) increase the allocation under this
subsection for the vintage year after the
vintage year for which emission allowances were
undisbursed by the amount of undisbursed
emission allowances, but only to the extent
that allowances for that later year are to be
auctioned.
(g) Investment in Energy Efficiency and Renewable Energy.--
The Administrator shall allocate emission allowances to invest
in energy efficiency and renewable energy as follows:
(1) To be distributed in accordance with section 132
of the American Clean Energy and Security Act of 2009
in the following amounts:
(A) For vintage years 2012 through 2015, 9.5
percent of the emission allowances established
for each year under section 721(a).
(B) For vintage years 2016 through 2017, 6.5
percent of the emission allowances established
for each year under section 721(a).
(C) For vintage years 2018 through 2021, 5.5
percent of the emission allowances established
for each year under section 721(a).
(D) For vintage years 2022 through 2025, 1.0
percent of the emission allowances established
for each year under section 721(a).
(E) For vintage years 2026 through 2050, 4.5
percent of the emission allowances established
for each year under section 721(a).
(F) At the same time the vintage year 2022
through 2025 allowances are distributed, 3.55
percent of emission allowances established
under section 721(a) for the vintage year four
years greater shall also be distributed (which
shall be in addition to the emission allowances
in subparagraph (E)).
(2) To be distributed in accordance with section 201
of the American Clean Energy and Security Act of 2009,
for each vintage year from 2012 through 2050, 0.5
percent of emission allowances established under
section 721(a).
(h) Clean Energy Innovation Centers.--For each vintage year
from 2012 through 2050, the Administrator shall allocate for
Clean Energy Innovation Centers, 1.5 percent of emission
allowances established under section 721(a), to be distributed
in accordance with section 171 of the American Clean Energy and
Security Act of 2009.
(i) Investment in Clean Vehicle Technology.--The
Administrator shall allocate emission allowances to invest in
the development and deployment of clean vehicles, to be
distributed in accordance with section 124 of the American
Clean Energy and Security Act of 2009 in the following amounts:
(1) For vintage years 2012 through 2017, 3 percent of
the emission allowances established for each year under
section 721(a).
(2) For vintage years 2018 through 2025, 1 percent of
the emission allowances established for each year under
section 721(a).
(j) Domestic Fuel Production.--For vintage years 2014 through
2026, the Administrator shall allocate 2.0 percent of the
emission allowances established under section 721(a) to
domestic refiners, to be distributed in accordance with section
787.
(k) Investment in Workers.--The Administrator shall auction
pursuant to section 791 emission allowances for workers in the
following amounts and shall report to the Secretary of Labor
the amount of proceeds from the sale of these allowances:
(1) For vintage years 2012 through 2021, 0.5 percent
of the emission allowances established for each year
under section 721(a).
(2) For vintage years 2022 through 2050, 1.0 percent
of the emission allowances established for each year
under section 721(a).
(l) Domestic Adaptation.--The Administrator shall allocate
emission allowances for domestic adaptation as follows:
(1) To be distributed in accordance with section 453
of the American Clean Energy and Security Act of 2009
in the following amounts:
(A) For vintage years 2012 through 2021, 0.9
percent of the emission allowances established
for each year under section 721(a).
(B) For vintage years 2022 through 2026, 1.9
percent of the emission allowances established
for each year under section 721(a).
(C) For vintage years 2027 through 2050, 3.9
percent of the emission allowances established
for each year under section 721(a).
(2) For vintage year 2012 and thereafter, the
Administrator shall auction, pursuant to section 791,
0.1 percent of the emission allowances established for
each year under section 721(a), and shall deposit the
proceeds in the Climate Change Health Protection and
Promotion Fund established by section 467 of the
American Clean Energy and Security Act of 2009.
(m) Wildlife and Natural Resource Adaptation.--The
Administrator shall allocate emission allowances for wildlife
and natural resource adaptation as follows:
(1) To be distributed to State agencies in accordance
with section 480(c)(1) of the American Clean Energy and
Security Act of 2009 in the following amounts:
(A) For vintage years 2012 through 2021,
0.385 percent of the emission allowances
established for each year under section 721(a).
(B) For vintage years 2022 through 2026, 0.77
percent of the emission allowances established
for each year under section 721(a).
(C) For vintage years 2027 through 2050, 1.54
percent of the emission allowances established
for each year under section 721(a).
(2) To be auctioned pursuant to section 791, with the
proceeds to be deposited in the Natural Resources
Climate Change Adaptation Fund established pursuant to
section 480(a), in the following amounts:
(A) For vintage years 2012 through 2021,
0.615 percent of the emission allowances
established for each year under section 721(a).
(B) For vintage years 2022 through 2026, 1.23
percent of the emission allowances established
for each year under section 721(a).
(C) For vintage years 2027 through 2050, 2.46
percent of the emission allowances established
for each year under section 721(a).
(n) International Adaptation.--The Administrator shall
allocate emission allowances for international adaptation to be
distributed in accordance with part 2 of subtitle E of title IV
of the American Clean Energy and Security Act of 2009 in the
following amounts:
(1) For vintage years 2012 through 2021, 1.0 percent
of the emission allowances established for each year
under section 721(a).
(2) For vintage years 2022 through 2026, 2.0 percent
of the emission allowances established for each year
under section 721(a).
(3) For vintage years 2027 through 2050, 4.0 percent
of the emission allowances established for each year
under section 721(a).
(o) International Clean Technology Deployment.--The
Administrator shall allocate emission allowances for
international clean technology deployment for distribution in
accordance with subtitle D of title IV of the American Clean
Energy and Security Act of 2009 in the following amounts:
(1) For vintage years 2012 through 2021, 1.0 percent
of the emission allowances established for each year
under section 721(a).
(2) For vintage years 2022 through 2026, 2.0 percent
of the emission allowances established for each year
under section 721(a).
(3) For vintage years 2027 through 2050, 4.0 percent
of the emission allowances established for each year
under section 721(a).
(p) Release of Future Allowances.--The Administrator shall
make future year allowances available by auctioning allowances,
pursuant to section 791, in the following amounts:
(1) In each of calendar years 2014 through 2019, a
string of 0.70 billion allowances with vintage years 12
to 17 years after the year of the auction, with an
equal number of allowances from each vintage year in
the string.
(2) In each of calendar years 2020 through 2025, a
string of 0.50 billion allowances with vintage years 12
to 17 years after the year of the auction, with an
equal number of allowances from each vintage year in
the string.
(3) In each of calendar years 2026 through 2030, a
string of 0.3 billion allowances with vintage years 12
to 17 years after the year of the auction, with an
equal number of allowances from each vintage year in
the string.
(q) Deficit Reduction.--
(1) For each of vintage years 2012 through 2025, any
allowances not designated for distribution or auction
pursuant to section 781, subsections (a) through (o) of
this section, or section 790 shall be auctioned by the
Administrator pursuant to section 791 and the proceeds
shall be deposited into the Treasury.
(2) Unless otherwise specified, any allowances
allocated pursuant to subsections (a) through (o) and
not distributed by March 31 of the calendar year
following the allowance's vintage year, shall be
auctioned by the Administrator and the proceeds shall
be deposited into the Treasury.
(3) For auctions conducted through calendar year 2020
pursuant to subsection (p), the auction proceeds shall
be deposited into the Treasury.
(r) Climate Change Consumer Refund.--
(1) For each of vintage years 2026 through 2050, the
Administrator shall auction the following allowances
established under section 721(a) and deposit the
proceeds into the Climate Change Consumer Refund
Account:
(A) Any allowances not designated for
distribution or auction pursuant to section
781, subsections (a) through (p) of this
section, or section 790.
(B) Unless otherwise specified, any
allowances allocated pursuant to subsections
(a) through (o) and not distributed by March 31
of the calendar year following the allowance's
vintage year.
(2) For auctions conducted pursuant to subsection (p)
in calendar years 2021 and thereafter, the
Administrator shall place the proceeds from the sales
of the these allowances into the Climate Change
Consumer Refund Account. Funds deposited into the
Climate Change Consumer Refund Account shall be used as
specified in section 789 and shall be available for
expenditure, without further appropriation or fiscal
year limitation.
SEC. 783. ELECTRICITY CONSUMERS.
(a) Definitions.--For purposes of this section:
(1) Electricity local distribution company.--The term
``electricity local distribution company'' means an
electric utility--
(A) that has a legal, regulatory, or
contractual obligation to deliver electricity
directly to retail consumers in the United
States, regardless of whether that entity or
another entity sells the electricity as a
commodity to those retail consumers; and
(B) the retail rates of which, except in the
case of a registered electric cooperative, are
regulated by a State regulatory authority,
regulatory commission, municipality, public
utility, or by an Indian tribe pursuant to
tribal law.
(2) Long-term contract generator.--The term ``long-
term contract generator'' means a qualifying small
power production facility or a qualifying cogeneration
facility (within the meaning of section 3(17)(C) or
3(18)(B) of the Federal Power Act), or a new
independent power production facility (within the
meaning of section 416(a)(2) of this Act, except that
subparagraph (C) of such definition shall not apply for
purposes of this paragraph), that is--
(A) a covered entity;
(B) as of the commencement of operation, a
facility consisting of one or more utility
units with total installed net output capacity
(in MWe) of no more than 130 percent of the
facility's total planned net output capacity
(in MWe);
(C) as of the date of enactment of this
title, a facility with a power sales agreement
executed before January 1, 2007, that governs
the facility's electricity sales and provides
for sales at a price (whether a fixed price or
a price formula) for electricity that does not
allow for recovery of the costs of compliance
with the limitation on greenhouse gas emissions
under this title; and
(D) not a merchant coal generator.
(3) Merchant coal generator.--The term ``merchant
coal generator'' means an electric generation facility
that--
(A) is a covered entity;
(B) derives at least 85 percent of its heat
input from coal, petroleum coke, or any
combination of these 2 fuels;
(C) is not owned by a Federal, State, or
regional agency or power authority; and
(D) generates electricity for sale to others,
provided that such sales are not subject to--
(i) retail rate regulation by a State
public utility commission; or
(ii) self-regulation of rates by a
local government, State agency, or
electric cooperative.
(4) State regulatory authority.--The term ``State
regulatory authority'' has the meaning given that term
in section 3(17) of the Public Utility Regulatory
Policies Act of 1978 (16 U.S.C. 2602(17)).
(b) Electricity Local Distribution Companies.--
(1) Allocation.--Not later than June 30 of 2011 and
each calendar year thereafter through 2028, the
Administrator shall distribute to electricity local
distribution companies for the benefit of retail
ratepayers the quantity of emission allowances
allocated for the electricity sector for the following
vintage year pursuant to section 782(a), provided that
the Administrator shall first subtract from such
quantity and distribute or reserve for distribution the
quantity of emission allowances for the relevant
vintage year that are required for distribution under
subsections (c) and (d) of this section.
(2) Distribution of allowances based on emissions.--
(A) In general.--For each vintage year, 50
percent of the emission allowances available
for distribution under paragraph (1) shall be
distributed by the Administrator among
individual electricity local distribution
companies ratably based on the annual average
carbon dioxide emissions attributable to
generation of electricity delivered at retail
by each such company during the base period
determined under subparagraph (B).
(B) Base period.--
(i) Vintage years 2012 and 2013.--For
vintage years 2012 and 2013, an
electricity local distribution
company's base period shall be--
(I) calendar years 2006
through 2008; or
(II) any 3 consecutive
calendar years between 1999 and
2008, inclusive, that such
company selects, provided that
the company timely informs the
Administrator of such
selection.
(ii) Vintage years 2014 and
thereafter.--For vintage years 2014 and
thereafter, the base period shall be--
(I) the base period selected
under clause (i); or
(II) any 3 consecutive
calendar years between 2009
through 2012, inclusive, or,
for local distribution
companies with new units that
are not fully operational
before 2012, solely calendar
year 2012, provided that such
company selects a period from
among these options and timely
informs the Administrator of
such selection.
(C) Determination of emissions.--As part of
the regulations promulgated pursuant to
subsection (e), the Administrator, after
consultation with the Energy Information
Administration, shall determine the average
amount of carbon dioxide emissions attributable
to generation of electricity delivered at
retail by each electricity local distribution
company for each of the years 1999 through 2009
or the most recent calendar year for which
appropriate data are available, taking into
account entities' electricity generation,
electricity purchases, and electricity sales.
Not later than March 31, 2013, the
Administrator, after consultation with the
Energy Information Administration, shall update
such determination to include emissions for any
additional calendar years through 2012. Such
determinations shall be as precise as
practicable, taking into account the nature of
data currently available and the nature of
markets and regulation in effect in various
regions of the country. The following
requirements shall apply to such
determinations:
(i) The Administrator shall determine
the amount of fossil fuel-based
electricity delivered at retail by each
electricity local distribution company,
and shall use appropriate emission
factors to calculate carbon dioxide
emissions associated with the
generation of such electricity.
(ii) Where it is not practical to
determine the precise fuel mix for the
electricity delivered at retail by an
individual electricity local
distribution company, the Administrator
may use the best available data,
including average data on a regional
basis with reference to Regional
Transmission Organizations or regional
entities (as that term is defined in
section 215(a)(7) of the Federal Power
Act (16 U.S.C. 824o(a)(7)), to estimate
fuel mix and emissions. Different
methodologies may be applied in
different regions if appropriate to
obtain the most accurate estimate.
(3) Distribution of allowances based on deliveries.--
(A) Initial allocation formula.--Except as
provided in subparagraph (B), for each vintage
year, the Administrator shall distribute 50
percent of the emission allowances allocated
under paragraph (1) of this subsection among
individual electricity local distribution
companies ratably based on each electricity
local distribution company's annual average
retail electricity deliveries for 2006 through
2008, unless the owner or operator of the
company selects 3 other consecutive years
between 1999 and 2008, inclusive, and timely
notifies the Administrator of its selection.
(B) Updating.--Prior to distributing 2015
vintage emission allowances under this
subparagraph and at 3-year intervals
thereafter, the Administrator shall update the
distribution formula under this subparagraph to
reflect changes in each electricity local
distribution company's service territory since
the most recent formula was established. For
each successive 3-year period, the
Administrator shall distribute allowances
ratably among individual electricity local
distribution companies based on the product
of--
(i) each electricity local
distribution company's average annual
deliveries per customer during calendar
years 2006 through 2008, or during the
3 alternative consecutive years
selected by such company under
subparagraph (A); and
(ii) the number of customers of such
electricity local distribution company
in the most recent year in which the
formula is updated under this clause.
(4) Use of allowances.--
(A) Ratepayer benefit.--Emission allowances
distributed to an electricity local
distribution company under this subsection
shall be used exclusively for the benefit of
retail ratepayers of such electricity local
distribution company and may not be used to
support electricity sales or deliveries to
entities or persons other than such ratepayers.
(B) Ratepayer classes.--In using emission
allowances distributed under this section for
the benefit of ratepayers, an electricity local
distribution company shall ensure that
ratepayer benefits are distributed--
(i) among ratepayer classes ratably
based on electricity deliveries to each
class; and
(ii) equitably among individual
ratepayers within each ratepayer class,
including entities that receive
emission allowances pursuant to part F.
(C) Limitation.--An electricity local
distribution company shall not use the value of
emission allowances distributed under this
subsection to provide to any ratepayer a rebate
that is based solely on the quantity of
electricity delivered to such ratepayer. To the
extent an electricity local distribution
company uses the value of emission allowances
distributed under this subsection to provide
rebates, it shall, to the maximum extent
practicable, provide such rebates with regard
to the fixed portion of ratepayers' bills or as
a fixed credit or rebate on electricity bills.
(D) Guidelines.--As part of the regulations
promulgated under subsection (e), the
Administrator shall prescribe specific
guidelines for the implementation of the
requirements of this paragraph.
(5) Regulatory proceedings.--
(A) Requirement.--No electricity local
distribution company shall be eligible to
receive emission allowances under this
subsection unless the State regulatory
authority with authority over such company, or
the entity with authority to regulate retail
electricity rates of an electricity local
distribution company not regulated by a State
regulatory authority, has--
(i) promulgated a regulation or
completed a rate proceeding (or the
equivalent, in the case of a ratemaking
entity other than a State regulatory
authority) that provides for the full
implementation of the requirements of
paragraph (4) of this subsection; and
(ii) made available to the
Administrator and the public a report
describing, in adequate detail, the
manner in which the requirements of
paragraph (4) will be implemented.
(B) Updating.--The Administrator shall
require, as a condition of continued receipt of
emission allowances under this subsection by an
electricity local distribution company, that a
new regulation be promulgated or rate
proceeding be completed, and a new report be
made available to the Administrator and the
public, pursuant to subparagraph (A), not less
frequently than every 5 years.
(6) Plans and reporting.--
(A) Regulations.--As part of the regulations
promulgated under subsection (e), the
Administrator shall prescribe requirements
governing plans and reports to be submitted in
accordance with this paragraph.
(B) Plans.--Not later than April 30 of 2011
and every 5 years thereafter through 2026, each
electricity local distribution company shall
submit to the Administrator a plan, approved by
the State regulatory authority or other entity
charged with regulating the retail rates of
such company, describing such company's plans
for the disposition of the value of emission
allowances to be received pursuant to this
subsection, in accordance with the requirements
of this subsection.
(C) Reports.--Not later than June 30 of 2013
and each calendar year thereafter through 2031,
each electricity local distribution company
shall submit a report to the Administrator, and
to the relevant State regulatory authority or
other entity charged with regulating the retail
electricity rates of such company, describing
the disposition of the value of any emission
allowances received by such company in the
prior calendar year pursuant to this
subsection, including--
(i) a description of sales, transfer,
exchange, or use by the company for
compliance with obligations under this
title, of any such emission allowances;
(ii) the monetary value received by
the company, whether in money or in
some other form, from the sale,
transfer, or exchange of emission
allowances received by the company
under this subsection;
(iii) the manner in which the
company's disposition of emission
allowances received under this
subsection complies with the
requirements of this subsection,
including each of the requirements of
paragraph (4); and
(iv) such other information as the
Administrator may require pursuant to
subparagraph (A).
(D) Publication.--The Administrator shall
make available to the public all plans and
reports submitted under this subsection,
including by publishing such plans and reports
on the Internet.
(7) Audits.--Each year, the Administrator shall audit
a representative sample of electricity local
distribution companies to ensure that emission
allowances distributed under this subsection have been
used exclusively for the benefit of retail ratepayers
and that such companies are complying with the
requirements of this subsection. In selecting companies
for audit, the Administrator shall take into account
any credible evidence of noncompliance with such
requirements. The Administrator shall make available to
the public a report describing the results of each such
audit, including by publishing such report on the
Internet.
(8) Enforcement.--A violation of any requirement of
this subsection shall be a violation of this Act. Each
emission allowance the value of which is used in
violation of the requirements of this subsection shall
be a separate violation.
(c) Merchant Coal Generators.--
(1) Qualifying emissions.--The qualifying emissions
for a merchant coal generator for a given calendar year
shall be the product of the number of megawatt hours of
electricity generated by such generator in such
calendar year and the average carbon dioxide emissions
per megawatt hour generated by such generator during
calendar years 2006 through 2008, provided that the
number of megawatt hours in a given calendar year for
purposes of such calculation shall be reduced in
proportion to the portion of such generator's carbon
dioxide emissions that are either--
(A) captured and sequestered in such calendar
year; or
(B) attributable to the combustion or
gasification of renewable biomass, such that
the generator is not required to hold emission
allowances for such emissions.
(2) Phase-down schedule.--The Administrator shall
identify an annual phase-down factor, applicable to
distributions to merchant coal generators for each of
vintage years 2012 through 2029, that corresponds to
the overall decline in the amount of emission
allowances to be allocated to the electricity sector in
such years pursuant to section 782(a). Such factor
shall--
(A) for vintage year 2012, be equal to 1.0;
(B) for each of vintage years 2013 through
2029, correspond to the quotient of--
(i) the quantity of emission
allowances allocated to the electricity
sector under section 782(a) for such
vintage year; divided by
(ii) the quantity of emission
allowances allocated to the electricity
sector under section 782(a) for vintage
year 2012.
(3) Distribution of emission allowances.--Not later
than March 1 of 2013 and each calendar year through
2030, the Administrator shall distribute emission
allowances of the preceding vintage year to the owner
or operator of each merchant coal generator equal to
the product of--
(A) 0.5;
(B) the qualifying emissions for such
merchant coal generator for the preceding year,
as determined under paragraph (1); and
(C) the phase-down factor for the preceding
calendar year, as identified under paragraph
(2).
(4) Adjustment.--
(A) Study.--Not later than July 1, 2014, the
Administrator, in consultation with the Federal
Energy Regulatory Commission, shall complete a
study to determine whether the allocation
formula under paragraph (3) is resulting in, or
is likely to result in, windfall profits to
merchant coal generators or substantially
disparate treatment of merchant coal generators
operating in different markets or regions.
(B) Regulation.--If the Administrator, in
consultation with the Federal Energy Regulatory
Commission, makes an affirmative finding of
windfall profits or disparate treatment under
subparagraph (A), the Administrator shall, not
later than 18 months after the completion of
the study described in subparagraph (A),
promulgate regulations providing for the
adjustment of the allocation formula under
paragraph (3) to mitigate, to the extent
practicable, such windfall profits, if any, and
such disparate treatment, if any.
(5) Limitation on allowances.--Notwithstanding
paragraph (3) or (4), for any vintage year the
Administrator shall distribute under this subsection no
more than 10 percent of the total quantity of emission
allowances available for such vintage year for
distribution to the electricity sector under section
782(a). If the quantity of emission allowances that
would otherwise be distributed pursuant to paragraph
(3) or (4) for any vintage year would exceed such
limit, the Administrator shall distribute 10 percent of
the total emission allowances available for
distribution under section 782(a) for such vintage year
ratably among merchant coal generators based on the
applicable formula under paragraph (3) or (4).
(d) Generators With Long-Term Power Purchase Agreements.--
(1) Reserved allowances.--Notwithstanding subsections
(b) and (c) of this section, the Administrator shall
withhold from distribution to electricity local
distribution companies a number of emission allowances
equal to 105 percent of the emission allowances the
Administrator anticipates will be distributed to long-
term contract generators under this subsection. If not
required to distribute all of these reserved allowances
under this subsection, the Administrator shall
distribute any remaining emission allowances to the
electricity local distribution companies in accordance
with subsection (b).
(2) Distribution.--Not later than March 1 of 2013 and
each calendar year through 2030, the Administrator
shall distribute to the owner or operator of each long-
term contract generator the number of emission
allowances of the preceding vintage year that are equal
to the number of tons of carbon dioxide emitted as a
result of a qualifying long-term power purchase
agreement referred to in subsection (a)(2)(C).
(3) Duration.--A long-term contract generator shall
cease to be eligible to receive allocations under this
subsection upon the earliest of the following dates:
(A) The date when the facility no longer
qualifies as a qualifying small power
production facility or a qualifying
cogeneration facility (within the meaning of
section 3(17)(C) or 3(18)(B) of the Federal
Power Act), or a new independent power
production facility (within the meaning of
section 416(a)(2) of this Act, except that
subparagraph (C) of such definition shall not
apply for purposes of this clause).
(B) The date when the facility no longer
meets the total installed net output capacity
criterion required to be met as of the
commencement of operation in subsection
(a)(2)(B).
(C) The date when the power purchase
agreement referred to in subsection (a)(2)(C)--
(i) expires;
(ii) is terminated; or
(iii) is amended in any way that
changes the location of the facility,
the price (whether a fixed price or
price formula) for electricity sold
under such agreement, the quantity of
electricity sold under the agreement,
or the expiration or termination date
of the agreement.
(4) Eligibility.--To be eligible to receive allowance
distributions under this subsection, the owner or
operator of a long-term contract generator shall submit
each of the following in writing to the Administrator
within 180 days after the date of enactment of this
title, and not later than September 30 of each vintage
year for which such generator wishes to receive
emission allowances:
(A) A certificate of representation described
in section 700(15).
(B) An identification of each owner and each
operator of the facility.
(C) An identification of the units at the
facility and the location of the facility.
(D) A written certification by the designated
representative that the facility meets all the
requirements of the definition of a long-term
contract generator.
(E) The expiration date of the power purchase
agreement referred to in subsection (a)(2)(C).
(F) A copy of the power purchase agreement
referred to in subsection (a)(2)(C).
(5) Notification.--Not later than 30 days after a
facility loses, in accordance with paragraph (3), its
eligibility for emission allowances distributed
pursuant to this subsection, the designated
representative of such facility shall notify the
Administrator in writing when, and on what basis, the
facility lost its eligibility to receive emission
allowances.
(e) Regulations.--Not later than 2 years after the date of
enactment of this title, the Administrator, in consultation
with the Federal Energy Regulatory Commission, shall promulgate
regulations to implement the requirements of this section.
SEC. 784. NATURAL GAS CONSUMERS.
(a) Definitions.--For purposes of this section:
(1) Natural gas local distribution company.--The term
``natural gas local distribution company'' means a
natural gas local distribution company that is a
covered entity.
(2) Cost-effective.--The term ``cost-effective'',
with respect to an energy efficiency program, means
that the program meets the Total Resource Cost Test,
which requires that the net present value of economic
benefits over the life of the program, including
avoided supply and delivery costs and deferred or
avoided investments, is greater than the net present
value of the economic costs over the life of the
program, including program costs and incremental costs
borne by the energy consumer.
(b) Allocation.--Not later than June 30 of 2015 and each
calendar year thereafter through 2028, the Administrator shall
distribute to natural gas local distribution companies for the
benefit of retail ratepayers the quantity of emission
allowances allocated for the following vintage year pursuant to
section 782(b). Such allowances shall be distributed among
local natural gas distribution companies based on the following
formula:
(1) Initial formula.--Except as provided in paragraph
(2), for each vintage year, the Administrator shall
distribute emission allowances among natural gas local
distribution companies ratably based on each such
company's annual average retail natural gas deliveries
for 2006 through 2008, unless the owner or operator of
the company selects 3 other consecutive years between
1999 and 2008, inclusive, and timely notifies the
Administrator of its selection.
(2) Updating.--Prior to distributing 2019 vintage
emission allowances and at 3-year intervals thereafter,
the Administrator shall update the distribution formula
under this subsection to reflect changes in each
natural gas local distribution company's service
territory since the most recent formula was
established. For each successive 3-year period, the
Administrator shall distribute allowances ratably among
natural gas local distribution companies based on the
product of--
(A) each natural gas local distribution
company's average annual natural gas deliveries
per customer during calendar years 2006 through
2008, or during the 3 alternative consecutive
years selected by such company under paragraph
(1); and
(B) the number of customers of such natural
gas local distribution company in the most
recent year in which the formula is updated
under this paragraph.
(c) Use of Allowances.--
(1) Ratepayer benefit.--Emission allowances
distributed to a natural gas local distribution company
under this section shall be used exclusively for the
benefit of retail ratepayers of such natural gas local
distribution company and may not be used to support
natural gas sales or deliveries to entities or persons
other than such ratepayers.
(2) Ratepayer classes.--In using emission allowances
distributed under this section for the benefit of
ratepayers, a natural gas local distribution company
shall ensure that ratepayer benefits are distributed--
(A) among ratepayer classes ratably based on
natural gas deliveries to each class; and
(B) equitably among individual ratepayers
within each ratepayer class.
(3) Limitation.--A natural gas local distribution
company shall not use the value of emission allowances
distributed under this section to provide to any
ratepayer a rebate that is based solely on the quantity
of natural gas delivered to such ratepayer. To the
extent a natural gas local distribution company uses
the value of emission allowances distributed under this
section to provide rebates, it shall, to the maximum
extent practicable, provide such rebates with regard to
the fixed portion of ratepayers' bills or as a fixed
creditor rebate on natural gas bills.
(4) Energy efficiency programs.--The value of no less
than one third of the emission allowances distributed
to natural gas local distribution companies pursuant to
this section in any calendar year shall be used for
cost-effective energy efficiency programs for natural
gas consumers. Such programs must be authorized and
overseen by the State regulatory authority, or by the
entity with regulatory authority over retail natural
gas rates in the case of a natural gas local
distribution company that is not regulated by a State
regulatory authority.
(5) Guidelines.--As part of the regulations
promulgated under subsection (h), the Administrator
shall prescribe specific guidelines for the
implementation of the requirements of this subsection.
(d) Regulatory Proceedings.--
(1) Requirement.--No natural gas local distribution
company shall be eligible to receive emission
allowances under this section unless the State
regulatory authority with authority over such company,
or the entity with authority to regulate retail rates
of a natural gas local distribution company not
regulated by a State regulatory authority, has--
(A) promulgated a regulation or completed a
rate proceeding (or the equivalent, in the case
of a ratemaking entity other than a State
regulatory authority) that provides for the
full implementation of the requirements of
subsection (c); and
(B) made available to the Administrator and
the public a report describing, in adequate
detail, the manner in which the requirements of
subsection (c) will be implemented.
(2) Updating.--The Administrator shall require, as a
condition of continued receipt of emission allowances
under this section, that a new regulation be
promulgated or rate proceeding be completed, and a new
report be made available to the Administrator and the
public, pursuant to paragraph (1), not less frequently
than every 5 years.
(e) Plans and Reporting.--
(1) Regulations.--As part of the regulations
promulgated under subsection (h), the Administrator
shall prescribe requirements governing plans and
reports to be submitted in accordance with this
subsection.
(2) Plans.--Not later than April 30 of 2015 and every
5 years thereafter through 2025, each natural gas local
distribution company shall submit to the Administrator
a plan, approved by the State regulatory authority or
other entity charged with regulating the retail rates
of such company, describing such company's plans for
the disposition of the value of emission allowances to
be received pursuant to this section, in accordance
with the requirements of this section.
(3) Reports.--Not later than June 30 of 2017 and each
calendar year thereafter through 2031, each natural gas
local distribution company shall submit a report to the
Administrator, approved by the relevant State
regulatory authority or other entity charged with
regulating the retail natural gas rates of such
company, describing the disposition of the value of any
emission allowances received by such company in the
prior calendar year pursuant to this subsection,
including--
(A) a description of sales, transfer,
exchange, or use by the company for compliance
with obligations under this title, of any such
emission allowances;
(B) the monetary value received by the
company, whether in money or in some other
form, from the sale, transfer, or exchange of
emission allowances received by the company
under this section;
(C) the manner in which the company's
disposition of emission allowances received
under this subsection complies with the
requirements of this section, including each of
the requirements of subsection (c);
(D) the cost-effectiveness of, and energy
savings achieved by, energy efficiency programs
supported through such emission allowances; and
(E) such other information as the
Administrator may require pursuant to paragraph
(1).
(4) Publication.--The Administrator shall make
available to the public all plans and reports submitted
by natural gas local distribution companies under this
subsection, including by publishing such plans and
reports on the Internet.
(f) Audits.--Each year, the Administrator shall audit a
representative sample of natural gas local distribution
companies to ensure that emission allowances distributed under
this section have been used exclusively for the benefit of
retail ratepayers and that such companies are complying with
the requirements of this section. In selecting companies for
audit, the Administrator shall take into account any credible
evidence of noncompliance with such requirements. The
Administrator shall make available to the public a report
describing the results of each such audit, including by
publishing such report on the Internet.
(g) Enforcement.--A violation of any requirement of this
section shall be a violation of this Act. Each emission
allowance the value of which is used in violation of the
requirements of this section shall be a separate violation.
(h) Regulations.--Not later than January 1, 2014, the
Administrator, in consultation with the Federal Energy
Regulatory Commission, shall promulgate regulations to
implement the requirements of this section.
SEC. 785. HOME HEATING OIL AND PROPANE CONSUMERS.
(a) Definitions.--For purposes of this section:
(1) Carbon content.--The term ``carbon content''
means the amount of carbon dioxide that would be
emitted as a result of the combustion of a fuel.
(2) Cost-effective.--The term ``cost-effective'' has
the meaning given that term in section 784(a)(2).
(b) Allocation.--Not later than September 30 of each of
calendar years 2012 through 2029, the Administrator shall
distribute among the States, in accordance with this section,
the quantity of emission allowances allocated pursuant to
section 782(c).
(c) Distribution Among States.--The Administrator shall
distribute emission allowances among the States under this
section each year ratably based on the ratio of--
(1) the carbon content of home heating oil and
propane sold to consumers within each State in the
preceding year for residential or commercial uses; to
(2) the carbon content of home heating oil and
propane sold to consumers within the United States in
the preceding year for residential or commercial uses.
(d) Use of Allowances.--
(1) In general.--States shall use emission allowances
distributed under this section exclusively for the
benefit of consumers of home heating oil or propane for
residential or commercial purposes. Such proceeds shall
be used exclusively for--
(A) cost-effective energy efficiency programs
for consumers that use home heating oil or
propane for residential or commercial purposes;
or
(B) rebates or other direct financial
assistance programs for consumers of home
heating oil or propane used for residential or
commercial purposes.
(2) Administration and delivery mechanisms.--In
administering programs supported by this section,
States shall--
(A) use no less than 50 percent of the value
of emission allowances received under this
section for cost-effective energy efficiency
programs to reduce consumers' overall fuel
costs;
(B) to the extent practicable, deliver
consumer support under this section through
existing energy efficiency and consumer energy
assistance programs or delivery mechanisms,
including, where appropriate, programs or
mechanisms administered by parties other than
the State; and
(C) seek to coordinate the administration and
delivery of energy efficiency and consumer
energy assistance programs supported under this
section, with one another and with existing
programs for various fuel types, so as to
deliver comprehensive, fuel-blind, coordinated
programs to consumers.
(e) Reporting.--Each State receiving emission allowances
under this section shall submit to the Administrator, within 12
months of each receipt of such allowances, a report, in
accordance with such requirements as the Administrator may
prescribe, that--
(1) describes the State's use of emission allowances
distributed under this section, including a description
of the energy efficiency and consumer assistance
programs supported with such allowances;
(2) demonstrates the cost-effectiveness of, and the
energy savings achieved by, energy efficiency programs
supported under this section; and
(3) includes a report prepared by an independent
third party, in accordance with such regulations as the
Administrator may promulgate, evaluating the
performance of the energy efficiency and consumer
assistance programs supported under this section.
(f) Enforcement.--If the Administrator determines that a
State is not in compliance with this section, the Administrator
may withhold a portion of the emission allowances, the quantity
of which is equal to up to twice the quantity of the allowances
that the State failed to use in accordance with the
requirements of this section, that such State would otherwise
be eligible to receive under this section in later years.
Allowances withheld pursuant to this subsection shall be
distributed among the remaining States ratably in accordance
with the formula in subsection (c).
SEC. 786. COMMERCIAL DEPLOYMENT OF CARBON CAPTURE AND SEQUESTRATION
TECHNOLOGIES.
(a) Regulations.--Not later than 2 years after the date of
enactment of this title, the Administrator shall promulgate
regulations providing for the distribution of emission
allowances allocated pursuant to section 782(f), pursuant to
the requirements of this section, to support the commercial
deployment of carbon capture and sequestration technologies in
both electric power generation and industrial operations.
(b) Eligibility Criteria.--To be eligible to receive emission
allowances under this section, the owner or operator of a
project must--
(1) implement carbon capture and sequestration
technology--
(A) at an electric generating unit that--
(i) has a nameplate capacity of 200
megawatts or more;
(ii) in the case of a retrofit
application, applies the carbon capture
and sequestration technology to the
flue gas from at least 200 megawatts of
the total nameplate generating capacity
of the unit, provided that clause (i)
shall apply without exception;
(iii) derives at least 50 percent of
its annual fuel input from coal,
petroleum coke, or any combination of
these 2 fuels; and
(iv) upon implementation of capture
and sequestration technology, will
achieve an emission limit that is at
least a 50 percent reduction in
emissions of the carbon dioxide
produced by--
(I) the unit, measured on an
annual basis, determined in
accordance with section
812(b)(2); or
(II) in the case of retrofit
applications under clause (ii),
the treated portion of flue gas
from the unit, measured on an
annual basis, determined in
accordance with section
812(b)(2); or
(B) at an industrial source that--
(i) absent carbon capture and
sequestration, would emit greater than
50,000 tons per year of carbon dioxide;
(ii) upon implementation, will
achieve an emission limit that is at
least a 50 percent reduction in
emissions of the carbon dioxide
produced by the emission point,
measured on an annual basis, determined
in accordance with section 812(b)(2);
and
(iii) does not produce a liquid
transportation fuel from a solid
fossil-based feedstock;
(2) geologically sequester carbon dioxide at a site
that meets all applicable permitting and certification
requirements for geologic sequestration, or, pursuant
to such requirements as the Administrator may prescribe
by regulation, convert captured carbon dioxide to a
stable form that will safely and permanently sequester
such carbon dioxide;
(3) meet all other applicable State and Federal
permitting requirements; and
(4) be located in the United States.
(c) Phase I Distribution to Electric Generating Units.--
(1) Application.--This subsection shall apply only to
projects at the first 6 gigawatts of electric
generating units, measured in cumulative generating
capacity of such units.
(2) Distribution.--The Administrator shall distribute
emission allowances allocated under section 782(f) to
the owner or operator of each eligible project at an
electric generating unit in a quantity equal to the
quotient obtained by dividing--
(A) the product obtained by multiplying--
(i) the number of metric tons of
carbon dioxide emissions avoided
through capture and sequestration of
emissions by the project, as determined
pursuant to such methodology as the
Administrator shall prescribe by
regulation; and
(ii) a bonus allowance value,
pursuant to paragraph (3); by
(B) the average fair market value of an
emission allowance during the preceding year.
(3) Bonus allowance values.--
(A) For a generating unit achieving the
capture and sequestration of 85 percent or more
of the carbon dioxide that otherwise would be
emitted by such unit, the bonus allowance value
shall be $90.
(B) The Administrator shall by regulation
establish a bonus allowance value for each rate
of lower capture and sequestration achieved by
a generating unit, from a minimum of $50 per
ton for a 50 percent rate and varying directly
with increasing rates of capture and
sequestration up to $90 per ton for an 85
percent rate.
(C) For a generating unit that achieves the
capture and sequestration of at least 50
percent of the carbon dioxide that otherwise
would be emitted by such unit by not later than
January 1, 2017, the otherwise applicable bonus
allowance value under this paragraph shall be
increased by $10, provided that the owner of
such unit notifies the Administrator of its
intent to achieve such rate of capture and
sequestration by not later than January 1,
2012.
(D) For a carbon capture and sequestration
project sequestering in a geological formation
for purposes of enhanced hydrocarbon recovery,
the Administrator shall, by regulation, reduce
the applicable bonus allowance value under this
paragraph to reflect the lower net cost of the
project when compared to sequestration into
geological formations solely for purposes of
sequestration.
(E) All monetary values in this section shall
be adjusted annually for inflation.
(d) Phase II Distribution to Electric Generating Units.--
(1) Application.--This subsection shall apply only to
the distribution of emission allowances to carbon
capture and sequestration projects at electric
generating units after the capacity threshold
identified in subsection (c)(1) is reached.
(2) Regulations.--Not later than 2 years prior to the
date on which the capacity threshold identified in
subsection (c)(1) is projected to be reached, the
Administrator shall promulgate regulations to govern
the distribution of emission allowances to the owners
or operators of eligible projects under this
subsection.
(3) Reverse auctions.--
(A) In general.--Except as provided in
paragraph (4), the regulations promulgated
under paragraph (2) shall provide for the
distribution of emission allowances to the
owners or operators of eligible projects under
this subsection through reverse auctions, which
shall be held no less frequently than once each
calendar year. The Administrator may establish
a separate auction for each of no more than 5
different project categories, defined on the
basis of coal type, capture technology,
geological formation type, new unit versus
retrofit application, such other factors as the
Administrator may prescribe, or any combination
thereof. The Administrator may establish
appropriate minimum rates of capture and
sequestration in implementing this paragraph.
(B) Auction process.--At each reverse
auction--
(i) the Administrator shall solicit
bids from eligible projects;
(ii) eligible projects participating
in the auction shall submit a bid
including the desired level of carbon
dioxide sequestration incentive per ton
and the estimated quantity of carbon
dioxide that the project will
permanently sequester over 10 years;
and
(iii) the Administrator shall select
bids, within each auction, for the
sequestration amount submitted,
beginning with the eligible project
submitting the bid for the lowest level
of sequestration incentive on a per ton
basis and meeting such other
requirements as the Administrator may
specify, until the amount of funds
available for the reverse auction is
committed.
(C) Form of distribution.--The Administrator
shall provide deployment incentives to the
owners or operators of eligible projects
selected through a reverse auction under this
paragraph pursuant to a formula equivalent to
that described in subsection (c)(2), except
that the incentive level that is bid by the
entity shall be substituted for the bonus
allowance value.
(4) Alternative distribution method.--
(A) In general.--If the Administrator
determines that reverse auctions would not
provide for efficient and cost-effective
commercial deployment of carbon capture and
sequestration technologies, the Administrator
may instead, through regulations promulgated
under paragraph (2) or (5), prescribe a
schedule for the award of bonus allowances to
the owners or operators of eligible projects
under this subsection, in accordance with the
requirements of this paragraph.
(B) Multiple tranches.--The Administrator
shall divide emission allowances available for
distribution to the owners or operators of
eligible projects into a series of tranches,
each supporting the deployment of a specified
quantity of cumulative electric generating
capacity utilizing carbon capture and
sequestration technology, each of which shall
not be greater than 6 gigawatts.
(C) Method of distribution.--The
Administrator shall distribute emission
allowances within each tranche, on a first-
come, first-served basis--
(i) based on the date of full-scale
operation of capture and sequestration
technology; and
(ii) pursuant to a formula, similar
to that set forth in subsection (c)(2)
(except that the Administrator shall
prescribe bonus allowance values
different than those set forth in
subsection (c)(2)), establishing the
number of allowances to be distributed
per ton of carbon dioxide sequestered
by the project.
(D) Requirements.--For each tranche
established pursuant to subparagraph (A), the
Administrator shall establish a schedule for
distributing emission allowances that--
(i) is based on a sliding scale that
provides higher bonus allowance values
for projects achieving higher rates of
capture and sequestration;
(ii) for each capture and
sequestration rate, establishes a bonus
allowance value that is lower than that
established for such rate in the
previous tranche (or, in the case of
the first tranche, than that
established for such rate under
subsection (c)(3)); and
(iii) may establish different bonus
allowance levels for no more than 5
different project categories, defined
by coal type, capture technology,
geological formation type, new unit
versus retrofit application, such other
factors as the Administrator may
prescribe, or any combination thereof.
(E) Criteria for establishing bonus allowance
values.--In setting bonus allowance values
under this paragraph, the Administrator shall
seek to cover no more than the reasonable
incremental capital and operating costs of a
project that are attributable to implementation
of carbon capture, transportation, and
sequestration technologies, taking into
account--
(i) the reduced cost of compliance
with section 722 of this Act;
(ii) the reduced cost associated with
sequestering in a geological formation
for purposes of enhanced hydrocarbon
recovery when compared to sequestration
into geological formations solely for
purposes of sequestration;
(iii) the relevant factors defining
the project category; and
(iv) such other factors as the
Administrator determines are
appropriate.
(5) Revision of regulations.--The Administrator shall
review, and as appropriate revise, the applicable
regulations under this subsection no less frequently
than every 8 years.
(e) Limits for Certain Electric Generating Units.--
(1) Definitions.--For purposes of this subsection,
the terms ``covered EGU'' and ``initially permitted''
shall have the meaning given those terms in section 812
of this Act.
(2) Covered egus initially permitted from 2009
through 2014.--For a covered EGU that is initially
permitted on or after January 1, 2009, and before
January 1, 2015, the Administrator shall reduce the
quantity of emission allowances that the owner or
operator of such covered EGU would otherwise be
eligible to receive under this section as follows:
(A) In the case of a unit commencing
operation on or before January 1, 2019, if the
date in clause (ii)(I) is earlier than the date
in clause (ii)(II), by the product of--
(i) 20 percent; and
(ii) the number of years, if any,
that have elapsed between--
(I) the earlier of January 1,
2020, or the date that is 5
years after the commencement of
operation of such covered EGU;
and
(II) the first year that such
covered EGU achieves (and
thereafter maintains) an
emission limit that is at least
a 50 percent reduction in
emissions of the carbon dioxide
produced by the unit, measured
on an annual basis, as
determined in accordance with
section 812(b)(2).
(B) In the case of a unit commencing
operation after January 1, 2019, by the product
of--
(i) 20 percent; and
(ii) the number of years between--
(I) the commencement of
operation of such covered EGU;
and
(II) the first year that such
covered EGU achieves (and
thereafter maintains) an
emission limit that is at least
a 50 percent reduction in
emissions of the carbon dioxide
produced by the unit, measured
on an annual basis, as
determined in accordance with
section 812(b)(2).
(3) Covered egus initially permitted from 2015
through 2019.--The owner or operator of a covered EGU
that is initially permitted on or after January 1,
2015, and before January 1, 2020, shall be ineligible
to receive emission allowances pursuant to this section
if such unit, upon commencement of operations (and
thereafter), does not achieve and maintain an emission
limit that is at least a 50 percent reduction in
emissions of the carbon dioxide produced by the unit,
measured on an annual basis, as determined in
accordance with section 812(b)(2).
(f) Industrial Sources.--
(1) Allowances.--The Administrator may distribute not
more than 15 percent of the allowances allocated under
section 782(a) for any vintage year to the owners or
operators of eligible industrial sources to support the
commercial-scale deployment of carbon capture and
sequestration technologies at such sources.
(2) Distribution.--The Administrator shall, by
regulation, prescribe requirements for the distribution
of emission allowances to the owners or operators of
industrial sources under this subsection, based on a
bonus allowance formula that awards allowances to
qualifying projects on the basis of tons of carbon
dioxide captured and permanently sequestered. The
Administrator may provide for the distribution of
emission allowances pursuant to--
(A) a reverse auction method, similar to that
described under subsection (d)(3), including
the use of separate auctions for different
project categories; or
(B) an incentive schedule, similar to that
described under subsection (d)(4), which shall
ensure that incentives are set so as to satisfy
the requirement described in subsection
(d)(4)(E).
(3) Revision of regulations.--The Administrator shall
review, and as appropriate revise, the applicable
regulations under this subsection no less frequently
than every 8 years.
(g) Limitations.--Allowances may be distributed under this
section only for tons of carbon dioxide emissions that have
already been captured and sequestered. A qualifying project may
receive annual emission allowances under this section only for
the first 10 years of operation. No greater than 72 gigawatts
of total cumulative generating capacity (including industrial
applications, measured by such equivalent metric as the
Administrator may designate) may receive emission allowances
under this section. Upon reaching the limit described in the
preceding sentence, any emission allowances that are allocated
for carbon capture and sequestration deployment under section
782(f) and are not yet obligated under this section shall be
treated as allowances not designated for distribution for
purposes of section 782(r).
(h) Exhaustion of Account and Annual Roll-Over of Surplus
Allowances.--
(1) In distributing bonus allowances under this
subsection, the Administrator shall ensure that
qualifying projects receiving allowances receive
distributions for 10 years.
(2) If the Administrator determines that the
allowances allocated under section 782(f) with a
vintage year that matches the year of distribution will
be exhausted once the estimated full 10-year
distributions will be provided to current eligible
participants, the Administrator shall provide to new
eligible projects allowances from vintage years after
the year of the distribution.
(i) Retrofit Applications.--(1) In calculating bonus
allowance values for retrofit applications eligible under
subsections (b)(1)(A)(ii) and (b)(1)(A)(iv)(II), the
Administrator shall apply the required capture rates with
respect to the treated portion of flue gas from the unit.
(2) No additional projects shall be eligible for allowances
under subsections (b)(1)(A)(ii) and (b)(1)(A)(iv)(II) as of
such time as the Administrator reports, pursuant to section
812(d), that carbon capture and sequestration retrofit projects
at electric generating units that are eligible for allowances
under this section have been applied, in the aggregate, to the
flue gas generated by 1 gigawatt of total cumulative generating
capacity.
(j) Davis-Bacon Compliance.--All laborers and mechanics
employed on projects funded directly by or assisted in whole or
in part by this section through the use of bonus allowances
shall be paid wages at rates not less than those prevailing on
projects of a character similar in the locality as determined
by the Secretary of Labor in accordance with subchapter IV,
chapter 31, part A of subtitle II of title 40, United States
Code. With respect to the labor standards specified in this
section, the Secretary of Labor shall have the authority and
functions set forth in Reorganization Plan Numbered 14 of 1950
(64 Stat. 1267; 5 U.S.C. App.) and section 3145 of title 40,
United States Code.
SEC. 787. ALLOCATIONS TO REFINERIES.
(a) Purpose.--To provide emission allowance rebates to
petroleum refiners in the United States in a manner that
promotes energy efficiency and a reduction in greenhouse gas
emissions at such facilities.
(b) Definitions.--In this section:
(1) Emissions.--The term ``emissions'' means the
greenhouse gas emissions in the calendar year preceding
the calendar year in which emission allowances are
being distributed. The term includes direct emissions
from fuel combustion, process emissions, and indirect
emissions from the generation of electricity used to
produce the output of the petroleum refinery or sector.
(2) Intensity.--The term ``intensity'' means tons of
carbon dioxide equivalent emissions per unit of output
in a given year.
(3) Intensity factor.--The term ``intensity factor''
means the intensity of the petroleum refining sector
divided by the intensity for an individual petroleum
refinery.
(4) Output.--The term ``output'' means the average
annual number of gallons of refined fuel produced in
the three calendar years preceding the calendar year in
which emission allowances are being distributed.
(5) Petroleum refinery.--The term ``petroleum
refinery'' means a facility classified under 324110 of
the North American Industrial Classification System of
2002.
(6) Production factor.--The term ``production
factor'' means the output of an individual petroleum
refinery divided by the output of the petroleum
refining sector.
(c) In General.--For each vintage year between 2014 and 2026,
the Administrator shall distribute allowances pursuant to this
section to owners and operators of petroleum refineries in the
United States.
(d) Distribution Schedule.--The Administrator shall
distribute emission allowances of each vintage year no later
than October 31 of the preceding calendar year.
(e) Calculation of Emission Allowance Rebates.--
(1) For each petroleum refinery, the Administrator
shall calculate an individual allocation factor for
each vintage year, based upon the product of the
intensity factor for such refinery multiplied by the
production factor for such refinery.
(2) The Administrator shall also calculate a total
allocation factor for each vintage year, based upon the
sum of all of the individual allocation factors.
(3) The Administrator shall calculate the number of
emission allowances to be provided to each petroleum
refinery in each vintage year by dividing the
individual allocation factor for such refinery by the
total allocation factor, then multiplying the result by
the number of emission allowances allocated to the
program under this section for that vintage year.
(f) Data Sources.--
(1) The Administrator shall use data from the
greenhouse gas registry, established under section 713,
where it is available.
(2) The Administrator shall determine, by rule, the
methodology by which to calculate indirect emissions
for a refinery. The Administrator shall also determine,
by rule, the methodology by which to take into account
the value of allowances provided at no cost to local
distribution companies that is passed through to a
refinery. Each person selling electricity to the owner
or operator of a petroleum refinery shall provide the
owner or operator and the Administrator, on an annual
basis, such data as the Administrator determines is
necessary to implement this section.
SEC. 788. [SECTION RESERVED].
SEC. 789. CLIMATE CHANGE CONSUMER REFUNDS.
(a) Refund.--In each year after deposits are made to the
Climate Change Consumer Refund Account, the Secretary of the
Treasury shall provide tax refunds on a per capita basis to
each household in the United States that shall collectively
equal the amount deposited into the Climate Change Consumer
Refund Account.
(b) Limitations.--The Secretary of the Treasury shall
establish procedures to ensure that individuals who are not--
(1) citizens or nationals of the United States; or
(2) immigrants lawfully residing in the United
States,
are excluded for the purpose of calculating and distributing
refunds under this section.
SEC. 790. EXCHANGE FOR STATE-ISSUED ALLOWANCES.
(a) In General.--Not later than one year after the date of
enactment of this title, the Administrator shall issue
regulations allowing any person in the United States to
exchange greenhouse gas emission allowances issued before
December 31, 2011, by the State of California or for the
Regional Greenhouse Gas Initiative, or the Western Climate
Initiative (in this section referred to as ``State
allowances'') for emission allowances established by the
Administrator under section 721(a).
(b) Regulations.--Regulations issued under subsection (a)
shall--
(1) provide that a person exchanging State allowances
under this section receive emission allowances
established under section 721(a) in the amount that is
sufficient to compensate for the cost of obtaining and
holding such State allowances;
(2) establish a deadline by which persons must
exchange the State allowances; and
(3) provide that the Federal emission allowances
disbursed pursuant to this section shall be deducted
from the allowances to be auctioned pursuant to section
782(b).
(c) Cost of Obtaining State Allowance.--For purposes of this
section, the cost of obtaining a State allowance shall be the
average auction price, for emission allowances issued in the
year in which the State allowance was issued, under the program
under which the State allowance was issued.
SEC. 791. AUCTION PROCEDURES.
(a) In General.--To the extent that auctions of emission
allowances by the Administrator are authorized by this part,
such auctions shall be carried out pursuant to this section and
the regulations established hereunder.
(b) Initial Regulations.--Not later than 12 months after the
date of enactment of this title, the Administrator, in
consultation with other agencies, as appropriate, shall
promulgate regulations governing the auction of allowances
under this section. Such regulations shall include the
following requirements:
(1) Frequency; first auction.--Auctions shall be held
four times per year at regular intervals, with the
first auction to be held no later than March 31, 2011.
(2) Auction schedule; current and future vintages.--
The Administrator shall, at each quarterly auction
under this section, offer for sale both a portion of
the allowances with the same vintage year as the year
in which the auction is being conducted and a portion
of the allowances with vintage years from future years.
The preceding sentence shall not apply to auctions held
before 2012, during which period, by necessity, the
Administrator shall auction only allowances with a
vintage year that is later than the year in which the
auction is held. Beginning with the first auction and
at each quarterly auction held thereafter, the
Administrator may offer for sale allowances with
vintage years of up to four years after the year in
which the auction is being conducted, except as
provided in section 782(p).
(3) Auction format.--Auctions shall follow a single-
round, sealed-bid, uniform price format.
(4) Participation; financial assurance.--Auctions
shall be open to any person, except that the
Administrator may establish financial assurance
requirements to ensure that auction participants can
and will perform on their bids.
(5) Disclosure of beneficial ownership.--Each bidder
in the auction shall be required to disclose the person
or entity sponsoring or benefitting from the bidder's
participation in the auction if such person or entity
is, in whole or in part, other than the bidder.
(6) Purchase limits.--No person may, directly or in
concert with another participant, purchase more than 5
percent of the allowances offered for sale at any
quarterly auction.
(7) Publication of information.--After the auction,
the Administrator shall, in a timely fashion, publish
the identities of winning bidders, the quantity of
allowances obtained by each winning bidder, and the
auction clearing price.
(8) Other requirements.--The Administrator may
include in the regulations such other requirements or
provisions as the Administrator, in consultation with
other agencies, as appropriate, considers appropriate
to promote effective, efficient, transparent, and fair
administration of auctions under this section.
(c) Revision of Regulations.--The Administrator may, in
consultation with other agencies, as appropriate, at any time,
revise the initial regulations promulgated under subsection
(b). Such revised regulations need not meet the requirements
identified in subsection (b) if the Administrator determines
that an alternative auction design would be more effective,
taking into account factors including costs of administration,
transparency, fairness, and risks of collusion or manipulation.
In determining whether and how to revise the initial
regulations under this subsection, the Administrator shall not
consider maximization of revenues to the Federal Government.
(d) Reserve Auction Price.--The minimum reserve auction price
shall be $10 (in constant 2009 dollars) for auctions occurring
in 2012. The minimum reserve price for auctions occurring in
years after 2012 shall be the minimum reserve auction price for
the previous year increased by 5 percent plus the rate of
inflation (as measured by the Consumer Price Index for all
urban consumers).
(e) Delegation or Contract.--Pursuant to regulations under
this section, the Administrator may by delegation or contract
provide for the conduct of auctions under the Administrator's
supervision by other departments or agencies of the Federal
Government or by nongovernmental agencies, groups, or
organizations.
SEC. 792. AUCTIONING ALLOWANCES FOR OTHER ENTITIES.
(a) Consignment.--Any entity holding emission allowances or
compensatory allowances may request that the Administrator
auction, pursuant to section 791, the allowances on
consignment.
(b) Pricing.--When the Administrator acts under this section
as the agent of an entity in possession of emission allowances,
the Administrator is not obligated to obtain the highest price
possible for the emission allowances, and instead shall auction
consignment allowances in the same manner and pursuant to the
same rules as auctions of other allowances under section 791.
The Administrator may permit the entity offering the allowance
for sale to condition the sale of its allowances pursuant to
this section on a minimum reserve price that is different than
the reserve auction price set pursuant to section 791(d).
(c) Proceeds.--For emission allowances and compensatory
allowances auctioned pursuant to this section, notwithstanding
section 3302 of title 31, United States Code, or any other
provision of law, within 90 days of receipt, the United States
shall transfer the proceeds from the auction to the entity
which held the allowances auctioned. No funds transferred from
a purchaser to a seller of emission allowances or compensatory
allowances under this subsection shall be held by any officer
or employee of the United States or treated for any purpose as
public monies.
(d) Regulations.--The Administrator shall issue regulations
within 24 months after the date of enactment of this title to
implement this section.
SEC. 793. ESTABLISHMENT OF FUNDS.
There is established in the Treasury of the United States the
following funds:
(1) The Strategic Reserve Fund.
(2) The Climate Change Consumer Refund Fund.
SEC. 794. OVERSIGHT OF ALLOCATIONS.
(a) In General.--Not later than January 1, 2014, and every 2
years thereafter, the Comptroller General of the United States
shall carry out a review of programs administered by the
Federal Government that distribute emission allowances or funds
from any Federal auction of allowances.
(b) Contents.--Each such report shall include a comprehensive
evaluation of the administration and effectiveness of each
program, including--
(1) the efficiency, transparency, and soundness of
the administration of each program;
(2) the performance of activities receiving
assistance under each program;
(3) the cost-effectiveness of each program in
achieving the stated purposes of the program; and
(4) recommendations, if any, for regulatory or
administrative changes to each program to improve its
effectiveness.
(c) Focus.--In evaluating program performance, each review
under this section review shall address the effectiveness of
such programs in--
(1) creating and preserving jobs;
(2) ensuring a manageable transition for working
families and workers;
(3) reducing the emissions, or enhancing
sequestration, of greenhouse gases;
(4) developing clean technologies; and
(5) building resilience to the impacts of climate
change.
TITLE VIII--ADDITIONAL GREENHOUSE GAS STANDARDS
SEC. 801. DEFINITIONS.
For purposes of this title, terms that are defined in title
VII, except for the term ``stationary source'', shall have the
meaning given those terms in title VII.
PART A--STATIONARY SOURCE STANDARDS
SEC. 811. STANDARDS OF PERFORMANCE.
(a) Uncapped Stationary Sources.--
(1) Inventory of source categories.--(A) Within 12
months after the date of enactment of this title, the
Administrator shall publish under section 111(b)(1)(A)
an inventory of categories of stationary sources that
consist of those categories that contain sources that
individually had uncapped greenhouse gas emissions
greater than 10,000 tons of carbon dioxide equivalent
and that, in the aggregate, were responsible for
emitting at least 20 percent annually of the uncapped
greenhouse gas emissions.
(B) The Administrator shall include in the inventory
under this paragraph each source category that is
responsible for at least 10 percent of the uncapped
methane emissions in 2005. Notwithstanding any other
provision, the inventory required by this section shall
not include sources of enteric fermentation. The list
under this paragraph shall include industrial sources,
the emissions from which, when added to the capped
emissions from industrial sources, constitute at least
95 percent of the greenhouse gas emissions of the
industrial sector.
(C) For purposes of this subsection, emissions shall
be calculated using tons of carbon dioxide equivalents.
In promulgating the inventory required by this
paragraph and the schedule required under by paragraph
(2)(C), the Administrator shall use the most current
emissions data available at the time of promulgation,
except as provided in subparagraph (B).
(D) Notwithstanding any other provisions, the
Administrator may list under 111(b) any source category
identified in the inventory required by this subsection
without making a finding that the source category
causes or contributes significantly to, air pollution
with may be reasonably anticipated to endanger public
health or welfare.
(2) Standards and schedule.--(A) For each category
identified as provided in paragraph (1), the
Administrator shall promulgate standards of performance
under section 111 for the uncapped emissions of
greenhouse gases from stationary sources in that
category and shall promulgate corresponding regulations
under section 111(d).
(B) The Administrator shall promulgate standards as
required by this subsection for stationary sources in
categories identified as provided in paragraph (1) as
expeditiously as practicable, assuring that--
(i) standards for identified source
categories that, combined, emitted 80 percent
or more of the greenhouse gas emissions of the
identified source categories shall be
promulgated not later than 3 years after the
date of enactment of this title and shall
include standards for natural gas extraction;
and
(ii) for all other identified source
categories--
(I) standards for not less than an
additional 25 percent of the identified
categories shall be promulgated not
later than 5 years after the date of
enactment of this title;
(II) standards for not less than an
additional 25 percent of the identified
categories shall be promulgated not
later than 7 years after the date of
enactment of this title; and
(III) standards for all the
identified categories shall be
promulgated not later than 10 years
after the date of enactment of this
title.
(C) Not later than 24 months after the date of
enactment of this title and after notice and
opportunity for comment, the Administrator shall
publish a schedule establishing a date for the
promulgation of standards for each category of sources
identified pursuant to paragraph (1). The date for each
category shall be consistent with the requirements of
subparagraph (B). The determination of priorities for
the promulgation of standards pursuant to this
paragraph is not a rulemaking and shall not be subject
to judicial review, except that failure to promulgate
any standard pursuant to the schedule established by
this paragraph shall be subject to review under section
304(a)(2).
(D) Notwithstanding section 307, no action of the
Administrator listing a source category under paragraph
(1) shall be a final agency action subject to judicial
review, except that any such action may be reviewed
under section 307 when the Administrator issues
performance standards for such category.
(b) Capped Sources.--No standard of performance shall be
established under section 111 for capped greenhouse gas
emissions from a capped source unless the Administrator
determines that such standards are appropriate because of
effects that do not include climate change effects. In
promulgating a standard of performance under section 111 for
the emission from capped sources of any air pollutant that is
not a greenhouse gas, the Administrator shall treat the
emission of any greenhouse gas by those entities as a nonair
quality public health and environmental impact within the
meaning of section 111(a)(1).
(c) Performance Standards.--For purposes of setting a
performance standard for source categories identified pursuant
to subsection (a)--
(1) The Administrator shall take into account the
goal of reducing total United States greenhouse gas
emissions as set forth in section 702.
(2) The Administrator may promulgate a design,
equipment, work practice, or operational standard, or
any combination thereof, under section 111 in lieu of a
standard of performance under that section without
regard to any determination of feasibility that would
otherwise be required under section 111(h).
(3) Notwithstanding any other provision, in setting
the level of each standard required by this section,
the Administrator shall take into account projections
of allowance prices, such that the marginal cost of
compliance (expressed as dollars per ton of carbon
dioxide equivalent reduced) imposed by the standard
would not, in the judgement of the Administrator, be
expected to exceed the Administrator's projected
allowance prices over the time period spanning from the
date of initial compliance to the date that the next
revisions of the standard would come into effect
pursuant to the schedule under section 111(b)(1)(B).
(d) Definitions.--In this section, the terms ``uncapped
greenhouse gas emissions'' and ``uncapped methane emissions''
mean those greenhouse gas or methane emissions, respectively,
to which section 722 would not have applied if the requirements
of this title had been in effect for the same year as the
emissions data upon which the list is based.
(e) Study of the Effects of Performance Standards.--
(1) Study.--The Administrator shall conduct a study
of the impacts of performance standards required under
this section, which shall evaluate the effect of such
standards on the--
(A) costs of achieving compliance with the
economy-wide reduction goals specified in
section 702 and the reduction targets specified
in section 703;
(B) available supply of offset credits; and
(C) ability to achieve the economy-wide
reduction goals specified in section 702 and
any other benefits of such standards.
(2) Report.--The Administrator shall submit to the
House Energy and Commerce Committee a report that
describes the results of the study not later than 18
months after the publication of the standards required
under subsection (a)(2)(B)(i).
SEC. 812. PERFORMANCE STANDARDS FOR NEW COAL-FIRED POWER PLANTS.
(a) Definitions.--For purposes of this section:
(1) Covered egu.--The term ``covered EGU'' means a
utility unit that is required to have a permit under
section 503(a) and is authorized under state or federal
law to derive at least 30 percent of its annual heat
input from coal, petroleum coke, or any combination of
these fuels.
(2) Initially permitted.--The term ``initially
permitted'' means that the owner or operator has
received a Clean Air Act preconstruction approval or
permit, for the covered EGU as a new (not a modified)
source, but administrative review or appeal of such
approval or permit has not been exhausted. A subsequent
modification of any such approval or permits, ongoing
administrative or court review, appeals, or challenges,
or the existence or tolling of any time to pursue
further review, appeals, or challenges shall not affect
the date on which a covered EGU is considered to be
initially permitted under this paragraph.
(b) Standards.--(1) A covered EGU that is initially permitted
on or after January 1, 2020, shall achieve an emission limit
that is a 65 percent reduction in emissions of the carbon
dioxide produced by the unit, as measured on an annual basis,
or meet such more stringent standard as the Administrator may
establish pursuant to subsection (c).
(2) A covered EGU that is initially permitted after January
1, 2009, and before January 1, 2020, shall, by the applicable
compliance date established under this paragraph, achieve an
emission limit that is a 50 percent reduction in emissions of
the carbon dioxide produced by the unit, as measured on an
annual basis. Compliance with the requirement set forth in this
paragraph shall be required by the earliest of the following:
(A) Four years after the date the Administrator has
published pursuant to subsection (d) a report that
there are in commercial operation in the United States
electric generating units or other stationary sources
equipped with carbon capture and sequestration
technology that, in the aggregate--
(i) have a total of at least 4 gigawatts of
nameplate generating capacity of which--
(I) at least 3 gigawatts must be
electric generating units; and
(II) up to 1 gigawatt may be
industrial applications, for which
capture and sequestration of 3 million
tons of carbon dioxide per year on an
aggregate annualized basis shall be
considered equivalent to 1 gigawatt;
(ii) include at least 2 electric generating
units, each with a nameplate generating
capacity of 250 megawatts or greater, that
capture, inject, and sequester carbon dioxide
into geologic formations other than oil and gas
fields; and
(iii) are capturing and sequestering in the
aggregate at least 12 million tons of carbon
dioxide per year, calculated on an aggregate
annualized basis.
(B) January 1, 2025.
(3) If the deadline for compliance with paragraph (2) is
January 1, 2025, the Administrator may extend the deadline for
compliance by a covered EGU by up to 18 months if the
Administrator makes a determination, based on a showing by the
owner or operator of the unit, that it will be technically
infeasible for the unit to meet the standard by the deadline.
The owner or operator must submit a request for such an
extension by no later than January 1, 2022, and the
Administrator shall provide for public notice and comment on
the extension request.
(c) Review and Revision of Standards.--Not later than 2025
and at 5-year intervals thereafter, the Administrator shall
review the standards for new covered EGUs under this section
and shall, by rule, reduce the maximum carbon dioxide emission
rate for new covered EGUs to a rate which reflects the degree
of emission limitation achievable through the application of
the best system of emission reduction which (taking into
account the cost of achieving such reduction and any nonair
quality health and environmental impact and energy
requirements) the Administrator determines has been adequately
demonstrated.
(d) Reports.--Not later than the date 18 months after the
date of enactment of this title and semiannually thereafter,
the Administrator shall publish a report on the nameplate
capacity of units (determined pursuant to subsection (b)(2)(A))
in commercial operation in the United States equipped with
carbon capture and sequestration technology, including the
information described in subsection (b)(2)(A) (including the
cumulative generating capacity to which carbon capture and
sequestration retrofit projects meeting the criteria described
in section 786(b)(1)(A)(ii) and (b)(1)(A)(iv)(II) has been
applied and the quantities of carbon dioxide captured and
sequestered by such projects).
(e) Regulations.--Not later than 2 years after the date of
enactment of this title, the Administrator shall promulgate
regulations to carry out the requirements of this section.
SEC. 813. GEOLOGIC SEQUESTRATION SITES.
(a) Coordinated Process.--The Administrator shall establish a
coordinated approach to certifying and permitting geologic
sequestration, taking into consideration all relevant statutory
authorities. In establishing such approach, the Administrator
shall--
(1) take into account, and reduce redundancy with,
the requirements of section 1421 of the Safe Drinking
Water Act (42 U.S.C. 300h), as amended by section
112(b) of the American Clean Energy and Security Act of
2009, including the rulemaking for geologic
sequestration wells described at 73 Fed. Reg. 43491-541
(July 25, 2008); and
(2) to the extent practicable, reduce the burden on
certified entities and implementing authorities.
(b) Regulations.--Not later than 2 years after the date of
enactment of this title, the Administrator shall promulgate
regulations to protect human health and the environment by
minimizing the risk of escape to the atmosphere of carbon
dioxide injected for purposes of geologic sequestration.
(c) Requirements.--The regulations under subsection (b) shall
include--
(1) a process to obtain certification for geologic
sequestration under this section; and
(2) requirements for--
(A) monitoring, record keeping, and reporting
for emissions associated with injection into,
and escape from, geologic sequestration sites,
taking into account any requirements or
protocols developed under section 713;
(B) public participation in the certification
process that maximizes transparency;
(C) the sharing of data between States,
Indian tribes, and the Environmental Protection
Agency; and
(D) other elements or safeguards necessary to
achieve the purpose set forth in subsection
(b).
(d) Report.--Not later than 2 years after the promulgation of
regulations under subsection (b), and at 3-year intervals
thereafter, the Administrator shall deliver to the Committee on
Energy and Commerce of the House of Representatives and the
Committee on Environment and Public Works of the Senate a
report on geologic sequestration in the United States, and, to
the extent relevant, other countries in North America. Such
report shall include--
(1) data regarding injection, emissions to the
atmosphere, if any, and performance of active and
closed geologic sequestration sites, including those
where enhanced hydrocarbon recovery operations occur;
(2) an evaluation of the performance of relevant
Federal environmental regulations and programs in
ensuring environmentally protective geologic
sequestration practices;
(3) recommendations on how such programs and
regulations should be improved or made more effective;
and
(4) other relevant information.
PART B--MOBILE SOURCES
SEC. 821. GREENHOUSE GAS EMISSION STANDARDS FOR MOBILE SOURCES.
(a) New Motor Vehicles and New Motor Vehicle Engines.--(1)
Pursuant to section 202(a)(1), by December 31, 2010, the
Administrator shall promulgate standards applicable to
emissions of greenhouse gases from new heavy-duty motor
vehicles or new heavy-duty motor vehicle engines, excluding
such motor vehicles covered by the Tier II standards (as
established by the Administrator as of the date of the
enactment of this section). The Administrator may revise these
standards from time to time.
(2) Regulations issued under section 202(a)(1) applicable to
emissions of greenhouse gases from new heavy-duty motor
vehicles or new heavy-duty motor vehicle engines, excluding
such motor vehicles covered by the Tier II standards (as
established by the Administrator as of the date of the
enactment of this section), shall contain standards that
reflect the greatest degree of emissions reduction achievable
through the application of technology which the Administrator
determines will be available for the model year to which such
standards apply, giving appropriate consideration to cost,
energy, and safety factors associated with the application of
such technology. Any such regulations shall take effect after
such period as the Administrator finds necessary to permit the
development and application of the requisite technology, and,
at a minimum, shall apply for a period no less than 3 model
years beginning no earlier than the model year commencing 4
years after such regulations are promulgated.
(3) Regulations issued under section 202(a)(1) applicable to
emissions of greenhouse gases from new heavy-duty motor
vehicles or new heavy-duty motor vehicle engines, excluding
such motor vehicles covered by the Tier II standards (as
established by the Administrator as of the date of the
enactment of this section), shall supersede and satisfy any and
all of the rulemaking and compliance requirements of section
32902(k) of title 49, United States Code.
(4) Other than as specifically set forth in paragraph (3) of
this subsection, nothing in this section shall affect or
otherwise increase or diminish the authority of the Secretary
of Transportation to adopt regulations to improve the overall
fuel efficiency of the commercial goods movement system.
(b) Nonroad Vehicles and Engines.--(1) Pursuant to section
213(a)(4) and (5), the Administrator shall identify those
classes or categories of new nonroad vehicles or engines, or
combinations of such classes or categories, that, in the
judgment of the Administrator, both contribute significantly to
the total emissions of greenhouse gases from nonroad engines
and vehicles, and provide the greatest potential for
significant and cost-effective reductions in emissions of
greenhouse gases. The Administrator shall promulgate standards
applicable to emissions of greenhouse gases from these new
nonroad engines or vehicles by December 31, 2012. The
Administrator shall also promulgate standards applicable to
emissions of greenhouse gases for such other classes and
categories of new nonroad vehicles and engines as the
Administrator determines appropriate and in the timeframe the
Administrator determines appropriate. The Administrator shall
base such determination, among other factors, on the relative
contribution of greenhouse gas emissions, and the costs for
achieving reductions, from such classes or categories of new
nonroad engines and vehicles. The Administrator may revise
these standards from time to time.
(2) Standards under section 213(a)(4) and (5) applicable to
emissions of greenhouse gases from those classes or categories
of new nonroad engines or vehicles identified in the first
sentence of paragraph (1) of this subsection, shall achieve the
greatest degree of emissions reduction achievable based on the
application of technology which the Administrator determines
will be available at the time such standards take effect,
taking into consideration cost, energy, and safety factors
associated with the application of such technology. Any such
regulations shall take effect after such period as the
Administrator finds necessary to permit the development and
application of the requisite technology.
(3) For purposes of this section and standards under section
213(a)(4) or (5) applicable to emissions of greenhouse gases,
the term ``nonroad engines and vehicles'' shall include non-
internal combustion engines and the vehicles these engines
power (such as electric engines and electric vehicles), for
those non-internal combustion engines and vehicles which would
be in the same category and have the same uses as nonroad
engines and vehicles that are powered by internal combustion
engines.
(c) Aircraft and Aircraft Engines.--
(1) Pursuant to section 231(a), the Administrator
shall promulgate standards applicable to emissions of
greenhouse gases from new aircraft and new engines used
in aircraft by December 31, 2012. Notwithstanding any
requirement in section 231(a), the Administrator, in
consultation with the Administrator of the Federal
Aviation Administration, shall also promulgate
standards applicable to emissions of greenhouse gases
from other classes and categories of aircraft and
aircraft engines for such classes and categories as the
Administrator determines appropriate and in the
timeframe the Administrator determines appropriate. The
Administrator may revise these standards from time to
time.
(2) Standards under section 231(a) applicable to
emissions of greenhouse gases from new aircraft and new
engines used in aircraft, and any later revisions or
additional standards, shall achieve the greatest degree
of emissions reduction achievable based on the
application of technology which the Administrator
determines will be available at the time such standards
take effect, taking into consideration cost, energy,
and safety factors associated with the application of
such technology. Any such standards shall take effect
after such period as the Administrator finds necessary
to permit the development and application of the
requisite technology.
(d) Averaging, Banking, and Trading of Emissions Credits.--In
establishing standards applicable to emissions of greenhouse
gases pursuant to this section and sections 202(a), 213(a)(4)
and (5), and 231(a), the Administrator may establish provisions
for averaging, banking, and trading of greenhouse gas emissions
credits within or across classes or categories of motor
vehicles and motor vehicle engines, nonroad vehicles and
engines (including marine vessels), and aircraft and aircraft
engines, to the extent the Administrator determines appropriate
and considering the factors appropriate in setting standards
under those sections. Such provisions may include reasonable
and appropriate provisions concerning generation, banking,
trading, duration, and use of credits.
(e) Reports.--The Administrator shall, from time to time,
submit a report to Congress that projects the amount of
greenhouse gas emissions from the transportation sector,
including transportation fuels, for the years 2030 and 2050,
based on the standards adopted under this section.
(f) Greenhouse Gases.--Notwithstanding the provisions of
section 711, hydrofluorocarbons shall be considered a
greenhouse gas for purposes of this section.
SEC. 822. SMARTWAY TRANSPORTATION EFFICIENCY PROGRAM.
(a) In General.--There is established within the
Environmental Protection Agency a SmartWay Transport Program to
quantify, demonstrate, and promote the benefits of
technologies, products, fuels, and operational strategies that
reduce petroleum consumption, air pollution, and greenhouse gas
emissions from the mobile source sector.
(b) General Duties.--Under the program established under this
section, the Administrator shall carry out each of the
following:
(1) Development of measurement protocols to evaluate
the energy consumption and greenhouse gas impacts from
technologies and strategies in the mobile source
sector, including those for passenger transport and
goods movement.
(2) Development of qualifying thresholds for
certifying, verifying, or designating energy-efficient,
low-greenhouse gas SmartWay technologies and strategies
for each mode of passenger transportation and goods
movement.
(3) Development of partnership and recognition
programs to promote best practices and drive demand for
energy-efficient, low-greenhouse gas transportation
performance.
(4) Promotion of the availability of, and
encouragement of the adoption of, SmartWay certified or
verified technologies and strategies, and publication
of the availability of financial incentives, such as
assistance from loan programs and other Federal and
State incentives.
(c) Smartway Transport Freight Partnership.--The
Administrator shall establish a SmartWay Transport Partnership
program with shippers and carriers of goods to promote energy-
efficient, low-greenhouse gas transportation. In carrying out
such partnership, the Administrator shall undertake each of the
following:
(1) Certification of the energy and greenhouse gas
performance of participating freight carriers,
including those operating rail, trucking, marine, and
other goods movement operations.
(2) Publication of a comprehensive energy and
greenhouse gas performance index of freight modes
(including rail, trucking, marine, and other modes of
transporting goods) and individual freight companies so
that shippers can choose to deliver their goods more
efficiently.
(3) Development of tools for--
(A) carriers to calculate their energy and
greenhouse gas performance; and
(B) shippers to calculate the energy and
greenhouse gas impacts of moving their products
and to evaluate the relative impacts from
transporting their goods by different modes and
corporate carriers.
(4) Provision of recognition opportunities for
participating shipper and carrier companies
demonstrating advanced practices and achieving superior
levels of greenhouse gas performance.
(d) Improving Freight Greenhouse Gas Performance Databases.--
The Administrator shall, in coordination with other appropriate
agencies, define and collect data on the physical and
operational characteristics of the Nation's truck population,
with special emphasis on data related to energy efficiency and
greenhouse gas performance to inform the performance index
published under subsection (c)(2) of this section, and other
means of goods transport as necessary, at least every 5 years.
(e) Establishment of Financing Program.--The Administrator
shall establish a SmartWay Financing Program to competitively
award funding to eligible entities identified by the
Administrator in accordance with the program requirements in
subsection (g).
(f) Purpose.--Under the SmartWay Financing Program, eligible
entities shall--
(1) use funds awarded by the Administrator to provide
flexible loan and lease terms that increase approval
rates or lower the costs of loans and leases in
accordance with guidance developed by the
Administrator; and
(2) make such loans and leases available to public
and private entities for the purpose of adopting low-
greenhouse gas technologies or strategies for the
mobile source sector that are designated by the
Administrator.
(g) Program Requirements.--The Administrator shall determine
program design elements and requirements, including--
(1) the type of financial mechanism with which to
award funding, in the form of grants or contracts;
(2) the designation of eligible entities to receive
funding, including State, tribal, and local
governments, regional organizations comprised of
governmental units, nonprofit organizations, or for-
profit companies;
(3) criteria for evaluating applications from
eligible entities, including anticipated--
(A) cost-effectiveness of loan or lease
program on a metric-ton-of-greenhouse gas-
saved-per-dollar basis;
(B) ability to promote the loan or lease
program and associated technologies and
strategies to the target audience; and
(4) reporting requirements for entities that receive
awards, including--
(A) actual cost-effectiveness and greenhouse
gas savings from the loan or lease program
based on a methodology designated by the
Administrator;
(B) the total number of applications and
number of approved applications; and
(C) terms granted to loan and lease
recipients compared to prevailing market
practices.
(h) Authorization of Appropriations.--Such sums as necessary
are authorized to be appropriated to the Administrator to carry
out this section.
PART C--EXEMPTIONS FROM OTHER PROGRAMS
SEC. 831. CRITERIA POLLUTANTS.
As of the date of the enactment of the Safe Climate Act, no
greenhouse gas may be added to the list under section 108(a) on
the basis of its effect on global climate change.
SEC. 832. INTERNATIONAL AIR POLLUTION.
Section 115 shall not apply to an air pollutant with respect
to that pollutant's contribution to global warming.
SEC. 833. HAZARDOUS AIR POLLUTANTS.
No greenhouse gas may be added to the list of hazardous air
pollutants under section 112 unless such greenhouse gas meets
the listing criteria of section 112(b) independent of its
effects on global climate change.
SEC. 834. NEW SOURCE REVIEW.
The provisions of part C of title I shall not apply to a
major emitting facility that is initially permitted or modified
after January 1, 2009, on the basis of its emissions of any
greenhouse gas.
SEC. 835. TITLE V PERMITS.
Notwithstanding any provision of title III or V, no
stationary source shall be required to apply for, or operate
pursuant to, a permit under title V, solely because the source
emits any greenhouse gases that are regulated solely because of
their effect on global climate change.
PART D--PLANNING REQUIREMENTS
SEC. 841. GREENHOUSE GAS EMISSIONS REDUCTIONS THROUGH TRANSPORTATION
EFFICIENCY.
(a) In General.--Each State shall--
(1) not later than 3 years after the date of
enactment of this section, submit to the Administrator
goals for transportation-related greenhouse gas
emissions reductions, which goals shall be reasonably
commensurate with the targets for overall greenhouse
gas emissions reduction established by this Act; and
(2) as part of each transportation plan or
transportation improvement program developed under
title 23 or title 49, United States Code, ensure that a
plan to achieve such goals, or an updated version of
such a plan, is submitted to the Administrator and to
the Secretary of Transportation (in this section
referred to as the ``Secretary'') by each metropolitan
planning organization in the State for an area with a
population exceeding 200,000.
(b) Models and Methodologies.--
(1) In general.--The Administrator shall promulgate
regulations to establish standards for use in
developing goals, plans, and strategies under this
section and for monitoring progress toward such goals.
Such standards shall include--
(A) data collection techniques for assessing
State and regional transportation-related
greenhouse gas emissions;
(B) methodologies for determining
transportation-related greenhouse gas emissions
baselines;
(C) models and methodologies for scenario
analysis; and
(D) models and methodologies for estimating
transportation-related greenhouse gas emissions
reductions from the strategies considered under
this section.
Such regulations may approve or improve existing models
and methodologies
(2) Timing.--The Administrator shall--
(A) publish proposed regulations under
paragraph (1) not later than 1 year after the
date of enactment of this section; and
(B) promulgate final regulations under
paragraph (1) not later than 2 years after such
date of enactment.
(3) Assessment.--At least every 6 years after
promulgating final regulations under paragraph (1), the
Administrator, in coordination with the Secretary,
shall assess current and projected progress in reducing
transportation-related greenhouse gas emissions. The
assessment shall examine the contributions to emissions
reductions attributable to improvements in vehicle
efficiency, greenhouse gas performance of
transportation fuels, and increased efficiency in
utilizing transportation systems.
(c) Greenhouse Gas Reduction Goals.--
(1) Consultation.--Each State shall develop the goals
referred to in subsection (a)(1)--
(A) in concurrence with State agencies
responsible for air quality and transportation;
(B) in consultation with each metropolitan
planning organization for an area in the State
with a population exceeding 200,000 and
applicable local air quality and transportation
agencies; and
(C) with public involvement, including public
comment periods and meetings.
(2) Period.--The goals referred to in subsection
(a)(1) shall be for 4-, 10-, and 20-year periods.
(3) Targets; designated year.--The goals referred to
in subsection (a)(1) shall establish targets to reduce
transportation-related greenhouse gas emissions in the
covered area. The targets shall be designed to ensure
that the levels of such emissions stabilize and
decrease after a designated year. The State shall
consider designating 2010 as such designated year.
(4) Covered area.--The goals referred to in
subsection (a)(1)--
(A) shall be established on a statewide
basis;
(B) shall be established for each
metropolitan planning organization in the State
for an area with a population exceeding
200,000; and
(C) may be established on a voluntary basis,
in accordance with the provisions of this
section, for any metropolitan planning
organization not described in subparagraph (B).
(5) Revised goals.--Every 4 years, each State shall
update and revise, as appropriate, the goals referred
to in subsection (a)(1).
(d) Planning.--A plan submitted under subsection (a)(2)
shall--
(1) be based upon the models and methodologies
established by the Administrator under subsection (b);
(2) use transportation and land use scenario analysis
to address transportation-related greenhouse gas
emissions and economic development impacts; and
(3) be developed--
(A) with public involvement, including public
comment periods and meetings that provide
opportunities for comment from a variety of
stakeholders based on age, race, income, and
disability;
(B) with regional coordination, including
with respect to--
(i) metropolitan planning
organizations;
(ii) the localities comprising the
metropolitan planning organization;
(iii) the State in which the
metropolitan planning organization is
located; and
(iv) air quality, environmental
health, and transportation agencies for
the State and region involved; and
(C) in consultation with the State and local
housing, public health, economic development,
land use, environment, and public
transportation agencies.
(e) Strategies.--In developing goals under subsection (a)(1)
and a plan under subsection (a)(2), the State or metropolitan
planning organization, as applicable, shall consider
transportation and land use planning strategies to reduce
transportation-related greenhouse gas emissions, including the
following:
(1) Efforts to increase or improve public
transportation, including--
(A) new public transportation systems,
including new commuter rail systems;
(B) expansion of existing public
transportation systems;
(C) employer-based subsidies;
(D) cleaner locomotive technologies;
(E) quality of service improvements,
including improved frequency of service; and
(F) use of transit buses that are powered by
alternative fuels.
(2) Updates to zoning and other land use regulations
and plans to support development that--
(A) coordinates transportation and land use
planning;
(B) focuses future growth close to existing
and planned job centers and public facilities;
(C) uses existing infrastructure;
(D) promotes walking, bicycling, and public
transportation use; and
(E) mixes land uses such as housing, retail,
and schools.
(3) Implementation of a policy (referred to as a
``complete streets policy'') that--
(A) ensures adequate accommodation of all
users of transportation systems, including
pedestrians, bicyclists, public transportation
users, motorists, children, the elderly, and
individuals with disabilities; and
(B) adequately addresses the safety and
convenience of all users of the transportation
system.
(4) Construction of bicycle and pedestrian
infrastructure facilities, including facilities that
improve the connections with networks that provide
access to human services, employment, schools, and
retail.
(5) Projects to promote telecommuting, flexible work
schedules, or satellite work centers.
(6) Pricing measures, including tolling, congestion
pricing, and pay-as-you-drive insurance.
(7) Intermodal freight system strategies, including
enhanced rail services, short sea shipping, and other
strategies.
(8) Parking policies.
(9) Intercity rail service, including high speed
rail.
(10) Travel demand management projects.
(11) Restriction of the use of certain roads, or
lanes, by vehicles other than passenger buses and high-
occupancy vehicles.
(12) Reduction of vehicle idling, including idling
associated with freight management, construction,
transportation, and commuter operations.
(13) Policies to encourage the use of retrofit
technologies and early replacement of vehicles, engines
and equipment to reduce transportation-related
greenhouse gas emissions from existing mobile sources.
(14) Other projects that the Administrator finds
reduce transportation-related greenhouse gas emissions.
(f) Public Availability.--The Administrator shall publish,
including by posting on the Environmental Protection Agency's
website--
(1) the goals and plans submitted under subsection
(a); and
(2) for each plan submitted under subsection (a)(2),
an analysis of the anticipated effects of the plan on
greenhouse gas emissions and oil consumption.
(g) Certification.--The Administrator, in consultation with
the Secretary, shall certify a State or metropolitan planning
organization greenhouse gas reduction plan submitted under
subsection (a)(2) if the plan's implementation is likely to
meet the corresponding greenhouse gas reduction goal referred
to in subsection (a)(1). If the Administrator, in consultation
with the Secretary, determines that a submitted plan cannot be
certified, the State or metropolitan planning organization
shall revise and resubmit the plan within 1 year.
(h) Enforcement.--If the Administrator finds that a State has
failed to submit goals under subsection (a)(1), has failed to
ensure the submission of a plan under subsection (a)(2), or has
failed to submit a revised plan under subsection (g), for any
area in the State (irrespective of whether the area is a
nonattainment area), the Administrator shall impose a
prohibition in accordance with section 179(b)(1) applicable to
the area within 2 years of such a finding. The Administrator
may not impose a prohibition under the preceding sentence, and
no action may be brought by the Administrator or any other
entity alleging a violation of this section, based on the
content or adequacy of a goal or plan submitted under
subsection (a)(1) or (a)(2) or failure to achieve the goal
submitted under subsection (a)(1).
(i) Competitive Grants.--
(1) Grants.--The Administrator, in consultation with
the Secretary, may award grants to States or
metropolitan planning organizations--
(A) to support activities related to
improving data collection, modeling, and
monitoring systems to assess transportation-
related greenhouse gas emissions and the
effects of plans, policies, and strategies
referenced in this section;
(B) for the development of goals and plans to
be submitted under sections (a)(1) or (a)(2);
and
(C) to implement plans certified under
subsection (g) or elements thereof, provided
that each project thus funded includes a
measurement and evaluation component that meets
the regulations promulgated under subsection
(b).
(2) Priority.--In making grants under paragraph
(1)(C), the Administrator shall give priority to
applicants based upon--
(A) the amount of total greenhouse gas
emissions to be reduced as a result of
implementation of a certified plan, within the
covered area, as determined by methods
established under subsection (b);
(B) the amount of per capita greenhouse gas
emissions to be reduced as a result of
implementation of a certified plan, within the
covered area, as determined by methods
established under subsection (b);
(C) the cost effectiveness, in terms of
dollars per tons of greenhouse gas reductions,
to be achieved as a result of the
implementation of a certified plan;
(D) the potential for both short- and long-
term reductions; and
(E) such other factors as the Administrator
determines appropriate.
(3) Authorization of appropriations.--To carry out
this subsection, there are authorized to be
appropriated such sums as may be necessary.
(j) Definitions.--In this section:
(1) The term ``metropolitan planning organization''
means a metropolitan planning organization, as such
term is used in section 176.
(2) The term ``scenario analysis'' means an analysis
that is conducted by identifying different trends and
making projections based on those trends to develop a
range of scenarios and estimates of how each scenario
could improve access to goods and services, including
access to employment, education, and health care
(especially for elderly and economically disadvantaged
communities), and could affect rates of--
(A) vehicle miles traveled;
(B) vehicle hours traveled;
(C) use of mobile source fuel by type,
including electricity; and
(D) transportation-related greenhouse gas
emissions.
(k) Land Use Authority.--Nothing in this section may be
construed to--
(1) infringe upon the existing authority of State or
local governments to plan or control land use; or
(2) provide or transfer authority over land use to
any other entity.
PART E--BLACK CARBON
SEC. 851. BLACK CARBON.
(a) Domestic Black Carbon Mitigation.--Not later than 18
months after the date of enactment of this section, the
Administrator, taking into consideration the public health and
environmental impacts of black carbon emissions, including the
effects on global and regional warming, the Arctic, and other
snow and ice-covered surfaces, shall propose regulations under
the existing authorities of this Act to reduce emissions of
black carbon or propose a finding that existing regulations
promulgated pursuant to this Act adequately regulate black
carbon emissions. Not later than two years after the date of
enactment of this section, the Administrator shall promulgate
final regulations under the existing authorities of this Act or
finalize the proposed finding.
(b) International Black Carbon Mitigation.--
(1) Report.--Not later than one year after the date
of enactment of this section, the Administrator, in
coordination with the Secretary of State and other
appropriate Federal agencies, shall transmit a report
to Congress on the amount, type, and direction of all
present United States financial, technical, and related
assistance to foreign countries to reduce, mitigate,
and otherwise abate black carbon emissions.
(2) Other opportunities.--The report required under
paragraph (1) shall also identify opportunities and
recommendations, including action under existing
authorities, to achieve significant black carbon
emission reductions in foreign countries through
technical assistance or other approaches to--
(A) promote sustainable solutions to bring
clean, efficient, safe, and affordable stoves,
fuels, or both stoves and fuels to residents of
developing countries that are reliant on solid
fuels such as wood, dung, charcoal, coal, or
crop residues for home cooking and heating, so
as to help reduce the public health,
environmental, and economic impacts of black
carbon emissions from these sources by--
(i) identifying key regions for
large-scale demonstration efforts, and
key partners in each such region; and
(ii) developing for each such region
a large-scale implementation strategy
with a goal of collectively reaching
20,000,000 homes over 5 years with
interventions that will--
(I) increase stove efficiency
by over 50 percent (or such
other goal as determined by the
Administrator);
(II) reduce emissions of
black carbon by over 60 percent
(or such other goal as
determined by the
Administrator); and
(III) reduce the incidence of
severe pneumonia in children
under 5 years old by over 30
percent (or such other goal as
determined by the
Administrator);
(B) make technological improvements to diesel
engines and provide greater access to fuels
that emit less or no black carbon;
(C) reduce unnecessary agricultural or other
biomass burning where feasible alternatives
exist;
(D) reduce unnecessary fossil fuel burning
that produces black carbon where feasible
alternatives exist;
(E) reduce other sources of black carbon
emissions; and
(F) improve capacity to achieve greater
compliance with existing laws to address black
carbon emissions.
PART F--MISCELLANEOUS
SEC. 861. STATE PROGRAMS.
Notwithstanding section 116, no State or political
subdivision thereof shall implement or enforce a cap and trade
program that covers any capped emissions emitted during the
years 2012 through 2017. For purposes of this section, the term
``cap and trade program'' means a system of greenhouse gas
regulation under which a State or political subdivision issues
a limited number of tradable instruments in the nature of
emission allowances and requires that sources within its
jurisdiction surrender such tradeable instruments for each unit
of greenhouse gases emitted during a compliance period. For
purposes of this section, a ``cap-and-trade program'' does not
include a target or limit on greenhouse gas emissions adopted
by a State or political subdivision that is implemented other
than through the issuance and surrender of a limited number of
tradable instruments in the nature of emission allowances, nor
does it include any other standard, limit, regulation, or
program to reduce greenhouse gas emissions that is not
implemented through the issuance and surrender of a limited
number of tradeable instruments in the nature of emission
allowances. For purposes of this section, the term ``cap and
trade program'' does not include, among other things, fleet-
wide motor vehicle emission requirements that allow greater
emissions with increased vehicle production, or requirements
that fuels, or other products, meet an average pollution
emission rate or lifecycle greenhouse gas standard.
SEC. 862. GRANTS FOR SUPPORT OF AIR POLLUTION CONTROL PROGRAMS.
The Administrator is authorized to make grants to air
pollution control agencies pursuant to section 105 for purposes
of assisting in the implementation of programs to address
global warming established under the Safe Climate Act.
* * * * * * *
----------
SAFE DRINKING WATER ACT
TITLE XIV--SAFETY OF PUBLIC WATER SYSTEMS
* * * * * * *
Part C--Protection of Underground Sources of Drinking Water
REGULATIONS FOR STATE PROGRAMS
Sec. 1421. (a) * * *
* * * * * * *
(e) Carbon Dioxide Geologic Sequestration Wells.--
(1) In general.--Not later than 1 year after the date
of enactment of this subsection, the Administrator
shall promulgate regulations under subsection (a) for
carbon dioxide geologic sequestration wells.
(2) Financial responsibility.--The regulations
referred to in paragraph (1) shall include requirements
for maintaining evidence of financial responsibility,
including financial responsibility for emergency and
remedial response, well plugging, site closure, and
post-injection site care. Financial responsibility may
be established for carbon dioxide geologic
sequestration wells in accordance with regulations
promulgated by the Administrator by any one, or any
combination, of the following: insurance, guarantee,
trust, standby trust, surety bond, letter of credit,
qualification as a self-insurer, or any other method
satisfactory to the Administrator.
* * * * * * *
----------
ENERGY INDEPENDENCE AND SECURITY ACT OF 2007
TITLE I--ENERGY SECURITY THROUGH IMPROVED VEHICLE FUEL ECONOMY
* * * * * * *
Subtitle B--Improved Vehicle Technology
* * * * * * *
SEC. 136. ADVANCED TECHNOLOGY VEHICLES MANUFACTURING INCENTIVE PROGRAM.
(a) * * *
* * * * * * *
(d) Direct Loan Program.--
(1) In general.--Not later than 1 year after the date
of enactment of this Act, and subject to the
availability of appropriated funds, the Secretary shall
carry out a program to provide a total of not more than
[$25,000,000,000] $50,000,000,000 in loans to eligible
individuals and entities (as determined by the
Secretary) for the costs of activities described in
subsection (b). The loans shall be made through the
Federal Financing Bank, with the full faith and credit
of the United States Government on the principal and
interest. The full credit subsidy shall be paid by the
Secretary using appropriated funds.
* * * * * * *
TITLE III--ENERGY SAVINGS THROUGH IMPROVED STANDARDS FOR APPLIANCE AND
LIGHTING
Subtitle A--Appliance Energy Efficiency
* * * * * * *
SEC. 302. UPDATING APPLIANCE TEST PROCEDURES.
(a) Consumer Appliances.--Section 323(b)(1) of the Energy
Policy and Conservation Act (42 U.S.C. 6293(b)(1)) is amended
by striking ``(1)'' and all that follows through the [end of
the paragraph] end of subparagraph (A) and inserting the
following:
``(1) Test procedures.--
``(A) * * *
(b) Industrial Equipment.--Section 343(a) of the Energy
Policy and Conservation Act (42 U.S.C. [6313(a)] 6314(a)) is
amended by striking ``(a)'' and all that follows through the
end of paragraph (1) and inserting the following:
``(a) Prescription by Secretary; Requirements.--
``(1) * * *
* * * * * * *
[SEC. 313. ELECTRIC MOTOR EFFICIENCY STANDARDS.
[(a) Definitions.--Section 340(13) of the Energy Policy and
Conservation Act (42 U.S.C. 6311(13)) is amended--
[(1) by redesignating subparagraphs (B) through (H)
as subparagraphs (C) through (I), respectively; and
[(2) by striking ``(13)(A)'' and all that follows
through the end of subparagraph (A) and inserting the
following:
[``(13) Electric motor.--
[``(A) General purpose electric motor
(subtype i).--The term `general purpose
electric motor (subtype I)' means any motor
that meets the definition of `General Purpose'
as established in the final rule issued by the
Department of Energy entitled `Energy
Efficiency Program for Certain Commercial and
Industrial Equipment: Test Procedures,
Labeling, and Certification Requirements for
Electric Motors' (10 CFR 431), as in effect on
the date of enactment of the Energy
Independence and Security Act of 2007.
[``(B) General purpose electric motor
(subtype ii).--The term `general purpose
electric motor (subtype II)' means motors
incorporating the design elements of a general
purpose electric motor (subtype I) that are
configured as 1 of the following:
[``(i) A U-Frame Motor.
[``(ii) A Design C Motor.
[``(iii) A close-coupled pump motor.
[``(iv) A Footless motor.
[``(v) A vertical solid shaft normal
thrust motor (as tested in a horizontal
configuration).
[``(vi) An 8-pole motor (900 rpm).
[``(vii) A poly-phase motor with
voltage of not more than 600 volts
(other than 230 or 460 volts.''.
[(b) Standards.--
[(1) Amendments.--Section 342(b) of the Energy Policy
and Conservation Act (42 U.S.C. 6313(b)) is amended--
[(A) by redesignating paragraphs (2) and (3)
as paragraphs (3) and (4), respectively; and
[(B) by inserting after paragraph (1) the
following:
[``(2) Electric motors.--
[``(A) General purpose electric motors
(subtype i).--Except as provided in
subparagraph (B), each general purpose electric
motor (subtype I) with a power rating of 1
horsepower or greater, but not greater than 200
horsepower, manufactured (alone or as a
component of another piece of equipment) after
the 3-year period beginning on the date of
enactment of the Energy Independence and
Security Act of 2007, shall have a nominal full
load efficiency that is not less than as
defined in NEMA MG-1 (2006) Table 12-12.
[``(B) Fire pump motors.--Each fire pump
motor manufactured (alone or as a component of
another piece of equipment) after the 3-year
period beginning on the date of enactment of
the Energy Independence and Security Act of
2007 shall have nominal full load efficiency
that is not less than as defined in NEMA MG-1
(2006) Table 12-11.
[``(C) General purpose electric motors
(subtype ii).--Each general purpose electric
motor (subtype II) with a power rating of 1
horsepower or greater, but not greater than 200
horsepower, manufactured (alone or as a
component of another piece of equipment) after
the 3-year period beginning on the date of
enactment of the Energy Independence and
Security Act of 2007, shall have a nominal full
load efficiency that is not less than as
defined in NEMA MG-1 (2006) Table 12-11.
[``(D) NEMA design b, general purpose
electric motors.--Each NEMA Design B, general
purpose electric motor with a power rating of
more than 200 horsepower, but not greater than
500 horsepower, manufactured (alone or as a
component of another piece of equipment) after
the 3-year period beginning on the date of
enactment of the Energy Independence and
Security Act of 2007, shall have a nominal full
load efficiency that is not less than as
defined in NEMA MG-1 (2006) Table 12-11.''.
[(2) Effective date.--The amendments made by
paragraph (1) take effect on the date that is 3 years
after the date of enactment of this Act.]
* * * * * * *
Subtitle B--Lighting Energy Efficiency
SEC. 321. EFFICIENT LIGHT BULBS.
(a) * * *
* * * * * * *
(e) Prohibited Acts.--Section 332(a) of the Energy Policy and
Conservation Act (42 U.S.C. 6302(a)) [is amended] (as amended
by section 306(b)) is amended--
[(1) in paragraph (4), by striking ``or'' at the end;
[(2) in paragraph (5), by striking the period at the
end and inserting ``; or''; and]
(1) in paragraph (5), by striking ``or'' after the
semicolon at the end;
(2) in paragraph (6), by striking the period at the
end and inserting ``; or''; and
* * * * * * *
SEC. 322. INCANDESCENT REFLECTOR LAMP EFFICIENCY STANDARDS.
(a) * * *
(b) Standards for Fluorescent Lamps and Incandescent
Reflector Lamps.--Section 325(i) of the Energy Policy and
Conservation Act (42 U.S.C. [6995(i)] 6295(i)) is amended by
striking paragraph (1) and inserting the following:
``(1) Standards.--
``(A) * * *
* * * * * * *
SEC. 325. ENERGY EFFICIENCY LABELING FOR CONSUMER ELECTRONIC PRODUCTS.
(a) * * *
(b) Content of Label.--Section 324(c) of the Energy Policy
and Conservation Act (42 U.S.C. [6924(c)] 6294(c)) is amended
by adding at the end the following:
``(9) Discretionary application.--The Commission may
apply paragraphs (1), (2), (3), (5), and (6) of this
subsection to the labeling of any product covered by
paragraph (2)(I) or (6) of subsection (a).''.
TITLE IV--ENERGY SAVINGS IN BUILDINGS AND INDUSTRY
SEC. 401. DEFINITIONS.
In this title:
(1) * * *
(2) Advisory committee.--The term ``Advisory
Committee'' means the Green Building Advisory Committee
established under section [484] 494.
* * * * * * *
(13) High-performance green building.--The term
``high-performance green building'' means a high-
performance building that, during its life-cycle, as
compared with similar buildings (as measured by
Commercial Buildings Energy Consumption Survey or
Residential Energy Consumption Survey data from the
Energy Information [Agency] Administration)--
(A) * * *
* * * * * * *
Subtitle C--High-Performance Federal Buildings
* * * * * * *
SEC. 436. HIGH-PERFORMANCE GREEN FEDERAL BUILDINGS.
(a) * * *
* * * * * * *
(c) Duties.--The Federal Director shall--
(1) * * *
* * * * * * *
(3) establish a senior-level Federal Green Building
Advisory Committee under section [474] 494, which shall
provide advice and recommendations in accordance with
that section and subsection (d);
* * * * * * *
SEC. 440. AUTHORIZATION OF APPROPRIATIONS.
There is authorized to be appropriated to carry out sections
434 through 439 [and 482] $4,000,000 for each of fiscal years
2008 through 2012, to remain available until expended.
* * * * * * *
Subtitle D--Industrial Energy Efficiency
* * * * * * *
SEC. 452. ENERGY-INTENSIVE INDUSTRIES PROGRAM.
(a) * * *
* * * * * * *
(e) Institution of Higher Education-Based Industrial Research
and Assessment Centers.--[The Secretary shall provide funding
to institution of higher education-based industrial research
and assessment centers, whose purpose shall be--]
(1) In general.--The Secretary shall provide funding
to institution of higher education-based industrial
research and assessment centers, whose purposes shall
be--
[(1)] (A) to identify opportunities for
optimizing energy efficiency and environmental
performance;
[(2)] (B) to promote applications of emerging
concepts and technologies in small- and medium-
sized manufacturers;
[(3)] (C) to promote research and development
for the use of alternative energy sources to
supply heat, power, and new feedstocks for
energy-intensive industries;
[(4)] (D) to coordinate with appropriate
Federal and State research offices, and provide
a clearinghouse for industrial process and
energy efficiency technical assistance
resources; and
[(5)] (E) to coordinate with State-accredited
technical training centers and community
colleges, while ensuring appropriate services
to all regions of the United States.
(2) Coordination with centers for energy and
environmental knowledge and outreach.--An industrial
research and assessment center may serve as a Center
for Energy and Environmental Knowledge and Outreach
established pursuant to section 173 of the American
Clean Energy and Security Act of 2009.
SEC. 453. ENERGY EFFICIENCY FOR DATA CENTER BUILDINGS.
(a) * * *
* * * * * * *
(c) Data Center Efficiency Organization.--
(1) In general.--After the establishment of the
program described in subsection (b) but not later than
2 years after the date of enactment of this Act, the
Secretary and the Administrator shall jointly designate
an information technology industry organization to
consult with and to coordinate the program.
* * * * * * *
TITLE V--ENERGY SAVINGS IN GOVERNMENT AND PUBLIC INSTITUTIONS
* * * * * * *
Subtitle E--Energy Efficiency and Conservation Block Grants
SEC. 541. DEFINITIONS.
In this subtitle:
(1) * * *
* * * * * * *
(3)(A) Eligible unit of local government-alternative
1.--The term ``eligible unit of local government-
alternative 1'' means--
(i) a city with a population--
(I) * * *
(II) that causes the city to be 1 of
the 10 highest-populated cities of the
State in which the city is located;
[and]
(ii) a county with a population--
(I) * * *
(II) that causes the county to be 1
of the 10 highest-populated counties of
the State in which the county is
located[.]; or
(iii) a group of adjacent, contiguous, or
geographically proximate units of local
government that reach agreement to act jointly
for purposes of this section and that represent
a combined population of not less than 35,000.
(B) Eligible unit of local government-alternative
2.--The term ``eligible unit of local government-
alternative 2'' means--
(i) a city with a population of at least
50,000; [or]
(ii) a county with a population of at least
200,000[.]; or
(iii) a group of adjacent, contiguous, or
geographically proximate units of local
government that reach agreement to act jointly
for purposes of this section and that represent
a combined population of not less than 50,000.
* * * * * * *
SEC. 545. REQUIREMENTS FOR ELIGIBLE ENTITIES.
(a) * * *
(b) Eligible Units of Local Government and Indian Tribes.--
(1) * * *
* * * * * * *
(3) Limitations on use of funds.--Of amounts provided
to an eligible unit of local government or Indian tribe
under the program, an eligible unit of local government
or [Indian tribe may use--
[(A) for administrative expenses] Indian
tribe may use for administrative expenses,
excluding the cost of meeting the reporting
requirements of this subtitle, an amount equal
to the greater of--
[(i)] (A) 10 percent; and
[(ii)] (B) $75,000[;].
[(B) for the establishment of revolving loan
funds, an amount equal to the greater of--
[(i) 20 percent; and
[(ii) $250,000; and
[(C) for the provision of subgrants to
nongovernmental organizations for the purpose
of assisting in the implementation of the
energy efficiency and conservation strategy of
the eligible unit of local government or Indian
tribe, an amount equal to the greater of--
[(i) 20 percent; and
[(ii) $250,000.]
* * * * * * *
TITLE XIII--SMART GRID
* * * * * * *
SEC. 1302. SMART GRID SYSTEM REPORT.
The Secretary, acting through the Assistant Secretary of the
Office of Electricity Delivery and Energy Reliability (referred
to in this section as the ``OEDER'') and through the Smart Grid
Task Force established in section 1303, shall, after consulting
with any interested individual or entity as appropriate, no
later than 1 year after [enactment] the date of enactment of
this Act, and every 2 years thereafter, report to Congress
concerning the status of smart grid deployments nationwide and
any regulatory or government barriers to continued deployment.
The report shall provide the current status and prospects of
smart grid development, including information on technology
penetration, communications network capabilities, costs, and
obstacles. It may include recommendations for State and Federal
policies or actions helpful to facilitate the transition to a
smart grid. To the extent appropriate, it should take a
regional perspective. In preparing this report, the Secretary
shall solicit advice and contributions from the Smart Grid
Advisory Committee created in section 1303; from other involved
Federal agencies including but not limited to the Federal
Energy Regulatory Commission (``Commission''), the National
Institute of Standards and Technology (``Institute''), and the
Department of Homeland Security; and from other stakeholder
groups not already represented on the Smart Grid Advisory
Committee.
* * * * * * *
SEC. 1306. FEDERAL MATCHING FUND FOR SMART GRID INVESTMENT COSTS.
(a) * * *
* * * * * * *
(c) Investments Not Included.--Qualifying Smart Grid
investments do not include any of the following:
(1) * * *
* * * * * * *
(3) After the final date for State consideration of
the Smart Grid Information Standard under [section 1307
(paragraph (17) of section 111(d) of the Public Utility
Regulatory Policies Act of 1978)] paragraph (19) of
section 111(d) of the Public Utility Regulatory
Policies Act of 1978 (16 U.S.C. 2621(d)), an investment
that is not in compliance with such standard.
* * * * * * *
----------
TITLE 49, UNITED STATES CODE
* * * * * * *
SUBTITLE VI--MOTOR VEHICLE AND DRIVER PROGRAMS
* * * * * * *
PART C--INFORMATION, STANDARDS, AND REQUIREMENTS
* * * * * * *
CHAPTER 329--AUTOMOBILE FUEL ECONOMY
Sec.
32901. Definitions.
* * * * * * *
32920. Open fuel standard for transportation.
* * * * * * *
Sec. 32920. Open fuel standard for transportation
(a) Definitions.--In this section:
(1) E85.--The term ``E85'' means a fuel mixture
containing 85 percent ethanol and 15 percent gasoline
by volume.
(2) Flexible fuel automobile.--The term ``flexible
fuel automobile'' means an automobile that has been
warranted by its manufacturer to operate on gasoline,
E85, and M85.
(3) Fuel choice-enabling automobile.--The term ``fuel
choice-enabling automobile'' means--
(A) a flexible fuel automobile; or
(B) an automobile that has been warranted by
its manufacturer to operate on biodiesel.
(4) Light-duty automobile.--The term ``light-duty
automobile'' means--
(A) a passenger automobile; or
(B) a non-passenger automobile.
(5) Light-duty automobile manufacturer's annual
covered inventory.--The term ``light-duty automobile
manufacturer's annual covered inventory'' means the
number of light-duty automobiles powered by an internal
combustion engine that a manufacturer, during a given
calendar year, manufactures in the United States or
imports from outside of the United States for sale in
the United States.
(6) M85.--The term ``M85'' means a fuel mixture
containing 85 percent methanol and 15 percent gasoline
by volume.
(b) Open Fuel Standard for Transportation.--
(1) In general.--The Secretary may promulgate
regulations to require each light-duty automobile
manufacturer's annual covered inventory to be comprised
of a minimum percentage of fuel-choice enabling
automobiles, with sufficient lead time, if the
Secretary, in coordination with the Secretary of Energy
and the Administrator of the Environmental Protection
Agency, determines such requirement is a cost-effective
way to achieve the Nation's energy independence and
environmental objectives. The cost-effective
determination shall consider the future availability of
both alternative fuel supply and infrastructure to
deliver the alternative fuel to the fuel-choice
enabling vehicles.
(2) Temporary exemption from requirements.--
(A) Application.--A manufacturer may request
an exemption from the requirement described in
paragraph (1) by submitting an application to
the Secretary, at such time, in such manner,
and containing such information as the
Secretary may require by regulation. Each such
application shall specify the models, lines,
and types of automobiles affected.
(B) Evaluation.--After evaluating an
application received from a manufacturer, the
Secretary may at any time, under such terms and
conditions, and to such extent as the Secretary
considers appropriate, temporarily exempt, or
renew the exemption of, a light-duty automobile
from the requirement described in paragraph (1)
if the Secretary determines that unavoidable
events not under the control of the
manufacturer prevent the manufacturer of such
automobile from meeting its required production
volume of fuel choice-enabling automobiles,
including--
(i) a disruption in the supply of any
component required for compliance with
the regulations;
(ii) a disruption in the use and
installation by the manufacturer of
such component; or
(iii) application to plug-in electric
drive vehicles causing such vehicles to
fail to meet State air quality
requirements.
(C) Consolidation.--The Secretary may
consolidate applications received from multiple
manufacturers under subparagraph (A) if they
are of a similar nature.
(D) Conditions.--Any exemption granted under
subparagraph (B) shall be conditioned upon the
manufacturer's commitment to recall the
exempted automobiles for installation of the
omitted components within a reasonable time
proposed by the manufacturer and approved by
the Secretary after such components become
available in sufficient quantities to satisfy
both anticipated production and recall volume
requirements.
(E) Notice.--The Secretary shall publish in
the Federal Register--
(i) notice of each application
received from a manufacturer;
(ii) notice of each decision to grant
or deny a temporary exemption; and
(iii) the reasons for granting or
denying such exemptions.
* * * * * * *
----------
ENERGY POLICY ACT OF 2005
SECTION 1. SHORT TITLE; TABLE OF CONTENTS.
(a) * * *
* * * * * * *
(b) Table of Contents.--The table of contents for this Act is
as follows:
* * * * * * *
TITLE I--ENERGY EFFICIENCY
* * * * * * *
Subtitle B--Energy Assistance and State Programs
* * * * * * *
[Sec. 124. Energy efficient appliance rebate programs.]
Sec. 124. Energy efficient and smart appliance rebate program.
* * * * * * *
Subtitle C--Energy Efficient Products
* * * * * * *
[Sec. 134. Energy efficiency public information initiative.]
Sec. 134. Energy efficiency and Smart Grid public information
initiative.
* * * * * * *
TITLE I--ENERGY EFFICIENCY
* * * * * * *
Subtitle B--Energy Assistance and State Programs
* * * * * * *
SEC. 124. [ENERGY EFFICIENT APPLIANCE REBATE PROGRAMS.] ENERGY
EFFICIENT AND SMART APPLIANCE REBATE PROGRAM.
(a) Definitions.--In this section:
(1) * * *
* * * * * * *
(4) Smart appliance.--The term ``smart appliance''
means a product that the Administrator of the
Environmental Protection Agency or the Secretary of
Energy has determined qualifies for such a designation
in the Energy Star program pursuant to section 142 of
the American Clean Energy and Security Act of 2009, or
that the Secretary or the Administrator has separately
determined includes the relevant Smart Grid
capabilities listed in section 1301 of the Energy
Independence and Security Act of 2007 (15 U.S.C.
17381).
[(4)] (5) State energy office.--The term ``State
energy office'' means the State agency responsible for
developing State energy conservation plans under
section 362 of the Energy Policy and Conservation Act
(42 U.S.C. 6322).
[(5)] (6) State program.--The term ``State program''
means a State energy efficient appliance rebate program
described in subsection (b)(1).
(b) Eligible States.--A State shall be eligible to receive an
allocation under subsection (c) if the State--
(1) establishes (or has established) a State energy
efficient and smart appliance rebate program to provide
rebates to residential consumers for the purchase of
residential Energy Star products, including products
designated as being smart appliances, or products with
improved energy efficiency in cold climates, to replace
used appliances of the same type;
* * * * * * *
(3) provides assurances satisfactory to the Secretary
that the State will use the allocation to supplement,
but not supplant, funds made available to carry out the
administration of the State program.
* * * * * * *
(d) Use of Allocated Funds.--The allocation to a State energy
office under subsection (c) may be used to pay up to 50 percent
of the cost of establishing and carrying out the administration
of a State program, and up to 100 percent of the value of the
rebates provided pursuant to this section.
(e) Issuance of Rebates.--Rebates may be provided to
residential consumers that meet the requirements of the State
program. The amount of a rebate shall be determined by the
State energy office, taking into consideration--
(1) * * *
* * * * * * *
(3) the difference between the cost of the
residential Energy Star product, with separate
consideration as applicable if the product is also a
smart appliance, or product with improved energy
efficiency in a cold climate and the cost of an
appliance that is not a residential Energy Star product
or product with improved energy efficiency in a cold
climate, but is of the same type as, and is the nearest
capacity, performance, and other relevant
characteristics (as determined by the State energy
office) to, the residential Energy Star product or
product with improved energy efficiency in a cold
climate or smart appliance.
(f) Authorization of Appropriations.--There are authorized to
be appropriated to the Secretary to carry out this section
[$50,000,000 for each of the fiscal years 2006 through 2010.]
$100,000,000 for each fiscal year from 2010 through 2015.
* * * * * * *
Subtitle C--Energy Efficient Products
* * * * * * *
SEC. 134. [ENERGY EFFICIENCY PUBLIC INFORMATION INITIATIVE.] ENERGY
EFFICIENCY AND SMART GRID PUBLIC INFORMATION
INITIATIVE.
(a) In General.--The Secretary shall carry out a
comprehensive national program, including advertising and media
awareness, to inform consumers about--
(1) the need to [reduce energy consumption during the
4-year period beginning on the date of enactment of
this Act] increase energy efficiency and to adopt Smart
Grid technology and practices;
(2) the [benefits to consumers of reducing] economic
and environmental benefits to consumers and the United
States of optimizing consumption of electricity,
natural gas, and petroleum, particularly during peak
use periods;
(3) the effect of energy efficiency and Smart Grid
capability in reducing energy and electricity prices
throughout the economy, together with the importance of
low energy costs to economic growth and preserving
manufacturing jobs in the United States; and
(4) practical, cost-effective measures that consumers
can take to reduce consumption of electricity, natural
gas, and gasoline, including--
(A) * * *
* * * * * * *
(C) purchasing energy efficient products;
[and]
(D) purchasing and utilizing equipment that
includes Smart Grid features and capability;
and
[(D)] (E) proper tire maintenance.
* * * * * * *
(c) Report.--[Not later than July 1, 2009,] For each year
when appropriations pursuant to the authorization in this
section exceed $10,000,000, the Secretary shall submit to
Congress a report describing the effectiveness of the program
under this section.
(d) Termination of Authority.--The program carried out under
this section shall terminate on December 31, [2010] 2020.
(e) Authorization of Appropriations.--There are authorized to
be appropriated to carry out this section $90,000,000 for each
of fiscal years 2006 through [2010] 2020.
* * * * * * *
TITLE II--RENEWABLE ENERGY
Subtitle A--General Provisions
* * * * * * *
SEC. 203. FEDERAL PURCHASE REQUIREMENT.
(a) Requirement.--The President, acting through the
Secretary, shall seek to ensure that, to the extent
economically feasible and technically practicable, of the total
amount of [electric] energy the Federal Government consumes
during any fiscal year, the following amounts shall be
renewable energy:
(1) * * *
* * * * * * *
(b) Definitions.--In this section:
(1) * * *
(2) Renewable energy.--The term ``renewable energy''
means electric or thermal energy generated from solar,
wind, biomass, landfill gas, ocean (including tidal,
wave, current, and thermal), geothermal, municipal
solid waste, or new hydroelectric generation capacity
achieved from increased efficiency or additions of new
capacity at an existing hydroelectric project.
[(c) Calculation.--For purposes of determining compliance
with the requirement of this section, the amount of renewable
energy shall be doubled if--
[(1) the renewable energy is produced and used on-
site at a Federal facility;
[(2) the renewable energy is produced on Federal
lands and used at a Federal facility; or
[(3) the renewable energy is produced on Indian land
as defined in title XXVI of the Energy Policy Act of
1992 (25 U.S.C. 3501 et seq.) and used at a Federal
facility.]
(c) Calculation.--Renewable energy produced at a Federal
facility, on Federal lands, or on Indian lands (as defined in
title XXVI of the Energy Policy Act of 1992 (25 U.S.C. 3501 et
seq.)) shall be calculated separately from renewable energy
consumed at a Federal facility, and each may be used to comply
with the consumption requirement under subsection (a).
* * * * * * *
TITLE VII--VEHICLES AND FUELS
* * * * * * *
Subtitle G--Diesel Emissions Reduction
SEC. 791. DEFINITIONS.
In this subtitle:
(1) * * *
* * * * * * *
(3) Eligible entity.--The term ``eligible entity''
means--
(A) * * *
(B) a nonprofit organization or institution
in any State that--
(i) * * *
* * * * * * *
(9) Definition of state.--[The term ``State''
includes the District of Columbia.] The term ``State''
includes the District of Columbia, American Samoa,
Guam, the Commonwealth of the Northern Mariana Islands,
Puerto Rico, and the Virgin Islands.
* * * * * * *
SEC. 793. STATE GRANT AND LOAN PROGRAMS.
(a) * * *
* * * * * * *
(c) Allocation of Funds.--
(1) * * *
(2) Allocation.--Using not more than 20 percent of
the funds made available to carry out this subtitle for
a fiscal year, the Administrator shall provide to each
State described in paragraph (1) for the fiscal year an
allocation of funds that is equal to--
(A) if each of the [51 States] 56 States
qualifies for an allocation, an amount equal to
[1.96 percent] 1.785 percent of the funds made
available to carry out this section; or
(B) if fewer than [51 States] 56 States
qualifies for an allocation, an amount equal to
the amount described in subparagraph (A), plus
an additional amount equal to the product
obtained by multiplying--
(i) * * *
[(ii) the amount of funds remaining
after each State described in paragraph
(1) receives the 2-percent allocation
under this paragraph.]
(ii) the amount of funds remaining
after each State described in paragraph
(1) receives the 1.785-percent
allocation under this paragraph.
* * * * * * *
TITLE XVII--INCENTIVES FOR INNOVATIVE TECHNOLOGIES
SEC. 1701. DEFINITIONS.
In this title:
(1) * * *
* * * * * * *
(6) Renewable fuel.--The term ``renewable fuel'' has
the meaning given the term in section 211(o)(1) of the
Clean Air Act (42 U.S.C. 7545(o)(1)), except that the
term shall include all ethanol and biodiesel.
(7) Renewable fuel pipeline.--The term ``renewable
fuel pipeline'' means a common carrier pipeline for
transporting renewable fuel.
(8) Conditional commitment.--The term ``conditional
commitment'' means a final term sheet negotiated
between the Secretary and a project sponsor or
sponsors, which term sheet shall be binding on both
parties and become a final loan guarantee agreement if
all conditions precedent established in the term sheet,
which shall include the acquisition of all necessary
permits and licenses, are satisfied.
SEC. 1702. TERMS AND CONDITIONS.
(a) * * *
[(b) Specific Appropriation or Contribution.--No guarantee
shall be made unless--
[(1) an appropriation for the cost has been made; or
[(2) the Secretary has received from the borrower a
payment in full for the cost of the obligation and
deposited the payment into the Treasury.]
(b) Specific Appropriation or Contribution.--
(1) In general.--No guarantee shall be made unless--
(A) an appropriation for the cost has been
made;
(B) the Secretary has received from the
borrower a payment in full for the cost of the
obligation and deposited the payment into the
Treasury; or
(C) a combination of appropriations or
payments from the borrower has been made
sufficient to cover the cost of the obligation.
(2) Limitation.--The source of payments received from
a borrower under paragraph (1)(B) shall not be a loan
or other debt obligation that is made or guaranteed by
the Federal Government.
* * * * * * *
(h) Fees.--
(1) * * *
[(2) Availability.--Fees collected under this
subsection shall--
[(A) be deposited by the Secretary into the
Treasury; and
[(B) remain available until expended, subject
to such other conditions as are contained in
annual appropriations Acts.]
(2) Availability.--Fees collected under this
subsection shall--
(A) be deposited by the Secretary into a
special fund in the Treasury to be known as the
``Incentives For Innovative Technologies
Fund''; and
(B) remain available to the Secretary for
expenditure, without further appropriation or
fiscal year limitation, for administrative
expenses incurred in carrying out this title.
* * * * * * *
(k) Wage Rate Requirements.--No loan guarantee shall be made
under this title unless the borrower has provided to the
Secretary reasonable assurances that all laborers and mechanics
employed by contractors and subcontractors in the performance
of construction work financed in whole or in part by the
guaranteed loan will be paid wages at rates not less than those
prevailing on projects of a character similar to the contract
work in the civil subdivision of the State in which the
contract work is to be performed as determined by the Secretary
of Labor in accordance with subchapter IV of chapter 31 of part
A of subtitle II of title 40, United States Code. With respect
to the labor standards specified in this subsection, the
Secretary of Labor shall have the authority and functions set
forth in Reorganization Plan Numbered 14 of 1950 (64 Stat.
1267; 5 U.S.C. App.) and section 3145 of title 40, United
States Code.
SEC. 1703. ELIGIBLE PROJECTS.
(a) * * *
(b) Categories.--Projects from the following categories shall
be eligible for a guarantee under this section:
(1) * * *
* * * * * * *
(11) Renewable fuel pipelines.
(12) The development, construction, acquisition,
retrofitting, or engineering integration of a qualified
advanced electric transmission manufacturing plant or
the construction of a qualified advanced electric
transmission property (whether by construction of new
facilities or the modification of existing facilities).
For purposes of this paragraph, the terms ``qualified
advanced electric transmission property'' and
``qualified advanced electric transmission
manufacturing plant'' have the meanings provided by
section 1705(a)(5).
* * * * * * *
SEC. 1705. TEMPORARY PROGRAM FOR RAPID DEPLOYMENT OF RENEWABLE ENERGY
AND ELECTRIC POWER TRANSMISSION PROJECTS.
(a) In General.--Notwithstanding section 1703, the Secretary
may make guarantees under this section only for the following
categories of projects that commence construction not later
than September 30, 2011:
(1) * * *
* * * * * * *
(5) The development, construction, acquisition,
retrofitting, or engineering integration of a qualified
advanced electric transmission manufacturing plant or
the construction of a qualified high efficiency
transmission property or a qualified advanced electric
transmission property (whether by construction of new
facilities or the modification of existing facilities).
For purposes of this paragraph:
(A) The term ``qualified advanced electric
transmission property'' means any high voltage
electric transmission cable, related
substation, converter station, or other
integrated facility that--
(i) utilizes advanced ultra low
resistance superconductive material or
other advanced technology that has been
determined by the Secretary of Energy
as--
(I) reasonably likely to
become commercially viable
within 10 years after the date
of enactment of this paragraph;
(II) capable of reliably
transmitting at least 5
gigawatts of high-voltage
electric energy for distances
greater than 300 miles with
energy losses not exceeding 3
percent of the total power
transported; and
(III) not creating an
electromagnetic field;
(ii) has been determined by an
appropriate energy regulatory body,
upon application, to be in the public
interest and thereby eligible for
inclusion in regulated rates; and
(iii) can be located safely and
economically in a permanent underground
right of way not to exceed 25 feet in
width.
The term ``qualified advanced electric
transmission property'' shall not include any
property placed in service after December 31,
2016.
(B)(i) The term ``qualified high efficiency
transmission property'' means any high voltage
overhead electric transmission line, related
substation, or other integrated facility that--
(I) utilizes advanced conductor core
technology that--
(aa) has been determined by
the Secretary of Energy as
reasonably likely to become
commercially viable within 10
years after the date of
enactment of this paragraph;
(bb) is suitable for use on
transmission lines up to 765kV;
and
(cc) exhibits power losses at
least 30 percent lower than
that of transmission lines
using conventional ``ACSR''
conductors;
(II) has been determined by an
appropriate energy regulatory body,
upon application, to be in the public
interest and thereby eligible for
inclusion in regulated rates; and
(III) can be located safely and
economically in a right of way not to
exceed that used by conventional
``ACSR'' conductors; and
(ii) The term ``qualified high efficiency
transmission property'' shall not include any
property placed in service after December 31,
2016.
(C) The term ``qualified advanced electric
transmission manufacturing plant'' means any
industrial facility located in the United
States which can be equipped, re-equipped,
expanded, or established to produce in whole or
in part qualified advanced electric
transmission property.
* * * * * * *
----------
ENERGY POLICY AND CONSERVATION ACT
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled, That this
Act may be cited as the ``Energy Policy and Conservation Act''.
TABLE OF CONTENTS
* * * * * * *
TITLE III--IMPROVING ENERGY EFFICIENCY
* * * * * * *
Part C--Certain Industrial Equipment
* * * * * * *
[Sec. 334. Injunctive enforcement.]
Sec. 334. Jurisdiction and venue.
* * * * * * *
Sec. 347. Motor efficiency rebate program.
* * * * * * *
TITLE III--IMPROVING ENERGY EFFICIENCY
* * * * * * *
Part B--Energy Conservation Program for Consumer Products Other Than
Automobiles
DEFINITIONS
Sec. 321. For purposes of this part:
(1) * * *
* * * * * * *
[(6) The term ``energy conservation standard''
means--
[(A) a performance standard which prescribes
a minimum level of energy efficiency or a
maximum quantity of energy use, or, in the case
of showerheads, faucets, water closets, and
urinals, water use, for a covered product,
determined in accordance with test procedures
prescribed under section 323; or
[(B) a design requirement for the products
specified in paragraphs (6), (7), (8), (10),
(15), (16), (17), and (19) of section 322(a);
and
includes any other requirements which the Secretary may
prescribe under section 325(r).]
(6) Energy conservation standard.--
(A) In general.--The term ``energy
conservation standard'' means 1 or more
performance standards that--
(i) for covered products (excluding
clothes washers, dishwashers,
showerheads, faucets, water closets,
and urinals), prescribe a minimum level
of energy efficiency or a maximum
quantity of energy use, determined in
accordance with test procedures
prescribed under section 323;
(ii) for showerheads, faucets, water
closets, and urinals, prescribe a
minimum level of water efficiency or a
maximum quantity of water use,
determined in accordance with test
procedures prescribed under section
323; and
(iii) for clothes washers and
dishwashers--
(I) prescribe a minimum level
of energy efficiency or a
maximum quantity of energy use,
determined in accordance with
test procedures prescribed
under section 323; and
(II) may include a minimum
level of water efficiency or a
maximum quantity of water use,
determined in accordance with
those test procedures.
(B) Inclusions.--The term ``energy
conservation standard'' includes--
(i) 1 or more design requirements, if
the requirements were established--
(I) on or before the date of
enactment of this subclause;
(II) as part of a direct
final rule under section
325(p)(4); or
(III) as part of a final rule
published on or after January
1, 2012, and
(ii) any other requirements that the
Secretary may prescribe under section
325(r).
(C) Exclusion.--The term ``energy
conservation standard'' does not include a
performance standard for a component of a
finished covered product, unless regulation of
the component is specifically authorized or
established pursuant to this title.
* * * * * * *
(30)(A) * * *
* * * * * * *
(C) Except as provided in subparagraph (E), the term
``incandescent lamp'' means a lamp in which light is
produced by a filament heated to incandescence by an
electric current, including only the following:
(i) * * *
(ii) Any lamp (commonly referred to as a
reflector lamp) which is not colored or
designed for rough or vibration service
applications, that contains an inner reflective
coating on the outer bulb to direct the light,
an R, PAR, ER, BR, BPAR, or similar bulb shapes
with E26 medium screw bases, a rated voltage or
voltage range that lies at least partially
within 115 and 130 volts, a diameter which
exceeds 2.25 inches, and has a rated wattage
that is 40 watts or higher.
* * * * * * *
(D) General service incandescent lamp.--
(i) In general.--The term ``general service
incandescent lamp'' means a standard
incandescent or halogen type lamp that--
(I) * * *
* * * * * * *
(III) has a lumen range of not less
than 310 lumens and not more than 2,600
lumens or, in the case of a modified
spectrum lamp, not less than 232 lumens
and not more than 1,950 lumens; and
* * * * * * *
(T) Appliance lamp.--The term ``appliance lamp''
means any lamp that--
(i) is specifically designed to operate in a
household appliance[,] and has a maximum
wattage of 40 watts, [and is sold at retail,]
including an oven lamp, refrigerator lamp, and
vacuum cleaner lamp; and
(ii) when sold at retail, is designated and
marketed for the intended application, with--
(I) * * *
* * * * * * *
(67) Art work light fixture.--The term ``art work
light fixture'' means a light fixture designed only to
be mounted directly to an art work and for the purpose
of illuminating that art work.
(68) Led light engine.--The term ``LED light engine''
or ``LED light engine with integral heat sink'' means a
subsystem of an LED light fixture that--
(A) includes 1 or more LED components,
including--
(i) an LED driver power source with
electrical and mechanical interfaces;
and
(ii) an integral heat sink to provide
thermal dissipation; and
(B) may be designed to accept additional
components that provide aesthetic, optical, and
environmental control.
(69) Led light fixture.--The term ``LED light
fixture'' means a complete lighting unit consisting
of--
(A) an LED light source with 1 or more LED
lamps or LED light engines; and
(B) parts--
(i) to distribute the light;
(ii) to position and protect the
light source; and
(iii) to connect the light source to
electrical power.
(70) Light fixture.--The term ``light fixture'' means
a product designed to provide light that includes--
(A) at least 1 lamp socket; and
(B) parts--
(i) to distribute the light;
(ii) position and protect 1 or more
lamps; and
(iii) to connect 1 or more lamps to a
power supply.
(71) Portable light fixture.--
(A) In general.--The term ``portable light
fixture'' means a light fixture that has a
flexible cord and an attachment plug for
connection to a nominal 120-volt circuit that--
(i) allows the user to relocate the
product without any rewiring; and
(ii) typically can be controlled with
a switch located on the product or the
power cord of the product.
(B) Exclusions.--The term ``portable light
fixture'' does not include--
(i) direct plug-in night lights, sun
or heat lamps, medical or dental
lights, portable electric hand lamps,
signs or commercial advertising
displays, photographic lamps,
germicidal lamps, or light fixtures for
marine use or for use in hazardous
locations (as those terms are defined
in ANSI/NFPA 70 of the National
Electrical Code); or
(ii) decorative lighting strings,
decorative lighting outfits, or
electric candles or candelabra without
lamp shades that are covered by
Underwriter Laboratories (UL) standard
588, ``Seasonal and Holiday Decorative
Products''.
(72) Gu-24.--The term ``GU-24'' means the designation
of a lamp socket, based on a coding system by the
International Electrotechnical Commission, under
which--
(A) ``G'' indicates a holder and socket type
with 2 or more projecting contacts, such as
pins or posts;
(B) ``U'' distinguishes between lamp and
holder designs of similar type that are not
interchangeable due to electrical or mechanical
requirements; and
(C) 24 indicates the distance in millimeters
between the electrical contact posts.
(73) Gu-24 adaptor.--
(A) In general.--The term ``GU-24 Adaptor''
means a 1-piece device, pig-tail, wiring
harness, or other such socket or base
attachment that--
(i) connects to a GU-24 socket on 1
end and provides a different type of
socket or connection on the other end;
and
(ii) does not alter the voltage.
(B) Exclusion.--The term ``GU-24 Adaptor''
does not include a fluorescent ballast with a
GU-24 base.
(74) Gu-24 base lamp.--``GU-24 base lamp'' means a
light bulb designed to fit in a GU-24 socket.
(75) The term ``water dispenser'' means a factory-
made assembly that mechanically cools and heats potable
water and that dispenses the cooled or heated water by
integral or remote means.
(76) The term ``bottle-type water dispenser'' means a
drinking water dispenser designed for dispensing both
hot and cold water that uses a removable bottle or
container as the source of potable water.
(77) The term ``commercial hot food holding cabinet''
means a heated, fully-enclosed compartment with one or
more solid or glass doors that is designed to maintain
the temperature of hot food that has been cooked in a
separate appliance. Such term does not include heated
glass merchandizing cabinets, drawer warmers,
commercial hot food holding cabinets with interior
volumes of less than 8 cubic feet, or cook-and-hold
appliances.
(78) The term ``portable electric spa'' means a
factory-built electric spa or hot tub, supplied with
equipment for heating and circulating water.
COVERAGE
Sec. 322. (a) In General.--The following consumer products,
excluding those consumer products designed solely for use in
recreational vehicles and other mobile equipment, are covered
products:
(1) * * *
* * * * * * *
(20) Portable light fixtures.
(21) Bottle type water dispensers.
(22) Commercial hot food holding cabinets.
(23) Portable electric spas.
[(20)] (24) Any other type of consumer product which
the Secretary classifies as a covered product under
subsection (b).
* * * * * * *
TEST PROCEDURES
Sec. 323. (a) * * *
(b) Amended and New Procedures.--
(1) * * *
* * * * * * *
(19) Led fixtures and led light engines.--Test
procedures for LED fixtures and LED light engines shall
be based on Illuminating Engineering Society of North
America (IESNA) test procedure LM-79, Approved Method
for Electrical and Photometric Testing of Solid-State
Lighting Devices, and IESNA-approved test procedure for
testing LED light engines.
(20) Bottle type water dispensers.--Test procedures
for bottle type water dispensers shall be based on
``Energy Star Program Requirements for Bottled Water
Coolers version 1.1'' published by the Environmental
Protection Agency. Units with an integral, automatic
timer shall not be tested using section 4D, ``Timer
Usage,'' of the test criteria.
(21) Commercial hot food holding cabinets.--Test
procedures for commercial hot food holding cabinets
shall be based on the test procedures described in
ANSI/ASTM F2140-01 (Test for idle energy rate-dry
test). Interior volume shall be based on the method
shown in the Environmental Protection Agency's ``Energy
Star Program Requirements for Commercial Hot Food
Holding Cabinets'' as in effect on August 15, 2003.
(22) Portable electric spas.--Test procedures for
portable electric spas shall be based on the test
method for portable electric spas contained in section
1604, title 20, California Code of Regulations as
amended on December 3, 2008. When the American National
Standards Institute publishes a test procedure for
portable electric spas, the Secretary shall revise the
Department of Energy's procedure.
(23) Consensus and alternate test procedures.--
(A) Receipt of joint recommendation or
alternate testing procedure.--On receipt of--
(i) a statement that is submitted
jointly by interested persons that are
fairly representative of relevant
points of view (including
representatives of manufacturers of
covered products, States, and
efficiency advocates), as determined by
the Secretary, and contains
recommendations with respect to the
testing procedure for a covered
product; or
(ii) a submission of a testing
procedure currently in use for a
covered product by a State, nation, or
group of nations--
(I) if the Secretary
determines that the recommended
testing procedure contained in
the statement or submission is
in accordance with subsection
(b)(3), the Secretary may issue
a final rule that establishes
an energy or water conservation
testing procedure that is
published simultaneously with a
notice of proposed rulemaking
that proposes a new or amended
energy or water conservation
testing procedure that is
identical to the testing
procedure established in the
final rule to establish the
recommended testing procedure
(referred to in this paragraph
as a ``direct final rule''); or
(II) if the Secretary
determines that a direct final
rule cannot be issued based on
the statement or submission,
the Secretary shall publish a
notice of the determination,
together with an explanation of
the reasons for the
determination.
(B) Public comment.--The Secretary shall
solicit public comment for a period of at least
110 days with respect to each direct final rule
issued by the Secretary under subparagraph
(A)(ii)(I).
(C) Withdrawal of direct final rules.--
(i) In general.--Not later than 120
days after the date on which a direct
final rule issued under subparagraph
(A)(ii)(I) is published in the Federal
Register, the Secretary shall withdraw
the direct final rule if--
(I) the Secretary receives 1
or more adverse public comments
relating to the direct final
rule under subparagraph (B)or
any alternative joint
recommendation; and
(II) based on the rulemaking
record relating to the direct
final rule, the Secretary
determines that such adverse
public comments or alternative
joint recommendation may
provide a reasonable basis for
withdrawing the direct final
rule under paragraph (3) or any
other applicable law.
(ii) Action on withdrawal.--On
withdrawal of a direct final rule under
clause (i), the Secretary shall--
(I) proceed with the notice
of proposed rulemaking
published simultaneously with
the direct final rule as
described in subparagraph
(A)(ii)(I); and
(II) publish in the Federal
Register the reasons why the
direct final rule was
withdrawn.
(iii) Treatment of withdrawn direct
final rules.--A direct final rule that
is withdrawn under clause (i) shall not
be considered to be a final rule for
purposes of subsection (b).
(D) Effect of paragraph.--Nothing in this
paragraph authorizes the Secretary to issue a
direct final rule based solely on receipt of
more than 1 statement containing recommended
test procedures relating to the direct final
rule.
(24) Televisions.--(A) On the date of enactment of
this paragraph, Appendix H to Subpart B of Part 430 of
the United States Code of Federal Regulations,
``Uniform Test Method for Measuring the Energy
Consumption of Television Sets'', is repealed.
(B) No later than 12 months after the date of
enactment of this paragraph the Secretary shall publish
in the Federal Register a final rule prescribing a new
test method for televisions.
* * * * * * *
LABELING
Sec. 324. (a) In General.--(1) * * *
(2)(A) * * *
* * * * * * *
(I)(i) Not later than 90 days after the date of enactment of
this subparagraph, the Commission shall initiate a rulemaking
to implement the additional labeling requirements specified in
subsection (c)(1)(C) of this section with an effective date for
the revised labeling requirement not later than 12 months from
issuance of the final rule.
(ii) Not later than 24 months after the date of enactment of
this subparagraph, the Commission shall complete the rulemaking
initiated under clause (i).
(iii) Not later than 90 days after issuance of the final rule
as provided in this subparagraph, the Secretary shall issue
calculation methods required to effectuate the labeling
requirements specified in subsection (c)(1)(C) of this section.
(J)(i) Not later than 3 years after the date of enactment of
this subparagraph, the Federal Trade Commission shall initiate
a rulemaking to consider making a special note in a prominent
manner on any ENERGY GUIDE label for any product actually
including Smart Grid capability that--
(I) Smart Grid capability is a
feature of that product;
(II) the use and value of that
feature depended on the Smart Grid
capability of the utility system in
which the product was installed and the
active utilization of that feature by
the customer; and
(III) on a utility system with Smart
Grid capability, the use of the
product's Smart Grid capability could
reduce the customer's cost of the
product's annual operation by an
estimated dollar amount range
representing the result of incremental
energy and electricity cost savings
that would result from the customer
taking full advantage of such Smart
Grid capability.
(ii) Not later than 3 years after the date of
enactment of this subparagraph, the Commission
shall complete the rulemaking initiated under
clause (i).
* * * * * * *
(c) Content of Label.--(1) Subject to paragraph (6), a rule
prescribed under this section shall require that each covered
product in the type or class of covered products to which the
rule applies bear a label which discloses--
(A) the estimated annual operating cost of such
product (determined in accordance with test procedures
prescribed under section 323), except that if--
(i) * * *
* * * * * * *
the Commission shall require disclosure of a different
useful measure of energy consumption (determined in
accordance with test procedures prescribed under
section 323); [and]
(B) information respecting the range of estimated
annual operating costs for covered products to which
the rule applies; except that if the Commission
requires disclosure under subparagraph (A) of a measure
of energy consumption different from estimated annual
operating cost, then the label shall disclose the range
of such measure of energy consumption of covered
products to which such rule applies[.];
(C) for products or groups of products providing a
comparable function (including the group of products
comprising the heating function of heat pumps and
furnaces) among covered products listed in paragraphs
(3), (4), (5), (8), (9), (10), and (11) of section
322(a) of this part, and others designated by the
Secretary, the estimated total annual atmospheric
carbon dioxide emissions (or their equivalent in other
greenhouse gases) associated with, or caused by, the
product, calculated utilizing--
(i) national average energy use for the
product including energy consumed at the point
of end use based on test procedures developed
under section 323 of this part;
(ii) national average energy consumed or lost
in the production, generation, transportation,
storage, and distribution of energy to the
point of end use; and
(iii) any direct emissions of greenhouse
gases from the product during normal use;
(D) in determining the national average energy
consumption and total annual atmospheric carbon dioxide
emissions, the Secretary shall utilize Federal
Government sources, including the Energy Information
Administration Annual Energy Review, the Environmental
Protection Agency eGRID data base, Environmental
Protection Agency AP-42 Emission Factors as amended,
and other sources determined to be appropriate by the
Secretary; and
(E) information presenting, for each product (or
group of products providing the comparable function)
identified in section (c)(1)(C) of this section, the
estimated annual carbon dioxide emissions calculated
within the range of emissions calculated for all models
of the product or group according to its function,
including those models consuming fuels and those models
not consuming fuels.
* * * * * * *
ENERGY STAR PROGRAM
Sec. 324A. (a) * * *
* * * * * * *
(c) Duties.--The Administrator and the Secretary shall--
(1) * * *
* * * * * * *
(6) on adoption of a new or revised product category,
specification, or criterion, provide reasonable notice
to interested parties of any changes (including
effective dates) in product categories, specifications,
or criteria, along with--
(A) * * *
(B) as appropriate, responses to comments
submitted by interested parties; [and]
(7) provide appropriate lead time (which shall be 270
days, unless the Agency or Department specifies
otherwise) prior to the applicable effective date for a
new or a significant revision to a product category,
specification, or criterion, taking into account the
timing requirements of the manufacturing, product
marketing, and distribution process for the specific
product addressed[.];
(8) in establishing and revising an Energy Star
product category, specification, or criterion, require
inclusion of developmental products planned for sale
within 2 years in the testing or evaluation of products
proposed for purposes of such establishment or
revision;
(9) not later than 18 months after the date of
enactment of this paragraph, establish and implement a
rating system for products identified as Energy Star
products pursuant to this section to provide consumers
with the most helpful information on the relative
energy efficiency of those products, unless the
Administrator and the Secretary communicate to Congress
that establishing such a system would diminish the
value of the Energy Star brand to consumers;
(10)(A) review the Energy Star product criteria for
the 10 products in each product category with the
greatest energy consumption at least once every 3
years; and
(B) based on the review, update and publish the
Energy Star product criteria for each such category, as
necessary; and
(11) require periodic verification of compliance with
the Energy Star product criteria by products identified
as Energy Star products pursuant to this section,
including--
(A) purchase and testing of products from the
market; or
(B) other appropriate testing and compliance
approaches.
* * * * * * *
ENERGY CONSERVATION STANDARDS
Sec. 325. (a) * * *
* * * * * * *
(g) Standards for Dishwashers; Clothes Washers; Clothes
Dryers, Fluorescent Lamp Ballasts.--(1) * * *
* * * * * * *
(8)(A) * * *
* * * * * * *
(C) The standards described in subparagraph (A) do not apply
to--
(i) * * *
(ii) a ballast that is designed for use with 2
F96T12HO lamps at ambient temperatures of [20F] -20F
or less and for use in an outdoor sign; or
* * * * * * *
[(i) General Service Fluorescent Lamps, General Service
Incandescent Lamps, Intermediate Base Incandescent Lamps,
Candelabra Base Incandescent Lamps, and Incandescent Reflector
Lamps.--
[(1) Standards.--
[(A) Definition of effective date.--In this
paragraph (other than subparagraph (D)), the
term ``effective date'' means, with respect to
each type of lamp specified in a table
contained in subparagraph (B), the last day of
the period of months corresponding to that type
of lamp (as specified in the table) that
follows October 24, 1992.
[(B) Minimum standards.--Each of the
following general service fluorescent lamps and
incandescent reflector lamps manufactured after
the effective date specified in the tables
contained in this paragraph shall meet or
exceed the following lamp efficacy and CRI
standards:
[FLUORESCENT LAMPS
----------------------------------------------------------------------------------------------------------------
Effective Date
[Lamp Type Nominal Lamp Minimum CRI Minimum Average Lamp (Period of
Wattage Efficacy (LPW) Months)
----------------------------------------------------------------------------------------------------------------
4-foot medium bi-pin........... >35 W 69 75.0 36
=35 W 45 75.0 36
2-foot U-shaped................ >35 W 69 68.0 36
=35 W 45 64.0 36
8-foot slimline................ 65 W 69 80.0 18
=65 W 45 80.0 18
8-foot high output............. >100 W 69 80.0 18
=100 W 45 80.0 18
----------------------------------------------------------------------------------------------------------------
INCANDESCENT REFLECTOR LAMPS
------------------------------------------------------------------------
Effective Date
Nominal Lamp Wattage Minimum Average Lamp (Period of
Efficacy (LPW) Months)
------------------------------------------------------------------------
40-50....................... 10.5 36
51-66....................... 11.0 36
67-85....................... 12.5 36
86-115...................... 14.0 36
116-155...................... 14.5 36
156-205...................... 15.0 36
------------------------------------------------------------------------
[(C) Exemptions.--The standards specified in
subparagraph (B) shall not apply to the
following types of incandescent reflector
lamps:
[(i) Lamps rated at 50 watts or less
that are ER30, BR30, BR40, or ER40
lamps.
[(ii) Lamps rated at 65 watts that
are BR30, BR40, or ER40 lamps.
[(iii) R20 incandescent reflector
lamps rated 45 watts or less.
[(D) Effective dates.--
[(i) ER, br, and bpar lamps.--The
standards specified in subparagraph (B)
shall apply with respect to ER
incandescent reflector lamps, BR
incandescent reflector lamps, BPAR
incandescent reflector lamps, and
similar bulb shapes on and after
January 1, 2008.
[(ii) Lamps between 2.25-2.75 inches
in diameter.--The standards specified
in subparagraph (B) shall apply with
respect to incandescent reflector lamps
with a diameter of more than 2.25
inches, but not more than 2.75 inches,
on and after the later of January 1,
2008, or the date that is 180 days
after the date of enactment of the
Energy Independence and Security Act of
2007.
[(2) Notwithstanding section 332(a)(5) and section 332(b), it
shall not be unlawful for a manufacturer to sell a lamp which
is in compliance with the law at the time such lamp was
manufactured.
[(3) Not less than 36 months after the date of the enactment
of this subsection, the Secretary shall initiate a rulemaking
procedure and shall publish a final rule not later than the end
of the 54-month period beginning on the date of the enactment
of this subsection to determine if the standards established
under paragraph (1) should be amended. Such rule shall contain
such amendment, if any, and provide that the amendment shall
apply to products manufactured on or after the 36-month period
beginning on the date such final rule is published.
[(4) Not less than eight years after the date of the
enactment of this subsection, the Secretary shall initiate a
rulemaking procedure and shall publish a final rule not later
than nine years and six months after the date of the enactment
of this subsection to determine if the standards in effect for
fluorescent lamps and incandescent lamps should be amended.
Such rule shall contain such amendment, if any, and provide
that the amendment shall apply to products manufactured on or
after the 36-month period beginning on the date such final rule
is published.
[(5) Not later than the end of the 24-month period beginning
on the date labeling requirements under section 324(a)(2)(C)
become effective, the Secretary shall initiate a rulemaking
procedure to determine if the standards in effect for
fluorescent lamps and incandescent lamps should be amended so
that they would be applicable to additional general service
fluorescent and shall publish, not later than 18 months after
initiating such rulemaking, a final rule including such amended
standards, if any. Such rule shall provide that the amendment
shall apply to products manufactured after a date which is 36
months after the date such rule is published.
[(6) Standards for general service lamps.--
[(A) Rulemaking before january 1, 2014.--
[(i) In general.--Not later than
January 1, 2014, the Secretary shall
initiate a rulemaking procedure to
determine whether--
[(I) standards in effect for
general service lamps should be
amended to establish more
stringent standards than the
standards specified in
paragraph (1)(A); and
[(II) the exemptions for
certain incandescent lamps
should be maintained or
discontinued based, in part, on
exempted lamp sales collected
by the Secretary from
manufacturers.
[(ii) Scope.--The rulemaking--
[(I) shall not be limited to
incandescent lamp technologies;
and
[(II) shall include
consideration of a minimum
standard of 45 lumens per watt
for general service lamps.
[(iii) Amended standards.--If the
Secretary determines that the standards
in effect for general service
incandescent lamps should be amended,
the Secretary shall publish a final
rule not later than January 1, 2017,
with an effective date that is not
earlier than 3 years after the date on
which the final rule is published.
[(iv) Phased-in effective dates.--The
Secretary shall consider phased-in
effective dates under this subparagraph
after considering--
[(I) the impact of any
amendment on manufacturers,
retiring and repurposing
existing equipment, stranded
investments, labor contracts,
workers, and raw materials; and
[(II) the time needed to work
with retailers and lighting
designers to revise sales and
marketing strategies.
[(v) Backstop requirement.--If the
Secretary fails to complete a
rulemaking in accordance with clauses
(i) through (iv) or if the final rule
does not produce savings that are
greater than or equal to the savings
from a minimum efficacy standard of 45
lumens per watt, effective beginning
January 1, 2020, the Secretary shall
prohibit the sale of any general
service lamp that does not meet a
minimum efficacy standard of 45 lumens
per watt.
[(vi) State preemption.--Neither
section 327(b) nor any other provision
of law shall preclude California or
Nevada from adopting, effective
beginning on or after January 1, 2018--
[(I) a final rule adopted by
the Secretary in accordance
with clauses (i) through (iv);
[(II) if a final rule
described in subclause (I) has
not been adopted, the backstop
requirement under clause (v);
or
[(III) in the case of
California, if a final rule
described in subclause (I) has
not been adopted, any
California regulations relating
to these covered products
adopted pursuant to State
statute in effect as of the
date of enactment of the Energy
Independence and Security Act
of 2007.
[(B) Rulemaking before january 1, 2020.--
[(i) In general.--Not later than
January 1, 2020, the Secretary shall
initiate a rulemaking procedure to
determine whether--
[(I) standards in effect for
general service incandescent
lamps should be amended to
reflect lumen ranges with more
stringent maximum wattage than
the standards specified in
paragraph (1)(A); and
[(II) the exemptions for
certain incandescent lamps
should be maintained or
discontinued based, in part, on
exempted lamp sales data
collected by the Secretary from
manufacturers.
[(ii) Scope.--The rulemaking shall
not be limited to incandescent lamp
technologies.
[(iii) Amended standards.--If the
Secretary determines that the standards
in effect for general service
incandescent lamps should be amended,
the Secretary shall publish a final
rule not later than January 1, 2022,
with an effective date that is not
earlier than 3 years after the date on
which the final rule is published.
[(iv) Phased-in effective dates.--The
Secretary shall consider phased-in
effective dates under this subparagraph
after considering--
[(I) the impact of any
amendment on manufacturers,
retiring and repurposing
existing equipment, stranded
investments, labor contracts,
workers, and raw materials; and
[(II) the time needed to work
with retailers and lighting
designers to revise sales and
marketing strategies.
[(7)(A) With respect to any lamp to which standards are
applicable under this subsection or any lamp specified in
section 346, the Secretary shall inform any Federal entity
proposing actions which would adversely impact the energy
consumption or energy efficiency of such lamp of the energy
conservation consequences of such action. It shall be the
responsibility of such Federal entity to carefully consider the
Secretary's comments.
[(B) Notwithstanding section 325(n)(1), the Secretary shall
not be prohibited from amending any standard, by rule, to
permit increased energy use or to decrease the minimum required
energy efficiency of any lamp to which standards are applicable
under this subsection if such action is warranted as a result
of other Federal action (including restrictions on materials or
processes) which would have the effect of either increasing the
energy use or decreasing the energy efficiency of such product.
[(8) Not later than the date on which standards established
pursuant to this subsection become effective, or, with respect
to high-intensity discharge lamps covered under section 346,
the effective date of standards established pursuant to such
section, each manufacturer of a product to which such standards
are applicable shall file with the Secretary a laboratory
report certifying compliance with the applicable standard for
each lamp type. Such report shall include the lumen output and
wattage consumption for each lamp type as an average of
measurements taken over the preceding 12-month period. With
respect to lamp types which are not manufactured during the 12-
month period preceding the date such standards become
effective, such report shall be filed with the Secretary not
later than the date which is 12 months after the date
manufacturing is commenced and shall include the lumen output
and wattage consumption for each such lamp type as an average
of measurements taken during such 12-month period.]
(i) General Service Fluorescent Lamps, General Service
Incandescent Lamps, Intermediate Base Incandescent Lamps,
Candelabra Base Incandescent Lamps, and Incandescent Reflector
Lamps.--
(1) Energy efficiency standards.--
(A) In general.--Each of the following
general service fluorescent lamps, general
service incandescent lamps, intermediate base
incandescent lamps, candelabra base
incandescent lamps, and incandescent reflector
lamps manufactured after the effective date
specified in the tables listed in this
subparagraph shall meet or exceed the following
lamp efficacy, new maximum wattage, and CRI
standards:
FLUORESCENT LAMPS
----------------------------------------------------------------------------------------------------------------
Effective Date
Lamp Type Nominal Lamp Minimum CRI Minimum Average Lamp (Period of
Wattage Efficacy (LPW) Months)
----------------------------------------------------------------------------------------------------------------
4-foot medium bi-pin........... >35 W 69 75.0 36
=35 W 45 75.0 36
2-foot U-shaped................ >35 W 69 68.0 36
=35 W 45 64.0 36
8-foot slimline................ 65 W 69 80.0 18
=65 W 45 80.0 18
8-foot high output............. >100 W 69 80.0 18
=100 W 45 80.0 18
----------------------------------------------------------------------------------------------------------------
INCANDESCENT REFLECTOR LAMPS
------------------------------------------------------------------------
Effective Date
Nominal Lamp Wattage Minimum Average Lamp (Period of
Efficacy (LPW) Months)
------------------------------------------------------------------------
40-50....................... 10.5 36
51-66....................... 11.0 36
67-85....................... 12.5 36
86-115...................... 14.0 36
116-155...................... 14.5 36
156-205...................... 15.0 36
------------------------------------------------------------------------
GENERAL SERVICE INCANDESCENT LAMPS
----------------------------------------------------------------------------------------------------------------
Minimum
Rated Lumen Ranges Maximum Rated Rated Effective
Wattage Lifetime Date
----------------------------------------------------------------------------------------------------------------
1490-2600 72 1,000 hrs 1/1/2012
1050-1489 53 1,000 hrs 1/1/2013
750-1049 43 1,000 hrs 1/1/2014
310-749 29 1,000 hrs 1/1/2014
----------------------------------------------------------------------------------------------------------------
MODIFIED SPECTRUM GENERAL SERVICE INCANDESCENT LAMPS
----------------------------------------------------------------------------------------------------------------
Minimum
Rated Lumen Ranges Maximum Rated Rated Effective
Wattage Lifetime Date
----------------------------------------------------------------------------------------------------------------
1118-1950 72 1,000 hrs 1/1/2012
788-1117 53 1,000 hrs 1/1/2013
563-787 43 1,000 hrs 1/1/2014
232-562 29 1,000 hrs 1/1/2014
----------------------------------------------------------------------------------------------------------------
(B) Application.--
(i) Application criteria.--This
subparagraph applies to each lamp
that--
(I) is intended for a general
service or general illumination
application (whether
incandescent or not);
(II) has a medium screw base
or any other screw base not
defined in ANSI C81.61-2006;
(III) is capable of being
operated at a voltage at least
partially within the range of
110 to 130 volts; and
(IV) is manufactured or
imported after December 31,
2011.
(ii) Requirement.--For purposes of
this paragraph, each lamp described in
clause (i) shall have a color rendering
index that is greater than or equal
to--
(I) 80 for nonmodified
spectrum lamps; or
(II) 75 for modified spectrum
lamps.
(C) Candelabra incandescent lamps and
intermediate base incandescent lamps.--
(i) Candelabra base incandescent
lamps.--Effective beginning January 1,
2012, a candelabra base incandescent
lamp shall not exceed 60 rated watts.
(ii) Intermediate base incandescent
lamps.--Effective beginning January 1,
2012, an intermediate base incandescent
lamp shall not exceed 40 rated watts.
(D) Exemptions.--
(i) Statutory exemptions.--The
standards specified in subparagraph (A)
shall not apply to the following types
of incandescent reflector lamps:
(I) Lamps rated at 50 watts
or less that are ER30, BR30,
BR40, or ER40 lamps.
(II) Lamps rated at 65 watts
that are BR30, BR40, or ER40
lamps.
(III) R20 incandescent
reflector lamps rated 45 watts
or less.
(ii) Administrative exemptions.--
(I) Petition.--Any person may
petition the Secretary for an
exemption for a type of general
service lamp from the
requirements of this
subsection.
(II) Criteria.--The Secretary
may grant an exemption under
subclause (I) only to the
extent that the Secretary
finds, after a hearing and
opportunity for public comment,
that it is not technically
feasible to serve a specialized
lighting application (such as a
military, medical, public
safety, or certified historic
lighting application) using a
lamp that meets the
requirements of this
subsection.
(III) Additional criterion.--
To grant an exemption for a
product under this clause, the
Secretary shall include, as an
additional criterion, that the
exempted product is unlikely to
be used in a general service
lighting application.
(E) Extension of coverage.--
(i) Petition.--Any person may
petition the Secretary to establish
standards for lamp shapes or bases that
are excluded from the definition of
general service lamps.
(ii) Increased sales of exempted
lamps.--The petition shall include
evidence that the availability or sales
of exempted incandescent lamps have
increased significantly since the date
on which the standards on general
service incandescent lamps were
established.
(iii) Criteria.--The Secretary shall
grant a petition under clause (i) if
the Secretary finds that--
(I) the petition presents
evidence that demonstrates that
commercial availability or
sales of exempted incandescent
lamp types have increased
significantly since the
standards on general service
lamps were established and
likely are being widely used in
general lighting applications;
and
(II) significant energy
savings could be achieved by
covering exempted products, as
determined by the Secretary
based in part on sales data
provided to the Secretary from
manufacturers and importers.
(iv) No presumption.--The grant of a
petition under this subparagraph shall
create no presumption with respect to
the determination of the Secretary with
respect to any criteria under a
rulemaking conducted under this
section.
(v) Expedited proceeding.--If the
Secretary grants a petition for a lamp
shape or base under this subparagraph,
the Secretary shall--
(I) conduct a rulemaking to
determine standards for the
exempted lamp shape or base;
and
(II) complete the rulemaking
not later than 18 months after
the date on which notice is
provided granting the petition.
(F) Effective dates.--
(i) In general.--In this paragraph,
except as otherwise provided in a table
contained in subparagraph (A) or in
clause (ii), the term ``effective
date'' means the last day of the month
specified in the table that follows
October 24, 1992.
(ii) Special effective dates.--
(I) Er, br, and bpar lamps.--
The standards specified in
subparagraph (A) shall apply
with respect to ER incandescent
reflector lamps, BR
incandescent reflector lamps,
BPAR incandescent reflector
lamps, and similar bulb shapes
on and after January 1, 2008,
or the date that is 180 days
after the date of enactment of
the Energy Independence and
Security Act of 2007.
(II) Lamps between 2.25-2.75
inches in diameter.--The
standards specified in
subparagraph (A) shall apply
with respect to incandescent
reflector lamps with a diameter
of more than 2.25 inches, but
not more than 2.75 inches, on
and after the later of January
1, 2008, or the date that is
180 days after the date of
enactment of the Energy
Independence and Security Act
of 2007.
(2) Compliance with existing law.--Notwithstanding
section 332(a)(5) and section 332(b), it shall not be
unlawful for a manufacturer to sell a lamp that is in
compliance with the law at the time the lamp was
manufactured.
(3) Rulemaking before october 24, 1995.--
(A) In general.--Not later than 36 months
after October 24, 1992, the Secretary shall
initiate a rulemaking procedure and shall
publish a final rule not later than the end of
the 54-month period beginning on October 24,
1992, to determine whether the standards
established under paragraph (1) should be
amended.
(B) Administration.--The rule shall contain
the amendment, if any, and provide that the
amendment shall apply to products manufactured
on or after the 36-month period beginning on
the date on which the final rule is published.
(4) Rulemaking before october 24, 2000.--
(A) In general.--Not later than 8 years after
October 24, 1992, the Secretary shall initiate
a rulemaking procedure and shall publish a
final rule not later than 9 years and 6 months
after October 24, 1992, to determine whether
the standards in effect for fluorescent lamps
and incandescent lamps should be amended.
(B) Administration.--The rule shall contain
the amendment, if any, and provide that the
amendment shall apply to products manufactured
on or after the 36-month period beginning on
the date on which the final rule is published.
(5) Rulemaking for additional general service
fluorescent lamps.--
(A) In general.--Not later than the end of
the 24-month period beginning on the date
labeling requirements under section
324(a)(2)(C) become effective, the Secretary
shall--
(i) initiate a rulemaking procedure
to determine whether the standards in
effect for fluorescent lamps and
incandescent lamps should be amended so
that the standards would be applicable
to additional general service
fluorescent lamps; and
(ii) publish, not later than 18
months after initiating the rulemaking,
a final rule including the amended
standards, if any.
(B) Administration.--The rule shall provide
that the amendment shall apply to products
manufactured after a date which is 36 months
after the date on which the rule is published.
(6) Standards for general service lamps.--
(A) Rulemaking before january 1, 2014.--
(i) In general.--Not later than
January 1, 2014, the Secretary shall
initiate a rulemaking procedure to
determine whether--
(I) standards in effect for
general service lamps should be
amended; and
(II) the exclusions for
certain incandescent lamps
should be maintained or
discontinued based, in part, on
excluded lamp sales collected
by the Secretary from
manufacturers.
(ii) Scope.--The rulemaking--
(I) shall not be limited to
incandescent lamp technologies;
and
(II) shall include
consideration of a minimum
standard of 45 lumens per watt
for general service lamps.
(iii) Amended standards.--If the
Secretary determines that the standards
in effect for general service lamps
should be amended, the Secretary shall
publish a final rule not later than
January 1, 2017, with an effective date
that is not earlier than 3 years after
the date on which the final rule is
published.
(iv) Phased-in effective dates.--The
Secretary shall consider phased-in
effective dates under this subparagraph
after considering--
(I) the impact of any
amendment on manufacturers,
retiring and repurposing
existing equipment, stranded
investments, labor contracts,
workers, and raw materials; and
(II) the time needed to work
with retailers and lighting
designers to revise sales and
marketing strategies.
(v) Backstop requirement.--If the
Secretary fails to complete a
rulemaking in accordance with clauses
(i) through (iv) or if the final rule
does not produce savings that are
greater than or equal to the savings
from a minimum efficacy standard of 45
lumens per watt, effective beginning
January 1, 2020, the Secretary shall
prohibit the manufacture of any general
service lamp that does not meet a
minimum efficacy standard of 45 lumens
per watt.
(vi) State preemption.--Neither
section 327(c) nor any other provision
of law shall preclude California or
Nevada from adopting, effective
beginning on or after January 1, 2018--
(I) a final rule adopted by
the Secretary in accordance
with clauses (i) through (iv);
(II) if a final rule
described in subclause (I) has
not been adopted, the backstop
requirement under clause (v);
or
(III) in the case of
California, if a final rule
described in subclause (I) has
not been adopted, any
California regulations relating
to these covered products
adopted pursuant to State
statute in effect as of the
date of enactment of the Energy
Independence and Security Act
of 2007.
(B) Rulemaking before january 1, 2020.--
(i) In general.--Not later than
January 1, 2020, the Secretary shall
initiate a rulemaking procedure to
determine whether--
(I) standards in effect for
general service lamps should be
amended; and
(II) the exclusions for
certain incandescent lamps
should be maintained or
discontinued based, in part, on
excluded lamp sales data
collected by the Secretary from
manufacturers.
(ii) Scope.--The rulemaking shall not
be limited to incandescent lamp
technologies.
(iii) Amended standards.--If the
Secretary determines that the standards
in effect for general service lamps
should be amended, the Secretary shall
publish a final rule not later than
January 1, 2022, with an effective date
that is not earlier than 3 years after
the date on which the final rule is
published.
(iv) Phased-in effective dates.--The
Secretary shall consider phased-in
effective dates under this subparagraph
after considering--
(I) the impact of any
amendment on manufacturers,
retiring and repurposing
existing equipment, stranded
investments, labor contracts,
workers, and raw materials; and
(II) the time needed to work
with retailers and lighting
designers to revise sales and
marketing strategies.
(7) Federal actions.--
(A) Comments of secretary.--
(i) In general.--With respect to any
lamp to which standards are applicable
under this subsection or any lamp
specified in section 346, the Secretary
shall inform any Federal entity
proposing actions that would adversely
impact the energy consumption or energy
efficiency of the lamp of the energy
conservation consequences of the
action.
(ii) Consideration.--The Federal
entity shall carefully consider the
comments of the Secretary.
(B) Amendment of standards.--Notwithstanding
section 325(n)(1), the Secretary shall not be
prohibited from amending any standard, by rule,
to permit increased energy use or to decrease
the minimum required energy efficiency of any
lamp to which standards are applicable under
this subsection if the action is warranted as a
result of other Federal action (including
restrictions on materials or processes) that
would have the effect of either increasing the
energy use or decreasing the energy efficiency
of the product.
(8) Compliance.--
(A) In general.--Not later than the date on
which standards established pursuant to this
subsection become effective, or, with respect
to high-intensity discharge lamps covered under
section 346, the effective date of standards
established pursuant to that section, each
manufacturer of a product to which the
standards are applicable shall file with the
Secretary a laboratory report certifying
compliance with the applicable standard for
each lamp type.
(B) Contents.--The report shall include the
lumen output and wattage consumption for each
lamp type as an average of measurements taken
over the preceding 12-month period.
(C) Other lamp types.--With respect to lamp
types that are not manufactured during the 12-
month period preceding the date on which the
standards become effective, the report shall--
(i) be filed with the Secretary not
later than the date that is 12 months
after the date on which manufacturing
is commenced; and
(ii) include the lumen output and
wattage consumption for each such lamp
type as an average of measurements
taken during the 12-month period.
(9) Certain incandescent reflector lamps.--(A) No
later than 12 months after enactment of this paragraph,
the Secretary shall publish a final rule establishing
standards for incandescent reflector lamp types
described in paragraph (1)(D). Such standards shall be
effective on July 1, 2013.
(B) Any rulemaking for incandescent reflector lamps
completed after enactment of this section shall
consider standards for all incandescent reflector
lamps, inclusive of those specified in paragraph
(1)(C).
(10) Reflector lamps.--No later than January 1, 2015,
the Secretary shall publish a final rule establishing
and amending standards for reflector lamps, including
incandescent reflector lamps. Such standards shall be
effective no sooner than three years after publication
of the final rule. Such rulemaking shall consider
incandescent and nonincandescent technologies. Such
rulemaking shall consider a new metric other than
lumens-per-watt based on the photometric distribution
of light from such lamps.
* * * * * * *
(l) Standards for Other Covered Products.--(1) The Secretary
may prescribe an energy conservation standard for any type (or
class) of covered products of a type specified in [paragraph
(19)] paragraph (24) of section 322(a) if the requirements of
subsections (o) and (p) are met and the Secretary determines
that--
(A) * * *
* * * * * * *
(2) Any new or amended standard for covered products of a
type specified in [paragraph (19)] paragraph (24) of section
322(a) shall not apply to products manufactured within five
years after the publication of a final rule establishing such
standard.
* * * * * * *
(4) Energy efficiency standards for certain lamps.--
(A) In general.--The Secretary shall prescribe an
energy efficiency standard for rough service lamps,
vibration service lamps, 3-way incandescent lamps,
2,601-3,300 lumen general service incandescent lamps,
and shatter-resistant lamps [only] in accordance with
this paragraph.
* * * * * * *
(o) Criteria for Prescribing New or Amended Standards.--(1) *
* *
(2)(A) * * *
(B)(i) In determining whether a standard is economically
justified, the Secretary shall, after receiving views and
comments furnished with respect to the proposed standard,
determine whether the benefits of the standard exceed its
burdens by, to the greatest extent practicable, considering--
(I) * * *
* * * * * * *
(VI) the need for national energy and water
conservation; [and]
(VII) the estimated value of the carbon dioxide and
other emission reductions that will be achieved by
virtue of the higher energy efficiency of the covered
products resulting from the imposition of the standard;
(VIII) the estimated impact of standards for a
particular product on average consumer energy prices;
(IX) the increased energy efficiency that may be
attributable to the installation of Smart Grid
technologies or capabilities in the covered products,
if applicable in the determination of the Secretary;
(X) the availability in the United States or in other
nations of examples or prototypes of covered products
that achieve significantly higher efficiency standards
for energy or for water; and
[(VII)] (XI) other factors the Secretary considers
relevant.
* * * * * * *
(iii) If the Secretary finds that the additional cost to the
consumer of purchasing a product complying with an energy
conservation standard level will be less than [three] 5 times
the value of the energy, and as applicable, water, savings
during the first year that the consumer will receive as a
result of the standard, as calculated under the applicable test
procedure, there shall be a rebuttable presumption that such
standard level is economically justified. [A determination by
the Secretary that such criterion is not met shall not be taken
into consideration in the Secretary's determination of whether
a standard is economically justified.] For products with an
average expected useful life of less than 5 years, such
rebuttable presumption shall be determined utilizing 75 percent
of the product's average expected useful life as a multiplier
instead of 5. Such a presumption may be rebutted only if the
Secretary finds, based on clear, convincing, and reliable
evidence, that--
(I) such standard level would cause serious and
unavoidable hardship to the average consumer of the
product, or to manufacturers supplying a significant
portion of the market for the product, that
substantially outweighs the standard level's benefits;
(II) the standard and implementing regulations cannot
be designed to avoid or mitigate the hardship
identified under subclause (I), through the adoption of
regional standards consistent with paragraph (6) of
this subsection, or other reasonable means consistent
with this part;
(III) the same or substantially similar hardship
would not occur under a standard adopted in the absence
of the presumption, but that otherwise meets the
requirements of this section; and
(IV) the hardship cannot be avoided or mitigated
pursuant the procedures specified in section 504 of the
Department of Energy Organization Act (42 U.S.C. 7194).
* * * * * * *
(u) Battery Charger and External Power Supply Electric Energy
Consumption.--(1) * * *
* * * * * * *
[(7)] (4) End-use products.--An energy conservation standard
for external power supplies shall not constitute an energy
conservation standard for the separate end-use product to which
the external power [supplies is] supply is connected.
* * * * * * *
(ii) Portable Light Fixtures.--
(1) In general.--Subject to paragraphs (2) and (3),
portable light fixtures manufactured on or after
January 1, 2012, shall meet 1 or more of the following
requirements:
(A) Be a fluorescent light fixture that meets
the requirements of the Energy Star Program for
Residential Light Fixtures, Version 4.2.
(B) Be equipped with only 1 or more GU-24
line-voltage sockets, not be rated for use with
incandescent lamps of any type (as defined in
ANSI standards), and meet the requirements of
version 4.2 of the Energy Star program for
residential light fixtures.
(C) Be an LED light fixture or a light
fixture with an LED light engine and comply
with the following minimum requirements:
(i) Minimum light output: 200 lumens
(initial).
(ii) Minimum LED light engine
efficacy: 40 lumens/watt installed in
fixtures that meet the minimum light
fixture efficacy of 29 lumens/watt or,
alternatively, a minimum LED light
engine efficacy of 60 lumens/watt for
fixtures that do not meet the minimum
light fixture efficacy of 29 lumens/
watt.
(iii) All portable fixtures shall
have a minimum LED light fixture
efficacy of 29 lumens/watt and a
minimum LED light engine efficacy of 60
lumens/watt by January 1, 2016.
(iv) Color Correlated Temperature
(CCT): 2700K through 4000K.
(v) Minimum Color Rendering Index
(CRI): 75.
(vi) Power factor equal to or greater
than 0.70.
(vii) Portable luminaries that have
internal power supplies shall have zero
standby power when the luminaire is
turned off.
(viii) LED light sources shall
deliver at least 70 percent of initial
lumens for at least 25,000 hours.
(D)(i) Be equipped with an ANSI-designated
E12, E17, or E26 screw-based socket and be
prepackaged and sold together with 1 screw-
based compact fluorescent lamp or screw-based
LED lamp for each screw-based socket on the
portable light fixture.
(ii) The compact fluorescent or LED lamps
prepackaged with the light fixture shall be
fully compatible with any light fixture
controls incorporated into the light fixture
(for example, light fixtures with dimmers shall
be packed with dimmable lamps).
(iii) Compact fluorescent lamps prepackaged
with light fixtures shall meet the requirements
of the Energy Star Program for CFLs Version
4.0.
(iv) Screw-based LED lamps shall comply with
the minimum requirements described in
subparagraph (C).
(E) Be equipped with 1 or more single-ended,
non-screw based halogen lamp sockets (line or
low voltage), a dimmer control or high-low
control, and be rated for a maximum of 100
watts.
(2) Review.--
(A) Review.--The Secretary shall review the
criteria and standards established under
paragraph (1) to determine if revised standards
are technologically feasible and economically
justified.
(B) Components.--The review shall include
consideration of--
(i) whether a separate compliance
procedure is still needed for halogen
fixtures described in subparagraph (E)
and, if necessary, what an appropriate
standard for halogen fixtures shall be;
(ii) whether the specific technical
criteria described in subparagraphs
(A), (C), and (D)(iii) should be
modified; and
(iii) which fixtures should be
exempted from the light fixture
efficacy standard as of January 1,
2016, because the fixtures are
primarily decorative in nature (as
defined by the Secretary) and, even if
exempted, are likely to be sold in
limited quantities.
(C) Timing.--
(i) Determination.--Not later than
January 1, 2014, the Secretary shall
publish amended standards, or a
determination that no amended standards
are justified, under this subsection.
(ii) Standards.--Any standards under
this paragraph shall take effect on
January 1, 2016.
(3) Art work light fixtures.--Art work light fixtures
manufactured on or after January 1, 2012, shall--
(A) comply with paragraph (1); or
(B)(i) contain only ANSI-designated E12
screw-based line-voltage sockets;
(ii) have not more than 3 sockets;
(iii) be controlled with an integral high/low
switch;
(iv) be rated for not more than 25 watts if
fitted with 1 socket; and
(v) be rated for not more than 15 watts per
socket if fitted with 2 or 3 sockets.
(4) Exception from preemption.--Notwithstanding
section 327, Federal preemption shall not apply to a
regulation concerning portable light fixtures adopted
by the California Energy Commission on or before
January 1, 2014.
(jj) GU-24 Base Lamps.--
(1) In general.--A GU-24 base lamp shall not be an
incandescent lamp as defined by ANSI.
(2) Gu-24 adaptors.--GU-24 adaptors shall not adapt a
GU-24 socket to any other line voltage socket.
(kk) Bottle Type Water Dispensers.--Effective January 1,
2012, bottle-type water dispensers designed for dispensing both
hot and cold water shall not have standby energy consumption
greater than 1.2 kilowatt-hours per day.
(ll) Commercial Hot Food Holding Cabinets.--Effective January
1, 2012, commercial hot food holding cabinets with interior
volumes of 8 cubic feet or greater shall have a maximum idle
energy rate of 40 watts per cubic foot of interior volume.
(mm) Portable Electric Spas.--Effective January 1, 2012,
portable electric spas shall not have a normalized standby
power greater than 5(V2/3) Watts where V=the fill
volume in gallons.
(nn) Revisions.--The Secretary of Energy shall consider
revisions to the standards in subsections (kk), (ll), and (mm)
in accordance with subsection (o) and publish a final rule no
later than January 1, 2013 establishing such revised standards,
or make a finding that no revisions are technically feasible
and economically justified. Any such revised standards shall
take effect January 1, 2016.
[(ii)] (oo) Application Date.--Section 327 applies--
(1) * * *
(2) to products for which energy conservation
standards are established under subsections (w) through
[(hh)] (mm) on the date of enactment of those
subsections, except that any State or local standard
prescribed or enacted before the date of enactment of
those subsections shall not be preempted until the
energy conservation standards established under
subsections (w) through [(hh)] (mm) take effect.
REQUIREMENTS OF MANUFACTURERS
Sec. 326. (a) * * *
* * * * * * *
[(d) Information Requirements.--(1) For purposes of carrying
out this part, the Secretary may require, under this part or
other provision of law administered by the Secretary, each
manufacturer of a covered product to submit information or
reports to the Secretary with respect to energy efficiency,
energy use, or, in the case of showerheads, faucets, water
closets, and urinals, water use of such covered product and the
economic impact of any proposed energy conservation standard,
as the Secretary determines may be necessary to establish and
revise test procedures, labeling rules, and energy conservation
standards for such product and to insure compliance with the
requirements of this part. In making any determination under
this paragraph, the Secretary shall consider existing public
sources of information, including nationally recognized
certification programs of trade associations.
[(2) The Secretary shall exercise authority under this
section in a manner designed to minimize unnecessary burdens on
manufacturers of covered products.
[(3) The provisions of section 11(d) of the Energy Supply and
Environmental Coordination Act of 1974 shall apply with respect
to information obtained under this subsection to the same
extent and in the same manner as they apply with respect to
energy information obtained under section 11 of such Act.]
(d) Information Requirements.--(1) For purposes of carrying
out this part, the Secretary shall publish proposed regulations
not later than one year after the date of enactment of the
American Clean Energy and Security Act of 2009, and after
receiving public comment, final regulations not later than 18
months from such date of enactment under this part or other
provision of law administered by the Secretary, which shall
require each manufacturer of a covered product to submit
information or reports to the Secretary on an annual basis in a
form adopted by the Secretary. Such reports shall include
information or data with respect to--
(A) the manufacturers' compliance with all
requirements applicable pursuant to this part;
(B) the economic impact of any proposed energy
conservation standard;
(C) the manufacturers' annual shipments of each class
or category of covered products, organized, to the
maximum extent practicable, by--
(i) energy efficiency, energy use, and, if
applicable, water use;
(ii) the presence or absence of such
efficiency related or energy consuming
operational characteristics or components as
the Secretary determines are relevant for the
purposes of carrying out this part; and
(iii) the State or regional location of sale,
for covered products for which the Secretary
may adopt regional standards; and
(D) such other categories of information as the
Secretary deems relevant to carry out this part,
including such other information as may be necessary to
establish and revise test procedures, labeling rules,
and energy conservation standards and to insure
compliance with the requirements of this part.
(2) In adopting regulations under this subsection, the
Secretary shall consider existing public sources of
information, including nationally recognized certification
programs of trade associations.
(3) The Secretary shall exercise authority under this section
in a manner designed to minimize unnecessary burdens on
manufacturers of covered products.
(4) To the extent that they do not conflict with the duties
of the Secretary in carrying out this part, the provisions of
section 11(d) of the Energy Supply and Environmental
Coordination Act of 1974 (15 U.S.C. 796(d)) shall apply with
respect to information obtained under this subsection to the
same extent and in the same manner as they apply with respect
to other energy information obtained under such section.
EFFECT ON OTHER LAW
Sec. 327. (a) * * *
(b) General Rule of Preemption for Energy Conservation
Standards Before Federal Standard Becomes Effective for a
Product.--Effective on the date of enactment of the National
Appliance Energy Conservation Act of 1987 and ending on the
effective date of an energy conservation standard established
under section 325 for any covered product, no State regulation,
or revision thereof, concerning the energy efficiency, energy
use, or water use of the covered product shall be effective
with respect to such covered product, unless the State
regulation or revision--
(1)(A) * * *
(B) in the case of any portion of any regulation that
establishes requirements for general service
incandescent lamps, intermediate base incandescent
lamps, or candelabra base lamps, was enacted or adopted
by the State of California or Nevada before December 4,
2007, except that--
(i) the regulation adopted by the California
Energy Commission with an effective date of
January 1, 2008, shall only be effective until
the effective date of the Federal standard for
the applicable lamp category under
subparagraphs (A), (B), and (C) of section
325(i)(1); and
(ii) the States of California and Nevada may,
at any time, modify or adopt a State standard
for general service lamps to conform with
Federal standards with effective dates no
earlier than 12 months prior to the Federal
effective dates prescribed under subparagraphs
(A), (B), and (C) of section 325(i)(1), at
which time any prior regulations adopted by the
State of California or Nevada shall no longer
be effective[; and].
[(iii) all other States may, at any time,
modify or adopt a State standard for general
service lamps to conform with Federal standards
and effective dates.]
* * * * * * *
(c) General Rule of Preemption for Energy Conservation
Standards When Federal Standard Becomes Effective for a
Product.--Except as provided in section 325(b)(3)(A)(ii),
subparagraphs (B) and (C) of section 325(j)(3), and
subparagraphs (B) and (C) of section 325(k)(3) and effective on
the effective date of an energy conservation standard
established in or prescribed under section 325 for any covered
product, no State regulation concerning the energy efficiency,
energy use, or water use of such covered product shall be
effective with respect to such product unless the regulation--
(1) * * *
* * * * * * *
(6) is a regulation (or portion thereof) concerning
the water efficiency or water use of gravity tank-type
low consumption water closets for installation in
public places, except that such a regulation shall be
effective only until January 1, 1997; [or]
* * * * * * *
(8)(A) * * *
(B) is an amendment to a regulation described in
subparagraph (A) that was developed to align California
regulations to changes in the Institute for
Transportation Engineers standards, entitled
``Performance Specification: Pedestrian Traffic Control
Signal Indications''; [and]
(9) is a regulation concerning metal halide lamp
fixtures adopted by the California Energy Commission on
or before January 1, 2011, [except that--
[(A) if the Secretary fails to issue] except
that if the Secretary fails to issue a final
rule within 180 days after the deadlines for
rulemakings in section 325(hh), notwithstanding
any other provision of this section, preemption
shall not apply to a regulation concerning
metal halide lamp fixtures adopted by the
California Energy Commission--
[(i)] (A) * * *
[(ii)] (B) on or before July 1, 2022, if the
Secretary fails to meet the deadline specified
in section 325(hh)(3)[.];
(10) is a regulation for general service lamps that
conforms with Federal standards and effective dates;
(11) is an energy efficiency standard for general
service lamps enacted into law by the State of Nevada
prior to December 19, 2007, if the State has not
adopted the Federal standards and effective dates
pursuant to subsection (b)(1)(B)(ii); or
(12) is a regulation concerning standards for hot
food holding cabinets, drinking water dispensers and
portable electric spas adopted by the California Energy
Commission on or before January 1, 2013.
(d) Waiver of Federal Preemption.--(1)(A) Any State or river
basin commission with a [State regulation] State statute or
regulation which provides for any energy conservation standard
or other requirement with respect to energy use, energy
efficiency, or water use for any type (or class) of covered
product for which there is a Federal energy conservation
standard under section 325 may file a petition with the
Secretary requesting a rule that such [State regulation] State
statute or regulation become effective with respect to such
covered product.
(B) Subject to paragraphs (2) through (5), the Secretary
shall, within the period described in paragraph (2) and after
consideration of the petition and the comments of interested
persons, prescribe such rule if the Secretary finds (and
publishes such finding) that the State or river basin
commission has established by a preponderance of the evidence
that such State regulation is needed to meet unusual and
compelling State or local energy or water interests. In making
such a finding, the Secretary may not reject a petition for
failure of the petitioning State or river basin commission to
produce confidential information maintained by any manufacturer
or distributor, or group or association of manufacturers or
distributors, and which the petitioning party does not have the
legal right to obtain.
(C) For purposes of this subsection, the term ``unusual and
compelling State or local energy or water interests'' means
interests which--
(i) * * *
(ii) are such that the [costs] estimated costs,
benefits, burdens, and reliability of energy or water
savings resulting from the State regulation make such
regulation preferable or necessary when measured
against the [costs] estimated costs, benefits, burdens,
and reliability of alternative approaches to energy or
water savings or production, including reliance on
reasonably predictable market-induced improvements in
efficiency of all products subject to the State
regulation.
The factors described in clause (ii) shall be evaluated [within
the context of the State's energy plan and forecast, and,] with
respect to a State regulation for which a petition has been
submitted to the Secretary which provides for any energy
conservation standard or requirement with respect to water use
of a covered product, within the context of the water supply
and groundwater management plan, water quality program, and
comprehensive plan (if any) of the State or river basin
commission for improving, developing, or conserving a waterway
affected by water supply development.
* * * * * * *
(f) Exception for Certain Building Code Requirements.--(1) *
* *
* * * * * * *
(3) Effective on the effective date of an energy conservation
standard for a covered product established in or prescribed
under section 325, a regulation or other requirement contained
in a State or local building code for new construction
concerning the energy efficiency or energy use of such covered
product is not superseded by this part if the code complies
with all of the following requirements:
(A) * * *
[(B) The code does not require that the covered
product have an energy efficiency exceeding the
applicable energy conservation standard established in
or prescribed under section 325, except that the
required efficiency may exceed such standard up to the
level required by a regulation of that State for which
the Secretary has issued a rule granting a waiver under
subsection (d).
[(C) The credit to the energy consumption or
conservation objective allowed by the code for
installing covered products having energy efficiencies
exceeding such energy conservation standard established
in or prescribed under section 325 or the efficiency
level required in a State regulation referred to in
subparagraph (B) is on a one-for-one equivalent energy
use or equivalent cost basis.
[(D) If the code uses one or more baseline building
designs against which all submitted building designs
are to be evaluated and such baseline building designs
contain a covered product subject to an energy
conservation standard established in or prescribed
under section 325, the baseline building designs are
based on the efficiency level for such covered product
which meets but does not exceed such standard or the
efficiency level required by a regulation of that State
for which the Secretary has issued a rule granting a
waiver under subsection (d).
[(E) If the code sets forth one or more optional
combinations of items which meet the energy consumption
or conservation objective, for every combination which
includes a covered product the efficiency of which
exceeds either standard or level referred to in
subparagraph (D), there also shall be at least one
combination which includes such covered product the
efficiency of which does not exceed such standard or
level by more than 5 percent, except that at least one
combination shall include such covered product the
efficiency of which meets but does not exceed such
standard.
[(F) The energy consumption or conservation objective
is specified in terms of an estimated total consumption
of energy (which may be calculated from energy loss- or
gain-based codes) utilizing an equivalent amount of
energy (which may be specified in units of energy or
its equivalent cost).
[(G) The estimated energy use of any covered product
permitted or required in the code, or used in
calculating the objective, is determined using the
applicable test procedures prescribed under section
323, except that the State may permit the estimated
energy use calculation to be adjusted to reflect the
conditions of the areas where the code is being applied
if such adjustment is based on the use of the
applicable test procedures prescribed under section 323
or other technically accurate documented procedure.]
(B) The code meets at least one of the following
requirements:
(i) The code does not require that the
covered product have an energy efficiency
exceeding--
(I) the applicable energy
conservation standard established in or
prescribed under section 325;
(II) the level required by a
regulation of that State for which the
Secretary has issued a rule granting a
waiver under subsection (d) of this
section; or
(III) the required level established
in the International Energy
Conservation Code or in a standard of
the American Society of Heating,
Refrigerating and Air-Conditioning
Engineers, or by the Secretary pursuant
to section 304 of the Energy
Conservation and Production Act.
(ii) If the code uses one or more baseline
building designs against which all submitted
building designs are to be evaluated and such
baseline building designs contain a covered
product subject to an energy conservation
standard established in or prescribed under
section 325, the baseline building designs are
based on an efficiency level for such covered
product which meets but does not exceed one of
the levels specified in clause (i).
(iii) If the code sets forth one or more
optional combinations of items which meet the
energy consumption or conservation objective,
in at least one combination that the State has
found to be reasonably achievable using
commercially available technologies the
efficiency of the covered product meets but
does not exceed one of the levels specified in
clause (i).
(C) The credit to the energy consumption or
conservation objective allowed by the code for
installing covered products having energy efficiencies
exceeding one of the levels specified in subparagraph
(B)(i) is on a one-for-one equivalent energy use or
equivalent energy cost basis, taking into account the
typical lifetime of the product.
(D) The energy consumption or conservation objective
is specified in terms of an estimated total consumption
of energy (which may be calculated from energy loss- or
gain-based codes) utilizing an equivalent amount of
energy (which may be specified in units of energy or
its equivalent cost) and equivalent lifetimes.
(E) The estimated energy use of any covered product
permitted or required in the code, or used in
calculating the objective, is determined using the
applicable test procedures prescribed under section
323, except that the State may permit the estimated
energy use calculation to be adjusted to reflect the
conditions of the areas where the code is being applied
if such adjustment is based on the use of the
applicable test procedures prescribed under section 323
or other technically accurate documented procedure.
(4)(A) * * *
[(B) If a building code requires the installation of covered
products with efficiencies exceeding both the applicable
Federal standard established in or prescribed under section 325
and the applicable standard of such State, if any, that has
been granted a waiver under subsection (d), such requirement of
the building code shall not be applicable unless the Secretary
has granted a waiver for such requirement under subsection
(d).]
(B) If a building code requires the installation of covered
products with efficiencies exceeding the levels and
requirements specified in paragraph (3)(B), such requirement of
the building code shall not be applicable unless the Secretary
has granted a waiver for such requirement under subsection (d)
of this section.
* * * * * * *
PROHIBITED ACTS
Sec. 332. (a) In General.--It shall be unlawful--
(1) * * *
* * * * * * *
[(6)] (7) for any manufacturer, distributor,
retailer, or private labeler to distribute in commerce
an adapter that--
(A) * * *
* * * * * * *
[INJUNCTIVE ENFORCEMENT
[Sec. 334. The United States district courts shall have
jurisdiction to restrain (1) any violation of section 332 and
(2) any person from distributing in commerce any covered
product which does not comply with an applicable rule under
section 324 or 325. Any such action shall be brought by the
Commission, except that any such action to restrain any
violation of section 332(a)(3) which relates to requirements
prescribed by the Secretary, any violation of section 332(a)(4)
which relates to requests of the Secretary under section
326(b)(2), or any violation of section 332(a)(5) shall be
brought by the Secretary. Any such action to restrain any
person from distributing in commerce a general service
incandescent lamp that does not comply with the applicable
standard established under section 325(i) or an adapter
prohibited under section 332(a)(6) may also be brought by the
attorney general of a State in the name of the State. Any such
action may be brought in the United States district court for a
district wherein any act, omission, or transaction constituting
the violation occurred, or in such court for the district
wherein the defendant is found or transacts business. In any
action under this section, process may be served on a defendant
in any other district in which the defendant resides or may be
found.]
SEC. 334. JURISDICTION AND VENUE.
(a) Jurisdiction.--The United States district courts shall
have jurisdiction to restrain--
(1) any violation of section 332; and
(2) any person from distributing in commerce any
covered product which does not comply with an
applicable rule under section 324 or 325.
(b) Authority.--Any action referred to in subsection (a)
shall be brought by the Commission or by the attorney general
of a State in the name of the State, except that--
(1) any such action to restrain any violation of
section 332(a)(3) which relates to requirements
prescribed by the Secretary or any violation of section
332(a)(4) which relates to request of the Secretary
under section 326(b)(2) shall be brought by the
Secretary; and
(2) any violation of section 332(a)(5) or 332(a)(7)
shall be brought by the Secretary or by the attorney
general of a State in the name of the State.
(c) Venue and Service of Process.--Any such action may be
brought in the United States district court for a district
wherein any act, omission, or transaction constituting the
violation occurred, or in such court of the district wherein
the defendant is found or transacts business. In any action
under this section, process may be served on a defendant in any
other district in which the defendant resides or may be found.
* * * * * * *
Part C--Certain Industrial Equipment
DEFINITIONS
Sec. 340. For purposes of this part--
(1) The term ``covered equipment'' means one of the
following types of industrial equipment:
(A) * * *
* * * * * * *
[(L) Any other type of industrial equipment
which the Secretary classifies as covered
equipment under section 341(b).]
(L) Outdoor luminaires.
(M) Outdoor high light output lamps.
(N) Any other type of industrial equipment
which the Secretary classifies as covered
equipment under section 341(b).
* * * * * * *
(13) Electric motor.--
[(A) General purpose electric motor (subtype
i).--The term ``general purpose electric motor
(subtype I)'' means any motor that meets the
definition of ``General Purpose'' as
established in the final rule issued by the
Department of Energy entitled ``Energy
Efficiency Program for Certain Commercial and
Industrial Equipment: Test Procedures,
Labeling, and Certification Requirements for
Electric Motors'' (10 CFR 431), as in effect on
the date of enactment of the Energy
Independence and Security Act of 2007.
[(B) General purpose electric motor (subtype
ii).--The term ``general purpose electric motor
(subtype II)'' means motors incorporating the
design elements of a general purpose electric
motor (subtype I) that are configured as 1 of
the following:
[(i) A U-Frame Motor.
[(ii) A Design C Motor.
[(iii) A close-coupled pump motor.
[(iv) A Footless motor.
[(v) A vertical solid shaft normal
thrust motor (as tested in a horizontal
configuration).
[(vi) An 8-pole motor (900 rpm).
[(vii) A poly-phase motor with
voltage of not more than 600 volts
(other than 230 or 460 volts.]
(A) In general.--The term ``electric motor''
means any motor that is--
(i) a general purpose T-frame,
single-speed, foot-mounting, polyphase
squirrel-cage induction motor of the
National Electrical Manufacturers
Association, Design A and B, continuous
rated, operating on 230/460 volts and
constant 60 Hertz line power as defined
in NEMA Standards Publication MG1-1987;
or
(ii) a motor incorporating the design
elements described in clause (i), but
is configured to incorporate one or
more of the following variations--
(I) U-frame motor;
(II) NEMA Design C motor;
(III) close-coupled pump
motor;
(IV) footless motor;
(V) vertical solid shaft
normal thrust motor (as tested
in a horizontal configuration);
(VI) 8-pole motor; or
(VII) poly-phase motor with a
voltage rating of not more than
600 volts (other than 230 volts
or 460 volts, or both, or can
be operated on 230 volts or 460
volts, or both).
[(C)] (B) The term ``definite purpose motor'' means
any motor designed in standard ratings with standard
operating characteristics or standard mechanical
construction for use under service conditions other
than usual or for use on a particular type of
application and which cannot be used in most general
purpose applications.
[(D)] (C) The term ``special purpose motor'' means
any motor, other than a general purpose motor or
definite purpose motor, which has special operating
characteristics or special mechanical construction, or
both, designed for a particular application.
[(E)] (D) The term ``open motor'' means a motor
having ventilating openings which permit passage of
external cooling air over and around the windings of
the machine.
[(F)] (E) The term ``enclosed motor'' means a motor
so enclosed as to prevent the free exchange of air
between the inside and outside of the case but not
sufficiently enclosed to be termed airtight.
[(G)] (F) The term ``small electric motor'' means a
NEMA general purpose alternating current single-speed
induction motor, built in a two-digit frame number
series in accordance with NEMA Standards Publication
MG1-1987.
[(H)] (G) The term ``efficiency'' when used with
respect to an electric motor means the ratio of an
electric motor's useful power output to its total power
input, expressed in percentage.
[(I)] (H) The term ``nominal full load efficiency''
means the average efficiency of a population of motors
of duplicate design as determined in accordance with
NEMA Standards Publication MG1-1987.
* * * * * * *
[(22)] (23) Single package vertical air
conditioner.--The term ``single package vertical air
conditioner'' means air-cooled commercial package air
conditioning and heating equipment that--
(A) * * *
* * * * * * *
[(23)] (24) Single package vertical heat pump.--The
term ``single package vertical heat pump'' means a
single package vertical air conditioner that--
(A) * * *
* * * * * * *
(25) The term ``luminaire'' means a complete lighting
unit consisting of one or more light sources and
ballast(s), together with parts designed to distribute
the light, to position and protect such lamps, and to
connect such light sources to the power supply.
(26) The term ``outdoor luminaire'' means a luminaire
that is listed as suitable for wet locations pursuant
to Underwriters Laboratories Inc. standard UL 1598 and
is labeled as ``Suitable for Wet Locations'' consistent
with section 410.4(A) of the National Electrical Code
2005, or is designed for roadway illumination and meets
the requirements of Addendum A for IESNA TM-15-07:
Backlight, Uplight, and Glare (BUG) Ratings, except
for--
(A) luminaires designed for outdoor video
display images that cannot be used in general
lighting applications;
(B) portable luminaires designed for use at
construction sites;
(C) luminaires designed for continuous
immersion in swimming pools and other water
features;
(D) seasonal luminaires incorporating solely
individual lamps rated at 10 watts or less;
(E) luminaires designed to be used in
emergency conditions that incorporate a means
of charging a battery and a device to switch
the power supply to emergency lighting loads
automatically upon failure of the normal power
supply;
(F) components used for repair of installed
luminaries and that meet the requirements of
section 342(h);
(G) a luminaire utilizing an electrode-less
fluorescent lamp as the light source;
(H) decorative gas lighting systems;
(I) luminaires designed explicitly for
lighting for theatrical purposes, including
performance, stage, film production, and video
production;
(J) luminaires designed as theme elements in
theme/amusement parks and that cannot be used
in most general lighting applications;
(K) luminaires designed explicitly for
vehicular roadway tunnels designed to comply
with ANSI/IESNA RP-22-05;
(L) luminaires designed explicitly for
hazardous locations meeting UL Standard 844;
(M) searchlights;
(N) luminaires that are designed to be
recessed into a building, and that cannot be
used in most general lighting applications;
(O) a luminaire rated only for residential
applications utilizing a light source or
sources regulated under the amendments made by
section 321 of the Energy Independence and
Security Act of 2007 and with a light output no
greater than 2,600 lumens;
(P) a residential pole-mounted luminaire that
is not rated for commercial use utilizing a
light source or sources meeting the efficiency
requirements of section 231 of the Energy
Independence and Security Act of 2007 and
mounted on a post or pole not taller than 10.5
feet above ground and with a light output not
greater than 2,600 lumens;
(Q) a residential fixture with E12
(Candelabra) bases that is rated for not more
than 300 watts total; or
(R) a residential fixture with medium screw
bases that is rated for not more than 145
watts.
(27) The term ``outdoor high light outputlamp'' means
a lamp that--
(A) has a rated lumen output not less than
2601 lumens;
(B) is capable of being operated at a voltage
not less than 110 volts and not greater than
300 volts, or driven at a constant current of
6.6 amperes;
(C) is not a Parabolic Aluminized Reflector
lamp; and
(D) is not a J-type double-ended (T-3)
halogen quartz lamp, utilizing R-7S bases, that
is manufactured before January 1, 2015.
(28) The term ``outdoor lighting control'' means a
device incorporated in a luminaire that receives a
signal, from either a sensor (such as an occupancy
sensor, motion sensor, or daylight sensor) or an input
signal (including analog or digital signals
communicated through wired or wireless technology), and
can adjust the light level according to the signal.
* * * * * * *
STANDARDS
Sec. 342. (a) Small, Large, and Very Large Commercial Package
Air Conditioning and Heating Equipment, Packaged Terminal Air
Conditioners and Heat Pumps, Warm-Air Furnaces, Packaged
Boilers, Storage Water Heaters, Instantaneous Water Heaters,
and Unfired Hot Water Storage Tanks.--(1) * * *
* * * * * * *
(6) Amended energy efficiency standards.--
(A) * * *
(B) Rule.--[If the Secretary]
(i) In general.--If the Secretary
makes a determination described in
[clause (ii)(II)] subparagraph
(A)(ii)(II) for a product described in
[clause (i)] subparagraph (A)(i), not
later than 30 months after the date of
publication of the amendment to the
ASHRAE/IES Standard 90.1 for the
product, the Secretary shall issue the
rule establishing the amended standard.
(ii) Factors.--In determining whether
a standard is economically justified
for the purposes of subparagraph
(A)(ii)(II), the Secretary shall, after
receiving views and comments furnished
with respect to the proposed standard,
determine whether the benefits of the
standard exceed the burden of the
proposed standard by, to the maximum
extent practicable, considering--
(I) the economic impact of
the standard on the
manufacturers and on the
consumers of the products
subject to the standard;
(II) the savings in operating
costs throughout the estimated
average life of the product in
the type (or class) compared to
any increase in the price of,
or in the initial charges for,
or maintenance expenses of, the
products that are likely to
result from the imposition of
the standard;
(III) the total projected
quantity of energy savings
likely to result directly from
the imposition of the standard;
(IV) any lessening of the
utility or the performance of
the products likely to result
from the imposition of the
standard;
(V) the impact of any
lessening of competition, as
determined in writing by the
Attorney General, that is
likely to result from the
imposition of the standard;
(VI) the need for national
energy conservation; and
(VII) other factors the
Secretary considers relevant.
(iii) Administration.--
(I) Energy use and
efficiency.--The Secretary may
not prescribe any amended
standard under this paragraph
that increases the maximum
allowable energy use, or
decreases the minimum required
energy efficiency, of a covered
product.
(II) Unavailability.--
(aa) In general.--The
Secretary may not
prescribe an amended
standard under this
subparagraph if the
Secretary finds (and
publishes the finding)
that interested persons
have established by a
preponderance of the
evidence that a
standard is likely to
result in the
unavailability in the
United States in any
product type (or class)
of performance
characteristics
(including reliability,
features, sizes,
capacities, and
volumes) that are
substantially the same
as those generally
available in the United
States at the time of
the finding of the
Secretary.
(bb) Other types or
classes.--The failure
of some types (or
classes) to meet the
criterion established
under this subclause
shall not affect the
determination of the
Secretary on whether to
prescribe a standard
for the other types or
classes.
(C) Amendment of standard.--
(i) * * *
* * * * * * *
(iv) Application to products.--[An
amendment prescribed under this
subsection] Notwithstanding
subparagraph (D), an amendment
prescribed under this subparagraph
shall apply to products manufactured
after a date that is the later of--
(I) * * *
* * * * * * *
[(iii)] (vi) Consideration of prices
and operating patterns.--If the
Secretary is considering revised
standards for air-cooled 3-phase
central air conditioners and central
air conditioning heat pumps with less
65,000 Btu per hour (cooling capacity),
the Secretary shall use commercial
energy prices and operating patterns in
all analyses conducted by the
Secretary.
* * * * * * *
(11) Warm air furnaces.--Each warm air furnace with an input
rating of 225,000 Btu per hour or more and manufactured after
January 1, 2011, shall meet the following standard levels:
(A) Gas-fired units.--
(i) Minimum thermal efficiency of 80 percent.
(ii) Include an interrupted or intermittent
ignition device.
(iii) Have jacket losses not exceeding 0.75
percent of the input rating.
(iv) Have either power venting or a flue
damper.
(B) Oil-fired units.--
(i) Minimum thermal efficiency of 81 percent.
(ii) Have jacket losses not exceeding 0.75
percent of the input rating.
(iii) Have either power venting or a flue
damper.
(b) Electric Motors.--(1) Except for definite purpose motors,
special purpose motors, and those motors exempted by the
Secretary under [paragraph (2)] paragraph (3), each electric
motor manufactured (alone or as a component of another piece of
equipment) after the 60-month period beginning on the date of
the enactment of this subsection, or in the case of an electric
motor which requires listing or certification by a nationally
recognized safety testing laboratory, after the 84-month period
beginning on such date, shall have a nominal full load
efficiency of not less than the following:
----------------------------------------------------------------------------------------------------------------
Nominal Full-Load Efficiency
-----------------------------------------------
Number of poles Open Motors Closed Motors
-----------------------------------------------
6 4 2 6 4 2
----------------------------------------------------------------------------------------------------------------
Motor Horsepower ...... ...... ...... ...... ...... ......
1............................................................... 80.0 82.5 ...... 80.0 82.5 75.5
1.5............................................................. 84.0 84.0 82.5 85.5 84.0 82.5
2............................................................... 85.5 84.0 84.0 86.5 84.0 84.0
3............................................................... 86.5 86.5 84.0 87.5 87.5 85.5
5............................................................... 87.5 87.5 85.5 87.5 87.5 87.5
7.5............................................................. 88.5 88.5 87.5 89.5 89.5 88.5
10.............................................................. 90.2 89.5 88.5 89.5 89.5 89.5
15.............................................................. 90.2 91.0 89.5 90.2 91.0 90.2
20.............................................................. 91.0 91.0 90.2 90.2 91.0 90.2
25.............................................................. 91.7 91.7 91.0 91.7 92.4 91.0
30.............................................................. 92.4 92.4 91.0 91.7 92.4 91.0
40.............................................................. 93.0 93.0 91.7 93.0 93.0 91.7
50.............................................................. 93.0 93.0 92.4 93.0 93.0 92.4
60.............................................................. 93.6 93.6 93.0 93.6 93.6 93.0
75.............................................................. 93.6 94.1 93.0 93.6 94.1 93.0
100............................................................. 94.1 94.1 93.0 94.1 94.5 93.6
125............................................................. 94.1 94.5 93.6 94.1 94.5 94.5
150............................................................. 94.5 95.0 93.6 95.0 95.0 94.5
200............................................................. 94.5 95.0 94.5 95.0 95.0 95.0
----------------------------------------------------------------------------------------------------------------
(2) Standards effective beginning december 19, 2010.--
(A) In general.--Except for definite purpose motors,
special purpose motors, and those motors exempted by
the Secretary under paragraph (3) and except as
provided for in subparagraphs (B), (C), and (D), each
electric motor manufactured with power ratings from 1
to 200 horsepower (alone or as a component of another
piece of equipment) on or after December 19, 2010,
shall have a nominal full load efficiency of not less
than the nominal full load efficiency described in NEMA
MG-1 (2006) Table 12-12.
(B) Fire pump electric motors.--Except for those
motors exempted by the Secretary under paragraph (3),
each fire pump electric motor manufactured with power
ratings from 1 to 200 horsepower (alone or as a
component of another piece of equipment) on or after
December 19, 2010, shall have a nominal full load
efficiency that is not less than the nominal full load
efficiency described in NEMA MG-1 (2006) Table 12-11.
(C) Nema design b electric motors.--Except for those
motors exempted by the Secretary under paragraph (3),
each NEMA Design B electric motor with power ratings of
more than 200 horsepower, but not greater than 500
horsepower, manufactured (alone or as a component of
another piece of equipment) on or after December 19,
2010, shall have a nominal full load efficiency of not
less than the nominal full load efficiency described in
NEMA MG-1 (2006) Table 12-11.
(D) Motors incorporating certain design elements.--
Except for those motors exempted by the Secretary under
paragraph (3), each electric motor described in section
340(13)(A)(ii) manufactured with power ratings from 1
to 200 horsepower (alone or as a component of another
piece of equipment) on or after December 19, 2010,
shall have a nominal full load efficiency of not less
than the nominal full load efficiency described in NEMA
MG-1 (2006) Table 12-11.
[(2)] (3)(A) The Secretary may, by rule, provide that the
standards specified in [paragraph (1)] paragraphs (1) and (2)
shall not apply to certain types or classes of electric motors
if--
(i) * * *
* * * * * * *
(D) Manufacturers of types or classes of motors developed
after the date of the enactment of this subsection to which
standards under [paragraph (1)] paragraphs (1) and (2) would be
applicable may petition the Secretary for exemptions from
compliance with such standards based on the criteria specified
in subparagraph (A).
[(3)] (4)(A) The Secretary shall publish a final rule no
later than the end of the 24-month period beginning on the
effective date of the standards established under paragraph (1)
to determine if such standards should be amended. Such rule
shall provide that any amendment shall apply to electric motors
manufactured on or after a date which is five years after the
effective date of the standards established under paragraph
(1).
* * * * * * *
(g) Outdoor Luminaires.--
(1) Each outdoor luminaire manufactured on or after
January 1, 2011, shall--
(A) have an initial luminaire efficacy of at
least 50 lumens per watt; and
(B) be designed to use a light source with a
lumen maintenance, calculated as mean rated
lumens divided by initial lumens, of at least
0.6.
(2) Each outdoor luminaire manufactured on or after
January 1, 2013, shall--
(A) have an initial luminaire efficacy of at
least 70 lumens per watt; and
(B) be designed to use a light source with a
lumen maintenance, calculated as mean rated
lumens divided by initial lumens, of at least
0.6.
(3) Each outdoor luminaire manufactured on or after
January 1, 2015, shall--
(A) have an initial luminaire efficacy of at
least 80 lumens per watt; and
(B) be designed to use a light source with a
lumen maintenance, calculated as mean rated
lumens divided by initial lumens, of at least
0.65.
(4) In addition to the requirements of paragraphs (1)
through (3), each outdoor luminaire manufactured on or
after January 1, 2011, shall have the capability of
producing at least two different light levels,
including 100 percent and 60 percent of full lamp
output as tested with the maximum rated lamp per UL1598
or the manufacturer's maximum specified for the
luminaire under test.
(5)(A) Not later than January 1, 2017, the Secretary
shall issue a final rule amending the applicable
standards established in paragraphs (3) and (4) if
technologically feasible and economically justified.
(B) A final rule issued under subparagraph (A) shall
establish efficiency standards at the maximum level
that is technically feasible and economically
justified, as provided in subsections (o) and (p) of
section 325. The Secretary may also, in such
rulemaking, amend or discontinue the product exclusions
listed in section 340(26)(A) through (P), or amend the
lumen maintenance requirements in paragraph (3) if the
Secretary determines that such amendments are
consistent with the purposes of this Act.
(C) If the Secretary issues a final rule under
subparagraph (A) establishing amended standards, the
final rule shall provide that the amended standards
apply to products manufactured on or after January 1,
2020, or one year after the date on which the final
amended standard is published, whichever is later.
(h) Outdoor High Light Output Lamps.--Each outdoor high light
output lamp manufactured on or after January 1, 2012, shall
have a lighting efficiency of at least 45 lumens per watt.
TEST PROCEDURES
Sec. 343. (a) Prescription by Secretary; Requirements.--
(1) [Test procedures.--
[(A) Amendment.--] Test procedures.--At least
once every 7 years, the Secretary shall conduct
an evaluation of each class of covered
equipment and--
[(i)] (A) if the Secretary determines that
amended test procedures would more accurately
or fully comply with the requirements of
paragraphs (2) and (3), shall prescribe test
procedures for the class in accordance with
this section; or
[(ii)] (B) shall publish notice in the
Federal Register of any determination not to
amend a test procedure.
* * * * * * *
(10) Outdoor lighting.--
(A) With respect to outdoor luminaires and
outdoor high light output lamps, the test
procedures shall be based upon the test
procedures specified in illuminating
engineering society procedures LM-79 as of
March 1, 2009, and LM-31, and/or other
appropriate consensus test procedures developed
by the Illuminating Engineering Society or
other appropriate consensus standards bodies.
(B) If illuminating engineering society
procedure LM--79 is amended, the Secretary
shall amend the test procedures established in
subparagraph (A) as necessary to be consistent
with the amended LM-79 test procedure, unless
the Secretary determines, by rule, published in
the Federal Register and supported by clear and
convincing evidence, that to do so would not
meet the requirements for test procedures under
paragraph (2).
(C) The Secretary may revise the test
procedures for outdoor luminaires or outdoor
high light output lamps by rule consistent with
paragraph (2), and may incorporate as
appropriate consensus test procedures developed
by the Illuminating Engineering Society or
other appropriate consensus standards bodies.
* * * * * * *
ADMINISTRATION, PENALTIES, ENFORCEMENT, AND PREEMPTION
Sec. 345. (a) The provisions of section 326 (a), (b), and
(d), the provisions of subsections (l) through (s) of section
325, and section 327 through 336 shall apply with respect to
this part (other than the equipment specified in [subparagraphs
(B) through (G)] subparagraphs (B), (C), (D), (I), (J), and (K)
of section 340(1)) to the same extent and in the same manner as
they apply in part B. In applying such provisions for the
purposes of this part--
(1) * * *
* * * * * * *
(b)(1) The provisions of section 325(p)(5), section 326(a),
(b), and (d), section 327(a), and sections 328 through 336
shall apply with respect to the equipment specified in
[subparagraphs (B) through (G)] subparagraphs (B), (C), (D),
(I), (J), and (K) of section 340(1) to the same extent and in
the same manner as they apply in [part A] part B. In applying
such provisions for the purposes of such equipment, paragraphs
(1), (2), (3), and (4) of subsection (a) shall apply.
* * * * * * *
(d)(1) Except as provided in paragraphs (2) and (3), section
327 shall apply with respect to very large commercial package
air conditioning and heating equipment to the same extent and
in the same manner as section 327 applies under [part A] part B
on the date of enactment of this subsection.
* * * * * * *
(e)(1)(A) Subsections (a), (b), and (d) of section 326,
subsections (m) through (s) of section 325, and sections 328
through 336 shall apply with respect to commercial
refrigerators, freezers, and refrigerator-freezers to the same
extent and in the same manner as those provisions apply under
[part A] part B.
* * * * * * *
(2)(A) Section 327 shall apply to commercial refrigerators,
freezers, and refrigerator-freezers for which standards are
established under paragraphs (2) and (3) of section 342(c) to
the same extent and in the same manner as those provisions
apply under [part A] part B on the date of enactment of this
subsection, except that any State or local standard issued
before the date of enactment of this subsection shall not be
preempted until the standards established under paragraphs (2)
and (3) of section 342(c) take effect.
* * * * * * *
(3)(A) Section 327 shall apply to commercial refrigerators,
freezers, and refrigerator-freezers for which standards are
established under section 342(c)(4) to the same extent and in
the same manner as the provisions apply under [part A] part B
on the date of publication of the final rule by the Secretary,
except that any State or local standard issued before the date
of publication of the final rule by the Secretary shall not be
preempted until the standards take effect.
* * * * * * *
(f)(1)(A)(i) Except as provided in clause (ii), section 327
shall apply to automatic commercial ice makers for which
standards have been established under section 342(d)(1) to the
same extent and in the same manner as the section applies under
[part A] part B on the date of enactment of this subsection.
* * * * * * *
(2)(A)(i) Except as provided in clause (ii), section 327
shall apply to automatic commercial ice makers for which
standards have been established under section 342(d)(2) to the
same extent and in the same manner as the section applies under
[part A] part B on the date of publication of the final rule by
the Secretary.
* * * * * * *
(h) Walk-In Coolers and Walk-In Freezers.--
(1) Covered types.--
(A) Relationship to other law.--
(i) In general.--Except as otherwise
provided in this subsection, section
327 shall apply to walk-in coolers and
walk-in freezers for which standards
have been established under paragraphs
(1), (2), and (3) of section 342(f) to
the same extent and in the same manner
as the section applies under [part A]
part B on the date of enactment of this
subsection.
* * * * * * *
(3) California.--Any standard issued in the State of
California before January 1, 2011, under title 20 of
the California Code of Regulations, that refers to
walk-in coolers and walk-in freezers, for which
standards have been established under paragraphs (1),
(2), and (3) of section 342(f), shall not be preempted
until the standards established under [section
342(f)(3)] section 342(f)(4) take effect.
(i)(1) Except as provided in paragraph (2), section 327 shall
apply to outdoor luminaires to the same extent and in the same
manner as the section applies under part B.
(2) Any State standard that is adopted on or before January
1, 2015, pursuant to a statutory requirement to adopt
efficiency standards for reducing outdoor lighting energy use
enacted prior to January 31, 2008, shall not be preempted.
* * * * * * *
SEC. 347. MOTOR EFFICIENCY REBATE PROGRAM.
(a) Establishment.--Not later than January 1, 2010, in
accordance with subsection (b), the Secretary shall establish a
program to provide rebates for expenditures made by entities--
(1) for the purchase and installation of a new
electric motor that has a nominal full load efficiency
that is not less than the nominal full load efficiency
as defined in--
(A) table 12-12 of NEMA Standards Publication
MG 1-2006 for random wound motors rated 600
volts or lower; or
(B) table 12-13 of NEMA Standards Publication
MG 1-2006 for form wound motors rated 5000
volts or lower; and
(2) to replace an installed motor of the entity the
specifications of which are established by the
Secretary by a date that is not later than 90 days
after the date of enactment of this section.
(b) Requirements.--
(1) Application.--To be eligible to receive a rebate
under this section, an entity shall submit to the
Secretary an application in such form, at such time,
and containing such information as the Secretary may
require, including--
(A) demonstrated evidence that the entity
purchased an electric motor described in
subsection (a)(1) to replace an installed motor
described in subsection (a)(2);
(B) demonstrated evidence that the entity--
(i) removed the installed motor of
the entity from service; and
(ii) properly disposed the installed
motor of the entity; and
(C) the physical nameplate of the installed
motor of the entity.
(2) Authorized amount of rebate.--The Secretary may
provide to an entity that meets each requirement under
paragraph (1) a rebate the amount of which shall be
equal to the product obtained by multiplying--
(A) the nameplate horsepower of the electric
motor purchased by the entity in accordance
with subsection (a)(1); and
(B) $25.00.
(3) Payments to distributors of qualifying electric
motors.--To assist in the payment for expenses relating
to processing and motor core disposal costs, the
Secretary shall provide to the distributor of an
electric motor described in subsection (a)(1), the
purchaser of which received a rebate under this
section, an amount equal to the product obtained by
multiplying--
(A) the nameplate horsepower of the electric
motor; and
(B) $5.00.
(c) Authorization of Appropriations.--There are authorized to
be appropriated to carry out this section, to remain available
until expended--
(1) $80,000,000 for fiscal year 2011;
(2) $75,000,000 for fiscal year 2012;
(3) $70,000,000 for fiscal year 2013;
(4) $65,000,000 for fiscal year 2014; and
(5) $60,000,000 for fiscal year 2015.
* * * * * * *
Part E--INDUSTRIAL ENERGY EFFICIENCY
* * * * * * *
SEC. 373. WASTE ENERGY RECOVERY INCENTIVE GRANT PROGRAM.
(a) * * *
* * * * * * *
(c) Grants to States.--In the case of any State that has
achieved 80 percent or more of waste heat recovery
opportunities identified by the Secretary under this part, the
[Administrator] Secretary shall make a 1-time grant to the
State in an amount of not more than $1,000 per megawatt of
waste-heat capacity recovered (or a thermal equivalent) to
support State-level programs to identify and achieve additional
energy efficiency.
* * * * * * *
(e) Limitation.--The Secretary shall not award grants to any
person for a combined heat and power project or a waste heat
recovery project [that qualifies for] who elects to claim
specific Federal tax incentives for combined heat and power or
for waste heat recovery from that project.
* * * * * * *
SEC. 375. CLEAN ENERGY APPLICATION CENTERS.
(a) * * *
* * * * * * *
(f) Coordination With Centers for Energy and Environmental
Knowledge and Outreach.--A Clean Energy Application Center may
serve as a Center for Energy and Environmental Knowledge and
Outreach established pursuant to section 173 of the American
Clean Energy and Security Act of 2009.
[(f)] (g) Authorization.--There is authorized to be
appropriated to carry out this section [$10,000,000 for each of
fiscal years 2008 through 2012] $30,000,000 for fiscal year
2010 and each fiscal year thereafter.
* * * * * * *
Part G--Energy Conservation Program for Schools and Hospitals
* * * * * * *
SEC. 399A. ENERGY SUSTAINABILITY AND EFFICIENCY GRANTS AND LOANS FOR
INSTITUTIONS.
(a) Definitions.--In this section:
(1) * * *
* * * * * * *
(5) Institutional entity.--The term ``institutional
entity'' means an institution of higher education, a
public school district, a local government, a municipal
utility, [or a designee] a not-for-profit hospital or
not-for-profit inpatient health care facility, or a
designated agent of 1 of those entities.
* * * * * * *
(c) Grants for Energy Efficiency Improvement and Energy
Sustainability.--
(1) Grants.--
(A) * * *
* * * * * * *
[(C) Minimum funding.--Not less than 50
percent of the total funding for all grants
under this subsection shall be awarded in
grants to institutions of higher education.]
* * * * * * *
(f) Grant Amounts.--
(1) * * *
* * * * * * *
(3) Grants for efficiency improvement and energy
sustainability.--In the case of grants for efficiency
improvement and energy sustainability under subsection
(c), grant funds shall be available for not more than
an amount equal to the lesser of--
(A) [$1,000,000] $2,500,000; or
* * * * * * *
(i) Authorization.--
(1) Grants.--There is authorized to be appropriated
for the cost of grants authorized in subsections (b),
(c), and (d) [$250,000,000 for each of fiscal years
2009 through 2013] $250,000,000 for each of fiscal
years 2010 through 2015, of which not more than 5
percent may be used for administrative expenses.
* * * * * * *
----------
FEDERAL POWER ACT
* * * * * * *
Part II--REGULATION OF ELECTRIC UTILITY COMPANIES ENGAGED IN INTERSTATE
COMMERCE
* * * * * * *
SEC. 216A. TRANSMISSION PLANNING.
(a) Federal Policy.--
(1) Objectives.--It is the policy of the United
States that regional electric grid planning should
facilitate the deployment of renewable and other zero-
carbon energy sources for generating electricity to
reduce greenhouse gas emissions while ensuring
reliability, reducing congestion, ensuring cyber-
security, and providing for cost-effective electricity
services throughout the United States.
(2) Options.--In addition to the policy under
paragraph (1), it is the policy of the United States
that regional electric grid planning to meet these
objectives should take into account all significant
demand-side and supply-side options, including energy
efficiency, distributed generation, renewable energy
and zero-carbon electricity generation technologies,
smart-grid technologies and practices, demand response,
electricity storage, voltage regulation technologies,
high capacity conductors with at least 25 percent
greater efficiency than traditional ACSR (aluminum
stranded conductors steel reinforced) conductors,
superconductor technologies, underground transmission
technologies, and new conventional electric
transmission capacity and corridors.
(b) Planning.--
(1) Planning principles.--Not later than 1 year after
the date of enactment of this section, the Commission
shall adopt, after notice and opportunity for comment,
national electricity grid planning principles derived
from the Federal policy established under subsection
(a) to be applied in ongoing and future transmission
planning that may implicate interstate transmission of
electricity.
(2) Regional planning entities.--Not later than 3
months after the date of adoption by the Commission of
national electricity grid planning principles pursuant
to paragraph (1), entities that conduct or may conduct
transmission planning pursuant to State or Federal law
or regulation, including States, entities designated by
States, public utility transmission providers,
operators and owners, regional organizations, and
electric utilities, and that are willing to incorporate
the national electricity grid planning principles
adopted by the Commission in their electric grid
planning, shall identify themselves and the regions for
which they propose to develop plans to the Commission.
(3) Coordination of regional planning entities.--The
Commission shall encourage regional planning entities
described under paragraph (2) to cooperate and
coordinate across regions and to harmonize regional
electric grid planning with planning in adjacent or
overlapping jurisdictions to the maximum extent
feasible. The Commission shall work with States, public
utilities transmission providers, load-serving
entities, transmission operators, and other
organizations to resolve any conflict or competition
among proposed planning entities in order to build
consensus and promote the Federal policy established
under subsection (a). The Commission shall seek to
ensure that planning that is consistent with the
national electricity grid planning principles adopted
pursuant to paragraph (1) is conducted in all regions
of the United States and the territories.
(4) Relation to existing planning policy.--In
implementing the Federal policy established under
subsection (a), the Commission shall--
(A) incorporate any ongoing planning efforts
undertaken pursuant to section 217; and
(B) consult with and invite the participation
of the Secretary of Energy in relationship to
the Secretary's duties pursuant to section 216.
(5) Assistance.--
(A) In general.--The Commission shall provide
support to and participate in the regional grid
planning processes conducted by regional
planning entities. The Commission may provide
planning resources and assistance as required
or as requested by regional planning entities,
including system data, cost information, system
analysis, technical expertise, modeling
support, dispute resolution services, and other
assistance to regional planning entities, as
appropriate.
(B) Authorization.--There are authorized to
be appropriated such sums as may be necessary
to carry out this paragraph.
(6) Conflict resolution.--In the event that regional
grid plans conflict, the Commission shall assist the
regional planning entities in resolving such conflicts
in order to achieve the objectives of the Federal
policy established under subsection (a).
(7) Submission of plans.--The Commission shall
require regional planning entities to submit initial
regional electric grid plans to the Commission not
later than 18 months after the date the Commission
promulgates national electricity grid planning
principles pursuant to paragraph (1). Regional electric
grid plans should, in general, be developed from sub-
regional requirements and plans, including planning
input reflecting individual utility service areas.
Regional plans may then in turn be combined into larger
regional plans, up to interconnection-wide and national
plans, as appropriate and necessary as determined by
the Commission. The Commission shall review such plans
for consistency with the national grid planning
principles and may return a plan to one or more
planning entities for further consideration, along with
the Commission's own recommendations for resolution of
any conflict or for improvement. To the extent
practicable, all plans submitted to the Commission
shall be public documents and available on the
Commission's website.
(8) Multi-regional meetings.--As regional grid plans
are submitted to the Commission, the Commission may
convene multi-regional meetings to discuss regional
grid plan consistency and integration, including
requirements for multi-regional projects, and to
resolve any conflicts that emerge from such multi-
regional projects. The Commission shall provide its
recommendations for eliminating any inter-regional
conflicts.
(9) Report to congress.--Not later than 3 years after
the date of enactment of this section, the Commission
shall provide a report to Congress containing the
results of the regional grid planning process,
including summaries of the adopted regional plans. The
Commission shall provide an electronic version of its
report on its website with links to all regional and
sub-regional plans taken into account. The Commission
shall note and provide its recommended resolution for
any conflicts not resolved during the planning process.
The Commission shall make any recommendations to
Congress on the appropriate Federal role or support
required to address the needs of the electric grid,
including recommendations for addressing any needs that
are beyond the reach of existing State and Federal
authority.
* * * * * * *
PART IV--CARBON MARKET ASSURANCE
SEC. 401. OVERSIGHT AND ASSURANCE OF CARBON MARKETS.
(a) Definitions.--In this section:
(1) Contract of sale.--The term ``contract of sale''
includes sales, agreements of sale, and agreements to
sell.
(2) Covered entity.--The term ``covered entity''
shall have the meaning given in section 700 of the
Clean Air Act.
(3) Future delivery.--The term ``future delivery''
does not include any sale of any cash commodity for
deferred shipment or delivery.
(4) Offset creation contract.--The term ``offset
creation contract'' mean a written agreement for the
origination and development of an offset project, and
the related issuance of offset credits, pursuant to
title VII of the Clean Air Act.
(5) Regulated allowance.--The term ``regulated
allowance'' means any emission allowance, compensatory
allowance, offset credit, or Federal renewable
electricity credit established or issued under the
American Clean Energy and Security Act of 2009.
(6) Regulated allowance derivative.--The term
``regulated allowance derivative'' means an instrument
that is, or includes, an instrument--
(A) which--
(i) is of the character of, or is
commonly known to the trade as, a ``put
option'', ``call option'',
``privilege'', ``indemnity'', ``advance
guaranty'', ``decline guaranty'', or
``swap agreement''; or
(ii) is a contract of sale for future
delivery other than an offset creation
contract; and
(B) the value of which, in whole or in part,
is expressly linked to the price of a regulated
allowance or another regulated allowance
derivative.
(7) Regulated instrument.--The term ``regulated
instrument'' means a regulated allowance or a regulated
allowance derivative.
(b) Regulated Allowance Market.--
(1) Authority.--The Commission shall promulgate
regulations for the establishment, operation, and
oversight of markets for regulated allowances not later
than 18 months after the date of the enactment of this
section, and from time to time thereafter as may be
appropriate.
(2) Regulations.--The regulations promulgated
pursuant to paragraph (1) shall--
(A) provide for effective and comprehensive
market oversight;
(B) prohibit fraud, market manipulation
(including an entity's fraudulent or
manipulative conduct with respect to regulated
allowance derivatives that benefits the entity
in regulated allowance markets), and excess
speculation, and provide measures to limit
unreasonable fluctuation in the prices of
regulated allowances;
(C) facilitate compliance with title VII of
the Clean Air Act by covered entities;
(D) ensure market transparency and
recordkeeping deemed necessary and appropriate
by the Commission to provide for efficient
price discovery; prevention of fraud, market
manipulation, and excess speculation; and
compliance with title VII of the Clean Air Act
and section 610 of the Public Utility
Regulatory Policies Act of 1978;
(E) as necessary, ensure that position
limitations for individual market participants
are established with respect to each class of
regulated allowances;
(F) as necessary, ensure that margin
requirements are established for each class of
regulated allowances;
(G) provide for the formation and operation
of a fair, orderly and liquid national market
system that allows for the best execution in
the trading of regulated allowances;
(H) limit or eliminate counterparty risks,
market power concentration risks, and other
risks associated with over-the-counter trading;
and
(I) establish standards for qualification as,
and operation of, trading facilities for
regulated allowances;
(J) establish standards for qualification as,
and operation of, clearing organizations for
trading facilities for regulated allowances;
and
(K) include such other requirements as
necessary to preserve market integrity and
facilitate compliance with title VII of the
Clean Air Act and section 610 of the Public
Utility Regulatory Policies Act of 1978 and the
regulations promulgated under such title and
such section.
(3) Enforcement.--
(A) In general.--If the Commission
determines, after notice and an opportunity for
a hearing on the record, that any entity has
violated any rule or order issued by the
Commission under this subsection, the
Commission may issue an order--
(i) prohibiting the entity from
trading on a trading facility for
regulated allowances registered with
the Commission, and requiring all such
facilities to refuse the entity all
privileges for such period as may be
specified in the order;
(ii) if the entity is registered with
the Commission in any capacity,
suspending for a period of not more
than 6 months, or revoking, the
registration of the entity;
(iii) assessing the entity a civil
penalty of not more than $1,000,000 per
day per violation for as long as the
violation continues (and in determining
the amount of a civil penalty, the
Commission shall take into account the
nature and seriousness of the violation
and the efforts to remedy the
violation); and
(iv) requiring disgorgement of unjust
profits, restitution to entities harmed
by the violation as determined by the
Commission, or both.
(B) Authority to suspend or revoke
registration.--The Commission may suspend for a
period of not more than 6 months, or revoke,
the registration of a trading facility for
regulated allowances or of a clearing
organization registered by the Commission if,
after notice and opportunity for a hearing on
the record, the Commission finds that--
(i) the entity violated any rule or
order issued by the Commission under
this subsection; or
(ii) a director, officer, employee,
or agent of the entity has violated any
rule or order issued by the Commission
under this subsection.
(C) Cease and desist proceedings.--
(i) In general.--If the Commission
determines that any entity may be
violating, may have violated, or may be
about to violate any provision of this
part, or any regulation promulgated by,
or any restriction, condition, or order
made or imposed by, the Commission
under this Act, and if the Commission
finds that the alleged violation or
threatened violation, or the
continuation of the violation, is
likely to result in significant harm to
covered entities or market
participants, or significant harm to
the public interest, the Commission may
issue a temporary order requiring the
entity--
(I) to cease and desist from
the violation or threatened
violation;
(II) to take such action as
is necessary to prevent the
violation or threatened
violation; and
(III) to prevent, as the
Commission determines to be
appropriate--
(aa) significant harm
to covered entities or
market participants;
(bb) significant harm
to the public interest;
and
(cc) frustration of
the ability of the
Commission to conduct
the proceedings or to
redress the violation
at the conclusion of
the proceedings.
(ii) Timing of entry.--An order
issued under clause (i) shall be
entered only after notice and
opportunity for a hearing, unless the
Commission determines that notice and
hearing before entry would be
impracticable or contrary to the public
interest.
(iii) Effective date.--A temporary
order issued under clause (i) shall--
(I) become effective upon
service upon the entity; and
(II) unless set aside,
limited, or suspended by the
Commission or a court of
competent jurisdiction, remain
effective and enforceable
pending the completion of the
proceedings.
(D) Proceedings regarding dissipation or
conversion of assets.--
(i) In general.--In a proceeding
involving an alleged violation of a
regulation or order promulgated or
issued by the Commission, if the
Commission determines that the alleged
violation or related circumstances are
likely to result in significant
dissipation or conversion of assets,
the Commission may issue a temporary
order requiring the respondent to take
such action as is necessary to prevent
the dissipation or conversion of
assets.
(ii) Timing of entry.--An order
issued under clause (i) shall be
entered only after notice and
opportunity for a hearing, unless the
Commission determines that notice and
hearing before entry would be
impracticable or contrary to the public
interest.
(iii) Effective date.--A temporary
order issued under clause (i) shall--
(I) become effective upon
service upon the respondent;
and
(II) unless set aside,
limited, or suspended by the
Commission or a court of
competent jurisdiction, remain
effective and enforceable
pending the completion of the
proceedings.
(E) Review of temporary orders.--
(i) Application for review.--At any
time after a respondent has been served
with a temporary cease-and-desist order
pursuant to subparagraph (C) or order
regarding the dissipation or conversion
of assets pursuant to subparagraph (D),
the respondent may apply to the
Commission to have the order set aside,
limited, or suspended.
(ii) No prior hearing.--If a
respondent has been served with a
temporary order entered without a prior
hearing of the Commission--
(I) the respondent may, not
later than 10 days after the
date on which the order was
served, request a hearing on
the application; and
(II) the Commission shall
hold a hearing and render a
decision on the application at
the earliest practicable time.
(iii) Judicial review.--
(I) In general.--An entity
shall not be required to submit
a request for rehearing of a
temporary order before seeking
judicial review in accordance
with this subparagraph.
(II) Timing of review.--Not
later than 10 days after the
date on which a respondent is
served with a temporary cease-
and-desist order entered with a
prior hearing of the
Commission, or 10 days after
the date on which the
Commission renders a decision
on an application and hearing
under clause (i) with respect
to any temporary order entered
without such a prior hearing--
(aa) the respondent
may obtain a review of
the order in a United
States circuit court
having jurisdiction
over the circuit in
which the respondent
resides or has a
principal place of
business, or in the
United States Court of
Appeals for the
District of Columbia
Circuit, for an order
setting aside,
limiting, or suspending
the effectiveness or
enforcement of the
order; and
(bb) the court shall
have jurisdiction to
enter such an order.
(III) No prior hearing.--A
respondent served with a
temporary order entered without
a prior hearing of the
Commission may not apply to the
applicable court described in
subclause (II) except after a
hearing and decision by the
Commission on the application
of the respondent under clauses
(i) and (ii).
(iv) Procedures.--Section 222 and
Part III shall apply to--
(I) an application for review
of an order under clause (i);
and
(II) an order subject to
review under clause (iii).
(v) No automatic stay of temporary
order.--The commencement of proceedings
under clause (iii) shall not, unless
specifically ordered by the court,
operate as a stay of the order of the
Commission.
(F) Actions to collect civil penalties.--If
any person fails to pay a civil penalty
assessed under this subsection after an order
assessing the penalty has become final and
unappealable, the Commission shall bring an
action to recover the amount of the penalty in
any appropriate United States district court.
In any such action, the validity or
appropriateness of the final assessment order
or judgment shall not be subject to review.
(4) Transaction fees.--
(A) In general.--The Commission shall, in
accordance with this paragraph, establish and
collect transaction fees designed to recover
the costs to the Federal Government of the
supervision and regulation of regulated
allowance markets and market participants,
including related costs for enforcement
activities, policy and rulemaking activities,
administration, legal services, and
international regulatory activities.
(B) Initial fee rate.--Each trading facility
on or through which regulated allowances are
transacted shall pay to the Commission a fee at
a rate of not more than $15 per $1,000,000 of
the aggregate dollar amount of sales of
regulated allowances transacted through the
facility.
(C) Annual adjustment of fee rate.--The
Commission shall, on an annual basis--
(i) assess the rate at which fees are
to be collected as necessary to meet
the cost recovery requirement in
subparagraph (A); and
(ii) consistent with subparagraph
(B), adjust the rate as necessary in
order to meet the requirement.
(D) Report on adequacy of fees in recovering
costs.--The Commission, shall, on an annual
basis, report to the Committee on Energy and
Commerce of the House of Representatives and
the Committee on Energy and Natural Resources
of the Senate on the adequacy of the
transaction fees in providing funding for the
Commission to regulate the regulated allowance
markets.
(5) Judicial review.--Judicial review of actions
taken by the Commission under this subsection shall be
pursuant to part III.
(6) Information-sharing.--Within 6 months after a
Federal agency with jurisdiction over regulated
allowance derivatives is delegated authority pursuant
to subsection (c)(1), the agency shall enter into a
memorandum of understanding with the Commission
relating to information sharing, which shall include
provisions ensuring that information requests to
markets within the respective jurisdiction of the
agency are properly coordinated to facilitate, among
other things, effective information-sharing while
minimizing duplicative information requests, and
provisions regarding the treatment of proprietary
information.
(7) Additional employees report and appointment.--
Within 18 months after the date of the enactment of
this section, the Commission shall submit to the
President, the Committee on Energy and Commerce of the
House of Representatives, and the Committee on Energy
and Natural Resources of the Senate, a report that
contains recommendations as to how many additional
employees would be necessary to provide robust
oversight and enforcement of the regulations
promulgated under this subsection. As soon as
practicable after the completion of the report, subject
to appropriations, the Commission shall appoint the
recommended number of additional employees for such
purposes.
(c) Delegation of Authority by the President.--
(1) Delegation.--The President, taking into
consideration the recommendations of the interagency
working group established in subsection (d), shall
delegate to members of the working group and the heads
of other appropriate Federal agencies the authority to
promulgate regulations for the establishment,
operation, and oversight of all markets for regulated
allowance derivatives.
(2) Regulations.--The regulations promulgated
pursuant to paragraph (1) shall--
(A) provide for effective and comprehensive
market oversight;
(B) prohibit fraud, market manipulation, and
excess speculation, and provide measures to
limit unreasonable fluctuation in the prices of
regulated allowance derivatives;
(C) facilitate compliance with title VII of
the Clean Air Act by covered entities;
(D) ensure market transparency and
recordkeeping necessary to provide for
efficient price discovery; prevention of fraud,
market manipulation, and excess speculation;
and compliance with title VII of the Clean Air
Act and section 610 of the Public Utility
Regulatory Policies Act of 1978;
(E) ensure that position limitations for
individual market participants are established
with respect to each regulated allowance
derivative and aggregate position limitations
for individual market participants are
established with respect to all regulated
allowance derivative markets;
(F) ensure that margin requirements are
established for each regulated allowance
derivative;
(G) provide for the formation and operation
of a market system that allows for best
execution in the trading of regulated allowance
derivatives;
(H) to the extent the regulations deviate
from the rule set forth in paragraph (4)(B),
limit or eliminate counterparty risks, market
power concentration risks, and other risks
associated with over-the-counter trading, and
promulgate reporting and market transparency
rules for large traders;
(I) ensure that market participants do not
evade position limits or otherwise undermine
the integrity and effectiveness of the
regulations promulgated under subparagraph (C)
through participation in markets not subject to
the position limits and regulations;
(J) establish standards, as necessary, for
qualification as, and operation of, trading
facilities for regulated allowance derivatives;
(K) establish standards, as necessary, for
qualification as, and operation of, clearing
organizations for trading facilities for
regulated allowance derivatives;
(L) provide boards of trade designated as
contract markets under the Commodity Exchange
Act, and market participants, with an adequate
transition period for compliance with any new
regulatory requirements established under this
paragraph;
(M) determine whether and to what extent
offset creation contracts, to the extent
incorporating regulated allowance derivatives,
should be governed by the same regulations that
apply to other regulated allowance derivatives;
and
(N) include such other requirements as
necessary to preserve market integrity and
facilitate compliance with title VII of the
Clean Air Act and section 610 of the Public
Utility Regulatory Policies Act of 1978 and the
regulations promulgated under such title and
such section.
(3) Deadline.--The agencies authorized to promulgate
regulations for the establishment, operation, and
oversight of markets for regulated allowance
derivatives pursuant to paragraph (1) shall promulgate
such regulations not later than 18 months after the
date of the enactment of this section, and from time to
time thereafter as may be appropriate.
(4) Default rules.--
(A) An individual market participant,
directly or in concert with another
participant, shall not control more than 10
percent of the open interest in any regulated
allowance derivative.
(B) All contracts for the purchase or sale of
any regulated allowance derivative shall be
executed on or through a board of trade
designated as a contract market under the
Commodity Exchange Act.
(C) To the extent that regulations
promulgated under this subsection provide
different rules with respect to the matters
described in subparagraph (A) or (B), the
regulations shall supersede subparagraph (A) or
(B), as the case may be.
(d) Working Group.--
(1) Establishment.--Not later than 30 days after the
date of the enactment of this section, the President
shall establish an interagency working group on carbon
market oversight, which shall include the Administrator
of the Environmental Protection Agency and
representatives of other relevant agencies, to make
recommendations to the President regarding proposed
regulations for the establishment, operation, and
oversight of markets for regulated allowance
derivatives.
(2) Report.--Not later than 180 days after the date
of the enactment of this section, and biennially
thereafter, the interagency working group shall submit
a written report to the President and Congress that
includes its recommendations to the President regarding
proposed regulations for the establishment, operation,
and oversight of markets for regulated allowance
derivatives and any recommendations to Congress for
statutory changes needed to ensure the establishment,
operation, and oversight of transparent, fair, stable,
and efficient markets for regulated allowance
derivatives.
(e) Enforcement of Regulations.--Each Federal agency that
promulgates under subsection (c) a regulation of conduct with
respect to a regulated allowance derivative shall have the same
authority to enforce compliance with the regulation as the
Commodity Futures Trading Commission has to enforce compliance
with any regulation of similar conduct with respect to a
contract, agreement, or transaction over which the Commodity
Futures Trading Commission has jurisdiction, except that any
enforcement by the Federal Energy Regulatory Commission shall
be pursuant to section 222 and Part III.
(f) Prohibition on Price or Market Manipulation, Fraud, and
False or Misleading Statements or Reports.--(1) It shall be a
felony punishable by a fine of not more than $25,000,000 (or
$5,000,000 in the case of a person who is an individual) or
imprisonment for not more than 20 years, or both, together with
the costs of prosecution for any person, directly or
indirectly--
(A) in connection with a transaction involving a
regulated instrument, to knowingly--
(i) use any manipulative or deceptive device
or contrivance in violation of regulations
promulgated pursuant to this section;
(ii) corner or attempt to corner the
regulated instrument; or
(iii) cheat or defraud, or attempt to cheat
or defraud, any other person;
(B) to knowingly deliver or cause to be delivered a
false, misleading, or inaccurate report concerning
information or conditions that affect or tend to affect
the price of a regulated instrument;
(C) to knowingly make, or cause to be made, in an
application, report, or document required to be filed
under any regulation promulgated pursuant to this
section, a statement which is false or misleading with
respect to a material fact, or to omit any material
fact required to be stated therein or necessary to make
the statements therein not misleading; or
(D) to knowingly falsify, conceal, or cover up by any
trick, scheme, or artifice a material fact, make any
false, fictitious, or fraudulent statements or
representations, or make or use any false writing or
document that contains a false, fictitious, or
fraudulent statement or entry, to an entity on or
through which transactions in regulated instruments
occur, or are settled or cleared, acting in furtherance
of its official duties under this section or
regulations promulgated under this section.
(2) If a person is found guilty of a felony established in
paragraph (1), the person may be prohibited from holding or
trading regulated instruments for a period of not more than 5
years pursuant to the regulations promulgated under this
section, except that, if the person is a covered entity, the
person shall be allowed to hold sufficient regulated allowances
to meet its compliance obligations.
(g) Relation to State Law.--Nothing in this section shall
preclude, diminish or qualify any authority of a State or
political subdivision thereof to adopt or enforce any unfair
competition, antitrust, consumer protection, securities,
commodities or any other law or regulation, except that no such
State law or regulation may relieve any person of any
requirement otherwise applicable under this section.
(h) Market Reports.--
(1) Collection and analysis of information.--The
Commission, in conjunction with the Federal agency with
jurisdiction over regulated allowance derivatives
pursuant to subsection (c)(1), shall, on a continuous
basis, collect and analyze the following information on
the functioning of the markets for regulated
instruments established under this part:
(A) The status of, and trends in, the
markets, including prices, trading volumes,
transaction types, and trading channels and
mechanisms.
(B) Spikes, collapses, and volatility in
prices of regulated instruments, and the causes
therefor.
(C) The relationship between the market for
regulated allowances and allowance derivatives,
and the spot and futures markets for energy
commodities, including electricity.
(D) Evidence of fraud or manipulation in any
such market, the effects on any such market of
any such fraud or manipulation (or threat of
fraud or manipulation) that the Commission, in
conjunction with the Federal agency, has
identified, and the effectiveness of corrective
measures undertaken by the Commission, in
conjunction with the Federal agency, to address
the fraud, manipulation, or threat.
(E) The economic effects of the markets,
including to macro- and micro-economic effects
of unexpected significant increases and
decreases in the price of regulated
instruments.
(F) Any changes in the roles, activities, or
strategies of various market participants.
(G) Regional, industrial, and consumer
responses to the markets, and energy investment
responses to the markets.
(H) Any other issue related to the markets
that the Commission, in conjunction with the
entities, deems appropriate.
(2) Annual reports to the congress.--Not later than 1
month after the end of each calendar year, the
Commission, in conjunction with the Federal agency,
shall submit to the President, the Committee on Energy
and Commerce of the House of Representatives, and the
Committee on Energy and Natural Resources of the
Senate, and make available to the public, a report on
the matters described in paragraph (1) with respect to
the year, including recommendations for any
administrative or statutory measures the Commission, in
conjunction with the Federal agency, considers
necessary to address any threats to the transparency,
fairness, or integrity of the markets in regulated
instruments.
SEC. 402. APPLICABILITY OF PART III PROVISIONS.
(a) Sections 301, 304, and 306.--Sections 301, 304, and 306
shall not apply to this part.
(b) Sections 307, 309, and 314.--Sections 307, 309, and 314
shall only apply to section 401(c) to the extent that the
Commission is delegated authority to promulgate regulations for
the establishment, operation, and oversight of markets for
regulated allowance derivatives (as defined in section 401). If
the Commission is not delegated authority to promulgate
regulations for the establishment, operation, and oversight of
markets for regulated allowance derivatives, sections 307, 309,
and 314 shall not apply to section 401(f) in the case of
regulated allowance derivatives.
(c) Section 315.--In applying section 315(a) to this part,
the words ``person or entity'' shall be substituted for the
words ``licensee or public utility''. In applying section
315(b) to this part, the words ``an entity'' shall be
substituted for the words ``a licensee or public utility'' and
the words ``such entity'' shall be substituted for the words
``such licensee or public utility.''
(d) Section 316.--Section 316(a) shall not apply to section
401(f).
----------
ENERGY CONSERVATION AND PRODUCTION ACT
* * * * * * *
CONTENTS
TITLE I--FEDERAL ENERGY ADMINISTRATION ACT AMENDMENTS AND RELATED
MATTERS
* * * * * * *
TITLE III--ENERGY CONSERVATION STANDARDS FOR NEW BUILDINGS
* * * * * * *
[Sec. 304. Updating State building energy efficiency codes.]
Sec. 304. Greater energy efficiency in building codes.
* * * * * * *
TITLE III--ENERGY CONSERVATION STANDARDS FOR NEW BUILDINGS
* * * * * * *
[SEC. 304. UPDATING STATE BUILDING ENERGY EFFICIENCY CODES.
[(a) Consideration and Determination Respecting Residential
Building Energy Codes.--(1) Not later than 2 years after the
date of the enactment of the Energy Policy Act of 1992, each
State shall certify to the Secretary that it has reviewed the
provisions of its residential building code regarding energy
efficiency and made a determination as to whether it is
appropriate for such State to revise such residential building
code provisions to meet or exceed CABO Model Energy Code, 1992.
[(2) The determination referred to in paragraph (1) shall
be--
[(A) made after public notice and hearing;
[(B) in writing;
[(C) based upon findings included in such
determination and upon the evidence presented at the
hearing; and
[(D) available to the public.
[(3) Each State may, to the extent consistent with otherwise
applicable State law, revise the provisions of its residential
building code regarding energy efficiency to meet or exceed
CABO Model Energy Code, 1992, or may decline to make such
revisions.
[(4) If a State makes a determination under paragraph (1)
that it is not appropriate for such State to revise its
residential building code, such State shall submit to the
Secretary, in writing, the reasons for such determination, and
such statement shall be available to the public.
[(5)(A) Whenever CABO Model Energy Code, 1992, (or any
successor of such code) is revised, the Secretary shall, not
later than 12 months after such revision, determine whether
such revision would improve energy efficiency in residential
buildings. The Secretary shall publish notice of such
determination in the Federal Register.
[(B) If the Secretary makes an affirmative determination
under subparagraph (A), each State shall, not later than 2
years after the date of the publication of such determination,
certify that it has reviewed the provisions of its residential
building code regarding energy efficiency and made a
determination as to whether it is appropriate for such State to
revise such residential building code provisions to meet or
exceed the revised code for which the Secretary made such
determination.
[(C) Paragraphs (2), (3), and (4) shall apply to any
determination made under subparagraph (B).
[(b) Certification of Commercial Building Energy Code
Updates.--(1) Not later than 2 years after the date of the
enactment of the Energy Policy Act of 1992, each State shall
certify to the Secretary that it has reviewed and updated the
provisions of its commercial building code regarding energy
efficiency. Such certification shall include a demonstration
that such State's code provisions meet or exceed the
requirements of ASHRAE Standard 90.1-1989.
[(2)(A) Whenever the provisions of ASHRAE Standard 90.1-1989
(or any successor standard) regarding energy efficiency in
commercial buildings are revised, the Secretary shall, not
later than 12 months after the date of such revision, determine
whether such revision will improve energy efficiency in
commercial buildings. The Secretary shall publish a notice of
such determination in the Federal Register.
[(B)(i) If the Secretary makes an affirmative determination
under subparagraph (A), each State shall, not later than 2
years after the date of the publication of such determination,
certify that it has reviewed and updated the provisions of its
commercial building code regarding energy efficiency in
accordance with the revised standard for which such
determination was made. Such certification shall include a
demonstration that the provisions of such State's commercial
building code regarding energy efficiency meet or exceed such
revised standard.
[(ii) If the Secretary makes a determination under
subparagraph (A) that such revised standard will not improve
energy efficiency in commercial buildings, State commercial
building code provisions regarding energy efficiency shall meet
or exceed ASHRAE Standard 90.1-1989, or if such standard has
been revised, the last revised standard for which the Secretary
has made an affirmative determination under subparagraph (A).
[(c) Extensions.--The Secretary shall permit extensions of
the deadlines for the certification requirements under
subsections (a) and (b) if a State can demonstrate that it has
made a good faith effort to comply with such requirements and
that it has made significant progress in doing so.
[(d) Technical Assistance.--The Secretary shall provide
technical assistance to States to implement the requirements of
this section, and to improve and implement State residential
and commercial building energy efficiency codes or to otherwise
promote the design and construction of energy efficient
buildings.
[(e) Availability of Incentive Funding.--(1) The Secretary
shall provide incentive funding to States to implement the
requirements of this section, and to improve and implement
State residential and commercial building energy efficiency
codes, including increasing and verifying compliance with such
codes. In determining whether, and in what amount, to provide
incentive funding under this subsection, the Secretary shall
consider the actions proposed by the State to implement the
requirements of this section, to improve and implement
residential and commercial building energy efficiency codes,
and to promote building energy efficiency through the use of
such codes.
[(2) Additional funding shall be provided under this
subsection for implementation of a plan to achieve and document
at least a 90 percent rate of compliance with residential and
commercial building energy efficiency codes, based on energy
performance--
[(A) to a State that has adopted and is implementing,
on a statewide basis--
[(i) a residential building energy efficiency
code that meets or exceeds the requirements of
the 2004 International Energy Conservation
Code, or any succeeding version of that code
that has received an affirmative determination
from the Secretary under subsection (a)(5)(A);
and
[(ii) a commercial building energy efficiency
code that meets or exceeds the requirements of
the ASHRAE Standard 90.1-2004, or any
succeeding version of that standard that has
received an affirmative determination from the
Secretary under subsection (b)(2)(A); or
[(B) in a State in which there is no statewide energy
code either for residential buildings or for commercial
buildings, to a local government that has adopted and
is implementing residential and commercial building
energy efficiency codes, as described in subparagraph
(A).
[(3) Of the amounts made available under this subsection, the
Secretary may use $500,000 for each fiscal year to train State
and local officials to implement codes described in paragraph
(2).
[(4)(A) There are authorized to be appropriated to carry out
this subsection--
[(i) $25,000,000 for each of fiscal years 2006
through 2010; and
[(ii) such sums as are necessary for fiscal year 2011
and each fiscal year thereafter.
[(B) Funding provided to States under paragraph (2) for each
fiscal year shall not exceed one-half of the excess of funding
under this subsection over $5,000,000 for the fiscal year.]
SEC. 304. GREATER ENERGY EFFICIENCY IN BUILDING CODES.
(a) Energy Efficiency Targets.--
(1) In general.--Except as provided in paragraph (2)
or (3), the national building code energy efficiency
target for the national average percentage improvement
of a building's energy performance when built to a code
meeting the target shall be--
(A) effective on the date of enactment of the
American Clean Energy and Security Act of 2009,
30 percent reduction in energy use relative to
a comparable building constructed in compliance
with the baseline code;
(B) effective January 1, 2014, for
residential buildings, and January 1, 2015, for
commercial buildings, 50 percent reduction in
energy use relative to the baseline code; and
(C) effective January 1, 2017, for
residential buildings, and January 1, 2018, for
commercial buildings, and every 3 years
thereafter, respectively, through January 1,
2029, and January 1, 2030, 5 percent additional
reduction in energy use relative to the
baseline code.
(2) Consensus-based codes.--If on any effective date
specified in paragraph (1)(A), (B), or (C) a successor
code to the baseline codes provides for greater
reduction in energy use than is required under
paragraph (1), the overall percentage reduction in
energy use provided by that successor code shall be the
national building code energy efficiency target.
(3) Targets established by secretary.--The Secretary
may by rule establish a national building code energy
efficiency target for residential or commercial
buildings achieving greater reductions in energy use
than the targets prescribed in paragraph (1) or (2) if
the Secretary determines that such greater reductions
in energy use can be achieved with a code that is life
cycle cost-justified and technically feasible. The
Secretary may by rule establish a national building
code energy efficiency target for residential or
commercial buildings achieving a reduction in energy
use that is greater than zero but less than the targets
prescribed in paragraph (1) or (2) if the Secretary
determines that such lesser target is the maximum
reduction in energy use that can be achieved through a
code that is life cycle cost-justified and technically
feasible.
(4) Additional reductions in energy use.--Effective
on January 1, 2033, and once every 3 years thereafter,
the Secretary shall determine, after notice and
opportunity for comment, whether further energy
efficiency building code improvements for residential
or commercial buildings, respectively, are life cycle
cost-justified and technically feasible, and shall
establish updated national building code energy
efficiency targets that meet such criteria.
(5) Zero-net-energy buildings.--In setting targets
under this subsection, the Secretary shall consider
ways to support the deployment of distributed renewable
energy technology, and shall seek to achieve the goal
of zero-net-energy commercial buildings established in
section 422 of the Energy Independence and Security Act
of 2007 (42 U.S.C. 17082).
(6) Baseline code.--For purposes of this section, the
term ``baseline code'' means--
(A) for residential buildings, the 2006
International Energy Conservation Code (IECC)
published by the International Code Council;
and
(B) for commercial buildings, the code
published in ASHRAE Standard 90.1-2004.
(7) Consultation.--In establishing the targets
required by this section, the Secretary shall consult
with the Director of the National Institute of
Standards and Technology.
(b) National Energy Efficiency Building Codes.--
(1) Requirement.--
(A) In general.--There shall be established
national energy efficiency building codes under
this subsection, for residential and commercial
buildings, sufficient to meet each of the
national building code energy efficiency
targets established under subsection (a), not
later than the date that is one year after the
deadline for establishment of each such target.
(B) Existing code.--If the Secretary finds
prior to the date one year after the deadline
for establishing a target that one or more
energy efficiency building codes published by a
recognized consensus-based code development
organization meet or exceed the established
target, the Secretary shall select the code
that meets the target with the highest
efficiency in the most cost-effective manner,
and such code shall be the national energy
efficiency building code.
(C) Requirement to establish code.--If the
Secretary does not make a finding under
subparagraph (B), the national energy
efficiency building code shall be established
by rule by the Secretary under paragraph (2).
(2) Establishment by secretary.--
(A) Procedure.--In order to establish a
national energy efficiency building code as
required under paragraph (1)(C), the Secretary
shall--
(i) not later than six months prior
to the effective date for each target,
review existing and proposed codes
published or under review by recognized
consensus-based code development
organizations;
(ii) determine the percentage of
energy efficiency improvements that are
or would be achieved in such published
or proposed code versions relative to
the target;
(iii) propose improvements to such
published or proposed code versions
sufficient to meet or exceed the
target; and
(iv) unless a finding is made under
paragraph (1)(B) with respect to a code
published by a recognized consensus-
based code development organization,
adopt a code that meets or exceeds the
relevant national building code energy
efficiency target by not later than one
year after the effective date of such
target.
(B) Calculations.--Each code established by
the Secretary under this paragraph shall be set
at the maximum level the Secretary determines
is life cycle cost-justified and technically
feasible, in accordance with the following:
(i) Savings calculations.--
Calculations of energy savings shall
take into account the typical lifetimes
of different products, measures, and
system configurations.
(ii) Cost-effectiveness
calculations.--Calculations of life
cycle cost-effectiveness shall be based
on life cycle cost methods and
procedures under section 544 of the
National Energy Conservation Policy Act
(42 U.S.C. 8254), but shall incorporate
to the extent feasible externalities
such as impacts on climate change and
on peak energy demand that are not
already incorporated in assumed energy
costs.
(C) Considerations.--In developing a national
energy efficiency building code under this
paragraph, the Secretary shall consider--
(i) for residential codes--
(I) residential building
standards published or proposed
by ASHRAE;
(II) residential building
codes published or proposed in
the International Energy
Conservation Code (IECC);
(III) data from the
Residential Energy Services
Network (RESNET) on compliance
measures utilized by consumers
to qualify for the residential
energy efficiency tax credits
established under the Energy
Policy Act of 2005;
(IV) data and information
from the Department of Energy's
Building America Program;
(V) data and information from
the Energy Star New Homes
program;
(VI) data and information
from the New Building Institute
and similar organizations; and
(VII) standards for practices
and materials to achieve cool
roofs in residential buildings,
taking into consideration
reduced air conditioning energy
use as a function of cool
roofs, the potential reduction
in global warming from
increased solar reflectance
from buildings, and cool roofs
criteria in State and local
building codes and in national
and local voluntary programs;
and
(ii) for commercial codes--
(I) commercial building
standards proposed by ASHRAE;
(II) commercial building
codes proposed in the
International Energy
Conservation Code (IECC);
(III) the Core Performance
Criteria published by the New
Buildings Institute;
(IV) data and information
developed by the Director of
the Commercial High-Performance
Green Building Office of the
Department of Energy and any
public-private partnerships
established under that Office;
(V) data and information from
the Energy Star for Buildings
program;
(VI) data and information
from the New Building
Institute, RESNET, and similar
organizations; and
(VII) standards for practices
and materials to achieve cool
roofs in commercial buildings,
taking into consideration
reduced air conditioning energy
use as a function of cool
roofs, the potential reduction
in global warming from
increased solar reflectance
from buildings, and cool roofs
criteria in State and local
building codes and in national
and local voluntary programs.
(D) Consultation.--In establishing any
national energy efficiency building code
required by this section, the Secretary shall
consult with the Director of the National
Institute of Standards and Technology.
(3) Consensus standard assistance.--(A) To support
the development of consensus standards that may provide
the basis for national energy efficiency building
codes, minimize duplication of effort, encourage
progress through consensus, and facilitate the
development of greater building efficiency, the
Secretary shall provide assistance to recognized
consensus-based code development organizations to
develop, and where the relevant code has been adopted
as the national code, disseminate consensus based
energy efficiency building codes as provided in this
paragraph.
(B) Upon a finding by the Secretary that a code
developed by such an organization meets a target
established under subsection (a), the Secretary shall--
(i) send notice of the Secretary's finding to
all duly authorized or appointed State and
local code agencies; and
(ii) provide sufficient support to such an
organization to make the code available on the
Internet, or to accomplish distribution of such
code to all such State and local code agencies
at no cost to the State and local code
agencies.
(C) The Secretary may contract with such an
organization and with other organizations with
expertise on codes to provide training for State and
local code officials and building inspectors in the
implementation and enforcement of such code.
(D) The Secretary may provide grants and other
support to such an organization to--
(i) develop appropriate refinements to such
code; and
(ii) support analysis of options for
improvements in the code to meet the next
scheduled target.
(4) Code developed by secretary.--If the Secretary
establishes a national energy efficiency building code
under paragraph (2), the Secretary shall--
(A) to the extent that such code is based on
a prior code developed by a recognized
consensus-based code development organization,
negotiate and provide appropriate compensation
to such organization for the use of the code
materials that remain in the code established
by the Secretary; and
(B) disseminate the national energy
efficiency building codes to State and local
code officials, and support training and
provide guidance and technical assistance to
such officials as appropriate.
(c) State Adoption of Energy Efficiency Building Codes.--
(1) Requirement.--Not later than 1 year after a
national energy efficiency building code for
residential or commercial buildings is established or
revised under subsection (b), each State--
(A) shall--
(i) review and update the provisions
of its building code regarding energy
efficiency to meet or exceed the target
met in the new national code, to
achieve equivalent or greater energy
savings;
(ii) document, where local
governments establish building codes,
that local governments representing not
less than 80 percent of the State's
urban population have adopted the new
national code, or have adopted local
codes that meet or exceed the target
met in the new national code to achieve
equivalent or greater energy savings;
or
(iii) adopt the new national code;
and
(B) shall provide a certification to the
Secretary demonstrating that energy efficiency
building code provisions that apply throughout
the State meet or exceed the target met by the
new national code, to achieve equivalent or
greater energy savings.
(2) Confirmation.--
(A) Requirement.--Not later than 90 days
after a State certification is provided under
paragraph (1)(B), the Secretary shall determine
whether the State's energy efficiency building
code provisions meet the requirements of this
subsection.
(B) Acceptance by secretary.--If the
Secretary determines under subparagraph (A)
that the State's energy efficiency building
code or codes meet the requirements of this
subsection, the Secretary shall accept the
certification.
(C) Deficiency notice.--If the Secretary
determines under subparagraph (A) that the
State's building code or codes do not meet the
requirements of this subsection, the Secretary
shall identify the deficiency in meeting the
national building code energy efficiency
target, and, to the extent possible, indicate
areas where further improvement in the State's
code provisions would allow the deficiency to
be eliminated.
(D) Revision of code and recertification.--A
State may revise its code or codes and submit a
recertification under paragraph (1)(B) to the
Secretary at any time.
(3) Compliant code.--For the purposes of meeting the
target described in subsection (a)(1)(A) for
residential buildings, a State that adopts the code
represented in California's Title 24-2009 by the date
two years after the date of enactment of the American
Clean Energy and Security Act of 2009 shall be
considered to have met the requirements of this
subsection for the applicable period.
(d) Application of National Code to State and Local
Jurisdictions.--
(1) In general.--Upon the expiration of 1 year after
a national energy efficiency building code is
established under subsection (b), in any jurisdiction
where the State has not had a certification relating to
that code accepted by the Secretary under subsection
(c)(2)(B), and the local government has not had a
certification relating to that code accepted by the
Secretary under subsection (e)(6)(B), the national code
shall become the applicable energy efficiency building
code for such jurisdiction.
(2) State legislative adoption.--In a State in which
the relevant building energy code is adopted
legislatively, the deadline in paragraph (1) shall not
be earlier than 1 year after the first day that the
legislature meets following establishment of a national
energy efficiency building code.
(3) Violations.--Violations of this section shall be
defined as follows:
(A) If the building is subject to the
requirements of a State energy efficiency
building code with respect to which a
certification has been accepted by the
Secretary under subsection (c)(2)(B) or a local
energy efficiency building code with respect to
which a certification has been accepted by the
Secretary pursuant to subsection (e)(6)(B), a
violation shall be determined pursuant to the
relevant provisions of the State or local code.
(B) If the building is subject to the
requirements of a national energy efficiency
building code adopted under subsection
(c)(1)(A)(i) or made applicable under paragraph
(1) of this subsection, a violation shall be
defined by the Secretary pursuant to subsection
(g).
(e) State Enforcement of Energy Efficiency Building Codes.--
(1) In general.--Each State, or where applicable
under State law each local government, shall implement
and enforce applicable State or local codes with
respect to which a certification was accepted by the
Secretary under subsection (c)(2)(B) or paragraph
(6)(B) of this subsection, or the national energy
efficiency building codes, as provided in this
subsection.
(2) State certification.--Not later than 2 years
after the date of a certification under subsection
(c)(1) or the establishment of a national energy
efficiency building code under subsection (b), each
State shall certify that it has--
(A) achieved compliance with--
(i) State codes, or, as provided
under State law, local codes, with
respect to which a certification was
accepted by the Secretary under
subsection (c)(2)(B); or
(ii) the national energy efficiency
building code, as applicable; or
(B) for any certification submitted within 7
years after the date of enactment of the
American Clean Energy and Security Act of 2009,
made significant progress toward achieving such
compliance.
(3) Achieving compliance.--A State shall be
considered to achieve compliance with a code described
in paragraph (2)(A) if at least 90 percent of new and
substantially renovated building space in that State in
the preceding year upon inspection meets the
requirements of the code. A certification under
paragraph (2) shall include documentation of the rate
of compliance based on--
(A) independent inspections of a random
sample of the new and substantially renovated
buildings covered by the code in the preceding
year; or
(B) an alternative method that yields an
accurate measure of compliance as determined by
the Secretary.
(4) Significant progress.--A State shall be
considered to have made significant progress toward
achieving compliance with a code described in paragraph
(2)(A) if--
(A) the State has developed a plan, including
for hiring enforcement staff, providing
training, providing manuals and checklists, and
instituting enforcement programs, designed to
achieve full compliance within 5 years after
the date of the adoption of the code;
(B) the State is taking significant, timely,
and measurable action to implement that plan;
(C) the State has not reduced its
expenditures for code enforcement; and
(D) at least 50 percent of new and
substantially renovated building space in the
State in the preceding year upon inspection
meets the requirements of the code.
(5) Secretary's determination.--Not later than 90
days after a State certification under paragraph (2),
the Secretary shall determine whether the State has
demonstrated that it has complied with the requirements
of this subsection, including accurate measurement of
compliance, or that it has made significant progress
toward compliance. If such determination is positive,
the Secretary shall accept the certification. If the
determination is negative, the Secretary shall identify
the areas of deficiency.
(6) Out of compliance.--
(A) In general.--Any State for which the
Secretary has not accepted a certification
under paragraph (5) by a deadline established
under this subsection is out of compliance with
this section.
(B) Local compliance.--In any State that is
out of compliance with this section as provided
in subparagraph (A), a local government may be
in compliance with this section by meeting all
certification requirements applicable to the
State.
(C) Noncompliance.--Any State that is not in
compliance with this section, as provided in
subparagraph (A), shall, until the State
regains such compliance, be ineligible to
receive--
(i) emission allowances pursuant to
subsection (h)(1);
(ii) Federal funding in excess of
that State's share (calculated
according to the allocation formula in
section 363 of the Energy Policy and
Conservation Act (42 U.S.C. 6323)) of
$125,000,000 each year; and
(iii) for--
(I) the first year for which
the State is out of compliance,
25 percent of any additional
funding or other items of
monetary value otherwise
provided under the American
Clean Energy and Security Act
of 2009;
(II) the second year for
which the State is out of
compliance, 50 percent of any
additional funding or other
items of monetary value
otherwise provided under the
American Clean Energy and
Security Act of 2009;
(III) the third year for
which the State is out of
compliance, 75 percent of any
additional funding or other
items of monetary value
otherwise provided under the
American Clean Energy and
Security Act of 2009; and
(IV) the fourth and
subsequent years for which the
State is out of compliance, 100
percent of any additional
funding or other items of
monetary value otherwise
provided under the American
Clean Energy and Security Act
of 2009.
(f) Federal Enforcement.--Where a State fails and local
governments in that State also fail to enforce the applicable
State or national energy efficiency building codes, the
Secretary shall enforce such codes, as follows:
(1) The Secretary shall establish, by rule, within 2
years after the date of enactment of the American Clean
Energy and Security Act of 2009, an energy efficiency
building code enforcement capability.
(2) Such enforcement capability shall be designed to
achieve 90 percent compliance with such code in any
State within 1 year after the date of the Secretary's
determination that such State is out of compliance with
this section.
(3) The Secretary may set and collect reasonable
inspection fees to cover the costs of inspections
required for such enforcement. Revenue from fees
collected shall be available to the Secretary to carry
out the requirements of this section upon
appropriation.
(g) Enforcement Procedures.--The Secretary shall propose and,
not later than three years after the date of enactment of the
American Clean Energy and Security Act of 2009, shall determine
and adopt by rule what shall constitute violations of the
energy efficiency building codes to be enforced pursuant to
this section, and the penalties that shall apply to violators.
To the extent that the Secretary determines that the authority
to adopt and impose such violations and penalties by rule
requires further statutory authority, the Secretary shall
report such determination to Congress as soon as such
determination is made, but not later than one year after the
enactment of the American Clean Energy and Security Act of
2009.
(h) Federal Support.--
(1) Allowance allocation for state compliance.--For
each vintage year from 2012 through 2050, the
Administrator shall distribute allowances allocated
pursuant to section 782(g)(2) of the Clean Air Act to
the SEED Account for each State that the Secretary
identifies as a State from which he has accepted the
State's certification under subsection (e)(5) for
compliance with the then current national energy
efficiency building codes. Such allowances shall be
distributed according to a formula established by the
Secretary as follows:
(A) One-fifth in an equal amount to each of
the 50 States and United States territories.
(B) Two-fifths as a function of the relative
energy use in all buildings in each State in
the most recent year for which data is
available.
(C) Two-fifths based on the number of
building construction starts recorded in each
State, the number of new building permits
applied for in each State, or other relevant
available data indicating building activity in
each State, in the judgment of the Secretary,
for the year prior to the year of the
distribution.
(2) Allowance allocation to local governments.--In
the instance that the Secretary certifies that one or
more local governments are in compliance with this
section pursuant to subsection (e)(6)(B), the
Administrator shall provide to each such local
government the portion of the emission allowances that
would have been provided to that State as a function of
the population of that locality as a proportion of the
population of that State as a whole.
(3) Unallocated allowances.--To the extent that
allowances are not provided to State or local
governments for lack of certification in any year,
those allowances shall be added to the amount provided
to those States and local governments that are
certified as eligible in that year.
(4) Use of allowances.--Each State or each local
government shall use such emission allowances as it
receives pursuant to this section exclusively for the
purposes of this section, including covering a
reasonable portion of the costs of the development,
adoption, implementation, and enforcement of a State or
local energy efficiency building code with respect to
which a certification is accepted by the Secretary
under subsection (c)(2)(B) or subsection (e)(6)(B), or
the national energy efficiency building code. In a
State where local governments provide building code
enforcement, a minimum of 50 percent of the allowance
value received pursuant to this section shall be
distributed to local governments as a function of the
relative populations of such localities.
(i) Authorization of Appropriations.--There are authorized to
be appropriated to the Secretary of Energy $100,000,000 for
each of fiscal years 2010 through 2020 and such sums thereafter
as may be necessary to support the purposes of this section.
(j) Annual Reports by Secretary.--The Secretary shall
annually submit to Congress, and publish in the Federal
Register, a report on--
(1) the status of national building energy efficiency
codes;
(2) the status of energy efficiency building code
adoption and compliance in the States;
(3) the implementation of this section; and
(4) impacts of past action under this section, and
potential impacts of further action, on lifetime energy
use by buildings, including resulting energy and cost
savings.
SEC. 305. FEDERAL BUILDING ENERGY EFFICIENCY STANDARDS.
(a)(1) * * *
* * * * * * *
(3)(A) * * *
* * * * * * *
(D) Not later than 1 year after the date of enactment of the
Energy Independence and Security Act of 2007, the Secretary
shall establish, by rule, revised Federal building energy
efficiency performance standards that require that:
(i) For new Federal buildings and Federal buildings
undergoing major renovations, with respect to which the
Administrator of General Services is required to
transmit a prospectus to Congress under section 3307 of
title 40, United States Code, in the case of public
buildings (as defined in section 3301 of title 40,
United States Code), or of at least $2,500,000 in costs
adjusted annually for inflation for other buildings:
(I) The buildings shall be designed so that
the fossil fuel-generated energy consumption of
the buildings is reduced, as compared with such
energy consumption by a similar building [in
fiscal year 2003 (as measured by Commercial
Buildings Energy Consumption Survey or
Residential Energy Consumption Survey data from
the Energy Information Agency)] as measured by
the calendar year 2003 Commercial Buildings
Energy Consumption Survey or the calendar year
2005 Residential Energy Consumption Survey data
from the Energy Information Administration, by
the percentage specified in the following
table:
[Fiscal Year] Calendar Year Percentage Reduction
2010................................ 55
2015................................ 65
2020................................ 80
2025................................ 90
2030................................ 100.
[(II) Upon petition]
(II) Downward adjustment of numeric
requirement.--
(aa) In general.--On petition by an
agency subject to this subparagraph,
the Secretary may adjust the applicable
numeric requirement under subclause (I)
downward with respect to a specific
building, if the head of the agency
designing the building certifies in
writing that meeting such requirement
would be technically impracticable in
light of the agency's specified
functional needs for that building and
the Secretary concurs with the agency's
conclusion. [This subclause shall not
apply to the General Services
Administration.]
(bb) Exceptions to requirement for
concurrence of secretary.--
(AA) In general.--The
requirement to petition and
obtain the concurrence of the
Secretary under this subclause
shall not apply to any Federal
building with respect to which
the Administrator of General
Services is required to
transmit a prospectus to
Congress under section 3307 of
title 40, United States Code,
or to any other Federal
building designed, constructed,
or renovated by the
Administrator if the
Administrator certifies, in
writing, that meeting the
applicable numeric requirement
under subclause (I) with
respect to the Federal building
would be technically
impracticable in light of the
specific functional needs for
the building.
(BB) Adjustment.--In the case
of a building described in
subitem (AA), the Administrator
may adjust the applicable
numeric requirement of
subclause (I) downward with
respect to the building.
* * * * * * *
TITLE IV--ENERGY CONSERVATION AND RENEWABLE-RESOURCE ASSISTANCE FOR
EXISTING BUILDINGS
* * * * * * *
Part A--Weatherization Assistance for Low-Income Persons
* * * * * * *
AUTHORIZATION OF APPROPRIATIONS
Sec. 422. For the purpose of carrying out the weatherization
program under this part, there are authorized to be
appropriated--
(1) * * *
* * * * * * *
(5) $1,400,000,000 for fiscal year 2012.[.]
* * * * * * *
----------
INSPECTOR GENERAL ACT OF 1978
* * * * * * *
REQUIREMENTS FOR FEDERAL ENTITIES AND DESIGNATED FEDERAL ENTITIES
Sec. 8G. (a) Notwithstanding section 12 of this Act, as used
in this section--
(1) * * *
(2) the term ``designated Federal entity'' means
Amtrak, the Appalachian Regional Commission, the Board
of Governors of the Federal Reserve System, the Board
for International Broadcasting, [the Commodity Futures
Trading Commission,] the Consumer Product Safety
Commission, the Corporation for Public Broadcasting,
the Equal Employment Opportunity Commission, the Farm
Credit Administration, the Federal Communications
Commission, the Federal Deposit Insurance Corporation ,
the Federal Election Commission, the Election
Assistance Commission, the Federal Housing Finance
Board, the Federal Labor Relations Authority, the
Federal Maritime Commission, the Federal Trade
Commission, the Legal Services Corporation, the
National Archives and Records Administration, the
National Credit Union Administration, the National
Endowment for the Arts, the National Endowment for the
Humanities, the National Labor Relations Board, the
National Science Foundation, the Panama Canal
Commission, the Peace Corps, the Pension Benefit
Guaranty Corporation, the Securities and Exchange
Commission, the Smithsonian Institution, the United
States International Trade Commission, the Postal
Regulatory Commission, and the United States Postal
Service;
* * * * * * *
DEFINITIONS
Sec. 12. As used in this Act--
(1) the term ``head of the establishment'' means the
Secretary of Agriculture, Commerce, Defense, Education,
Energy, Health and Human Services, Housing and Urban
Development, the Interior, Labor, State,
Transportation, Homeland Security, or the Treasury; the
Attorney General; the Administrator of the Agency for
International Development, Environmental Protection,
General Services, National Aeronautics and Space, or
Small Business, or Veterans' Affairs; the Director of
the Federal Emergency Management Agency, or the Office
of Personnel Management; the Chairman of the Nuclear
Regulatory Commission or the Railroad Retirement Board;
the Chairperson of the Thrift Depositor Protection
Oversight Board; the Chief Executive Officer of the
Corporation for National and Community Service; the
Administrator of the Community Development Financial
Institutions Fund; the chief executive officer of the
Resolution Trust Corporation; the Chairperson of the
Federal Deposit Insurance Corporation; the Commissioner
of Social Security, Social Security Administration; the
Director of the Federal Housing Finance Agency; the
Board of Directors of the Tennessee Valley Authority;
the President of the Export-Import Bank; [or the
Federal Cochairpersons of the Commissions established
under section 15301 of title 40, United States Code;]
the Administrator of the Clean Energy Deployment
Administration; the Federal Cochairpersons of the
Commissions established under section 15301 of title
40, United States Code; or the Chairman of the
Commodity Futures Trading Commission; as the case may
be;
(2) the term ``establishment'' means the Department
of Agriculture, Commerce, Defense, Education, Energy,
Health and Human Services, Housing and Urban
Development, the Interior, Justice, Labor, State,
Transportation, Homeland Security, or the Treasury; the
Agency for International Development, the Community
Development Financial Institutions Fund, the
Environmental Protection Agency, the Federal Emergency
Management Agency, the General Services Administration,
the National Aeronautics and Space Administration, the
Nuclear Regulatory Commission, the Office of Personnel
Management, the Railroad Retirement Board, the
Resolution Trust Corporation, the Federal Deposit
Insurance Corporation, the Small Business
Administration, the Corporation for National and
Community Service, or the Veterans' Administration, the
Social Security Administration, the Federal Housing
Finance Agency, the Tennessee Valley Authority, the
Export-Import Bank, [or the Commissions established
under section 15301 of title 40, United States Code,]
the Clean Energy Deployment Administration, the
Commissions established under section 15301 of title
40, United States Code, or the Commodity Futures
Trading Commission, as the case may be;
* * * * * * *
----------
SECTION 507 OF THE ENERGY POLICY ACT OF 1992
SEC. 507. FLEET REQUIREMENT PROGRAM.
(a) * * *
* * * * * * *
(o) Mandatory State Fleet Programs.--(1) * * *
* * * * * * *
(3) The Secretary shall revise the rules under this
subsection with respect to the types of alternative fueled
vehicles required for compliance with this subsection to ensure
those rules are consistent with any guidance issued pursuant to
section 303 of this Act.
* * * * * * *
----------
NATIONAL ENERGY CONSERVATION POLICY ACT
* * * * * * *
TITLE I--GENERAL PROVISIONS
SEC. 101. SHORT TITLE AND TABLE OF CONTENTS.
(a) * * *
(b) Table of Contents.--
TITLE I--GENERAL PROVISIONS
* * * * * * *
TITLE V--FEDERAL ENERGY INITIATIVES
* * * * * * *
[Sec. 543. Energy management requirements.]
Sec. 543. Energy efficient information and communications technologies.
* * * * * * *
TITLE V--FEDERAL ENERGY INITIATIVE
* * * * * * *
PART 3--FEDERAL ENERGY MANAGEMENT
* * * * * * *
[SEC. 543. ENERGY MANAGEMENT REQUIREMENTS.
[(a) Energy Performance Requirement for Federal Buildings.--
(1) Subject to paragraph (2), each agency shall apply energy
conservation measures to, and shall improve the design for the
construction of, the Federal buildings of the agency (including
each industrial or laboratory facility) so that the energy
consumption per gross square foot of the Federal buildings of
the agency in fiscal years 2006 through 2015 is reduced, as
compared with the energy consumption per gross square foot of
the Federal buildings of the agency in fiscal year 2003, by the
percentage specified in the following table:
[Fiscal Year Percentage Reduction
2006...................................................... 2
2007...................................................... 4
2008...................................................... 9
2009...................................................... 12
2010...................................................... 15
2011...................................................... 18
2012...................................................... 21
2013...................................................... 24
2014...................................................... 27
2015...................................................... 30.
[(2) An agency may exclude from the requirements of paragraph
(1) any building, and the associated energy consumption and
gross square footage, in which energy intensive activities are
carried out. Each agency shall identify and list in each report
made under section 548(a) the buildings designated by it for
such exclusion.
[(3) Not later than December 31, 2014, the Secretary shall
review the results of the implementation of the energy
performance requirement established under paragraph (1) and
submit to Congress recommendations concerning energy
performance requirements for fiscal years 2016 through 2025.
[(b) Energy Management Requirement for Federal Agencies.--(1)
Not later than January 1, 2005, each agency shall, to the
maximum extent practicable, install in Federal buildings owned
by the United States all energy and water conservation measures
with payback periods of less than 10 years, as determined by
using the methods and procedures developed pursuant to section
544.
[(2) The Secretary may waive the requirements of this
subsection for any agency for such periods as the Secretary may
determine if the Secretary finds that the agency is taking all
practicable steps to meet the requirements and that the
requirements of this subsection will pose an unacceptable
burden upon the agency. If the Secretary waives the
requirements of this subsection, the Secretary shall, as part
of the report required under section 548(b), notify the
Congress in writing with an explanation and a justification of
the reasons for such waiver.
[(3) This subsection shall not apply to an agency's
facilities that generate or transmit electric energy or to the
uranium enrichment facilities operated by the Department of
Energy.
[(4) An agency may participate in the Environmental
Protection Agency's ``Green Lights'' program for purposes of
receiving technical assistance in complying with the
requirements of this section.
[(c) Exclusions.--(1)(A) An agency may exclude, from the
energy performance requirement for a fiscal year established
under subsection (a) and the energy management requirement
established under subsection (b), any Federal building or
collection of Federal buildings, if the head of the agency
finds that--
[(i) compliance with those requirements would be
impracticable;
[(ii) the agency has completed and submitted all
federally required energy management reports;
[(iii) the agency has achieved compliance with the
energy efficiency requirements of this Act, the Energy
Policy Act of 1992, Executive orders, and other Federal
law; and
[(iv) the agency has implemented all practicable,
life cycle cost-effective projects with respect to the
Federal building or collection of Federal buildings to
be excluded.
[(B) A finding of impracticability under subparagraph (A)(i)
shall be based on--
[(i) the energy intensiveness of activities carried
out in the Federal building or collection of Federal
buildings; or
[(ii) the fact that the Federal building or
collection of Federal buildings is used in the
performance of a national security function.
[(2) Each agency shall identify and list, in each report made
under section 548(a), the Federal buildings designated by it
for such exclusion. The Secretary shall review such findings
for consistency with the standards for exclusion set forth in
paragraph (1), and may within 90 days after receipt of the
findings, reverse the exclusion. In the case of any such
reversal, the agency shall comply with the requirements of
subsections (a) and (b)(1) for the building concerned.
[(3) Not later than 180 days after the date of enactment of
this paragraph, the Secretary shall issue guidelines that
establish criteria for exclusions under paragraph (1).
[(d) Implementation Steps.--The Secretary shall consult with
the Secretary of Defense and the Administrator of General
Services in developing guidelines for the implementation of
this part. To meet the requirements of this section, each
agency shall--
[(1) prepare and submit to the Secretary, not later
than December 31, 1993, a plan describing how the
agency intends to meet such requirements, including how
it will--
[(A) designate personnel primarily
responsible for achieving such requirements;
[(B) identify high priority projects through
calculation of payback periods;
[(C) take maximum advantage of contracts
authorized under title VIII of this Act, of
financial incentives and other services
provided by utilities for efficiency
investment, and of other forms of financing to
reduce the direct costs to the Government; and
[(D) otherwise implement this part;
[(2) perform energy surveys of its Federal buildings
to the extent necessary and update such surveys as
needed, incorporating any relevant information obtained
from the survey conducted pursuant to section 550;
[(3) using such surveys, determine the cost and
payback period of energy and water conservation
measures likely to achieve the requirements of this
section;
[(4) install energy and water conservation measures
that will achieve the requirements of this section
through the methods and procedures established pursuant
to section 544; and
[(5) ensure that the operation and maintenance
procedures applied under this section are continued.
[(e) Metering of Energy Use.--
[(1) Deadline.--By October 1, 2012, in accordance
with guidelines established by the Secretary under
paragraph (2), all Federal buildings shall, for the
purposes of efficient use of energy and reduction in
the cost of electricity used in such buildings, be
metered. Each agency shall use, to the maximum extent
practicable, advanced meters or advanced metering
devices that provide data at least daily and that
measure at least hourly consumption of electricity in
the Federal buildings of the agency. Not later than
October 1, 2016, each agency shall provide for
equivalent metering of natural gas and steam, in
accordance with guidelines established by the Secretary
under paragraph (2). Such data shall be incorporated
into existing Federal energy tracking systems and made
available to Federal facility managers.
[(2) Guidelines.--
[(A) In general.--Not later than 180 days
after the date of enactment of this subsection,
the Secretary, in consultation with the
Department of Defense, the General Services
Administration, representatives from the
metering industry, utility industry, energy
services industry, energy efficiency industry,
energy efficiency advocacy organizations,
national laboratories, universities, and
Federal facility managers, shall establish
guidelines for agencies to carry out paragraph
(1).
[(B) Requirements for guidelines.--The
guidelines shall--
[(i) take into consideration--
[(I) the cost of metering and
the reduced cost of operation
and maintenance expected to
result from metering;
[(II) the extent to which
metering is expected to result
in increased potential for
energy management, increased
potential for energy savings
and energy efficiency
improvement, and cost and
energy savings due to utility
contract aggregation; and
[(III) the measurement and
verification protocols of the
Department of Energy;
[(ii) include recommendations
concerning the amount of funds and the
number of trained personnel necessary
to gather and use the metering
information to track and reduce energy
use;
[(iii) establish priorities for types
and locations of buildings to be
metered based on cost-effectiveness and
a schedule of one or more dates, not
later than 1 year after the date of
issuance of the guidelines, on which
the requirements specified in paragraph
(1) shall take effect; and
[(iv) establish exclusions from the
requirements specified in paragraph (1)
based on the de minimis quantity of
energy use of a Federal building,
industrial process, or structure.
[(3) Plan.--Not later than 6 months after the date
guidelines are established under paragraph (2), in a
report submitted by the agency under section 548(a),
each agency shall submit to the Secretary a plan
describing how the agency will implement the
requirements of paragraph (1), including (A) how the
agency will designate personnel primarily responsible
for achieving the requirements and (B) demonstration by
the agency, complete with documentation, of any finding
that advanced meters or advanced metering devices, as
defined in paragraph (1), are not practicable.
[(f) Use of Energy and Water Efficiency Measures in Federal
Buildings.--
[(1) Definitions.--In this subsection:
[(A) Commissioning.--The term
``commissioning'', with respect to a facility,
means a systematic process--
[(i) of ensuring, using appropriate
verification and documentation, during
the period beginning on the initial day
of the design phase of the facility and
ending not earlier than 1 year after
the date of completion of construction
of the facility, that all facility
systems perform interactively in
accordance with--
[(I) the design documentation
and intent of the facility; and
[(II) the operational needs
of the owner of the facility,
including preparation of
operation personnel; and
[(ii) the primary goal of which is to
ensure fully functional systems that
can be properly operated and maintained
during the useful life of the facility.
[(B) Energy manager.--
[(i) In general.--The term ``energy
manager'', with respect to a facility,
means the individual who is responsible
for--
[(I) ensuring compliance with
this subsection by the
facility; and
[(II) reducing energy use at
the facility.
[(ii) Inclusions.--The term ``energy
manager'' may include--
[(I) a contractor of a
facility;
[(II) a part-time employee of
a facility; and
[(III) an individual who is
responsible for multiple
facilities.
[(C) Facility.--
[(i) In general.--The term
``facility'' means any building,
installation, structure, or other
property (including any applicable
fixtures) owned or operated by, or
constructed or manufactured and leased
to, the Federal Government.
[(ii) Inclusions.--The term
``facility'' includes--
[(I) a group of facilities at
a single location or multiple
locations managed as an
integrated operation; and
[(II) contractor-operated
facilities owned by the Federal
Government.
[(iii) Exclusions.--The term
``facility'' does not include any land
or site for which the cost of utilities
is not paid by the Federal Government.
[(D) Life cycle cost-effective.--The term
``life cycle cost-effective'', with respect to
a measure, means a measure, the estimated
savings of which exceed the estimated costs
over the lifespan of the measure, as determined
in accordance with section 544.
[(E) Payback period.--
[(i) In general.--Subject to clause
(ii), the term ``payback period'', with
respect to a measure, means a value
equal to the quotient obtained by
dividing--
[(I) the estimated initial
implementation cost of the
measure (other than financing
costs); by
[(II) the annual cost savings
resulting from the measure,
including--
[(aa) net savings in
estimated energy and
water costs; and
[(bb) operations,
maintenance, repair,
replacement, and other
direct costs.
[(ii) Modifications and exceptions.--
The Secretary, in guidelines issued
pursuant to paragraph (6), may make
such modifications and provide such
exceptions to the calculation of the
payback period of a measure as the
Secretary determines to be appropriate
to achieve the purposes of this Act.
[(F) Recommissioning.--The term
``recommissioning'' means a process--
[(i) of commissioning a facility or
system beyond the project development
and warranty phases of the facility or
system; and
[(ii) the primary goal of which is to
ensure optimum performance of a
facility, in accordance with design or
current operating needs, over the
useful life of the facility, while
meeting building occupancy
requirements.
[(G) Retrocommissioning.--The term
``retrocommis-sioning'' means a process of
commissioning a facility or system that was not
commissioned at the time of construction of the
facility or system.
[(2) Facility energy managers.--
[(A) In general.--Each Federal agency shall
designate an energy manager responsible for
implementing this subsection and reducing
energy use at each facility that meets criteria
under subparagraph (B).
[(B) Covered facilities.--The Secretary shall
develop criteria, after consultation with
affected agencies, energy efficiency advocates,
and energy and utility service providers, that
cover, at a minimum, Federal facilities,
including central utility plants and
distribution systems and other energy intensive
operations, that constitute at least 75 percent
of facility energy use at each agency.
[(3) Energy and water evaluations.--
[(A) Evaluations.--Effective beginning on the
date that is 180 days after the date of
enactment of this subsection and annually
thereafter, energy managers shall complete, for
each calendar year, a comprehensive energy and
water evaluation for approximately 25 percent
of the facilities of each agency that meet the
criteria under paragraph (2)(B) in a manner
that ensures that an evaluation of each such
facility is completed at least once every 4
years.
[(B) Recommissioning and
retrocommissioning.--As part of the evaluation
under subparagraph (A), the energy manager
shall identify and assess recommissioning
measures (or, if the facility has never been
commissioned, retrocommissioning measures) for
each such facility.
[(4) Implementation of identified energy and water
efficiency measures.--Not later than 2 years after the
completion of each evaluation under paragraph (3), each
energy manager may--
[(A) implement any energy- or water-saving
measure that the Federal agency identified in
the evaluation conducted under paragraph (3)
that is life cycle cost-effective; and
[(B) bundle individual measures of varying
paybacks together into combined projects.
[(5) Follow-up on implemented measures.--For each
measure implemented under paragraph (4), each energy
manager shall ensure that--
[(A) equipment, including building and
equipment controls, is fully commissioned at
acceptance to be operating at design
specifications;
[(B) a plan for appropriate operations,
maintenance, and repair of the equipment is in
place at acceptance and is followed;
[(C) equipment and system performance is
measured during its entire life to ensure
proper operations, maintenance, and repair; and
[(D) energy and water savings are measured
and verified.
[(6) Guidelines.--
[(A) In general.--The Secretary shall issue
guidelines and necessary criteria that each
Federal agency shall follow for implementation
of--
[(i) paragraphs (2) and (3) not later
than 180 days after the date of
enactment of this subsection; and
[(ii) paragraphs (4) and (5) not
later than 1 year after the date of
enactment of this subsection.
[(B) Relationship to funding source.--The
guidelines issued by the Secretary under
subparagraph (A) shall be appropriate and
uniform for measures funded with each type of
funding made available under paragraph (10),
but may distinguish between different types of
measures project size, and other criteria the
Secretary determines are relevant.
[(7) Web-based certification.--
[(A) In general.--For each facility that
meets the criteria established by the Secretary
under paragraph (2)(B), the energy manager
shall use the web-based tracking system under
subparagraph (B) to certify compliance with the
requirements for--
[(i) energy and water evaluations
under paragraph (3);
[(ii) implementation of identified
energy and water measures under
paragraph (4); and
[(iii) follow-up on implemented
measures under paragraph (5).
[(B) Deployment.--
[(i) In general.--Not later than 1
year after the date of enactment of
this subsection, the Secretary shall
develop and deploy a web-based tracking
system required under this paragraph in
a manner that tracks, at a minimum--
[(I) the covered facilities;
[(II) the status of meeting
the requirements specified in
subparagraph (A);
[(III) the estimated cost and
savings for measures required
to be implemented in a
facility;
[(IV) the measured savings
and persistence of savings for
implemented measures; and
[(V) the benchmarking
information disclosed under
paragraph (8)(C).
[(ii) Ease of compliance.--The
Secretary shall ensure that energy
manager compliance with the
requirements in this paragraph, to the
maximum extent practicable--
[(I) can be accomplished with
the use of streamlined
procedures and templates that
minimize the time demands on
Federal employees; and
[(II) is coordinated with
other applicable energy
reporting requirements.
[(C) Availability.--
[(i) In general.--Subject to clause
(ii), the Secretary shall make the web-
based tracking system required under
this paragraph available to Congress,
other Federal agencies, and the public
through the Internet.
[(ii) Exemptions.--At the request of
a Federal agency, the Secretary may
exempt specific data for specific
facilities from disclosure under clause
(i) for national security purposes.
[(8) Benchmarking of federal facilities.--
[(A) In general.--The energy manager shall
enter energy use data for each metered building
that is (or is a part of) a facility that meets
the criteria established by the Secretary under
paragraph (2)(B) into a building energy use
benchmarking system, such as the Energy Star
Portfolio Manager.
[(B) System and guidance.--Not later than 1
year after the date of enactment of this
subsection, the Secretary shall--
[(i) select or develop the building
energy use benchmarking system required
under this paragraph for each type of
building; and
[(ii) issue guidance for use of the
system.
[(C) Public disclosure.--Each energy manager
shall post the information entered into, or
generated by, a benchmarking system under this
subsection, on the web-based tracking system
under paragraph (7)(B). The energy manager
shall update such information each year, and
shall include in such reporting previous years'
information to allow changes in building
performance to be tracked over time.
[(9) Federal agency scorecards.--
[(A) In general.--The Director of the Office
of Management and Budget shall issue semiannual
scorecards for energy management activities
carried out by each Federal agency that
includes--
[(i) summaries of the status of
implementing the various requirements
of the agency and its energy managers
under this subsection; and
[(ii) any other means of measuring
performance that the Director considers
appropriate.
[(B) Availability.--The Director shall make
the scorecards required under this paragraph
available to Congress, other Federal agencies,
and the public through the Internet.
[(10) Funding and implementation.--
[(A) Authorization of appropriations.--There
are authorized to be appropriated such sums as
are necessary to carry out this subsection.
[(B) Funding options.--
[(i) In general.--To carry out this
subsection, a Federal agency may use
any combination of--
[(I) appropriated funds made
available under subparagraph
(A); and
[(II) private financing
otherwise authorized under
Federal law, including
financing available through
energy savings performance
contracts or utility energy
service contracts.
[(ii) Combined funding for same
measure.--A Federal agency may use any
combination of appropriated funds and
private financing described in clause
(i) to carry out the same measure under
this subsection.
[(C) Implementation.--Each Federal agency may
implement the requirements under this
subsection itself or may contract out
performance of some or all of the requirements.
[(11) Rule of construction.--This subsection shall
not be construed to require or to obviate any
contractor savings guarantees.
[(f) Large Capital Energy Investments.--
[(1) In general.--Each Federal agency shall ensure
that any large capital energy investment in an existing
building that is not a major renovation but involves
replacement of installed equipment (such as heating and
cooling systems), or involves renovation,
rehabilitation, expansion, or remodeling of existing
space, employs the most energy efficient designs,
systems, equipment, and controls that are life-cycle
cost effective.
[(2) Process for review of investment decisions.--Not
later than 180 days after the date of enactment of this
subsection, each Federal agency shall--
[(A) develop a process for reviewing each
decision made on a large capital energy
investment described in paragraph (1) to ensure
that the requirements of this subsection are
met; and
[(B) report to the Director of the Office of
Management and Budget on the process
established.
[(3) Compliance report.--Not later than 1 year after
the date of enactment of this subsection, the Director
of the Office of Management and Budget shall evaluate
and report to Congress on the compliance of each agency
with this subsection.]
SEC. 543. ENERGY EFFICIENT INFORMATION AND COMMUNICATIONS TECHNOLOGIES.
(a) In General.--Not later than 1 year after the date of
enactment of the American Clean Energy and Security Act of
2009, each Federal agency shall collaborate with the Director
of the Office of Management and Budget (referred to in this
section as the ``Director'') to create an implementation
strategy, including best practices and measurement and
verification techniques, for the purchase and use of energy
efficient information and communications technologies and
practices. Wherever possible, existing standards,
specifications, performance metrics, and best management
practices that have been or are being developed in open
collaboration and with broad stakeholder input and review
should be incorporated. In addition, agency strategies shall be
flexible, cost-effective, and based on the specific operating
requirements and statutory mission of each agency.
(b) Energy Efficient Information and Communications
Technologies.--In developing an implementation strategy, each
agency shall--
(1) consider information and communications
technologies and infrastructure, including, but not
limited to, advanced metering infrastructure,
information and communications technology services and
products, efficient data center strategies,
applications modernization and rationalization,
building systems energy efficiency, and telework; and
(2) ensure that agencies are eligible to realize the
savings and rewards brought about through increased
efficiencies.
(c) Performance Goals.--Not later than 6 months after the
date of enactment of the American Clean Energy and Security Act
of 2009, the Director shall establish performance goals for
evaluating the efforts of the agencies in improving the
maintenance, purchase and use of energy efficiency of
information and communications technology systems. These
performance goals should measure information technology costs
over a specific time horizon (3 to 5 years), providing a
complete picture of all costs, including energy.
(d) Report.--Not later than 18 months after the date of
enactment of the American Clean Energy and Security Act of
2009, and annually thereafter, the Director shall submit a
report to Congress on--
(1) the progress of each agency in reducing energy
use through its implementation strategy; and
(2) new and emerging technologies that would help
achieve increased energy efficiency.
* * * * * * *
TITLE VIII--ENERGY SAVINGS PERFORMANCE CONTRACTS
SEC. 801. AUTHORITY TO ENTER INTO CONTRACTS.
(a) In General.--(1) * * *
(2)(A) * * *
* * * * * * *
(E) Funding options.--[In] Notwithstanding any other
provision of law, in carrying out a contract under this title,
a Federal agency may use any combination of--
(i) * * *
* * * * * * *
(3)(A) The head of a Federal agency may issue a task or
delivery order under an energy savings performance contract
by--
(i) notifying all contractors that have received an
award under such contract that the agency proposes to
discuss energy savings performance services for some or
all of its facilities, soliciting an expression of
interest in performing site surveys or investigations
and feasibility designs and studies and the submission
of qualifications from such contractors, and including
in such notice summary information concerning energy
use for any facilities that the agency has specific
interest in including in such contract;
(ii) reviewing all expressions of interest and
qualifications submitted pursuant to the notice under
clause (i);
(iii) selecting two or more contractors (from among
those reviewed under clause (ii)) to conduct
discussions concerning the contractors' respective
qualifications to implement potential energy
conservation measures, including requesting references
demonstrating experience on similar efforts and the
resulting energy savings of such similar efforts;
(iv) selecting and authorizing--
(I) more than one contractor (from among
those selected under clause (iii)) to conduct
site surveys, investigations, feasibility
designs and studies or similar assessments for
the energy savings performance contract
services (or for discrete portions of such
services), for the purpose of allowing each
such contractor to submit a firm, fixed-price
proposal to implement specific energy
conservation measures; or
(II) one contractor (from among those
selected under clause (iii)) to conduct a site
survey, investigation, a feasibility design and
study or similar for the purpose of allowing
the contractor to submit a firm, fixed-price
proposal to implement specific energy
conservation measures;
(v) negotiating a task or delivery order for energy
savings performance contracting services with the
contractor or contractors selected under clause (iv)
based on the energy conservation measures identified;
and
(vi) issuing a task or delivery order for energy
savings performance contracting services to such
contractor or contractors.
(B) The issuance of a task or delivery order for energy
savings performance contracting services pursuant to
subparagraph (A) is deemed to satisfy the task and delivery
order competition requirements in section 2304c(d) of title 10,
United States Code, and section 303J(d) of the Federal Property
and Administrative Services Act of 1949 (41 U.S.C. 253j(d)).
(C) The Secretary may issue guidance as necessary to agencies
issuing task or delivery orders pursuant to subparagraph (A).
* * * * * * *
----------
COMMODITY EXCHANGE ACT
* * * * * * *
SEC. 1A. DEFINITIONS.
As used in this Act:
(1) * * *
* * * * * * *
(13) Energy commodity.--The term ``energy commodity''
means--
(A) coal;
(B) crude oil, gasoline, diesel fuel, jet
fuel, heating oil, and propane;
(C) electricity (excluding financial
transmission rights which are subject to
regulation and oversight by the Federal Energy
Regulatory Commission);
(D) natural gas; and
(E) any other substance (other than an
excluded commodity, a metal, or an agricultural
commodity) that is used as a source of energy,
as the Commission, in its discretion, deems
appropriate.
[(13)] (14) Excluded commodity.--The term ``excluded
commodity'' means--
(i) * * *
* * * * * * *
[(14)] (15) Exempt commodity.--The term ``exempt
commodity'' means a commodity that is not an excluded
commodity, an energy commodity, or an agricultural
commodity.
[(15)] (16) Financial institution.--The term
``financial institution'' means--
(A) * * *
* * * * * * *
[(16)] (17) Floor broker.--The term ``floor broker''
means any person who, in or surrounding any pit, ring,
post, or other place provided by a contract market or
derivatives transaction execution facility for the
meeting of persons similarly engaged, shall purchase or
sell for any other person any commodity for future
delivery on or subject to the rules of any contract
market or derivatives transaction execution facility.
[(17)] (18) Floor trader.--The term ``floor trader''
means any person who, in or surrounding any pit, ring,
post, or other place provided by a contract market or
derivatives transaction execution facility for the
meeting of persons similarly engaged, purchases, or
sells solely for such person's own account, any
commodity for future delivery on or subject to the
rules of any contract market or derivatives transaction
execution facility.
[(18)] (19) Foreign futures authority.--The term
``foreign futures authority'' means any foreign
government, or any department, agency, governmental
body, or regulatory organization empowered by a foreign
government to administer or enforce a law, rule, or
regulation as it relates to a futures or options
matter, or any department or agency of a political
subdivision of a foreign government empowered to
administer or enforce a law, rule, or regulation as it
relates to a futures or options matter.
[(19)] (20) Future delivery.--The term ``future
delivery'' does not include any sale of any cash
commodity for deferred shipment or delivery.
[(20)] (21) Futures commission merchant.--The term
``futures commission merchant'' means an individual,
association, partnership, corporation, or trust that--
(A) * * *
* * * * * * *
[(21)] (22) Hybrid instrument.--The term ``hybrid
instrument'' means a security having one or more
payments indexed to the value, level, or rate of, or
providing for the delivery of, one or more commodities.
(23) Included energy transaction.--The term
``included energy transaction'' means a contract,
agreement, or transaction in an energy commodity for
future delivery that provides for a delivery point of
the energy commodity in the United States or a
territory or possession of the United States, or that
is offered or transacted on or through a computer
terminal located in the United States.
[(22)] (24) Interstate commerce.--The term
``interstate commerce'' means commerce--
(A) * * *
* * * * * * *
[(23)] (25) Introducing broker.--The term
``introducing broker'' means any person (except an
individual who elects to be and is registered as an
associated person of a futures commission merchant)
engaged in soliciting or in accepting orders for the
purchase or sale of any commodity for future delivery
on or subject to the rules of any contract market or
derivatives transaction execution facility who does not
accept any money, securities, or property (or extend
credit in lieu thereof) to margin, guarantee, or secure
any trades or contracts that result or may result
therefrom.
[(24)] (26) Member of a registered entity; member of
a derivatives transaction execution facility.--The term
``member'' means, with respect to a registered entity
or derivatives transaction execution facility, an
individual, association, partnership, corporation, or
trust--
(A) * * *
* * * * * * *
[(25)] (27) Narrow-based security index.--
(A) The term ``narrow-based security index''
means an index--
(i) * * *
* * * * * * *
[(26)] (28) Option.--The term ``option'' means an
agreement, contract, or transaction that is of the
character of, or is commonly known to the trade as, an
``option'', ``privilege'', ``indemnity'', ``bid'',
``offer'', ``put'', ``call'', ``advance guaranty'', or
``decline guaranty''.
[(27)] (29) Organized exchange.--The term ``organized
exchange'' means a trading facility that--
(A) * * *
* * * * * * *
[(28)] (30) Person.--The term ``person'' imports the
plural or singular, and includes individuals,
associations, partnerships, corporations, and trusts.
[(29)] (31) Registered entity.--The term ``registered
entity'' means--
(A) * * *
* * * * * * *
[(30)] (32) Security.--The term ``security'' means a
security as defined in section 2(a)(1) of the
Securities Act of 1933 (15 U.S.C. 77b(a)(1)) or section
3(a)(10) of the Securities Exchange Act of 1934 (15
U.S.C. 78c(a)(10)).
[(31)] (33) Security future.--The term ``security
future'' means a contract of sale for future delivery
of a single security or of a narrow-based security
index, including any interest therein or based on the
value thereof, except an exempted security under
section 3(a)(12) of the Securities Exchange Act of 1934
as in effect on the date of the enactment of the
Futures Trading Act of 1982 (other than any municipal
security as defined in section 3(a)(29) of the
Securities Exchange Act of 1934 as in effect on the
date of the enactment of the Futures Trading Act of
1982). The term ``security future'' does not include
any agreement, contract, or transaction excluded from
this Act under section 2(c), 2(d), 2(f), or 2(g) of
this Act (as in effect on the date of the enactment of
the Commodity Futures Modernization Act of 2000) or
title IV of the Commodity Futures Modernization Act of
2000.
[(32)] (34) Security futures product.--The term
``security futures product'' means a security future or
any put, call, straddle, option, or privilege on any
security future.
[(33)] (35) Significant price discovery contract.--
The term ``significant price discovery contract'' means
an agreement, contract, or transaction subject to
section 2(h)(7).
[(34)] (36) Trading facility.--
(A) * * *
* * * * * * *
(37) Credit default swap.--The term ``credit default
swap'' means a contract which insures a party to the
contract against the risk that an entity may experience
a loss of value as a result of an event specified in
the contract, such as a default or credit downgrade. A
credit default swap that is traded on or cleared by a
registered entity shall be excluded from the definition
of a security as defined in this Act and in section
2(a)(1) of the Securities Act of 1933 or section
3(a)(10) of the Securities Exchange Act of 1934, except
it shall be deemed a security solely for purpose of
enforcing prohibitions against insider trading in
sections 10 and 16 of the Securities Exchange Act of
1934.
SEC. 2. JURISDICTION OF COMMISSION; LIABILITY OF PRINCIPAL FOR ACT OF
AGENT; COMMODITY FUTURES TRADING COMMISSION;
TRANSACTION IN INTERSTATE COMMERCE.
(a) * * *
* * * * * * *
(d) Excluded Derivative Transactions.--
(1) In general.--Nothing in this Act (other than
section 5b or 12(e)(2)(B) governs or applies to an
agreement, contract, or transaction in an excluded
commodity if--
(A) the agreement, contract, or transaction
is entered into only between persons that are
eligible contract participants at the time at
which the persons enter into the agreement,
contract, or transaction; [and]
(B) the agreement, contract, or transaction
is not executed or traded on a trading
facility[.]; and
(C) except as provided in section 4(f), the
agreement, contract, or transaction is settled
and cleared through a derivatives clearing
organization registered with the Commission.
(2) Electronic trading facility exclusion.--Nothing
in this Act (other than section 5a (to the extent
provided in section 5a(g)), 5b, 5d, or 12(e)(2)(B))
governs or applies to an agreement, contract, or
transaction in an excluded commodity if--
(A) * * *
(B) the agreement, contract, or transaction
is entered into only between persons that are
eligible contract participants described in
subparagraph (A), (B)(ii), or (C) of section
1a(12)) at the time at which the persons enter
into the agreement, contract, or transaction;
[and]
(C) the agreement, contract, or transaction
is executed or traded on an electronic trading
facility[.]; and
(D) except as provided in section 4(f), the
agreement, contract, or transaction is settled
and cleared through a derivatives clearing
organization registered with the Commission.
* * * * * * *
(g) Excluded Swap Transactions.--No provision of this Act
(other than section 5a (to the extent provided in section
5a(g)), 5b, 5d, or 12(e)(2)) shall apply to or govern any
agreement, contract, or transaction in a commodity other than
an agricultural commodity or an energy commodity if the
agreement, contract, or transaction is--
(1) * * *
(2) subject to individual negotiation by the parties;
[and]
(3) not executed or traded on a trading facility[.];
and
(4) except as provided in section 4(f), settled and
cleared through a derivatives clearing organization
registered with the Commission.
(h) Legal Certainty for Certain Transactions in Exempt
Commodities.--
(1) Except as provided in paragraph (2), nothing in
this Act shall apply to a contract, agreement, or
transaction in an exempt commodity (other than an
energy commodity) which--
(A) is entered into solely between persons
that are eligible contract participants at the
time the persons enter into the agreement,
contract, or transaction; [and]
(B) is not entered into on a trading
facility[.]; and
(C) except as provided in section 4(f), is
settled and cleared through a derivatives
clearing organization registered with the
Commission.
* * * * * * *
(3) Except as provided in paragraphs (4) and (7),
nothing in this Act shall apply to an agreement,
contract, or transaction in an exempt commodity which
is--
(A) entered into on a principal-to-principal
basis solely between persons that are eligible
commercial entities at the time the persons
enter into the agreement, contract, or
transaction; [and]
(B) executed or traded on an electronic
trading facility[.]; and
(C) except as provided in section 4(f),
settled and cleared through a derivatives
clearing organization registered with the
Commission.
* * * * * * *
(7) Significant price discovery contracts.--
(A) In general.--An agreement, contract, or
transaction conducted in reliance on the
exemption in paragraph (3) shall be subject to
the provisions of subparagraphs (B) through (D)
of this paragraph and section 4a(a), under such
rules and regulations as the Commission shall
promulgate, provided that the Commission
determines, in its discretion, that the
agreement, contract, or transaction performs a
significant price discovery function as
described in subparagraph (B) of this
paragraph.
* * * * * * *
(C) Core principles applicable to significant
price discovery contracts.--
(i) * * *
(ii) Core principles.--The electronic
trading facility shall have reasonable
discretion (including discretion to
account for differences between cleared
and uncleared significant price
discovery contracts) in establishing
the manner in which it complies with
the following core principles:
(I) * * *
* * * * * * *
(IV) Position [limitations
or] accountability.--The
electronic trading facility
shall adopt, where necessary
and appropriate, [position
limitations or] position
accountability for speculators
in significant price discovery
contracts, taking into account
positions in other agreements,
contracts, and transactions
that are treated by a
derivatives clearing
organization, whether
registered or not registered,
as fungible with such
significant price discovery
contracts to reduce the
potential threat of market
manipulation or congestion,
especially during trading in
the delivery month.
* * * * * * *
[(D) Implementation.--
[(i) Clearing.--The Commission shall
take into consideration differences
between cleared and uncleared
significant price discovery contracts
when reviewing the implementation of
the core principles by an electronic
trading facility.
[(ii) Review.--As part of]
(D) Review of implementation.--As part of the
Commission's continual monitoring and
surveillance activities, the Commission shall,
not less frequently than annually, evaluate, as
appropriate, all the agreements, contracts, or
transactions conducted on an electronic trading
facility in reliance on the exemption provided
in paragraph (3) to determine whether they
serve a significant price discovery function as
described in subparagraph (B) of this
paragraph.
* * * * * * *
(j) This Act shall not be interpreted to affect the
jurisdiction of the Federal Energy Regulatory Commission with
respect to the authority of the Federal Energy Regulatory
Commission under the Federal Power Act (16 U.S.C. 791a et
seq.), the Natural Gas Act (15 U.S.C. 717 et seq.), or other
law to obtain information, carry out enforcement actions, or
otherwise carry out the responsibilities of the Federal Energy
Regulatory Commission.
(k) The Commission shall have jurisdiction over the
establishment, operations, and oversight of markets for
regulated allowance derivatives (as defined in section 401 of
the Federal Power Act (16 U.S.C. 791a and following)), and
shall provide for the establishment, operation, and oversight
of the markets in accordance with the same regulations that
apply under this Act to included energy transactions.
* * * * * * *
Sec. 4. (a) Unless exempted by the Commission pursuant to
subsection (c), it shall be unlawful for any person to offer to
enter into, to enter into, to execute, to confirm the execution
of, or to conduct any office or business anywhere in the United
States, its territories or possessions, for the purpose of
soliciting, or accepting any order for, or otherwise dealing
in, any transaction in, or in connection with, a contract for
the purchase or sale of a commodity for future delivery (other
than a contract which is made on or subject to the rules of a
board of trade, exchange, or market located outside the United
States, its territories or possessions, and which is not an
included energy transaction) unless--
(1) * * *
* * * * * * *
(b) The Commission may adopt rules and regulations
proscribing fraud and requiring minimum financial standards,
the disclosure of risk, the filing of reports, the keeping of
books and records, the safeguarding of customers' funds, and
registration with the Commission by any person located in the
United States, its territories or possessions, who engages in
the offer or sale of any contract of sale of a commodity for
future delivery that is made or to be made on or subject to the
rules of a board of trade, exchange, or market located outside
the United States, its territories or possessions. Such rules
and regulations may impose different requirements for such
persons depending upon the particular foreign board of trade,
exchange, or market involved. No rule or regulation may be
adopted by the Commission under this subsection that (1)
requires Commission approval of any contract, rule, regulation,
or action of any foreign board of trade, exchange, or market,
or clearinghouse for such board of trade, exchange, or market,
or (2) governs in any way any rule or contract term or action
of any foreign board of trade, exchange, or market, or
clearinghouse for such board of trade, exchange, or market. The
preceding sentence shall not apply with respect to included
energy transactions.
(c)(1) In order to promote responsible economic or financial
innovation and fair competition, the Commission by rule,
regulation, or order, after notice and opportunity for hearing,
may (on its own initiative or on application of any person,
including any board of trade designated or registered as a
contract market or derivatives transaction execution facility
for transactions for future delivery in any commodity under
section 5 of this Act) exempt any agreement, contract, or
transaction (or class thereof) that is otherwise subject to
subsection (a) (including any person or class of persons
offering, entering into, rendering advice or rendering other
services with respect to, the agreement, contract, or
transaction), either unconditionally or on stated terms or
conditions or for stated periods and either retroactively or
prospectively, or both, from any of the requirements of
subsection (a), or from any other provision of this Act (except
subparagraphs (C)(ii) and (D) of section 2(a)(1), except that
the Commission and the Securities and Exchange Commission may
by rule, regulation, or order jointly exclude any agreement,
contract, or transaction from section 2(a)(1)(D)), if the
agreement, contract, or transaction, except as provided in
section 4(h), will be settled and cleared through a derivatives
clearing organization registered with the Commission and the
Commission determines that the exemption would be consistent
with the public interest.
* * * * * * *
(6) The Commission may not exempt any included energy
transaction from the requirements of subsection (a), unless the
Commission provides 60 days advance notice to the Congress and
the Position Limit Energy Advisory Group and solicits public
comment about the exemption request and any proposed Commission
action.
* * * * * * *
(e) Detailed Reporting and Disaggregation of Market Data.--
(1) Index traders and swap dealers reporting.--The
Commission shall issue a proposed rule defining and
classifying index traders and swap dealers (as those
terms are defined by the Commission) for purposes of
data reporting requirements and setting routine
detailed reporting requirements for any positions of
such entities in contracts traded on designated
contract markets, over-the-counter markets, derivatives
transaction execution facilities, foreign boards of
trade subject to section 4(f), and electronic trading
facilities with respect to significant price discovery
contracts not later than 120 days after the date of the
enactment of this subsection, and issue a final rule
within 180 days after such date of enactment.
(2) Disaggregation of index funds and other data in
markets.--Subject to section 8 and beginning within 60
days of the issuance of the final rule required by
paragraph (1), the Commission shall disaggregate and
make public weekly--
(A) the number of positions and total
notional value of index funds and other
passive, long-only and short-only positions (as
defined by the Commission) in all markets to
the extent such information is available; and
(B) data on speculative positions relative to
bona fide physical hedgers in those markets to
the extent such information is available.
(3) Disclosure of identity of holders of positions in
indexes in excess of position limits.--The Commission
shall include in its weekly Commitment of Trader
reports the identity of each person who holds a
position in an index in excess of a limit imposed under
section 4i.
(f) Alternatives to Clearing Through Designated Clearing
Organizations.--
(1) Settlement and clearing through certain other
regulated entities.--An agreement, contract, or
transaction, or class thereof, relating to an excluded
commodity, that would otherwise be required to be
settled and cleared by section 2(d)(1)(C), 2(d)(2)(D),
2(g)(4), 2(h)(1)(C), or 2(h)(3)(C) of this Act, or
subsection (c)(1) of this section may be settled and
cleared through an entity listed in subsections (a) or
(b) of section 409 of the Federal Deposit Insurance
Corporation Improvement Act of 1991.
(2) Waiver of clearing requirement.--
(A) The Commission, in its discretion, may
exempt an agreement, contract, or transaction,
or class thereof, that would otherwise be
required by section 2(d)(1)(C), 2(d)(2)(D),
2(g)(4), 2(h)(1)(C), or 2(h)(3)(C) of this Act,
or subsection (c)(1) of this section to be
settled and cleared through a derivatives
clearing organization registered with the
Commission from such requirement.
(B) In granting exemptions pursuant to
subparagraph (A), the Commission shall consult
with the Securities and Exchange Commission and
the Board of Governors of the Federal Reserve
System regarding exemptions that relate to
excluded commodities or entities for which the
Securities Exchange Commission or the Board of
Governors of the Federal Reserve System serve
as the primary regulator.
(C) Before granting an exemption pursuant to
subparagraph (A), the Commission shall find
that the agreement, contract, or transaction,
or class thereof--
(i) is highly customized as to its
material terms and conditions;
(ii) is transacted infrequently;
(iii) does not serve a significant
price-discovery function in the
marketplace; and
(iv) is being entered into by parties
who can demonstrate the financial
integrity of the agreement, contract,
or transaction and their own financial
integrity, as such terms and standards
are determined by the Commission. The
standards may include, with respect to
any federally regulated financial
entity for which net capital
requirements are imposed, a net capital
requirement associated with any
agreement, contract, or transaction
subject to an exemption from the
clearing requirement that is higher
than the net capital requirement that
would be associated with such a
transaction were it cleared
(D) Any agreement, contract, or transaction,
or class thereof, which is exempted pursuant to
subparagraph (A) shall be reported to the
Commission in a manner designated by the
Commission, or to such other entity the
Commission deems appropriate.
(E) The Commission, the Securities and
Exchange Commission and the Board of Governors
of the Federal Reserve System shall enter into
a memorandum of understanding by which the
information reported to the Commission pursuant
to subparagraph (D) with regard to excluded
commodities or entities for which the
Securities Exchange Commission or the Board of
Governors of the Federal Reserve System serve
as the primary regulator may be provided to the
other agencies.
(g) Spot and Forward Exclusion.--The settlement and clearing
requirements of section 2(d)(1)(C), 2(d)(2)(D), 2(g)(4),
2(h)(1)(C), 2(h)(3)(C), or 4(c)(1) shall not apply to an
agreement, contract, or transaction of any cash commodity for
immediate or deferred shipment or delivery, as defined by the
Commission.
Sec. 4a. (a)(1) Excessive speculation in any commodity under
contracts of sale of such commodity for future delivery made on
or subject to the rules of contract markets or derivatives
transaction execution facilities, or on electronic trading
facilities with respect to a significant price discovery
contract causing sudden or unreasonable fluctuations or
unwarranted changes in the price of such commodity, is an undue
and unnecessary burden on interstate commerce in such
commodity. For the purpose of diminishing, eliminating, or
preventing such burden, the Commission shall, from time to
time, after due notice and opportunity for hearing, by rule,
regulation, or order, proclaim and fix such limits on the
amounts of trading which may be done or positions which may be
held by any person under contracts of sale of such commodity
for future delivery on or subject to the rules of any contract
market or derivatives transaction execution facility, or on an
electronic trading facility with respect to a significant price
discovery contract, as the Commission finds are necessary to
diminish, eliminate, or prevent such burden. With respect to
energy transactions, the Commission shall fix limits on the
aggregate number of positions which may be held by any person
for each month across all markets subject to the jurisdiction
of the Commission. In determining whether any person has
exceeded such limits, the positions held and trading done by
any persons directly or indirectly controlled by such person
shall be included with the positions held and trading done by
such person; and further, such limits upon positions and
trading shall apply to positions held by, and trading done by,
two or more persons acting pursuant to an expressed or implied
agreement or understanding, the same as if the positions were
held by, or the trading were done by, a single person. Nothing
in this section shall be construed to prohibit the Commission,
consistent with the 3rd sentence, from fixing different trading
or position limits for different commodities, markets, futures,
or delivery months, or for different number of days remaining
until the last day of trading in a contract, or different
trading limits for buying and selling operations, or different
limits for the purposes of paragraphs (1) and (2) of subsection
(b) of this section, or from exempting transactions normally
known to the trade as ``spreads'' or ``straddles'' or
``arbitrage'' or from fixing limits applying to such
transactions or positions different from limits fixed for other
transactions or positions. The word ``arbitrage'' in domestic
markets shall be defined to mean the same as a ``spread'' or
``straddle''. The Commission is authorized to define the term
``international arbitrage''.
(2)(A) Not later than 60 days after the date of the enactment
of this paragraph, the Commission shall convene a Position
Limit Energy Advisory Group consisting of representatives
from--
(i) 7 predominantly commercial short hedgers of the
actual energy commodity for future delivery;
(ii) 7 predominantly commercial long hedgers of the
actual energy commodity for future delivery;
(iii) 4 non-commercial participants in markets for
energy commodities for future delivery; and
(iv) each designated contract market or derivatives
transaction execution facility upon which a contract in
the energy commodity for future delivery is traded, and
each electronic trading facility that has a significant
price discovery contract in the energy commodity.
(B) Not later than 60 days after the date on which the
advisory group is convened under subparagraph (A), and annually
thereafter, the advisory group shall submit to the Commission
advisory recommendations regarding the position limits to be
established in paragraph (1).
(C) The Commission shall have exclusive authority to grant
exemptions for bona fide hedging transactions and positions
from position limits imposed under this Act on energy
transactions.
* * * * * * *
(c)(1) No rule, regulation, or order issued under subsection
(a) of this section shall apply to transactions or positions
which are shown to be bona fide hedging transactions or
positions, as such terms shall be defined by the Commission by
rule, regulation, or order consistent with the purposes of this
Act. Such terms may be defined to permit producers, purchasers,
sellers, middlemen, and users of a commodity or a product
derived therefrom to hedge their legitimate anticipated
business needs for that period of time into the future for
which an appropriate futures contract is open and available on
an exchange. To determine the adequacy of this Act and the
powers of the Commission acting thereunder to prevent
unwarranted price pressures by large hedgers, the Commission
shall monitor and analyze the trading activities of the largest
hedgers, as determined by the Commission, operating in the
cattle, hog, or pork belly markets and shall report its
findings and recommendations to the Senate Committee on
Agriculture, Nutrition, and Forestry and the House Committee on
Agriculture in its annual reports for at least two years
following the date of enactment of the Futures Trading Act of
1982.
(2) For the purposes of contracts of sale for future delivery
and options on such contracts or commodities, the Commission
shall define what constitutes a bona fide hedging transaction
or position as a transaction or position that--
(A)(i) represents a substitute for transactions made
or to be made or positions taken or to be taken at a
later time in a physical marketing channel;
(ii) is economically appropriate to the reduction of
risks in the conduct and management of a commercial
enterprise; and
(iii) arises from the potential change in the value
of--
(I) assets that a person owns, produces,
manufactures, processes, or merchandises or
anticipates owning, producing, manufacturing,
processing, or merchandising;
(II) liabilities that a person owns or
anticipates incurring; or
(III) services that a person provides,
purchases, or anticipates providing or
purchasing; or
(B) reduces risks attendant to a position resulting
from a transaction that--
(i) was executed pursuant to subsection (d),
(g), (h)(1), or (h)(2) of section 2, or an
exemption issued by the Commission by rule,
regulation or order; and
(ii) was executed opposite a counterparty for
which the transaction would qualify as a bona
fide hedging transaction pursuant to paragraph
(2)(A) of this subsection.
* * * * * * *
(f) The provisions of this section shall apply to the amounts
of trading which may be done or positions which may be held by
any person under contracts of sale of an index for future
delivery on or subject to the rules of any contract market,
derivatives transaction execution facility, or over-the-counter
market, or on an electronic trading facility with respect to a
significant price discovery contract, in the same manner in
which this section applies to contracts of sale of a commodity
for future delivery.
* * * * * * *
SEC. 4C. PROHIBITED TRANSACTIONS.
(a) * * *
* * * * * * *
(h) Limitation on Eligibility to Purchase a Credit Default
Swap.--It shall be unlawful for any person to enter into a
credit default swap unless the person--
(1) owns a credit instrument which is insured by the
credit default swap;
(2) would experience financial loss if an event that
is the subject of the credit default swap occurs with
respect to the credit instrument; and
(3) meets such minimum capital adequacy standards as
may be established by the Commission, in consultation
with the Board of Governors of the Federal Reserve
System, or such more stringent minimum capital adequacy
standards as may be established by or under the law of
any State in which the swap is originated or entered
into, or in which possession of the contract involved
takes place.
* * * * * * *
SEC. 5. DESIGNATION OF BOARDS OF TRADE AS CONTRACT MARKETS.
(a) * * *
* * * * * * *
(d) Core Principles for Contract Markets.--
(1) * * *
* * * * * * *
(5) Position [limitations or] accountability.--To
reduce the potential threat of market manipulation or
congestion, especially during trading in the delivery
month, the board of trade shall adopt [position
limitations or] position accountability for
speculators, where necessary and appropriate.
* * * * * * *
SEC. 5A. DERIVATIVES TRANSACTION EXECUTION FACILITIES.
(a) * * *
* * * * * * *
(d) Core Principles for Registered Derivatives Transaction
Execution Facilities.--
(1) * * *
* * * * * * *
(4) Position [Limitations or] accountability.--To
reduce the potential threat of market manipulation or
congestion, especially during trading in the delivery
month, the derivatives transaction execution facility
shall adopt [position limits or] position
accountability for speculators, where necessary and
appropriate for a contract, agreement or transaction
with an underlying commodity that has a physically
deliverable supply.
* * * * * * *
SEC. 5B. DERIVATIVES CLEARING ORGANIZATIONS.
(a) * * *
* * * * * * *
(c) Registration of Derivatives Clearing Organizations.--
(1) * * *
(2) Core principles.--
(A) * * *
* * * * * * *
(O) Disclosure of general information.--The
applicant shall disclose publicly and to the
Commission information concerning--
(i) the terms and conditions of
contracts, agreements, and transactions
cleared and settled by the applicant;
(ii) the conventions, mechanisms, and
practices applicable to the contracts,
agreements, and transactions;
(iii) the margin-setting methodology
and the size and composition of the
financial resource package of the
applicant; and
(iv) other information relevant to
participation in the settlement and
clearing activities of the applicant.
(P) Daily publication of trading
information.--The applicant shall make public
daily information on settlement prices, volume,
and open interest for contracts settled or
cleared pursuant to the requirements of section
2(d)(1)(C), 2(d)(2)(D), 2(g)(4), 2(h)(1)(C),
2(h)(3)(C) or 4(c)(1) of this Act by the
applicant if the Commission determines that the
contracts perform a significant price discovery
function for transactions in the cash market
for the commodity underlying the contracts.
(Q) Fitness standards.--The applicant shall
establish and enforce appropriate fitness
standards for directors, members of any
disciplinary committee, and members of the
applicant, and any other persons with direct
access to the settlement or clearing activities
of the applicant, including any parties
affiliated with any of the persons described in
this subparagraph.
* * * * * * *
Sec. 12. (a) * * *
* * * * * * *
(e) Clearing Fees.--
(1) In general.--The Commission shall, in accordance
with this subsection, charge and collect from each
registered clearing organization, and each such
organization shall pay to the Commission, transaction
fees at a rate calculated to recover the costs to the
Federal Government of the supervision and regulation of
futures markets, except those directly related to
enforcement.
(2) Fees assessed per side of cleared contracts.--
(A) In general.--The Commission shall
determine the fee rate referred to in paragraph
(1), and shall apply the fee rate per side of
any transaction cleared.
(B) Authority to delegate.--The Commission
may determine the procedures by which the fee
rate is to be applied on the transactions
subject to the fee, or delegate the authority
to make the determination to any appropriate
derivatives clearing organization.
(3) Exemptions.--The Commission may not impose a fee
under paragraph (1) on--
(A) a class of contracts or transactions if
the Commission finds that it is in the public
interest to exempt the class from the fee; or
(B) a contract or transaction cleared by a
registered derivatives clearing organization
that is--
(i) subject to fees under section 31
of the Securities Exchange Act of 1934;
or
(ii) a security as defined in the
Securities Act of 1933 or the
Securities Exchange Act of 1934.
(4) Dates for payment of fees.--The fees imposed
under paragraph (1) shall be paid on or before--
(A) March 15 of each year, with respect to
transactions occurring on or after the
preceding September 1 and on or before the
preceding December 31; and
(B) September 15 of each year, with respect
to transactions occurring on or after the
preceding January 1 and on or before the
preceding August 31.
(5) Annual adjustment of fee rates.--
(A) In general.--Not later than April 30 of
each fiscal year , the Commission shall, by
order, adjust each fee rate determined under
paragraph (2) for the fiscal year to a uniform
adjusted rate that, when applied to the
estimated aggregate number of cleared sides of
transactions for the fiscal year, is reasonably
likely to produce aggregate fee receipts under
this subsection for the fiscal year equal to
the target offsetting receipt amount for the
fiscal year.
(B) Definitions.--In subparagraph (A):
(i) Estimated aggregate number of
cleared sides of transactions.--The
term ``estimated aggregate number of
cleared sides of transactions'' means,
with respect to a fiscal year, the
aggregate number of cleared sides of
transactions to be cleared by
registered derivatives clearing
organizations during the fiscal year,
as estimated by the Commission, after
consultation with the Office of
Management and Budget, using the
methodology required for making
projections pursuant to section 257 of
the Balanced Budget and Emergency
Deficit Control Act of 1985.
(ii) Target offsetting receipt
amount.--The term ``target offsetting
receipt amount'' means, with respect to
a fiscal year, the total level of
Commission budget authority for all
non-enforcement activities of the
Commission, as contained in the regular
appropriations Acts for the fiscal
year.
(C) No judicial review.--An adjusted fee rate
prescribed under subparagraph (A) shall not be
subject to judicial review.
(6) Publication.--Not later than April 30 of each
fiscal year, the Commission shall cause to be published
in the Federal Register notices of the fee rates
applicable under this subsection for the succeeding
fiscal year, and any estimate or projection on which
the fee rates are based.
(7) Inapplicability of certain procedural rules.--
Section 553 of title 5, United States Code, shall not
apply with respect to any exercise of authority under
this subsection.
(8) Establishment of futures and options transaction
fee account; deposit of fees.--There is established in
the Treasury of the United States an account which
shall be known as the ``Futures and Options Transaction
Fee Account''. All fees collected under this subsection
for a fiscal year shall be deposited in the account.
Amounts in the account are authorized to be
appropriated to fund the expenditures of the
Commission.
[(e)] (f) Relation to Other Law, Departments, or Agencies.--
(1) * * *
(2) This Act shall supersede and preempt the
application of any State or local law that prohibits or
regulates gaming or the operation of bucket shops
(other than antifraud provisions of general
applicability) in the case of--
(A) * * *
(B) an agreement, contract, or transaction
(other than a credit default swap in which the
purchaser of the swap would not experience
financial loss if an event that is the subject
of the swap occurred) that is excluded from
this Act under section 2(c), 2(d), 2(f), or
2(g) of this Act or title IV of the Commodity
Futures Modernization Act of 2000, or exempted
under section 2(h) or 4(c) of this Act
(regardless of whether any such agreement,
contract, or transaction is otherwise subject
to this Act).
[(f)] (g)(1) * * *
* * * * * * *
[(g)] (h) Consistent with its responsibilities under section
18, the Commission is directed to facilitate the development
and operation of computerized trading as an adjunct to the open
outcry auction system. The Commission is further directed to
cooperate with the Office of the United States Trade
Representative, the Department of the Treasury, the Department
of Commerce, and the Department of State in order to remove any
trade barriers that may be imposed by a foreign nation on the
international use of electronic trading systems.
* * * * * * *
----------
SECTION 409 OF THE FEDERAL DEPOSIT INSURANCE CORPORATION IMPROVEMENT
ACT OF 1991
SEC. 409. MULTILATERAL CLEARING ORGANIZATIONS.
(a) * * *
* * * * * * *
(c) Clearing Requirement.--A multilateral clearing
organization described in subsections (a) or (b) of this
section shall comply with requirements similar to the
requirements of sections 5b and 5c of the Commodity Exchange
Act.
* * * * * * *
----------
SECTION 407 OF THE LEGAL CERTAINTY FOR BANK PRODUCTS ACT OF 2000
SEC. 407. EXCLUSION OF COVERED SWAP AGREEMENTS.
No provision of the Commodity Exchange Act (other than
section 5b of such Act with respect to the clearing of covered
swap agreements and the settlement and clearing requirements of
sections 2(d)(1)(C), 2(d)(2)(D), 2(g)(4), 2(h)(1)(C),
2(h)(3)(C), and 4(c)(1) of such Act) shall apply to, and the
Commodity Futures Trading Commission shall not exercise
regulatory authority with respect to, a covered swap agreement
offered, entered into, or provided by a bank.
* * * * * * *
----------
NATURAL GAS ACT
* * * * * * *
ENFORCEMENT OF ACT; REGULATIONS AND ORDERS
Sec. 20. (a) * * *
* * * * * * *
(e) Cease-and-Desist Proceedings; Temporary Orders; Authority
of the Commission.--
(1) In general.--If the Commission finds, after
notice and opportunity for hearing, that any entity may
be violating, may have violated, or may be about to
violate any provision of this Act, or any rule,
regulation, restriction, condition, or order made or
imposed by the Commission under the authority of this
Act, the Commission may publish its findings and issue
an order requiring such entity, and any other entity
that is, was, or would be a cause of the violation, due
to an act or omission the entity knew or should have
known would contribute to such violation, to cease and
desist from committing or causing such violation and
any future violation of the same provision, rule, or
regulation. Such order may, in addition to requiring an
entity to cease and desist from committing or causing a
violation, require such entity to comply, to provide an
accounting and disgorgement, or to take steps to effect
compliance, with such provision, rule, or regulation,
upon such terms and conditions and within such time as
the Commission may specify in such order. Any such
order may, as the Commission deems appropriate, require
future compliance or steps to effect future compliance,
either permanently or for such period of time as the
Commission may specify.
(2) Timing of entry.--An order issued under this
subsection shall be entered only after notice and
opportunity for a hearing, unless the Commission
determines that notice and hearing prior to entry would
be impracticable or contrary to the public interest.
(f) Hearing.--The notice instituting proceedings pursuant to
subsection (e) shall fix a hearing date not earlier than 30
days nor later than 60 days after service of the notice unless
an earlier or a later date is set by the Commission with the
consent of any respondent so served.
(g) Temporary Order.--Whenever the Commission determines
that--
(1) a respondent may take actions to dissipate or
convert assets prior to the completion of the
proceedings referred to in subsection (e), and such
assets would be necessary to comply with or otherwise
satisfy a final enforcement order of the Commission
pursuant to alleged violations or threatened violations
specified in the notice instituting proceedings; or
(2) a respondent is engaged in actual or threatened
violations of this Act or a Commission rule,
regulation, restriction or order referred to in
subsection (e),
the Commission may issue a temporary order requiring the
respondent to take such action to prevent dissipation or
conversion of assets, significant harm to energy consumers, or
substantial harm to the public interest, frustration of the
Commission's ability to conduct the proceedings, or frustration
of the Commission's ability to redress said violation at the
conclusion of the proceedings, as the Commission deems
appropriate pending completion of such proceedings.
(h) Review of Temporary Orders.--
(1) Commission review.--At any time after the
respondent has been served with a temporary cease-and-
desist order pursuant to subsection (g), the respondent
may apply to the Commission to have the order set
aside, limited, or suspended. If the respondent has
been served with a temporary cease-and-desist order
entered without a prior Commission hearing, the
respondent may, within 10 days after the date on which
the order was served, request a hearing on such
application and the Commission shall hold a hearing and
render a decision on such application at the earliest
possible time.
(2) Judicial review.--Within--
(A) 10 days after the date the respondent was
served with a temporary cease-and-desist order
entered with a prior Commission hearing; or
(B) 10 days after the Commission renders a
decision on an application and hearing under
paragraph (1),
with respect to any temporary cease-and-desist order
entered without a prior Commission hearing, the
respondent may apply to the United States district
court for the district in which the respondent resides
or has its principal place of business, or for the
District of Columbia, for an order setting aside,
limiting, or suspending the effectiveness or
enforcement of the order, and the court shall have
jurisdiction to enter such an order. A respondent
served with a temporary cease-and-desist order entered
without a prior Commission hearing may not apply to the
court except after hearing and decision by the
Commission on the respondent's application under
paragraph (1) of this subsection.
(3) No automatic stay of temporary order.--The
commencement of proceedings under paragraph (2) of this
subsection shall not, unless specifically ordered by
the court, operate as a stay of the Commission's order.
(4) Exclusive review.--Sections 19(d) and 24 shall
not apply to a temporary order entered pursuant to this
section.
(i) Implementation.--The Commission is authorized to adopt
rules, regulations, and orders as it deems appropriate to
implement this section.
* * * * * * *
----------
SECTION 504 OF THE NATURAL GAS POLICY ACT OF 1978
SEC. 504. ENFORCEMENT.
(a) * * *
* * * * * * *
(d) Cease-and-Desist Proceedings; Temporary Orders; Authority
of the Commission.--
(1) In general.--If the Commission finds, after
notice and opportunity for hearing, that any entity may
be violating, may have violated, or may be about to
violate any provision of this Act, or any rule,
regulation, restriction, condition, or order made or
imposed by the Commission under the authority of this
Act, the Commission may publish its findings and issue
an order requiring such entity, and any other entity
that is, was, or would be a cause of the violation, due
to an act or omission the entity knew or should have
known would contribute to such violation, to cease and
desist from committing or causing such violation and
any future violation of the same provision, rule, or
regulation. Such order may, in addition to requiring an
entity to cease and desist from committing or causing a
violation, require such entity to comply, to provide an
accounting and disgorgement, or to take steps to effect
compliance, with such provision, rule, or regulation,
upon such terms and conditions and within such time as
the Commission may specify in such order. Any such
order may, as the Commission deems appropriate, require
future compliance or steps to effect future compliance,
either permanently or for such period of time as the
Commission may specify.
(2) Timing of entry.--An order issued under this
subsection shall be entered only after notice and
opportunity for a hearing, unless the Commission
determines that notice and hearing prior to entry would
be impracticable or contrary to the public interest.
(3) Hearing.--The notice instituting proceedings
pursuant to paragraph (1) shall fix a hearing date not
earlier than 30 days nor later than 60 days after
service of the notice unless an earlier or a later date
is set by the Commission with the consent of any
respondent so served.
(4) Temporary order.--Whenever the Commission
determines that--
(A) a respondent may take actions to
dissipate or convert assets prior to the
completion of the proceedings referred to in
paragraph (1) and such assets would be
necessary to comply with or otherwise satisfy a
final enforcement order of the Commission
pursuant to alleged violations or threatened
violations specified in the notice instituting
proceedings; or
(B) a respondent is engaged in actual or
threatened violations of this Act or a
Commission rule, regulation, restriction or
order referred to in paragraph (1),
the Commission may issue a temporary order requiring
the respondent to take such action to prevent
dissipation or conversion of assets, significant harm
to energy consumers, or substantial harm to the public
interest, frustration of the Commission's ability to
conduct the proceedings, or frustration of the
Commission's ability to redress said violation at the
conclusion of the proceedings, as the Commission deems
appropriate pending completion of such proceedings.
(5) Review of temporary orders.--
(A) Commission review.--At any time after the
respondent has been served with a temporary
cease-and-desist order pursuant to paragraph
(4), the respondent may apply to the Commission
to have the order set aside, limited, or
suspended. If the respondent has been served
with a temporary cease-and-desist order entered
without a prior Commission hearing, the
respondent may, within 10 days after the date
on which the order was served, request a
hearing on such application and the Commission
shall hold a hearing and render a decision on
such application at the earliest possible time.
(B) Judicial review.--Within--
(i) 10 days after the date the
respondent was served with a temporary
cease-and-desist order entered with a
prior Commission hearing; or
(ii) 10 days after the Commission
renders a decision on an application
and hearing under subparagraph (A),
with respect to any temporary cease-
and-desist order entered without a
prior Commission hearing, the
respondent may apply to the United
States district court for the district
in which the respondent resides or has
its principal place of business, or for
the District of Columbia, for an order
setting aside, limiting, or suspending
the effectiveness or enforcement of the
order, and the court shall have
jurisdiction to enter such an order. A
respondent served with a temporary
cease-and-desist order entered without
a prior Commission hearing may not
apply to the court except after hearing
and decision by the Commission on the
respondent's application under
paragraph (1) of this subsection.
(C) No automatic stay of temporary order.--
The commencement of proceedings under
subparagraph (B) of this paragraph shall not,
unless specifically ordered by the court,
operate as a stay of the Commission's order.
(6) Implementation.--The Commission is authorized to
adopt rules, regulations, and orders as it deems
appropriate to implement this subsection.
----------
SECTION 171 OF THE WORKFORCE INVESTMENT ACT OF 1998
SEC. 171. DEMONSTRATION, PILOT, MULTISERVICE, RESEARCH, AND MULTISTATE
PROJECTS.
(a) * * *
* * * * * * *
(e) Energy Efficiency and Renewable Energy Worker Training
Program.--
(1) * * *
* * * * * * *
(8) Authorization of appropriations.--There is
authorized to be appropriated to carry out this
subsection, [$125,000,000] $150,000,000 for each fiscal
year, of which--
(A) * * *
* * * * * * *
----------
INTERNAL REVENUE CODE OF 1986
* * * * * * *
Subtitle A--Income Taxes
CHAPTER 1--NORMAL TAXES AND SURTAXES
Subchapter A--Determination of Tax Liability
* * * * * * *
PART IV--CREDITS AGAINST TAX
* * * * * * *
Subpart C--Refundable Credits
* * * * * * *
SEC. 36B. ENERGY TAX CREDIT.
(a) Allowance of Credit.--In the case of an eligible
individual, there shall be allowed as a credit against the tax
imposed by this subtitle for the taxable year an amount equal
to--
(1) for an eligible individual with applicable income
of less than $6,000, the phase in rate times the
applicable income;
(2) for an eligible individual with applicable income
that is greater than or equal to $6,000 and is less
than or equal to the phase down amount, the maximum
energy tax credit; and
(3) for an individual with applicable income that
exceeds the phase down amount, an amount equal to--
(A) the maximum energy tax credit minus; or
(B) the difference between the individual's
applicable income and the phase down amount
multiplied by .2.
(b) Coordination With Energy Refund Received Through State
Human Service Agencies.--The amount described in subsection (a)
shall be reduced by \1/12\ for each month in which the
individual or his or her spouse received a refund under section
432 of the American Clean Energy and Security Act of 2009.
(1) The Secretary of the Treasury shall promulgate
regulations that instruct States on how to inform adult
individuals who receive a refund under section 432 of
the American Clean Energy and Security Act of 2009 of
the number of months he or she received a refund and
how such information shall be provided to the Internal
Revenue Service.
(2) The Secretary of the Treasury shall establish a
telephone and online system that allows an individual
to inquire about the number of months she or he
received such a refund.
(3) In the case of an individual that does not report
the number of months a refund was provided under
section 432 of the American Clean Energy and Security
Act of 2009 or recorded an incorrect number of months,
the Secretary of the Treasury shall adjust the energy
tax credit based on the information received from
States, provided that the Secretary of the Treasury has
made a determination that the information meets a
sufficient standard for accuracy.
(c) Definitions and Special Rules.--For purposes of this
section:
(1) Eligible individual.--
(A) In general.--The term ``eligible
individual'' means any individual other than--
(i) any nonresident alien individual;
(ii) any individual with respect to
whom a deduction under section 151 is
allowable to another taxpayer for a
taxable year beginning in the calendar
year in which the individual's taxable
year begins; and
(iii) an estate or trust.
(B) Identification number requirement.--Such
term shall not include any individual who--
(i) in the case of a return that is
not a joint return, does not include
the social security number of the
individual; and
(ii) in the case of joint return,
does not include the social security
number of at least one of the taxpayers
on such return.
For purposes of the preceding sentence, the
social security number shall not include a TIN
issued by the Internal Revenue Service.
(2) Applicable income.--Applicable income means the
larger of--
(A) earned income as defined in section
32(c)(2), except that such term shall not
include net earnings from self-employment which
are not taken into account in computing taxable
income; and
(B) adjusted gross income.
(3) Phase in rate.--The Secretary of the Treasury
shall compute the phase in rates each year for the
energy credit for joint returns and for returns that
are not filed jointly with respect to each relevant
number of qualifying individuals such that the phase in
rate equals the maximum energy tax credit divided by
$6,000.
(4) Maximum energy tax credit.--
(A) In general.--
(i) The maximum energy tax credit
shall vary based on the number of
individuals in the tax filing unit.
(ii) The maximum energy tax credit
for a filing unit of a particular size
shall be equal to the average annual
reduction in purchasing power for low-
income households of that household
size, as calculated by the
Environmental Protection Agency, that
results from the regulation of
greenhouse gas emissions under title
VII of the Clean Air Act.
(iii) The Environmental Protection
Agency, in consultation with other
appropriate Federal agencies, shall
calculate the maximum energy tax credit
by August 31 of each year for the
following calendar year using the most
recent, reliable data available.
(B) Energy tax credit calculation.--
(i) Distribution.--For each calendar
year, the Environmental Protection
Agency shall determine pursuant to
subparagraph (B)(iii) the aggregate
reduction in purchasing power among all
United States households that results
from the regulation of greenhouse gas
emissions under title VII of the Clean
Air Act and distribute that aggregate
reduction in purchasing power among all
United States households based on--
(I) households' share of
total consumption by all
households;
(II) the carbon intensity and
covered-emissions intensity of
households' consumption; and
(III) the share of
households' carbon and covered-
emissions consumption that is
not financed by Federal
benefits subject to a cost of
living adjustment that offsets
increased carbon costs.
(ii) Maximum energy tax credit.--The
maximum energy tax credit shall be
equal to the arithmetic mean value of
the amount allocated under clause (i)
to households of a specified household
size in the lowest income quintile. Tax
filing units that include 5 or more
individuals shall be eligible for the
arithmetic mean value of the amount
allocated under clause (i) to
households that includes 5 or more
individuals.
(iii) Aggregate reduction in
purchasing power.--For purposes of this
section, the aggregate reduction in
purchasing power shall be based on the
projected total market value of the
emissions allowances used to
demonstrate compliance with title VII
of the Clean Air Act in that year,
adjusted to reflect costs that were not
incurred by households as a result of
allowances freely allocated pursuant to
section 782 of the Clean Air Act, as
estimated by the Environmental
Protection Agency, and calculated in a
way generally recognized as suitable by
experts in evaluating such purchasing
power impacts.
(iv) Income quintiles.--Income
quintiles shall be determined by
ranking households according to income
adjusted for household size, and shall
be constructed so that each quintile
contains an equal number of people.
(5) Phase down amount.--
(A) In the case of an eligible individual who
has no qualifying individuals, the phase down
amount shall be--
(i) $20,000 in the case of an
individual who does not file a joint
return; and
(ii) $25,000 in the case of a joint
return.
(B) In the case of an eligible individual who
files a joint return and has at least one
qualifying individual--
(i) If the eligible individual has
one qualifying individual, the lowest
income level that exceeds the phaseout
amount as defined in section 32(b)(2)
at which a married couple with one
qualifying child is ineligible for the
earned income credit for the taxable
year.
(ii) If the eligible individual has
two qualifying individuals, the lowest
income level that exceeds the phaseout
amount as defined in section 32(b)(2)
at which a married couple with two
qualifying children is ineligible for
the earned income credit for the
taxable year.
(iii) If the eligible individual
claims three or more qualifying
individuals, the lowest income level
that exceeds the phaseout amount as
defined in section 32(b)(2) at which a
married couple with three or more
qualifying children is ineligible for
the earned income credit for the
taxable year.
(C) In the case of an eligible individual who
does not file a joint return and has at least
one individual qualifying individual--
(i) If the eligible individual has
one qualifying individual, the lowest
income level that exceeds the phaseout
amount as defined in section 32(b)(2)
at which a single individual with one
qualifying child is ineligible for the
earned income credit for the taxable
year.
(ii) If the eligible individual has
two qualifying individuals, the lowest
income level that exceeds the phaseout
amount as defined in section 32(b)(2)
at which a single individual with two
qualifying children is ineligible for
the earned income credit for the
taxable year.
(iii) If the eligible individual has
three or more qualifying individuals,
the lowest income level that exceeds
the phaseout amount as defined in
section 32(b)(2) at which a single
individual with three or more
qualifying children is ineligible for
the earned income credit for the
taxable year.
(6) Qualifying individual.--A qualifying individual
is an individual whom the eligible individual claims as
a dependent under section 151, or as a qualifying child
for the earned income credit under section 32(c)(3) or
the child tax credit under section 24, or both. The
term qualifying individual does not include--
(A) someone claimed as a dependent under
section 151 if that dependent is claimed as a
qualifying child for the earned income tax
credit or the child tax credit on a tax form by
someone other than the eligible individual; and
(B) the eligible individual and, if a joint
return, his or her spouse.
(7) Number of people in the tax filing unit.--The
number of people in the tax filing unit shall equal the
sum of the number of qualifying individuals plus--
(A) in the case of a joint return, 2; and
(B) in the case of a return that is not filed
jointly, 1.
(d) Treatment of Possessions.--
(1) Payments to possessions.--
(A) Mirror code possession.--The Secretary of
the Treasury shall pay to each possession of
the United States with a mirror code tax system
amounts equal to the loss to that possession by
reason of the amendments made by this section.
Such amounts shall be determined by the
Secretary of the Treasury based on information
provided by the Government of the respective
possession.
(B) Other possessions.--The Secretary of the
Treasury shall pay to each possession of the
United States which does not have a mirror code
tax system amounts estimated by the Secretary
of the Treasury as being equal to the aggregate
benefits that would have been provided to
residents of such possession by reason of the
amendments made by this section if a mirror
code tax system had been in effect in such
possession. The preceding sentence shall not
apply for a given taxable year with respect to
any possession of the United States unless such
possession has a plan, which has been approved
by the Secretary of the Treasury, under which
such possession will promptly distribute such
payments to residents of such possession.
(2) Coordination with credit allowed against united
states income taxes.--No credit shall be allowed
against United States income taxes for any taxable year
under this section to any person--
(A) to whom a credit is allowed against taxes
imposed by the possession by reason of the
amendments made by this section for such
taxable year; or
(B) who is eligible for a payment under a
plan described in paragraph (1)(B) with respect
to such taxable year.
(e) Amount of Credit to be Determined Under Tables.--The
amount of the credit allowed by this section shall be
determined under tables prescribed by the Secretary.
(f) Inflation Adjustments.-- In the case of any taxable year
beginning after 2009, dollar amounts in subsection (c)(4)(A)
shall be increased by an amount equal to such dollar amount,
multiplied by the cost-of-living adjustment determined under
section 1(f)(3) of the Internal Revenue Code of 1986.
(g) Treatment in Other Programs.--The energy tax credit
provided under this section shall not be considered income or
resources for any purpose under any Federal, State, or local
laws, including, but not limited to, laws relating to an income
tax or public assistance program (including, but not limited
to, health care, cash aid, child care, nutrition programs, and
housing assistance), and no participating State or political
subdivision thereof shall decrease any assistance otherwise
provided an individual or individuals because of the receipt of
an energy tax credit under this Act.
* * * * * * *
Minority and Additional Views
MINORITY VIEWS ON H.R. 2454
SUMMARY
H.R. 2454 is proposed legislation that if enacted would
impose major new costs and expansive regulatory controls over a
weak and struggling U.S. economy. If implemented, this
legislation threatens to lock the United States into an era of
economic stagnation and global decline.
The bill would impose new greenhouse gas emissions
standards and efficiency standards across the U.S. economy,
create an untested and complex multi-trillion dollar cap-and-
trade program, direct the Environmental Protection Agency
(EPA), the Department of Energy (DOE) and other agencies to
promulgate a host of new regulations on American businesses and
enterprise, and authorize more than a trillion dollars of
taxpayer outlays. This bill if enacted would result in a
massive expansion of the EPA and other federal regulatory
control over virtually all major sectors of the U.S. economy.
If enacted, the bill would impose enormous new direct and
indirect costs on U.S. consumers and would have major
implications for financial markets and international trade and
commerce. The full costs of implementing the bill are not known
and the bill was considered and reported by the Committee
before cost estimates of all the titles were prepared or made
available. While prices for energy and goods and services would
rise for virtually all Americans, certain regions of the
country will be particularly adversely affected by the
legislation. All amendments offered by the Minority to suspend
the bill in the event of significantly increased energy prices,
including amendments offered by Representative Lee Terry (R-
NE), Representative Roy Blunt (R-MO), and Representative George
Radanovich (R-CA), were defeated. An amendment offered by
Representative Marsha Blackburn (R-TN) that would have required
that the costs of compliance be reflected in utility bills,
fuel pump bills, and manufactured products and food labels, was
also defeated.
Enactment of this legislation will unquestionably cause job
losses in the U.S. in the manufacturing, industrial and other
energy-intensive sectors, including in those industries that
produce globally-traded commodities. The bill would
dramatically increase energy costs for energy-intensive
industries and put U.S. companies at a competitive disadvantage
with foreign competitors in China, India, and other developing
countries. While the proponents of the bill contend that an
unspecified number of clean energy jobs will be created in the
coming years, modeling done to date concludes that the number
of jobs lost would far exceed any jobs created. All amendments
offered by the Minority, including amendments offered by
Representative Fred Upton (R-MI), Representative Tim Murphy (R-
PA), Representative Mike Rogers (R-MI), Representative John
Shimkus (R-IL), and Representative George Radanovich (R-CA) to
protect against high national unemployment or job losses in
specific industries resulting from implementation of the bill,
such as job losses in the steel, coal, automotive and
agriculture industries, were all defeated along partisan lines.
While imposing a massive new energy tax on American
consumers and businesses, as a practical matter the bill will
not be effective in reducing overall global greenhouse gas
emissions. Global climate change is an international issue and
the U.S. unilateral efforts will be ineffective in reducing
global emissions as long as the world's major emitters refuse
to undertake similar emissions reduction programs. An amendment
offered by Representative Mike Rogers (R-MI) that would suspend
the bill if China and India do not adopt emissions programs as
stringent as those in the U.S. was also defeated in a straight
party-line vote.
TITLE I
Sec. 101--Combined efficiency and renewable electricity standard
Section 101 is a combined efficiency and renewable
electricity mandate which will penalize consumers in areas of
the country without ample wind resources. This one-size-fits-
all federal mandate requires utilities to purchase renewable
electricity, even if it is considerably more expensive than the
conventional sources of electricity that are currently
generated. The definition of ``renewable'' in the base text is
incredibly limited--it picks and chooses favored types of
electricity even among renewable sources, declaring that all
hydroelectric electricity does not qualify, and that only a
limited selection of biomass would be eligible. Democrats
rejected, on a 26 to 32 vote, an amendment offered by
Representative Greg Walden (R-OR), which would have replaced
the flawed definition of ``renewable biomass,'' ensuring
biomass from both public and private lands would be treated
equally under the act.
This section also raises the question of why there are so
many different ways to try to address the same concern in the
bill--if the goal of the legislation is to reduce greenhouse
gas emissions, then why are we mandating certain types of
electricity be purchased, instead of simply requiring that low-
emitting electricity be generated? At a February 26, 2009
hearing the Energy and Environment Subcommittee held on
renewable electricity mandates, a state public utility
commissioner testified that ``establishing a uniform national
RPS focused exclusively on a limited number of sources like
wind, solar, biomass or geothermal, without regard to crucial
regional differences, will unnecessarily drive up electricity
costs, jeopardize reliability, and divert capital that will be
needed to achieve other objectives like meeting aggressive
carbon targets.'' Republicans offered a number of amendments to
remedy this narrow standard. An amendment by Representative
Greg Walden (R-OR) would have added language to the bill
allowing nuclear energy, biomass, new hydroelectric power, and
any other comparable low-emission source of energy to qualify
for the same provisions provided under this act's renewable
energy standard. If America is to reduce carbon dioxide
emissions and increase energy independence, we should encourage
all sources of clean, domestic energy. This amendment was
rejected as part of an en bloc vote of 22 to 36. In a similar
vein, Representative Cliff Stearns (R-FL) offered an amendment
to afford existing nuclear power plants the same benefits
provided to new nuclear power plants under the bill.
Inexplicably, Section 101 effectively gives new nuclear plants
partial credit as renewable energy but does not give any credit
to existing plants. Nuclear energy plants, whether they are
already operating or constructed years from now, all provide
the dual benefit of reducing national carbon emissions while
promoting energy independence. Unfortunately, this amendment
was also rejected, by a vote of 26 to 30.
Secs. 111-116--Carbon capture and sequestration
Sections 111-116 (Subtitle B of Title I) of the bill seek
to facilitate the commercial-scale deployment of carbon capture
and sequestration (CCS) technologies and set performance
standards for new coal plants. As currently drafted, however,
the timeframes for widespread deployment of CCS technologies,
as well as for meeting the new performance standards, are not 2
achievable. Notwithstanding the fact that coal currently
represents approximately 50% of our national electricity, and
is a domestic, low-cost and reliable source of electricity, the
Minority believes that this bill is unfortunately unlikely to
result in any new coal plants being built in the United States.
As an initial matter, Sections 111 and 113 would require
the EPA to issue a national strategy for CCS deployment and to
commission various studies and reports by academics, including
reports on existing environmental federal and state laws that
may apply to geologic sequestration sites for carbon dioxide,
regulatory barriers to CCS deployment, and how and under what
circumstances the environmental statutes for which EPA has
responsibility would apply to carbon dioxide injection and
geologic sequestration activities. These provisions serve to
highlight the fact that currently there is not a comprehensive
statutory and regulatory framework in place for carbon capture
and sequestration sites and facilities, and that significant
legal and regulatory uncertainty surrounds the deployment of
CCS technologies. Yet, the legislation does nothing to
eliminate barriers or solve problems identified by these
studies and reports. We believe that if the authors want a
future with coal, the bill should be strengthened in these
sections to require EPA to explicitly address legal obligations
and potential liabilities associated with the capture, storage
and sequestration of carbon and carbon dioxide.
Section 112 would require EPA to, within two years, issue
new regulations to minimize the risk of escape to the
atmosphere of carbon dioxide injected for purposes of geologic
sequestration. Given the significant technical and other issues
involved, not the least of which is the lack of an
understanding of sequestration, two years is not likely to be
adequate time to complete such a rulemaking. Nor is it clear
what would happen to CCS development if these new rules were
not issued timely by EPA or if they were subject to prolonged
legal challenges. Section 112 would also require EPA to issue,
within one year of enactment, new regulations under the Safe
Drinking Water Act (SWDA) for permitting carbon dioxide
geologic sequestration wells and to address financial
responsibilities. It is not clear whether or how such
regulations would affect proposed rules already issued by EPA
on July 25, 2008, under the SDWA relating to underground
injection of carbon dioxide for the purpose geologic
sequestration. It is also not clear whether the bill intends
that the new regulations impose financial responsibility
requirements to cover risks to air, ecosystems or public health
associated with CCS technology deployment, which are areas for
which financial responsibility mechanisms may not be available.
Further consideration should be given to whether the timelines
under this section for issuing the regulations are realistic,
and the section should be amended to more fully address the
scope of the regulations to be issued by EPA relating to
financial responsibility. Further, we believe this section
creates overlapping and potentially conflicting regimes under
the Clean Air Act and the SDWA.
Section 114 seeks to facilitate CCS technology development
by authorizing formation of an industry ``Carbon Storage
Research Corporation.'' As currently drafted, the corporation
would operate as an affiliate of the Electric Power Research
Institute and would be authorized to make financial assessments
on deliveries of fossil fuel-fired electricity to retail
consumers in the amount of between $1 billion and $1.1 billion
annually for 10 years. The corporation would be authorized to
use those funds for competitively awarded grants, contracts and
financial assistance to eligible entities to accelerate
commercial deployment of CCS technologies. While the
legislation seeks to support at least 5 commercial-scale
demonstration projects, it is not clear that the projects to be
funded would in fact advance the type of large-scale,
integrated projects for capture and sequestration that would be
needed for full-scale commercial deployment of CCS technologies
necessary to meet the performance standards for new coal
plants. The bill also does not address whether the corporation
would be subject to any prior federal or state approvals before
funds could be distributed and used. If the purpose was only to
do demonstration projects, that is one matter, but we believe
that Section 114 seeks to be the jumping off point for the
future of coal. That being the case, its provisions assure that
coal has a very bleak future.
Section 115 would require EPA to establish a program to
distribute emission allowances to support commercial deployment
of CCS in electric generation and industrial operations. The
Majority's June 2, 2009, bill summary indicates that the
estimated value of the allowances allocated for investment in
CCS technologies is $60 billion through 2025. While this
section of the bill has been amended to provide certain
eligibility criteria, this section is highly complex and would
benefit from clarification and greater direction to EPA about
how it should be implemented. As currently drafted this section
contains a lengthy and complex set of provisions authorizing
reverse auctions and/or the award of bonus allowances to the
owners or operators of eligible projects, and delegates broad
rulemaking and decision-making authority to EPA to administer
the program. Given the complexity and importance of this
section and the very significant amount of funds at issue,
additional review and revision of these provisions is
warranted. We are concerned that without these changes,
potential fraud, mismanagement and arbitrary application will
result.
Finally, Section 116 would establish performance standards
for new coal-fired power plants that would require a 50%
reduction for units permitted between January 1, 2009, and
January 1, 2020, and a 65% reduction for units permitted after
January 1, 2020. The compliance date for plants permitted
between 2009 and 2020 for meeting these standards would be not
later than January 1, 2025, and potentially earlier in the
event the EPA Administrator were to make certain determinations
relating to CCS technology availability. The compliance date
for new plants permitted after 2020 would be upon commencement
of operations. As currently drafted, the 2025 compliance date
for any plants that would be constructed during the next decade
does not appear to be achievable given that the development,
demonstration and deployment of such technologies present
significant technical, regulatory, legal and other challenges.
To the contrary, the Department of Energy (DOE) has advised
that larger-scale (near commercial scale) CCS projects take
upwards of 10+ years to complete, and may require more time
because they are complex in terms of site selection,
characterization, carbon dioxide injection and post-injection
monitoring. This section needs to be written in a less
aspirational and more realistic fashion.
Given the many challenges associated with CCS technology
deployment, including the technical and siting issues, the time
required for necessary environmental reviews, the current lack
of a comprehensive regulatory and statutory framework for CCS
deployment, and the need to address with certainty both near-
and long-term liability issues associated with stored carbon
dioxide, the CCS provisions of the bill as currently drafted
call into question whether under this legislation there is a
serious desire to have any new coal plants built in the United
States. If not, this would result in increased energy costs to
American consumers and businesses, and significant adverse
consequences for regions of the country that rely primarily on
coal-based electricity.
Sec. 141-143--Smart Grid Advancement
Subtitle E on Smart Grid Advancement establishes numerous
new rulemakings and bureaucratic processes, some of which are
only tangentially related to smart grid advancement. In
particular, Section 144 is unclear--it establishes a new
process requiring unspecified reductions in peak electricity
usage. It also refers to a ``National Electric Reliability
Corporation'' which is undefined in the bill and does not
exist; perhaps this is meant to reference the North American
Electric Reliability Corporation, an organization whose purview
extends beyond U.S. borders and is therefore not purely a
national organization.
Sec. 151-153--Transmission planning
Section 151, the transmission planning section, sets up a
three-year regional and national planning process. This
provision may actually slow transmission development; existing
transmission plans could be delayed in favor of waiting for the
results of this new national plan. When the new plan is
developed, there is no direction that anything be done with the
plan other than a report to Congress. Given the massive
redesign of the national electric system which this bill's
carbon cap and renewable mandate would require, this bill
should have included a transmission planning and siting
proposal which would actually result in a more reliable
electric system. Representative Joe Barton (R-TX) offered a
substitute amendment which would have given the Federal Energy
Regulatory Commission authority to site electric transmission
comparable to the authority it now has over the natural gas
pipeline network. This amendment was rejected by a vote of 19
to 35.
At the conclusion of Title I consideration, Rep. Roy Blunt
(R-MO) offered an amendment to suspend the Waxman-Markey bill
in the event of a 10 percent or greater increase above 2009
electric rates in retail residential electricity prices in one
or more Census Divisions in the United States, but that
amendment was defeated by a partisan vote. Rep. Fred Upton (R-
MI) also offered four amendments to protect against residential
electricity account arrearages but those amendments were also
defeated along partisan lines.
TITLE II
Sec. 201--Greater energy efficiency in building codes
Upon the date of enactment of this bill, a 30 percent
increase in building efficiency is required. Effective January
1, 2014, for residential buildings and January 1, 2015, for
commercial buildings, an additional 50 percent increased
efficiency is required. Subsequent three-year targets of
additional five percent increases in efficiency are mandated
through January 2030. These targets and deadlines were
established with no concern for cost and with no assessment of
feasibility. Moreover, section 201 requires each state to adopt
the national energy efficiency building code. Failure by the
states to adopt the code results in the federal government
taking over code enforcement, effectively enforcing legislation
never enacted by the state. In addition, the federal government
would be empowered to assess civil penalties for failure to
adopt and enforce the national code. This mandate raises
potential constitutional questions under the Tenth Amendment,
where powers not expressly granted to the federal government in
the Constitution--like zoning and building codes--are reserved
to the states and local governments.
Furthermore, Congress's traditional constitutional
authority to regulate industry under the Commerce Clause does
not extend to housing, raising additional questions about the
constitutionality of provisions of this section. Section 201 is
fraught with Constitutional implications, and this section 201
was preserved by the Majority who almost unanimously voted
against the amendment offered by Representative Steve Scalise
(R-LA) to strike this troubling section.
Sec. 204--Building energy performance labeling program
Real property, by legal designation, is unique. A labeling
system of homes and buildings could never begin to incorporate
all of the variable, preferences, and elements that make
residential and commercial buildings distinct and attractive to
potential purchasers. The energy profile of a home varies
dramatically from one to the next depending on a range of
variables for which a government agency cannot account to any
degree of scientific precision when formulating the labeling
system. For example, orientation of the home on its lot, number
of shade trees surrounding the home, local climate, number of
occupants in the home, decision of residents to use or not use
the air conditioning and heat. Moreover, the other values of
the home cannot be quantified in a labeling system. For
example, historical character, safety features, and original
fixtures. A ``one-size-fits-all'' numerical rating for
something as diverse as housing could only serve to mislead
consumers and distort the housing market.
By supporting a labeling system--and voting against the
amendment offered by Mr. Cliff Stearns (R-FL) to remove Section
204 of the bill--the majority stigmatizes existing housing
stock while providing no guidance and no incentives for
upgrading the home.
Sec. 211--Lighting efficiency standards
Section 211 adopts consensus standards for portable
lighting fixtures that would take effect in 2012. In
particular, this section of the bill adopts California's
portable lighting fixture standard as the national standard.
The rationale is that manufacturers of lamps cannot compete
with two sets of standards, i.e., California's and the rest of
the country.
This section would also require the Department of Energy
(DOE) to publish amended standards in 2014 to take effect in
2016, or to determine if no new standards are needed. The
section also provides that if California adopts any new
regulations concerning portable lighting fixtures prior to
2014, federal preemption would not apply. As currently drafted,
these provisions would create the potential again for two
competing standards in 2014.
Section 211 should be amended to delete the provisions
requiring DOE to set new standards in 2014 and the provisions
exempting California from federal preemption. Such an amendment
would eliminate the possibility of conflicting California and
federal standards for portable lighting fixtures, provide
certainty for manufacturers and avoid undue additional costs
for consumers.
Sec. 213--Appliance efficiency standards
The hit-and-miss approach to appliance efficiency standards
taken when drafting this section is baffling at best. Despite
nary a hearing to address specific appliance efficiency
improvements, the majority has decided to hop into American hot
tubs, literally. This section mandates efficiency improvements
in portable electric spas, hot food cabinets, and water
dispensers to name a few selected items. Three amendments were
offered en bloc by Representative George Radanovich (R-CA) that
would have prevented the federal government's intrusion and
imposition of regulations on portable electric spas, hot food
cabinets, and water dispensers. Restricting the production of
these goods will damage more than just these industries. These
regulations will hinder consumer choice, raise prices, and
expand federal government regulation into more aspects of daily
life.
TITLE III
Title III of this act seeks to reduce the quantity of
United States greenhouse gas emissions without regard to costs
to households, businesses, and industry; without regard to the
availability of the necessary technology to maintain clean,
inexpensive energy; without regard to effectiveness towards
reducing global emissions; and without regard to whether the
provisions will impede the economic growth of the United States
and the future economic welfare of its citizens.
There is no safety valve or exit ramp. If household energy
costs increase by hundreds of dollars or regions lose thousands
of jobs because of this legislation, there are no provisions to
rescind the scheme. If carbon capture and sequestration
technology for the use of clean and abundant coal-fired
electricity has not become widely available and fully
deployable, there are no provisions to rescind the scheme's
effective ban on new coal generation. There is no way out. If
enacted into law, this legislation--especially as outlined in
this title--is designed to raise the price of energy on
American consumers, businesses, and industry. Raising energy
costs is the only way this legislation can force the reduction
of greenhouse emissions from the inexpensive, abundant, and
reliable fossil energy Americans use to live and work. Any
provisions to shield consumers from costs, merely rearrange the
costs among regions or income classes, and have no effect on
the overall impact on the American economy. At the same time,
the increased energy costs will place the United States at a
competitive disadvantage to many developing nations, losing
jobs and economic opportunity overseas, as has been amply
discussed before the Committee in expert and industry testimony
during legislative hearings.
During the Committee markup, Republicans offered numerous
amendments to suspend the cap-and-trade provisions of the bill,
should it increase electricity prices to certain levels or
should job losses, such as in the steel, coal, or automotive
industry, reach certain levels. All such amendments were
defeated.
Sec. 311--Global warming provisions
Section 311 outlines the schedule for greenhouse emissions
cuts, and establishes three primary programs for reducing
greenhouse gases: the cap on large domestic sources, the
program to reduce tropical deforestation, and the offset
program. Despite the substantially higher energy costs, it is
highly questionable whether the emissions reduction programs
will make enough impact on global greenhouse emissions to
justify the costs.
First, it is not established that emissions reductions in
the United States will have any meaningful impact on global
emissions. There are no provisions in the legislation to
require comparable international participation in an emissions
reduction scheme. Republicans, led by Representative Mike
Rogers (R-MI), offered an amendment that would require such
action before the U.S. scheme took effect. The amendment was
defeated by a party-line vote of 23-36.
International participation is essential if the goals are
to reduce global emissions and stabilize levels in the
atmosphere. Global participation is also essential to ensure
the international community does not take strategic and
competitive advantage of higher U.S. energy costs.
The bill currently does not require binding action from the
largest and fastest growing greenhouse gas emitters, such as
China and India, or the fast growing developing world, which at
present emit more greenhouse gases than the developed world
combined, according to the Energy Information Administration's
International Energy Outlook (2009). At the current pace, the
United States could cut its current energy-related emissions to
zero, and by 2030 annual global energy-related carbon emissions
are still projected to be nearly seven billion metric tons more
than 2005--equivalent to a doubling of all of North America's
current emissions in 20 years.
In the meantime, all evidence from the developing world
indicates no interest in submitting to equivalent binding
emissions reductions to those required in this legislation. In
point of fact, India and China have repeatedly and publicly
stated no interest in binding emissions caps or emissions
rationing.
The United States cannot, moreover, assess with any
reliability the amount of greenhouse gases these nations emit.
The emissions data China and India submitted in 2004 to the
United Nations, pursuant to the 1992 United Nations Framework
Convention on Climate Change, were estimates for 1994
emissions, and have yet to be updated. Indeed, the most recent
emissions data reported by most large developing countries are
now 12 years older than what the United States and other
developed countries have reported. Moreover, as a bloc, the
developing countries, including China, Brazil, and India,
refuse to bring reporting regimes into closer accordance with
the developed countries.
These facts form part of the international backdrop against
which this legislation should be assessed. Not only would this
cap-and-trade scheme be an ineffective policy if developing
nations do not reduce emissions, it would weaken U.S. economic
competitiveness. During legislative hearings, witnesses could
provide no credible evidence that foreign nations would avoid
taking economic advantage of reduced U.S. competitiveness. The
United States, if this legislation is enacted, would
unilaterally surrender competitiveness with no reliable
assurance that it can turn back if the international community
fails to take comparable action.
Second, emission reduction goals are not based on any
clearly defined, realistic, or evidentiary foundation relating
to impacts on world global emissions--or temperature. Indeed
the only potential factual reference we find for the target of
an 80% reduction of emissions from 2005 levels is in the
Majority's report on this bill. This report references a
handful of the most stringent emissions ``stabilization
scenarios'' examined by the Intergovernmental Panel on Climate
Change (IPCC)--the so-called Category I scenarios, composed of
the six most extreme of some 177 model runs organized into
seven categories (see the Intergovernmental Panel on Climate
Change, Climate Change 2007: Mitigation of Climate Change,
Table TS.2). These Category I scenarios require global
emissions to have peaked and begun declining between the years
2000 and 2015. The reality that global emissions have been
accelerating over most of this time period, and are projected
to continue to increase for the next 30 years, calls into
serious question the validity of these targets and their use as
a realistic goal in this legislation. Taken literally, there
are implausibly only a few years for proponents of this
legislation to convince China, India and the rest of the
developing world to adopt binding emissions caps and commence
immediate emissions reductions to comport with these targets.
The IPCC also reports these scenarios depend on current
technology ``readiness'' of carbon capture and sequestration
and other undeveloped technologies along with ``simultaneous
emissions mitigation in developing countries''--factors plainly
at odds with current reality. We should add that such
information about the scenarios or emissions targets was not
examined in any hearing relating to this legislation.
Third, section 311 is premised on some critical findings
that minimize the key uncertainties and facts about the Earth's
climate. For example, the legislation does not define global
warming, although the text suggests global warming is solely
the result of man-made, or anthropogenic, emissions and that
any effects of global warming on climate therefore must be
traced to these man-made emissions. This construct ignores the
scientific consensus understanding that global warming is first
and foremost a natural phenomenon and that climate change is
not solely or necessarily the result of man-made emissions.
Reports by the National Academies and the IPCC make clear that
climate change represents the natural long-term fluctuation in
regional temperature and weather patterns. It is equally clear
that, over millennia, natural climate change has occurred and
has threatened public health and welfare and necessitated
constant human innovation and adaptation. Hearings before the
Subcommittee on Energy and the Environment in the 111th and
110th Congresses provided testimony to these facts.
Reviews of scientific studies, including by the IPCC and
the National Academies, and testimony before the Committee
suggest that combined anthropogenic greenhouse gas emissions
may contribute to a long-term global warming trend. This has
also been reported at Committee hearings. However, testimony
has indicated that scientists cannot quantify how much
anthropogenic greenhouse gases may be effecting the natural
global temperature change and how much that may be effecting
climate change impacts, especially in the future. The IPCC
consensus document states that ``the complexity of the climate
system and the multiple interactions that determine its
behaviour impose limitations on our ability to understand fully
the future course of Earth's global climate.''
Given this complexity and uncertainty about man's
contribution to global warming and climate change, we recognize
that prudent policy calls for taking cost-effective measures to
reduce greenhouse gas emissions, but this must be done while
ensuring continued United States economic growth, innovation,
and industrial strength. Unfortunately, the provisions setting
forth emissions reduction targets fail to acknowledge the
scientific uncertainty or the economic risks. The schedule of
reductions cannot be linked to any measure of effectiveness.
The related reviews required by EPA and the National Academies
do not provide any clear mechanisms for rescinding the
reduction targets if they prove ineffective or too costly to
the American public.
The costs of this legislation are too high to impose such
emissions targets without sufficient factual or practical
foundation.
Sec. 311--Reducing global warming pollution
With regard to offsets, Section 311 provides for the use of
a combination of domestic and international offsets that
covered entities can purchase to meet emissions obligations. If
not enough domestic offsets are available, up to three-quarters
of offsets used for compliance may come from developing
nations. Reliance on international offsets is controversial on
effectiveness and cost-control grounds.
There are outstanding and difficult challenges concerning
the integrity of offset markets, according to two 2008
evaluations by the Government Accountability Office (GAO).
There is inherent uncertainty in certifying reductions of
emissions that have not occurred. There are related challenges
in measuring and validating the reductions to some acceptable
standard, domestically and, especially, internationally. The
GAO concluded that ``the use of carbon offsets in a cap and
trade program can undermine the system's integrity, given that
it is not possible to ensure that every credit represents real,
measurable, and long-term reductions in emissions.'' (Emphasis
added.)
The larger the number, range, and geographic scope of
offset projects allowed into the regulatory scheme, the more
integrity of emissions reductions becomes an issue. Available
evidence, as provided by GAO and other witnesses before the
Subcommittee on Energy and the Environment, shows offset
markets have not worked as cost-effectively as promised. The
existing international offset program administered by the
United Nations in particular has proved susceptible to abuse.
Analysis provided during climate policy hearings before the
Committee revealed that the existing international system fails
as a market because it has animated accounting tricks that
allow participants to manufacture offset credits at little or
no cost. The system has also promoted substantial strategic
behavior on the part of developing nations aimed at
manipulating baselines in order to increase the number of
offsets created. And, as participation in the energy sectors of
developing countries has expanded, the regulatory challenge to
determine whether these projects' emissions reductions are
``additional'' to what would have happened in the absence of
the international offsets subsidy has increased. Meanwhile, the
program has failed as a subsidy because the developed world has
had to purchase the offsets emissions reductions at an
extremely high premium--10 to 100 times the cost of most of the
emissions reductions.
Against this record, there is no assurance international
abuse can be avoided with additional EPA or other regulatory
oversight. While provisions provide for EPA determination as to
the quality and additionality of domestic or international
offsets, the bill continues to allow the EPA to modify or omit
integrity requirements ``if not feasible.'' Further, while the
EPA is directed to conduct random audits of offsets projects,
it is not evident how the Administrator could successfully
conduct random audits of international offsets. What agreements
with China and other nations are there to allow audits of
offsets projects by U.S. officials? Given the experience and
evidence collected by the Committee with regard to
international inspections of food and drug products imported
into the United States, there is little assurance offset audits
in China or the developing world can be any more frequent or
reliable.
Any such offset subsidies from U.S. covered entities will
effectively represent a substantial wealth transfer to the
developing world. The EPA, in its own analysis, notes that the
availability of offsets drastically affects the cost of
compliance with the cap-and-trade program. In its analysis, EPA
wrote that without international offsets the allowance price
would increase 96 percent. Absent the availability of
international offsets, or severe restriction because of strict
EPA regulation and international competition for the projects,
the costs imposed on Americans by the cap-and-trade scheme
outlined in this legislation will be substantially higher than
proponents advertise.
Section 311 also creates a mechanism to use allowances and
auction revenues to support a complicated and untested
international program to prevent tropical deforestation. This
untested program presents reliability questions similar to
those created by reliance on international offsets. Integrity
issues aside, this provision, if enacted, effectively involves
transferring energy tax funds generated domestically to
developing countries. Whatever the merits or weaknesses of this
program, the transfer of funds internationally effectively
reduces what is available for domestic relief from higher
energy prices.
Finally, accounting for the risk that offsets or the
tropical forest program do not effectively reduce international
emissions and the cost-benefit of these mechanisms for global
emissions reduction is called further into question. It is upon
such questionable foundation that the legislation provides for
the transfer of tens of billions of dollars to international
projects (and jobs) that we believe could be more effectively
spent providing jobs in the United States.
Sec. 321--Disposition of allowances
Section 321 provides details on the distribution of free
allowances and auction revenues to utilities and other affected
sectors. As it was with the Emissions Trading Scheme in Europe,
special corporate interest support for caps and emissions
rationing was not possible without ensuring valuable allowances
were allotted to these groups. The ostensible purpose of
distributing free allowances is to reduce job losses and
prevent increases in consumer (commercial and residential)
electricity and heating bills. Despite such goals, the funds
are not necessarily distributed directly to consumers. For
example, with regard to natural gas consumer allowances, the
states will actually administer half the funds for natural gas
energy efficiency programs rather than provide for relief on
utility bills. The section does not protect consumers from
higher energy costs. It is the higher costs that drive the cuts
in CO2.
All of the targeted spending of the allowances induces
additional inefficiencies to the program that will raise its
costs on the economy. Giving allowances to the chosen few just
redistributes the economic pain to others. Moreover, every
dollar of allowances given to one group is a dollar's worth
that cannot be used for cutting taxes or reducing the deficit.
According to the Congressional Budget Office, under both
Directors Orszag and Elmendorf, even if all the allowances are
allocations given away to industry and affected sectors, the
cap-and-trade scheme will still lead to price increases.
Sec. 331--Greenhouse gas standards
Representative Marsha Blackburn (R-TN) offered an amendment
that would establish that carbon dioxide, water vapor, and
other greenhouse gases are not air pollutants under the Clean
Air Act. This amendment would have prevented the Environmental
Protection Agency from imposing intrusive regulations into all
aspects of American lives. Throughout the mark-up and the
series of hearings preceding the legislation's passage, Members
warned that if Congress does not act on this issue, the EPA
would. The Blackburn amendment acknowledged this risk and would
have prevented EPA action without forcing Congress's hand
before the issues were properly explored and consensus was
established. The Blackburn amendment would have taken the EPA
variable out of the equation and would have allowed Congress to
explore the topic fully, with additional hearings and plenty of
time for regular order, including a Subcommittee mark-up. This
amendment failed along strict partisan lines.
Sec. 335--State programs
As written, this bill allows states and localities to
enforce their own regulations of greenhouse gases covered by
the cap after 2017. Until 2012, and beginning again in 2018,
states could enforce their own greenhouse gas emissions cap-
and-trade programs in addition to the federal cap-and-trade
program established under the Waxman-Markey bill. One major
premise touted by the Majority is that the complex cap-and-
trade scheme will provide industry and capital markets with
certainty to invest in the green technologies of the future,
the power sector, affected industries, or new clean
technologies for coal or the oil industry. This certainty is
compromised without a permanent preemption of state and local
regulation of greenhouse gas emissions. This section should be
amended to preempt states from implementing or enforcing their
own cap-and-trade programs. This would avoid potentially
duplicative, conflicting and inconsistent state and federal
regulatory regimes that would impose additional costs,
regulations and burdens on U.S. consumers and businesses.
Sec. 336--Enforcement
Section 336 addresses enforcement relating to Title III of
the bill. While the current version of the bill has eliminated
the ``Citizens Suits'' provisions that were offered in the
original discussion draft of the bill, under the current
version of the bill, subject to certain limitations any person
could still seek to bring a civil action against any other
person for violation of the new greenhouse gas emission
standards under Title III of the bill. In particular, under
Section 304 of the Clean Air Act as amended elsewhere by the
bill, plaintiffs could bring citizen suits to enforce the new
greenhouse gas emissions standards.
This section should be amended to add a new paragraph
focusing any citizen suits to enforce any of the provisions of
Title III of the bill only on the EPA Administrator. If citizen
suits are allowed to go forward against any person, it is
likely that there would be a substantial amount of new climate
change litigation brought against companies throughout the
United States in all of the sectors of the economy regulated by
the bill. While a windfall to lawyers, such litigation would
impose significant costs and burdens on those companies in
addition to the already enormous direct and indirect costs
imposed by the bill. An amendment to limit citizen suits would
prevent excessive or unwarranted litigation and protect U.S.
companies and ultimately U.S. jobs and consumers.
Subtitle D--Carbon market assurance
The bill provides for the establishment of a regulated
allowance market where market participants will engage in the
trading of regulated allowances and regulated allowance
derivatives. While the bill does provide a certain level of
market protection comparable to the CFTC regulatory regime in
the futures market, the bill does not ban speculators from
participation in this market. Therefore, hedge funds,
proprietary trading desks and sovereign wealth funds will be
able to play the market and thus impact the price of carbon.
Representative Steve Scalise (R-LA) introduced an amendment
that would have limited participation in the market to covered
entities, but the amendment was defeated by a vote of 20-32.
During the summer of 2008, Congress was exploring the link
between speculation and the increase in food and gas prices.
Speculation can lead to price volatility and ultimately higher
prices in the traded contract, which will lead to higher energy
costs for the average American ratepayer in this new market.
Sec. 355--Limitation on eligibility to purchase a credit default swap
In general, it is important to note that this bill delves
into the derivatives market in a far-reaching way, including by
banning naked credit default swaps. The derivatives market does
need regulatory reform, but such reforms should take place
after extensive hearings within the Committee. Much of this
language was added only to the Amendment in the Nature of a
Substitute, and therefore there was not sufficient time for
review and analysis, not to mention no opportunity for a
hearing on this topic.
TITLE IV
By subjecting domestic employers to a costly regulatory
system, the bill places American jobs at a double disadvantage:
competitive disadvantage vis-a-vis their foreign competitors
and pressure to move jobs overseas to countries that do not
unilaterally disadvantage manufacturing or other energy
intensive activities.
Section 401 amends section 762 of the Clean Air Act and
states: ``Congress finds that the purposes of this part, as set
forth in section 761, can be most effectively addressed and
achieved through agreements negotiated between the United
States and foreign countries.'' Instead of rushing this bill
through Committee mark-up, including by skipping the
subcommittee mark-up, international negotiations should have
taken place prior to this legislation being implemented. This
would ensure that unilateral actions taken by the United States
would not be negated by emissions from India and China.
Section 425 and section 426 of the bill address climate
change worker adjustment assistance. A far better alternative
to addressing the job losses that will inevitably be caused by
the enactment of this bill was proposed by several Republican
amendments.
Representative Fred Upton (R-MI) introduced an amendment to
protect domestic employment that would have required the
Administrator of the EPA, in consultation with the Secretary of
Labor, to prepare an annual report to Congress on the average
national unemployment rate, and if the unemployment rate for
the prior year surpassed 15% as a result of implementation of
the 13 bill, then the bill shall sunset. The amendment was
defeated by a vote of 21-34. Representative Tim Murphy (R-PA)
introduced an amendment to protect the U.S. steel industry that
would have required the Administrator of the EPA, in
consultation with the Secretary of Labor, to prepare an annual
report to Congress setting forth the number of domestic jobs
that been lost in the U.S. steel industry as a result of
implementation of the bill, and the bill shall sunset if the
total number of job losses in the steel industry exceeded
10,000. The amendment was defeated by a vote of 20-35.
Representative Mike Rogers (R-MI) offered three separate
amendments that would have required the Administrator of the
EPA, in consultation with the Secretary of Labor, to prepare an
annual report to Congress on the number of domestic jobs in the
auto parts, auto and transportation manufacturing industries,
and the bill shall sunset if there were any job losses in each
of these industries as a result of the implementation of the
bill. This series of amendments offered en bloc was defeated by
a vote of 22-32. Representative John Shimkus (R-IL) introduced
an amendment that would sunset the bill if two or more coal
mines were to close as a result of this bill. The amendment was
defeated by a vote of 22-34. Representative George Radanovich
(R-CA) introduced an amendment that would sunset the bill if
the EPA Administrator determined that 43,846 or more jobs were
lost in the agriculture industry in the United States in the
prior year due to implementation of the bill. The amendment was
defeated by a vote of 22-36.
Joe Barton.
Fred Upton.
Cliff Stearns.
Nathan Deal.
George Radanovich.
Greg Walden.
Roy Blunt.
Ralph M. Hall.
Ed Whitfield.
John Shimkus.
Steve Buyer.
Joseph R. Pitts.
Lee Terry.
Tim Murphy.
Sue Wilkins Myrick.
Michael Burgess.
Marsha Blackburn.
Phil Gingrey.
Steve Scalise.
ADDITIONAL VIEWS
When the Energy and Commerce Committee began crafting a
comprehensive energy and climate change bill, I expected that
it would include an Open Fuel Standard. Such a standard would
require new cars manufactured or sold in the United States to
be flex fuel vehicles capable of burning any combination of
gasoline, ethanol, or methanol. Although this bill moves a
small step in that direction, it does not go nearly far enough.
I am appalled by opposition from the auto industry and its
allies to any real flex fuel standard. I am especially
disappointed that while all kinds of compromises were made with
anti-environmental energy industries, no real compromises on
flex fuel cars could be made. I consider this a missed
opportunity.
Above all else, I believe that our energy policy must break
our addiction to foreign oil. Our national security and our
economy depend on it, as the world currently runs on a resource
controlled by our enemies. We exacerbate our nation's economic
woes by exporting hundreds of billions of dollars every year to
purchase foreign oil. That money in turn finances people who
plot ways to cause us harm.
These economic and national security problems are enabled
by the simple fact that oil provides more than 96% of the fuel
for our cars and trucks. For nearly every American, there is no
substitute for oil.
Unfortunately, unless we act now, the problem will continue
to worsen. Demand for oil continues to rise across the globe,
led by the rapid industrialization of China and India, while
production can not keep up.
The President announced a new national policy two weeks
ago, which would increase fuel economy and reduce greenhouse
gas pollution for all new cars and trucks sold in the United
States. This proposal would come with an average additional
cost of $1,300 per vehicle. The new CAFE standards, which cover
model years 2012-2016, and ultimately require an average fuel
economy standard of 35.5 mpg in 2016, are projected to save 1.8
billion barrels of oil over the life of the program. This would
surpass the CAFE law passed by Congress in 2007 requiring an
average fuel economy of 35 mpg in 2020.
This is a step in the right direction. However, as a method
of achieving energy independence, an increase in CAFE standards
is only a small step because cars still run on oil. They run on
less oil, but they still run on oil.
I believe the solution is to introduce fuel choice and
competition into the market. We can accomplish this by passing
a law making new cars manufactured or sold in the United States
flex fuel vehicles capable of burning any combination of
gasoline, ethanol, or methanol. Flex fuel vehicles cost only
about $90--$100 more than the same car in a gasoline-only
version. It is a simple and inexpensive modification that
should be standard in cars, like seatbelts or airbags.
The largest producers of both ethanol and methanol are all
in the Western Hemisphere, and the United States has by far the
greatest production potential for both. Ethanol is made from
agricultural products. Methanol can also be made from biomass,
as well as from natural gas or coal.
Brazil has already achieved energy independence. Three
decades ago, Brazil imported 80 percent of its oil supply.
Today, after investments in their sugar-based ethanol industry,
and an influx of flex-fuel cars that began in 2003, Brazil has
achieved energy independence and is largely insulated from
fluctuations in global oil prices.
The bipartisan call for implementation of flex fuel
technology here in the United States is growing. President
Obama announced during his campaign that he seeks to ensure
that ``all new vehicles are flexible fuel vehicles . . . by the
end of his first term in office.'' The Obama-Biden New Energy
for America Plan, at p. 5. Former House Speaker Newt Gingrich
joined the call in an April 2009 article in Newsweek, writing
``[w]e should . . . pass an open-fuel standard for 95 percent
of the new cars sold in the United States, allowing the
construction of flex-fuel vehicles that can run on a variety of
fuels, including ethanol.'' Newt Gingrich, Our Tanks Are On
Full, Newsweek (Apr. 13, 2009). Energy Secretary Steven Chu
expressed his support for flex fuel vehicles to the New
Democratic Coalition on May 16, 2009, and confirmed his support
to me in a private conversation later that same day.
Just six months ago, the CEOs of General Motors, Chrysler,
and Ford appeared before the Senate Banking Committee and the
House Financial Services Committee, and each committed to my
colleagues and to the American people that they would make 50%
of their cars flex-fuel vehicles by 2012.
General Motors Corporation--``In 2012, over
50% of GMs new vehicle sales will be flex-fuel
capable.'' General Motors Corporation Restructuring
Plan for Long-Term Viability, Submitted to Senate
Banking Committee & House of Representatives Financial
Services Committee, at p. 22 (Dec. 2, 2008).
Chrysler LLC--``[Chrysler] is on target to
meet our commitment of 50% of our fleet being flex fuel
capable by 2012.'' Chrysler's Plan for Short-Term and
Long-Term Viability, Submitted to the United States
Senate Committee on Banking, Housing, and Urban
Affairs, at p. 7 (Dec. 2, 2008).
Ford Motor Company--``Ford has committed to
doubling the production of flexible fuel vehicles by
2010 and to producing 50% of our products capable of
running on E85 by 2012.'' Ford Motor Company Business
Plan, Submitted to the Senate Banking Committee, at pp.
14, 29 (Dec. 2, 2008).
However, the Detroit Three no longer wants to honor their
commitment. So, I introduced the Open Fuel Standard Act with
three of my colleagues--Reps. Bob Inglis (R-SC), Steve Israel
(D-NY), and Roscoe Bartlett (R-MD)--to require the automakers
to honor their flex fuel promise to the American people.
Instead of supporting our legislation, the auto industry is
vigorously opposing it. Instead of choosing to innovate and
benefit both American consumers and the U.S. auto industry in
the long-term, the auto industry would rather resist change and
continue to follow its failed business plan in the short-term.
This is precisely the type of misguided thinking that led
to the deterioration of the U.S. auto industry. Chrysler and
General Motors have become the first large American car
companies to declare bankruptcy since Studebaker in 1933. Now
the American people are picking up the pieces they left behind.
Despite promises from just six months ago, the automakers
now argue that they should not be required to produce flex fuel
cars because there are not enough advanced fuels available to
run them. The problem with this argument is that it puts the
nation in a Catch-22. The automakers will not make the cars
until there is sufficient alternative fuel available to run
them, but industry has no incentive to produce the alternative
fuel until there are sufficient numbers of cars available to
use it. In essence, the automakers are presenting the illusion
of choice while preventing any real choice at all.
The Open Fuel Standard would require a simple $90 or $100
modification to vehicles. That's far less the $1,300 increase
in CAFE standards that the President just set forth, and could
be instrumental in breaking our dependence on foreign oil.
The world is changing, and it's time for the auto industry
to change with it. Now is the time for bold action and the auto
industry must not be content by giving us more of the same.
Simply doing the same thing will yield the same results:
increasing prices and a greater reliance on OPEC.
I am disappointed that the opposition to energy
independence has been so fierce. I believe it is past time to
break our addiction to foreign oil. The American Clean Energy
and Security Act is a good start, and I will work every step of
the way to strengthen it as it moves toward becoming law.
Eliot L. Engel.