Full Text of the
Clean Energy Jobs and American Power Act



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111TH CONGRESS

Clean Energy Jobs and American Power Act (Full Text )


1ST SESSION



S. ll



To create clean energy jobs, promote energy independence, reduce
global



warming pollution, and transition to a clean energy economy.



IN THE SENATE OF THE UNITED STATES



llllllllll



Mr. KERRY (for himself and Mrs. BOXER) introduced the
following bill; which



was read twice and referred to the Committee on llllllllll



A BILL



To create clean energy jobs, promote energy independence,



reduce global warming pollution, and transition to a



clean energy economy.



1 Be it enacted by the Senate and House of Representa-



2 tives of the United States of America in Congress
assembled,



3 SECTION 1. SHORT TITLE; TABLE OF CONTENTS.



4 (a) SHORT TITLE.—This Act may be cited as the



5 ‘‘Clean Energy Jobs and American Power Act’’.



6 (b) TABLE OF CONTENTS.—The table of contents of



7 this Act is as follows:



Sec. 1. Short title; table of contents.



Sec. 2. Findings.



Sec. 3. Economywide emission reduction goals.



Sec. 4. Definitions. 2



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DIVISION A—AUTHORIZATIONS FOR POLLUTION REDUCTION,



TRANSITION, AND ADAPTATION



Sec. 101. Structure of Act.



TITLE I—GREENHOUSE GAS REDUCTION PROGRAMS



Subtitle A—Clean Transportation



Sec. 111. Emission standards.



‘‘PART B—MOBILE SOURCES



‘‘Sec. 821. Greenhouse gas emission standards for mobile
sources.



Sec. 112. Greenhouse gas emission reductions through
transportation efficiency.



‘‘PART C—TRANSPORTATION EMISSIONS



‘‘Sec. 831. Greenhouse gas emission reductions through
transportation efficiency.



Sec. 113. Transportation greenhouse gas emission reduction program
grants.



‘‘Sec. 832. Transportation greenhouse gas emission reduction
program



grants.



Sec. 114. Smartway transportation efficiency program.



‘‘Sec. 822. SmartWay transportation efficiency program.



Subtitle B—Carbon Capture and Sequestration



Sec. 121. National strategy.



Sec. 122. Regulations for geological sequestration sites.



‘‘Sec. 813. Geological storage sites.



Sec. 123. Studies and reports.



Sec. 124. Performance standards for coal-fueled power
plants.



‘‘Sec. 812. Performance standards for new coal-fired power
plants.



Sec. 125. Carbon capture and sequestration demonstration and
early deployment program.



Subtitle C—Nuclear and Advanced Technologies



Sec. 131. Findings and policy.



Sec. 132. Nuclear worker training.



Sec. 133. Nuclear safety and waste management programs.



Subtitle D—Water Efficiency



Sec. 141. WaterSense.



Sec. 142. Federal procurement of water-efficient products.



Sec. 143. State residential water efficiency and
conservation incentives program.



Subtitle E—Miscellaneous



Sec. 151. Office of Consumer Advocacy.



Sec. 152. Clean technology business competition grant
program.



Sec. 153. Product carbon disclosure program.



Sec. 154. State recycling programs.



Sec. 155. Supplemental agriculture and forestry greenhouse
gas reduction and



renewable energy program.



Sec. 156. Economic Development Climate Change Fund. 3



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‘‘Sec. 219. Economic Development Climate Change Fund.



Sec. 157. Study of risk-based programs addressing vulnerable
areas.



Subtitle F—Energy Efficiency and Renewable Energy



Sec. 161. Renewable energy.



Sec. 162. Advanced biofuels.



Sec. 163. Energy efficiency in building codes.



Sec. 164. Retrofit for energy and environmental performance.



Subtitle G—Emission Reductions From Public Transportation
Vehicles



Sec. 171. Short title.



Sec. 172. State fuel economy regulation for taxicabs.



Sec. 173. State regulation of motor vehicle emissions for
taxicabs.



Subtitle H—Clean Energy and Natural Gas



Sec. 181. Clean Energy and Accelerated Emission Reduction
Program.



Sec. 182. Advanced natural gas technologies.



TITLE II—RESEARCH



Subtitle A—Energy Research



Sec. 201. Advanced energy research.



Subtitle B—Drinking Water Adaptation, Technology, Education,
and



Research



Sec. 211. Effects of climate change on drinking water
utilities.



TITLE III—TRANSITION AND ADAPTATION



Subtitle A—Green Jobs and Worker Transition



PART 1—GREEN JOBS



Sec. 301. Clean energy curriculum development grants.



Sec. 302. Development of Information and Resources
clearinghouse for vocational education and job training in renewable energy
sectors.



Sec. 303. Green construction careers demonstration project.



PART 2—CLIMATE CHANGE WORKER ADJUSTMENT ASSISTANCE



Sec. 311. Petitions, eligibility requirements, and
determinations.



Sec. 312. Program benefits.



Sec. 313. General provisions.



Subtitle B—International Climate Change Programs



Sec. 321. Strategic Interagency Board on International
Climate Investment.



Sec. 322. Emission reductions from reduced deforestation.



‘‘PART E—SUPPLEMENTAL EMISSION REDUCTIONS



‘‘Sec. 751. Definitions.



‘‘Sec. 752. Purposes.



‘‘Sec. 753. Emission reductions from reduced deforestation.



Sec. 323. International Clean Energy Deployment Program. 4



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Sec. 324. International climate change adaptation and global
security program.



Sec. 325. Evaluation and reports.



Sec. 326. Report on climate actions of major economies.



Subtitle C—Adapting to Climate Change



PART 1—DOMESTIC ADAPTATION



SUBPART A—NATIONAL CLIMATE CHANGE ADAPTATION PROGRAM



Sec. 341. National Climate Change Adaptation Program.



Sec. 342. Climate services.



SUBPART B—PUBLIC HEALTH AND CLIMATE CHANGE



Sec. 351. Sense of Congress on public health and climate
change.



Sec. 352. Relationship to other laws.



Sec. 353. National strategic action plan.



Sec. 354. Advisory board.



Sec. 355. Reports.



Sec. 356. Definitions.



SUBPART C—CLIMATE CHANGE SAFEGUARDS FOR NATURAL RESOURCES



CONSERVATION



Sec. 361. Purposes.



Sec. 362. Natural resources climate change adaptation
policy.



Sec. 363. Definitions.



Sec. 364. Council on Environmental Quality.



Sec. 365. Natural Resources Climate Change Adaptation Panel.



Sec. 366. Natural Resources Climate Change Adaptation
Strategy.



Sec. 367. Natural resources adaptation science and
information.



Sec. 368. Federal natural resource agency adaptation plans.



Sec. 369. State natural resources adaptation plans.



Sec. 370. Natural Resources Climate Change Adaptation
Account.



Sec. 371. National Fish and Wildlife Habitat and Corridors
Information Program.



Sec. 372. Additional provisions regarding Indian tribes.



SUBPART D—ADDITIONAL CLIMATE CHANGE ADAPTATION PROGRAMS



Sec. 381. Water system mitigation and adaption partnerships.



Sec. 382. Flood control, protection, prevention, and
response.



Sec. 383. Wildfire.



Sec. 384. Coastal and Great Lakes State adaptation program.



DIVISION B—POLLUTION REDUCTION AND INVESTMENT



TITLE I—REDUCING GLOBAL WARMING POLLUTION



Subtitle A—Reducing Global Warming Pollution



Sec. 101. Reducing global warming pollution.



‘‘TITLE VII—GLOBAL WARMING POLLUTION REDUCTION AND



INVESTMENT PROGRAM



‘‘PART A—GLOBAL WARMING POLLUTION REDUCTION GOALS AND TARGETS5



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‘‘Sec. 701. Findings.



‘‘Sec. 702. Economywide 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.



‘‘Sec. 714. Perfluorocarbon regulation.



‘‘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. Market Stability 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. Office of Offsets Integrity.



‘‘Sec. 744. International offset credits.



Sec. 102. Definitions.



‘‘Sec. 700. Definitions.



Sec. 103. Offset reporting requirements.



Subtitle B—Disposition of Allowances



Sec. 111. Disposition of allowances for global warming
pollution reduction program.



‘‘PART H—DISPOSITION OF ALLOWANCES



‘‘Sec. 771. Allocation of emission allowances.



‘‘Sec. 772. Electricity consumers.



‘‘Sec. 773. Natural gas consumers.



‘‘Sec. 774. Home heating oil and propane consumers. 6



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‘‘Sec. 775. Domestic fuel production.



‘‘Sec. 776. Consumer protection.



‘‘Sec. 777. Exchange for State-issued allowances.



‘‘Sec. 778. Auction procedures.



‘‘Sec. 779. Auctioning allowances for other entities.



‘‘Sec. 780. Commercial deployment of carbon capture and
sequestration



technologies.



‘‘Sec. 781. Oversight of allocations.



‘‘Sec. 782. Early action recognition.



‘‘Sec. 783. Establishment of Deficit Reduction Fund.



Subtitle C—Additional Greenhouse Gas Standards



Sec. 121. Greenhouse gas standards.



‘‘TITLE VIII—ADDITIONAL GREENHOUSE GAS STANDARDS



‘‘Sec. 801. Definitions.



‘‘PART A—STATIONARY SOURCE STANDARDS



‘‘Sec. 811. Standards of performance.



Sec. 122. HFC regulation.



‘‘Sec. 619. Hydrofluorocarbons (HFCs).



Sec. 123. Black carbon.



‘‘PART E—BLACK CARBON



‘‘Sec. 851. Black carbon.



Sec. 124. States.



Sec. 125. State programs.



‘‘PART F—MISCELLANEOUS



‘‘Sec. 861. State programs.



‘‘Sec. 862. Grants for support of air pollution control
programs.



Sec. 126. Enforcement.



Sec. 127. Conforming amendments.



Sec. 128. Davis-Bacon compliance.



Subtitle D—Carbon Market Assurance



Sec. 131. Carbon market assurance.



Subtitle E—Ensuring Real Reductions in Industrial Emissions



Sec. 141. Ensuring real reductions in industrial emissions.



‘‘PART F—ENSURING REAL REDUCTIONS IN INDUSTRIAL EMISSIONS



‘‘Sec. 761. Purposes.



‘‘Sec. 762. Definitions.



‘‘Sec. 763. Eligible industrial sectors.



‘‘Sec. 764. Distribution of emission allowance rebates.



‘‘Sec. 765. International trade.



TITLE II—PROGRAM ALLOCATIONS



Sec. 201. Investment in clean vehicle technology. 7



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Sec. 202. State and local investment in energy efficiency
and renewable energy.



Sec. 203. Energy efficiency in building codes.



Sec. 204. Building retrofit program.



Sec. 205. Energy Innovation Hubs.



Sec. 206. ARPA–E research.



Sec. 207. International clean energy deployment program.



Sec. 208. International climate change adaptation and global
security.



Sec. 209. Energy efficiency and renewable energy worker
training.



Sec. 210. Worker transition.



Sec. 211. State programs for greenhouse gas reduction and
climate adaptation.



Sec. 212. Climate Change Health Protection and Promotion
Fund.



Sec. 213. Climate change safeguards for natural resources
conservation.



Sec. 214. Nuclear worker training.



Sec. 215. Supplemental agriculture, renewable energy, and
forestry.



1 SEC. 2. FINDINGS.



2 Congress finds that—



3 (1) the United States can take back control of



4 the energy future of the United States, strengthen



5 economic competitiveness, safeguard the health of



6 families and the environment, and ensure the na-



7 tional security, of the United States by increasing



8 energy independence;



9 (2) creating a clean energy future requires a



10 comprehensive approach that includes support for



11 the improvement of all energy sources, including



12 coal, natural gas, nuclear power, and renewable gen-



13 eration;



14 (3) efficiency in the energy sector also rep-



15 resents a critical avenue to reduce energy consump-



16 tion and carbon pollution, and those benefits can be



17 captured while generating additional savings for con-



18 sumers; 8



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1 (4) substantially increasing the investment in



2 the clean energy future of the United States will



3 provide economic opportunities to millions of people



4 in the United States and drive future economic



5 growth in this country;



6 (5) the United States is responsible for many of



7 the initial scientific advances in clean energy tech-



8 nology, but, as of September 2009, the United



9 States has only 5 of the top 30 leading companies



10 in solar, wind, and advanced battery technology;



11 (6) investment in the clean energy sector will



12 allow companies in the United States to retake a



13 leadership position, and the jobs created by those in-



14 vestments will significantly accelerate growth in do-



15 mestic manufacturing;



16 (7) those opportunities also will result in sub-



17 stantial employment gains in construction, a sector



18 in which the median hourly wage is 17 percent high-



19 er than the national median;



20 (8) those jobs are distributed throughout the



21 United States, and the highest clean energy economy



22 employment growth rates in the last 10 years were



23 in the States of Idaho, Nebraska, South Dakota, Or-



24 egon, and New Mexico; 9



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1 (9) focusing on clean energy will dramatically



2 reduce pollution and significantly improve the health



3 of families in and the environment of the United



4 States;



5 (10) moving to a low-carbon economy must pro-



6 tect the most vulnerable populations in the United



7 States, including low-income families that are par-



8 ticularly affected by volatility in energy prices;



9 (11) if unchecked, the impact of climate change



10 will include widespread effects on health and welfare,



11 including—



12 (A) increased outbreaks from waterborne



13 diseases;



14 (B) more droughts;



15 (C) diminished agricultural production;



16 (D) severe storms and floods;



17 (E) heat waves;



18 (F) wildfires; and



19 (G) a substantial rise in sea levels, due in



20 part to—



21 (i) melting mountain glaciers;



22 (ii) shrinking sea ice; and



23 (iii) thawing permafrost; 10



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1 (12) the most recent science indicates that the



2 changes described in paragraph (11)(G) are occur-



3 ring faster and with greater intensity than expected;



4 (13) military officials, including retired admi-



5 rals and generals, concur with the intelligence com-



6 munity that climate change acts as a threat multi-



7 plier for instability and presents significant national



8 security challenges for the United States;



9 (14) massive portions of the infrastructure of



10 the United States, including critical military infra-



11 structure, are at risk from the effects of climate



12 change;



13 (15) impacts are already being felt in local com-



14 munities within the United States as well as by at-



15 risk populations abroad;



16 (16) the Declaration of the Leaders from the



17 Major Economies Forum on Energy and Climate,



18 representing 17 of the largest economies in the



19 world, recognizes the need to limit the increase in



20 global average temperatures to within 2 degrees



21 Centigrade, as a necessary step to prevent the cata-



22 strophic consequences of climate change; and



23 (17) the United States should lead the global



24 community in combating the threat of global climate



25 change and reaching a robust international agree-11



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1 ment to address global warming under the United



2 Nations Framework Convention on Climate Change,



3 done at New York on May 9, 1992 (or a successor



4 agreement).



5 SEC. 3. ECONOMYWIDE EMISSION REDUCTION GOALS.



6 The goals of this Act and the amendments made by



7 this Act are to reduce steadily the quantity of United



8 States greenhouse gas emissions such that—



9 (1) in 2012, the quantity of United States



10 greenhouse gas emissions does not exceed 97 percent



11 of the quantity of United States greenhouse gas



12 emissions in 2005;



13 (2) in 2020, the quantity of United States



14 greenhouse gas emissions does not exceed 80 percent



15 of the quantity of United States greenhouse gas



16 emissions in 2005;



17 (3) in 2030, the quantity of United States



18 greenhouse gas emissions does not exceed 58 percent



19 of the quantity of United States greenhouse gas



20 emissions in 2005; and



21 (4) in 2050, the quantity of United States



22 greenhouse gas emissions does not exceed 17 percent



23 of the quantity of United States greenhouse gas



24 emissions in 2005. 12



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1 SEC. 4. DEFINITIONS.



2 In this Act:



3 (1) ADMINISTRATOR.—The term ‘‘Adminis-



4 trator’’ means the Administrator of the Environ-



5 mental Protection Agency.



6 (2) INDIAN TRIBE.—The term ‘‘Indian tribe’’



7 has the meaning given the term in section 302 of the



8 Clean Air Act (42 U.S.C. 7602).



9 (3) STATE.—The term ‘‘State’’ has the mean-



10 ing given that term in section 302 of the Clean Air



11 Act (42 U.S.C. 7602).



12 DIVISION A—AUTHORIZATIONS



13 FOR POLLUTION REDUCTION,



14 TRANSITION, AND ADAPTA-



15 TION



16 SEC. 101. STRUCTURE OF ACT.



17 (a) AUTHORIZED AND ALLOCATED PROGRAMS.—The



18 following programs authorized under this division are
eli-



19 gible to receive an allocation under title VII of the
Clean



20 Air Act:



21 (1) The program for greenhouse gas emission



22 reductions through transportation efficiency under



23 part C of title VIII the Clean Air Act (as added by



24 sections 112 and 113 of this division). 13



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1 (2) The program for nuclear worker training



2 under section 132 of this division and 214 of divi-



3 sion B.



4 (3) State recycling programs under section 154



5 of this division and section 211 of division B.



6 (4) The supplemental agriculture and forestry



7 greenhouse gas reduction and renewable energy pro-



8 gram under section 155 of this division and section



9 215 of division B.



10 (5) The program for energy efficiency in build-



11 ing codes under section 163 of this division and sec-



12 tion 203 of division B.



13 (6) The program for retrofit for energy and en-



14 vironmental performance under section 164 of this



15 division and section 204 of division B.



16 (7) The program for worker transition under



17 part 2 of subtitle A of title III of this division and



18 section 210 of division B.



19 (8) The program for public health and climate



20 change under subpart B of part 1 of subtitle C of



21 title III of this division and section 212 of division



22 B.



23 (9) The program for climate change safeguards



24 for natural resources conservation under subpart C 14



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1 of part 1 of subtitle C of title III of this division and



2 section 213 of division B.



3 (10) The program for emission reductions from



4 reduced deforestation under section 753 of the Clean



5 Air Act (as added by section 322 of this division)



6 and section 771(d) of the Clean Air Act (as added



7 by section 111 of division B.



8 (11) The International Clean Energy Deploy-



9 ment Program under section 323 of this division and



10 section 207 of division B.



11 (12) The international climate change adapta-



12 tion and global security program under 324 of this



13 division and section 208 of division B.



14 (13) The program for water system mitigation



15 and adaptation partnerships under section 381 of



16 this division and section 211 of division B.



17 (14) The program for flood control, protection,



18 prevention, and response under section 382 of this



19 division and section 211 of division B.



20 (15) The program for wildfire under section



21 383 of this division and section 211 of division B.



22 (16) The Coastal and Great Lakes State Adap-



23 tation Program under section 384 of this division



24 and section 211 of division B. 15



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1 (b) ALLOCATED PROGRAMS.—The following alloca-



2 tions are provided under title VII of the Clean Air Act:



3 (1) The Market Stability Reserve Fund under



4 section 726 of the Clean Air Act (as added by sec-



5 tion 101 of division B).



6 (2) The program to ensure real reductions in



7 industrial emissions under part F of title VII of the



8 Clean Air Act (as added by section 141 of division



9 B).



10 (3) The program for electricity consumers pur-



11 suant to section 772 of the Clean Air Act (as added



12 by section 111 of division B).



13 (4) The program for natural gas consumers



14 pursuant to section 773 of the Clean Air Act (as



15 added by section 111 of division B).



16 (5) The program for home heating oil and pro-



17 pane consumers pursuant to section 774 of the



18 Clean Air Act (as added by section 111 of division



19 B).



20 (6) The program for domestic fuel production,



21 including petroleum refiners and small business re-



22 finers, under section 775 of the Clean Air Act (as



23 added by section 111 of division B).



24 (7) The program for climate change consumer



25 refunds and low- and moderate-income consumers 16



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1 pursuant to section 776 of the Clean Air Act (as



2 added by section 111 of division B), including—



3 (A) consumer rebates under section 776(a)



4 of the Clean Air Act (as so added); and



5 (B) energy refunds under section 776(b) of



6 the Clean Air Act (as so added).



7 (8)  øThe program
for commercial deployment



8 of carbon capture and storage technology under sec-



9 tion 780 of the Clean Air Act (as added by section



10 111 of division B)¿.



11 (9) The program for early action recognition



12 pursuant to section 782 of the Clean Air Act (as



13 added by section 111 of division B).



14 (10) The program for investment in clean vehi-



15 cle technology under section 201 of division B.



16 (11) The program for State and local invest-



17 ment in energy efficiency and renewable energy



18 under section 202 of division B.



19 (12) The program for Energy Innovation Hubs



20 pursuant to section 205 of division B.



21 (13) The program for ARPA–E research pursu-



22 ant to section 206 of division B.



23 (14) The program for energy efficiency and re-



24 newable energy worker training under section 209 of



25 division B. 17



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1 (15) The State programs for greenhouse gas re-



2 duction and climate adaptation pursuant to section



3 211 of division B.



4 (c) NONALLOCATED PROGRAMS.—The following pro-



5 grams are authorized under this division:



6 (1) The SmartWay Transportation Efficiency



7 Program under section 822 of the Clean Air Act (as



8 added by section 114 of this division).



9 (2) The carbon capture and sequestration dem-



10 onstration and early deployment program under sec-



11 tion 125 of this division.



12 (3) The nuclear safety and waste management



13 programs under section 133 of this division.



14 (4) Water efficiency programs under subtitle D



15 of title I of this division.



16 (5) The Office of Consumer Advocacy under



17 section 151 of this division.



18 (6) The clean technology business competition



19 grant program under section 152 of this division.



20 (7) The product carbon disclosure program



21 under section 153 of this division.



22 (8) The Economic Development Climate



23 Change Fund under section 219 of the Public Works



24 and Economic Development Act of 1965 (as added



25 by section 156 of this division). 18



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1 (9) The program for renewable energy under



2 section 161 of this division.



3 (10) The program for advanced biofuels under



4 section 162 of this division.



5 (11) The program for emission reductions from



6 public transportation vehicles under subtitle G of



7 title I of this division.



8 (12) The Clean Energy and Accelerated Emis-



9 sion Reduction Program under section 181 of this



10 division.



11 (13) The program for advanced natural gas



12 technologies under section 182 of this division.



13 (14) The program for advanced energy research



14 under subtitle A of title II of this division.



15 (15) The program for drinking water adapta-



16 tion, technology, education, and research under sub-



17 title B of title II of this division.



18 (16) The program for clean energy curriculum



19 development grants under section 301 of this divi-



20 sion.



21 (17) The program for Development of Informa-



22 tion and Resources clearinghouse for vocational edu-



23 cation and job training in renewable energy sectors



24 under section 302 of this division. 19



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1 (18) The green construction careers demonstra-



2 tion project under section 303 of this division.



3 TITLE I—GREENHOUSE GAS



4 REDUCTION PROGRAMS



5 Subtitle A—Clean Transportation



6 SEC. 111. EMISSION STANDARDS.



7 Title VIII of the Clean Air Act (as added by section



8 121 of division B) is amended by adding at the end the



9 following:



10 ‘‘PART B—MOBILE SOURCES



11 ‘‘SEC. 821. GREENHOUSE GAS EMISSION STANDARDS FOR



12 MOBILE SOURCES.



13 ‘‘(a) NEW MOTOR VEHICLES AND NEW MOTOR VE-



14 HICLE ENGINES.—(1) Pursuant to section 202(a)(1), by



15 December 31, 2010, the Administrator shall promulgate



16 standards applicable to emissions of greenhouse gases



17 from new heavy-duty motor vehicles or new heavy-duty



18 motor vehicle engines, excluding such motor vehicles cov-



19 ered by the Tier II standards (as established by the Ad-



20 ministrator as of the date of the enactment of this sec-



21 tion). The Administrator may revise these standards from



22 time to time.



23 ‘‘(2) Regulations issued under section 202(a)(1) ap-



24 plicable to emissions of greenhouse gases from new heavy-



25 duty motor vehicles or new heavy-duty motor vehicle en-20



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1 gines, excluding such motor vehicles covered by the Tier



2 II standards (as established by the Administrator as of



3 the date of the enactment of this section), shall contain



4 standards that reflect the greatest degree of emissions
re-



5 duction achievable through the application of technology



6 which the Administrator determines will be available for



7 the model year to which such standards apply, giving ap-



8 propriate consideration to cost, energy, and safety
factors



9 associated with the application of such technology. Any



10 such regulations shall take effect after such period as
the



11 Administrator finds necessary to permit the development



12 and application of the requisite technology, and, at a
min-



13 imum, shall apply for a period no less than 3 model years



14 beginning no earlier than the model year commencing 4



15 years after such regulations are promulgated.



16 ‘‘(3) Regulations issued under section 202(a)(1) ap-



17 plicable to emissions of greenhouse gases from new heavy-



18 duty motor vehicles or new heavy-duty motor vehicle en-



19 gines, excluding such motor vehicles covered by the Tier



20 II standards (as established by the Administrator as of



21 the date of the enactment of this section), shall
supersede



22 and satisfy any and all of the rulemaking and compliance



23 requirements of section 32902(k) of title 49, United



24 States Code. 21



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1 ‘‘(4) Other than as specifically set forth in paragraph



2 (3) of this subsection, nothing in this section shall affect



3 or otherwise increase or diminish the authority of the
Sec-



4 retary of Transportation to adopt regulations to improve



5 the overall fuel efficiency of the commercial goods move-



6 ment system.



7 ‘‘(b) NONROAD VEHICLES AND ENGINES.—(1) Pur-



8 suant to section 213(a)(4) and (5), the Administrator



9 shall identify those classes or categories of new nonroad



10 vehicles or engines, or combinations of such classes or
cat-



11 egories, that, in the judgment of the Administrator, both



12 contribute significantly to the total emissions of green-



13 house gases from nonroad engines and vehicles, and pro-



14 vide the greatest potential for significant and
cost-effective



15 reductions in emissions of greenhouse gases. The Adminis-



16 trator shall promulgate standards applicable to emissions



17 of greenhouse gases from these new nonroad engines or



18 vehicles by December 31, 2012. The Administrator shall



19 also promulgate standards applicable to emissions of



20 greenhouse gases for such other classes and categories of



21 new nonroad vehicles and engines as the Administrator de-



22 termines appropriate and in the timeframe the Adminis-



23 trator determines appropriate. The Administrator shall



24 base such determination, among other factors, on the rel-



25 ative contribution of greenhouse gas emissions, and the
22



O:\\DEC\\DEC09671.xml [file 2 of 5] S.L.C.



1 costs for achieving reductions, from such classes or cat-



2 egories of new nonroad engines and vehicles. The Adminis-



3 trator may revise these standards from time to time.



4 ‘‘(2) Standards under section 213(a)(4) and (5) ap-



5 plicable to emissions of greenhouse gases from those
class-



6 es or categories of new nonroad engines or vehicles
identi-



7 fied in the first sentence of paragraph (1) of this sub-



8 section, shall achieve the greatest degree of emissions
re-



9 duction achievable based on the application of technology



10 which the Administrator determines will be available at



11 the time such standards take effect, taking into
consider-



12 ation cost, energy, and safety factors associated with
the



13 application of such technology. Any such regulations
shall



14 take effect at the earliest possible date after such
period



15 as the Administrator finds necessary to permit the devel-



16 opment and application of the requisite technology,
giving



17 appropriate consideration to the cost of compliance
within



18 such period, the applicable compliance dates for other



19 standards, and other appropriate factors, including the
pe-



20 riod of time appropriate for the transfer of applicable
tech-



21 nology from other applications, including motor vehicles,



22 and the period of time in which previously promulgated



23 regulations have been in effect.



24 ‘‘(3) For purposes of this section and standards



25 under section 213(a)(4) or (5) applicable to emissions of
23



O:\\DEC\\DEC09671.xml [file 2 of 5] S.L.C.



1 greenhouse gases, the term ‘nonroad engines and vehicles’



2 shall include non-internal combustion engines and the ve-



3 hicles these engines power (such as electric engines and



4 electric vehicles), for those non-internal combustion en-



5 gines and vehicles which would be in the same category



6 and have the same uses as nonroad engines and vehicles



7 that are powered by internal combustion engines.



8 ‘‘(c) AVERAGING, BANKING, AND TRADING OF EMIS-



9 SIONS CREDITS.—In establishing standards applicable to



10 emissions of greenhouse gases pursuant to this section
and



11 sections 202(a), 213(a)(4) and (5), and 231(a), the Ad-



12 ministrator may establish provisions for averaging, bank-



13 ing, and trading of greenhouse gas emissions credits
with-



14 in or across classes or categories of motor vehicles and



15 motor vehicle engines, nonroad vehicles and engines (in-



16 cluding marine vessels), and aircraft and aircraft
engines,



17 to the extent the Administrator determines appropriate



18 and considering the factors appropriate in setting stand-



19 ards under those sections. Such provisions may include



20 reasonable and appropriate provisions concerning genera-



21 tion, banking, trading, duration, and use of credits.



22 ‘‘(d) REPORTS.—The Administrator shall, from time



23 to time, submit a report to Congress that projects the



24 amount of greenhouse gas emissions from the transpor-



25 tation sector, including transportation fuels, for the
years 24



O:\\DEC\\DEC09671.xml [file 2 of 5] S.L.C.



1 2030 and 2050, based on the standards adopted under



2 this section.



3 ‘‘(e) GREENHOUSE GASES.—Notwithstanding the



4 provisions of section 711, hydrofluorocarbons shall be
con-



5 sidered a greenhouse gas for purposes of this section.’’.



6 SEC. 112. GREENHOUSE GAS EMISSION REDUCTIONS



7 THROUGH TRANSPORTATION EFFICIENCY.



8 (a) ENVIRONMENTAL PROTECTION AGENCY.—Title



9 VIII of the Clean Air Act (as amended by section 111



10 of this division) is amended by adding at the end the
fol-



11 lowing:



12 ‘‘PART C—TRANSPORTATION EMISSIONS



13 ‘‘SEC. 831. GREENHOUSE GAS EMISSION REDUCTIONS



14 THROUGH TRANSPORTATION EFFICIENCY.



15 ‘‘(a) IN GENERAL.—The Administrator, in consulta-



16 tion with the Secretary of Transportation (referred to in



17 this part as the ‘Secretary’), shall promulgate, and
update



18 from time to time, regulations to establish—



19 ‘‘(1) national transportation-related greenhouse



20 gas emission reduction goals that are commensurate



21 with the emission reduction goals established under



22 the Clean Energy Jobs and American Power Act



23 and amendments made by that Act;



24 ‘‘(2) standardized emission models and related



25 methods, to be used by States, metropolitan plan-25



O:\\DEC\\DEC09671.xml [file 2 of 5] S.L.C.



1 ning organizations, and air quality agencies to ad-



2 dress emission reduction goals, including—



3 ‘‘(A) the development of surface transpor-



4 tation-related greenhouse gas emission reduc-



5 tion targets pursuant to sections 134 and 135



6 of title 23, and sections 5303 and 5304 of title



7 49, United States Code;



8 ‘‘(B) the assessment of projected surface



9 transportation-related greenhouse gas emissions



10 from transportation strategies;



11 ‘‘(C) the assessment of projected surface



12 transportation-related greenhouse gas emissions



13 from State and regional transportation plans;



14 ‘‘(D) the establishment of surface trans-



15 portation-related greenhouse gas emission base-



16 lines at a national, State, and regional level;



17 and



18 ‘‘(E) the measurement and assessment of



19 actual surface transportation-related emissions



20 to assess progress toward achievement of emis-



21 sion targets at the State and regional level;



22 ‘‘(3) methods for collection of data on transpor-



23 tation-related greenhouse gas emissions; and



24 ‘‘(4) publication and distribution of successful



25 strategies employed by States, metropolitan planning 26



O:\\DEC\\DEC09671.xml [file 2 of 5] S.L.C.



1 organizations, and other entities to reduce transpor-



2 tation-related greenhouse gas emissions.



3 ‘‘(b) ROLE OF DEPARTMENT OF TRANSPOR-



4 TATION.—The Secretary, in consultation with the Admin-



5 istrator, shall promulgate, and update from time to time,



6 regulations—



7 ‘‘(1) to improve the ability of transportation



8 planning models and tools, including travel demand



9 models, to address greenhouse gas emissions;



10 ‘‘(2) to assess projected surface transportation-



11 related travel activity and transportation strategies



12 from State and regional transportation plans; and



13 ‘‘(3) to update transportation planning require-



14 ments and approval of transportation plans as nec-



15 essary to carry out this section.



16 ‘‘(c) CONSULTATION AND MODELS.—In promul-



17 gating the regulations, the Administrator and the Sec-



18 retary—



19 ‘‘(1) shall consult with States, metropolitan



20 planning organizations, and air quality agencies;



21 ‘‘(2) may use existing models and methodolo-



22 gies if the models and methodologies are widely con-



23 sidered to reflect the best practicable modeling or



24 methodological approach for assessing actual and



25 projected transportation-related greenhouse gas 27



O:\\DEC\\DEC09671.xml [file 2 of 5] S.L.C.



1 emissions from transportation plans and projects;



2 and



3 ‘‘(3) shall consider previously developed plans



4 that were based on models and methodologies for re-



5 ducing greenhouse gas emissions in applying those



6 regulations to the first approvals after promulgation.



7 ‘‘(d) TIMING.—The Administrator and the Secretary



8 shall—



9 ‘‘(1) publish proposed regulations under sub-



10 sections (a) and (b) not later than 1 year after the



11 date of enactment of this section; and



12 ‘‘(2) promulgate final regulations under sub-



13 sections (a) and (b) not later than 18 months after



14 the date of enactment of this section.



15 ‘‘(e) ASSESSMENT.—



16 ‘‘(1) IN GENERAL.—At least every 6 years after



17 promulgating final regulations under subsections (a)



18 and (b), the Administrator and the Secretary shall



19 jointly assess current and projected progress in re-



20 ducing national transportation-related greenhouse



21 gas emissions.



22 ‘‘(2) REQUIREMENTS.—The assessment shall



23 examine the contributions to emission reductions at-



24 tributable to—



25 ‘‘(A) improvements in vehicle efficiency; 28



O:\\DEC\\DEC09671.xml [file 2 of 5] S.L.C.



1 ‘‘(B) greenhouse gas performance of trans-



2 portation fuels;



3 ‘‘(C) reductions in vehicle miles traveled;



4 ‘‘(D) changes in consumer demand and use



5 of transportation management systems; and



6 ‘‘(E) any other greenhouse gas-related



7 transportation policies enacted by Congress.



8 ‘‘(3) RESULTS OF ASSESSMENT.—The Sec-



9 retary and the Administrator shall consider—



10 ‘‘(A) the results of the assessment con-



11 ducted under this subsection; and



12 ‘‘(B) based on those results, whether tech-



13 nical or other updates to regulations required



14 under this section and sections 134 and 135 of



15 title 23, and sections 5303 and 5304 of title 49,



16 United States Code, are necessary.’’.



17 (b) METROPOLITAN PLANNING ORGANIZATIONS.—



18 (1) TITLE 23.—Section 134 of title 23, United



19 States Code, is amended—



20 (A) in subsection (a)(1)—



21 (i) by striking ‘‘minimizing’’ and in-



22 serting ‘‘reducing’’; and



23 (ii) by inserting ‘‘, reliance on oil, im-



24 pacts on the environment, transportation- 29



O:\\DEC\\DEC09671.xml [file 2 of 5] S.L.C.



1 related greenhouse gas emissions,’’ after



2 ‘‘consumption’’;



3 (B) in subsection (h)(1)(E)—



4 (i) by inserting ‘‘sustainability, and



5 livability, reduce surface transportation-re-



6 lated greenhouse gas emissions and reli-



7 ance on oil, adapt to the effects of climate



8 change,’’ after ‘‘energy conservation,’’;



9 (ii) by inserting ‘‘and public health’’



10 after ‘‘quality of life’’; and



11 (iii) by inserting ‘‘, including housing



12 and land use patterns’’ after ‘‘development



13 patterns’’;



14 (C) in subsection (i)—



15 (i) in paragraph (4)(A)—



16 (I) by striking ‘‘consult, as ap-



17 propriate,’’ and inserting ‘‘cooperate’’;



18 (II) by inserting ‘‘transportation,



19 public transportation, air quality, and



20 housing, and shall consult, as appro-



21 priate, with State and local agencies



22 responsible for’’ after ‘‘responsible



23 for’’ and



24 (III) by inserting ‘‘public



25 health,’’ after ‘‘conservation,’’; and 30



O:\\DEC\\DEC09671.xml [file 2 of 5] S.L.C.



1 (ii) in paragraph (5)(C)(iii), by insert-



2 ing ‘‘and through the website of the metro-



3 politan planning organization, including



4 emission reduction targets and strategies



5 developed under subsection (k)(6), includ-



6 ing an analysis of the anticipated effects of



7 the targets and strategies,’’ after ‘‘World



8 Wide Web’’; and



9 (D) in subsection (k), by adding at the end



10 the following:



11 ‘‘(6) TRANSPORTATION GREENHOUSE GAS RE-



12 DUCTION EFFORTS.—



13 ‘‘(A) IN GENERAL.—Within a metropolitan



14 planning area serving a transportation manage-



15 ment area, the transportation planning process



16 under this section shall address transportation-



17 related greenhouse gas emissions by including



18 emission reduction targets and strategies to



19 meet those targets.



20 ‘‘(B) ELIGIBLE ORGANIZATIONS.—



21 ‘‘(i) MPOS  WITHIN
TMAS.—All provi-



22 sions and requirements of this section, in-



23 cluding the requirements of the transpor-



24 tation greenhouse gas reduction efforts,



25 shall apply to metropolitan planning orga-31



O:\\DEC\\DEC09671.xml [file 2 of 5] S.L.C.



1 nizations that also serve as transportation



2 management areas.



3 ‘‘(ii) OTHER MPOS.—A metropolitan



4 planning organization that does not serve



5 as a transportation management area—



6 ‘‘(I) may develop transportation



7 greenhouse gas emission reduction



8 targets and strategies to meet those



9 targets; and



10 ‘‘(II) if those targets and strate-



11 gies are developed, shall be subject to



12 all applicable provisions and require-



13 ments of this section and the Clean



14 Energy Jobs and American Power



15 Act, including requirements of the



16 transportation greenhouse gas reduc-



17 tion efforts.



18 ‘‘(C) ESTABLISHMENT OF TARGETS AND



19 CRITERIA.—



20 ‘‘(i) IN GENERAL.—Not later than 2



21 years after the promulgation of the final



22 regulations required under section 831 of



23 the Clean Air Act, each metropolitan plan-



24 ning organization that also serves as a



25 transportation management area shall de-32



O:\\DEC\\DEC09671.xml [file 2 of 5] S.L.C.



1 velop surface transportation-related green-



2 house gas emission reduction targets, as



3 well as strategies to meet those targets, in



4 consultation with State air agencies as



5 part of the metropolitan transportation



6 planning process under this section.



7 ‘‘(ii) MULTIPLE DESIGNATIONS.—If



8 more than 1 metropolitan planning organi-



9 zation has been designated within a metro-



10 politan area, each metropolitan planning



11 organization shall coordinate with other



12 metropolitan planning organizations in the



13 same metropolitan area to develop the tar-



14 gets and strategies described in clause (i).



15 ‘‘(iii) MINIMUM REQUIREMENTS.—



16 Each metropolitan transportation plan de-



17 veloped by a metropolitan planning organi-



18 zation under clause (i) shall, within the



19 plan, demonstrate progress in stabilizing



20 and reducing transportation-related green-



21 house gas emissions so as to contribute to



22 the achievement of State targets pursuant



23 to section 135(f)(9).



24 ‘‘(iv) REQUIREMENTS FOR TARGETS



25 AND STRATEGIES.—The targets and strat-33



O:\\DEC\\DEC09671.xml [file 2 of 5] S.L.C.



1 egies developed under this subparagraph



2 shall, at a minimum—



3 ‘‘(I) be based on the emission



4 and travel demand models and related



5 methodologies established in the final



6 regulations required under section



7 831 of the Clean Air Act;



8 ‘‘(II) inventory all sources of sur-



9 face transportation-related greenhouse



10 gas emissions;



11 ‘‘(III) apply to those modes of



12 surface transportation that are ad-



13 dressed in the planning process under



14 this section;



15 ‘‘(IV) be integrated and con-



16 sistent with regional transportation



17 plans and transportation improvement



18 programs; and



19 ‘‘(V) be selected through scenario



20 analysis, and include, pursuant to the



21 requirements of the transportation



22 planning process under this section,



23 transportation investment and man-



24 agement strategies that reduce green-



25 house gas emissions from the trans-34



O:\\DEC\\DEC09671.xml [file 2 of 5] S.L.C.



1 portation sector over the life of the



2 plan, such as—



3 ‘‘(aa) efforts to increase



4 public transportation ridership,



5 including through service im-



6 provements, capacity expansions,



7 and access enhancement;



8 ‘‘(bb) efforts to increase



9 walking, bicycling, and other



10 forms of nonmotorized transpor-



11 tation;



12 ‘‘(cc) implementation of zon-



13 ing and other land use regula-



14 tions and plans to support infill,



15 transit-oriented development, re-



16 development, or mixed use devel-



17 opment;



18 ‘‘(dd) travel demand man-



19 agement programs (including



20 carpool, vanpool, or car-share



21 projects), transportation pricing



22 measures, parking policies, and



23 programs to promote telecom-



24 muting, flexible work schedules,



25 and satellite work centers; 35



O:\\DEC\\DEC09671.xml [file 2 of 5] S.L.C.



1 ‘‘(ee) surface transportation



2 system operation improvements,



3 including intelligent transpor-



4 tation systems or other oper-



5 ational improvements to reduce



6 long-term greenhouse gas emis-



7 sions through reduced congestion



8 and improved system manage-



9 ment;



10 ‘‘(ff) intercity passenger rail



11 improvements;



12 ‘‘(gg) intercity bus improve-



13 ments;



14 ‘‘(hh) freight rail improve-



15 ments;



16 ‘‘(ii) use of materials or



17 equipment associated with the



18 construction or maintenance of



19 transportation projects that re-



20 duce greenhouse gas emissions;



21 ‘‘(jj) public facilities for sup-



22 plying electricity to electric or



23 plug-in hybrid-electric vehicles; or



24 ‘‘(kk) any other effort that



25 demonstrates progress in reduc-36



O:\\DEC\\DEC09671.xml [file 2 of 5] S.L.C.



1 ing transportation-related green-



2 house gas emissions in each met-



3 ropolitan planning organization



4 under this subsection.



5 ‘‘(D) REVIEW AND APPROVAL.—Not later



6 than 180 days after the date of submission of



7 a plan under this section—



8 ‘‘(i) the Secretary and the Adminis-



9 trator shall review the plan; and



10 ‘‘(ii) the Secretary shall approve a



11 plan developed by a metropolitan planning



12 organization pursuant to subparagraph (C)



13 if—



14 ‘‘(I) the Secretary finds that a



15 metropolitan planning organization



16 has developed, submitted, and pub-



17 lished the plan of the metropolitan



18 planning organization pursuant to this



19 section;



20 ‘‘(II) the Secretary, in consulta-



21 tion with the Administrator, deter-



22 mines that the plan is likely to achieve



23 the targets established by the metro-



24 politan planning organization under



25 this subsection; and 37



O:\\DEC\\DEC09671.xml [file 2 of 5] S.L.C.



1 ‘‘(III) the development of the



2 plan complies with the minimum re-



3 quirements established under clauses



4 (iii) and (iv) of subparagraph (C).



5 ‘‘(E) CERTIFICATION.—Failure to comply



6 with the requirements under subparagraph (C)



7 shall not impact certification standards under



8 paragraph (5).



9 ‘‘(7) DEFINITION OF METROPOLITAN PLANNING



10 ORGANIZATION.—In this subsection, the term ‘met-



11 ropolitan planning organization’ means a metropoli-



12 tan planning organization described in clause (i) or



13 (ii) of paragraph (6)(B).



14 ‘‘(8) SCENARIO ANALYSIS.—The term ‘scenario



15 analysis’ means the use of a planning tool that—



16 ‘‘(A) develops a range of scenarios rep-



17 resenting various combinations of transpor-



18 tation and land use strategies, and estimates of



19 how each of those scenarios would perform in



20 meeting the greenhouse gas emission reduction



21 targets based on analysis of various forces



22 (such as health, transportation, economic or en-



23 vironmental factors, and land use) that affect



24 growth;



25 ‘‘(B) may include features such as— 38



O:\\DEC\\DEC09671.xml [file 2 of 5] S.L.C.



1 ‘‘(i) the involvement of the general



2 public, key stakeholders, and elected offi-



3 cials on a broad scale;



4 ‘‘(ii) the creation of an opportunity



5 for those participants to educate each



6 other as to growth trends and trade-offs,



7 as a means to incorporate values and feed-



8 back into future plans; and



9 ‘‘(iii) the use of continuing efforts and



10 ongoing processes; and



11 ‘‘(C) may include key elements such as—



12 ‘‘(i) identification of the driving forces



13 behind planning decisions and outcomes;



14 ‘‘(ii) determination of patterns of



15 interaction;



16 ‘‘(iii) creation of scenarios for discus-



17 sion purposes;



18 ‘‘(iv) analysis of implications;



19 ‘‘(v) evaluation of scenarios; and



20 ‘‘(vi) use of monitoring indicators.’’.



21 (2) TITLE 49.—Section 5303 of title 49, United



22 States Code, is amended—



23 (A) in subsection (a)(1)—



24 (i) by striking ‘‘minimizing’’ and in-



25 serting ‘‘reducing’’; and 39



O:\\DEC\\DEC09671.xml [file 2 of 5] S.L.C.



1 (ii) by inserting ‘‘, reliance on oil, im-



2 pacts on the environment, transportation-



3 related greenhouse gas emissions,’’ after



4 ‘‘consumption’’;



5 (B) in subsection (h)(1)(E)—



6 (i) by inserting ‘‘sustainability, and



7 livability, reduce surface transportation-re-



8 lated greenhouse gas emissions and reli-



9 ance on oil, adapt to the effects of climate



10 change,’’ after ‘‘energy conservation,’’;



11 (ii) by inserting ‘‘and public health’’



12 after ‘‘quality of life’’; and



13 (iii) by inserting ‘‘, including housing



14 and land use patterns’’ after ‘‘development



15 patterns’’;



16 (C) in subsection (i)—



17 (i) in paragraph (4)(A)—



18 (I) by striking ‘‘consult, as ap-



19 propriate,’’ and inserting ‘‘cooperate’’;



20 (II) by inserting ‘‘transportation,



21 public transportation, air quality, and



22 housing, and shall consult, as appro-



23 priate, with State and local agencies



24 responsible for’’ after ‘‘responsible



25 for’’ and 40



O:\\DEC\\DEC09671.xml [file 2 of 5] S.L.C.



1 (III) by inserting ‘‘public



2 health,’’ after ‘‘conservation,’’; and



3 (ii) in paragraph (5)(C)(iii), by insert-



4 ing ‘‘and through the website of the metro-



5 politan planning organization, including



6 emission reduction targets and strategies



7 developed under subsection (k)(6), includ-



8 ing an analysis of the anticipated effects of



9 the targets and strategies,’’ after ‘‘World



10 Wide Web’’; and



11 (D) in subsection (k), by adding at the end



12 the following:



13 ‘‘(6) TRANSPORTATION GREENHOUSE GAS RE-



14 DUCTION EFFORTS.—



15 ‘‘(A) IN GENERAL.—Within a metropolitan



16 planning area serving a transportation manage-



17 ment area, the transportation planning process



18 under this section shall address transportation-



19 related greenhouse gas emissions by including



20 emission reduction targets and strategies to



21 meet those targets.



22 ‘‘(B) ELIGIBLE ORGANIZATIONS.—



23 ‘‘(i) IN GENERAL.—The requirements



24 of the transportation greenhouse gas re-



25 duction efforts shall apply only to metro-41



O:\\DEC\\DEC09671.xml [file 2 of 5] S.L.C.



1 politan planning organizations within a



2 transportation management area.



3 ‘‘(ii) DEVELOPMENT OF PLAN.—A



4 metropolitan planning organization that



5 does not serve as a transportation manage-



6 ment area—



7 ‘‘(I) may develop transportation



8 greenhouse gas emission reduction



9 targets and strategies to meet those



10 targets; and



11 ‘‘(II) if those targets and strate-



12 gies are developed, shall be subject to



13 all provisions and requirements of this



14 section, including requirements of the



15 transportation greenhouse gas reduc-



16 tion efforts.



17 ‘‘(C) ESTABLISHMENT OF TARGETS AND



18 CRITERIA.—



19 ‘‘(i) IN GENERAL.—Not later than 2



20 years after the promulgation of the final



21 regulations required under section 831 of



22 the Clean Air Act, each metropolitan plan-



23 ning organization shall develop surface



24 transportation-related greenhouse gas



25 emission reduction targets, as well as 42



O:\\DEC\\DEC09671.xml [file 2 of 5] S.L.C.



1 strategies to meet those targets, in con-



2 sultation with State air agencies as part of



3 the metropolitan transportation planning



4 process under this section.



5 ‘‘(ii) MULTIPLE DESIGNATIONS.—If



6 more than 1 metropolitan planning organi-



7 zation has been designated within a metro-



8 politan area, each metropolitan planning



9 organization shall coordinate with other



10 metropolitan planning organizations in the



11 same metropolitan area to develop the tar-



12 gets and strategies described in clause (i).



13 ‘‘(iii) MINIMUM REQUIREMENTS.—



14 Each metropolitan transportation plan de-



15 veloped by a metropolitan planning organi-



16 zation under clause (i) shall, within the



17 plan, demonstrate progress in stabilizing



18 and reducing transportation-related green-



19 house gas emissions so as to contribute to



20 the achievement of State targets pursuant



21 to section 135(f)(9) of title 23.



22 ‘‘(iv) REQUIREMENTS FOR TARGETS



23 AND STRATEGIES.—The targets and strat-



24 egies developed under this subparagraph



25 shall, at a minimum— 43



O:\\DEC\\DEC09671.xml [file 2 of 5] S.L.C.



1 ‘‘(I) be based on the emission



2 models and related methodologies es-



3 tablished in the final regulations re-



4 quired under section 831 of the Clean



5 Air Act;



6 ‘‘(II) inventory all sources of sur-



7 face transportation-related greenhouse



8 gas emissions;



9 ‘‘(III) apply to those modes of



10 surface transportation that are ad-



11 dressed in the planning process under



12 this section;



13 ‘‘(IV) be integrated and con-



14 sistent with regional transportation



15 plans and transportation improvement



16 programs; and



17 ‘‘(V) be selected through scenario



18 analysis (as defined in section 134(k)



19 of title 23), and include, pursuant to



20 the requirements of the transportation



21 planning process under this section,



22 transportation investment and man-



23 agement strategies that reduce green-



24 house gas emissions from the trans-44



O:\\DEC\\DEC09671.xml [file 2 of 5] S.L.C.



1 portation sector over the life of the



2 plan, such as—



3 ‘‘(aa) efforts to increase



4 public transportation ridership,



5 including through service im-



6 provements, capacity expansions,



7 and access enhancement;



8 ‘‘(bb) efforts to increase



9 walking, bicycling, and other



10 forms of nonmotorized transpor-



11 tation;



12 ‘‘(cc) implementation of zon-



13 ing and other land use regula-



14 tions and plans to support infill,



15 transit-oriented development, re-



16 development, or mixed use devel-



17 opment;



18 ‘‘(dd) travel demand man-



19 agement programs (including



20 carpool, vanpool, or car-share



21 projects), transportation pricing



22 measures, parking policies, and



23 programs to promote telecom-



24 muting, flexible work schedules,



25 and satellite work centers; 45



O:\\DEC\\DEC09671.xml [file 2 of 5] S.L.C.



1 ‘‘(ee) surface transportation



2 system operation improvements,



3 including intelligent transpor-



4 tation systems or other oper-



5 ational improvements to reduce



6 long-term greenhouse gas emis-



7 sions through reduced congestion



8 and improved system manage-



9 ment;



10 ‘‘(ff) intercity passenger rail



11 improvements;



12 ‘‘(gg) intercity bus improve-



13 ments;



14 ‘‘(hh) freight rail improve-



15 ments;



16 ‘‘(ii) use of materials or



17 equipment associated with the



18 construction or maintenance of



19 transportation projects that re-



20 duce greenhouse gas emissions;



21 ‘‘(jj) public facilities for sup-



22 plying electricity to electric or



23 plug-in hybrid-electric vehicles; or



24 ‘‘(kk) any other effort that



25 demonstrates progress in reduc-46



O:\\DEC\\DEC09671.xml [file 2 of 5] S.L.C.



1 ing transportation-related green-



2 house gas emissions in each met-



3 ropolitan planning organization



4 under this subsection.



5 ‘‘(D) REVIEW AND APPROVAL.—Not later



6 than 180 days after the date of submission of



7 a plan under this section—



8 ‘‘(i) the Secretary and the Adminis-



9 trator shall review the plan; and



10 ‘‘(ii) the Secretary shall approve a



11 plan developed by a metropolitan planning



12 organization pursuant to subparagraph (C)



13 if—



14 ‘‘(I) the Secretary finds that a



15 metropolitan planning organization



16 has developed, submitted, and pub-



17 lished the plan of the metropolitan



18 planning organization pursuant to this



19 section;



20 ‘‘(II) the Secretary, in consulta-



21 tion with the Administrator, deter-



22 mines that the plan is likely to achieve



23 the targets established by the metro-



24 politan planning organization under



25 this subsection; and 47



O:\\DEC\\DEC09671.xml [file 2 of 5] S.L.C.



1 ‘‘(III) the development of the



2 plan complies with the minimum re-



3 quirements established under clauses



4 (iii) and (iv) of subparagraph (C).



5 ‘‘(E) CERTIFICATION.—Failure to comply



6 with the requirements under subparagraph (C)



7 shall not impact certification standards under



8 paragraph (5).



9 ‘‘(7) DEFINITION OF METROPOLITAN PLANNING



10 ORGANIZATION.—In this subsection, the term ‘met-



11 ropolitan planning organization’ means a metropoli-



12 tan planning organization described in clause (i) or



13 (ii) of paragraph (6)(B).’’.



14 (c) STATES.—



15 (1) TITLE 23.—Section 135 of title 23, United



16 States Code, is amended—



17 (A) in subsection (d)(1)(E)—



18 (i) by inserting ‘‘sustainability, and



19 livability, reduce surface transportation-re-



20 lated greenhouse gas emissions and reli-



21 ance on oil, adapt to the effects of climate



22 change,’’ after ‘‘energy conservation,’’;



23 (ii) by inserting ‘‘and public health’’



24 after ‘‘quality of life’’; and 48



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1 (iii) by inserting ‘‘, including housing



2 and land use patterns’’ after ‘‘development



3 patterns’’; and



4 (B) in subsection (f)—



5 (i) in paragraph (2)(D)(i)—



6 (I) by striking ‘‘, as appropriate,



7 in consultation’’ and inserting ‘‘in co-



8 operation’’;



9 (II) by inserting ‘‘State and local



10 agencies responsible for transpor-



11 tation, public transportation, air qual-



12 ity, and housing and in consultation



13 with’’ before ‘‘State, tribal’’; and



14 (III) by inserting ‘‘public



15 health,’’ after ‘‘conservation,’’;



16 (ii) in paragraph (3)(B)(iii), by insert-



17 ing ‘‘and through the website of the State,



18 including emission reduction targets and



19 strategies developed under paragraph (9)



20 and an analysis of the anticipated effects



21 of the targets and strategies’’ after ‘‘World



22 Wide Web’’; and



23 (iii) by adding at the end the fol-



24 lowing: 49



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1 ‘‘(9) TRANSPORTATION GREENHOUSE GAS RE-



2 DUCTION EFFORTS.—



3 ‘‘(A) IN GENERAL.—Within a State, the



4 transportation planning process under this sec-



5 tion, shall address transportation-related green-



6 house gas emissions by including emission re-



7 duction targets and strategies to meet those



8 targets.



9 ‘‘(B) ESTABLISHMENT OF TARGETS AND



10 CRITERIA.—



11 ‘‘(i) IN GENERAL.—Not later than 2



12 years after the promulgation of the final



13 regulations required under section 831 of



14 the Clean Air Act, each State shall develop



15 surface transportation-related greenhouse



16 gas emission reduction targets, as well as



17 strategies to meet those targets, in con-



18 sultation with State air agencies as part of



19 the transportation planning process under



20 this section.



21 ‘‘(ii) MINIMUM REQUIREMENTS.—



22 Each transportation plan developed by a



23 State under clause (i) shall, within the



24 plan, demonstrate progress in stabilizing



25 and reducing transportation-related green-50



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1 house gas emissions in the State so as to



2 contribute to the achievement of national



3 targets pursuant to section 831(a)(1) of



4 the Clean Air Act.



5 ‘‘(iii) REQUIREMENTS FOR TARGETS



6 AND STRATEGIES.—The targets and strat-



7 egies developed under this subparagraph



8 shall, at a minimum—



9 ‘‘(I) be based on the emission



10 models and related methodologies es-



11 tablished in the final regulations re-



12 quired under section 831 of the Clean



13 Air Act;



14 ‘‘(II) inventory all sources of sur-



15 face transportation-related greenhouse



16 gas emissions;



17 ‘‘(III) apply to those modes of



18 surface transportation that are ad-



19 dressed in the planning process under



20 this section;



21 ‘‘(IV) be integrated and con-



22 sistent with statewide transportation



23 plans and statewide transportation



24 improvement programs; and 51



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1 ‘‘(V) be selected through scenario



2 analysis (as defined in section



3 134(k)), and include, pursuant to the



4 requirements of the transportation



5 planning process under this section,



6 transportation investment and man-



7 agement strategies that reduce green-



8 house gas emissions from the trans-



9 portation sector over the life of the



10 plan, such as—



11 ‘‘(aa) efforts to increase



12 public transportation ridership,



13 including through service im-



14 provements, capacity expansions,



15 and access enhancement;



16 ‘‘(bb) efforts to increase



17 walking, bicycling, and other



18 forms of nonmotorized transpor-



19 tation;



20 ‘‘(cc) implementation of zon-



21 ing and other land use regula-



22 tions and plans to support infill,



23 transit-oriented development, re-



24 development, or mixed use devel-



25 opment; 52



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1 ‘‘(dd) travel demand man-



2 agement programs (including



3 carpool, vanpool, or car-share



4 projects), transportation pricing



5 measures, parking policies, and



6 programs to promote telecom-



7 muting, flexible work schedules,



8 and satellite work centers;



9 ‘‘(ee) surface transportation



10 system operation improvements,



11 including intelligent transpor-



12 tation systems or other oper-



13 ational improvements to reduce



14 congestion and improve system



15 management;



16 ‘‘(ff) intercity passenger rail



17 improvements;



18 ‘‘(gg) intercity bus improve-



19 ments;



20 ‘‘(hh) freight rail improve-



21 ments;



22 ‘‘(ii) use of materials or



23 equipment associated with the



24 construction or maintenance of 53



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1 transportation projects that re-



2 duce greenhouse gas emissions;



3 ‘‘(jj) public facilities for sup-



4 plying electricity to electric or



5 plug-in hybrid-electric vehicles; or



6 ‘‘(kk) any other effort that



7 demonstrates progress in reduc-



8 ing transportation-related green-



9 house gas emissions.



10 ‘‘(C) COORDINATION AND CONSULTATION



11 WITH PUBLIC AGENCIES.—Transportation



12 greenhouse gas targets and plans pursuant to



13 this section shall be developed—



14 ‘‘(i) in coordination with—



15 ‘‘(I) all metropolitan planning or-



16 ganizations covered by this section



17 within the State; and



18 ‘‘(II) transportation and air qual-



19 ity agencies within the State; and



20 ‘‘(ii) in consultation with representa-



21 tives of State and local housing, economic



22 development, and land use agencies.



23 ‘‘(D) ENFORCEMENT.—Not later than 180



24 days after the date of submission of a plan



25 under this section— 54



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1 ‘‘(i) the Secretary and the Adminis-



2 trator shall review the plan; and



3 ‘‘(ii) the Secretary shall approve a



4 plan developed by a State pursuant to sub-



5 paragraph (B) if—



6 ‘‘(I) the Secretary finds that a



7 State has developed, submitted, and



8 published the plan pursuant to this



9 section;



10 ‘‘(II) the Secretary, in consulta-



11 tion with the Administrator, deter-



12 mines that the plan is likely to achieve



13 the targets established by the State



14 under this subsection; and



15 ‘‘(III) the development of the



16 plan complies with the minimum re-



17 quirements established under clauses



18 (ii) and (iii) of subparagraph (B).



19 ‘‘(E) PLANNING FINDING.—Failure to



20 comply with the requirements under subpara-



21 graph (B) shall not impact the planning finding



22 under subsection (g)(7).’’.



23 (2) TITLE 49.—Section 5304 of title 49, United



24 States Code is amended—



25 (A) in subsection (d)(1)(E)— 55



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1 (i) by inserting ‘‘sustainability, and



2 livability, reduce surface transportation-re-



3 lated greenhouse gas emissions and reli-



4 ance on oil, adapt to the effects of climate



5 change,’’ after ‘‘energy conservation,’’;



6 (ii) by inserting ‘‘and public health’’



7 after ‘‘quality of life’’; and



8 (iii) by inserting ‘‘, including housing



9 and land use patterns’’ after ‘‘development



10 patterns’’; and



11 (B) in subsection (f)—



12 (i) in paragraph (2)(D)(i)—



13 (I) by striking ‘‘, as appropriate,



14 in consultation’’ and inserting ‘‘in co-



15 operation’’;



16 (II) by inserting ‘‘State and local



17 agencies responsible for transpor-



18 tation, public transportation, air qual-



19 ity, and housing and in consultation



20 with’’ before ‘‘State, tribal’’; and



21 (III) by inserting ‘‘public



22 health,’’ after ‘‘conservation,’’;



23 (ii) in paragraph (3)(B)(iii), by insert-



24 ing ‘‘and through the website of the State,



25 including emission reduction targets and 56



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1 strategies developed under paragraph (9)



2 and an analysis of the anticipated effects



3 of the targets and strategies’’ after ‘‘World



4 Wide Web’’; and



5 (iii) by adding at the end the fol-



6 lowing:



7 ‘‘(9) TRANSPORTATION GREENHOUSE GAS RE-



8 DUCTION EFFORTS.—



9 ‘‘(A) IN GENERAL.—Within a State, the



10 transportation planning process under this sec-



11 tion, shall address transportation-related green-



12 house gas emissions by including emission re-



13 duction targets and strategies to meet those



14 targets.



15 ‘‘(B) ESTABLISHMENT OF TARGETS AND



16 CRITERIA.—



17 ‘‘(i) IN GENERAL.—Not later than 2



18 years after the promulgation of the final



19 regulations required under section 831 of



20 the Clean Air Act, each State shall develop



21 surface transportation-related greenhouse



22 gas emission reduction targets, as well as



23 strategies to meet those targets, in con-



24 sultation with State air agencies as part of 57



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1 the transportation planning process under



2 this section.



3 ‘‘(ii) MINIMUM REQUIREMENTS.—



4 Each transportation plan developed by a



5 State under clause (i) shall, within the



6 plan, demonstrate progress in stabilizing



7 and reducing transportation-related green-



8 house gas emissions in the State so as to



9 contribute to the achievement of national



10 targets pursuant to section 831(a)(1) of



11 the Clean Air Act.



12 ‘‘(iii) REQUIREMENTS FOR TARGETS



13 AND STRATEGIES.—The targets and strat-



14 egies developed under this subparagraph



15 shall, at a minimum—



16 ‘‘(I) be based on the emission



17 models and related methodologies es-



18 tablished in the final regulations re-



19 quired under section 831 of the Clean



20 Air Act;



21 ‘‘(II) inventory all sources of sur-



22 face transportation-related greenhouse



23 gas emissions;



24 ‘‘(III) apply to those modes of



25 surface transportation that are ad-58



O:\\DEC\\DEC09671.xml [file 2 of 5] S.L.C.



1 dressed in the planning process under



2 this section;



3 ‘‘(IV) be integrated and con-



4 sistent with statewide transportation



5 plans and statewide transportation



6 improvement programs; and



7 ‘‘(V) be selected through scenario



8 analysis (as defined in section 134(k)



9 of title 23), and include, pursuant to



10 the requirements of the transportation



11 planning process under this section,



12 transportation investment and man-



13 agement strategies that reduce green-



14 house gas emissions from the trans-



15 portation sector over the life of the



16 plan, such as—



17 ‘‘(aa) efforts to increase



18 public transportation ridership,



19 including through service im-



20 provements, capacity expansions,



21 and access enhancement;



22 ‘‘(bb) efforts to increase



23 walking, bicycling, and other



24 forms of nonmotorized transpor-



25 tation; 59



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1 ‘‘(cc) implementation of zon-



2 ing and other land use regula-



3 tions and plans to support infill,



4 transit-oriented development, re-



5 development, or mixed use devel-



6 opment;



7 ‘‘(dd) travel demand man-



8 agement programs (including



9 carpool, vanpool, or car-share



10 projects), transportation pricing



11 measures, parking policies, and



12 programs to promote telecom-



13 muting, flexible work schedules,



14 and satellite work centers;



15 ‘‘(ee) surface transportation



16 system operation improvements,



17 including intelligent transpor-



18 tation systems or other oper-



19 ational improvements to reduce



20 congestion and improve system



21 management;



22 ‘‘(ff) intercity passenger rail



23 improvements;



24 ‘‘(gg) intercity bus improve-



25 ments; 60



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1 ‘‘(hh) freight rail improve-



2 ments;



3 ‘‘(ii) use of materials or



4 equipment associated with the



5 construction or maintenance of



6 transportation projects that re-



7 duce greenhouse gas emissions;



8 ‘‘(jj) public facilities for sup-



9 plying electricity to electric or



10 plug-in hybrid-electric vehicles; or



11 ‘‘(kk) any other effort that



12 demonstrates progress in reduc-



13 ing transportation-related green-



14 house gas emissions.



15 ‘‘(C) COORDINATION AND CONSULTATION



16 WITH PUBLIC AGENCIES.—Transportation



17 greenhouse gas targets and plans pursuant to



18 this section shall be developed—



19 ‘‘(i) in coordination with—



20 ‘‘(I) all metropolitan planning or-



21 ganizations covered by this section



22 within the State; and



23 ‘‘(II) transportation and air qual-



24 ity agencies within the State; and 61



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1 ‘‘(ii) in consultation with representa-



2 tives of State and local housing, economic



3 development, and land use agencies.



4 ‘‘(D) ENFORCEMENT.—Not later than 180



5 days after the date of submission of a plan



6 under this section—



7 ‘‘(i) the Secretary and the Adminis-



8 trator shall review the plan; and



9 ‘‘(ii) the Secretary shall approve a



10 plan developed by a State pursuant to sub-



11 paragraph (B) if—



12 ‘‘(I) the Secretary finds that a



13 State has developed, submitted, and



14 published the plan pursuant to this



15 section;



16 ‘‘(II) the Secretary, in consulta-



17 tion with the Administrator, deter-



18 mines that the plan is likely to achieve



19 the targets established by the State



20 under this subsection; and



21 ‘‘(III) the development of the



22 plan complies with the minimum re-



23 quirements established under clauses



24 (ii) and (iii) of subparagraph (B). 62



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1 ‘‘(E) PLANNING FINDING.—Failure to



2 comply with the requirements under subpara-



3 graph (B) shall not impact the planning finding



4 under subsection (g)(7).’’.



5 (d) APPLICABILITY.—Section 304 of the Clean Air



6 Act (42 U.S.C. 7604) shall not apply to the planning pro-



7 visions of this section or any amendment made by this



8 section.



9 (e) LAND USE AUTHORITY.—Nothing in this section



10 or an amendment made by this section—



11 (1) infringes on the existing authority of local



12 governments to plan or control land use; or



13 (2) provides or transfers authority over land



14 use to any other entity.



15 SEC. 113. TRANSPORTATION GREENHOUSE GAS EMISSION



16 REDUCTION PROGRAM GRANTS.



17 Part C of title VIII of the Clean Air Act (as amended



18 by section 112) is amended by adding at the end the fol-



19 lowing:



20 ‘‘SEC. 832. TRANSPORTATION GREENHOUSE GAS EMISSION



21 REDUCTION PROGRAM GRANTS.



22 ‘‘(a) IN GENERAL.—The Secretary of Transportation



23 (referred to in this section as the ‘Secretary’) shall
provide



24 grants to States and metropolitan planning organizations
63



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1 to carry out the purposes of this section for each fiscal



2 year—



3 ‘‘(1) to support the developing and updating of



4 transportation greenhouse gas reduction targets and



5 strategies; and



6 ‘‘(2) to provide financial assistance to imple-



7 ment plans approved pursuant to—



8 ‘‘(A) sections 134(k)(6) and 135(f)(9) of



9 title 23, United States Code; and



10 ‘‘(B) sections 5303(k)(6) and 5304(f)(9) of



11 title 49, United States Code.



12 ‘‘(b) PLANNING GRANTS.—



13 ‘‘(1) IN GENERAL.—Subject to paragraph (2),



14 the Secretary shall allocate not more than 5 percent



15 of the funds available to carry out this section for



16 a fiscal year for metropolitan planning organizations



17 to develop and update transportation plans, includ-



18 ing targets and strategies for greenhouse gas emis-



19 sion reduction under—



20 ‘‘(A) sections 134(k)(6) and 135(f)(9) of



21 title 23, United States Code; and



22 ‘‘(B) sections 5303(k)(6) and 5304(f)(9) of



23 title 49, United States Code.



24 ‘‘(2) ELIGIBLE ORGANIZATIONS.—The Sec-



25 retary shall distribute the funds available in (1) to 64



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1 metropolitan planning organizations (as defined in



2 section 134(k)(7) of title 23, United States Code) in



3 the proportion that—



4 ‘‘(A) the population within such a metro-



5 politan planning organization; bears to



6 ‘‘(B) the total population of all such met-



7 ropolitan planning organizations.



8 ‘‘(c) PERFORMANCE GRANTS.—



9 ‘‘(1) IN GENERAL.—After allocating funds pur-



10 suant to subsection (b)(1), the Secretary shall use



11 the remainder of amounts made available to carry



12 out this section to provide grants to States and met-



13 ropolitan planning organizations.



14 ‘‘(2) CRITERIA.—In providing grants under this



15 subsection, the Secretary, in consultation with the



16 Administrator, shall develop criteria for providing



17 the grants, taking into consideration, with respect to



18 areas to be covered by the grants—



19 ‘‘(A) the quantity of total greenhouse gas



20 emissions to be reduced as a result of imple-



21 mentation of a plan, within a covered area, as



22 determined by methods established under sec-



23 tion 831(a);



24 ‘‘(B) the quantity of total greenhouse gas



25 emissions to be reduced per capita as a result 65



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1 of implementation of a plan, within the covered



2 area, as determined by methods established



3 under section 831(a);



4 ‘‘(C) the cost-effectiveness of reducing



5 greenhouse gas emissions during the life of the



6 plan;



7 ‘‘(D) progress toward achieving emission



8 reductions target established under—



9 ‘‘(i) sections 134(k)(6) and 135(f)(9)



10 of title 23, United States Code; and



11 ‘‘(ii) sections 5303(k)(6) and



12 5304(f)(9) of title 49, United States Code;



13 ‘‘(E) reductions in greenhouse gas emis-



14 sions previously achieved by States and metro-



15 politan planning organizations during the 5-



16 year period beginning on the date of enactment



17 of this Act;



18 ‘‘(F) plans that increase transportation op-



19 tions and mobility, particularly for low-income



20 individuals, minorities, the elderly, households



21 without motor vehicles, cost-burdened house-



22 holds, and the disabled; and



23 ‘‘(G) other factors, including innovative ap-



24 proaches, minimization of costs, and consider-



25 ation of economic development, revenue genera-66



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1 tion, consumer fuel cost-savings, and other eco-



2 nomic, environmental and health benefits, as



3 the Secretary determines to be appropriate.



4 ‘‘(d) REQUIREMENT FOR REDUCED EMISSIONS.—A



5 performance grant under subsection (c) may be used only



6 to fund strategies that demonstrate a reduction in green-



7 house gas emissions that is sustainable over the life of
the



8 applicable transportation plan.



9 ‘‘(e) COST-SHARING.—The Federal share of the costs



10 of a project receiving Federal financial assistance under



11 this section shall be 80 percent.



12 ‘‘(f) COMPLIANCE WITH APPLICABLE LAWS.—



13 ‘‘(1) IN GENERAL.—Subject to paragraph (2), a



14 project receiving funds under this section shall com-



15 ply with all applicable Federal laws (including regu-



16 lations), including—



17 ‘‘(A) subchapter IV of chapter 31 of title



18 40, United States Code; and



19 ‘‘(B) applicable requirements of titles 23



20 and 49, United States Code.



21 ‘‘(2) ELIGIBILITY.—Project eligibility shall be



22 determined in accordance with this section.



23 ‘‘(3) DETERMINATION OF APPLICABLE MODAL



24 REQUIREMENTS.—The Secretary shall— 67



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1 ‘‘(A) have the discretion to designate the



2 specific modal requirements that shall apply to



3 a project; and



4 ‘‘(B) be guided by the predominant modal



5 characteristics of the project in the event that



6 a project has cross-modal application.



7 ‘‘(g) ADDITIONAL REQUIREMENTS.—



8 ‘‘(1) IN GENERAL.—As a condition on the re-



9 ceipt of financial assistance under this section, the



10 interests of public transportation employees affected



11 by the assistance shall be protected under arrange-



12 ments that the Secretary of Labor determines—



13 ‘‘(A) to be fair and equitable; and



14 ‘‘(B) to provide benefits equal to the bene-



15 fits established under section 5333(b) of title



16 49, United States Code.



17 ‘‘(2) WAGES AND BENEFITS.—Laborers and



18 mechanics employed on projects funded with



19 amounts made available under this section shall be



20 paid wages and benefits not less than those deter-



21 mined by the Secretary of Labor under subchapter



22 IV of chapter 31 of title 40, United States Code, to



23 be prevailing in the same locality.



24 ‘‘(h) MISCELLANEOUS.— 68



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1 ‘‘(1) ROAD-USE AND CONGESTION PRICING



2 MEASURES.—All projects funded by amounts made



3 available under this section shall be eligible to re-



4 ceive amounts collected through road-use and con-



5 gestion pricing measures.



6 ‘‘(2) LIMITATIONS.—The Administrator may



7 not approve any transportation plan for a project



8 that would be inconsistent with existing design, pro-



9 curement, and construction guidelines established by



10 the Department of Transportation.



11 ‘‘(3) SUBGRANTEES.—With the approval of the



12 Secretary, recipients of funding under this section



13 may enter into agreements providing for the transfer



14 of funds to noneligible public entities (such as local



15 governments, air quality agencies, zoning commis-



16 sions, special districts and transit agencies) that



17 have statutory responsibility or authority for actions



18 necessary to implement the strategies pursuant to—



19 ‘‘(A) sections 134(k)(6) and 135(f)(9) of



20 title 23, United States Code; and



21 ‘‘(B) sections 5303(k)(6) and 5304(f)(9) of



22 title 49, United States Code.’’. 69



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1 SEC. 114. SMARTWAY TRANSPORTATION EFFICIENCY PRO-



2 GRAM.



3 Part B of title VIII of the Clean Air Act (as amended



4 by section 111) is amended by adding at the end the fol-



5 lowing:



6 ‘‘SEC. 822. SMARTWAY TRANSPORTATION EFFICIENCY PRO-



7 GRAM.



8 ‘‘(a) IN GENERAL.—There is established within the



9 Environmental Protection Agency a SmartWay Transpor-



10 tation Efficiency Program to quantify, demonstrate, and



11 promote the benefits of technologies, products, fuels,
and



12 operational strategies that reduce petroleum consumption,



13 air pollution, and greenhouse gas emissions from the mo-



14 bile source sector.



15 ‘‘(b) GENERAL DUTIES.—Under the program estab-



16 lished under this section, the Administrator shall carry
out



17 each of the following:



18 ‘‘(1) Development of measurement protocols to



19 evaluate the energy consumption and greenhouse gas



20 impacts from technologies and strategies in the mo-



21 bile source sector, including those for passenger



22 transport and goods movement.



23 ‘‘(2) Development of qualifying thresholds for



24 certifying, verifying, or designating energy-efficient,



25 low-greenhouse gas SmartWay technologies and 70



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1 strategies for each mode of passenger transportation



2 and goods movement.



3 ‘‘(3) Development of partnership and recogni-



4 tion programs to promote best practices and drive



5 demand for energy-efficient, low-greenhouse gas



6 transportation performance.



7 ‘‘(4) Promotion of the availability of, and en-



8 couragement of the adoption of, SmartWay certified



9 or verified technologies and strategies, and publica-



10 tion of the availability of financial incentives, such



11 as assistance from loan programs and other Federal



12 and State incentives.



13 ‘‘(c) SMARTWAY TRANSPORT FREIGHT PARTNER-



14 SHIP.—The Administrator shall establish a SmartWay



15 Transport Partnership program with shippers and carriers



16 of goods to promote energy-efficient, low-greenhouse gas



17 transportation. In carrying out such partnership, the Ad-



18 ministrator shall undertake each of the following:



19 ‘‘(1) Verification of the energy and greenhouse



20 gas performance of participating freight carriers, in-



21 cluding those operating rail, trucking, marine, and



22 other goods movement operations.



23 ‘‘(2) Publication of a comprehensive energy and



24 greenhouse gas performance index of freight modes



25 (including rail, trucking, marine, and other modes of 71



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1 transporting goods) and individual freight companies



2 so that shippers can choose to deliver their goods



3 more efficiently.



4 ‘‘(3) Development of tools for—



5 ‘‘(A) carriers to calculate their energy and



6 greenhouse gas performance; and



7 ‘‘(B) shippers to calculate the energy and



8 greenhouse gas impacts of moving their prod-



9 ucts and to evaluate the relative impacts from



10 transporting their goods by different modes and



11 corporate carriers.



12 ‘‘(4) Provision of recognition opportunities for



13 participating shipper and carrier companies dem-



14 onstrating advanced practices and achieving superior



15 levels of greenhouse gas performance.



16 ‘‘(d) IMPROVING FREIGHT GREENHOUSE GAS PER-



17 FORMANCE DATABASES.—The Administrator shall, in co-



18 ordination with the Secretary of Commerce and other ap-



19 propriate agencies, define and collect data on the
physical



20 and operational characteristics of the Nation’s truck
popu-



21 lation, with special emphasis on data related to energy
ef-



22 ficiency and greenhouse gas performance to inform the



23 performance index published under subsection (c)(2) of



24 this section, and other means of goods transport as
nec-72



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1 essary, at least every 5 years as part of the economic
cen-



2 sus required under title 13, United States Code.



3 ‘‘(e) ESTABLISHMENT OF FINANCING PROGRAM.—



4 The Administrator shall establish a SmartWay Financing



5 Program to competitively award funding to eligible
entities



6 identified by the Administrator in accordance with the



7 program requirements in subsection (g).



8 ‘‘(f) PURPOSES.—Under the SmartWay Financing



9 Program, eligible entities shall—



10 ‘‘(1) use funds awarded by the Administrator to



11 provide flexible loan and/or lease terms that increase



12 approval rates or lower the costs of loans and/or



13 leases in accordance with guidance developed by the



14 Administrator;



15 ‘‘(2) make such loans and/or leases available to



16 public and private entities for the purpose of adopt-



17 ing low-greenhouse gas technologies or strategies for



18 the mobile source sector that are designated by the



19 Administrator; and



20 ‘‘(3) use funds provided by the Administrator



21 for electrification of freight transportation systems



22 in major national goods movement corridors, giving



23 priority to electrification of transportation systems



24 in areas that are gateways for high volumes of inter-



25 national and national freight transport and require 73



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1 substantial criteria pollutant emission reductions in



2 order to attain national ambient air quality stand-



3 ards.



4 ‘‘(g) PROGRAM REQUIREMENTS.—The Administrator



5 shall determine program design elements and require-



6 ments, including—



7 ‘‘(1) the type of financial mechanism with



8 which to award funding, in the form of grants and/



9 or contracts;



10 ‘‘(2) the designation of eligible entities to re-



11 ceive funding, such as State, tribal, and local gov-



12 ernments, regional organizations comprised of gov-



13 ernmental units, nonprofit organizations, or for-prof-



14 it companies;



15 ‘‘(3) criteria for evaluating applications from el-



16 igible entities, including anticipated—



17 ‘‘(A) cost-effectiveness of loan or lease pro-



18 gram on a metric-ton-of-greenhouse gas-saved-



19 per-dollar basis; and



20 ‘‘(B) ability to promote the loan or lease



21 program and associated technologies and strate-



22 gies to the target audience; and



23 ‘‘(4) reporting requirements for entities that re-



24 ceive awards, including— 74



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1 ‘‘(A) actual cost-effectiveness and green-



2 house gas savings from the loan or lease pro-



3 gram based on a methodology designated by the



4 Administrator;



5 ‘‘(B) the total number of applications and



6 number of approved applications; and



7 ‘‘(C) terms granted to loan and lease re-



8 cipients compared to prevailing market prac-



9 tices and/or rates.



10 ‘‘(h) AUTHORIZATION OF APPROPRIATIONS.—Such



11 sums as necessary are authorized to be appropriated to



12 the Administrator to carry out this section.’’.



13 Subtitle B—Carbon Capture and



14 Sequestration



15 SEC. 121. NATIONAL STRATEGY.



16 (a) IN GENERAL.—Not later than 1 year after the



17 date of enactment of this Act, the Administrator, in con-



18 sultation with the Secretary of Energy, the Secretary of



19 the Interior, and the heads of such other relevant
Federal



20 agencies as the President may designate, shall submit to



21 Congress a report establishing a unified and comprehen-



22 sive strategy to address the key legal, regulatory, and



23 other barriers to the commercial-scale deployment of car-



24 bon capture and storage. 75



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1 (b) BARRIERS.—The report under this section



2 shall—



3 (1) identify the regulatory, legal, and other



4 gaps and barriers that—



5 (A) could be addressed by a Federal agen-



6 cy using existing statutory authority;



7 (B) require Federal legislation, if any; or



8 (C) would be best addressed at the State,



9 tribal, or regional level;



10 (2) identify regulatory implementation chal-



11 lenges, including challenges relating to approval of



12 State and tribal programs and delegation of author-



13 ity for permitting; and



14 (3) recommend rulemakings, Federal legisla-



15 tion, or other actions that should be taken to further



16 evaluate and address those barriers.



17 (c) FINDING.—Congress finds that it is in the public



18 interest to achieve widespread, commercial-scale deploy-



19 ment of carbon capture and storage in the United States



20 and throughout Asia before January 1, 2030.



21 SEC. 122. REGULATIONS FOR GEOLOGICAL SEQUESTRA-



22 TION SITES.



23 (a) COORDINATED CERTIFICATION AND PERMITTING



24 PROCESS.—Part A of title VIII of the Clean Air Act (as 76



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1 amended by section 124 of this division) is amended by



2 adding at the end the following:



3 ‘‘SEC. 813. GEOLOGICAL STORAGE SITES.



4 ‘‘(a) COORDINATED PROCESS.—



5 ‘‘(1) IN GENERAL.—The Administrator shall es-



6 tablish a coordinated approach to certifying and per-



7 mitting geological storage, taking into consideration



8 all relevant statutory authorities.



9 ‘‘(2) REQUIREMENTS.—In establishing such ap-



10 proach, the Administrator shall—



11 ‘‘(A) take into account, and reduce redun-



12 dancy with, the requirements of section 1421 of



13 the Safe Drinking Water Act (42 U.S.C. 300h),



14 including the rulemaking for geological storage



15 wells described in the proposed rule entitled



16 ‘Federal Requirements Under the Underground



17 Injection Control (UIC) Program for Carbon



18 Dioxide (CO2) Geologic Sequestration (GS)



19 Wells’ (73 Fed. Reg. 43492 (July 25, 2008));



20 and



21 ‘‘(B) to the maximum extent practicable,



22 reduce the burden on certified entities and im-



23 plementing authorities.



24 ‘‘(b) REGULATIONS.—Not later than 2 years after



25 the date of enactment of this title, the Administrator
shall 77



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1 promulgate regulations to protect human health and the



2 environment by minimizing the risk of escape to the at-



3 mosphere of carbon dioxide injected for purposes of geo-



4 logical storage.



5 ‘‘(c) REQUIREMENTS.—The regulations under sub-



6 section (b) shall include—



7 ‘‘(1) a process to obtain certification for geo-



8 logical storage under this section; and



9 ‘‘(2) requirements for—



10 ‘‘(A) monitoring, recordkeeping, and re-



11 porting for emissions associated with injection



12 into, and escape from, geological storage sites,



13 taking into account any requirements or proto-



14 cols developed under section 713;



15 ‘‘(B) public participation in the certifi-



16 cation process that maximizes transparency;



17 ‘‘(C) the sharing of data among States, In-



18 dian tribes, and the Environmental Protection



19 Agency; and



20 ‘‘(D) other elements or safeguards nec-



21 essary to achieve the purpose described in sub-



22 section (b).



23 ‘‘(d) REPORT.—



24 ‘‘(1) IN GENERAL.—Not later than 2 years



25 after the date of promulgation of regulations pursu-78



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1 ant to subsection (b), and not less frequently than



2 once every 3 years thereafter, the Administrator



3 shall submit to the Committee on Energy and Com-



4 merce of the House of Representatives and the Com-



5 mittee on Environment and Public Works of the



6 Senate a report describing geological storage in the



7 United States, and, to the extent relevant, other



8 countries in North America.



9 ‘‘(2) INCLUSIONS.—Each report under para-



10 graph (1) shall include—



11 ‘‘(A) data regarding injection, emissions to



12 the atmosphere, if any, and performance of ac-



13 tive and closed geological storage sites, includ-



14 ing those at which enhanced hydrocarbon recov-



15 ery operations occur;



16 ‘‘(B) an evaluation of the performance of



17 relevant Federal environmental regulations and



18 programs in ensuring environmentally protec-



19 tive geological storage practices;



20 ‘‘(C) recommendations on how those pro-



21 grams and regulations should be improved or



22 made more effective; and



23 ‘‘(D) other relevant information.’’. 79



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1 (b) SAFE DRINKING WATER ACT STANDARDS.—Sec-



2 tion 1421 of the Safe Drinking Water Act (42 U.S.C.



3 300h) is amended by adding at the end the following:



4 ‘‘(e) CARBON DIOXIDE GEOLOGICAL STORAGE



5 WELLS.—



6 ‘‘(1) IN GENERAL.—Not later than 1 year after



7 the date of enactment of this subsection, the Admin-



8 istrator shall promulgate regulations under sub-



9 section (a) for carbon dioxide geological storage



10 wells.



11 ‘‘(2) FINANCIAL RESPONSIBILITY.—



12 ‘‘(A) IN GENERAL.—The regulations under



13 paragraph (1) shall include requirements for



14 maintaining evidence of financial responsibility,



15 including financial responsibility for emergency



16 and remedial response, well plugging, site clo-



17 sure, and post-injection site care.



18 ‘‘(B) REGULATIONS.—Financial responsi-



19 bility may be established for carbon dioxide geo-



20 logical wells in accordance with regulations pro-



21 mulgated by the Administrator by any 1, or any



22 combination, of the following:



23 ‘‘(i) Insurance.



24 ‘‘(ii) Guarantee.



25 ‘‘(iii) Trust. 80



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1 ‘‘(iv) Standby trust.



2 ‘‘(v) Surety bond.



3 ‘‘(vi) Letter of credit.



4 ‘‘(vii) Qualification as a self-insurer.



5 ‘‘(viii) Any other method satisfactory



6 to the Administrator.’’.



7 SEC. 123. STUDIES AND REPORTS.



8 (a) STUDY OF LEGAL FRAMEWORK FOR GEOLOGICAL



9 STORAGE SITES.—



10 (1) ESTABLISHMENT OF TASK FORCE.—



11 (A) IN GENERAL.—As soon as practicable,



12 but not later than 180 days after the date of



13 enactment of this Act, the Administrator shall



14 establish a task force, to be composed of an



15 equal number of—



16 (i) subject matter experts;



17 (ii) nongovernmental organizations



18 with expertise regarding environmental pol-



19 icy;



20 (iii) academic experts with expertise in



21 environmental law;



22 (iv) State and tribal officials with en-



23 vironmental expertise;



24 (v) representatives of State and tribal



25 attorneys general; 81



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1 (vi) representatives of the Environ-



2 mental Protection Agency, the Department



3 of the Interior, the Department of Energy,



4 the Department of Transportation, and



5 other relevant Federal agencies; and



6 (vii) members of the private sector.



7 (B) STUDY.—The task force established



8 under subparagraph (A) shall conduct a study



9 of—



10 (i) existing Federal environmental



11 statutes, State environmental statutes, and



12 State common law that apply to geological



13 storage sites for carbon dioxide, including



14 the ability of those laws to serve as risk



15 management tools;



16 (ii) the existing statutory framework,



17 including Federal and State laws, that



18 apply to harm and damage to the environ-



19 ment or public health at closed sites at



20 which carbon dioxide injection has been



21 used for enhanced hydrocarbon recovery;



22 (iii) the statutory framework, environ-



23 mental health and safety considerations,



24 implementation issues, and financial impli-



25 cations of potential models for Federal, 82



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1 State, or private sector assumption of li-



2 abilities and financial responsibilities with



3 respect to closed geological storage sites;



4 (iv) private sector mechanisms, includ-



5 ing insurance and bonding, that may be



6 available to manage environmental, health,



7 and safety risks from closed geological



8 storage sites; and



9 (v) the subsurface mineral rights,



10 water rights, and property rights issues as-



11 sociated with geological storage of carbon



12 dioxide, including issues specific to Federal



13 land.



14 (2) REPORT.—Not later than 18 months after



15 the date of enactment of this Act, the task force es-



16 tablished under paragraph (1)(A) shall submit to



17 Congress a report describing the results of the study



18 conducted under that paragraph, including any con-



19 sensus recommendations of the task force.



20 (b) ENVIRONMENTAL STATUTES.—



21 (1) STUDY.—The Administrator shall conduct a



22 study of the means by which, and under what cir-



23 cumstances, the environmental statutes for which



24 the Environmental Protection Agency has responsi-83



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1 bility would apply to carbon dioxide injection and ge-



2 ological storage activities.



3 (2) REPORT.—Not later than 1 year after the



4 date of enactment of this Act, the Administrator



5 shall submit to Congress a report describing the re-



6 sults of the study conducted under paragraph (1).



7 SEC. 124. PERFORMANCE STANDARDS FOR COAL-FUELED



8 POWER PLANTS.



9 (a) IN GENERAL.—Part A of title VIII of the Clean



10 Air Act (as added by section 121 of division B) is
amended



11 by adding at the end the following:



12 ‘‘SEC. 812. PERFORMANCE STANDARDS FOR NEW COAL-



13 FIRED POWER PLANTS.



14 ‘‘(a) DEFINITIONS.—For purposes of this section:



15 ‘‘(1) COVERED EGU.—The term ‘covered EGU’



16 means a utility unit that is required to have a per-



17 mit under section 503(a) and is authorized under



18 State or Federal law to derive at least 30 percent of



19 its annual heat input from coal, petroleum coke, or



20 any combination of these fuels.



21 ‘‘(2) INITIALLY PERMITTED.—The term ‘ini-



22 tially permitted’ means that the owner or operator



23 has received a preconstruction approval or permit



24 under this Act, for the covered EGU as a new (not



25 a modified) source, but administrative review or ap-84



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1 peal of such approval or permit has not been ex-



2 hausted. A subsequent modification of any such ap-



3 proval or permits, ongoing administrative or court



4 review, appeals, or challenges, or the existence or



5 tolling of any time to pursue further review, appeals,



6 or challenges shall not affect the date on which a



7 covered EGU is considered to be initially permitted



8 under this paragraph.



9 ‘‘(b) STANDARDS.—(1) A covered EGU that is ini-



10 tially permitted on or after January 1, 2020, shall
achieve



11 an emission limit that is a 65 percent reduction in emis-



12 sions of the carbon dioxide produced by the unit, as



13 measured on an annual basis, or meet such more stringent



14 standard as the Administrator may establish pursuant to



15 subsection (c).



16 ‘‘(2) A covered EGU that is initially permitted after



17 January 1, 2009, and before January 1, 2020, shall, by



18 the applicable compliance date established under this



19 paragraph, achieve an emission limit that is a 50 percent



20 reduction in emissions of the carbon dioxide produced by



21 the unit, as measured on an annual basis. Compliance



22 with the requirement set forth in this paragraph shall be



23 required by the earliest of the following:



24 ‘‘(A) Four years after the date the Adminis-



25 trator has published pursuant to subsection (d) a re-85



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1 port that there are in commercial operation in the



2 United States electric generating units or other sta-



3 tionary sources equipped with carbon capture and



4 sequestration technology that, in the aggregate—



5 ‘‘(i) have a total of at least 4 gigawatts of



6 nameplate generating capacity of which—



7 ‘‘(I) at least 3 gigawatts must be elec-



8 tric generating units; and



9 ‘‘(II) up to 1 gigawatt may be indus-



10 trial applications, for which capture and



11 sequestration of 3,000,000 tons of carbon



12 dioxide per year on an aggregate



13 annualized basis shall be considered equiv-



14 alent to 1 gigawatt;



15 ‘‘(ii) include at least 2 electric generating



16 units, each with a nameplate generating capac-



17 ity of 250 megawatts or greater, that capture,



18 inject, and sequester carbon dioxide into geo-



19 logic formations other than oil and gas fields;



20 and



21 ‘‘(iii) are capturing and sequestering in the



22 aggregate at least 12,000,000 tons of carbon



23 dioxide per year, calculated on an aggregate



24 annualized basis.



25 ‘‘(B) January 1, 2025. 86



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1 ‘‘(3) If the deadline for compliance with paragraph



2 (2) is January 1, 2025, the Administrator may extend the



3 deadline for compliance by a covered EGU by up to 18



4 months if the Administrator makes a determination, based



5 on a showing by the owner or operator of the unit, that



6 it will be technically infeasible for the unit to meet the



7 standard by the deadline. The owner or operator must



8 submit a request for such an extension by no later than



9 January 1, 2022, and the Administrator shall provide for



10 public notice and comment on the extension request.



11 ‘‘(c) REVIEW AND REVISION OF STANDARDS.—Not



12 later than 2025 and at 5-year intervals thereafter, the
Ad-



13 ministrator shall review the standards for new covered



14 EGUs under this section and shall, by rule, reduce the



15 maximum carbon dioxide emission rate for new covered



16 EGUs to a rate which reflects the degree of emission
limi-



17 tation achievable through the application of the best
sys-



18 tem of emission reduction which (taking into account the



19 cost of achieving such reduction and any nonair quality



20 health and environmental impact and energy require-



21 ments) the Administrator determines has been adequately



22 demonstrated.



23 ‘‘(d) REPORTS.—Not later than 18 months after the



24 date of enactment of this title and semiannually there-



25 after, the Administrator shall publish a report on the 87



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1 nameplate capacity of units (determined pursuant to sub-



2 section (b)(2)(A)) in commercial operation in the United



3 States equipped with carbon capture and sequestration



4 technology, including the information described in sub-



5 section (b)(2)(A) (including the cumulative generating ca-



6 pacity to which carbon capture and sequestration retrofit



7 projects meeting the criteria described in section



8 775(b)(1)(A)(ii) and (b)(1)(A)(iv)(II) has been applied



9 and the quantities of carbon dioxide captured and seques-



10 tered by such projects).



11 ‘‘(e) REGULATIONS.—Not later than 2 years after the



12 date of enactment of this title, the Administrator shall



13 promulgate regulations to carry out the requirements of



14 this section.’’.



15 SEC. 125. CARBON CAPTURE AND SEQUESTRATION DEM-



16 ONSTRATION AND EARLY DEPLOYMENT PRO-



17 GRAM.



18 (a) DEFINITIONS.—For purposes of this section:



19 (1) SECRETARY.—The term ‘‘Secretary’’ means



20 the Secretary of Energy.



21 (2) DISTRIBUTION UTILITY.—The term ‘‘dis-



22 tribution utility’’ means an entity that distributes



23 electricity directly to retail consumers under a legal,



24 regulatory, or contractual obligation to do so. 88



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1 (3) ELECTRIC UTILITY.—The term ‘‘electric



2 utility’’ has the meaning provided by section 3 of the



3 Federal Power Act (16 U.S.C. 796).



4 (4) FOSSIL FUEL-BASED ELECTRICITY.—The



5 term ‘‘fossil fuel-based electricity’’ means electricity



6 that is produced from the combustion of fossil fuels.



7 (5) FOSSIL FUEL.—The term ‘‘fossil fuel’’



8 means coal, petroleum, natural gas or any derivative



9 of coal, petroleum, or natural gas.



10 (6) CORPORATION.—The term ‘‘Corporation’’



11 means the Carbon Storage Research Corporation es-



12 tablished in accordance with this section.



13 (7) QUALIFIED INDUSTRY ORGANIZATION.—The



14 term ‘‘qualified industry organization’’ means the



15 Edison Electric Institute, the American Public



16 Power Association, the National Rural Electric Co-



17 operative Association, a successor organization of



18 such organizations, or a group of owners or opera-



19 tors of distribution utilities delivering fossil fuel-



20 based electricity who collectively represent at least



21 20 percent of the volume of fossil fuel-based elec-



22 tricity delivered by distribution utilities to consumers



23 in the United States.



24 (8) RETAIL CONSUMER.—The term ‘‘retail con-



25 sumer’’ means an end-user of electricity. 89



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1 (b) CARBON STORAGE RESEARCH CORPORATION.—



2 (1) ESTABLISHMENT.—



3 (A) REFERENDUM.—Qualified industry or-



4 ganizations may conduct, at their own expense,



5 a referendum among the owners or operators of



6 distribution utilities delivering fossil fuel-based



7 electricity for the creation of a Carbon Storage



8 Research Corporation. Such referendum shall



9 be conducted by an independent auditing firm



10 agreed to by the qualified industry organiza-



11 tions. Voting rights in such referendum shall be



12 based on the quantity of fossil fuel-based elec-



13 tricity delivered to consumers in the previous



14 calendar year or other representative period as



15 determined by the Secretary pursuant to sub-



16 section (f). Upon approval of those persons rep-



17 resenting two-thirds of the total quantity of fos-



18 sil fuel-based electricity delivered to retail con-



19 sumers, the Corporation shall be established un-



20 less opposed by the State regulatory authorities



21 pursuant to subparagraph (B). All distribution



22 utilities voting in the referendum shall certify to



23 the independent auditing firm the quantity of



24 fossil fuel-based electricity represented by their



25 vote. 90



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1 (B) STATE REGULATORY AUTHORITIES.—



2 Upon its own motion or the petition of a quali-



3 fied industry organization, each State regu-



4 latory authority shall consider its support or op-



5 position to the creation of the Corporation



6 under subparagraph (A). State regulatory au-



7 thorities may notify the independent auditing



8 firm referred to in subparagraph (A) of their



9 views on the creation of the Corporation within



10 180 days after the date of enactment of this



11 Act. If 40 percent or more of the State regu-



12 latory authorities submit to the independent au-



13 diting firm written notices of opposition, the



14 Corporation shall not be established notwith-



15 standing the approval of the qualified industry



16 organizations as provided in subparagraph (A).



17 (2) TERMINATION.—The Corporation shall be



18 authorized to collect assessments and conduct oper-



19 ations pursuant to this section for a 10-year period



20 from the date 6 months after the date of enactment



21 of this Act. After such 10-year period, the Corpora-



22 tion is no longer authorized to collect assessments



23 and shall be dissolved on the date 15 years after



24 such date of enactment, unless the period is ex-



25 tended by an Act of Congress. 91



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1 (3) GOVERNANCE.—The Corporation shall oper-



2 ate as a division or affiliate of the Electric Power



3 Research Institute (referred to in this section as



4 ‘‘EPRI’’) and be managed by a Board of not more



5 than 15 voting members responsible for its oper-



6 ations, including compliance with this section. EPRI,



7 in consultation with the Edison Electric Institute,



8 the American Public Power Association and the Na-



9 tional Rural Electric Cooperative Association shall



10 appoint the Board members under clauses (i), (ii),



11 and (iii) of subparagraph (A) from among can-



12 didates recommended by those organizations. At



13 least a majority of the Board members appointed by



14 EPRI shall be representatives of distribution utilities



15 subject to assessments under subsection (d).



16 (A) MEMBERS.—The Board shall include



17 at least 1 representative of each of the fol-



18 lowing:



19 (i) Investor-owned utilities.



20 (ii) Utilities owned by a State agency,



21 a municipality, and an Indian tribe.



22 (iii) Rural electric cooperatives.



23 (iv) Fossil fuel producers.



24 (v) Nonprofit environmental organiza-



25 tions. 92



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1 (vi) Independent generators or whole-



2 sale power providers.



3 (vii) Consumer groups.



4 (viii) The National Energy Tech-



5 nology laboratory of the Department of



6 Energy.



7 (ix) The Environmental Protection



8 Agency.



9 (B) NONVOTING MEMBERS.—The Board



10 shall also include as additional nonvoting Mem-



11 bers the Secretary of Energy or his designee



12 and 2 representatives of State regulatory au-



13 thorities as defined in section 3 of the Public



14 Utility Regulatory Policies Act of 1978 (16



15 U.S.C. 2602), each designated by the National



16 Association of State Regulatory Utility Com-



17 missioners from States that are not within the



18 same transmission interconnection.



19 (4) COMPENSATION.—Corporation Board mem-



20 bers shall receive no compensation for their services,



21 nor shall Corporation Board members be reimbursed



22 for expenses relating to their service.



23 (5) TERMS.—Corporation Board members shall



24 serve terms of 4 years and may serve not more than



25 2 full consecutive terms. Members filling unexpired 93



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1 terms may serve not more than a total of 8 consecu-



2 tive years. Former members of the Corporation



3 Board may be reappointed to the Corporation Board



4 if they have not been members for a period of 2



5 years. Initial appointments to the Corporation Board



6 shall be for terms of 1, 2, 3, and 4 years, staggered



7 to provide for the selection of 3 members each year.



8 (6) STATUS OF CORPORATION.—The Corpora-



9 tion shall not be considered to be an agency, depart-



10 ment, or instrumentality of the United States, and



11 no officer or director or employee of the Corporation



12 shall be considered to be an officer or employee of



13 the United States Government, for purposes of title



14 5 or title 31 of the United States Code, or for any



15 other purpose, and no funds of the Corporation shall



16 be treated as public money for purposes of chapter



17 33 of title 31, United States Code, or for any other



18 purpose.



19 (c) FUNCTIONS AND ADMINISTRATION OF THE COR-



20 PORATION.—



21 (1) IN GENERAL.—The Corporation shall estab-



22 lish and administer a program to accelerate the com-



23 mercial availability of carbon dioxide capture and



24 storage technologies and methods, including tech-



25 nologies which capture and store, or capture and 94



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1 convert, carbon dioxide. Under such program com-



2 petitively awarded grants, contracts, and financial



3 assistance shall be provided and entered into with el-



4 igible entities. Except as provided in paragraph (8),



5 the Corporation shall use all funds derived from as-



6 sessments under subsection (d) to issue grants and



7 contracts to eligible entities.



8 (2) PURPOSE.—The purposes of the grants,



9 contracts, and assistance under this subsection shall



10 be to support commercial-scale demonstrations of



11 carbon capture or storage technology projects capa-



12 ble of advancing the technologies to commercial



13 readiness. Such projects should encompass a range



14 of different coal and other fossil fuel varieties, be



15 geographically diverse, involve diverse storage media,



16 and employ capture or storage, or capture and con-



17 version, technologies potentially suitable either for



18 new or for retrofit applications. The Corporation



19 shall seek, to the extent feasible, to support at least



20 5 commercial-scale demonstration projects inte-



21 grating carbon capture and sequestration or conver-



22 sion technologies.



23 (3) ELIGIBLE ENTITIES.—Entities eligible for



24 grants, contracts or assistance under this subsection



25 may include distribution utilities, electric utilities 95



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1 and other private entities, academic institutions, na-



2 tional laboratories, Federal research agencies, State



3 and tribal research agencies, nonprofit organizations,



4 or consortiums of 2 or more entities. Pilot-scale and



5 similar small-scale projects are not eligible for sup-



6 port by the Corporation. Owners or developers of



7 projects supported by the Corporation shall, where



8 appropriate, share in the costs of such projects.



9 Projects supported by the Corporation shall meet the



10 eligibility criteria of section 780(b) of the Clean Air



11 Act.



12 (4) GRANTS FOR EARLY MOVERS.—Fifty per-



13 cent of the funds raised under this section shall be



14 provided in the form of grants to electric utilities



15 that had, prior to the award of any grant under this



16 section, committed resources to deploy a large scale



17 electricity generation unit with integrated carbon



18 capture and sequestration or conversion applied to a



19 substantial portion of the unit’s carbon dioxide emis-



20 sions. Grant funds shall be provided to defray costs



21 incurred by such electricity utilities for at least 5



22 such electricity generation units.



23 (5) ADMINISTRATION.—The members of the



24 Board of Directors of the Corporation shall elect a



25 Chairman and other officers as necessary, may es-96



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1 tablish committees and subcommittees of the Cor-



2 poration, and shall adopt rules and bylaws for the



3 conduct of business and the implementation of this



4 section. The Board shall appoint an Executive Di-



5 rector and professional support staff who may be



6 employees of the Electric Power Research Institute



7 (EPRI). After consultation with the Technical Advi-



8 sory Committee established under subsection (j), the



9 Secretary, and the Director of the National Energy



10 Technology Laboratory to obtain advice and rec-



11 ommendations on plans, programs, and project selec-



12 tion criteria, the Board shall establish priorities for



13 grants, contracts, and assistance; publish requests



14 for proposals for grants, contracts, and assistance;



15 and award grants, contracts, and assistance competi-



16 tively, on the basis of merit, after the establishment



17 of procedures that provide for scientific peer review



18 by the Technical Advisory Committee. The Board



19 shall give preference to applications that reflect the



20 best overall value and prospect for achieving the



21 purposes of the section, such as those which dem-



22 onstrate an integrated approach for capture and



23 storage or capture and conversion technologies. The



24 Board members shall not participate in making 97



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1 grants or awards to entities with whom they are af-



2 filiated.



3 (6) USES OF GRANTS, CONTRACTS, AND ASSIST-



4 ANCE.—A grant, contract, or other assistance pro-



5 vided under this subsection may be used to purchase



6 carbon dioxide when needed to conduct tests of car-



7 bon dioxide storage sites, in the case of established



8 projects that are storing carbon dioxide emissions, or



9 for other purposes consistent with the purposes of



10 this section. The Corporation shall make publicly



11 available at no cost information learned as a result



12 of projects which it supports financially.



13 (7) INTELLECTUAL PROPERTY.—The Board



14 shall establish policies regarding the ownership of in-



15 tellectual property developed as a result of Corpora-



16 tion grants and other forms of technology support.



17 Such policies shall encourage individual ingenuity



18 and invention.



19 (8) ADMINISTRATIVE EXPENSES.—Up to 5 per-



20 cent of the funds collected in any fiscal year under



21 subsection (d) may be used for the administrative



22 expenses of operating the Corporation (not including



23 costs incurred in the determination and collection of



24 the assessments pursuant to subsection (d)). 98



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1 (9) PROGRAMS AND BUDGET.—Before August 1



2 each year, the Corporation, after consulting with the



3 Technical Advisory Committee and the Secretary



4 and the Director of the Department’s National En-



5 ergy Technology Laboratory and other interested



6 parties to obtain advice and recommendations, shall



7 publish for public review and comment its proposed



8 plans, programs, project selection criteria, and



9 projects to be funded by the Corporation for the



10 next calendar year. The Corporation shall also pub-



11 lish for public review and comment a budget plan for



12 the next calendar year, including the probable costs



13 of all programs, projects, and contracts and a rec-



14 ommended rate of assessment sufficient to cover



15 such costs. The Secretary may recommend programs



16 and activities the Secretary considers appropriate.



17 The Corporation shall include in the first publication



18 it issues under this paragraph a strategic plan or



19 roadmap for the achievement of the purposes of the



20 Corporation, as set forth in paragraph (2).



21 (10) RECORDS; AUDITS.—The Corporation shall



22 keep minutes, books, and records that clearly reflect



23 all of the acts and transactions of the Corporation



24 and make public such information. The books of the



25 Corporation shall be audited by a certified public ac-99



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1 countant at least once each fiscal year and at such



2 other times as the Corporation may designate. Cop-



3 ies of each audit shall be provided to the Congress,



4 all Corporation board members, all qualified indus-



5 try organizations, each State regulatory authority



6 and, upon request, to other members of the industry.



7 If the audit determines that the Corporation’s prac-



8 tices fail to meet generally accepted accounting prin-



9 ciples the assessment collection authority of the Cor-



10 poration under subsection (d) shall be suspended



11 until a certified public accountant renders a subse-



12 quent opinion that the failure has been corrected.



13 The Corporation shall make its books and records



14 available for review by the Secretary or the Comp-



15 troller General of the United States.



16 (11) PUBLIC ACCESS.—The Corporation



17 Board’s meetings shall be open to the public and



18 shall occur after at least 30 days advance public no-



19 tice. Meetings of the Board of Directors may be



20 closed to the public where the agenda of such meet-



21 ings includes only confidential matters pertaining to



22 project selection, the award of grants or contracts,



23 personnel matters, or the receipt of legal advice. The



24 minutes of all meetings of the Corporation shall be 100



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1 made available to and readily accessible by the pub-



2 lic.



3 (12) ANNUAL REPORT.—Each year the Cor-



4 poration shall prepare and make publicly available a



5 report which includes an identification and descrip-



6 tion of all programs and projects undertaken by the



7 Corporation during the previous year. The report



8 shall also detail the allocation or planned allocation



9 of Corporation resources for each such program and



10 project. The Corporation shall provide its annual re-



11 port to the Congress, the Secretary, each State regu-



12 latory authority, and upon request to the public. The



13 Secretary shall, not less than 60 days after receiving



14 such report, provide to the President and Congress



15 a report assessing the progress of the Corporation in



16 meeting the objectives of this section.



17 (d) ASSESSMENTS.—



18 (1) AMOUNT.—(A) In all calendar years fol-



19 lowing its establishment, the Corporation shall col-



20 lect an assessment on distribution utilities for all



21 fossil fuel-based electricity delivered directly to
retail



22 consumers (as determined under subsection (f)). The



23 assessments shall reflect the relative carbon dioxide



24 emission rates of different fossil fuel-based elec-101



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1 tricity, and initially shall be not less than the fol-



2 lowing 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.



3 (B) The Corporation is authorized to adjust the



4 assessments on fossil fuel-based electricity to reflect



5 changes in the expected quantities of such electricity



6 from different fuel types, such that the assessments



7 generate not less than $1.0 billion and not more



8 than $1.1 billion annually. The Corporation is au-



9 thorized to supplement assessments through addi-



10 tional financial commitments.



11 (2) INVESTMENT OF FUNDS.—Pending dis-



12 bursement pursuant to a program, plan, or project,



13 the Corporation may invest funds collected through



14 assessments under this subsection, and any other



15 funds received by the Corporation, only in obliga-



16 tions of the United States or any agency thereof, in



17 general obligations of any State or any political sub-



18 division thereof, in any interest-bearing account or



19 certificate of deposit of a bank that is a member of



20 the Federal Reserve System, or in obligations fully



21 guaranteed as to principal and interest by the



22 United States. 102



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1 (3) REVERSION OF UNUSED FUNDS.—If the



2 Corporation does not disburse, dedicate or assign 75



3 percent or more of the available proceeds of the as-



4 sessed fees in any calendar year 7 or more years fol-



5 lowing its establishment, due to an absence of quali-



6 fied projects or similar circumstances, it shall reim-



7 burse the remaining undedicated or unassigned bal-



8 ance of such fees, less administrative and other ex-



9 penses authorized by this section, to the distribution



10 utilities upon which such fees were assessed, in pro-



11 portion to their collected assessments.



12 (e) ERCOT.—



13 (1) ASSESSMENT, 
COLLECTION,  AND REMIT-



14 TANCE.—(A) Notwithstanding any other provision of



15 this section, within ERCOT, the assessment pro-



16 vided for in subsection (d) shall be—



17 (i) levied directly on qualified scheduling



18 entities, or their successor entities;



19 (ii) charged consistent with other charges



20 imposed on qualified scheduling entities as a fee



21 on energy used by the load-serving entities; and



22 (iii) collected and remitted by ERCOT to



23 the Corporation in the amounts and in the



24 same manner as set forth in subsection (d). 103



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1 (B) The assessment amounts referred to in sub-



2 paragraph (A) shall be—



3 (i) determined by the amount and types of



4 fossil fuel-based electricity delivered directly to



5 all retail customers in the prior calendar year



6 beginning with the year ending immediately



7 prior to the period described in subsection



8 (b)(2); and



9 (ii) take into account the number of renew-



10 able energy credits retired by the load-serving



11 entities represented by a qualified scheduling



12 entity within the prior calendar year.



13 (2) ADMINISTRATION EXPENSES.—Up to 1 per-



14 cent of the funds collected in any fiscal year by



15 ERCOT under the provisions of this subsection may



16 be used for the administrative expenses incurred in



17 the determination, collection and remittance of the



18 assessments to the Corporation.



19 (3) AUDIT.—ERCOT shall provide a copy of its



20 annual audit pertaining to the administration of the



21 provisions of this subsection to the Corporation.



22 (4) DEFINITIONS.—For the purposes of this



23 subsection:



24 (A) The term ‘‘ERCOT’’ means the Elec-



25 tric Reliability Council of Texas. 104



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1 (B) The term ‘‘load-serving entities’’ has



2 the meaning adopted by ERCOT Protocols and



3 in effect on the date of enactment of this Act.



4 (C) The term ‘‘qualified scheduling enti-



5 ties’’ has the meaning adopted by ERCOT Pro-



6 tocols and in effect on the date of enactment of



7 this Act.



8 (D) The term ‘‘renewable energy credit’’



9 has the meaning as promulgated and adopted



10 by the Public Utility Commission of Texas pur-



11 suant to section 39.904(b) of the Public Utility



12 Regulatory Act of 1999, and in effect on the



13 date of enactment of this Act.



14 (f) DETERMINATION OF FOSSIL FUEL-BASED ELEC-



15 TRICITY DELIVERIES.—



16 (1) FINDINGS.—The Congress finds that:



17 (A) The assessments under subsection (d)



18 are to be collected based on the amount of fossil



19 fuel-based electricity delivered by each distribu-



20 tion utility.



21 (B) Since many distribution utilities pur-



22 chase all or part of their retail consumer’s elec-



23 tricity needs from other entities, it may not be



24 practical to determine the precise fuel mix for 105



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1 the power sold by each individual distribution



2 utility.



3 (C) It may be necessary to use average



4 data, often on a regional basis with reference to



5 Regional Transmission Organization (‘‘RTO’’)



6 or NERC regions, to make the determinations



7 necessary for making assessments.



8 (2) DOE  PROPOSED
RULE.—The Secretary,



9 acting in close consultation with the Energy Infor-



10 mation Administration, shall issue for notice and



11 comment a proposed rule to determine the level of



12 fossil fuel electricity delivered to retail customers by



13 each distribution utility in the United States during



14 the most recent calendar year or other period deter-



15 mined to be most appropriate. Such proposed rule



16 shall balance the need to be efficient, reasonably pre-



17 cise, and timely, taking into account the nature and



18 cost of data currently available and the nature of



19 markets and regulation in effect in various regions



20 of the country. Different methodologies may be ap-



21 plied in different regions if appropriate to obtain the



22 best balance of such factors.



23 (3) FINAL RULE.—Within 6 months after the



24 date of enactment of this Act, and after opportunity



25 for comment, the Secretary shall issue a final rule 106



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1 under this subsection for determining the level and



2 type of fossil fuel-based electricity delivered to retail



3 customers by each distribution utility in the United



4 States during the appropriate period. In issuing



5 such rule, the Secretary may consider opportunities



6 and costs to develop new data sources in the future



7 and issue recommendations for the Energy Informa-



8 tion Administration or other entities to collect such



9 data. After notice and opportunity for comment the



10 Secretary may, by rule, subsequently update and



11 modify the methodology for making such determina-



12 tions.



13 (4) ANNUAL DETERMINATIONS.—Pursuant to



14 the final rule issued under paragraph (3), the Sec-



15 retary shall make annual determinations of the



16 amounts and types for each such utility and publish



17 such determinations in the Federal Register. Such



18 determinations shall be used to conduct the ref-



19 erendum under subsection (b) and by the Corpora-



20 tion in applying any assessment under this sub-



21 section.



22 (5) REHEARING AND JUDICIAL REVIEW.—The



23 owner or operator of any distribution utility that be-



24 lieves that the Secretary has misapplied the method-



25 ology in the final rule in determining the amount 107



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1 and types of fossil fuel electricity delivered by such



2 distribution utility may seek rehearing of such deter-



3 mination within 30 days of publication of the deter-



4 mination in the Federal Register. The Secretary



5 shall decide such rehearing petitions within 30 days.



6 The Secretary’s determinations following rehearing



7 shall be final and subject to judicial review in the



8 United States Court of Appeals for the District of



9 Columbia.



10 (g) COMPLIANCE WITH CORPORATION ASSESS-



11 MENTS.—The Corporation may bring an action in the ap-



12 propriate court of the United States to compel compliance



13 with an assessment levied by the Corporation under this



14 section. A successful action for compliance under this
sub-



15 section may also require payment by the defendant of the



16 costs incurred by the Corporation in bringing such
action.



17 (h) MIDCOURSE REVIEW.—Not later than 5 years



18 following establishment of the Corporation, the Comp-



19 troller General of the United States shall prepare an
anal-



20 ysis, and report to Congress, assessing the Corporation’s



21 activities, including project selection and methods of
dis-



22 bursement of assessed fees, impacts on the prospects for



23 commercialization of carbon capture and storage tech-



24 nologies, adequacy of funding, and administration of



25 funds. The report shall also make such recommendations
108



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1 as may be appropriate in each of these areas. The Cor-



2 poration shall reimburse the Government Accountability



3 Office for the costs associated with performing this mid-



4 course review.



5 (i) RECOVERY OF COSTS.—



6 (1) IN GENERAL.—A distribution utility whose



7 transmission, delivery, or sales of electric energy are



8 subject to any form of rate regulation shall not be



9 denied the opportunity to recover the full amount of



10 the prudently incurred costs associated with com-



11 plying with this section, consistent with applicable



12 State or Federal law.



13 (2) RATEPAYER REBATES.—Regulatory authori-



14 ties that approve cost recovery pursuant to para-



15 graph (1) may order rebates to ratepayers to the ex-



16 tent that distribution utilities are reimbursed



17 undedicated or unassigned balances pursuant to sub-



18 section (d)(3).



19 (j) TECHNICAL ADVISORY COMMITTEE.—



20 (1) ESTABLISHMENT.—There is established an



21 advisory committee, to be known as the ‘‘Technical



22 Advisory Committee’’.



23 (2) MEMBERSHIP.—The Technical Advisory



24 Committee shall be comprised of not less than 7



25 members appointed by the Board from among aca-109



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1 demic institutions, national laboratories, independent



2 research institutions, and other qualified institu-



3 tions. No member of the Committee shall be affili-



4 ated with EPRI or with any organization having



5 members serving on the Board. At least one member



6 of the Committee shall be appointed from among of-



7 ficers or employees of the Department of Energy



8 recommended to the Board by the Secretary of En-



9 ergy.



10 (3) CHAIRPERSON AND VICE CHAIRPERSON.—



11 The Board shall designate one member of the Tech-



12 nical Advisory Committee to serve as Chairperson of



13 the Committee and one to serve as Vice Chairperson



14 of the Committee.



15 (4) COMPENSATION.—The Board shall provide



16 compensation to members of the Technical Advisory



17 Committee for travel and other incidental expenses



18 and such other compensation as the Board deter-



19 mines to be necessary.



20 (5) PURPOSE.—The Technical Advisory Com-



21 mittee shall provide independent assessments and



22 technical evaluations, as well as make non-binding



23 recommendations to the Board, concerning Corpora-



24 tion activities, including but not limited to the fol-



25 lowing: 110



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1 (A) Reviewing and evaluating the Corpora-



2 tion’s plans and budgets described in subsection



3 (c)(9), as well as any other appropriate areas,



4 which could include approaches to prioritizing



5 technologies, appropriateness of engineering



6 techniques, monitoring and verification tech-



7 nologies for storage, geological site selection,



8 and cost control measures.



9 (B) Making annual non-binding rec-



10 ommendations to the Board concerning any of



11 the matters referred to in subparagraph (A), as



12 well as what types of investments, scientific re-



13 search, or engineering practices would best fur-



14 ther the goals of the Corporation.



15 (6) PUBLIC AVAILABILITY.—All reports, evalua-



16 tions, and other materials of the Technical Advisory



17 Committee shall be made available to the public by



18 the Board, without charge, at time of receipt by the



19 Board.



20 (k) LOBBYING RESTRICTIONS.—No funds collected



21 by the Corporation shall be used in any manner for influ-



22 encing legislation or elections, except that the
Corporation



23 may recommend to the Secretary and the Congress



24 changes in this section or other statutes that would fur-



25 ther the purposes of this section. 111



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1 (l) DAVIS-BACON COMPLIANCE.—The Corporation



2 shall ensure that entities receiving grants, contracts, or



3 other financial support from the Corporation for the



4 project activities authorized by this section are in
compli-



5 ance with subchapter IV of chapter 31 of title 40, United



6 States Code (commonly known as the ‘‘Davis-Bacon



7 Act’’).



8 Subtitle C—Nuclear and Advanced



9 Technologies



10 SEC. 131. FINDINGS AND POLICY.



11 (a) FINDINGS.—Congress finds that—



12 (1) in 2008, 104 nuclear power plants produced



13 19.6 percent of the electricity generated in the



14 United States, slightly less than the electricity gen-



15 erated by natural gas;



16 (2) nuclear energy is the largest provider of



17 clean, low-carbon, electricity, almost 8 times larger



18 than all renewable power production combined, ex-



19 cluding hydroelectric power;



20 (3) nuclear energy supplies consistent, base-load



21 electricity, independent of environmental conditions;



22 (4) by displacing fossil fuels that would other-



23 wise be used for electricity production, nuclear power



24 plants virtually eliminate emissions of greenhouse 112



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1 gases and criteria pollutants associated with acid



2 rain, smog, or ozone;



3 (5) nuclear power generation continues to re-



4 quire robust efforts to address issues of safety,



5 waste, and proliferation;



6 (6) even if every nuclear plant is granted a 20-



7 year extension, all currently operating nuclear plants



8 will be retired by 2055;



9 (7) long lead times for nuclear power plant con-



10 struction indicate that action to stimulate the nu-



11 clear power industry should not be delayed;



12 (8) the high upfront capital costs of nuclear



13 plant construction remain a substantial obstacle, de-



14 spite theoretical potential for significant cost reduc-



15 tion;



16 (9) translating theoretical cost reduction poten-



17 tial into actual reduced construction costs remains a



18 significant industry challenge that can be overcome



19 only through demonstrated performance;



20 (10) as of January 2009, 17 companies and



21 consortia have submitted applications to the Nuclear



22 Regulatory Commission for 26 new reactors in the



23 United States;



24 (11) those proposed reactors will use the latest



25 in nuclear technology for efficiency and safety, more 113



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1 advanced than the technology of the 1960s and



2 1970s found in the reactors currently operating in



3 the United States;



4 (12) increased resources for the Nuclear Regu-



5 latory Commission and reform of the licensing proc-



6 ess have improved the safety and timeliness of the



7 regulatory environment;



8 (13) the United States has not built a new re-



9 actor since the 1970s and, as a result, will need to



10 revitalize and retool the institutions and infrastruc-



11 ture necessary to construct, maintain, and support



12 new reactors, including improvements in manufac-



13 turing of nuclear components and training for the



14 next generation nuclear workforce; and



15 (14) those new reactors will launch a new era



16 for the nuclear industry, and translate into tens of



17 thousands of jobs



18 (b) STATEMENT OF POLICY.—It is the policy of the



19 United States, given the importance of transitioning to a



20 clean energy, low-carbon economy, to facilitate the
contin-



21 ued development and growth of a safe and clean nuclear



22 energy industry, through—



23 (1) reductions in financial and technical bar-



24 riers to construction and operation; and 114



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1 (2) incentives for the development of a well-



2 trained workforce and the growth of safe domestic



3 nuclear and nuclear-related industries.



4 SEC. 132. NUCLEAR WORKER TRAINING.



5 (a) DEFINITION OF APPLICABLE PERIOD.—In this



6 section, the term ‘‘applicable period’’ means—



7 (1) the 5-year period beginning on January 1,



8 2012; and



9 (2) each 5-year period beginning on each Janu-



10 ary 1 thereafter.



11 (b) USE OF FUNDS.—Of amounts made available to



12 carry out this section for the calendar years in each
appli-



13 cable period—



14 (1) the Secretary of Energy shall use such



15 amounts for each applicable period as the Secretary



16 of Energy determines to be necessary to increase the



17 number and amounts of nuclear science talent ex-



18 pansion grants and nuclear science competitiveness



19 grants provided under section 5004 of the America



20 COMPETES Act (42 U.S.C. 16532); and



21 (2) the Secretary of Labor, in consultation with



22 nuclear energy entities and organized labor, shall



23 use such amounts for each applicable period as the



24 Secretary of Labor determines to be necessary to



25 carry out programs expanding workforce training to 115



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1 meet the high demand for workers skilled in nuclear



2 power plant construction and operation, including



3 programs for—



4 (A) electrical craft certification;



5 (B) preapprenticeship career technical edu-



6 cation for industrialized skilled crafts that are



7 useful in the construction of nuclear power



8 plants;



9 (C) community college and skill center



10 training for nuclear power plant technicians;



11 (D) training of construction management



12 personnel for nuclear power plant construction



13 projects; and



14 (E) regional grants for integrated nuclear



15 energy workforce development programs.



16 SEC. 133. NUCLEAR SAFETY AND WASTE MANAGEMENT



17 PROGRAMS.



18 (a) NUCLEAR FACILITY LONG-TERM OPERATIONS



19 RESEARCH AND DEVELOPMENT PROGRAM.—



20 (1) ESTABLISHMENT.—As soon as practicable



21 after the date of enactment of this Act, the Sec-



22 retary of Energy (referred to in this section as the



23 ‘‘Secretary’’) shall establish a research and develop-



24 ment program— 116



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1 (A) to address the reliability, availability,



2 productivity, component aging, safety, and secu-



3 rity of nuclear power plants;



4 (B) to improve the performance of nuclear



5 power plants;



6 (C) to sustain the health and safety of em-



7 ployees of nuclear power plants;



8 (D) to assess the feasibility of nuclear



9 power plants to continue to provide clean and



10 economic electricity safely, substantially beyond



11 the first license extension period of the nuclear



12 power plants, which will—



13 (i) significantly contribute to the en-



14 ergy security of the United States; and



15 (ii) help protect the environment of



16 the United States; and



17 (E) to support significant carbon reduc-



18 tions, lower overall costs that are required to



19 reduce carbon emissions, and increase energy



20 security.



21 (2) CONDUCT OF PROGRAM.—



22 (A) IN GENERAL.—In carrying out the



23 program established under paragraph (1), the



24 Secretary shall— 117



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1 (i) build a fundamental scientific basis



2 to understand, predict, and measure



3 changes in materials, systems, structures,



4 equipment, and components as the mate-



5 rials, systems, structures, equipment, and



6 components age through continued oper-



7 ations in long-term service environments;



8 (ii) develop new safety analysis tools



9 and methods to enhance the performance



10 and safety of nuclear power plants;



11 (iii) develop advanced online moni-



12 toring, control, and diagnostics tech-



13 nologies to prevent equipment failures and



14 improve the safety of nuclear power plants;



15 (iv) establish a technical basis for ad-



16 vanced fuel designs (including silicon car-



17 bide fuel cladding) to increase the safety



18 margins of nuclear power plants; and



19 (v) examine issues, including—



20 (I) issues relating to material



21 degradation, plant aging, and tech-



22 nology upgrades; and



23 (II) any other issue that would



24 impact decisions to extend the lifespan



25 of nuclear power plants. 118



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1 (B) TECHNICAL SUPPORT.—In carrying



2 out the program established under paragraph



3 (1), the Secretary shall provide to the Chairman



4 of the Nuclear Regulatory Commission informa-



5 tion collected under the program—



6 (i) to help ensure informed decisions



7 regarding the extension of the life of nu-



8 clear power plants beyond a 60-year life-



9 span; and



10 (ii) for the licensing and long-term



11 management, and safe and economical op-



12 eration, of nuclear power plants.



13 (b) SPENT NUCLEAR WASTE DISPOSAL RESEARCH



14 AND DEVELOPMENT PROGRAM.—



15 (1) ESTABLISHMENT.—As soon as practicable



16 after the date of enactment of this Act, the Sec-



17 retary shall establish a research and development



18 program to improve the understanding of nuclear



19 spent fuel management and the entire nuclear fuel



20 cycle life.



21 (2) CONDUCT OF PROGRAM.—In carrying out



22 the program established under paragraph (1), the



23 Secretary shall carry out science-based research and



24 development activities to pursue dramatic improve-



25 ments in a range of nuclear spent fuel management 119



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1 options, including short-term and long-term storage



2 and disposal, and proliferation-resistant nuclear



3 spent fuel recycling.



4 (c) AUTHORIZATION OF APPROPRIATIONS.—There



5 are authorized to be appropriated such sums as are nec-



6 essary to carry out this section.



7 Subtitle D—Water Efficiency



8 SEC. 141. WATERSENSE.



9 (a) IN GENERAL.—There is established within the



10 Environmental Protection Agency a WaterSense program



11 to identify and promote water-efficient products, build-



12 ings, landscapes, facilities, processes, and services, so
as—



13 (1) to reduce water use;



14 (2) to reduce the strain on water, wastewater,



15 and stormwater infrastructure;



16 (3) to conserve energy used to pump, heat,



17 transport, and treat water; and



18 (4) to preserve water resources for future gen-



19 erations, through voluntary labeling of, or other



20 forms of communications about, products, buildings,



21 landscapes, facilities, processes, and services that



22 meet the highest water efficiency and performance



23 criteria.



24 (b) DUTIES.—The Administrator shall—



25 (1) establish— 120



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1 (A) a WaterSense label to be used for cer-



2 tain items; and



3 (B) the procedure by which an item may



4 be certified to display the WaterSense label;



5 (2) promote WaterSense-labeled products,



6 buildings, landscapes, facilities, processes, and serv-



7 ices in the market place as the preferred tech-



8 nologies and services for—



9 (A) reducing water use; and



10 (B) ensuring product and service perform-



11 ance;



12 (3) work to enhance public awareness of the



13 WaterSense label through public outreach, edu-



14 cation, and other means;



15 (4) preserve the integrity of the WaterSense



16 label by—



17 (A) establishing and maintaining perform-



18 ance criteria so that products, buildings, land-



19 scapes, facilities, processes, and services labeled



20 with the WaterSense label perform as well or



21 better than less water-efficient counterparts;



22 (B) overseeing WaterSense certifications



23 made by third parties;



24 (C) conducting reviews of the use of the



25 WaterSense label in the marketplace and taking 121



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1 corrective action in any case in which misuse of



2 the label is identified; and



3 (D) carrying out such other measures as



4 the Administrator determines to be appropriate;



5 (5) regularly review and, if appropriate, update



6 WaterSense criteria for categories of products, build-



7 ings, landscapes, facilities, processes, and services,



8 at least once every 4 years;



9 (6) to the maximum extent practicable, regu-



10 larly estimate and make available to the public the



11 production and relative market shares of, and the



12 savings of water, energy, and capital costs of water,



13 wastewater, and stormwater infrastructure attrib-



14 utable to the use of WaterSense-labeled products,



15 buildings, landscapes, facilities, processes, and serv-



16 ices, at least annually;



17 (7) solicit comments from interested parties and



18 the public prior to establishing or revising a



19 WaterSense category, specification, installation cri-



20 terion, or other criterion (or prior to effective dates



21 for any such category, specification, installation cri-



22 terion, or other criterion);



23 (8) provide reasonable notice to interested par-



24 ties and the public of any changes (including effec-



25 tive dates), on the adoption of a new or revised cat-122



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1 egory, specification, installation criterion, or other



2 criterion, along with—



3 (A) an explanation of the changes; and



4 (B) as appropriate, responses to comments



5 submitted by interested parties and the public;



6 (9) provide appropriate lead time (as deter-



7 mined by the Administrator) prior to the applicable



8 effective date for a new or significant revision to a



9 category, specification, installation criterion, or other



10 criterion, taking into account the timing require-



11 ments of the manufacturing, marketing, training,



12 and distribution process for the specific product,



13 building and landscape, or service category ad-



14 dressed;



15 (10) identify and, if appropriate, implement



16 other voluntary approaches in commercial, institu-



17 tional, residential, industrial, and municipal sectors



18 to encourage recycling and reuse technologies to im-



19 prove water efficiency or lower water use; and



20 (11) where appropriate, apply the WaterSense



21 label to water-using products that are labeled by the



22 Energy Star program implemented by the Adminis-



23 trator and the Secretary of Energy. 123



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1 (c) AUTHORIZATION OF APPROPRIATIONS.—There



2 are authorized to be appropriated to carry out this sec-



3 tion—



4 (1) $7,500,000 for fiscal year 2010;



5 (2) $10,000,000 for fiscal year 2011;



6 (3) $20,000,000 for fiscal year 2012;



7 (4) $50,000,000 for fiscal year 2013; and



8 (5) for each subsequent fiscal year, the applica-



9 ble amount during the preceding fiscal year, as ad-



10 justed to reflect changes for the 12-month period



11 ending the preceding November 30 in the Consumer



12 Price Index for All Urban Consumers published by



13 the Bureau of Labor Statistics of the Department of



14 Labor.



15 SEC. 142. FEDERAL PROCUREMENT OF WATER-EFFICIENT



16 PRODUCTS.



17 (a) DEFINITIONS.—In this section:



18 (1) AGENCY.—The term ‘‘Agency’’ has the



19 meaning given the term in section 7902(a) of title



20 5, United States Code.



21 (2) FEMP-DESIGNATED PRODUCT.—The term



22 ‘‘FEMP-designated product’’ means a product that



23 is designated under the Federal Energy Manage-



24 ment Program of the Department of Energy as 124



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1 being among the highest 25 percent of equivalent



2 products for efficiency.



3 (3) PRODUCT, 
BUILDING,  LANDSCAPE,  FACIL-



4 ITY, PROCESS, AND SERVICE.—The terms ‘‘product’’,



5 ‘‘building’’, ‘‘landscape’’, ‘‘facility’’, ‘‘process’’,
and



6 ‘‘service’’ do not include—



7 (A) any water-using product, building,



8 landscape, facility, process, or service designed



9 or procured for combat or combat-related mis-



10 sions; or



11 (B) any product, building, landscape, facil-



12 ity, process, or service already covered by the



13 Federal procurement regulations established



14 under section 553 of the National Energy Con-



15 servation Policy Act (42 U.S.C. 8259b).



16 (4) WATERSENSE PRODUCT, 
BUILDING,  LAND-



17 SCAPE, FACILITY, PROCESS, OR SERVICE.—The term



18 ‘‘WaterSense product, building, landscape, facility,



19 process, or service’’ means a product, building, land-



20 scape, facility, process, or service that is labeled for



21 water efficiency under the WaterSense program.



22 (5) WATERSENSE PROGRAM.—The term



23 ‘‘WaterSense program’’ means the program estab-



24 lished by section 141. 125



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1 (b) PROCUREMENT OF WATER EFFICIENT PROD-



2 UCTS.—



3 (1) REQUIREMENT.—



4 (A) IN GENERAL.—To meet the require-



5 ments of an agency for a water-using product,



6 building, landscape, facility, process, or service,



7 the head of an Agency shall, except as provided



8 in paragraph (2), procure—



9 (i) a WaterSense product, building,



10 landscape, facility, process, or service; or



11 (ii) a FEMP-designated product.



12 (B) SENSE OF CONGRESS REGARDING IN-



13 STALLATION PREFERENCES.—It is the sense of



14 Congress that a WaterSense irrigation system



15 should, to the maximum extent practicable, be



16 installed and audited by a WaterSense-certified



17 irrigation professional to ensure optimal per-



18 formance.



19 (2) EXCEPTIONS.—The head of an Agency shall



20 not be required to procure a WaterSense product,



21 building, landscape, facility, process, or service or



22 FEMP-designated product under paragraph (1) if



23 the head of the Agency finds in writing that—



24 (A) a WaterSense product, building, land-



25 scape, facility, process, or service or FEMP-des-126



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1 ignated product is not cost-effective over the life



2 of the product, building, landscape, facility,



3 process, or service, taking energy, water, and



4 wastewater service cost savings into account; or



5 (B) no WaterSense product, building, land-



6 scape, facility, process, or service or FEMP-des-



7 ignated product is reasonably available that



8 meets the functional requirements of the Agen-



9 cy.



10 (3) PROCUREMENT PLANNING.—



11 (A) IN GENERAL.—The head of an Agency



12 shall incorporate criteria used for evaluating



13 WaterSense products, buildings, landscapes, fa-



14 cilities, processes, and services and FEMP-des-



15 ignated products into—



16 (i) the specifications for all procure-



17 ments involving water-using products,



18 buildings, landscapes, facilities, processes,



19 and systems, including guide specifications,



20 project specifications, and construction,



21 renovation, and services contracts that in-



22 clude provision of water-using products,



23 buildings, landscapes, facilities, processes,



24 and systems; and 127



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1 (ii) the factors for the evaluation of



2 offers received for the procurement.



3 (B) LISTING OF WATER-EFFICIENT PROD-



4 UCTS IN FEDERAL CATALOGS.—WaterSense



5 products, buildings, landscapes, facilities, proc-



6 esses, and systems and FEMP-designated prod-



7 ucts shall be clearly identified and prominently



8 displayed in any inventory or listing of products



9 by the General Services Administration or the



10 Defense Logistics Agency.



11 (C) ADDITIONAL MEASURES.—The head of



12 an Agency shall consider, to the maximum ex-



13 tent practicable, additional measures for reduc-



14 ing Agency water use, including water reuse



15 technologies, leak detection and repair, and use



16 of waterless products that perform similar func-



17 tions to existing water-using products.



18 (c) RETROFIT PROGRAMS.—The head of each Agen-



19 cy, working in coordination with the Administrator and



20 the heads of such other Agencies as the President may



21 designate, shall develop standards and implementation



22 procedures for a building water efficiency retrofit pro-



23 gram, which shall include the following elements:



24 (1) EVALUATION OF PRODUCTS AND SYS-



25 TEMS.—Not later than 270 days after the date of 128



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1 enactment of this Act, each Agency shall evaluate



2 water-consuming products and systems in buildings



3 operated by such Agency and identify opportunities



4 for retrofit and replacement of such products and



5 systems with high-efficiency equipment, such as



6 zero-water-consumption equipment, high-efficiency



7 toilets, high-efficiency shower heads, and high-effi-



8 ciency faucets, and other products that are certified



9 as Watersense products or FEMP-designated prod-



10 ucts.



11 (2) RETROFIT PLAN.—Not later than 360 days



12 after the date of enactment of this Act, each Agency



13 shall, in coordination with other appropriate Agen-



14 cies and officials, prepare a water efficiency retrofit



15 plan that shall, to the maximum extent practicable,



16 maximize retrofitting of water-consuming products



17 and systems and replacement with high-efficiency



18 equipment described in paragraph (1).



19 (d) GUIDELINES.—Not later than 180 days after the



20 date of enactment of this Act, the Administrator, working



21 in coordination with the Secretary of Energy and the



22 heads of such other Agencies as the President may des-



23 ignate, shall issue guidelines to carry out this section.
129



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1 SEC. 143. STATE RESIDENTIAL WATER EFFICIENCY AND



2 CONSERVATION INCENTIVES PROGRAM.



3 (a) DEFINITIONS.—In this section:



4 (1) ELIGIBLE ENTITY.—The term ‘‘eligible enti-



5 ty’’ means a State government, local or county gov-



6 ernment, tribal government, wastewater or sewerage



7 utility, municipal water authority, energy utility,



8 water utility, or nonprofit organization that meets



9 the requirements of subsection (b).



10 (2) INCENTIVE PROGRAM.—The term ‘‘incentive



11 program’’ means a program for administering finan-



12 cial incentives for consumer purchase and installa-



13 tion of water-efficient products, buildings (including



14 New Water-Efficient Homes), landscapes, processes,



15 or services described in subsection (b)(1).



16 (3) RESIDENTIAL WATER-EFFICIENT PRODUCT,



17 BUILDING, LANDSCAPE, PROCESS, OR SERVICE.—



18 (A) IN GENERAL.—The term ‘‘residential



19 water-efficient product, building, landscape,



20 process, or service’’ means a product, building,



21 landscape, process, or service for a residence or



22 its landscape that is rated for water efficiency



23 and performance—



24 (i) by the WaterSense program; or



25 (ii) if a WaterSense specification does



26 not exist, by the Energy Star program or 130



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1 an incentive program approved by the Ad-



2 ministrator.



3 (B) INCLUSIONS.—The term ‘‘residential



4 water-efficient product, building, landscape,



5 process, or service’’ includes—



6 (i) faucets;



7 (ii) irrigation technologies and serv-



8 ices;



9 (iii) point-of-use water treatment de-



10 vices;



11 (iv) reuse and recycling technologies;



12 (v) toilets;



13 (vi) clothes washers;



14 (vii) dishwashers;



15 (viii) showerheads;



16 (ix) xeriscaping and other landscape



17 conversions that replace irrigated turf; and



18 (x) New Water Efficient Homes cer-



19 tified by the WaterSense program.



20 (4) WATERSENSE PROGRAM.—The term



21 ‘‘WaterSense program’’ means the program estab-



22 lished by section 141.



23 (b) ELIGIBLE ENTITIES.—An entity shall be eligible



24 to receive an allocation under subsection (c) if the
entity— 131



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1 (1) establishes (or has established) an incentive



2 program to provide financial incentives to residential



3 consumers for the purchase of residential water-effi-



4 cient products, buildings, landscapes, processes, or



5 services;



6 (2) submits an application for the allocation at



7 such time, in such form, and containing such infor-



8 mation as the Administrator may require; and



9 (3) provides assurances satisfactory to the Ad-



10 ministrator that the entity will use the allocation to



11 supplement, but not supplant, funds made available



12 to carry out the incentive program.



13 (c) AMOUNT OF ALLOCATIONS.—For each fiscal year,



14 the Administrator shall determine the amount to allocate



15 to each eligible entity to carry out subsection (d),
taking



16 into consideration—



17 (1) the population served by the eligible entity



18 during the most recent calendar year for which data



19 are available;



20 (2) the targeted population of the incentive pro-



21 gram of the eligible entity, such as general house-



22 holds, low-income households, or first-time home-



23 owners, and the probable effectiveness of the incen-



24 tive program for that population; 132



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1 (3) for existing programs, the effectiveness of



2 the program in encouraging the adoption of water-



3 efficient products, buildings, landscapes, facilities,



4 processes, and services;



5 (4) any allocation to the eligible entity for a



6 preceding fiscal year that remains unused; and



7 (5) the per capita water demand of the popu-



8 lation served by the eligible entity during the most



9 recent calendar year for which data are available



10 and the accessibility of water supplies to such entity.



11 (d) USE OF ALLOCATED FUNDS.—Funds allocated to



12 an eligible entity under subsection (c) may be used to
pay



13 up to 50 percent of the cost of establishing and carrying



14 out an incentive program.



15 (e) FIXTURE RECYCLING.—Eligible entities are en-



16 couraged to promote or implement fixture recycling pro-



17 grams to manage the disposal of older fixtures replaced



18 due to the incentive program under this section.



19 (f) ISSUANCE OF INCENTIVES.—



20 (1) IN GENERAL.—Financial incentives may be



21 provided to residential consumers that meet the re-



22 quirements of the applicable incentive program.



23 (2) MANNER OF ISSUANCE.—An eligible entity



24 may— 133



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1 (A) issue all financial incentives directly to



2 residential consumers; or



3 (B) with approval of the Administrator,



4 delegate all or part of financial incentive admin-



5 istration to other organizations, including local



6 governments, municipal water authorities, water



7 utilities, and non-profit organizations.



8 (3) AMOUNT.—The amount of a financial in-



9 centive shall be determined by the eligible entity,



10 taking into consideration—



11 (A) the amount of any Federal or State in-



12 centive available for the purchase of the resi-



13 dential water-efficient product or service;



14 (B) the amount necessary to change con-



15 sumer behavior to purchase water-efficient



16 products and services; and



17 (C) the consumer expenditures for onsite



18 preparation, assembly, and original installation



19 of the product.



20 (g) AUTHORIZATION OF APPROPRIATIONS.—There



21 are authorized to be appropriated to the Administrator to



22 carry out this section—



23 (1) $100,000,000 for fiscal year 2010;



24 (2) $150,000,000 for fiscal year 2011;



25 (3) $200,000,000 for fiscal year 2012; 134



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1 (4) $150,000,000 for fiscal year 2013;



2 (5) $100,000,000 for fiscal year 2014; and



3 (6) for each subsequent fiscal year, the applica-



4 ble amount during the preceding fiscal year, as ad-



5 justed to reflect changes for the 12-month period



6 ending the preceding November 30 in the Consumer



7 Price Index for All Urban Consumers published by



8 the Bureau of Labor Statistics of the Department of



9 Labor.



10 Subtitle E—Miscellaneous



11 SEC. 151. OFFICE OF CONSUMER ADVOCACY.



12 (a) OFFICE.—



13 (1) ESTABLISHMENT.—There is established an



14 Office of Consumer Advocacy to serve as an advo-



15 cate for the public interest.



16 (2) DIRECTOR.—The Office shall be headed by



17 a Director to be appointed by the President, who is



18 admitted to the Federal Bar, with experience in pub-



19 lic utility proceedings, and by and with the advice



20 and consent of the Senate.



21 (3) DUTIES.—The Office may—



22 (A) represent, and appeal on behalf of, en-



23 ergy customers on matters concerning rates or



24 service of public utilities and natural gas com-135



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1 panies under the jurisdiction of the Commis-



2 sion—



3 (i) at hearings of the Commission;



4 (ii) in judicial proceedings in the



5 courts of the United States; and



6 (iii) at hearings or proceedings of



7 other Federal regulatory agencies and com-



8 missions;



9 (B) monitor and review energy customer



10 complaints and grievances on matters con-



11 cerning rates or service of public utilities and



12 natural gas companies under the jurisdiction of



13 the Commission;



14 (C) investigate independently, or within the



15 context of formal proceedings, the services pro-



16 vided by, the rates charged by, and the valu-



17 ation of the properties of, public utilities and



18 natural gas companies under the jurisdiction of



19 the Commission;



20 (D) develop means, such as public dissemi-



21 nation of information, consultative services, and



22 technical assistance, to ensure, to the maximum



23 extent practicable, that the interests of energy



24 consumers are adequately represented in the 136



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1 course of any hearing or proceeding described



2 in subparagraph (A);



3 (E) collect data concerning rates or service



4 of public utilities and natural gas companies



5 under the jurisdiction of the Commission; and



6 (F) prepare and issue reports and rec-



7 ommendations.



8 (4) COMPENSATION AND POWERS.—The Direc-



9 tor may—



10 (A) employ and fix the compensation of



11 such staff personnel as is deemed necessary;



12 and



13 (B) procure temporary and intermittent



14 services as needed.



15 (5) ACCESS TO INFORMATION.—Each depart-



16 ment, agency, and instrumentality of the Federal



17 Government is authorized and directed to furnish to



18 the Director such reports and other information as



19 he deems necessary to carry out his functions under



20 this section.



21 (b) CONSUMER ADVOCACY ADVISORY COMMITTEE.—



22 (1) ESTABLISHMENT.—The Director shall es-



23 tablish an advisory committee to be known as Con-



24 sumer Advocacy Advisory Committee (in this section



25 referred to as the ‘‘Advisory Committee’’) to review 137



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1 rates, services, and disputes and to make rec-



2 ommendations to the Director.



3 (2) COMPOSITION.—The Director shall appoint



4 5 members to the Advisory Committee including—



5 (A) 2 individuals representing State Utility



6 Consumer Advocates; and



7 (B) 1 individual, from a nongovernmental



8 organization, representing consumers.



9 (3) MEETINGS.—The Advisory Committee shall



10 meet at such frequency as may be required to carry



11 out its duties.



12 (4) REPORTS.—The Director shall provide for



13 publication of recommendations of the Advisory



14 Committee on the public website established for the



15 Office.



16 (5) DURATION.—Notwithstanding any other



17 provision of law, the Advisory Committee shall con-



18 tinue in operation during the period in which the Of-



19 fice exists.



20 (6) APPLICATION OF FACA.—Except as other-



21 wise specifically provided, the Advisory Committee



22 shall be subject to the Federal Advisory Committee



23 Act.



24 (c) DEFINITIONS.—In this section: 138



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1 (1) COMMISSION.—The term ‘‘Commission’’



2 means the Federal Energy Regulatory Commission.



3 (2) ENERGY CUSTOMER.—The term ‘‘energy



4 customer’’ means a residential customer or a small



5 commercial customer that receives products or serv-



6 ices from a public utility or natural gas company



7 under the jurisdiction of the Commission.



8 (3) NATURAL GAS COMPANY.—The term ‘‘nat-



9 ural gas company’’ has the meaning given the term



10 in section 2 of the Natural Gas Act (15 U.S.C.



11 717a).



12 (4) OFFICE.—The term ‘‘Office’’ means the Of-



13 fice of Consumer Advocacy established by subsection



14 (a)(1).



15 (5) PUBLIC UTILITY.—The term ‘‘public util-



16 ity’’ has the meaning given the term in section



17 201(e) of the Federal Power Act (16 U.S.C. 824(e)).



18 (6) SMALL COMMERCIAL CUSTOMER.—The term



19 ‘‘small commercial customer’’ means a commercial



20 customer that has a peak demand of not more than



21 1,000 kilowatts per hour.



22 (d) AUTHORIZATION OF APPROPRIATIONS.—There



23 are authorized such sums as necessary to carry out this



24 section. 139



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1 (e) SAVINGS CLAUSE.—Nothing in this section af-



2 fects the rights or obligations of State Utility Consumer



3 Advocates.



4 SEC. 152. CLEAN TECHNOLOGY BUSINESS COMPETITION



5 GRANT PROGRAM.



6 (a) IN GENERAL.—The Administrator may provide



7 grants to organizations to conduct business competitions



8 that provide incentives, training, and mentorship to
entre-



9 preneurs and early stage start-up companies throughout



10 the United States to meet high-priority economic,
environ-



11 mental, and energy goals in areas including air quality,



12 energy efficiency and renewable energy, transportation,



13 water quality and conservation, green buildings, and
waste



14 management.



15 (b) PURPOSES.—



16 (1) IN GENERAL.—The competitions described



17 in subsection (a) shall have the purposes of—



18 (A) accelerating the development and de-



19 ployment of clean technology businesses and



20 green jobs;



21 (B) stimulating green economic develop-



22 ment;



23 (C) providing business training and men-



24 toring to early stage clean technology compa-



25 nies; and 140



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1 (D) strengthening the competitiveness of



2 United States clean technology industry in



3 world trade markets.



4 (2) PRIORITY.—Priority shall be given to busi-



5 ness competitions that—



6 (A) are led by the private sector;



7 (B) encourage regional and interregional



8 cooperation; and



9 (C) can demonstrate market-driven prac-



10 tices and the creation of cost-effective green



11 jobs through an annual publication of competi-



12 tion activities and directory of companies.



13 (c) ELIGIBILITY.—



14 (1) IN GENERAL.—To be eligible for a grant



15 under this section, an organization shall be any



16 sponsored entity of an organization described in sub-



17 paragraph (A) that is operated as a nonprofit entity.



18 (2) PRIORITY.—In making grants under this



19 section, the Administrator shall give priority to orga-



20 nizations that can demonstrate broad funding sup-



21 port from private and other non-Federal funding



22 sources to leverage Federal investment.



23 (d) AUTHORIZATION OF APPROPRIATIONS.—There is



24 authorized to be appropriated to carry out this section



25 $20,000,000. 141



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1 SEC. 153. PRODUCT CARBON DISCLOSURE PROGRAM.



2 (a) EPA STUDY.—The Administrator shall conduct



3 a study to determine the feasibility of establishing a na-



4 tional program for measuring, reporting, publicly dis-



5 closing, and labeling products or materials sold in the



6 United States for their carbon content, and shall, not
later



7 than 18 months after the date of enactment of this Act,



8 transmit a report to Congress which shall include the fol-



9 lowing:



10 (1) A determination of whether a national prod-



11 uct carbon disclosure program and labeling program



12 would be effective in achieving the intended goals of



13 achieving greenhouse gas reductions and an exam-



14 ination of existing programs globally and their



15 strengths and weaknesses.



16 (2) Criteria for identifying and prioritizing sec-



17 tors and products and processes that should be cov-



18 ered in such program or programs.



19 (3) An identification of products, processes, or



20 sectors whose inclusion could have a substantial car-



21 bon impact (prioritizing industrial products such as



22 iron and steel, aluminum, cement, chemicals, and



23 paper products, and also including food, beverage,



24 hygiene, cleaning, household cleaners, construction,



25 metals, clothing, semiconductor, and consumer elec-



26 tronics). 142



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1 (4) Suggested methodology and protocols for



2 measuring the carbon content of the products across



3 the entire carbon lifecycle of such products for use



4 in a carbon disclosure program and labeling pro-



5 gram.



6 (5) A review of existing greenhouse gas product



7 accounting standards, methodologies, and practices



8 including the Greenhouse Gas Protocol, ISO 14040/



9 44, ISO 14067, and Publically Available Specifica-



10 tion 2050, and including a review of the strengths



11 and weaknesses of each.



12 (6) A survey of secondary databases including



13 the Manufacturing Energy Consumption Survey, an



14 evaluation of the quality of data for use in a product



15 carbon disclosure program and product carbon label-



16 ing program, an identification of gaps in the data



17 relative to the potential purposes of a national prod-



18 uct carbon disclosure program and product carbon



19 labeling program, and development of recommenda-



20 tions for addressing these data gaps.



21 (7) An assessment of the utility of comparing



22 products and the appropriateness of product carbon



23 standards.



24 (8) An evaluation of the information needed on



25 a label for clear and accurate communication, in-143



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1 cluding what pieces of quantitative and qualitative



2 information need to be disclosed.



3 (9) An evaluation of the appropriate boundaries



4 of the carbon lifecycle analysis for different sectors



5 and products.



6 (10) An analysis of whether default values



7 should be developed for products whose producer



8 does not participate in the program or does not have



9 data to support a disclosure or label and a deter-



10 mination of the best ways to develop such default



11 values.



12 (11) A recommendation of certification and



13 verification options necessary to assure the quality



14 of the information and avoid greenwashing or the



15 use of insubstantial or meaningless environmental



16 claims to promote a product.



17 (12) An assessment of options for educating



18 consumers about product carbon content and the



19 product carbon disclosure program and product car-



20 bon labeling program.



21 (13) An analysis of the costs and timelines as-



22 sociated with establishing a national product carbon



23 disclosure program and product carbon labeling pro-



24 gram, including options for a phased approach.



25 Costs should include those for businesses associated 144



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1 with the measurement of carbon footprints and



2 those associated with creating a product carbon label



3 and managing and operating a product carbon label-



4 ing program, and options for minimizing these costs.



5 (14) An evaluation of incentives (such as finan-



6 cial incentives, brand reputation, and brand loyalty)



7 to determine whether reductions in emissions can be



8 accelerated through encouraging more efficient man-



9 ufacturing or by encouraging preferences for lower-



10 emissions products to substitute for higher-emissions



11 products whose level of performance is no better.



12 (b) DEVELOPMENT OF NATIONAL CARBON DISCLO-



13 SURE PROGRAM.—Upon conclusion of the study, and not



14 later than 3 years after the date of enactment of this
Act,



15 the Administrator shall establish a national product car-



16 bon disclosure program, participation in which shall be



17 voluntary, and which may involve a product carbon label



18 with broad applicability to the wholesale and consumer



19 markets to enable and encourage knowledge about carbon



20 content by producers and consumers and to inform efforts



21 to reduce energy consumption (carbon dioxide equivalent



22 emissions) nationwide. In developing such a program, the



23 Administrator shall—



24 (1) consider the results of the study conducted



25 under subsection (a); 145



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1 (2) consider existing and planned programs and



2 proposals and measurement standards (including the



3 Publicly Available Specification 2050, standards to



4 be developed by the World Resource Institute/World



5 Business Council for Sustainable Development, the



6 International Standards Organization, and the bill



7 AB19 pending in the California legislature as of the



8 date of enactment of this Act);



9 (3) consider the compatibility of a national



10 product carbon disclosure program with existing pro-



11 grams;



12 (4) utilize incentives and other means to spur



13 the adoption of product carbon disclosure and prod-



14 uct carbon labeling;



15 (5) develop protocols and parameters for a



16 product carbon disclosure program, including a



17 methodology and formula for assessing, verifying,



18 and potentially labeling a product’s greenhouse gas



19 content, and for data quality requirements to allow



20 for product comparison;



21 (6) create a means to—



22 (A) document best practices;



23 (B) ensure clarity and consistency;



24 (C) work with suppliers, manufacturers,



25 and retailers to encourage participation; 146



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1 (D) ensure that protocols are consistent



2 and comparable across like products; and



3 (E) evaluate the effectiveness of the pro-



4 gram;



5 (7) make publicly available information on



6 product carbon content to ensure transparency;



7 (8) provide for public outreach, including a con-



8 sumer education program to increase awareness;



9 (9) develop training and education programs to



10 help businesses learn how to measure and commu-



11 nicate their carbon footprint and easy tools and tem-



12 plates for businesses to use to reduce cost and time



13 to measure their products’ carbon lifecycle;



14 (10) consult with the Secretary of Energy, the



15 Secretary of Commerce, the Federal Trade Commis-



16 sion, and other Federal agencies, as necessary;



17 (11) gather input from stakeholders through



18 consultations, public workshops, or hearings with



19 representatives of consumer product manufacturers,



20 consumer groups, and environmental groups;



21 (12) utilize systems for verification and product



22 certification that will ensure that claims manufactur-



23 ers make about their products are valid;



24 (13) create a process for reviewing the accuracy



25 of product carbon label information and protecting 147



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1 the product carbon label in the case of a change in



2 the product’s energy source, supply chain, ingredi-



3 ents, or other factors, and specify the frequency to



4 which data should be updated; and



5 (14) develop a standardized, easily understand-



6 able carbon label, if appropriate, and create a proc-



7 ess for responding to inaccuracies and misuses of



8 such a label.



9 (c) REPORT TO CONGRESS.—Not later than 5 years



10 after the program is established pursuant to subsection



11 (b), the Administrator shall report to Congress on the
ef-



12 fectiveness and impact of the program, the level of vol-



13 untary participation, and any recommendations for addi-



14 tional measures.



15 (d) DEFINITIONS.—In this section:



16 (1) The term ‘‘carbon content’’ means the



17 quantity of greenhouse gas emissions and the warm-



18 ing impact of those emissions on the atmosphere ex-



19 pressed in carbon dioxide equivalent associated with



20 a product’s value chain.



21 (2) The term ‘‘carbon footprint’’ means the



22 level of greenhouse gas emissions produced by a par-



23 ticular activity, service, or entity.



24 (3) The term ‘‘carbon lifecycle’’ means the



25 greenhouse gas emissions that are released as part 148



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1 of the processes of creating, producing, processing,



2 manufacturing, modifying, transporting, distrib-



3 uting, storing, using, recycling, or disposing of goods



4 and services.



5 (e) AUTHORIZATION OF APPROPRIATIONS.—There is



6 authorized to be appropriated to the Administrator—



7 (1) to carry out the study required by sub-



8 section (a), $5,000,000; and



9 (2) to carry out the program required under



10 subsection (b), $25,000,000 for each of fiscal years



11 2010 through 2025.



12 SEC. 154. STATE RECYCLING PROGRAMS.



13 (a) ESTABLISHMENT.—The Administrator shall es-



14 tablish a State Recycling Program governing the use of



15 funds by States in accordance with this Act.



16 (b) USE OF FUNDING.—



17 (1) IN GENERAL.—States receiving funding to



18 carry out this section shall use the proceeds to carry



19 out recycling programs in accordance with this sec-



20 tion.



21 (2) COUNTY AND MUNICIPAL PROGRAMS.—Not



less than



1



22 ⁄4 of the funding made available to a State



23 to carry out this section shall be distributed by the



24 State to county and municipal recycling programs as



25 described in subsection (c)(1), to be used exclusively
149



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1 to support recycling purposes and associated source



2 reduction purposes, including to provide incentives—



3 (A) for recycling-related technology that—



4 (i) reduces or avoids greenhouse gas



5 emissions;



6 (ii) increases collection rates; and



7 (iii) improves the quality of recyclable



8 material that is separated from solid



9 waste;



10 (B) for energy-efficiency projects for trans-



11 portation fleets and recycling equipment used to



12 collect and sort recyclable material separated



13 from solid waste;



14 (C) for recycling program-related expenses,



15 including—



16 (i) education and job training;



17 (ii) development and implementation



18 of variable rate (commonly referred to as



19 ‘‘pay-as-you-throw’’) recycling programs



20 and anaerobic digestion programs;



21 (iii) promotion of public space recy-



22 cling programs;



23 (iv) approaches for assuring compli-



24 ance with recycling requirements; and 150



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1 (v) development or implementation of



2 best practices for municipal solid waste re-



3 duction programs; and



4 (D) to ensure that recyclable material is



5 not sent for disposal or incineration during fluc-



6 tuating markets.



(3) RECYCLING FACILITIES.—Not less than



1



7 ⁄4



8 of the funding made available to a State to carry out



9 this section shall be distributed by the State to eligi-



10 ble recycling facilities as described in subsection



11 (c)(2) to be used exclusively to support the recycling



12 purposes and associated source reduction purposes



13 of the facilities, including to provide—



14 (A) incentives for the demonstration or de-



15 ployment of recycling-related technology and



16 equipment that reduce or avoid greenhouse gas



17 emissions;



18 (B) incentives to facilities that increase the



19 quantity and quality of recyclable material that



20 is recycled versus sent for disposal or inciner-



21 ation;



22 (C) funding for research, management,



23 and removal of impediments to recycling, in-



24 cluding—



25 (i) radioactive material; and 151



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1 (ii) devices or materials that contain



2 polychlorinated biphenyls, mercury, or



3 chlorofluorocarbons;



4 (D) funding for research on, and develop-



5 ment and deployment of, new technologies to



6 more efficiently and effectively recycle items



7 such as automobile shredder residue, cathode



8 ray tubes, plastics, and tires; and



9 (E) incentives to recycle materials identi-



10 fied by the Administrator that are not being re-



11 cycled at a recycling facility.



12 (4) MANUFACTURING FACILITIES.—Not less



than



1



13 ⁄4 of the funding made available to a State to



14 carry out this section shall be distributed by the



15 State to eligible manufacturing facilities as described



16 in subsection (c)(3) to be used exclusively to support



17 recycling purposes, including to provide incentives



18 for the demonstration or deployment of—



19 (A) manufacturing-related technology and



20 equipment that would increase the use of recy-



21 clable material and avoid or reduce greenhouse



22 gas emissions;



23 (B) radiation detection equipment and the



24 costs associated with recovery of detected radi-



25 ated recyclable material; 152



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1 (C) technologies that will detect and sepa-



2 rate contaminants, including mercury-, lead-,



3 and cadmium-containing devices;



4 (D) strategies and technologies to remove



5 impediments to recovering recyclable material;



6 and



7 (E) strategies and technologies to improve



8 the energy efficiency of technology and equip-



9 ment used to manufacture recyclable material.



10 (c) ELIGIBILITY REQUIREMENTS.—



11 (1) COUNTY AND MUNICIPALITY PROGRAMS.—



12 Funds provided under subsection (b)(2) shall be pro-



13 vided on a competitive basis to county and municipal



14 recycling programs that—



15 (A) have within the solid waste manage-



16 ment plans of the programs a recycling man-



17 agement plan that includes an education out-



18 reach program for the individuals and entities



19 served by the program constituency that high-



20 lights the lifecycle benefits of recycling; and



21 (B) collect at least 5 recyclable materials,



22 such as—



23 (i) ferrous and nonferrous metal;



24 (ii) aluminum;



25 (iii) plastic; 153



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1 (iv) tires and rubber;



2 (v) household electronic equipment;



3 (vi) glass;



4 (vii) scrap food;



5 (viii) recoverable fiber or paper; and



6 (ix) textiles;



7 (C) demonstrate, not later than 3 years



8 after the date of receipt of funds under this



9 subtitle, reasonable progress toward achieving—



10 (i) a collection rate goal of at least 30



11 percent of the total recyclable materials



12 available from the solid waste stream in



13 the requesting State, county, or municipal



14 program; or



15 (ii) a 10-percent increase of collected



16 recyclable materials compared to the total



17 solid waste stream in the requesting State,



18 county, or municipal program; and



19 (D)(i) own, operate, or contract to oper-



20 ate—



21 (I) a curbside recyclables collection



22 program;



23 (II) a redemption center or drop-off



24 facility for recyclables; and



25 (III) a materials recovery facility; and 154



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1 (ii) have in place a quality, environmental,



2 health, and safety management system (such as



3 that of the International Standards Organiza-



4 tion or an equivalent) that includes goals to re-



5 duce the operational carbon baselines of the



6 programs.



7 (2) RECYCLING FACILITY.—Funds provided



8 under subsection (b)(3) shall be provided on a com-



9 petitive basis to a recycling facility that—



10 (A) processes recyclable material into com-



11 mercial specification-grade commodities for use



12 as raw material feed stock at recovery facilities,



13 including for use as—



14 (i) a replacement or substitute for a



15 virgin raw material; or



16 (ii) a replacement or substitute for a



17 product made, in whole or in part, from a



18 virgin raw material;



19 (B) has a verifiable carbon baseline; and



20 (C) has an environmental, health and safe-



21 ty, and quality management system (such as



22 that of the International Standards Organiza-



23 tion or an equivalent) that includes goals to re-



24 duce the operational carbon baseline of the re-



25 cycling facility per unit of material processed. 155



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1 (3) MANUFACTURING FACILITY.—Funds pro-



2 vided under subsection (b)(4) shall be provided on a



3 competitive basis to a manufacturing facility that—



4 (A) can report on a verifiable carbon base-



5 line that is consistent with applicable reporting



6 requirements; and



7 (B) has an environmental, health and safe-



8 ty, and quality management system (such as



9 that of the International Standards Organiza-



10 tion or an equivalent) that includes goals to re-



11 duce the operational carbon baseline of the



12 manufacturing facility per unit of material



13 processed.



14 (d) REPORTING.—Each State that distributes funds



15 under this section shall submit to the Administrator, in



16 accordance with such requirements as the Administrator



17 may prescribe, a report that includes—



18 (1) a list of entities receiving funding under



19 this section, including entities receiving such funding



20 from units of local government pursuant to sub-



21 section (b)(2);



22 (2) the amount of funding received by each



23 such recipient;



24 (3) the specific purposes for which the funding



25 was conveyed to each such recipient; and 156



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1 (4) documentation of the quantity of net recy-



2 clable material that was collected and processed and



3 greenhouse gas emissions that were reduced or



4 avoided accordingly, through use of the funding,



5 based on a lifecycle calculation developed by the Ad-



6 ministrator.



7 (e) METHODOLOGY AND DECISIONMAKING.—The Ad-



8 ministrator, as appropriate—



9 (1) shall develop and periodically update



10 lifecycle methods to quantify the relationship be-



11 tween waste management decisions, including recy-



12 cling and waste reduction, greenhouse gas reduc-



13 tions, and energy use reductions, for purposes that



14 include—



15 (A) helping to support decisions under



16 Federal, State, and municipal recycling and



17 waste management programs, including—



18 (i) estimating greenhouse gas and en-



19 ergy benefits of increasing collection or



20 adding new materials to recycling pro-



21 grams;



22 (ii) comparing the benefits of recy-



23 cling and waste reduction to other green-



24 house gas and energy use reduction strate-



25 gies; 157



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1 (iii) optimizing waste management



2 strategies to maximize greenhouse gas re-



3 ductions and energy use reductions; and



4 (iv) public education; and



5 (B) designing products to optimize waste



6 reduction and recycling opportunities and use of



7 recycled materials in the manufacturing proc-



8 ess;



9 (2) may collect data to support the development



10 of the methods described in paragraph (1); and



11 (3) to improve national consistency, shall, in



12 consultation with appropriate State and local rep-



13 resentatives and municipal recycling programs, iden-



14 tify best practices to promote improvement in, and



15 support State efforts in improving, municipal recy-



16 cling and resource recovery programs.



17 SEC. 155. SUPPLEMENTAL AGRICULTURE AND FORESTRY



18 GREENHOUSE GAS REDUCTION AND RENEW-



19 ABLE ENERGY PROGRAM.



20 (a) AGRICULTURAL GREENHOUSE GAS REDUC-



21 TIONS.—



22 (1) ESTABLISHMENT.—



23 (A) IN GENERAL.—The Secretary of Agri-



24 culture (referred to in this section as the ‘‘Sec-



25 retary’’), in coordination with the Secretary of 158



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1 the Interior, shall establish a Greenhouse Gas



2 Reduction Incentives Program (referred to in



3 this section as the ‘‘program’’) to provide finan-



4 cial assistance to owners and operators of agri-



5 cultural land (including land on which specialty



6 crops are produced and private or public land



7 used for grazing) and forest land for projects



8 and activities that measurably increase carbon



9 sequestration or reduce greenhouse gas emis-



10 sions.



11 (B) SHARED AUTHORITY.—The Secretary



12 shall delegate to the Secretary of the Interior



13 the authority to carry out projects on land



14 under the jurisdiction of or operated by the De-



15 partment of the Interior.



16 (2) PRIORITY.—In carrying out the program,



17 the Secretary shall give priority to projects or activi-



18 ties that—



19 (A) reduce greenhouse gas emissions or in-



20 crease sequestration of greenhouse gases, and



21 achieve significant other environmental benefits,



22 such as the improvements of water or air qual-



23 ity or natural resources; and



24 (B) reduce greenhouse gas emissions or se-



25 quester carbon in agricultural and forestry op-159



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1 erations where there are limited recognized op-



2 portunities to achieve such emission reductions



3 or sequestration.



4 (3) ELIGIBLE PROJECTS AND ACTIVITIES.—Eli-



5 gible projects and payments shall include those



6 that—



7 (A) reflect the comparable amount that the



8 owners or operators would receive in the offset



9 market if not for compliance with environ-



10 mental laws that preclude the owners and oper-



11 ators from being eligible for receiving an offset



12 credit under a Federal law enacted for the pur-



13 pose of regulating greenhouse gas emissions;



14 (B) provide greenhouse gas emission bene-



15 fits, but do not receive an offset credit or qual-



16 ify for an early action allowance under a Fed-



17 eral law enacted for the purpose of regulating



18 greenhouse gas emissions, including projects



19 and activities that provide an opportunity to



20 demonstrate and test new or uncertain methods



21 to reduce or sequester emissions;



22 (C) reward early adopters, including pro-



23 ducers that practice no-till agriculture, and en-



24 sure that individuals and entities that took ac-



25 tion prior to the implementation of a Federal 160



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1 law enacted for the purpose of regulating green-



2 house gas emissions are not placed at a com-



3 petitive disadvantage, including giving special



4 consideration to owners or operators located in



5 jurisdictions with more stringent environmental



6 laws (including regulations), compliance with



7 which precludes the owners or operators from



8 participating such an offset market;



9 (D) provide incentives for supplemental



10 greenhouse gas emission reductions on private



11 forest land of the United States;



12 (E) prevent any conversion of land, includ-



13 ing native grassland, native prairie, rangeland,



14 cropland, or forested land, that would increase



15 greenhouse gas emissions or a loss of carbon se-



16 questration; or



17 (F) support action on Federal, State, or



18 tribal land.



19 (4) REQUIREMENTS.—Financial incentives and



20 support provided by the Secretary for a project or



21 activity under this section shall, to the maximum ex-



22 tent practicable—



23 (A) be directly proportional to the quantity



24 and duration of greenhouse gas emissions re-



25 duced or carbon sequestered (except with re-161



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1 spect to projects and activities that provide ad-



2 aptation benefits); and



3 (B) complement and leverage existing con-



4 servation, forestry, and energy program expend-



5 itures to provide measurable emission reduction



6 and sequestration benefits that otherwise may



7 not take place or continue to exist.



8 (5) ELIGIBILITY.—An owner or operator shall



9 not be prohibited from participating in the program



10 established under this section due to participation of



11 the owner or operator in other Federal or State con-



12 servation or agricultural assistance programs.



13 (6) FORMS OF ASSISTANCE.—The Secretary



14 may use any of the following to provide assistance



15 under this section:



16 (A) Conservation easements.



17 (B) Carbon sequestration and mitigation



18 contracts between the owner or operator and



19 the Secretary for the performance of projects or



20 activities that reduce greenhouse gas emissions



21 or sequester carbon.



22 (C) Financial incentives through timber



23 harvest contracts.



24 (D) Financial incentives through grazing



25 contracts. 162



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1 (E) Grants.



2 (F) Such other forms of assistance as the



3 Secretary determines to be appropriate.



4 (7) REVERSALS.—The Secretary shall specify



5 methods to address intentional or unintentional re-



6 versal of carbon sequestration or greenhouse gas



7 emission reductions that occur during the term of a



8 contract or easement under this section.



9 (8) ACCOUNTING SYSTEMS.—In carrying out



10 this section, the Secretary shall develop and imple-



11 ment—



12 (A) a national accounting system for car-



13 bon stocks, sequestration, and greenhouse gas



14 emissions that may be used to assess progress



15 in implementing this section at a national level;



16 and



17 (B) credible reporting and accounting sys-



18 tems to ensure that incentives provided under



19 this section are achieving stated objectives.



20 (9) PROGRAM MEASUREMENT, 
MONITORING,



21 AND VERIFICATION.—The Secretary, in consultation



22 with the Administrator—



23 (A) shall establish and implement protocols



24 that provide reasonable monitoring and



25 verification of compliance with terms associated 163



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1 with assistance provided under this section, in-



2 cluding field sampling of actual performance, to



3 develop annual estimates of emission reductions



4 achieved under the program;



5 (B) shall report annually the total number



6 of tons of carbon dioxide sequestered or the



7 total number of tons of emissions avoided



8 through incentives provided under this section;



9 and



10 (C) not later than 2 years after the date



11 of enactment of this Act, and at least every 18



12 months thereafter, submit to Congress and



13 make available to the public on the website of



14 the Department of Agriculture a report that in-



15 cludes—



16 (i) an estimate of annual and cumu-



17 lative reductions generated through the



18 program under this section, determined



19 using standardized measures (including



20 economic efficiency); and



21 (ii) a summary of any changes to the



22 program, in accordance with this section,



23 that will be made as a result of program



24 measurement, monitoring, and verification



25 conducted under this section. 164



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1 (b) RESEARCH PROGRAM.—The Secretary shall es-



2 tablish by rule a program to conduct research to develop



3 additional projects and activities for crops to find addi-



4 tional techniques and methods to reduce greenhouse gas



5 emissions or sequester greenhouse gases that may or may



6 not meet criteria for a Federal law enacted for the
purpose



7 of regulating greenhouse gas emissions.



8 SEC. 156. ECONOMIC DEVELOPMENT CLIMATE CHANGE



9 FUND.



10 (a) IN GENERAL.—Title II of the Public Works and



11 Economic Development Act of 1965 (42 U.S.C. 3141 et



12 seq.) is amended by adding at the end the following:



13 ‘‘SEC. 219. ECONOMIC DEVELOPMENT CLIMATE CHANGE



14 FUND.



15 ‘‘(a) IN GENERAL.—On the application of an eligible



16 recipient, the Secretary may provide technical
assistance,



17 make grants, enter into contracts, or otherwise provide



18 amounts for projects—



19 ‘‘(1) to promote energy efficiency to enhance



20 economic competitiveness;



21 ‘‘(2) to increase the use of renewable energy re-



22 sources to support sustainable economic development



23 and job growth; 165



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1 ‘‘(3) to support the development of conventional



2 energy resources to produce alternative transpor-



3 tation fuels, electricity and heat;



4 ‘‘(4) to develop energy efficient or environ-



5 mentally sustainable infrastructure;



6 ‘‘(5) to promote environmentally sustainable



7 economic development practices and models;



8 ‘‘(6) to support development of energy effi-



9 ciency and alternative energy development plans,



10 studies or analysis, including enhancement of new



11 and existing Comprehensive Economic Development



12 Strategies funded under this Act; and



13 ‘‘(7) to supplement other Federal grants, loans,



14 or loan guarantees for purposes described in para-



15 graphs (1) through (6).



16 ‘‘(b) FEDERAL SHARE.—The Federal share of the



17 cost of any project carried out under this section shall
not



18 exceed 80 percent, except that the Federal share of a
Fed-



19 eral grant, loan, or loan guarantee provided under sub-



20 section (a)(7) may be 100 percent.



21 ‘‘(c) AUTHORIZATION OF APPROPRIATIONS.—There



22 is authorized to be appropriated to carry out this
section



23 $50,000,000 for each of fiscal years 2009 through 2013,



24 to remain available until expended.’’. 166



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1 (b) CONFORMING AMENDMENT.—The table of con-



2 tents contained in section 1(b) of the Public Works and



3 Economic Development Act of 1965 (42 U.S.C. 3141 et



4 seq.)is amended by inserting after the item relating to
sec-



5 tion 218 the following:



‘‘Sec. 219. Economic Development Climate Change Fund.’’.



6 SEC. 157. STUDY OF RISK-BASED PROGRAMS ADDRESSING



7 VULNERABLE AREAS.



8 (a) IN GENERAL.—The Administrator, or the heads



9 of such other Federal agencies as the President may des-



10 ignate, shall conduct a study and, not later than 2 years



11 after the date of enactment of this Act, submit to Con-



12 gress a report regarding risk-based policies and programs



13 addressing vulnerable areas.



14 (b) REQUIREMENTS.—The report shall



15 (1) review and assess Federal predisaster miti-



16 gation, emergency response, and flood insurance



17 policies and programs that affect areas vulnerable to



18 the impacts of climate change;



19 (2) describe strategies for better addressing



20 such vulnerabilities and provide implementation rec-



21 ommendations;



22 (3) assess whether the policies and programs



23 described in paragraph (1) support the State re-



24 sponse and adaptation goals and objectives identified



25 under this Act; 167



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1 (4) identify, and make recommendations to re-



2 solve, inconsistencies in Federal policies and pro-



3 grams in effect as of the date of enactment of this



4 Act that address areas vulnerable to climate change;



5 and



6 (5) identify annual cost savings to the Federal



7 Government associated with the implementation of



8 the strategies and recommendations contained in the



9 report.



10 Subtitle F—Energy Efficiency and



11 Renewable Energy



12 SEC. 161. RENEWABLE ENERGY.



13 (a) DEFINITIONS.—In this section:



14 (1) RENEWABLE ENERGY.—The term ‘‘renew-



15 able energy’’ means electric energy generated from



16 solar, wind, biomass, landfill gas, ocean (including



17 tidal, wave, current, and thermal), geothermal, mu-



18 nicipal solid waste, or new hydroelectric generation



19 capacity achieved from increased efficiency or addi-



20 tions of new capacity at an existing hydroelectric



21 project.



22 (2) RENEWABLE PORTFOLIO STANDARD.—The



23 term ‘‘ ‘renewable portfolio standard’ ’’ means a state



24 statute that requires electricity providers to obtain a
168



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1 minimum percentage of their power from renewable



2 energy resources by a certain date.



3 (b) GRANTS.—The Administrator, in consultation



4 with the Secretaries of Energy, Interior, and Agriculture,



5 may provide grants for projects to increase the quantity



6 of energy a State uses from renewable sources under State



7 renewable portfolio standard laws.



8 (c) ELIGIBILITY.—The Administrator shall review for



9 approval projects applications that are—



10 (1) submitted by State and local governments,



11 Indian tribes, public utilities, regional energy co-



12 operatives, or individual energy producers from



13 states with a binding Renewable Portfolio Standard;



14 or



15 (2) submitted by State and local governments,



16 Indian tribes, public utilities, or regional energy co-



17 operatives from states with nonbinding goals for



18 adoption of renewable energy requirements.



19 (d) PRIORITY.—The Administrator shall give priority



20 to project applications that are—



21 (1) submitted by States with a binding renew-



22 able portfolio standard;



23 (2) cost-effective in achieving greater renewable



24 energy production in each State.



25 (e) CERTIFICATION.— 169



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1 (1) IN GENERAL.—The Administrator shall no-



2 tify in writing the Governor of each eligible State as



3 described in section (c) at the time at which the Ad-



4 ministrator begins review of a project application re-



5 ceived from an eligible entity within the State.



6 (2) CERTIFICATION.—The Governor shall cer-



7 tify in writing within 30 days of receipt of the Ad-



8 ministrator’s notification described in subsection (1)



9 that the project application—



10 (A) will assist the State in reaching renew-



11 able portfolio standard targets under applicable



12 state laws; and



13 (B) has secured non-Federal funding



14 sources that, in conjunction with the requested



15 grant amount, will be sufficient to complete the



16 renewable energy project.



17 (f) RULEMAKING.—



18 (1) IN GENERAL.—Not later than 90 days after



19 the date of enactment of this Act, the Administrator



20 shall initiate rulemaking procedures necessary to im-



21 plement this section.



22 (2) FINAL RULES; 
ACCEPTANCE OF APPLICA-



23 TIONS.—Not later than 90 days after the close of



24 the public comment period relating to the rule-170



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1 making described in paragraph (1), the Adminis-



2 trator shall—



3 (A) promulgate final regulations to carry



4 out this section; and



5 (B) begin accepting project applications for



6 review.



7 (g) REPORTING.—Not later than 180 days after the



8 date of enactment of this Act, and every 180 days there-



9 after, the Administrator shall submit to the Committee on



10 Energy and Commerce of the House of Representatives



11 and the Committee on Environment and Public Works of



12 the Senate a report specifying, with respect to the pro-



13 gram under this section—



14 (1) the project applications received;



15 (2) the project applications approved;



16 (3) the amount of funding allocated per project;



17 and



18 (4) the cumulative benefits of the grant pro-



19 gram.



20 (h) GRANT AMOUNT.—A grant provided under this



21 section may be in an amount that does not exceed 50 per-



22 cent of the total cost of the renewable energy project to



23 be funded by the grant. 171



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1 (i) AUTHORIZATION.—There are authorized to be ap-



2 propriated such sums as are necessary to carry out this



3 section.



4 SEC. 162. ADVANCED BIOFUELS.



5 (a) DEFINITIONS.—In this section:



6 (1) ADVANCED BIOFUEL.—The term ‘‘advanced



7 biofuel’’ shall have such meaning as is given the



8 term by the Administrator in regulations promul-



9 gated under subsection (c).



10 (2) ELIGIBLE ENTITY.—The term ‘‘eligible enti-



11 ty’’ means an individual, corporate entity, unit of



12 State or local government, Indian tribe, farm cooper-



13 ative, institution of higher learning, rural electric co-



14 operative, or public utility.



15 (b) GRANTS.—The Administrator, in consultation



16 with the Secretary of Agriculture and the Secretary of
En-



17 ergy, may provide grants to support research and develop-



18 ment of advanced biofuels.



19 (c) REGULATIONS.—



20 (1) IN GENERAL.—Not later than 18 months



21 after the date of enactment of this Act, the Adminis-



22 trator shall promulgate regulations to carry out this



23 section (including a definition of the term ‘‘advanced



24 biofuel’’ for the purpose of providing assistance



25 under this section). 172



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1 (2) REQUIREMENTS.—The regulations promul-



2 gated under paragraph (1) shall—



3 (A) provide that the Administrator shall



4 make grants available to eligible entities to sup-



5 port—



6 (i) research regarding the production



7 of advanced biofuels;



8 (ii) the development of new advanced



9 biofuel production and capacity-building



10 technologies;



11 (iii) the development and construction



12 of commercial-scale advanced biofuel pro-



13 duction facilities; and



14 (iv) the expanded production of ad-



15 vanced biofuels;



16 (B) provide that, to receive a grant under



17 this section, an eligible entity shall submit to



18 the Administrator—



19 (i) a project proposal with detailed



20 project information, as determined by the



21 Administrator; and



22 (ii) such records as the Administrator



23 may require as evidence of the production



24 of advanced biofuels or the importance and 173



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1 necessity of advanced biofuels research and



2 new technologies; and



3 (C) include appropriate cost-sharing re-



4 quirements developed by the Administrator for



5 grant awards for authorized uses of funds



6 under this section.



7 (3) PRIORITY.—The Administrator shall give



8 priority to eligible entities based on—



9 (A) technical and economic feasibility of a



10 project proposal;



11 (B) cost-effectiveness of a project proposal;



12 (C) the use of innovative technologies in a



13 project proposal;



14 (D) the availability of non-Federal re-



15 sources, including private resources, to fund the



16 project proposal; and



17 (E) whether the project proposed can be



18 replicated.



19 SEC. 163. ENERGY EFFICIENCY IN BUILDING CODES.



20 (a) ENERGY EFFICIENCY TARGETS.—



21 (1) RULEMAKING TO ESTABLISH TARGETS.—



22 The Administrator, or such other agency head or



23 heads as may be designated by the President, in



24 consultation with the Director of the National Insti-



25 tute of Standards and Technology, shall promulgate 174



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1 regulations establishing building code energy effi-



2 ciency targets for the national average percentage



3 improvement of buildings’ energy performance. Such



4 regulations shall establish a national building code



5 energy efficiency target for residential buildings and



6 commercial buildings when built to a code meeting



7 the target, beginning not later than January 1, 2014



8 and applicable each calendar year through December



9 31, 2030.



10 (b) NATIONAL ENERGY EFFICIENCY BUILDING



11 CODES.—



12 (1) RULEMAKING TO ESTABLISH NATIONAL



13 CODES.—The Administrator, or such other agency



14 head or heads as may be designated by the Presi-



15 dent, shall promulgate regulations establishing na-



16 tional energy efficiency building codes for residential



17 and commercial buildings. Such regulations shall be



18 sufficient to meet the national building code energy



19 efficiency targets established under subsection (a) in



20 the most cost-effective manner, and may include pro-



21 visions for State adoption of the national building



22 code standards and certification of State programs



23 (c) ANNUAL REPORTS.—The Administrator, or such



24 other agency head or heads as may be designated by the
175



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1 President, shall annually submit to Congress, and publish



2 in the Federal Register, a report on—



3 (1) the status of national energy efficiency



4 building codes;



5 (2) the status of energy efficiency building code



6 adoption and compliance in the States;



7 (3) the implementation of and compliance with



8 regulations promulgated under this section;



9 (4) the status of Federal and State enforcement



10 of building codes; and



11 (5) impacts of action under this section, and



12 potential impacts of further action, on lifetime en-



13 ergy use by buildings, including resulting energy and



14 cost savings.



15 SEC. 164. RETROFIT FOR ENERGY AND ENVIRONMENTAL



16 PERFORMANCE.



17 (a) DEFINITIONS.—For purposes of this section:



18 (1) ASSISTED HOUSING.—The term ‘‘assisted



19 housing’’ means those properties receiving project-



20 based assistance pursuant to section 202 of the



21 Housing Act of 1959 (12 U.S.C. 1701q), section



22 811 of the Cranston-Gonzalez National Affordable



23 Housing Act (42 U.S.C. 8013), section 8 of the



24 United States Housing Act of 1937 (42 U.S.C.



25 1437f), or similar programs. 176



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1 (2) NONRESIDENTIAL BUILDING.—The term



2 ‘‘nonresidential building’’ means a building with a



3 primary use or purpose other than residential hous-



4 ing, including any building used for commercial of-



5 fices, schools, academic and other public and private



6 institutions, nonprofit organizations including faith-



7 based organizations, hospitals, hotels, and other non-



8 residential purposes. Such buildings shall include



9 mixed-use properties used for both residential and



10 nonresidential purposes in which more than half of



11 building floor space is nonresidential.



12 (3) PERFORMANCE-BASED BUILDING RETROFIT



13 PROGRAM.—The term ‘‘performance-based building



14 retrofit program’’ means a program that determines



15 building energy efficiency success based on actual



16 measured savings after a retrofit is complete, as evi-



17 denced by energy invoices or evaluation protocols.



18 (4) PRESCRIPTIVE BUILDING RETROFIT PRO-



19 GRAM.—The term ‘‘prescriptive building retrofit pro-



20 gram’’ means a program that projects building ret-



21 rofit energy efficiency success based on the known



22 effectiveness of measures prescribed to be included



23 in a retrofit.



24 (5) PUBLIC HOUSING.—The term ‘‘public hous-



25 ing’’ means properties receiving assistance under 177



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1 section 9 of the United States Housing Act of 1937



2 (42 U.S.C. 1437g).



3 (6) RECOMMISSIONING;



4 RETROCOMMISSIONING.—The terms ‘‘recommis-



5 sioning’’ and ‘‘retrocommissioning’’ have the mean-



6 ing given those terms in section 543(f)(1) of the Na-



7 tional Energy Conservation Policy Act (42 U.S.C.



8 8253(f)(1)).



9 (7) RESIDENTIAL BUILDING.—The term ‘‘resi-



10 dential building’’ means a building whose primary



11 use is residential. Such buildings shall include sin-



12 gle-family homes (both attached and detached),



13 owner-occupied units in larger buildings with their



14 own dedicated space-conditioning systems, apart-



15 ment buildings, multi-unit condominium buildings,



16 public housing, assisted housing, and buildings used



17 for both residential and nonresidential purposes in



18 which more than half of building floor space is resi-



19 dential.



20 (8) STATE ENERGY PROGRAM.—The term



21 ‘‘State Energy Program’’ means the program under



22 part D of title III of the Energy Policy and Con-



23 servation Act (42 U.S.C. 6321 et seq.).



24 (b) ESTABLISHMENT.—The Administrator shall de-



25 velop and implement, in consultation with the Secretary
178



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1 of Energy, standards for a national energy and environ-



2 mental building retrofit policy for single-family and
multi-



3 family residences. The Administrator shall develop and



4 implement, in consultation with the Secretary of Energy



5 and the Director of Commercial High-Performance Green



6 Buildings, standards for a national energy and environ-



7 mental building retrofit policy for nonresidential
buildings.



8 The programs to implement the residential and nonresi-



9 dential policies based on the standards developed under



10 this section shall together be known as the Retrofit for



11 Energy and Environmental Performance (REEP) pro-



12 gram.



13 (c) PURPOSE.—The purpose of the REEP program



14 is to facilitate the retrofitting of existing buildings
across



15 the United States to achieve maximum cost-effective en-



16 ergy efficiency improvements and significant improve-



17 ments in water use and other environmental attributes.



18 (d) FEDERAL ADMINISTRATION.—



19 (1) EXISTING PROGRAMS.—In creating and op-



20 erating the REEP program—



21 (A) the Administrator shall make appro-



22 priate use of existing programs, including the



23 Energy Star program and in particular the En-



24 vironmental Protection Agency Energy Star for



25 Buildings program; and 179



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1 (B) the Administrator shall consult with



2 the Secretary of Energy regarding appropriate



3 use of existing programs, including delegating



4 authority to the Director of Commercial High-



5 Performance Green Buildings appointed under



6 section 421 of the Energy Independence and



7 Security Act of 2007 (42 U.S.C. 17081).



8 (2) CONSULTATION AND COORDINATION.—The



9 Administrator shall consult with and coordinate with



10 the and the Secretary of Energy and the Secretary



11 of Housing and Urban Development in carrying out



12 the REEP program with regard to retrofitting of



13 public housing and assisted housing. As a result of



14 such consultation, the Administrator shall establish



15 standards to ensure that retrofits of public housing



16 and assisted housing funded pursuant to this section



17 are cost-effective, including opportunities to address



18 the potential co-performance of repair and replace-



19 ment needs that may be supported with other forms



20 of Federal assistance. Owners of public housing or



21 assisted housing receiving funding through the



22 REEP program shall agree to continue to provide



23 affordable housing consistent with the provisions of



24 the authorizing legislation governing each program



25 for an additional period commensurate with the 180



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1 funding received, as determined in accordance with



2 guidelines established by the Secretary of Housing



3 and Urban Development.



4 (3) ASSISTANCE.—The Administrator shall pro-



5 vide consultation and assistance to State and local



6 agencies for the establishment of revolving loan



7 funds, loan guarantees, or other forms of financial



8 assistance under this section.



9 (e) STATE AND LOCAL ADMINISTRATION.—



10 (1) DESIGNATION AND DELEGATION.—A State



11 may designate one or more agencies or entities, in-



12 cluding those regulated by the State, to carry out



13 the purposes of this section, but shall designate one



14 entity or individual as the principal point of contact



15 for the Administrator regarding the REEP Pro-



16 gram. The designated State agency, agencies, or en-



17 tities may delegate performance of appropriate ele-



18 ments of the REEP program, upon their request



19 and subject to State law, to counties, municipalities,



20 appropriate public agencies, and other divisions of



21 local government, as well as to entities regulated by



22 the State. In making any such designation or delega-



23 tion, a State shall give priority to entities that ad-



24 minister existing comprehensive retrofit programs,



25 including those under the supervision of State utility
181



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1 regulators. States shall maintain responsibility for



2 meeting the standards and requirements of the



3 REEP program. In any State that elects not to ad-



4 minister the REEP program, a unit of local govern-



5 ment may propose to do so within its jurisdiction,



6 and if the Administrator finds that such local gov-



7 ernment is capable of administering the program,



8 the Administrator may provide assistance to that



9 local government, prorated according to the popu-



10 lation of the local jurisdiction relative to the popu-



11 lation of the State, for purposes of the REEP pro-



12 gram.



13 (2) EMPLOYMENT.—States and local govern-



14 ment entities may administer a REEP program in



15 a manner that authorizes public or regulated inves-



16 tor-owned utilities, building auditors and inspectors,



17 contractors, nonprofit organizations, for-profit com-



18 panies, and other entities to perform audits and ret-



19 rofit services under this section. A State may pro-



20 vide incentives for retrofits without direct participa-



21 tion by the State or its agents, so long as the result-



22 ing savings are measured and verified. A State or



23 local administrator of a REEP program shall seek



24 to ensure that sufficient qualified entities are avail-



25 able to support retrofit activities so that building 182



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1 owners have a competitive choice among qualified



2 auditors, raters, contractors, and providers of serv-



3 ices related to retrofits. Nothing in this section is in-



4 tended to deny the right of a building owner to



5 choose the specific providers of retrofit services to



6 engage for a retrofit project in that owner’s building.



7 (3) EQUAL INCENTIVES FOR EQUAL IMPROVE-



8 MENT.—In general, the States should strive to offer



9 the same levels of incentives for retrofits that meet



10 the same efficiency improvement goals, regardless of



11 whether the State, its agency or entity, or the build-



12 ing owner has conducted the retrofit achieving the



13 improvement, provided the improvement is measured



14 and verified.



15 (f) ELEMENTS OF REEP PROGRAM.—The Adminis-



16 trator, in consultation with the Secretary of Energy,
shall



17 establish goals, guidelines, practices, and standards for
ac-



18 complishing the purpose stated in subsection (c), and
shall



19 annually review and, as appropriate, revise such goals,



20 guidelines, practices, and standards. The program under



21 this section shall include the following:



22 (1) Residential Energy Services Network



23 (RESNET) or Building Performance Institute



24 (BPI) analyst certification of residential building en-



25 ergy and environment auditors, inspectors, and rat-183



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1 ers, or an equivalent certification system as deter-



2 mined by the Administrator.



3 (2) BPI certification or licensing by States of



4 residential building energy and environmental ret-



5 rofit contractors, or an equivalent certification or li-



6 censing system as determined by the Administrator.



7 (3) Provision of BPI, RESNET, or other ap-



8 propriate information on equipment and procedures,



9 as determined by the Administrator, that contractors



10 can use to test the energy and environmental effi-



11 ciency of buildings effectively (such as infrared pho-



12 tography and pressurized testing, and tests for water



13 use and indoor air quality).



14 (4) Provision of clear and effective materials to



15 describe the testing and retrofit processes for typical



16 buildings.



17 (5) Guidelines for offering and managing pre-



18 scriptive building retrofit programs and perform-



19 ance-based building retrofit programs for residential



20 and nonresidential buildings.



21 (6) Guidelines for applying recommissioning



22 and retrocommissioning principles to improve a



23 building’s operations and maintenance procedures.



24 (7) A requirement that building retrofits con-



25 ducted pursuant to a REEP program utilize, espe-184



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1 cially in all air-conditioned buildings, roofing mate-



2 rials with high solar energy reflectance, unless inap-



3 propriate due to green roof management, solar en-



4 ergy production, or for other reasons identified by



5 the Administrator, in order to reduce energy con-



6 sumption within the building, increase the albedo of



7 the building’s roof, and decrease the heat island ef-



8 fect in the area of the building, without reduction of



9 otherwise applicable ceiling insulation standards.



10 (8) Determination of energy savings in a per-



11 formance-based building retrofit program through—



12 (A) for residential buildings, comparison of



13 before and after retrofit scores on the Home



14 Energy Rating System (HERS) Index, where



15 the final score is produced by an objective third



16 party;



17 (B) for nonresidential buildings, Environ-



18 mental Protection Agency Portfolio Manager



19 benchmarks; or



20 (C) for either residential or nonresidential



21 buildings, use of an Administrator-approved



22 simulation program by a contractor with the



23 appropriate certification, subject to appropriate



24 software standards and verification of at least 185



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1 15 percent of all work done, or such other per-



2 centage as the Administrator may determine.



3 (9) Guidelines for utilizing the Energy Star



4 Portfolio Manager, the Home Energy Rating System



5 (HERS) rating system, Home Performance with En-



6 ergy Star program approvals, and any other tools



7 associated with the retrofit program.



8 (10) Requirements and guidelines for post-ret-



9 rofit inspection and confirmation of work and energy



10 savings.



11 (11) Detailed descriptions of funding options



12 for the benefit of State and local governments, along



13 with model forms, accounting aids, agreements, and



14 guides to best practices.



15 (12) Guidance on opportunities for—



16 (A) rating or certifying retrofitted build-



17 ings as Energy Star buildings, or as green



18 buildings under a recognized green building rat-



19 ing system;



20 (B) assigning Home Energy Rating Sys-



21 tem (HERS) or similar ratings; and



22 (C) completing any applicable building per-



23 formance labels. 186



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1 (13) Sample materials for publicizing the pro-



2 gram to building owners, including public service an-



3 nouncements and advertisements.



4 (14) Processes for tracking the numbers and lo-



5 cations of buildings retrofitted under the REEP pro-



6 gram, with information on projected and actual sav-



7 ings of energy and its value over time.



8 (g) REQUIREMENTS.—As a condition of receiving as-



9 sistance for the REEP program pursuant to this Act, a



10 State or qualifying local government shall—



11 (1) adopt the standards for training, certifi-



12 cation of contractors, certification of buildings, and



13 post-retrofit inspection as developed by the Adminis-



14 trator for residential and nonresidential buildings,



15 respectively, except as necessary to match local con-



16 ditions, needs, efficiency opportunities, or other local



17 factors, or to accord with State laws or regulations,



18 and then only after the Administrator approves such



19 a variance;



20 (2) establish fiscal controls and accounting pro-



21 cedures (which conform to generally accepted gov-



22 ernment accounting principles) sufficient to ensure



23 proper accounting during appropriate accounting pe-



24 riods for payments received and disbursements, and



25 for fund balances; and 187



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1 (3) agree to make 10 percent of assistance re-



2 ceived to carry out this section available on a pref-



3 erential basis for retrofit projects proposed for pub-



4 lic housing and assisted housing, provided that—



5 (A) none of such funds shall be used for



6 demolition of such housing;



7 (B) such retrofits not shall not be used to



8 justify any increase in rents charged to resi-



9 dents of such housing; and



10 (C) owners of such housing shall agree to



11 continue to provide affordable housing con-



12 sistent with the provisions of the authorizing



13 legislation governing each program for an addi-



14 tional period commensurate with the funding



15 received; and



16 (4) the Administrator shall conduct or require



17 each State to have such independent financial audits



18 of REEP-related funding as the Administrator con-



19 siders necessary or appropriate to carry out the pur-



20 poses of this section.



21 (h) OPTIONS TO SUPPORT REEP PROGRAM.—The as-



22 sistance provided under this section shall support the
im-



23 plementation through State REEP programs of alternate



24 means of creating incentives for, or reducing financial
bar-188



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1 riers to, improved energy and environmental performance



2 in buildings, consistent with this section, including—



3 (1) implementing prescriptive building retrofit



4 programs and performance-based building retrofit



5 programs;



6 (2) providing credit enhancement, interest rate



7 subsidies, loan guarantees, or other credit support;



8 (3) providing initial capital for public revolving



9 fund financing of retrofits;



10 (4) providing funds to support utility-operated



11 retrofit programs with repayments over time



12 through utility rates, calibrated to create net positive



13 cash flow to the building owner, and transferable



14 from one building owner to the next with the build-



15 ing’s utility services;



16 (5) providing funds to local government pro-



17 grams to provide REEP services and financial as-



18 sistance; and



19 (6) other means proposed by State and local



20 agencies, subject to the approval of the Adminis-



21 trator.



22 (i) SUPPORT FOR PROGRAM.—



23 (1) INITIAL AWARD LIMITS.—Except as pro-



24 vided in paragraph (2), State and local REEP pro-



25 grams may make per-building direct expenditures 189



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1 for retrofit improvements, or their equivalent in indi-



2 rect or other forms of financial support, from funds



3 made available to carry out this section, in amounts



4 not to exceed the following amounts per unit:



5 (A) RESIDENTIAL BUILDING PROGRAM.—



6 (i) AWARDS.—For residential build-



7 ings—



8 (I) support for a free or low-cost



9 detailed building energy audit that



10 prescribes measures sufficient to



11 achieve at least a 20 percent reduc-



12 tion in energy use, by providing an in-



13 centive equal to the documented cost



14 of such audit, but not more than



15 $200, in addition to any earned by



16 achieving a 20 percent or greater effi-



17 ciency improvement;



18 (II) a total of $1,000 for a com-



19 bination of measures, prescribed in an



20 audit conducted under subclause (I),



21 designed to reduce energy consump-



22 tion by more than 10 percent, and



23 $2,000 for a combination of measures



24 prescribed in such an audit, designed 190



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1 to reduce energy consumption by more



2 than 20 percent;



3 (III) $3,000 for demonstrated



4 savings of 20 percent, pursuant to a



5 performance-based building retrofit



6 program; and



7 (IV) $1,000 for each additional 5



8 percentage points of energy savings



9 achieved beyond savings for which



10 funding is provided under subclause



11 (II) or (III).



12 Funding shall not be provided under



13 clauses (II) and (III) for the same energy



14 savings.



15 (ii) MAXIMUM PERCENTAGE.—Awards



16 under clause (i) shall not exceed 50 per-



17 cent of retrofit costs for each building. For



18 buildings with multiple residential units,



19 awards under clause (i) shall not be great-



20 er than 50 percent of the total cost of ret-



21 rofitting the building, prorated among indi-



22 vidual residential units on the basis of rel-



23 ative costs of the retrofit. In the case of



24 public housing and assisted housing, the



25 50 percent contribution matching the con-191



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1 tribution from REEP program funds may



2 come from any other source, including



3 other Federal funds.



4 (iii) ADDITIONAL AWARDS.—Addi-



5 tional awards may be provided for pur-



6 poses of increasing energy efficiency, for



7 buildings achieving at least 20 percent en-



8 ergy savings using funding provided under



9 clause (i), in the form of grants of not



10 more than $600 for measures projected or



11 measured (using an appropriate method



12 approved by the Administrator) to achieve



13 at least 35 percent potable water savings



14 through equipment or systems with an es-



15 timated service life of not less than 7



16 years, and not more than an additional



17 $20 may be provided for each additional



18 one percent of such savings, up to a max-



19 imum total grant of $1,200.



20 (B) NONRESIDENTIAL BUILDING PRO-



21 GRAM.—



22 (i) AWARDS.—For nonresidential



23 buildings—



24 (I) support for a free or low-cost



25 detailed building energy audit that 192



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1 prescribes, as part of a energy-reduc-



2 ing measures sufficient to achieve at



3 least a 20 percent reduction in energy



4 use, by providing an incentive equal to



5 the documented cost of such audit,



6 but not more than $500, in addition



7 to any award earned by achieving a



8 20 percent or greater efficiency im-



9 provement;



10 (II) $0.15 per square foot of ret-



11 rofit area for demonstrated energy use



12 reductions from 20 percent to 30 per-



13 cent;



14 (III) $0.75 per square foot for



15 demonstrated energy use reductions



16 from 30 percent to 40 percent;



17 (IV) $1.60 per square foot for



18 demonstrated energy use reductions



19 from 40 percent to 50 percent; and



20 (V) $2.50 per square foot for



21 demonstrated energy use reductions



22 exceeding 50 percent.



23 (ii) MAXIMUM PERCENTAGE.—



24 Amounts provided under subclauses (II)



25 through (V) of clause (i) combined shall 193



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1 not exceed 50 percent of the total retrofit



2 cost of a building. In nonresidential build-



3 ings with multiple units, such awards shall



4 be prorated among individual units on the



5 basis of relative costs of the retrofit.



6 (iii) ADDITIONAL AWARDS.—Addi-



7 tional awards may be provided, for build-



8 ings achieving at least 20 percent energy



9 savings using funding provided under



10 clause (i), as follows:



11 (I) WATER.—For purposes of in-



12 creasing energy efficiency, grants may



13 be made for whole building potable



14 water use reduction (using an appro-



15 priate method approved by the Ad-



16 ministrator) for up to 50 percent of



17 the total retrofit cost, including



18 amounts up to—



19 (aa) $24.00 per thousand



20 gallons per year of potable water



21 savings of 40 percent or more;



22 (bb) $27.00 per thousand



23 gallons per year of potable water



24 savings of 50 percent or more;



25 and 194



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1 (cc) $30.00 per thousand



2 gallons per year of potable water



3 savings of 60 percent or more.



4 (II) ENVIRONMENTAL IMPROVE-



5 MENTS.—Additional awards of up to



6 $1,000 may be granted for the inclu-



7 sion of other environmental attributes



8 that the Administrator, in consulta-



9 tion with the Secretary, identifies as



10 contributing to energy efficiency. Such



11 attributes may include, but are not



12 limited to waste diversion and the use



13 of environmentally preferable mate-



14 rials (including salvaged, renewable,



15 or recycled materials, and materials



16 with no or low-VOC content). The Ad-



17 ministrator may recommend that



18 States develop such standards as are



19 necessary to account for local or re-



20 gional conditions that may affect the



21 feasibility or availability of identified



22 resources and attributes.



23 (iv) INDOOR AIR QUALITY MINIMUM.—



24 Nonresidential buildings receiving incen-



25 tives under this section must satisfy at a 195



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1 minimum the most recent version of



2 ASHRAE Standard 62.1 for ventilation, or



3 the equivalent as determined by the Ad-



4 ministrator. A State may issue a waiver



5 from this requirement to a building project



6 on a showing that such compliance is in-



7 feasible due to the physical constraints of



8 the building’s existing ventilation system,



9 or such other limitations as may be speci-



10 fied by the Administrator.



11 (C) DISASTER DAMAGED BUILDINGS.—Any



12 source of funds, including Federal funds pro-



13 vided through the Robert T. Stafford Disaster



14 Relief and Emergency Assistance Act, shall



15 qualify as the building owner’s 50 percent con-



16 tribution, in order to match the contribution of



17 REEP funds, so long as the REEP funds are



18 only used to improve the energy efficiency of



19 the buildings being reconstructed. In addition,



20 the appropriate Federal agencies providing as-



21 sistance to building owners through the Robert



22 T. Stafford Disaster Relief and Emergency As-



23 sistance Act shall make information available,



24 following a disaster, to building owners rebuild-



25 ing disaster damaged buildings with assistance 196



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1 from the Act, that REEP funds may be used



2 for energy efficiency improvements.



3 (D) HISTORIC BUILDINGS.—Notwith-



4 standing subparagraphs (A) and (B), a building



5 in or eligible for the National Register of His-



6 toric Places shall be eligible for awards under



7 this paragraph in amounts up to 120 percent of



8 the amounts set forth in subparagraphs (A) and



9 (B).



10 (E) SUPPLEMENTAL SUPPORT.—State and



11 local governments may supplement the per-



12 building expenditures under this paragraph



13 with funding from other sources.



14 (2) ADJUSTMENT.—The Administrator may ad-



15 just the specific dollar amounts provided under para-



16 graph (1) in years subsequent to the second year



17 after the date of enactment of this Act, and every



18 2 years thereafter, as the Administrator determines



19 necessary to achieve optimum cost-effectiveness and



20 to maximize incentives to achieve energy efficiency



21 within the total building award amounts provided in



22 that paragraph, and shall publish and hold constant



23 such revised limits for at least 2 years.



24 (j) REPORT TO CONGRESS.—The Administrator shall



25 conduct an annual assessment of the achievements of the
197



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1 REEP program in each State, shall prepare an annual re-



2 port of such achievements and any recommendations for



3 program modifications, and shall provide such report to



4 Congress at the end of each fiscal year during which fund-



5 ing or other resources were made available to the States



6 for the REEP Program.



7 Subtitle G—Emission Reductions



8 From Public Transportation Ve-



9 hicles



10 SEC. 171. SHORT TITLE.



11 This subtitle may be cited as the ‘‘Green Taxis Act



12 of 2009’’.



13 SEC. 172. STATE FUEL ECONOMY REGULATION FOR TAXI-



14 CABS.



15 Section 32919 of title 49, United States Code, is



16 amended by adding at the end the following new sub-



17 section:



18 ‘‘(d) TAXICABS.—Notwithstanding subsection (a), a



19 State or political subdivision of a State may prescribe
re-



20 quirements for fuel economy for taxicabs and other auto-



21 mobiles if such requirements are at least as stringent as



22 applicable Federal requirements and if such taxicabs and



23 other automobiles— 198



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1 ‘‘(1) are automobiles that are capable of trans-



2 porting not more than 10 individuals, including the



3 driver;



4 ‘‘(2) are commercially available or are designed



5 and manufactured pursuant to a contract with such



6 State or political subdivision of such State;



7 ‘‘(3) are operated for hire pursuant to an oper-



8 ating or regulatory license, permit, or other author-



9 ization issued by such State or political subdivision



10 of such State;



11 ‘‘(4) provide local transportation for a fare de-



12 termined on the basis of the time or distance trav-



13 eled or a combination of time and distance traveled;



14 and



15 ‘‘(5) do not exclusively provide transportation to



16 and from airports.’’.



17 SEC. 173. STATE REGULATION OF MOTOR VEHICLE EMIS-



18 SIONS FOR TAXICABS.



19 Section 209 of the Clean Air Act (42 U.S.C. 7543)



20 is amended by adding at the end the following new sub-



21 section:



22 ‘‘(f) TAXICABS.—(1) Notwithstanding subsection (a),



23 a State or political subdivision thereof may adopt and
en-



24 force standards for the control of emissions from new



25 motor vehicles that are taxicabs and other vehicles if
such 199



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1 standards will be, in the aggregate, at least as
protective



2 of public health and welfare as applicable Federal stand-



3 ards and if such taxicabs and other vehicles—



4 ‘‘(A) are passenger motor vehicles that are



5 capable of transporting not more than 10 indi-



6 viduals, including the driver;



7 ‘‘(B) are commercially available or are de-



8 signed and manufactured pursuant to a con-



9 tract with such State or political subdivision



10 thereof;



11 ‘‘(C) are operated for hire pursuant to an



12 operating or regulatory license, permit, or other



13 authorization issued by such State or political



14 subdivision thereof;



15 ‘‘(D) provide local transportation for a fare



16 determined on the basis of the time or distance



17 traveled or a combination of time and distance



18 traveled; and



19 ‘‘(E) do not exclusively provide transpor-



20 tation to and from airports.



21 ‘‘(2) If each standard of a State or political subdivi-



22 sion thereof is at least as stringent as the comparable
ap-



23 plicable Federal standard, such standard of such State or



24 political subdivision thereof shall be deemed at least as
200



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1 protective of health and welfare as such Federal standards



2 for purposes of this subsection.’’.



3 Subtitle H—Clean Energy and



4 Natural Gas



5 SEC. 181. CLEAN ENERGY AND ACCELERATED EMISSION



6 REDUCTION PROGRAM.



7 (a) ESTABLISHMENT.—



8 (1) IN GENERAL.—The Administrator shall es-



9 tablish a program to promote dispatchable power



10 generation projects that can accelerate the reduction



11 of power sector carbon dioxide and other greenhouse



12 gas emissions.



13 (2) USE OF FUNDS.—Funds provided under



14 this section shall be used by the Administrator to



15 make incentive payments to owners or operators of



16 eligible projects.



17 (b) REGULATIONS.—Not later than 90 days after the



18 date of enactment of this Act, the Administrator shall
pro-



19 mulgate regulations providing for incentives, pursuant to



20 the requirements of this section.



21 (c) GOAL.—Not later than 3 years after the date of



22 enactment of this Act, the Administrator shall provide
in-



23 centives for eligible projects that generate 300,000



24 gigawatt-hours of electricity per year. 201



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1 (d) CRITERIA FOR ELIGIBLE PROJECTS.—To be eli-



2 gible for funding under this section a project must—



3 (1) reduce emissions below the 2007 average



4 greenhouse gas emissions per megawatt-hour of the



5 United States electric power sector by the quantity



6 specified in subsection (f); and



7 (2) not receive an investment or production



8 credit in—



9 (A) the year in which the project is placed



10 in service; or



11 (B) calendar year 2009, notwithstanding



12 the year in which the project was placed in



13 service.



14 (e) PRIORITY.—The Administrator shall give priority



15 to eligible projects from the following categories:



16 (1) Power generation projects designed to inte-



17 grate intermittent renewable power into the bulk-



18 power system.



19 (2) Energy storage projects used to support re-



20 newable energy.



21 (3) Power generation projects with carbon cap-



22 ture and sequestration that are not eligible for other



23 assistance under this Act. 202



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1 (4) Projects that achieve the greatest reduction



2 in greenhouse gas emissions per dollar of incentive



3 payment.



4 (f) EMISSION REDUCTION CRITERIA.—For the pur-



5 poses of subsection (d), the applicable emission reduction



6 quantity shall be determined in accordance with the fol-



7 lowing table:



Calendar years



Percentage below 2007 average greenhouse gas emissions per
MWh of



United States electric power sector



2010 through 2020
.................................................. 25 percent



2021 through 2025
.................................................. 40 percent



2026 through 2030
.................................................. 65 percent



8 (g) AUTHORIZATION OF APPROPRIATIONS.—There



9 are authorized to be appropriated to the Administrator



10 such sums as are necessary to carry out this section for



11 each of fiscal years 2010 through 2030.



12 SEC. 182. ADVANCED NATURAL GAS TECHNOLOGIES.



13 (a) DEFINITIONS.—In this section:



14 (1) CORPORATION.—



15 (A) IN GENERAL.—The term ‘‘corpora-



16 tion’’ means any corporation, joint-stock com-



17 pany, partnership, limited liability company, as-



18 sociation, business trust, or other organized



19 group of persons, regardless of incorporation.



20 (B) EXCLUSION.—The term ‘‘corporation’’



21 does not include a municipality.



22 (2) ELIGIBLE ENTITY.— 203



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1 (A) IN GENERAL.—The term ‘‘eligible enti-



2 ty’’ means an entity that is eligible to receive a



3 grant under subsection (b).



4 (B) INCLUSIONS.—The term ‘‘eligible enti-



5 ty’’ includes a corporation, an eligible research



6 entity, an industry entity, a municipality, a mu-



7 nicipal natural gas distribution system, and a



8 natural gas distribution company.



9 (3) ELIGIBLE RESEARCH ENTITY.—



10 (A) IN GENERAL.—The term ‘‘eligible re-



11 search entity’’ means an entity that is experi-



12 enced in planning, conducting, and imple-



13 menting natural gas research, development,



14 demonstration, and deployment projects.



15 (B) INCLUSIONS.—The term ‘‘eligible re-



16 search entity’’ includes a research institution



17 and an institution of higher education.



18 (4) INDUSTRY ENTITY.—



19 (A) IN GENERAL.—The term ‘‘industry en-



20 tity’’ means the persons and municipalities col-



21 lectively engaged in the delivery of natural gas



22 for consumption in the United States (such as



23 natural gas distribution companies and munic-



24 ipal natural gas distribution systems). 204



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1 (B) EXCLUSION.—The term ‘‘industry en-



2 tity’’ does not include any natural gas cus-



3 tomer.



4 (5) MUNICIPALITY.—The term ‘‘municipality’’



5 means a city, county, or other political subdivision or



6 agency of a State.



7 (6) MUNICIPAL NATURAL GAS DISTRIBUTION



8 SYSTEM.—The term ‘‘municipal natural gas distribu-



9 tion system’’ means a municipality engaged in the



10 business of delivering natural gas for consumption to



11 residential, commercial, industrial, and other natural



12 gas customers.



13 (7) NATURAL GAS.—



14 (A) IN GENERAL.—The term ‘‘natural



15 gas’’ means a mixture of hydrocarbon and non-



16 hydrocarbon gases, primarily methane, that



17 have been produced from geological formations



18 or by any other means.



19 (B) INCLUSION.—The term ‘‘natural gas’’



20 includes renewable biogas.



21 (8) NATURAL GAS DISTRIBUTION COMPANY.—



22 The term ‘‘natural gas distribution company’’ means



23 a person engaged in the business of distributing nat-



24 ural gas for consumption to residential, commercial,



25 industrial, or other natural gas customers. 205



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1 (b) GRANT PROGRAMS.—



2 (1) NATURAL GAS ELECTRICITY GENERATION



3 GRANTS.—The Administrator, in consultation with



4 Secretary of Energy, may provide to eligible entities



5 research and development grants to support the de-



6 ployment of low greenhouse-gas-emitting end-use



7 technologies, including carbon capture and seques-



8 tration technologies, for natural gas electricity gen-



9 eration.



10 (2) NATURAL GAS RESIDENTIAL AND COMMER-



11 CIAL TECHNOLOGY GRANTS.—The Administrator



12 shall establish a program to provide to eligible enti-



13 ties grants to advance the commercial demonstration



14 or early development of low greenhouse-gas-emitting



15 end-use technologies fueled by natural gas, including



16 carbon capture and storage, for residential and com-



17 mercial purposes, through research, development,



18 demonstration, and deployment of those tech-



19 nologies.



20 (c) REPORTING.—Not later than 180 days after the



21 date of enactment of this Act, and every 180 days there-



22 after, the Secretary of Energy shall submit to the Com-



23 mittee on Energy and Commerce of the House of Rep-



24 resentatives and the Senate Committees on Energy and



25 Natural Resources and Environment and Public Works of 206



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1 the Senate a report that describes the status and results



2 of activities carried out under subsection (b).



3 (d) AUTHORIZATION.—There are authorized to be ap-



4 propriated such sums as are necessary to carry out this



5 section.



6 TITLE II—RESEARCH



7 Subtitle A—Energy Research



8 SEC. 201. ADVANCED ENERGY RESEARCH.



9 (a) IN GENERAL.—The Administrator shall establish



10 a program to provide grants for advanced energy research.



11 (b) DISTRIBUTION.—The Administrator shall dis-



12 tribute grants on a competitive basis to institutions of



13 higher education, companies, research foundations, trade



14 and industry research collaborations, or consortia of
such



15 entities, or other appropriate research and development



16 entities.



17 (c) SELECTION OF PROPOSALS.—In selecting pro-



18 posals for funding under this section, the Administrator



19 shall prioritize applications that—



20 (1) enhance the economic and energy security



21 of the United States through the development of en-



22 ergy technologies that result in—



23 (A) reductions of imports of energy from



24 foreign sources; 207



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1 (B) reductions of energy-related emissions,



2 including greenhouse gases; and



3 (C) improvements in the energy efficiency



4 of all economic sectors; and



5 (2) ensure that the United States maintains a



6 technological lead in developing and deploying ad-



7 vanced energy technologies.



8 (d) RESPONSIBILITIES.—The Administrator shall be



9 responsible for assessing the success of programs and ter-



10 minating programs carried out under this section that are



11 not achieving the goals of the programs.



12 (e) ASSISTANCE.—Assistance provided under this



13 section shall be used to supplement, and not to supplant,



14 any other Federal resources available to carry out
activi-



15 ties described in this section.



16 (f) AUTHORIZATION.—There are authorized to be ap-



17 propriated such sums as are necessary to carry out this



18 section.



19 Subtitle B—Drinking Water Adap-



20 tation, Technology, Education,



21 and Research



22 SEC. 211. EFFECTS OF CLIMATE CHANGE ON DRINKING



23 WATER UTILITIES.



24 (a) FINDINGS.—Congress finds that— 208



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1 (1) the consensus among climate scientists is



2 overwhelming that climate change is occurring more



3 rapidly than can be attributed to natural causes, and



4 that significant impacts to the water supply are al-



5 ready occurring;



6 (2) among the first and most critical of those



7 impacts will be change to patterns of precipitation



8 around the world, which will affect water availability



9 for the most basic drinking water and domestic



10 water needs of populations in many areas of the



11 United States;



12 (3) drinking water utilities throughout the



13 United States, as well as those in Europe, Australia,



14 and Asia, are concerned that extended changes in



15 precipitation will lead to extended droughts;



16 (4) supplying water is highly energy-intensive



17 and will become more so as climate change forces



18 more utilities to turn to alternative supplies;



19 (5) energy production consumes a significant



20 percentage of the fresh water resources of the



21 United States;



22 (6) since 2003, the drinking water industry of



23 the United States has sponsored, through a non-



24 profit water research foundation, various studies to 209



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1 assess the impacts of climate change on drinking



2 water supplies;



3 (7) those studies demonstrate the need for a



4 comprehensive program of research into the full



5 range of impacts on drinking water utilities, includ-



6 ing impacts on water supplies, facilities, and cus-



7 tomers;



8 (8) that nonprofit water research foundation is



9 also coordinating internationally with other drinking



10 water utilities on shared research projects and has



11 hosted international workshops with counterpart Eu-



12 ropean and Asian water research organizations to



13 develop a unified research agenda for applied re-



14 search on adaptive strategies to address climate



15 change impacts;



16 (9) research data in existence as of the date of



17 enactment of this Act—



18 (A) summarize the best available scientific



19 evidence on climate change;



20 (B) identify the implications of climate



21 change for the water cycle and the availability



22 and quality of water resources; and



23 (C) provide general guidance on planning



24 and adaptation strategies for water utilities;



25 and 210



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1 (10) given uncertainties about specific climate



2 changes in particular areas, drinking water utilities



3 need to prepare for a wider range of likely possibili-



4 ties in managing and delivery of water.



5 (b) IN GENERAL.—The Administrator, in cooperation



6 with the Secretary of Commerce, the Secretary of Energy,



7 and the Secretary of the Interior, shall establish and
pro-



8 vide funding for a program of directed and applied re-



9 search, to be conducted through a nonprofit drinking



10 water research foundation and sponsored by water utili-



11 ties, to assist the utilities in adapting to the effects
of cli-



12 mate change.



13 (c) RESEARCH AREAS.—The research conducted in



14 accordance with subsection (b) shall include research



15 into—



16 (1) water quality impacts and solutions, includ-



17 ing research—



18 (A) to address probable impacts on raw



19 water quality resulting from—



20 (i) erosion and turbidity from extreme



21 precipitation events;



22 (ii) watershed vegetation changes; and



23 (iii) increasing ranges of pathogens,



24 algae, and nuisance organisms resulting



25 from warmer temperatures; and 211



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1 (B) on mitigating increasing damage to



2 watersheds and water quality by evaluating ex-



3 treme events, such as wildfires and hurricanes,



4 to learn and develop management approaches to



5 mitigate—



6 (i) permanent watershed damage;



7 (ii) quality and yield impacts on



8 source waters; and



9 (iii) increased costs of water treat-



10 ment;



11 (2) impacts on groundwater supplies from car-



12 bon sequestration, including research to evaluate po-



13 tential water quality consequences of carbon seques-



14 tration in various regional aquifers, soil conditions,



15 and mineral deposits;



16 (3) water quantity impacts and solutions, in-



17 cluding research—



18 (A) to evaluate climate change impacts on



19 water resources throughout hydrological basins



20 of the United States;



21 (B) to improve the accuracy and resolution



22 of climate change models at a regional level;



23 (C) to identify and explore options for in-



24 creasing conjunctive use of aboveground and



25 underground storage of water; and 212



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1 (D) to optimize operation of existing and



2 new reservoirs in diminished and erratic periods



3 of precipitation and runoff;



4 (4) infrastructure impacts and solutions for



5 water treatment and wastewater treatment facilities



6 and underground pipelines, including research—



7 (A) to evaluate and mitigate the impacts of



8 sea level rise on—



9 (i) near-shore facilities;



10 (ii) soil drying and subsidence;



11 (iii) reduced flows in water and waste-



12 water pipelines; and



13 (iv) extreme flows in wastewater sys-



14 tems; and



15 (B) on ways of increasing the resilience of



16 existing infrastructure, planning cost-effective



17 responses to adapt to climate change, and de-



18 veloping new design standards for future infra-



19 structure that include the use of energy con-



20 servation measures and renewable energy in



21 new construction to the maximum extent prac-



22 ticable;



23 (5) desalination, water reuse, and alternative



24 supply technologies, including research— 213



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1 (A) to improve and optimize existing mem-



2 brane technologies, and to identify and develop



3 breakthrough technologies, to enable the use of



4 seawater, brackish groundwater, treated waste-



5 water, and other impaired sources;



6 (B) into new sources of water through



7 more cost-effective water treatment practices in



8 recycling and desalination; and



9 (C) to improve technologies for use in—



10 (i) managing and minimizing the vol-



11 ume of desalination and reuse concentrate



12 streams; and



13 (ii) minimizing the environmental im-



14 pacts of seawater intake at desalination fa-



15 cilities;



16 (6) energy efficiency and greenhouse gas mini-



17 mization, including research—



18 (A) on optimizing the energy efficiency of



19 water supply and wastewater operations and



20 improving water efficiency in energy production



21 and management; and



22 (B) to identify and develop renewable, car-



23 bon-neutral energy options for the water supply



24 and wastewater industry; 214



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1 (7) regional and hydrological basin cooperative



2 water management solutions, including research



3 into—



4 (A) institutional mechanisms for greater



5 regional cooperation and use of water ex-



6 changes, banking, and transfers; and



7 (B) the economic benefits of sharing risks



8 of shortage across wider areas;



9 (8) utility management, decision support sys-



10 tems, and water management models, including re-



11 search—



12 (A) into improved decision support systems



13 and modeling tools for use by water utility



14 managers to assist with increased water supply



15 uncertainty and adaptation strategies posed by



16 climate change;



17 (B) to provide financial tools, including



18 new rate structures, to manage financial re-



19 sources and investments, because increased con-



20 servation practices may diminish revenue and



21 increase investments in infrastructure; and



22 (C) to develop improved systems and mod-



23 els for use in evaluating— 215



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1 (i) successful alternative methods for



2 conservation and demand management;



3 and



4 (ii) climate change impacts on



5 groundwater resources;



6 (9) reducing greenhouse gas emissions and im-



7 proving energy demand management, including re-



8 search to improve energy efficiency in water collec-



9 tion, production, transmission, treatment, distribu-



10 tion, and disposal to provide more sustainability and



11 means to assist drinking water utilities in reducing



12 the production of greenhouse gas emissions in the



13 collection, production, transmission, treatment, dis-



14 tribution, and disposal of drinking water;



15 (10) water conservation and demand manage-



16 ment, including research—



17 (A) to develop strategic approaches to



18 water demand management that offer the low-



19 est-cost, noninfrastructural options to serve



20 growing populations or manage declining sup-



21 plies, primarily through—



22 (i) efficiencies in water use and re-



23 allocation of the saved water;



24 (ii) demand management tools;



25 (iii) economic incentives; and 216



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1 (iv) water-saving technologies; and



2 (B) into efficiencies in water management



3 through integrated water resource management



4 that incorporates—



5 (i) supply-side and demand-side proc-



6 esses;



7 (ii) continuous adaptive management;



8 and



9 (iii) the inclusion of stakeholders in



10 decisionmaking processes; and



11 (11) communications, education, and public ac-



12 ceptance, including research—



13 (A) into improved strategies and ap-



14 proaches for communicating with customers, de-



15 cisionmakers, and other stakeholders about the



16 implications of climate change on water supply



17 and water management;



18 (B) to develop effective communication ap-



19 proaches—



20 (i) to gain public acceptance of alter-



21 native water supplies and new policies and



22 practices, including conservation and de-



23 mand management; and



24 (ii) to gain public recognition and ac-



25 ceptance of increased costs; and 217



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1 (C) to create and maintain a clearinghouse



2 of climate change information for water utili-



3 ties, academic researchers, stakeholders, gov-



4 ernment agencies, and research organizations.



5 (d) AUTHORIZATION OF APPROPRIATIONS.—There is



6 authorized to be appropriated to carry out this section



7 $25,000,000 for each of fiscal years 2010 through 2020.



8 TITLE III—TRANSITION AND



9 ADAPTATION



10 Subtitle A—Green Jobs and Worker



11 Transition



12 PART 1—GREEN JOBS



13 SEC. 301. CLEAN ENERGY CURRICULUM DEVELOPMENT



14 GRANTS.



15 (a) AUTHORIZATION.—The Secretary of Education is



16 authorized to award grants, on a competitive basis, to
eli-



17 gible partnerships to develop programs of study (con-



18 taining the information described in section 122(c)(1)(A)



19 of the Carl D. Perkins Career and Technical Education



20 Act of 2006 (20 U.S.C. 2342)), that are focused on emerg-



21 ing careers and jobs in the fields of clean energy,
renew-



22 able energy, energy efficiency, climate change
mitigation,



23 and climate change adaptation. The Secretary of Edu-



24 cation shall consult with the Secretary of Labor and the
218



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1 Secretary of Energy prior to the issuance of a
solicitation



2 for grant applications.



3 (b) ELIGIBLE PARTNERSHIPS.—For purposes of this



4 section, an eligible partnership shall include—



5 (1) at least 1 local educational agency eligible



6 for funding under section 131 of the Carl D. Per-



7 kins Career and Technical Education Act of 2006



8 (20 U.S.C. 2351) or an area career and technical



9 education school or education service agency de-



10 scribed in such section;



11 (2) at least 1 postsecondary institution eligible



12 for funding under section 132 of such Act (20



13 U.S.C. 2352); and



14 (3) representatives of the community including



15 business, labor organizations, and industry that have



16 experience in fields as described in subsection (a).



17 (c) APPLICATION.—An eligible partnership seeking a



18 grant under this section shall submit an application to
the



19 Secretary at such time and in such manner as the Sec-



20 retary may require. Applications shall include—



21 (1) a description of the eligible partners and



22 partnership, the roles and responsibilities of each



23 partner, and a demonstration of each partner’s ca-



24 pacity to support the program; 219



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1 (2) a description of the career area or areas



2 within the fields as described in subsection (a) to be



3 developed, the reason for the choice, and evidence of



4 the labor market need to prepare students in that



5 area;



6 (3) a description of the new or existing program



7 of study and both secondary and postsecondary com-



8 ponents;



9 (4) a description of the students to be served by



10 the new program of study;



11 (5) a description of how the program of study



12 funded by the grant will be replicable and dissemi-



13 nated to schools outside of the partnership, including



14 urban and rural areas;



15 (6) a description of applied learning that will be



16 incorporated into the program of study and how it



17 will incorporate or reinforce academic learning;



18 (7) a description of how the program of study



19 will be delivered;



20 (8) a description of how the program will pro-



21 vide accessibility to students, especially economically



22 disadvantaged, low performing, and urban and rural



23 students;



24 (9) a description of how the program will ad-



25 dress placement of students in nontraditional fields 220



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1 as described in section 3(20) of the Carl D. Perkins



2 Career and Technical Education Act of 2006 (20



3 U.S.C. 2302(20)); and



4 (10) a description of how the applicant proposes



5 to consult or has consulted with a labor organiza-



6 tion, labor management partnership, apprenticeship



7 program, or joint apprenticeship and training pro-



8 gram that provides education and training in the



9 field of study for which the applicant proposes to de-



10 velop a curriculum.



11 (d) PRIORITY.—The Secretary shall give priority to



12 applications that—



13 (1) use online learning or other innovative



14 means to deliver the program of study to students,



15 educators, and instructors outside of the partner-



16 ship; and



17 (2) focus on low performing students and spe-



18 cial populations as defined in section 3(29) of the



19 Carl D. Perkins Career and Technical Education



20 Act of 2006 (20 U.S.C. 2302(29)).



21 (e) PEER REVIEW.—The Secretary shall convene a



22 peer review process to review applications for grants under



23 this section and to make recommendations regarding the



24 selection of grantees. Members of the peer review com-



25 mittee shall include— 221



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1 (1) educators who have experience imple-



2 menting curricula with comparable purposes; and



3 (2) business and industry experts in fields as



4 described in subsection (a).



5 (f) USES OF FUNDS.—Grants awarded under this



6 section shall be used for the development, implementation,



7 and dissemination of programs of study (as described in



8 section 122(c)(1)(A) of the Carl D. Perkins Career and



9 Technical Education Act (20 U.S.C. 2342(c)(1)(A))) in



10 career areas related to clean energy, renewable energy,
en-



11 ergy efficiency, climate change mitigation, and climate



12 change adaptation.



13 SEC. 302. DEVELOPMENT OF INFORMATION AND RE-



14 SOURCES CLEARINGHOUSE FOR VOCA-



15 TIONAL EDUCATION AND JOB TRAINING IN



16 RENEWABLE ENERGY SECTORS.



17 (a) DEVELOPMENT OF CLEARINGHOUSE.—Not later



18 than 18 months after the date of enactment of this Act,



19 the Secretary of Labor, in collaboration with the
Secretary



20 of Energy and the Secretary of Education, shall develop



21 an internet based information and resources clearinghouse



22 to aid career and technical education and job training
pro-



23 grams for the renewable energy sectors. In establishing



24 the clearinghouse, the Secretary shall— 222



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1 (1) collect and provide information that ad-



2 dresses the consequences of rapid changes in tech-



3 nology and regional disparities for renewable energy



4 training programs and provides best practices for



5 training and education in light of such changes and



6 disparities;



7 (2) place an emphasis on facilitating collabora-



8 tion between the renewable energy industry and job



9 training programs and on identifying industry and



10 technological trends and best practices, to better



11 help job training programs maintain quality and rel-



12 evance; and



13 (3) place an emphasis on assisting programs



14 that cater to high-demand middle-skill, trades, man-



15 ufacturing, contracting, and consulting careers.



16 (b) SOLICITATION AND CONSULTATION.—In devel-



17 oping the clearinghouse pursuant to subsection (a), the



18 Secretary shall solicit information and expertise from
busi-



19 nesses and organizations in the renewable energy sector



20 and from institutions of higher education, career and
tech-



21 nical schools, and community colleges that provide train-



22 ing in the renewable energy sectors. The Secretary shall



23 solicit a comprehensive peer review of the clearinghouse



24 by such entities not less than once every 2 years.
Nothing 223



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1 in this subsection should be interpreted to require the
di-



2 vulgence of proprietary or competitive information.



3 (c) CONTENTS OF CLEARINGHOUSE.—



4 (1) SEPARATE SECTION FOR EACH RENEWABLE



5 ENERGY SECTOR.—The clearinghouse shall contain



6 separate sections developed for each of the following



7 renewable energy sectors:



8 (A) Solar energy systems.



9 (B) Wind energy systems.



10 (C) Energy transmission systems.



11 (D) Geothermal systems of energy and



12 heating.



13 (E) Energy efficiency technical training.



14 (2) ADDITIONAL REQUIREMENTS.—In addition



15 to the information required in subsection (a), each



16 section of the clearinghouse shall include information



17 on basic environmental science and processes needed



18 to understand renewable energy systems, Federal



19 government and industry resources, and points of



20 contact to aid institutions in the development of



21 placement programs for apprenticeships and post



22 graduation opportunities, and information and tips



23 about a green workplace, energy efficiency, and rel-



24 evant environmental topics and information on avail-



25 able industry recognized certifications in each area. 224



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1 (d) DISSEMINATION.—The clearinghouse shall be



2 made available via the Internet to the general public. No-



3 tice of the completed clearinghouse and any major revi-



4 sions thereto shall also be provided—



5 (1) to each Member of Congress; and



6 (2) on the websites of the Departments of Edu-



7 cation, Energy, and Labor.



8 (e) REVISION.—The Secretary of Labor shall revise



9 and update the clearinghouse on a regular basis to ensure



10 its relevance.



11 SEC. 303. GREEN CONSTRUCTION CAREERS DEMONSTRA-



12 TION PROJECT.



13 (a) ESTABLISHMENT AND AUTHORITY.—The Sec-



14 retary of Labor, in consultation with the Secretary of
En-



15 ergy, shall, not later than 180 days after the enactment



16 of this Act, establish a Green Construction Careers dem-



17 onstration project by rules, regulations, and guidance in



18 accordance with the provisions of this section. The
purpose



19 of the demonstration project shall be to promote middle



20 class careers and quality employment practices in the



21 green construction sector among targeted workers and to



22 advance efficiency and performance on construction



23 projects related to this Act. In order to advance these
pur-



24 poses, the Secretary shall identify projects, including
resi-



25 dential retrofitting projects, funded directly by or
assisted 225



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1 in whole or in part by or through the Federal Government



2 pursuant to this Act or by any other entity established



3 in accordance with this Act, to which all of the following



4 shall apply.



5 (b) REQUIREMENTS.—The Secretaries may establish



6 such terms and conditions for the demonstration projects



7 as the Secretaries determine are necessary to meet the



8 purposes of subsection (a), including establishing min-



9 imum proportions of hours to be worked by targeted work-



10 ers on such projects. The Secretaries may require the
con-



11 tractors and subcontractors performing construction serv-



12 ices on the project to comply with the terms and
conditions



13 as a condition of receiving funding or assistance from
the



14 Federal Government under this Act.



15 (c) EVALUATION.—The Secretaries shall evaluate the



16 demonstration projects against the purposes of this
section



17 at the end of 3 years from initiation of the
demonstration



18 project. If the Secretaries determine that the demonstra-



19 tion projects have been successful, the Secretaries may



20 identify further projects to which of the provisions of
this



21 section shall apply.



22 (d) GAO REPORT.—The Comptroller General shall



23 prepare and submit a report to the Committee on Health,



24 Education, Labor, and Pensions and the Committee on



25 Energy and Natural Resources of the Senate and the 226



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1 Committee on Education and Labor and the Committee



2 on Energy and Commerce of the House of Representatives



3 not later than 5 years after the date of enactment of this



4 Act, which shall advise the committees of the results of



5 the demonstration projects and make appropriate rec-



6 ommendations.



7 (e) DEFINITION AND DESIGNATION OF TARGETED



8 WORKERS.—As used in this section, the term ‘‘targeted



9 worker’’ means an individual who resides in the same



10 labor market area (as defined in section 101(18) of the



11 Workforce Investment Act of 1998 (29 U.S.C. 2801(18)))



12 as the project and who—



13 (1) is a member of a targeted group, within the



14 meaning of section 51 of the Internal Revenue Code



15 of 1986, other than an individual described in sub-



16 section (d)(1)(C) of such section;



17 (2)(A) resides in a census tract in which not



18 less than 20 percent of the households have incomes



19 below the Federal poverty guidelines; or



20 (B) is a member of a family that received a



21 total family income that, during the 2-year period



22 prior to employment on the project or admission to



23 the pre-apprenticeship program, did not exceed 200



24 percent of the Federal poverty guidelines (exclusive



25 of unemployment compensation, child support pay-227



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1 ments, payments described in section 101(25)(A) of



2 the Workforce Investment Act (29 U.S.C.



3 2801(25)(A)), and old-age and survivors insurance



4 benefits received under section 202 of the Social Se-



5 curity Act (42 U.S.C. 402); or



6 (3) is a displaced homemaker, as such term is



7 defined in section 3(10) of the Carl D. Perkins Ca-



8 reer and Technical Education Act of 2006 (20



9 U.S.C. 2302(10)).



10 (f) QUALIFIED PRE-APPRENTICESHIP PROGRAM.—A



11 qualified pre-apprenticeship program is a pre-apprentice-



12 ship program that has demonstrated an ability to recruit,



13 train, and prepare for admission to apprenticeship pro-



14 grams individuals who are targeted workers.



15 (g) QUALIFIED APPRENTICESHIP AND OTHER



16 TRAINING PROGRAMS.—



17 (1) PARTICIPATION BY EACH CONTRACTOR RE-



18 QUIRED.—Each contractor and subcontractor that



19 seeks to provide construction services on projects



20 identified by the Secretaries pursuant to subsection



21 (a) shall submit adequate assurances with its bid or



22 proposal that it participates in a qualified appren-



23 ticeship or other training program, with a written



24 arrangement with a qualified pre-apprenticeship pro-



25 gram, for each craft or trade classification of worker
228



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1 that it intends to employ to perform work on the



2 project.



3 (2) DEFINITION OF QUALIFIED APPRENTICE



4 SHIP OR OTHER TRAINING PROGRAM.—



5 (A) IN GENERAL.—For purposes of this



6 section, the term ‘‘qualified apprenticeship or



7 other training program’’ means an apprentice-



8 ship or other training program that qualifies as



9 an employee welfare benefit plan, as defined in



10 section 3(1) of the Employee Retirement In-



11 come Security Act of 1974 (29 U.S.C.



12 1002(1)).



13 (B) CERTIFICATION OF OTHER PROGRAMS



14 IN CERTAIN LOCALITIES.—In the event that the



15 Secretary of Labor certifies that a qualified ap-



16 prenticeship or other training program (as de-



17 fined in subparagraph (A)) for a craft or trade



18 classification of workers that a prospective con-



19 tractor or subcontractor intends to employ, is



20 not operated in the locality where the project



21 will be performed, an apprenticeship or other



22 training program that is not an employee wel-



23 fare benefit plan (as defined in such section)



24 may be certified by the Secretary as a qualified



25 apprenticeship or other training program pro-229



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1 vided it is registered with the Office of Appren-



2 ticeship of the Department of Labor, or a State



3 apprenticeship agency recognized by the Office



4 of Apprenticeship for Federal purposes.



5 (h) FACILITATING COMPLIANCE.—The Secretary



6 may require Federal contracting agencies, recipients of



7 Federal assistance, and any other entity established in
ac-



8 cordance with this Act to require contractors to enter
into



9 an agreement in a manner comparable with the standards



10 set forth in sections 3 and 4 of Executive Order 13502



11 in order to achieve the purposes of this section,
including



12 any requirements established by subsection (b).



13 (i) LIMITATION.—The requirements of this section



14 shall not apply to any project funded under this Act in



15 American Samoa, Guam, the Commonwealth of the North-



16 ern Mariana Islands, the Commonwealth of Puerto Rico,



17 or the United States Virgin Islands, unless participation



18 is requested by the governor of such territories within 1



19 year of the promulgation of rules under this Act.



20 PART 2—CLIMATE CHANGE WORKER



21 ADJUSTMENT ASSISTANCE



22 SEC. 311. PETITIONS, ELIGIBILITY REQUIREMENTS, AND



23 DETERMINATIONS.



24 (a) PETITIONS.— 230



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1 (1) FILING.—A petition for certification of eli-



2 gibility to apply for adjustment assistance for a



3 group of workers under this part may be filed by



4 any of the following:



5 (A) The group of workers.



6 (B) The certified or recognized union or



7 other duly authorized representative of such



8 workers.



9 (C) Employers of such workers, one-stop



10 operators or one-stop partners (as defined in



11 section 101 of the Workforce Investment Act of



12 1998 (29 U.S.C. 2801)), including State em-



13 ployment security agencies, or the State dis-



14 located worker unit established under title I of



15 such Act, on behalf of such workers.



16 The petition shall be filed simultaneously with the



17 Secretary of Labor and with the Governor of the



18 State in which such workers’ employment site is lo-



19 cated.



20 (2) ACTION BY GOVERNORS.—Upon receipt of a



21 petition filed under paragraph (1), the Governor



22 shall—



23 (A) ensure that rapid response activities



24 and appropriate core and intensive services (as



25 described in section 134 of the Workforce In-231



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1 vestment Act of 1998 (29 U.S.C. 2864)) au-



2 thorized under other Federal laws are made



3 available to the workers covered by the petition



4 to the extent authorized under such laws; and



5 (B) assist the Secretary in the review of



6 the petition by verifying such information and



7 providing such other assistance as the Secretary



8 may request.



9 (3) ACTION BY THE SECRETARY.—Upon receipt



10 of the petition, the Secretary shall promptly publish



11 notice in the Federal Register and on the website of



12 the Department of Labor that the Secretary has re-



13 ceived the petition and initiated an investigation.



14 (4) HEARINGS.—If the petitioner, or any other



15 person found by the Secretary to have a substantial



16 interest in the proceedings, submits not later than



17 10 days after the date of the Secretary’s publication



18 under paragraph (3) a request for a hearing, the



19 Secretary shall provide for a public hearing and af-



20 ford such interested persons an opportunity to be



21 present, to produce evidence, and to be heard.



22 (b) ELIGIBILITY.—



23 (1) IN GENERAL.—A group of workers shall be



24 certified by the Secretary as eligible to apply for
ad-232



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1 justment assistance under this part pursuant to a



2 petition filed under subsection (a) if—



3 (A) the group of workers is employed in—



4 (i) energy producing and transforming



5 industries;



6 (ii) industries dependent upon energy



7 industries;



8 (iii) energy-intensive manufacturing



9 industries;



10 (iv) consumer goods manufacturing;



11 or



12 (v) other industries whose employment



13 the Secretary determines has been ad-



14 versely affected by any requirement of title



15 VII of the Clean Air Act;



16 (B) the Secretary determines that a sig-



17 nificant number or proportion of the workers in



18 such workers’ employment site have become to-



19 tally or partially separated, or are threatened to



20 become totally or partially separated from em-



21 ployment; and



22 (C) the sales, production, or delivery of



23 goods or services have decreased as a result of



24 any requirement of title VII of the Clean Air



25 Act, including— 233



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1 (i) the shift from reliance upon fossil



2 fuels to other sources of energy, including



3 renewable energy, that results in the clos-



4 ing of a facility or layoff of employees at



5 a facility that mines, produces, processes,



6 or utilizes fossil fuels to generate elec-



7 tricity;



8 (ii) a substantial increase in the cost



9 of energy required for a manufacturing fa-



10 cility to produce items whose prices are



11 competitive in the marketplace, to the ex-



12 tent the cost is not offset by assistance



13 provided to the facility pursuant to title



14 VII of the Clean Air Act; or



15 (iii) other documented occurrences



16 that the Secretary determines are indica-



17 tors of an adverse impact on an industry



18 described in subparagraph (A) as a result



19 of any requirement of title VII of the



20 Clean Air Act.



21 (2) WORKERS IN PUBLIC AGENCIES.—A group



22 of workers in a public agency shall be certified by



23 the Secretary as eligible to apply for climate change



24 adjustment assistance pursuant to a petition filed if



25 the Secretary determines that a significant number 234



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1 or proportion of the workers in the public agency



2 have become totally or partially separated from em-



3 ployment, or are threatened to become totally or



4 partially separated as a result of any requirement of



5 title VII of the Clean Air Act.



6 (3) ADVERSELY AFFECTED SERVICE WORK-



7 ERS.—A group of workers shall be certified as eligi-



8 ble to apply for climate change adjustment assist-



9 ance pursuant to a petition filed if the Secretary de-



10 termines that—



11 (A) a significant number or proportion of



12 the service workers at an employment site



13 where a group of workers has been certified by



14 the Secretary as eligible to apply for adjustment



15 assistance under this part pursuant to para-



16 graph (1) have become totally or partially sepa-



17 rated from employment, or are threatened to



18 become totally or partially separated; and



19 (B) a loss of business in the firm providing



20 service workers to an employment site is di-



21 rectly attributable to one or more of the docu-



22 mented occurrences listed in paragraph (1)(C).



23 (c) AUTHORITY TO INVESTIGATE AND COLLECT IN-



24 FORMATION.— 235



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1 (1) IN GENERAL.—The Secretary shall, in de-



2 termining whether to certify a group of workers



3 under subsection (d), obtain information the Sec-



4 retary determines to be necessary to make the cer-



5 tification, through questionnaires and in such other



6 manner as the Secretary determines appropriate



7 from—



8 (A) the workers’ employer;



9 (B) officials of certified or recognized



10 unions or other duly authorized representatives



11 of the group of workers; or



12 (C) one-stop operators or one-stop partners



13 (as defined in section 101 of the Workforce In-



14 vestment Act of 1998 (29 U.S.C. 2801)).



15 (2) VERIFICATION OF INFORMATION.—The Sec-



16 retary shall require an employer, union, or one-stop



17 operator or partner to certify all information ob-



18 tained under paragraph (1) from the employer,



19 union, or one-stop operator or partner (as the case



20 may be) on which the Secretary relies in making a



21 determination under subsection (d), unless the Sec-



22 retary has a reasonable basis for determining that



23 such information is accurate and complete without



24 being certified. 236



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1 (3) PROTECTION OF CONFIDENTIAL INFORMA-



2 TION.—The Secretary may not release information



3 obtained under paragraph (1) that the Secretary



4 considers to be confidential business information un-



5 less the employer submitting the confidential busi-



6 ness information had notice, at the time of submis-



7 sion, that the information would be released by the



8 Secretary, or the employer subsequently consents to



9 the release of the information. Nothing in this para-



10 graph shall be construed to prohibit the Secretary



11 from providing such confidential business informa-



12 tion to a court in camera or to another party under



13 a protective order issued by a court.



14 (d) DETERMINATION BY THE SECRETARY OF



15 LABOR.—



16 (1) IN GENERAL.—As soon as possible after the



17 date on which a petition is filed under subsection



18 (a), but in any event not later than 40 days after



19 that date, the Secretary, in consultation with the



20 Secretary of Energy and the Administrator, as nec-



21 essary, shall determine whether the petitioning



22 group meets the requirements of subsection (b) and



23 shall issue a certification of eligibility to apply for



24 assistance under this part covering workers in any



25 group which meets such requirements. Each certifi-237



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1 cation shall specify the date on which the total or



2 partial separation began or threatened to begin.



3 Upon reaching a determination on a petition, the



4 Secretary shall promptly publish a summary of the



5 determination in the Federal Register and on the



6 website of the Department of Labor, together with



7 the Secretary’s reasons for making such determina-



8 tion.



9 (2) ONE YEAR LIMITATION.—A certification



10 under this section shall not apply to any worker



11 whose last total or partial separation from the em-



12 ployment site before the worker’s application under



13 section 312(a) occurred more than 1 year before the



14 date of the petition on which such certification was



15 granted.



16 (3) REVOCATION OF CERTIFICATION.—When-



17 ever the Secretary determines, with respect to any



18 certification of eligibility of the workers of an em-



19 ployment site, that total or partial separations from



20 such site are no longer a result of the factors speci-



21 fied in subsection (b)(1), the Secretary shall termi-



22 nate such certification and promptly have notice of



23 such termination published in the Federal Register



24 and on the website of the Department of Labor, to-



25 gether with the Secretary’s reasons for making such 238



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1 determination. Such termination shall apply only



2 with respect to total or partial separations occurring



3 after the termination date specified by the Secretary.



4 (e) INDUSTRY NOTIFICATION OF ASSISTANCE.—



5 Upon receiving a notification of a determination under



6 subsection (d) with respect to a domestic industry the
Sec-



7 retary of Labor shall notify the representatives of the
do-



8 mestic industry affected by the determination, employers



9 publicly identified by name during the course of the pro-



10 ceeding relating to the determination, and any certified



11 or recognized union or, to the extent practicable, other



12 duly authorized representative of workers employed by



13 such representatives of the domestic industry, of—



14 (1) the adjustment assistance, training, and



15 other benefits available under this part;



16 (2) the manner in which to file a petition and



17 apply for such benefits;



18 (3) the availability of assistance in filing such



19 petitions;



20 (4) notify the Governor of each State in which



21 one or more employers in such industry are located



22 of the Secretary’s determination and the identity of



23 the employers; and



24 (5) upon request, provide any assistance that is



25 necessary to file a petition under subsection (a). 239



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1 (f) BENEFIT INFORMATION TO WORKERS, PRO-



2 VIDERS OF TRAINING.—



3 (1) IN GENERAL.—The Secretary shall provide



4 full information to workers about the adjustment as-



5 sistance, training, and other benefits available under



6 this part and about the petition and application pro-



7 cedures, and the appropriate filing dates, for such



8 assistance, training and services. The Secretary shall



9 provide whatever assistance is necessary to enable



10 groups of workers to prepare petitions or applica-



11 tions for program benefits. The Secretary shall make



12 every effort to insure that cooperating State agen-



13 cies fully comply with the agreements entered into



14 under section 312(a) and shall periodically review



15 such compliance. The Secretary shall inform the



16 State Board for Vocational Education or equivalent



17 agency, the one-stop operators or one-stop partners



18 (as defined in section 101 of the Workforce Invest-



19 ment Act of 1998 (29 U.S.C. 2801)), and other pub-



20 lic or private agencies, institutions, and employers,



21 as appropriate, of each certification issued under



22 subsection (d) and of projections, if available, of the



23 needs for training under as a result of such certifi-



24 cation. 240



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1 (2) NOTICE BY MAIL.—The Secretary shall pro-



2 vide written notice through the mail of the benefits



3 available under this part to each worker whom the



4 Secretary has reason to believe is covered by a cer-



5 tification made under subsection (d)—



6 (A) at the time such certification is made,



7 if the worker was partially or totally separated



8 from the adversely affected employment before



9 such certification; or



10 (B) at the time of the total or partial sepa-



11 ration of the worker from the adversely affected



12 employment, if subparagraph (A) does not



13 apply.



14 (3) NEWSPAPERS; 
WEBSITE.—The Secretary



15 shall publish notice of the benefits available under



16 this part to workers covered by each certification



17 made under subsection (d) in newspapers of general



18 circulation in the areas in which such workers reside



19 and shall make such information available on the



20 website of the Department of Labor.



21 SEC. 312. PROGRAM BENEFITS.



22 (a) CLIMATE CHANGE ADJUSTMENT ASSISTANCE.—



23 (1) ELIGIBILITY.—Payment of climate change



24 adjustment assistance shall be made to an adversely



25 affected worker covered by a certification under sec-241



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1 tion 311(b) who files an application for such assist-



2 ance for any week of unemployment which begins on



3 or after the date of such certification, if the fol-



4 lowing conditions are met:



5 (A) Such worker’s total or partial separa-



6 tion before the worker’s application under this



7 part occurred—



8 (i) on or after the date, as specified in



9 the certification under which the worker is



10 covered, on which total or partial separa-



11 tion began or threatened to begin in the



12 adversely affected employment;



13 (ii) before the expiration of the 2-year



14 period beginning on the date on which the



15 determination under section 311(d) was



16 made; and



17 (iii) before the termination date, if



18 any, determined pursuant to section



19 311(d)(3).



20 (B) Such worker had, in the 52-week pe-



21 riod ending with the week in which such total



22 or partial separation occurred, at least 26



23 weeks of full-time employment or 1,040 hours



24 of part time employment in adversely affected



25 employment, or, if data with respect to weeks of 242



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1 employment are not available, equivalent



2 amounts of employment computed under regu-



3 lations prescribed by the Secretary. For the



4 purposes of this paragraph, any week in which



5 such worker—



6 (i) is on employer-authorized leave for



7 purposes of vacation, sickness, injury, ma-



8 ternity, or inactive duty or active duty



9 military service for training;



10 (ii) does not work because of a dis-



11 ability that is compensable under a work-



12 men’s compensation law or plan of a State



13 or the United States;



14 (iii) had his employment interrupted



15 in order to serve as a full-time representa-



16 tive of a labor organization in such firm; or



17 (iv) is on call-up for purposes of active



18 duty in a reserve status in the Armed



19 Forces of the United States, provided such



20 active duty is ‘‘Federal service’’ as defined



21 in section 8521(a)(1) of title 5, United



22 States Code,



23 shall be treated as a week of employment. 243



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1 (C) Such worker is enrolled in a training



2 program approved by the Secretary under sub-



3 section (b)(2).



4 (2) INELIGIBILITY FOR CERTAIN OTHER BENE-



5 FITS.—An adversely affected worker receiving a pay-



6 ment under this section shall be ineligible to receive



7 any other form of unemployment insurance for the



8 period in which such worker is receiving climate



9 change adjustment assistance under this section.



10 (3) REVOCATION.—If—



11 (A) the Secretary determines that—



12 (i) the adversely affected worker—



13 (I) has failed to begin participa-



14 tion in the training program the en-



15 rollment in which meets the require-



16 ment of paragraph (1)(C); or



17 (II) has ceased to participate in



18 such training program before com-



19 pleting such training program; and



20 (ii) there is no justifiable cause for



21 such failure or cessation; or



22 (B) the certification made with respect to



23 such worker under section 311(d) is revoked



24 under paragraph (3) of such section, 244



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1 no adjustment assistance may be paid to the ad-



2 versely affected worker under this part for the week



3 in which such failure, cessation, or revocation oc-



4 curred, or any succeeding week, until the adversely



5 affected worker begins or resumes participation in a



6 training program approved by the Secretary under



7 subsection (b)(2).



8 (4) WAIVERS OF TRAINING REQUIREMENTS.—



9 The Secretary may issue a written statement to an



10 adversely affected worker waiving the requirement to



11 be enrolled in training described in subsection (b)(2)



12 if the Secretary determines that it is not feasible or



13 appropriate for the worker, because of 1 or more of



14 the following reasons:



15 (A) RECALL.—The worker has been noti-



16 fied that the worker will be recalled by the em-



17 ployer from which the separation occurred.



18 (B) MARKETABLE SKILLS.—



19 (i) IN GENERAL.—The worker pos-



20 sesses marketable skills for suitable em-



21 ployment (as determined pursuant to an



22 assessment of the worker, which may in-



23 clude the profiling system under section



24 303(j) of the Social Security Act (42



25 U.S.C. 503(j)), carried out in accordance 245



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1 with guidelines issued by the Secretary)



2 and there is a reasonable expectation of



3 employment at equivalent wages in the



4 foreseeable future.



5 (ii) MARKETABLE SKILLS DEFINED.—



6 For purposes of clause (i), the term ‘‘mar-



7 ketable skills’’ may include the possession



8 of a postgraduate degree from an institu-



9 tion of higher education (as defined in sec-



10 tion 102 of the Higher Education Act of



11 1965 (20 U.S.C. 1002)) or an equivalent



12 institution, or the possession of an equiva-



13 lent postgraduate certification in a special-



14 ized field.



15 (C) RETIREMENT.—The worker is within 2



16 years of meeting all requirements for entitle-



17 ment to either—



18 (i) old-age insurance benefits under



19 title II of the Social Security Act (42



20 U.S.C. 401 et seq.) (except for application



21 therefor); or



22 (ii) a private pension sponsored by an



23 employer or labor organization.



24 (D) HEALTH.—The worker is unable to



25 participate in training due to the health of the 246



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1 worker, except that a waiver under this sub-



2 paragraph shall not be construed to exempt a



3 worker from requirements relating to the avail-



4 ability for work, active search for work, or re-



5 fusal to accept work under Federal or State un-



6 employment compensation laws.



7 (E) ENROLLMENT UNAVAILABLE.—The



8 first available enrollment date for the training



9 of the worker is within 60 days after the date



10 of the determination made under this para-



11 graph, or, if later, there are extenuating cir-



12 cumstances for the delay in enrollment, as de-



13 termined pursuant to guidelines issued by the



14 Secretary.



15 (F) TRAINING NOT AVAILABLE.—Training



16 described in subsection (b)(2) is not reasonably



17 available to the worker from either govern-



18 mental agencies or private sources (which may



19 include area career and technical education



20 schools, as defined in section 3 of the Carl D.



21 Perkins Career and Technical Education Act of



22 2006 (20 U.S.C. 2302), and employers), no



23 training that is suitable for the worker is avail-



24 able at a reasonable cost, or no training funds



25 are available. 247



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1 (5) WEEKLY AMOUNTS.—The climate change



2 adjustment assistance payable to an adversely af-



3 fected worker for a week of unemployment shall be



4 an amount equal to 70 percent of the average weekly



5 wage of such worker, but in no case shall such



6 amount exceed the average weekly wage for all work-



7 ers in the State where the adversely affected worker



8 resides.



9 (6) MAXIMUM DURATION OF BENEFITS.—An el-



10 igible worker may receive a climate change adjust-



11 ment assistance under this subsection for a period of



12 not longer than 156 weeks.



13 (b) EMPLOYMENT SERVICES AND TRAINING.—



14 (1) INFORMATION AND EMPLOYMENT SERV-



15 ICES.—The Secretary shall make available, directly



16 or through agreements with the States under section



17 313(a) to adversely affected workers covered by a



18 certification under section 311(a) the following in-



19 formation and employment services:



20 (A) Comprehensive and specialized assess-



21 ment of skill levels and service needs, including



22 through—



23 (i) diagnostic testing and use of other



24 assessment tools; and 248



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1 (ii) in-depth interviewing and evalua-



2 tion to identify employment barriers and



3 appropriate employment goals.



4 (B) Development of an individual employ-



5 ment plan to identify employment goals and ob-



6 jectives, and appropriate training to achieve



7 those goals and objectives.



8 (C) Information on training available in



9 local and regional areas, information on indi-



10 vidual counseling to determine which training is



11 suitable training, and information on how to



12 apply for such training.



13 (D) Information on training programs and



14 other services provided by a State pursuant to



15 title I of the Workforce Investment Act of 1998



16 (29 U.S.C. 2801 et seq.) and available in local



17 and regional areas, information on individual



18 counseling to determine which training is suit-



19 able training, and information on how to apply



20 for such training.



21 (E) Information on how to apply for finan-



22 cial aid, including referring workers to edu-



23 cational opportunity centers described in section



24 402F of the Higher Education Act of 1965 (20



25 U.S.C. 1070a–16), where applicable, and noti-249



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1 fying workers that the workers may request fi-



2 nancial aid administrators at institutions of



3 higher education (as defined in section 102 of



4 such Act (20 U.S.C. 1002)) to use the adminis-



5 trators’ discretion under section 479A of such



6 Act (20 U.S.C. 1087tt) to use current year in-



7 come data, rather than preceding year income



8 data, for determining the amount of need of the



9 workers for Federal financial assistance under



10 title IV of such Act (20 U.S.C. 1070 et seq.).



11 (F) Short-term prevocational services, in-



12 cluding development of learning skills, commu-



13 nications skills, interviewing skills, punctuality,



14 personal maintenance skills, and professional



15 conduct to prepare individuals for employment



16 or training.



17 (G) Individual career counseling, including



18 job search and placement counseling, during the



19 period in which the individual is receiving cli-



20 mate change adjustment assistance or training



21 under this part, and after receiving such train-



22 ing for purposes of job placement.



23 (H) Provision of employment statistics in-



24 formation, including the provision of accurate 250



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1 information relating to local, regional, and na-



2 tional labor market areas, including—



3 (i) job vacancy listings in such labor



4 market areas;



5 (ii) information on jobs skills nec-



6 essary to obtain jobs identified in job va-



7 cancy listings described in subparagraph



8 (A);



9 (iii) information relating to local occu-



10 pations that are in demand and earnings



11 potential of such occupations; and



12 (iv) skills requirements for local occu-



13 pations described in subparagraph (C).



14 (I) Information relating to the availability



15 of supportive services, including services relat-



16 ing to child care, transportation, dependent



17 care, housing assistance, and need-related pay-



18 ments that are necessary to enable an indi-



19 vidual to participate in training.



20 (2) TRAINING.—



21 (A) APPROVAL OF AND PAYMENT FOR



22 TRAINING.—If the Secretary determines, with



23 respect to an adversely affected worker that—



24 (i) there is no suitable employment



25 (which may include technical and profes-251



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1 sional employment) available for an ad-



2 versely affected worker;



3 (ii) the worker would benefit from ap-



4 propriate training;



5 (iii) there is a reasonable expectation



6 of employment following completion of



7 such training;



8 (iv) training approved by the Sec-



9 retary is reasonably available to the worker



10 from either governmental agencies or pri-



11 vate sources (including area career and



12 technical education schools, as defined in



13 section 3 of the Carl D. Perkins Career



14 and Technical Education Act of 2006 (20



15 U.S.C. 2302), and employers);



16 (v) the worker is qualified to under-



17 take and complete such training; and



18 (vi) such training is suitable for the



19 worker and available at a reasonable cost,



20 the Secretary shall approve such training for



21 the worker. Upon such approval, the worker



22 shall be entitled to have payment of the costs



23 of such training (subject to the limitations im-



24 posed by this section) paid on the worker’s be-252



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1 half by the Secretary directly or through a



2 voucher system.



3 (B) DISTRIBUTION.—The Secretary shall



4 establish procedures for the distribution of the



5 funds to States to carry out the training pro-



6 grams approved under this paragraph, and shall



7 make an initial distribution of the funds made



8 available as soon as practicable after the begin-



9 ning of each fiscal year.



10 (C) ADDITIONAL RULES REGARDING AP-



11 PROVAL OF AND PAYMENT FOR TRAINING.—



12 (i) For purposes of applying subpara-



13 graph (A)(iii), a reasonable expectation of



14 employment does not require that employ-



15 ment opportunities for a worker be avail-



16 able, or offered, immediately upon the



17 completion of training approved under



18 such subparagraph.



19 (ii) If the costs of training an ad-



20 versely affected worker are paid by the



21 Secretary under subparagraph (A), no



22 other payment for such costs may be made



23 under any other provision of Federal law.



24 No payment may be made under subpara-



25 graph (A) of the costs of training an ad-253



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1 versely affected worker or an adversely af-



2 fected incumbent worker if such costs—



3 (I) have already been paid under



4 any other provision of Federal law; or



5 (II) are reimbursable under any



6 other provision of Federal law and a



7 portion of such costs have already



8 been paid under such other provision



9 of Federal law.



10 The provisions of this clause shall not



11 apply to, or take into account, any funds



12 provided under any other provision of Fed-



13 eral law which are used for any purpose



14 other than the direct payment of the costs



15 incurred in training a particular adversely



16 affected worker, even if such use has the



17 effect of indirectly paying or reducing any



18 portion of the costs involved in training the



19 adversely affected worker.



20 (D) TRAINING PROGRAMS.—The training



21 programs that may be approved under subpara-



22 graph (A) include—



23 (i) employer-based training, includ-



24 ing— 254



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1 (I) on-the-job training if ap-



2 proved by the Secretary under sub-



3 section (c); and



4 (II) joint labor-management ap-



5 prenticeship programs;



6 (ii) any training program provided by



7 a State pursuant to title I of the Work-



8 force Investment Act of 1998 (29 U.S.C.



9 2801 et seq.);



10 (iii) any programs in career and tech-



11 nical education described in section 3(5) of



12 the Carl D. Perkins Career and Technical



13 Education Act of 2006 (20 U.S.C.



14 2302(5));



15 (iv) any program of remedial edu-



16 cation;



17 (v) any program of prerequisite edu-



18 cation or coursework required to enroll in



19 training that may be approved under this



20 paragraph;



21 (vi) any training program for which



22 all, or any portion, of the costs of training



23 the worker are paid—



24 (I) under any Federal or State



25 program other than this part; or 255



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1 (II) from any source other than



2 this part;



3 (vii) any training program or



4 coursework at an accredited institution of



5 higher education (described in section 102



6 of the Higher Education Act of 1965 (20



7 U.S.C. 1002)), including a training pro-



8 gram or coursework for the purpose of—



9 (I) obtaining a degree or certifi-



10 cation; or



11 (II) completing a degree or cer-



12 tification that the worker had pre-



13 viously begun at an accredited institu-



14 tion of higher education; and



15 (viii) any other training program ap-



16 proved by the Secretary.



17 (3) SUPPLEMENTAL ASSISTANCE.—The Sec-



18 retary may, as appropriate, authorize supplemental



19 assistance that is necessary to defray reasonable



20 transportation and subsistence expenses for separate



21 maintenance in a case in which training for a worker



22 is provided in a facility that is not within commuting



23 distance of the regular place of residence of the



24 worker.



25 (c) ON-THE-JOB TRAINING REQUIREMENTS.— 256



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1 (1) IN GENERAL.—The Secretary may approve



2 on-the-job training for any adversely affected worker



3 if—



4 (A) the Secretary determines that on-the-



5 job training—



6 (i) can reasonably be expected to lead



7 to suitable employment with the employer



8 offering the on-the-job training;



9 (ii) is compatible with the skills of the



10 worker;



11 (iii) includes a curriculum through



12 which the worker will gain the knowledge



13 or skills to become proficient in the job for



14 which the worker is being trained; and



15 (iv) can be measured by benchmarks



16 that indicate that the worker is gaining



17 such knowledge or skills; and



18 (B) the State determines that the on-the-



19 job training program meets the requirements of



20 clauses (iii) and (iv) of subparagraph (A).



21 (2) MONTHLY PAYMENTS.—The Secretary shall



22 pay the costs of on-the-job training approved under



23 paragraph (1) in monthly installments.



24 (3) CONTRACTS FOR ON-THE-JOB TRAINING.— 257



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1 (A) IN GENERAL.—The Secretary shall en-



2 sure, in entering into a contract with an em-



3 ployer to provide on-the-job training to a work-



4 er under this subsection, that the skill require-



5 ments of the job for which the worker is being



6 trained, the academic and occupational skill



7 level of the worker, and the work experience of



8 the worker are taken into consideration.



9 (B) TERM OF CONTRACT.—Training under



10 any such contract shall be limited to the period



11 of time required for the worker receiving on-



12 the-job training to become proficient in the job



13 for which the worker is being trained, but may



14 not exceed 156 weeks in any case.



15 (4) EXCLUSION OF CERTAIN EMPLOYERS.—The



16 Secretary shall not enter into a contract for on-the-



17 job training with an employer that exhibits a pattern



18 of failing to provide workers receiving on-the-job



19 training from the employer with—



20 (A) continued, long-term employment as



21 regular employees; and



22 (B) wages, benefits, and working condi-



23 tions that are equivalent to the wages, benefits,



24 and working conditions provided to regular em-



25 ployees who have worked a similar period of 258



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1 time and are doing the same type of work as



2 workers receiving on-the-job training from the



3 employer.



4 (d) ADMINISTRATIVE AND EMPLOYMENT SERVICES



5 FUNDING.—



6 (1) ADMINISTRATIVE FUNDING.—In addition to



7 any funds made available to a State to carry out this



8 section for a fiscal year, the State shall receive for



9 the fiscal year a payment in an amount that is equal



10 to 15 percent of the amount of such funds and



11 shall—



(A) use not more than



2



12 ⁄3 of such payment



13 for the administration of the climate change ad-



14 justment assistance for workers program under



15 this part, including for—



16 (i) processing waivers of training re-



17 quirements under subsection (a)(4); and



18 (ii) collecting, validating, and report-



19 ing data required under this part; and



(B) use not less than



1



20 ⁄3 of such payment



21 for information and employment services under



22 subsection (b)(1).



23 (2) EMPLOYMENT SERVICES FUNDING.—



24 (A) IN GENERAL.—In addition to any



25 funds made available to a State to carry out 259



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1 subsection (b)(2) and the payment under para-



2 graph (1) for a fiscal year, the Secretary shall



3 provide to the State for the fiscal year a reason-



4 able payment for the purpose of providing em-



5 ployment and services under subsection (b)(1).



6 (B) VOLUNTARY RETURN OF FUNDS.—A



7 State that receives a payment under subpara-



8 graph (A) may decline or otherwise return such



9 payment to the Secretary.



10 (e) JOB SEARCH ASSISTANCE.—The Secretary of



11 Labor may provide adversely affected workers one-time



12 job search assistance in accordance with regulations pre-



13 scribed by the Secretary. Any job search assistance pro-



14 vided shall be available only under the following cir-



15 cumstances and conditions:



16 (1) The worker is no longer eligible for the cli-



17 mate change adjustment assistance under subsection



18 (a) and has completed the training program required



19 by subsection (b)(1)(E).



20 (2) The Secretary determines that the worker



21 cannot reasonably be expected to secure suitable em-



22 ployment in the commuting area in which the worker



23 resides.



24 (3) Assistance granted shall provide reimburse-



25 ment to the worker of all necessary job search ex-260



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1 penses as prescribed by the Secretary in regulations.



2 Such reimbursement under this subsection may not



3 exceed $1,500 for any worker.



4 (f) RELOCATION ASSISTANCE AUTHORIZED.—



5 (1) IN GENERAL.—Any adversely affected work-



6 er covered by a certification issued under section



7 311 may file an application for relocation assistance



8 with the Secretary, and the Secretary may grant the



9 relocation assistance, subject to the terms and condi-



10 tions of this subsection.



11 (2) CONDITIONS FOR GRANTING ASSISTANCE.—



12 Relocation assistance may be granted if all of the



13 following terms and conditions are met:



14 (A) ASSIST AN ADVERSELY AFFECTED



15 WORKER.—The relocation assistance will assist



16 an adversely affected worker in relocating with-



17 in the United States.



18 (B) LOCAL EMPLOYMENT NOT AVAIL-



19 ABLE.—The Secretary determines that the



20 worker cannot reasonably be expected to secure



21 suitable employment in the commuting area in



22 which the worker resides.



23 (C) TOTAL SEPARATION.—The worker is



24 totally separated from employment at the time



25 relocation commences. 261



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1 (D) SUITABLE EMPLOYMENT OBTAINED.—



2 The worker—



3 (i) has obtained suitable employment



4 affording a reasonable expectation of long-



5 term duration in the area in which the



6 worker wishes to relocate; or



7 (ii) has obtained a bona fide offer of



8 such employment.



9 (E) APPLICATION.—The worker filed an



10 application with the Secretary at such time and



11 in such manner as the Secretary shall specify



12 by regulation.



13 (3) AMOUNT OF ASSISTANCE.—Relocation as-



14 sistance granted to a worker under paragraph (1)



15 includes—



16 (A) all reasonable and necessary expenses



17 (including, subsistence and transportation ex-



18 penses at levels not exceeding amounts pre-



19 scribed by the Secretary in regulations) in-



20 curred in transporting the worker, the worker’s



21 family, and household effects; and



22 (B) a lump sum equivalent to 3 times the



23 worker’s average weekly wage, up to a max-



24 imum payment of $1,500. 262



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1 (4) LIMITATIONS.—Relocation assistance may



2 not be granted to a worker unless—



3 (A) the relocation occurs within 182 days



4 after the filing of the application for relocation



5 assistance; or



6 (B) the relocation occurs within 182 days



7 after the conclusion of training, if the worker



8 entered a training program approved by the



9 Secretary under subsection (b)(2).



10 (g) HEALTH INSURANCE CONTINUATION.—Not later



11 than 1 year after the date of enactment of this Act, the



12 Secretary of Labor shall prescribe regulations to
provide,



13 for the period in which an adversely affected worker is



14 participating in a training program described in sub-



15 section (b)(2), 80 percent of the monthly premium of any



16 health insurance coverage that an adversely affected
work-



17 er was receiving from such worker’s employer prior to the



18 separation from employment described in section 311(b),



19 to be paid to any health care insurance plan designated



20 by the adversely affected worker receiving assistance



21 under this section.



22 SEC. 313. GENERAL PROVISIONS.



23 (a) AGREEMENTS WITH STATES.—



24 (1) IN GENERAL.—The Secretary is authorized



25 on behalf of the United States to enter into an 263



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1 agreement with any State, or with any State agency



2 (referred to in this section as ‘‘cooperating States’’



3 and ‘‘cooperating State agencies’’ respectively).



4 Under such an agreement, the cooperating State or



5 cooperating State agency—



6 (A) as agent of the United States, shall re-



7 ceive applications for, and shall provide, pay-



8 ments on the basis provided in this part;



9 (B) in accordance with paragraph (6),



10 shall make available to adversely affected work-



11 ers covered by a certification under section



12 311(d) the employment services described in



13 section 312(b)(1);



14 (C) shall make any certifications required



15 under section 311(d); and



16 (D) shall otherwise cooperate with the Sec-



17 retary and with other State and Federal agen-



18 cies in providing payments and services under



19 this part.



20 Each agreement under this section shall provide the



21 terms and conditions upon which the agreement may



22 be amended, suspended, or terminated.



23 (2) FORM AND MANNER OF DATA.—Each



24 agreement under this section shall— 264



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1 (A) provide the Secretary with the author-



2 ity to collect any data the Secretary determines



3 necessary to meet the requirements of this part;



4 and



5 (B) specify the form and manner in which



6 any such data requested by the Secretary shall



7 be reported.



8 (3) RELATIONSHIP TO UNEMPLOYMENT INSUR-



9 ANCE.—Each agreement under this section shall



10 provide that an adversely affected worker receiving



11 climate change adjustment assistance under this



12 part shall not be eligible for unemployment insur-



13 ance otherwise payable to such worker under the



14 laws of the State.



15 (4) REVIEW.—A determination by a cooper-



16 ating State agency with respect to entitlement to



17 program benefits under an agreement is subject to



18 review in the same manner and to the same extent



19 as determinations under the applicable State law



20 and only in that manner and to that extent.



21 (5) COORDINATION.—Any agreement entered



22 into under this section shall provide for the coordi-



23 nation of the administration of the provisions for



24 employment services, training, and supplemental as-



25 sistance under section 312 and under title I of the 265



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1 Workforce Investment Act of 1998 (29 U.S.C. 2801



2 et seq.) upon such terms and conditions as are es-



3 tablished by the Secretary in consultation with the



4 States and set forth in such agreement. Any agency



5 of the State jointly administering such provisions



6 under such agreement shall be considered to be a co-



7 operating State agency for purposes of this part.



8 (6) RESPONSIBILITIES OF COOPERATING AGEN-



9 CIES.—Each cooperating State agency shall, in car-



10 rying out paragraph (1)(B)—



11 (A) advise each worker who applies for un-



12 employment insurance of the benefits under this



13 part and the procedures and deadlines for ap-



14 plying for such benefits;



15 (B) facilitate the early filing of petitions



16 under section 311(a) for any workers that the



17 agency considers are likely to be eligible for



18 benefits under this part;



19 (C) advise each adversely affected worker



20 to apply for training under section 312(b) be-



21 fore, or at the same time, the worker applies for



22 climate change adjustment assistance under



23 section 312(a);



24 (D) perform outreach to, intake of, and



25 orientation for adversely affected workers and 266



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1 adversely affected incumbent workers covered



2 by a certification under section 312(a) with re-



3 spect to assistance and benefits available under



4 this part;



5 (E) make employment services described in



6 section 312(b)(1) available to adversely affected



7 workers and adversely affected incumbent work-



8 ers covered by a certification under section



9 311(d) and, if funds provided to carry out this



10 part are insufficient to make such services



11 available, make arrangements to make such



12 services available through other Federal pro-



13 grams; and



14 (F) provide the benefits and reemployment



15 services under this part in a manner that is



16 necessary for the proper and efficient adminis-



17 tration of this part, including the use of state



18 agency personnel employed in accordance with a



19 merit system of personnel administration stand-



20 ards, including—



21 (i) making determinations of eligibility



22 for, and payment of, climate change read-



23 justment assistance and health care benefit



24 replacement amounts; 267



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1 (ii) developing recommendations re-



2 garding payments as a bridge to retire-



3 ment and lump sum payments to pension



4 plans in accordance with this subsection;



5 and



6 (iii) the provision of reemployment



7 services to eligible workers, including refer-



8 ral to training services.



9 (7) SUBMISSION OF CERTAIN INFORMATION.—



10 In order to promote the coordination of workforce



11 investment activities in each State with activities



12 carried out under this part, any agreement entered



13 into under this section shall provide that the State



14 shall submit to the Secretary, in such form as the



15 Secretary may require, the description and informa-



16 tion described in paragraphs (8) and (14) of section



17 112(b) of the Workforce Investment Act of 1998 (29



18 U.S.C. 2822(b)) and a description of the State’s



19 rapid response activities under section 134(a)(2)(A)



20 of that Act (29 U.S.C. 2864(a)(2)(A)).



21 (8) CONTROL MEASURES.—



22 (A) IN GENERAL.—The Secretary shall re-



23 quire each cooperating State and cooperating



24 State agency to implement effective control



25 measures and to effectively oversee the oper-268



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1 ation and administration of the climate change



2 adjustment assistance program under this part,



3 including by means of monitoring the operation



4 of control measures to improve the accuracy



5 and timeliness of the data being collected and



6 reported.



7 (B) DEFINITION.—For purposes of sub-



8 paragraph (A), the term ‘‘control measures’’



9 means measures that—



10 (i) are internal to a system used by a



11 State to collect data; and



12 (ii) are designed to ensure the accu-



13 racy and verifiability of such data.



14 (9) DATA REPORTING.—



15 (A) IN GENERAL.—Any agreement entered



16 into under this section shall require the cooper-



17 ating State or cooperating State agency to re-



18 port to the Secretary on a quarterly basis com-



19 prehensive performance accountability data, to



20 consist of—



21 (i) the core indicators of performance



22 described in subparagraph (B)(i);



23 (ii) the additional indicators of per-



24 formance described in subparagraph



25 (B)(ii), if any; and 269



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1 (iii) a description of efforts made to



2 improve outcomes for workers under the



3 climate change adjustment assistance pro-



4 gram.



5 (B) CORE INDICATORS DESCRIBED.—



6 (i) IN GENERAL.—The core indicators



7 of performance described in this subpara-



8 graph are—



9 (I) the percentage of workers re-



10 ceiving benefits under this part who



11 are employed during the second cal-



12 endar quarter following the calendar



13 quarter in which the workers cease re-



14 ceiving such benefits;



15 (II) the percentage of such work-



16 ers who are employed in each of the



17 third and fourth calendar quarters fol-



18 lowing the calendar quarter in which



19 the workers cease receiving such bene-



20 fits; and



21 (III) the earnings of such work-



22 ers in each of the third and fourth



23 calendar quarters following the cal-



24 endar quarter in which the workers



25 cease receiving such benefits. 270



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1 (ii) ADDITIONAL INDICATORS.—The



2 Secretary and a cooperating State or co-



3 operating State agency may agree upon



4 additional indicators of performance for



5 the climate change adjustment assistance



6 program under this part, as appropriate.



7 (C) STANDARDS WITH RESPECT TO RELI-



8 ABILITY OF DATA.—In preparing the quarterly



9 report required by subparagraph (A), each co-



10 operating State or cooperating State agency



11 shall establish procedures that are consistent



12 with guidelines to be issued by the Secretary to



13 ensure that the data reported are valid and reli-



14 able.



15 (10) VERIFICATION OF ELIGIBILITY FOR PRO-



16 GRAM BENEFITS.—



17 (A) IN GENERAL.—An agreement under



18 this section shall provide that the State shall



19 periodically redetermine that a worker receiving



20 benefits under this part who is not a citizen or



21 national of the United States remains in a sat-



22 isfactory immigration status. Once satisfactory



23 immigration status has been initially verified



24 through the immigration status verification sys-



25 tem described in section 1137(d) of the Social 271



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1 Security Act (42 U.S.C. 1320b–7(d)) for pur-



2 poses of establishing a worker’s eligibility for



3 unemployment compensation, the State shall



4 reverify the worker’s immigration status if the



5 documentation provided during initial



6 verification will expire during the period in



7 which that worker is potentially eligible to re-



8 ceive benefits under this part. The State shall



9 conduct such redetermination in a timely man-



10 ner, utilizing the immigration status verification



11 system described in section 1137(d) of the So-



12 cial Security Act (42 U.S.C. 1320b–7(d)).



13 (B) PROCEDURES.—The Secretary shall



14 establish procedures to ensure the uniform ap-



15 plication by the States of the requirements of



16 this paragraph.



17 (b) ADMINISTRATION ABSENT STATE AGREE-



18 MENT.—



19 (1) In any State where there is no agreement



20 in force between a State or its agency under sub-



21 section (a), the Secretary shall promulgate regula-



22 tions for the performance of all necessary functions



23 under section 312, including provision for a fair



24 hearing for any worker whose application for pay-



25 ments is denied. 272



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1 (2) A final determination under paragraph (1)



2 with respect to entitlement to program benefits



3 under section 312 is subject to review by the courts



4 in the same manner and to the same extent as is



5 provided by section 205(g) of the Social Security Act



6 (42 U.S.C. 405(g)).



7 (c) PROHIBITION ON CONTRACTING WITH PRIVATE



8 ENTITIES.—Neither the Secretary nor a State may con-



9 tract with any private for-profit or nonprofit entity for
the



10 administration of the climate change adjustment assist-



11 ance program under this part.



12 (d) PAYMENT TO THE STATES.—



13 (1) IN GENERAL.—The Secretary shall from



14 time to time certify to the Secretary of the Treasury



15 for payment to each cooperating State the sums nec-



16 essary to enable such State as agent of the United



17 States to make payments provided for by this part.



18 (2) RESTRICTION.—All money paid a State



19 under this subsection shall be used solely for the



20 purposes for which it is paid; and money so paid



21 which is not used for such purposes shall be re-



22 turned, at the time specified in the agreement under



23 this section, to the Secretary of the Treasury.



24 (3) BONDS.—Any agreement under this section



25 may require any officer or employee of the State cer-273



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1 tifying payments or disbursing funds under the



2 agreement or otherwise participating in the perform-



3 ance of the agreement, to give a surety bond to the



4 United States in such amount as the Secretary may



5 deem necessary, and may provide for the payment of



6 the cost of such bond from funds for carrying out



7 the purposes of this part.



8 (e) LABOR STANDARDS.—



9 (1) PROHIBITION ON DISPLACEMENT.—An indi-



10 vidual in an apprenticeship program or on-the-job



11 training program under this part shall not displace



12 (including a partial displacement, such as a reduc-



13 tion in the hours of non-overtime work, wages, or



14 employment benefits) any employed employee.



15 (2) PROHIBITION ON IMPAIRMENT OF CON-



16 TRACTS.—An apprenticeship program or on-the-job



17 raining program under this Act shall not impair an



18 existing contract for services or collective bargaining



19 agreement, and no such activity that would be incon-



20 sistent with the terms of a collective bargaining



21 agreement shall be undertaken without the written



22 concurrence of the labor organization and employer



23 concerned.



24 (3) ADDITIONAL STANDARDS.—The Secretary,



25 or a State acting under an agreement described in 274



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1 subsection (a) may pay the costs of on-the-job train-



2 ing, notwithstanding any other provision of this sec-



3 tion, only if—



4 (A) in the case of training which would be



5 inconsistent with the terms of a collective bar-



6 gaining agreement, the written concurrence of



7 the labor organization concerned has been ob-



8 tained;



9 (B) the job for which such adversely af-



10 fected worker is being trained is not being cre-



11 ated in a promotional line that will infringe in



12 any way upon the promotional opportunities of



13 currently employed individuals;



14 (C) such training is not for the same occu-



15 pation from which the worker was separated



16 and with respect to which such worker’s group



17 was certified pursuant to section 311(d);



18 (D) the employer is provided reimburse-



19 ment of not more than 50 percent of the wage



20 rate of the participant, for the cost of providing



21 the training and additional supervision related



22 to the training; and



23 (E) the employer has not received payment



24 under with respect to any other on-the-job



25 training provided by such employer which failed 275



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1 to meet the requirements of subparagraphs (A)



2 through (D).



3 (f) DEFINITIONS.—As used in this part the following



4 definitions apply:



5 (1) The term ‘‘adversely affected employment’’



6 means employment at an employment site, if work-



7 ers at such site are eligible to apply for adjustment



8 assistance under this part.



9 (2) The term ‘‘adversely affected worker’’



10 means an individual who has been totally or partially



11 separated from employment and is eligible to apply



12 for adjustment assistance under this part.



(3) The term ‘‘average weekly wage’’ means



1



13 ⁄13



14 of the total wages paid to an individual in the quar-



15 ter in which the individual’s total wages were highest



16 among the first 4 of the last 5 completed calendar



17 quarters immediately before the quarter in which oc-



18 curs the week with respect to which the computation



19 is made. Such week shall be the week in which total



20 separation occurred, or, in cases where partial sepa-



21 ration is claimed, an appropriate week, as defined in



22 regulations prescribed by the Secretary.



23 (4) The term ‘‘average weekly hours’’ means



24 the average hours worked by the individual (exclud-



25 ing overtime) in the employment from which he has 276



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1 been or claims to have been separated in the 52



2 weeks (excluding weeks during which the individual



3 was sick or on vacation) preceding the week speci-



4 fied in the last sentence of paragraph (4).



5 (5) The term ‘‘benefit period’’ means, with re-



6 spect to an individual—



7 (A) the benefit year and any ensuing pe-



8 riod, as determined under applicable State law,



9 during which the individual is eligible for reg-



10 ular compensation, additional compensation, or



11 extended compensation; or



12 (B) the equivalent to such a benefit year



13 or ensuing period provided for under the appli-



14 cable Federal unemployment insurance law.



15 (6) The term ‘‘consumer goods manufacturing’’



16 means the electrical equipment, appliance, and com-



17 ponent manufacturing industry and transportation



18 equipment manufacturing.



19 (7) The term ‘‘employment site’’ means a single



20 facility or site of employment.



21 (8) The term ‘‘energy-intensive manufacturing



22 industries’’ means all industrial sectors, entities, or



23 groups of entities that meet the energy or green-



24 house gas intensity criteria in section 763(b)(2)(A) 277



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1 of the Clean Air Act based on the most recent data



2 available.



3 (9) The term ‘‘energy producing and trans-



4 forming industries’’ means the coal mining industry,



5 oil and gas extraction, electricity power generation,



6 transmission and distribution, and natural gas dis-



7 tribution.



8 (10) The term ‘‘on-the-job training’’ means



9 training provided by an employer to an individual



10 who is employed by the employer.



11 (11) The terms ‘‘partial separation’’ and ‘‘par-



12 tially separated’’ refer, with respect to an individual



13 who has not been totally separated, that such indi-



14 vidual has had—



15 (A) his or her hours of work reduced to 80



16 percent or less of his average weekly hours in



17 adversely affected employment; and



18 (B) his or her wages reduced to 80 percent



19 or less of his average weekly wage in such ad-



20 versely affected employment.



21 (12) The term ‘‘public agency’’ means a depart-



22 ment or agency of a State or political subdivision of



23 a State or of the Federal Government.



24 (13) The term ‘‘Secretary’’ means the Secretary



25 of Labor. 278



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1 (14) The term ‘‘service workers’’ means work-



2 ers supplying support or auxiliary services to an em-



3 ployment site.



4 (15) The term ‘‘State’’ includes the District of



5 Columbia and the Commonwealth of Puerto Rico:



6 and the term ‘‘United States’’ when used in the geo-



7 graphical sense includes such Commonwealth.



8 (16) The term ‘‘State agency’’ means the agen-



9 cy of the State which administers the State law.



10 (17) The term ‘‘State law’’ means the unem-



11 ployment insurance law of the State approved by the



12 Secretary of Labor under section 3304 of the Inter-



13 nal Revenue Code of 1986.



14 (18) The terms ‘‘total separation’’ and ‘‘totally



15 separated’’ refer to the layoff or severance of an in-



16 dividual from employment with an employer in which



17 adversely affected employment exists.



18 (19) The term ‘‘unemployment insurance’’



19 means the unemployment compensation payable to



20 an individual under any State law or Federal unem-



21 ployment compensation law, including chapter 85 of



22 title 5, United States Code, and the Railroad Unem-



23 ployment Insurance Act (45 U.S.C. 351 et seq.).



24 The terms ‘‘regular compensation’’, ‘‘additional com-



25 pensation’’, and ‘‘extended compensation’’ have the 279



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1 same respective meanings that are given them in



2 section 205(2), (3), and (4) of the Federal-State Ex-



3 tended Unemployment Compensation Act of 1970



4 (26 U.S.C. 3304 note; Public Law 91–373).



5 (20) The term ‘‘week’’ means a week as defined



6 in the applicable State law.



7 (21) The term ‘‘week of unemployment’’ means



8 a week of total, part-total, or partial unemployment



9 as determined under the applicable State law or



10 Federal unemployment insurance law.



11 (g) SPECIAL RULE WITH RESPECT TO MILITARY



12 SERVICE.—



13 (1) IN GENERAL.—Notwithstanding any other



14 provision of this part, the Secretary may waive any



15 requirement of this part that the Secretary deter-



16 mines is necessary to ensure that an adversely af-



17 fected worker who is a member of a reserve compo-



18 nent of the Armed Forces and serves a period of



19 duty described in paragraph (2) is eligible to receive



20 climate change adjustment assistance, training, and



21 other benefits under this part in the same manner



22 and to the same extent as if the worker had not



23 served the period of duty.



24 (2) PERIOD OF DUTY DESCRIBED.—An ad-



25 versely affected worker serves a period of duty de-280



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1 scribed in this paragraph if, before completing train-



2 ing under this part, the worker—



3 (A) serves on active duty for a period of



4 more than 30 days under a call or order to ac-



5 tive duty of more than 30 days; or



6 (B) in the case of a member of the Army



7 National Guard of the United States or Air Na-



8 tional Guard of the United States, performs



9 full-time National Guard duty under section



10 502(f) of title 32, United States Code, for 30



11 consecutive days or more when authorized by



12 the President or the Secretary of Defense for



13 the purpose of responding to a national emer-



14 gency declared by the President and supported



15 by Federal funds.



16 (h) FRAUD AND RECOVERY OF OVERPAYMENTS.—



17 (1) RECOVERY OF PAYMENTS TO WHICH AN IN-



18 DIVIDUAL WAS NOT ENTITLED.—If the Secretary or



19 a court of competent jurisdiction determines that



20 any person has received any payment under this



21 part to which the individual was not entitled, such



22 individual shall be liable to repay such amount to



23 the Secretary, as the case may be, except that the



24 Secretary shall waive such repayment if such agency



25 or the Secretary determines that— 281



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1 (A) the payment was made without fault



2 on the part of such individual; and



3 (B) requiring such repayment would cause



4 a financial hardship for the individual (or the



5 individual’s household, if applicable) when tak-



6 ing into consideration the income and resources



7 reasonably available to the individual (or house-



8 hold) and other ordinary living expenses of the



9 individual (or household).



10 (2) MEANS OF RECOVERY.—Unless an overpay-



11 ment is otherwise recovered, or waived under para-



12 graph (1), the Secretary shall recover the overpay-



13 ment by deductions from any sums payable to such



14 person under this part, under any Federal unem-



15 ployment compensation law or other Federal law ad-



16 ministered by the Secretary which provides for the



17 payment of assistance with respect to unemploy-



18 ment. Any amount recovered under this section shall



19 be returned to the Treasury of the United States.



20 (3) PENALTIES FOR FRAUD.—Any person



21 who—



22 (A) makes a false statement of a material



23 fact knowing it to be false, or knowingly fails



24 to disclose a material fact, for the purpose of



25 obtaining or increasing for that person or for 282



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1 any other person any payment authorized to be



2 furnished under this part; or



3 (B) makes a false statement of a material



4 fact knowing it to be false, or knowingly fails



5 to disclose a material fact, when providing in-



6 formation to the Secretary during an investiga-



7 tion of a petition under section 311(c);



8 shall be imprisoned for not more than one year, or fined



9 under title 18, United States Code, or both, and be ineli-



10 gible for any further payments under this part.



11 (i) REGULATIONS.—The Secretary shall prescribe



12 such regulations as may be necessary to carry out the
pro-



13 visions of this part.



14 (j) STUDY ON OLDER WORKERS.—The Secretary



15 shall conduct a study examine the circumstances of older



16 adversely affected workers and the ability of such
workers



17 to access their retirement benefits. The Secretary shall



18 transmit a report to Congress not later than 2 years
after



19 the date of enactment of this Act on the findings of the



20 study and the Secretary’s recommendations on how to en-



21 sure that adversely affected workers within 2 years of
re-



22 tirement are able to access their retirement benefits.
283



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1 Subtitle B—International Climate



2 Change Programs



3 SEC. 321. STRATEGIC INTERAGENCY BOARD ON INTER-



4 NATIONAL CLIMATE INVESTMENT.



5 (a) ESTABLISHMENT.—



6 (1) IN GENERAL.—Not later than 90 days after



7 the date of the enactment of this Act, the President



8 shall establish the ‘‘Strategic Interagency Board on



9 International Climate Investment’’ (referred to in



10 this subtitle as the ‘‘Board’’).



11 (2) COMPOSITION.—The Board shall be com-



12 posed of—



13 (A) the Secretary of State;



14 (B) the Administrator of United States



15 Agency for International Development;



16 (C) the Secretary of Energy;



17 (D) the Secretary of the Treasury;



18 (E) the Secretary of Commerce;



19 (F) the Secretary of Agriculture;



20 (G) the Administrator; and



21 (H) such other relevant officials as the



22 President may designate.



23 (b) DUTIES.—The duties of the Board shall include



24 assessing, monitoring, and evaluating the progress and



25 contributions of relevant departments and agencies of the
284



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1 Federal Government in supporting financing for inter-



2 national climate change activities.



3 SEC. 322. EMISSION REDUCTIONS FROM REDUCED DEFOR-



4 ESTATION.



5 Title VII of the Clean Air Act (as amended by section



6 101 of division B) is amended by adding at the end the



7 following:



8 ‘‘PART E—SUPPLEMENTAL EMISSION



9 REDUCTIONS



10 ‘‘SEC. 751. DEFINITIONS.



11 ‘‘In this part:



12 ‘‘(1) ADMINISTRATOR.—The term ‘Adminis-



13 trator’ means the Administrator of the United



14 States Agency for International Development.



15 ‘‘(2) DEFORESTATION.—The term ‘deforest-



16 ation’ means a change in land use from a forest to



17 any other land use.



18 ‘‘(3) DEGRADATION.—The term ‘degradation’,



19 with respect to a forest, is any reduction in the car-



20 bon stock of a forest due to the impact of human



21 land-use activities.



22 ‘‘(4) EMISSION REDUCTIONS.—The term ‘emis-



23 sion reductions’ means greenhouse gas emission re-



24 ductions achieved from reduced or avoided deforest-



25 ation under this title. 285



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1 ‘‘(5) LEAKAGE PREVENTION ACTIVITIES.—The



2 term ‘leakage prevention activities’ means activities



3 in developing countries that are directed at pre-



4 serving existing forest carbon stocks, including for-



5 ested wetlands and peatlands, that might, absent



6 such activities, be lost through leakage.



7 ‘‘SEC. 752. PURPOSES.



8 ‘‘The purposes of this part are to provide United



9 States assistance to developing countries—



10 ‘‘(1) to develop, implement and improve nation-



11 ally appropriate greenhouse gas mitigation policies



12 and actions that reduce deforestation and forest deg-



13 radation or conserve or restore forest ecosystems, in



14 a measurable, reportable, and verifiable manner; and



15 ‘‘(2) in a manner that is consistent with and



16 enhances the implementation of complementary



17 United States policies that support the good govern-



18 ance of forests, biodiversity conservation, and envi-



19 ronmentally sustainable development, while taking



20 local communities, most vulnerable populations and



21 communities, particularly forest-dependent commu-



22 nities and indigenous peoples into consideration. 286



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1 ‘‘SEC. 753. EMISSION REDUCTIONS FROM REDUCED DEFOR-



2 ESTATION.



3 ‘‘(a) IN GENERAL.—Not later than 2 years after the



4 date of the enactment of this part, the Administrator, in



5 consultation with the Administrator of the Environmental



6 Protection Agency, the Secretary of Agriculture, and the



7 head of any other appropriate agency, shall establish a



8 program to provide assistance to reduce greenhouse gas



9 emissions from deforestation in developing countries, in



10 accordance with this title.



11 ‘‘(b) OBJECTIVES.—The objectives of the program es-



12 tablished under this section shall be—



13 ‘‘(1) to reduce greenhouse gas emissions from



14 deforestation in developing countries by at least



15 720,000,000 tons of carbon dioxide equivalent in



16 2020, and a cumulative quantity of at least



17 6,000,000,000 tons of carbon dioxide equivalent by



18 December 31, 2025, with additional reductions in



19 subsequent years;



20 ‘‘(2) to assist developing countries in preparing



21 to participate in international markets for inter-



22 national offset credits for reduced emissions from



23 deforestation; and



24 ‘‘(3) to preserve existing forest carbon stocks in



25 countries where such forest carbon may be vulner-



26 able to international leakage.’’. 287



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1 SEC. 323. INTERNATIONAL CLEAN ENERGY DEPLOYMENT



2 PROGRAM.



3 (a) PURPOSES.—The purposes of this section are—



4 (1) to assist developing countries in activities



5 that reduce, sequester, or avoid greenhouse gas



6 emissions;



7 (2) to encourage those countries to shift toward



8 low-carbon development, and promote a successful



9 global agreement under the United Nations Frame-



10 work Convention on Climate Change, done at New



11 York on May 9, 1992 (or a successor agreement)



12 (referred to in this subtitle as the ‘‘Convention’’);



13 and



14 (3) to promote robust compliance with and en-



15 forcement of existing international legal require-



16 ments for the protection of intellectual property



17 rights.



18 (b) ESTABLISHMENT OF INTERNATIONAL CLEAN EN-



19 ERGY DEPLOYMENT PROGRAM.—



20 (1) ESTABLISHMENT.—The Secretary of State,



21 in consultation with an interagency group designated



22 by the President, shall establish an International



23 Clean Energy Deployment Program in accordance



24 with this section.



25 (2) DISTRIBUTION OF ASSISTANCE.—The Sec-



26 retary of State, or the head of such other Federal 288



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1 agency as the President may designate, shall direct



2 the distribution of funding to carry out the Clean



3 Energy Technology Program—



4 (A) in the form of bilateral assistance;



5 (B) to multilateral funds or international



6 institutions pursuant to the Convention or an



7 agreement negotiated under the Convention; or



8 (C) through a combination of the mecha-



9 nisms identified under subparagraphs (A) and



10 (B).



11 (c) DETERMINATION OF QUALIFYING ACTIVITIES.—



12 Assistance under this subtitle may be provided only to



13 qualifying entities for clean technology activities
(includ-



14 ing building relevant technical and institutional
capacity)



15 that contribute to substantial, measurable, reportable,
and



16 verifiable reductions, sequestration, or avoidance of
green-



17 house gas emissions.



18 SEC. 324. INTERNATIONAL CLIMATE CHANGE ADAPTATION



19 AND GLOBAL SECURITY PROGRAM.



20 (a) PURPOSES.—The purposes of this section are—



21 (1) to provide assistance to the most vulnerable



22 developing countries, particularly to the most vulner-



23 able communities and populations in those countries;



24 and 289



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1 (2) to support the development and implemen-



2 tation of climate change adaptation programs in a



3 way that protects and promotes interests of the



4 United States, to the extent those interests may be



5 advanced by minimizing, averting, or increasing re-



6 silience to climate change impacts.



7 (b) INTERNATIONAL CLIMATE CHANGE ADAPTATION



8 AND GLOBAL SECURITY PROGRAM.—



9 (1) ESTABLISHMENT.—The Secretary of State,



10 in consultation with the Administrator of the United



11 States Agency for International Development, the



12 Secretary of the Treasury, and the Administrator,



13 shall establish an International Climate Change Ad-



14 aptation and Global Security Program in accordance



15 with this section.



16 (2) DISTRIBUTION OF ASSISTANCE.—The Sec-



17 retary of State, or the head of such other Federal



18 agency as the President may designate, after con-



19 sultation with the Secretary of the Treasury, the Ad-



20 ministrator of the United States Agency for Inter-



21 national Development, and the Administrator, shall



22 direct the distribution of funding to carry out the



23 International Climate Change Adaptation and Global



24 Security Program—



25 (A) in the form of bilateral assistance; 290



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1 (B) to multilateral funds or international



2 institutions pursuant to the Convention or an



3 agreement negotiated under the Convention; or



4 (C) through a combination of the mecha-



5 nisms identified under subparagraphs (A) and



6 (B).



7 SEC. 325. EVALUATION AND REPORTS.



8 (a) MONITORING, EVALUATION,  AND ENFORCE-



9 MENT.—The Board shall establish and implement a sys-



10 tem to monitor and evaluate the effectiveness and effi-



11 ciency of assistance provided under this subtitle by
includ-



12 ing evaluation criteria, such as performance indicators.



13 (b) REPORTS AND REVIEW.—



14 (1) ANNUAL REPORT.—Not later than 1 year



15 after the date of enactment of this Act, and annually



16 thereafter, the Board shall submit to the appropriate



17 committees of Congress a report that describes—



18 (A) the steps Federal agencies have taken,



19 and the progress made, toward accomplishing



20 the objectives of this section; and



21 (B) the ramifications of any potentially de-



22 stabilizing impacts climate change may have on



23 the interests of the United States.



24 (2) REVIEWS.—Not later than 3 years after the



25 date of enactment of this Act, and triennially there-291



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1 after, the Board, in cooperation with the National



2 Academy of Sciences and other appropriate research



3 and development institutions, shall—



4 (A) review the global needs and opportuni-



5 ties for climate change investment in developing



6 countries; and



7 (B) submit to Congress a report that de-



8 scribes the findings of the review.



9 SEC. 326. REPORT ON CLIMATE ACTIONS OF MAJOR



10 ECONOMIES.



11 (a) IN GENERAL.—The Secretary of State, in co-



12 operation with the Board, shall prepare an interagency
re-



13 port on climate change and energy policy of the 5 coun-



14 tries that, of the countries that are not members of the



15 Organisation for Economic Co-Operation and Develop-



16 ment, emit the greatest annual quantity of greenhouse



17 gases.



18 (b) PURPOSES.—The purposes of the report shall



19 be—



20 (1) to provide to Congress and the public of the



21 United States—



22 (A) a better understanding of the actions



23 the countries described in subsection (a) are



24 taking to reduce greenhouse gas emissions; and 292



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1 (B) an assessment of the climate change



2 and energy policy commitments and actions of



3 those countries; and



4 (2) to identify the means by which the United



5 States can assist those countries in achieving such



6 a reduction.



7 (c) SUBMISSION TO CONGRESS.—Not later than 15



8 months after the date of enactment of this Act, the Sec-



9 retary of State shall submit to the appropriate committees



10 of Congress the report prepared under this section.



11 Subtitle C—Adapting to Climate



12 Change



13 PART 1—DOMESTIC ADAPTATION



14 Subpart A—National Climate Change Adaptation



15 Program



16 SEC. 341. NATIONAL CLIMATE CHANGE ADAPTATION PRO-



17 GRAM.



18 The President shall establish within the United



19 States Global Change Research Program a National Cli-



20 mate Change Adaptation Program for the purpose of in-



21 creasing the overall effectiveness of Federal climate



22 change adaptation efforts.



23 SEC. 342. CLIMATE SERVICES.



24 The Secretary of Commerce, acting through the Ad-



25 ministrator of the National Oceanic and Atmospheric
Ad-293



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1 ministration (NOAA), shall establish within NOAA a Na-



2 tional Climate Service to develop climate information,



3 data, forecasts, and warnings at national and regional



4 scales, and to distribute information related to climate im-



5 pacts to State, local, and tribal governments and the pub-



6 lic to facilitate the development and implementation of



7 strategies to reduce society’s vulnerability to climate
varia-



8 bility and change.



9 Subpart B—Public Health and Climate Change



10 SEC. 351. SENSE OF CONGRESS ON PUBLIC HEALTH AND



11 CLIMATE CHANGE.



12 It is the sense of the Congress that the Federal Gov-



13 ernment, in cooperation with international, State,
tribal,



14 and local governments, Indian tribes, concerned public
and



15 private organizations, and citizens, should use all prac-



16 ticable means and measures—



17 (1) to assist the efforts of public health and



18 health care professionals, first responders, States,



19 Indian tribes, municipalities, and local communities



20 to incorporate measures to prepare health systems to



21 respond to the impacts of climate change;



22 (2) to ensure—



23 (A) that the Nation’s health professionals



24 have sufficient information to prepare for and 294



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1 respond to the adverse health impacts of cli-



2 mate change;



3 (B) the utility and value of scientific re-



4 search in advancing understanding of—



5 (i) the health impacts of climate



6 change; and



7 (ii) strategies to prepare for and re-



8 spond to the health impacts of climate



9 change;



10 (C) the identification of communities vul-



11 nerable to the health effects of climate change



12 and the development of strategic response plans



13 to be carried out by health professionals for



14 those communities;



15 (D) the improvement of health status and



16 health equity through efforts to prepare for and



17 respond to climate change; and



18 (E) the inclusion of health policy in the de-



19 velopment of climate change responses;



20 (3) to encourage further research, interdiscipli-



21 nary partnership, and collaboration among stake-



22 holders in order to—



23 (A) understand and monitor the health im-



24 pacts of climate change; and 295



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1 (B) improve public health knowledge and



2 response strategies to climate change;



3 (4) to enhance preparedness activities, and pub-



4 lic health infrastructure, relating to climate change



5 and health;



6 (5) to encourage each and every American to



7 learn about the impacts of climate change on health;



8 and



9 (6) to assist the efforts of developing nations to



10 incorporate measures to prepare health systems to



11 respond to the impacts of climate change.



12 SEC. 352. RELATIONSHIP TO OTHER LAWS.



13 Nothing in this subpart in any manner limits the au-



14 thority provided to or responsibility conferred on any
Fed-



15 eral department or agency by any provision of any law



16 (including regulations) or authorizes any violation of
any



17 provision of any law (including regulations), including
any



18 health, energy, environmental, transportation, or any



19 other law or regulation.



20 SEC. 353. NATIONAL STRATEGIC ACTION PLAN.



21 (a) REQUIREMENT.—



22 (1) IN GENERAL.—The Secretary of Health and



23 Human Services, within 2 years after the date of the



24 enactment of this Act, on the basis of the best avail-



25 able science, and in consultation pursuant to para-296



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1 graph (2), shall publish a strategic action plan to as-



2 sist health professionals in preparing for and re-



3 sponding to the impacts of climate change on public



4 health in the United States and other nations, par-



5 ticularly developing nations.



6 (2) CONSULTATION.—In developing or making



7 any revision to the national strategic action plan, the



8 Secretary shall—



9 (A) consult with the Director of the Cen-



10 ters for Disease Control and Prevention, the



11 Administrator of the Environmental Protection



12 Agency, the Director of the National Institutes



13 of Health, the Director of the Indian Health



14 Service, the Secretary of Energy, other appro-



15 priate Federal agencies, Indian tribes, State



16 and local governments, public health organiza-



17 tions, scientists, and other interested stake-



18 holders; and



19 (B) provide opportunity for public input.



20 (b) CONTENTS.—



21 (1) IN GENERAL.—The Secretary shall assist



22 health professionals in preparing for and responding



23 effectively and efficiently to the health effects of cli-



24 mate change through measures including— 297



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1 (A) developing, improving, integrating, and



2 maintaining domestic and international disease



3 surveillance systems and monitoring capacity to



4 respond to health-related effects of climate



5 change, including on topics addressing—



6 (i) water, food, and vector borne infec-



7 tious diseases and climate change;



8 (ii) pulmonary effects, including re-



9 sponses to aeroallergens;



10 (iii) cardiovascular effects, including



11 impacts of temperature extremes;



12 (iv) air pollution health effects, includ-



13 ing heightened sensitivity to air pollution;



14 (v) hazardous algal blooms;



15 (vi) mental and behavioral health im-



16 pacts of climate change;



17 (vii) the health of refugees, displaced



18 persons, and vulnerable communities;



19 (viii) the implications for communities



20 vulnerable to health effects of climate



21 change, as well as strategies for responding



22 to climate change within these commu-



23 nities; and 298



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1 (ix) local and community-based health



2 interventions for climate-related health im-



3 pacts;



4 (B) creating tools for predicting and moni-



5 toring the public health effects of climate



6 change on the international, national, regional,



7 State, tribal, and local levels, and providing



8 technical support to assist in their implementa-



9 tion;



10 (C) developing public health communica-



11 tions strategies and interventions for extreme



12 weather events and disaster response situations;



13 (D) identifying and prioritizing commu-



14 nities and populations vulnerable to the health



15 effects of climate change, and determining ac-



16 tions and communication strategies that should



17 be taken to inform and protect these commu-



18 nities and populations from the health effects of



19 climate change;



20 (E) developing health communication, pub-



21 lic education, and outreach programs aimed at



22 public health and health care professionals, as



23 well as the general public, to promote prepared-



24 ness and response strategies relating to climate



25 change and public health, including the identi-299



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1 fication of greenhouse gas reduction behaviors



2 that are health-promoting; and



3 (F) developing academic and regional cen-



4 ters of excellence devoted to—



5 (i) researching relationships between



6 climate change and health;



7 (ii) expanding and training the public



8 health workforce to strengthen the capacity



9 of such workforce to respond to and pre-



10 pare for the health effects of climate



11 change;



12 (iii) creating and supporting academic



13 fellowships focusing on the health effects



14 of climate change; and



15 (iv) training senior health ministry of-



16 ficials from developing nations to strength-



17 en the capacity of such nations to—



18 (I) prepare for and respond to



19 the health effects of climate change;



20 and



21 (II) build an international net-



22 work of public health professionals



23 with the necessary climate change



24 knowledge base; 300



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1 (G) using techniques, including health im-



2 pact assessments, to assess various climate



3 change public health preparedness and response



4 strategies on international, national, State, re-



5 gional, tribal, and local levels, and make rec-



6 ommendations as to those strategies that best



7 protect the public health;



8 (H)(i) assisting in the development, imple-



9 mentation, and support of State, regional, trib-



10 al, and local preparedness, communication, and



11 response plans (including with respect to the



12 health departments of such entities) to antici-



13 pate and reduce the health threats of climate



14 change; and



15 (ii) pursuing collaborative efforts to de-



16 velop, integrate, and implement such plans;



17 (I) creating a program to advance research



18 as it relates to the effects of climate change on



19 public health across Federal agencies, including



20 research to—



21 (i) identify and assess climate change



22 health effects preparedness and response



23 strategies;



24 (ii) prioritize critical public health in-



25 frastructure projects related to potential 301



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1 climate change impacts that affect public



2 health; and



3 (iii) coordinate preparedness for cli-



4 mate change health impacts, including the



5 development of modeling and forecasting



6 tools;



7 (J) providing technical assistance for the



8 development, implementation, and support of



9 preparedness and response plans to anticipate



10 and reduce the health threats of climate change



11 in developing nations; and



12 (K) carrying out other activities deter-



13 mined appropriate by the Secretary to plan for



14 and respond to the impacts of climate change



15 on public health.



16 (c) REVISION.—The Secretary shall revise the na-



17 tional strategic action plan not later than July 1, 2014,



18 and every 4 years thereafter, to reflect new information



19 collected pursuant to implementation of the national
stra-



20 tegic action plan and otherwise, including information



21 on—



22 (1) the status of critical environmental health



23 parameters and related human health impacts;



24 (2) the impacts of climate change on public



25 health; and 302



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1 (3) advances in the development of strategies



2 for preparing for and responding to the impacts of



3 climate change on public health.



4 (d) IMPLEMENTATION.—



5 (1) IMPLEMENTATION THROUGH HHS.—The



6 Secretary shall exercise the Secretary’s authority



7 under this subpart and other provisions of Federal



8 law to achieve the goals and measures of the na-



9 tional strategic action plan.



10 (2) OTHER PUBLIC HEALTH PROGRAMS AND



11 INITIATIVES.—The Secretary and Federal officials of



12 other relevant Federal agencies shall administer



13 public health programs and initiatives authorized by



14 provisions of law other than this subpart, subject to



15 the requirements of such statutes, in a manner de-



16 signed to achieve the goals of the national strategic



17 action plan.



18 (3) SPECIFIC ACTIVITIES.—In furtherance of



19 the national strategic action plan, the Secretary



20 shall—



21 (A) conduct scientific research to assist



22 health professionals in preparing for and re-



23 sponding to the impacts of climate change on



24 public health; and



25 (B) provide funding for— 303



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1 (i) research on the health effects of



2 climate change; and



3 (ii) preparedness planning on the



4 international, national, State, tribal, re-



5 gional, and local levels to respond to or re-



6 duce the burden of health effects of climate



7 change; and



8 (C) carry out other activities determined



9 appropriate by the Secretary to prepare for and



10 respond to the impacts of climate change on



11 public health.



12 SEC. 354. ADVISORY BOARD.



13 (a) ESTABLISHMENT.—The Secretary shall establish



14 a permanent science advisory board comprised of not less



15 than 10 and not more than 20 members.



16 (b) APPOINTMENT OF MEMBERS.—The Secretary



17 shall appoint the members of the science advisory board



18 from among individuals—



19 (1) who have expertise in public health and



20 human services, climate change, and other relevant



21 disciplines; and



(2) at least



1



22 ⁄2 of whom are recommended by



23 the President of the National Academy of Sciences.



24 (c) FUNCTIONS.—The science advisory board shall— 304



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1 (1) provide scientific and technical advice and



2 recommendations to the Secretary on the domestic



3 and international impacts of climate change on pub-



4 lic health, populations and regions particularly vul-



5 nerable to the effects of climate change, and strate-



6 gies and mechanisms to prepare for and respond to



7 the impacts of climate change on public health; and



8 (2) advise the Secretary regarding the best



9 science available for purposes of issuing the national



10 strategic action plan.



11 SEC. 355. REPORTS.



12 (a) NEEDS ASSESSMENT.—



13 (1) IN GENERAL.—The Secretary shall seek to



14 enter into, by not later than 6 months after the date



15 of the enactment of this Act, an agreement with the



16 National Research Council and the Institute of Med-



17 icine to complete a report that—



18 (A) assesses the needs for health profes-



19 sionals to prepare for and respond to climate



20 change impacts on public health; and



21 (B) recommends programs to meet those



22 needs.



23 (2) SUBMISSION.—The agreement under para-



24 graph (1) shall require the completed report to be



25 submitted to the Congress and the Secretary and 305



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1 made publicly available not later than 1 year after



2 the date of the agreement.



3 (b) CLIMATE CHANGE HEALTH PROTECTION AND



4 PROMOTION REPORTS.—



5 (1) IN GENERAL.—The Secretary, in consulta-



6 tion with the advisory board established under sec-



7 tion 354, shall ensure the issuance of reports to aid



8 health professionals in preparing for and responding



9 to the adverse health effects of climate change



10 that—



11 (A) review scientific developments on



12 health impacts of climate change; and



13 (B) recommend changes to the national



14 strategic action plan.



15 (2) SUBMISSION.—The Secretary shall submit



16 the reports required by paragraph (1) to the Con-



17 gress and make such reports publicly available not



18 later than July 1, 2013, and every 4 years there-



19 after.



20 SEC. 356. DEFINITIONS.



21 In this subpart:



22 (1) HEALTH IMPACT ASSESSMENT.—The term



23 ‘‘health impact assessment’’ means a combination of



24 procedures, methods, and tools by which a policy,



25 program, or project may be judged as to its potential 306



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1 effects on the health of a population, and the dis-



2 tribution of those effects within the population.



3 (2) NATIONAL STRATEGIC ACTION PLAN.—The



4 term ‘‘national strategic action plan’’ means the



5 plan issued and revised under section 353.



6 (3) SECRETARY.—Unless otherwise specified,



7 the term ‘‘Secretary’’ means the Secretary of Health



8 and Human Services.



9 Subpart C—Climate Change Safeguards for Natural



10 Resources Conservation



11 SEC. 361. PURPOSES.



12 The purposes of this subpart are—



13 (1) to establish an integrated Federal program



14 that responds to ongoing and expected impacts of



15 climate change, including, where applicable, ocean



16 acidification, drought, flooding, and wildfire, by pro-



17 tecting, restoring, and conserving the natural re-



18 sources of the United States; and



19 (2) to provide financial support and incentives



20 for programs, strategies, and activities that respond



21 to threats of climate change, including, where appli-



22 cable, ocean acidification, drought, flooding, and



23 wildfire, by protecting, restoring, and conserving the



24 natural resources of the United States. 307



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1 SEC. 362. NATURAL RESOURCES CLIMATE CHANGE ADAP-



2 TATION POLICY.



3 It is the policy of the Federal Government, in co-



4 operation with State and local governments, Indian tribes,



5 and other interested stakeholders, to use all practicable



6 means to protect, restore, and conserve natural resources



7 so that natural resources become more resilient, adapt to,



8 and withstand the ongoing and expected impacts of cli-



9 mate change, including, where applicable, ocean acidifica-



10 tion, drought, flooding, and wildfire.



11 SEC. 363. DEFINITIONS.



12 In this subpart:



13 (1) ACCOUNT.—The term ‘‘Account’’ means the



14 Natural Resources Climate Change Adaption Ac-



15 count established by section 370(a).



16 (2) ADMINISTRATORS.—The term ‘‘Administra-



17 tors’’ means—



18 (A) the Administrator of the National Oce-



19 anic and Atmospheric Administration; and



20 (B) the Director of the United States Geo-



21 logical Survey.



22 (3) BOARD.—The term ‘‘Board’’ means the



23 Science Advisory Board established by section



24 367(f)(1). 308



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1 (4) CENTER.—The term ‘‘Center’’ means the



2 National Climate Change and Wildlife Science Cen-



3 ter described by section 367(e)(1).



4 (5) COASTAL STATE.—The term ‘‘coastal



5 State’’ has the meaning given the term ‘‘coastal



6 state’’ in section 304 of the Coastal Zone Manage-



7 ment Act of 1972 (16 U.S.C. 1453).



8 (6) CORRIDORS.—The term ‘‘corridors’’ means



9 areas that—



10 (A) provide connectivity, over different



11 time scales, of habitats or potential habitats;



12 and



13 (B) facilitate terrestrial, marine, estuarine,



14 and freshwater fish, wildlife, or plant movement



15 necessary for migration, gene flow, or dispersal,



16 or to respond to the ongoing and expected im-



17 pacts of climate change, including, where appli-



18 cable, ocean acidification, drought, flooding,



19 and wildfire.



20 (7) ECOLOGICAL PROCESSES.—The term ‘‘eco-



21 logical processes’’ means biological, chemical, or



22 physical interaction between the biotic and abiotic



23 components of an ecosystem, including—



24 (A) nutrient cycling;



25 (B) pollination; 309



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1 (C) predator-prey relationships;



2 (D) soil formation;



3 (E) gene flow;



4 (F) disease epizootiology;



5 (G) larval dispersal and settlement;



6 (H) hydrological cycling;



7 (I) decomposition; and



8 (J) disturbance regimes, such as fire and



9 flooding.



10 (8) HABITAT.—The term ‘‘habitat’’ means the



11 physical, chemical, and biological properties that



12 fish, wildlife, or plants use for growth, reproduction,



13 survival, food, water, or cover (whether on land, in



14 water, or in an area or region).



15 (9) INDIAN TRIBE.—The term ‘‘Indian tribe’’



16 has the meaning given the term in section 4 of the



17 Indian Self-Determination and Education Assistance



18 Act (25 U.S.C. 450b).



19 (10) NATURAL RESOURCES.—The term ‘‘nat-



20 ural resources’’ means land, wildlife, fish, air, water,



21 estuaries, plants, habitats, and ecosystems of the



22 United States.



23 (11) NATURAL RESOURCES ADAPTATION.—The



24 term ‘‘natural resources adaptation’’ means the pro-



25 tection, restoration, and conservation of natural re-310



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1 sources so that natural resources become more resil-



2 ient, adapt to, and withstand the ongoing and ex-



3 pected impacts of climate change, including, where



4 applicable, ocean acidification, drought, flooding,



5 and wildfire.



6 (12) PANEL.—The term ‘‘Panel’’ means the



7 Natural Resources Climate Change Adaptation



8 Panel established under section 365(a).



9 (13) RESILIENCE; 
RESILIENT.—The terms ‘‘re-



10 silience’’ and ‘‘resilient’’ mean—



11 (A) the ability to resist or recover from



12 disturbance; and



13 (B) the ability to preserve diversity, pro-



14 ductivity, and sustainability.



15 (14) STATE.—The term ‘‘State’’ means—



16 (A) a State of the United States;



17 (B) the District of Columbia;



18 (C) American Samoa;



19 (D) Guam;



20 (E) the Commonwealth of the Northern



21 Mariana Islands;



22 (F) the Commonwealth of Puerto Rico;



23 and



24 (G) the United States Virgin Islands. 311



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1 (15) STRATEGY.—The term ‘‘Strategy’’ means



2 the Natural Resources Climate Change Adaptation



3 Strategy developed under section 366(a).



4 SEC. 364. COUNCIL ON ENVIRONMENTAL QUALITY.



5 The Chair of the Council on Environmental Quality



6 shall—



7 (1) advise the President on implementing and



8 developing—



9 (A) the Strategy; and



10 (B) the Federal natural resource agency



11 adaptation plans required by section 368;



12 (2) serve as the Chair of the Panel established



13 under section 365; and



14 (3) coordinate Federal agency strategies, plans,



15 programs, and activities relating to protecting, re-



16 storing, and maintaining natural resources so that



17 natural resources become more resilient, adapt to,



18 and withstand the ongoing and expected impacts of



19 climate change.



20 SEC. 365. NATURAL RESOURCES CLIMATE CHANGE ADAP-



21 TATION PANEL.



22 (a) ESTABLISHMENT.—Not later than 90 days after



23 the date of enactment of this Act, the President shall
es-



24 tablish a Natural Resources Climate Change Adaptation



25 Panel. 312



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1 (b) DUTIES.—The Panel shall serve as a forum for



2 interagency consultation on, and the coordination of, the



3 development and implementation of the Strategy.



4 (c) MEMBERSHIP.—The Panel shall be composed



5 of—



6 (1) the Administrator of the National Oceanic



7 and Atmospheric Administration (or a designee);



8 (2) the Chief of the Forest Service (or a des-



9 ignee);



10 (3) the Director of the National Park Service



11 (or a designee);



12 (4) the Director of the United States Fish and



13 Wildlife Service (or a designee);



14 (5) the Director of the Bureau of Land Man-



15 agement (or a designee);



16 (6) the Director of the United States Geological



17 Survey (or a designee);



18 (7) the Commissioner of Reclamation (or a des-



19 ignee); and



20 (8) the Director of the Bureau of Indian Affairs



21 (or a designee);



22 (9) the Administrator of the Environmental



23 Protection Agency (or a designee);



24 (10) the Chief of Engineers (or a designee); 313



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1 (11) the Chair of the Council on Environmental



2 Quality (or a designee);



3 (12) the Administrator of the Federal Emer-



4 gency Management Agency (or a designee); and



5 (13) the heads of such other Federal agencies



6 or departments with jurisdiction over natural re-



7 sources of the United States, as determined by the



8 President.



9 (d) CHAIRPERSON.—The Chair of the Council on En-



10 vironmental Quality shall serve as the Chairperson of the



11 Panel.



12 SEC. 366. NATURAL RESOURCES CLIMATE CHANGE ADAP-



13 TATION STRATEGY.



14 (a) IN GENERAL.—Not later than 1 year after the



15 date of enactment of this Act, the Panel shall develop a



16 Natural Resources Climate Change Adaptation Strategy—



17 (1) to protect, restore, and conserve natural re-



18 sources so that natural resources become more resil-



19 ient, adapt to, and withstand the ongoing and ex-



20 pected impacts of climate change; and



21 (2) to identify opportunities to mitigate the on-



22 going and expected impacts of climate change.



23 (b) DEVELOPMENT.—In developing and revising the



24 Strategy, the Panel shall— 314



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1 (1) base the strategy on the best available



2 science;



3 (2) develop the strategy in close cooperation



4 with States and Indian tribes;



5 (3) coordinate with other Federal agencies, as



6 appropriate;



7 (4) consult with local governments, conservation



8 organizations, scientists, and other interested stake-



9 holders; and



10 (5) provide public notice and opportunity for



11 comment.



12 (c) REVISION.—After the Panel adopts the initial



13 Strategy, the Panel shall review and revise the Strategy



14 every 5 years to incorporate—



15 (1) new information regarding the ongoing and



16 expected impacts of climate change on natural re-



17 sources; and



18 (2) new advances in the development of strate-



19 gies that make natural resources more resilient or



20 able to adapt to the ongoing and expected impacts



21 of climate change.



22 (d) CONTENTS.—The Strategy shall—



23 (1) assess the vulnerability of natural resources



24 to climate change, including short-term, medium- 315



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1 term, long-term, cumulative, and synergistic im-



2 pacts;



3 (2) describe current research, observation, and



4 monitoring activities at the Federal, State, tribal,



5 and local level related to the ongoing and expected



6 impacts of climate change on natural resources;



7 (3) identify and prioritize research and data



8 needs;



9 (4) identify natural resources likely to have the



10 greatest need for protection, restoration, and con-



11 servation due to the ongoing and expanding impacts



12 of climate change;



13 (5) include specific protocols for integrating



14 natural resources adaptation strategies and activities



15 into the conservation and management of natural re-



16 sources by Federal departments and agencies to en-



17 sure consistency across agency jurisdictions;



18 (6) include specific actions that Federal depart-



19 ments and agencies shall take to protect, conserve,



20 and restore natural resources to become more resil-



21 ient, adapt to, and withstand the ongoing and ex-



22 pected impacts of climate change, including a



23 timeline to implement those actions;



24 (7) include specific mechanisms for ensuring



25 communication and coordination— 316



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1 (A) among Federal departments and agen-



2 cies; and



3 (B) between Federal departments and



4 agencies and State natural resource agencies,



5 United States territories, Indian tribes, private



6 landowners, conservation organizations, and



7 other countries that share jurisdiction over nat-



8 ural resources with the United States;



9 (8) include specific actions to develop and im-



10 plement consistent natural resources inventory and



11 monitoring protocols through interagency coordina-



12 tion and collaboration; and



13 (9) include procedures for guiding the develop-



14 ment of detailed agency- and department-specific ad-



15 aptation plans required under section 368.



16 (e) IMPLEMENTATION.—Consistent with other laws



17 and Federal trust responsibilities concerning Indian
land,



18 each Federal department or agency represented on the



19 Panel shall integrate the elements of the Strategy that
re-



20 late to conservation, restoration, and management of nat-



21 ural resources into agency plans, environmental reviews,



22 programs, and activities. 317



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1 SEC. 367. NATURAL RESOURCES ADAPTATION SCIENCE



2 AND INFORMATION.



3 (a) COORDINATION.—Not later than 90 days after



4 the date of enactment of this Act, the Administrators
shall



5 establish coordinated procedures for developing and pro-



6 viding science and information necessary to address the



7 ongoing and expected impacts of climate change on nat-



8 ural resources.



9 (b) OVERSIGHT.—The National Climate Change and



10 Wildlife Science Center established under subsection (e)



11 and the National Climate Service of the National Oceanic



12 and Atmospheric Administration shall oversee develop-



13 ment of the procedures.



14 (c) FUNCTIONS.—The Administrators shall—



15 (1) ensure that the procedures required under



16 subsection (a) avoid duplication; and



17 (2) ensure that the National Oceanic and At-



18 mospheric Administration and the United States Ge-



19 ological Survey—



20 (A) provide technical assistance to Federal



21 departments and agencies, State and local gov-



22 ernments, Indian tribes, and interested private



23 landowners that are pursuing the goals of ad-



24 dressing the ongoing and expected impacts of



25 climate change on natural resources; 318



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1 (B) conduct and sponsor research to de-



2 velop strategies that increase the ability of nat-



3 ural resources to become more resilient, adapt



4 to, and withstand the ongoing and expected im-



5 pacts of climate change;



6 (C) provide Federal departments and agen-



7 cies, State and local governments, Indian tribes,



8 and interested private landowners with research



9 products, decision and monitoring tools, and in-



10 formation to develop strategies that increase



11 the ability of natural resources to become more



12 resilient, adapt to, and withstand the ongoing



13 and expected impacts of climate change; and



14 (D) assist Federal departments and agen-



15 cies in the development of adaptation plans re-



16 quired by section 368.



17 (d) SURVEY.—Not later than 1 year after the date



18 of enactment of this Act, and every 5 years thereafter,



19 the Secretary of Commerce and the Secretary of the Inte-



20 rior shall conduct a climate change impact survey that—



21 (1) identifies natural resources considered likely



22 to be adversely affected by climate change;



23 (2) includes baseline monitoring and ongoing



24 trend analysis; 319



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1 (3) with input from stakeholders, identifies and



2 prioritizes necessary monitoring and research that is



3 most relevant to the needs of natural resource man-



4 agers to address the ongoing and expected impacts



5 of climate change and to promote resilience; and



6 (4) identifies the decision tools necessary to de-



7 velop strategies that increase the ability of natural



8 resources to become more resilient, adapt to, and



9 withstand the ongoing and expected impacts of cli-



10 mate change.



11 (e) NATIONAL CLIMATE CHANGE AND WILDLIFE



12 SCIENCE CENTER.—



13 (1) ESTABLISHMENT.—The Secretary of the In-



14 terior shall establish the National Climate Change



15 and Wildlife Science Center within the United States



16 Geological Survey.



17 (2) FUNCTIONS.—In collaboration with Federal



18 and State natural resources agencies and depart-



19 ments, Indian tribes, universities, and other partner



20 organizations, the Center shall—



21 (A) assess and synthesize current physical



22 and biological knowledge;



23 (B) prioritize scientific gaps in such knowl-



24 edge in order to forecast the ecological impacts



25 of climate change, including, where applicable, 320



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1 ocean acidification, drought, flooding, and wild-



2 fire on fish and wildlife at the ecosystem, habi-



3 tat, community, population, and species levels;



4 (C) develop and improve tools to identify,



5 evaluate, and link scientific approaches and



6 models that forecast the impacts of climate



7 change, including, where applicable, ocean acidi-



8 fication, drought, flooding, and wildfire on fish,



9 wildlife, plants, and associated habitats, includ-



10 ing—



11 (i) monitoring;



12 (ii) predictive models;



13 (iii) vulnerability analyses;



14 (iv) risk assessments; and



15 (v) decision support systems that help



16 managers make informed decisions;



17 (D) develop and evaluate tools to adapt-



18 ively manage and monitor the effects of climate



19 change (including tools for the collection of



20 data) on fish and wildlife on the national, re-



21 gional, and local level; and



22 (E) develop capacities for sharing stand-



23 ardized data and the synthesis of the data de-



24 scribed in subparagraph (D).



25 (f) SCIENCE ADVISORY BOARD.— 321



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1 (1) ESTABLISHMENT.—Not later than 180 days



2 after the date of enactment of this Act, the Sec-



3 retary of Commerce and the Secretary of the Inte-



4 rior shall establish and appoint the members of the



5 Science Advisory Board.



6 (2) MEMBERSHIP.—The Board shall be com-



7 prised of not fewer than 10 and not more than 20



8 members—



9 (A) who have expertise in fish, wildlife,



10 plant, aquatic, and coastal and marine biology,



11 ecology, climate change, including, where appli-



12 cable, ocean acidification, drought, flooding,



13 and wildfire, and other relevant scientific dis-



14 ciplines;



15 (B) who represent a balanced membership



16 among Federal, State, tribal, and local rep-



17 resentatives, universities, and conservation or-



18 ganizations; and



(C) at least



1



19 ⁄2 of whom are recommended



20 by the President of the National Academy of



21 Sciences.



22 (3) DUTIES.—The Board shall—



23 (A) advise the Secretary of Commerce and



24 the Secretary of the Interior on the state of the



25 science regarding— 322



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1 (i) the ongoing and expected impacts



2 of climate change, including, where appli-



3 cable, ocean acidification, drought, flood-



4 ing, and wildfire on natural resources; and



5 (ii) scientific strategies and mecha-



6 nisms for protecting, restoring, and con-



7 serving natural resources so natural re-



8 sources become more resilient, adapt to,



9 and withstand the ongoing and expected



10 impacts of climate change, including,



11 where applicable, ocean acidification,



12 drought, flooding, and wildfire; and



13 (B) identify and recommend priorities for



14 ongoing research needs on the issues described



15 in subparagraph (A).



16 (4) COLLABORATION.—The Board shall collabo-



17 rate with climate change and ecosystem research en-



18 tities in other Federal agencies and departments.



19 (5) AVAILABILITY TO PUBLIC.—The advice and



20 recommendations of the Board shall be made avail-



21 able to the public. 323



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1 SEC. 368. FEDERAL NATURAL RESOURCE AGENCY ADAPTA-



2 TION PLANS.



3 (a) DEVELOPMENT.—Not later than 1 year after the



4 date of development of the Strategy, each department or



5 agency with representation on the Panel shall—



6 (1) complete an adaptation plan for that de-



7 partment or agency that—



8 (A) implements the Strategy and is con-



9 sistent with the natural resources climate



10 change adaptation policy required by section



11 362;



12 (B) details the ongoing and expanding ac-



13 tions of the department or agency, and any



14 changes in decisionmaking processes necessary



15 to increase the ability of resources under the ju-



16 risdiction of the department or agency and, to



17 the maximum extent practicable, resources



18 under the jurisdiction of other departments and



19 agencies that may be significantly affected by



20 decisions of the department or agency, to be-



21 come more resilient, adapt to, and withstand



22 the ongoing and expected impacts of climate



23 change, including, where applicable, ocean acidi-



24 fication, drought, flooding, and wildfire; and



25 (C) includes a timeline for implementation; 324



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1 (2) provide opportunities for public review and



2 comment on the adaptation plan, and in the case of



3 a plan by the Bureau of Indian Affairs, review by



4 Indian tribes; and



5 (3) submit the plan to the President for ap-



6 proval.



7 (b) REVIEW BY PRESIDENT AND SUBMISSION TO



8 CONGRESS.—



9 (1) REVIEW BY PRESIDENT.—The President



10 shall—



11 (A) approve an adaptation plan submitted



12 under subsection (a)(3) if the plan meets the



13 requirements of subsection (c) and is consistent



14 with the Strategy; and



15 (B) decide whether to approve the plan



16 within 60 days of submission.



17 (2) DISAPPROVAL.—If the President dis-



18 approves an adaptation plan, the President shall di-



19 rect the department or agency to submit a revised



20 plan within 60 days of that disapproval.



21 (3) SUBMISSION TO CONGRESS.—Not later than



22 30 days after the date of approval of an adaptation



23 plan by the President, the department or agency



24 shall submit the plan to— 325



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1 (A) the Committee on Natural Resources



2 of the House of Representatives;



3 (B) the Committee on Energy and Natural



4 Resources of the Senate;



5 (C) the Committee on Environment and



6 Public Works of the Senate; and



7 (D) any other committees of the House of



8 Representatives or the Senate with principal ju-



9 risdiction over the department or agency.



10 (c) REQUIREMENTS.—Each adaptation plan shall—



11 (1) establish programs for assessing the ongo-



12 ing and expected impacts of climate change, includ-



13 ing, where applicable, ocean acidification, drought,



14 flooding, and wildfire on natural resources under the



15 jurisdiction of the department or agency preparing



16 the plan, including—



17 (A) assessment of cumulative and syner-



18 gistic effects; and



19 (B) programs that identify and monitor



20 natural resources likely to be adversely affected



21 and that have need for conservation;



22 (2) identify and prioritize—



23 (A) the strategies of the department or



24 agency preparing the plan; 326



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1 (B) the specific conservation actions that



2 address the ongoing and expected impacts of



3 climate change, including, where applicable,



4 ocean acidification, drought, flooding, and wild-



5 fire on natural resources under jurisdiction of



6 the department or agency preparing the plan;



7 (C) strategies to protect, restore, and con-



8 serve such resources to become more resilient,



9 adapt to, and better withstand those impacts,



10 including—



11 (i) protection, restoration, and con-



12 servation of terrestrial, marine, estuarine,



13 and freshwater habitats and ecosystems;



14 (ii) establishment of terrestrial, ma-



15 rine, estuarine, and freshwater habitat



16 linkages and corridors;



17 (iii) restoration and conservation of



18 ecological processes;



19 (iv) protection of a broad diversity of



20 native species of fish, wildlife, and plant



21 populations across the ranges of those spe-



22 cies; and



23 (v) protection of fish, wildlife, and



24 plant health, recognizing that climate can 327



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1 alter the distribution and ecology of



2 parasites, pathogens, and vectors;



3 (3) describe how the department or agency



4 will—



5 (A) integrate the strategies and conserva-



6 tion activities into plans, programs, activities,



7 and actions of the department or agency relat-



8 ing to the conservation and management of nat-



9 ural resources; and



10 (B) establish new plans, programs, activi-



11 ties, and actions, if necessary;



12 (4) establish methods—



13 (A) to assess the effectiveness of strategies



14 and conservation actions the department or



15 agency takes to protect, restore, and conserve



16 natural resources so natural resources become



17 more resilient, adapt to, and withstand the on-



18 going and expected impacts of climate change;



19 and



20 (B) to update those strategies and actions



21 to respond to new information and changing



22 conditions;



23 (5) describe current and proposed mechanisms



24 to enhance cooperation and coordination of natural



25 resources adaptation efforts with other Federal 328



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1 agencies, State and local governments, Indian tribes,



2 and nongovernmental stakeholders;



3 (6) include written guidance to resource man-



4 agers that—



5 (A) explains how managers are expected to



6 address the ongoing and expected effects of cli-



7 mate change, including, where applicable, ocean



8 acidification, drought, flooding, and wildfire;



9 (B) identifies how managers shall obtain



10 any necessary site-specific information; and



11 (C) reflects best practices shared among



12 relevant agencies, but recognizes the unique



13 missions, objectives, and responsibilities of each



14 agency;



15 (7) identify and assess data and information



16 gaps necessary to develop natural resources adapta-



17 tion plans and strategies; and



18 (8) consider strategies that engage youth and



19 young adults (including youth and young adults



20 working in full-time or part-time youth service or



21 conservation corps programs) to provide the youth



22 and young adults with opportunities for meaningful



23 conservation and community service and to encour-



24 age opportunities for employment in the private sec-



25 tor through partnerships with employers. 329



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1 (d) IMPLEMENTATION.—



2 (1) IN GENERAL.—Upon approval by the Presi-



3 dent, each department or agency with representation



4 on the Panel shall, consistent with existing author-



5 ity, implement the adaptation plan of the depart-



6 ment or agency through existing and new plans,



7 policies, programs, activities, and actions.



8 (2) CONSIDERATION OF IMPACTS.—



9 (A) IN GENERAL.—To the maximum ex-



10 tent practicable and consistent with existing au-



11 thority, natural resource management decisions



12 made by the department or agency shall—



13 (i) consider the ongoing and expected



14 impacts of climate change, including,



15 where applicable, ocean acidification,



16 drought, flooding, nd wildfire on natural



17 resources; and



18 (ii) choose alternatives that will avoid



19 and minimize those impacts and promote



20 resilience.



21 (B) GUIDANCE.—The Council on Environ-



22 mental Quality shall provide guidance for Fed-



23 eral departments and agencies considering those



24 impacts and choosing alternatives that will 330



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1 avoid and minimize those impacts and promote



2 resilience.



3 (e) REVISION AND REVIEW.—Not less than every 5



4 years, each department or agency shall review and revise



5 the adaptation plan of the department or agency to incor-



6 porate the best available science, and other information,



7 regarding the ongoing and expected impacts of climate



8 change on natural resources.



9 SEC. 369. STATE NATURAL RESOURCES ADAPTATION



10 PLANS.



11 (a) REQUIREMENT.—In order to be eligible for funds



12 under section 370, not later than 1 year after the
develop-



13 ment of the Strategy, each State shall prepare a State
nat-



14 ural resources adaptation plan detailing current and fu-



15 ture efforts of the State to address the ongoing and ex-



16 pected impacts of climate change on natural resources and



17 coastal areas within the jurisdiction of the State.



18 (b) REVIEW OR APPROVAL.—



19 (1) IN GENERAL.—The Secretary of the Inte-



20 rior and, as applicable, the Secretary of Commerce



21 shall review each State adaptation plan, and approve



22 the plan if the plan—



23 (A) meets the requirements of subsection



24 (c); and



25 (B) is consistent with the Strategy. 331



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1 (2) APPROVAL OR DISAPPROVAL.—The Sec-



2 retary of the Interior and, as applicable, the Sec-



3 retary of Commerce shall approve or disapprove the



4 plan by written notice not later than 180 days after



5 the date of submission of the plan (or a revised



6 plan).



7 (3) RESUBMISSION.—Not later than 90 days



8 after the date of resubmission of an adaptation plan



9 that has been disapproved under paragraph (2), the



10 Secretary of the Interior and, as applicable, the Sec-



11 retary of Commerce, shall approve or disapprove the



12 plan by written notice.



13 (c) CONTENTS.—A State natural resources adapta-



14 tion plan shall—



15 (1) include strategies for addressing the ongo-



16 ing and expected impacts of climate change, includ-



17 ing, where applicable, ocean acidification, drought,



18 flooding, and wildfire on terrestrial, marine, estua-



19 rine, and freshwater fish, wildlife, plants, habitats,



20 ecosystems, wildlife health, and ecological processes



21 that—



22 (A) describe the ongoing and expected im-



23 pacts of climate change, including, where appli-



24 cable, ocean acidification, drought, flooding,



25 and wildfire on the diversity and health of fish, 332



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1 wildlife and plant populations, habitats, eco-



2 systems, and associated ecological processes;



3 (B) establish programs for monitoring the



4 ongoing and expected impacts of climate



5 change, including, where applicable, ocean acidi-



6 fication, drought, flooding, and wildfire on fish,



7 wildlife, and plant populations, habitats, eco-



8 systems, and associated ecological processes;



9 (C) describe and prioritize proposed con-



10 servation actions that increase the ability of



11 fish, wildlife, plant populations, habitats, eco-



12 systems, and associated ecological processes to



13 become more resilient, adapt to, and better



14 withstand those impacts;



15 (D) consider strategies that engage youth



16 and young adults (including youth and young



17 adults working in full-time or part-time youth



18 service or conservation corps programs) to pro-



19 vide the youth and young adults with opportu-



20 nities for meaningful conservation and commu-



21 nity service and to encourage opportunities for



22 employment in the private sector through part-



23 nerships with employers; 333



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1 (E) integrate protection and restoration of



2 resource resilience into agency decision making



3 and specific conservation actions;



4 (F) include a time frame for implementing



5 conservation actions for fish, wildlife, and plant



6 populations, habitats, ecosystems, and associ-



7 ated ecological processes;



8 (G) establish methods—



9 (i) for assessing the effectiveness of



10 strategies and conservation actions taken



11 to increase the ability of fish, wildlife, and



12 plant populations, habitats, ecosystems,



13 and associated ecological processes to be-



14 come more resilient, adapt to, and better



15 withstand the ongoing and expected im-



16 pacts of climate changes, including, where



17 applicable, ocean acidification, drought,



18 flooding, and wildfire; and



19 (ii) for updating strategies and ac-



20 tions to respond appropriately to new in-



21 formation or changing conditions;



22 (H) are incorporated into a revision of the



23 State wildlife action plan (also known as the



24 State comprehensive wildlife strategy) that has



25 been— 334



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1 (i) submitted to the United States



2 Fish and Wildlife Service; and



3 (ii) approved, or is pending approval,



4 by the United States Fish and Wildlife



5 Service; and



6 (I) are developed—



7 (i) with the participation of the State



8 fish and wildlife agency, the State coastal



9 agency, the State agency responsible for



10 administration of Land and Water Con-



11 servation Fund grants, the State Forest



12 Legacy program coordinator, and other



13 State agencies considered appropriate by



14 the Governor of the State;



15 (ii) in coordination with the Secretary



16 of the Interior, and where applicable, the



17 Secretary of Commerce; and



18 (iii) in coordination with other States



19 that share jurisdiction over natural re-



20 sources with the State; and



21 (2) in the case of a coastal State, include strat-



22 egies for addressing the ongoing and expected im-



23 pacts of climate change, including, where applicable,



24 ocean acidification, drought, flooding, and wildfire



25 on a coastal zone that— 335



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1 (A) identify natural resources likely to be



2 impacted by climate change, and describe the



3 impacts;



4 (B) identify and prioritize continuing re-



5 search and data collection needed to address



6 the impacts, including—



7 (i) acquisition of high-resolution



8 coastal elevation and nearshore bathymetry



9 data;



10 (ii) historic shoreline position maps,



11 erosion rates, and inventories of shoreline



12 features and structures;



13 (iii) measures and models of relative



14 rates of sea level rise or lake level changes,



15 including effects on flooding, storm surge,



16 inundation, and coastal geological proc-



17 esses;



18 (iv) measures and models of habitat



19 loss, including projected losses of coastal



20 wetlands and potentials for inland migra-



21 tion of natural shoreline habitats;



22 (v) measures and models of ocean and



23 coastal species and ecosystem migrations,



24 and changes in species population dynam-



25 ics; 336



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1 (vi) changes in storm frequency, in-



2 tensity, or rainfall patterns;



3 (vii) measures and models of saltwater



4 intrusion into coastal rivers and aquifers;



5 (viii) changes in chemical or physical



6 characteristics of marine and estuarine



7 systems, including the presence, extent,



8 and timing of hypoxic and anoxic condi-



9 tions;



10 (ix) measures and models of increased



11 harmful algal blooms; and



12 (x) measures and models of the



13 spread of invasive species;



14 (C) identify and prioritize adaptation strat-



15 egies to protect, restore, and conserve natural



16 resources to enable natural resources to become



17 more resilient, adapt to, and withstand the on-



18 going and expected impacts of climate change,



19 including, where applicable, ocean acidification,



20 drought, flooding, and wildfire, including—



21 (i) protection, maintenance, and res-



22 toration of ecologically important coastal



23 lands, coastal and ocean ecosystems, and



24 species biodiversity and the establishment 337



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1 of habitat buffer zones, migration cor-



2 ridors, and climate refugia; and



3 (ii) improved planning, siting policies,



4 hazard mitigation strategies, and State



5 property insurance programs;



6 (D) establish programs—



7 (i) for the long-term monitoring of the



8 ongoing and expected impacts of climate



9 change, including, where applicable, ocean



10 acidification, drought, flooding, and wild-



11 fire on the ocean and coastal zone; and



12 (ii) assess and adjust, when necessary,



13 the adaptive management strategies;



14 (E) establish performance measures that—



15 (i) assess the effectiveness of adapta-



16 tion strategies intended to improve resil-



17 ience and the ability of natural resources



18 to adapt to and withstand the ongoing and



19 expected impacts of climate change, includ-



20 ing, where applicable, ocean acidification,



21 drought, flooding, and wildfire;



22 (ii) assess the effectiveness of adapta-



23 tion strategies intended to minimize those



24 impacts on the coastal zone; and 338



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1 (iii) update the strategies to respond



2 to new information or changing conditions;



3 and



4 (F) are developed—



5 (i) with the participation of the State



6 coastal agency and other appropriate State



7 agencies; and



8 (ii) in coordination with the Secretary



9 of Commerce and other appropriate Fed-



10 eral agencies.



11 (d) PUBLIC INPUT.—In developing the adaptation



12 plan, a State shall provide for solicitation and
consider-



13 ation of public input and independent scientific input.



14 (e) COORDINATION WITH OTHER PLANS.—The State



15 adaptation plan shall review research and information



16 and, where appropriate, integrate the goals and measures



17 set forth in other natural resources conservation strate-



18 gies, including—



19 (1) the National Fish Habitat Action Plan;



20 (2) plans under the North American Wetlands



21 Conservation Act (16 U.S.C. 4401 et seq.);



22 (3) the Federal, State, and local partnership



23 known as ‘‘Partners in Flight’’; 339



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1 (4) federally approved coastal zone management



2 plans under the Coastal Zone Management Act of



3 1972 (16 U.S.C. 1451 et seq.);



4 (5) federally approved regional fishery manage-



5 ment plants and habitat conservation activities



6 under the Magnuson-Stevens Fishery Conservation



7 and Management Act (16 U.S.C. 1801 et seq.);



8 (6) the National Coral Reef Action Plan;



9 (7) recovery plans for threatened species and



10 endangered species under section 4(f) of the Endan-



11 gered Species Act of 1973 (16 U.S.C. 1533(f));



12 (8) habitat conservation plans under section 10



13 of that Act (16 U.S.C. 1539);



14 (9) other Federal, State, and tribal plans for



15 imperiled species;



16 (10) State or tribal hazard mitigation plans;



17 (11) State or tribal water management plans;



18 (12) State property insurance programs; and



19 (13) other State-based strategies that com-



20 prehensively implement adaptation activities to re-



21 mediate the ongoing and expected effects of climate



22 change, including, where applicable, ocean acidifica-



23 tion, drought, flooding, and wildfire, on terrestrial,



24 marine, and freshwater fish, wildlife, plants, and



25 other natural resources. 340



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1 (f) UPDATING.—Each State plan shall be updated at



2 least every 5 years.



3 (g) FUNDING.—



4 (1) IN GENERAL.—Funds allocated to States



5 under section 370 shall be used only for activities



6 consistent with a State natural resources adaptation



7 plan approved by the Secretary of the Interior and,



8 as appropriate, the Secretary of Commerce.



9 (2) FUNDING PRIOR TO THE APPROVAL OF A



10 STATE PLAN.—Until the earlier of the date that is



11 3 years after the date of enactment of this Act or



12 the date on which a State adaptation plan is ap-



13 proved, a State shall be eligible to receive funding



14 under section 370 for adaptation activities that



15 are—



16 (A) consistent with the comprehensive



17 wildlife strategy of the State and, where appro-



18 priate, other natural resources conservation



19 strategies; and



20 (B) in accordance with a work plan devel-



21 oped in coordination with—



22 (i) the Secretary of the Interior; and



23 (ii) the Secretary of Commerce.



24 (3) COASTAL STATE.—In developing a work



25 plan under paragraph (2)(B), a coastal State shall 341



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1 coordinate with the Secretary of Commerce only for



2 those portions of the strategy relating to activities



3 affecting the coastal zone.



4 (4) PENDING APPROVAL.—During the period



5 for which approval by the applicable Secretary is



6 pending, the State may continue to receive funds



7 under section 370 pursuant to the work plan de-



8 scribed in paragraph (2)(B).



9 SEC. 370. NATURAL RESOURCES CLIMATE CHANGE ADAP-



10 TATION ACCOUNT.



11 (a) DISTRIBUTION OF AMOUNTS.—



12 (1) STATES.—Of the amounts made available



13 for each fiscal year to carry out this subpart, 38.5



14 percent shall be provided to States to carry out nat-



15 ural resources adaptation activities in accordance



16 with adaptation plans approved under section 369,



17 and shall be distributed as follows:



18 (A) 32.5 percent shall be available to State



19 wildlife agencies in accordance with the appor-



20 tionment formula established under the second



21 subsection (c) (relating to the apportionment of



22 the Wildlife Conservation and Restoration Ac-



23 count) of section 4 of the Pittman-Robertson



24 Wildlife Restoration Act (16 U.S.C. 669c); and 342



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1 (B) 6 percent shall be available to State



2 coastal agencies pursuant to the formula estab-



3 lished by the Secretary of Commerce under sec-



4 tion 306(c) of the Coastal Management Act of



5 1972 (16 U.S.C. 1455(c)).



6 (2) NATURAL RESOURCE ADAPTATION.—Of the



7 amounts made available for each fiscal year to carry



8 out this subpart—



9 (A) 17 percent shall be allocated to the



10 Secretary of the Interior for use in funding—



11 (i) natural resources adaptation activi-



12 ties carried out—



13 (I) under endangered species, mi-



14 gratory species, and other fish and



15 wildlife programs administered by the



16 National Park Service, the United



17 States Fish and Wildlife Service, the



18 Bureau of Indian Affairs, and the Bu-



19 reau of Land Management;



20 (II) on wildlife refuges, National



21 Park Service land, and other public



22 land under the jurisdiction of the



23 United States Fish and Wildlife Serv-



24 ice, the Bureau of Land Management, 343



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1 the Bureau of Indian Affairs, or the



2 National Park Service; and



3 (III) within Federal water man-



4 aged by the Bureau of Reclamation



5 and the National Park Service; and



6 (ii) the implementation of the Na-



7 tional Fish and Wildlife Habitat and Cor-



8 ridors Information Program required by



9 section 371;



10 (B) 5 percent shall be allocated to the Sec-



11 retary of the Interior for natural resources ad-



12 aptation activities carried out under cooperative



13 grant programs, including—



14 (i) the cooperative endangered species



15 conservation fund authorized under section



16 6 of the Endangered Species Act of 1973



17 (16 U.S.C. 1535);



18 (ii) programs under the North Amer-



19 ican Wetlands Conservation Act (16



20 U.S.C. 4401 et seq.);



21 (iii) the Neotropical Migratory Bird



22 Conservation Fund established by section



23 9(a) of the Neotropical Migratory Bird



24 Conservation Act (16 U.S.C. 6108(a)); 344



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1 (iv) the Coastal Program of the



2 United States Fish and Wildlife Service;



3 (v) the National Fish Habitat Action



4 Plan;



5 (vi) the Partners for Fish and Wildlife



6 Program;



7 (vii) the Landowner Incentive Pro-



8 gram;



9 (viii) the Wildlife Without Borders



10 Program of the United States Fish and



11 Wildlife Service; and



12 (ix) the Migratory Species Program



13 and Park Flight Migratory Bird Program



14 of the National Park Service; and



15 (C) 3 percent shall be allocated to the Sec-



16 retary of the Interior to provide financial assist-



17 ance to Indian tribes to carry out natural re-



18 sources adaptation activities through the Tribal



19 Wildlife Grants Program of the United States



20 Fish and Wildlife Service.



21 (3) LAND AND WATER CONSERVATION.—



22 (A) DEPOSITS.—



23 (i) IN GENERAL.—Of the amounts



24 made available for each fiscal year to carry



25 out this subpart, 12 percent shall be de-345



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1 posited in the Land and Water Conserva-



2 tion Fund established under section 2 of



3 the Land and Water Conservation Fund



4 Act of 1965 (16 U.S.C. 460l–5).



5 (ii) USE OF DEPOSITS.—Deposits in



6 the Land and Water Conservation Fund



7 under this paragraph shall—



8 (I) be supplemental to authoriza-



9 tions provided under section 3 of the



10 Land and Water Conservation Fund



11 Act of 1965 (16 U.S.C. 460l–6),



12 which shall remain available for non-



13 adaptation needs; and



14 (II) be available to carry out this



15 subpart without further appropriation



16 or fiscal year limitation.



17 (B) DISTRIBUTION OF AMOUNTS.—Of the



18 amounts deposited under this paragraph in the



19 Land and Water Conservation Fund—



20 (i) for the purposes of carrying out



21 the natural resources adaptation activities



22 through the acquisition of land and inter-



23 ests in land under section 6 of the Land



24 and Water Conservation Fund Act of 1965



(16 U.S.C. 460l–8),



1



25 ⁄6 shall be allocated 346



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1 to the Secretary of the Interior and made



2 available on a competitive basis—



3 (I) to States, in accordance with



4 the natural resources adaptation plans



5 of States, and to Indian tribes;



6 (II) notwithstanding section 5 of



7 that Act (16 U.S.C. 460l–7); and



8 (III) in addition to any funds



9 provided pursuant to annual appro-



10 priations Acts, the Energy Policy Act



11 of 2005 (42 U.S.C. 15801 et seq.), or



12 any other authorization for non-



13 adaptation needs;



(ii)



1



14 ⁄3 shall be allocated to the Sec-



15 retary of the Interior to carry out natural



16 resources adaptation activities through the



17 acquisition of lands and interests in land



18 under section 7 of the Land and Water



19 Conservation Fund Act of 1965 (16 U.S.C.



20 460l–9);



(iii)



1



21 ⁄6 shall be allocated to the Sec-



22 retary of Agriculture and made available to



23 the States and Indian tribes to carry out



24 natural resources adaptation activities



25 through the acquisition of land and inter-347



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1 ests in land under section 7 of the Cooper-



2 ative Forestry Assistance Act of 1978 (16



3 U.S.C. 2103c); and



(iv)



1



4 ⁄3 shall be allocated to the Sec-



5 retary of Agriculture to carry out natural



6 resources adaptation activities through the



7 acquisition of land and interests in land



8 under section 7 of the Land and Water



9 Conservation Fund Act of 1965 (16 U.S.C.



10 460l–9).



11 (C) EXPENDITURE OF FUNDS.—In allo-



12 cating funds under subparagraph (B), the Sec-



13 retary of the Interior and the Secretary of Agri-



14 culture shall take into consideration factors in-



15 cluding—



16 (i) the availability of non-Federal con-



17 tributions from State, local, or private



18 sources;



19 (ii) opportunities to protect fish and



20 wildlife corridors or otherwise to link or



21 consolidate fragmented habitats;



22 (iii) opportunities to reduce the risk of



23 catastrophic wildfires, drought, extreme



24 flooding, or other climate-related events 348



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1 that are harmful to fish and wildlife and



2 people; and



3 (iv) the potential for conservation of



4 species or habitat types at serious risk due



5 to climate change, including, where appli-



6 cable, ocean acidification, drought, flood-



7 ing, and wildfire, or other stressors.



8 (4) NATIONAL FOREST AND GRASSLAND ADAP-



9 TATION.—Of the amounts made available for each



10 fiscal year to carry out this subpart, 5 percent shall



11 be allocated to the Forest Service, through the Sec-



12 retary of Agriculture—



13 (A) to fund natural resources adaptation



14 activities carried out in national forests and na-



15 tional grasslands under the jurisdiction of the



16 Forest Service; and



17 (B) to carry out natural resource adapta-



18 tion activities on State and private forest land



19 carried out under the Cooperative Forestry As-



20 sistance Act of 1978 (16 U.S.C. 2101 et seq.).



21 (5) COASTAL AND MARINE SYSTEM ADAPTA-



22 TION.—Of the amounts made available for each fis-



23 cal year to carry out this subpart, 7 percent shall be



24 allocated to the Secretary of Commerce to fund nat-



25 ural resources adaptation activities that protect, 349



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1 maintain, and restore coastal, estuarine, and marine



2 resources, habitats, and ecosystems, including such



3 activities carried out under—



4 (A) the coastal and estuarine land con-



5 servation program administered by the National



6 Oceanic and Atmospheric Administration;



7 (B) the community-based restoration pro-



8 gram for fishery and coastal habitats estab-



9 lished under section 117 of the Magnuson-Ste-



10 vens Fishery Conservation and Management



11 Reauthorization Act of 2006 (16 U.S.C.



12 1891a);



13 (C) the Coastal Zone Management Act of



14 1972 (16 U.S.C. 1451 et seq.) that are specifi-



15 cally designed to strengthen the ability of coast-



16 al, estuarine, and marine resources, habitats,



17 and ecosystems to adapt to and withstand the



18 ongoing and expected impacts of climate



19 change, including, where applicable, ocean acidi-



20 fication, drought, flooding, and wildfire;



21 (D) the Open Rivers Initiative;



22 (E) the Magnuson-Stevens Fishery Con-



23 servation and Management Act (16 U.S.C.



24 1801 et seq.); 350



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1 (F) the Marine Mammal Protection Act of



2 1972 (16 U.S.C. 1361 et seq.);



3 (G) the Endangered Species Act of 1973



4 (16 U.S.C. 1531 et seq.);



5 (H) the Marine Protection, Research, and



6 Sanctuaries Act of 1972 (33 U.S.C. 1401 et



7 seq.);



8 (I) the Coral Reef Conservation Act of



9 2000 (16 U.S.C. 6401 et seq.); and



10 (J) the Estuary Restoration Act of 2000



11 (33 U.S.C. 2901 et seq.).



12 (6) ESTUARINE AND FRESHWATER ECOSYSTEM



13 ADAPTATION.—Of the amounts made available for



14 each fiscal year to carry out this subpart, 7.5 per-



15 cent shall be allocated to the Administrator of the



16 Environmental Protection Agency and 5 percent



17 shall be available to the Secretary of the Army for



18 use by the Corps of Engineers for use in natural re-



19 sources adaptation activities restoring and pro-



20 tecting—



21 (A) large-scale freshwater aquatic eco-



22 systems, such as the Everglades, the Great



23 Lakes, Flathead Lake, the Missouri River, the



24 Mississippi River, the Colorado River, the Sac-



25 ramento-San Joaquin Rivers, the Ohio River, 351



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1 the Columbia-Snake River System, the Apa-



2 lachicola, Chattahoochee, and Flint River Sys-



3 tem, the Connecticut River, and the Yellowstone



4 River;



5 (B) large-scale estuarine ecosystems, such



6 as Chesapeake Bay, Long Island Sound, Puget



7 Sound, the Mississippi River Delta, the San



8 Francisco Bay Delta, Narragansett Bay, and



9 Albemarle-Pamlico Sound;



10 (C) freshwater and estuarine ecosystems,



11 watersheds, and basins identified and



12 prioritized by the Administrator of the Environ-



13 mental Protection Agency or the Corps of Engi-



14 neers, working in cooperation with other Fed-



15 eral agencies, States, tribal governments, local



16 governments, scientists, and other conservation



17 partners; and



18 (D)(i) habitats and ecosystems through es-



19 tuary habitat restoration projects authorized by



20 the Estuary Restoration Act of 2000 (33



21 U.S.C. 2901 et seq.);



22 (ii) project modifications for improvement



23 of the environment;



24 (iii) aquatic restoration and protection



25 projects authorized by section 206 of the Water 352



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1 Resources Development Act of 1996 (33 U.S.C.



2 2330); and



3 (iv) other appropriate programs and activi-



4 ties.



5 (b) USE OF FUNDS BY FEDERAL DEPARTMENTS AND



6 AGENCIES.—Funds allocated to Federal departments and



7 agencies under this section shall only be used for natural



8 resources adaptation activities consistent with an adapta-



9 tion plan approved under section 368.



10 (c) STATE COST-SHARING.—Notwithstanding any



11 other provision of law, a State that receives a grant
under



12 this section shall use funds from non-Federal sources to



13 pay 10 percent of the costs of each activity carried out



14 under the grant.



15 SEC. 371. NATIONAL FISH AND WILDLIFE HABITAT AND



16 CORRIDORS INFORMATION PROGRAM.



17 (a) DEFINITIONS.—In this section:



18 (1) GEOSPATIAL INTEROPERABILITY FRAME-



19 WORK.—The term ‘‘Geospatial Interoperability



20 Framework’’ means the strategy used by the Na-



21 tional Biological Information Infrastructure (based



22 on accepted standards, specifications, and protocols



23 adopted through the International Standards Orga-



24 nization, the Open Geospatial Consortium, and the



25 Federal Geographic Data Committee) to manage, ar-353



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1 chive, integrate, analyze, and make geospatial and



2 biological data and metadata accessible.



3 (2) PROGRAM.—The term ‘‘Program’’ means



4 the National Fish and Wildlife Habitat and Cor-



5 ridors Information Program established under sub-



6 section (b).



7 (3) SECRETARY.—The term ‘‘Secretary’’ means



8 the Secretary of the Interior.



9 (4) SYSTEM.—The term ‘‘System’’ means the



10 Habitat and Corridors Information System estab-



11 lished under subsection (d)(1).



12 (b) ESTABLISHMENT.—Not later than 180 days after



13 the date of enactment of this Act, the Secretary, in co-



14 operation with the States and Indian tribes, shall
establish



15 a National Fish and Wildlife Habitat and Corridors Infor-



16 mation Program.



17 (c) PURPOSE.—The purposes of the Program are—



18 (1) to support States and Indian tribes in devel-



19 oping geographical information system databases of



20 fish and wildlife habitats and corridors that—



21 (A) inform planning and development deci-



22 sions within each State;



23 (B) enable each State to model climate im-



24 pacts and adaptation; and 354



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1 (C) provide geographically specific en-



2 hancements of State wildlife action plans;



3 (2) to ensure the collaborative development of a



4 comprehensive national geographic information sys-



5 tem database of maps, models, data, surveys, infor-



6 mational products, and other geospatial information



7 regarding fish and wildlife habitat and corridors



8 that—



9 (A) is based on consistent protocols for



10 sampling and mapping across landscapes;



11 (B) takes into account regional differences;



12 and



13 (C) uses—



14 (i) existing and planned State- and



15 tribal-based geographical information sys-



16 tem databases; and



17 (ii) existing databases, analytical



18 tools, metadata activities, and other infor-



19 mation products available through the Na-



20 tional Biological Information Infrastruc-



21 ture maintained by the Secretary and non-



22 governmental organizations; and



23 (3) to facilitate the use of those databases by



24 Federal, State, local, and tribal decisionmakers to



25 incorporate qualitative information on fish and wild-355



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1 life habitats and corridors at the earliest practicable



2 stage for use in—



3 (A) prioritizing and targeting natural re-



4 sources adaptation strategies and activities;



5 (B) avoiding, minimizing, and mitigating



6 the impacts on fish and wildlife habitat and cor-



7 ridors when locating energy development, water,



8 transmission, transportation, and other land



9 use projects;



10 (C) assessing the impacts of existing devel-



11 opment on habitats and corridors; and



12 (D) developing management strategies that



13 enhance the ability of fish, wildlife, and plant



14 species to migrate or respond to shifting habi-



15 tats within existing habitats and corridors.



16 (d) HABITAT AND CORRIDORS INFORMATION SYS-



17 TEM.—



18 (1) IN GENERAL.—The Secretary, in coopera-



19 tion with States and Indian tribes, shall establish a



20 Habitat and Corridors Information System.



21 (2) CONTENTS.—The System shall—



22 (A) include maps, data, and descriptions of



23 fish and wildlife habitat and corridors that—



24 (i) have been developed by Federal



25 agencies, State wildlife agencies, and nat-356



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1 ural heritage programs, Indian tribes, local



2 governments, nongovernmental organiza-



3 tions, and industry; and



4 (ii) meet accepted geospatial inter-



5 operability framework data and metadata



6 protocols and standards;



7 (B) include maps and descriptions of pro-



8 jected shifts in habitats and corridors of fish



9 and wildlife species in response to climate



10 change;



11 (C) ensure data quality;



12 (D) at scales useful to decisionmakers,



13 make data, models, and analyses included in



14 the System available—



15 (i) to prioritize and target natural re-



16 sources adaptation strategies and activi-



17 ties;



18 (ii) to assess the impacts of existing



19 development on habitats and corridors;



20 (iii) to assess the impacts of proposed



21 energy development, water, transmission,



22 transportation, and other land use projects



23 and to avoid, minimize, or mitigate those



24 impacts on habitats and corridors; and 357



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1 (iv) to develop management strategies



2 that enhance the ability of fish, wildlife,



3 and plant species to migrate or respond to



4 shifting habitats within existing habitats



5 and corridors;



6 (E) update maps and other information as



7 landscapes, habitats, corridors, and wildlife pop-



8 ulations change, or as new information becomes



9 available;



10 (F) encourage development of collaborative



11 plans by Federal and State agencies and Indian



12 tribes that monitor and evaluate the ability of



13 the System to meet the needs of decision-



14 makers;



15 (G) identify gaps in habitat and corridor



16 information, mapping, and research needed to



17 fully assess current data and metadata;



18 (H) prioritize research and future data col-



19 lection activities for use in updating the System



20 and provide support for those activities;



21 (I) include mechanisms to support collabo-



22 rative research, mapping, and planning of habi-



23 tats and corridors by Federal and State agen-



24 cies, Indian tribes, and other interested stake-



25 holders; 358



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1 (J) incorporate biological and geospatial



2 data on species and corridors found in energy



3 development and transmission plans, including



4 renewable energy initiatives, transportation, and



5 other land use plans;



6 (K) identify, prioritize, and describe key



7 parcels of non-Federal land that—



8 (i) are located within units of the Na-



9 tional Park System, National Wildlife Ref-



10 uge System, National Forest System, or



11 National Grassland System; and



12 (ii) are critical to maintenance of



13 wildlife habitat and migration corridors;



14 and



15 (L) be based on the best scientific informa-



16 tion available.



17 (e) FINANCIAL AND OTHER SUPPORT.—The Sec-



18 retary may provide support to the States and Indian



19 tribes, including financial and technical assistance, for
ac-



20 tivities that support the development and implementation



21 of the System.



22 (f) COORDINATION.—In cooperation with States and



23 Indian tribes, the Secretary shall recommend how the in-



24 formation in the System may be incorporated into relevant
359



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1 State and Federal plans that affect fish and wildlife, in-



2 cluding—



3 (1) land management plans;



4 (2) the State Comprehensive Wildlife Conserva-



5 tion Strategies; and



6 (3) appropriate tribal conservation plans.



7 (g) PURPOSE OF INCORPORATION.—The Secretary



8 shall make the recommendations required by subsection



9 (f) to ensure that relevant State and Federal plans that



10 affect fish and wildlife—



11 (1) prevent unnecessary habitat fragmentation



12 and disruption of corridors;



13 (2) promote the landscape connectivity nec-



14 essary to allow wildlife to move as necessary to meet



15 biological needs, adjust to shifts in habitat, and



16 adapt to climate change; and



17 (3) minimize the impacts of energy, develop-



18 ment, water, transportation, and transmission



19 projects and other activities expected to impact habi-



20 tat and corridors.



21 SEC. 372. ADDITIONAL PROVISIONS REGARDING INDIAN



22 TRIBES.



23 (a) FEDERAL TRUST RESPONSIBILITY.—Nothing in



24 this subpart amends, alters, or gives priority over the
Fed-



25 eral trust responsibility to any Indian tribe. 360



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1 (b) EXEMPTION FROM FOIA.—If a Federal depart-



2 ment or agency receives any information relating to sacred



3 sites or cultural activities identified by an Indian tribe
as



4 confidential, such information shall be exempt from
disclo-



5 sure under section 552 of title 5, United States Code



6 (commonly referred to as the Freedom of Information



7 Act).



8 (c) APPLICATION OF OTHER LAW.—The Secretary of



9 the Interior may apply the provisions of the Indian Self-



10 Determination and Education Assistance Act (25 U.S.C.



11 450 et seq.) in the implementation of this subpart.



12 Subpart D—Additional Climate Change Adaptation



13 Programs



14 SEC. 381. WATER SYSTEM MITIGATION AND ADAPTION



15 PARTNERSHIPS.



16 (a) DEFINITIONS.—In this section:



17 (1) OWNER OR OPERATOR.—



18 (A) IN GENERAL.—The term ‘‘owner or



19 operator’’ means a person (including a regional,



20 local, municipal, or private entity) that owns or



21 operates a water system.



22 (B) INCLUSION.—The term ‘‘owner or op-



23 erator’’ includes— 361



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1 (i) a non-Federal entity that has oper-



2 ational responsibilities for a federally or



3 State owned water system; and



4 (ii) an entity formed pursuant to any



5 State’s joint exercise of powers statutes



6 that includes one or more of the entities in



7 paragraph (A).



8 (2) WATER SYSTEM.—The term ‘‘water sys-



9 tem’’ means—



10 (A) a community water system (as defined



11 in section 1401 of the Safe Drinking Water Act



12 (42 U.S.C. 300f));



13 (B) a treatment works (as defined in sec-



14 tion 212 of the Federal Water Pollution Control



15 Act (33 U.S.C. 1292)), including a municipal



16 separate storm sewer system;



17 (C) a decentralized wastewater treatment



18 system for domestic sewage;



19 (D) a groundwater storage and replenish-



20 ment system; or



21 (E) a system for transport and delivery of



22 water for irrigation or conservation.



23 (b) ESTABLISHMENT.—The Administrator shall es-



24 tablish a water system mitigation and adaptation
partner-362



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1 ship program to provide funds to States for water system



2 adaptation projects.



3 (c) GRANTS.—Beginning in fiscal year 2010, each



4 State receiving funds pursuant to this section shall make



5 grants to owners or operators of water systems to address



6 any ongoing or forecasted (based on the best available re-



7 search and data) climate-related impact on the water qual-



8 ity, water supply or reliability of a region of the United



9 States, for the purposes of mitigating or adapting to the



10 impacts of climate change.



11 (d) ELIGIBLE USES.—The funds made available to



12 each State pursuant to this section shall be used exclu-



13 sively to assist in the planning, design, construction,
im-



14 plementation, or operation or maintenance of any program



15 or project to respond or increase the resilience of a
water



16 system to climate change by—



17 (1) conserving water or enhancing water use ef-



18 ficiency, including through the use of water metering



19 and electronic sensing and control systems to meas-



20 ure the effectiveness of a water efficiency program;



21 (2) modifying or relocating existing water sys-



22 tem infrastructure made or projected to be signifi-



23 cantly impaired by climate change impacts;



24 (3) preserving or improving water quality, in-



25 cluding through measures to manage, reduce, treat, 363



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1 or reuse municipal stormwater, wastewater, or



2 drinking water;



3 (4) investigating, designing, or constructing



4 groundwater remediation, recycled water, or desali-



5 nation facilities or systems to serve existing commu-



6 nities;



7 (5) enhancing water management by increasing



8 watershed preservation and protection, such as



9 through the use of natural or engineered green in-



10 frastructure in the management, conveyance, or



11 treatment of water, wastewater, or stormwater;



12 (6) enhancing energy efficiency or the use and



13 generation of renewable energy in the management,



14 conveyance, or treatment of water, wastewater, or



15 stormwater;



16 (7) supporting the adoption and use of ad-



17 vanced water treatment, water supply management



18 (such as reservoir reoperation and water banking),



19 or water demand management technologies, projects,



20 or processes (such as water reuse and recycling,



21 adaptive conservation pricing, and groundwater



22 banking) that maintain or increase water supply or



23 improve water quality;



24 (8) modifying or replacing existing systems or



25 constructing new systems for existing communities 364



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1 or land currently in agricultural production to im-



2 prove water supply, reliability, storage, or convey-



3 ance in a manner that—



4 (A) promotes conservation or improves the



5 efficiency of utilization of available water sup-



6 plies; and



7 (B) does not further exacerbate stresses on



8 ecosystems or cause redirected impacts by de-



9 grading water quality or increasing net green-



10 house gas emissions;



11 (9) supporting practices and projects, such as



12 improved irrigation systems, water banking and



13 other forms of water transactions, groundwater re-



14 charge, stormwater capture, groundwater conjunc-



15 tive use, and reuse or recycling of drainage water,



16 to improve water quality or promote more efficient



17 water use on land currently in agricultural produc-



18 tion; or



19 (10) conducting and completing studies or as-



20 sessments to project how climate change may impact



21 the future operations and sustainability of water sys-



22 tems.



23 (e) APPLICATION.—To be eligible to receive a grant



24 from the State under this section, the owner or operator
365



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1 of a water system shall submit to the State an application



2 that—



3 (1) includes a proposal of the program, strat-



4 egy, or infrastructure improvement to be planned,



5 designed, constructed, implemented, or maintained



6 by the water system;



7 (2) cites the best available research or data that



8 demonstrate—



9 (A) the risk to the water resources or in-



10 frastructure of the water system as a result of



11 ongoing or forecasted changes to the



12 hydrological system brought about by factors



13 arising from climate change, including rising



14 sea levels and changes in precipitation levels;



15 and



16 (B) how the proposed program, strategy,



17 or infrastructure improvement would perform



18 under the anticipated climate conditions; and



19 (3) explains how the proposed program, strat-



20 egy, or infrastructure improvement is expected to



21 enhance the resiliency of the water system, including



22 source water protection for community water sys-



23 tems, to these risks or reduce the direct or indirect



24 greenhouse gas emissions of the water system.



25 (f) COMPETITIVE PROCESS.— 366



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1 (1) IN GENERAL.—Each calendar year, each



2 State shall conduct a competitive process to select



3 and fund applications under this section.



4 (2) PRIORITY REQUIREMENTS AND



5 WEIGHTING.—In carrying out the process, the



6 States shall—



7 (A) prioritize funding of applications that



8 are submitted by the owners or operators of



9 water systems that are, based on the best avail-



10 able research and data, at the greatest and



11 most immediate risk of facing significant cli-



12 mate-related negative impacts on water quality



13 or quantity; and



14 (B) in selecting among the priority applica-



15 tions determined under subparagraph (A), en-



16 sure that, to the maximum extent practicable,



17 the final list of applications funded for each



18 year includes a substantial number meeting one



19 or more of each of the following goals—



20 (i) promote more efficient water use,



21 water conservation, water reuse, or recy-



22 cling;



23 (ii) use decentralized, low-impact de-



24 velopment technologies and nonstructural



25 approaches, including practices that use, 367



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1 enhance, or mimic the natural hydrological



2 cycle or protect natural flows;



3 (iii) reduce stormwater runoff by pro-



4 tecting or enhancing natural ecosystem



5 functions;



6 (iv) modify, upgrade, enhance, or re-



7 place existing water system infrastructure



8 in response to ongoing or forecasted cli-



9 mate-related impacts;



10 (v) promote the sustainability and re-



11 liability of water supplies used for agricul-



12 tural purposes;



13 (vi) improve water quality or quantity



14 for agricultural and municipal uses, includ-



15 ing through salinity reduction; and



16 (vii) provide multiple benefits, includ-



17 ing to water supply enhancement or de-



18 mand reduction, water quality protection



19 or improvement, increased flood protection,



20 and ecosystem protection or improvement;



21 and



22 (C) provide for solicitation and consider-



23 ation of public input in the development of cri-



24 teria used in evaluating applications.



25 (g) COST-SHARING.— 368



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1 (1) FEDERAL SHARE.—The share of the cost of



2 any program, strategy, or infrastructure improve-



3 ment that is the subject of a grant awarded by a



4 State to the owner or operator of a water system



5 under subsection (c) paid through funds distributed



6 under this section shall not exceed 50 percent of the



7 cost of the program, strategy, and infrastructure im-



8 provement.



9 (2) CALCULATION OF NON-FEDERAL SHARE.—



10 In calculating the non-Federal share of the cost of



11 a program, strategy, or infrastructure improvement



12 proposed by a water system through an application



13 submitted by the water system under subsection (e),



14 the State shall—



15 (A) include the value of any in-kind serv-



16 ices that are integral to the completion of the



17 program, strategy, or infrastructure improve-



18 ment, including reasonable administrative and



19 overhead costs; and



20 (B) not include any other amount that the



21 water system receives from a Federal agency.



22 (h) LABOR STANDARDS.—



23 (1) IN GENERAL.—Other than with respect to



24 employees of State and local agencies, or other pub-



25 lic entities, all laborers and mechanics employed on 369



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1 infrastructure improvements funded directly by or



2 assisted in whole or in part by this section shall be



3 paid wages at rates not less than those prevailing for



4 the same type of work on similar construction in the



5 immediate locality, as determined by the Secretary



6 of Labor in accordance with subchapter IV of chap-



7 ter 31 of part A of subtitle II of title 40, United



8 States Code.



9 (2) AUTHORITY AND FUNCTIONS.—With re-



10 spect to the labor standards in this subsection, the



11 Secretary of Labor shall have the authority and



12 functions set forth in Reorganization Plan Num-



13 bered 14 of 1950 (64 Stat. 1267; 5 U.S.C. App.)



14 and section 3145 of title 40, United States Code.



15 SEC. 382. FLOOD CONTROL, PROTECTION, PREVENTION,



16 AND RESPONSE.



17 (a) ESTABLISHMENT.—The Administrator shall es-



18 tablish a Flood Control, Protection, Prevention and Re-



19 sponse Program to provide funds to States for flood con-



20 trol, protection, prevention and response projects.



21 (b) ELIGIBLE USES.—



22 (1) IN GENERAL.—States receiving funding



23 pursuant to this section may use such funding on



24 flood control, protection, prevention and response



25 programs and projects addressing the projected im-370



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1 pacts of climate change in accordance with this sec-



2 tion.



3 (2) OBJECTIVES.—Such projects and activities



4 shall seek to mitigate or adapt to the destructive im-



5 pacts of climate related increases in the duration,



6 frequency, or magnitude of rainfall or runoff, includ-



7 ing snowmelt runoff, as well as hurricanes, including



8 projects and programs that—



9 (A) reduce flood damage, risk, and vulner-



10 ability;



11 (B) identify, maintain and restore eco-



12 systems and natural barriers integral to flood



13 control, protection, prevention and response;



14 (C) update the available data, technologies,



15 and scientific knowledge used in estimating,



16 identifying and mitigating flood hazards;



17 (D) highlight, update and remediate



18 vulnerabilities in emergency response;



19 (E) incorporate risk analysis and a risk-re-



20 duction approach to flood-related investments;



21 (F) incorporate and identify changes in



22 risk due to processes such as land loss, subsid-



23 ence, sea-level rise, reduced natural buffers,



24 urban development and infrastructure aging;



25 and 371



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1 (G) identify and incorporate innovative ap-



2 proaches to land use management, water re-



3 source planning, and ecosystem restoration.



4 (3) PRIORITY.—Priority in projects to reduce



5 flood events shall be given to those projects that di-



6 rectly assist local governments and communities in



7 flood control, protection, prevention and response ac-



8 tivities.



9 SEC. 383. WILDFIRE.



10 (a) FINDINGS.—Congress finds that—



11 (1) since 1980, wildfires in the United States



12 have burned almost twice as many acres per year on



13 average than the average burned acreage during the



14 period beginning on January 1, 1920, and ending on



15 December 31, 1979;



16 (2) the wildfire season in the western United



17 States has increased by an average of 78 days dur-



18 ing the 30-year period preceding the date of enact-



19 ment of this Act;



20 (3) researchers predict that the area subject to



21 wildfire damage will increase during the 21st cen-



22 tury by up to 118 percent as a result of climate



23 change; 372



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1 (4) of the annual budget of the Forest Service,



2 the Forest Service used for wildfire suppression ac-



3 tivities—



4 (A) 13 percent in 1991; and



5 (B) 45 percent in 2007; and



6 (5) 1 percent of the largest escaped fires—



7 (A) burn 95 percent of all burned acres;



8 and



9 (B) consume 85 percent of all wildfire



10 fighting costs.



11 (b) PURPOSE.—The purpose of this section is to au-



12 thorize a program to reduce the risk of wildfires in
fire-



13 ready communities.



14 (c) DEFINITIONS.—In this section:



15 (1) FIRE-READY COMMUNITY.—The term ‘‘fire-



16 ready community’’ means a community that—



17 (A) is located within a priority area identi-



18 fied pursuant to subsection (d);



19 (B) has a cooperative fire agreement that



20 articulates the roles and responsibilities for



21 Federal, State and local government entities in



22 local wildfire suppression and protection;



23 (C) has local codes that require fire-resist-



24 ant home design and building materials; 373



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1 (D) has a community wildfire protection



2 plan (as defined in section 101 of the Healthy



3 Forests Restoration Act of 2003 (16 U.S.C.



4 6502)); and



5 (E) is engaged in a successful collaborative



6 process that includes multiple interested per-



7 sons representing diverse interests and is trans-



8 parent and nonexclusive, such as a resource ad-



9 visory committee established under section 205



10 of the Secure Rural Schools and Community



11 Self-Determination Act of 2000 (Public Law



12 106-393; 16 U.S.C. 500 note).



13 (2) SECRETARIES.—The term ‘‘Secretaries’’



14 means the Secretary of Agriculture and the Sec-



15 retary of the Interior.



16 (d) FIRE RISK MAPPING.—As soon as is practicable



17 after the date of the enactment of this Act, the
Secretaries



18 shall develop regional maps of communities most at risk



19 of wildfire and in need of hazardous fuel treatment and



20 maintenance. The maps shall identify priority areas for



21 hazardous fuels reduction projects, including—



22 (1) at-risk communities in fire-prone areas of



23 the wildland-urban interface (as defined in section



24 101 of the Healthy Forests Restoration Act of 2003



25 (16 U.S.C. 6502)); 374



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1 (2) watersheds and municipal drinking water



2 sources;



3 (3) emergency evacuation corridors;



4 (4) electricity transmission corridors;



5 (5) low-capacity or low-income communities;



6 and



7 (6) communities in fire-prone areas due to the



8 impact of pest infestation on forest resources.



9 (e) LOCAL WILDLAND FIREFIGHTING CAPABILITY



10 GRANTS.—



11 (1) GRANTS AVAILABLE.—The Secretaries may



12 provide cost-share grants to fire-ready communities



13 to assist such communities in carrying out activities



14 authorized by paragraph (2).



15 (2) ELIGIBLE ACTIVITIES.—Grant funds may



16 be used for the following:



17 (A) Education programs to raise aware-



18 ness of homeowners and citizens about wildland



19 fire protection practices, including FireWise or



20 similar programs.



21 (B) Training programs for local fire-



22 fighters on wildland firefighting techniques and



23 approaches.



24 (C) Equipment acquisition to facilitate



25 wildland fire preparedness. 375



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1 (D) Implementation of a community wild-



2 fire protection plan.



3 (E) Forest restoration that accomplishes



4 fuels reduction



5 (f) WILDLAND FIRE COST-SHARE AGREEMENTS.—In



6 developing any wildland fire cost-share agreement with a



7 State Forester or equivalent official, the Secretaries
shall,



8 to the maximum extent practicable, encourage the State



9 and local communities involved to become fire-ready com-



10 munities.



11 SEC. 384. COASTAL AND GREAT LAKES STATE ADAPTATION



12 PROGRAM.



13 (a) FINDINGS.—According to the National Ocean Ec-



14 onomics Program, coastal and Great Lakes States account



15 for 81.4 percent of the population of the United States



16 and generate 83 percent of the economic output of the



17 United States.



18 (b) DEFINITIONS.—In this section:



19 (1) COASTAL STATE.—The term ‘‘coastal



20 State’’ has the meaning given the term ‘‘coastal



21 state’’ in section 304 of the Coastal Zone Manage-



22 ment Act of 1972 (16 U.S.C. 1453).



23 (2) COASTAL WATERSHED.—The term ‘‘coastal



24 watershed’’ means a geographical area drained into



25 or contributing water to an estuarine area, an ocean, 376



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1 or a Great Lake, all or a portion of which is within



2 the coastal zone (as defined in section 304 of the



3 Coastal Zone Management Act of 1972 (16 U.S.C.



4 1453)).



5 (3) SHORELINE MILES.—The term ‘‘shoreline



6 miles’’, with respect to a coastal State, means the



7 mileage of tidal shoreline or Great Lake shoreline of



8 the coastal State, based on the most recently avail-



9 able data from or accepted by the National Ocean



10 Service of the National Oceanic and Atmospheric



11 Administration.



12 (c) DISTRIBUTION.—



13 (1) IN GENERAL.—The Administrator shall dis-



14 tribute, in accordance with this section, funding for



15 coastal State economic protection under subsection.



16 (2) ALLOCATION.—The funding available for al-



17 location under subsection (b) for a calendar year



18 shall be distributed among coastal States, as follows:



19 (A) 25 percent based on the proportion



20 that—



21 (i) the number of shoreline miles of a



22 coastal State; bears to



23 (ii) the total number of shoreline



24 miles of all coastal States. 377



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1 (B) 25 percent based on the proportion



2 that—



3 (i) the population of a coastal State;



4 bears to



5 (ii) the total population of all coastal



6 States.



7 (C) 50 percent divided equally among all



8 coastal States.



9 (d) USE OF FUNDING.—



10 (1) IN GENERAL.—During any calendar year, a



11 coastal State receiving funding under this section



12 may use the funding only for projects and activities



13 to plan for and address the impacts of climate



14 change in the coastal watershed, including—



15 (A) to address the impacts of climate



16 change with respect to—



17 (i) accelerated sea level rise and lake



18 level changes;



19 (ii) shoreline erosion;



20 (iii) increased storm frequency or in-



21 tensity;



22 (iv) changes in rainfall or other pre-



23 cipitation; and



24 (v) related flooding; 378



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1 (B) to identify and develop plans to pro-



2 tect, or, as necessary or applicable, to relocate



3 public facilities and infrastructure, coastal re-



4 sources of national significance, public energy



5 facilities, or other public water uses located in



6 the coastal watershed that are affected by cli-



7 mate change, including strategies that use nat-



8 ural resources, such as natural buffer zones,



9 natural shorelines, and habitat protection or



10 restoration;



11 (C) to research and collect data using, or



12 on matters such as—



13 (i) historical shoreline position maps;



14 (ii) historical shoreline erosion rates;



15 (iii) inventories of shoreline features



16 and conditions;



17 (iv) acquisition of high-resolution to-



18 pography and bathymetry;



19 (v) sea level rise inundation models;



20 (vi) storm surge sea level rise linked



21 inundation models;



22 (vii) shoreline change modeling based



23 on sea level rise projections;



24 (viii) sea level rise vulnerability anal-



25 yses and socioeconomic studies; and 379



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1 (ix) environmental and habitat



2 changes associated with sea level rise; and



3 (D) to respond to—



4 (i) changes in chemical characteristics



5 (including ocean acidification) and physical



6 characteristics (including thermal strati-



7 fication) of marine systems;



8 (ii) saltwater intrusion into ground-



9 water aquifers;



10 (iii) increased harmful algae blooms;



11 (iv) spread of invasive species;



12 (v) coastal habitat loss;



13 (vi) species migrations; and



14 (vii) marine, estuarine, and freshwater



15 ecosystem changes associated with climate



16 change.



17 (2) EXECUTION.—Priority to plan and carry



18 out projects and activities under this subsection shall



19 be given to State coastal agencies, as determined in



20 accordance with State law.



21 (3) COORDINATION.—In carrying out this sub-



22 section, a coastal State shall coordinate with other



23 statewide climate change efforts in order to avoid



24 duplication of such efforts. 380



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1 (e) REPORT.—Not later than 1 year after the date



2 on which a State receives funds under this section, and



3 biennially thereafter until such time as the funding is
fully



4 expended, the State shall submit to the Administrator, or



5 the heads of such other Federal agencies as the President



6 may designate, a report that—



7 (1) provides a full accounting for the State’s



8 use of funding distributed under this section, includ-



9 ing a description of the projects and activities fund-



10 ed; and



11 (2) may be independent or included within any



12 report required for any State programs for green-



13 house gas reduction and climate adaptation.



14 DIVISION B—POLLUTION



15 REDUCTION AND INVESTMENT



16 TITLE I—REDUCING GLOBAL



17 WARMING POLLUTION



18 Subtitle A—Reducing Global



19 Warming Pollution



20 SEC. 101. REDUCING GLOBAL WARMING POLLUTION.



21 The Clean Air Act is amended by adding after title



22 VI (42 U.S.C. 7671 et seq.) the following: 381



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1 ‘‘TITLE VII—GLOBAL WARMING



2 POLLUTION REDUCTION AND



3 INVESTMENT PROGRAM



4 ‘‘PART A—GLOBAL WARMING POLLUTION



5 REDUCTION GOALS AND TARGETS



6 ‘‘SEC. 701. FINDINGS.



7 ‘‘Congress finds that—



8 ‘‘(1) global warming poses a significant threat



9 to the national security, economy, public health and



10 welfare, and environment of the United States, as



11 well as of other countries;



12 ‘‘(2) reviews of scientific studies, including by



13 the Intergovernmental Panel on Climate Change and



14 the National Academy of Sciences, demonstrate that



15 global warming is the result of the combined anthro-



16 pogenic greenhouse gas emissions from numerous



17 sources of all types and sizes;



18 ‘‘(3) each increment of emission, when com-



19 bined with other emissions, causes or contributes



20 materially to the acceleration and extent of global



21 warming and its adverse effects for the lifetime of



22 such gas in the atmosphere;



23 ‘‘(4) accordingly, controlling emissions in small



24 as well as large quantities is essential to prevent, 382



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1 slow the pace of, reduce the threats from, and miti-



2 gate global warming and its adverse effects;



3 ‘‘(5) because they induce global warming,



4 greenhouse gas emissions cause or contribute to in-



5 juries to persons in the United States, including—



6 ‘‘(A) adverse health effects, such as disease



7 and loss of life;



8 ‘‘(B) displacement of human populations;



9 ‘‘(C) damage to property and other inter-



10 ests relating to ocean levels, acidification, and



11 ice changes;



12 ‘‘(D) severe weather and seasonal changes;



13 ‘‘(E) disruption, costs, and losses to busi-



14 ness, trade, employment, farms, subsistence,



15 aesthetic enjoyment of the environment, recre-



16 ation, culture, and tourism;



17 ‘‘(F) damage to plants, forests, lands, and



18 waters;



19 ‘‘(G) harm to wildlife and habitat;



20 ‘‘(H) scarcity of water and the decreased



21 abundance of other natural resources;



22 ‘‘(I) worsening of tropospheric air pollu-



23 tion;



24 ‘‘(J) substantial threats of similar damage;



25 and 383



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1 ‘‘(K) other harm;



2 ‘‘(6) the fact that many of those effects and



3 risks of future effects of global warming are widely



4 shared does not minimize the adverse effects indi-



5 vidual persons have suffered, will suffer, and are at



6 risk of suffering because of global warming;



7 ‘‘(7) the fact that some of the adverse and po-



8 tentially catastrophic effects of global warming are



9 at risk of occurring and not a certainty does not ne-



10 gate the harm persons suffer from actions that in-



11 crease the likelihood, extent, and severity of such fu-



12 ture impacts;



13 ‘‘(8) countries of the world look to the United



14 States for leadership in addressing the threat of and



15 harm from global warming;



16 ‘‘(9) full implementation of this title is critical



17 to engage other countries in an international effort



18 to mitigate the threat of and harm from global



19 warming; and



20 ‘‘(10) global warming and its adverse effects



21 are occurring and are likely to continue and increase



22 in magnitude, and to do so at a greater and more



23 harmful rate, unless the this title is fully imple-



24 mented and enforced in an expeditious manner. 384



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1 ‘‘SEC. 702. ECONOMYWIDE REDUCTION GOALS.



2 ‘‘The goals of this title, and the Clean Energy Jobs



3 and American Power Act (and the amendments made by



4 that Act), are to reduce steadily the quantity of United



5 States greenhouse gas emissions such that—



6 ‘‘(1) in 2012, the quantity of United States



7 greenhouse gas emissions does not exceed 97 percent



8 of the quantity of United States greenhouse gas



9 emissions in 2005;



10 ‘‘(2) in 2020, the quantity of United States



11 greenhouse gas emissions does not exceed 80 percent



12 of the quantity of United States greenhouse gas



13 emissions in 2005;



14 ‘‘(3) in 2030, the quantity of United States



15 greenhouse gas emissions does not exceed 58 percent



16 of the quantity of United States greenhouse gas



17 emissions in 2005; and



18 ‘‘(4) in 2050, the quantity of United States



19 greenhouse gas emissions does not exceed 17 percent



20 of the quantity of United States greenhouse gas



21 emissions in 2005.



22 ‘‘SEC. 703. REDUCTION TARGETS FOR SPECIFIED SOURCES.



23 ‘‘(a) IN GENERAL.—The regulations issued under



24 section 721 shall limit and reduce annually the
greenhouse



25 gas emissions of capped sources each calendar year begin-



26 ning in 2012 such that— 385



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1 ‘‘(1) in 2012, the quantity of greenhouse gas



2 emissions from capped sources does not exceed 97



3 percent of the quantity of greenhouse gas emissions



4 from such sources in 2005;



5 ‘‘(2) in 2020, the quantity of greenhouse gas



6 emissions from capped sources does not exceed 80



7 percent of the quantity of greenhouse gas emissions



8 from such sources in 2005;



9 ‘‘(3) in 2030, the quantity of greenhouse gas



10 emissions from capped sources does not exceed 58



11 percent of the quantity of greenhouse gas emissions



12 from such sources in 2005; and



13 ‘‘(4) in 2050, the quantity of greenhouse gas



14 emissions from capped sources does not exceed 17



15 percent of the quantity of greenhouse gas emissions



16 from such sources in 2005.



17 ‘‘(b) DEFINITION OF GREENHOUSE GAS EMISSIONS



18 FROM SUCH SOURCES IN 2005.—For purposes of this sec-



19 tion, the term ‘greenhouse gas emissions from such



20 sources in 2005’ means emissions to which section 722



21 would have applied if the requirements of this title for
the



22 specified year had been in effect for 2005.



23 ‘‘SEC. 704. SUPPLEMENTAL POLLUTION REDUCTIONS.



24 ‘‘For the purposes of decreasing the likelihood of cat-



25 astrophic climate change, preserving tropical forests,
386



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1 building capacity to generate offset credits, and facili-



2 tating international action on global warming, the Admin-



3 istrator shall set aside a percentage specified in section



4 771(d) of the quantity of emission allowances established



5 under section 721(a) for each year, to be used to achieve



6 a reduction of greenhouse gas emissions from deforest-



7 ation in developing countries in accordance with part E.



8 In 2020, activities supported under part E shall provide



9 greenhouse gas reductions in an amount equal to an addi-



10 tional 10 percentage points of reductions from United



11 States greenhouse gas emissions in 2005. The Adminis-



12 trator shall distribute these allowances with respect to
ac-



13 tivities in countries that enter into and implement
agree-



14 ments or arrangements relating to reduced deforestation



15 as described in section 753(a)(2).



16 ‘‘SEC. 705. REVIEW AND PROGRAM RECOMMENDATIONS.



17 ‘‘(a) IN GENERAL.—The Administrator shall, in con-



18 sultation with appropriate Federal agencies, submit to



19 Congress a report not later than July 1, 2013, and every



20 4 years thereafter, that includes—



21 ‘‘(1) an analysis of key findings based on up-



22 to-date scientific information and data relevant to



23 global climate change;



24 ‘‘(2) an analysis of capabilities to monitor and



25 verify greenhouse gas reductions on a worldwide 387



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1 basis, including for the United States, as required



2 under the Clean Energy Jobs and American Power



3 Act (and the amendments made by that Act); and



4 ‘‘(3) an analysis of the status of worldwide



5 greenhouse gas reduction efforts, including imple-



6 mentation of the Clean Energy Jobs and American



7 Power Act and other policies, both domestic and



8 international, for reducing greenhouse gas emissions,



9 preventing dangerous atmospheric concentrations of



10 greenhouse gases, preventing significant irreversible



11 consequences of climate change, and reducing vul-



12 nerability to the impacts of climate change.



13 ‘‘(b) EXCEPTION.—Subsection (a)(3) shall not apply



14 to the first report submitted under subsection (a).



15 ‘‘(c) LATEST SCIENTIFIC INFORMATION.—The anal-



16 ysis required under subsection (a)(1) shall—



17 ‘‘(1) address existing scientific information and



18 reports, considering, to the greatest extent possible,



19 the most recent assessment report of the Intergov-



20 ernmental Panel on Climate Change, reports by the



21 United States Global Change Research Program, the



22 Natural Resources Climate Change Adaptation



23 Panel established under section 365 of the Clean



24 Energy Jobs and American Power Act, and Federal 388



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1 agencies, and the European Union’s global tempera-



2 ture data assessment;



3 ‘‘(2) review trends and projections for—



4 ‘‘(A) global and country-specific annual



5 emissions of greenhouse gases, and cumulative



6 greenhouse gas emissions produced between



7 1850 and the present, including—



8 ‘‘(i) global cumulative emissions of an-



9 thropogenic greenhouse gases;



10 ‘‘(ii) global annual emissions of an-



11 thropogenic greenhouse gases; and



12 ‘‘(iii) by country, annual total, annual



13 per capita, and cumulative anthropogenic



14 emissions of greenhouse gases for the top



15 50 emitting nations;



16 ‘‘(B) significant changes, both globally and



17 by region, in annual net non-anthropogenic



18 greenhouse gas emissions from natural sources,



19 including permafrost, forests, or oceans;



20 ‘‘(C) global atmospheric concentrations of



21 greenhouse gases, expressed in annual con-



22 centration units as well as carbon dioxide



23 equivalents based on 100-year global warming



24 potentials; 389



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1 ‘‘(D) major climate forcing factors, such as



2 aerosols;



3 ‘‘(E) global average temperature, expressed



4 as seasonal and annual averages in land, ocean,



5 and land-plus-ocean averages; and



6 ‘‘(F) sea level rise;



7 ‘‘(3) assess the current and potential impacts of



8 global climate change on—



9 ‘‘(A) human populations, including impacts



10 on public health, economic livelihoods, subsist-



11 ence, tribal culture, human infrastructure, and



12 displacement or permanent relocation due to



13 flooding, severe weather, extended drought, ero-



14 sion, or other ecosystem changes;



15 ‘‘(B) freshwater systems, including water



16 resources for human consumption and agri-



17 culture and natural and managed ecosystems,



18 flood and drought risks, and relative humidity;



19 ‘‘(C) the carbon cycle, including impacts



20 related to the thawing of permafrost, the fre-



21 quency and intensity of wildfire, and terrestrial



22 and ocean carbon sinks;



23 ‘‘(D) ecosystems and animal and plant



24 populations, including impacts on species abun-



25 dance, phenology, and distribution; 390



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1 ‘‘(E) oceans and ocean ecosystems, includ-



2 ing effects on sea level, ocean acidity, ocean



3 temperatures, coral reefs, ocean circulation,



4 fisheries, and other indicators of ocean eco-



5 system health;



6 ‘‘(F) the cryosphere, including effects on



7 ice sheet mass balance, mountain glacier mass



8 balance, and sea-ice extent and volume;



9 ‘‘(G) changes in the intensity, frequency,



10 or distribution of severe weather events, includ-



11 ing precipitation, tropical cyclones, tornadoes,



12 and severe heat waves;



13 ‘‘(H) agriculture and forest systems; and



14 ‘‘(I) any other indicators the Administrator



15 deems appropriate;



16 ‘‘(4) summarize any significant socioeconomic



17 impacts of climate change in the United States, in-



18 cluding the territories of the United States, drawing



19 on work by Federal agencies and the academic lit-



20 erature, including impacts on—



21 ‘‘(A) public health;



22 ‘‘(B) economic livelihoods, subsistence, and



23 tribal culture; 391



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1 ‘‘(C) displacement or permanent relocation



2 due to flooding, severe weather, extended



3 drought, or other ecosystem changes;



4 ‘‘(D) human infrastructure, including



5 coastal infrastructure vulnerability to extreme



6 events and sea level rise, river floodplain infra-



7 structure, and sewer and water management



8 systems;



9 ‘‘(E) agriculture and forests, including ef-



10 fects on potential growing season, distribution,



11 and yield;



12 ‘‘(F) water resources for human consump-



13 tion, agriculture and natural and managed eco-



14 systems, flood and drought risks, and relative



15 humidity;



16 ‘‘(G) energy supply and use; and



17 ‘‘(H) transportation;



18 ‘‘(5) in assessing risks and impacts, use a risk



19 management framework, including both qualitative



20 and quantitative measures, to assess the observed



21 and projected impacts of current and future climate



22 change, accounting for—



23 ‘‘(A) both monetized and non-monetized



24 losses; 392



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1 ‘‘(B) potential nonlinear, abrupt, or essen-



2 tially irreversible changes in the climate system;



3 ‘‘(C) potential nonlinear increases in the



4 cost of impacts;



5 ‘‘(D) potential low-probability, high impact



6 events; and



7 ‘‘(E) whether impacts are transitory or es-



8 sentially permanent; and



9 ‘‘(6) based on the findings of the Administrator



10 under this section, as well as assessments produced



11 by the Intergovernmental Panel on Climate Change,



12 the United States Global Change Research program,



13 and other relevant scientific entities—



14 ‘‘(A) describe increased risks to natural



15 systems and society that would result from an



16 increase in global average temperature 3.6 de-



17 grees Fahrenheit (2 degrees Celsius) above the



18 pre-industrial average or an increase in atmos-



19 pheric greenhouse gas concentrations above 450



20 parts per million carbon dioxide equivalent; and



21 ‘‘(B) identify and assess—



22 ‘‘(i) significant residual risks not



23 avoided by the thresholds described in sub-



24 paragraph (A); 393



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1 ‘‘(ii) alternative thresholds or targets



2 that may more effectively limit the risks



3 identified pursuant to clause (i); and



4 ‘‘(iii) thresholds above those described



5 in subparagraph (A) which significantly in-



6 crease the risk of certain impacts or render



7 them essentially permanent.



8 ‘‘(d) STATUS OF MONITORING AND VERIFICATION



9 CAPABILITIES TO EVALUATE GREENHOUSE GAS REDUC-



10 TION EFFORTS.—The analysis required under subsection



11 (a)(2) shall evaluate the capabilities of the monitoring,
re-



12 porting, and verification systems used to quantify
progress



13 in achieving reductions in greenhouse gas emissions both



14 globally and in the United States (as described in section



15 702), including—



16 ‘‘(1) quantification of emissions and emission



17 reductions by entities participating in the pollution



18 reduction and investment program under this title;



19 ‘‘(2) quantification of emissions and emission



20 reductions by entities participating in the offset pro-



21 gram under this title;



22 ‘‘(3) quantification of emission and emission re-



23 ductions by entities regulated by performance stand-



24 ards; 394



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1 ‘‘(4) quantification of aggregate net emissions



2 and emission reductions by the United States; and



3 ‘‘(5) quantification of global changes in net



4 emissions and in sources and sinks of greenhouse



5 gases.



6 ‘‘(e) STATUS OF GREENHOUSE GAS REDUCTION EF-



7 FORTS.—The analysis required under subsection (a)(3)



8 shall address—



9 ‘‘(1) whether the programs under the Clean En-



10 ergy Jobs and American Power Act (and the amend-



11 ments made by that Act) and other Federal statutes



12 are resulting in sufficient United States greenhouse



13 gas emission reductions to meet the emissions reduc-



14 tion goals described in section 702, taking into ac-



15 count the use of offsets; and



16 ‘‘(2) whether United States actions, taking into



17 account international actions, commitments, and



18 trends, and considering the range of plausible emis-



19 sions scenarios, are sufficient to avoid—



20 ‘‘(A) atmospheric greenhouse gas con-



21 centrations above 450 parts per million carbon



22 dioxide equivalent;



23 ‘‘(B) global average surface temperature



24 3.6 degrees Fahrenheit (2 degrees Celsius)



25 above the pre-industrial average, or such other 395



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1 temperature thresholds as the Administrator



2 deems appropriate; and



3 ‘‘(C) other temperature or greenhouse gas



4 thresholds identified pursuant to subsection



5 (c)(6)(B).



6 ‘‘(f) RECOMMENDATIONS.—



7 ‘‘(1) LATEST SCIENTIFIC INFORMATION.—



8 Based on the analysis described in subsection (a)(1),



9 each report under subsection (a) shall identify ac-



10 tions that could be taken to—



11 ‘‘(A) improve the characterization of



12 changes in the earth-climate system and im-



13 pacts of global climate change;



14 ‘‘(B) better inform decision making and



15 actions related to global climate change;



16 ‘‘(C) mitigate risks to natural and social



17 systems; and



18 ‘‘(D) design policies to better account for



19 climate risks.



20 ‘‘(2) MONITORING, 
REPORTING AND



21 VERIFICATION.—Based on the analysis described in



22 subsection (a)(2), each report under subsection (a)



23 shall identify key gaps in measurement, reporting,



24 and verification capabilities and make recommenda-396



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1 tions to improve the accuracy and reliability of those



2 capabilities.



3 ‘‘(3) STATUS OF GREENHOUSE GAS REDUCTION



4 EFFORTS.—Based on the analysis described in sub-



5 section (a)(3), taking into account international ac-



6 tions, commitments, and trends, and considering the



7 range of plausible emissions scenarios, each report



8 under subsection (a) shall identify—



9 ‘‘(A) the quantity of additional reductions



10 required to meet the emissions reduction goals



11 in section 702;



12 ‘‘(B) the quantity of additional reductions



13 in global greenhouse gas emissions needed to



14 avoid the concentration and temperature



15 thresholds identified in subsection (e); and



16 ‘‘(C) possible strategies and approaches for



17 achieving additional reductions.



18 ‘‘(g) AUTHORIZATION OF APPROPRIATIONS.—There



19 are authorized to be appropriated to carry out this
section



20 such sums as may be necessary.



21 ‘‘SEC. 706. NATIONAL ACADEMY REVIEW.



22 ‘‘(a) IN GENERAL.—Not later than 1 year after the



23 date of enactment of this title, the Administrator shall



24 offer to enter into a contract with the National Academy



25 of Sciences (in this section referred to as the
‘Academy’) 397



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1 under which the Academy shall, not later than July 1,



2 2014, and every 4 years thereafter, submit to Congress



3 and the Administrator a report that includes—



4 ‘‘(1) a review of the most recent report and rec-



5 ommendations issued under section 705; and



6 ‘‘(2) an analysis of technologies to achieve re-



7 ductions in greenhouse gas emissions.



8 ‘‘(b) FAILURE TO ISSUE A REPORT.—In the event



9 that the Administrator has not issued all or part of the



10 most recent report required under section 705, the Acad-



11 emy shall conduct its own review and analysis of the re-



12 quired information.



13 ‘‘(c) TECHNOLOGICAL INFORMATION.—The analysis



14 required under subsection (a)(2) shall—



15 ‘‘(1) review existing technological information



16 and reports, including the most recent reports by the



17 Department of Energy, the United States Global



18 Change Research Program, the Intergovernmental



19 Panel on Climate Change, and the International En-



20 ergy Agency and any other relevant information on



21 technologies or practices that reduce or limit green-



22 house gas emissions;



23 ‘‘(2) include the participation of technical ex-



24 perts from relevant private industry sectors; 398



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1 ‘‘(3) review the current and future projected de-



2 ployment of technologies and practices in the United



3 States that reduce or limit greenhouse gas emis-



4 sions, including—



5 ‘‘(A) technologies for capture and seques-



6 tration of greenhouse gases;



7 ‘‘(B) technologies to improve energy effi-



8 ciency;



9 ‘‘(C) low- or zero-greenhouse gas emitting



10 energy technologies;



11 ‘‘(D) low- or zero-greenhouse gas emitting



12 fuels;



13 ‘‘(E) biological sequestration practices and



14 technologies; and



15 ‘‘(F) any other technologies the Academy



16 deems relevant; and



17 ‘‘(4) review and compare the emissions reduc-



18 tion potential, commercial viability, market penetra-



19 tion, investment trends, and deployment of the tech-



20 nologies described in paragraph (3), including—



21 ‘‘(A) the need for additional research and



22 development, including publicly funded research



23 and development;



24 ‘‘(B) the extent of commercial deployment,



25 including, where appropriate, a comparison to 399



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1 the cost and level of deployment of conventional



2 fossil fuel-fired energy technologies and devices;



3 and



4 ‘‘(C) an evaluation of any substantial tech-



5 nological, legal, or market-based barriers to



6 commercial deployment.



7 ‘‘(d) RECOMMENDATIONS.—



8 ‘‘(1) LATEST SCIENTIFIC INFORMATION.—



9 Based on the review described in subsection (a)(1),



10 the Academy shall identify actions that could be



11 taken to—



12 ‘‘(A) improve the characterization of



13 changes in the earth-climate system and im-



14 pacts of global climate change;



15 ‘‘(B) better inform decision making and



16 actions related to global climate change;



17 ‘‘(C) mitigate risks to natural and social



18 systems;



19 ‘‘(D) design policies to better account for



20 climate risks; and



21 ‘‘(E) improve the accuracy and reliability



22 of capabilities to monitor, report, and verify



23 greenhouse gas emissions reduction efforts. 400



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1 ‘‘(2) TECHNOLOGICAL INFORMATION.—Based



2 on the analysis described in subsection (a)(2), the



3 Academy shall identify—



4 ‘‘(A) additional emission reductions that



5 may be possible as a result of technologies de-



6 scribed in the analysis;



7 ‘‘(B) barriers to the deployment of such



8 technologies; and



9 ‘‘(C) actions that could be taken to speed



10 deployment of such technologies.



11 ‘‘(3) STATUS OF GREENHOUSE GAS REDUCTION



12 EFFORTS.—Based on the review described in sub-



13 section (a)(1), the Academy shall identify—



14 ‘‘(A) the quantity of additional reductions



15 required to meet the emissions reduction goals



16 described in section 702; and



17 ‘‘(B) the quantity of additional reductions



18 in global greenhouse gas emissions needed to



19 avoid the concentration and temperature



20 thresholds described in section 705(c)(6)(A) or



21 identified pursuant to section 705(c)(6)(B).



22 ‘‘(e) AUTHORIZATION OF APPROPRIATIONS.—There



23 are authorized to be appropriated to carry out this
section



24 such sums as may be necessary. 401



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1 ‘‘SEC. 707. PRESIDENTIAL RESPONSE AND RECOMMENDA-



2 TIONS.



3 ‘‘Not later than July 1, 2015, and every 4 years



4 thereafter—



5 ‘‘(1) the President shall direct relevant Federal



6 agencies to use existing statutory authority to take



7 appropriate actions identified in the reports sub-



8 mitted under sections 705 and 706 and to address



9 any shortfalls identified in such reports; and



10 ‘‘(2) in the event that the National Academy of



11 Sciences has concluded, in the most recent report



12 submitted under section 706, that the United States



13 will not achieve the necessary domestic greenhouse



14 gas emission reductions, or that global actions will



15 not maintain safe global average surface tempera-



16 ture and atmospheric greenhouse gas concentration



17 thresholds, the President shall submit to Congress a



18 plan identifying domestic and international actions



19 that will achieve necessary additional greenhouse gas



20 reductions, including any recommendations for legis-



21 lative action.



22 ‘‘PART B—DESIGNATION AND REGISTRATION OF



23 GREENHOUSE GASES



24 ‘‘SEC. 711. DESIGNATION OF GREENHOUSE GASES.



25 ‘‘(a) GREENHOUSE GASES.—For purposes of this



26 title, the following are greenhouse gases: 402



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1 ‘‘(1) Carbon dioxide.



2 ‘‘(2) Methane.



3 ‘‘(3) Nitrous oxide.



4 ‘‘(4) Sulfur hexafluoride.



5 ‘‘(5) Hydrofluorocarbons from a chemical man-



6 ufacturing process at an industrial stationary



7 source.



8 ‘‘(6) Any perfluorocarbon, except as otherwise



9 provided in section 714.



10 ‘‘(7) Nitrogen trifluoride.



11 ‘‘(8) Any other anthropogenic gas designated as



12 a greenhouse gas by the Administrator under this



13 section.



14 ‘‘(b) DETERMINATION ON ADMINISTRATOR’S INITIA-



15 TIVE.—The Administrator shall, by rule—



16 ‘‘(1) determine whether 1 metric ton of another



17 anthropogenic gas makes the same or greater con-



18 tribution to global warming over 100 years as 1 met-



19 ric ton of carbon dioxide;



20 ‘‘(2) determine the carbon dioxide equivalent



21 value for each gas with respect to which the Admin-



22 istrator makes an affirmative determination under



23 paragraph (1);



24 ‘‘(3) for each gas with respect to which the Ad-



25 ministrator makes an affirmative determination 403



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1 under paragraph (1) and that is used as a substitute



2 for a class I or class II substance under title VI, de-



3 termine the extent to which to regulate that gas



4 under section 619 and specify appropriate compli-



5 ance obligations under section 619;



6 ‘‘(4) designate as a greenhouse gas for purposes



7 of this title each gas for which the Administrator



8 makes an affirmative determination under para-



9 graph (1), to the extent that it is not regulated



10 under section 619; and



11 ‘‘(5) specify the appropriate compliance obliga-



12 tions under this title for each gas designated as a



13 greenhouse gas under paragraph (4).



14 ‘‘(c) PETITIONS TO DESIGNATE A GREENHOUSE



15 GAS.—



16 ‘‘(1) IN GENERAL.—Any person may petition



17 the Administrator to designate as a greenhouse gas



18 any anthropogenic gas 1 metric ton of which makes



19 the same or greater contribution to global warming



20 over 100 years as 1 metric ton of carbon dioxide.



21 ‘‘(2) CONTENTS OF PETITION.—The petitioner



22 shall provide sufficient data, as specified by rule by



23 the Administrator, to demonstrate that the gas is



24 likely to be a greenhouse gas and is likely to be pro-



25 duced, imported, used, or emitted in the United 404



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1 States. To the extent practicable, the petitioner shall



2 also identify producers, importers, distributors,



3 users, and emitters of the gas in the United States.



4 ‘‘(3) REVIEW AND ACTION BY THE ADMINIS-



5 TRATOR.—Not later than 90 days after receipt of a



6 petition under paragraph (2), the Administrator



7 shall determine whether the petition is complete and



8 notify the petitioner and the public of the decision.



9 ‘‘(4) ADDITIONAL INFORMATION.—The Admin-



10 istrator may require producers, importers, distribu-



11 tors, users, or emitters of the gas to provide infor-



12 mation on the contribution of the gas to global



13 warming over 100 years compared to carbon dioxide.



14 ‘‘(5) TREATMENT OF PETITION.—For any sub-



15 stance used as a substitute for a class I or class II



16 substance under title VI, the Administrator may



17 elect to treat a petition under this subsection as a



18 petition to list the substance as a class II, group II



19 substance under section 619, and may require the



20 petition to be amended to address listing criteria



21 promulgated under that section.



22 ‘‘(6) DETERMINATION.—Not later than 2 years



23 after receipt of a complete petition, the Adminis-



24 trator shall, after notice and an opportunity for com-



25 ment— 405



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1 ‘‘(A) issue and publish in the Federal Reg-



2 ister—



3 ‘‘(i) a determination that 1 metric ton



4 of the gas does not make a contribution to



5 global warming over 100 years that is



6 equal to or greater than that made by 1



7 metric ton of carbon dioxide; and



8 ‘‘(ii) an explanation of the decision; or



9 ‘‘(B) determine that 1 metric ton of the



10 gas makes a contribution to global warming



11 over 100 years that is equal to or greater than



12 that made by 1 metric ton of carbon dioxide,



13 and take the actions described in subsection (b)



14 with respect to such gas.



15 ‘‘(7) GROUNDS FOR DENIAL.—The Adminis-



16 trator may not deny a petition under this subsection



17 solely on the basis of inadequate Environmental Pro-



18 tection Agency resources or time for review.



19 ‘‘(d) SCIENCE ADVISORY BOARD CONSULTATION.—



20 ‘‘(1) CONSULTATION.—The Administrator



21 shall—



22 ‘‘(A) give notice to the Science Advisory



23 Board prior to making a determination under



24 subsection (b)(1), (c)(6), or (e)(2)(B); 406



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1 ‘‘(B) consider the written recommendations



2 of the Science Advisory Board under paragraph



3 (2) regarding the determination; and



4 ‘‘(C) consult with the Science Advisory



5 Board regarding such determination, including



6 consultation subsequent to receipt of such writ-



7 ten recommendations.



8 ‘‘(2) FORMULATION OF RECOMMENDATIONS.—



9 Upon receipt of notice under paragraph (1)(A) re-



10 garding a pending determination under subsection



11 (b)(1), (c)(6), or (e)(2)(B), the Science Advisory



12 Board shall—



13 ‘‘(A) formulate recommendations regarding



14 such determination, subject to a peer review



15 process; and



16 ‘‘(B) submit such recommendations in



17 writing to the Administrator.



18 ‘‘(e) MANUFACTURING AND EMISSION NOTICES.—



19 ‘‘(1) NOTICE REQUIREMENT.—



20 ‘‘(A) IN GENERAL.—Except as otherwise



21 provided in section 714, effective 24 months



22 after the date of enactment of this title, no per-



23 son may manufacture or introduce into inter-



24 state commerce a fluorinated gas, or emit a sig-



25 nificant quantity, as determined by the Admin-407



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1 istrator, of any fluorinated gas that is gen-



2 erated as a byproduct during the production or



3 use of another fluorinated gas, unless—



4 ‘‘(i) the gas is designated as a green-



5 house gas under this section or is an



6 ozone-depleting substance listed as a class



7 I or class II substance under title VI;



8 ‘‘(ii) the Administrator has deter-



9 mined that 1 metric ton of such gas does



10 not make a contribution to global warming



11 that is equal to or greater than that made



12 by 1 metric ton of carbon dioxide; or



13 ‘‘(iii) the person manufacturing or im-



14 porting the gas for distribution into inter-



15 state commerce, or emitting the gas, has



16 submitted to the Administrator, at least 90



17 days before the start of such manufacture,



18 introduction into commerce, or emission, a



19 notice of such person’s manufacture, intro-



20 duction into commerce, or emission of such



21 gas, and the Administrator has not deter-



22 mined that notice or a substantially similar



23 notice is incomplete.



24 ‘‘(B) ALTERNATIVE COMPLIANCE.—For a



25 gas that is a substitute for a class I or class II 408



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1 substance under title VI and either has been



2 listed as acceptable for use under section 612



3 or is currently subject to evaluation under sec-



4 tion 612, the Administrator may accept the no-



5 tice and information provided pursuant to that



6 section as fulfilling the obligation under clause



7 (iii) of subparagraph (A).



8 ‘‘(2) REVIEW AND ACTION BY THE ADMINIS-



9 TRATOR.—



10 ‘‘(A) COMPLETENESS.—Not later than 90



11 days after receipt of notice under paragraph



12 (1)(A)(iii) or (B), the Administrator shall deter-



13 mine whether the notice is complete.



14 ‘‘(B) DETERMINATION.—If the Adminis-



15 trator determines that the notice is complete,



16 the Administrator shall, after notice and an op-



17 portunity for comment, not later than 12



18 months after receipt of the notice—



19 ‘‘(i) issue and publish in the Federal



20 Register a determination that 1 metric ton



21 of the gas does not make a contribution to



22 global warming over 100 years that is



23 equal to or greater than that made by 1



24 metric ton of carbon dioxide and an expla-



25 nation of the decision; or 409



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1 ‘‘(ii) determine that 1 metric ton of



2 the gas makes a contribution to global



3 warming over 100 years that is equal to or



4 greater than that made by 1 metric ton of



5 carbon dioxide, and take the actions de-



6 scribed in subsection (b) with respect to



7 such gas.



8 ‘‘(f) REGULATIONS.—Not later than one year after



9 the date of enactment of this title, the Administrator
shall



10 promulgate regulations to carry out this section. Such
reg-



11 ulations shall include—



12 ‘‘(1) requirements for the contents of a petition



13 submitted under subsection (c);



14 ‘‘(2) requirements for the contents of a notice



15 required under subsection (e); and



16 ‘‘(3) methods and standards for evaluating the



17 carbon dioxide equivalent value of a gas.



18 ‘‘(g) GASES REGULATED UNDER TITLE VI.—The



19 Administrator shall not designate a gas as a greenhouse



20 gas under this section to the extent that the gas is
regu-



21 lated under title VI.



22 ‘‘(h) SAVINGS CLAUSE.—Nothing in this section shall



23 be interpreted to relieve any person from complying with



24 the requirements of section 612. 410



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1 ‘‘SEC. 712. CARBON DIOXIDE EQUIVALENT VALUE OF



2 GREENHOUSE GASES.



3 ‘‘(a) MEASURE OF QUANTITY OF GREENHOUSE



4 GASES.—Any provision of this title or title VIII that
refers



5 to a quantity or percentage of a quantity of greenhouse



6 gases shall mean the quantity or percentage of the green-



7 house gases expressed in carbon dioxide equivalents.



8 ‘‘(b) INITIAL VALUE.—Except as provided by the Ad-



9 ministrator under this section or section 711—



10 ‘‘(1) the carbon dioxide equivalent value of



11 greenhouse gases for purposes of this Act shall be as



12 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 7,390 411



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‘‘ CARBON DIOXIDE EQUIVALENT OF 1 TON OF LISTED



GREENHOUSE GASES—Continued



Greenhouse gas (1 metric ton)



Carbon dioxide equivalent



(metric tons)



C2F6 12,200



C4F10 8,860



C6F14 9,300



SF6 22,800



NF3 17,200



1 ; and



2 ‘‘(2) the carbon dioxide equivalent value for



3 purposes of this Act for any greenhouse gas not list-



4 ed in the table under paragraph (1) shall be the



5 100-year Global Warming Potentials provided in the



6 Intergovernmental Panel on Climate Change Fourth



7 Assessment Report.



8 ‘‘(c) PERIODIC REVIEW.—



9 ‘‘(1) Not later than February 1, 2017, and (ex-



10 cept as provided in paragraph (3)) not less than



11 every 5 years thereafter, the Administrator shall—



12 ‘‘(A) review and, if appropriate, revise the



13 carbon dioxide equivalent values established



14 under this section or section 711(b)(2), based



15 on a determination of the number of metric



16 tons of carbon dioxide that makes the same



17 contribution to global warming over 100 years



18 as 1 metric ton of each greenhouse gas; and 412



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1 ‘‘(B) publish in the Federal Register the



2 results of that review and any revisions.



3 ‘‘(2) A revised determination published in the



4 Federal Register under paragraph (1)(B) shall take



5 effect for greenhouse gas emissions starting on Jan-



6 uary 1 of the first calendar year starting at least 9



7 months after the date on which the revised deter-



8 mination was published.



9 ‘‘(3) The Administrator may decrease the fre-



10 quency of review and revision under paragraph (1)



11 if the Administrator determines that such decrease



12 is appropriate in order to synchronize such review



13 and revision with any similar review process carried



14 out pursuant to the United Nations Framework



15 Convention on Climate Change, done at New York



16 on May 9, 1992, or to an agreement negotiated



17 under that convention, except that in no event shall



18 the Administrator carry out such review and revision



19 any less frequently than every 10 years.



20 ‘‘(d) METHODOLOGY.—In setting carbon dioxide



21 equivalent values, for purposes of this section or
section



22 711, the Administrator shall take into account publica-



23 tions by the Intergovernmental Panel on Climate Change



24 or a successor organization under the auspices of the 413



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1 United Nations Environmental Programme and the World



2 Meteorological Organization.



3 ‘‘SEC. 713. GREENHOUSE GAS REGISTRY.



4 ‘‘(a) DEFINITIONS.—For purposes of this section:



5 ‘‘(1) CLIMATE REGISTRY.—The term ‘Climate



6 Registry’ means the greenhouse gas emissions reg-



7 istry jointly established and managed by more than



8 40 States and Indian tribes in 2007 to collect high-



9 quality greenhouse gas emission data from facilities,



10 corporations, and other organizations to support var-



11 ious greenhouse gas emission reporting and reduc-



12 tion policies for the member States and Indian



13 tribes.



14 ‘‘(2) REPORTING ENTITY.—The term ‘reporting



15 entity’ means—



16 ‘‘(A) a covered entity;



17 ‘‘(B) an entity that—



18 ‘‘(i) would be a covered entity if it had



19 emitted, produced, imported, manufac-



20 tured, or delivered in 2008 or any subse-



21 quent year more than the applicable



22 threshold level in the definition of covered



23 entity in paragraph (13) of section 700;



24 and 414



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1 ‘‘(ii) has emitted, produced, imported,



2 manufactured, or delivered in 2008 or any



3 subsequent year more than the applicable



4 threshold level in the definition of covered



5 entity in paragraph (13) of section 700,



6 provided that the figure of 25,000 tons of



7 carbon dioxide equivalent is read instead



8 as 10,000 tons of carbon dioxide equivalent



9 and the figure of 460,000,000 cubic feet is



10 read instead as 184,000,000 cubic feet;



11 ‘‘(C) any other entity that emits a green-



12 house gas, or produces, imports, manufactures,



13 or delivers material whose use results or may



14 result in greenhouse gas emissions if the Ad-



15 ministrator determines that reporting under



16 this section by such entity will help achieve the



17 purposes of this title or title VIII;



18 ‘‘(D) any vehicle fleet with emissions of



19 more than 25,000 tons of carbon dioxide equiv-



20 alent on an annual basis, if the Administrator



21 determines that the inclusion of such fleet will



22 help achieve the purposes of this title or title



23 VIII; or



24 ‘‘(E) any entity that delivers electricity to



25 an energy-intensive facility in an industrial sec-415



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1 tor that meets the energy or greenhouse gas in-



2 tensity criteria in section 764(b)(3)(B)(i).



3 ‘‘(b) REGULATIONS.—



4 ‘‘(1) IN GENERAL.—Not later than 6 months



5 after the date of enactment of this title, the Admin-



6 istrator shall issue regulations establishing a Federal



7 greenhouse gas registry. Such regulations shall—



8 ‘‘(A) require reporting entities to submit to



9 the Administrator data on—



10 ‘‘(i) greenhouse gas emissions in the



11 United States;



12 ‘‘(ii) the production and manufacture



13 in the United States, importation into the



14 United States, and, at the discretion of the



15 Administrator, exportation from the



16 United States, of fuels and industrial gases



17 the uses of which result or may result in



18 greenhouse gas emissions;



19 ‘‘(iii) deliveries in the United States of



20 natural gas, and any other gas meeting the



21 specifications for commingling with natural



22 gas for purposes of delivery, the combus-



23 tion of which result or may result in green-



24 house gas emissions; and 416



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1 ‘‘(iv) the capture and sequestration of



2 greenhouse gases;



3 ‘‘(B) require covered entities and, where



4 appropriate, other reporting entities to submit



5 to the Administrator data sufficient to ensure



6 compliance with or implementation of the re-



7 quirements of this title;



8 ‘‘(C) require reporting of electricity deliv-



9 ered to industrial sources in energy-intensive in-



10 dustries;



11 ‘‘(D) ensure the completeness, consistency,



12 transparency, accuracy, precision, and reliability



13 of such data;



14 ‘‘(E) take into account the best practices



15 from the most recent Federal, State, tribal, and



16 international protocols for the measurement, ac-



17 counting, reporting, and verification of green-



18 house gas emissions, including protocols from



19 the Climate Registry and other mandatory



20 State or multistate authorized programs;



21 ‘‘(F) take into account the latest scientific



22 research;



23 ‘‘(G) require that, for covered entities with



24 respect to greenhouse gases to which section



25 722 applies, and, to the extent determined to be 417



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1 appropriate by the Administrator, for covered



2 entities with respect to other greenhouse gases



3 and for other reporting entities, submitted data



4 are based on—



5 ‘‘(i) continuous monitoring systems



6 for fuel flow or emissions, such as contin-



7 uous emission monitoring systems;



8 ‘‘(ii) alternative systems that are dem-



9 onstrated as providing data with the same



10 precision, reliability, accessibility, and



11 timeliness, or, to the extent the Adminis-



12 trator determines is appropriate for report-



13 ing small amounts of emissions, the same



14 precision, reliability, and accessibility and



15 similar timeliness, as data provided by con-



16 tinuous monitoring systems for fuel flow or



17 emissions; or



18 ‘‘(iii) alternative methodologies that



19 are demonstrated to provide data with pre-



20 cision, reliability, accessibility, and timeli-



21 ness, or, to the extent the Administrator



22 determines is appropriate for reporting



23 small amounts of emissions, precision, reli-



24 ability, and accessibility, as similar as is



25 technically feasible to that of data gen-418



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1 erally provided by continuous monitoring



2 systems for fuel flow or emissions, if the



3 Administrator determines that, with re-



4 spect to a reporting entity, there is no con-



5 tinuous monitoring system or alternative



6 system described in clause (i) or (ii) that



7 is technically feasible;



8 ‘‘(H) require that the Administrator, in de-



9 termining the extent to which the requirement



10 to use systems or methodologies in accordance



11 with subparagraph (G) is appropriate for re-



12 porting entities other than covered entities or



13 for greenhouse gases to which section 722 does



14 not apply, consider the cost of using such sys-



15 tems and methodologies, and of using other sys-



16 tems and methodologies that are available and



17 suitable, for quantifying the emissions involved



18 in light of the purposes of this title, including



19 the goal of collecting consistent entity-wide



20 data;



21 ‘‘(I) include methods for minimizing double



22 reporting and avoiding irreconcilable double re-



23 porting of greenhouse gas emissions;



24 ‘‘(J) establish measurement protocols for



25 carbon capture and sequestration systems, tak-419



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1 ing into consideration the regulations promul-



2 gated under section 813;



3 ‘‘(K) require that reporting entities provide



4 the data required under this paragraph in re-



5 ports submitted electronically to the Adminis-



6 trator, in such form and containing such infor-



7 mation as may be required by the Adminis-



8 trator;



9 ‘‘(L) include requirements for keeping



10 records supporting or related to, and protocols



11 for auditing, submitted data;



12 ‘‘(M) establish consistent policies for calcu-



13 lating carbon content and greenhouse gas emis-



14 sions for each type of fossil fuel with respect to



15 which reporting is required;



16 ‘‘(N) subsequent to implementation of poli-



17 cies developed under subparagraph (M), provide



18 for immediate dissemination, to States, Indian



19 tribes, and on the Internet, of all data reported



20 under this section as soon as practicable after



21 electronic audit by the Administrator and any



22 resulting correction of data, except that data



23 shall not be disseminated under this subpara-



24 graph if— 420



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1 ‘‘(i) its nondissemination is vital to



2 the national security of the United States,



3 as determined by the President; or



4 ‘‘(ii) it is confidential business infor-



5 mation that cannot be derived from infor-



6 mation that is otherwise publicly available



7 and that would cause significant calculable



8 competitive harm if published, except



9 that—



10 ‘‘(I) data relating to greenhouse



11 gas emissions, including any upstream



12 or verification data from reporting en-



13 tities, shall not be considered to be



14 confidential business information; and



15 ‘‘(II) data that is confidential



16 business information shall be provided



17 to a State or Indian tribe within



18 whose jurisdiction the reporting entity



19 is located, if the Administrator deter-



20 mines that such State or Indian tribe



21 has in effect protections for confiden-



22 tial business information that are



23 equivalent to protections applicable to



24 the Federal Government; 421



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1 ‘‘(O) prescribe methods by which the Ad-



2 ministrator shall, in cases in which satisfactory



3 data are not submitted to the Administrator for



4 any period of time, estimate emission, produc-



5 tion, importation, manufacture, or delivery lev-



6 els—



7 ‘‘(i) for covered entities with respect



8 to greenhouse gas emissions, production,



9 importation, manufacture, or delivery regu-



10 lated under this title to ensure that emis-



11 sions, production, importation, manufac-



12 ture, or deliveries are not underreported,



13 and to create a strong incentive for meet-



14 ing data monitoring and reporting require-



15 ments—



16 ‘‘(I) with a conservative estimate



17 of the highest emission, production,



18 importation, manufacture, or delivery



19 levels that may have occurred during



20 the period for which data are missing;



21 or



22 ‘‘(II) to the extent the Adminis-



23 trator considers appropriate, with an



24 estimate of such levels assuming the



25 unit is emitting, producing, importing, 422



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1 manufacturing, or delivering at a



2 maximum potential level during the



3 period, in order to ensure that such



4 levels are not underreported and to



5 create a strong incentive for meeting



6 data monitoring and reporting re-



7 quirements; and



8 ‘‘(ii) for covered entities with respect



9 to greenhouse gas emissions to which sec-



10 tion 722 does not apply and for other re-



11 porting entities, with a reasonable estimate



12 of the emission, production, importation,



13 manufacture, or delivery levels that may



14 have occurred during the period for which



15 data are missing;



16 ‘‘(P) require the designation of a des-



17 ignated representative for each reporting entity;



18 ‘‘(Q) require an appropriate certification,



19 by the designated representative for the report-



20 ing entity, of accurate and complete accounting



21 of greenhouse gas emissions, as determined by



22 the Administrator; and



23 ‘‘(R) include requirements for other data



24 necessary for accurate and complete accounting



25 of greenhouse gas emissions, as determined by 423



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1 the Administrator, including data for quality



2 assurance of monitoring systems, monitors and



3 other measurement devices, and other data



4 needed to verify reported emissions, production,



5 importation, manufacture, or delivery.



6 ‘‘(2) TIMING.—



7 ‘‘(A) CALENDAR YEARS 2007 THROUGH



8 2010.—For a base period of calendar years



9 2007 through 2010, each reporting entity shall



10 submit annual data required under this section



11 to the Administrator not later than March 31,



12 2011. The Administrator may waive or modify



13 reporting requirements for calendar years 2007



14 through 2010 for categories of reporting enti-



15 ties to the extent that the Administrator deter-



16 mines that the reporting entities did not keep



17 data or records necessary to meet reporting re-



18 quirements. The Administrator may, in addition



19 to or in lieu of such requirements, collect infor-



20 mation on energy consumption and production.



21 ‘‘(B) SUBSEQUENT CALENDAR YEARS.—



22 For calendar year 2011 and each subsequent



23 calendar year, each reporting entity shall sub-



24 mit quarterly data required under this section



25 to the Administrator not later than 60 days 424



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1 after the end of the applicable quarter, except



2 when the data is already being reported to the



3 Administrator on an earlier timeframe for an-



4 other program.



5 ‘‘(3) WAIVER OF REPORTING REQUIREMENTS.—



6 The Administrator may waive reporting require-



7 ments under this section for specific entities to the



8 extent that the Administrator determines that suffi-



9 cient and equally or more reliable verified and timely



10 data are available to the Administrator and the pub-



11 lic on the Internet under other mandatory statutory



12 requirements.



13 ‘‘(4) ALTERNATIVE THRESHOLD.—The Admin-



14 istrator may, by rule, establish applicability thresh-



15 olds for reporting under this section using alter-



16 native metrics and levels, provided that such metrics



17 and levels are easier to administer and cover the



18 same size and type of sources as the threshold de-



19 fined in this section.



20 ‘‘(c) INTERRELATIONSHIP WITH OTHER SYSTEMS.—



21 In developing the regulations issued under subsection
(b),



22 the Administrator shall take into account the work done



23 by the Climate Registry and other mandatory State or



24 multistate programs. Such regulations shall include an
ex-



25 planation of any major differences in approach between
425



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1 the system established under the regulations and such reg-



2 istries and programs.



3 ‘‘SEC. 714. PERFLUOROCARBON REGULATION.



4 ‘‘(a) DEFINITIONS.—In this section:



5 ‘‘(1) CONSUMPTION.—The term ‘consumption’



6 means, with respect to perfluorocarbon, the quantity



7 of that substance produced in the United States,



8 plus the quantity imported, minus the quantity ex-



9 ported.



10 ‘‘(2) PRODUCE; PRODUCED; PRODUCTION.—



11 ‘‘(A) IN GENERAL.—The terms ‘produce’,



12 ‘produced’, and ‘production’ mean the manufac-



13 ture of perfluorocarbon, or the emission of



14 perfluorocarbon from other industrial sources.



15 ‘‘(B) EXCLUSIONS.—The terms ‘produce’,



16 ‘produced’, and ‘production’ do not include—



17 ‘‘(i) the manufacture of



18 perfluorocarbon that is used and entirely



19 consumed (except for trace quantities) in



20 the manufacture of other chemicals or



21 products;



22 ‘‘(ii) the reuse or recycling of



23 perfluorocarbon; or 426



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1 ‘‘(iii) the emission of perfluorocarbon



2 from use in production processes, such as



3 electronics manufacturing.



4 ‘‘(C) OFFSET CREDIT.—The term ‘offset



5 credit’ means reduction of perfluorocarbon



6 emissions by destruction or conversionary use of



7 perfluorocarbons during production processes,



8 such as electronics manufacturing.



9 ‘‘(b) DETERMINATION BY ADMINISTRATOR.—As soon



10 as practicable after the date of enactment of this
section,



11 the Administrator shall determine, based on such criteria



12 as the Administrator determines to be appropriate, wheth-



13 er emissions from the production and consumption of



14 perfluorocarbon should be regulated in accordance with—



15 ‘‘(1) this section; or



16 ‘‘(2) the other applicable provisions of this title.



17 ‘‘(c) EFFECT OF DETERMINATION.—On a determina-



18 tion by the Administrator under subsection (a)(1) that



19 perfluorocarbon emissions described in subsection (b)



20 should be regulated in accordance with this section—



21 ‘‘(1) emissions from the production of



22 perfluorocarbon shall be subject to the best available



23 control technology (as defined in section 169) for



24 each greenhouse gas designated in section 711 at fa-427



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1 cilities emitting 25,000 metric tons of carbon dioxide



2 equivalent perfluorocarbon emissions or more; and



3 ‘‘(2) the consumption of perfluorocarbon shall



4 be phased down in accordance with this section.



5 ‘‘(d) USE AND CONSUMPTION.—



6 ‘‘(1) PHASE-DOWNS.—



7 ‘‘(A) CONSUMPTION.—



8 ‘‘(i) IN GENERAL.—With respect to



9 perfluorocarbon, not later than 18 months



10 after the date of enactment of this section,



11 the Administrator shall promulgate regula-



12 tions phasing down, in accordance with



13 this section—



14 ‘‘(I) the consumption of



15 perfluorocarbon in the United States;



16 and



17 ‘‘(II) the importation into the



18 United States of products containing



19 any perfluorocarbon.



20 ‘‘(ii) PROHIBITION.—Effective begin-



21 ning on January 1, 2014, it shall be un-



22 lawful for any person to produce any



23 perfluorocarbon, import any



24 perfluorocarbon, or import any product



25 containing perfluorocarbon, unless the per-428



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1 son holds 1 consumption allowance or 1



2 offset credit for each carbon dioxide equiv-



3 alent ton of the perfluorocarbon destroyed.



4 ‘‘(iii) RETIRED ALLOWANCES.—Any



5 person who exports a perfluorocarbon for



6 which a use allowance was retired may re-



7 ceive a refund of that allowance from the



8 Administrator after the date of export.



9 ‘‘(B) INTEGRITY OF LIMITS.—To maintain



10 the integrity of the perfluorocarbon limits under



11 this paragraph, the Administrator may limit, by



12 regulation, the percentage of the compliance ob-



13 ligation of any person that may be met through



14 the consumption of offset credits or banked al-



15 lowances.



16 ‘‘(C) COUNTING OF VIOLATIONS.—Each



17 consumption allowance or offset credit not held



18 as required by this subsection shall be a sepa-



19 rate violation of this section.



20 ‘‘(2) SCHEDULE.—Pursuant to the regulations



21 promulgated under paragraph (1)(A), the number of



22 perfluorocarbon consumption allowances available for



23 distribution for each calendar year beginning in cal-



24 endar year 2014 shall be established by the Adminis-



25 trator. 429



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1 ‘‘(3) BASELINE.—



2 ‘‘(A) IN GENERAL.—Not later than 1 year



3 after the date of enactment of this section, the



4 Administrator shall promulgate regulations to



5 establish the baseline for purposes of paragraph



6 (2).



7 ‘‘(B) CALCULATION.—The baseline shall



8 be—



9 ‘‘(i) the sum, expressed in metric tons



10 of carbon dioxide equivalents, of—



11 ‘‘(I) the average of the annual



12 consumption of all perfluorocarbon in



13 each of calendar years 2004, 2005,



14 and 2006; and



15 ‘‘(II) the annual average quantity



16 of all perfluorocarbon contained in im-



17 ported products during the period of



18 calendar years 2004, 2005, and 2006;



19 or



20 ‘‘(ii) such alternative quantity of car-



21 bon dioxide equivalents that, as determined



22 by the Administrator, more accurately re-



23 flects the average annual quantity of



24 perfluorocarbon consumed in and imported



25 into the United States (including in prod-430



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1 ucts), as based on information compiled by



2 the Administrator.



3 ‘‘(4) DISTRIBUTION OF ALLOWANCES.—The



4 Administrator shall determine an allocation, and



5 procedures for the distribution, transfer, and ex-



6 change of allowances for the consumption of



7 perfluorocarbon under this section, including a de-



8 termination of whether allowances may be auctioned,



9 sold, or allocated and distributed at no cost, trans-



10 ferred, or exchanged for domestic or international



11 consumption, in accordance with such criteria as the



12 Administrator considers to be appropriate.



13 ‘‘(e) IMPLEMENTATION.—To the maximum extent



14 practicable, the Administrator shall implement this
section



15 in accordance with the procedures described in section



16 619.



17 ‘‘(f) DEADLINES FOR COMPLIANCE.—The Adminis-



18 trator shall promulgate regulations for perfluorocarbon
in



19 accordance with this section by not later than October
31,



20 2013.



21 ‘‘PART C—PROGRAM RULES



22 ‘‘SEC. 721. EMISSION ALLOWANCES.



23 ‘‘(a) IN GENERAL.—The Administrator shall estab-



24 lish a separate quantity of emission allowances for each
431



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1 calendar year starting in 2012, in the amounts prescribed



2 under subsection (e).



3 ‘‘(b) IDENTIFICATION NUMBERS.—The Adminis-



4 trator shall assign to each emission allowance established



5 under subsection (a) a unique identification number that



6 includes the vintage year for that emission allowance.



7 ‘‘(c) LEGAL STATUS OF EMISSION ALLOWANCES.—



8 ‘‘(1) IN GENERAL.—An allowance established



9 by the Administrator under this title does not con-



10 stitute a property right.



11 ‘‘(2) TERMINATION OR LIMITATION.—Nothing



12 in this Act or any other provision of law shall be



13 construed to limit or alter the authority of the



14 United States, including the Administrator acting



15 pursuant to statutory authority, to terminate or



16 limit allowances, offset credits, or term offset cred-



17 its.



18 ‘‘(3) OTHER PROVISIONS UNAFFECTED.—Ex-



19 cept as otherwise specified in this Act, nothing in



20 this Act relating to allowances, offset credits, or



21 term offset credits established or issued under this



22 title shall affect the application of any other provi-



23 sion of law to a covered entity, or the responsibility



24 for a covered entity to comply with any such provi-



25 sion of law. 432



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1 ‘‘(d) SAVINGS PROVISION.—Nothing in this part shall



2 be construed as requiring a change of any kind in any



3 State law regulating electric utility rates and charges,
or



4 as affecting any State law regarding such State regula-



5 tion, or as limiting State regulation (including any



6 prudency review) under such a State law. Nothing in this



7 part shall be construed as modifying the Federal Power



8 Act (16 U.S.C. 791a et seq.) or as affecting the authority



9 of the Federal Energy Regulatory Commission under that



10 Act. Nothing in this part shall be construed to interfere



11 with or impair any program for competitive bidding for



12 power supply in a State in which such program is estab-



13 lished.



14 ‘‘(e) ALLOWANCES FOR EACH CALENDAR YEAR.—



15 ‘‘(1) IN GENERAL.—Except as provided in para-



16 graph (2), the number of emission allowances estab-



17 lished by the Administrator under subsection (a) for



18 each calendar year shall be as provided in the fol-



19 lowing table:



‘‘Calendar Year Emissions Allowances (MtCO2e)



2012
....................................................................... 4,627



2013 .......................................................................
4,544



2014
....................................................................... 5,099



2015
....................................................................... 5,003



2016 .......................................................................
5,482



2017
....................................................................... 5,261



2018
....................................................................... 5,132



2019 .......................................................................
5,002



2020
....................................................................... 4,873



2021
....................................................................... 4,739



2022
....................................................................... 4,605



2023
....................................................................... 4,471
433



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2024 .......................................................................
4,337



2025
....................................................................... 4,203



2026
....................................................................... 4,069



2027 .......................................................................
3,935



2028
....................................................................... 3,801



2029
....................................................................... 3,667



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
....................................................................... 1,035



1 ‘‘(2) REVISION.—



2 ‘‘(A) IN GENERAL.—The Administrator



3 may adjust, in accordance with subparagraph



4 (B), the number of emission allowances estab-



5 lished pursuant to paragraph (1) if, after notice



6 and an opportunity for public comment, the Ad-



7 ministrator determines that—



8 ‘‘(i) United States greenhouse gas



9 emissions in 2005 were other than 7,206



10 million metric tons carbon dioxide equiva-



11 lent;



12 ‘‘(ii) if the requirements of this title



13 for 2012 had been in effect in 2005, sec-434



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1 tion 722 would have required emission al-



2 lowances to be held for other than 66.2



3 percent of United States greenhouse gas



4 emissions in 2005;



5 ‘‘(iii) if the requirements of this title



6 for 2014 had been in effect in 2005, sec-



7 tion 722 would have required emission al-



8 lowances to be held for other than 75.7



9 percent of United States greenhouse gas



10 emissions in 2005; or



11 ‘‘(iv) if the requirements of this title



12 for 2016 had been in effect in 2005, sec-



13 tion 722 would have required emission al-



14 lowances to be held for other than 84.5



15 percent United States greenhouse gas



16 emissions in 2005.



17 ‘‘(B) ADJUSTMENT FORMULA.—



18 ‘‘(i) IN GENERAL.—If the Adminis-



19 trator adjusts under this paragraph the



20 number of emission allowances established



21 pursuant to paragraph (1), the number of



22 emission allowances the Administrator es-



23 tablishes for any given calendar year shall



24 equal the product of— 435



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1 ‘‘(I) United States greenhouse



2 gas emissions in 2005, expressed in



3 tons of carbon dioxide equivalent;



4 ‘‘(II) the percent of United



5 States greenhouse gas emissions in



6 2005, expressed in tons of carbon di-



7 oxide equivalent, that would have been



8 subject to section 722 if the require-



9 ments of this title for the given cal-



10 endar year had been in effect in 2005;



11 and



12 ‘‘(III) the percentage set forth



13 for that calendar year in section



14 703(a), or determined under clause



15 (ii) of this subparagraph.



16 ‘‘(ii) TARGETS.—In applying the por-



17 tion of the formula in clause (i)(III) of this



18 subparagraph, for calendar years for which



19 a percentage is not listed in section 703(a),



20 the Administrator shall use a uniform an-



21 nual decline in the amount of emissions be-



22 tween the years that are specified.



23 ‘‘(iii) CARBON DIOXIDE EQUIVALENT



24 VALUE.—If the Administrator adjusts



25 under this paragraph the number of emis-436



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1 sion allowances established pursuant to



2 paragraph (1), the Administrator shall use



3 the carbon dioxide equivalent values estab-



4 lished pursuant to section 712.



5 ‘‘(iv) LIMITATION ON ADJUSTMENT



6 TIMING.—Once a calendar year has start-



7 ed, the Administrator may not adjust the



8 number of emission allowances to be estab-



9 lished for that calendar year.



10 ‘‘(C) LIMITATION ON ADJUSTMENT AU-



11 THORITY.—The Administrator may adjust



12 under this paragraph the number of emission



13 allowances to be established pursuant to para-



14 graph (1) only once.



15 ‘‘(f) COMPENSATORY ALLOWANCE.—



16 ‘‘(1) IN GENERAL.—The regulations promul-



17 gated under subsection (h) shall provide for the es-



18 tablishment and distribution of compensatory allow-



19 ances for—



20 ‘‘(A) the destruction, in 2012 or later, of



21 fluorinated gases that are greenhouse gases if—



22 ‘‘(i) allowances or offset credits were



23 retired for their production or importation;



24 and 437



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1 ‘‘(ii) such gases are not required to be



2 destroyed under any other provision of law;



3 ‘‘(B) the nonemissive use, in 2012 or later,



4 of petroleum-based or coal-based liquid or gas-



5 eous fuel, petroleum coke, natural gas liquid, or



6 natural gas as a feedstock, if allowances or off-



7 set credits were retired for the greenhouse



8 gases that would have been emitted from their



9 combustion; and



10 ‘‘(C) the conversionary use, in 2012 or



11 later, of fluorinated gases in a manufacturing



12 process, including semiconductor research or



13 manufacturing, if allowances or offset credits



14 were retired for the production or importation



15 of such gas.



16 ‘‘(2) ESTABLISHMENT AND DISTRIBUTION.—



17 ‘‘(A) IN GENERAL.—Not later than 90



18 days after the end of each calendar year, the



19 Administrator shall establish and distribute to



20 the entity taking the actions described in sub-



21 paragraph (A), (B), or (C) of paragraph (1) a



22 quantity of compensatory allowances equivalent



23 to the number of tons of carbon dioxide equiva-



24 lent of avoided emissions achieved through such



25 actions. In establishing the quantity of compen-438



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1 satory allowances, the Administrator shall take



2 into account the carbon dioxide equivalent value



3 of any greenhouse gas resulting from such ac-



4 tion.



5 ‘‘(B) SOURCE OF ALLOWANCES.—Compen-



6 satory allowances established under this sub-



7 section shall not be emission allowances estab-



8 lished under subsection (a).



9 ‘‘(C) IDENTIFICATION NUMBERS.—The



10 Administrator shall assign to each compen-



11 satory allowance established under subpara-



12 graph (A) a unique identification number.



13 ‘‘(3) DEFINITIONS.—For purposes of this sub-



14 section—



15 ‘‘(A) the term ‘destruction’ means the con-



16 version of a greenhouse gas by thermal, chem-



17 ical, or other means to another gas or set of



18 gases with little or no carbon dioxide equivalent



19 value;



20 ‘‘(B) the term ‘nonemissive use’ means the



21 use of fossil fuel as a feedstock in an industrial



22 or manufacturing process to the extent that



23 greenhouse gases are not emitted from such



24 process, and to the extent that the products of 439



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1 such process are not intended for use as, or to



2 be contained in, a fuel; and



3 ‘‘(C) the term ‘conversionary use’ means



4 the conversion during research or manufac-



5 turing of a fluorinated gas into another green-



6 house gas or set of gases with a lower carbon



7 dioxide equivalent value.



8 ‘‘(4) FEEDSTOCK EMISSIONS STUDY.—



9 ‘‘(A) The Administrator may conduct a



10 study to determine the extent to which petro-



11 leum-based or coal-based liquid or gaseous fuel,



12 petroleum coke, natural gas liquid, or natural



13 gas are used as feedstocks in manufacturing



14 processes to produce products and the green-



15 house gas emissions resulting from such uses.



16 ‘‘(B) If as a result of such a study, the Ad-



17 ministrator determines that the use of such



18 products by noncovered sources results in sub-



19 stantial emissions of greenhouse gases or their



20 precursors and that such emissions have not



21 been adequately addressed under other require-



22 ments of this Act, the Administrator may, after



23 notice and comment rulemaking, promulgate a



24 regulation reducing compensatory allowances 440



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1 commensurately if doing so will not result in



2 leakage.



3 ‘‘(g) FLUORINATED GASES ASSESSMENT.—



4 ‘‘(1) IN GENERAL.—Not later than March 31,



5 2014, the Administrator shall conduct an assess-



6 ment of the regulation of non-hydrofluorocarbon



7 fluorinated gases under this title (excluding



8 perfluorocarbon) to determine whether the most ap-



9 propriate point of regulation of those gases is at—



10 ‘‘(A) the gas manufacturer or importer



11 level; or



12 ‘‘(B) the downstream source of the emis-



13 sions.



14 ‘‘(2) MODIFICATION OF DEFINITION.—If the



15 Administrator determines, based on consideration of



16 environmental effectiveness, cost-effectiveness, ad-



17 ministrative feasibility, extent of coverage of emis-



18 sions, and competitiveness considerations, that emis-



19 sions of non-hydrofluorocarbon fluorinated gases (ex-



20 cluding perfluorocarbons) can best be regulated by



21 designating downstream emission sources as covered



22 entities with compliance obligations under section



23 722, the Administrator shall—



24 ‘‘(A) after providing notice and an oppor-



25 tunity for comment, modify the definition of the 441



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1 term ‘covered entity’ with respect to fluorinated



2 gases (other than hydrofluorocarbons and



3 perfluorocarbons) accordingly; and



4 ‘‘(B) establish such requirements as are



5 necessary to ensure compliance by the covered



6 entities with the requirements of this title.



7 ‘‘(h) REGULATIONS.—Not later than 24 months after



8 the date of enactment of this title, the Administrator
shall



9 promulgate regulations to carry out the provisions of this



10 title.



11 ‘‘SEC. 722. PROHIBITION OF EXCESS EMISSIONS.



12 ‘‘(a) PROHIBITION.—Except as provided in sub-



13 section (c), effective January 1, 2012, each covered
entity



14 is prohibited from emitting greenhouse gases, and having



15 attributable greenhouse gas emissions, in combination, in



16 excess of its allowable emissions level. A covered
entity’s



17 allowable emissions level for each calendar year is the



18 number of emission allowances (or credits or other allow-



19 ances as provided in subsection (d)) it holds as of 12:01



20 a.m. on April 1 (or a later date established by the
Admin-



21 istrator under subsection (j)) of the following calendar



22 year.



23 ‘‘(b) METHODS OF DEMONSTRATING COMPLIANCE.—



24 Except as otherwise provided in this section, the owner



25 or operator of a covered entity shall not be considered
to 442



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1 be in compliance with the prohibition in subsection (a)
un-



2 less, as of 12:01 a.m. on April 1 (or a later date estab-



3 lished by the Administrator under subsection (j)) of each



4 calendar year starting in 2013, the owner or operator



5 holds a quantity of emission allowances (or credits or
other



6 allowances as provided in subsection (d)) at least as
great



7 as the quantity calculated as follows:



8 ‘‘(1) ELECTRICITY SOURCES.—For a covered



9 entity described in section 700(13)(A), 1 emission



10 allowance for each ton of carbon dioxide equivalent



11 of greenhouse gas that such covered entity emitted



12 in the previous calendar year, excluding emissions



13 resulting from the combustion of—



14 ‘‘(A) petroleum-based or coal-based liquid



15 fuel;



16 ‘‘(B) natural gas liquid;



17 ‘‘(C) renewable biomass or gas derived



18 from renewable biomass; or



19 ‘‘(D) petroleum coke.



20 ‘‘(2) FUEL PRODUCERS AND IMPORTERS.—For



21 a covered entity described in section 700(13)(B), 1



22 emission allowance for each ton of carbon dioxide



23 equivalent of greenhouse gas that would be emitted



24 from the combustion of any petroleum-based or coal-



25 based liquid fuel, petroleum coke, or natural gas liq-443



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1 uid, produced or imported by such covered entity



2 during the previous calendar year for sale or dis-



3 tribution in interstate commerce, assuming no cap-



4 ture and sequestration of any greenhouse gas emis-



5 sions.



6 ‘‘(3) INDUSTRIAL GAS PRODUCERS AND IM-



7 PORTERS.—For a covered entity described in section



8 700(13)(C), 1 emission allowance for each ton of



9 carbon dioxide equivalent of fossil fuel-based carbon



10 dioxide, nitrous oxide, or any other fluorinated gas



11 that is a greenhouse gas (except for nitrogen



12 trifluoride), or any combination thereof, produced or



13 imported by such covered entity during the previous



14 calendar year for sale or distribution in interstate



15 commerce or released as fugitive emissions in the



16 production of fluorinated gas.



17 ‘‘(4) NITROGEN TRIFLUORIDE SOURCES.—For



18 a covered entity described in section 700(13)(D), 1



19 emission allowance for each ton of carbon dioxide



20 equivalent of nitrogen trifluoride that such covered



21 entity emitted in the previous calendar year.



22 ‘‘(5) GEOLOGICAL SEQUESTRATION SITES.—For



23 a covered entity described in section 700(13)(E), 1



24 emission allowance for each ton of carbon dioxide 444



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1 equivalent of greenhouse gas that such covered enti-



2 ty emitted in the previous calendar year.



3 ‘‘(6) INDUSTRIAL STATIONARY SOURCES.—For



4 a covered entity described in section 700(13)(F),



5 (G), or (H), 1 emission allowance for each ton of



6 carbon dioxide equivalent of greenhouse gas that



7 such covered entity emitted in the previous calendar



8 year, excluding emissions resulting from—



9 ‘‘(A) the combustion of petroleum-based or



10 coal-based liquid fuel;



11 ‘‘(B) the combustion of natural gas liquid;



12 ‘‘(C) the combustion of renewable biomass



13 or gas derived from renewable biomass;



14 ‘‘(D) the combustion of petroleum coke; or



15 ‘‘(E) the use of any fluorinated gas that is



16 a greenhouse gas purchased for use at that cov-



17 ered entity, except for nitrogen trifluoride.



18 ‘‘(7) INDUSTRIAL FOSSIL FUEL-FIRED COMBUS-



19 TION DEVICES.—For a covered entity described in



20 section 700(13)(I), 1 emission allowance for each



21 ton of carbon dioxide equivalent of greenhouse gas



22 that the devices emitted in the previous calendar



23 year, excluding emissions resulting from the combus-



24 tion of— 445



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1 ‘‘(A) petroleum-based or coal-based liquid



2 fuel;



3 ‘‘(B) natural gas liquid;



4 ‘‘(C) renewable biomass or gas derived



5 from renewable biomass; or



6 ‘‘(D) petroleum coke.



7 ‘‘(8) NATURAL GAS LOCAL DISTRIBUTION COM-



8 PANIES.—For a covered entity described in section



9 700(13)(J), 1 emission allowance for each ton of



10 carbon dioxide equivalent of greenhouse gas that



11 would be emitted from the combustion of the natural



12 gas, and any other gas meeting the specifications for



13 commingling with natural gas for purposes of deliv-



14 ery, that such entity delivered during the previous



15 calendar year to customers that are not covered enti-



16 ties, assuming no capture and sequestration of that



17 greenhouse gas.



18 ‘‘(9) R&D FACILITIES.—



19 ‘‘(A) IN GENERAL.—For a qualified R&D



20 facility that emitted 25,000 tons per year or



21 more carbon dioxide equivalent in the previous



22 calendar year, 1 emission allowance for each



23 ton of carbon dioxide equivalent of greenhouse



24 gas that such facility emitted in the previous



25 calendar year. 446



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1 ‘‘(B) TREATMENT.—A qualified R&D facil-



2 ity shall be treated as a separate covered entity



3 solely for purposes of applying the requirements



4 of this subsection.



5 ‘‘(10) ALGAE-BASED FUELS.—Where carbon di-



6 oxide (or another greenhouse gas) is used as an



7 input in the production of algae-based fuels, the Ad-



8 ministrator shall ensure that allowances are required



9 to be held either for the carbon dioxide used to grow



10 the algae or for the carbon dioxide emitted from



11 combustion of the fuel produced from such algae,



12 but not for both.



13 ‘‘(11) FUGITIVE EMISSIONS.—The greenhouse



14 gas emissions to which paragraphs (1), (4), (6), and



15 (7) apply shall not include fugitive emissions of



16 greenhouse gas, except to the extent the Adminis-



17 trator determines that data on the carbon dioxide



18 equivalent value of greenhouse gas in the fugitive



19 emissions can be provided with sufficient precision,



20 reliability, accessibility, and timeliness to ensure the



21 integrity of emission allowances, the allowance track-



22 ing system, and the limits on emissions.



23 ‘‘(12) EXPORT EXEMPTION.—This section shall



24 not apply to any petroleum-based or coal-based liq-



25 uid fuel, petroleum coke, natural gas liquid, fossil 447



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1 fuel-based carbon dioxide, nitrous oxide, or



2 fluorinated gas that is exported for sale or use.



3 ‘‘(13) NATURAL GAS LIQUIDS.—Notwith-



4 standing subsection (a), if the owner or operator of



5 a covered entity described in section 700(13)(B)



6 that produces natural gas liquids does not take own-



7 ership of the liquids, and is not responsible for the



8 distribution or use of the liquids in commerce, the



9 owner of the liquids shall be responsible for compli-



10 ance with this section, section 723, and other rel-



11 evant sections of this title with respect to such liq-



12 uids. In the regulations promulgated under section



13 721, the Administrator shall include such provisions



14 with respect to such liquids as the Administrator de-



15 termines are appropriate to determine and ensure



16 compliance, and to penalize noncompliance. In such



17 a case, the owner of the covered entity shall provide



18 to the Administrator, in a manner to be determined



19 by the Administrator, information regarding the



20 quantity and ownership of liquids produced at the



21 covered entity.



22 ‘‘(14) APPLICATION OF MULTIPLE PARA-



23 GRAPHS.—For a covered entity to which more than



24 1 of paragraphs (1) through (8) apply, all applicable



25 paragraphs shall apply, except that not more than 1 448



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1 emission allowance shall be required for the same



2 emission.



3 ‘‘(c) PHASE-IN OF PROHIBITION.—



4 ‘‘(1) INDUSTRIAL STATIONARY SOURCES.—The



5 prohibition under subsection (a) shall first apply to



6 a covered entity described in section 700(13)(D),



7 (F), (G), (H), or (I), with respect to emissions oc-



8 curring during calendar year 2014.



9 ‘‘(2) NATURAL GAS LOCAL DISTRIBUTION COM-



10 PANIES.—The prohibition under subsection (a) shall



11 first apply to a covered entity described in section



12 700(13)(J) with respect to deliveries occurring dur-



13 ing calendar year 2016.



14 ‘‘(d) ADDITIONAL METHODS.—In addition to using



15 the method of compliance described in subsection (b), a



16 covered entity may do the following:



17 ‘‘(1) OFFSET CREDITS.—



18 ‘‘(A) CREDITS.—



19 ‘‘(i) IN GENERAL.—Covered entities



20 collectively may, in accordance with this



21 paragraph, use offset credits to dem-



22 onstrate compliance for up to a maximum



23 of 2,000,000,000 tons of greenhouse gas



24 emissions annually. 449



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1 ‘‘(ii) DEMONSTRATION OF COMPLI-



2 ANCE.—In any calendar year, a covered



3 entity may demonstrate compliance by



4 holding 1 domestic offset credit or 1.25



5 international offset credits in lieu of an



6 emission allowance, except as provided in



7 subparagraph (D), up to a total number of



8 offset credits described in subparagraph



9 (B).



10 ‘‘(B) APPLICABLE PERCENTAGE.—



11 ‘‘(i) IN GENERAL.—The total number



12 of offset credits referred to in subpara-



13 graph (A)(ii) for a covered entity for a



14 given calendar year shall be determined



15 by—



16 ‘‘(I) dividing—



17 ‘‘(aa) the tons of carbon di-



18 oxide equivalent of greenhouse



19 gas emissions of the covered enti-



20 ty (except for the types of emis-



21 sions excluded under subpara-



22 graphs (A) through (D) of sub-



23 section (b)(1), subparagraphs (A)



24 through (E) of subsection (b)(6),



25 and subparagraphs (A) through 450



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1 (D) of subsection (b)(7)) and at-



2 tributable greenhouse gas emis-



3 sions for the year before the pre-



4 ceding calendar year; by



5 ‘‘(bb) the sum of the tons of



6 carbon dioxide equivalent of



7 greenhouse gas emissions of all



8 covered entities (except for the



9 types of emissions excluded under



10 subparagraphs (A) through (D)



11 of subsection (b)(1), subpara-



12 graphs (A) through (E) of sub-



13 section (b)(6), and subpara-



14 graphs (A) through (D) of sub-



15 section (b)(7)) and attributable



16 greenhouse gas emissions for the



17 year before the preceding cal-



18 endar year; and



19 ‘‘(II) multiplying the quotient ob-



20 tained under subclause (I) by



21 2,000,000,000.



22 ‘‘(ii) APPLICABILITY.—Clause (i) shall



23 apply to a covered entity (including a cov-



24 ered entity that commenced operation dur-



25 ing the preceding calendar year) even if 451



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1 the covered entity had no greenhouse gas



2 emissions or attributable greenhouse gas



3 emissions described in that clause.



4 ‘‘(iii) OFFSET CREDITS.—Not more



than



3



5 ⁄4 of the applicable percentage under



6 this paragraph may be used by holding domestic offset
credits, and not more than



1



7 ⁄4



8 of the applicable percentage under this



9 paragraph may be used by holding inter-



10 national offset credits, except as provided



11 in subparagraph (C).



12 ‘‘(C) MODIFIED PERCENTAGES.—If the



13 Administrator determines that domestic offset



14 credits available for use in demonstrating com-



15 pliance in any calendar year at domestic offset



16 prices generally equal to or less than allowance



17 prices, are likely to offset less than 900,000,000



18 tons of greenhouse gas emissions (measured in



19 tons of carbon dioxide equivalents), the Admin-



20 istrator shall increase the percent of emissions



21 that can be offset through the use of inter-



22 national offset credits (and decrease the percent



23 of emissions that can be allowed through the



24 use of domestic offset credits by the same



25 amount) to reflect the amount that 452



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1 1,500,000,000 exceeds the number of domestic



2 offset credits the Administrator determines is



3 available for that year, up to a maximum of



4 750,000,000 tons of greenhouse gas emissions.



5 ‘‘(D) INTERNATIONAL OFFSET CREDITS.—



6 Notwithstanding subparagraph (A), to dem-



7 onstrate compliance prior to calendar year



8 2018, a covered entity may use 1 international



9 offset credit in lieu of an emission allowance up



10 to the amount permitted under this paragraph.



11 ‘‘(E) PRESIDENT’S RECOMMENDATION.—



12 The President may make a recommendation to



13 Congress as to whether the number



14 2,000,000,000 specified in subparagraphs (A)



15 and (B) should be increased or decreased.



16 ‘‘(2) TERM OFFSET CREDITS.—



17 ‘‘(A) IN GENERAL.—Covered entities may,



18 in accordance with this paragraph, use non-ex-



19 pired term offset credits instead of domestic



20 offset credits for purposes of temporarily dem-



21 onstrating compliance with this section.



22 ‘‘(B) AMOUNT.—The combined quantity of



23 term offset credits and domestic offset credits



24 used by a covered entity to demonstrate compli-



25 ance for its emissions or attributable green-453



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1 house gas emissions in any given year shall not



2 exceed the quantity of domestic offset credits



3 that a covered entity is entitled to use for that



4 year to demonstrate compliance in accordance



5 with paragraph (1).



6 ‘‘(C) EXPIRATION.—A term offset credit



7 shall expire in the year after its term ends. The



8 term of a term offset credit shall be calculated



9 by adding to the year of issuance the number



10 of years equal to the length of the crediting pe-



11 riod for the practice or project for which the



12 term offset credit was issued, but in no case



13 shall be later than the date 5 years from the



14 date of issuance.



15 ‘‘(D) DEMONSTRATING COMPLIANCE UPON



16 EXPIRATION OF TERM OFFSET CREDIT.—With



17 respect to the emissions for which a covered en-



18 tity is using term offset credits to demonstrate



19 compliance temporarily with this section, the



20 owner or operator of a covered entity shall not



21 be considered to be in compliance with the pro-



22 hibition in subsection (a) unless, as of 12:01



23 a.m. on April 1 (or a later date established by



24 the Administrator under subsection (j)) of the 454



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1 calendar year in which a term offset credit ex-



2 pires, the owner or operator holds—



3 ‘‘(i) for purposes of finally dem-



4 onstrating compliance, an allowance or a



5 domestic offset credit; or



6 ‘‘(ii) for purposes of temporarily dem-



7 onstrating compliance, a non-expired term



8 offset credit.



9 ‘‘(E) INAPPLICABILITY OF PERCENTAGE



10 LIMITATIONS.—Domestic offset credits used for



11 purposes of finally demonstrating compliance



12 under this subparagraph shall not be subject to



13 the percentage limitations in subparagraph (B).



14 ‘‘(F) FINANCIAL ASSURANCE.—A covered



15 entity may not use a term offset credit to dem-



16 onstrate compliance temporarily unless it simul-



17 taneously provides to the Administrator finan-



18 cial assurance that, at the end of the term off-



19 set credit‘s crediting term, the covered entity



20 will have sufficient resources to obtain the



21 quantity of allowances or credits necessary to



22 demonstrate final compliance. The Adminis-



23 trator shall issue regulations establishing re-



24 quirements for such financial assurance, which



25 shall take into account the increased risk asso-455



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1 ciated with longer crediting terms. These regu-



2 lations shall take into account the total number



3 of tons of carbon dioxide equivalent of green-



4 house gas emissions for which a covered entity



5 is demonstrating compliance temporarily, and



6 may set a limit on this amount. In the event



7 that a covered entity that used term offset cred-



8 its to demonstrate compliance temporarily fails



9 to meet the requirements of subparagraph (D)



10 at the end of the term offset credits’ crediting



11 term, if the financial assurance mechanism fails



12 to provide to the Administrator the number of



13 allowances or offset credits for which the cred-



14 iting term has expired, then the Administrator



15 shall retire that number of allowances with the



16 vintage year 2 years after the year in which the



17 term offset credit expires in the same amount.



18 Allowances so retired shall not be counted as



19 emission allowances established for that cal-



20 endar year under section 721(a).



21 ‘‘(3) INTERNATIONAL EMISSION ALLOW-



22 ANCES.—To demonstrate compliance, a covered enti-



23 ty may hold an international emission allowance in



24 lieu of an emission allowance, except as modified



25 under section 728(d). 456



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1 ‘‘(4) COMPENSATORY ALLOWANCES.—To dem-



2 onstrate compliance, a covered entity may hold a



3 compensatory allowance obtained under section



4 721(f) in lieu of an emission allowance.



5 ‘‘(e) RETIREMENT OF ALLOWANCES AND CREDITS.—



6 As soon as practicable after a deadline established for
cov-



7 ered entities to demonstrate compliance with this title,
the



8 Administrator shall retire the quantity of allowances or



9 credits required to be held under this title.



10 ‘‘(f) ALTERNATIVE METRICS.—For categories of cov-



11 ered entities described in subparagraph (B), (C), (D),
(G),



12 (H), or (I) of section 700(13), the Administrator may, by



13 rule, establish an applicability threshold for inclusion



14 under those subparagraphs using an alternative metric



15 and level, provided that such metric and level are easier



16 to administer and cover the same size and type of sources



17 as the threshold defined in such subparagraphs.



18 ‘‘(g) THRESHOLD REVIEW.—For each category of



19 covered entities described in subparagraph (B), (C), (D),



20 (G), (H), or (I) of section 700(13), the Administrator



21 shall, in 2020 and once every 8 years thereafter, review



22 the carbon dioxide equivalent emission thresholds that
are



23 used to define covered entities. After consideration of—



24 ‘‘(1) emissions from covered entities in each



25 such category, and from other entities of the same 457



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1 type that emit less than the threshold amount for



2 the category (including emission sources that com-



3 mence operation after the date of enactment of this



4 title that are not covered entities); and



5 ‘‘(2) whether greater greenhouse gas emission



6 reductions can be cost-effectively achieved by low-



7 ering the applicable threshold,



8 the Administrator may by rule lower such threshold to not



9 less than 10,000 tons of carbon dioxide equivalent emis-



10 sions. In determining the cost effectiveness of potential
re-



11 ductions from lowering the threshold for covered
entities,



12 the Administrator shall consider alternative regulatory



13 greenhouse gas programs, including setting standards



14 under other titles of this Act.



15 ‘‘(h) DESIGNATED REPRESENTATIVES.—The regula-



16 tions promulgated under section 721(h) shall require that



17 each covered entity, and each entity holding allowances
or



18 credits or receiving allowances or credits from the
Admin-



19 istrator under this title, select a designated
representative.



20 ‘‘(i) EDUCATION AND OUTREACH.—



21 ‘‘(1) IN GENERAL.—The Administrator shall es-



22 tablish and carry out a program of education and



23 outreach to assist covered entities, especially entities



24 having little experience with environmental regu-



25 latory requirements similar or comparable to those 458



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1 under this title, in preparing to meet the compliance



2 obligations of this title. Such program shall include



3 education with respect to using markets to effec-



4 tively achieve such compliance.



5 ‘‘(2) FAILURE TO RECEIVE INFORMATION.—A



6 failure to receive information or assistance under



7 this subsection may not be used as a defense against



8 an allegation of any violation of this title.



9 ‘‘(j) ADJUSTMENT OF DEADLINE.—The Adminis-



10 trator may, by rule, establish a deadline for
demonstrating



11 compliance, for a calendar year, later than the date pro-



12 vided in subsection (a), as necessary to ensure the
avail-



13 ability of emissions data, but in no event shall the
deadline



14 be later than June 1.



15 ‘‘(k) NOTICE REQUIREMENT FOR COVERED ENTI-



16 TIES RECEIVING NATURAL GAS FROM NATURAL GAS



17 LOCAL DISTRIBUTION COMPANIES.—The owner or oper-



18 ator of a covered entity that takes delivery of natural
gas



19 from a natural gas local distribution company shall, not



20 later than September 1 of each calendar year, notify such



21 natural gas local distribution company in writing that



22 such entity will qualify as a covered entity under this
title



23 for that calendar year.



24 ‘‘(l) COMPLIANCE OBLIGATION.—For purposes of



25 this title, the year of a compliance obligation is the
year 459



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1 in which compliance is determined, not the year in which



2 the greenhouse gas emissions occur or the covered entity



3 has attributable greenhouse gas emissions.



4 ‘‘SEC. 723. PENALTY FOR NONCOMPLIANCE.



5 ‘‘(a) ENFORCEMENT.—A violation of any prohibition



6 of, requirement of, or regulation promulgated pursuant to



7 this title shall be a violation of this Act. It shall be a
viola-



8 tion of this Act for a covered entity to emit greenhouse



9 gases, and have attributable greenhouse gas emissions, in



10 combination, in excess of its allowable emissions level
as



11 provided in section 722(a). Each ton of carbon dioxide



12 equivalent for which a covered entity fails to
demonstrate



13 compliance under section 722(b) shall be a separate
viola-



14 tion. In the event that a covered entity fails to dem-



15 onstrate compliance at the expiration of a term of offset



16 credits crediting term as required by section
722(d)(2)(D),



17 the year of the violation shall be the year in which the



18 term offset credit expires.



19 ‘‘(b) EXCESS EMISSIONS PENALTY.—



20 ‘‘(1) IN GENERAL.—The owner or operator of



21 any covered entity that fails for any year to comply,



22 on the deadline described in section 722(a) or (j),



23 shall be liable for payment to the Administrator of



24 an excess emissions penalty in the amount described



25 in paragraph (2). 460



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1 ‘‘(2) AMOUNT.—The amount of an excess emis-



2 sions penalty required to be paid under paragraph



3 (1) shall be equal to the product obtained by multi-



4 plying—



5 ‘‘(A) the tons of carbon dioxide equivalent



6 of greenhouse gas emissions or attributable



7 greenhouse gas emissions for which the owner



8 or operator of a covered entity failed to comply



9 under section 722(b) on the deadline; by



10 ‘‘(B) twice the fair market value of emis-



11 sion allowances established for emissions occur-



12 ring in the calendar year for which the emission



13 allowances were due.



14 ‘‘(3) TIMING.—An excess emissions penalty re-



15 quired under this subsection shall be immediately



16 due and payable to the Administrator, without de-



17 mand, in accordance with regulations promulgated



18 by the Administrator, which shall be issued not later



19 than 2 years after the date of enactment of this



20 title.



21 ‘‘(4) NO EFFECT ON LIABILITY.—An excess



22 emissions penalty due and payable by the owners or



23 operators of a covered entity under this subsection



24 shall not diminish the liability of the owners or oper-



25 ators for any fine, penalty, or assessment against 461



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1 the owners or operators for the same violation under



2 any other provision of this Act or any other law.



3 ‘‘(c) EXCESS EMISSIONS ALLOWANCES.—The owner



4 or operator of a covered entity that fails for any year to



5 comply on the deadline described in section 722(a) or (j)



6 shall be liable to offset the covered entity’s excess com-



7 bination of greenhouse gases emitted and attributable



8 greenhouse gas emissions by an equal quantity of emission



9 allowances during the following calendar year, or such



10 longer period as the Administrator may prescribe. During



11 the year in which the covered entity failed to comply, or



12 any year thereafter, the Administrator may deduct the



13 emission allowances required under this subsection to
off-



14 set the covered entity’s excess actual or attributable
emis-



15 sions.



16 ‘‘SEC. 724. TRADING.



17 ‘‘(a) PERMITTED TRANSACTIONS.—Except as other-



18 wise provided in this title, the lawful holder of an
emission



19 allowance, compensatory allowance, or offset credit may,



20 without restriction, sell, exchange, transfer, hold for
com-



21 pliance in accordance with section 722, or request that
the



22 Administrator retire the emission allowance, compensatory



23 allowance, or offset credit.



24 ‘‘(b) NO RESTRICTION ON TRANSACTIONS.—The



25 privilege of purchasing, holding, selling, exchanging,
462



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1 transferring, and requesting retirement of emission allow-



2 ances, compensatory allowances, or offset credits shall
not



3 be restricted to the owners and operators of covered enti-



4 ties, except as otherwise provided in this title.



5 ‘‘(c) EFFECTIVENESS OF ALLOWANCE TRANS-



6 FERS.—No transfer of an allowance or offset credit shall



7 be effective for purposes of this title until a
certification



8 of the transfer, signed by the designated representative
of



9 the transferor, is received and recorded by the Adminis-



10 trator in accordance with regulations promulgated under



11 section 721(h).



12 ‘‘(d) ALLOWANCE TRACKING SYSTEM.—The regula-



13 tions promulgated under section 721(h) shall include a



14 system for issuing, recording, holding, and tracking
allow-



15 ances, offset credits, and term offset credits that shall



16 specify all necessary procedures and requirements for an



17 orderly and competitive functioning of the allowance and



18 offset credit markets. Such regulations shall provide for



19 appropriate publication of the information in the system



20 on the Internet.



21 ‘‘SEC. 725. BANKING AND BORROWING.



22 ‘‘(a) BANKING.—An emission allowance may be used



23 to comply with section 722 or 723 for emissions in—



24 ‘‘(1) the vintage year for the allowance; or 463



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1 ‘‘(2) any calendar year subsequent to the vin-



2 tage year for the allowance.



3 ‘‘(b) EXPIRATION.—



4 ‘‘(1) REGULATIONS.—The Administrator may



5 establish by regulation criteria and procedures for



6 determining whether, and for implementing a deter-



7 mination that, the expiration of an allowance, credit,



8 or term offset credit established or issued by the Ad-



9 ministrator under this title, or expiration of the abil-



10 ity to use an international emission allowance to



11 comply with section 722, is necessary to ensure the



12 authenticity and integrity of allowances, credits, or



13 term offset credits or the allowance tracking system.



14 ‘‘(2) GENERAL RULE.—An allowance, credit, or



15 term offset credit established or issued by the Ad-



16 ministrator under this title shall not expire unless—



17 ‘‘(A) it is retired by the Administrator as



18 required under this title; or



19 ‘‘(B) it is determined to expire or to have



20 expired by a specific date by the Administrator



21 in accordance with regulations promulgated



22 under paragraph (1).



23 ‘‘(3) INTERNATIONAL EMISSION ALLOW-



24 ANCES.—The ability to use an international emission 464



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1 allowance to comply with section 722 shall not ex-



2 pire unless—



3 ‘‘(A) the allowance is retired by the Ad-



4 ministrator as required by this title; or



5 ‘‘(B) the ability to use such allowance to



6 meet such compliance obligation requirements is



7 determined to expire or to have expired by a



8 specific date by the Administrator in accord-



9 ance with regulations promulgated under para-



10 graph (1).



11 ‘‘(c) BORROWING FUTURE VINTAGE YEAR ALLOW-



12 ANCES.—



13 ‘‘(1) BORROWING WITHOUT INTEREST.—In ad-



14 dition to the uses described in subsection (a), an



15 emission allowance may be used to comply with sec-



16 tion 722(a) or 723 for emissions, production, impor-



17 tation, manufacture, or deliveries in the calendar



18 year immediately preceding the vintage year for the



19 allowance.



20 ‘‘(2) BORROWING WITH INTEREST.—



21 ‘‘(A) IN GENERAL.—A covered entity may



22 demonstrate compliance under subsection (b) in



23 a specific calendar year for up to 15 percent of



24 its emissions by holding emission allowances 465



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1 with a vintage year 1 to 5 years later than that



2 calendar year.



3 ‘‘(B) LIMITATIONS.—An emission allow-



4 ance borrowed pursuant to this paragraph shall



5 be an emission allowance that is established by



6 the Administrator for a specific future calendar



7 year under section 721(a) and that is held by



8 the borrower.



9 ‘‘(C) PREPAYMENT OF INTEREST.—For



10 each emission allowance that an owner or oper-



11 ator of a covered entity borrows pursuant to



12 this paragraph, such owner or operator shall, at



13 the time it borrows the allowance, hold for re-



14 tirement by the Administrator a quantity of



15 emission allowances that is equal to the product



16 obtained by multiplying—



17 ‘‘(i) 0.08; by



18 ‘‘(ii) the number of years between the



19 calendar year in which the allowance is



20 being used to satisfy a compliance obliga-



21 tion and the vintage year of the allowance.



22 ‘‘SEC. 726. MARKET STABILITY RESERVE.



23 ‘‘(a) MARKET STABILITY RESERVE AUCTIONS.—



24 ‘‘(1) IN GENERAL.—Once each quarter of each



25 calendar year for which allowances are established 466



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1 under section 721(a), the Administrator shall auc-



2 tion market stability reserve allowances.



3 ‘‘(2) RESTRICTION TO COVERED ENTITIES.—In



4 each auction conducted under paragraph (1), only



5 covered entities that the Administrator expects will



6 be required to comply with section 722 in the fol-



7 lowing calendar year shall be eligible to make pur-



8 chases.



9 ‘‘(b) POOL OF EMISSION ALLOWANCES FOR MARKET



10 STABILITY RESERVE AUCTIONS.—



11 ‘‘(1) FILLING THE MARKET STABILITY RE-



12 SERVE INITIALLY.—



13 ‘‘(A) IN GENERAL.—The Administrator



14 shall, not later than 2 years after the date of



15 enactment of this title, establish a market sta-



16 bility reserve account, and shall place in that



17 account an amount of emission allowances es-



18 tablished under section 721(a).



19 ‘‘(B) EFFECT ON OTHER PROVISIONS.—



20 Any provision in this title (except for subpara-



21 graph (B) of this paragraph) that refers to a



22 quantity or percentage of the emission allow-



23 ances established for a calendar year under sec-



24 tion 721(a) shall be considered to refer to the



25 amount of emission allowances as determined 467



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1 pursuant to section 721(e), less any emission



2 allowances established for that year that are



3 placed in the market stability reserve account



4 under this paragraph.



5 ‘‘(2) SUPPLEMENTING THE MARKET STABILITY



6 RESERVE.—The Administrator shall also—



7 ‘‘(A) at the end of each calendar year,



8 transfer to the market stability reserve account



9 each emission allowance that was offered for



10 sale but not sold at any auction conducted



11 under section 778; and



12 ‘‘(B) transfer emission allowances estab-



13 lished under subsection (g) from auction pro-



14 ceeds, and deposit them into the market sta-



15 bility reserve, to the extent necessary to main-



16 tain the reserve at its original size.



17 ‘‘(c) MINIMUM MARKET STABILITY RESERVE AUC-



18 TION PRICE.—



19 ‘‘(1) IN GENERAL.—At each market stability re-



20 serve auction, the Administrator shall offer emission



21 allowances for sale beginning at a minimum price



22 per emission allowance, which shall be known as the



23 ‘minimum market stability reserve auction price’.



24 ‘‘(2) INITIAL MINIMUM MARKET STABILITY RE-



25 SERVE AUCTION PRICES.—The minimum market 468



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1 stability reserve auction price shall be $28 (in con-



2 stant 2005 dollars) for the market stability reserve



3 auctions held in 2012. For the market stability re-



4 serve auctions held in 2013 through 2017, the min-



5 imum market stability reserve auction price shall be



6 the market stability reserve auction price for the



7 previous year increased by 5 percent plus the rate of



8 inflation (as measured by the Consumer Price Index



9 for All Urban Consumers).



10 ‘‘(3) MINIMUM MARKET STABILITY RESERVE



11 AUCTION PRICE IN SUBSEQUENT YEARS.—For each



12 market stability reserve auction held in 2018 and



13 each year thereafter, the minimum market stability



14 reserve auction price shall be the market stability re-



15 serve auction price for the previous year increased



16 by 7 percent, plus the rate of inflation (as measured



17 by the Consumer Price Index for All Urban Con-



18 sumers).



19 ‘‘(d) QUANTITY OF EMISSION ALLOWANCES RE-



20 LEASED FROM THE MARKET STABILITY RESERVE.—



21 ‘‘(1) INITIAL LIMITS.—Subject to paragraph



22 (4), for each of calendar years 2012 through 2016,



23 the annual limit on the number of emission allow-



24 ances from the market stability reserve account that



25 may be auctioned is an amount equal to 15 percent 469



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1 of the emission allowances established for that cal-



2 endar year under section 721(a). This limit does not



3 apply to offset credits sold on consignment pursuant



4 to subsection (h).



5 ‘‘(2) LIMITS IN SUBSEQUENT YEARS.—Subject



6 to paragraph (4), for calendar year 2017 and each



7 year thereafter, the annual limit on the number of



8 emission allowances from the market stability re-



9 serve account that may be auctioned is an amount



10 equal to 25 percent of the emission allowances estab-



11 lished for that calendar year under section 721(a).



12 This limit does not apply to offset credits sold on



13 consignment pursuant to subsection (h).



14 ‘‘(3) ALLOCATION OF LIMITATION.—One-fourth



15 of each year’s annual market stability reserve auc-



16 tion limit under this subsection shall be made avail-



17 able for auction in each quarter. Any allowances



18 from the market stability reserve account that are



19 made available for sale in a quarterly auction and



20 not sold shall be rolled over and added to the quan-



21 tity available for sale in the following quarter, except



22 that allowances not sold at auction in the fourth



23 quarter of a year shall not be rolled over to the fol-



24 lowing calendar year’s auctions, but shall be re-



25 turned to the market stability reserve account. 470



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1 ‘‘(4) AUTHORITY TO ADJUST LIMITATION.—The



2 Administrator may adjust the limits in paragraphs



3 (1) or (2) if the Administrator determines an adjust-



4 ment is required to prevent disruptively high prices



5 or to preserve the integrity of the market stability



6 reserve.



7 ‘‘(e) PURCHASE LIMIT.—



8 ‘‘(1) IN GENERAL.—Except as provided in para-



9 graph (2) or (3), the annual number of emission al-



10 lowances that a covered entity may purchase at the



11 market stability reserve auctions in each calendar



12 year shall not exceed 20 percent of the covered enti-



13 ty’s emissions during the most recent year for which



14 allowances or credits were retired under section 722.



15 ‘‘(2) 2012 LIMIT.—For calendar year 2012, the



16 maximum aggregate number of emission allowances



17 that a covered entity may purchase from that year’s



18 market stability reserve auctions shall be 20 percent



19 of the covered entity’s greenhouse gas emissions that



20 the covered entity reported to the registry estab-



21 lished under section 713 for 2011 and that would be



22 subject to section 722(a) if occurring in later cal-



23 endar years.



24 ‘‘(3) NEW ENTRANTS.—The Administrator



25 shall, by regulation, establish a separate purchase 471



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1 limit applicable to entities that expect to become a



2 covered entity in the year of the auction, permitting



3 them to purchase emission allowances at the market



4 stability reserve auctions in their first calendar year



5 of operation in an amount of at least 20 percent of



6 their expected combined emissions and attributable



7 greenhouse gas emissions for that year.



8 ‘‘(f) DELEGATION OR CONTRACT.—Pursuant to regu-



9 lations under this section, the Administrator may, by
dele-



10 gation or contract, provide for the conduct of market
sta-



11 bility reserve auctions under the Administrator’s super-



12 vision by other departments or agencies of the Federal



13 Government or by nongovernmental agencies, groups, or



14 organizations.



15 ‘‘(g) USE OF AUCTION PROCEEDS.—



16 ‘‘(1) DEPOSIT IN MARKET STABILITY RESERVE



17 FUND.—The proceeds from market stability reserve



18 auctions shall be placed in the Market Stability Re-



19 serve Fund established by subsection (j), and shall



20 be available without further appropriation or fiscal



21 year limitation for the purposes described in this



22 subsection.



23 ‘‘(2) OFFSET CREDITS.—The Administrator



24 shall use the proceeds from each market stability re-



25 serve auction to purchase offset credits, including 472



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1 domestic offset credits and international offset cred-



2 its issued for reduced deforestation activities pursu-



3 ant to section 753. The Administrator shall retire



4 those offset credits and establish a number of emis-



5 sion allowances equal to the number of international



6 offset credits so retired. Emission allowances estab-



7 lished under this paragraph shall be in addition to



8 those established under section 721(a).



9 ‘‘(3) EMISSION ALLOWANCES.—The Adminis-



10 trator shall deposit emission allowances established



11 under paragraph (2) in the market stability reserve,



12 except that, with respect to any such emission allow-



13 ances in excess of the amount necessary to fill the



14 market stability reserve to its original size, the Ad-



15 ministrator shall—



16 ‘‘(A) except as provided in subparagraph



17 (B), assign a vintage year to the emission al-



18 lowance, which shall be no earlier than the year



19 in which the allowance is established under



20 paragraph (2) and shall treat such allowances



21 as ones that are not designated for distribution



22 or auction; and



23 ‘‘(B) to the extent any such allowances



24 cannot be assigned a vintage year because of 473



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1 the limitation in paragraph (4), retire the allow-



2 ances.



3 ‘‘(4) LIMITATION.—In no case may the Admin-



4 istrator assign under paragraph (3)(A) more emis-



5 sion allowances to a vintage year than the number



6 of emission allowances from that vintage year that



7 were placed in the market stability reserve account



8 under subsection (b)(1).



9 ‘‘(h) AVAILABILITY OF OFFSET CREDITS FOR AUC-



10 TION.—



11 ‘‘(1) IN GENERAL.—The regulations promul-



12 gated under section 721(h) shall allow any entity



13 holding offset credits to request that the Adminis-



14 trator include such offset credits in an upcoming



15 market stability reserve auction. The regulations



16 shall provide that—



17 ‘‘(A) upon sale of such offset credits, the



18 Administrator shall retire those offset credits,



19 and establish and provide to the purchasers a



20 number of emission allowances equal to the



21 number of offset credits so retired, which allow-



22 ances shall be in addition to those established



23 under section 721(a); and



24 ‘‘(B) for offset credits sold pursuant to



25 this subsection, the proceeds for the entity that 474



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1 offered the offset credits for sale shall be the



2 lesser of—



3 ‘‘(i) the average daily closing price for



4 offset credits sold on registered exchanges



5 (or if such price is unavailable, the average



6 price as determined by the Administrator)



7 during the six months prior to the market



8 stability reserve auction at which they were



9 auctioned, with the remaining funds col-



10 lected upon the sale of the offset credits



11 deposited in the Treasury; and



12 ‘‘(ii) the amount received for the off-



13 set credits at the auction.



14 ‘‘(2) PROCEEDS.—For offset credits sold pursu-



15 ant to this subsection, notwithstanding section 3302



16 of title 31, United States Code, or any other provi-



17 sion of law, within 90 days of receipt, the United



18 States shall transfer the proceeds from the auction,



19 as defined in paragraph (1)(D), to the entity that



20 offered the offset credits for sale. No funds trans-



21 ferred from a purchaser to a seller of offset credits



22 under this paragraph shall be held by any officer or



23 employee of the United States or treated for any



24 purpose as public monies. 475



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1 ‘‘(3) PRICING.—When the Administrator acts



2 under this subsection as the agent of an entity in



3 possession of offset credits, the Administrator is not



4 obligated to obtain the highest price possible for the



5 offset credits, and instead shall auction such offset



6 credits in the same manner and pursuant to the



7 same rules (except as modified in paragraph (1)) as



8 set forth for auctioning market stability reserve al-



9 lowances. Entities requesting that such offset credits



10 be offered for sale at a market stability reserve auc-



11 tion may not set a minimum reserve price for their



12 offset credits that is different than the minimum



13 market stability reserve auction price set pursuant



14 to subsection (c).



15 ‘‘(i) INITIAL REGULATIONS.—Not later than 24



16 months after the date of enactment of this title, the Ad-



17 ministrator shall promulgate regulations, in consultation



18 with other appropriate agencies, governing the auction of



19 allowances under this section. Such regulations shall in-



20 clude the following requirements:



21 ‘‘(1) FREQUENCY; 
FIRST AUCTION.—Auctions



22 shall be held four times per year at regular intervals,



23 with the first auction to be held no later than March



24 31, 2012. 476



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1 ‘‘(2) AUCTION FORMAT.—Auctions shall follow



2 a single-round, sealed-bid, uniform price format.



3 ‘‘(3) PARTICIPATION; FINANCIAL ASSURANCE.—



4 Auctions shall be open to any covered entity eligible



5 to purchase emission allowances at the auction



6 under subsection (a)(2), except that the Adminis-



7 trator may establish financial assurance require-



8 ments to ensure that auction participants can and



9 will perform on their bids.



10 ‘‘(4) DISCLOSURE OF BENEFICIAL OWNER-



11 SHIP.—Each bidder in an auction shall be required



12 to disclose the person or entity sponsoring or bene-



13 fitting from the bidder’s participation in the auction



14 if such person or entity is, in whole or in part, other



15 than the bidder.



16 ‘‘(5) PURCHASE LIMITS.—No person may, di-



17 rectly or in concert with another participant, pur-



18 chase more than 20 percent of the allowances of-



19 fered for sale at any quarterly auction.



20 ‘‘(6) PUBLICATION OF INFORMATION.—After



21 the auction, the Administrator shall, in a timely



22 fashion, publish the identities of winning bidders,



23 the quantity of allowances obtained by each winning



24 bidder, and the auction clearing price. 477



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1 ‘‘(7) OTHER REQUIREMENTS.—The Adminis-



2 trator may include in the regulations such other re-



3 quirements or provisions as the Administrator, in



4 consultation with other agencies as appropriate, con-



5 siders appropriate to promote effective, efficient,



6 transparent, and fair administration of auctions



7 under this section.



8 ‘‘(j) MARKET STABILITY RESERVE FUND.—There



9 are established in the Treasury of the United States a



10 fund to be known as the ‘Market Stability Reserve Fund’.



11 ‘‘(k) REVISION OF REGULATIONS.—The Adminis-



12 trator may, at any time, in consultation with other agen-



13 cies as appropriate, revise the initial regulations
promul-



14 gated under subsection (i). Such revised regulations need



15 not meet the requirements identified in subsection (i) if



16 the Administrator determines that an alternative auction



17 design would be more effective, taking into account
factors



18 including costs of administration, transparency,
fairness,



19 and risks of collusion or manipulation. In determining



20 whether and how to revise the initial regulations under



21 this subsection, the Administrator shall not consider
maxi-



22 mization of revenues to the Federal Government.



23 ‘‘SEC. 727. PERMITS.



24 ‘‘(a) PERMIT PROGRAM.—For stationary sources



25 subject to title V of this Act, that are covered
entities, 478



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1 the provisions of this title shall be implemented by
permits



2 issued to such covered entities (and enforced) in accord-



3 ance with the provisions of title V, as modified by this



4 title. Any such permit issued by the Administrator, or by



5 a State with an approved permit program, shall require



6 the owner or operator of a covered entity to hold emission



7 allowances or offset credits at least equal to the total
an-



8 nual amount of carbon dioxide equivalents for its com-



9 bined emissions and attributable greenhouse gas emissions



10 to which section 722 applies. No such permit shall be



11 issued that is inconsistent with the requirements of this



12 title, and title V as applicable. Nothing in this section
re-



13 garding compliance plans or in title V shall be construed



14 as affecting allowances or offset credits. Submission of
a



15 statement by the owner or operator, or the designated rep-



16 resentative of the owners and operators, of a covered
enti-



17 ty that the owners and operators will hold emission
allow-



18 ances or offset credits for the entity’s combined
emissions



19 and attributable greenhouse gas emissions to which sec-



20 tion 722 applies shall be deemed to meet the proposed and



21 approved planning requirements of title V. Recordation by



22 the Administrator of transfers of emission allowances
shall



23 amend automatically all applicable proposed or approved



24 permit applications, compliance plans, and permits. 479



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1 ‘‘(b) MULTIPLE OWNERS.—No permit shall be issued



2 under this section and no allowances or offset credits
shall



3 be disbursed under this title to a covered entity or any



4 other person until the designated representative of the



5 owners or operators has filed a certificate of representa-



6 tion with regard to matters under this title, including
the



7 holding and distribution of emission allowances and the



8 proceeds of transactions involving emission allowances.



9 Where there are multiple holders of a legal or equitable



10 title to, or a leasehold interest in, such a covered
entity



11 or other entity or where a utility or industrial customer



12 purchases power under a long-term power purchase con-



13 tract from an independent power production facility that



14 is a covered entity, the certificate shall state—



15 ‘‘(1) that emission allowances and the proceeds



16 of transactions involving emission allowances will be



17 deemed to be held or distributed in proportion to



18 each holder’s legal, equitable, leasehold, or contrac-



19 tual reservation or entitlement; or



20 ‘‘(2) if such multiple holders have expressly pro-



21 vided for a different distribution of emission allow-



22 ances by contract, that emission allowances and the



23 proceeds of transactions involving emission allow-



24 ances will be deemed to be held or distributed in ac-



25 cordance with the contract. 480



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1 A passive lessor, or a person who has an equitable
interest



2 through such lessor, whose rental payments are not based,



3 either directly or indirectly, upon the revenues or income



4 from the covered entity or other entity shall not be
deemed



5 to be a holder of a legal, equitable, leasehold, or
contrac-



6 tual interest for the purpose of holding or distributing



7 emission allowances as provided in this subsection, during



8 either the term of such leasehold or thereafter, unless
ex-



9 pressly provided for in the leasehold agreement. Except



10 as otherwise provided in this subsection, where all legal



11 or equitable title to or interest in a covered entity, or
other



12 entity, is held by a single person, the certificate shall
state



13 that all emission allowances received by the entity are



14 deemed to be held for that person.



15 ‘‘(c) PROHIBITION.—It shall be unlawful for any per-



16 son to operate any stationary source subject to the re-



17 quirements of this section except in compliance with the



18 terms and requirements of a permit issued by the Admin-



19 istrator or a State with an approved permit program in



20 accordance with this section. For purposes of this sub-



21 section, compliance, as provided in section 504(f), with
a



22 permit issued under title V which complies with this
title



23 for covered entities shall be deemed compliance with this



24 subsection as well as section 502(a). 481



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1 ‘‘(d) RELIABILITY.—Nothing in this section or title



2 V shall be construed as requiring termination of oper-



3 ations of a stationary source that is a covered entity for



4 failure to have an approved permit, or compliance plan,



5 that is consistent with the requirements in the second and



6 fifth sentences of subsection (a) concerning the holding



7 of emission allowances, compensatory allowances, inter-



8 national emission allowances, or offset allowances, except



9 that any such covered entity may be subject to the
applica-



10 ble enforcement provision of section 113.



11 ‘‘(e) REGULATIONS.—The Administrator shall pro-



12 mulgate regulations to implement this section. To provide



13 for permits required under this section, each State in



14 which one or more stationary sources and that are covered



15 entities are located shall submit, in accordance with
this



16 section and title V, revised permit programs for
approval.



17 ‘‘SEC. 728. INTERNATIONAL EMISSION ALLOWANCES.



18 ‘‘(a) QUALIFYING PROGRAMS.—The Administrator,



19 in consultation with the Secretary of State, may by rule



20 designate an international climate change program as a



21 qualifying international program if—



22 ‘‘(1) the program is run by a national or supra-



23 national foreign government, and imposes a manda-



24 tory absolute tonnage limit on greenhouse gas emis-



25 sions from 1 or more foreign countries, or from 1 or 482



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1 more economic sectors in such a country or coun-



2 tries; and



3 ‘‘(2) the program is at least as stringent as the



4 program established by this title, including provi-



5 sions to ensure at least comparable monitoring, com-



6 pliance, enforcement, quality of offsets, and restric-



7 tions on the use of offsets.



8 ‘‘(b) DISQUALIFIED ALLOWANCES.—An international



9 emission allowance may not be held under section



10 722(d)(3) if it is in the nature of an offset instrument



11 or allowance awarded based on the achievement of green-



12 house gas emission reductions or avoidance, or greenhouse



13 gas sequestration, that are not subject to the mandatory



14 absolute tonnage limits referred to in subsection (a)(1).



15 ‘‘(c) RETIREMENT.—



16 ‘‘(1) ENTITY CERTIFICATION.—The owner or



17 operator of an entity that holds an international



18 emission allowance under section 722(d)(3) shall



19 certify to the Administrator that such international



20 emission allowance has not previously been used to



21 comply with any foreign, international, or domestic



22 greenhouse gas regulatory program.



23 ‘‘(2) RETIREMENT.—



24 ‘‘(A) FOREIGN AND INTERNATIONAL REG-



25 ULATORY ENTITIES.—The Administrator, in 483



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1 consultation with the Secretary of State, shall



2 seek, by whatever means appropriate, including



3 agreements and technical cooperation on allow-



4 ance tracking, to ensure that any relevant for-



5 eign, international, and domestic regulatory en-



6 tities—



7 ‘‘(i) are notified of the use, for pur-



8 poses of compliance with this title, of any



9 international emission allowance; and



10 ‘‘(ii) provide for the disqualification of



11 such international emission allowance for



12 any subsequent use under the relevant for-



13 eign, international, or domestic greenhouse



14 gas regulatory program, regardless of



15 whether such use is a sale, exchange, or



16 submission to satisfy a compliance obliga-



17 tion.



18 ‘‘(B) DISQUALIFICATION FROM FURTHER



19 USE.—The Administrator shall ensure that,



20 once an international emission allowance has



21 been disqualified or otherwise used for purposes



22 of compliance with this title, such allowance



23 shall be disqualified from any further use under



24 this title. 484



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1 ‘‘(d) USE LIMITATIONS.—The Administrator may, by



2 rule, modify the percentage applicable to international



3 emission allowances under section 722(d)(3), consistent



4 with the purposes of the Clean Energy Jobs and American



5 Power Act.



6 ‘‘PART D—OFFSETS



7 ‘‘SEC. 731. OFFSETS INTEGRITY ADVISORY BOARD.



8 ‘‘(a) ESTABLISHMENT.—Not later than 30 days after



9 the date of enactment of this title, the President shall
es-



10 tablish an independent Offsets Integrity Advisory Board.



11 The Advisory Board shall make recommendations to the



12 President for use in promulgating and revising
regulations



13 under this part, and for ensuring the overall environ-



14 mental integrity of the programs established pursuant to



15 those regulations.



16 ‘‘(b) MEMBERSHIP.—The Advisory Board shall be



17 comprised of at least nine members. Each member shall



18 be qualified by education, training, and experience to



19 evaluate scientific and technical information on matters



20 referred to the Board under this section. The President



21 shall appoint Advisory Board members, including a chair



22 and vice-chair of the Advisory Board. Terms shall be 3



23 years in length, except for initial terms, which may be
up



24 to 5 years in length to allow staggering. Members may



25 be reappointed only once for an additional 3-year term,
485



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1 and such second term may follow directly after a first



2 term.



3 ‘‘(c) ACTIVITIES.—The Advisory Board established



4 pursuant to subsection (a) shall—



5 ‘‘(1) provide recommendations, not later than



6 90 days after the Advisory Board’s establishment



7 and periodically thereafter, to the President regard-



8 ing offset project types that should be considered for



9 eligibility under section 733, taking into consider-



10 ation relevant scientific and other issues, including—



11 ‘‘(A) the availability of a representative



12 data set for use in developing the activity base-



13 line;



14 ‘‘(B) the potential for accurate quantifica-



15 tion of greenhouse gas reduction, avoidance, or



16 sequestration for an offset project type;



17 ‘‘(C) the potential level of scientific and



18 measurement uncertainty associated with an



19 offset project type;



20 ‘‘(D) any beneficial or adverse environ-



21 mental, public health, welfare, social, economic,



22 or energy effects associated with an offset



23 project type; 486



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1 ‘‘(E) the extent to which, as of the date of



2 submission of the report, the project or activity



3 types within each category—



4 ‘‘(i) are required by law (including a



5 regulation); or



6 ‘‘(ii) represent business-as-usual (ab-



7 sent funding from offset credits) practices



8 for a relevant land area, industry sector, or



9 forest, soil or facility type;



10 ‘‘(2) make available to the President its advice



11 and comments on offset methodologies that should



12 be considered under regulations promulgated pursu-



13 ant to subsection (a) and (b) of section 734, includ-



14 ing methodologies to address the issues of



15 additionality, activity baselines, measurement, leak-



16 age, uncertainty, permanence, and environmental in-



17 tegrity;



18 ‘‘(3) make available to the President, and other



19 relevant Federal agencies, its advice and comments



20 regarding scientific, technical, and methodological



21 issues specific to the issuance of international offset



22 credits under section 744;



23 ‘‘(4) make available to the President, and other



24 relevant Federal agencies, its advice and comments



25 regarding scientific, technical, and methodological 487



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1 issues associated with the implementation of this



2 part;



3 ‘‘(5) make available to the President its advice



4 and comments on areas in which further knowledge



5 is required to appraise the adequacy of existing, re-



6 vised, or proposed methodologies for use under this



7 part, and describe the research efforts necessary to



8 provide the required information; and



9 ‘‘(6) make available to the President its advice



10 and comments on other ways to improve or safe-



11 guard the environmental integrity of programs es-



12 tablished under this part.



13 ‘‘(d) SCIENTIFIC REVIEW OF OFFSET AND DEFOR-



14 ESTATION REDUCTION PROGRAMS.—Not later than Janu-



15 ary 1, 2017, and at five-year intervals thereafter, the
Ad-



16 visory Board shall submit to the President and make
avail-



17 able to the public an analysis of relevant scientific and



18 technical information related to this part. The Advisory



19 Board shall review approved and potential methodologies,



20 scientific studies, offset project monitoring, offset
project



21 verification reports, and audits related to this part,
and



22 evaluate the net emissions effects of implemented offset



23 projects. The Advisory Board shall recommend changes to



24 offset methodologies, protocols, or project types, or to
the



25 overall offset program under this part, to ensure that
off-488



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1 set credits issued by the President do not compromise the



2 integrity of the annual emission reductions established



3 under section 703, and to avoid or minimize adverse ef-



4 fects to human health or the environment.



5 ‘‘SEC. 732. ESTABLISHMENT OF OFFSETS PROGRAM.



6 ‘‘(a) REGULATIONS.—Not later than 2 years after



7 the date of enactment of this title, the President, in
con-



8 sultation with appropriate Federal agencies and taking



9 into consideration the recommendations of the Advisory



10 Board, shall promulgate regulations establishing a pro-



11 gram for the issuance of offset credits in accordance
with



12 the requirements of this part. The President shall
periodi-



13 cally revise these regulations as necessary to meet the
re-



14 quirements of this part.



15 ‘‘(b) REQUIREMENTS.—The regulations described in



16 subsection (a) shall—



17 ‘‘(1) authorize the issuance of offset credits



18 with respect to qualifying offset projects that result



19 in reductions or avoidance of greenhouse gas emis-



20 sions, or sequestration of greenhouse gases;



21 ‘‘(2) ensure that such offset credits represent



22 verifiable and additional greenhouse gas emission re-



23 ductions or avoidance, or increases in sequestration; 489



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1 ‘‘(3) ensure that offset credits issued for se-



2 questration offset projects are only issued for green-



3 house gas reductions that are permanent;



4 ‘‘(4) provide for the implementation of the re-



5 quirements of this part;



6 ‘‘(5) include as reductions in greenhouse gases



7 reductions achieved through the destruction of meth-



8 ane and its conversion to carbon dioxide, and reduc-



9 tions achieved through destruction of



10 chlorofluorocarbons or other ozone depleting sub-



11 stances, if permitted by the President under section



12 619(b)(9) and subject to the conditions specified in



13 section 619(b)(9), based on the carbon dioxide



14 equivalent value of the substance destroyed; and



15 ‘‘(6) establish a process to accept and respond



16 to comments from third parties regarding programs



17 established under this part in a timely manner.



18 ‘‘(c) COORDINATION TO MINIMIZE NEGATIVE EF-



19 FECTS.—In promulgating and implementing regulations



20 under this part, the President shall act (including by
re-



21 jecting projects, if necessary) to avoid or minimize, to
the



22 maximum extent practicable, adverse effects on human



23 health or the environment resulting from the implementa-



24 tion of offset projects under this part. 490



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1 ‘‘(d) OFFSET REGISTRY.—The President shall estab-



2 lish within the allowance tracking system established



3 under section 724(d) an Offset Registry for qualifying
off-



4 set projects and offset credits issued with respect
thereto



5 under this part.



6 ‘‘(e) LEGAL STATUS OF OFFSET CREDIT.—An offset



7 credit does not constitute a property right.



8 ‘‘(f) FEES.—The President shall assess fees payable



9 by offset project developers in an amount necessary to



10 cover the administrative costs and the enforcement costs



11 to the Environmental Protection Agency and the Depart-



12 ment of Justice of carrying out the activities under this



13 part. Amounts collected for such fees shall be available



14 to the President and the Attorney General for carrying



15 out the activities under this part to the extent provided



16 in advance in appropriations Acts.



17 ‘‘SEC. 733. ELIGIBLE PROJECT TYPES.



18 ‘‘(a) LIST OF ELIGIBLE PROJECT TYPES.—



19 ‘‘(1) IN GENERAL.—As part of the regulations



20 promulgated under section 732(a), the President



21 shall establish, and may periodically revise, a list of



22 types of projects eligible to generate offset credits,



23 including international offset credits, under this



24 part. 491



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1 ‘‘(2) ADVISORY BOARD RECOMMENDATIONS.—



2 In determining the eligibility of project types, the



3 President shall take into consideration the rec-



4 ommendations of the Advisory Board. If a list estab-



5 lished under this section differs from the rec-



6 ommendations of the Advisory Board, the regula-



7 tions promulgated under section 732(a) shall include



8 a justification for the discrepancy.



9 ‘‘(3) INITIAL DETERMINATION.—The President



10 shall establish the initial eligibility list under para-



11 graph (1) not later than one year after the date of



12 enactment of this title for which there are well devel-



13 oped methodologies that the President determines



14 would meet the criteria of section 734.



15 ‘‘(4) PROJECT TYPES TO BE CONSIDERED FOR



16 INITIAL LIST.—In determining the initial list, the



17 President shall give priority to consideration of off-



18 set project types that are recommended by the Advi-



19 sory Board and for which there are well developed



20 methodologies that the President determines would



21 meet the criteria of section 734, and shall con-



22 sider—



23 ‘‘(A) methane collection and combustion



24 projects at active underground coal mines; 492



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1 ‘‘(B) methane collection and combustion



2 projects at landfills;



3 ‘‘(C) capture of venting, flaring, and fugi-



4 tive emissions from oil and natural gas systems;



5 ‘‘(D) nonlandfill methane collection, com-



6 bustion and avoidance projects involving organic



7 waste streams that would have otherwise emit-



8 ted methane in the atmosphere, including ma-



9 nure management and biogas capture and com-



10 bustion;



11 ‘‘(E) projects involving afforestation or re-



12 forestation of acreage not forested as of Janu-



13 ary 1, 2009;



14 ‘‘(F) forest management resulting in an in-



15 crease in forest carbon stores, including har-



16 vested wood products;



17 ‘‘(G) agricultural, grassland, and range-



18 land sequestration and management practices,



19 including—



20 ‘‘(i) altered tillage practices, including



21 avoided abandonment of such practices;



22 ‘‘(ii) winter cover cropping, contin-



23 uous cropping, and other means to in-



24 crease biomass returned to soil in lieu of



25 planting followed by fallowing; 493



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1 ‘‘(iii) reduction of nitrogen fertilizer



2 use or increase in nitrogen use efficiency;



3 ‘‘(iv) reduction in the frequency and



4 duration of flooding of rice paddies;



5 ‘‘(v) reduction in carbon emissions



6 from organic soils;



7 ‘‘(vi) reduction in greenhouse gas



8 emissions from manure and effluent;



9 ‘‘(vii) reduction in greenhouse gas



10 emissions due to changes in animal man-



11 agement practices, including dietary modi-



12 fications;



13 ‘‘(viii) planting and cultivation of per-



14 manent tree crops;



15 ‘‘(ix) greenhouse gas emission reduc-



16 tions from improvements and upgrades to



17 mobile or stationary equipment (including



18 engines);



19 ‘‘(x) practices to reduce and eliminate



20 soil tillage;



21 ‘‘(xi) reductions in greenhouse gas



22 emissions through restoration of wetlands,



23 forestland, and grassland; and 494



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1 ‘‘(xii) sequestration of greenhouse



2 gases through management of tree crops;



3 and



4 ‘‘(H) changes in carbon stocks attributed



5 to land use change and forestry activities, in-



6 cluding—



7 ‘‘(i) management of peatland or wet-



8 land;



9 ‘‘(ii) conservation of grassland and



10 forested land;



11 ‘‘(iii) improved forest management,



12 including accounting for carbon stored in



13 wood products;



14 ‘‘(iv) reduced deforestation or avoided



15 forest conversion;



16 ‘‘(v) urban tree-planting and mainte-



17 nance;



18 ‘‘(vi) agroforestry; and



19 ‘‘(vii) adaptation of plant traits or



20 new technologies that increase sequestra-



21 tion by forests.



22 ‘‘(5) METHODOLOGIES.—In issuing methodolo-



23 gies pursuant to section 734, the President shall



24 give priority to methodologies for offset types in-



25 cluded on the initial eligibility list. 495



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1 ‘‘(b) MODIFICATION OF LIST.—The President—



2 ‘‘(1) shall add additional project types to the



3 list not later than 2 years after the date of enact-



4 ment of this title;



5 ‘‘(2) may at any time, by rule, add a project



6 type to the list established under subsection (a) if



7 the President, in consultation with appropriate Fed-



8 eral agencies and taking into consideration the rec-



9 ommendations of the Advisory Board, determines



10 that the project type can generate additional reduc-



11 tions or avoidance of greenhouse gas emissions, or



12 sequestration of greenhouse gases, subject to the re-



13 quirements of this part;



14 ‘‘(3) may at any time, by rule, determine that



15 a project type on the list does not meet the require-



16 ments of this part, and remove a project type from



17 the list established under subsection (a), in consulta-



18 tion with appropriate Federal agencies and taking



19 into consideration any recommendations of the Advi-



20 sory Board; and



21 ‘‘(4) shall consider adding to or removing from



22 the list established under subsection (a), at a min-



23 imum, project types proposed to the President—



24 ‘‘(A) by petition pursuant to subsection



25 (c); or 496



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1 ‘‘(B) by the Advisory Board.



2 ‘‘(c) PETITION PROCESS.—Any person may petition



3 the President to modify the list established under sub-



4 section (a) by adding or removing a project type pursuant



5 to subsection (b). Any such petition shall include a show-



6 ing by the petitioner that there is adequate data to
estab-



7 lish that the project type does or does not meet the re-



8 quirements of this part. Not later than 12 months after



9 receipt of such a petition, the President shall either
grant



10 or deny the petition and publish a written explanation of



11 the reasons for the President’s decision. The President



12 may not deny a petition under this subsection on the
basis



13 of inadequate Environmental Protection Agency resources



14 or time for review.



15 ‘‘SEC. 734. REQUIREMENTS FOR OFFSET PROJECTS.



16 ‘‘(a) METHODOLOGIES.—As part of the regulations



17 promulgated under section 732(a), the President shall es-



18 tablish, for each type of offset project listed as
eligible



19 under section 733, the following:



20 ‘‘(1) ADDITIONALITY.—A standardized method-



21 ology for determining the additionality of greenhouse



22 gas emission reductions or avoidance, or greenhouse



23 gas sequestration, achieved by an offset project of



24 that type. Such methodology shall ensure, at a min-



25 imum, that any greenhouse gas emission reduction 497



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1 or avoidance, or any greenhouse gas sequestration, is



2 considered additional only to the extent that it re-



3 sults from activities that—



4 ‘‘(A) are not required by or undertaken to



5 comply with any law, including any regulation



6 or consent order;



7 ‘‘(B) were not commenced prior to Janu-



8 ary 1, 2009, except in the case of—



9 ‘‘(i) offset project activities that com-



10 menced after January 1, 2001, and were



11 registered as of the date of enactment of



12 this title under an offset program with re-



13 spect to which the President has made an



14 affirmative determination under section



15 740(a)(2); or



16 ‘‘(ii) activities that are readily revers-



17 ible, with respect to which the President



18 may set an alternative earlier date under



19 this subparagraph that is not earlier than



20 January 1, 2001, where the President de-



21 termines that setting such an alternative



22 date may produce an environmental benefit



23 by removing an incentive to cease and then



24 reinitiate activities that began prior to



25 January 1, 2009; 498



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1 ‘‘(C) are not receiving support under sec-



2 tion 323 of division A, or section 207 of divi-



3 sion B, of the Clean Energy Jobs and American



4 Power Act; and



5 ‘‘(D) exceed the activity baseline estab-



6 lished under paragraph (2).



7 ‘‘(2) ACTIVITY BASELINES.—A standardized



8 methodology for establishing activity baselines for



9 offset projects of that type. The President shall set



10 activity baselines to reflect a conservative estimate of



11 business-as-usual performance or practices for the



12 relevant type of activity such that the baseline pro-



13 vides an adequate margin of safety to ensure the en-



14 vironmental integrity of offsets calculated in ref-



15 erence to such baseline.



16 ‘‘(3) QUANTIFICATION METHODS.—A standard-



17 ized methodology for determining the extent to



18 which greenhouse gas emission reductions or avoid-



19 ance, or greenhouse gas sequestration, achieved by



20 an offset project of that type exceed a relevant activ-



21 ity baseline, including protocols for monitoring and



22 accounting for uncertainty.



23 ‘‘(4) LEAKAGE.—A standardized methodology



24 for accounting for and mitigating potential leakage, 499



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1 if any, from an offset project of that type, taking



2 uncertainty into account.



3 ‘‘(b) ACCOUNTING FOR REVERSALS.—



4 ‘‘(1) IN GENERAL.—As part of the regulations



5 promulgated under section 732(a), for each type of



6 sequestration project listed under section 733, the



7 President shall establish requirements to account for



8 and address reversals, including—



9 ‘‘(A) a requirement to report any reversal



10 with respect to an offset project for which offset



11 credits have been issued under this part;



12 ‘‘(B) provisions to require emission allow-



13 ances to be held in amounts to fully compensate



14 for greenhouse gas emissions attributable to re-



15 versals, and to assign responsibility for holding



16 such emission allowances;



17 ‘‘(C) provisions to discourage repeated in-



18 tentional reversals by offset project developers,



19 including but not limited to the assessment of



20 administrative fees, temporary suspension, or



21 disqualification of an offset project developer



22 from the program; and



23 ‘‘(D) any other provisions the President



24 determines necessary to account for and ad-



25 dress reversals. 500



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1 ‘‘(2) MECHANISMS.—The President shall pre-



2 scribe mechanisms to ensure that any sequestration



3 with respect to which an offset credit is issued under



4 this part results in a permanent net increase in se-



5 questration, and that full account is taken of any ac-



6 tual or potential reversal of such sequestration, with



7 an adequate margin of safety. The President shall



8 prescribe at least one of the following mechanisms to



9 meet the requirements of this paragraph:



10 ‘‘(A) An offsets reserve, pursuant to para-



11 graph (3).



12 ‘‘(B) Insurance that provides for purchase



13 and provision to the President for retirement of



14 an amount of offset credits or emission allow-



15 ances equal in number to the tons of carbon di-



16 oxide equivalents of greenhouse gas emissions



17 released due to reversal.



18 ‘‘(C) Another mechanism that the Presi-



19 dent determines satisfies the requirements of



20 this part.



21 ‘‘(3) OFFSETS RESERVE.—



22 ‘‘(A) IN GENERAL.—An offsets reserve re-



23 ferred to in paragraph (2)(A) is a program



24 under which, before issuance of offset credits



25 under this part, the President shall subtract 501



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1 and reserve from the quantity to be issued a



2 quantity of offset credits based on the risk of



3 reversal. The President shall—



4 ‘‘(i) hold these reserved offset credits



5 in the offsets reserve; and



6 ‘‘(ii) register the holding of the re-



7 served offset credits in the Offset Registry



8 established under section 732(d).



9 ‘‘(B) PROJECT REVERSAL.—



10 ‘‘(i) IN GENERAL.—If a reversal has



11 occurred with respect an offset project for



12 which offset credits are reserved under this



13 paragraph, the President shall remove off-



14 set credits or emission allowances from the



15 offsets reserve and cancel them to fully ac-



16 count for the tons of carbon dioxide equiv-



17 alent that are no longer sequestered.



18 ‘‘(ii) INTENTIONAL REVERSALS.—If



19 the President determines that a reversal



20 was intentional, the offset project developer



21 for the relevant offset project shall place



22 into the offsets reserve a quantity of offset



23 credits, or combination of offset credits



24 and emission allowances, equal in number



25 to the number of reserve offset credits that 502



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1 were canceled due to the reversal pursuant



2 to clause (i).



3 ‘‘(iii) UNINTENTIONAL REVERSALS.—



4 If the President determines that a reversal



5 was unintentional, the offset project devel-



6 oper for the relevant offset project shall



7 place into the offsets reserve a quantity of



8 offset credits, or combination of offset



9 credits and emission allowances, equal in



10 number to half the number of offset credits



11 that were reserved for that offset project,



12 or half the number of reserve offset credits



13 that were canceled due to the reversal pur-



14 suant to clause (i), whichever is less.



15 ‘‘(iv) PETITION.—Any person may pe-



16 tition the President for a determination



17 that an offsets reversal has occurred. Any



18 such petition shall include a showing by



19 the petitioner that there is adequate data



20 or other evidence to support the petition.



21 Not later than 90 days after the date of



22 receipt of the petition, the President shall



23 take final action determining either that



24 the reversal has occurred or that the rever-



25 sal has not occurred. Such determination 503



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1 shall be accompanied by a statement of the



2 basis for the determination.



3 ‘‘(C) USE OF RESERVED OFFSET CRED-



4 ITS.—Offset credits placed into the offsets re-



5 serve under this paragraph may not be used to



6 comply with section 722.



7 ‘‘(4) TERM OFFSET CREDITS.—



8 ‘‘(A) APPLICABILITY.—With respect to a



9 practice listed under section 733 that seques-



10 ters greenhouse gases and has a crediting pe-



11 riod of not more than 5 years, the President



12 may address reversals pursuant to this para-



13 graph in lieu of permanently accounting for re-



14 versals pursuant to paragraphs (1) and (2).



15 ‘‘(B) ACCOUNTING FOR REVERSALS.—For



16 such practices or projects implementing the



17 practices described in subparagraph (A), the



18 President shall require only reversals that occur



19 during the crediting period to be accounted for



20 and addressed pursuant to paragraphs (1) and



21 (2).



22 ‘‘(C) CREDITS ISSUED.—For practices or



23 projects regulated pursuant to subparagraph



24 (B), the Secretary shall issue under section 737



25 a term offset credit, in lieu of an offset credit, 504



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1 for each ton of carbon dioxide equivalent that



2 has been sequestered.



3 ‘‘(c) CREDITING PERIODS.—



4 ‘‘(1) IN GENERAL.—As part of the regulations



5 promulgated under section 732(a), for each offset



6 project type, the President shall specify a crediting



7 period, and establish provisions for petitions for new



8 crediting periods, in accordance with this subsection.



9 ‘‘(2) DURATION.—



10 ‘‘(A) IN GENERAL.—The crediting period



11 shall be not less than 5 and not greater than



12 10 years for any project type other than those



13 involving sequestration or term offsets.



14 ‘‘(B) FORESTRY PROJECTS.—The crediting



15 period for a forestry offset project shall not ex-



16 ceed 20 years.



17 ‘‘(C) TERM OFFSET CREDITS.—The cred-



18 iting period for a term offset credit issued shall



19 not exceed 5 years.



20 ‘‘(3) ELIGIBILITY.—An offset project shall be



21 eligible to generate offset credits under this part



22 only during the project’s crediting period. During



23 such crediting period, the project shall remain eligi-



24 ble to generate offset credits, subject to the meth-



25 odologies and project type eligibility list that applied
505



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1 as of the date of project approval under section 735,



2 except as provided in paragraph (4).



3 ‘‘(4) PETITION FOR NEW CREDITING PERIOD.—



4 An offset project developer may petition for a new



5 crediting period to commence after termination of a



6 crediting period, subject to the methodologies and



7 project type eligibility list in effect at the time when



8 such petition is submitted. A petition may not be



9 submitted under this paragraph more than 18



10 months before the end of the pending crediting pe-



11 riod. The President may grant such petition after



12 public notice and opportunity for comment. The



13 President may limit the number of new crediting pe-



14 riods available for projects of particular project



15 types.



16 ‘‘(d) ENVIRONMENTAL INTEGRITY.—In establishing



17 the requirements under this section, the President shall



18 apply conservative assumptions or methods to maximize



19 the certainty that the environmental integrity of the
green-



20 house gas limitations established under section 703 is
not



21 compromised.



22 ‘‘(e) PRE-EXISTING METHODOLOGIES.—In promul-



23 gating requirements under this section, the President
shall



24 give due consideration to methodologies for offset
projects



25 existing as of the date of enactment of this title. 506



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1 ‘‘(f) ADDED PROJECT TYPES.—The President shall



2 establish methodologies described in subsection (a), and,



3 as applicable, requirements and mechanisms for reversals



4 as described in subsection (b), for any project type that



5 is added to the list pursuant to section 733.



6 ‘‘SEC. 735. APPROVAL OF OFFSET PROJECTS.



7 ‘‘(a) APPROVAL PETITION.—An offset project devel-



8 oper shall submit an offset project approval petition
signed



9 by a responsible official (who shall certify the accuracy
of



10 the information submitted) and providing such informa-



11 tion as the President requires to determine whether the



12 offset project is eligible for issuance of offset credits
under



13 rules promulgated pursuant to this part.



14 ‘‘(b) TIMING.—An approval petition shall be sub-



15 mitted to the President under subsection (a) not later
than



16 the time at which an offset project’s first verification
re-



17 port is submitted under section 736.



18 ‘‘(c) APPROVAL PETITION REQUIREMENTS.—As part



19 of the regulations promulgated under section 732, the



20 President shall include provisions for, and shall
specify,



21 the required components of an offset project approval
peti-



22 tion required under subsection (a), which shall include—



23 ‘‘(1) designation of an offset project developer; 507



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1 ‘‘(2) designation of a party who is authorized to



2 provide access to the appropriate officials or an au-



3 thorized representative to the offset project; and



4 ‘‘(3) any other information that the President



5 considers to be necessary to achieve the purposes of



6 this part.



7 ‘‘(d) APPROVAL AND NOTIFICATION.—Not later than



8 90 days after receiving a complete approval petition under



9 subsection (a), the President shall make the approval
peti-



10 tion publicly available on the internet, approve or deny
the



11 petition in writing, and, if the petition is denied, make



12 the President’s decision publicly available on the
internet.



13 After an offset project is approved, the offset project
de-



14 veloper shall not be required to resubmit an approval
peti-



15 tion during the offset project’s crediting period, except
as



16 provided in section 734(c)(4).



17 ‘‘(e) APPEAL.—The President shall establish proce-



18 dures for appeal and review of determinations made under



19 subsection (d).



20 ‘‘(f) VOLUNTARY PREAPPROVAL REVIEW.—The



21 President may establish a voluntary preapproval review



22 procedure, to allow an offset project developer to
request



23 the President to conduct a preliminary eligibility review



24 for an offset project. Findings of such reviews shall not
508



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1 be binding upon the President. The voluntary preapproval



2 review procedure—



3 ‘‘(1) shall require the offset project developer to



4 submit such basic project information as the Presi-



5 dent requires to provide a meaningful review; and



6 ‘‘(2) shall require a response from the President



7 not later than 6 weeks after receiving a request for



8 review under this subsection.



9 ‘‘SEC. 736. VERIFICATION OF OFFSET PROJECTS.



10 ‘‘(a) IN GENERAL.—As part of the regulations pro-



11 mulgated under section 732(a), the President shall estab-



12 lish requirements, including protocols, for verification
of



13 the quantity of greenhouse gas emission reductions or



14 avoidance, or sequestration of greenhouse gases,
resulting



15 from an offset project. The regulations shall require
that



16 an offset project developer shall submit a report,
prepared



17 by a third-party verifier accredited under subsection
(d),



18 providing such information as the President requires to



19 determine the quantity of greenhouse gas emission reduc-



20 tions or avoidance, or sequestration of greenhouse gas,
re-



21 sulting from the offset project.



22 ‘‘(b) SCHEDULE.—The President shall prescribe a



23 schedule for the submission of verification reports under



24 subsection (a). 509



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1 ‘‘(c) VERIFICATION REPORT REQUIREMENTS.—The



2 President shall specify the required components of a



3 verification report required under subsection (a), which



4 shall include—



5 ‘‘(1) the name and contact information for a



6 designated representative for the offset project devel-



7 oper;



8 ‘‘(2) the quantity of greenhouse gas reduced,



9 avoided, or sequestered;



10 ‘‘(3) the methodologies applicable to the project



11 pursuant to section 734;



12 ‘‘(4) a certification that the project meets the



13 applicable requirements;



14 ‘‘(5) a certification establishing that the conflict



15 of interest requirements in the regulations promul-



16 gated under subsection (d)(1) have been complied



17 with; and



18 ‘‘(6) any other information that the President



19 considers to be necessary to achieve the purposes of



20 this part.



21 ‘‘(d) VERIFIER ACCREDITATION.—



22 ‘‘(1) IN GENERAL.—As part of the regulations



23 promulgated under section 732(a), the President



24 shall establish a process and requirements for peri-



25 odic accreditation of third-party verifiers to ensure 510



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1 that such verifiers are professionally qualified and



2 have no conflicts of interest with offset project devel-



3 opers.



4 ‘‘(2) STANDARDS.—



5 ‘‘(A) AMERICAN NATIONAL STANDARDS IN-



6 STITUTE ACCREDITATION.—The President may



7 accredit, or accept for purposes of accreditation



8 under this subsection, verifiers accredited under



9 the American National Standards Institute



10 (ANSI) accreditation program in accordance



11 with ISO 14065. The President shall accredit,



12 or accept for accreditation, verifiers under this



13 subparagraph only if the President finds that



14 the American National Standards Institute ac-



15 creditation program provides sufficient assur-



16 ance that the requirements of this part will be



17 met.



18 ‘‘(B) EPA 
ACCREDITATION.—As part of



19 the regulations promulgated under section



20 732(a), the President may establish accredita-



21 tion standards for verifiers under this sub-



22 section, and may establish related training and



23 testing programs and requirements.



24 ‘‘(3) PUBLIC ACCESSIBILITY.—Each verifier



25 meeting the requirements for accreditation in ac-511



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1 cordance with this subsection shall be listed in a



2 publicly accessible database, which shall be main-



3 tained and updated by the President.



4 ‘‘(4) REVOCATION.—The regulations concerning



5 accreditation of third-party verifiers required under



6 paragraph (1) shall establish a process for the Presi-



7 dent to revoke the accreditation of any third-party



8 verifier that the President finds fails to maintain



9 professional qualifications or to avoid a conflict of



10 interest, or for other good cause.



11 ‘‘SEC. 737. ISSUANCE OF OFFSET CREDITS.



12 ‘‘(a) DETERMINATION AND NOTIFICATION.—Not



13 later than 90 days after receiving a complete
verification



14 report under section 736, the President shall—



15 ‘‘(1) make the report publicly available on the



16 Internet;



17 ‘‘(2) make a determination of the quantity of



18 greenhouse gas emissions reduced or avoided, or



19 greenhouse gases sequestered, resulting from an off-



20 set project approved under section 735; and



21 ‘‘(3) notify the offset project developer in writ-



22 ing of such determination and make such determina-



23 tion publicly available on the Internet.



24 ‘‘(b) ISSUANCE OF OFFSET CREDITS.—The Presi-



25 dent shall issue one offset credit to an offset project
devel-512



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1 oper for each ton of carbon dioxide equivalent that the



2 President has determined has been reduced, avoided, or



3 sequestered during the period covered by a verification
re-



4 port submitted in accordance with section 736, only if—



5 ‘‘(1) the President has approved the offset



6 project pursuant to section 735; and



7 ‘‘(2) the relevant emissions reduction, avoid-



8 ance, or sequestration has—



9 ‘‘(A) already occurred, during the offset



10 project’s crediting period; and



11 ‘‘(B) occurred after January 1, 2009.



12 ‘‘(c) APPEAL.—The President shall establish proce-



13 dures for appeal and review of determinations made under



14 subsection (a).



15 ‘‘(d) TIMING.—Offset credits meeting the criteria es-



16 tablished in subsection (b) shall be issued not later
than



17 2 weeks following the verification determination made by



18 the President under subsection (a).



19 ‘‘(e) REGISTRATION.—The President shall assign a



20 unique serial number to and register each offset credit
to



21 be issued in the Offset Registry established under
section



22 732(d).



23 ‘‘SEC. 738. AUDITS.



24 ‘‘(a) IN GENERAL.—The President shall, on an ongo-



25 ing basis, conduct random audits of offset projects and
513



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1 offset credits. The President shall conduct audits of the



2 practices of third-party verifiers. In each year, the
Presi-



3 dent shall conduct audits, at minimum, for a representa-



4 tive sample of project types and geographic areas.



5 ‘‘(b) DELEGATION.—The President may delegate to



6 a State or tribal government the responsibility for con-



7 ducting audits under this section if the President finds



8 that the program proposed by the State or tribal govern-



9 ment provides assurances equivalent to those provided by



10 the auditing program of the President, and that the
integ-



11 rity of the offset program under this part will be main-



12 tained. Nothing in this subsection shall prevent the
Presi-



13 dent from conducting any audit the President considers



14 necessary and appropriate.



15 ‘‘(c) AUDIT REQUIREMENTS.—As part of the regula-



16 tions promulgated under section 732(a), the appropriate



17 officials shall establish requirements and protocols for
an



18 auditing program, whether undertaken by the appropriate



19 officials or an authorized representative, concerning



20 project developers, third party verifiers, and various
com-



21 ponents of the offsets program. Such regulations shall
in-



22 clude—



23 ‘‘(1) the components of the offset project, which



24 shall be evaluated against the offset approval peti-



25 tion and the verification report; 514



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1 ‘‘(2) the minimum experience or training of the



2 auditors;



3 ‘‘(3) the form in which reports shall be com-



4 pleted;



5 ‘‘(4) requirements for delegating auditing func-



6 tions to States or tribal governments, including re-



7 quiring periodic reports from State or tribal govern-



8 ments on their auditing activities and findings; and



9 ‘‘(5) any other information that the appropriate



10 officials considers to be necessary to achieve the pur-



11 pose of the Act.



12 ‘‘SEC. 739. PROGRAM REVIEW AND REVISION.



13 ‘‘At least once every 5 years, the President shall re-



14 view and, based on new or updated information and taking



15 into consideration the recommendations of the Advisory



16 Board, update and revise—



17 ‘‘(1) the list of eligible project types established



18 under section 733;



19 ‘‘(2) the methodologies established, including



20 specific activity baselines, under section 734(a);



21 ‘‘(3) the reversal requirements and mechanisms



22 established or prescribed under section 734(b);



23 ‘‘(4) measures to improve the accountability of



24 the offsets program; and 515



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1 ‘‘(5) any other requirements established under



2 this part to ensure the environmental integrity and



3 effective operation of this part.



4 ‘‘SEC. 740. EARLY OFFSET SUPPLY.



5 ‘‘(a) PROJECTS REGISTERED UNDER OTHER GOV-



6 ERNMENT-RECOGNIZED PROGRAMS.—Except as provided



7 in subsection (b) or (c), after public notice and oppor-



8 tunity for comment, the President shall issue one offset



9 credit for each ton of carbon dioxide equivalent emissions



10 reduced, avoided, or sequestered—



11 ‘‘(1) under an offset project that was started



12 after January 1, 2001;



13 ‘‘(2) for which a credit was issued under any



14 regulatory or voluntary greenhouse gas emission off-



15 set program that the President determines—



16 ‘‘(A) was established under State or tribal



17 law or regulation prior to January 1, 2009, or



18 has been approved by the President pursuant to



19 subsection (e);



20 ‘‘(B) has developed offset project type



21 standards, methodologies, and protocols



22 through a public consultation process or a peer



23 review process;



24 ‘‘(C) has made available to the public



25 standards, methodologies, and protocols that re-516



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1 quire that credited emission reductions, avoid-



2 ance, or sequestration are permanent, addi-



3 tional, verifiable, and enforceable;



4 ‘‘(D) requires that all emission reductions,



5 avoidance, or sequestration be verified by a



6 State regulatory agency or an accredited third-



7 party independent verification body;



8 ‘‘(E) requires that all credits issued are



9 registered in a publicly accessible registry, with



10 individual serial numbers assigned for each ton



11 of carbon dioxide equivalent emission reduc-



12 tions, avoidance, or sequestration; and



13 ‘‘(F) ensures that no credits are issued for



14 activities for which the entity administering the



15 program, or a program administrator or rep-



16 resentative, has funded, solicited, or served as a



17 fund administrator for the development of, the



18 project or activity that caused the emission re-



19 duction, avoidance, or sequestration; and



20 ‘‘(3) for which the credit described in para-



21 graph (2) is transferred to the President.



22 ‘‘(b) INELIGIBLE CREDITS.—Subsection (a) shall not



23 apply to offset credits that have expired or have been
re-



24 tired, canceled, or used for compliance under a program



25 established under State or tribal law or regulation. 517



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1 ‘‘(c) LIMITATION.—Notwithstanding subsection



2 (a)(1), offset credits shall be issued under this section—



3 ‘‘(1) only for reductions or avoidance of green-



4 house gas emissions, or sequestration of greenhouse



5 gases, that occur after January 1, 2009; and



6 ‘‘(2) only until the date that is 3 years after the



7 date of enactment of this title, or the date that regu-



8 lations promulgated under section 732(a) take ef-



9 fect, whichever occurs sooner.



10 ‘‘(d) RETIREMENT OF CREDITS.—The President



11 shall seek to ensure that offset credits described in
sub-



12 section (a)(2) are retired for purposes of use under a
pro-



13 gram described in subsection (b).



14 ‘‘(e) OTHER PROGRAMS.—



15 ‘‘(1) IN GENERAL.—Offset programs that ei-



16 ther—



17 ‘‘(A) were not established under State or



18 tribal law; or



19 ‘‘(B) were not established prior to January



20 1, 2009;



21 but that otherwise meet all of the criteria of sub-



22 section (a)(2) may apply to the President to be ap-



23 proved under this subsection as an eligible program



24 for early offset credits under this section. 518



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1 ‘‘(2) APPROVAL.—The President shall approve



2 any such program that the President determines has



3 criteria and methodologies of at least equal strin-



4 gency to the criteria and methodologies of the pro-



5 grams established under State or tribal law that the



6 President determines meet the criteria of subsection



7 (a)(2). The President may approve types of offsets



8 under any such program that are subject to criteria



9 and methodologies of at least equal stringency to the



10 criteria and methodologies for such types of offsets



11 applied under the programs established under State



12 or tribal law that the President determines meet the



13 criteria of subsection (a)(2). The President shall



14 make a determination on any application received



15 under this subsection by not later than 180 days



16 from the date of receipt of the application.



17 ‘‘SEC. 741. ENVIRONMENTAL CONSIDERATIONS.



18 ‘‘If the President lists forestry or other relevant land



19 management-related offset projects as eligible offset



20 project types under section 733, the President, in con-



21 sultation with appropriate Federal agencies, shall
promul-



22 gate regulations to establish criteria for such offset



23 projects—



24 ‘‘(1) to ensure that native species are given pri-



25 mary consideration in such projects; 519



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1 ‘‘(2) to enhance biological diversity in such



2 projects;



3 ‘‘(3) to prohibit the use of federally designated



4 or State-designated noxious weeds;



5 ‘‘(4) to prohibit the use of a species listed by



6 a regional or State invasive plant authority within



7 the applicable region or State;



8 ‘‘(5) in the case of forestry offset projects, in



9 accordance with widely accepted, environmentally



10 sustainable forestry practices;



11 ‘‘(6) to ensure that the offset project area was



12 not converted from native ecosystems, such as a for-



13 est, grassland, scrubland or wetland, to generate off-



14 sets, unless such conversation took place at least 10



15 years prior to the date of enactment of this title or



16 before January 1, 2009, whichever date is earlier;



17 and



18 ‘‘(7) to the maximum extent practicable, ensure



19 that the use of offset credits would be eligible to sat-



20 isfy emission reduction commitments made by the



21 United States in multilateral agreements, such as



22 the United Nations Framework Convention on Cli-



23 mate Change, done at New York on May 9, 1992 (or



24 any successor agreement). 520



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1 ‘‘SEC. 742. TRADING.



2 ‘‘Section 724 shall apply to the trading of offset cred-



3 its.



4 ‘‘SEC. 743. OFFICE OF OFFSETS INTEGRITY.



5 ‘‘(a) ESTABLISHMENT.—There is established within



6 the Office of the Assistant Attorney General of the Envi-



7 ronment and Natural Resources Division in the Depart-



8 ment of Justice a Carbon Offsets Integrity Unit, to be



9 headed by a Special Counsel (hereinafter referred to as



10 the ‘Special Counsel’). The Carbon Offsets Integrity Unit



11 and the Special Counsel shall be responsible to and shall



12 report directly to the Assistant Attorney General of the



13 Environment and Natural Resources Division.



14 ‘‘(b) APPOINTMENT.—The Special Counsel shall be



15 appointed by the President, by and with the advice and



16 consent of the Senate.



17 ‘‘(c) RESPONSIBILITIES.—The Special Counsel



18 shall—



19 ‘‘(1) supervise and coordinate investigations



20 and civil enforcement within the Department of Jus-



21 tice of the carbon offsets program under this part;



22 ‘‘(2) ensure that Federal law relating to civil



23 enforcement of the carbon offsets program is used to



24 the fullest extent authorized; and 521



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1 ‘‘(3) ensure that adequate resources are made



2 available for the investigation and enforcement of



3 civil violations of the carbon offsets program.



4 ‘‘(d) COMPENSATION.—The Special Counsel shall be



5 paid at the basic pay payable for level V of the Executive



6 Schedule under section 5316 of title 5, United States



7 Code.



8 ‘‘(e) ASSIGNMENT OF PERSONNEL.—There shall be



9 assigned to the Carbon Offsets Integrity Unit such per-



10 sonnel as the Attorney General determines to be necessary



11 to provide an appropriate level of enforcement activity
in



12 the area of carbon offsets.



13 ‘‘SEC. 744. INTERNATIONAL OFFSET CREDITS.



14 ‘‘(a) IN GENERAL.—The Administrator, in consulta-



15 tion with the Secretary of State and the Administrator



16 of the United States Agency for International Develop-



17 ment, may issue, in accordance with this section, inter-



18 national offset credits based on activities that reduce
or



19 avoid greenhouse gas emissions, or increase sequestration



20 of greenhouse gases, in a developing country. Such
credits



21 may be issued for projects pursuant to the requirements



22 of this part or as provided in subsection (c), (d), or
(e).



23 ‘‘(b) ISSUANCE.—



24 ‘‘(1) REGULATIONS.—Not later than 2 years



25 after the date of enactment of this title, the Admin-522



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1 istrator, in consultation with the Secretary of State,



2 the Administrator of the United States Agency for



3 International Development, and any other appro-



4 priate Federal agency, and taking into consideration



5 the recommendations of the Advisory Board, shall



6 promulgate regulations for implementing this sec-



7 tion, taking into consideration specific factors rel-



8 evant to the determination of eligible international



9 offset project types and the implementation of inter-



10 national methodologies for each offset type ap-



11 proved. Except as otherwise provided in this section,



12 the issuance of international offset credits under this



13 section shall be subject to the requirements of this



14 part.



15 ‘‘(2) REQUIREMENTS FOR INTERNATIONAL



16 OFFSET CREDITS.—The Administrator may issue



17 international offset credits only if—



18 ‘‘(A) the United States is a party to a bi-



19 lateral or multilateral agreement or arrange-



20 ment that includes the country in which the



21 project or measure achieving the relevant green-



22 house gas emission reduction or avoidance, or



23 greenhouse gas sequestration, has occurred;



24 ‘‘(B) such country is a developing country;



25 and 523



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1 ‘‘(C) such agreement or arrangement—



2 ‘‘(i) ensures that all of the require-



3 ments of this part apply to the issuance of



4 international offset credits under this sec-



5 tion;



6 ‘‘(ii) provides for the appropriate dis-



7 tribution of international offset credits



8 issued; and



9 ‘‘(iii) provides that the offset project



10 developer be eligible to receive service of



11 process in the United States for the pur-



12 pose of all civil and regulatory actions in



13 Federal courts, if such service is made in



14 accordance with the Federal rules for serv-



15 ice of process in the States in which the



16 case or regulatory action is brought.



17 ‘‘(3) SUPPLEMENTAL INTERNATIONAL OFFSET



18 CATEGORIES.—



19 ‘‘(A) IN GENERAL.—In order to ensure a



20 sufficient supply of international offsets and to



21 reduce the cost of compliance with this title, the



22 Administrator may establish categories of inter-



23 national offsets in addition to those described in



24 subsections (c), (d), and (e), if— 524



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1 ‘‘(i) for 2 consecutive years, the auc-



2 tion price for allowances reaches the mar-



3 ket stability reserve auction price under



4 section 726(c); and



5 ‘‘(ii) the Administrator determines



6 that the total amount of international off-



7 sets held by covered entities for each of the



8 2 years referred to in clause (i) does not



9 exceed the limit on international offsets es-



10 tablished under section 722(d)(3).



11 ‘‘(B) SUPPLEMENTAL CATEGORIES.—



12 ‘‘(i) IN GENERAL.—Any supplemental



13 categories of international offsets estab-



14 lished pursuant to subparagraph (A)



15 shall—



16 ‘‘(I) satisfy all applicable provi-



17 sions of this part, including subsection



18 (b)(2) of this section and sections 733



19 and 734; and



20 ‘‘(II) meet the criteria described



21 in clause (ii).



22 ‘‘(ii) CRITERIA.—The criteria referred



23 to in clause (i)(II) are that—



24 ‘‘(I) the country in which the ac-



25 tivities in the offset category would 525



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1 take place has developed and is imple-



2 menting a low carbon development



3 plan that includes provisions for the



4 activities described in the offset cat-



5 egory;



6 ‘‘(II) the activities in the offset



7 category are not activities included



8 under subsection (c), (d) or (e); and



9 ‘‘(III) the activities in the offset



10 category satisfy specific criteria rel-



11 evant to methodologies and institu-



12 tional and technical capacities associ-



13 ated with developing country contexts



14 to ensure adequate treatment of leak-



15 age, additionality, and permanence.



16 ‘‘(c) SECTOR-BASED CREDITS.—



17 ‘‘(1) IN GENERAL.—In order to minimize the



18 potential for leakage and to encourage countries to



19 take nationally appropriate mitigation actions to re-



20 duce or avoid greenhouse gas emissions, or sequester



21 greenhouse gases, the Administrator, in consultation



22 with the Secretary of State and the Administrator of



23 the United States Agency for International Develop-



24 ment, shall— 526



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1 ‘‘(A) identify sectors, or combinations of



2 sectors, within specific countries with respect to



3 which the issuance of international offset cred-



4 its on a sectoral basis is appropriate; and



5 ‘‘(B) issue international offset credits for



6 such sectors only on a sectoral basis.



7 ‘‘(2) IDENTIFICATION OF SECTORS.—



8 ‘‘(A) GENERAL RULE.—For purposes of



9 paragraph (1)(A), a sectoral basis shall be ap-



10 propriate for activities—



11 ‘‘(i) in countries that have compara-



12 tively high greenhouse gas emissions, or



13 comparatively greater levels of economic



14 development; and



15 ‘‘(ii) that, if located in the United



16 States, would be within a sector subject to



17 the compliance obligation under section



18 722.



19 ‘‘(B) FACTORS.—In determining the sec-



20 tors and countries for which international offset



21 credits should be awarded only on a sectoral



22 basis, the Administrator, in consultation with



23 the Secretary of State and the Administrator of



24 the United States Agency for International De-



25 velopment, shall consider the following factors: 527



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1 ‘‘(i) The country’s gross domestic



2 product.



3 ‘‘(ii) The country’s total greenhouse



4 gas emissions.



5 ‘‘(iii) Whether the comparable sector



6 of the United States economy is covered by



7 the compliance obligation under section



8 722.



9 ‘‘(iv) The heterogeneity or homo-



10 geneity of sources within the relevant sec-



11 tor.



12 ‘‘(v) Whether the relevant sector pro-



13 vides products or services that are sold in



14 internationally competitive markets.



15 ‘‘(vi) The risk of leakage if inter-



16 national offset credits were issued on a



17 project-level basis, instead of on a sectoral



18 basis, for activities within the relevant sec-



19 tor.



20 ‘‘(vii) The capability of accurately



21 measuring, monitoring, reporting, and



22 verifying the performance of sources across



23 the relevant sector.



24 ‘‘(viii) Such other factors as the Ad-



25 ministrator, in consultation with the Sec-528



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1 retary of State and the Administrator of



2 the United States Agency for International



3 Development, determines are appropriate



4 to—



5 ‘‘(I) ensure the integrity of the



6 United States greenhouse gas emis-



7 sions limitations established under



8 section 703; and



9 ‘‘(II) encourage countries to take



10 nationally appropriate mitigation ac-



11 tions to reduce or avoid greenhouse



12 gas emissions, or sequester green-



13 house gases.



14 ‘‘(ix) The issuance of offsets for ac-



15 tivities that are—



16 ‘‘(I) in addition to nationally ap-



17 propriate mitigation actions taken by



18 developing countries pursuant to the



19 low-carbon development plans of the



20 countries; and



21 ‘‘(II) on a sectoral basis.



22 ‘‘(3) SECTORAL BASIS.—



23 ‘‘(A) DEFINITION.—In this subsection, the



24 term ‘sectoral basis’ means the issuance of



25 international offset credits only for the quantity 529



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1 of sector-wide reductions or avoidance of green-



2 house gas emissions, or sector-wide increases in



3 sequestration of greenhouse gases, achieved



4 across the relevant sector or sectors of the econ-



5 omy relative to a baseline level of emissions es-



6 tablished in an agreement or arrangement de-



7 scribed in subsection (b)(2)(A) for the sector.



8 ‘‘(B) BASELINE.—The baseline for a sec-



9 tor shall—



10 ‘‘(i) be established at levels of green-



11 house gas emissions lower than would



12 occur under a business-as-usual scenario,



13 taking into account relevant domestic or



14 international policies or incentives to re-



15 duce greenhouse gas emissions;



16 ‘‘(ii) be used to determine



17 additionality and performance;



18 ‘‘(iii) account for all significant



19 sources of emissions from a sector;



20 ‘‘(iv) be adjusted over time to reflect



21 changing circumstances;



22 ‘‘(v) be developed taking into consid-



23 eration such factors as—



24 ‘‘(I) any established emissions



25 performance level for the sector; 530



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1 ‘‘(II) the current performance of



2 the sector in the country;



3 ‘‘(III) expected future trends of



4 the sector in the country; and



5 ‘‘(IV) historical data and other



6 factors to ensure additionality; and



7 ‘‘(vi) be designed to produce signifi-



8 cant deviations from business-as-usual



9 emissions, consistent with nationally appro-



10 priate mitigation commitments or actions,



11 in a way that equitably contributes to



12 meeting thresholds identified in section



13 705(e)(2).



14 ‘‘(d) CREDITS ISSUED BY AN INTERNATIONAL



15 BODY.—



16 ‘‘(1) IN GENERAL.—The Administrator, in con-



17 sultation with the Secretary of State, may issue



18 international offset credits in exchange for instru-



19 ments in the nature of offset credits that are issued



20 by an international body established pursuant to the



21 United Nations Framework Convention on Climate



22 Change, to a protocol to such Convention, or to a



23 treaty that succeeds such Convention. The Adminis-



24 trator may issue international offset credits under



25 this subsection only if, in addition to the require-531



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1 ments of subsection (b), the Administrator has de-



2 termined that the international body that issued the



3 instruments has implemented substantive and proce-



4 dural requirements for the relevant project type that



5 provide equal or greater assurance of the integrity of



6 such instruments as is provided by the requirements



7 of this part. Beginning on January 1, 2016, the Ad-



8 ministrator shall issue no offset credit pursuant to



9 this subsection if the activity generating the green-



10 house gas emission reductions or avoidance, or



11 greenhouse gas sequestration, occurs in a country



12 and sector identified by the Administrator under



13 subsection (c), unless the offset credit issued by the



14 international body is consistent with section 744(c).



15 ‘‘(2) RETIREMENT.—The Administrator, in



16 consultation with the Secretary of State, shall seek,



17 by whatever means appropriate, including agree-



18 ments, arrangements, or technical cooperation with



19 the international issuing body described in para-



20 graph (1), to ensure that such body—



21 ‘‘(A) is notified of the Administrator’s



22 issuance, under this subsection, of an inter-



23 national offset credit in exchange for an instru-



24 ment issued by such international body; and 532



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1 ‘‘(B) provides, to the extent feasible, for



2 the disqualification of the instrument issued by



3 such international body for subsequent use



4 under any relevant foreign or international



5 greenhouse gas regulatory program, regardless



6 of whether such use is a sale, exchange, or sub-



7 mission to satisfy a compliance obligation.



8 ‘‘(e) OFFSETS FROM REDUCED DEFORESTATION.—



9 ‘‘(1) REQUIREMENTS.—The Administrator, in



10 accordance with the regulations promulgated under



11 subsection (b)(1) and an agreement or arrangement



12 described in subsection (b)(2)(A), shall issue inter-



13 national offset credits for greenhouse gas emission



14 reductions achieved through activities to reduce de-



15 forestation only if, in addition to the requirements of



16 subsection (b)—



17 ‘‘(A) the activity occurs in—



18 ‘‘(i) a country listed by the Adminis-



19 trator pursuant to paragraph (2);



20 ‘‘(ii) a state or province listed by the



21 Administrator pursuant to paragraph (5);



22 or



23 ‘‘(iii) a country listed by the Adminis-



24 trator pursuant to paragraph (6); 533



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1 ‘‘(B) except as provided in paragraph (5)



2 or (6), the quantity of the international offset



3 credits is determined by comparing the national



4 emissions from deforestation relative to a na-



5 tional deforestation baseline for that country es-



6 tablished, in accordance with an agreement or



7 arrangement described in subsection (b)(2)(A),



8 pursuant to paragraph (4);



9 ‘‘(C) the reduction in emissions from de-



10 forestation has occurred before the issuance of



11 the international offset credit and, taking into



12 consideration relevant international standards,



13 has been demonstrated using ground-based in-



14 ventories, remote sensing technology, and other



15 methodologies to ensure that all relevant carbon



16 stocks are accounted;



17 ‘‘(D) the Administrator has made appro-



18 priate adjustments, such as discounting for any



19 additional uncertainty, to account for cir-



20 cumstances specific to the country, including its



21 technical capacity described in paragraph



22 (2)(A);



23 ‘‘(E) the Administrator has determined



24 that the country within which the activity oc-



25 curs has in place a publicly available strategic 534



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1 plan that includes the criteria listed in para-



2 graph (2)(C);



3 ‘‘(F) the activity is designed, carried out,



4 and managed—



5 ‘‘(i) in accordance with forest manage-



6 ment practices that—



7 ‘‘(I) improve the livelihoods of



8 forest communities;



9 ‘‘(II) maintain the natural bio-



10 diversity, resilience, and carbon stor-



11 age capacity of forests; and



12 ‘‘(III) do not adversely impact



13 the permanence of forest carbon



14 stocks or emission reductions;



15 ‘‘(ii) to promote or restore native for-



16 est species and ecosystems where prac-



17 ticable, and to avoid the introduction of



18 invasive nonnative species;



19 ‘‘(iii) in a manner that gives due re-



20 gard to the rights and interests of local



21 communities, indigenous peoples, forest-de-



22 pendent communities, and vulnerable social



23 groups;



24 ‘‘(iv) with consultations with, and full



25 participation of, local communities, indige-535



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1 nous peoples, and forest-dependent com-



2 munities, in affected areas, as partners



3 and primary stakeholders, prior to and



4 during the design, planning, implementa-



5 tion, and monitoring and evaluation of ac-



6 tivities;



7 ‘‘(v) with transparent and equitable



8 sharing of profits and benefits derived



9 from offset credits with local communities,



10 indigenous peoples, and forest-dependent



11 communities;



12 ‘‘(vi) with full transparency, third-



13 party independent oversight, and public



14 dissemination of related financial and con-



15 tractual arrangements, and



16 ‘‘(vii) so that the social and environ-



17 mental impacts of these activities are mon-



18 itored and reported in sufficient detail to



19 allow appropriate officials to determine



20 compliance with the requirements of this



21 section;



22 ‘‘(G) the reduction otherwise satisfies and



23 is consistent with any relevant requirements es-



24 tablished by an agreement reached under the



25 auspices of the United Nations Framework 536



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1 Convention on Climate Change, done at New



2 York on May 9, 1992; and



3 ‘‘(H) in the case that offsets are deter-



4 mined by comparing the national emissions



5 from deforestation relative to a national, state-



6 level, or province-level deforestation baseline as



7 provided in paragraph (4) or (5)—



8 ‘‘(i) a list of activities to reduce defor-



9 estation is provided to the Administrator



10 and made publicly available;



11 ‘‘(ii) the social and environmental im-



12 pacts of these activities are monitored and



13 reported in sufficient detail to allow the



14 Administrator to determine compliance



15 with the requirements of this section; and



16 ‘‘(iii) the distribution of revenues for



17 activities to reduce deforestation is trans-



18 parent, subject to independent third-party



19 oversight, and publicly disseminated.



20 ‘‘(2) ELIGIBLE COUNTRIES.—The Adminis-



21 trator, in consultation with the Secretary of State



22 and the Administrator of the United States Agency



23 for International Development, and in accordance



24 with an agreement or arrangement described in sub-



25 section (b)(2)(A), shall establish, and periodically
re-537



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1 view and update, a list of the developing countries



2 that have the capacity to participate in deforestation



3 reduction activities at a national level, including—



4 ‘‘(A) the technical capacity to monitor,



5 measure, report, and verify forest carbon fluxes



6 for all significant sources of greenhouse gas



7 emissions from deforestation with an acceptable



8 level of uncertainty, as determined taking into



9 account relevant internationally accepted meth-



10 odologies, such as those established by the



11 Intergovernmental Panel on Climate Change;



12 ‘‘(B) the institutional capacity to reduce



13 emissions from deforestation, including strong



14 forest governance and mechanisms to ensure



15 transparency and third-party independent over-



16 sight of offset activities and revenues, and the



17 transparent and equitable distribution of offset



18 revenues for local actions; and



19 ‘‘(C) a land use or forest sector strategic



20 plan that—



21 ‘‘(i) assesses national and local drivers



22 of deforestation and forest degradation and



23 identifies reforms to national policies need-



24 ed to address them; 538



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1 ‘‘(ii) estimates the country’s emissions



2 from deforestation and forest degradation;



3 ‘‘(iii) identifies improvements in and a



4 timeline for data collection, monitoring,



5 and institutional capacity necessary to im-



6 plement an effective national deforestation



7 reduction program that meets the criteria



8 set forth in this section (including a na-



9 tional deforestation baseline);



10 ‘‘(iv) establishes a timeline for imple-



11 menting the program and transitioning



12 forest-based economies to low-emissions de-



13 velopment pathways with respect to emis-



14 sions from forest and land use activities;



15 ‘‘(v) includes a national policy for con-



16 sultations with, and full participation of,



17 all stakeholders, especially indigenous and



18 forest-dependent communities, in its de-



19 sign, planning, and implementation of ac-



20 tivities, whether at the national or local



21 level, to reduce deforestation in the country



22 (including a national process for address-



23 ing grievances if stakeholders have been



24 caused social, environmental, or economic



25 harm); 539



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1 ‘‘(vi) provides for the distribution of



2 revenues for activities to reduce deforest-



3 ation transparently and publicly, subject to



4 independent third-party oversight; and



5 ‘‘(vii) includes a national platform or



6 a type of registry for information relating



7 to deforestation and degradation policy and



8 program implementation processes, includ-



9 ing a mechanism for the monitoring and



10 reporting of the social and environmental



11 impacts of those activities.



12 ‘‘(3) PROTECTION OF INTERESTS.—With re-



13 spect to an agreement or arrangement described in



14 subsection (b)(2)(A) with a country that addresses



15 international offset credits under this subsection, the



16 Administrator, in consultation with the Secretary of



17 State and the Administrator of the United States



18 Agency for International Development, shall under-



19 take due diligence to ensure the establishment and



20 enforcement by such country of legal regimes, proc-



21 esses, standards, and safeguards that—



22 ‘‘(A) give due regard to the rights and in-



23 terests of local communities, indigenous peoples,



24 forest-dependent communities, and vulnerable



25 social groups; 540



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1 ‘‘(B) promote consultations with, and full



2 participation of, forest-dependent communities



3 and indigenous peoples in affected areas, as



4 partners and primary stakeholders, prior to and



5 during the design, planning, implementation,



6 and monitoring and evaluation of activities; and



7 ‘‘(C) encourage transparent and equitable



8 sharing of profits and benefits derived from



9 international offset credits with local commu-



10 nities, indigenous peoples, and forest-dependent



11 communities.



12 ‘‘(4) NATIONAL DEFORESTATION BASELINE.—A



13 national deforestation baseline established under this



14 subsection shall—



15 ‘‘(A) be national in scope;



16 ‘‘(B) be consistent with nationally appro-



17 priate mitigation commitments or actions with



18 respect to deforestation, taking into consider-



19 ation the average annual historical deforestation



20 rates of the country during a period of at least



21 5 years, the applicable drivers of deforestation,



22 and other factors to ensure that only reductions



23 that are in addition to such commitments or ac-



24 tions will generate offsets; 541



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1 ‘‘(C) establish a trajectory that would re-



2 sult in zero net deforestation by not later than



3 20 years after the national deforestation base-



4 line has been established, including a spatially



5 explicit land use plan that identifies intact and



6 primary forest areas and managed forest areas



7 that are to remain while the country is reaching



8 the zero net deforestation trajectory;



9 ‘‘(D) be adjusted over time to take account



10 of changing national circumstances;



11 ‘‘(E) be designed to account for all signifi-



12 cant sources of greenhouse gas emissions from



13 deforestation in the country; and



14 ‘‘(F) be consistent with the national defor-



15 estation baseline, if any, established for such



16 country under section 753.



17 ‘‘(5) STATE-LEVEL OR PROVINCE-LEVEL AC-



18 TIVITIES.—



19 ‘‘(A) ELIGIBLE STATES OR PROVINCES.—



20 The Administrator, in consultation with the



21 Secretary of State and the Administrator of the



22 United States Agency for International Devel-



23 opment, shall establish, and periodically review



24 and update, a list of states or provinces in de-



25 veloping countries where— 542



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1 ‘‘(i) the developing country is not in-



2 cluded on the list of countries established



3 pursuant to paragraph (6)(A);



4 ‘‘(ii) the State or province is under-



5 taking deforestation reduction activities;



6 ‘‘(iii) the state or province has the ca-



7 pacity to engage in deforestation reduction



8 activities at the state or province level, in-



9 cluding—



10 ‘‘(I) the technical capacity to



11 monitor and measure forest carbon



12 fluxes for all significant sources of



13 greenhouse gas emissions from defor-



14 estation with an acceptable amount of



15 uncertainty, including a spatially ex-



16 plicit land use plan that identifies in-



17 tact and primary forest areas and



18 managed forest areas that are to re-



19 main while the country is reaching the



20 zero net deforestation trajectory; and



21 ‘‘(II) the institutional capacity to



22 reduce emissions from deforestation,



23 including strong forest governance



24 and mechanisms to deliver forest con-



25 servation resources for local actions; 543



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1 ‘‘(iv) the state or province meets the



2 eligibility criteria in paragraphs (2) and



3 (3) for the geographic area under its juris-



4 diction; and



5 ‘‘(v) the country—



6 ‘‘(I) demonstrates that efforts



7 are underway to transition to a na-



8 tional program within 5 years; or



9 ‘‘(II) in the determination of the



10 Administrator, is making a good-faith



11 effort to develop a land use or forest



12 sector strategic national plan or pro-



13 gram that meets the criteria described



14 in paragraph (2)(C).



15 ‘‘(B) ACTIVITIES.—The Administrator may



16 issue international offset credits for greenhouse



17 gas emission reductions achieved through activi-



18 ties to reduce deforestation at a state or provin-



19 cial level that meet the requirements of this sec-



20 tion. Such credits shall be determined by com-



21 paring the emissions from deforestation within



22 that state or province relative to the state or



23 province deforestation baseline for that state or



24 province established, in accordance with an



25 agreement or arrangement described in sub-544



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1 section (b)(2)(A), pursuant to subparagraph



2 (C) of this paragraph.



3 ‘‘(C) STATE-LEVEL OR PROVINCE-LEVEL



4 DEFORESTATION BASELINE.—A state-level or



5 province-level deforestation baseline shall—



6 ‘‘(i) be consistent with any existing



7 nationally appropriate mitigation commit-



8 ments or actions for the country in which



9 the activity is occurring, so that only re-



10 ductions that are in addition to those com-



11 mitments or actions will generate offsets;



12 ‘‘(ii) be developed taking into consid-



13 eration the average annual historical defor-



14 estation rates of the state or province dur-



15 ing a period of at least 5 years, relevant



16 drivers of deforestation, and other factors



17 to ensure additionality;



18 ‘‘(iii) establish a trajectory that would



19 result in zero net deforestation by not later



20 than 20 years after the state-level or prov-



21 ince-level deforestation baseline has been



22 established; and



23 ‘‘(iv) be designed to account for all



24 significant sources of greenhouse gas emis-



25 sions from deforestation in the state or 545



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1 province and adjusted to fully account for



2 emissions leakage outside the state or



3 province through monitoring of major for-



4 ested areas in the host country and other



5 areas of the host country susceptible to



6 leakage.



7 ‘‘(D) PHASE OUT.—Beginning 5 years



8 after the first calendar year for which a covered



9 entity must demonstrate compliance with sec-



10 tion 722(a), the Administrator shall issue no



11 further international offset credits for eligible



12 state-level or province-level activities to reduce



13 deforestation pursuant to this paragraph.



14 ‘‘(6) PROJECTS AND PROGRAMS TO REDUCE



15 DEFORESTATION.—



16 ‘‘(A) ELIGIBLE COUNTRIES.—The Admin-



17 istrator, in consultation with the Secretary of



18 State and the Administrator of the United



19 States Agency for International Development,



20 shall establish, and periodically review and up-



21 date, a list of developing countries that—



22 ‘‘(i) the Administrator determines,



23 based on recent, credible, and reliable



24 emissions data, account for less than 1



25 percent of global greenhouse gas emissions 546



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1 and less than 3 percent of global forest-



2 sector and land use change greenhouse gas



3 emissions;



4 ‘‘(ii) have, or in the determination of



5 the Administrator are making a good faith



6 effort to develop, a land use or forest sec-



7 tor strategic plan that meets the criteria



8 described in paragraph (2)(C); and



9 ‘‘(iii) has made, or in the determina-



10 tion of the Administrator, is making, a



11 good-faith effort to develop, through the



12 implementation of activities under this sec-



13 tion, a monitoring program for major for-



14 ested areas in a host country and other



15 areas in a host country susceptible to leak-



16 age, including a spatially explicit land use



17 plan that identifies intact and primary for-



18 est areas and managed forest areas that



19 are to remain while country is reaching the



20 zero net deforestation trajectory.



21 ‘‘(B) ACTIVITIES.—The Administrator may



22 issue international offset credits for greenhouse



23 gas emission reductions achieved through



24 project or program level activities to reduce de-



25 forestation in countries listed under subpara-547



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1 graph (A) that meet the requirements of this



2 section. The quantity of international offset



3 credits shall be determined by comparing the



4 project-level or program-level emissions from



5 deforestation to a deforestation baseline for



6 such project or program established pursuant to



7 subparagraph (C).



8 ‘‘(C) PROJECT-LEVEL OR PROGRAM-LEVEL



9 BASELINE.—A project-level or program-level de-



10 forestation baseline shall—



11 ‘‘(i) be consistent with any existing



12 nationally appropriate mitigation commit-



13 ments or actions for the country in which



14 the project or program is occurring, so



15 that only reductions that are in addition to



16 such commitments or actions will generate



17 offsets;



18 ‘‘(ii) be developed taking into consid-



19 eration the average annual historical defor-



20 estation rates in the project or program



21 boundary during a period of at least 5



22 years, applicable drivers of deforestation,



23 and other factors to ensure additionality;



24 ‘‘(iii) be designed to account for all



25 significant sources of greenhouse gas emis-548



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1 sions from deforestation in the project or



2 program boundary; and



3 ‘‘(iv) be adjusted to fully account for



4 emissions leakage outside the project or



5 program boundary, including—



6 ‘‘(I) estimation through moni-



7 toring of major forested areas in a



8 host country and other areas in a host



9 country susceptible to leakage, pursu-



10 ant to section 744(e)(5); and



11 ‘‘(II) a spatially explicit land use



12 plan that identifies intact and primary



13 forest areas and managed forest areas



14 that are to remain while country is



15 reaching the zero net deforestation



16 trajectory



17 ‘‘(D) PHASE-OUT.—



18 ‘‘(i) IN GENERAL.—Beginning on the



19 date that is 8 years after the first calendar



20 year for which a covered entity must dem-



21 onstrate compliance with section 722(a),



22 the Administrator shall issue no further



23 international offset credits for project-level



24 or program-level activities as described in 549



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1 this paragraph, except as provided in



2 clause (ii).



3 ‘‘(ii) EXTENSION.—The Administrator



4 may extend the phase out deadline for the



5 issuance of international offset credits



6 under this section by up to 5 years with re-



7 spect to eligible activities taking place in a



8 least developed country, which is a foreign



9 country that the United Nations has iden-



10 tified as among the least developed of de-



11 veloping countries at the time that the Ad-



12 ministrator determines to provide an exten-



13 sion, provided that the Administrator, in



14 consultation with the Secretary of State



15 and the Administrator of the United States



16 Agency for International Development, de-



17 termines the country—



18 ‘‘(I) lacks sufficient capacity to



19 adopt and implement effective pro-



20 grams to achieve reductions in defor-



21 estation measured against national



22 baselines;



23 ‘‘(II) is receiving support under



24 part E to develop such capacity; and 550



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1 ‘‘(III) has developed and is work-



2 ing to implement a credible national



3 strategy or plan to reduce deforest-



4 ation.



5 ‘‘(7) EXPANSION OF SCOPE.—In implementing



6 this subsection, the Administrator, taking into con-



7 sideration the recommendations of the Advisory



8 Board, may—



9 ‘‘(A) expand credible activities to include



10 forest degradation; and



11 ‘‘(B) include soil carbon losses associated



12 with forested wetlands or peatlands.



13 ‘‘(f) MODIFICATION OF REQUIREMENTS.—In promul-



14 gating regulations under subsection (b)(1) with respect
to



15 the issuance of international offset credits under sub-



16 section (c), (d), or (e), the Administrator, in
consultation



17 with the Secretary of State and the Administrator of the



18 United States Agency for International Development, may



19 modify or omit a requirement of this part (excluding the



20 requirements of this section) if the Administrator deter-



21 mines that the application of that requirement to such



22 subsection is not feasible or would result in the
creation



23 of offset credits that would not be eligible to satisfy
emis-



24 sions reduction commitments made by the United States



25 pursuant to the United Nations Framework Convention 551



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1 on Climate Change, done at New York on May 9, 1992



2 (or any successor agreement). In modifying or omitting



3 such a requirement on the basis of infeasibility, the Ad-



4 ministrator, in consultation with the Secretary of State



5 and the Administrator of the United States Agency for



6 International Development, shall ensure, with an adequate



7 margin of safety, the integrity of international offset
cred-



8 its issued under this section and of the greenhouse gas



9 emissions limitations established pursuant to section 703.



10 ‘‘(g) AVOIDING DOUBLE COUNTING.—The Adminis-



11 trator, in consultation with the Secretary of State,
shall



12 seek, by whatever means appropriate, including agree-



13 ments, arrangements, or technical cooperation, to ensure



14 that activities on the basis of which international
offset



15 credits are issued under this section are not used for
com-



16 pliance with an obligation to reduce or avoid greenhouse



17 gas emissions, or increase greenhouse gas sequestration,



18 under a foreign or international regulatory system. In
ad-



19 dition, no international offset credits shall be issued
for



20 emission reductions from activities with respect to which



21 emission allowances were allocated under section 771(d)



22 for distribution under part E.



23 ‘‘(h) LIMITATION.—The Administrator shall not issue



24 international offset credits generated by projects based
on



25 the destruction of hydrofluorocarbons.’’. 552



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1 SEC. 102. DEFINITIONS.



2 Title VII of the Clean Air Act (as added by section



3 101 of this division) is amended by inserting before part



4 A the following:



5 ‘‘SEC. 700. DEFINITIONS.



6 ‘‘In this title:



7 ‘‘(1) ADDITIONAL.—The term ‘additional’,



8 when used with respect to reductions or avoidance of



9 greenhouse gas emissions, or to sequestration of



10 greenhouse gases, means reductions, avoidance, or



11 sequestration that result in a lower level of net



12 greenhouse gas emissions or atmospheric concentra-



13 tions than would occur in the absence of an offset



14 credit.



15 ‘‘(2) ADDITIONALITY.—The term ‘additionality’



16 means the extent to which reductions or avoidance



17 of greenhouse gas emissions, or sequestration of



18 greenhouse gases, are additional.



19 ‘‘(3) ADVISORY BOARD.—The term ‘Advisory



20 Board’ means the Offsets Integrity Advisory Board



21 established under section 731.



22 ‘‘(4) AFFILIATED.—The term ‘affiliated’—



23 ‘‘(A) when used in relation to an entity,



24 means owned or controlled by, or under com-



25 mon ownership or control with, another entity,



26 as determined by the Administrator; and 553



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1 ‘‘(B) when used in relation to a natural



2 gas local distribution company, means owned or



3 controlled by, or under common ownership or



4 control with, another natural gas local distribu-



5 tion company, as determined by the Adminis-



6 trator.



7 ‘‘(5) ALLOWANCE.—The term ‘allowance’



8 means a limited authorization to emit, or have at-



9 tributable greenhouse gas emissions in an amount



10 of, 1 ton of carbon dioxide equivalent of a green-



11 house gas in accordance with this title; it includes an



12 emission allowance, a compensatory allowance, or an



13 international emission allowance.



14 ‘‘(6) ATTRIBUTABLE GREENHOUSE GAS EMIS-



15 SIONS.—The term ‘attributable greenhouse gas emis-



16 sions’ means—



17 ‘‘(A) for a covered entity that is a fuel pro-



18 ducer or importer described in paragraph



19 (13)(B), greenhouse gases that would be emit-



20 ted from the combustion of any petroleum-



21 based or coal-based liquid fuel, petroleum coke,



22 or natural gas liquid, produced or imported by



23 that covered entity for sale or distribution in



24 interstate commerce, assuming no capture and



25 sequestration of any greenhouse gas emissions; 554



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1 ‘‘(B) for a covered entity that is an indus-



2 trial gas producer or importer described in



3 paragraph (13)(C), the tons of carbon dioxide



4 equivalent of fossil fuel-based carbon dioxide,



5 nitrous oxide, any fluorinated gas, other than



6 nitrogen trifluoride, that is a greenhouse gas, or



7 any combination thereof—



8 ‘‘(i) produced or imported by such



9 covered entity during the previous calendar



10 year for sale or distribution in interstate



11 commerce; or



12 ‘‘(ii) released as fugitive emissions in



13 the production of fluorinated gas; and



14 ‘‘(C) for a natural gas local distribution



15 company described in paragraph (13)(J), green-



16 house gases that would be emitted from the



17 combustion of the natural gas, and any other



18 gas meeting the specifications for commingling



19 with natural gas for purposes of delivery, that



20 such entity delivered during the previous cal-



21 endar year to customers that are not covered



22 entities, assuming no capture and sequestration



23 of that greenhouse gas.



24 ‘‘(7) BIOLOGICAL SEQUESTRATION;  BIO-



25 LOGICALLY SEQUESTERED.—The terms ‘biological 555



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1 sequestration’ and ‘biologically sequestered’ mean



2 the removal of greenhouse gases from the atmos-



3 phere by terrestrial biological means, such as by



4 growing plants, and the storage of those greenhouse



5 gases in plants or soils.



6 ‘‘(8) CAPPED EMISSIONS.—The term ‘capped



7 emissions’ means greenhouse gas emissions to which



8 section 722 applies, including emissions from the



9 combustion of natural gas, petroleum-based or coal-



10 based liquid fuel, petroleum coke, or natural gas liq-



11 uid to which section 722(b)(2) or (8) applies.



12 ‘‘(9) CAPPED SOURCE.—The term ‘capped



13 source’ means a source that directly emits capped



14 emissions.



15 ‘‘(10) CARBON DIOXIDE EQUIVALENT.—The



16 term ‘carbon dioxide equivalent’ means the unit of



17 measure, expressed in metric tons, of greenhouse



18 gases as provided under section 711 or 712.



19 ‘‘(11) CARBON STOCK.—The term ‘carbon



20 stock’ means the quantity of carbon contained in a



21 biological reservoir or system which has the capacity



22 to accumulate or release carbon.



23 ‘‘(12) COMPENSATORY ALLOWANCE.—The term



24 ‘compensatory allowance’ means an allowance issued



25 under section 721(f). 556



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1 ‘‘(13) COVERED ENTITY.—The term ‘covered



2 entity’ means each of the following:



3 ‘‘(A) Any electricity source.



4 ‘‘(B)(i) Any stationary source that pro-



5 duces petroleum-based or coal-based liquid fuel,



6 petroleum coke, or natural gas liquid, the com-



7 bustion of which would emit 25,000 or more



8 tons of carbon dioxide equivalent, as determined



9 by the Administrator.



10 ‘‘(ii) Any entity that (or any group of 2 or



11 more affiliated entities that, in the aggregate)



12 imports petroleum-based or coal-based liquid



13 fuel, petroleum coke, or natural gas liquid, the



14 combustion of which would emit 25,000 or more



15 tons of carbon dioxide equivalent, as determined



16 by the Administrator.



17 ‘‘(C) Any stationary source that produces,



18 and any entity that (or any group of two or



19 more affiliated entities that, in the aggregate)



20 imports, for sale or distribution in interstate



21 commerce, in bulk, or in products designated by



22 the Administrator, in 2008 or any subsequent



23 year more than 25,000 tons of carbon dioxide



24 equivalent of—



25 ‘‘(i) fossil fuel-based carbon dioxide; 557



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1 ‘‘(ii) nitrous oxide;



2 ‘‘(iii) except as otherwise provided in



3 section 714, perfluorocarbons;



4 ‘‘(iv) sulfur hexafluoride;



5 ‘‘(v) any other fluorinated gas, except



6 for nitrogen trifluoride, that is a green-



7 house gas, as designated by the Adminis-



8 trator under section 711(b) or (c); or



9 ‘‘(vi) any combination of greenhouse



10 gases described in clauses (i) through (v).



11 ‘‘(D) Any stationary source that has emit-



12 ted 25,000 or more tons of carbon dioxide



13 equivalent of nitrogen trifluoride in 2008 or any



14 subsequent year.



15 ‘‘(E) Any geologic sequestration site.



16 ‘‘(F) Any stationary source in the following



17 industrial sectors:



18 ‘‘(i) Adipic acid production.



19 ‘‘(ii) Primary aluminum production.



20 ‘‘(iii) Ammonia manufacturing.



21 ‘‘(iv) Cement production, excluding



22 grinding-only operations.



23 ‘‘(v) Hydrochlorofluorocarbon produc-



24 tion.



25 ‘‘(vi) Lime manufacturing. 558



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1 ‘‘(vii) Nitric acid production.



2 ‘‘(viii) Petroleum refining.



3 ‘‘(ix) Phosphoric acid production.



4 ‘‘(x) Silicon carbide production.



5 ‘‘(xi) Soda ash production.



6 ‘‘(xii) Titanium dioxide production.



7 ‘‘(xiii) Coal-based liquid or gaseous



8 fuel production.



9 ‘‘(G) Any stationary source in the chemical



10 or petrochemical sector that, in 2008 or any



11 subsequent year—



12 ‘‘(i) produces acrylonitrile, carbon



13 black, ethylene, ethylene dichloride, ethyl-



14 ene oxide, or methanol; or



15 ‘‘(ii) produces a chemical or petro-



16 chemical product if producing that product



17 results in annual combustion plus process



18 emissions of 25,000 or more tons of carbon



19 dioxide equivalent.



20 ‘‘(H) Any stationary source that—



21 ‘‘(i) is in one of the following indus-



22 trial sectors: ethanol production; ferroalloy



23 production; fluorinated gas production;



24 food processing; glass production; hydrogen



25 production; metal ore production or other 559



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1 processing; iron and steel production; lead



2 production; pulp and paper manufacturing;



3 and zinc production; and



4 ‘‘(ii) has emitted 25,000 or more tons



5 of carbon dioxide equivalent in 2008 or



6 any subsequent year.



7 ‘‘(I) Any fossil fuel-fired combustion device



8 (such as a boiler) or grouping of such devices



9 that—



10 ‘‘(i) is all or part of an industrial



11 source not specified in subparagraph (D),



12 (F), (G), or (H); and



13 ‘‘(ii) has emitted 25,000 or more tons



14 of carbon dioxide equivalent in 2008 or



15 any subsequent year.



16 ‘‘(J) Any natural gas local distribution



17 company that (or any group of 2 or more affili-



18 ated natural gas local distribution companies



19 that, in the aggregate) in 2008 or any subse-



20 quent year, delivers 460,000,000 cubic feet or



21 more of natural gas to customers that are not



22 covered entities.



23 ‘‘(14) CREDITING PERIOD.—The term ‘crediting



24 period’ means the period with respect to which an 560



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1 offset project is eligible to earn offset credits under



2 part D, as determined under section 734(c).



3 ‘‘(15) DESIGNATED REPRESENTATIVE.—The



4 term ‘designated representative’ means, with respect



5 to a covered entity, a reporting entity, an offset



6 project developer, or any other entity receiving or



7 holding allowances or offset credits under this title,



8 an individual authorized, through a certificate of



9 representation submitted to the Administrator by



10 the owners and operators or similar entity official, to



11 represent the owners and operators or similar entity



12 official in all matters pertaining to this title (includ-



13 ing the holding, transfer, or disposition of allowances



14 or offset credits), and to make all submissions to the



15 Administrator under this title.



16 ‘‘(16) DEVELOPING COUNTRY.—The term ‘de-



17 veloping country’ means a country eligible to receive



18 official development assistance according to the in-



19 come guidelines of the Development Assistance Com-



20 mittee of the Organization for Economic Coopera-



21 tion and Development.



22 ‘‘(17) DOMESTIC OFFSET CREDIT.—



23 ‘‘(A) IN GENERAL.—The term ‘domestic



24 offset credit’ means an offset credit issued 561



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1 under part D, other than an international offset



2 credit.



3 ‘‘(B) EXCLUSION.—The term ‘domestic



4 offset credit’ does not include a term offset



5 credit.



6 ‘‘(18) ELECTRICITY SOURCE.—The term ‘elec-



7 tricity source’ means a stationary source that in-



8 cludes one or more utility units.



9 ‘‘(19) EMISSION.—The term ‘emission’ means



10 the release of a greenhouse gas into the ambient air.



11 Such term does not include gases that are captured



12 and sequestered, except to the extent that they are



13 later released into the atmosphere, in which case



14 compliance must be demonstrated pursuant to sec-



15 tion 722(b)(5).



16 ‘‘(20) EMISSION ALLOWANCE.—The term ‘emis-



17 sion allowance’ means an allowance established



18 under section 721(a) or 726(g)(2).



19 ‘‘(21) FAIR MARKET VALUE.—The term ‘fair



20 market value’ means the average daily closing price



21 on registered exchanges or, if such a price is un-



22 available, the average price as determined by the Ad-



23 ministrator, during a specified time period, of an



24 emission allowance. 562



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1 ‘‘(22) FEDERAL LAND.—The term ‘Federal



2 land’ means land that is owned by the United



3 States, other than land held in trust for an Indian



4 or Indian tribe.



5 ‘‘(23) FOSSIL FUEL.—The term ‘fossil fuel’



6 means natural gas, petroleum, or coal, or any form



7 of solid, liquid, or gaseous fuel derived from such



8 material, including consumer products that are de-



9 rived from such materials and are combusted.



10 ‘‘(24) FOSSIL FUEL-FIRED.—The term ‘fossil



11 fuel-fired’ means powered by combustion of fossil



12 fuel, alone or in combination with any other fuel, re-



13 gardless of the percentage of fossil fuel consumed.



14 ‘‘(25) FUGITIVE EMISSIONS.—The term ‘fugi-



15 tive emissions’ means emissions from leaks, valves,



16 joints, or other small openings in pipes, ducts, or



17 other equipment, or from vents.



18 ‘‘(26) GEOLOGIC SEQUESTRATION;  GEOLOGI-



19 CALLY SEQUESTERED.—The terms ‘geologic seques-



20 tration’ and ‘geologically sequestered’ mean the se-



21 questration of greenhouse gases in subsurface geo-



22 logic formations for purposes of permanent storage.



23 ‘‘(27) GEOLOGIC SEQUESTRATION SITE.—The



24 term ‘geologic sequestration site’ means a site where



25 carbon dioxide is geologically sequestered. 563



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1 ‘‘(28) GREENHOUSE GAS.—The term ‘green-



2 house gas’ means any gas described in section



3 711(a) or designated under section 711(b), (c), or



4 (e), except to the extent that it is regulated under



5 title VI.



6 ‘‘(29) HIGH CONSERVATION PRIORITY LAND.—



7 The term ‘high conservation priority land’ means



8 land that is not Federal land and is—



9 ‘‘(A) globally or State ranked as critically



10 imperiled or imperiled under a State Natural



11 Heritage Program; or



12 ‘‘(B) old-growth or late-successional forest,



13 as identified by the office of the State Forester



14 or relevant State agency with regulatory juris-



15 diction over forestry activities.



16 ‘‘(30) HOLD.—The term ‘hold’ means, with re-



17 spect to an allowance, offset credit, or term offset



18 credit, to have in the appropriate account in the al-



19 lowance tracking system, or submit to the Adminis-



20 trator for recording in such account.



21 ‘‘(31) INDUSTRIAL SOURCE.—The term ‘indus-



22 trial source’ means any stationary source that—



23 ‘‘(A) is not an electricity source; and



24 ‘‘(B) is in— 564



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1 ‘‘(i) the manufacturing sector (as de-



2 fined in North American Industrial Classi-



3 fication System codes 31, 32, and 33); or



4 ‘‘(ii) the natural gas processing or



5 natural gas pipeline transportation sector



6 (as defined in North American Industrial



7 Classification System codes 211112 or



8 486210).



9 ‘‘(32) INTERNATIONAL EMISSION ALLOW-



10 ANCE.—The term ‘international emission allowance’



11 means a tradable authorization to emit 1 ton of car-



12 bon dioxide equivalent of greenhouse gas that is



13 issued by a national or supranational foreign govern-



14 ment pursuant to a qualifying international program



15 designated by the Administrator pursuant to section



16 728(a).



17 ‘‘(33) INTERNATIONAL OFFSET CREDIT.—The



18 term ‘international offset credit’ means an offset



19 credit issued by the Administrator under section



20 744.



21 ‘‘(34) LEAKAGE.—The term ‘leakage’ means a



22 significant increase in greenhouse gas emissions, or



23 significant decrease in sequestration, which is caused



24 by an offset project and occurs outside the bound-



25 aries of the offset project. 565



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1 ‘‘(35) MARKET STABILITY RESERVE ALLOW-



2 ANCE.—The term ‘market stability reserve allow-



3 ance’ means an emission allowance reserved for,



4 transferred to, or deposited in the market stability



5 reserve, or established, under section 726.



6 ‘‘(36) MINERAL SEQUESTRATION.—The term



7 ‘mineral sequestration’ means sequestration of car-



8 bon dioxide from the atmosphere by capturing car-



9 bon dioxide into a permanent mineral, such as the



10 aqueous precipitation of carbonate minerals that re-



11 sults in the storage of carbon dioxide in a mineral



12 form.



13 ‘‘(37) NATURAL GAS LIQUID.—The term ‘nat-



14 ural gas liquid’ means ethane, butane, isobutane,



15 natural gasoline, and propane which is ready for



16 commercial sale or use.



17 ‘‘(38) NATURAL GAS LOCAL DISTRIBUTION



18 COMPANY.—The term ‘natural gas local distribution



19 company’ has the meaning given the term ‘local dis-



20 tribution company’ in section 2(17) of the Natural



21 Gas Policy Act of 1978 (15 U.S.C. 3301(17)).



22 ‘‘(39) OFFSET CREDIT.—



23 ‘‘(A) IN GENERAL.—The term ‘offset cred-



24 it’ means an offset credit issued under part D. 566



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1 ‘‘(B) EXCLUSION.—The term ‘offset credit’



2 does not include a term offset credit.



3 ‘‘(40) OFFSET PROJECT.—The term ‘offset



4 project’ means a project or activity that reduces or



5 avoids greenhouse gas emissions, or sequesters



6 greenhouse gases, and for which offset credits are or



7 may be issued under part D.



8 ‘‘(41) OFFSET PROJECT DEVELOPER.—The



9 term ‘offset project developer’ means the individual



10 or entity designated as the offset project developer



11 in an offset project approval petition under section



12 735(c)(1).



13 ‘‘(42) QUALIFIED R&D FACILITY.—The term



14 ‘qualified R&D facility’ means a facility that con-



15 ducts research and development, that was in oper-



16 ation as of the date of enactment of this title, and



17 that is part of a covered entity subject to paragraphs



18 (1) through (8) of section 722(b).



19 ‘‘(43) PETROLEUM.—The term ‘petroleum’ in-



20 cludes crude oil, tar sands, oil shale, and heavy oils.



21 ‘‘(44) REPEATED INTENTIONAL REVERSALS.—



22 The term ‘repeated intentional reversals’ means at



23 least 3 intentional reversals, as determined by the



24 Administrator or a court under section



25 734(b)(3)(B)(ii). 567



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1 ‘‘(45) RESEARCH AND DEVELOPMENT.—The



2 term ‘research and development’ means activities—



3 ‘‘(A) that are conducted in process units or



4 at laboratory bench-scale settings;



5 ‘‘(B) whose purpose is to conduct research



6 and development for new processes, tech-



7 nologies, or products that contribute to lower



8 greenhouse gas emissions; and



9 ‘‘(C) that do not manufacture products for



10 sale.



11 ‘‘(46) RENEWABLE BIOMASS.—The term ‘re-



12 newable biomass’ means any of the following:



13 ‘‘(A) Plant material, including waste mate-



14 rial, harvested or collected from actively man-



15 aged agricultural land that was in cultivation,



16 cleared, or fallow and nonforested on January



17 1, 2009.



18 ‘‘(B) Plant material, including waste mate-



19 rial, harvested or collected from pastureland



20 that was nonforested on January 1, 2009.



21 ‘‘(C) Nonhazardous vegetative matter de-



22 rived from waste, including separated yard



23 waste, landscape right-of-way trimmings, con-



24 struction and demolition debris, or food waste



25 (but not municipal solid waste, recyclable waste 568



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1 paper, painted, treated or pressurized wood, or



2 wood contaminated with plastic or metals).



3 ‘‘(D) Animal waste or animal byproducts,



4 including products of animal waste digesters.



5 ‘‘(E) Algae.



6 ‘‘(F) Trees, brush, slash, residues, or any



7 other vegetative matter removed from within



8 600 feet of any building, campground, or route



9 designated for evacuation by a public official



10 with responsibility for emergency preparedness,



11 or from within 300 feet of a paved road, electric



12 transmission line, utility tower, or water supply



13 line.



14 ‘‘(G) Residues from or byproducts of



15 milled logs.



16 ‘‘(H) Any of the following removed from



17 forested land that is not Federal and is not



18 high conservation priority land:



19 ‘‘(i) Trees, brush, slash, residues,



20 interplanted energy crops, or any other



21 vegetative matter removed from an actively



22 managed tree plantation established—



23 ‘‘(I) prior to January 1, 2009; or 569



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1 ‘‘(II) on land that, as of January



2 1, 2009, was cultivated or fallow and



3 non-forested.



4 ‘‘(ii) Trees, logging residue, thinnings,



5 cull trees, pulpwood, and brush removed



6 from naturally regenerated forests or other



7 non-plantation forests, including for the



8 purposes of hazardous fuel reduction or



9 preventative treatment for reducing or con-



10 taining insect or disease infestation.



11 ‘‘(iii) Logging residue, thinnings, cull



12 trees, pulpwood, brush, and species that



13 are non-native and noxious, from stands



14 that were planted and managed after Jan-



15 uary 1, 2009, to restore or maintain native



16 forest types.



17 ‘‘(iv) Dead or severely damaged trees



18 removed within 5 years of fire, blowdown,



19 or other natural disaster, and badly in-



20 fested trees.



21 ‘‘(I) Materials, pre-commercial thinnings,



22 or removed invasive species from National For-



23 est System land and public lands (as defined in



24 section 103 of the Federal Land Policy and



25 Management Act of 1976 (43 U.S.C. 1702)), 570



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1 including those that are byproducts of preven-



2 tive treatments (such as trees, wood, brush,



3 thinnings, chips, and slash), that are removed



4 as part of a federally recognized timber sale, or



5 that are removed to reduce hazardous fuels, to



6 reduce or contain disease or insect infestation,



7 or to restore ecosystem health, and that are—



8 ‘‘(i) not from components of the Na-



9 tional Wilderness Preservation System,



10 Wilderness Study Areas, Inventoried



11 Roadless Areas, old growth or mature for-



12 est stands, components of the National



13 Landscape Conservation System, National



14 Monuments, National Conservation Areas,



15 Designated Primitive Areas; or Wild and



16 Scenic Rivers corridors;



17 ‘‘(ii) harvested in environmentally sus-



18 tainable quantities, as determined by the



19 appropriate Federal land manager; and



20 ‘‘(iii) are harvested in accordance with



21 Federal and State law, and applicable land



22 management plans.



23 ‘‘(47) RETIRE.—The term ‘retire’, with respect



24 to an allowance, offset credit, or term offset credit



25 established or issued under this title, means to dis-571



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1 qualify such allowance or offset credit for any subse-



2 quent use under this title, regardless of whether the



3 use is a sale, exchange, or submission of the allow-



4 ance, offset credit, or term offset credit to satisfy a



5 compliance obligation.



6 ‘‘(48) REVERSAL.—The term ‘reversal’ means



7 an intentional or unintentional loss of sequestered



8 greenhouse gases to the atmosphere.



9 ‘‘(49) SEQUESTERED AND SEQUESTRATION.—



10 The terms ‘sequestered’ and ‘sequestration’ mean



11 the separation, isolation, or removal of greenhouse



12 gases from the atmosphere, as determined by the



13 Administrator. The terms include biological, geo-



14 logic, and mineral sequestration, but do not include



15 ocean fertilization techniques.



16 ‘‘(50) STATIONARY SOURCE.—The term ‘sta-



17 tionary source’ means any integrated operation com-



18 prising any plant, building, structure, or stationary



19 equipment, including support buildings and equip-



20 ment, that is located within one or more contiguous



21 or adjacent properties, is under common control of



22 the same person or persons, and emits or may emit



23 a greenhouse gas.



24 ‘‘(51) TON.—The term ‘ton’ means a metric



25 ton. 572



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1 ‘‘(52) UNCAPPED EMISSIONS.—The term ‘un-



2 capped emissions’ means emissions of greenhouse



3 gases emitted after December 31, 2011, that are not



4 capped emissions.



5 ‘‘(53) UNITED STATES GREENHOUSE GAS EMIS-



6 SIONS.—The term ‘United States greenhouse gas



7 emissions’ means the total quantity of annual green-



8 house gas emissions from the United States, as cal-



9 culated by the Administrator and reported to the



10 United Nations Framework Convention on Climate



11 Change Secretariat.



12 ‘‘(54) UTILITY UNIT.—The term ‘utility unit’



13 means a combustion device that, on January 1,



14 2009, or any date thereafter, is fossil fuel-fired and



15 serves a generator that produces electricity for sale,



16 unless such combustion device, during the 12-month



17 period starting the later of January 1, 2009, or the



18 commencement of commercial operation and each



19 calendar year starting after such later date—



20 ‘‘(A) is part of an integrated cycle system



21 that cogenerates steam and electricity during



22 normal operation and that supplies one-third or



23 less of its potential electric output capacity and



24 25 MW or less of electrical output for sale; or 573



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1 ‘‘(B) combusts materials of which more



2 than 95 percent is municipal solid waste on a



3 heat input basis.



4 ‘‘(55) VINTAGE YEAR.—The term ‘vintage year’



5 means the calendar year for which an emission al-



6 lowance is established under section 721(a) or which



7 is assigned to an emission allowance under section



8 726(g)(3)(A), except that the vintage year for a



9 market stability reserve allowance shall be the year



10 in which such allowance is purchased at auction.’’.



11 SEC. 103. OFFSET REPORTING REQUIREMENTS.



12 Section 114 of Clean Air Act (42 U.S.C. 7414) is



13 amended by adding at the end the following:



14 ‘‘(e) RECORDKEEPING FOR CARBON OFFSETS PRO-



15 GRAM.—For the purpose of implementing the carbon off-



16 sets program set forth in subtitle D of title VII, the
Ad-



17 ministrator shall require any person who is an offset



18 project developer, and may require any person who is a



19 third party verifier, to establish and maintain records,
for



20 a period of not less than the crediting period under
section



21 734(c) plus 5 years, relating to—



22 ‘‘(1) any offset project approval petition sub-



23 mitted to the appropriate officials under section 735;



24 ‘‘(2) any reversals which occur with respect to



25 an offset project; 574



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1 ‘‘(3) any verification reports; and



2 ‘‘(4) any other aspect of the offset project that



3 the appropriate officials determines is appropriate.’’.



4 Subtitle B—Disposition of



5 Allowances



6 SEC. 111. DISPOSITION OF ALLOWANCES FOR GLOBAL



7 WARMING POLLUTION REDUCTION PRO-



8 GRAM.



9 Title VII of the Clean Air Act (as amended by section



10 141 of this division) is amended by adding at the end the



11 following:



12 ‘‘PART H—DISPOSITION OF ALLOWANCES



13 ‘‘SEC. 771. ALLOCATION OF EMISSION ALLOWANCES.



14 ‘‘(a) ALLOCATION.—The Administrator shall allocate



15 emission allowances for the following purposes:



16 ‘‘(1) The program for electricity consumers pur-



17 suant to section 772.



18 ‘‘(2) The program for natural gas consumers



19 pursuant to section 773.



20 ‘‘(3) The program for home heating oil and pro-



21 pane consumers pursuant to section 774.



22 ‘‘(4) The program for domestic fuel production,



23 including petroleum refiners and small business re-



24 finers, under section 775. 575



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1 ‘‘(5) The program to ensure real reductions in



2 industrial emissions under part F.



3 ‘‘(6) The program for commercial deployment



4 of carbon capture and sequesration technologies



5 under section 780.



6 ‘‘(7) The program for early action recognition



7 pursuant to section 782.



8 ‘‘(8) The program for State and local invest-



9 ment in energy efficiency and renewable energy



10 under section 202 of division B of the Clean Energy



11 Jobs and American Power Act.



12 ‘‘(9) The program for energy efficiency in build-



13 ing codes under section 163 of division A, and sec-



14 tion 203 of division B, of the Clean Energy Jobs



15 and American Power Act



16 ‘‘(10) The program for retrofit for energy and



17 environmental performance under section 164 of di-



18 vision A, and 204 of division B, of the Clean Energy



19 Jobs and American Power Act.



20 ‘‘(11) The program for Energy Innovation



21 Hubs pursuant to section 205 of division B of the



22 Clean Energy Jobs and American Power Act.



23 ‘‘(12) The program for ARPA–E research pur-



24 suant to section 206 of division B of the Clean En-



25 ergy Jobs and American Power Act. 576



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1 ‘‘(13) The International Clean Energy Deploy-



2 ment Program under section 323 of division A, and



3 section 207 of division B, of the Clean Energy Jobs



4 and American Power Act.



5 ‘‘(14) The international climate change adapta-



6 tion and global security program under section 324



7 of division A, and section 208 of division B, of the



8 Clean Energy Jobs and American Power Act.



9 ‘‘(b) AUCTIONS.—The Administrator shall auction,



10 pursuant to section 778, emission allowances for the fol-



11 lowing purposes:



12 ‘‘(1) The Market Stability Reserve Fund under



13 section 726.



14 ‘‘(2) The program for climate change consumer



15 refunds and low- and moderate-income consumers



16 pursuant to section 776, including—



17 ‘‘(A) consumer rebates under section



18 776(a); and



19 ‘‘(B) energy refunds under section 776(b).



20 ‘‘(3) The program for investment in clean vehi-



21 cle technology under section 201 of division B of the



22 Clean Energy Jobs and American Power Act.



23 ‘‘(4) The program for State and local invest-



24 ment in energy efficiency and renewable energy 577



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1 under section 202 of division B of the Clean Energy



2 Jobs and American Power Act.



3 ‘‘(5) The program for energy efficiency and re-



4 newable energy worker training under section 209 of



5 division B of the Clean Energy Jobs and American



6 Power Act.



7 ‘‘(6) The program for worker transition under



8 part 2 of subtitle A of title III of division A, and



9 section 210 of division B, of the Clean Energy Jobs



10 and American Power Act.



11 ‘‘(7) The State programs for greenhouse gas re-



12 duction and climate adaptation pursuant to section



13 211 of division B of the Clean Energy Jobs and



14 American Power Act.



15 ‘‘(8) The program for public health and climate



16 change under subpart B of part 1 of subtitle C of



17 title III of division A, and section 212 of division B,



18 of the Clean Energy Jobs and American Power Act.



19 ‘‘(9) The program for climate change safe-



20 guards for natural resources conservation under sub-



21 part C of part 1 of subtitle C of title III of division



22 A, and section 213 of division B, of the Clean En-



23 ergy Jobs and American Power Act. 578



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1 ‘‘(10) Nuclear worker training under section



2 132 of division A, and section 214 of division B, of



3 the Clean Energy Jobs and American Power Act.



4 ‘‘(11) The supplemental agriculture and for-



5 estry greenhouse gas reduction and renewable en-



6 ergy program under section 155 of division A, and



7 section 215 of division B, of the Clean Energy Jobs



8 and American Power Act.



9 ‘‘(c) DEFICIT REDUCTION.—



10 ‘‘(1) IN GENERAL.—The Administrator shall—



11 ‘‘(A) auction, pursuant to section 778,



12 emission allowances for deficit reduction in the



13 amounts described in paragraph (2); and



14 ‘‘(B) deposit those proceeds immediately



15 on receipt in the Deficit Reduction Fund estab-



16 lished by section 783.



17 ‘‘(2) AMOUNTS.—For vintage years 2012



18 through 2050, 25.0 percent of emission allowances



19 established for each year under section 721(a) shall



20 be auctioned and the proceeds deposited pursuant to



21 paragraph (1) to ensure that this title does not con-



22 tribute to the deficit for that particular calendar



23 year.



24 ‘‘(d) SUPPLEMENTAL REDUCTIONS.— 579



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1 ‘‘(1) IN GENERAL.—The Administrator shall al-



2 locate allowances for each vintage year to achieve



3 supplemental reductions pursuant to section 753.



4 ‘‘(2) ADJUSTMENT.—The Administrator shall



5 modify the allowances allocated under paragraph (1)



6 as necessary to ensure the achievement of the an-



7 nual supplemental emissions reduction objective for



8 2020 set forth in section 704.



9 ‘‘SEC. 772. ELECTRICITY CONSUMERS.



10 ‘‘(a) DEFINITIONS.—For purposes of this section:



11 ‘‘(1) CHP 
SAVINGS.—The term ‘CHP savings’



12 means—



13 ‘‘(A) CHP system savings from a combined



14 heat and power system that commences oper-



15 ation after the date of enactment of this sec-



16 tion; and



17 ‘‘(B) the increase in CHP system savings



18 from, at any time after the date of the enact-



19 ment of this section, upgrading, replacing, ex-



20 panding, or increasing the utilization of a com-



21 bined heat and power system that commenced



22 operation on or before the date of enactment of



23 this section.



24 ‘‘(2) CHP  SYSTEM
SAVINGS.—The term ‘CHP



25 system savings’ means the increment of electric out-580



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1 put of a combined heat and power system that is at-



2 tributable to the higher efficiency of the combined



3 system (as compared to the efficiency of separate



4 production of the electric and thermal outputs).



5 ‘‘(3) COAL-FUELED UNIT.—The term ‘coal-



6 fueled unit’ means a utility unit that derives at least



7 85 percent of its heat input from coal, petroleum



8 coke, or any combination of those 2 fuels.



9 ‘‘(4) COST-EFFECTIVE.—The term ‘cost-effec-



10 tive’, with respect to an energy efficiency program,



11 means that the program meets the total resource



12 cost test, which requires that the net present value



13 of economic benefits over the life of the program, in-



14 cluding avoided supply and delivery costs and de-



15 ferred or avoided investments, is greater than the



16 net present value of the economic costs over the life



17 of the program, including program costs and incre-



18 mental costs borne by the energy consumer.



19 ‘‘(5) ELECTRICITY LOCAL DISTRIBUTION COM-



20 PANY.—The term ‘electricity local distribution com-



21 pany’ means an electric utility—



22 ‘‘(A) that has a legal, regulatory, or con-



23 tractual obligation to deliver electricity directly



24 to retail consumers in the United States, re-



25 gardless of whether that entity or another enti-581



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1 ty sells the electricity as a commodity to those



2 retail consumers; and



3 ‘‘(B) the retail rates of which, except in



4 the case of an electric cooperative, are regulated



5 or set by—



6 ‘‘(i) a State regulatory authority;



7 ‘‘(ii) a State or political subdivision



8 thereof (or an agency or instrumentality



9 of, or corporation wholly owned by, either



10 of the foregoing); or



11 ‘‘(iii) an Indian tribe pursuant to trib-



12 al law.



13 ‘‘(6) ELECTRICITY SAVINGS.—The term ‘elec-



14 tricity savings’ means reductions in electricity con-



15 sumption, relative to business-as-usual projections,



16 achieved through measures implemented after the



17 date of enactment of this section, limited to—



18 ‘‘(A) customer facility savings of elec-



19 tricity, adjusted to reflect any associated in-



20 crease in fuel consumption at the facility;



21 ‘‘(B) reductions in distribution system



22 losses of electricity achieved by a retail elec-



23 tricity distributor, as compared to losses attrib-



24 utable to new or replacement distribution sys-



25 tem equipment of average efficiency; 582



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1 ‘‘(C) CHP savings; and



2 ‘‘(D) fuel cell savings.



3 ‘‘(7) FUEL CELL.—The term ‘fuel cell’ means a



4 device that directly converts the chemical energy of



5 a fuel and an oxidant into electricity by electro-



6 chemical processes occurring at separate electrodes



7 in the device.



8 ‘‘(8) FUEL CELL SAVINGS.—The term ‘fuel cell



9 savings’ means the electricity saved by a fuel cell



10 that is installed after the date of enactment of this



11 section, or by upgrading a fuel cell that commenced



12 operation on or before the date of enactment of this



13 section, as a result of the greater efficiency with



14 which the fuel cell transforms fuel into electricity as



15 compared with sources of electricity delivered



16 through the grid, provided that—



17 ‘‘(A) the fuel cell meets such requirements



18 relating to efficiency and other operating char-



19 acteristics as the Federal Energy Regulatory



20 Commission may promulgate by regulation; and



21 ‘‘(B) the net sales of electricity from the



22 fuel cell to customers not consuming the ther-



23 mal output from the fuel cell, if any, do not ex-



24 ceed 50 percent of the total annual electricity



25 generation by the fuel cell. 583



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1 ‘‘(9) INDEPENDENT POWER PRODUCTION FA-



2 CILITY.—The term ‘independent power production



3 facility’ means a facility—



4 ‘‘(A) that is used for the generation of



5 electric energy, at least 80 percent of which is



6 sold at wholesale; and



7 ‘‘(B) the sales of the output of which are



8 not subject to retail rate regulation or setting



9 of retail rates by—



10 ‘‘(i) a State regulatory authority;



11 ‘‘(ii) a State or political subdivision



12 thereof (or an agency or instrumentality



13 of, or corporation wholly owned by, either



14 of the foregoing);



15 ‘‘(iii) an electric cooperative; or



16 ‘‘(iv) an Indian tribe pursuant to trib-



17 al law.



18 ‘‘(10) LONG-TERM CONTRACT GENERATOR.—



19 The term ‘long-term contract generator’ means a



20 qualifying small power production facility, a quali-



21 fying cogeneration facility ), an independent power



22 production facility, or a facility for the production of



23 electric energy for sale to others that is owned and



24 operated by an electric cooperative that is—



25 ‘‘(A) a covered entity; and 584



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1 ‘‘(B) as of the date of enactment of this



2 title—



3 ‘‘(i) a facility with 1 or more sales or



4 tolling agreements executed before March



5 1, 2007, that govern the facility’s elec-



6 tricity sales and provide for sales at a price



7 (whether a fixed price or a price formula)



8 for electricity that does not allow for recov-



9 ery of the costs of compliance with the lim-



10 itation on greenhouse gas emissions under



11 this title, provided that such agreements



12 are not between entities that are affiliates



13 of one another; or



14 ‘‘(ii) a facility consisting of 1 or more



15 cogeneration units that makes useful ther-



16 mal energy available to an industrial or



17 commercial process with 1 or more sales



18 agreements executed before March 1,



19 2007, that govern the facility’s useful ther-



20 mal energy sales and provide for sales at



21 a price (whether a fixed price or price for-



22 mula) for useful thermal energy that does



23 not allow for recovery of the costs of com-



24 pliance with the limitation on greenhouse



25 gas emissions under this title, provided 585



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1 that such agreements are not between enti-



2 ties that are affiliates of one another.



3 ‘‘(11) MERCHANT COAL UNIT.—The term ‘mer-



4 chant coal unit’ means a coal-fueled unit that—



5 ‘‘(A) is or is part of a covered entity;



6 ‘‘(B) is not owned by a Federal, State, or



7 regional agency or power authority; and



8 ‘‘(C) generates electricity solely for sale to



9 others, provided that all or a portion of such



10 sales are made by a separate legal entity that—



11 ‘‘(i) has a full or partial ownership or



12 leasehold interest in the unit, as certified



13 in accordance with such requirements as



14 the Administrator shall prescribe; and



15 ‘‘(ii) is not subject to retail rate regu-



16 lation or setting of retail rates by—



17 ‘‘(I) a State regulatory authority;



18 ‘‘(II) a State or political subdivi-



19 sion thereof (or an agency or instru-



20 mentality of, or corporation wholly



21 owned by, either of the foregoing);



22 ‘‘(III) an electric cooperative; or



23 ‘‘(IV) an Indian tribe pursuant



24 to tribal law. 586



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1 ‘‘(12) MERCHANT COAL UNIT SALES.—The



2 term ‘merchant coal unit sales’ means sales to oth-



3 ers of electricity generated by a merchant coal unit



4 that are made by the owner or leaseholder described



5 in paragraph (11)(C).



6 ‘‘(13) NEW COAL-FUELED UNIT.—The term



7 ‘new coal-fueled unit’ means a coal-fueled unit that



8 commenced operation on or after January 1, 2009



9 and before January 1, 2013.



10 ‘‘(14) NEW MERCHANT COAL UNIT.—The term



11 ‘new merchant coal unit’ means a merchant coal



12 unit—



13 ‘‘(A) that commenced operation on or after



14 January 1, 2009 and before January 1, 2013;



15 and



16 ‘‘(B) the actual, on-site construction of



17 which commenced prior to January 1, 2009.



18 ‘‘(15) QUALIFIED HYDROPOWER.—The term



19 ‘qualified hydropower’ means—



20 ‘‘(A) energy produced from increased effi-



21 ciency achieved, or additions of capacity made,



22 on or after January 1, 1988, at a hydroelectric



23 facility that was placed in service before that



24 date and does not include additional energy



25 generated as a result of operational changes not 587



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1 directly associated with efficiency improvements



2 or capacity additions; or



3 ‘‘(B) energy produced from generating ca-



4 pacity added to a dam on or after January 1,



5 1988, provided that the Federal Energy Regu-



6 latory Commission certifies that—



7 ‘‘(i) the dam was placed in service be-



8 fore the date of the enactment of this sec-



9 tion and was operated for flood control,



10 navigation, or water supply purposes and



11 was not producing hydroelectric power



12 prior to the addition of such capacity;



13 ‘‘(ii) the hydroelectric project installed



14 on the dam is licensed (or is exempt from



15 licensing) by the Federal Energy Regu-



16 latory Commission and is in compliance



17 with the terms and conditions of the li-



18 cense or exemption, and with other appli-



19 cable legal requirements for the protection



20 of environmental quality, including applica-



21 ble fish passage requirements; and



22 ‘‘(iii) the hydroelectric project in-



23 stalled on the dam is operated so that the



24 water surface elevation at any given loca-



25 tion and time that would have occurred in 588



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1 the absence of the hydroelectric project is



2 maintained, subject to any license or ex-



3 emption requirements that require changes



4 in water surface elevation for the purpose



5 of improving the environmental quality of



6 the affected waterway.



7 ‘‘(16) QUALIFYING SMALL POWER PRODUCTION



8 FACILITY; 
QUALIFYING COGENERATION FACILITY.—



9 The terms ‘qualifying small power production facil-



10 ity’ and ‘qualifying cogeneration facility’ have the



11 meanings given those terms in section 3(17)(C) and



12 3(18)(B) of the Federal Power Act (16 U.S.C.



13 796(17)(C) and 796(18)(B)).



14 ‘‘(17) RENEWABLE ENERGY RESOURCE.—The



15 term ‘renewable energy resource’ means each of the



16 following:



17 ‘‘(A) Wind energy.



18 ‘‘(B) Solar energy.



19 ‘‘(C) Geothermal energy.



20 ‘‘(D) Renewable biomass.



21 ‘‘(E) Biogas derived exclusively from re-



22 newable biomass.



23 ‘‘(F) Biofuels derived exclusively from re-



24 newable biomass.



25 ‘‘(G) Qualified hydropower. 589



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1 ‘‘(H) Marine and hydrokinetic renewable



2 energy, as that term is defined in section 632



3 of the Energy Independence and Security Act



4 of 2007 (42 U.S.C. 17211).



5 ‘‘(18) SMALL LDC.—The term ‘small LDC’



6 means, for any given year, an electricity local dis-



7 tribution company that delivered less than 4,000,000



8 megawatt hours of electric energy directly to retail



9 consumers in the preceding year.



10 ‘‘(19) STATE REGULATORY AUTHORITY.—The



11 term ‘State regulatory authority’ has the meaning



12 given that term in section 3(17) of the Public Utility



13 Regulatory Policies Act of 1978 (16 U.S.C.



14 2602(17)).



15 ‘‘(20) USEFUL THERMAL ENERGY.—The term



16 ‘useful thermal energy’ has the meaning given that



17 term in section 371(7) of the Energy Policy and



18 Conservation Act (42 U.S.C. 6341(7)).



19 ‘‘(b) ELECTRICITY LOCAL DISTRIBUTION COMPA-



20 NIES.—



21 ‘‘(1) DISTRIBUTION OF ALLOWANCES.—The



22 Administrator shall distribute to electricity local dis-



23 tribution companies for the benefit of retail rate-



24 payers the quantity of emission allowances allocated



25 for the following vintage year pursuant to section 590



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1 771(a)(1). Notwithstanding the preceding sentence,



2 the Administrator shall withhold from distribution



3 under this subsection a quantity of emission allow-



4 ances equal to the lesser of 14.3 percent of the



5 quantity of emission allowances allocated under sec-



6 tion 771(a)(1) for the relevant vintage year, or 105



7 percent of the emission allowances for the relevant



8 vintage year that the Administrator anticipates will



9 be distributed to merchant coal units and to long-



10 term contract generators, respectively, under sub-



11 sections (c) and (d). If not required by subsections



12 (c) and (d) to distribute all of these reserved allow-



13 ances, the Administrator shall distribute any remain-



14 ing emission allowances to electricity local distribu-



15 tion companies in accordance with this subsection.



16 ‘‘(2) DISTRIBUTION BASED ON EMISSIONS.—



17 ‘‘(A) IN GENERAL.—For each vintage year,



18 50 percent of the emission allowances available



19 for distribution under paragraph (1), after re-



20 serving allowances for distribution under sub-



21 sections (c) and (d), shall be distributed by the



22 Administrator among individual electricity local



23 distribution companies ratably based on the an-



24 nual average carbon dioxide emissions attrib-



25 utable to generation of electricity delivered at 591



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1 retail by each such company during the base



2 period determined under subparagraph (B).



3 ‘‘(B) BASE PERIOD.—



4 ‘‘(i) VINTAGE YEARS 2012 AND 2013.—



5 For vintage years 2012 and 2013, an elec-



6 tricity local distribution company’s base



7 period shall be—



8 ‘‘(I) calendar years 2006 through



9 2008; or



10 ‘‘(II) any 3 consecutive calendar



11 years between 1999 and 2008, inclu-



12 sive, that such company selects, pro-



13 vided that the company timely informs



14 the Administrator of such selection.



15 ‘‘(ii) VINTAGE YEARS 2014 AND



16 THEREAFTER.—For vintage years 2014



17 and thereafter, the base period shall be—



18 ‘‘(I) the base period selected



19 under clause (i); or



20 ‘‘(II) calendar year 2012, in the



21 case of an electricity local distribution



22 company that owns, co-owns, or pur-



23 chases through a power purchase



24 agreement (whether directly or



25 through a cooperative arrangement) a 592



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1 substantial portion of the electricity



2 generated by a new coal-fueled unit,



3 provided that such company timely in-



4 forms the Administrator of its election



5 to use 2012 as its base period.



6 ‘‘(C) DETERMINATION OF EMISSIONS.—



7 ‘‘(i) DETERMINATION FOR 1999–



8 2008.—As part of the regulations promul-



9 gated pursuant to subsection (g), the Ad-



10 ministrator, after consultation with the



11 Energy Information Administration, shall



12 determine the average amount of carbon



13 dioxide emissions attributable to genera-



14 tion of electricity delivered at retail by



15 each electricity local distribution company



16 for each of the years 1999 through 2008,



17 taking into account entities’ electricity gen-



18 eration, electricity purchases, and elec-



19 tricity sales. In the case of any electricity



20 local distribution company that owns, co-



21 owns, or purchases through a power pur-



22 chase agreement (whether directly or



23 through a cooperative arrangement) a sub-



24 stantial portion of the electricity generated



25 by, a coal-fueled unit that commenced op-593



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1 eration after January 1, 2006, and before



2 December 31, 2008, the Administrator



3 shall adjust the emissions attributable to



4 such company’s retail deliveries in calendar



5 years 2006 through 2008 to reflect the



6 emissions that would have occurred if the



7 relevant unit were in operation during the



8 entirety of such 3-year period.



9 ‘‘(ii) ADJUSTMENTS FOR NEW COAL-



10 FUELED UNITS.—



11 ‘‘(I) VINTAGE YEARS 2012 AND



12 2013.—For purposes of emission al-



13 lowance distributions for vintage years



14 2012 and 2013, in the case of any



15 electricity local distribution company



16 that owns, co-owns, or purchases



17 through a power purchase agreement



18 (whether directly or through a cooper-



19 ative arrangement) a substantial por-



20 tion of the electricity generated by, a



21 new coal-fueled unit, the Adminis-



22 trator shall adjust the emissions at-



23 tributable to such company’s retail de-



24 liveries in the applicable base period



25 to reflect the emissions that would 594



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1 have occurred if the new coal-fueled



2 unit were in operation during such pe-



3 riod.



4 ‘‘(II) VINTAGE YEAR 2014 AND



5 THEREAFTER.—Not later than nec-



6 essary for use in making emission al-



7 lowance distributions under this sub-



8 section for vintage year 2014, the Ad-



9 ministrator shall, for any electricity



10 local distribution company that owns,



11 co-owns, or purchases through a



12 power purchase agreement (whether



13 directly or through a cooperative ar-



14 rangement) a substantial portion of



15 the electricity generated by a new



16 coal-fueled unit and has selected cal-



17 endar year 2012 as its base period



18 pursuant to subparagraph (B)(ii)(II),



19 determine the amount of carbon diox-



20 ide emissions attributable to genera-



21 tion of electricity delivered at retail by



22 such company in calendar year 2012.



23 If the relevant new coal-fueled unit



24 was not yet operational by January 1,



25 2012, the Administrator shall adjust 595



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1 such determination to reflect the



2 emissions that would have occurred if



3 such unit were in operation for all of



4 calendar year 2012.



5 ‘‘(iii) REQUIREMENTS.—Determina-



6 tions under this paragraph shall be as pre-



7 cise as practicable, taking into account the



8 nature of data currently available and the



9 nature of markets and regulation in effect



10 in various regions of the country. The fol-



11 lowing requirements shall apply to such de-



12 terminations:



13 ‘‘(I) The Administrator shall de-



14 termine the amount of fossil fuel-



15 based electricity delivered at retail by



16 each electricity local distribution com-



17 pany, and shall use appropriate emis-



18 sion factors to calculate carbon diox-



19 ide emissions associated with the gen-



20 eration of such electricity.



21 ‘‘(II) Where it is not practical to



22 determine the precise fuel mix for the



23 electricity delivered at retail by an in-



24 dividual electricity local distribution



25 company, the Administrator may use 596



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1 the best available data, including aver-



2 age data on a regional basis with ref-



3 erence to Regional Transmission Or-



4 ganizations or regional entities (as



5 that term is defined in section



6 215(a)(7) of the Federal Power Act



7 (16 U.S.C. 824o(a)(7)), to estimate



8 fuel mix and emissions. Different



9 methodologies may be applied in dif-



10 ferent regions if appropriate to obtain



11 the most accurate estimate.



12 ‘‘(3) DISTRIBUTION BASED ON DELIVERIES.—



13 ‘‘(A) INITIAL FORMULA.—Except as pro-



14 vided in subparagraph (B), for each vintage



15 year, the Administrator shall distribute 50 per-



16 cent of the emission allowances available for



17 distribution under paragraph (1), after reserv-



18 ing allowances for distribution under sub-



19 sections (c) and (d), among individual elec-



20 tricity local distribution companies ratably



21 based on each electricity local distribution com-



22 pany’s annual average retail electricity deliv-



23 eries for calendar years 2006 through 2008, un-



24 less the owner or operator of the company se-



25 lects 3 other consecutive years between 1999 597



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1 and 2008, inclusive, and timely notifies the Ad-



2 ministrator of its selection.



3 ‘‘(B) UPDATING.—Prior to distributing



4 2015 vintage year emission allowances under



5 this paragraph and at 3-year intervals there-



6 after, the Administrator shall update the dis-



7 tribution formula under this paragraph to re-



8 flect changes in each electricity local distribu-



9 tion company’s service territory since the most



10 recent formula was established. For each suc-



11 cessive 3-year period, the Administrator shall



12 distribute allowances ratably among individual



13 electricity local distribution companies based on



14 the product of—



15 ‘‘(i) each electricity local distribution



16 company’s average annual deliveries per



17 customer during calendar years 2006



18 through 2008, or during the 3 alternative



19 consecutive years selected by such company



20 under subparagraph (A); and



21 ‘‘(ii) the number of customers of such



22 electricity local distribution company in the



23 most recent year in which the formula is



24 updated under this subparagraph. 598



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1 ‘‘(4) PROHIBITION AGAINST EXCESS DISTRIBU-



2 TIONS.—The regulations promulgated under sub-



3 section (g) shall ensure that, notwithstanding para-



4 graphs (2) and (3), no electricity local distribution



5 company shall receive a greater quantity of allow-



6 ances under this subsection than is necessary to off-



7 set any increased electricity costs to such company’s



8 retail ratepayers, including increased costs attrib-



9 utable to purchased power costs, due to enactment



10 of this title. Any emission allowances withheld from



11 distribution to an electricity local distribution com-



12 pany pursuant to this paragraph shall be distributed



13 among all remaining electricity local distribution



14 companies ratably based on emissions pursuant to



15 paragraph (2).



16 ‘‘(5) USE OF ALLOWANCES.—



17 ‘‘(A) RATEPAYER BENEFIT.—Emission al-



18 lowances distributed to an electricity local dis-



19 tribution company under this subsection shall



20 be used exclusively for the benefit of retail rate-



21 payers of such electricity local distribution com-



22 pany and may not be used to support electricity



23 sales or deliveries to entities or persons other



24 than such ratepayers. 599



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1 ‘‘(B) RATEPAYER CLASSES.—In using



2 emission allowances distributed under this sub-



3 section for the benefit of ratepayers, an elec-



4 tricity local distribution company shall ensure



5 that ratepayer benefits are distributed—



6 ‘‘(i) among ratepayer classes ratably



7 based on electricity deliveries to each class;



8 and



9 ‘‘(ii) equitably among individual rate-



10 payers within each ratepayer class, includ-



11 ing entities that receive emission allow-



12 ances pursuant to part F.



13 ‘‘(C) LIMITATION.—In general, an elec-



14 tricity local distribution company shall not use



15 the value of emission allowances distributed



16 under this subsection to provide to any rate-



17 payer a rebate that is based solely on the quan-



18 tity of electricity delivered to such ratepayer.



19 To the extent an electricity local distribution



20 company uses the value of emission allowances



21 distributed under this subsection to provide re-



22 bates, it shall, to the maximum extent prac-



23 ticable, provide such rebates with regard to the



24 fixed portion of ratepayers’ bills or as a fixed



25 credit or rebate on electricity bills. 600



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1 ‘‘(D) RESIDENTIAL AND INDUSTRIAL



2 RATEPAYERS.—Notwithstanding subparagraph



3 (C), if compliance with the requirements of this



4 title results (or would otherwise result) in an



5 increase in electricity costs for residential or in-



6 dustrial retail ratepayers of any given electricity



7 local distribution company (including entities



8 that receive emission allowances pursuant to



9 part F), such electricity local distribution com-



10 pany—



11 ‘‘(i) shall pass through to residential



12 retail ratepayers as a class their ratable



13 share (based on deliveries to each rate-



14 payer class) of the value of the emission al-



15 lowances that reduce electricity cost im-



16 pacts on such ratepayers; and



17 ‘‘(ii) shall pass through to industrial



18 ratepayers as a class their ratable share



19 (based on deliveries to each ratepayer



20 class) of the value of the emission allow-



21 ances that reduce electricity cost impacts



22 on such ratepayers. The electricity local



23 distribution company may do so based on



24 the quantity of electricity delivered to indi-



25 vidual industrial retail ratepayers. 601



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1 ‘‘(E) GUIDELINES.—As part of the regula-



2 tions promulgated under subsection (g), the Ad-



3 ministrator shall, after consultation with State



4 regulatory authorities, prescribe guidelines for



5 the implementation of the requirements of this



6 paragraph. Such guidelines shall include—



7 ‘‘(i) requirements to ensure that resi-



8 dential and industrial retail ratepayers (in-



9 cluding entities that receive emission allow-



10 ances under part F) receive their ratable



11 share of the value of the allowances dis-



12 tributed to each electricity local distribu-



13 tion company pursuant to this subsection;



14 and



15 ‘‘(ii) requirements for measurement,



16 verification, reporting, and approval of



17 methods used to assure the use of allow-



18 ance values to benefit retail ratepayers.



19 ‘‘(6) REGULATORY PROCEEDINGS.—



20 ‘‘(A) REQUIREMENT.—No electricity local



21 distribution company shall be eligible to receive



22 emission allowances under this subsection or



23 subsection (e) unless the State regulatory au-



24 thority with authority over such company’s re-



25 tail rates, or the entity with authority to regu-602



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1 late or set retail electricity rates of an elec-



2 tricity local distribution company not regulated



3 by a State regulatory authority, has—



4 ‘‘(i) after public notice and an oppor-



5 tunity for comment, promulgated a regula-



6 tion or completed a rate proceeding (or the



7 equivalent, in the case of a ratemaking en-



8 tity other than a State regulatory author-



9 ity) that provides for the full implementa-



10 tion of the requirements of paragraph (5)



11 of this subsection and the requirements of



12 subsection (e); and



13 ‘‘(ii) made available to the Adminis-



14 trator and the public a report describing,



15 in adequate detail, the manner in which



16 the requirements of paragraph (5) and the



17 requirements of subsection (e) will be im-



18 plemented.



19 ‘‘(B) UPDATING.—The Administrator shall



20 require, as a condition of continued receipt of



21 emission allowances under this subsection by an



22 electricity local distribution company, that a



23 new regulation be promulgated or rate pro-



24 ceeding be completed , after public notice and



25 an opportunity for comment, and a new report 603



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1 be made available to the Administrator and the



2 public, pursuant to subparagraph (A), not less



3 frequently than every 5 years.



4 ‘‘(7) PLANS AND REPORTING.—



5 ‘‘(A) REGULATIONS.—As part of the regu-



6 lations promulgated under subsection (g), the



7 Administrator shall prescribe requirements gov-



8 erning plans and reports to be submitted in ac-



9 cordance with this paragraph.



10 ‘‘(B) PLANS.—Not later than April 30 of



11 2011 and every 5 years thereafter through



12 2026, each electricity local distribution com-



13 pany shall submit to the Administrator a plan,



14 approved by the State regulatory authority or



15 other entity charged with regulating tor setting



16 the retail rates of such company, describing



17 such company’s plans for the disposition of the



18 value of emission allowances to be received pur-



19 suant to this subsection and subsection (e), in



20 accordance with the requirements of this sub-



21 section and subsection (e). Such plan shall in-



22 clude a description of the manner in which the



23 company will provide to industrial retail rate-



24 payers (including entities that receive emission 604



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1 allowances under part F) their ratable share of



2 the value of such allowances.



3 ‘‘(C) REPORTS.—Not later than June 30,



4 2013, and each calendar year thereafter



5 through 2031, each electricity local distribution



6 company shall submit a report to the Adminis-



7 trator, and to the relevant State regulatory au-



8 thority or other entity charged with regulating



9 or setting the retail electricity rates of such



10 company, describing the disposition of the value



11 of any emission allowances received by such



12 company in the prior calendar year pursuant to



13 this subsection and subsection (e), including—



14 ‘‘(i) a description of sales, transfer,



15 exchange, or use by the company for com-



16 pliance with obligations under this title, of



17 any such emission allowances;



18 ‘‘(ii) the monetary value received by



19 the company, whether in money or in some



20 other form, from the sale, transfer, or ex-



21 change of any such emission allowances;



22 ‘‘(iii) the manner in which the com-



23 pany’s disposition of any such emission al-



24 lowances complies with the requirements of



25 this subsection and of subsection (e), in-605



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1 cluding each of the requirements of para-



2 graph (5) of this subsection, including the



3 requirement that industrial retail rate-



4 payers (including entities that receive



5 emission allowances under part F) receive



6 their ratable share of the value of such al-



7 lowances; and



8 ‘‘(iv) such other information as the



9 Administrator may require pursuant to



10 subparagraph (A).



11 ‘‘(D) PUBLICATION.—The Administrator



12 shall make available to the public all plans and



13 reports submitted under this subsection, includ-



14 ing by publishing such plans and reports on the



15 Internet.



16 ‘‘(8) ADMINISTRATOR AUDIT REPORTS.—



17 ‘‘(A) IN GENERAL.—Each year, the Ad-



18 ministrator shall audit a representative sample



19 of electricity local distribution companies to en-



20 sure that emission allowances distributed under



21 this subsection have been used exclusively for



22 the benefit of retail ratepayers and that such



23 companies are complying with the requirements



24 of this subsection and of subsection (e), includ-



25 ing the requirement that residential and indus-606



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1 trial retail ratepayers (including entities that



2 receive emission allowances under part F) re-



3 ceive their ratable share of the value of such al-



4 lowances. The Administrator shall assess the



5 degree to which electric local distribution com-



6 panies have maintained a marginal electric



7 price signal while protecting consumers on total



8 cost using the value of emissions allowances. In



9 selecting companies for audit, the Adminis-



10 trator shall take into account any credible evi-



11 dence of noncompliance with such requirements.



12 The Administrator shall make available to the



13 public a report describing the results of each



14 such audit, including by publishing such report



15 on the Internet.



16 ‘‘(B) GAO  AUDIT
REPORT.—Not later



17 than April 30, 2015, and every 3 years there-



18 after through 2026, the Comptroller General of



19 the United States, incorporating results from



20 the Administrators’ audit report and other rel-



21 evant information including distribution com-



22 pany reports, shall conduct an in-depth evalua-



23 tion and make available to the public a report



24 on the investments made pursuant to paragraph



25 (5). Said report shall be made available to the 607



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1 State regulatory authority, or the entity with



2 authority to regulate or set retail electricity



3 rates in the case of an electricity distribution



4 company that is not regulated by a State regu-



5 latory authority, and shall include a description



6 of how the distribution companies in the audit



7 meet or fail to meet the requirement of para-



8 graph (5), including for investments made in



9 cost-effective end-use energy efficiency pro-



10 grams, the lifetime and annual energy saving



11 benefits, and capacity benefits of said pro-



12 grams.



13 ‘‘(C) ADMINISTRATOR COST CONTAINMENT



14 REPORT.—Not later than April 30, 2015 and



15 every 3 years thereafter through 2026, the Ad-



16 ministrator shall transmit a report to Congress



17 containing an evaluation of the disposition of



18 the value of emission allowances received pursu-



19 ant to this subsection and subsection (e) and



20 recommendations of ways to more effectively di-



21 rect the value of allowances to reduce costs for



22 consumers, contain the overall costs of the



23 greenhouse gas emissions reduction program,



24 and meet the pollution reduction targets of the



25 Act. The Administrator shall make available to 608



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1 the public such report, including by publishing



2 such report on the Internet.



3 ‘‘(9) ENFORCEMENT.—A violation of any re-



4 quirement of this subsection or of subsection (e), ir-



5 respective of approval by a State regulatory author-



6 ity, shall be a violation of this Act. Each emission



7 allowance the value of which is used in violation of



8 the requirements of this subsection or of subsection



9 (e) shall be a separate violation.



10 ‘‘(c) MERCHANT COAL UNITS.—



11 ‘‘(1) QUALIFYING EMISSIONS.—The qualifying



12 emissions for a merchant coal unit for a given cal-



13 endar year shall be the product of the number of



14 megawatt hours of merchant coal unit sales gen-



15 erated by such unit in such calendar year and the



16 average carbon dioxide emissions per megawatt hour



17 generated by such unit during the base period under



18 paragraph (2), provided that the number of mega-



19 watt hours in a given calendar year for purposes of



20 such calculation shall be reduced in proportion to



21 the portion of such unit’s carbon dioxide emissions



22 that are either—



23 ‘‘(A) captured and sequestered in such cal-



24 endar year; or 609



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1 ‘‘(B) attributable to the combustion or gas-



2 ification of biomass, to the extent that the



3 owner or operator of the unit is not required to



4 hold emission allowances for such emissions.



5 ‘‘(2) BASE PERIOD.—For purposes of this sub-



6 section, the base period for a merchant coal unit



7 shall be—



8 ‘‘(A) calendar years 2006 through 2008; or



9 ‘‘(B) in the case of a new merchant coal



10 unit—



11 ‘‘(i) the first full calendar year of op-



12 eration of such unit, if such unit com-



13 mences operation before January 1, 2012;



14 ‘‘(ii) calendar year 2012, if such unit



15 commences operation on or after January



16 1, 2012, and before October 1, 2012; or



17 ‘‘(iii) calendar year 2013, if such unit



18 commences operation on or after October



19 1, 2012, and before January 1, 2013.



20 ‘‘(3) PHASE-DOWN SCHEDULE.—The Adminis-



21 trator shall identify an annual phase-down factor,



22 applicable to distributions to merchant coal units for



23 each of vintage years 2012 through 2029, that cor-



24 responds to the overall decline in the amount of



25 emission allowances allocated to the electricity sector
610



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1 in such years pursuant to section 771(a)(1). Such



2 factor shall—



3 ‘‘(A) for vintage year 2012, be equal to



4 1.0;



5 ‘‘(B) for each of vintage years 2013



6 through 2029, correspond to the quotient of—



7 ‘‘(i) the quantity of emission allow-



8 ances allocated under section 771(a)(1) for



9 such vintage year; divided by



10 ‘‘(ii) the quantity of emission allow-



11 ances allocated under section 771(a)(1) for



12 vintage year 2012.



13 ‘‘(4) DISTRIBUTION OF EMISSION ALLOW-



14 ANCES.—Not later than March 1 of 2013 and each



15 calendar year through 2030, the Administrator shall



16 distribute emission allowances of the preceding vin-



17 tage year to the owner or operator of each merchant



18 coal unit described in subsection (a)(11)(C) in an



19 amount equal to the product of—



20 ‘‘(A) 0.5;



21 ‘‘(B) the qualifying emissions for such



22 merchant coal unit for the preceding year, as



23 determined under paragraph (1); and 611



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1 ‘‘(C) the phase-down factor for the pre-



2 ceding calendar year, as identified under para-



3 graph (3).



4 ‘‘(5) ADJUSTMENT.—



5 ‘‘(A) STUDY.—Not later than July 1,



6 2014, the Administrator, in consultation with



7 the Federal Energy Regulatory Commission,



8 shall complete a study to determine whether the



9 allocation formula under paragraph (3) is re-



10 sulting in, or is likely to result in, windfall prof-



11 its to merchant coal generators or substantially



12 disparate treatment of merchant coal genera-



13 tors operating in different markets or regions.



14 ‘‘(B) REGULATION.—If the Administrator,



15 in consultation with the Federal Energy Regu-



16 latory Commission, makes an affirmative find-



17 ing of windfall profits or disparate treatment



18 under subparagraph (A), the Administrator



19 shall, not later than 18 months after the com-



20 pletion of the study described in subparagraph



21 (A), promulgate regulations providing for the



22 adjustment of the allocation formula under



23 paragraph (3) to mitigate, to the extent prac-



24 ticable, such windfall profits, if any, and such



25 disparate treatment, if any. 612



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1 ‘‘(6) LIMITATION ON ALLOWANCES.—Notwith-



2 standing paragraph (4) or (5), for each vintage year



3 the Administrator shall distribute under this sub-



4 section no more than 10 percent of the total quan-



5 tity of emission allowances available for such vintage



6 year for distribution to the electricity sector under



7 section 771(a)(1). If the quantity of emission allow-



8 ances that would otherwise be distributed pursuant



9 to paragraph (4) or (5) for any vintage year would



10 exceed such limit, the Administrator shall distribute



11 10 percent of the total emission allowances available



12 for distribution under section 771(a)(1) for such vin-



13 tage year ratably among merchant coal generators



14 based on the applicable formula under paragraph (4)



15 or (5).



16 ‘‘(7) ELIGIBILITY.—The owner or operator of a



17 merchant coal unit shall not be eligible to receive



18 emission allowances under this subsection for any



19 vintage year for which such owner or operator has



20 elected to receive emission allowances for the same



21 unit under subsection (d).



22 ‘‘(d) LONG-TERM CONTRACT GENERATORS.—



23 ‘‘(1) DISTRIBUTION.—Not later than March 1,



24 2013, and each calendar year through 2030, the Ad-



25 ministrator shall distribute to the owner or operator 613



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1 of each long-term contract generator a quantity of



2 emission allowances of the preceding vintage year



3 that is equal to the sum of—



4 ‘‘(A) the number of tons of carbon dioxide



5 emitted as a result of a qualifying electricity



6 sales agreement referred to in subsection



7 (a)(10)(B)(i); and



8 ‘‘(B) the incremental number of tons of



9 carbon dioxide emitted solely as a result of a



10 qualifying thermal sales agreement referred to



11 in subsection (a)(10)(B)(ii), provided that in no



12 event shall the Administrator distribute more



13 than 1 emission allowance for the same ton of



14 emissions.



15 ‘‘(2) LIMITATION ON ALLOWANCES.—Notwith-



16 standing paragraph (1), for each vintage year the



17 Administrator shall distribute under this subsection



18 no more than 4.3 percent of the total quantity of



19 emission allowances available for such vintage year



20 for distribution to the electricity sector under section



21 771(a)(1). If the quantity of emission allowances



22 that would otherwise be distributed pursuant to



23 paragraph (1) for any vintage year would exceed



24 such limit, the Administrator shall distribute 4.3



25 percent of the total emission allowances available for
614



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1 distribution under section 771(a)(1) for such vintage



2 year ratably among long-term contract generators



3 based on paragraph (1).



4 ‘‘(3) ELIGIBILITY.—



5 ‘‘(A) FACILITY ELIGIBILITY.—The owner



6 or operator of a facility shall cease to be eligible



7 to receive emission allowances under this sub-



8 section upon the earliest date on which the fa-



9 cility no longer meets each and every element of



10 the definition of a long-term contract generator



11 under subsection (a)(10).



12 ‘‘(B) CONTRACT ELIGIBILITY.—The owner



13 or operator of a facility shall cease to be eligible



14 to receive emission allowances under this sub-



15 section based on an electricity or thermal sales



16 agreement referred to in subsection (a)(10)(B)



17 upon the earliest date that such agreement—



18 ‘‘(i) expires;



19 ‘‘(ii) is terminated; or



20 ‘‘(iii) is amended in any way that



21 changes the location of the facility, the



22 price (whether a fixed price or price for-



23 mula) for electricity or thermal energy sold



24 under such agreement, the quantity of



25 electricity or thermal energy sold under the 615



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1 agreement, or the expiration or termi-



2 nation date of the agreement.



3 ‘‘(4) DEMONSTRATION OF ELIGIBILITY.—To be



4 eligible to receive allowance distributions under this



5 subsection, the owner or operator of a long-term



6 contract generator shall submit each of the following



7 in writing to the Administrator within 180 days



8 after the date of enactment of this title, and not



9 later than September 30 of each vintage year for



10 which such generator wishes to receive emission al-



11 lowances:



12 ‘‘(A) A certificate of representation de-



13 scribed in section 700(15).



14 ‘‘(B) An identification of each owner and



15 each operator of the facility.



16 ‘‘(C) An identification of the units at the



17 facility and the location of the facility.



18 ‘‘(D) A written certification by the des-



19 ignated representative that the facility meets all



20 the requirements of the definition of a long-



21 term contract generator.



22 ‘‘(E) The expiration date of each quali-



23 fying electricity or thermal sales agreement re-



24 ferred to in subsection (a)(10)(B). 616



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1 ‘‘(F) A copy of each qualifying electricity



2 or thermal sales agreement referred to in sub-



3 section (a)(10)(B).



4 ‘‘(5) NOTIFICATION.—Not later than 30 days



5 after, in accordance with paragraph (3), a facility or



6 an agreement ceases to meet the eligibility require-



7 ments for distribution of emission allowances pursu-



8 ant to this subsection, the designated representative



9 of such facility shall notify the Administrator in



10 writing when, and on what basis, such facility or



11 agreement ceased to meet such requirements.



12 ‘‘(e) SMALL LDCs.—



13 ‘‘(1) DISTRIBUTION.—The Administrator shall,



14 in accordance with this subsection, distribute emis-



15 sion allowances allocated pursuant to section



16 771(a)(1) for the following vintage year. Such allow-



17 ances shall be distributed ratably among small



18 LDCs based on historic emissions in accordance with



19 the same measure of such emissions applied to each



20 such small LDC for the relevant vintage year under



21 subsection (b)(2) of this section.



22 ‘‘(2) USES.—A small LDC receiving allowances



23 under this section shall use such allowances exclu-



24 sively for the following purposes: 617



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1 ‘‘(A) Cost-effective programs to achieve



2 electricity savings, provided that such savings



3 shall not be transferred or used for compliance



4 with any renewable electricity standard estab-



5 lished under the Public Utility Regulatory Poli-



6 cies Act of 1978 (16 U.S.C. 2601 et seq.).



7 ‘‘(B) Deployment of technologies to gen-



8 erate electricity from renewable energy re-



9 sources, provided that any Federal renewable



10 electricity credits issued based on generation



11 supported under this section shall be submitted



12 to the Federal Energy Regulatory Commission



13 for voluntary retirement and shall not be used



14 for compliance with the Public Utility Regu-



15 latory Policies Act of 1978 (16 U.S.C. 2601 et



16 seq.).



17 ‘‘(C) Assistance programs to reduce elec-



18 tricity costs for low-income residential rate-



19 payers of such small LDC, provided that such



20 assistance is made available equitably to all res-



21 idential ratepayers below a certain income level,



22 which shall not be higher than 200 percent of



23 the poverty line (as that term is defined in sec-



24 tion 673(2) of the Community Services Block



25 Grant Act (42 U.S.C. 9902(2)). 618



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1 ‘‘(3) REQUIREMENTS.—As part of the regula-



2 tions promulgated under subsection (g), the Admin-



3 istrator shall prescribe—



4 ‘‘(A) after consultation with the Federal



5 Energy Regulatory Commission, requirements



6 to ensure that programs and projects under



7 paragraph (2)(A) and (B) are consistent with



8 the standards established by, and effectively



9 supplement electricity savings and generation of



10 electricity from renewable energy resources



11 achieved by, the Combined Efficiency and Re-



12 newable Electricity Standard established by



13 law;



14 ‘‘(B) eligibility criteria and guidelines for



15 consumer assistance programs for low-income



16 residential ratepayers under paragraph (2)(C);



17 and



18 ‘‘(C) such other requirements as the Ad-



19 ministrator determines appropriate to ensure



20 compliance with the requirements of this sub-



21 section.



22 ‘‘(4) REPORTING.—Reports submitted under



23 subsection (b)(7) shall include, in accordance with



24 such requirements as the Administrator may pre-



25 scribe— 619



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1 ‘‘(A) a description of any facilities de-



2 ployed under paragraph (2)(A), the quantity of



3 resulting electricity generation from renewable



4 energy resources;



5 ‘‘(B) an assessment demonstrating the



6 cost-effectiveness of, and electricity savings



7 achieved by, programs supported under para-



8 graph (2)(B); and



9 ‘‘(C) a description of assistance provided to



10 low-income retail ratepayers under paragraph



11 (2)(C).



12 ‘‘(f) CERTAIN COGENERATION FACILITIES.—



13 ‘‘(1) ELIGIBLE COGENERATION FACILITIES.—



14 For purposes of this subsection, an ‘eligible cogen-



15 eration facility’ is a facility that—



16 ‘‘(A) is a qualifying co-generation facility



17 (as that term is defined in section 3(18)(B) of



18 the Federal Power Act (16 U.S.C. 796(18)(B));



19 ‘‘(B) derives 80 percent or more of its heat



20 input from coal, petroleum coke, or any com-



21 bination of these 2 fuels;



22 ‘‘(C) has a nameplate capacity of 100



23 megawatts or greater;



24 ‘‘(D) was in operation as of January 1,



25 2009, and remains in operation as of the date 620



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1 of any distribution of emission allowances under



2 this subsection;



3 ‘‘(E) in calendar years 2006 through 2008



4 sold, and as of the date of any distribution of



5 emission allowances under this section sells,



6 steam or electricity directly and solely to mul-



7 tiple, separately-owned industrial or commercial



8 facilities co-located at the same site with the co-



9 generation facility; and



10 ‘‘(F) is not eligible to receive allowances



11 under any other subsection of this section or



12 under part F of this title.



13 ‘‘(2) DISTRIBUTION.—The Administrator shall



14 distribute the emission allowances allocated pursuant



15 to section 771(a)(1) to owners or operators of eligi-



16 ble cogeneration facilities ratably based on the car-



17 bon dioxide emissions of each such facility in cal-



18 endar years 2006 through 2008. The Adminis-



19 trator—



20 ‘‘(A) shall not, in any year, distribute



21 emission allowances under this subsection to the



22 owner or operator of any eligible cogeneration



23 facility in excess of the amount necessary to



24 offset such facility’s cost of compliance with the



25 requirements of this title in that year; and 621



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1 ‘‘(B) may distribute such allowances over a



2 period of years if annual distributions under



3 this subsection would otherwise exceed the limi-



4 tation in subparagraph (A), provided that in no



5 event shall distributions be made under this



6 subsection after calendar year 2025.



7 ‘‘(3) REQUIREMENTS.—The Administrator



8 shall, by regulation, establish requirements to ensure



9 that the value of any emission allowances distributed



10 pursuant to this subsection are passed through, on



11 an equitable basis, to the facilities to which the rel-



12 evant cogeneration facility provides electricity or



13 steam deliveries, including any facility owned or op-



14 erated by the owner or operator of the cogeneration



15 facility.



16 ‘‘(g) REGULATIONS.—Not later than 2 years after



17 the date of enactment of this title, the Administrator,
in



18 consultation with the Federal Energy Regulatory Commis-



19 sion, shall promulgate regulations to implement the re-



20 quirements of this section.



21 ‘‘SEC. 773. NATURAL GAS CONSUMERS.



22 ‘‘(a) DEFINITION.—For purposes of this section, the



23 term ‘cost-effective’, with respect to an energy
efficiency



24 program, means that the program meets the Total Re-



25 source Cost Test, which requires that the net present 622



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1 value of economic benefits over the life of the program,



2 including avoided supply and delivery costs and deferred



3 or avoided investments, is greater than the net present



4 value of the economic costs over the life of the program,



5 including program costs and incremental costs borne by



6 the energy consumer.



7 ‘‘(b) ALLOCATION.—Not later than June 30, 2015,



8 and each calendar year thereafter through 2028, the Ad-



9 ministrator shall distribute to natural gas local
distribu-



10 tion companies for the benefit of retail ratepayers the



11 quantity of emission allowances allocated for the
following



12 vintage year pursuant to section 771(a)(2). Such allow-



13 ances shall be distributed among local natural gas dis-



14 tribution companies based on the following formula:



15 ‘‘(1) INITIAL FORMULA.—Except as provided in



16 paragraph (2), for each vintage year, the Adminis-



17 trator shall distribute emission allowances among



18 natural gas local distribution companies on a pro



19 rata basis based on each such company’s annual av-



20 erage retail natural gas deliveries for 2006 through



21 2008, unless the owner or operator of the company



22 selects 3 other consecutive years between 1999 and



23 2008, inclusive, and timely notifies the Adminis-



24 trator of its selection. 623



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1 ‘‘(2) UPDATING.—Prior to distributing 2019



2 vintage emission allowances and at 3-year intervals



3 thereafter, the Administrator shall update the dis-



4 tribution formula under this subsection to reflect



5 changes in each natural gas local distribution com-



6 pany’s service territory since the most recent for-



7 mula was established. For each successive 3-year pe-



8 riod, the Administrator shall distribute allowances



9 on a pro rata basis among natural gas local distribu-



10 tion companies based on the product of—



11 ‘‘(A) each natural gas local distribution



12 company’s average annual natural gas deliveries



13 per customer during calendar years 2006



14 through 2008, or during the 3 alternative con-



15 secutive years selected by such company under



16 paragraph (1); and



17 ‘‘(B) the number of customers of such nat-



18 ural gas local distribution company in the most



19 recent year in which the formula is updated



20 under this paragraph.



21 ‘‘(c) USE OF ALLOWANCES.—



22 ‘‘(1) RATEPAYER BENEFIT.—Emission allow-



23 ances distributed to a natural gas local distribution



24 company under this section shall be used exclusively



25 for the benefit of retail ratepayers of such natural 624



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1 gas local distribution company and may not be used



2 to support natural gas sales or deliveries to entities



3 or persons other than such ratepayers.



4 ‘‘(2) RATEPAYER CLASSES.—In using emission



5 allowances distributed under this section for the ben-



6 efit of ratepayers, a natural gas local distribution



7 company shall ensure that ratepayer benefits are



8 distributed—



9 ‘‘(A) among ratepayer classes on a pro



10 rata basis based on natural gas deliveries to



11 each class; and



12 ‘‘(B) equitably among individual ratepayers



13 within each ratepayer class.



14 ‘‘(3) LIMITATION.—A natural gas local dis-



15 tribution company shall not use the value of emis-



16 sion allowances distributed under this section to pro-



17 vide to any ratepayer a rebate that is based solely



18 on the quantity of natural gas delivered to such



19 ratepayer. To the extent a natural gas local distribu-



20 tion company uses the value of emission allowances



21 distributed under this section to provide rebates, it



22 shall, to the maximum extent practicable, provide



23 such rebates with regard to the fixed portion of rate-



24 payers’ bills or as a fixed creditor rebate on natural



25 gas bills. 625



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1 ‘‘(4) ENERGY EFFICIENCY PROGRAMS.—The



2 value of no less than one-third of the emission allow-



3 ances distributed to natural gas local distribution



4 companies pursuant to this section in any calendar



5 year shall be used for cost-effective energy efficiency



6 programs for natural gas consumers. Such programs



7 must be authorized and overseen by the State regu-



8 latory authority, or by the entity with regulatory au-



9 thority over retail natural gas rates in the case of



10 a natural gas local distribution company that is not



11 regulated by a State regulatory authority.



12 ‘‘(5) GUIDELINES.—As part of the regulations



13 promulgated under subsection (h), the Administrator



14 shall prescribe specific guidelines for the implemen-



15 tation of the requirements of this subsection.



16 ‘‘(d) REGULATORY PROCEEDINGS.—



17 ‘‘(1) REQUIREMENT.—No natural gas local dis-



18 tribution company shall be eligible to receive emis-



19 sion allowances under this section unless the State



20 regulatory authority with authority over such com-



21 pany, or the entity with authority to regulate retail



22 rates of a natural gas local distribution company not



23 regulated by a State regulatory authority, has—



24 ‘‘(A) promulgated a regulation or com-



25 pleted a rate proceeding (or the equivalent, in 626



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1 the case of a ratemaking entity other than a



2 State regulatory authority) that provides for



3 the full implementation of the requirements of



4 subsection (c); and



5 ‘‘(B) made available to the Administrator



6 and the public a report describing, in adequate



7 detail, the manner in which the requirements of



8 subsection (c) will be implemented.



9 ‘‘(2) UPDATING.—The Administrator shall re-



10 quire, as a condition of continued receipt of emission



11 allowances under this section, that a new regulation



12 be promulgated or rate proceeding be completed, and



13 a new report be made available to the Administrator



14 and the public, pursuant to paragraph (1), not less



15 frequently than every 5 years.



16 ‘‘(e) PLANS AND REPORTING.—



17 ‘‘(1) REGULATIONS.—As part of the regulations



18 promulgated under subsection (h), the Administrator



19 shall prescribe requirements governing plans and re-



20 ports to be submitted in accordance with this sub-



21 section.



22 ‘‘(2) PLANS.—Not later than April 30, 2015,



23 and every 5 years thereafter through 2025, each



24 natural gas local distribution company shall submit



25 to the Administrator a plan, approved by the State 627



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1 regulatory authority or other entity charged with



2 regulating the retail rates of such company, describ-



3 ing such company’s plans for the disposition of the



4 value of emission allowances to be received pursuant



5 to this section, in accordance with the requirements



6 of this section.



7 ‘‘(3) REPORTS.—Not later than June 30, 2017,



8 and each calendar year thereafter through 2031,



9 each natural gas local distribution company shall



10 submit a report to the Administrator, approved by



11 the relevant State regulatory authority or other enti-



12 ty charged with regulating the retail natural gas



13 rates of such company, describing the disposition of



14 the value of any emission allowances received by



15 such company in the prior calendar year pursuant to



16 this subsection, including—



17 ‘‘(A) a description of sales, transfer, ex-



18 change, or use by the company for compliance



19 with obligations under this title, of any such



20 emission allowances;



21 ‘‘(B) the monetary value received by the



22 company, whether in money or in some other



23 form, from the sale, transfer, or exchange of



24 emission allowances received by the company



25 under this section; 628



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1 ‘‘(C) the manner in which the company’s



2 disposition of emission allowances received



3 under this subsection complies with the require-



4 ments of this section, including each of the re-



5 quirements of subsection (c);



6 ‘‘(D) the cost-effectiveness of, and energy



7 savings achieved by, energy efficiency programs



8 supported through such emission allowances;



9 and



10 ‘‘(E) such other information as the Admin-



11 istrator may require pursuant to paragraph (1).



12 ‘‘(4) PUBLICATION.—The Administrator shall



13 make available to the public all plans and reports



14 submitted by natural gas local distribution compa-



15 nies under this subsection, including by publishing



16 such plans and reports on the Internet.



17 ‘‘(f) AUDITING.—



18 ‘‘(1) ADMINISTRATOR AUDIT REPORT.—Each



19 year, the Administrator shall audit a significant rep-



20 resentative sample of natural gas local distribution



21 companies to ensure that emission allowances dis-



22 tributed under this section have been used exclu-



23 sively for the benefit of retail ratepayers and that



24 such companies are complying with the requirements



25 of this section. In selecting companies for audit, the
629



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1 Administrator shall take into account any credible



2 evidence of noncompliance with such requirements.



3 The Administrator shall make available to the public



4 a report describing the results of each such audit,



5 including by publishing such report on the Internet.



6 ‘‘(2) GAO AUDIT REPORT.—Not later April 30,



7 2015 and every 3 years thereafter through April 30,



8 2026, the Comptroller General of the United States,



9 incorporating results from the Administrators’ audit



10 report and other relevant information including dis-



11 tribution company reports, shall conduct an in-depth



12 evaluation and make available to the public a report



13 on the investments made pursuant to subsection (c).



14 Said report shall be made available to the State reg-



15 ulatory authority, or the entity with authority to



16 regulate or set retail natural gas rates in the case



17 of a natural gas distribution company that is not



18 regulated by a State regulatory authority, and shall



19 include a description how the distribution companies



20 in the audit meet or fail to meet the requirement of



21 subsection (c), including for investments made in



22 cost-effective end-use energy efficiency programs, the



23 lifetime and annual energy saving benefits, and ca-



24 pacity benefits of said programs. 630



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1 ‘‘(3) ADMINISTRATOR COST CONTAINMENT RE-



2 PORT.—Not later April 30, 2015, and every 3 years



3 thereafter through April 30, 2026, the Adminis-



4 trator shall transmit a report to Congress containing



5 an evaluation of the disposition of the value of emis-



6 sion allowances received pursuant to this subsection



7 and recommendations of ways to more effectively di-



8 rect the value of allowances to reduce costs for con-



9 sumers, contain the overall costs of the greenhouse



10 gas emissions reduction program, and meet the pol-



11 lution reduction targets of the Act. The Adminis-



12 trator shall make available to the public such report,



13 including by publishing such report on the Internet.



14 ‘‘(g) ENFORCEMENT.—A violation of any require-



15 ment of this section, irrespective of approval by a State



16 regulatory authority, shall be a violation of this Act.
Each



17 emission allowance the value of which is used in
violation



18 of the requirements of this section shall be a separate
vio-



19 lation.



20 ‘‘(h) REGULATIONS.—Not later than January 1,



21 2014, the Administrator, in consultation with the Federal



22 Energy Regulatory Commission, shall promulgate regula-



23 tions to implement the requirements of this section.



24 ‘‘SEC. 774. HOME HEATING OIL AND PROPANE CONSUMERS.



25 ‘‘(a) DEFINITIONS.—For purposes of this section: 631



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1 ‘‘(1) CARBON CONTENT.—The term ‘carbon



2 content’ means the amount of carbon dioxide that



3 would be emitted as a result of the combustion of a



4 fuel.



5 ‘‘(2) COST-EFFECTIVE.—The term ‘cost-effec-



6 tive’ has the meaning given that term in section



7 773(a).



8 ‘‘(b) ALLOCATION.—The Administrator shall dis-



9 tribute among the States, in accordance with this section,



10 the quantity of emission allowances allocated pursuant to



11 section 771(a)(3). The Administrator shall distribute a



12 percentage of such allowances determined by the Adminis-



13 trator, after consultation with the Secretary of the
Inte-



14 rior, pursuant to subsection (f).



15 ‘‘(c) DISTRIBUTION AMONG STATES.—The Adminis-



16 trator shall distribute emission allowances among the



17 States under this section each year on a pro rata basis



18 based on the ratio of—



19 ‘‘(1) the carbon content of home heating oil and



20 propane sold to consumers within each State in the



21 preceding year for residential or commercial uses; to



22 ‘‘(2) the carbon content of home heating oil and



23 propane sold to consumers within the United States



24 in the preceding year for residential or commercial



25 uses. 632



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1 ‘‘(d) USE OF ALLOWANCES.—



2 ‘‘(1) IN GENERAL.—States shall use emission



3 allowances distributed under this section exclusively



4 for the benefit of consumers of home heating oil or



5 propane for residential or commercial purposes.



6 Such proceeds shall be used exclusively for—



7 ‘‘(A) cost-effective energy efficiency pro-



8 grams for consumers that use home heating oil



9 or propane for residential or commercial pur-



10 poses; or



11 ‘‘(B) rebates or other direct financial as-



12 sistance programs for consumers of home heat-



13 ing oil or propane used for residential or com-



14 mercial purposes.



15 ‘‘(2) ADMINISTRATION AND DELIVERY MECHA-



16 NISMS.—In administering programs supported by



17 this section, States shall—



18 ‘‘(A) use no less than 50 percent of the



19 value of emission allowances received under this



20 section for cost-effective energy efficiency pro-



21 grams to reduce consumers’ overall fuel costs;



22 ‘‘(B) to the extent practicable, deliver con-



23 sumer support under this section through exist-



24 ing energy efficiency and consumer energy as-



25 sistance programs or delivery mechanisms, in-633



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1 cluding, where appropriate, programs or mecha-



2 nisms administered by parties other than the



3 State; and



4 ‘‘(C) seek to coordinate the administration



5 and delivery of energy efficiency and consumer



6 energy assistance programs supported under



7 this section, with one another and with existing



8 programs for various fuel types, so as to deliver



9 comprehensive, fuel-blind, coordinated programs



10 to consumers.



11 ‘‘(e) REPORTING.—Each State receiving emission al-



12 lowances under this section shall submit to the Adminis-



13 trator, within 12 months of each receipt of such allow-



14 ances, a report, in accordance with such requirements as



15 the Administrator may prescribe, that—



16 ‘‘(1) describes the State’s use of emission allow-



17 ances distributed under this section, including a de-



18 scription of the energy efficiency and consumer as-



19 sistance programs supported with such allowances;



20 ‘‘(2) demonstrates the cost-effectiveness of, and



21 the energy savings achieved by, energy efficiency



22 programs supported under this section; and



23 ‘‘(3) includes a report prepared by an inde-



24 pendent third party, in accordance with such regula-



25 tions as the Administrator may promulgate, evalu-634



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1 ating the performance of the energy efficiency and



2 consumer assistance programs supported under this



3 section.



4 ‘‘(f) ENFORCEMENT.—If the Administrator deter-



5 mines that a State is not in compliance with this section,



6 the Administrator may withhold a portion of the emission



7 allowances, the quantity of which is equal to up to twice



8 the quantity of the allowances that the State failed to
use



9 in accordance with the requirements of this section, that



10 such State would otherwise be eligible to receive under
this



11 section in later years. Allowances withheld pursuant to



12 this subsection shall be distributed among the remaining



13 States on a pro rata basis in accordance with the formula



14 in subsection (c).



15 ‘‘SEC. 775. DOMESTIC FUEL PRODUCTION.



16 ‘‘(a) PURPOSE.—The purpose of this section is to



17 provide emission allowance rebates to petroleum
refineries



18 in the United States in a manner that promotes energy



19 efficiency and a reduction in greenhouse gas emissions at



20 such facilities.



21 ‘‘(b) DEFINITIONS.—In this section:



22 ‘‘(1) EMISSIONS.—The term ‘emissions’ in-



23 cludes direct emissions from fuel combustion, proc-



24 ess emissions, and indirect emissions from the gen-



25 eration of electricity, steam, and hydrogen used to 635



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1 produce the output of a petroleum refinery or the



2 petroleum refinery sector.



3 ‘‘(2) PETROLEUM REFINERY.—The term ‘petro-



4 leum refinery’ means a facility classified under code



5 324110 of the North American Industrial Classifica-



6 tion System of 2002.



7 ‘‘(3) SMALL BUSINESS REFINER.—The term



8 ‘small business refiner’ means a refiner that meets



9 the applicable Federal refinery capacity and em-



10 ployee limitations criteria described in section



11 45H(c)(1) of the Internal Revenue Code of 1986 (as



12 in effect on the date of enactment of this section and



13 without regard to section 45H(d)). Eligibility of a



14 small business refiner under this paragraph shall not



15 be recalculated or disallowed on account of (i) its



16 merger with another small business refiner or refin-



17 ers after December 31, 2002 or (ii) its acquisition



18 of another small business refiner (or refinery of such



19 refiner) after December 31, 2002.



20 ‘‘(c) IN GENERAL.—The Administrator shall dis-



21 tribute allowances pursuant to this section to owners and



22 operators of petroleum refineries, including small
business



23 refiners, in the United States.



24 ‘‘(d) DISTRIBUTION SCHEDULE.—The Administrator



25 shall distribute emission allowances pursuant to the
regu-636



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1 lations issued under subsection (e) for each vintage year



2 no later than October 31 of the preceding calendar year.



3 ‘‘(e) REGULATIONS.—Not later than 3 years after the



4 date of enactment of this title, the Administrator, in con-



5 sultation with the Administrator of the Energy Informa-



6 tion Administration, shall promulgate regulations that es-



7 tablish a formula for distributing emission allowances
con-



8 sistent with the purpose of this section. In establishing



9 such formula, the Administrator shall consider the
relative



10 complexity of refinery processes and appropriate mecha-



11 nisms to take energy efficiency and greenhouse gas reduc-



12 tions into account. If a petroleum refinery’s electricity
pro-



13 vider received a free allocation of emission allowances
pur-



14 suant to section 771(a)(1), the Administrator shall take



15 this free allocation into account when establishing such



16 formula to avoid rebates to a petroleum refinery for
costs



17 that the Administrator determines were not incurred by



18 the petroleum refinery because the allowances were freely



19 allocated to the petroleum refinery’s electricity
provider



20 and used for the benefit of the petroleum refinery. This



21 formula shall apply separately to the distribution of
allow-



22 ances allocated pursuant to section 771(a)(4), including



23 for petroleum refiners and small business refiners.



24 ‘‘SEC. 776. CONSUMER PROTECTION.



25 ‘‘(a) CONSUMER REBATES.— 637



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1 ‘‘(1) ESTABLISHMENT OF FUND.—There is es-



2 tablished in the Treasury a separate account, to be



3 known as the ‘Consumer Rebate Fund’).



4 ‘‘(2) AVAILABILITY OF AMOUNTS.—All amounts



5 deposited in the Consumer Rebate Fund shall be



6 available without further appropriation or fiscal year



7 limitation.



8 ‘‘(3) DISTRIBUTION OF AMOUNTS.—Beginning



9 in 2026, for each year after deposits are made in the



10 Consumer Rebate Fund pursuant to section



11 771(b)(2)(A), the President shall use the funds in



12 accordance with Federal statutory authority to pro-



13 vide relief to consumers and others affected by the



14 enactment of the Clean Energy Jobs and American



15 Power Act (and amendments made by that Act).



16 ‘‘(b) ENERGY REFUND PROGRAM.—



17 ‘‘(1) ESTABLISHMENT OF FUND.—There is es-



18 tablished in the Treasury a separate account, to be



19 known as the ‘Energy Refund Account’).



20 ‘‘(2) AVAILABILITY OF AMOUNTS.—All amounts



21 deposited in the Energy Refund Account shall be



22 available without further appropriation or fiscal year



23 limitation.



24 ‘‘(3) DISTRIBUTION OF AMOUNTS.—For each



25 year after deposits are made to the Energy Refund 638



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1 Account pursuant to section 771(b)(2)(B), the



2 President shall use the funds in accordance with



3 Federal statutory authority to offset energy cost im-



4 pacts on low- and moderate-income households.



5 ‘‘SEC. 777. EXCHANGE FOR STATE-ISSUED ALLOWANCES.



6 ‘‘(a) IN GENERAL.—Not later than 1 year after the



7 date of enactment of this title, the Administrator shall



8 issue regulations allowing any person in the United States



9 to exchange greenhouse gas emission allowances issued be-



10 fore the later of December 31, 2011, or the date that is



11 9 months after the first auction under section 778, by
the



12 State of California or for the Regional Greenhouse Gas



13 Initiative, or the Western Climate Initiative (in this
sec-



14 tion referred to as ‘State allowances’) for emission
allow-



15 ances established by the Administrator under section



16 721(a).



17 ‘‘(b) REGULATIONS.—Regulations issued under sub-



18 section (a) shall—



19 ‘‘(1) provide that a person exchanging State al-



20 lowances under this section receive emission allow-



21 ances established under section 721(a) in the



22 amount that is sufficient to compensate for the cost



23 of obtaining and holding such State allowances;



24 ‘‘(2) establish a deadline by which persons must



25 exchange the State allowances; 639



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1 ‘‘(3) provide that the Federal emission allow-



2 ances disbursed pursuant to this section shall be de-



3 ducted from the allowances to be auctioned pursuant



4 to section 771(b); and



5 ‘‘(4) require that, once exchanged, the credit or



6 other instrument be retired for purposes of use



7 under the program by or for which it was originally



8 issued.



9 ‘‘(c) COST OF OBTAINING STATE ALLOWANCE.—For



10 purposes of this section, the cost of obtaining a State
al-



11 lowance shall be the average auction price, for emission



12 allowances issued in the year in which the State
allowance



13 was issued, under the program under which the State al-



14 lowance was issued.



15 ‘‘SEC. 778. AUCTION PROCEDURES.



16 ‘‘(a) IN GENERAL.—To the extent that auctions of



17 emission allowances by the Administrator are authorized



18 by this part, such auctions shall be carried out pursuant



19 to this section and the regulations established
hereunder.



20 ‘‘(b) INITIAL REGULATIONS.—Not later than 12



21 months after the date of enactment of this title, the Ad-



22 ministrator, in consultation with other agencies, as
appro-



23 priate, shall promulgate regulations governing the
auction



24 of allowances under this section. Such regulations shall
in-



25 clude the following requirements: 640



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1 ‘‘(1) FREQUENCY; 
FIRST AUCTION.—Auctions



2 shall be held four times per year at regular intervals,



3 with the first auction to be held no later than March



4 31, 2011.



5 ‘‘(2) AUCTION SCHEDULE; 
CURRENT AND FU-



6 TURE VINTAGES.—The Administrator shall, at each



7 quarterly auction under this section, offer for sale



8 both a portion of the allowances with the same vin-



9 tage year as the year in which the auction is being



10 conducted and a portion of the allowances with vin-



11 tage years from future years. The preceding sen-



12 tence shall not apply to auctions held before 2012,



13 during which period, by necessity, the Administrator



14 shall auction only allowances with a vintage year



15 that is later than the year in which the auction is



16 held. Beginning with the first auction and at each



17 quarterly auction held thereafter, the Administrator



18 may offer for sale allowances with vintage years of



19 up to 4 years after the year in which the auction is



20 being conducted.



21 ‘‘(3) AUCTION FORMAT.—Auctions shall follow



22 a single-round, sealed-bid, uniform price format.



23 ‘‘(4) PARTICIPATION; FINANCIAL ASSURANCE.—



24 Auctions shall be open to any person, except that



25 the Administrator may establish financial assurance 641



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1 requirements to ensure that auction participants can



2 and will perform on their bids.



3 ‘‘(5) DISCLOSURE OF BENEFICIAL OWNER-



4 SHIP.—Each bidder in the auction shall be required



5 to disclose the person or entity sponsoring or bene-



6 fitting from the bidder’s participation in the auction



7 if such person or entity is, in whole or in part, other



8 than the bidder.



9 ‘‘(6) PURCHASE LIMITS.—No person may, di-



10 rectly or in concert with another participant, pur-



11 chase more than 5 percent of the allowances offered



12 for sale at any quarterly auction.



13 ‘‘(7) PUBLICATION OF INFORMATION.—After



14 the auction, the Administrator shall, in a timely



15 fashion, publish the identities of winning bidders,



16 the quantity of allowances obtained by each winning



17 bidder, and the auction clearing price.



18 ‘‘(8) OTHER REQUIREMENTS.—The Adminis-



19 trator may include in the regulations such other re-



20 quirements or provisions as the Administrator, in



21 consultation with other agencies, as appropriate,



22 considers appropriate to promote effective, efficient,



23 transparent, and fair administration of auctions



24 under this section. 642



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1 ‘‘(c) REVISION OF REGULATIONS.—The Adminis-



2 trator may, in consultation with other agencies, as appro-



3 priate, at any time, revise the initial regulations
promul-



4 gated under subsection (b) by promulgating new regula-



5 tions. Such revised regulations need not meet the require-



6 ments identified in subsection (b) if the Administrator
de-



7 termines that an alternative auction design would be more



8 effective, taking into account factors including costs of
ad-



9 ministration, transparency, fairness, and risks of
collusion



10 or manipulation. In determining whether and how to re-



11 vise the initial regulations under this subsection, the
Ad-



12 ministrator shall not consider maximization of revenues
to



13 the Federal Government.



14 ‘‘(d) RESERVE AUCTION PRICE.—The minimum re-



15 serve auction price shall be $10 (in constant 2005
dollars)



16 for auctions occurring in 2012. The minimum reserve



17 price for auctions occurring in years after 2012 shall be



18 the minimum reserve auction price for the previous year



19 increased by 5 percent plus the rate of inflation (as
meas-



20 ured by the Consumer Price Index for all urban con-



21 sumers).



22 ‘‘(e) DELEGATION OR CONTRACT.—Pursuant to reg-



23 ulations under this section, the Administrator may by
del-



24 egation or contract provide for the conduct of auctions



25 under the Administrator’s supervision by other depart-643



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1 ments or agencies of the Federal Government or by non-



2 governmental agencies, groups, or organizations.



3 ‘‘(f) SMALL BUSINESS REFINER RESERVE.—The Ad-



4 ministrator shall, in accordance with this subsection,
issue



5 regulations setting aside a specified number of allowances,



6 as determined by the Administrator, that small business



7 refiners may purchase at the average auction price and



8 may use to demonstrate compliance pursuant to section



9 722. These regulations shall provide the following:



10 ‘‘(1) ALLOWED PURCHASES.—From January 1



11 of the calendar year that matches the vintage year



12 for which allowances have been placed in the reserve,



13 through January 14 of the following year, small



14 business refiners (as defined in section 775(b)) may



15 purchase allowances from this reserve at the price



16 determined pursuant to paragraph (2).



17 ‘‘(2) PRICE.—The price for allowances pur-



18 chased from this reserve shall be the average auction



19 price for allowances of the same vintage year pur-



20 chased at auctions conducted pursuant to this sec-



21 tion during the 12 months preceding the purchase of



22 the allowances.



23 ‘‘(3) USE OF ALLOWANCES.—Allowances pur-



24 chased from this reserve shall only be used by the



25 purchaser to demonstrate compliance pursuant to 644



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1 section 722 for attributable greenhouse gas emis-



2 sions in the calendar year that matches the vintage



3 year of the purchased allowance. Allowances pur-



4 chased from this reserve may not be banked, traded



5 or borrowed.



6 ‘‘(4) LIMITATIONS ON PURCHASE AMOUNT.—



7 The Administrator, by regulation adopted after pub-



8 lic notice and an opportunity for comment, shall es-



9 tablish procedures to distribute the ability to pur-



10 chase allowances from the reserve fairly among all



11 small business refiners interested in purchasing al-



12 lowances from this reserve so as to address the po-



13 tential that requests to purchase allowances exceed



14 the number of allowances available in the reserve.



15 This regulation may place limits on the number of



16 allowances a small business refiner may purchase



17 from the reserve.



18 ‘‘(5) UNSOLD ALLOWANCES.—Vintage year al-



19 lowances not sold from the reserve on or before Jan-



20 uary 15 of the calendar year following the vintage



21 year shall be sold at an auction conducted pursuant



22 to this section no later than March 31 of the cal-



23 endar year following the vintage year. If significantly



24 more allowances are being placed in the reserve than



25 are being purchased from the reserve several years 645



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1 in a row, the Administrator may adjust either the



2 percent of allowances placed in the reserve or the



3 date by which allowances may be purchased from the



4 reserve.



5 ‘‘SEC. 779. AUCTIONING ALLOWANCES FOR OTHER ENTI-



6 TIES.



7 ‘‘(a) CONSIGNMENT.—Any entity holding emission al-



8 lowances or compensatory allowances may request that the



9 Administrator auction, pursuant to section 778, the allow-



10 ances on consignment.



11 ‘‘(b) PRICING.—When the Administrator acts under



12 this section as the agent of an entity in possession of
emis-



13 sion allowances, the Administrator is not obligated to ob-



14 tain the highest price possible for the emission
allowances,



15 and instead shall auction consignment allowances in the



16 same manner and pursuant to the same rules as auctions



17 of other allowances under section 778. The Administrator



18 may permit the entity offering the allowance for sale to



19 condition the sale of its allowances pursuant to this
section



20 on a minimum reserve price that is different than the re-



21 serve auction price set pursuant to section 778(d).



22 ‘‘(c) PROCEEDS.—For emission allowances and com-



23 pensatory allowances auctioned pursuant to this section,



24 notwithstanding section 3302 of title 31, United States



25 Code, or any other provision of law, within 90 days of
re-646



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1 ceipt, the United States shall transfer the proceeds from



2 the auction to the entity which held the allowances auc-



3 tioned. No funds transferred from a purchaser to a seller



4 of emission allowances or compensatory allowances under



5 this subsection shall be held by any officer or employee



6 of the United States or treated for any purpose as public



7 monies.



8 ‘‘(d) REGULATIONS.—The Administrator shall issue



9 regulations within 24 months after the date of enactment



10 of this title to implement this section.



11 ‘‘SEC. 780. COMMERCIAL DEPLOYMENT OF CARBON CAP-



12 TURE AND SEQUESTRATION TECHNOLOGIES.



13 ‘‘(a) DEFINITIONS.—In this section:



14 ‘‘(1) CARBON CAPTURE AND STORAGE.—The



15 term ‘carbon capture and sequestration’ shall—



16 ‘‘(A) have such term as Administrator



17 shall determine by regulation; and



18 ‘‘(B) include—



19 ‘‘(i) geological sequestration; and



20 ‘‘(ii) conversion of captured carbon di-



21 oxide to a stable form that will safely and



22 permanently sequester the carbon dioxide.



23 ‘‘(2) QUALIFYING ELECTRIC GENERATING



24 UNIT.—The term ‘qualifying electric generating unit’



25 means an electric utility unit that— 647



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1 ‘‘(A) derives at least 50 percent of the an-



2 nual fuel input of the unit from—



3 ‘‘(i) coal or waste coal;



4 ‘‘(ii) petroleum coke; or



5 ‘‘(iii) any combination of those 2



6 fuels; and



7 ‘‘(B)(i) has a nameplate capacity of 200



8 megawatts or more; or



9 ‘‘(ii) in the case of retrofit applications, the



10 carbon capture and sequestration technology is



11 applied to the flue gas or fuel gas stream from



12 at least 200 megawatts of the total nameplate



13 generating capacity of the unit.



14 ‘‘(3) QUALIFYING INDUSTRIAL SOURCE.—The



15 term ‘qualifying industrial source’ means a source



16 that—



17 ‘‘(A) is not a qualifying electric generating



18 unit;



19 ‘‘(B) absent carbon capture and sequestra-



20 tion, would emit greater than 50,000 tons per



21 year of carbon dioxide; and



22 ‘‘(C) does not produce a liquid transpor-



23 tation fuel from a solid fossil-based feedstock.



24 ‘‘(4) TREATED GENERATING CAPACITY.— 648



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1 ‘‘(A) IN GENERAL.—The term ‘treated



2 generating capacity’ means the portion of the



3 total generating capacity of an electric gener-



4 ating unit (or industrial source, measured by



5 such method as the Administrator may des-



6 ignate to be equivalent to the calculation under



7 subparagraph (B)) for which the flue gas or



8 fuel gas is treated by the carbon capture and



9 sequestration technology.



10 ‘‘(B) CALCULATION.—In determining the



11 treated portion of flue gas or fuel gas of an



12 electric generating unit under subparagraph



13 (A), the Administrator shall multiply the name-



14 plate capacity of the unit by the ratio that—



15 ‘‘(i) the mass of flue gas or fuel gas



16 that is treated by the carbon capture and



17 sequestration technology; bears to



18 ‘‘(ii) the total mass of the flue gas or



19 fuel gas that is produced when the unit is



20 operating at maximum capacity.



21 ‘‘(b) REGULATIONS.—Not later than 2 years after



22 the date of enactment of this title, the Administrator
shall



23 promulgate regulations providing for the distribution of



24 emission allowances allocated under section 771(a)(6),



25 pursuant to the requirements of this section, to support
649



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1 the commercial deployment of carbon capture and seques-



2 tration technologies in electric power generation and in-



3 dustrial operations.



4 ‘‘(c) ELIGIBILITY CRITERIA AND METHOD OF DIS-



5 TRIBUTION.—



6 ‘‘(1) ELIGIBILITY.—For an owner or operator



7 of a project to be eligible to receive emission allow-



8 ances under this section, the project shall—



9 ‘‘(A) implement carbon capture and se-



10 questration technology—



11 ‘‘(i) at a qualifying electric generating



12 unit that, upon implementation of the car-



13 bon capture and sequestration technology,



14 will achieve an emission limitation that is



15 at least a 50-percent reduction in emis-



16 sions of the carbon dioxide produced by—



17 ‘‘(I) the unit, measured on an



18 annual basis, as determined by the



19 Administrator; or



20 ‘‘(II) in the case of retrofit appli-



21 cations described in subsection



22 (a)(2)(B)(ii), the treated portion of



23 flue gas from the unit, measured on



24 an annual basis, as determined by the



25 Administrator; or 650



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1 ‘‘(ii) at a qualifying industrial source



2 that, upon implementation, will achieve an



3 emission limitation that is at least a 50-



4 percent reduction in emissions of the car-



5 bon dioxide produced by the emission



6 point, measured on an annual basis, as de-



7 termined by the Administrator;



8 ‘‘(B)(i) geologically sequester carbon diox-



9 ide at a site that meets all applicable permitting



10 and certification requirements for geological se-



11 questration; or



12 ‘‘(ii) pursuant to such requirements as the



13 Administrator may prescribe by regulation, con-



14 vert captured carbon dioxide to a stable form



15 that will safely and permanently sequester the



16 carbon dioxide;



17 ‘‘(C) meet all other applicable State, tribal,



18 and Federal permitting requirements; and



19 ‘‘(D) be located in the United States.



20 ‘‘(2) METHOD OF DISTRIBUTION.—



21 ‘‘(A) PERIOD.—The Administrator shall



22 distribute emission allowances allocated under



23 section 771(a)(6) to eligible projects for each of



24 the first 10 calendar years for which each eligi-



25 ble project is in commercial operation. 651



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1 ‘‘(B) BONUS ALLOWANCE FORMULA FOR



2 ELECTRIC GENERATING UNITS.—



3 ‘‘(i) PHASE I DISTRIBUTION.—For



4 each project that is certified under sub-



5 section (h), the quantity of emission allow-



6 ances that the Administrator shall dis-



7 tribute for a calendar year to the owner or



8 operator of the eligible project shall be



9 equal to the quotient obtained by divid-



10 ing—



11 ‘‘(I) the product obtained by mul-



12 tiplying—



13 ‘‘(aa) the number of metric



14 tons of carbon dioxide emissions



15 avoided through capture and se-



16 questration of emissions by the



17 project for a particular year, as



18 determined pursuant to such



19 methodology as the Adminis-



20 trator shall prescribe by regula-



21 tion; and



22 ‘‘(bb) a bonus allowance



23 value that is assigned to the



24 project under subsection (d)(2);



25 by 652



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1 ‘‘(II) the average fair market



2 value of an emission allowance during



3 the calendar year preceding the year



4 during which the project captured and



5 sequestered the carbon dioxide emis-



6 sions.



7 ‘‘(ii) PHASE II DISTRIBUTION.—For



8 each project that qualifies under subsection



9 (e), the quantity of emission allowances



10 that the Administrator shall distribute for



11 a calendar year to the owner or operator of



12 the eligible project shall be determined



13 through—



14 ‘‘(I) reverse auction, as pre-



15 scribed by regulation under subsection



16 (e)(3); or



17 ‘‘(II) if the Administrator decides



18 not to distribute allowances through a



19 reverse auction, an alternate distribu-



20 tion method established by regulation



21 under subsection (e)(4).



22 ‘‘(C) FORMULA FOR INDUSTRIAL



23 SOURCES.—For each project that qualifies



24 under subsection (g), the quantity of emission



25 allowances that the Administrator shall dis-653



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1 tribute for a calendar year to the owner or op-



2 erator of the eligible project shall be determined



3 in accordance with subsection (g)(2).



4 ‘‘(D) CONSISTENCY.—The Administrator



5 shall develop a method of distribution for each



6 category of eligible projects under this para-



7 graph in a manner that is consistent with the



8 certification and distribution requirements



9 under subsection (h).



10 ‘‘(d) PHASE I DISTRIBUTION TO ELECTRIC GENER-



11 ATING UNITS.—



12 ‘‘(1) APPLICABILITY.—



13 ‘‘(A) IN GENERAL.—Subject to subpara-



14 graph (B), this subsection shall apply to



15 projects that are undertaken at qualifying elec-



16 tric generating units that the Administrator de-



17 termines to be eligible to receive emission allow-



18 ances under this section.



19 ‘‘(B) CAPACITY.—The total cumulative



20 generating capacity of the projects described in



21 subparagraph (A) shall be equal to approxi-



22 mately 20 gigawatts of the treated generating



23 capacity.



24 ‘‘(2) BONUS ALLOWANCE VALUES.—



25 ‘‘(A) FIRST TRANCHE.— 654



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1 ‘‘(i) IN GENERAL.—The first tranche



2 shall include the first 10 gigawatts of



3 treated generating capacity undertaken at



4 qualifying electric generating units that re-



5 ceive emission allowances under this sec-



6 tion.



7 ‘‘(ii) CERTAIN UNITS.—For an eligible



8 project achieving capture and sequestration



9 of 90 percent or more of the carbon diox-



10 ide that otherwise would be emitted by the



11 unit, the bonus allowance value shall be



12 $96 per ton of carbon dioxide emissions



13 avoided through the use of capture and se-



14 questration.



15 ‘‘(iii) BONUS ALLOWANCE VALUE.—



16 The Administrator shall establish, by regu-



17 lation, a bonus allowance value for each



18 rate of capture and sequestration achieved



19 by an eligible project—



20 ‘‘(I) beginning at a minimum of



21 $50 per ton for a 50-percent rate; and



22 ‘‘(II) varying in direct proportion



23 with increasing rates of capture and



24 sequestration up to $96 per ton for an



25 90-percent rate. 655



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1 ‘‘(B) SECOND TRANCHE.—



2 ‘‘(i) IN GENERAL.—The second



3 tranche shall include the second 10



4 gigawatts of treated generating capacity



5 undertaken at qualifying electric gener-



6 ating units that receive emission allow-



7 ances under this section.



8 ‘‘(ii) CERTAIN UNITS.—For an eligible



9 project achieving the capture and seques-



10 tration of 90 percent or more of the carbon



11 dioxide that otherwise would be emitted by



12 the eligible project, the bonus allowance



13 value shall be $85 per ton of carbon diox-



14 ide emissions avoided through the use of



15 capture and sequestration.



16 ‘‘(iii) BONUS ALLOWANCE VALUE.—



17 The Administrator shall establish, by regu-



18 lation, a bonus allowance value for each



19 rate of capture and sequestration achieved



20 by an eligible project—



21 ‘‘(I) beginning at a minimum of



22 $50 per ton for a 50-percent rate; and



23 ‘‘(II) varying in direct proportion



24 with increasing rates of capture and 656



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1 sequestration up to $85 per ton for a



2 90-percent rate.



3 ‘‘(C) INCREASE IN BONUS ALLOWANCE



4 VALUE.—For an eligible project that com-



5 mences commercial operation by not later than



6 January 1, 2017, and that meets the eligibility



7 criteria under subsection (c), the otherwise-ap-



8 plicable bonus allowance value under this para-



9 graph shall be increased by $10, if the owner



10 or operator of the eligible project submits to the



11 Administrator by not later than January 1,



12 2012, a notification of the intent to implement



13 carbon capture and sequestration technology at



14 a qualifying electric generating unit in accord-



15 ance with subsection (c).



16 ‘‘(D) REDUCTION.—



17 ‘‘(i) IN GENERAL.—For a carbon cap-



18 ture and sequestration project sequestering



19 in a geological formation for purposes of



20 enhanced hydrocarbon recovery, the Ad-



21 ministrator, by regulation, shall reduce the



22 applicable bonus allowance value under



23 this paragraph to reflect the lower net cost



24 of the project, as compared to sequestra-657



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1 tion into geological formations solely for



2 purposes of sequestration.



3 ‘‘(ii) ASSESSMENT OF NET COST.—



4 For the purpose of this subparagraph, an



5 assessment of net cost of a project shall



6 account for the cost of the injection of car-



7 bon dioxide, or other method of enhanced



8 hydrocarbon recovery, that would have oth-



9 erwise been undertaken in the absence of



10 the carbon capture and sequestration



11 project under consideration.



12 ‘‘(E) ADJUSTMENTS.—The Administrator



13 shall annually adjust for monetary inflation the



14 bonus allowance values established under this



15 paragraph.



16 ‘‘(F) MEASUREMENT.—The Administrator



17 shall measure the tranches and capture levels



18 for assigning the bonus allowance values under



19 this subsection based on the treated generating



20 capacity of the qualifying electric generating



21 units and qualifying industrial sources that re-



22 ceive emission allowances under this subsection.



23 ‘‘(G) AVERAGE FAIR MARKET VALUE.—



24 ‘‘(i) IN GENERAL.—The Administrator



25 and the Secretary of Energy may jointly 658



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1 determine that the average fair market



2 value for emission allowances or the bonus



3 allowances have been too low or too high to



4 achieve efficient and cost-effective commer-



5 cial deployment of carbon capture and se-



6 questration technology in a given calendar



7 year.



8 ‘‘(ii) ACTION ON DETERMINATION.—



9 On making a determination under clause



10 (i), the Administrator may—



11 ‘‘(I) promulgate regulations to



12 adjust the bonus allowance value



13 under this paragraph; or



14 ‘‘(II) distribute an appropriate



15 quantity of emission allowances allo-



16 cated under section 771(a)(6) from



17 any future vintage year.



18 ‘‘(e) PHASE II DISTRIBUTION TO ELECTRIC GENER-



19 ATING UNITS.—



20 ‘‘(1) APPLICATION.—This subsection shall



21 apply only to the distribution of emission allowances



22 for carbon capture and sequestration projects under-



23 taken at qualifying electric generating units and



24 qualifying industrial sources after the treated gener-659



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1 ating capacity threshold identified under subsection



2 (d)(1) is reached.



3 ‘‘(2) REGULATIONS.—Not later than 2 years



4 before the date on which the capacity threshold iden-



5 tified in subsection (d)(1) is projected to be reached,



6 the Administrator shall promulgate regulations to



7 govern the distribution of emission allowances to the



8 owners or operators of eligible projects under this



9 subsection.



10 ‘‘(3) REVERSE AUCTIONS.—



11 ‘‘(A) IN GENERAL.—Except as provided in



12 paragraph (4), the regulations promulgated



13 pursuant to paragraph (2) shall provide for the



14 distribution of emission allowances to the own-



15 ers or operators of eligible projects under this



16 subsection through at least 2 reverse auctions,



17 each of which shall be held not less frequently



18 than once each calendar year.



19 ‘‘(B) REQUIREMENTS.—



20 ‘‘(i) PROJECTS AT INDUSTRIAL



21 SOURCES.—The Administrator shall annu-



22 ally establish a reverse auction for projects



23 at industrial sources, which may not par-



24 ticipate in other auctions. 660



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1 ‘‘(ii) OTHER AUCTIONS.—The Admin-



2 istrator may establish a separate auction



3 for each of not more than 5 different



4 project categories, as defined based on—



5 ‘‘(I) coal type;



6 ‘‘(II) capture technology;



7 ‘‘(III) geological formation type;



8 ‘‘(IV) new unit versus retrofit ap-



9 plication;



10 ‘‘(V) such other factors as the



11 Administrator may prescribe; or



12 ‘‘(VI) any combination of the fac-



13 tors described in subclauses (I)



14 through (V).



15 ‘‘(iii) EFFICIENT DISTRIBUTION.—



16 The Administrator shall establish proce-



17 dures for the auction of emission allow-



18 ances under this subparagraph to ensure



19 that the establishment of separate auctions



20 for different project categories will not un-



21 duly impede the efficient and expeditious



22 distribution of emission allowances to eligi-



23 ble projects under this subsection.



24 ‘‘(iv) MINIMUM RATES.—The Admin-



25 istrator may establish appropriate min-661



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1 imum rates of capture and sequestration



2 for the treated generating capacity of a



3 project in implementing this subparagraph.



4 ‘‘(C) AUCTION PROCESS.—At each reverse



5 auction under this paragraph—



6 ‘‘(i) the Administrator shall solicit



7 bids from eligible projects;



8 ‘‘(ii) owners or operators of eligible



9 projects participating in the auction shall



10 submit a bid, including the desired level of



11 carbon dioxide sequestration incentive per



12 ton and the estimated quantity of carbon



13 dioxide that the project will permanently



14 sequester during a 10-year period; and



15 ‘‘(iii) the Administrator shall select



16 bids within each auction for the sequestra-



17 tion quantity submitted, beginning with



18 the eligible project for which the bid is



19 submitted for the lowest level of sequestra-



20 tion incentive on a per-ton basis and meet-



21 ing such other requirements as the Admin-



22 istrator may specify, until the amounts



23 available for the reverse auction are com-



24 mitted. 662



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1 ‘‘(D) FORM OF DISTRIBUTION.—The Ad-



2 ministrator shall distribute emission allowances



3 to the owners or operators of eligible projects



4 selected through a reverse auction under this



5 paragraph pursuant to a formula equivalent to



6 the formula contained in subsection (c)(2)(B),



7 except that the bonus allowance value that is



8 bid by the applicable entity shall be substituted



9 for the bonus allowance values described in sub-



10 section (c)(2).



11 ‘‘(4) ALTERNATIVE DISTRIBUTION METHOD.—



12 ‘‘(A) IN GENERAL.—If the Administrator



13 determines that a reverse auction will not result



14 in efficient and cost-effective commercial de-



15 ployment of carbon capture and sequestration



16 technologies, the Administrator, pursuant to



17 regulations under paragraph (2) or (5), shall



18 prescribe a schedule for the provision of bonus



19 allowances to the owners or operators of eligible



20 projects under this subsection, in accordance



21 with the requirements of this paragraph.



22 ‘‘(B) MULTIPLE TRANCHES.—The Admin-



23 istrator shall divide emission allowances avail-



24 able for distribution to the owners or operators 663



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1 of eligible projects into a series of tranches,



2 each of which—



3 ‘‘(i) shall support the deployment of a



4 specified quantity of cumulative electric



5 generating capacity using carbon capture



6 and sequestration technology; and



7 ‘‘(ii) shall not be greater than 10



8 gigawatts of treated generating capacity.



9 ‘‘(C) METHOD OF DISTRIBUTION.—The



10 Administrator shall distribute emission allow-



11 ances within each tranche, on a first-come,



12 first-served basis—



13 ‘‘(i) based on the date of full-scale op-



14 eration of capture and sequestration tech-



15 nology; and



16 ‘‘(ii) pursuant to a formula that—



17 ‘‘(I) is similar to the formula



18 contained in subsection (c)(2)(C), ex-



19 cept that the Administrator may pre-



20 scribe bonus allowance values dif-



21 ferent than those described in sub-



22 section (c)(2) based on the criteria es-



23 tablished under subparagraph (E);



24 and 664



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1 ‘‘(II) establishes the number of



2 emission allowances to be distributed



3 per ton of carbon dioxide sequestered



4 by the project.



5 ‘‘(D) REQUIREMENTS.—For each tranche



6 established pursuant to subparagraph (B), the



7 Administrator shall establish a schedule for dis-



8 tributing emission allowances that—



9 ‘‘(i) is based on a sliding scale that



10 provides higher bonus allowance values for



11 projects achieving higher rates of capture



12 and sequestration for the treated genera-



13 tion capacity at the unit;



14 ‘‘(ii) for each capture and sequestra-



15 tion rate, establishes a bonus allowance



16 value that is lower than that established



17 for the applicable rate for the previous



18 tranche (or, in the case of the first



19 tranche, than that established for the ap-



20 plicable rate under subsection (d)(2)); and



21 ‘‘(iii) may establish different bonus al-



22 lowance levels for not more than 5 dif-



23 ferent project categories, as defined based



24 on—



25 ‘‘(I) coal type; 665



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1 ‘‘(II) capture and transportation



2 technology;



3 ‘‘(III) geological formation type;



4 ‘‘(IV) new unit versus retrofit ap-



5 plication;



6 ‘‘(V) such other factors as the



7 Administrator may prescribe; or



8 ‘‘(VI) any combination of the fac-



9 tors described in subclauses (I)



10 through (V).



11 ‘‘(E) CRITERIA FOR ESTABLISHING BONUS



12 ALLOWANCE VALUES.—In establishing bonus al-



13 lowance values under this paragraph, the Ad-



14 ministrator shall seek to cover not more than



15 the reasonable incremental capital and oper-



16 ating costs of a project that are attributable to



17 implementation of carbon capture, transpor-



18 tation, and sequestration technologies, taking



19 into account—



20 ‘‘(i) the reduced cost of compliance



21 with section 722;



22 ‘‘(ii) the reduced cost associated with



23 sequestering in a geological formation for



24 purposes of enhanced hydrocarbon recov-



25 ery, as compared to sequestration into geo-666



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1 logical formations solely for purposes of se-



2 questration;



3 ‘‘(iii) the relevant factors defining the



4 project category; and



5 ‘‘(iv) such other factors as the Admin-



6 istrator determines to be appropriate.



7 ‘‘(5) REVISION OF REGULATIONS.—The Admin-



8 istrator shall review and, as appropriate, revise the



9 applicable regulations under this subsection not less



10 frequently than once every 8 years.



11 ‘‘(f) LIMITS FOR CERTAIN ELECTRIC GENERATING



12 UNITS.—



13 ‘‘(1) DEFINITIONS.—In this subsection, the



14 terms ‘covered EGU’ and ‘initially permitted’ have



15 the meanings given those terms in section 812.



16 ‘‘(2) COVERED EGUS INITIALLY PERMITTED



17 FROM 2009 THROUGH 2014.—For a covered EGU



18 that is initially permitted during the period begin-



19 ning on January 1, 2009, and ending on December



20 31, 2014, the Administrator shall reduce the quan-



21 tity of emission allowances that the owner or oper-



22 ator of the covered EGU would otherwise be eligible



23 to receive under this section as follows:



24 ‘‘(A) In the case of a covered EGU com-



25 mencing operation on or before January 1, 667



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1 2019, if the date in clause (ii)(I) is earlier than



2 the date in clause (ii)(II), by the product ob-



3 tained by multiplying—



4 ‘‘(i) 20 percent; and



5 ‘‘(ii) the number of years, if any, that



6 have elapsed between—



7 ‘‘(I) the earlier of—



8 ‘‘(aa) January 1, 2020; and



9 ‘‘(bb) the date that is 5



10 years after the commencement of



11 operation of the covered EGU;



12 and



13 ‘‘(II) the first year that the cov-



14 ered EGU achieves (and thereafter



15 maintains) an emission limitation that



16 is at least a 50-percent reduction in



17 emissions of carbon dioxide produced



18 by the unit, measured on an annual



19 basis, as determined in accordance



20 with section 812(b)(2).



21 ‘‘(B) In the case of a covered EGU com-



22 mencing operation after January 1, 2019, by



23 the product obtained by multiplying—



24 ‘‘(i) 20 percent; and 668



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1 ‘‘(ii) the number of years, if any, that



2 have elapsed between—



3 ‘‘(I) the commencement of oper-



4 ation of the covered EGU; and



5 ‘‘(II) the first year that the cov-



6 ered EGU achieves (and thereafter



7 maintains) an emission limitation that



8 is at least a 50-percent reduction in



9 emissions of carbon dioxide produced



10 by the unit, measured on an annual



11 basis, as determined in accordance



12 with section 812(b)(2).



13 ‘‘(3) COVERED EGUS INITIALLY PERMITTED



14 FROM 2015 THROUGH 2019.—The owner or operator



15 of a covered EGU that is initially permitted during



16 the period beginning on January 1, 2015, and end-



17 ing on December 31, 2019, shall be ineligible to re-



18 ceive emission allowances under this section if the



19 covered EGU, on commencement of operations (and



20 thereafter), does not achieve and maintain an emis-



21 sion limitation that is at least a 50-percent reduction



22 in emissions of carbon dioxide produced by the cov-



23 ered EGU, measured on an annual basis, as deter-



24 mined in accordance with section 812(b)(2).



25 ‘‘(g) INDUSTRIAL SOURCES.— 669



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1 ‘‘(1) EMISSION ALLOWANCES.—The Adminis-



2 trator—



3 ‘‘(A) may distribute not more than 15 per-



4 cent of the emission allowances allocated under



5 section 771(a)(6) for any vintage year to the



6 owners or operators of eligible industrial



7 sources to support the commercial-scale deploy-



8 ment of carbon capture and sequestration tech-



9 nologies at those sources; and



10 ‘‘(B) notwithstanding any other provision



11 of law—



12 ‘‘(i) may distribute to eligible indus-



13 trial sources not more than 15 percent of



14 the emission allowances allocated under



15 section 771(a)(6) for any vintage year in



16 the second tranche of phase I; but



17 ‘‘(ii) may not distribute those allow-



18 ances for any vintage year in the first



19 tranche of phase I.



20 ‘‘(2) DISTRIBUTION.—



21 ‘‘(A) IN GENERAL.—The Administrator



22 shall prescribe, by regulation, requirements for



23 the distribution of emission allowances to the



24 owners or operators of industrial sources under



25 this subsection, based on a bonus allowance for-670



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1 mula that awards emission allowances to quali-



2 fying projects on the basis of tons of carbon di-



3 oxide captured and permanently sequestered.



4 ‘‘(B) METHOD.—The Administrator may



5 provide for the distribution of emission allow-



6 ances pursuant to—



7 ‘‘(i) a reverse auction method similar



8 to the method described in subsection



9 (e)(3), including the use of separate auc-



10 tions for different project categories; or



11 ‘‘(ii) an incentive schedule similar to



12 the schedule described in subsection (e)(4),



13 which shall ensure that incentives are es-



14 tablished so as to satisfy the requirement



15 described in subsection (e)(4)(E).



16 ‘‘(3) REVISION OF REGULATIONS.—The Admin-



17 istrator shall review and, as appropriate, revise the



18 regulations under this subsection not less frequently



19 than once every 8 years.



20 ‘‘(h) CERTIFICATION AND DISTRIBUTION.—



21 ‘‘(1) CERTIFICATION.—



22 ‘‘(A) REQUEST.—



23 ‘‘(i) PHASE I; 
ALTERNATIVE DIS-



24 TRIBUTION METHOD.—In the case of a



25 qualifying project that is eligible to receive 671



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1 allowances under phase I or under sub-



2 section (e)(4), the owner or operator of the



3 planned project may request from the Ad-



4 ministrator a certification that the project



5 is eligible to receive emission allowances



6 under this section.



7 ‘‘(ii) REVERSE AUCTIONS.—In the



8 case of a qualifying project that wins a re-



9 verse auction under subsection (e) or (g),



10 within a reasonably brief period following



11 completion of the auction (as specified by



12 the Administrator), the owner or operator



13 of the qualifying project shall request from



14 the Administrator a certification that the



15 project is eligible to receive emission allow-



16 ances under this section.



17 ‘‘(iii) ELIGIBLE PROJECTS.—Eligible



18 projects in phase I and phase II may re-



19 ceive certification under this paragraph.



20 ‘‘(iv) ISSUANCE.—The Administrator



21 shall issue a certification described in this



22 subparagraph if the owner or operator



23 demonstrates a commitment to construct



24 and operate a project that satisfies— 672



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1 ‘‘(I) the eligibility criteria of sub-



2 section (c); and



3 ‘‘(II) the requirements of this



4 subsection.



5 ‘‘(B) DOCUMENTATION.—The Adminis-



6 trator shall prescribe, by regulation, the docu-



7 mentation necessary for making a determina-



8 tion of project eligibility for the certification



9 under subparagraph (A), including—



10 ‘‘(i) technical information regarding



11 the capture and sequestration technology,



12 coal type, geological formation type (if ap-



13 plicable), and other relevant design fea-



14 tures of the project;



15 ‘‘(ii) the annual reductions in carbon



16 dioxide emissions that the capture and se-



17 questration technology is projected to



18 achieve during each of the first 10 years of



19 the project’s commercial operation; and



20 ‘‘(iii) a demonstration that the owner



21 or operator is committed to both con-



22 structing and operating the planned



23 project on a timeline marked by reasonable



24 capture and sequestration milestones, 673



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1 through the completion of 1 of the actions



2 specified in subparagraph (C)(iii).



3 ‘‘(C) COMMITMENT.—



4 ‘‘(i) IN GENERAL.—Subject to clause



5 (ii), the completion of any 1 of the quali-



6 fying actions specified under clause (iii)



7 shall constitute a commitment to construct



8 and operate a planned carbon capture and



9 sequestration project.



10 ‘‘(ii) CONDITION.—In the case of a



11 qualifying action specified in subclause (I)



12 or (II) of clause (iii), the completion of



13 such an action may be subject to a condi-



14 tion that the Administrator will issue a



15 certification under this paragraph for the



16 distribution of emission allowances to the



17 project.



18 ‘‘(iii) QUALIFYING ACTIONS.—Quali-



19 fying actions under this subparagraph



20 shall include—



21 ‘‘(I) the execution of—



22 ‘‘(aa) a commitment by



23 lenders or other appropriate enti-



24 ties to finance the project, which



25 may be subject to customary 674



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1 closing conditions that are associ-



2 ated with the execution of the



3 commitment; and



4 ‘‘(bb) a commitment by the



5 owner or operator of the project



6 to execute a surety bond in suffi-



7 cient amounts by not later than 2



8 years after the date on which the



9 Administrator issues the certifi-



10 cation for the project; or



11 ‘‘(II) an authorization by a State



12 regulatory authority to allow recovery,



13 from the retail customers of such elec-



14 tric utility, of the costs of the project



15 by a State-regulated electric utility



16 that plans to construct the project.



17 ‘‘(D) FAILURE TO REQUEST CERTIFI-



18 CATION.—



19 ‘‘(i) IN GENERAL.—An owner or oper-



20 ator may elect not to request a certifi-



21 cation on the eligibility of a planned



22 project under subparagraph (A) prior to



23 the commercial operation of the project.



24 ‘‘(ii) DETERMINATION BY ADMINIS-



25 TRATOR.—If an owner or operator elects 675



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1 not to request a certification under clause



2 (i), the Administrator shall make a deter-



3 mination regarding whether the project



4 satisfies the eligibility requirements of sub-



5 section (c) at the time that the Adminis-



6 trator makes a determination regarding



7 the annual distribution of emission allow-



8 ances under paragraph (3)(A).



9 ‘‘(2) RESERVATION OF EMISSION ALLOW-



10 ANCES.—



11 ‘‘(A) AMOUNT.—



12 ‘‘(i) IN GENERAL.—For each project



13 that receives a certification of eligibility



14 under paragraph (1), the Administrator



15 shall reserve on a first-come, first-served



16 basis a portion of the emission allowances



17 that are allocated for the deployment of



18 carbon capture and sequestration tech-



19 nology under section 771(a)(6).



20 ‘‘(ii) DETERMINATION.—The reserva-



21 tion of emission allowances for a particular



22 eligible project under this paragraph shall



23 be equal to the number of emission allow-



24 ances that the project is entitled to receive



25 under the applicable distribution method 676



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1 under this section upon commercial oper-



2 ation of the carbon capture and sequestra-



3 tion technology, as determined by the Ad-



4 ministrator based on—



5 ‘‘(I) the applicable bonus allow-



6 ance value;



7 ‘‘(II) the number of tons of car-



8 bon dioxide emissions projected to be



9 captured and sequestered each cal-



10 endar year under paragraph



11 (1)(B)(i)(II); and



12 ‘‘(III) a discount rate to account



13 for the monetary inflation that may



14 be expected to occur during each of



15 the relevant 10 calendar years, as de-



16 termined by the Administrator.



17 ‘‘(B) TERMINATION OF RESERVATION.—



18 ‘‘(i) IN GENERAL.—A reservation of



19 emission allowances for a particular project



20 under subparagraph (A) shall terminate if



21 the owner or operator fails to achieve rea-



22 sonable milestones for commencing con-



23 struction or commercial operation of the



24 project, as specified under paragraph



25 (1)(B)(i)(III). 677



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1 ‘‘(ii) REDUCED QUANTITY OF CARBON



2 DIOXIDE CAPTURED AND SEQUESTERED.—



3 If the quantity of carbon dioxide captured



4 and sequestered by a project on average



5 over 3 consecutive vintage years is less



6 than the quantity estimated for those vin-



7 tage years under subparagraph (A), the



8 reservation of emission allowances for the



9 project under subparagraph (A) shall be



10 reduced in future years by the difference



11 between—



12 ‘‘(I) the quantity of carbon diox-



13 ide captured and sequestered on aver-



14 age over the applicable 3 consecutive



15 years; and



16 ‘‘(II) the quantity estimated



17 under subparagraph (A) for the appli-



18 cable years.



19 ‘‘(iii) AVAILABILITY.—The Adminis-



20 trator shall immediately make available to



21 other eligible projects emission allowances



22 for which the Administrator has termi-



23 nated an emission allowance reservation



24 for a particular project under this subpara-



25 graph. 678



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1 ‘‘(3) DISTRIBUTION PROCESS.—



2 ‘‘(A) ANNUAL DISTRIBUTION.—The Ad-



3 ministrator shall distribute the emission allow-



4 ances to eligible projects on an annual basis.



5 ‘‘(B) BASIS.—The annual distribution of



6 emission allowances shall be based on the total



7 tons of carbon dioxide that the project annually



8 captures and sequesters during each of the first



9 10 years of commercial operation, in accordance



10 with subsection (c)(2).



11 ‘‘(C) TOTAL DISTRIBUTION AMOUNT.—The



12 total amount of emission allowances distributed



13 to an eligible project for each of the first 10



14 years of commercial operation may be greater



15 than, or less than, the quantity of emissions al-



16 lowances that the Administrator has reserved



17 for the eligible project under paragraph (2).



18 ‘‘(D) REPORTS.—



19 ‘‘(i) IN GENERAL.—Except as pro-



20 vided in subparagraph (B), the Adminis-



21 trator shall make each annual distribution



22 of emission allowances by not later than 90



23 days after the date on which the owner or



24 operator of a project submits to the Ad-



25 ministrator a report regarding the carbon 679



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1 dioxide emissions captured and sequestered



2 for a particular year by the project.



3 ‘‘(ii) REQUIREMENT.—A report under



4 subclause (I) shall be verified in accord-



5 ance with regulations to be promulgated by



6 the Administrator.



7 ‘‘(i) LIMITATIONS.—



8 ‘‘(1) IN GENERAL.—Emission allowances shall



9 be distributed under this section only for tons of car-



10 bon dioxide emissions that have already been cap-



11 tured and sequestered.



12 ‘‘(2) PERIOD.—A qualifying project may receive



13 annual emission allowances under this section only



14 for the first 10 years of operation.



15 ‘‘(3) CAPACITY.—



16 ‘‘(A) IN GENERAL.—Approximately 72



17 gigawatts of total cumulative treated generating



18 capacity may receive emission allowances under



19 this section.



20 ‘‘(B) ALLOWANCE SURPLUS.—On reaching



21 the cumulative capacity described in subpara-



22 graph (A), any emission allowances that are al-



23 located for carbon capture and sequestration



24 deployment under section 771(a)(6) and are not



25 yet obligated under this section shall be treated 680



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1 as emission allowances not designated for dis-



2 tribution for purposes of section 771(b)(2).



3 ‘‘(j) EXHAUSTION OF ACCOUNT AND ANNUAL ROLL-



4 OVER OF SURPLUS EMISSION ALLOWANCES.—



5 ‘‘(1) IN GENERAL.—In distributing emission al-



6 lowances under this section, the Administrator shall



7 ensure that eligible projects receive distributions of



8 emission allowances for the first 10 years of com-



9 mercial operation.



10 ‘‘(2) DIFFERENT VINTAGE YEARS.—



11 ‘‘(A) DETERMINATION.—If the Adminis-



12 trator determines that the emission allowances



13 allocated under section 771(a)(6) with a vintage



14 year that matches the year of distribution will



15 be exhausted once the estimated full 10-year



16 distributions will be provided to current eligible



17 participants, the Administrator shall provide to



18 new eligible projects emission allowances from



19 vintage years after the year of the distribution.



20 ‘‘(B) DIVERSITY FACTORS.—If the Admin-



21 istrator provides allowances to new eligible



22 projects under subparagraph (A), the Adminis-



23 trator shall promulgate regulations to prioritize



24 new eligible projects that are distinguished from



25 prior recipients of allowances by 1 or more of 681



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1 the following diversity factors (without regard



2 to order):



3 ‘‘(i) Location in a coal-producing re-



4 gion that provides a majority of coal to the



5 project.



6 ‘‘(ii) Coal type, including waste coal.



7 ‘‘(iii) Capture and transportation



8 technologies.



9 ‘‘(iv) Geological formations.



10 ‘‘(v) New units and retrofit applica-



11 tions.



12 ‘‘(k) ALLOCATION OF ALLOWANCES FOR DEPLOY-



13 MENT OF CARBON CAPTURE AND SEQUESTRATION TECH-



14 NOLOGY.—



15 ‘‘(1) ANNUAL ALLOCATION.—The Adminis-



16 trator shall allocate emission allowances for the de-



17 ployment of carbon capture and sequestration tech-



18 nology in accordance with this section in the fol-



19 lowing quantities:



20 ‘‘(A) For each of vintage years 2014



21 through 2017, 1.75 percent of the emission al-



22 lowances established for each year under section



23 721(a). 682



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1 ‘‘(B) For each of vintage years 2018 and



2 2019, 4.75 percent of the emission allowances



3 established for each year under section 721(a).



4 ‘‘(C) For each of vintage years 2020



5 through 2050, 5 percent of the emission allow-



6 ances established for each year under section



7 721(a).



8 ‘‘(2) CARRYOVER.—If the Administrator has



9 not distributed all of the allowances allocated pursu-



10 ant to this subsection for a given vintage year by the



11 end of that year, the Administrator shall—



12 ‘‘(A) auction those emission allowances in



13 accordance with section 778 by not later than



14 March 31 of the year following that vintage



15 year; and



16 ‘‘(B) increase the allocation under this



17 subsection for the vintage year after the vintage



18 year for which emission allowances were



19 undisbursed by the quantity of undisbursed



20 emission allowances, but only to the extent that



21 allowances for that later year are to be auc-



22 tioned.



23 ‘‘(l) DAVIS-BACON COMPLIANCE.—



24 ‘‘(1) IN GENERAL.—All laborers and mechanics



25 employed on projects funded directly by or assisted 683



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1 in whole or in part by this section through the use



2 of emission allowances shall be paid wages at rates



3 not less than those prevailing on projects of a char-



4 acter similar in the locality as determined by the



5 Secretary of Labor in accordance with subchapter



6 IV of chapter 31 of title 40, United States Code.



7 ‘‘(2) AUTHORITY.—With respect to the labor



8 standards specified in this subsection, the Secretary



9 of Labor shall have the authority and functions set



10 forth in Reorganization Plan Numbered 14 of 1950



11 (64 Stat. 1267; 5 U.S.C. App.) and section 3145 of



12 title 40, United States Code.



13 ‘‘SEC. 781. OVERSIGHT OF ALLOCATIONS.



14 ‘‘(a) IN GENERAL.—Not later than January 1, 2014,



15 and every 2 years thereafter, the Comptroller General of



16 the United States shall carry out a review of programs



17 administered by the Federal Government that distribute



18 emission allowances or funds from any Federal auction of



19 allowances.



20 ‘‘(b) CONTENTS.—Each such report shall include a



21 comprehensive evaluation of the administration and effec-



22 tiveness of each program, including—



23 ‘‘(1) the efficiency, transparency, and sound-



24 ness of the administration of each program; 684



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1 ‘‘(2) the performance of activities receiving as-



2 sistance under each program;



3 ‘‘(3) the cost-effectiveness of each program in



4 achieving the stated purposes of the program; and



5 ‘‘(4) recommendations, if any, for regulatory or



6 administrative changes to each program to improve



7 its effectiveness.



8 ‘‘(c) FOCUS.—In evaluating program performance,



9 each review under this section review shall address the
ef-



10 fectiveness of such programs in—



11 ‘‘(1) creating and preserving jobs;



12 ‘‘(2) ensuring a manageable transition for



13 working families and workers;



14 ‘‘(3) reducing the emissions, or enhancing se-



15 questration, of greenhouse gases;



16 ‘‘(4) developing clean technologies; and



17 ‘‘(5) building resilience to the impacts of cli-



18 mate change.



19 ‘‘SEC. 782. EARLY ACTION RECOGNITION.



20 ‘‘(a) IN GENERAL.—Emission allowances allocated



21 pursuant to section 771(a)(7) shall be distributed by the



22 Administrator in accordance with this section. Not later



23 than 1 year after the date of enactment of this title,
the



24 Administrator shall issue regulations allowing— 685



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1 ‘‘(1) any person in the United States to ex-



2 change instruments in the nature of offset credits



3 issued before January 1, 2009, by a State, local, or



4 voluntary offset program with respect to which the



5 Administrator has made an affirmative determina-



6 tion under section 740(a)(2), for emission allowances



7 established by the Administrator under section



8 721(a); and



9 ‘‘(2) the Administrator to provide compensation



10 in the form of emission allowances to entities, in-



11 cluding units of local government, that do not meet



12 the criteria of paragraph (1) and meet the criteria



13 of this paragraph for documented early reductions or



14 avoidance of greenhouse gas emissions or greenhouse



15 gases sequestered before January 1, 2009, from



16 projects or process improvements begun before Jan-



17 uary 1, 2009, where—



18 ‘‘(A) the entity publicly stated greenhouse



19 gas reduction goals and publicly reported



20 against those goals;



21 ‘‘(B) the entity demonstrated entity-wide



22 net greenhouse gas reductions; and



23 ‘‘(C) the entity demonstrates the actual



24 projects or process improvements undertaken to



25 make reductions and documents the reductions 686



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1 (such as through documentation of engineering



2 projects).



3 ‘‘(b) REGULATIONS.—Regulations issued under sub-



4 section (a) shall—



5 ‘‘(1) provide that a person exchanging credits



6 under subsection (a)(1) receive emission allowances



7 established under section 721(a) in an amount for



8 which the monetary value is equivalent to the aver-



9 age monetary value of the credits during the period



10 from January 1, 2006, to January 1, 2009, as ad-



11 justed for inflation to reflect current dollar values at



12 the time of the exchange;



13 ‘‘(2) provide that a person receiving compensa-



14 tion for documented early action under subsection



15 (a)(2) shall receive emission allowances established



16 under section 721(a) in an amount that is approxi-



17 mately equivalent in value to the carbon dioxide



18 equivalent per ton value received by entities in ex-



19 change for credits under paragraph (1) (as adjusted



20 for inflation to reflect current dollar values at the



21 time of the exchange), as determined by the Admin-



22 istrator;



23 ‘‘(3) provide that only reductions or avoidance



24 of greenhouse gas emissions, or sequestration of



25 greenhouse gases, achieved by activities in the 687



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1 United States between January 1, 2001, and Janu-



2 ary 1, 2009, may be compensated under this section,



3 and only credits issued for such activities may be ex-



4 changed under this section;



5 ‘‘(4) provide that only credits that have not



6 been retired or otherwise used to meet a voluntary



7 or mandatory commitment, and have not expired,



8 may be exchanged under subsection (a)(1);



9 ‘‘(5) require that, once exchanged, the credit be



10 retired for purposes of use under the program by or



11 for which it was originally issued; and



12 ‘‘(6) establish a deadline by which persons must



13 exchange the credits or request compensation for



14 early action under this section.



15 ‘‘(c) PARTICIPATION.—Participation in an exchange



16 of credits for allowances or compensation for early
action



17 authorized by this section shall not preclude any person



18 from participation in an offset credit program
established



19 under part D.



20 ‘‘(d) DISTRIBUTION.—Of the emission allowances



21 distributed under this section, a quantity equal to 0.75



22 percent of vintage year 2012 emission allowances estab-



23 lished under section 721(a) shall be distributed pursuant



24 to subsection (a)(1), and a quantity equal to 0.25
percent



25 of vintage year 2012 emission allowances established 688



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1 under section 721(a) shall be distributed pursuant to sub-



2 section (a)(2).



3 ‘‘SEC. 783. ESTABLISHMENT OF DEFICIT REDUCTION FUND.



4 ‘‘(a) DEFICIT REDUCTION FUND.—There is estab-



5 lished in the Treasury of the United States a fund, to be



6 known as the ‘Deficit Reduction Fund’.



7 ‘‘(b) DISBURSEMENTS.—No disbursement shall be



8 made from the Deficit Reduction Fund except pursuant



9 to an appropriation Act.’’.



10 Subtitle C—Additional Greenhouse



11 Gas Standards



12 SEC. 121. GREENHOUSE GAS STANDARDS.



13 The Clean Air Act (42 U.S.C. 7401 et seq.), as



14 amended by subtitles A and B of this title, is further



15 amended by adding the following new title after title
VII:



16 ‘‘TITLE VIII—ADDITIONAL



17 GREENHOUSE GAS STANDARDS



18 ‘‘SEC. 801. DEFINITIONS.



19 ‘‘For purposes of this title, terms that are defined



20 in title VII, except for the term ‘stationary source’,
shall



21 have the meanings given those terms in title VII.



22 ‘‘PART A—STATIONARY SOURCE STANDARDS



23 ‘‘SEC. 811. STANDARDS OF PERFORMANCE.



24 ‘‘(a) DEFINITION OF UNCAPPED GREENHOUSE GAS



25 EMISSIONS.—In this section, the term ‘uncapped green-689



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1 house gas emissions’ means those greenhouse gas emis-



2 sions to which section 722 does not apply.



3 ‘‘(b) STANDARDS.—Before January 1, 2020, the Ad-



4 ministrator shall not promulgate new source performance



5 standards for greenhouse gases under section 111 that are



6 applicable to any stationary source that—



7 ‘‘(1) emits uncapped greenhouse gas emissions;



8 and



9 ‘‘(2) qualifies as an eligible offset project pursu-



10 ant to section 733 that is eligible to receive an offset



11 credit pursuant to section 737.’’.



12 SEC. 122. HFC REGULATION.



13 (a) IN GENERAL.—Title VI of the Clean Air Act (42



14 U.S.C. 7671 et seq.) (relating to stratospheric ozone
pro-



15 tection) is amended by adding at the end the following:



16 ‘‘SEC. 619. HYDROFLUOROCARBONS (HFCS).



17 ‘‘(a) TREATMENT AS CLASS II, GROUP II SUB-



18 STANCES.—Except as otherwise provided in this section,



19 hydrofluorocarbons shall be treated as class II
substances



20 for purposes of applying the provisions of this title.
The



21 Administrator shall establish two groups of class II sub-



22 stances. Class II, group I substances shall include all



23 hydrochlorofluorocarbons (HCFCs) listed pursuant to sec-



24 tion 602(b). Class II, group II substances shall include



25 each of the following: 690



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1 ‘‘(1) Hydrofluorocarbon-23 (HFC–23).



2 ‘‘(2) Hydrofluorocarbon-32 (HFC–32).



3 ‘‘(3) Hydrofluorocarbon-41 (HFC–41).



4 ‘‘(4) Hydrofluorocarbon-125 (HFC–125).



5 ‘‘(5) Hydrofluorocarbon-134 (HFC–134).



6 ‘‘(6) Hydrofluorocarbon-134a (HFC–134a).



7 ‘‘(7) Hydrofluorocarbon-143 (HFC–143).



8 ‘‘(8) Hydrofluorocarbon-143a (HFC–143a).



9 ‘‘(9) Hydrofluorocarbon-152 (HFC–152).



10 ‘‘(10) Hydrofluorocarbon-152a (HFC–152a).



11 ‘‘(11) Hydrofluorocarbon-227ea (HFC–227ea).



12 ‘‘(12) Hydrofluorocarbon-236cb (HFC–236cb).



13 ‘‘(13) Hydrofluorocarbon-236ea (HFC–236ea).



14 ‘‘(14) Hydrofluorocarbon-236fa (HFC–236fa).



15 ‘‘(15) Hydrofluorocarbon-245ca (HFC–245ca).



16 ‘‘(16) Hydrofluorocarbon-245fa (HFC–245fa).



17 ‘‘(17) Hydrofluorocarbon-365mfc (HFC–



18 365mfc).



19 ‘‘(18) Hydrofluorocarbon-43-10mee (HFC–43–



20 10mee).



21 ‘‘(19) Hydrofluoroolefin-1234yf (HFO–1234yf).



22 ‘‘(20) Hydrofluoroolefin-1234ze (HFO–1234ze).



23 Not later than 6 months after the date of enactment of



24 this title, the Administrator shall publish an initial
list of



25 class II, group II substances, which shall include the
sub-691



O:\\DEC\\DEC09674.xml [file 5 of 5] S.L.C.



1 stances listed in this subsection. The Administrator may



2 add to the list of class II, group II substances any other



3 substance used as a substitute for a class I or II
substance



4 if the Administrator determines that 1 metric ton of the



5 substance makes the same or greater contribution to glob-



6 al warming over 100 years as 1 metric ton of carbon diox-



7 ide. Within 24 months after the date of enactment of this



8 section, the Administrator shall amend the regulations



9 under this title (including the regulations referred to in



10 sections 603, 608, 609, 610, 611, 612, and 613) to apply



11 to class II, group II substances.



12 ‘‘(b) CONSUMPTION AND PRODUCTION OF CLASS II,



13 GROUP II SUBSTANCES.—



14 ‘‘(1) IN GENERAL.—



15 ‘‘(A) CONSUMPTION PHASE DOWN.—In the



16 case of class II, group II substances, in lieu of



17 applying section 605 and the regulations there-



18 under, the Administrator shall promulgate reg-



19 ulations phasing down the consumption of class



20 II, group II substances in the United States,



21 and the importation of products containing any



22 class II, group II substance, in accordance with



23 this subsection within 18 months after the date



24 of enactment of this section. Effective January



25 1, 2012, it shall be unlawful for any person to 692



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1 produce any class II, group II substance, im-



2 port any class II, group II substance, or import



3 any product containing any class II, group II



4 substance without holding one consumption al-



5 lowance or one destruction offset credit for each



6 carbon dioxide equivalent ton of the class II,



7 group II substance. Any person who exports a



8 class II, group II substance for which a con-



9 sumption allowance was retired may receive a



10 refund of that allowance from the Adminis-



11 trator following the export.



12 ‘‘(B) PRODUCTION.—If the United States



13 becomes a party or otherwise adheres to a mul-



14 tilateral agreement, including any amendment



15 to the Montreal Protocol on Substances That



16 Deplete the Ozone Layer, that restricts the pro-



17 duction of class II, group II substances, the Ad-



18 ministrator shall promulgate regulations estab-



19 lishing a baseline for the production of class II,



20 group II substances in the United States and



21 phasing down the production of class II, group



22 II substances in the United States, in accord-



23 ance with such multilateral agreement and sub-



24 ject to the same exceptions and other provisions



25 as are applicable to the phase down of con-693



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1 sumption of class II, group II substances under



2 this section (except that the Administrator shall



3 not require a person who obtains production al-



4 lowances from the Administrator to make pay-



5 ment for such allowances if the person is mak-



6 ing payment for a corresponding quantity of



7 consumption allowances of the same vintage



8 year). Upon the effective date of such regula-



9 tions, it shall be unlawful for any person to



10 produce any class II, group II substance with-



11 out holding one consumption allowance and one



12 production allowance, or one destruction offset



13 credit, for each carbon dioxide equivalent ton of



14 the class II, group II substance.



15 ‘‘(C) INTEGRITY OF LIMITS.—To maintain



16 the integrity of the class II, group II limits, the



17 Administrator may, through rulemaking, limit



18 the percentage of each person’s compliance obli-



19 gation that may be met through the use of de-



20 struction offset credits or banked allowances.



21 ‘‘(D) COUNTING OF VIOLATIONS.—Each



22 consumption allowance, production allowance,



23 or destruction offset credit not held as required



24 by this section shall be a separate violation of



25 this section. 694



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1 ‘‘(2) SCHEDULE.—Pursuant to the regulations



2 promulgated pursuant to paragraph (1)(A), the



3 number of class II, group II consumption allowances



4 established by the Administrator for each calendar



5 year beginning in 2012 shall be the following per-



6 centage of the baseline, as established by the Admin-



7 istrator 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 25 695



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‘‘Calendar Year Percent of Baseline



2031 21



2032 17



after 2032 15



1 ‘‘(3) BASELINE.—(A) Within 12 months after



2 the date of enactment of this section, the Adminis-



3 trator shall promulgate regulations to establish the



4 baseline for purposes of paragraph (2). The baseline



5 shall be the sum, expressed in metric tons of carbon



6 dioxide equivalents, of—



7 ‘‘(i) the annual average consumption of all



8 class II substances in calendar years 2004,



9 2005, and 2006; plus



10 ‘‘(ii) the annual average quantity of all



11 class II substances contained in imported prod-



12 ucts in calendar years 2004, 2005, and 2006.



13 ‘‘(B) Notwithstanding subparagraph (A), if the



14 Administrator determines that the baseline is higher



15 than 370 million metric tons of carbon dioxide



16 equivalents, then the Administrator shall establish



17 the baseline at 370 million metric tons of carbon di-



18 oxide equivalents.



19 ‘‘(C) Notwithstanding subparagraph (A), if the



20 Administrator determines that the baseline is lower



21 than 280 million metric tons of carbon dioxide 696



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1 equivalents, then the Administrator shall establish



2 the baseline at 280 million metric tons of carbon di-



3 oxide equivalents.



4 ‘‘(4) DISTRIBUTION OF ALLOWANCES.—



5 ‘‘(A) IN GENERAL.—Pursuant to the regu-



6 lations promulgated under paragraph (1)(A),



7 for each calendar year beginning in 2012, the



8 Administrator shall sell consumption allowances



9 in accordance with this paragraph.



10 ‘‘(B) ESTABLISHMENT OF POOLS.—The



11 Administrator shall establish two allowance



12 pools. Eighty percent of the consumption allow-



13 ances available for a calendar year shall be



14 placed in the producer-importer pool, and 20



15 percent of the consumption allowances available



16 for a calendar year shall be placed in the sec-



17 ondary pool.



18 ‘‘(C) PRODUCER-IMPORTER POOL.—



19 ‘‘(i) AUCTION.—(I) For each calendar



20 year, the Administrator shall offer for sale



21 at auction the following percentage of the



22 consumption allowances in the producer-



23 importer pool:



‘‘Calendar Year Percent Available for Auction



2012 10 697



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‘‘Calendar Year Percent Available for Auction



2013 20



2014 30



2015 40



2016 50



2017 60



2018 70



2019 80



2020 and thereafter 90



1 ‘‘(II) Any person who produced or im-



2 ported any class II substance during cal-



3 endar year 2004, 2005, or 2006 may par-



4 ticipate in the auction. No other persons



5 may participate in the auction unless per-



6 mitted to do so pursuant to subclause



7 (III).



8 ‘‘(III) Not later than 3 years after the



9 date of the initial auction and from time to



10 time thereafter, the Administrator shall de-



11 termine through rulemaking whether any



12 persons who did not produce or import a



13 class II substance during calendar year



14 2004, 2005, or 2006 will be permitted to



15 participate in future auctions. The Admin-



16 istrator shall base this determination on



17 the duration, consistency, and scale of such 698



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1 person’s purchases of consumption allow-



2 ances in the secondary pool under subpara-



3 graph (D)(ii)(III), as well as economic or



4 technical hardship and other factors



5 deemed relevant by the Administrator.



6 ‘‘(IV) The Administrator shall set a



7 minimum bid per consumption allowance of



8 the following:



9 ‘‘(aa) For vintage year 2012,



10 $1.00.



11 ‘‘(bb) For vintage year 2013,



12 $1.20.



13 ‘‘(cc) For vintage year 2014,



14 $1.40.



15 ‘‘(dd) For vintage year 2015,



16 $1.60.



17 ‘‘(ee) For vintage year 2016,



18 $1.80.



19 ‘‘(ff) For vintage year 2017,



20 $2.00.



21 ‘‘(gg) For vintage year 2018 and



22 thereafter, $2.00 adjusted for infla-



23 tion after vintage year 2017 based



24 upon the producer price index as pub-699



O:\\DEC\\DEC09674.xml [file 5 of 5] S.L.C.



1 lished by the Department of Com-



2 merce.



3 ‘‘(ii) NON-AUCTION SALE.—(I) For



4 each calendar year, as soon as practicable



5 after auction, the Administrator shall offer



6 for sale the remaining consumption allow-



7 ances in the producer-importer pool at the



8 following prices:



9 ‘‘(aa) A fee of $1.00 per vintage



10 year 2012 allowance.



11 ‘‘(bb) A fee of $1.20 per vintage



12 year 2013 allowance.



13 ‘‘(cc) A fee of $1.40 per vintage



14 year 2014 allowance.



15 ‘‘(dd) For each vintage year



16 2015 allowance, a fee equal to the av-



17 erage of $1.10 and the auction clear-



18 ing price for vintage year 2014 allow-



19 ances.



20 ‘‘(ee) For each vintage year 2016



21 allowance, a fee equal to the average



22 of $1.30 and the auction clearing



23 price for vintage year 2015 allow-



24 ances. 700



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1 ‘‘(ff) For each vintage year 2017



2 allowance, a fee equal to the average



3 of $1.40 and the auction clearing



4 price for vintage year 2016 allow-



5 ances.



6 ‘‘(gg) For each allowance of vin-



7 tage year 2018 and subsequent vin-



8 tage years, a fee equal to the auction



9 clearing price for that vintage year.



10 ‘‘(II) The Administrator shall offer to



11 sell the remaining consumption allowances



12 in the producer-importer pool to producers



13 of class II, group II substances and im-



14 porters of class II, group II substances in



15 proportion to their relative allocation



16 share.



17 ‘‘(III) Such allocation share for such



18 sale shall be determined by the Adminis-



19 trator using such producer’s or importer’s



20 annual average data on class II substances



21 from calendar years 2004, 2005, and



22 2006, on a carbon dioxide equivalent basis,



23 and—



24 ‘‘(aa) shall be based on a pro-



25 ducer’s production, plus importation, 701



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1 plus acquisitions and purchases from



2 persons who produced class II sub-



3 stances in the United States during



4 calendar year 2004, 2005, or 2006,



5 less exportation, less transfers and



6 sales to persons who produced class II



7 substances in the United States dur-



8 ing calendar year 2004, 2005, or



9 2006; and



10 ‘‘(bb) for an importer of class II



11 substances that did not produce in the



12 United States any class II substance



13 during calendar years 2004, 2005,



14 and 2006, shall be based on the im-



15 porter’s importation less exportation.



16 For purposes of item (aa), the Adminis-



17 trator shall account for 100 percent of



18 class II, group II substances and 60 per-



19 cent of class II, group I substances. For



20 purposes of item (bb), the Administrator



21 shall account for 100 percent of class II,



22 group II substances and 100 percent of



23 class II, group I substances.



24 ‘‘(IV) Any consumption allowances



25 made available for nonauction sale to a 702



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1 specific producer or importer of class II,



2 group II substances but not purchased by



3 the specific producer or importer shall be



4 made available for sale to any producer or



5 importer of class II substances during cal-



6 endar year 2004, 2005, or 2006. If de-



7 mand for such consumption allowances ex-



8 ceeds supply of such consumption allow-



9 ances, the Administrator shall develop and



10 utilize criteria for the sale of such con-



11 sumption allowances that may include pro



12 rata shares, historic production and impor-



13 tation, economic or technical hardship, or



14 other factors deemed relevant by the Ad-



15 ministrator. If the supply of such con-



16 sumption allowances exceeds demand, the



17 Administrator may offer such consumption



18 allowances for sale in the secondary pool as



19 set forth in subparagraph (D).



20 ‘‘(D) SECONDARY POOL.—(i) For each cal-



21 endar year, as soon as practicable after the auc-



22 tion required in subparagraph (C), the Adminis-



23 trator shall offer for sale the consumption al-



24 lowances in the secondary pool at the prices



25 listed in subparagraph (C)(ii). 703



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1 ‘‘(ii) The Administrator shall accept appli-



2 cations for purchase of secondary pool con-



3 sumption allowances from—



4 ‘‘(I) importers of products containing



5 class II, group II substances;



6 ‘‘(II) persons who purchased any class



7 II, group II substance directly from a pro-



8 ducer or importer of class II, group II sub-



9 stances for use in a product containing a



10 class II, group II substance, a manufac-



11 turing process, or a reclamation process;



12 ‘‘(III) persons who did not produce or



13 import a class II substance during cal-



14 endar year 2004, 2005, or 2006, but who



15 the Administrator determines have subse-



16 quently taken significant steps to produce



17 or import a substantial quantity of any



18 class II, group II substance; and



19 ‘‘(IV) persons who produced or im-



20 ported any class II substance during cal-



21 endar year 2004, 2005, or 2006.



22 ‘‘(iii) If the supply of consumption allow-



23 ances in the secondary pool equals or exceeds



24 the demand for consumption allowances in the



25 secondary pool as presented in the applications 704



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1 for purchase, the Administrator shall sell the



2 consumption allowances in the secondary pool



3 to the applicants in the amounts requested in



4 the applications for purchase. Any consumption



5 allowances in the secondary pool not purchased



6 in a calendar year may be rolled over and added



7 to the quantity available in the secondary pool



8 in the following year.



9 ‘‘(iv) If the demand for consumption allow-



10 ances in the secondary pool as presented in the



11 applications for purchase exceeds the supply of



12 consumption allowances in the secondary pool,



13 the Administrator shall sell the consumption al-



14 lowances as follows:



15 ‘‘(I) The Administrator shall first sell



16 the consumption allowances in the sec-



17 ondary pool to any importers of products



18 containing class II, group II substances in



19 the amounts requested in their applications



20 for purchase. If the demand for such con-



21 sumption allowances exceeds supply of



22 such consumption allowances, the Adminis-



23 trator shall develop and utilize criteria for



24 the sale of such consumption allowances



25 among importers of products containing 705



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1 class II, group II substances that may in-



2 clude pro rata shares, historic importation,



3 economic or technical hardship, or other



4 factors deemed relevant by the Adminis-



5 trator.



6 ‘‘(II) The Administrator shall next



7 sell any remaining consumption allowances



8 to persons identified in subclauses (II) and



9 (III) of clause (ii) in the amounts re-



10 quested in their applications for purchase.



11 If the demand for such consumption allow-



12 ances exceeds remaining supply of such



13 consumption allowances, the Administrator



14 shall develop and utilize criteria for the



15 sale of such consumption allowances



16 among subclauses (II) and (III) applicants



17 that may include pro rata shares, historic



18 use, economic or technical hardship, or



19 other factors deemed relevant by the Ad-



20 ministrator.



21 ‘‘(III) The Administrator shall then



22 sell any remaining consumption allowances



23 to persons who produced or imported any



24 class II substance during calendar year



25 2004, 2005, or 2006 in the amounts re-706



O:\\DEC\\DEC09674.xml [file 5 of 5] S.L.C.



1 quested in their applications for purchase.



2 If demand for such consumption allow-



3 ances exceeds remaining supply of such



4 consumption allowances, the Administrator



5 shall develop and utilize criteria for the



6 sale of such consumption allowances that



7 may include pro rata shares, historic pro-



8 duction and importation, economic or tech-



9 nical hardship, or other factors deemed rel-



10 evant by the Administrator.



11 ‘‘(IV) Each person who purchases



12 consumption allowances in a non-auction



13 sale under this subparagraph shall be re-



14 quired to disclose the person or entity



15 sponsoring or benefitting from the pur-



16 chases if such person or entity is, in whole



17 or in part, other than the purchaser or the



18 purchaser’s employer.



19 ‘‘(E) DISCRETION TO WITHHOLD ALLOW-



20 ANCES.—Nothing in this paragraph prevents



21 the Administrator from exercising discretion to



22 withhold and retire consumption allowances



23 that would otherwise be available for auction or



24 nonauction sale. Not later than 18 months after



25 the date of enactment of this section, the Ad-707



O:\\DEC\\DEC09674.xml [file 5 of 5] S.L.C.



1 ministrator shall promulgate regulations estab-



2 lishing criteria for withholding and retiring con-



3 sumption allowances.



4 ‘‘(5) BANKING.—A consumption allowance or



5 destruction offset credit may be used to meet the



6 compliance obligation requirements of paragraph (1)



7 in—



8 ‘‘(A) the vintage year for the allowance or



9 destruction offset credit; or



10 ‘‘(B) any calendar year subsequent to the



11 vintage year for the allowance or destruction



12 offset credit.



13 ‘‘(6) AUCTIONS.—



14 ‘‘(A) INITIAL REGULATIONS.—Not later



15 than 18 months after the date of enactment of



16 this section, the Administrator shall promulgate



17 regulations governing the auction of allowances



18 under this section. Such regulations shall in-



19 clude the following requirements:



20 ‘‘(i) FREQUENCY; 
FIRST AUCTION.—



21 Auctions shall be held one time per year at



22 regular intervals, with the first auction to



23 be held no later than October 31, 2011. 708



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1 ‘‘(ii) AUCTION FORMAT.—Auctions



2 shall follow a single-round, sealed-bid, uni-



3 form price format.



4 ‘‘(iii) FINANCIAL ASSURANCE.—The



5 Administrator may establish financial as-



6 surance requirements to ensure that auc-



7 tion participants can and will perform on



8 their bids.



9 ‘‘(iv) DISCLOSURE OF BENEFICIAL



10 OWNERSHIP.—Each bidder in the auction



11 shall be required to disclose the person or



12 entity sponsoring or benefitting from the



13 bidder’s participation in the auction if such



14 person or entity is, in whole or in part,



15 other than the bidder.



16 ‘‘(v) PUBLICATION OF INFORMA-



17 TION.—After the auction, the Adminis-



18 trator shall, in a timely fashion, publish



19 the number of bidders, number of winning



20 bidders, the quantity of allowances sold,



21 and the auction clearing price.



22 ‘‘(vi) BIDDING LIMITS IN 2012.—In



23 the vintage year 2012 auction, no auction



24 participant may, directly or in concert with



25 another participant, bid for or purchase 709



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1 more allowances offered for sale at the



2 auction than the greater of—



3 ‘‘(I) the number of allowances



4 which, when added to the number of



5 allowances available for purchase by



6 the participant in the producer-im-



7 porter pool non-auction sale, would



8 equal the participant’s annual average



9 consumption of class II, group II sub-



10 stances in calendar years 2004, 2005,



11 and 2006; or



12 ‘‘(II) the number of allowances



13 equal to the product of—



14 ‘‘(aa) 1.20 multiplied by the



15 participant’s allocation share of



16 the producer-importer pool non-



17 auction sale as determined under



18 paragraph (4)(C)(ii); and



19 ‘‘(bb) the number of vintage



20 year 2012 allowances offered at



21 auction.



22 ‘‘(vii) BIDDING LIMITS IN 2013.—In



23 the vintage year 2013 auction, no auction



24 participant may, directly or in concert with



25 another participant, bid for or purchase 710



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1 more allowances offered for sale at the



2 auction than the product of—



3 ‘‘(I) 1.15 multiplied by the ratio



4 of the total number of vintage year



5 2012 allowances purchased by the



6 participant from the auction and from



7 the producer-importer pool non-auc-



8 tion sale to the total number of vin-



9 tage year 2012 allowances in the pro-



10 ducer-importer pool; and



11 ‘‘(II) the number of vintage year



12 2013 allowances offered at auction.



13 ‘‘(viii) BIDDING LIMITS IN SUBSE-



14 QUENT YEARS.—In the auctions for vin-



15 tage year 2014 and subsequent vintage



16 years, no auction participant may, directly



17 or in concert with another participant, bid



18 for or purchase more allowances offered



19 for sale at the auction than the product



20 of—



21 ‘‘(I) 1.15 multiplied by the ratio



22 of the highest number of allowances



23 required to be held by the participant



24 in any of the three prior vintage years



25 to meet its compliance obligation 711



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1 under paragraph (1) to the total num-



2 ber of allowances in the producer-im-



3 porter pool for such vintage year; and



4 ‘‘(II) the number of allowances



5 offered at auction for that vintage



6 year.



7 ‘‘(ix) OTHER REQUIREMENTS.—The



8 Administrator may include in the regula-



9 tions such other requirements or provisions



10 as the Administrator considers necessary



11 to promote effective, efficient, transparent,



12 and fair administration of auctions under



13 this section.



14 ‘‘(B) REVISION OF REGULATIONS.—The



15 Administrator may, at any time, revise the ini-



16 tial regulations promulgated under subpara-



17 graph (A) based on the Administrator’s experi-



18 ence in administering allowance auctions by



19 promulgating new regulations. Such revised reg-



20 ulations need not meet the requirements identi-



21 fied in subparagraph (A) if the Administrator



22 determines that an alternative auction design



23 would be more effective, taking into account



24 factors including costs of administration, trans-



25 parency, fairness, and risks of collusion or ma-712



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1 nipulation. In determining whether and how to



2 revise the initial regulations under this para-



3 graph, the Administrator shall not consider



4 maximization of revenues to the Federal Gov-



5 ernment.



6 ‘‘(C) DELEGATION OR CONTRACT.—Pursu-



7 ant to regulations under this section, the Ad-



8 ministrator may, by delegation or contract, pro-



9 vide for the conduct of auctions under the Ad-



10 ministrator’s supervision by other departments



11 or agencies of the Federal Government or by



12 nongovernmental agencies, groups, or organiza-



13 tions.



14 ‘‘(7) PAYMENTS FOR ALLOWANCES.—



15 ‘‘(A) INITIAL REGULATIONS.—Not later



16 than 18 months after the date of enactment of



17 this section, the Administrator shall promulgate



18 regulations governing the payment for allow-



19 ances purchased in auction and non-auction



20 sales under this section. Such regulations shall



21 include the requirement that, in the event that



22 full payment for purchased allowances is not



23 made on the date of purchase, equal payments



24 shall be made one time per calendar quarter 713



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1 with all payments for allowances of a vintage



2 year made by the end of that vintage year.



3 ‘‘(B) REVISION OF REGULATIONS.—The



4 Administrator may, at any time, revise the ini-



5 tial regulations promulgated under subpara-



6 graph (A) based on the Administrator’s experi-



7 ence in administering collection of payments by



8 promulgating new regulations. Such revised reg-



9 ulations need not meet the requirements identi-



10 fied in subparagraph (A) if the Administrator



11 determines that an alternative payment struc-



12 ture or frequency would be more effective, tak-



13 ing into account factors including cost of ad-



14 ministration, transparency, and fairness. In de-



15 termining whether and how to revise the initial



16 regulations under this paragraph, the Adminis-



17 trator shall not consider maximization of reve-



18 nues to the Federal Government.



19 ‘‘(C) PENALTIES FOR NON-PAYMENT.—



20 Failure to pay for purchased allowances in ac-



21 cordance with the regulations promulgated pur-



22 suant to this paragraph shall be a violation of



23 the requirements of subsection (b). Section



24 113(c)(3) shall apply in the case of any person



25 who knowingly fails to pay for purchased allow-714



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1 ances in accordance with the regulations pro-



2 mulgated pursuant to this paragraph.



3 ‘‘(8) IMPORTED PRODUCTS.—If the United



4 States becomes a party or otherwise adheres to a



5 multilateral agreement, including any amendment to



6 the Montreal Protocol on Substances That Deplete



7 the Ozone Layer, which restricts the production or



8 consumption of class II, group II substances—



9 ‘‘(A) as of the date on which such agree-



10 ment or amendment enters into force, it shall



11 no longer be unlawful for any person to import



12 from a party to such agreement or amendment



13 any product containing any class II, group II



14 substance whose production or consumption is



15 regulated by such agreement or amendment



16 without holding one consumption allowance or



17 one destruction offset credit for each carbon di-



18 oxide equivalent ton of the class II, group II



19 substance;



20 ‘‘(B) the Administrator shall promulgate



21 regulations within 12 months of the date the



22 United States becomes a party or otherwise ad-



23 heres to such agreement or amendment, or the



24 date on which such agreement or amendment



25 enters into force, whichever is later, to establish 715



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1 a new baseline for purposes of paragraph (2),



2 which new baseline shall be the original baseline



3 less the carbon dioxide equivalent of the annual



4 average quantity of any class II substances reg-



5 ulated by such agreement or amendment con-



6 tained in products imported from parties to



7 such agreement or amendment in calendar



8 years 2004, 2005, and 2006;



9 ‘‘(C) as of the date on which such agree-



10 ment or amendment enters into force, no per-



11 son importing any product containing any class



12 II, group II substance may, directly or in con-



13 cert with another person, purchase any con-



14 sumption allowances for sale by the Adminis-



15 trator for the importation of products from a



16 party to such agreement or amendment that



17 contain any class II, group II substance re-



18 stricted by such agreement or amendment; and



19 ‘‘(D) the Administrator may adjust the



20 two allowance pools established in paragraph



21 (4) such that up to 90 percent of the consump-



22 tion allowances available for a calendar year are



23 placed in the producer-importer pool with the



24 remaining consumption allowances placed in the



25 secondary pool. 716



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1 ‘‘(9) OFFSETS.—



2 ‘‘(A) CHLOROFLUOROCARBON DESTRUC-



3 TION.—Within 18 months after the date of en-



4 actment of this section, the Administrator shall



5 promulgate regulations to provide for the



6 issuance of offset credits for the destruction, in



7 the calendar year 2012 or later, of



8 chlorofluorocarbons in the United States. The



9 Administrator shall establish and distribute to



10 the destroying entity a quantity of destruction



11 offset credits equal to 0.8 times the number of



12 metric tons of carbon dioxide equivalents of re-



13 duction achieved through the destruction. No



14 destruction offset credits shall be established



15 for the destruction of a class II, group II sub-



16 stance.



17 ‘‘(B) DEFINITION.—For purposes of this



18 paragraph, the term ‘destruction’ means the



19 conversion of a substance by thermal, chemical,



20 or other means to another substance with little



21 or no carbon dioxide equivalent value and no



22 ozone depletion potential.



23 ‘‘(C) REGULATIONS.—The regulations pro-



24 mulgated under this paragraph shall include



25 standards and protocols for project eligibility, 717



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1 certification of destroyers, monitoring, tracking,



2 destruction efficiency, quantification of project



3 and baseline emissions and carbon dioxide



4 equivalent value, and verification. The Adminis-



5 trator shall ensure that destruction offset cred-



6 its represent real and verifiable destruction of



7 chlorofluorocarbons or other class I or class II,



8 group I, substances authorized under subpara-



9 graph (D).



10 ‘‘(D) OTHER SUBSTANCES.—The Adminis-



11 trator may promulgate regulations to add to the



12 list of class I and class II, group I, substances



13 that may be destroyed for destruction offset



14 credits, taking into account a candidate sub-



15 stance’s carbon dioxide equivalent value, ozone



16 depletion potential, prevalence in banks in the



17 United States, and emission rates, as well as



18 the need for additional cost containment under



19 the class II, group II limits and the integrity of



20 the class II, group II limits. The Administrator



21 shall not add a class I or class II, group I sub-



22 stance to the list if the consumption of the sub-



23 stance has not been completely phased-out



24 internationally (except for essential use exemp-718



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1 tions or other similar exemptions) pursuant to



2 the Montreal Protocol.



3 ‘‘(E) EXTENSION OF OFFSETS.—(i) At any



4 time after the Administrator promulgates regu-



5 lations pursuant to subparagraph (A), the Ad-



6 ministrator may, pursuant to the requirements



7 of part D of title VII and based on the carbon



8 dioxide equivalent value of the substance de-



9 stroyed, add the types of destruction projects



10 authorized to receive destruction offset credits



11 under this paragraph to the list of types of



12 projects eligible for offset credits under section



13 733. If such projects are added to the list under



14 section 733, the issuance of offset credits for



15 such projects under part D of title VII shall be



16 governed by the requirements of such part D,



17 while the issuance of offset credits for such



18 projects under this paragraph shall be governed



19 by the requirements of this paragraph. Nothing



20 in this paragraph shall affect the issuance of



21 offset credits under section 740.



22 ‘‘(ii) The Administrator shall not make the



23 addition under clause (i) unless the Adminis-



24 trator finds that insufficient destruction is oc-



25 curring or is projected to occur under this para-719



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1 graph and that the addition would increase de-



2 struction.



3 ‘‘(iii) In no event shall more than one de-



4 struction offset credit be issued under title VII



5 and this section for the destruction of the same



6 quantity of a substance.



7 ‘‘(10) LEGAL STATUS OF ALLOWANCES AND



8 CREDITS.—None of the following constitutes a prop-



9 erty right:



10 ‘‘(A) A production or consumption allow-



11 ance.



12 ‘‘(B) A destruction offset credit.



13 ‘‘(c) DEADLINES FOR COMPLIANCE.—Notwith-



14 standing the deadlines specified for class II substances
in



15 sections 608, 609, 610, 612, and 613 that occur prior to



16 January 1, 2009, the deadline for promulgating regula-



17 tions under those sections for class II, group II
substances



18 shall be January 1, 2012.



19 ‘‘(d) EXCEPTIONS FOR ESSENTIAL USES.—Notwith-



20 standing any phase down of production and consumption



21 required by this section, to the extent consistent with
any



22 applicable multilateral agreement to which the United



23 States is a party or otherwise adheres, the Administrator



24 shall consider providing exceptions for essential uses
under 720



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1 paragraph (1) and may provide exceptions for essential



2 uses under paragraph (2), as follows:



3 ‘‘(1) MEDICAL DEVICES.—If the Administrator



4 makes the determination under this subsection that



5 a medical device is eligible for an exception, after no-



6 tice and opportunity for public comment, and in con-



7 sultation with the Commissioner of Food and Drugs,



8 the Administrator shall provide an exception for the



9 production and consumption of class II, group II



10 substances solely for use in medical devices, such as



11 metered dose inhalers.



12 ‘‘(2) AVIATION AND SPACE VEHICLE SAFETY.—



13 The Administrator, after notice and opportunity for



14 public comment, may authorize the production and



15 consumption of limited quantities of class II, group



16 II substances solely for the purposes of aviation or



17 space vehicle safety if either the Administrator of



18 the Federal Aviation Administration or the Adminis-



19 trator of the National Aeronautics and Space Ad-



20 ministration, in consultation with the Administrator,



21 determines that no safe and effective substitute has



22 been developed and that such authorization is nec-



23 essary for aviation or space flight safety purposes.



24 ‘‘(e) DEVELOPING COUNTRIES.—Notwithstanding



25 any phase down of production required by this section,
the 721



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1 Administrator, after notice and opportunity for public



2 comment, may authorize the production of limited quan-



3 tities of class II, group II substances in excess of the



4 amounts otherwise allowable under this section solely for



5 export to, and use in, developing countries. Any produc-



6 tion authorized under this subsection shall be solely for



7 purposes of satisfying the basic domestic needs of such



8 countries as provided in applicable international agree-



9 ments, if any, to which the United States is a party or



10 otherwise adheres.



11 ‘‘(f) NATIONAL SECURITY; FIRE SUPPRESSION,



12 ETC.—The provisions of subsection (f) and paragraphs (1)



13 and (2) of subsection (g) of section 604 shall apply to
any



14 consumption and production phase down of class II, group



15 II substances in the same manner and to the same extent,



16 consistent with any applicable international agreement to



17 which the United States is a party or otherwise adheres,



18 as such provisions apply to the substances specified in



19 such subsection.



20 ‘‘(g) ACCELERATED SCHEDULE.—In lieu of section



21 606, the provisions of paragraphs (1), (2), and (3) of
this



22 subsection shall apply in the case of class II, group II
sub-



23 stances.



24 ‘‘(1) IN GENERAL.—The Administrator shall



25 promulgate initial regulations not later than 18 722



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1 months after the date of enactment of this section,



2 and revised regulations any time thereafter, which



3 establish a schedule for phasing down the consump-



4 tion (and, if the condition in subsection (b)(1)(B) is



5 met, the production) of class II, group II substances



6 that is more stringent than the schedule set forth in



7 this section if, based on the availability of sub-



8 stitutes, the Administrator determines that such



9 more stringent schedule is practicable, taking into



10 account technological achievability, safety, and other



11 factors the Administrator deems relevant, or if the



12 Montreal Protocol, or any applicable international



13 agreement to which the United States is a party or



14 otherwise adheres, is modified or established to in-



15 clude a schedule or other requirements to control or



16 reduce production, consumption, or use of any class



17 II, group II substance more rapidly than the appli-



18 cable schedule under this section.



19 ‘‘(2) PETITION.—Any person may submit a pe-



20 tition to promulgate regulations under this sub-



21 section in the same manner and subject to the same



22 procedures as are provided in section 606(b).



23 ‘‘(3) INCONSISTENCY.—If the Administrator de-



24 termines that the provisions of this section regarding



25 banking, allowance rollover, or destruction offset 723



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1 credits create a significant potential for inconsist-



2 ency with the requirements of any applicable inter-



3 national agreement to which the United States is a



4 party or otherwise adheres, the Administrator may



5 promulgate regulations restricting the availability of



6 banking, allowance rollover, or destruction offset



7 credits to the extent necessary to avoid such incon-



8 sistency.



9 ‘‘(h) EXCHANGE.—Section 607 shall not apply in the



10 case of class II, group II substances. Production and
con-



11 sumption allowances for class II, group II substances may



12 be freely exchanged or sold but may not be converted into



13 allowances for class II, group I substances.



14 ‘‘(i) LABELING.—(1) In applying section 611 to prod-



15 ucts containing or manufactured with class II, group II



16 substances, in lieu of the words ‘destroying ozone in the



17 upper atmosphere’ on labels required under section 611



18 there shall be substituted the words ‘contributing to
global



19 warming’.



20 ‘‘(2) The Administrator may, through rulemaking,



21 exempt from the requirements of section 611 products



22 containing or manufactured with class II, group II sub-



23 stances determined to have little or no carbon dioxide



24 equivalent value compared to other substances used in



25 similar products. 724



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1 ‘‘(j) NONESSENTIAL PRODUCTS.—For the purposes



2 of section 610, class II, group II substances shall be
regu-



3 lated under section 610(b), except that in applying
section



4 610(b) the word ‘hydrofluorocarbon’ shall be substituted



5 for the word ‘chlorofluorocarbon’ and the term ‘class II,



6 group II’ shall be substituted for the term ‘class I’.
Class



7 II, group II substances shall not be subject to the provi-



8 sions of section 610(d).



9 ‘‘(k) INTERNATIONAL TRANSFERS.—In the case of



10 class II, group II substances, in lieu of section 616,
this



11 subsection shall apply. To the extent consistent with any



12 applicable international agreement to which the United



13 States is a party or otherwise adheres, including any



14 amendment to the Montreal Protocol, the United States



15 may engage in transfers with other parties to such agree-



16 ment or amendment under the following conditions:



17 ‘‘(1) The United States may transfer produc-



18 tion allowances to another party to such agreement



19 or amendment if, at the time of the transfer, the



20 Administrator establishes revised production limits



21 for the United States accounting for the transfer in



22 accordance with regulations promulgated pursuant



23 to this subsection.



24 ‘‘(2) The United States may acquire production



25 allowances from another party to such agreement or 725



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1 amendment if, at the time of the transfer, the Ad-



2 ministrator finds that the other party has revised its



3 domestic production limits in the same manner as



4 provided with respect to transfers by the United



5 States in the regulations promulgated pursuant to



6 this subsection.



7 ‘‘(l) RELATIONSHIP TO OTHER LAWS.—



8 ‘‘(1) STATE LAWS.—For purposes of section



9 116, the requirements of this section for class II,



10 group II substances shall be treated as requirements



11 for the control and abatement of air pollution.



12 ‘‘(2) MULTILATERAL AGREEMENTS.—Section



13 614 shall apply to the provisions of this section con-



14 cerning class II, group II substances, except that for



15 the words ‘Montreal Protocol’ there shall be sub-



16 stituted the words ‘Montreal Protocol, or any appli-



17 cable multilateral agreement to which the United



18 States is a party or otherwise adheres that restricts



19 the production or consumption of class II, group II



20 substances,’ and for the words ‘Article 4 of the Mon-



21 treal Protocol’ there shall be substituted ‘any provi-



22 sion of such multilateral agreement regarding trade



23 with non-parties’.



24 ‘‘(3) FEDERAL FACILITIES.—For purposes of



25 section 118, the requirements of this section for 726



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1 class II, group II substances and corresponding



2 State, interstate, and local requirements, administra-



3 tive authority, and process and sanctions shall be



4 treated as requirements for the control and abate-



5 ment of air pollution within the meaning of section



6 118.



7 ‘‘(m) CARBON DIOXIDE EQUIVALENT VALUE.—(1)



8 In lieu of section 602(e), the provisions of this
subsection



9 shall apply in the case of class II, group II substances.



10 Simultaneously with establishing the list of class II,
group



11 II substances, and simultaneously with any addition to



12 that list, the Administrator shall publish the carbon
diox-



13 ide equivalent value of each listed class II, group II
sub-



14 stance, based on a determination of the number of metric



15 tons of carbon dioxide that makes the same contribution



16 to global warming over 100 years as 1 metric ton of each



17 class II, group II substance.



18 ‘‘(2) Not later than February 1, 2017, and not less



19 than every 5 years thereafter, the Administrator shall—



20 ‘‘(A) review, and if appropriate, revise the car-



21 bon dioxide equivalent values established for class II,



22 group II substances based on a determination of the



23 number of metric tons of carbon dioxide that makes



24 the same contributions to global warming over 100 727



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1 years as 1 metric ton of each class II, group II sub-



2 stance; and



3 ‘‘(B) publish in the Federal Register the results



4 of that review and any revisions.



5 ‘‘(3) A revised determination published in the Federal



6 Register under paragraph (2)(B) shall take effect for pro-



7 duction of class II, group II substances, consumption of



8 class II, group II substances, and importation of products



9 containing class II, group II substances starting on Janu-



10 ary 1 of the first calendar year starting at least 9
months



11 after the date on which the revised determination was
pub-



12 lished.



13 ‘‘(4) The Administrator may decrease the frequency



14 of review and revision under paragraph (2) if the
Adminis-



15 trator determines that such decrease is appropriate in



16 order to synchronize such review and revisions with any



17 similar review process carried out pursuant to the United



18 Nations Framework Convention on Climate Change, an



19 agreement negotiated under that convention, The Vienna



20 Convention for the Protection of the Ozone Layer, or an



21 agreement negotiated under that convention, except that



22 in no event shall the Administrator carry out such review



23 and revision any less frequently than every 10 years.



24 ‘‘(n) REPORTING REQUIREMENTS.—In lieu of sub-



25 sections (b) and (c) of section 603, paragraphs (1) and
728



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1 (2) of this subsection shall apply in the case of class
II,



2 group II substances:



3 ‘‘(1) IN GENERAL.—On a quarterly basis, or



4 such other basis (not less than annually) as deter-



5 mined by the Administrator, each person who pro-



6 duced, imported, or exported a class II, group II



7 substance, or who imported a product containing a



8 class II, group II substance, shall file a report with



9 the Administrator setting forth the carbon dioxide



10 equivalent amount of the substance that such person



11 produced, imported, or exported, as well as the



12 amount that was contained in products imported by



13 that person, during the preceding reporting period.



14 Each such report shall be signed and attested by a



15 responsible officer. If all other reporting is complete,



16 no such report shall be required from a person after



17 April 1 of the calendar year after such person per-



18 manently ceases production, importation, and expor-



19 tation of the substance, as well as importation of



20 products containing the substance, and so notifies



21 the Administrator in writing. If the United States



22 becomes a party or otherwise adheres to a multilat-



23 eral agreement, including any amendment to the



24 Montreal Protocol on Substances That Deplete the



25 Ozone Layer, that restricts the production or con-729



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1 sumption of class II, group II substances, then, if all



2 other reporting is complete, no such report shall be



3 required from a person with respect to importation



4 from parties to such agreement or amendment of



5 products containing any class II, group II substance



6 restricted by such agreement or amendment, after



7 April 1 of the calendar year following the year dur-



8 ing which such agreement or amendment enters into



9 force.



10 ‘‘(2) BASELINE REPORTS FOR CLASS II,  GROUP



11 II SUBSTANCES.—



12 ‘‘(A) IN GENERAL.—Unless such informa-



13 tion has been previously reported to the Admin-



14 istrator, on the date on which the first report



15 under paragraph (1) of this subsection is re-



16 quired to be filed, each person who produced,



17 imported, or exported a class II, group II sub-



18 stance, or who imported a product containing a



19 class II substance, (other than a substance



20 added to the list of class II, group II substances



21 after the publication of the initial list of such



22 substances under this section), shall file a re-



23 port with the Administrator setting forth the



24 amount of such substance that such person pro-



25 duced, imported, exported, or that was con-730



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1 tained in products imported by that person,



2 during each of calendar years 2004, 2005, and



3 2006.



4 ‘‘(B) PRODUCERS.—In reporting under



5 subparagraph (A), each person who produced in



6 the United States a class II substance during



7 calendar year 2004, 2005, or 2006 shall—



8 ‘‘(i) report all acquisitions or pur-



9 chases of class II substances during each



10 of calendar years 2004, 2005, and 2006



11 from all other persons who produced in the



12 United States a class II substance during



13 calendar year 2004, 2005, or 2006, and



14 supply evidence of such acquisitions and



15 purchases as deemed necessary by the Ad-



16 ministrator; and



17 ‘‘(ii) report all transfers or sales of



18 class II substances during each of calendar



19 years 2004, 2005, and 2006 to all other



20 persons who produced in the United States



21 a class II substance during calendar year



22 2004, 2005, or 2006, and supply evidence



23 of such transfers and sales as deemed nec-



24 essary by the Administrator. 731



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1 ‘‘(C) ADDED SUBSTANCES.—In the case of



2 a substance added to the list of class II, group



3 II substances after publication of the initial list



4 of such substances under this section, each per-



5 son who produced, imported, exported, or im-



6 ported products containing such substance in



7 calendar year 2004, 2005, or 2006 shall file a



8 report with the Administrator within 180 days



9 after the date on which such substance is added



10 to the list, setting forth the amount of the sub-



11 stance that such person produced, imported,



12 and exported, as well as the amount that was



13 contained in products imported by that person,



14 in calendar years 2004, 2005, and 2006.



15 ‘‘(o) STRATOSPHERIC OZONE AND CLIMATE PROTEC-



16 TION FUND.—



17 ‘‘(1) IN GENERAL.—There is established in the



18 Treasury of the United States a Stratospheric Ozone



19 and Climate Protection Fund.



20 ‘‘(2) DEPOSITS.—The Administrator shall de-



21 posit all proceeds from the auction and non-auction



22 sale of allowances under this section into the Strato-



23 spheric Ozone and Climate Protection Fund.



24 ‘‘(3) USE.—Amounts deposited into the Strato-



25 spheric Ozone and Climate Protection Fund shall be 732



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1 available, subject to appropriations, exclusively for



2 the following purposes:



3 ‘‘(A) RECOVERY, 
RECYCLING,  AND REC-



4 LAMATION.—The Administrator may utilize



5 funds to establish a program to incentivize the



6 recovery, recycling, and reclamation of any



7 Class II substances in order to reduce emissions



8 of such substances.



9 ‘‘(B) MULTILATERAL FUND.—If the



10 United States becomes a party or otherwise ad-



11 heres to a multilateral agreement, including any



12 amendment to the Montreal Protocol on Sub-



13 stances That Deplete the Ozone Layer, which



14 restricts the production or consumption of class



15 II, group II substances, the Administrator may



16 utilize funds to meet any related contribution



17 obligation of the United States to the Multilat-



18 eral Fund for the Implementation of the Mon-



19 treal Protocol or similar multilateral fund es-



20 tablished under such multilateral agreement.



21 ‘‘(C) LOW GLOBAL WARMING PRODUCT



22 TRANSITION ASSISTANCE PROGRAM.—



23 ‘‘(i) IN GENERAL.—The Adminis-



24 trator, in consultation with the Secretary



25 of Energy, may utilize funds in fiscal years 733



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1 2012 through 2022 to establish a program



2 to provide financial assistance to manufac-



3 turers of products containing class II,



4 group II substances to facilitate the transi-



5 tion to products that contain or utilize al-



6 ternative substances with no or low carbon



7 dioxide equivalent value and no ozone de-



8 pletion potential.



9 ‘‘(ii) DEFINITION.—In this subpara-



10 graph, the term ‘products’ means refrig-



11 erators, freezers, dehumidifiers, air condi-



12 tioners, foam insulation, technical aerosols,



13 fire protection systems, and semiconduc-



14 tors.



15 ‘‘(iii) FINANCIAL ASSISTANCE.—The



16 Administrator may provide financial assist-



17 ance to manufacturers pursuant to clause



18 (i) for—



19 ‘‘(I) the design and configuration



20 of new products that use alternative



21 substances with no or low carbon di-



22 oxide equivalent value and no ozone



23 depletion potential; and



24 ‘‘(II) the redesign and retooling



25 of facilities for the manufacture of 734



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1 products in the United States that use



2 alternative substances with no or low



3 carbon dioxide equivalent value and



4 no ozone depletion potential.



5 ‘‘(iv) REPORTS.—For any fiscal year



6 during which the Administrator provides



7 financial assistance pursuant to this sub-



8 paragraph, the Administrator shall submit



9 a report to the Congress within 3 months



10 of the end of such fiscal year detailing the



11 amounts, recipients, specific purposes, and



12 results of the financial assistance pro-



13 vided.’’.



14 (b) TABLE OF CONTENTS.—The table of contents of



15 title VI of the Clean Air Act (42 U.S.C. 7671 et seq.)



16 is amended by adding the following new item at the end



17 thereof:



‘‘Sec. 619. Hydrofluorocarbons (HFCs).’’.



18 (c) FIRE SUPPRESSION AGENTS.—Section 605(a) of



19 the Clean Air Act (42 U.S.C. 7671(a)) is amended—



20 (1) by striking ‘‘or’’ at the end of paragraph



21 (2);



22 (2) by striking the period at the end of para-



23 graph (3) and inserting ‘‘; or’’; and



24 (3) by adding the following new paragraph after



25 paragraph (3): 735



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1 ‘‘(4) is listed as acceptable for use as a fire sup-



2 pression agent for nonresidential applications in ac-



3 cordance with section 612(c).’’.



4 (d) MOTOR VEHICLE AIR CONDITIONERS.—



5 (1) Section 609(e) of the Clean Air Act (42



6 U.S.C. 7671h(e)) is amended by inserting ‘‘, group



7 I’’ after each reference to ‘‘class II’’ in the text and



8 heading.



9 (2) Section 609 of the Clean Air Act (42 U.S.C.



10 7671h) is amended by adding the following new sub-



11 section after subsection (e):



12 ‘‘(f) CLASS II, GROUP II SUBSTANCES.—



13 ‘‘(1) REPAIR.—The Administrator may promul-



14 gate regulations establishing requirements for repair



15 of motor vehicle air conditioners prior to adding a



16 class II, group II substance.



17 ‘‘(2) SMALL CONTAINERS.—(A) The Adminis-



18 trator may promulgate regulations establishing serv-



19 icing practices and procedures for recovery of class



20 II, group II substances from containers which con-



21 tain less than 20 pounds of such class II, group II



22 substances.



23 ‘‘(B) Not later than 18 months after enactment



24 of this subsection, the Administrator shall either



25 promulgate regulations requiring that containers 736



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1 which contain less than 20 pounds of a class II,



2 group II substance be equipped with a device or



3 technology that limits refrigerant emissions and



4 leaks from the container and limits refrigerant emis-



5 sions and leaks during the transfer of refrigerant



6 from the container to the motor vehicle air condi-



7 tioner or issue a determination that such require-



8 ments are not necessary or appropriate.



9 ‘‘(C) Not later than 18 months after enactment



10 of this subsection, the Administrator shall promul-



11 gate regulations establishing requirements for con-



12 sumer education materials on best practices associ-



13 ated with the use of containers which contain less



14 than 20 pounds of a class II, group II substance and



15 prohibiting the sale or distribution, or offer for sale



16 or distribution, of any class II, group II substance



17 in any container which contains less than 20 pounds



18 of such class II, group II substance, unless con-



19 sumer education materials consistent with such re-



20 quirements are displayed and available at point-of-



21 sale locations, provided to the consumer, or included



22 in or on the packaging of the container which con-



23 tain less than 20 pounds of a class II, group II sub-



24 stance. 737



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1 ‘‘(D) The Administrator may, through rule-



2 making, extend the requirements established under



3 this paragraph to containers which contain 30



4 pounds or less of a class II, group II substance if



5 the Administrator determines that such action would



6 produce significant environmental benefits.



7 ‘‘(3) RESTRICTION OF SALES.—Effective Janu-



8 ary 1, 2014, no person may sell or distribute or offer



9 to sell or distribute or otherwise introduce into inter-



10 state commerce any motor vehicle air conditioner re-



11 frigerant in any size container unless the substance



12 has been found acceptable for use in a motor vehicle



13 air conditioner under section 612.’’.



14 (e) SAFE ALTERNATIVES POLICY.—Section 612(e) of



15 the Clean Air Act (42 U.S.C. 7671k(e)) is amended by



16 inserting ‘‘or class II’’ after each reference to ‘‘class
I’’.



17 SEC. 123. BLACK CARBON.



18 (a) STUDY OF BLACK CARBON EMISSIONS.—



19 (1) DEFINITION OF BLACK CARBON.—In this



20 subsection, the term ‘‘black carbon’’ means any



21 light-absorbing graphitic (or elemental) particle pro-



22 duced by incomplete combustion.



23 (2) STUDY.—The Administrator, in consulta-



24 tion with the Secretary of Energy, the Secretary of



25 State, and the heads of the National Oceanic and 738



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1 Atmospheric Administration, the National Aero-



2 nautics and Space Administration, the United States



3 Agency for International Development, the National



4 Institutes of Health, the Centers for Disease Control



5 and Prevention, National Institute of Standards and



6 Technology, and other relevant Federal departments



7 and agencies and representatives of appropriate in-



8 dustry and environmental groups, shall conduct a 4-



9 phase study of black carbon emissions, the phases of



10 which shall be the following:



11 (A) PHASE I–UNIVERSAL DEFINITION.—



12 The Administrator shall conduct phase I of the



13 study under this subsection to carry out meas-



14 ures to establish for the scientific community



15 standard definitions of the terms—



16 (i) black carbon; and



17 (ii) organic carbon.



18 (B) PHASE II–SOURCES AND TECH-



19 NOLOGIES.—The Administrator shall conduct



20 phase II of the study under this subsection to



21 summarize the available scientific and technical



22 information concerning—



23 (i) the identification of the major



24 sources of black carbon emissions in the



25 United States and throughout the world; 739



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1 (ii) an estimate of—



2 (I) the quantity of current and



3 projected future black carbon emis-



4 sions from those sources; and



5 (II) the net climate effects of the



6 emissions;



7 (iii) the most recent scientific data



8 relevant to the public health- and climate-



9 related impacts of black carbon emissions



10 and associated emissions of organic car-



11 bon, nitrogen oxides, and sulfur oxides



12 from the sources identified under clause



13 (i);



14 (iv) the most effective control strate-



15 gies for additional domestic and inter-



16 national reductions in black carbon emis-



17 sions, taking into consideration lifecycle



18 analysis, cost-effectiveness, and the net cli-



19 mate impact of technologies, operations,



20 and strategies, such as—



21 (I) diesel particulate filters on ex-



22 isting diesel on- and off-road engines;



23 and



24 (II) particulate emission reduc-



25 tion measures for marine vessels; 740



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1 (v) carbon dioxide equivalency factors,



2 global/regional modeling, or other metrics



3 to compare the global warming and other



4 climate effects of black carbon emissions



5 with carbon dioxide and other greenhouse



6 gas emissions; and



7 (vi) the health benefits associated with



8 additional black carbon emission reduc-



9 tions.



10 (C) PHASE III–INTERNATIONAL FUND-



11 ING.—The Administrator shall conduct phase



12 III of the study under this subsection—



13 (i) to summarize the amount, type,



14 and direction of all actual and potential fi-



15 nancial, technical, and related assistance



16 provided by the United States to foreign



17 countries to reduce, mitigate, or otherwise



18 abate—



19 (I) black carbon emissions; and



20 (II) any health, environmental,



21 and economic impacts associated with



22 those emissions; and



23 (ii) to identify opportunities, including



24 action under existing authority, to achieve



25 significant black carbon emission reduc-741



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1 tions in foreign countries through the pro-



2 vision of technical assistance or other ap-



3 proaches.



4 (D) PHASE IV–RESEARCH AND DEVELOP-



5 MENT OPPORTUNITIES.—The Administrator



6 shall conduct phase IV of the study under this



7 subsection for the purpose of providing to Con-



8 gress recommendations regarding—



9 (i) areas of focus for additional re-



10 search for cost-effective technologies, oper-



11 ations, and strategies with the highest po-



12 tential to reduce black carbon emissions



13 and protect public health in the United



14 States and internationally; and



15 (ii) actions that the Federal Govern-



16 ment could take to encourage or require



17 additional black carbon emission reduc-



18 tions.



19 (3) REPORTS.—The Administrator shall submit



20 to Congress—



21 (A) by not later than 180 days after the



22 date of enactment of this Act, a report describ-



23 ing the results of phases I and II of the study



24 under subparagraphs (A) and (B) of paragraph



25 (2); 742



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1 (B) by not later than 270 days after the



2 date of enactment of this Act, a report describ-



3 ing the results of phase III of the study under



4 paragraph (2)(C); and



5 (C) by not later than 1 year after the date



6 of enactment of this Act, a report describing



7 the recommendations developed for phase IV of



8 the study under paragraph (2)(D).



9 (4) AUTHORIZATION OF APPROPRIATIONS.—



10 There are authorized to be appropriated such sums



11 as are necessary to carry out this subsection.



12 (b) BLACK CARBON MITIGATION.—Title VIII of the



13 Clean Air Act (as amended by section 113 of division A)



14 is amended by adding at the end the following:



15 ‘‘PART E—BLACK CARBON



16 ‘‘SEC. 851. BLACK CARBON.



17 ‘‘(a) DOMESTIC BLACK CARBON MITIGATION.—



18 ‘‘(1) IN GENERAL.—Taking into consideration



19 the public health and environmental impacts of black



20 carbon emissions, including the effects on global and



21 regional warming, the Arctic, and other snow and



22 ice-covered surfaces, the Administrator shall—



23 ‘‘(A) not later than 2 years after the date



24 of enactment of this part, propose— 743



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1 ‘‘(i) regulations applicable to emis-



2 sions of black carbon under the existing



3 authorities of this Act; or



4 ‘‘(ii) a finding that existing regula-



5 tions promulgated pursuant to this Act



6 adequately regulate black carbon emis-



7 sions, which finding may be based on a



8 finding that existing regulations, in the



9 judgment of the Administrator—



10 ‘‘(I) address those sources that



11 both contribute significantly to the



12 total emissions of black carbon and



13 provide the greatest potential for sig-



14 nificant and cost-effective reductions



15 in emissions of black carbon, under



16 the existing authorities; and



17 ‘‘(II) reflect the greatest degree



18 of emission reduction achievable



19 through application of technology that



20 will be available for such sources, giv-



21 ing appropriate consideration to cost,



22 energy, and safety factors associated



23 with the application of such tech-



24 nology; and 744



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1 ‘‘(B) not later than 3 years after the date



2 of enactment of this part, promulgate final reg-



3 ulations under the existing authorities of this



4 Act or finalize the proposed finding.



5 ‘‘(2) APPLICABILITY OF REGULATIONS.—Regu-



6 lations promulgated under paragraph (1) shall not



7 apply to specific types, classes, categories, or other



8 suitable groupings of emission sources that the Ad-



9 ministrator finds are subject to adequate regulation.



10 ‘‘(b) AUTHORIZATION OF APPROPRIATIONS.—There



11 are authorized to be appropriated such sums as are nec-



12 essary to carry out this section.’’.



13 SEC. 124. STATES.



14 Section 116 of the Clean Air Act (42 U.S.C. 7416)



15 is amended by adding the following at the end thereof:



16 ‘‘For the purposes of this section, the phrases ‘standard



17 or limitation respecting emissions of air pollutants’ and



18 ‘requirements respecting control or abatement of air
pollu-



19 tion’ shall include any provision to: limit greenhouse
gas



20 emissions, require surrender to the State or a political



21 subdivision thereof of emission allowances or offset
credits



22 established or issued under this Act, and require the use



23 of such allowances or credits as a means of demonstrating



24 compliance with requirements established by a State or



25 political subdivision thereof.’’. 745



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1 SEC. 125. STATE PROGRAMS.



2 Title VIII of the Clean Air Act (as amended by sec-



3 tion 123(b)) is amended by adding at the end the fol-



4 lowing:



5 ‘‘PART F—MISCELLANEOUS



6 ‘‘SEC. 861. STATE PROGRAMS.



7 ‘‘(a) IN GENERAL.—Notwithstanding section 116, if



8 a Federal auction is conducted, by the deadline of March



9 31, 2011, as established in section 778, no State or
polit-



10 ical subdivision thereof shall implement or enforce a
com-



11 prehensive greenhouse gas emission limitation program



12 that covers any capped emissions emitted during the years



13 2012 through 2017.



14 ‘‘(b) DEADLINE.—Notwithstanding section 116, in



15 the event the March 31, 2011 auction is delayed, no State



16 or political subdivision thereof shall enforce a
comprehen-



17 sive greenhouse gas emission limitation program that cov-



18 ers any capped emissions emitted during the period that



19 is at least 9 months from the first auction as set out in



20 section 778, through 2017.



21 ‘‘(c) DEFINITION OF COMPREHENSIVE GREENHOUSE



22 GAS EMISSION LIMITATION PROGRAM.—For purposes of



23 this section, the term ‘comprehensive greenhouse gas



24 emission limitation program’ means a system of green-



25 house gas regulation under which a State or political
sub-



26 division issues a limited number of tradable instruments
746



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1 in the nature of emission allowances and requires that



2 sources within its jurisdiction surrender such tradeable
in-



3 struments for each unit of greenhouse gases emitted dur-



4 ing a compliance period. For purposes of this section, a



5 ‘comprehensive greenhouse gas emission limitation pro-



6 gram’ does not include a target or limit on greenhouse



7 gas emissions adopted by a State or political subdivision



8 that is implemented other than through the issuance and



9 surrender of a limited number of tradable instruments in



10 the nature of emission allowances, nor does it include
any



11 other standard, limit, regulation, or program to reduce



12 greenhouse gas emissions that is not implemented through



13 the issuance and surrender of a limited number of



14 tradeable instruments in the nature of emission allow-



15 ances. For purposes of this section, the term ‘comprehen-



16 sive greenhouse gas emission limitation program’ does not



17 include, among other things, fleet-wide motor vehicle
emis-



18 sion requirements that allow greater emissions with in-



19 creased vehicle production, or requirements that fuels,
or



20 other products, meet an average pollution emission rate



21 or lifecycle greenhouse gas standard.



22 ‘‘SEC. 862. GRANTS FOR SUPPORT OF AIR POLLUTION CON-



23 TROL PROGRAMS.



24 ‘‘The Administrator is authorized to make grants to



25 air pollution control agencies pursuant to section 105
for 747



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1 purposes of assisting in the implementation of programs



2 to address global warming established under the Clean



3 Energy Jobs and American Power Act.’’.



4 SEC. 126. ENFORCEMENT.



5 (a) REMAND.—Section 307(b) of the Clean Air Act



6 (42 U.S.C. 7607(b)) is amended by adding the following



7 new paragraph at the end thereof:



8 ‘‘(3) If the court determines that any action of



9 the Administrator is arbitrary, capricious, or other-



10 wise unlawful, the court may remand such action,



11 without vacatur, if vacatur would impair or delay



12 protection of the environment or public health or



13 otherwise undermine the timely achievement of the



14 purposes of this Act.



15 ‘‘(4) If the court determines that any action of



16 the Administrator is arbitrary, capricious, or other-



17 wise unlawful, and remands the matter to the Ad-



18 ministrator, the Administrator shall complete final



19 action on remand within an expeditious time period



20 not longer than the time originally allowed for the



21 action or 1 year, whichever is less, unless the court



22 on motion determines that a shorter or longer period



23 is necessary, appropriate, and consistent with the



24 purposes of this Act. The court of appeals shall have 748



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1 jurisdiction to enforce a deadline for action on re-



2 mand under this paragraph.’’.



3 (b) PETITION FOR RECONSIDERATION.—Section



4 307(d)(7)(B) of the Clean Air Act (42 U.S.C.



5 7607(d)(7)(B)) is amended as follows:



6 (1) By inserting after the second sentence ‘‘If



7 a petition for reconsideration is filed, the Adminis-



8 trator shall take final action on such petition, in-



9 cluding promulgation of final action either revising



10 or determining not to revise the action for which re-



11 consideration is sought, within 150 days after the



12 petition is received by the Administrator or the peti-



13 tion shall be deemed denied for the purpose of judi-



14 cial review.’’.



15 (2) By amending the third sentence to read as



16 follows: ‘‘Such person may seek judicial review of



17 such denial, or of any other final action, by the Ad-



18 ministrator, in response to a petition for reconsider-



19 ation, in the United States court of appeals for the



20 appropriate circuit (as provided in subsection (b)).’’.



21 (c) PETITION FOR REVIEW.—Section 307(b)(1) of



22 the Clean Air Act (42 U.S.C. 7607(b)(1)) is amended by



23 inserting after the second sentence the following: ‘‘Any



24 person may file a petition for review of action by the
Ad-



25 ministrator as provided in this subsection.’’. 749



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1 SEC. 127. CONFORMING AMENDMENTS.



2 (a) FEDERAL ENFORCEMENT.—Section 113 of the



3 Clean Air Act (42 U.S.C. 7413) is amended as follows:



4 (1) In subsection (a)(3), by striking ‘‘or title



5 VI,’’ and inserting ‘‘title VI, title VII, or title
VIII’’.



6 (2) In subsection (b), by striking ‘‘or a major



7 stationary source’’ and inserting ‘‘a major stationary



8 source, or a covered EGU under title VIII’’ in the



9 material preceding paragraph (1).



10 (3) In paragraph (2) of subsection (b), by strik-



11 ing ‘‘or title VI’’ and inserting ‘‘title VI, title VII,



12 or title VIII’’.



13 (4) In subsection (c)—



14 (A) in the first sentence of paragraph (1),



15 by striking ‘‘or title VI (relating to strato-



16 spheric ozone control),’’ and inserting ‘‘title VI,



17 title VII, or title VIII,’’; and



18 (B) in the first sentence of paragraph (3),



19 by striking ‘‘or VI’’ and inserting ‘‘VI, VII, or



20 VIII’’.



21 (5) In subsection (d)(1)(B), by striking ‘‘or VI’’



22 and inserting ‘‘VI, VII, or VIII’’.



23 (6) In subsection (f), in the first sentence, by



24 striking ‘‘or VI’’ and inserting ‘‘VI, VII, or VIII’’.
750



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1 (b) RETENTION OF STATE AUTHORITY.—Section



2 116 of the Clean Air Act (42 U.S.C. 7416) is amended



3 as follows:



4 (1) By striking ‘‘and 233’’ and inserting ‘‘233’’.



5 (2) By striking ‘‘of moving sources)’’ and in-



6 serting ‘‘of moving sources), and 861 (preempting



7 certain State greenhouse gas programs for a limited



8 time)’’.



9 (c) INSPECTIONS, MONITORING,  AND ENTRY.—Sec-



10 tion 114(a) of the Clean Air Act (42 U.S.C. 7414(a)) is



11 amended by striking ‘‘section 112,’’ and all that follows



12 through ‘‘(ii)’’ and inserting the following: ‘‘section
112,



13 or any regulation of greenhouse gas emissions under title



14 VII or VIII, (ii)’’.



15 (d) ENFORCEMENT.—Subsection (f) of section 304 of



16 the Clean Air Act (42 U.S.C. 7604(f)) is amended as fol-



17 lows:



18 (1) By striking ‘‘; or’’ at the end of paragraph



19 (3) thereof and inserting a comma.



20 (2) By striking the period at the end of para-



21 graph (4) thereof and inserting ‘‘, or’’.



22 (3) By adding the following after paragraph (4)



23 thereof:



24 ‘‘(5) any requirement of title VII or VIII.’’. 751



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1 (e) ADMINISTRATIVE PROCEEDINGS AND JUDICIAL



2 REVIEW.—Section 307 of the Clean Air Act (42 U.S.C.



3 7607) is amended as follows:



4 (1) In subsection (a), by striking ‘‘, or section



5 306’’ and inserting ‘‘section 306, or title VII or



6 VIII’’.



7 (2) In subsection (b)(1)—



8 (A) by striking ‘‘,,’’ and inserting ‘‘,’’ in



9 each place such punctuation appears; and



10 (B) by striking ‘‘section 120,’’ in the first



11 sentence and inserting ‘‘section 120, any final



12 action under title VII or VIII,’’.



13 (3) In subsection (d)(1) by amending subpara-



14 graph (S) to read as follows:



15 ‘‘(S) the promulgation or revision of any



16 regulation under title VII or VIII,’’.



17 (f) TECHNICAL AMENDMENT.—Title IV of the Clean



18 Air Act (relating to noise pollution) (42 U.S.C. 7641 et



19 seq.)—



20 (1) is amended by redesignating sections 401



21 through 403 as sections 901 through 903, respec-



22 tively; and



23 (2) is redesignated as title IX and moved to ap-



24 pear at the end of that Act. 752



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1 SEC. 128. DAVIS-BACON COMPLIANCE.



2 (a) IN GENERAL.—Notwithstanding any other provi-



3 sion of law and in a manner consistent with other provi-



4 sions in this Act, to receive emission allowances or
funding



5 under this Act, or the amendments made by this Act, the



6 recipient shall provide reasonable assurances that all la-



7 borers and mechanics employed by contractors and sub-



8 contractors on projects funded directly by or assisted in



9 whole or in part by and through the Federal Government



10 pursuant to this Act, or the amendments made by this



11 Act, or by any entity established in accordance with this



12 Act, or the amendments made by this Act, including the



13 Carbon Storage Research Corporation, will be paid wages



14 at rates not less than those prevailing on projects of a



15 character similar in the locality as determined by the
Sec-



16 retary of Labor in accordance with subchapter IV of chap-



17 ter 31 of title 40, United States Code (commonly known



18 as the ‘‘Davis-Bacon Act’’). With respect to the labor



19 standards specified in this section, the Secretary of
Labor



20 shall have the authority and functions set forth in
Reorga-



21 nization Plan Numbered 14 of 1950 (64 Stat. 1267; 5



22 U.S.C. App.) and section 3145 of title 40, United States



23 Code.



24 (b) EXEMPTION.—Neither subsection (a) nor the re-



25 quirements of subchapter IV of chapter 31 of title 40,
753



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1 United States Code, shall apply to retrofitting of the
fol-



2 lowing:



3 (1) Single family homes (both attached and de-



4 tached) under section 164 of division A.



5 (2) Owner-occupied residential units in larger



6 buildings that have their own dedicated space-condi-



7 tioning systems under section 164 of division A.



8 (3) Residential buildings (as defined in section



9 164(a) of division A) if designed for residential use



10 by less than 4 families.



11 (4) Nonresidential buildings (as defined in sec-



12 tion 164(a) of division A) if the net interior space



13 of such nonresidential building is less than 6,500



14 square feet.



15 Subtitle D—Carbon Market



16 Assurance



17 SEC. 131. CARBON MARKET ASSURANCE.



18 It is the sense of the Senate that there shall be a



19 single, integrated carbon market oversight program—



20 (1) to provide for effective and comprehensive



21 market oversight and enforcement;



22 (2) to lower systemic risk and protect con-



23 sumers;



24 (3) to ensure market liquidity and allowance



25 availability; 754



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1 (4) to enhance the price discovery function of



2 such markets, ensuring that the price for emission



3 allowances and offset credits reflects the marginal



4 cost of abatement;



5 (5) to prevent excessive speculation that con-



6 tributes to price volatility, including the establish-



7 ment of robust aggregate position limits and margin



8 requirements;



9 (6) to ensure that market mechanisms and as-



10 sociated oversight support the environmental integ-



11 rity of the program established under title VII of the



12 Clean Air Act (as added by section 101 of this divi-



13 sion);



14 (7) to establish provisions for market trans-



15 parency that provide authority, resources, and infor-



16 mation needed to prevent fraud and manipulation in



17 such markets;



18 (8) to establish standards for trading as, and



19 operation of, trading facilities;



20 (9) to ensure a well-functioning, well-regulated



21 market, including a futures market, designed to



22 manage risk and facilitate investment in emission re-



23 ductions;



24 (10) to establish clear, professional standards



25 for dealers, traders, and other market participants; 755



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1 (11) to provide for appropriate criminal and



2 civil penalties; and



3 (12) to prevent any excessive leverage by mar-



4 ket participants that creates risk to the economy.



5 Subtitle E—Ensuring Real



6 Reductions in Industrial Emissions



7 SEC. 141. ENSURING REAL REDUCTIONS IN INDUSTRIAL



8 EMISSIONS.



9 Title VII of the Clean Air Act (as amended by section



10 322 of division A) is amended by adding at the end the



11 following:



12 ‘‘PART F—ENSURING REAL REDUCTIONS IN



13 INDUSTRIAL EMISSIONS



14 ‘‘SEC. 761. PURPOSES.



15 ‘‘The purposes of this part are—



16 ‘‘(1) to promote a strong global effort to signifi-



17 cantly reduce greenhouse gas emissions, and,



18 through this global effort, stabilize greenhouse gas



19 concentrations in the atmosphere at a level that will



20 prevent dangerous anthropogenic interference with



21 the climate system;



22 ‘‘(2) to prevent an increase in greenhouse gas



23 emissions in countries other than the United States



24 as a result of direct and indirect compliance costs in-



25 curred under this title; 756



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1 ‘‘(3) to provide a rebate to the owners and op-



2 erators of entities in domestic eligible industrial sec-



3 tors for their greenhouse gas emission costs incurred



4 under this title, but not for costs associated with



5 other related or unrelated market dynamics;



6 ‘‘(4) to design such rebates in a way that will



7 prevent carbon leakage while also rewarding innova-



8 tion and facility-level investments in energy effi-



9 ciency performance improvements; and



10 ‘‘(5) to eliminate or reduce distribution of emis-



11 sion allowances under this part when such distribu-



12 tion is no longer necessary to prevent carbon leakage



13 from eligible industrial sectors.



14 ‘‘SEC. 762. DEFINITIONS.



15 ‘‘In this part:



16 ‘‘(1) CARBON LEAKAGE.—The term ‘carbon



17 leakage’ means any substantial increase (as deter-



18 mined by the Administrator) in greenhouse gas



19 emissions by industrial entities located in other



20 countries if such increase is caused by an incre-



21 mental cost of production increase in the United



22 States resulting from the implementation of this



23 title.



24 ‘‘(2) ELIGIBLE INDUSTRIAL SECTOR.—The



25 term ‘eligible industrial sector’ means an industrial 757



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1 sector determined by the Administrator under sec-



2 tion 763(b) to be eligible to receive emission allow-



3 ance rebates under this part.



4 ‘‘(3) INDUSTRIAL SECTOR.—The term ‘indus-



5 trial sector’ means any sector that is in the manu-



6 facturing sector (as defined in NAICS codes 31, 32,



7 and 33) or that beneficiates or otherwise processes



8 (including agglomeration) metal ores, including iron



9 and copper ores, soda ash, or phosphate. The extrac-



10 tion of metal ores, soda ash, or phosphate shall not



11 be considered to be an industrial sector.



12 ‘‘(4) NAICS.—The term ‘NAICS’ means the



13 North American Industrial Classification System of



14 2002.



15 ‘‘(5) OUTPUT.—The term ‘output’ means the



16 total tonnage or other standard unit of production



17 (as determined by the Administrator) produced by



18 an entity in an industrial sector. The output of the



19 cement sector is hydraulic cement, and not clinker.



20 ‘‘SEC. 763. ELIGIBLE INDUSTRIAL SECTORS.



21 ‘‘(a) LIST.—



22 ‘‘(1) INITIAL LIST.—Not later than June 30,



23 2011, the Administrator shall publish in the Federal



24 Register a list of eligible industrial sectors pursuant



25 to subsection (b). Such list shall include the amount 758



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1 of the emission allowance rebate per unit of produc-



2 tion that shall be provided to entities in each eligible



3 industrial sector in the following two calendar years



4 pursuant to section 764.



5 ‘‘(2) SUBSEQUENT LISTS.—Not later than Feb-



6 ruary 1, 2013, and every 4 years thereafter, the Ad-



7 ministrator shall publish in the Federal Register an



8 updated version of the list published under para-



9 graph (1).



10 ‘‘(b) ELIGIBLE INDUSTRIAL SECTORS.—



11 ‘‘(1) IN GENERAL.—Not later than June 30,



12 2011, the Administrator shall promulgate a rule des-



13 ignating, based on the criteria under paragraph (2),



14 the industrial sectors eligible for emission allowance



15 rebates under this part.



16 ‘‘(2) PRESUMPTIVELY ELIGIBLE INDUSTRIAL



17 SECTORS.—



18 ‘‘(A) ELIGIBILITY CRITERIA.—



19 ‘‘(i) IN GENERAL.—An owner or oper-



20 ator of an entity shall be eligible to receive



21 emission allowance rebates under this part



22 if such entity is in an industrial sector that



23 is included in a six-digit classification of



24 the NAICS that meets the criteria in both 759



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1 clauses (ii) and (iii), or the criteria in



2 clause (iv).



3 ‘‘(ii) ENERGY OR GREENHOUSE GAS



4 INTENSITY.—As determined by the Admin-



5 istrator, the industrial sector had—



6 ‘‘(I) an energy intensity of at



7 least 5 percent, calculated by dividing



8 the cost of purchased electricity and



9 fuel costs of the sector by the value of



10 the shipments of the sector, based on



11 data described in subparagraph (D);



12 or



13 ‘‘(II) a greenhouse gas intensity



14 of at least 5 percent, calculated by di-



15 viding—



16 ‘‘(aa) the number 20 multi-



17 plied by the number of tons of



18 carbon dioxide equivalent green-



19 house gas emissions (including



20 direct emissions from fuel com-



21 bustion, process emissions, and



22 indirect emissions from the gen-



23 eration of electricity used to



24 produce the output of the sector) 760



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1 of the sector based on data de-



2 scribed in subparagraph (D); by



3 ‘‘(bb) the value of the ship-



4 ments of the sector, based on



5 data described in subparagraph



6 (D).



7 ‘‘(iii) TRADE INTENSITY.—As deter-



8 mined by the Administrator, the industrial



9 sector had a trade intensity of at least 15



10 percent, calculated by dividing the value of



11 the total imports and exports of such sec-



12 tor by the value of the shipments plus the



13 value of imports of such sector, based on



14 data described in subparagraph (D).



15 ‘‘(iv) VERY HIGH ENERGY OR GREEN-



16 HOUSE GAS INTENSITY.—As determined by



17 the Administrator, the industrial sector



18 had an energy or greenhouse gas intensity,



19 as calculated under clause (ii)(I) or (II), of



20 at least 20 percent.



21 ‘‘(B) METAL AND PHOSPHATE PRODUC-



22 TION CLASSIFIED UNDER MORE THAN ONE



23 NAICS CODE.—For purposes of this section, the



24 Administrator shall— 761



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1 ‘‘(i) aggregate data for the



2 beneficiation or other processing (including



3 agglomeration) of metal ores, including



4 iron and copper ores, soda ash, or phos-



5 phate with subsequent steps in the process



6 of metal and phosphate manufacturing, re-



7 gardless of the NAICS code under which



8 such activity is classified; and



9 ‘‘(ii) aggregate data for the manufac-



10 turing of steel with the manufacturing of



11 steel pipe and tube made from purchased



12 steel in a nonintegrated process.



13 ‘‘(C) EXCLUSION.—The petroleum refining



14 sector shall not be an eligible industrial sector.



15 ‘‘(D) DATA SOURCES.—



16 ‘‘(i) ELECTRICITY AND FUEL COSTS,



17 VALUE OF SHIPMENTS.—The Adminis-



18 trator shall determine electricity and fuel



19 costs and the value of shipments under



20 this subsection from data from the United



21 States Census Annual Survey of Manufac-



22 turers. The Administrator shall take the



23 average of data from as many of the years



24 of 2004, 2005, and 2006 for which such



25 data are available. If such data are un-762



O:\\DEC\\DEC09674.xml [file 5 of 5] S.L.C.



1 available, the Administrator shall make a



2 determination based upon 2002 or 2006



3 data from the most detailed industrial clas-



4 sification level of Energy Information



5 Agency’s Manufacturing Energy Consump-



6 tion Survey (using 2006 data if it is avail-



7 able) and the 2002 or 2007 Economic Cen-



8 sus of the United States (using 2007 data



9 if it is available). If data from the Manu-



10 facturing Energy Consumption Survey or



11 Economic Census are unavailable for any



12 sector at the six-digit classification level in



13 the NAICS, then the Administrator may



14 extrapolate the information necessary to



15 determine the eligibility of a sector under



16 this paragraph from available Manufac-



17 turing Energy Consumption Survey or



18 Economic Census data pertaining to a



19 broader industrial category classified in the



20 NAICS. If data relating to the



21 beneficiation or other processing (including



22 agglomeration) of metal ores, including



23 iron and copper ores, soda ash, or phos-



24 phate are not available from the specified



25 data sources, the Administrator shall use 763



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1 the best available Federal or State govern-



2 ment data and may use, to the extent nec-



3 essary, representative data submitted by



4 entities that perform such beneficiation or



5 other processing (including agglomeration),



6 in making a determination. Fuel cost data



7 shall not include the cost of fuel used as



8 feedstock by an industrial sector.



9 ‘‘(ii) IMPORTS AND EXPORTS.—The



10 Administrator shall base the value of im-



11 ports and exports under this subsection on



12 United States International Trade Com-



13 mission data. The Administrator shall take



14 the average of data from as many of the



15 years of 2004, 2005, and 2006 for which



16 such data are available. If data from the



17 United States International Trade Com-



18 mission are unavailable for any sector at



19 the six-digit classification level in the



20 NAICS, then the Administrator may ex-



21 trapolate the information necessary to de-



22 termine the eligibility of a sector under



23 this paragraph from available United



24 States International Trade Commission 764



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1 data pertaining to a broader industrial cat-



2 egory classified in the NAICS.



3 ‘‘(iii) PERCENTAGES.—The Adminis-



4 trator shall round the energy intensity,



5 greenhouse gas intensity, and trade inten-



6 sity percentages under subparagraph (A)



7 to the nearest whole number.



8 ‘‘(iv) GREENHOUSE GAS EMISSION



9 CALCULATIONS.—When calculating the



10 tons of carbon dioxide equivalent green-



11 house gas emissions for each sector under



12 subparagraph (A)(ii)(II)(aa), the Adminis-



13 trator—



14 ‘‘(I) shall use the best available



15 data from as many of the years 2004,



16 2005, and 2006 for which such data



17 is available; and



18 ‘‘(II) may, to the extent nec-



19 essary with respect to a sector, use



20 economic and engineering models and



21 the best available information on tech-



22 nology performance levels for such



23 sector.



24 ‘‘(3) ADMINISTRATIVE DETERMINATION OF AD-



25 DITIONAL ELIGIBLE INDUSTRIAL SECTORS.— 765



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1 ‘‘(A) UPDATED TRADE INTENSITY DATA.—



2 The Administrator shall designate as eligible to



3 receive emission allowance rebates under this



4 part an industrial sector that—



5 ‘‘(i) met the energy or greenhouse gas



6 intensity criteria in paragraph (2)(A)(ii) as



7 of the date of promulgation of the rule



8 under paragraph (1); and



9 ‘‘(ii) meets the trade intensity criteria



10 in paragraph (2)(A)(iii), using data from



11 any year after 2006.



12 ‘‘(B) INDIVIDUAL SHOWING PETITION.—



13 ‘‘(i) PETITION.—In addition to des-



14 ignation under paragraph (2) or subpara-



15 graph (A) of this paragraph, the owner or



16 operator of an entity in an industrial sec-



17 tor may petition the Administrator to des-



18 ignate as eligible industrial sectors under



19 this part an entity or a group of entities



20 that—



21 ‘‘(I) represent a subsector of a



22 six-digit section of the NAICS code;



23 and



24 ‘‘(II) meet the eligibility criteria



25 in both clauses (ii) and (iii) of para-766



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1 graph (2)(A), or the eligibility criteria



2 in clause (iv) of paragraph (2)(A).



3 ‘‘(ii) DATA.—In making a determina-



4 tion under this subparagraph, the Admin-



5 istrator shall consider data submitted by



6 the petitioner that is specific to the entity,



7 data solicited by the Administrator from



8 other entities in the subsector, if such



9 other entities exist, and data specified in



10 paragraph (2)(D).



11 ‘‘(iii) BASIS OF SUBSECTOR DETER-



12 MINATION.—The Administrator shall de-



13 termine an entity or group of entities to be



14 a subsector of a six-digit section of the



15 NAICS code based only upon the products



16 manufactured and not the industrial proc-



17 ess by which the products are manufac-



18 tured, except that the Administrator may



19 determine an entity or group of entities



20 that manufacture a product from primarily



21 virgin material to be a separate subsector



22 from another entity or group of entities



23 that manufacture the same product pri-



24 marily from recycled material. 767



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1 ‘‘(iv) USE OF MOST RECENT DATA.—



2 In determining whether to designate a sec-



3 tor or subsector as an eligible industrial



4 sector under this subparagraph, the Ad-



5 ministrator shall use the most recent data



6 available from the sources described in



7 paragraph (2)(D), rather than the data



8 from the years specified in paragraph



9 (2)(D), to determine the trade intensity of



10 such sector or subsector, but only for de-



11 termining such trade intensity.



12 ‘‘(v) FINAL ACTION.—The Adminis-



13 trator shall take final action on such peti-



14 tion no later than 6 months after the peti-



15 tion is received by the Administrator.



16 ‘‘SEC. 764. DISTRIBUTION OF EMISSION ALLOWANCE RE-



17 BATES.



18 ‘‘(a) DISTRIBUTION SCHEDULE.—



19 ‘‘(1) IN GENERAL.—For each vintage year, the



20 Administrator shall distribute pursuant to this sec-



21 tion emission allowances made available under sec-



22 tion 771(a)(5), no later than October 31 of the pre-



23 ceding calendar year. The Administrator shall make



24 such annual distributions to the owners and opera-



25 tors of each entity in an eligible industrial sector in
768



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1 the amount of emission allowances calculated under



2 subsection (b), except that—



3 ‘‘(A) for vintage years 2012 and 2013, the



4 distribution for a covered entity shall be pursu-



5 ant to the entity’s indirect carbon factor as cal-



6 culated under subsection (b)(3);



7 ‘‘(B) for vintage year 2026 and thereafter,



8 the distribution shall be pursuant to the



9 amount calculated under subsection (b) multi-



10 plied by, for a sector—



11 ‘‘(i) 90 percent for vintage year 2026;



12 ‘‘(ii) 80 percent for vintage year



13 2027;



14 ‘‘(iii) 70 percent for vintage year



15 2028;



16 ‘‘(iv) 60 percent for vintage year



17 2029;



18 ‘‘(v) 50 percent for vintage year 2030;



19 ‘‘(vi) 40 percent for vintage year



20 2031;



21 ‘‘(vii) 30 percent for vintage year



22 2032;



23 ‘‘(viii) 20 percent for vintage year



24 2033; 769



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1 ‘‘(ix) 10 percent for vintage year



2 2034; and



3 ‘‘(x) 0 percent for vintage year 2035



4 and thereafter.



5 ‘‘(2) NEWLY ELIGIBLE SECTORS.—In addition



6 to receiving a distribution of emission allowances



7 under this section in the first distribution occurring



8 after an industrial sector is designated as eligible



9 under section 763(b)(3), the owner or operator of an



10 entity in that eligible industrial sector may receive a



11 prorated share of any emission allowances made



12 available for distribution under this section that



13 were not distributed for the year in which the peti-



14 tion for eligibility was granted under section



15 763(b)(3)(A).



16 ‘‘(3) CESSATION OF QUALIFYING ACTIVITIES.—



17 If, as determined by the Administrator, a facility is



18 no longer in an eligible industrial sector designated



19 under section 763—



20 ‘‘(A) the Administrator shall not distribute



21 emission allowances to the owner or operator of



22 such facility under this section; and



23 ‘‘(B) the owner or operator of such facility



24 shall return to the Administrator all allowances



25 that have been distributed to it for future vin-770



O:\\DEC\\DEC09674.xml [file 5 of 5] S.L.C.



1 tage years and a pro-rated amount of allow-



2 ances distributed to the facility under this sec-



3 tion for the vintage year in which the facility



4 ceases to be in an eligible industrial sector des-



5 ignated under section 763.



6 ‘‘(b) CALCULATION OF DIRECT AND INDIRECT CAR-



7 BON FACTORS.—



8 ‘‘(1) IN GENERAL.—



9 ‘‘(A) COVERED ENTITIES.—Except as pro-



10 vided in subsection (a), for covered entities that



11 are in eligible industrial sectors, the amount of



12 emission allowance rebates shall be based on



13 the sum of the covered entity’s direct and indi-



14 rect carbon factors.



15 ‘‘(B) OTHER ELIGIBLE ENTITIES.—For



16 entities that are in eligible industrial sectors



17 but are not covered entities, the amount of



18 emission allowance rebates shall be based on



19 the entity’s indirect carbon factor.



20 ‘‘(C) NEW ENTITIES.—Not later than 2



21 years after the date of enactment of this title,



22 the Administrator shall issue regulations gov-



23 erning the distribution of emission allowance re-



24 bates for the first and second years of operation 771



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1 of a new entity in an eligible industrial sector.



2 These regulations shall provide for—



3 ‘‘(i) the distribution of emission allow-



4 ance rebates to such entities based on com-



5 parable entities in the same sector; and



6 ‘‘(ii) an adjustment in the third and



7 fourth years of operation to reconcile the



8 total amount of emission allowance rebates



9 received during the first and second years



10 of operation to the amount the entity



11 would have received during the first and



12 second years of operation had the appro-



13 priate data been available.



14 ‘‘(2) DIRECT CARBON FACTOR.—The direct car-



15 bon factor for a covered entity for a vintage year is



16 the product of—



17 ‘‘(A) the average annual output of the cov-



18 ered entity for the 2 years preceding the year



19 of the distribution; and



20 ‘‘(B) the most recent calculation of the av-



21 erage direct greenhouse gas emissions (ex-



22 pressed in tons of carbon dioxide equivalent)



23 per unit of output for all covered entities in the



24 sector, as determined by the Administrator



25 under paragraph (4). 772



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1 ‘‘(3) INDIRECT CARBON FACTOR.—



2 ‘‘(A) IN GENERAL.—The indirect carbon



3 factor for an entity for a vintage year is the



4 product obtained by multiplying the average an-



5 nual output of the entity for the 2 years pre-



6 ceding the year of the distribution by both the



7 electricity emissions intensity factor determined



8 pursuant to subparagraph (B) and the elec-



9 tricity efficiency factor determined pursuant to



10 subparagraph (C) for the year concerned.



11 ‘‘(B) ELECTRICITY EMISSIONS INTENSITY



12 FACTOR.—



13 ‘‘(i) IN GENERAL.—Each person sell-



14 ing electricity to the owner or operator of



15 an entity in any sector designated as an el-



16 igible industrial sector under section



17 763(b) shall provide the owner or operator



18 of the entity and the Administrator, on an



19 annual basis, the electricity emissions in-



20 tensity factor for the entity. The electricity



21 emissions intensity factor for the entity,



22 expressed in tons of carbon dioxide equiva-



23 lents per kilowatt hour, is determined by



24 dividing— 773



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1 ‘‘(I) the annual sum of the hour-



2 ly product of—



3 ‘‘(aa) the electricity pur-



4 chased by the entity from that



5 person in each hour (expressed in



6 kilowatt hours); multiplied by



7 ‘‘(bb) the marginal or



8 weighted average tons of carbon



9 dioxide equivalent per kilowatt



10 hour that are reflected in the



11 electricity charges to the entity,



12 as determined by the entity’s re-



13 tail rate arrangements; by



14 ‘‘(II) the total kilowatt hours of



15 electricity purchased by the entity



16 from that person during that year.



17 ‘‘(ii) USE OF OTHER DATA TO DETER-



18 MINE FACTOR.—Where it is not possible to



19 determine the precise electricity emissions



20 intensity factor for an entity using the



21 methodology in clause (i), the person sell-



22 ing electricity shall use the monthly aver-



23 age data reported by the Energy Informa-



24 tion Administration or collected and re-



25 ported by the Administrator for the utility 774



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1 serving the entity to determine the elec-



2 tricity emissions intensity factor.



3 ‘‘(C) ELECTRICITY EFFICIENCY FACTOR.—



4 The electricity efficiency factor is the average



5 amount of electricity (in kilowatt hours) used



6 per unit of output for all entities in the relevant



7 sector, as determined by the Administrator



8 based on the best available data, including data



9 provided under paragraph (6).



10 ‘‘(D) INDIRECT CARBON FACTOR REDUC-



11 TION.—If an electricity provider received a free



12 allocation of emission allowances pursuant to



13 section 771(a)(1), the Administrator shall ad-



14 just the indirect carbon factor to avoid rebates



15 to the eligible entity for costs that the Adminis-



16 trator determines were not incurred by the eli-



17 gible entity because the allowances were freely



18 allocated to the eligible entity’s electricity pro-



19 vider and used for the benefit of industrial con-



20 sumers.



21 ‘‘(4) GREENHOUSE GAS INTENSITY CALCULA-



22 TIONS.—The Administrator shall calculate the aver-



23 age direct greenhouse gas emissions (expressed in



24 tons of carbon dioxide equivalent) per unit of output



25 and the electricity efficiency factor for all covered 775



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1 entities in each eligible industrial sector every 4



2 years, using an average of the four most recent



3 years of the best available data. For purposes of the



4 lists required to be published no later than February



5 1, 2013, the Administrator shall use the best avail-



6 able data for the maximum number of years, up to



7 4 years, for which data are available.



8 ‘‘(5) ENSURING EFFICIENCY IMPROVEMENTS.—



9 When making greenhouse gas calculations, the Ad-



10 ministrator shall—



11 ‘‘(A) limit the average direct greenhouse



12 gas emissions per unit of output, calculated



13 under paragraph (4), for any eligible industrial



14 sector to an amount that is not greater than it



15 was in any previous calculation under this sub-



16 section;



17 ‘‘(B) limit the electricity emissions inten-



18 sity factor, calculated under paragraph (3)(B)



19 and resulting from a change in electricity sup-



20 ply, for any entity to an amount that is not



21 greater than it was during any previous year;



22 and



23 ‘‘(C) limit the electricity efficiency factor,



24 calculated under paragraph (3)(C), for any eli-



25 gible industrial sector to an amount that is not 776



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1 greater than it was in any previous calculation



2 under this subsection.



3 ‘‘(6) DATA SOURCES.—For the purposes of this



4 subsection—



5 ‘‘(A) the Administrator shall use data from



6 the greenhouse gas registry established under



7 section 713, where it is available; and



8 ‘‘(B) each owner or operator of an entity



9 in an eligible industrial sector and each depart-



10 ment, agency, and instrumentality of the



11 United States shall provide the Administrator



12 with such information as the Administrator



13 finds necessary to determine the direct carbon



14 factor and the indirect carbon factor for each



15 entity subject to this section.



16 ‘‘(c) TOTAL MAXIMUM DISTRIBUTION.—Notwith-



17 standing subsections (a) and (b), the Administrator shall



18 not distribute more allowances for any vintage year
pursu-



19 ant to this section than are allocated for use under this



20 part pursuant to section 765 for that vintage year. For



21 any vintage year for which the total emission allowance



22 rebates calculated pursuant to this section exceed the



23 number of allowances allocated pursuant to section 765,



24 the Administrator shall reduce each entity’s distribution



25 on a pro rata basis so that the total distribution under
777



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1 this section equals the number of allowances allocated



2 under section 765.



3 ‘‘(d) IRON AND STEEL SECTOR.—For purposes of



4 this section, the Administrator shall consider as in dif-



5 ferent industrial sectors—



6 ‘‘(1) entities using integrated iron and



7 steelmaking technologies (including coke ovens, blast



8 furnaces, and other iron-making technologies); and



9 ‘‘(2) entities using electric arc furnace tech-



10 nologies.



11 ‘‘(e) METAL, SODA ASH, 
OR PHOSPHATE PRODUC-



12 TION CLASSIFIED UNDER MORE THAN ONE NAICS



13 CODE.—For purposes of this section, the Administrator



14 shall not aggregate data for the beneficiation or other



15 processing (including agglomeration) of metal ores, soda



16 ash, or phosphate with subsequent steps in the process



17 of metal, soda ash, or phosphate manufacturing. The Ad-



18 ministrator shall consider the beneficiation or other
proc-



19 essing (including agglomeration) of metal ores, soda ash,



20 or phosphate to be in separate industrial sectors from
the



21 metal, soda ash, or phosphate manufacturing sectors. In-



22 dustrial sectors that beneficiate or otherwise process
(in-



23 cluding agglomeration) metal ores, soda ash, or phosphate



24 shall not receive emission allowance rebates under this
sec-778



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1 tion related to the activity of extracting metal ores,
soda



2 ash, or phosphate.



3 ‘‘(f) COMBINED HEAT AND POWER.—For purposes



4 of this section, and to achieve the purpose set forth in



5 section 761(4),(the Administrator may consider entities to



6 be in different industrial sectors or otherwise take into
ac-



7 count the differences among entities in the same
industrial



8 sector, based upon the extent to which such entities use



9 combined heat and power technologies.



10 ‘‘SEC. 765. INTERNATIONAL TRADE.



11 ‘‘It is the sense of the Senate that this Act will con-



12 tain a trade title that will include a border measure
that



13 is consistent with our international obligations and de-



14 signed to work in conjunction with provisions that
allocate



15 allowances to energy-intensive and trade-exposed indus-



16 tries.’’.



17 TITLE II—PROGRAM



18 ALLOCATIONS



19 SEC. 201. INVESTMENT IN CLEAN VEHICLE TECHNOLOGY.



20 (a) ESTABLISHMENT OF FUND.—There is estab-



21 lished in the Treasury a separate account, which shall be



22 known as the ‘‘Clean Vehicle Technology Fund’’.



23 (b) AUCTION PROCEEDS.—The Administrator shall



24 deposit the proceeds of the auction conducted pursuant
779



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1 to section 771(b)(3) of the Clean Air Act in the Clean



2 Vehicle Technology Fund.



3 (c) AVAILABILITY OF AMOUNTS.—Of the amounts



4 deposited in the Clean Vehicle Technology Fund—



5 (1) 80 percent shall be available to the Sec-



6 retary of Energy to support—



7 (A) the development and demonstration of



8 a national transportation low-emissions energy



9 plan; and



10 (B) the use of plug-in electric drive vehi-



11 cles, including medium- and heavy-duty motor



12 vehicles (including transit vehicles) and other



13 advanced technology vehicles (as defined in sec-



14 tions 131 and 136 of the Energy Independence



15 and Security Act of 2007 (42 U.S.C. 17011,



16 17013)) that are developed and produced in the



17 United States; and



18 (2) 20 percent of the amounts shall be available



19 to the Administrator for use in providing grants au-



20 thorized under subtitle G of title VII of the Energy



21 Policy Act of 2005 (42 U.S.C. 16131 et seq.).



22 (d) PILOT PROGRAM.—



23 (1) IN GENERAL.—Of the amounts deposited in



24 accordance with (c)(1), the Secretary of Energy



25 shall use not more than 5 percent to develop a na-780



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1 tional transportation low-emissions energy plan that



2 shall—



3 (A) project the near- and long-term need



4 for and location of electric drive vehicle refuel-



5 ing infrastructure at strategic locations across



6 all major national highways, roads, and cor-



7 ridors;



8 (B) identify infrastructure and standard-



9 ization needs for electricity providers, infra-



10 structure providers, vehicle manufacturers, and



11 electricity purchasers;



12 (C) establish an aspirational goal of



13 achieving strategic deployment of electric vehi-



14 cle infrastructure by 2020;



15 (D) be developed by the Secretary with the



16 involvement of all relevant stakeholders; and



17 (E) prioritize the development of—



18 (i) standardized public charge access



19 ports with wireless or smart card billing



20 capability; and



21 (ii) level I and level II charge port



22 systems (that charge an electric vehicle



23 over a period of 8 to 14 hours and 4 to 8



24 hours, respectively) that will meet the en-781



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1 ergy requirements of the majority of plug-



2 in hybrid and battery electric vehicles;



3 (F) examine the feasibility of level III



4 charge port systems that can charge an electric



5 vehicle over a period of 10 to 20 minutes; and



6 (G) focus on infrastructure that provides



7 consumers with the lowest cost while providing



8 convenient charge system access.



9 (2) ELECTRIC DRIVE DEMONSTRATION



10 PROJECTS.—



11 (A) IN GENERAL.—The Secretary shall es-



12 tablish pilot projects to demonstrate electric



13 drive vehicles and infrastructure.



14 (B) REQUIREMENTS.—The Secretary



15 shall—



16 (i) establish the pilot projects de-



17 scribed in subparagraph (A) after publica-



18 tion of the plan developed under paragraph



19 (1);



20 (ii) use the plan to determine which



21 regions of the United States are most



22 ready to demonstrate electric vehicle infra-



23 structure; 782



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1 (iii) carry out the pilot projects under



2 this paragraph in different regions of the



3 United States; and



4 (iv) ensure that—



5 (I) at least 1 pilot project is car-



6 ried out in a rural region of the



7 United States; and



8 (II) at least 1 pilot project is fo-



9 cused on freight issues.



10 (3) FINANCIAL RESOURCES.—In carrying out



11 the pilot projects under paragraph (2), the Secretary



12 shall coordinate the use of appropriate financial in-



13 centives, grant programs, and other Federal finan-



14 cial resources to ensure that electric infrastructure



15 delivery entities are able to participate in the pilot



16 projects.



17 (4) LEEP 
COORDINATOR.—The Secretary may



18 designate 1 full-time position within the Department



19 of Transportation, to be known as the ‘‘LEEP coor-



20 dinator’’, with responsibility to oversee—



21 (A) the development of the plan under



22 paragraph (1); and



23 (B) the implementation of the pilot



24 projects under paragraph (2). 783



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1 SEC. 202. STATE AND LOCAL INVESTMENT IN ENERGY EFFI-



2 CIENCY AND RENEWABLE ENERGY.



3 (a) DEFINITIONS.—For purposes of this section:



4 (1) ALLOWANCE.—The term ‘‘allowance’’



5 means an emission allowance established under sec-



6 tion 721 of the Clean Air Act.



7 (2) INDIAN TRIBE.—The term ‘‘Indian tribe’’



8 has the meaning given the term in section 4 of the



9 Indian Self-Determination and Education Assistance



10 Act (25 U.S.C. 450b).



11 (3) VINTAGE YEAR.—The term ‘‘vintage year’’



12 has the meaning given the term in section 700 of the



13 Clean Air Act.



14 (b) DISTRIBUTION AMONG INDIAN TRIBES, STATES,



15 LOCAL GOVERNMENTS, METROPOLITAN PLANNING ORGA-



16 NIZATIONS AND RENEWABLE ELECTRICITY GENERA-



17 TIONS.—The Administrator shall, in accordance with this



18 section, distribute allowances allocated pursuant to
section



19 771(a)(8) of the Clean Air Act for the following vintage



20 year. The Administrator, after consultation with the Sec-



21 retary of the Interior, shall distribute not less than 1
per-



22 cent of such allowances to Indian tribes. The Adminis-



23 trator, after consultation with the Secretary of Energy



24 and the with the assistance of the Secretary of Transpor-



25 tation, shall distribute the remaining allowances among



26 the States, local governments, metropolitan planning
orga-784



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1 nizations, and renewable electricity generations under
this



2 section each year in accordance with the following for-



3 mula:



4 (1) 62.5 percent of the allowances shall be pro-



5 vided to the States, of which—



6 (A) 30 percent shall be divided equally



7 among the States;



8 (B) 30 percent shall be distributed on a



9 pro rata basis among the States based on the



10 population of each State, as contained in the



11 most recent reliable census data available from



12 the Bureau of the Census for all States at the



13 time at which the Administrator calculates the



14 formula for distribution;



15 (C) 30 percent shall be distributed on a



16 pro rata basis among the States on the basis of



17 the energy consumption of each State, as con-



18 tained in the most recent State Energy Data



19 Report available from the Energy Information



20 Administration (or such alternative reliable



21 source as the Administrator may designate);



22 and



23 (D) 10 percentage shall be provided to the



24 States based on an energy-efficiency formula 785



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1 developed by the Administrator, which formula



2 shall be—



3 (i) based on—



4 (I) weather-adjusted criteria; and



5 (II) performance-based metrics



6 that measure each State’s success at



7 decreasing energy consumption or in-



8 creasing energy efficiency—



9 (aa) on a per capita basis in



10 the residential sector; and



11 (bb) on an energy consump-



12 tion per square-foot basis in the



13 commercial sector; and



14 (ii) updated every 3 years.



15 (2) 25 percent of the allowances shall be pro-



16 vided to local governments for energy conservation



17 and efficiency grants.



18 (3) 10 percent of the allowances shall be re-



19 served by the Secretary of Transportation for grants



20 to States and metropolitan planning organizations



21 for greenhouse gas reduction programs in the trans-



22 portation sector.



23 (4) 2.5 percent of the allowances shall be pro-



24 vided to renewable energy generating companies with



25 a capacity of 20 megawatts or greater exclusively for 786



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1 the generation of renewable energy. The Adminis-



2 trator, in consultation with the Secretary of Energy,



3 shall award allocations to renewable energy genera-



4 tion companies based on the number of megawatt-



5 hours the company generates and the technology



6 used. The Administrator shall promulgate such regu-



7 lations as are appropriate to carry out this para-



8 graph.



9 (c) USES.—The allowances distributed to each State,



10 local government, and metropolitan planning organization



11 pursuant to this section shall be used exclusively in
accord-



12 ance with the following requirements:



13 (1) ALLOCATION TO STATES.—Allowances allo-



14 cated to the States under subsection (b)(1) shall be



15 for the following purposes and be used in accordance



16 with the following conditions:



17 (A) PURPOSES.—



18 (i) ENERGY EFFICIENCY PRO-



19 GRAMS.—Not less than 35 percent shall be



20 used exclusively for—



21 (I) implementation and enforce-



22 ment of building codes;



23 (II) implementation of the en-



24 ergy-efficient manufactured homes



25 program; 787



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1 (III) implementation of building



2 energy performance labeling; and



3 (IV) low-income community en-



4 ergy efficiency programs.



5 (ii) RENEWABLE ENERGY PRO-



6 GRAMS.—Renewable energy programs for



7 capital grants, production incentives, loans,



8 loan guarantees, forgivable loans, direct



9 provision of allowances, and interest rate



10 buy-downs for—



11 (I) re-equipping, expanding, or



12 establishing a manufacturing facility



13 that receives certification from the



14 Secretary of Energy pursuant to sec-



15 tion 48C of the Internal Revenue



16 Code of 1986 for the production of—



17 (aa) property designed to be



18 used to produce energy from re-



19 newable energy sources; and



20 (bb) electricity storage sys-



21 tems;



22 (II) deployment of technologies to



23 generate electricity from renewable



24 energy sources; and 788



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1 (III) deployment of facilities or



2 equipment, such as solar panels, to



3 generate electricity or thermal energy



4 from renewable energy resources in



5 and on buildings in an urban environ-



6 ment.



7 (iii) IMPROVEMENT IN ELECTRICITY



8 TRANSMISSION.—Improvement in elec-



9 tricity transmission for 1 or more of the



10 following purposes:



11 (I) State implementation of elec-



12 tricity transmission planning and



13 siting activities that facilitate renew-



14 able energy development, including fa-



15 cilitation of landowner negotiations



16 for transmission of right-of-way leas-



17 ing or other contractual arrange-



18 ments.



19 (II) Grants to nonprofit organi-



20 zations that facilitate negotiations for



21 transmission right-of-way leasing or



22 other contractual agreements between



23 landowners and developers.



24 (III) State or regional studies of



25 renewable energy zones and resources 789



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1 with insufficient transmission capac-



2 ity, including geographical identifica-



3 tion of potential renewable energy



4 sites, environmental reviews, and land



5 use or coastal zone constraints.



6 (IV) Grants to support land-



7 owner associations’ and other non-



8 profit organizations’ participation in



9 State and Federal siting processes, in-



10 cluding such associations’ studies of



11 renewable energy feasibility and bene-



12 fits and associated data collection.



13 (V) Grants to landowners or



14 landowner associations or nonprofit



15 organizations for mitigation of im-



16 pacts on property or ecosystems due



17 to transmission projects that are part



18 of an interconnection-wide plan fo-



19 cused on facilitating renewable energy



20 development.



21 (VI) Training for State regu-



22 latory authority staff and local



23 workforces relating to renewable en-



24 ergy generation resources and storage, 790



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1 smart grid, or new transmission tech-



2 nologies.



3 (VII) Grants to transmission pro-



4 viders for transmission improvements



5 (including smart grid investments)



6 that benefit consumers.



7 (VIII) Grants to transmission



8 providers for security upgrades to the



9 transmission system and authorized



10 uses under title XIII of the Energy



11 Independence and Security Act of



12 2007 (42 U.S.C. 17381 et seq.).



13 (IX) Grants to develop energy



14 storage, reliability, or distributed re-



15 newable generation projects.



16 (iv) END-USE CONSUMERS.—Cost-ef-



17 fective energy efficiency programs for end-



18 use consumers of electricity, natural gas,



19 home heating oil, or propane, including,



20 where appropriate, programs or mecha-



21 nisms administered by local governments



22 and entities other than the State.



23 (v) RETROFITS AND HOUSING INVEST-



24 MENTS.—Energy retrofits and green in-



25 vestments in subsidized housing based on 791



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1 standards to ensure that investments are



2 cost-effective, taking into account reduc-



3 tions in future use of energy and other



4 utilities, and the extent to which such ret-



5 rofits and investments address repair and



6 replacement needs that may otherwise need



7 to be addressed with other forms of assist-



8 ance. As a condition of such funding, the



9 recipient shall commit to an additional pe-



10 riod of affordability of not fewer than 15



11 years, covering all units for which such



12 grants and loans are used.



13 (vi) THERMAL ENERGY EFFI-



14 CIENCY.—Not less than 2 percent shall be



15 used for thermal energy efficiency projects



16 that provide district thermal energy



17 through a network of pipes from 1 or more



18 central plants to at least 2 or more build-



19 ings, combined heat and power that pro-



20 duces electricity and thermal energy with a



21 minimum 60 percent overall efficiency on a



22 lower-heating value basis, or recoverable



23 waste energy (including mechanical, ther-



24 mal, or electrical energy) that, if not for



25 recovery, would be wasted and may be re-792



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1 covered or generated through modification



2 of an existing facility or addition of a new



3 facility. Allocations may be used for plan-



4 ning, engineering, and feasibility studies as



5 well as project construction and develop-



6 ment. Such projects shall—



7 (I) reduce or avoid greenhouse



8 gas emissions; and



9 (II)(aa) produce thermal energy



10 from renewable energy resources or



11 natural cooling sources;



12 (bb) capture and productively use



13 thermal energy from an electric gen-



14 eration facility;



15 (cc) integrate new electricity gen-



16 eration into an existing district energy



17 system;



18 (dd) capture and productively



19 uses surplus thermal energy from an



20 industrial or municipal process (such



21 as wastewater treatment); or



22 (ee) distribute and transfer to



23 buildings the thermal energy from the



24 energy sources described in items (aa)



25 through (dd). 793



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1 (vii) SMART GRID DEVELOPMENT.—



2 Enabling the development of a Smart Grid



3 (as described in section 1301 of the En-



4 ergy Independence and Security Act of



5 2007 (42 U.S.C. 17381)) for State, local



6 government, and other public buildings and



7 facilities, including integration of renew-



8 able energy resources and distributed gen-



9 eration, demand response, demand-side



10 management, and systems analysis.



11 (B) CONDITIONS.—



12 (i) IN GENERAL.—The States shall



13 prioritize expansion of existing energy effi-



14 ciency programs approved and overseen by



15 the State or the appropriate State regu-



16 latory authority.



17 (ii) SUPPLEMENTATION.—The States



18 shall demonstrate that such allowances



19 have been used to supplement, and not to



20 supplant, existing and otherwise available



21 State, local, and ratepayer funding for



22 such purpose.



23 (2) ENERGY CONSERVATION AND EFFI-



24 CIENCY.—Allowances allocated to local governments



25 under subsection (b)(2) shall be used exclusively for 794



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1 energy conservation and efficiency purposes specified



2 under section 543 of the Energy Independence and



3 Security Act of 2007 (42 U.S.C. 17153).



4 (3) STATE AND MPO GRANTS.—Allocation to



5 the Secretary of Transportation for grants to States



6 and metropolitan planning organizations under sub-



7 section (b)(3) shall be used exclusively for the



8 Transportation Greenhouse Gas Reduction program



9 in accordance with sections 831 and 832 of the



10 Clean Air Act.



11 (d) REPORTING.—Each Indian tribe, State, local gov-



12 ernment, metropolitan planning organization, and renew-



13 able electricity generating company directly receiving
al-



14 lowances or allowance value under this section shall sub-



15 mit to the Administrator a report that contains a list of



16 entities receiving allowances or allowance value under
this



17 section.



18 (e) ENFORCEMENT.—If the Administrator deter-



19 mines that an Indian tribe, State, local government, met-



20 ropolitan planning organization, or renewable electricity



21 generation company is not in compliance with this
section,



22 the Administrator may withhold up to twice the number



23 of allowances or allowance value that the Indian tribe,



24 State, local government, metropolitan planning organiza-



25 tion, or renewable electricity generation company failed
to 795



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1 use in accordance with the requirements of this section,



2 that such Indian tribe, State, local government,
metropoli-



3 tan planning organization, or renewable electricity
genera-



4 tion companies would otherwise be eligible to receive
under



5 this section in later years. Allowances withheld pursuant



6 to this subsection shall be distributed among the remain-



7 ing Indian tribes, States, local governments, metropolitan



8 planning organizations, and renewable electricity genera-



9 tion companies in accordance with subsection (b).



10 SEC. 203. ENERGY EFFICIENCY IN BUILDING CODES.



11 The Administrator shall distribute emission allow-



12 ances allocated for the following vintage year pursuant
to



13 section 771(a)(9) of the Clean Air Act among the States



14 in accordance with the formula described in section 202



15 of this division exclusively for the purpose of section
163



16 of division A.



17 SEC. 204. BUILDING RETROFIT PROGRAM.



18 The Administrator shall distribute emission allow-



19 ances allocated for the following vintage year pursuant
to



20 section 771(a)(10) of the Clean Air Act among the States



21 in accordance with the formula described in section 202



22 of this division exclusively for the purpose of section
164



23 of division A. 796



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1 SEC. 205. ENERGY INNOVATION HUBS.



2 (a) PURPOSE.—The Secretary shall carry out a pro-



3 gram in accordance with this section to establish Energy



4 Innovation Hubs to enhance the economic, environmental,



5 and energy security of the United States by promoting



6 commercial application of clean, indigenous energy alter-



7 natives to oil and other fossil fuels, reducing greenhouse



8 gas emissions, and ensuring that the United States main-



9 tains a technological lead in the development and commer-



10 cial application of state-of-the-art energy technologies.



11 (b) DISTRIBUTION OF ALLOWANCES TO ENERGY IN-



12 NOVATION HUBS.—The Secretary shall, in accordance



13 with the requirements of this section, distribute to
eligible



14 consortia allowances allocated for the following vintage



15 year under section 772(a)(11) of the Clean Air Act.



16 SEC. 206. ARPA–E RESEARCH.



17 (a) DEFINITIONS.—For purposes of this section:



18 (1) ALLOWANCE.—The term ‘‘allowance’’



19 means an emission allowance established under sec-



20 tion 721 of the Clean Air Act.



21 (2) DIRECTOR.—The term ‘‘Director’’ means



22 Director of the Advanced Research Projects Agency–



23 Energy.



24 (b) DISTRIBUTION OF ALLOWANCES.—The Director,



25 in accordance with this section, shall distribute
allowances



26 allocated for the following vintage year under section
797



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1 771(a)(12) of the Clean Air Act. Such allowances shall



2 be distributed on a competitive basis to institutions of



3 higher education, companies, research foundations, trade



4 and industry research collaborations, or consortia of such



5 entities, or other appropriate research and development



6 entities to achieve the goals of the Advanced Research



7 Projects Agency-Energy (as described in section 5012(c)



8 of the America COMPETES Act (42 U.S.C. 16538(c)))



9 through targeted acceleration of—



10 (1) novel early-stage energy research with pos-



11 sible technology applications;



12 (2) development of techniques, processes, and



13 technologies, and related testing and evaluation;



14 (3) development of manufacturing processes for



15 technologies; and



16 (4) demonstration and coordination with non-



17 governmental entities for commercial applications of



18 technologies and research applications.



19 (c) SUPPLEMENT NOT SUPPLANT.—Assistance pro-



20 vided under this section shall be used to supplement, and



21 not to supplant, any other Federal resources available to



22 carry out activities described in this section. 798



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1 SEC. 207. INTERNATIONAL CLEAN ENERGY DEPLOYMENT



2 PROGRAM.



3 The Secretary of State shall distribute emission al-



4 lowances allocated for the following vintage year pursuant



5 to section 771(a)(13) of the Clean Air Act exclusively for



6 the purpose of section 323 of division A.



7 SEC. 208. INTERNATIONAL CLIMATE CHANGE ADAPTATION



8 AND GLOBAL SECURITY.



9 The Secretary of State shall distribute emission al-



10 lowances allocated for the following vintage year
pursuant



11 to section 771(a)(14) of the Clean Air Act exclusively
for



12 the purpose of section 324 of division A.



13 SEC. 209. ENERGY EFFICIENCY AND RENEWABLE ENERGY



14 WORKER TRAINING.



15 (a) ESTABLISHMENT OF FUND.—There is estab-



16 lished in the Treasury a separate account, to be known



17 as the ‘‘Energy Efficiency and Renewable Energy Worker



18 Training Fund’’.



19 (b) AUCTION PROCEEDS.—The Administrator shall



20 deposit the proceeds of the auction conducted pursuant



21 to section 771(b)(5) of the Clean Air Act in the Energy



22 Efficiency and Renewable Energy Worker Training Fund.



23 (c) AVAILABILITY OF AMOUNTS.—The Secretary of



24 Energy shall use the amounts deposited in the Energy Ef-



25 ficiency and Renewable Energy Worker Training Fund



26 under subsection (b) to carry out section 171(e)(8) of
the 799



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1 Workforce Investment Act of 1998 (29 U.S.C. 2916(e)(8))



2 without further appropriation or fiscal year limitation.



3 SEC. 210. WORKER TRANSITION.



4 (a) ESTABLISHMENT OF FUND.—There is estab-



5 lished in the Treasury a separate account, to be known



6 as the ‘‘Worker Transition Fund’’.



7 (b) AUCTION PROCEEDS.—The Administrator shall



8 deposit the proceeds of the auction conducted pursuant



9 to section 771(b)(6) of the Clean Air Act in the Worker



10 Transition Fund.



11 (c) AVAILABILITY OF AMOUNTS.—The amounts de-



12 posited in the Worker Transition Fund shall be used to



13 carry out part 2 of subtitle A of title III of division
A.



14 SEC. 211. STATE PROGRAMS FOR GREENHOUSE GAS RE-



15 DUCTION AND CLIMATE ADAPTATION.



16 (a) DEFINITIONS.—In this section:



17 (1) ALASKA NATIVE VILLAGE.—The term



18 ‘‘Alaska Native village’’ means a federally recognized



19 Indian tribe located in the State of Alaska and listed



20 in the Bureau of Indian Affairs publication entitled



21 ‘‘Indian Entities Recognized and Eligible to Receive



22 Services from the United States Bureau of Indian



23 Affairs’’ (74 Fed. Reg. 40218 (Aug. 11, 2009)). 800



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1 (2) ALLOWANCE.—The term ‘‘allowance’’



2 means an emission allowance established under sec-



3 tion 721 of the Clean Air Act.



4 (3) INDIAN TRIBE.—The term ‘‘Indian tribe’’



5 has the meaning given the term in section 4 of the



6 Indian Self-Determination and Education Assistance



7 Act (25 U.S.C. 450b).



8 (4) SCCR 
ACCOUNT.—The term ‘‘SCCR Ac-



9 count’’ means a State Climate Change Response Ac-



10 count established under subsection (d)(5).



11 (5) VINTAGE YEAR.—The term ‘‘vintage year’’



12 has the meaning given that term in section 700 of



13 the Clean Air Act.



14 (b) REGULATIONS; COORDINATION.—



15 (1) REGULATIONS.—Not later than 2 years



16 after the date of enactment of this Act, the Adminis-



17 trator, or the heads of such Federal agencies as the



18 President may designate, shall promulgate regula-



19 tions to implement this section.



20 (2) COORDINATION.—If the President des-



21 ignates more than 1 Federal agency to implement



22 this section, the President shall require such agen-



23 cies to establish a memorandum of understanding



24 providing for coordination of rulemaking and other 801



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1 implementing activities, in accordance with this sec-



2 tion.



3 (c) STATE CLIMATE CHANGE RESPONSE AND TRANS-



4 PORTATION FUND.—



5 (1) ESTABLISHMENT OF FUND.—There is es-



6 tablished in the Treasury a separate account, to be



7 known as the ‘‘State Climate Change Response and



8 Transportation Fund’’.



9 (2) AUCTION PROCEEDS DEPOSITED TO



10 FUND.—The Administrator shall deposit the pro-



11 ceeds of the auction conducted pursuant to section



12 771(b)(7) of the Clean Air Act in the State Climate



13 Change Response and Transportation Fund.



14 (3) AVAILABILITY OF AMOUNTS.—All amounts



15 deposited in the State Climate Change Response and



16 Transportation Fund shall be available, without fur-



17 ther appropriation or fiscal year limitation, to carry



18 out this section.



19 (d) DISTRIBUTION OF ALLOWANCE PROCEEDS.—



20 (1) IN GENERAL.—The Administrator shall dis-



21 tribute, in accordance with this section, proceeds of



22 the auction of allowances allocated for the following



23 vintage year that have been deposited in the State



24 Climate Change Response and Transportation Fund



25 pursuant to subsection (c)(2). 802



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1 (2) RESERVATION AND ALLOCATION.—The Ad-



2 ministrator shall—



3 (A) reserve 10 percent of the proceeds of



4 such allowances described in paragraph (1) for



5 distribution among coastal and Great Lakes



6 States in accordance with subsection (f);



7 (B) after consultation with the Secretary



8 of the Interior, reserve at least 1 percent of the



9 proceeds of those allowances for distribution to



10 Indian tribes in accordance with subsection (e);



11 and



12 (C) distribute the remaining proceeds of



13 those allowances to fund State and local govern-



14 ment programs for greenhouse gas reduction



15 and climate adaptation, with such remaining



16 proceeds divided equally between—



17 (i) funding of transportation grant



18 programs under subsection (g); and



19 (ii) funding of other programs admin-



20 istered by the States, with the proceeds to



21 be deposited in and administered through



22 the State Climate Change Response Ac-



23 counts established pursuant to paragraph



24 (5). 803



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1 (3) FORMULA FOR DISTRIBUTION.—The Ad-



2 ministrator shall distribute the proceeds to be allo-



3 cated pursuant to paragraph (2)(C)(ii) ratably



4 among the States based on the product obtained by



5 multiplying—



6 (A) the population of a State; and



7 (B) the allocation factor for the State de-



8 termined under paragraph (4).



9 (4) STATE ALLOCATION FACTORS.—



10 (A) IN GENERAL.—Except as provided in



11 subparagraph (B), the allocation factor for a



12 State shall be the quotient obtained by divid-



13 ing—



14 (i) the per capita income of all indi-



15 viduals in the United States; by



16 (ii) the per capita income of all indi-



17 viduals in the State.



18 (B) LIMITATION.—



19 (i) MAXIMUM.—If the allocation fac-



20 tor for a State as calculated under sub-



21 paragraph (A) would exceed 1.2, the allo-



22 cation factor for such State shall be 1.2.



23 (ii) MINIMUM.—If the allocation fac-



24 tor for a State as calculated under sub-



25 paragraph (A) would be less than 0.8, the 804



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1 allocation factor for such State shall be



2 0.8.



3 (C) PER CAPITA INCOME.—For purposes



4 of this paragraph, per capita income shall be—



5 (i) determined at 2-year intervals; and



6 (ii) subject to subparagraph (D),



7 equal to the average of the annual per cap-



8 ita incomes for the most recent period of



9 3 consecutive years for which satisfactory



10 data are available from the Department of



11 Commerce at the time such determination



12 is made.



13 (D) REVENUE DIRECTLY RESULTING FROM



14 A PRESIDENTIALLY DECLARED MAJOR DIS-



15 ASTER.—



16 (i) IN GENERAL.—For purposes of



17 this paragraph, per capita income from 1



18 or more of the sources described in clause



19 (ii) shall be reduced or excluded if the Sec-



20 retary of Commerce—



21 (I) (in consultation with the Ad-



22 ministrator and the heads of the de-



23 partments or agencies involved) deter-



24 mines that the income accrues to per-



25 sons as the result of a major disaster 805



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1 designated by the President under the



2 Robert T. Stafford Disaster Relief



3 and Emergency Assistance Act (42



4 U.S.C. 5121 et seq.); and



5 (II) finds that the inclusion of 1



6 or more of the income sources, in



7 whole or in part, results in a transi-



8 tory, rather than a sustainable, in-



9 crease in a State’s per capita income



10 level relative to the national average.



11 (ii) SOURCES OF INCOME.—The



12 sources of income referred to in clause (i)



13 are the following:



14 (I) Property and casualty insur-



15 ance (including homeowners and rent-



16 ers insurance).



17 (II) The National Flood Insur-



18 ance Program of the Federal Emer-



19 gency Management Agency.



20 (III) The Individual and Family



21 Grants Program of the Federal Emer-



22 gency Management Agency.



23 (IV) The Disaster Housing Pro-



24 gram of the Federal Emergency Man-



25 agement Agency. 806



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1 (V) The Community Develop-



2 ment Block Grant Program of the De-



3 partment of Housing and Urban De-



4 velopment.



5 (VI) The Disaster Unemployment



6 Assistance Program of the Depart-



7 ment of Labor.



8 (VII) Any other source deter-



9 mined appropriate by the Adminis-



10 trator.



11 (5) STATE CLIMATE CHANGE RESPONSE AC-



12 COUNTS.—Each State shall establish a State Cli-



13 mate Change Response Account, to be administered



14 pursuant to State law, to receive and distribute the



15 amounts provided under paragraph (2)(C)(ii). State



16 regulations and implementing procedures relating to



17 such accounts shall require compliance with the pro-



18 visions of this section and all other applicable provi-



19 sions of Federal law.



20 (e) DISTRIBUTION TO INDIAN TRIBES.—



21 (1) IN GENERAL.—The Administrator, or the



22 heads of such Federal agencies as the President may



23 designate, shall promulgate regulations establishing



24 a program to distribute allowance proceeds to Indian



25 tribes, in accordance with the requirements of this 807



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1 section, of which not less than 18 percent shall be



2 allocated to Alaska Native Villages for each year.



3 (2) USE OF PROCEEDS.—Allowance proceeds



4 distributed to Indian tribes shall be used exclu-



5 sively—



6 (A) in accordance with subsection (h); and



7 (B) in compliance with any approved tribal



8 climate change response plan.



9 (f) DISTRIBUTION TO COASTAL AND GREAT LAKES



10 STATES.—The Administrator, or the heads of such other



11 Federal agencies as the President may designate, shall
dis-



12 tribute proceeds of emission allowances for coastal State



13 economic protection each fiscal year, in accordance with



14 section 384 of division A.



15 (g) DISTRIBUTION OF TRANSPORTATION GRANTS.—



16 (1) DISTRIBUTION OF TRANSPORTATION



17 GRANTS.—



18 (A) IN GENERAL.—The Secretary of



19 Transportation, in consultation with the Admin-



20 istrator, shall distribute the amounts allocated



21 for transportation grants each fiscal year in ac-



22 cordance with subsection (d)(2)(C)(i) as grants



23 to public transportation agencies (including des-



24 ignated recipients (as defined in section



25 5307(a) and section 5340 of title 49, United 808



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1 States Code)) and recipients and sub-recipients



2 (as defined in section 5311(a) of title 49,



3 United States Code).



4 (B) FORMULA.—In providing grants under



5 this subsection, the Secretary shall distribute—



6 (i) 80 percent of the funds in accord-



7 ance with the formula and conditions gov-



8 erning grants under section 5307 of title



9 49, United States Code;



10 (ii) 10 percent of the funds in accord-



11 ance with the formula and conditions gov-



12 erning grants under section 5311 of title



13 49, United States Code; and



14 (iii) 10 percent of the funds in accord-



15 ance with the formula and conditions gov-



16 erning grants under section 5340 of title



17 49, United States Code.



18 (h) USES OF ALLOWANCE PROCEEDS DEPOSITED TO



19 SCCR ACCOUNTS.—



20 (1) IN GENERAL.—States shall use allowance



21 proceeds deposited to SCCR Accounts under sub-



22 section (d)(2)(C)(ii) exclusively for the development



23 and implementation of projects, programs, or meas-



24 ures as described in this section to address climate



25 change by reducing emissions of greenhouse gases or 809



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1 by building resilience to the impacts of climate



2 change, including impacts such as—



3 (A) extreme weather events, such as flood-



4 ing and tropical cyclones;



5 (B) more frequent heavy precipitation



6 events;



7 (C) water scarcity and adverse impacts on



8 water quality;



9 (D) stronger and longer heat waves;



10 (E) more frequent and severe droughts;



11 (F) rises in sea level;



12 (G) ecosystem disruption;



13 (H) increased wildfire risk;



14 (I) increased air pollution;



15 (J) effects on public health;



16 (K) impaired transportation systems and



17 infrastructure; and



18 (L) reduced productivity of agricultural or



19 ranching operations.



20 (2) REQUIREMENTS.—The allowance proceeds



21 received by each SCCR Account for each fiscal year



22 shall be used by the State exclusively to fund the fol-



23 lowing categories of activities, in compliance with the



24 provisions of approved State climate change re-



25 sponse plans: 810



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1 (A) Grants to fund water system mitiga-



2 tion and adaptation partnerships in accordance



3 with section 381 of division A.



4 (B) Flood control, protection, prevention



5 and response programs and projects in accord-



6 ance with section 382 of division A.



7 (C) Programs or projects implemented by



8 State agencies as owners or operators of water



9 systems to address any ongoing or forecasted



10 climate-related impact on water quality, water



11 supply or reliability, for 1 or more of the pur-



12 poses listed in section 381(d) of division A.



13 (D) Programs or projects to reduce green-



14 house gas emissions through recycling or for in-



15 creasing recycling rates in accordance with sec-



16 tion 154 of division A.



17 (E) Programs and projects addressing ad-



18 verse impacts of climate change affecting agri-



19 culture or ranching activities.



20 (F) Programs or projects addressing air



21 pollution or air quality impacts caused or exac-



22 erbated by climate change.



23 (G) Programs or projects to reduce green-



24 house gas emissions that result in a decrease in



25 emissions of other air pollutants. 811



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1 (3) DISTRIBUTION FOR LOCAL GOVERN-



2 MENTS.—Not less than 12.5 percent of the proceeds



3 deposited to SCCR Accounts shall be distributed by



4 each State to units of local government within such



5 State, to be used exclusively to support the cat-



6 egories of climate change response efforts listed in



7 paragraph (2).



8 (4) VULNERABLE POPULATIONS.—In deploying



9 allowance proceeds under this section, States and



10 units of local government shall ensure that programs



11 and projects are funded responding to impacts af-



12 fecting socially and economically vulnerable popu-



13 lations, including—



14 (A) persons of low-income (as defined in



15 title I of the Housing and Community Develop-



16 ment Act of 1974, (42 U.S.C. 5301 et seq.));



17 (B) members of socially disadvantaged



18 groups (as defined in section 2501(e)(2) of the



19 Food, Agriculture, Conservation, and Trade Act



20 of 1990 (7 U.S.C. 2279(e)(2)));



21 (C) individuals over 65 years of age and



22 under 5 years of age; and



23 (D) individuals with disabilities.



24 (5) INTENT OF CONGRESS.—It is the intent of



25 the Congress that allowances distributed to carry 812



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1 out this section should be used to supplement, and



2 not replace, existing sources of funding used to ad-



3 dress and build resilience to the impacts of climate



4 change.



5 (i) STATE AND TRIBAL CLIMATE CHANGE RESPONSE



6 PLANS.—



7 (1) IN GENERAL.—The regulations promulgated



8 pursuant to subsection (b) shall include require-



9 ments for submission and approval of State and



10 tribal climate change response plans under this sec-



11 tion. Beginning with vintage year 2012, distribution



12 of allowance proceeds to a State pursuant to this



13 section shall be contingent on approval of a State



14 climate change response plan for such State that



15 meets the requirements of such regulations.



16 (2) REQUIREMENTS.—Regulations promulgated



17 under this section shall require, at minimum, that



18 State climate change response plans—



19 (A) assess and prioritize the vulnerability



20 of a State to a broad range of impacts of cli-



21 mate change, based on the best available



22 science;



23 (B) identify and prioritize specific cost-ef-



24 fective projects, programs, and measures to



25 mitigate and build resilience to current and pre-813



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1 dicted impacts of climate change, including



2 projects, programs, and measures within each



3 of the categories of activities listed in sub-



4 section (h)(2);



5 (C) include an assessment of potential for



6 carbon reduction through changes to land man-



7 agement policies (including enhancement or



8 protection of forest carbon sinks);



9 (D) ensure that the State fully considers



10 and undertakes, to the maximum extent prac-



11 ticable, initiatives that—



12 (i) protect or enhance natural eco-



13 system functions, including protection,



14 maintenance, or restoration of natural in-



15 frastructure such as wetlands, reefs, and



16 barrier islands to buffer communities from



17 floodwaters or storms, watershed protec-



18 tion to maintain water quality and ground-



19 water recharge, or floodplain restoration to



20 improve natural flood control capacity;



21 (ii) where appropriate, use non-



22 structural approaches, including practices



23 that use, enhance, or mimic the natural



24 hydrologic cycle processes of infiltration,



25 evapotranspiration, and use; or 814



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1 (iii) where appropriate, protect for-



2 ested land via scientifically based ecological



3 restoration practices, including by reducing



4 fuel loads, restoring forest diversity, and



5 conducting research on pest mitigation;



6 (E) give consideration to impacts affecting



7 socially and economically vulnerable popu-



8 lations, including—



9 (i) persons of low-income (as defined



10 in title I of the Housing and Community



11 Development Act of 1974 (42 U.S.C. sec.



12 5301 et seq.));



13 (ii) members of socially disadvantaged



14 groups (as defined in section 2501(e)(2) of



15 the Food, Agriculture, Conservation, and



16 Trade Act of 1990 (7 U.S.C. 2279(e)(2)));



17 (iii) persons over 65 years of age and



18 under 5 years of age; and



19 (iv) persons with disabilities;



20 (F) use pre-disaster mitigation, emergency



21 response, and public insurance programs to



22 mitigate the impacts of climate change;



23 (G) be consistent with Federal conserva-



24 tion and environmental laws and, to the max-815



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1 imum extent practicable, avoid environmental



2 degradation; and



3 (H) be revised and resubmitted for ap-



4 proval not less frequently than every 5 years.



5 (3) TRIBAL CLIMATE CHANGE RESPONSE



6 PLANS.—Requirements for tribal climate change re-



7 sponse plans should include the requirements listed



8 in subparagraphs (A) through (H) of paragraph (2),



9 as appropriate, but may vary from those of State cli-



10 mate change response plans to the extent necessary



11 to account for the special circumstances of Indian



12 tribes.



13 (4) COORDINATION WITH PRIOR PLANNING EF-



14 FORTS.—In implementing this subsection, the Ad-



15 ministrator, or the heads of such Federal agencies



16 as the President may designate, shall—



17 (A) draw upon lessons learned and best



18 practices from preexisting State and tribal cli-



19 mate change response planning efforts;



20 (B) seek to avoid duplication of such ef-



21 forts; and



22 (C) ensure that the plans developed under



23 this section are developed in coordination with



24 State natural resources adaptation plans devel-



25 oped under section 369 of division A. 816



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1 (j) REPORTING.—Not later than 1 year after each



2 date of receipt of allowance proceeds under this section,



3 and biennially thereafter until the value of any allowance



4 proceeds received under this section has been fully ex-



5 pended, each State or Indian tribe receiving allowance
pro-



6 ceeds under this section shall submit to the
Administrator,



7 or the heads of such Federal agencies as the President



8 may designate, a report that—



9 (1) provides a full accounting for the use by the



10 State or Indian tribe of allowance proceeds distrib-



11 uted under this section, including a description of



12 the projects, programs, or measures supported using



13 such proceeds;



14 (2) includes a report prepared by an inde-



15 pendent third party, in accordance with such regula-



16 tions as are promulgated by the Administrator or



17 the heads of such other Federal agencies as the



18 President may designate, evaluating the performance



19 of the projects, programs, or measures supported



20 under this section; and



21 (3) identifies any use by the State or Indian



22 tribe of allowance proceeds distributed under this



23 section for the reduction of flood and storm damage



24 and the effects of climate change on water and flood



25 protection infrastructure. 817



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1 (k) AUDITING.—The Administrator, or the heads of



2 such Federal agencies as the President may designate,



3 shall have authority to conduct such audits or other
review



4 of States implementation of and compliance with this sec-



5 tion as such Federal officials may in their discretion
deter-



6 mine to be necessary or appropriate.



7 (l) ENFORCEMENT.—If the Administrator, or the



8 heads of such Federal agencies as the President may des-



9 ignate, determine that a State or Indian tribe is not in



10 compliance with this section, the Administrator or such



11 other agency head may withhold a quantity of the allow-



12 ance proceeds equal to up to twice the quantity of allow-



13 ance proceeds that the State or Indian tribe failed to
use



14 in accordance with the requirements of this section, that



15 such State or Indian tribe would otherwise be eligible to



16 receive under this section in 1 or more later years.
Allow-



17 ance proceeds withheld pursuant to this subsection shall



18 be distributed among the remaining States or Indian



19 tribes ratably in accordance with—



20 (1) the formula under subsection (d), in the



21 case of allowances withheld from a State; or



22 (2) in accordance with subsection (e), in the



23 case of allowance proceeds withheld from an Indian



24 tribe. 818



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1 SEC. 212. CLIMATE CHANGE HEALTH PROTECTION AND



2 PROMOTION FUND.



3 (a) ESTABLISHMENT OF FUND.—There is estab-



4 lished in the Treasury a separate account, to be known



5 as the ‘‘Climate Change Health Protection and Promotion



6 Fund’’.



7 (b) AUCTION PROCEEDS.—The Administrator shall



8 deposit the proceeds of the auction pursuant to section



9 771(b)(8) of the Clean Air Act in the Climate Change



10 Health Protection and Promotion Fund.



11 (c) AVAILABILITY OF AMOUNTS.—All amounts depos-



12 ited in the Climate Change Health Protection and Pro-



13 motion Fund shall be available to the Secretary of Health



14 and Human Services to carry out subpart B of subtitle



15 C of title III of division A, without further
appropriation



16 or fiscal year limitation.



17 (d) DISTRIBUTION OF FUNDS BY HHS.—In carrying



18 out subpart B of subtitle C of title III of division A,
the



19 Secretary of Health and Human Services may make funds



20 deposited in the Climate Change Health Protection and



21 Promotion Fund available to—



22 (1) other departments, agencies, and offices of



23 the Federal Government;



24 (2) foreign, State, tribal, and local govern-



25 ments; and 819



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1 (3) such other entities as the Secretary deter-



2 mines to be appropriate.



3 (e) SUPPLEMENT, NOT REPLACE.—It is the intent



4 of Congress that funds made available to carry out sub-



5 part B of subtitle C of title III of division A should be



6 used to supplement, and not replace, existing sources of



7 funding for public health.



8 SEC. 213. CLIMATE CHANGE SAFEGUARDS FOR NATURAL



9 RESOURCES CONSERVATION.



10 (a) ESTABLISHMENT OF FUND.—There is estab-



11 lished in the Treasury a separate account, to be known



12 as the ‘‘Natural Resources Climate Change Adaptation



13 Account’’.



14 (b) AUCTION PROCEEDS.—The Administrator shall



15 deposit the proceeds of the auction conducted pursuant



16 to section 771(b)(9) of the Clean Air Act in the Natural



17 Resources Climate Change Adaptation Account.



18 (c) AVAILABILITY OF AMOUNTS.—All amounts depos-



19 ited in the Natural Resources Climate Change Adaptation



20 Account shall be available without further appropriation



21 or fiscal year limitation solely for the purposes of
section



22 370 of division A. 820



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1 SEC. 214. NUCLEAR WORKER TRAINING.



2 (a) ESTABLISHMENT OF FUND.—There is estab-



3 lished in the Treasury a separate account, to be known



4 as the ‘‘Nuclear Worker Training Fund’’.



5 (b) AUCTION PROCEEDS.—The Administrator shall



6 deposit the proceeds of the auction conducted pursuant



7 to section 771(b)(10) of the Clean Air Act in the Nuclear



8 Worker Training Fund.



9 (c) AVAILABILITY OF AMOUNTS.—All amounts depos-



10 ited in the Nuclear Worker Training Fund shall be avail-



11 able without further appropriation or fiscal year
limitation



12 solely for the purpose of carrying out section 132 of
divi-



13 sion A.



14 SEC. 215. SUPPLEMENTAL AGRICULTURE, RENEWABLE EN-



15 ERGY, AND FORESTRY.



16 (a) ESTABLISHMENT OF FUND.—There is estab-



17 lished in the Treasury a separate account, to be known



18 as the ‘‘Supplemental Agriculture, Renewable Energy, and



19 Forestry Fund’’.



20 (b) AUCTION PROCEEDS.—The Administrator shall



21 deposit the proceeds of the auction conducted pursuant



22 to section 771(b)(11) of the Clean Air Act in the Supple-



23 mental Agriculture, Renewable Energy, and Forestry



24 Fund.



25 (c) AVAILABILITY OF AMOUNTS.—All amounts depos-



26 ited in the Supplemental Agriculture, Renewable Energy,
821



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1 and Forestry Fund shall be available without further ap-



2 propriation or fiscal year limitation solely for the
purpose



3 of carrying out section 155 of division A.