Sovereign: June 2009

************************************************************
THIS IS THE TEXT OF THE
[BROKEN INTO TWO POSTS BECAUSE THE BILL IS SO BIG THIS IS PART 2 OF 2]
CLIMATE CHANGE BILL
GLOBAL WARMING BILL
GREENHOUSE GAS
BREATH TAX
CARBON EMISSIONS
GREEN BILL
ECO-FEUDALISM BILL
The bill has been referred to by many names, The correct name is as follows

American Clean Energy and Security Act of 2009 (Reported in House)[H.R.2454.RH]
SOURCE: http://thomas.loc.gov/cgi-bin/query/z?c111:H.2454:
As Of 10:47 Sunday June 26, 2009
************************************************************

`(2) the carbon dioxide equivalent value for purposes of this Act for any greenhouse gas not listed in the table under paragraph (1) shall be the 100-year Global Warming

Potentials provided in the Intergovernmental Panel on Climate Change Fourth Assessment Report.

`(c) Periodic Review-

`(1) Not later than February 1, 2017, and (except as provided in paragraph (3)) not less than every 5 years thereafter, the Administrator shall--

`(A) review and, if appropriate, revise the carbon dioxide equivalent values established under this section or section 711(b)(2), based on a determination of the number of

metric tons of carbon dioxide that makes the same contribution to global warming over 100 years as 1 metric ton of each greenhouse gas; and

`(B) publish in the Federal Register the results of that review and any revisions.

`(2) A revised determination published in the Federal Register under paragraph (1)(B) shall take effect for greenhouse gas emissions starting on January 1 of the first calendar

year starting at least 9 months after the date on which the revised determination was published.

`(3) The Administrator may decrease the frequency of review and revision under paragraph (1) if the Administrator determines that such decrease is appropriate in order to

synchronize such review and revision with any similar review process carried out pursuant to the United Nations Framework Convention on Climate Change, done at New York on

May 9, 1992, or to an agreement negotiated under that convention, except that in no event shall the Administrator carry out such review and revision any less frequently than every 10

years.

`(d) Methodology- In setting carbon dioxide equivalent values, for purposes of this section or section 711, the Administrator shall take into account publications by the

Intergovernmental Panel on Climate Change or a successor organization under the auspices of the United Nations Environmental Programme and the World Meteorological

Organization.

`SEC. 713. GREENHOUSE GAS REGISTRY.

`(a) Definitions- For purposes of this section:

`(1) CLIMATE REGISTRY- The term `Climate Registry' means the greenhouse gas emissions registry jointly established and managed by more than 40 States and Indian

tribes in 2007 to collect high-quality greenhouse gas emission data from facilities, corporations, and other organizations to support various greenhouse gas emission reporting and

reduction policies for the member States and Indian tribes.

`(2) REPORTING ENTITY- The term `reporting entity' means--

`(A) a covered entity;

`(B) an entity that--

`(i) would be a covered entity if it had emitted, produced, imported, manufactured, or delivered in 2008 or any subsequent year more than the applicable threshold level in

the definition of covered entity in paragraph (13) of section 700; and

`(ii) has emitted, produced, imported, manufactured, or delivered in 2008 or any subsequent year more than the applicable threshold level in the definition of covered

entity in paragraph (13) of section 700, provided that the figure of 25,000 tons of carbon dioxide equivalent is read instead as 10,000 tons of carbon dioxide equivalent and the figure of

460,000,000 cubic feet is read instead as 184,000,000 cubic feet;

`(C) any other entity that emits a greenhouse gas, or produces, imports, manufactures, or delivers material whose use results or may result in greenhouse gas emissions

if the Administrator determines that reporting under this section by such entity will help achieve the purposes of this title or title VIII;

`(D) any vehicle fleet with emissions of more than 25,000 tons of carbon dioxide equivalent on an annual basis, if the Administrator determines that the inclusion of such

fleet will help achieve the purposes of this title or title VIII; or

`(E) any entity that delivers electricity to an energy-intensive facility in an industrial sector that meets the energy or greenhouse gas intensity criteria in section 764(b)(2)(A)(i).

`(b) Regulations-

`(1) IN GENERAL- Not later than 6 months after the date of enactment of this title, the Administrator shall issue regulations establishing a Federal greenhouse gas registry.

Such regulations shall--

`(A) require reporting entities to submit to the Administrator data on--

`(i) greenhouse gas emissions in the United States;

`(ii) the production and manufacture in the United States, importation into the United States, and, at the discretion of the Administrator, exportation from the United States,

of fuels and industrial gases the uses of which result or may result in greenhouse gas emissions;

`(iii) deliveries in the United States of natural gas, and any other gas meeting the specifications for commingling with natural gas for purposes of delivery, the

combustion of which result or may result in greenhouse gas emissions; and

`(iv) the capture and sequestration of greenhouse gases;

`(B) require covered entities and, where appropriate, other reporting entities to submit to the Administrator data sufficient to ensure compliance with or implementation of the

requirements of this title;

`(C) require reporting of electricity delivered to industrial sources in energy-intensive industries;

`(D) ensure the completeness, consistency, transparency, accuracy, precision, and reliability of such data;

`(E) take into account the best practices from the most recent Federal, State, tribal, and international protocols for the measurement, accounting, reporting, and verification of

greenhouse gas emissions, including protocols from the Climate Registry and other mandatory State or multistate authorized programs;

`(F) take into account the latest scientific research;

`(G) require that, for covered entities with respect to greenhouse gases to which section 722 applies, and, to the extent determined to be appropriate by the Administrator, for

covered entities with respect to other greenhouse gases and for other reporting entities, submitted data are based on--

`(i) continuous monitoring systems for fuel flow or emissions, such as continuous emission monitoring systems;

`(ii) alternative systems that are demonstrated as providing data with the same precision, reliability, accessibility, and timeliness, or, to the extent the Administrator

determines is appropriate for reporting small amounts of emissions, the same precision, reliability, and accessibility and similar timeliness, as data provided by continuous

monitoring systems for fuel flow or emissions; or

`(iii) alternative methodologies that are demonstrated to provide data with precision, reliability, accessibility, and timeliness, or, to the extent the Administrator determines

is appropriate for reporting small amounts of emissions, precision, reliability, and accessibility, as similar as is technically feasible to that of data generally provided by continuous

monitoring systems for fuel flow or emissions, if the Administrator determines that, with respect to a reporting entity, there is no continuous monitoring system or alternative system

described in clause (i) or (ii) that is technically feasible;

`(H) require that the Administrator, in determining the extent to which the requirement to use systems or methodologies in accordance with subparagraph (G) is appropriate

for reporting entities other than covered entities or for greenhouse gases to which section 722 does not apply, consider the cost of using such systems and methodologies, and of

using other systems and methodologies that are available and suitable, for quantifying the emissions involved in light of the purposes of this title, including the goal of collecting

consistent entity-wide data;

`(I) include methods for minimizing double reporting and avoiding irreconcilable double reporting of greenhouse gas emissions;

`(J) establish measurement protocols for carbon capture and sequestration systems, taking into consideration the regulations promulgated under section 813;

`(K) require that reporting entities provide the data required under this paragraph in reports submitted electronically to the Administrator, in such form and containing such

information as may be required by the Administrator;

`(L) include requirements for keeping records supporting or related to, and protocols for auditing, submitted data;

`(M) establish consistent policies for calculating carbon content and greenhouse gas emissions for each type of fossil fuel with respect to which reporting is required;

`(N) subsequent to implementation of policies developed under subparagraph (M), provide for immediate dissemination, to States, Indian tribes, and on the Internet, of all

data reported under this section as soon as practicable after electronic audit by the Administrator and any resulting correction of data, except that data shall not be disseminated

under this subparagraph if--

`(i) its nondissemination is vital to the national security of the United States, as determined by the President; or

`(ii) it is confidential business information that cannot be derived from information that is otherwise publicly available and that would cause significant calculable

competitive harm if published, except that--

`(I) data relating to greenhouse gas emissions, including any upstream or verification data from reporting entities, shall not be considered to be confidential

business information; and

`(II) data that is confidential business information shall be provided to a State or Indian tribe within whose jurisdiction the reporting entity is located, if the

Administrator determines that such State or Indian tribe has in effect protections for confidential business information that are equivalent to protections applicable to the Federal

Government;

`(O) prescribe methods by which the Administrator shall, in cases in which satisfactory data are not submitted to the Administrator for any period of time, estimate emission,

production, importation, manufacture, or delivery levels--

`(i) for covered entities with respect to greenhouse gas emissions, production, importation, manufacture, or delivery regulated under this title to ensure that emissions,

production, importation, manufacture, or deliveries are not underreported, and to create a strong incentive for meeting data monitoring and reporting requirements--

`(I) with a conservative estimate of the highest emission, production, importation, manufacture, or delivery levels that may have occurred during the period for which

data are missing; or

`(II) to the extent the Administrator considers appropriate, with an estimate of such levels assuming the unit is emitting, producing, importing, manufacturing, or

delivering at a maximum potential level during the period, in order to ensure that such levels are not underreported and to create a strong incentive for meeting data monitoring and

reporting requirements; and

`(ii) for covered entities with respect to greenhouse gas emissions to which section 722 does not apply and for other reporting entities, with a reasonable estimate of the

emission, production, importation, manufacture, or delivery levels that may have occurred during the period for which data are missing;

`(P) require the designation of a designated representative for each reporting entity;

`(Q) require an appropriate certification, by the designated representative for the reporting entity, of accurate and complete accounting of greenhouse gas emissions, as

determined by the Administrator; and

`(R) include requirements for other data necessary for accurate and complete accounting of greenhouse gas emissions, as determined by the Administrator, including data

for quality assurance of monitoring systems, monitors and other measurement devices, and other data needed to verify reported emissions, production, importation, manufacture, or

delivery.

`(2) TIMING-

`(A) CALENDAR YEARS 2007 THROUGH 2010- For a base period of calendar years 2007 through 2010, each reporting entity shall submit annual data required under this

section to the Administrator not later than March 31, 2011. The Administrator may waive or modify reporting requirements for calendar years 2007 through 2010 for categories of

reporting entities to the extent that the Administrator determines that the reporting entities did not keep data or records necessary to meet reporting requirements. The Administrator

may, in addition to or in lieu of such requirements, collect information on energy consumption and production.

`(B) SUBSEQUENT CALENDAR YEARS- For calendar year 2011 and each subsequent calendar year, each reporting entity shall submit quarterly data required under this

section to the Administrator not later than 60 days after the end of the applicable quarter, except when the data is already being reported to the Administrator on an earlier timeframe

for another program.

`(3) WAIVER OF REPORTING REQUIREMENTS- The Administrator may waive reporting requirements under this section for specific entities to the extent that the Administrator

determines that sufficient and equally or more reliable verified and timely data are available to the Administrator and the public on the Internet under other mandatory statutory

requirements.

`(4) ALTERNATIVE THRESHOLD- The Administrator may, by rule, establish applicability thresholds for reporting under this section using alternative metrics and levels,

provided that such metrics and levels are easier to administer and cover the same size and type of sources as the threshold defined in this section.

`(c) Interrelationship With Other Systems- In developing the regulations issued under subsection (b), the Administrator shall take into account the work done by the Climate

Registry and other mandatory State or multistate programs. Such regulations shall include an explanation of any major differences in approach between the system established

under the regulations and such registries and programs.

`PART C--PROGRAM RULES

`SEC. 721. EMISSION ALLOWANCES.

`(a) In General- The Administrator shall establish a separate quantity of emission allowances for each calendar year starting in 2012, in the amounts prescribed under subsection

(e).

`(b) Identification Numbers- The Administrator shall assign to each emission allowance established under subsection (a) a unique identification number that includes the vintage

year for that emission allowance.

`(c) Legal Status of Emission Allowances-

`(1) IN GENERAL- An allowance established by the Administrator under this title does not constitute a property right.

`(2) TERMINATION OR LIMITATION- Nothing in this Act or any other provision of law shall be construed to limit or alter the authority of the United States, including the

Administrator acting pursuant to statutory authority, to terminate or limit allowances or offset credits.

`(3) OTHER PROVISIONS UNAFFECTED- Except as otherwise specified in this Act, nothing in this Act relating to allowances or offset credits established or issued under this

title shall affect the application of any other provision of law to a covered entity, or the responsibility for a covered entity to comply with any such provision of law.

`(d) Savings Provision- Nothing in this part shall be construed as requiring a change of any kind in any State law regulating electric utility rates and charges, or as affecting any

State law regarding such State regulation, or as limiting State regulation (including any prudency review) under such a State law. Nothing in this part shall be construed as modifying

the Federal Power Act or as affecting the authority of the Federal Energy Regulatory Commission under that Act. Nothing in this part shall be construed to interfere with or impair any

program for competitive bidding for power supply in a State in which such program is established.

`(e) Allowances for Each Calendar Year-

`(1) IN GENERAL- Except as provided in paragraph (2), the number of emission allowances established by the Administrator under subsection (a) for each calendar year shall

be as provided in the following table:

-------------------------------------------------------------------------

`Calendar year Emission allowances (in millions)

-------------------------------------------------------------------------

2012 4,627

2013 4,544

2014 5,099

2015 5,003

2016 5,482

2017 5,375

2018 5,269

2019 5,162

2020 5,056

2021 4,903

2022 4,751

2023 4,599

2024 4,446

2025 4,294

2026 4,142

2027 3,990

2028 3,837

2029 3,685

2030 3,533

2031 3,408

2032 3,283

2033 3,158

2034 3,033

2035 2,908

2036 2,784

2037 2,659

2038 2,534

2039 2,409

2040 2,284

2041 2,159

2042 2,034

2043 1,910

2044 1,785

2045 1,660

2046 1,535

2047 1,410

2048 1,285

2049 1,160

2050 and each year thereafter 1,035

-------------------------------------------------------------------------

`(2) REVISION-

`(A) IN GENERAL- The Administrator may adjust, in accordance with subparagraph (B), the number of emission allowances established pursuant to paragraph (1) if, after

notice and an opportunity for public comment, the Administrator determines that--

`(i) United States greenhouse gas emissions in 2005 were other than 7,206 million metric tons carbon dioxide equivalent;

`(ii) if the requirements of this title for 2012 had been in effect in 2005, section 722 would have required emission allowances to be held for other than 66.2 percent of

United States greenhouse gas emissions in 2005;

`(iii) if the requirements of this title for 2014 had been in effect in 2005, section 722 would have required emission allowances to be held for other than 75.7 percent of

United States greenhouse gas emissions in 2005; or

`(iv) if the requirements of this title for 2016 had been in effect in 2005, section 722 would have required emission allowances to be held for other than 84.5 percent

United States greenhouse gas emissions in 2005.

`(B) ADJUSTMENT FORMULA-

`(i) IN GENERAL- If the Administrator adjusts under this paragraph the number of emission allowances established pursuant to paragraph (1), the number of emission

allowances the Administrator establishes for any given calendar year shall equal the product of--

`(I) United States greenhouse gas emissions in 2005, expressed in tons of carbon dioxide equivalent;

`(II) the percent of United States greenhouse gas emissions in 2005, expressed in tons of carbon dioxide equivalent, that would have been subject to section 722 if

the requirements of this title for the given calendar year had been in effect in 2005; and

`(III) the percentage set forth for that calendar year in section 703(a), or determined under clause (ii) of this subparagraph.

`(ii) TARGETS- In applying the portion of the formula in clause (i)(III) of this subparagraph, for calendar years for which a percentage is not listed in section 703(a), the

Administrator shall use a uniform annual decline in the amount of emissions between the years that are specified.

`(iii) CARBON DIOXIDE EQUIVALENT VALUE- If the Administrator adjusts under this paragraph the number of emission allowances established pursuant to paragraph

(1), the Administrator shall use the carbon dioxide equivalent values established pursuant to section 712.

`(iv) LIMITATION ON ADJUSTMENT TIMING- Once a calendar year has started, the Administrator may not adjust the number of emission allowances to be established

for that calendar year.

`(C) LIMITATION ON ADJUSTMENT AUTHORITY- The Administrator may adjust under this paragraph the number of emission allowances to be established pursuant to

paragraph (1) only once.

`(f) Compensatory Allowance-

`(1) IN GENERAL- The regulations promulgated under subsection (h) shall provide for the establishment and distribution of compensatory allowances for--

`(A) the destruction, in 2012 or later, of fluorinated gases that are greenhouse gases if--

`(i) allowances or offset credits were retired for their production or importation; and

`(ii) such gases are not required to be destroyed under any other provision of law;

`(B) the nonemissive use, in 2012 or later, of petroleum-based or coal-based liquid or gaseous fuel, petroleum coke, natural gas liquid, or natural gas as a feedstock, if

allowances or offset credits were retired for the greenhouse gases that would have been emitted from their combustion; and

`(C) the conversionary use, in 2012 or later, of fluorinated gases in a manufacturing process, including semiconductor research or manufacturing, if allowances or offset

credits were retired for the production or importation of such gas.

`(2) ESTABLISHMENT AND DISTRIBUTION-

`(A) IN GENERAL- Not later than 90 days after the end of each calendar year, the Administrator shall establish and distribute to the entity taking the actions described in

subparagraph (A), (B), or (C) of paragraph (1) a quantity of compensatory allowances equivalent to the number of tons of carbon dioxide equivalent of avoided emissions achieved

through such actions. In establishing the quantity of compensatory allowances, the Administrator shall take into account the carbon dioxide equivalent value of any greenhouse gas

resulting from such action.

`(B) SOURCE OF ALLOWANCES- Compensatory allowances established under this subsection shall not be emission allowances established under subsection (a).

`(C) IDENTIFICATION NUMBERS- The Administrator shall assign to each compensatory allowance established under subparagraph (A) a unique identification number.

`(3) DEFINITIONS- For purposes of this subsection--

`(A) the term `destruction' means the conversion of a greenhouse gas by thermal, chemical, or other means to another gas or set of gases with little or no carbon dioxide

equivalent value;

`(B) the term `nonemissive use' means the use of fossil fuel as a feedstock in an industrial or manufacturing process to the extent that greenhouse gases are not emitted

from such process, and to the extent that the products of such process are not intended for use as, or to be contained in, a fuel; and

`(C) the term `conversionary use' means the conversion during research or manufacturing of a fluorinated gas into another greenhouse gas or set of gases with a lower

carbon dioxide equivalent value.

`(4) FEEDSTOCK EMISSIONS STUDY-

`(A) The Administrator may conduct a study to determine the extent to which petroleum-based or coal-based liquid or gaseous fuel, petroleum coke, natural gas liquid, or

natural gas are used as feedstocks in manufacturing processes to produce products and the greenhouse gas emissions resulting from such uses.

`(B) If as a result of such a study, the Administrator determines that the use of such products by noncovered sources results in substantial emissions of greenhouse gases

or their precursors and that such emissions have not been adequately addressed under other requirements of this Act, the Administrator may, after notice and comment rulemaking,

promulgate a regulation reducing compensatory allowances commensurately if doing so will not result in leakage.

`(g) Fluorinated Gases Assessment- No later than March 31, 2014, the Administrator shall conduct an assessment of the regulation of non-HFC fluorinated gases under this title

to determine whether the most appropriate point of regulation is at the gas manufacturer or importer level, or at the source of emissions downstream. If the Administrator determines,

based on consideration of environmental effectiveness, cost effectiveness, administrative feasibility, extent of coverage of emissions, and competitiveness considerations, that

emissions of non-HFC fluorinated gases can best be regulated by designating downstream emission sources as covered entities with compliance obligations under section 722,

the Administrator shall, after notice and comment rulemaking, change the definition of covered entity with respect to fluorinated gases (other than HFCs) accordingly and establish

such requirements as are necessary to ensure compliance for such entities with the requirements of this title.

`(h) Regulations- Not later than 24 months after the date of enactment of this title, the Administrator shall promulgate regulations to carry out the provisions of this title.

`SEC. 722. PROHIBITION OF EXCESS EMISSIONS.

`(a) Prohibition- Except as provided in subsection (c), effective January 1, 2012, each covered entity is prohibited from emitting greenhouse gases, and having attributable

greenhouse gas emissions, in combination, in excess of its allowable emissions level. A covered entity's allowable emissions level for each calendar year is the number of emission

allowances (or credits or other allowances as provided in subsection (d)) it holds as of 12:01 a.m. on April 1 (or a later date established by the Administrator under subsection (j)) of

the following calendar year.

`(b) Methods of Demonstrating Compliance- Except as otherwise provided in this section, the owner or operator of a covered entity shall not be considered to be in compliance

with the prohibition in subsection (a) unless, as of 12:01 a.m. on April 1 (or a later date established by the Administrator under subsection (j)) of each calendar year starting in 2013,

the owner or operator holds a quantity of emission allowances (or credits or other allowances as provided in subsection (d)) at least as great as the quantity calculated as follows:

`(1) ELECTRICITY SOURCES- For a covered entity described in section 700(13)(A), 1 emission allowance for each ton of carbon dioxide equivalent of greenhouse gas that

such covered entity emitted in the previous calendar year, excluding emissions resulting from the combustion of--

`(A) petroleum-based or coal-based liquid fuel;

`(B) natural gas liquid;

`(C) renewable biomass or gas derived from renewable biomass; or

`(D) petroleum coke or gas derived from petroleum coke.

`(2) FUEL PRODUCERS AND IMPORTERS- For a covered entity described in section 700(13)(B), 1 emission allowance for each ton of carbon dioxide equivalent of

greenhouse gas that would be emitted from the combustion of any petroleum-based or coal-based liquid fuel, petroleum coke, or natural gas liquid, produced or imported by such

covered entity during the previous calendar year for sale or distribution in interstate commerce, assuming no capture and sequestration of any greenhouse gas emissions.

`(3) INDUSTRIAL GAS PRODUCERS AND IMPORTERS- For a covered entity described in section 700(13)(C), 1 emission allowance for each ton of carbon dioxide equivalent of

fossil fuel-based carbon dioxide, nitrous oxide, or any other fluorinated gas that is a greenhouse gas (except for nitrogen trifluoride), or any combination thereof, produced or imported

by such covered entity during the previous calendar year for sale or distribution in interstate commerce or released as fugitive emissions in the production of fluorinated gas.

`(4) NITROGEN TRIFLUORIDE SOURCES- For a covered entity described in section 700(13)(D), 1 emission allowance for each ton of carbon dioxide equivalent of nitrogen

trifluoride that such covered entity emitted in the previous calendar year.

`(5) GEOLOGICAL SEQUESTRATION SITES- For a covered entity described in section 700(13)(E), 1 emission allowance for each ton of carbon dioxide equivalent of

greenhouse gas that such covered entity emitted in the previous calendar year.

`(6) INDUSTRIAL STATIONARY SOURCES- For a covered entity described in section 700(13)(F), (G), or (H), 1 emission allowance for each ton of carbon dioxide equivalent of

greenhouse gas that such covered entity emitted in the previous calendar year, excluding emissions resulting from--

`(A) the combustion of petroleum-based or coal-based liquid fuel;

`(B) the combustion of natural gas liquid;

`(C) the combustion of renewable biomass or gas derived from renewable biomass;

`(D) the combustion of petroleum coke or gas derived from petroleum coke; or

`(E) the use of any fluorinated gas that is a greenhouse gas purchased for use at that covered entity, except for nitrogen trifluoride.

`(7) INDUSTRIAL FOSSIL FUEL-FIRED COMBUSTION DEVICES- For a covered entity described in section 700(13)(I), 1 emission allowance for each ton of carbon dioxide

equivalent of greenhouse gas that the devices emitted in the previous calendar year, excluding emissions resulting from the combustion of--

`(A) petroleum-based or coal-based liquid fuel;

`(B) natural gas liquid;

`(C) renewable biomass or gas derived from renewable biomass; or

`(D) petroleum coke or gas derived from petroleum coke.

`(8) NATURAL GAS LOCAL DISTRIBUTION COMPANIES- For a covered entity described in section 700(13)(J), 1 emission allowance for each ton of carbon dioxide equivalent

of greenhouse gas that would be emitted from the combustion of the natural gas, and any other gas meeting the specifications for commingling with natural gas for purposes of

delivery, that such entity delivered during the previous calendar year to customers that are not covered entities, assuming no capture and sequestration of that greenhouse gas.

`(9) ALGAE-BASED FUELS- Where carbon dioxide (or another greenhouse gas) is used as an input in the production of algae-based fuels, the Administrator shall ensure that

allowances are required to be held either for the carbon dioxide used to grow the algae or for the carbon dioxide emitted from combustion of the fuel produced from such algae, but

not for both.

`(10) FUGITIVE EMISSIONS- The greenhouse gas emissions to which paragraphs (1), (4), (6), and (7) apply shall not include fugitive emissions of greenhouse gas, except to

the extent the Administrator determines that data on the carbon dioxide equivalent value of greenhouse gas in the fugitive emissions can be provided with sufficient precision,

reliability, accessibility, and timeliness to ensure the integrity of emission allowances, the allowance tracking system, and the cap on emissions.

`(11) EXPORT EXEMPTION- This section shall not apply to any petroleum-based or coal-based liquid fuel, petroleum coke, natural gas liquid, fossil fuel-based carbon dioxide,

nitrous oxide, or fluorinated gas that is exported for sale or use.

`(12) NATURAL GAS LIQUIDS- Notwithstanding subsection (a), if the owner or operator of a covered entity described in section 700(13)(B) that produces natural gas liquids

does not take ownership of the liquids, and is not responsible for the distribution or use of the liquids in commerce, the owner of the liquids shall be responsible for compliance with

this section, section 723, and other relevant sections of this title with respect to such liquids. In the regulations promulgated under section 721, the Administrator shall include such

provisions with respect to such liquids as the Administrator determines are appropriate to determine and ensure compliance, and to penalize noncompliance. In such a case, the

owner of the covered entity shall provide to the Administrator, in a manner to be determined by the Administrator, information regarding the quantity and ownership of liquids produced

at the covered entity.

`(13) APPLICATION OF MULTIPLE PARAGRAPHS- For a covered entity to which more than 1 of paragraphs (1) through (8) apply, all applicable paragraphs shall apply, except

that not more than 1 emission allowance shall be required for the same emission.

`(c) Phase-in of Prohibition-

`(1) INDUSTRIAL STATIONARY SOURCES- The prohibition under subsection (a) shall first apply to a covered entity described in section 700(13)(D), (F), (G), (H), or (I), with

respect to emissions occurring during calendar year 2014.

`(2) NATURAL GAS LOCAL DISTRIBUTION COMPANIES- The prohibition under subsection (a) shall first apply to a covered entity described in section 700(13)(J) with respect to

deliveries occurring during calendar year 2016.

`(d) Additional Methods- In addition to using the method of compliance described in subsection (b), a covered entity may do the following:

`(1) OFFSET CREDITS-

`(A) IN GENERAL- Covered entities collectively may, in accordance with this paragraph, use offset credits to demonstrate compliance for up to a maximum of 2 billion tons of

greenhouse gas emissions annually. The ability to demonstrate compliance with offset credits shall be divided pro rata among covered entities by allowing each covered entity to

satisfy a percentage of the number of allowances required to be held under subsection (b) to demonstrate compliance by holding 1 domestic offset credit or 1.25 international offset

credits in lieu of an emission allowance, except as provided in subparagraph (D).

`(B) APPLICABLE PERCENTAGE- The percentage referred to in subparagraph (A) for a given calendar year shall be determined by dividing 2 billion by the sum of 2 billion

plus the number of emission allowances established under section 721(a) for the previous year, and multiplying that number by 100. Not more than one half of the applicable

percentage under this paragraph may be used by holding domestic offset credits, and not more than one half of the applicable percentage under this paragraph may be used by

holding international offset credits, except as provided in subparagraph (C).

`(C) MODIFIED PERCENTAGES- If the Administrator determines that domestic offset credits available for use in demonstrating compliance in any calendar year at domestic

offset prices generally equal to or less than allowance prices, are likely to offset less than 0.9 billion tons of greenhouse gas emissions (measured in tons of carbon dioxide

equivalents), the Administrator shall increase the percent of emissions that can be offset through the use of international offset credits (and decrease the percent of emissions that

can be allowed through the use of domestic offset credits by the same amount) to reflect the amount that 1.0 billion exceeds the number of domestic offset credits the Administrator

determines is available for that year, up to a maximum of 0.5 billion tons of greenhouse gas emissions.

`(D) INTERNATIONAL OFFSET CREDITS- Notwithstanding subparagraph (A), to demonstrate compliance prior to calendar year 2018, a covered entity may use 1

international offset credit in lieu of an emission allowance up to the amount permitted under this paragraph.

`(E) President'S RECOMMENDATION- The President may make a recommendation to Congress as to whether the number 2 billion specified in subparagraphs (A) and (B)

should be increased or decreased.

`(2) INTERNATIONAL EMISSION ALLOWANCES- To demonstrate compliance, a covered entity may hold an international emission allowance in lieu of an emission allowance,

except as modified under section 728(d).

`(3) COMPENSATORY ALLOWANCES- To demonstrate compliance, a covered entity may hold a compensatory allowance obtained under section 721(f) in lieu of an emission

allowance.

`(e) Retirement of Allowances and Credits- As soon as practicable after a deadline established for covered entities to demonstrate compliance with this title, the Administrator

shall retire the quantity of allowances or credits required to be held under this title.

`(f) Alternative Metrics- For categories of covered entities described in subparagraph (B), (C), (D), (G), (H), or (I) of section 700(13), the Administrator may, by rule, establish an

applicability threshold for inclusion under those subparagraphs using an alternative metric and level, provided that such metric and level are easier to administer and cover the same

size and type of sources as the threshold defined in such subparagraphs.

`(g) Threshold Review- For each category of covered entities described in subparagraph (B), (C), (D), (G), (H), or (I) of section 700(13), the Administrator shall, in 2020 and once

every 8 years thereafter, review the carbon dioxide equivalent emission thresholds that are used to define covered entities. After consideration of--

`(1) emissions from covered entities in each such category, and from other entities of the same type that emit less than the threshold amount for the category (including

emission sources that commence operation after the date of enactment of this title that are not covered entities); and

`(2) whether greater greenhouse gas emission reductions can be cost-effectively achieved by lowering the applicable threshold,

the Administrator may by rule lower such threshold to not less than 10,000 tons of carbon dioxide equivalent emissions. In determining the cost effectiveness of potential

reductions from lowering the threshold for covered entities, the Administrator shall consider alternative regulatory greenhouse gas programs, including setting standards under other

titles of this Act.

`(h) Designated Representatives- The regulations promulgated under section 721(h) shall require that each covered entity, and each entity holding allowances or credits or

receiving allowances or credits from the Administrator under this title, select a designated representative.

`(i) Education and Outreach-

`(1) IN GENERAL- The Administrator shall establish and carry out a program of education and outreach to assist covered entities, especially entities having little experience

with environmental regulatory requirements similar or comparable to those under this title, in preparing to meet the compliance obligations of this title. Such program shall include

education with respect to using markets to effectively achieve such compliance.

`(2) FAILURE TO RECEIVE INFORMATION- A failure to receive information or assistance under this subsection may not be used as a defense against an allegation of any

violation of this title.

`(j) Adjustment of Deadline- The Administrator may, by rule, establish a deadline for demonstrating compliance, for a calendar year, later than the date provided in subsection (a),

as necessary to ensure the availability of emissions data, but in no event shall the deadline be later than June 1.

`(k) Notice Requirement for Covered Entities Receiving Natural Gas From Natural Gas Local Distribution Companies- The owner or operator of a covered entity that takes delivery

of natural gas from a natural gas local distribution company shall, not later than September 1 of each calendar year, notify such natural gas local distribution company in writing that

such entity will qualify as a covered entity under this title for that calendar year.

`(l) Compliance Obligation- For purposes of this title, the year of a compliance obligation is the year in which compliance is determined, not the year in which the greenhouse gas

emissions occur or the covered entity has attributable greenhouse gas emissions.

`SEC. 723. PENALTY FOR NONCOMPLIANCE.

`(a) Enforcement- A violation of any prohibition of, requirement of, or regulation promulgated pursuant to this title shall be a violation of this Act. It shall be a violation of this Act for a

covered entity to emit greenhouse gases, and have attributable greenhouse gas emissions, in combination, in excess of its allowable emissions level as provided in section 722(a).

Each ton of carbon dioxide equivalent for which a covered entity fails to demonstrate compliance under section 722(b) shall be a separate violation.

`(b) Excess Emissions Penalty-

`(1) IN GENERAL- The owner or operator of any covered entity that fails for any year to comply, on the deadline described in section 722(a) or (j), shall be liable for payment to

the Administrator of an excess emissions penalty in the amount described in paragraph (2).

`(2) AMOUNT- The amount of an excess emissions penalty required to be paid under paragraph (1) shall be equal to the product obtained by multiplying--

`(A) the tons of carbon dioxide equivalent of greenhouse gas emissions or attributable greenhouse gas emissions for which the owner or operator of a covered entity failed

to comply under section 722(b) on the deadline; by

`(B) twice the fair market value of emission allowances established for emissions occurring in the calendar year for which the emission allowances were due.

`(3) TIMING- An excess emissions penalty required under this subsection shall be immediately due and payable to the Administrator, without demand, in accordance with

regulations promulgated by the Administrator, which shall be issued not later than 2 years after the date of enactment of this title.

`(4) NO EFFECT ON LIABILITY- An excess emissions penalty due and payable by the owners or operators of a covered entity under this subsection shall not diminish the

liability of the owners or operators for any fine, penalty, or assessment against the owners or operators for the same violation under any other provision of this Act or any other law.

`(c) Excess Emissions Allowances- The owner or operator of a covered entity that fails for any year to comply on the deadline described in section 722(a) or (j) shall be liable to

offset the covered entity's excess combination of greenhouse gases emitted and attributable greenhouse gas emissions by an equal quantity of emission allowances during the

following calendar year, or such longer period as the Administrator may prescribe. During the year in which the covered entity failed to comply, or any year thereafter, the Administrator

may deduct the emission allowances required under this subsection to offset the covered entity's excess actual or attributable emissions.

`SEC. 724. TRADING.

`(a) Permitted Transactions- Except as otherwise provided in this title, the lawful holder of an emission allowance, compensatory allowance, or offset credit may, without

restriction, sell, exchange, transfer, hold for compliance in accordance with section 722, or request that the Administrator retire the emission allowance, compensatory allowance, or

offset credit.

`(b) No Restriction on Transactions- The privilege of purchasing, holding, selling, exchanging, transferring, and requesting retirement of emission allowances, compensatory

allowances, or offset credits shall not be restricted to the owners and operators of covered entities, except as otherwise provided in this title.

`(c) Effectiveness of Allowance Transfers- No transfer of an allowance or offset credit shall be effective for purposes of this title until a certification of the transfer, signed by the

designated representative of the transferor, is received and recorded by the Administrator in accordance with regulations promulgated under section 721(h).

`(d) Allowance Tracking System- The regulations promulgated under section 721(h) shall include a system for issuing, recording, holding, and tracking allowances and offset

credits that shall specify all necessary procedures and requirements for an orderly and competitive functioning of the allowance and offset credit markets. Such regulations shall

provide for appropriate publication of the information in the system on the Internet.

`SEC. 725. BANKING AND BORROWING.

`(a) Banking- An emission allowance may be used to comply with section 722 or section 723 for emissions in--

`(1) the vintage year for the allowance; or

`(2) any calendar year subsequent to the vintage year for the allowance.

`(b) Expiration-

`(1) REGULATIONS- The Administrator may establish by regulation criteria and procedures for determining whether, and for implementing a determination that, the expiration

of an allowance or credit established or issued by the Administrator under this title, or expiration of the ability to use an international emission allowance to comply with section 722, is

necessary to ensure the authenticity and integrity of allowances or credits or the allowance tracking system.

`(2) GENERAL RULE- An allowance or credit established or issued by the Administrator under this title shall not expire unless--

`(A) it is retired by the Administrator as required under this title; or

`(B) it is determined to expire or to have expired by a specific date by the Administrator in accordance with regulations promulgated under paragraph (1).

`(3) INTERNATIONAL EMISSION ALLOWANCES- The ability to use an international emission allowance to comply with section 722 shall not expire unless--

`(A) the allowance is retired by the Administrator as required by this title; or

`(B) the ability to use such allowance to meet such compliance obligation requirements is determined to expire or to have expired by a specific date by the Administrator in

accordance with regulations promulgated under paragraph (1).

`(c) Borrowing Future Vintage Year Allowances-

`(1) BORROWING WITHOUT INTEREST- In addition to the uses described in subsection (a), an emission allowance may be used to comply with section 722(a) or section 723

for emissions, production, importation, manufacture, or deliveries in the calendar year immediately preceding the vintage year for the allowance.

`(2) BORROWING WITH INTEREST-

`(A) IN GENERAL- A covered entity may demonstrate compliance under subsection (b) in a specific calendar year for up to 15 percent of its emissions by holding emission

allowances with a vintage year 1 to 5 years later than that calendar year.

`(B) LIMITATIONS- An emission allowance borrowed pursuant to this paragraph shall be an emission allowance that is established by the Administrator for a specific future

calendar year under section 721(a) and that is held by the borrower.

`(C) PREPAYMENT OF INTEREST- For each emission allowance that an owner or operator of a covered entity borrows pursuant to this paragraph, such owner or operator

shall, at the time it borrows the allowance, hold for retirement by the Administrator a quantity of emission allowances that is equal to the product obtained by multiplying--

`(i) 0.08; by

`(ii) the number of years between the calendar year in which the allowance is being used to satisfy a compliance obligation and the vintage year of the allowance.

`SEC. 726. STRATEGIC RESERVE.

`(a) Strategic Reserve Auctions-

`(1) IN GENERAL- Once each quarter of each calendar year for which allowances are established under section 721(a), the Administrator shall auction strategic reserve

allowances.

`(2) RESTRICTION TO COVERED ENTITIES- In each auction conducted under paragraph (1), only covered entities that the Administrator expects will be required to comply with

section 722 in the following calendar year shall be eligible to make purchases.

`(b) Pool of Emission Allowances for Strategic Reserve Auctions-

`(1) FILLING THE STRATEGIC RESERVE INITIALLY-

`(A) IN GENERAL- The Administrator shall, not later than 2 years after the date of enactment of this title, establish a strategic reserve account, and shall place in that account

an amount of emission allowances established under section 721(a) for each calendar year from 2012 through 2050 in the amounts specified in subparagraph (B) of this paragraph.

`(B) AMOUNT- The amount referred to in subparagraph (A) shall be--

`(i) for each of calendar years 2012 through 2019, 1 percent of the quantity of emission allowances established for that year pursuant to section 721(e)(1);

`(ii) for each of calendar years 2020 through 2029, 2 percent of the quantity of emission allowances established for that year pursuant to section 721(e)(1); and

`(iii) for each of calendar years 2030 through 2050, 3 percent of the quantity of emission allowances established for that year pursuant to section 721(e)(1).

`(C) EFFECT ON OTHER PROVISIONS- Any provision in this title (except for subparagraph (B) of this paragraph) that refers to a quantity or percentage of the emission

allowances established for a calendar year under section 721(a) shall be considered to refer to the amount of emission allowances as determined pursuant to section 721(e), less

any emission allowances established for that year that are placed in the strategic reserve account under this paragraph.

`(2) SUPPLEMENTING THE STRATEGIC RESERVE- The Administrator shall also--

`(A) at the end of each calendar year, transfer to the strategic reserve account each emission allowance that was offered for sale but not sold at any auction conducted under

section 791; and

`(B) transfer emission allowances established under subsection (g) from auction proceeds, and deposit them into the strategic reserve, to the extent necessary to maintain

the reserve at its original size.

`(c) Minimum Strategic Reserve Auction Price-

`(1) IN GENERAL- At each strategic reserve auction, the Administrator shall offer emission allowances for sale beginning at a minimum price per emission allowance, which

shall be known as the `minimum strategic reserve auction price'.

`(2) INITIAL MINIMUM STRATEGIC RESERVE AUCTION PRICES- The minimum strategic reserve auction price shall be $28 (in constant 2009 dollars) for the strategic reserve

auctions held in 2012. For the strategic reserve auctions held in 2013 and 2014, the minimum strategic reserve auction price shall be the strategic reserve auction price for the

previous year increased by 5 percent plus the rate of inflation (as measured by the Consumer Price Index for All Urban Consumers).

`(3) MINIMUM STRATEGIC RESERVE AUCTION PRICE IN SUBSEQUENT YEARS- For each strategic reserve auction held in 2015 and each year thereafter, the minimum

strategic reserve auction price shall be 60 percent above a rolling 36-month average of the daily closing price for that year's emission allowance vintage as reported on registered

carbon trading facilities, calculated using constant dollars.

`(d) Quantity of Emission Allowances Released From the Strategic Reserve-

`(1) INITIAL LIMITS- For each of calendar years 2012 through 2016, the annual limit on the number of emission allowances from the strategic reserve account that may be

auctioned is an amount equal to 5 percent of the emission allowances established for that calendar year under section 721(a). This limit does not apply to international offset credits

sold on consignment pursuant to subsection (h).

`(2) LIMITS IN SUBSEQUENT YEARS- For calendar year 2017 and each year thereafter, the annual limit on the number of emission allowances from the strategic reserve

account that may be auctioned is an amount equal to 10 percent of the emission allowances established for that calendar year under section 721(a). This limit does not apply to

international offset credits sold on consignment pursuant to subsection (h).

`(3) ALLOCATION OF LIMITATION- One-fourth of each year's annual strategic reserve auction limit under this subsection shall be made available for auction in each quarter.

Any allowances from the strategic reserve account that are made available for sale in a quarterly auction and not sold shall be rolled over and added to the quantity available for sale

in the following quarter, except that allowances not sold at auction in the fourth quarter of a year shall not be rolled over to the following calendar year's auctions, but shall be returned

to the strategic reserve account.

`(e) Purchase Limit-

`(1) IN GENERAL- Except as provided in paragraph (2) or (3), the annual number of emission allowances that a covered entity may purchase at the strategic reserve auctions in

each calendar year shall not exceed 20 percent of the covered entity's emissions during the most recent year for which allowances or credits were retired under section 722.

`(2) 2012 LIMIT- For calendar year 2012, the maximum aggregate number of emission allowances that a covered entity may purchase from that year's strategic reserve

auctions shall be 20 percent of the covered entity's greenhouse gas emissions that the covered entity reported to the registry established under section 713 for 2011 and that would

be subject to section 722(a) if occurring in later calendar years.

`(3) NEW ENTRANTS- The Administrator shall, by regulation, establish a separate purchase limit applicable to entities that expect to become a covered entity in the year of the

auction, permitting them to purchase emission allowances at the strategic reserve auctions in their first calendar year of operation in an amount of at least 20 percent of their

expected combined emissions and attributable greenhouse gas emissions for that year.

`(f) Delegation or Contract- Pursuant to regulations under this section, the Administrator may, by delegation or contract, provide for the conduct of strategic reserve auctions under

the Administrator's supervision by other departments or agencies of the Federal Government or by nongovernmental agencies, groups, or organizations.

`(g) Use of Auction Proceeds-

`(1) DEPOSIT IN STRATEGIC RESERVE FUND- The proceeds from strategic reserve auctions shall be placed in the Strategic Reserve Fund established under section 793(1),

and shall be available without further appropriation or fiscal year limitation for the purposes described in this subsection.

`(2) INTERNATIONAL OFFSET CREDITS FOR REDUCED DEFORESTATION- The Administrator shall use the proceeds from each strategic reserve auction to purchase

international offset credits issued for reduced deforestation activities pursuant to section 743(e). The Administrator shall retire those international offset credits and establish a

number of emission allowances equal to 80 percent of the number of international offset credits so retired. Emission allowances established under this paragraph shall be in

addition to those established under section 721(a).

`(3) EMISSION ALLOWANCES- The Administrator shall deposit emission allowances established under paragraph (2) in the strategic reserve, except that, with respect to any

such emission allowances in excess of the amount necessary to fill the strategic reserve to its original size, the Administrator shall--

`(A) except as provided in subparagraph (B), assign a vintage year to the emission allowance, which shall be no earlier than the year in which the allowance is established

under paragraph (2) and shall treat such allowances as ones that are not designated for distribution or auction for purposes of section 782(q) and (r); and

`(B) to the extent any such allowances cannot be assigned a vintage year because of the limitation in paragraph (4), retire the allowances.

`(4) LIMITATION- In no case may the Administrator assign under paragraph (3)(A) more emission allowances to a vintage year than the number of emission allowances from

that vintage year that were placed in the strategic reserve account under subsection (b)(1).

`(h) Availability of International Offset Credits for Auction-

`(1) IN GENERAL- The regulations promulgated under section 721(h) shall allow any entity holding international offset credits from reduced deforestation issued under section

743(e) to request that the Administrator include such offset credits in an upcoming strategic reserve auction. The regulations shall provide that--

`(A) such international offset credits will be used to fill bid orders only after the supply of strategic reserve allowances available for sale at that auction has been depleted;

`(B) international offset credits may be sold at a strategic reserve auction under this subsection only if the Administrator determines that it is highly likely that covered entities

will, to cover emissions occurring in the year the auction is held, use offset credits to demonstrate compliance under section 722 for emissions equal to or greater than 80 percent of

2 billion tons of carbon dioxide equivalent;

`(C) upon sale of such international offset credits, the Administrator shall retire those international offset credits, and establish and provide to the purchasers a number of

emission allowances equal to 80 percent of the number of international offset credits so retired, which allowances shall be in addition to those established under section 721(a); and

`(D) for international offset credits sold pursuant to this subsection, the proceeds for the entity that offered the international offset credits for sale shall be the lesser of--

`(i) the average daily closing price for international offset credits sold on registered exchanges (or if such price is unavailable, the average price as determined by the

Administrator) during the six months prior to the strategic reserve auction at which they were auctioned, with the remaining funds collected upon the sale of the international offset

credits deposited in the Treasury; and

`(ii) the amount received for the international offset credits at the auction.

`(2) PROCEEDS- For international offset credits sold pursuant to this subsection, notwithstanding section 3302 of title 31, United States Code, or any other provision of law,

within 90 days of receipt, the United States shall transfer the proceeds from the auction, as defined in paragraph (1)(D), to the entity that offered the international offset credits for sale.

No funds transferred from a purchaser to a seller of international offset credits under this paragraph shall be held by any officer or employee of the United States or treated for any

purpose as public monies.

`(3) PRICING- When the Administrator acts under this subsection as the agent of an entity in possession of international offset credits, the Administrator is not obligated to

obtain the highest price possible for the international offset credits, and instead shall auction such international offset credits in the same manner and pursuant to the same rules

(except as modified in paragraph (1)) as set forth for auctioning strategic reserve allowances. Entities requesting that such international offset credits be offered for sale at a strategic

reserve auction may not set a minimum reserve price for their international offset credits that is different than the minimum strategic reserve auction price set pursuant to subsection

(c).

`(i) Initial Regulations- Not later than 24 months after the date of enactment of this title, the Administrator shall promulgate regulations, in consultation with other appropriate

agencies, governing the auction of allowances under this section. Such regulations shall include the following requirements:

`(1) FREQUENCY; FIRST AUCTION- Auctions shall be held four times per year at regular intervals, with the first auction to be held no later than March 31, 2012.

`(2) AUCTION FORMAT- Auctions shall follow a single-round, sealed-bid, uniform price format.

`(3) PARTICIPATION; FINANCIAL ASSURANCE- Auctions shall be open to any covered entity eligible to purchase emission allowances at the auction under subsection (a)(2),

except that the Administrator may establish financial assurance requirements to ensure that auction participants can and will perform on their bids.

`(4) DISCLOSURE OF BENEFICIAL OWNERSHIP- Each bidder in an auction shall be required to disclose the person or entity sponsoring or benefitting from the bidder's

participation in the auction if such person or entity is, in whole or in part, other than the bidder.

`(5) PURCHASE LIMITS- No person may, directly or in concert with another participant, purchase more than 20 percent of the allowances offered for sale at any quarterly

auction.

`(6) PUBLICATION OF INFORMATION- After the auction, the Administrator shall, in a timely fashion, publish the identities of winning bidders, the quantity of allowances

obtained by each winning bidder, and the auction clearing price.

`(7) OTHER REQUIREMENTS- The Administrator may include in the regulations such other requirements or provisions as the Administrator, in consultation with other

agencies as appropriate, considers appropriate to promote effective, efficient, transparent, and fair administration of auctions under this section.

`(j) Revision of Regulations- The Administrator may, at any time, in consultation with other agencies as appropriate, revise the initial regulations promulgated under subsection (i).

Such revised regulations need not meet the requirements identified in subsection (i) if the Administrator determines that an alternative auction design would be more effective, taking

into account factors including costs of administration, transparency, fairness, and risks of collusion or manipulation. In determining whether and how to revise the initial regulations

under this subsection, the Administrator shall not consider maximization of revenues to the Federal Government.

`SEC. 727. PERMITS.

`(a) Permit Program- For stationary sources subject to title V of this Act, that are covered entities, the provisions of this title shall be implemented by permits issued to such covered

entities (and enforced) in accordance with the provisions of title V, as modified by this title. Any such permit issued by the Administrator, or by a State with an approved permit program,

shall require the owner or operator of a covered entity to hold emission allowances or offset credits at least equal to the total annual amount of carbon dioxide equivalents for its

combined emissions and attributable greenhouse gas emissions to which section 722 applies. No such permit shall be issued that is inconsistent with the requirements of this title,

and title V as applicable. Nothing in this section regarding compliance plans or in title V shall be construed as affecting allowances or offset credits. Submission of a statement by the

owner or operator, or the designated representative of the owners and operators, of a covered entity that the owners and operators will hold emission allowances or offset credits for

the entity's combined emissions and attributable greenhouse gas emissions to which section 722 applies shall be deemed to meet the proposed and approved planning

requirements of title V. Recordation by the Administrator of transfers of emission allowances shall amend automatically all applicable proposed or approved permit applications,

compliance plans, and permits.

`(b) Multiple Owners- No permit shall be issued under this section and no allowances or offset credits shall be disbursed under this title to a covered entity or any other person

until the designated representative of the owners or operators has filed a certificate of representation with regard to matters under this title, including the holding and distribution of

emission allowances and the proceeds of transactions involving emission allowances. Where there are multiple holders of a legal or equitable title to, or a leasehold interest in, such

a covered entity or other entity or where a utility or industrial customer purchases power under a long-term power purchase contract from an independent power production facility that

is a covered entity, the certificate shall state--

`(1) that emission allowances and the proceeds of transactions involving emission allowances will be deemed to be held or distributed in proportion to each holder's legal,

equitable, leasehold, or contractual reservation or entitlement; or

`(2) if such multiple holders have expressly provided for a different distribution of emission allowances by contract, that emission allowances and the proceeds of transactions

involving emission allowances will be deemed to be held or distributed in accordance with the contract.

A passive lessor, or a person who has an equitable interest through such lessor, whose rental payments are not based, either directly or indirectly, upon the revenues or income

from the covered entity or other entity shall not be deemed to be a holder of a legal, equitable, leasehold, or contractual interest for the purpose of holding or distributing emission

allowances as provided in this subsection, during either the term of such leasehold or thereafter, unless expressly provided for in the leasehold agreement. Except as otherwise

provided in this subsection, where all legal or equitable title to or interest in a covered entity, or other entity, is held by a single person, the certificate shall state that all emission

allowances received by the entity are deemed to be held for that person.

`(c) Prohibition- It shall be unlawful for any person to operate any stationary source subject to the requirements of this section except in compliance with the terms and

requirements of a permit issued by the Administrator or a State with an approved permit program in accordance with this section. For purposes of this subsection, compliance, as

provided in section 504(f), with a permit issued under title V which complies with this title for covered entities shall be deemed compliance with this subsection as well as section

502(a).

`(d) Reliability- Nothing in this section or title V shall be construed as requiring termination of operations of a stationary source that is a covered entity for failure to have an

approved permit, or compliance plan, that is consistent with the requirements in the second and fifth sentences of subsection (a) concerning the holding of emission allowances,

compensatory allowances, international emission allowances, or offset allowances, except that any such covered entity may be subject to the applicable enforcement provision of

section 113.

`(e) Regulations- The Administrator shall promulgate regulations to implement this section. To provide for permits required under this section, each State in which one or more

stationary sources and that are covered entities are located shall submit, in accordance with this section and title V, revised permit programs for approval.

`SEC. 728. INTERNATIONAL EMISSION ALLOWANCES.

`(a) Qualifying Programs- The Administrator, in consultation with the Secretary of State, may by rule designate an international climate change program as a qualifying international

program if--

`(1) the program is run by a national or supranational foreign government, and imposes a mandatory absolute tonnage limit on greenhouse gas emissions from 1 or more

foreign countries, or from 1 or more economic sectors in such a country or countries; and

`(2) the program is at least as stringent as the program established by this title, including provisions to ensure at least comparable monitoring, compliance, enforcement,

quality of offsets, and restrictions on the use of offsets.

`(b) Disqualified Allowances- An international emission allowance may not be held under section 722(d)(2) if it is in the nature of an offset instrument or allowance awarded based

on the achievement of greenhouse gas emission reductions or avoidance, or greenhouse gas sequestration, that are not subject to the mandatory absolute tonnage limits referred to

in subsection (a)(1).

`(c) Retirement-

`(1) ENTITY CERTIFICATION- The owner or operator of an entity that holds an international emission allowance under section 722(d)(2) shall certify to the Administrator that

such international emission allowance has not previously been used to comply with any foreign, international, or domestic greenhouse gas regulatory program.

`(2) RETIREMENT-

`(A) FOREIGN AND INTERNATIONAL REGULATORY ENTITIES- The Administrator, in consultation with the Secretary of State, shall seek, by whatever means appropriate,

including agreements and technical cooperation on allowance tracking, to ensure that any relevant foreign, international, and domestic regulatory entities--

`(i) are notified of the use, for purposes of compliance with this title, of any international emission allowance; and

`(ii) provide for the disqualification of such international emission allowance for any subsequent use under the relevant foreign, international, or domestic greenhouse

gas regulatory program, regardless of whether such use is a sale, exchange, or submission to satisfy a compliance obligation.

`(B) DISQUALIFICATION FROM FURTHER USE- The Administrator shall ensure that, once an international emission allowance has been disqualified or otherwise used for

purposes of compliance with this title, such allowance shall be disqualified from any further use under this title.

`(d) Use Limitations- The Administrator may, by rule, modify the percentage applicable to international emission allowances under section 722(d)(2), consistent with the purposes

of the Safe Climate Act.

`PART D--OFFSETS

`SEC. 731. OFFSETS INTEGRITY ADVISORY BOARD.

`(a) Establishment- Not later than 30 days after the date of enactment of this title, the Administrator shall establish an independent Offsets Integrity Advisory Board. The Advisory

Board shall make recommendations to the Administrator for use in promulgating and revising regulations under this part and part E, and for ensuring the overall environmental

integrity of the programs established pursuant to those regulations.

`(b) Membership- The Advisory Board shall be comprised of at least nine members. Each member shall be qualified by education, training, and experience to evaluate scientific

and technical information on matters referred to the Board under this section. The Administrator shall appoint Advisory Board members, including a chair and vice-chair of the

Advisory Board. Terms shall be 3 years in length, except for initial terms, which may be up to 5 years in length to allow staggering. Members may be reappointed only once for an

additional 3-year term, and such second term may follow directly after a first term.

`(c) Activities- The Advisory Board established pursuant to subsection (a) shall--

`(1) provide recommendations, not later than 90 days after the Advisory Board's establishment and periodically thereafter, to the Administrator regarding offset project types that

should be considered for eligibility under section 733, taking into consideration relevant scientific and other issues, including--

`(A) the availability of a representative data set for use in developing the activity baseline;

`(B) the potential for accurate quantification of greenhouse gas reduction, avoidance, or sequestration for an offset project type;

`(C) the potential level of scientific and measurement uncertainty associated with an offset project type; and

`(D) any beneficial or adverse environmental, public health, welfare, social, economic, or energy effects associated with an offset project type;

`(2) make available to the Administrator its advice and comments on offset methodologies that should be considered under regulations promulgated pursuant to section

734(a) and (b), including methodologies to address the issues of additionality, activity baselines, measurement, leakage, uncertainty, permanence, and environmental integrity;

`(3) make available to the Administrator, and other relevant Federal agencies, its advice and comments regarding scientific, technical, and methodological issues specific to

the issuance of international offset credits under section 743;

`(4) make available to the Administrator, and other relevant Federal agencies, its advice and comments regarding scientific, technical, and methodological issues associated

with the implementation of part E;

`(5) make available to the Administrator its advice and comments on areas in which further knowledge is required to appraise the adequacy of existing, revised, or proposed

methodologies for use under this part and part E, and describe the research efforts necessary to provide the required information; and

`(6) make available to the Administrator its advice and comments on other ways to improve or safeguard the environmental integrity of programs established under this part

and part E.

`(d) Scientific Review of Offset and Deforestation Reduction Programs- Not later than January 1, 2017, and at five-year intervals thereafter, the Advisory Board shall submit to the

Administrator and make available to the public an analysis of relevant scientific and technical information related to this part and part E. The Advisory Board shall review approved and

potential methodologies, scientific studies, offset project monitoring, offset project verification reports, and audits related to this part and part E, and evaluate the net emissions effects

of implemented offset projects. The Advisory Board shall recommend changes to offset methodologies, protocols, or project types, or to the overall offset program under this part, to

ensure that offset credits issued by the Administrator do not compromise the integrity of the annual emission reductions established under section 703, and to avoid or minimize

adverse effects to human health or the environment.

`SEC. 732. ESTABLISHMENT OF OFFSETS PROGRAM.

`(a) Regulations- Not later than 2 years after the date of enactment of this title, the Administrator, in consultation with appropriate Federal agencies and taking into consideration

the recommendations of the Advisory Board, shall promulgate regulations establishing a program for the issuance of offset credits in accordance with the requirements of this part.

The Administrator shall periodically revise these regulations as necessary to meet the requirements of this part.

`(b) Requirements- The regulations described in subsection (a) shall--

`(1) authorize the issuance of offset credits with respect to qualifying offset projects that result in reductions or avoidance of greenhouse gas emissions, or sequestration of

greenhouse gases;

`(2) ensure that such offset credits represent verifiable and additional greenhouse gas emission reductions or avoidance, or increases in sequestration;

`(3) ensure that offset credits issued for sequestration offset projects are only issued for greenhouse gas reductions that are permanent;

`(4) provide for the implementation of the requirements of this part; and

`(5) include as reductions in greenhouse gases reductions achieved through the destruction of methane and its conversion to carbon dioxide.

`(c) Coordination to Minimize Negative Effects- In promulgating and implementing regulations under this part, the Administrator shall act (including by rejecting projects, if

necessary) to avoid or minimize, to the maximum extent practicable, adverse effects on human health or the environment resulting from the implementation of offset projects under

this part.

`(d) Offset Registry- The Administrator shall establish within the allowance tracking system established under section 724(d) an Offset Registry for qualifying offset projects and

offset credits issued with respect thereto under this part.

`(e) Legal Status of Offset Credit- An offset credit does not constitute a property right.

`(f) Fees- The Administrator shall assess fees payable by offset project developers in an amount necessary to cover the administrative costs to the Environmental Protection

Agency of carrying out the activities under this part. Amounts collected for such fees shall be available to the Administrator for carrying out the activities under this part to the extent

provided in advance in appropriations Acts.

`SEC. 733. ELIGIBLE PROJECT TYPES.

`(a) List of Eligible Project Types-

`(1) IN GENERAL- As part of the regulations promulgated under section 732(a), the Administrator shall establish, and may periodically revise, a list of types of projects eligible

to generate offset credits, including international offset credits, under this part.

`(2) ADVISORY BOARD RECOMMENDATIONS- In determining the eligibility of project types, the Administrator shall take into consideration the recommendations of the Advisory

Board. If a list established under this section differs from the recommendations of the Advisory Board, the regulations promulgated under section 732(a) shall include a justification

for the discrepancy.

`(3) INITIAL DETERMINATION- The Administrator shall establish the initial eligibility list under paragraph (1) not later than one year after the date of enactment of this title. The

Administrator shall add additional project types to the list not later than 2 years after the date of enactment of this title. In determining the initial list, the Administrator shall give priority

to consideration of offset project types that are recommended by the Advisory Board and for which there are well developed methodologies that the Administrator determines would

meet the criteria of section 734, with such modifications as the Administrator deems appropriate. In issuing methodologies pursuant to section 734, the Administrator shall give

priority to methodologies for offset types included on the initial eligibility list.

`(b) Modification of List- The Administrator--

`(1) may at any time, by rule, add a project type to the list established under subsection (a) if the Administrator, in consultation with appropriate Federal agencies and taking into

consideration the recommendations of the Advisory Board, determines that the project type can generate additional reductions or avoidance of greenhouse gas emissions, or

sequestration of greenhouse gases, subject to the requirements of this part;

`(2) may at any time, by rule, determine that a project type on the list does not meet the requirements of this part, and remove a project type from the list established under

subsection (a), in consultation with appropriate Federal agencies and taking into consideration any recommendations of the Advisory Board; and

`(3) shall consider adding to or removing from the list established under subsection (a), at a minimum, project types proposed to the Administrator--

`(A) by petition pursuant to subsection (c); or

`(B) by the Advisory Board.

`(c) Petition Process- Any person may petition the Administrator to modify the list established under subsection (a) by adding or removing a project type pursuant to subsection (b).

Any such petition shall include a showing by the petitioner that there is adequate data to establish that the project type does or does not meet the requirements of this part. Not later

than 12 months after receipt of such a petition, the Administrator shall either grant or deny the petition and publish a written explanation of the reasons for the Administrator's decision.

The Administrator may not deny a petition under this subsection on the basis of inadequate Environmental Protection Agency resources or time for review.

`SEC. 734. REQUIREMENTS FOR OFFSET PROJECTS.

`(a) Methodologies- As part of the regulations promulgated under section 732(a), the Administrator shall establish, for each type of offset project listed as eligible under section

733, the following:

`(1) ADDITIONALITY- A standardized methodology for determining the additionality of greenhouse gas emission reductions or avoidance, or greenhouse gas sequestration,

achieved by an offset project of that type. Such methodology shall ensure, at a minimum, that any greenhouse gas emission reduction or avoidance, or any greenhouse gas

sequestration, is considered additional only to the extent that it results from activities that--

`(A) are not required by or undertaken to comply with any law, including any regulation or consent order;

`(B) were not commenced prior to January 1, 2009, except in the case of--

`(i) offset project activities that commenced after January 1, 2001, and were registered as of the date of enactment of this title under an offset program with respect to

which the Administrator has made an affirmative determination under section 740(a)(2); or

`(ii) activities that are readily reversible, with respect to which the Administrator may set an alternative earlier date under this subparagraph that is not earlier than January

1, 2001, where the Administrator determines that setting such an alternative date may produce an environmental benefit by removing an incentive to cease and then reinitiate activities

that began prior to January 1, 2009;

`(C) are not receiving support under part E of this title or title IV, subtitle D of the American Clean Energy and Security Act of 2009; and

`(D) exceed the activity baseline established under paragraph (2).

`(2) ACTIVITY BASELINES- A standardized methodology for establishing activity baselines for offset projects of that type. The Administrator shall set activity baselines to reflect a

conservative estimate of business-as-usual performance or practices for the relevant type of activity such that the baseline provides an adequate margin of safety to ensure the

environmental integrity of offsets calculated in reference to such baseline.

`(3) QUANTIFICATION METHODS- A standardized methodology for determining the extent to which greenhouse gas emission reductions or avoidance, or greenhouse gas

sequestration, achieved by an offset project of that type exceed a relevant activity baseline, including protocols for monitoring and accounting for uncertainty.

`(4) LEAKAGE- A standardized methodology for accounting for and mitigating potential leakage, if any, from an offset project of that type, taking uncertainty into account.

`(b) Accounting for Reversals-

`(1) IN GENERAL- For each type of sequestration project listed under section 733, the Administrator shall establish requirements to account for and address reversals,

including--

`(A) a requirement to report any reversal with respect to an offset project for which offset credits have been issued under this part;

`(B) provisions to require emission allowances to be held in amounts to fully compensate for greenhouse gas emissions attributable to reversals, and to assign

responsibility for holding such emission allowances; and

`(C) any other provisions the Administrator determines necessary to account for and address reversals.

`(2) MECHANISMS- The Administrator shall prescribe mechanisms to ensure that any sequestration with respect to which an offset credit is issued under this part results in a

permanent net increase in sequestration, and that full account is taken of any actual or potential reversal of such sequestration, with an adequate margin of safety. The Administrator

shall prescribe at least one of the following mechanisms to meet the requirements of this paragraph:

`(A) An offsets reserve, pursuant to paragraph (3).

`(B) Insurance that provides for purchase and provision to the Administrator for retirement of an amount of offset credits or emission allowances equal in number to the tons

of carbon dioxide equivalents of greenhouse gas emissions released due to reversal.

`(C) Another mechanism that the Administrator determines satisfies the requirements of this part.

`(3) OFFSETS RESERVE-

`(A) IN GENERAL- An offsets reserve referred to in paragraph (2)(A) is a program under which, before issuance of offset credits under this part, the Administrator shall

subtract and reserve from the quantity to be issued a quantity of offset credits based on the risk of reversal. The Administrator shall--

`(i) hold these reserved offset credits in the offsets reserve; and

`(ii) register the holding of the reserved offset credits in the Offset Registry established under section 732(d).

`(B) PROJECT REVERSAL-

`(i) IN GENERAL- If a reversal has occurred with respect an offset project for which offset credits are reserved under this paragraph, the Administrator shall remove offset

credits from the offsets reserve and cancel them to fully account for the tons of carbon dioxide equivalent that are no longer sequestered.

`(ii) INTENTIONAL REVERSALS- If the Administrator determines that a reversal was intentional, the offset project developer for the relevant offset project shall place into

the offsets reserve a quantity of offset credits, or combination of offset credits and emission allowances, equal in number to the number of reserve offset credits that were canceled

due to the reversal pursuant to clause (i).

`(iii) UNINTENTIONAL REVERSALS- If the Administrator determines that a reversal was unintentional, the offset project developer for the relevant offset project shall

place into the offsets reserve a quantity of offset credits, or combination of offset credits and emission allowances, equal in number to half the number of offset credits that were

reserved for that offset project, or half the number of reserve offset credits that were canceled due to the reversal pursuant to clause (i), whichever is less.

`(C) USE OF RESERVED OFFSET CREDITS- Offset credits placed into the offsets reserve under this paragraph may not be used to comply with section 722.

`(c) Crediting Periods-

`(1) IN GENERAL- For each offset project type, the Administrator shall specify a crediting period, and establish provisions for petitions for new crediting periods, in accordance

with this subsection.

`(2) DURATION- The crediting period shall be no less than 5 and no greater than 10 years for any project type other than those involving sequestration.

`(3) ELIGIBILITY- An offset project shall be eligible to generate offset credits under this part only during the project's crediting period. During such crediting period, the project

shall remain eligible to generate offset credits, subject to the methodologies and project type eligibility list that applied as of the date of project approval under section 735, except as

provided in paragraph (4) of this subsection.

`(4) PETITION FOR NEW CREDITING PERIOD- An offset project developer may petition for a new crediting period to commence after termination of a crediting period, subject

to the methodologies and project type eligibility list in effect at the time when such petition is submitted. A petition may not be submitted under this paragraph more than 18 months

before the end of the pending crediting period. The Administrator may limit the number of new crediting periods available for projects of particular project types.

`(d) Environmental Integrity- In establishing the requirements under this section, the Administrator shall apply conservative assumptions or methods to maximize the certainty that

the environmental integrity of the cap established under section 703 is not compromised.

`(e) Pre-Existing Methodologies- In promulgating requirements under this section, the Administrator shall give due consideration to methodologies for offset projects existing as of

the date of enactment of this title.

`(f) Added Project Types- The Administrator shall establish methodologies described in subsection (a), and, as applicable, requirements and mechanisms for reversals as

described in subsection (b), for any project type that is added to the list pursuant to section 733.

`SEC. 735. APPROVAL OF OFFSET PROJECTS.

`(a) Approval Petition- An offset project developer shall submit an offset project approval petition providing such information as the Administrator requires to determine whether the

offset project is eligible for issuance of offset credits under rules promulgated pursuant to this part.

`(b) Timing- An approval petition shall be submitted to the Administrator under subsection (a) no later than the time at which an offset project's first verification report is submitted

under section 736.

`(c) Approval Petition Requirements- As part of the regulations promulgated under section 732, the Administrator shall include provisions for, and shall specify, the required

components of an offset project approval petition required under subsection (a), which shall include--

`(1) designation of an offset project developer; and

`(2) any other information that the Administrator considers to be necessary to achieve the purposes of this part.

`(d) Approval and Notification- Not later than 90 days after receiving a complete approval petition under subsection (a), the Administrator shall approve or deny the petition in writing

and, if the petition is denied, provide the reasons for denial. After an offset project is approved, the offset project developer shall not be required to resubmit an approval petition during

the offset project's crediting period, except as provided in section 734(c)(4).

`(e) Appeal- The Administrator shall establish procedures for appeal and review of determinations made under subsection (d).

`(f) Voluntary Preapproval Review- The Administrator may establish a voluntary preapproval review procedure, to allow an offset project developer to request the Administrator to

conduct a preliminary eligibility review for an offset project. Findings of such reviews shall not be binding upon the Administrator. The voluntary preapproval review procedure--

`(1) shall require the offset project developer to submit such basic project information as the Administrator requires to provide a meaningful review; and

`(2) shall require a response from the Administrator not later than 6 weeks after receiving a request for review under this subsection.

`SEC. 736. VERIFICATION OF OFFSET PROJECTS.

`(a) In General- As part of the regulations promulgated under section 732(a), the Administrator shall establish requirements, including protocols, for verification of the quantity of

greenhouse gas emission reductions or avoidance, or sequestration of greenhouse gases, resulting from an offset project. The regulations shall require that an offset project

developer shall submit a report, prepared by a third-party verifier accredited under subsection (d), providing such information as the Administrator requires to determine the quantity of

greenhouse gas emission reductions or avoidance, or sequestration of greenhouse gas, resulting from the offset project.

`(b) Schedule- The Administrator shall prescribe a schedule for the submission of verification reports under subsection (a).

`(c) Verification Report Requirements- The Administrator shall specify the required components of a verification report required under subsection (a), which shall include--

`(1) the name and contact information for a designated representative for the offset project developer;

`(2) the quantity of greenhouse gas reduced, avoided, or sequestered;

`(3) the methodologies applicable to the project pursuant to section 734;

`(4) a certification that the project meets the applicable requirements;

`(5) a certification establishing that the conflict of interest requirements in the regulations promulgated under subsection (d)(1) have been complied with; and

`(6) any other information that the Administrator considers to be necessary to achieve the purposes of this part.

`(d) Verifier Accreditation-

`(1) IN GENERAL- As part of the regulations promulgated under section 732(a), the Administrator shall establish a process and requirements for periodic accreditation of

third-party verifiers to ensure that such verifiers are professionally qualified and have no conflicts of interest.

`(2) STANDARDS-

`(A) AMERICAN NATIONAL STANDARDS INSTITUTE ACCREDITATION- The Administrator may accredit, or accept for purposes of accreditation under this subsection,

verifiers accredited under the American National Standards Institute (ANSI) accreditation program in accordance with ISO 14065. The Administrator shall accredit, or accept for

accreditation, verifiers under this subparagraph only if the Administrator finds that the American National Standards Institute accreditation program provides sufficient assurance that

the requirements of this part will be met.

`(B) EPA ACCREDITATION- As part of the regulations promulgated under section 732(a), the Administrator may establish accreditation standards for verifiers under this

subsection, and may establish related training and testing programs and requirements.

`(3) PUBLIC ACCESSIBILITY- Each verifier meeting the requirements for accreditation in accordance with this subsection shall be listed in a publicly accessible database,

which shall be maintained and updated by the Administrator.

`SEC. 737. ISSUANCE OF OFFSET CREDITS.

`(a) Determination and Notification- Not later than 90 days after receiving a complete verification report under section 736, the Administrator shall--

`(1) make the report publicly available;

`(2) make a determination of the quantity of greenhouse gas emissions reduced or avoided, or greenhouse gases sequestered, resulting from an offset project approved

under section 735; and

`(3) notify the offset project developer in writing of such determination.

`(b) Issuance Of Offset Credits- The Administrator shall issue one offset credit to an offset project developer for each ton of carbon dioxide equivalent that the Administrator has

determined has been reduced, avoided, or sequestered during the period covered by a verification report submitted in accordance with section 736, only if--

`(1) the Administrator has approved the offset project pursuant to section 735; and

`(2) the relevant emissions reduction, avoidance, or sequestration has--

`(A) already occurred, during the offset project's crediting period; and

`(B) occurred after January 1, 2009.

`(c) Appeal- The Administrator shall establish procedures for appeal and review of determinations made under subsection (a).

`(d) Timing- Offset credits meeting the criteria established in subsection (b) shall be issued not later than 2 weeks following the verification determination made by the

Administrator under subsection (a).

`(e) Registration- The Administrator shall assign a unique serial number to and register each offset credit to be issued in the Offset Registry established under section 732(d).

`SEC. 738. AUDITS.

`(a) In General- The Administrator shall, on an ongoing basis, conduct random audits of offset projects, offset credits, and practices of third-party verifiers. In each year, the

Administrator shall conduct audits, at minimum, for a representative sample of project types and geographic areas.

`(b) Delegation- The Administrator may delegate to a State or tribal government the responsibility for conducting audits under this section if the Administrator finds that the program

proposed by the State or tribal government provides assurances equivalent to those provided by the auditing program of the Administrator, and that the integrity of the offset program

under this part will be maintained. Nothing in this subsection shall prevent the Administrator from conducting any audit the Administrator considers necessary and appropriate.

`SEC. 739. PROGRAM REVIEW AND REVISION.

`At least once every 5 years, the Administrator shall review and, based on new or updated information and taking into consideration the recommendations of the Advisory Board,

update and revise--

`(1) the list of eligible project types established under section 733;

`(2) the methodologies established, including specific activity baselines, under section 734(a);

`(3) the reversal requirements and mechanisms established or prescribed under section 734(b);

`(4) measures to improve the accountability of the offsets program; and

`(5) any other requirements established under this part to ensure the environmental integrity and effective operation of this part.

`SEC. 740. EARLY OFFSET SUPPLY.

`(a) Projects Registered Under Other Government-Recognized Programs- Except as provided in subsection (b) or (c), the Administrator shall issue one offset credit for each ton of

carbon dioxide equivalent emissions reduced, avoided, or sequestered--

`(1) under an offset project that was started after January 1, 2001;

`(2) for which a credit was issued under any regulatory or voluntary greenhouse gas emission offset program that the Administrator determines--

`(A) was established under State or tribal law or regulation prior to January 1, 2009, or has been approved by the Administrator pursuant to subsection (e);

`(B) has developed offset project type standards, methodologies, and protocols through a public consultation process or a peer review process;

`(C) has made available to the public standards, methodologies, and protocols that require that credited emission reductions, avoidance, or sequestration are permanent,

additional, verifiable, and enforceable;

`(D) requires that all emission reductions, avoidance, or sequestration be verified by a State regulatory agency or an accredited third-party independent verification body;

`(E) requires that all credits issued are registered in a publicly accessible registry, with individual serial numbers assigned for each ton of carbon dioxide equivalent

emission reductions, avoidance, or sequestration; and

`(F) ensures that no credits are issued for activities for which the entity administering the program, or a program administrator or representative, has funded, solicited, or

served as a fund administrator for the development of, the project or activity that caused the emission reduction, avoidance, or sequestration; and

`(3) for which the credit described in paragraph (2) is transferred to the Administrator.

`(b) Ineligible Credits- Subsection (a) shall not apply to offset credits that have expired or have been retired, canceled, or used for compliance under a program established under

State or tribal law or regulation.

`(c) Limitation- Notwithstanding subsection (a)(1), offset credits shall be issued under this section--

`(1) only for reductions or avoidance of greenhouse gas emissions, or sequestration of greenhouse gases, that occur after January 1, 2009; and

`(2) only until the date that is 3 years after the date of enactment of this title, or the date that regulations promulgated under section 732(a) take effect, whichever occurs sooner.

`(d) Retirement of Credits- The Administrator shall seek to ensure that offset credits described in subsection (a)(2) are retired for purposes of use under a program described in

subsection (b).

`(e) Other Programs- (1) Offset programs that either--

`(A) were not established under State or tribal law; or

`(B) were not established prior to January 1, 2009,

but that otherwise meet all of the criteria of subsection (a)(2) may apply to the Administrator to be approved under this subsection as an eligible program for early offset credits

under this section.

`(2) The Administrator shall approve any such program that the Administrator determines has criteria and methodologies of at least equal stringency to the criteria and

methodologies of the programs established under State or tribal law that the Administrator determines meet the criteria of subsection (a)(2). The Administrator may approve types of

offsets under any such program that are subject to criteria and methodologies of at least equal stringency to the criteria and methodologies for such types of offsets applied under the

programs established under State or tribal law that the Administrator determines meet the criteria of subsection (a)(2). The Administrator shall make a determination on any

application received under this subsection by no later than 180 days from the date of receipt of the application.

`SEC. 741. ENVIRONMENTAL CONSIDERATIONS.

`If the Administrator lists forestry projects as eligible offset project types under section 733, the Administrator, in consultation with appropriate Federal agencies, shall promulgate

regulations for the selection and use of species in forestry and other relevant land management-related offset projects--

`(1) to ensure that native species are given primary consideration in such projects;

`(2) to enhance biological diversity in such projects;

`(3) to prohibit the use of federally designated or State-designated noxious weeds;

`(4) to prohibit the use of a species listed by a regional or State invasive plant authority within the applicable region or State; and

`(5) in accordance with widely accepted, environmentally sustainable forestry practices.

`SEC. 742. TRADING.

`Section 724 shall apply to the trading of offset credits.

`SEC. 743. INTERNATIONAL OFFSET CREDITS.

`(a) In General- The Administrator, in consultation with the Secretary of State and the Administrator of the United States Agency for International Development, may issue, in

accordance with this section, international offset credits based on activities that reduce or avoid greenhouse gas emissions, or increase sequestration of greenhouse gases, in a

developing country. Such credits may be issued for projects pursuant to the requirements of this part or as provided in subsection (c), (d), or (e).

`(b) Issuance-

`(1) REGULATIONS- Not later than 2 years after the date of enactment of this title, the Administrator, in consultation with the Secretary of State, the Administrator of the United

States Agency for International Development, and any other appropriate Federal agency, and taking into consideration the recommendations of the Advisory Board, shall promulgate

regulations for implementing this section. Except as otherwise provided in this section, the issuance of international offset credits under this section shall be subject to the

requirements of this part.

`(2) REQUIREMENTS FOR INTERNATIONAL OFFSET CREDITS- The Administrator may issue international offset credits only if--

`(A) the United States is a party to a bilateral or multilateral agreement or arrangement that includes the country in which the project or measure achieving the relevant

greenhouse gas emission reduction or avoidance, or greenhouse gas sequestration, has occurred;

`(B) such country is a developing country; and

`(C) such agreement or arrangement--

`(i) ensures that all of the requirements of this part apply to the issuance of international offset credits under this section; and

`(ii) provides for the appropriate distribution of international offset credits issued.

`(c) Sector-Based Credits-

`(1) IN GENERAL- In order to minimize the potential for leakage and to encourage countries to take nationally appropriate mitigation actions to reduce or avoid greenhouse gas

emissions, or sequester greenhouse gases, the Administrator, in consultation with the Secretary of State and the Administrator of the United States Agency for International

Development, shall--

`(A) identify sectors of specific countries with respect to which the issuance of international offset credits on a sectoral basis is appropriate; and

`(B) issue international offset credits for such sectors only on a sectoral basis.

`(2) IDENTIFICATION OF SECTORS-

`(A) GENERAL RULE- For purposes of paragraph (1)(A), a sectoral basis shall be appropriate for activities--

`(i) in countries that have comparatively high greenhouse gas emissions, or comparatively greater levels of economic development; and

`(ii) that, if located in the United States, would be within a sector subject to the compliance obligation under section 722.

`(B) FACTORS- In determining the sectors and countries for which international offset credits should be awarded only on a sectoral basis, the Administrator, in consultation

with the Secretary of State and the Administrator of the United States Agency for International Development, shall consider the following factors:

`(i) The country's gross domestic product.

`(ii) The country's total greenhouse gas emissions.

`(iii) Whether the comparable sector of the United States economy is covered by the compliance obligation under section 722.

`(iv) The heterogeneity or homogeneity of sources within the relevant sector.

`(v) Whether the relevant sector provides products or services that are sold in internationally competitive markets.

`(vi) The risk of leakage if international offset credits were issued on a project-level basis, instead of on a sectoral basis, for activities within the relevant sector.

`(vii) The capability of accurately measuring, monitoring, reporting, and verifying the performance of sources across the relevant sector.

`(viii) Such other factors as the Administrator, in consultation with the Secretary of State and the Administrator of the United States Agency for International Development,

determines are appropriate to--

`(I) ensure the integrity of the United States greenhouse gas emissions cap established under section 703; and

`(II) encourage countries to take nationally appropriate mitigation actions to reduce or avoid greenhouse gas emissions, or sequester greenhouse gases.

`(3) SECTORAL BASIS-

`(A) DEFINITION- In this subsection, the term `sectoral basis' means the issuance of international offset credits only for the quantity of sector-wide reductions or avoidance

of greenhouse gas emissions, or sector-wide increases in sequestration of greenhouse gases, achieved across the relevant sector of the economy relative to a baseline level of

performance established in an agreement or arrangement described in subsection (b)(2)(A) for the sector.

`(B) BASELINE- The baseline for a sector shall be established at levels of greenhouse gas emissions lower than would occur under a business-as-usual scenario taking

into account relevant domestic or international policies or incentives to reduce greenhouse gas emissions, among other factors, and additionality and performance shall be

determined on the basis of such baseline.

`(d) Credits Issued by an International Body-

`(1) IN GENERAL- The Administrator, in consultation with the Secretary of State, may issue international offset credits in exchange for instruments in the nature of offset credits

that are issued by an international body established pursuant to the United Nations Framework Convention on Climate Change, to a protocol to such Convention, or to a treaty that

succeeds such Convention. The Administrator may issue international offset credits under this subsection only if, in addition to the requirements of subsection (b), the Administrator

has determined that the international body that issued the instruments has implemented substantive and procedural requirements for the relevant project type that provide equal or

greater assurance of the integrity of such instruments as is provided by the requirements of this part.

`(2) RETIREMENT- The Administrator, in consultation with the Secretary of State, shall seek, by whatever means appropriate, including agreements, arrangements, or technical

cooperation with the international issuing body described in paragraph (1), to ensure that such body--

`(A) is notified of the Administrator's issuance, under this subsection, of an international offset credit in exchange for an instrument issued by such international body; and

`(B) provides, to the extent feasible, for the disqualification of the instrument issued by such international body for subsequent use under any relevant foreign or international

greenhouse gas regulatory program, regardless of whether such use is a sale, exchange, or submission to satisfy a compliance obligation.

`(e) Offsets From Reduced Deforestation-

`(1) REQUIREMENTS- The Administrator, in accordance with the regulations promulgated under subsection (b)(1) and an agreement or arrangement described in subsection

(b)(2)(A), shall issue international offset credits for greenhouse gas emission reductions achieved through activities to reduce deforestation only if, in addition to the requirements of

subsection (b)--

`(A) the activity occurs in--

`(i) a country listed by the Administrator pursuant to paragraph (2);

`(ii) a state or province listed by the Administrator pursuant to paragraph (5); or

`(iii) a country listed by the Administrator pursuant to paragraph (6);

`(B) except as provided in paragraph (5) or (6), the quantity of the international offset credits is determined by comparing the national emissions from deforestation relative

to a national deforestation baseline for that country established, in accordance with an agreement or arrangement described in subsection (b)(2)(A), pursuant to paragraph (4);

`(C) the reduction in emissions from deforestation has occurred before the issuance of the international offset credit and, taking into consideration relevant international

standards, has been demonstrated using ground-based inventories, remote sensing technology, and other methodologies to ensure that all relevant carbon stocks are accounted;

`(D) the Administrator has made appropriate adjustments, such as discounting for any additional uncertainty, to account for circumstances specific to the country, including

its technical capacity described in paragraph (2)(A);

`(E) the activity is designed, carried out, and managed--

`(i) in accordance with widely accepted, environmentally sustainable forest management practices;

`(ii) to promote or restore native forest species and ecosystems where practicable, and to avoid the introduction of invasive nonnative species;

`(iii) in a manner that gives due regard to the rights and interests of local communities, indigenous peoples, forest-dependent communities, and vulnerable social

groups;

`(iv) with consultations with, and full participation of, local communities, indigenous peoples, and forest-dependent communities, in affected areas, as partners and

primary stakeholders, prior to and during the design, planning, implementation, and monitoring and evaluation of activities; and

`(v) with equitable sharing of profits and benefits derived from offset credits with local communities, indigenous peoples, and forest-dependent communities; and

`(F) the reduction otherwise satisfies and is consistent with any relevant requirements established by an agreement reached under the auspices of the United Nations

Framework Convention on Climate Change.

`(2) ELIGIBLE COUNTRIES- The Administrator, in consultation with the Secretary of State and the Administrator of the United States Agency for International Development, and

in accordance with an agreement or arrangement described in subsection (b)(2)(A), shall establish, and periodically review and update, a list of the developing countries that have the

capacity to participate in deforestation reduction activities at a national level, including--

`(A) the technical capacity to monitor, measure, report, and verify forest carbon fluxes for all significant sources of greenhouse gas emissions from deforestation with an

acceptable level of uncertainty, as determined taking into account relevant internationally accepted methodologies, such as those established by the Intergovernmental Panel on

Climate Change;

`(B) the institutional capacity to reduce emissions from deforestation, including strong forest governance and mechanisms to equitably distribute deforestation resources

for local actions; and

`(C) a land use or forest sector strategic plan that--

`(i) assesses national and local drivers of deforestation and forest degradation and identifies reforms to national policies needed to address them;

`(ii) estimates the country's emissions from deforestation and forest degradation;

`(iii) identifies improvements in data collection, monitoring, and institutional capacity necessary to implement a national deforestation reduction program; and

`(iv) establishes a timeline for implementing the program and transitioning to low-emissions development.

`(3) PROTECTION OF INTERESTS- With respect to an agreement or arrangement described in subsection (b)(2)(A) with a country that addresses international offset credits

under this subsection, the Administrator, in consultation with the Secretary of State and the Administrator of the United States Agency for International Development, shall seek to

ensure the establishment and enforcement by such country of legal regimes, processes, standards, and safeguards that--

`(A) give due regard to the rights and interests of local communities, indigenous peoples, forest-dependent communities, and vulnerable social groups;

`(B) promote consultations with, and full participation of, forest-dependent communities and indigenous peoples in affected areas, as partners and primary stakeholders,

prior to and during the design, planning, implementation, and monitoring and evaluation of activities; and

`(C) encourage equitable sharing of profits and benefits derived from international offset credits with local communities, indigenous peoples, and forest-dependent

communities.

`(4) NATIONAL DEFORESTATION BASELINE- A national deforestation baseline established under this subsection shall--

`(A) be national in scope;

`(B) be consistent with nationally appropriate mitigation commitments or actions with respect to deforestation, taking into consideration the average annual historical

deforestation rates of the country during a period of at least 5 years, the applicable drivers of deforestation, and other factors to ensure additionality;

`(C) establish a trajectory that would result in zero net deforestation by not later than 20 years after the national deforestation baseline has been established;

`(D) be adjusted over time to take account of changing national circumstances;

`(E) be designed to account for all significant sources of greenhouse gas emissions from deforestation in the country; and

`(F) be consistent with the national deforestation baseline, if any, established for such country under section 754(d)(1).

`(5) STATE-LEVEL OR PROVINCE-LEVEL ACTIVITIES-

`(A) ELIGIBLE STATES OR PROVINCES- The Administrator, in consultation with the Secretary of State and the Administrator of the United States Agency for International

Development, shall establish, and periodically review and update, a list of states or provinces in developing countries where--

`(i) the developing country is not included on the list of countries established pursuant to paragraph (6)(A);

`(ii) the state or province by itself is a major emitter of greenhouse gases from tropical deforestation on a scale commensurate to the emissions of other countries; and

`(iii) the state or province meets the eligibility criteria in paragraphs (2) and (3) for the geographic area under its jurisdiction.

`(B) ACTIVITIES- The Administrator may issue international offset credits for greenhouse gas emission reductions achieved through activities to reduce deforestation at a

state or provincial level that meet the requirements of this section. Such credits shall be determined by comparing the emissions from deforestation within that state or province

relative to the state or province deforestation baseline for that state or province established, in accordance with an agreement or arrangement described in subsection (b)(2)(A),

pursuant to subparagraph (C) of this paragraph.

`(C) STATE-LEVEL OR PROVINCE-LEVEL DEFORESTATION BASELINE- A state-level or province-level deforestation baseline shall--

`(i) be consistent with any existing nationally appropriate mitigation commitments or actions for the country in which the activity is occurring, taking into consideration the

average annual historical deforestation rates of the state or province during a period of at least 5 years, relevant drivers of deforestation, and other factors to ensure additionality;

`(ii) establish a trajectory that would result in zero net deforestation by not later than 20 years after the state-level or province-level deforestation baseline has been

established; and

`(iii) be designed to account for all significant sources of greenhouse gas emissions from deforestation in the state or province and adjusted to fully account for

emissions leakage outside the state or province.

`(D) PHASE OUT- Beginning 5 years after the first calendar year for which a covered entity must demonstrate compliance with section 722(a), the Administrator shall issue

no further international offset credits for eligible state-level or province-level activities to reduce deforestation pursuant to this paragraph.

`(6) PROJECTS AND PROGRAMS TO REDUCE DEFORESTATION-

`(A) ELIGIBLE COUNTRIES- The Administrator, in consultation with the Secretary of State and the Administrator of the United States Agency for International Development,

shall establish, and periodically review and update, a list of developing countries that--

`(i) the Administrator determines, based on recent, credible, and reliable emissions data, account for less than 1 percent of global greenhouse gas emissions and less

than 3 percent of global forest-sector and land use change greenhouse gas emissions; and

`(ii) have, or in the determination of the Administrator are making a good faith effort to develop, a land use or forest sector strategic plan that meets the criteria described

in paragraph (2)(C).

`(B) ACTIVITIES- The Administrator may issue international offset credits for greenhouse gas emission reductions achieved through project or program level activities to

reduce deforestation in countries listed under subparagraph (A) that meet the requirements of this section. The quantity of international offset credits shall be determined by

comparing the project-level or program-level emissions from deforestation to a deforestation baseline for such project or program established pursuant to subparagraph (C).

`(C) PROJECT-LEVEL OR PROGRAM-LEVEL BASELINE- A project-level or program-level deforestation baseline shall--

`(i) be consistent with any existing nationally appropriate mitigation commitments or actions for the country in which the project or program is occurring, taking into

consideration the average annual historical deforestation rates in the project or program boundary during a period of at least 5 years, applicable drivers of deforestation, and other

factors to ensure additionality;

`(ii) be designed to account for all significant sources of greenhouse gas emissions from deforestation in the project or program boundary; and

`(iii) be adjusted to fully account for emissions leakage outside the project or program boundary.

`(D) PHASE OUT- (i) Beginning 5 years after the first calendar year for which a covered entity must demonstrate compliance with section 722(a), the Administrator shall

issue no further international offset credits for project-level or program-level activities as described in this paragraph, except as provided in clause (ii).

`(ii) The Administrator may extend the phase out deadline for the issuance of international offset credits under this section by up to 8 years with respect to eligible activities

taking place in a least developed nation, which is a foreign country that the United Nations has identified as among the least developed of developing countries at the time that the

Administrator determines to provide an extension, provided that the Administrator, in consultation with the Secretary of State and the Administrator of the United States Agency for

International Development, determines the nation--

`(I) lacks sufficient capacity to adopt and implement effective programs to achieve reductions in deforestation measured against national baselines;

`(II) is receiving support under part E to develop such capacity; and

`(III) has developed and is working to implement a credible national strategy or plan to reduce deforestation.

`(7) DEFORESTATION- In implementing this subsection, the Administrator, taking into consideration the recommendations of the Advisory Board, may include forest

degradation, or soil carbon losses associated with forested wetlands or peatlands, within the meaning of deforestation.

`(f) Modification of Requirements- In promulgating regulations under subsection (b)(1) with respect to the issuance of international offset credits under subsection (c), (d), or (e),

the Administrator, in consultation with the Secretary of State and the Administrator of the United States Agency for International Development, may modify or omit a requirement of this

part (excluding the requirements of this section) if the Administrator determines that the application of that requirement to such subsection is not feasible. In modifying or omitting

such a requirement on the basis of infeasibility, the Administrator, in consultation with the Secretary of State and the Administrator of the United States Agency for International

Development, shall ensure, with an adequate margin of safety, the integrity of international offset credits issued under this section and of the greenhouse gas emissions cap

established pursuant to section 703.

`(g) Avoiding Double Counting- The Administrator, in consultation with the Secretary of State, shall seek, by whatever means appropriate, including agreements, arrangements, or

technical cooperation, to ensure that activities on the basis of which international offset credits are issued under this section are not used for compliance with an obligation to reduce

or avoid greenhouse gas emissions, or increase greenhouse gas sequestration, under a foreign or international regulatory system. In addition, no international offset credits shall be

issued for emission reductions from activities with respect to which emission allowances were allocated under section 781 for distribution under part E.

`(h) Limitation- The Administrator shall not issue international offset credits generated by projects based on the destruction of hydrofluorocarbons.

`PART E--SUPPLEMENTAL EMISSIONS REDUCTIONS FROM REDUCED DEFORESTATION

`SEC. 751. DEFINITIONS.

`In this part:

`(1) LEAKAGE PREVENTION ACTIVITIES- The term `leakage prevention activities' means activities in developing countries that are directed at preserving existing forest carbon

stocks, including forested wetlands and peatlands, that might, absent such activities, be lost through leakage.

`(2) NATIONAL DEFORESTATION REDUCTION ACTIVITIES- The term `national deforestation reduction activities' means activities in developing countries that reduce a quantity

of greenhouse gas emissions from deforestation that is calculated by measuring actual emissions against a national deforestation baseline established pursuant to section

754(d)(1) and (2).

`(3) SUBNATIONAL DEFORESTATION REDUCTION ACTIVITIES- The term `subnational deforestation reduction activities' means activities in developing countries that reduce a

quantity of greenhouse gas emissions from deforestation that are calculated by measuring actual emissions using an appropriate baseline established by the Administrator that is

less than national in scope.

`(4) SUPPLEMENTAL EMISSIONS REDUCTIONS- The term `supplemental emissions reductions' means greenhouse gas emissions reductions achieved from reduced or

avoided deforestation under this part.

`(5) USAID- The term `USAID' means the United States Agency for International Development.

`SEC. 752. FINDINGS.

`Congress finds that--

`(1) as part of a global effort to mitigate climate change, it is in the national interest of the United States to assist developing countries to reduce and ultimately halt emissions

from deforestation;

`(2) deforestation is one of the largest sources of greenhouse gas emissions in developing countries, amounting to roughly 20 percent of overall emissions globally;

`(3) recent scientific analysis shows that it will be substantially more difficult to limit the increase in global temperatures to less than 2 degrees centigrade above preindustrial

levels without reducing and ultimately halting net emissions from deforestation;

`(4) reducing emissions from deforestation is highly cost-effective, compared to many other sources of emissions reductions;

`(5) in addition to contributing significantly to worldwide efforts to address global warming, this assistance will generate significant environmental and social cobenefits,

including protection of biodiversity, ecosystem services, and forest-related livelihoods; and

`(6) Under the Bali Action Plan, developed country parties to the United Nations Framework Convention on Climate Change, including the United States, committed to

`enhanced action on the provision of financial resources and investment to support action on mitigation and adaptation and technology cooperation,' including, inter alia,

consideration of `improved access to adequate, predictable, and sustainable financial resources and financial and technical support, and the provision of new and additional

resources, including official and concessional funding for developing country parties' .

`SEC. 753. SUPPLEMENTAL EMISSIONS REDUCTIONS THROUGH REDUCED DEFORESTATION.

`(a) Regulations- Not later than 2 years after the date of enactment of this title, the Administrator, in consultation with the Administrator of USAID and any other appropriate

agencies, shall promulgate regulations establishing a program to use emission allowances set aside for this purpose under section 781 to achieve the reduction of greenhouse gas

emissions from deforestation in developing countries in accordance with the requirements of this part.

`(b) Objectives- The objectives of the program established under this section shall be to--

`(1) achieve supplemental emissions reductions of at least 720,000,000 tons of carbon dioxide equivalent in 2020, a cumulative amount of at least 6,000,000,000 tons of

carbon dioxide equivalent by December 31, 2025, and additional supplemental emissions reductions in subsequent years;

`(2) build capacity to reduce deforestation in developing countries experiencing deforestation, including preparing developing countries to participate in international markets

for international offset credits for reduced emissions from deforestation; and

`(3) preserve existing forest carbon stocks in countries where such forest carbon may be vulnerable to international leakage, particularly in developing countries with largely

intact native forests.

`SEC. 754. REQUIREMENTS FOR INTERNATIONAL DEFORESTATION REDUCTION PROGRAM.

`(a) Eligible Countries- The Administrator may support activities under this part only with respect to a developing country that--

`(1) the Administrator, in consultation with the Administrator of USAID, determines is experiencing deforestation or forest degradation or has standing forest carbon stocks that

may be at risk of deforestation or degradation; and

`(2) has entered into a bilateral or multilateral agreement or arrangement with the United States establishing the conditions of its participation in the program established

under this part, which shall include an agreement to meet the standards established under subsection (d) for the activities to which those standards apply.

`(b) Activities- (1) Subject to the requirements of this part, the Administrator, in consultation with the Administrator of USAID, may support activities to achieve the objectives

identified in section 753(b), including--

`(A) national deforestation reduction activities;

`(B) subnational deforestation reduction activities, including pilot activities that reduce greenhouse gas emissions but are subject to significant uncertainty;

`(C) activities to measure, monitor, and verify deforestation, avoided deforestation, and deforestation rates;

`(D) leakage prevention activities;

`(E) development of measurement, monitoring, and verification capacities to enable a country to quantify supplemental emissions reductions and to generate for sale offset

credits from reduced or avoided deforestation;

`(F) development of governance structures to reduce deforestation and illegal logging;

`(G) enforcement of requirements for reduced deforestation or forest conservation;

`(H) efforts to combat illegal logging and increase enforcement cooperation;

`(I) providing incentives for policy reforms to achieve the objectives identified in section 753(b); and

`(J) monitoring and evaluation of the results of the activities conducted under this section.

`(2) ACTIVITIES SELECTED BY USAID-

`(A) The Administrator of USAID, in consultation with the Administrator, may select for support and implementation pursuant to subsection (c) any of the activities described

in paragraph (1), consistent with this part and the regulations promulgated under subsection (d), and subject to the requirement to achieve the objectives listed in section 753(b)(1).

`(B) With respect to the activities listed in subparagraphs (D) through (J) of paragraph (1), the Administrator of USAID, in consultation with the Administrator, shall have

primary but not exclusive responsibility for selecting the activities to be supported and implemented.

`(3) INTERAGENCY COORDINATION- The Administrator and the Administrator of USAID shall jointly develop and biennially update a strategic plan for meeting the objectives

listed in section 753(b) and shall execute a memorandum of understanding delineating the agencies' respective roles in implementing this part.

`(c) Mechanisms-

`(1) IN GENERAL- The Administrator may support activities to achieve the objectives identified in section 753(b) by--

`(A) developing and implementing programs and projects that achieve such objectives; and

`(B) distributing emission allowances to a country that is eligible under subsection (a), to any private or public group (including international organizations), or to an

international fund established by an international agreement to which the United States is a party, to carry out activities to achieve such objectives.

`(2) USAID ACTIVITIES- With respect to activities selected and implemented by the Administrator of USAID pursuant to (b)(2), the Administrator shall distribute emission

allowances as provided in subparagraph (1) based upon the direction of the Administrator of USAID, subject to the availability of allowances for such activities.

`(3) IMPLEMENTATION THROUGH INTERNATIONAL ORGANIZATIONS- If support is distributed through an international organization, the agency responsible for selecting

activities in accordance with subparagraph (b)(1) or (2), in consultation with the Secretary of State, shall ensure the establishment and implementation of adequate mechanisms to

apply and enforce the eligibility requirements and other requirements of this section.

`(4) ROLE OF THE SECRETARY OF STATE- The Administrator may not distribute emission allowances to the government of another country or to an international organization

or international fund unless the Secretary of State has concurred with such distribution.

`(d) Standards- The Administrator, in consultation with the Administrator of USAID, shall promulgate standards to ensure that supplemental emissions reductions achieved

through supported activities are additional, measurable, verifiable, permanent, monitored, and account for leakage and uncertainty. In addition, such standards shall--

`(1) require the establishment of a national deforestation baseline for each country with national deforestation reduction activities that is used to account for reductions

achieved from such activities;

`(2) provide that a national deforestation baseline established under paragraph (1) shall--

`(A) be national in scope;

`(B) be consistent with nationally appropriate mitigation commitments or actions with respect to deforestation, taking into consideration the average annual historical

deforestation rates of the country during a period of at least 5 years and other factors to ensure additionality;

`(C) establish a trajectory that would result in zero net deforestation by not later than 20 years from the date the baseline is established;

`(D) be adjusted over time to take account of changing national circumstances;

`(E) be designed to account for all significant sources of greenhouse gas emissions from deforestation in the country; and

`(F) be consistent with the national deforestation baseline, if any, established for such country under section 743(e)(4);

`(3) with respect to support provided pursuant to subsection (b)(1)(A) or (B), require supplemental emissions reductions to be achieved and verified prior to compensation

through the distribution of emission allowances under this part;

`(4) with respect to accounting for subnational deforestation reduction activities that lack the standardized or precise measurement and monitoring techniques needed for a full

accounting of changes in emissions or baselines, or are subject to other sources of uncertainty, apply a conservative discount factor to reflect the uncertainty regarding the levels of

reductions achieved;

`(5) ensure that activities under this part shall be designed, carried out, and managed--

`(A) in accordance with widely accepted, environmentally sustainable forestry practices;

`(B) to promote native species and conservation or restoration of native forests, if practicable, and to avoid the introduction of invasive nonnative species;

`(C) in a manner that gives due regard to the rights and interests of local communities, indigenous peoples, forest-dependent communities, and vulnerable social groups;

`(D) with consultations with, and full participation of, local communities, indigenous peoples, and forest-dependent communities in affected areas, as partners and primary

stakeholders, prior to and during the design, planning, implementation, and monitoring and evaluation of activities; and

`(E) with equitable sharing of profits and benefits derived from the activities with local communities, indigenous peoples, and forest-dependent communities; and

`(6) with respect to support for all activities under this part, seek to ensure the establishment and enforcement by the recipient country of legal regimes, standards, processes,

and safeguards that--

`(A) give due regard to the rights and interests of local communities, indigenous peoples, forest-dependent communities, and vulnerable social groups;

`(B) promote consultations with local communities and indigenous peoples and forest-dependent communities in affected areas, as partners and primary stakeholders,

prior to and during the design, planning, implementation, monitoring, and evaluation of activities under this part; and

`(C) encourage equitable sharing of profits and benefits from incentives for emissions reductions or leakage prevention with local communities, indigenous peoples, and

forest-dependent communities.

`(e) Expansion of Scope- The Administrator, in consultation with the Administrator of USAID, may decide, taking into account any advice from the Advisory Board, to expand, where

appropriate, the scope of activities under this part to include--

`(1) reduced emissions from forest degradation; or

`(2) reduced soil carbon-derived emissions associated with deforestation and degradation of forested wetlands and peatlands.

`(f) Accounting- The Administrator shall establish a publicly accessible registry of the supplemental emissions reductions achieved through support provided under this part each

year, after appropriately discounting for uncertainty and other relevant factors as required by the standards established under subsection (d).

`(g) Transition to National Reductions- Beginning 5 years after the date that a country entered into the agreement or arrangement required under subsection (a)(2), the

Administrator shall provide no further compensation through emission allowances to that country under this part for any subnational deforestation reduction activities, except that the

Administrator may extend this period by an additional 5 years if the Administrator, in consultation with the Administrator of USAID, determines that--

`(1) the country is making substantial progress towards adopting and implementing a program to achieve reductions in deforestation measured against a national baseline;

`(2) the greenhouse gas emissions reductions achieved are not resulting in significant leakage; and

`(3) the greenhouse gas emissions reductions achieved are being appropriately discounted to account for any leakage that is occurring.

The limitation under this subsection shall not apply to support for activities to further the objectives listed in section 753(b)(2) or (3).

`(h) Coordination With U.S. Foreign Assistance- Subject to the direction of the President, the Administrator and the Administrator of USAID shall, to the extent practicable and

consistent with the objectives of this program, seek to align activities under this section with broader development, poverty alleviation, or natural resource management objectives and

initiatives in the recipient country.

`(i) Support as Supplement- The provision of support for activities under this part shall be used to supplement, and not to supplant, any other Federal, State, or local support

available to carry out such qualifying activities under this part.

`SEC. 755. REPORTS AND REVIEWS.

`(a) Reports- Not later than January 1, 2014, and annually thereafter, the Administrator and the Administrator of USAID shall submit to the Committee on Energy and Commerce

and the Committee on Foreign Affairs of the House of Representatives, and the Committee on Environment and Public Works and the Committee on Foreign Relations of the Senate,

and make available to the public, a report on the support provided under this part during the prior fiscal year. The report shall include--

`(1) a statement of the quantity of supplemental emissions reductions for which compensation in the form of emission allowances was provided under this part during the prior

fiscal year, as registered by the Administrator under section 754(f); and

`(2) a description of the national and subnational deforestation reduction activities, capacity-building activities, and leakage prevention activities supported under this part,

including a statement of the quantity of emission allowances distributed to each recipient for each activity during the prior fiscal year, and a description of what was accomplished

through each of the activities.

`(b) Reviews- Not later than 4 years after the date of enactment of this title and every 5 years thereafter, the Administrator and the Administrator of USAID and taking into

consideration any evaluation by or recommendations from the Advisory Board established under section 731, shall conduct a review of the activities undertaken pursuant to this part

and make any appropriate changes in the program established under this part based on the findings of the review. The review shall include the effects of the activities on--

`(1) total documented carbon stocks of each country that directly or indirectly received support under this part compared with such country's national deforestation baseline

established under section 754(d)(1);

`(2) the number of countries with the capacity to generate for sale instruments in the nature of offset credits from forest-related activities, and the amount of such activities;

`(3) forest governance in each country that directly or indirectly received support under this part;

`(4) indigenous peoples and forest-dependent communities residing in areas affected by such activities;

`(5) biodiversity and ecosystem services within forested areas associated with the activities;

`(6) international leakage; and

`(7) any program or mechanism established under the United Nations Framework Convention on Climate Change related to greenhouse gas emissions from deforestation.

`SEC. 756. LEGAL EFFECT OF PART.

`(1) IN GENERAL- Nothing in this part supersedes, limits, or otherwise affects any restriction imposed by Federal law (including regulations) on any interaction between an

entity located in the United States and an entity located in a foreign country.

`(2) ROLE OF THE SECRETARY OF STATE- Nothing in this part shall be construed as affecting the role of the Secretary of State or the responsibilities of the Secretary under

section 622 (c) of the Foreign Assistance Act of 1961.'.

SEC. 312. DEFINITIONS.

Title VII of the Clean Air Act, as added by section 311 of this Act, is amended by inserting before part A the following new section:

`SEC. 700. DEFINITIONS.

`In this title:

`(1) ADDITIONAL- The term `additional', when used with respect to reductions or avoidance of greenhouse gas emissions, or to sequestration of greenhouse gases, means

reductions, avoidance, or sequestration that result in a lower level of net greenhouse gas emissions or atmospheric concentrations than would occur in the absence of an offset

project.

`(2) ADDITIONALITY- The term `additionality' means the extent to which reductions or avoidance of greenhouse gas emissions, or sequestration of greenhouse gases, are

additional.

`(3) ADVISORY BOARD- The term `Advisory Board' means the Offsets Integrity Advisory Board established under section 731.

`(4) AFFILIATED- The term `affiliated'--

`(A) when used in relation to an entity means owned or controlled by, or under common ownership or control with, another entity, as determined by the Administrator; and

`(B) when used in relation to a natural gas local distribution company, means owned or controlled by, or under common ownership or control with, another natural gas local

distribution company, as determined by the Administrator.

`(5) ALLOWANCE- The term `allowance' means a limited authorization to emit, or have attributable greenhouse gas emissions in an amount of, 1 ton of carbon dioxide

equivalent of a greenhouse gas in accordance with this title; it includes an emission allowance, a compensatory allowance, or an international emission allowance.

`(6) ATTRIBUTABLE GREENHOUSE GAS EMISSIONS- The term `attributable greenhouse gas emissions' means--

`(A) for a covered entity that is a fuel producer or importer described in paragraph (13)(B), greenhouse gases that would be emitted from the combustion of any

petroleum-based or coal-based liquid fuel, petroleum coke, or natural gas liquid, produced or imported by that covered entity for sale or distribution in interstate commerce, assuming

no capture and sequestration of any greenhouse gas emissions;

`(B) for a covered entity that is an industrial gas producer or importer described in paragraph (13)(C), the tons of carbon dioxide equivalent of fossil fuel-based carbon

dioxide, nitrous oxide, any fluorinated gas, other than nitrogen trifluoride, that is a greenhouse gas, or any combination thereof--

`(i) produced or imported by such covered entity during the previous calendar year for sale or distribution in interstate commerce; or

`(ii) released as fugitive emissions in the production of fluorinated gas; and

`(C) for a natural gas local distribution company described in paragraph (13)(J), greenhouse gases that would be emitted from the combustion of the natural gas, and any

other gas meeting the specifications for commingling with natural gas for purposes of delivery, that such entity delivered during the previous calendar year to customers that are not

covered entities, assuming no capture and sequestration of that greenhouse gas.

`(7) BIOLOGICAL SEQUESTRATION; BIOLOGICALLY SEQUESTERED- The terms `biological sequestration' and `biologically sequestered' mean the removal of greenhouse

gases from the atmosphere by terrestrial biological means, such as by growing plants, and the storage of those greenhouse gases in plants or soils.

`(8) CAPPED EMISSIONS- The term `capped emissions' means greenhouse gas emissions to which section 722 applies, including emissions from the combustion of natural

gas, petroleum-based or coal-based liquid fuel, petroleum coke, or natural gas liquid to which section 722(b)(2) or (8) applies.

`(9) CAPPED SOURCE- The term `capped source' means a source that directly emits capped emissions.

`(10) CARBON DIOXIDE EQUIVALENT- The term `carbon dioxide equivalent' means the unit of measure, expressed in metric tons, of greenhouse gases as provided under

section 711 or 712.

`(11) CARBON STOCK- The term `carbon stock' means the quantity of carbon contained in a biological reservoir or system which has the capacity to accumulate or release

carbon.

`(12) COMPENSATORY ALLOWANCE- The term `compensatory allowance' means an allowance issued under section 721(f).

`(13) COVERED ENTITY- The term `covered entity' means each of the following:

`(A) Any electricity source.

`(B) Any stationary source that produces, and any entity that (or any group of two or more affiliated entities that, in the aggregate) imports, for sale or distribution in interstate

commerce in 2008 or any subsequent year, petroleum-based or coal-based liquid fuel, petroleum coke, or natural gas liquid, the combustion of which would emit more than 25,000

tons of carbon dioxide equivalent, as determined by the Administrator.

`(C) Any stationary source that produces, and any entity that (or any group of two or more affiliated entities that, in the aggregate) imports, for sale or distribution in interstate

commerce, in bulk, or in products designated by the Administrator, in 2008 or any subsequent year more than 25,000 tons of carbon dioxide equivalent of--

`(i) fossil fuel-based carbon dioxide;

`(ii) nitrous oxide;

`(iii) perfluorocarbons;

`(iv) sulfur hexafluoride;

`(v) any other fluorinated gas, except for nitrogen trifluoride, that is a greenhouse gas, as designated by the Administrator under section 711(b) or (c); or

`(vi) any combination of greenhouse gases described in clauses (i) through (vi).

`(D) Any stationary source that has emitted 25,000 or more tons of carbon dioxide equivalent of nitrogen trifluoride in 2008 or any subsequent year.

`(E) Any geologic sequestration site.

`(F) Any stationary source in the following industrial sectors:

`(i) Adipic acid production.

`(ii) Primary aluminum production.

`(iii) Ammonia manufacturing.

`(iv) Cement production, excluding grinding-only operations.

`(v) Hydrochlorofluorocarbon production.

`(vi) Lime manufacturing.

`(vii) Nitric acid production.

`(viii) Petroleum refining.

`(ix) Phosphoric acid production.

`(x) Silicon carbide production.

`(xi) Soda ash production.

`(xii) Titanium dioxide production.

`(xiii) Coal-based liquid or gaseous fuel production.

`(G) Any stationary source in the chemical or petrochemical sector that, in 2008 or any subsequent year--

`(i) produces acrylonitrile, carbon black, ethylene, ethylene dichloride, ethylene oxide, or methanol; or

`(ii) produces a chemical or petrochemical product if producing that product results in annual combustion plus process emissions of 25,000 or more tons of carbon

dioxide equivalent.

`(H) Any stationary source that--

`(i) is in one of the following industrial sectors: ethanol production; ferroalloy production; fluorinated gas production; food processing; glass production; hydrogen

production; iron and steel production; lead production; pulp and paper manufacturing; and zinc production; and

`(ii) has emitted 25,000 or more tons of carbon dioxide equivalent in 2008 or any subsequent year.

`(I) Any fossil fuel-fired combustion device (such as a boiler) or grouping of such devices that--

`(i) is all or part of an industrial source not specified in subparagraph (D), (F), (G), or (H); and

`(ii) has emitted 25,000 or more tons of carbon dioxide equivalent in 2008 or any subsequent year.

`(J) Any natural gas local distribution company that (or any group of 2 or more affiliated natural gas local distribution companies that, in the aggregate) in 2008 or any

subsequent year, delivers 460,000,000 cubic feet or more of natural gas to customers that are not covered entities.

`(14) CREDITING PERIOD- The term `crediting period' means the period with respect to which an offset project is eligible to earn offset credits under part D, as determined

under section 734(c).

`(15) DESIGNATED REPRESENTATIVE- The term `designated representative' means, with respect to a covered entity, a reporting entity, an offset project developer, or any other

entity receiving or holding allowances or offset credits under this title, an individual authorized, through a certificate of representation submitted to the Administrator by the owners and

operators or similar entity official, to represent the owners and operators or similar entity official in all matters pertaining to this title (including the holding, transfer, or disposition of

allowances or offset credits), and to make all submissions to the Administrator under this title.

`(16) DEVELOPING COUNTRY- The term `developing country' means a country eligible to receive official development assistance according to the income guidelines of the

Development Assistance Committee of the Organization for Economic Cooperation and Development.

`(17) DOMESTIC OFFSET CREDIT- The term `domestic offset credit' means an offset credit issued under part D, other than an international offset credit.

`(18) ELECTRICITY SOURCE- The term `electricity source' means a stationary source that includes one or more utility units.

`(19) EMISSION- The term `emission' means the release of a greenhouse gas into the ambient air. Such term does not include gases that are captured and sequestered,

except to the extent that they are later released into the atmosphere, in which case compliance must be demonstrated pursuant to section 722(b)(5).

`(20) EMISSION ALLOWANCE- The term `emission allowance' means an allowance established under section 721(a) or section 726(g)(2) or (h)(1)(C).

`(21) FAIR MARKET VALUE- The term `fair market value' means the average daily closing price on registered exchanges or, if such a price is unavailable, the average price as

determined by the Administrator, during a specified time period, of an emission allowance.

`(22) FEDERAL LAND- The term `Federal land' means land that is owned by the United States, other than land held in trust for an Indian or Indian tribe.

`(23) FOSSIL FUEL- The term `fossil fuel' means natural gas, petroleum, or coal, or any form of solid, liquid, or gaseous fuel derived from such material, including consumer

products that are derived from such materials and are combusted.

`(24) FOSSIL FUEL-FIRED- The term `fossil fuel-fired' means powered by combustion of fossil fuel, alone or in combination with any other fuel, regardless of the percentage of

fossil fuel consumed.

`(25) FUGITIVE EMISSIONS- The term `fugitive emissions' means emissions from leaks, valves, joints, or other small openings in pipes, ducts, or other equipment, or from

vents.

`(26) GEOLOGIC SEQUESTRATION; GEOLOGICALLY SEQUESTERED- The terms `geologic sequestration' and `geologically sequestered' mean the sequestration of

greenhouse gases in subsurface geologic formations for purposes of permanent storage.

`(27) GEOLOGIC SEQUESTRATION SITE- The term `geologic sequestration site' means a site where carbon dioxide is geologically sequestered.

`(28) GREENHOUSE GAS- The term `greenhouse gas' means any gas described in section 711(a) or designated under section 711(b), (c), or (e), except to the extent that it is

regulated under title VI.

`(29) HIGH CONSERVATION PRIORITY LAND- The term `high conservation priority land' means land that is not Federal land and is--

`(A) globally or State ranked as critically imperiled or imperiled under a State Natural Heritage Program; or

`(B) old-growth or late-successional forest, as identified by the office of the State Forester or relevant State agency with regulatory jurisdiction over forestry activities.

`(30) HOLD- The term `hold' means, with respect to an allowance or offset credit, to have in the appropriate account in the allowance tracking system, or submit to the

Administrator for recording in such account.

`(31) INDUSTRIAL SOURCE- The term `industrial source' means any stationary source that--

`(A) is not an electricity source; and

`(B) is in--

`(i) the manufacturing sector (as defined in North American Industrial Classification System codes 31, 32, and 33); or

`(ii) the natural gas processing or natural gas pipeline transportation sector (as defined in North American Industrial Classification System codes 211112 or 486210).

`(32) INTERNATIONAL EMISSION ALLOWANCE- The term `international emission allowance' means a tradable authorization to emit 1 ton of carbon dioxide equivalent of

greenhouse gas that is issued by a national or supranational foreign government pursuant to a qualifying international program designated by the Administrator pursuant to section

728(a).

`(33) INTERNATIONAL OFFSET CREDIT- The term `international offset credit' means an offset credit issued by the Administrator under section 743.

`(34) LEAKAGE- The term `leakage' means a significant increase in greenhouse gas emissions, or significant decrease in sequestration, which is caused by an offset project

and occurs outside the boundaries of the offset project.

`(35) MINERAL SEQUESTRATION- The term `mineral sequestration' means sequestration of carbon dioxide from the atmosphere by capturing carbon dioxide into a

permanent mineral, such as the aqueous precipitation of carbonate minerals that results in the storage of carbon dioxide in a mineral form.

`(36) NATURAL GAS LIQUID- The term `natural gas liquid' means ethane, butane, isobutane, natural gasoline, and propane which is ready for commercial sale or use.

`(37) NATURAL GAS LOCAL DISTRIBUTION COMPANY- The term `natural gas local distribution company' has the meaning given the term `local distribution company' in

section 2(17) of the Natural Gas Policy Act of 1978 (15 U.S.C. 3301(17)).

`(38) OFFSET CREDIT- The term `offset credit' means a credit issued under part D.

`(39) OFFSET PROJECT- The term `offset project' means a project or activity that reduces or avoids greenhouse gas emissions, or sequesters greenhouse gases, and for

which offset credits are issued under part D.

`(40) OFFSET PROJECT DEVELOPER- The term `offset project developer' means the individual or entity designated as the offset project developer in an offset project approval

petition under section 735(c)(1).

`(41) PETROLEUM- The term `petroleum' includes crude oil, tar sands, oil shale, and heavy oils.

`(42) RENEWABLE BIOMASS- The term `renewable biomass' means any of the following:

`(A) Plant material, including waste material, harvested or collected from actively managed agricultural land that was in cultivation, cleared, or fallow and nonforested on

January 1, 2009.

`(B) Plant material, including waste material, harvested or collected from pastureland that was nonforested on January 1, 2009.

`(C) Nonhazardous vegetative matter derived from waste, including separated yard waste, landscape right-of-way trimmings, construction and demolition debris or food

waste (but not municipal solid waste, recyclable waste paper, painted, treated or pressurized wood, or wood contaminated with plastic or metals).

`(D) Animal waste or animal byproducts, including products of animal waste digesters.

`(E) Algae.

`(F) Trees, brush, slash, residues, or any other vegetative matter removed from within 600 feet of any building, campground, or route designated for evacuation by a public

official with responsibility for emergency preparedness, or from within 300 feet of a paved road, electric transmission line, utility tower, or water supply line.

`(G) Residues from or byproducts of milled logs.

`(H) Any of the following removed from forested land that is not Federal and is not high conservation priority land:

`(i) Trees, brush, slash, residues, interplanted energy crops, or any other vegetative matter removed from an actively managed tree plantation established--

`(I) prior to January 1, 2009; or

`(II) on land that, as of January 1, 2009, was cultivated or fallow and non-forested.

`(ii) Trees, logging residue, thinnings, cull trees, pulpwood, and brush removed from naturally-regenerated forests or other non-plantation forests, including for the

purposes of hazardous fuel reduction or preventative treatment for reducing or containing insect or disease infestation.

`(iii) Logging residue, thinnings, cull trees, pulpwood, brush and species that are non-native and noxious, from stands that were planted and managed after January 1,

2009, to restore or maintain native forest types.

`(iv) Dead or severely damaged trees removed within 5 years of fire, blowdown, or other natural disaster, and badly infested trees.

`(I) Materials, pre-commercial thinnings, or removed invasive species from National Forest System land and public lands (as defined in section 103 of the Federal Land

Policy and Management Act of 1976 (43 U.S.C. 1702)), including those that are byproducts of preventive treatments (such as trees, wood, brush, thinnings, chips, and slash), that are

removed as part of a federally recognized timber sale, or that are removed to reduce hazardous fuels, to reduce or contain disease or insect infestation, or to restore ecosystem

health, and that are--

`(i) not from components of the National Wilderness Preservation System, Wilderness Study Areas, Inventoried Roadless Areas, old growth or mature forest stands,

components of the National Landscape Conservation System, National Monuments, National Conservation Areas, Designated Primitive Areas; or Wild and Scenic Rivers corridors;

`(ii) harvested in environmentally sustainable quantities, as determined by the appropriate Federal land manager; and

`(iii) are harvested in accordance with Federal and State law, and applicable land management plans.

`(43) RETIRE- The term `retire', with respect to an allowance or offset credit established or issued under this title, means to disqualify such allowance or offset credit for any

subsequent use under this title, regardless of whether the use is a sale, exchange, or submission of the allowance or offset credit to satisfy a compliance obligation.

`(44) REVERSAL- The term `reversal' means an intentional or unintentional loss of sequestered greenhouse gases to the atmosphere.

`(45) SEQUESTERED AND SEQUESTRATION- The terms `sequestered' and `sequestration' mean the separation, isolation, or removal of greenhouse gases from the

atmosphere, as determined by the Administrator. The terms include biological, geologic, and mineral sequestration, but do not include ocean fertilization techniques.

`(46) STATIONARY SOURCE- The term `stationary source' means any integrated operation comprising any plant, building, structure, or stationary equipment, including support

buildings and equipment, that is located within one or more contiguous or adjacent properties, is under common control of the same person or persons, and emits or may emit a

greenhouse gas.

`(47) STRATEGIC RESERVE ALLOWANCE- The term `strategic reserve allowance' means an emission allowance reserved for, transferred to, or deposited in the strategic

reserve, or established, under section 726.

`(48) UNCAPPED EMISSIONS- The term `uncapped emissions' means emissions of greenhouse gases emitted after December 31, 2011, that are not capped emissions.

`(49) UNITED STATES GREENHOUSE GAS EMISSIONS- The term `United States greenhouse gas emissions' means the total quantity of annual greenhouse gas emissions

from the United States, as calculated by the Administrator and reported to the United Nations Framework Convention on Climate Change Secretariat.

`(50) UTILITY UNIT- The term `utility unit' means a combustion device that, on January 1, 2009, or any date thereafter, is fossil fuel-fired and serves a generator that produces

electricity for sale, unless such combustion device, during the 12-month period starting the later of January 1, 2009, or the commencement of commercial operation and each

calendar year starting after such later date--

`(A) is part of an integrated cycle system that cogenerates steam and electricity during normal operation and that supplies one-third or less of its potential electric output

capacity and 25 MW or less of electrical output for sale; or

`(B) combusts materials of which more than 95 percent is municipal solid waste on a heat input basis.

`(51) VINTAGE YEAR- The term `vintage year' means the calendar year for which an emission allowance is established under section 721(a) or which is assigned to an

emission allowance under section 726(g)(3)(A), except that the vintage year for a strategic reserve allowance shall be the year in which such allowance is purchased at auction.'.

Subtitle B--Disposition of Allowances

SEC. 321. DISPOSITION OF ALLOWANCES FOR GLOBAL WARMING POLLUTION REDUCTION PROGRAM.

Title VII of the Clean Air Act, as added by section 311 of this Act, is amended by adding at the end the following part:

`PART H--DISPOSITION OF ALLOWANCES

`SEC. 781. ALLOCATION OF ALLOWANCES FOR SUPPLEMENTAL REDUCTIONS.

`(a) In General- The Administrator shall allocate for each vintage year the following percentage of the emission allowances established under section 721(a), for distribution in

accordance with part E:

`(1) For vintage years 2012 through 2025, 5 percent.

`(2) For vintage years 2026 through 2030, 3 percent.

`(3) For vintage years 2031 through 2050, 2 percent.

`(b) Adjustment- The Administrator shall modify the percentages set forth in subsection (a) as necessary to ensure the achievement of the annual supplemental emission

reduction objective for 2020, and the cumulative reduction objective through 2025, set forth in section 753(b)(1).

`(c) Carryover- If the Administrator has not distributed all of the allowances allocated pursuant to this section for a given vintage year by the end of that year, the Administrator shall--

`(1) auction the remaining emission allowances under section 791 not later than March 31 of the year following that vintage year; and

`(2) increase the allocation for the vintage year after the vintage year for which emission allowances were undistributed by the amount of undistributed emission allowances.

`SEC. 782. ALLOCATION OF EMISSION ALLOWANCES.

`(a) Electricity Consumers- The Administrator shall allocate emission allowances for the benefit of electricity consumers, to be distributed in accordance with section 783 in the

following amounts:

`(1) For vintage years 2012 and 2013, 43.75 percent of the emission allowances established for each year under section 721(a).

`(2) For vintage years 2014 and 2015, 38.89 percent of the emission allowances established for each year under section 721(a).

`(3) For vintage years 2016 through 2025, 35.00 percent of the emission allowances established for each year under section 721(a).

`(4) For vintage year 2026, 28 percent of the emission allowances established for each year under section 721(a).

`(5) For vintage year 2027, 21 percent of the emission allowances established for each year under section 721(a).

`(6) For vintage year 2028, 14 percent of the emission allowances established for each year under section 721(a).

`(7) For vintage year 2029, 7 percent of the emission allowances established for each year under section 721(a).

`(b) Natural Gas Consumers- The Administrator shall allocate emission allowances for the benefit of natural gas consumers to be distributed in accordance with section 784 in

the following amounts:

`(1) For vintage years 2016 through 2025, 9 percent of the emission allowances established for each year under section 721(a).

`(2) For vintage year 2026, 7.2 percent of the emission allowances established for each year under section 721(a).

`(3) For vintage year 2027, 5.4 percent of the emission allowances established for each year under section 721(a).

`(4) For vintage year 2028, 3.6 percent of the emission allowances established for each year under section 721(a).

`(5) For vintage year 2029, 1.8 percent of the emission allowances established for each year under section 721(a).

`(c) Home Heating Oil and Propane Consumers- The Administrator shall allocate emission allowances for the benefit of home heating oil and propane consumers to be

distributed in accordance with section 785 in the following amounts:

`(1) For vintage years 2012 and 2013, 1.875 percent of the emission allowances established for each year under section 721(a).

`(2) For vintage years 2014 and 2015, 1.67 percent of the emission allowances established for each year under section 721(a).

`(3) For vintage years 2016 through 2025, 1.5 percent of the emission allowances established for each year under section 721(a).

`(4) For vintage year 2026, 1.2 percent of the emission allowances established for each year under section 721(a).

`(5) For vintage year 2027, 0.9 percent of the emission allowances established for each year under section 721(a).

`(6) For vintage year 2028, 0.6 percent of the emission allowances established for each year under section 721(a).

`(7) For vintage year 2029, 0.3 percent of the emission allowances established for each year under section 721(a).

`(d) Low Income Consumers- For each vintage year starting in 2012, the Administrator shall auction pursuant to section 791 15 percent of the emission allowances established

for each year under section 721(a), with the proceeds used for the benefit of low income consumers to fund the program set forth in subtitle C of title IV of American Clean Energy and

Security Act of 2009.

`(e) Trade-Vulnerable Industries- The Administrator shall allocate emission allowances to energy-intensive, trade-exposed entities, to be distributed in accordance with section

765, in the following amounts:

`(1) For vintage years 2012 and 2013, up to 2.0 percent of the emission allowances established for each year under section 721(a).

`(2) For vintage year 2014, up to 15 percent of the emission allowances established for that year under section 721(a).

`(3) For vintage year 2015, up to the product of the amount specified in paragraph (2), multiplied by the quantity of emission allowances established for 2015 under section

721(a) divided by the quantity of emission allowances established for 2014 under section 721(a).

`(4) For vintage year 2016, up to the product of the amount specified in paragraph (3), multiplied by the quantity of emission allowances established for 2015 under section

721(a) divided by the quantity of emission allowances established for 2014 under section 721(a).

`(5) For vintage years 2017 through 2025, up to the product of the amount specified in paragraph (4), multiplied by the quantity of emission allowances established for that year

under section 721(a) divided by the quantity of emission allowances established for 2016 under section 721(a).

`(6) For vintage years 2026 through 2050, up to the product of the amount specified in paragraph (4)--

`(A) multiplied by the quantity of emission allowances established for the applicable year during 2026 through 2050 under section 721(a) divided by the quantity of emission

allowances established for 2016 under section 721(a); and

`(B) multiplied by a factor, not exceeding 100 percent, that shall equal 90 percent for 2026 and decline 10 percent for each year thereafter until reaching zero,

except that, if the President sets one or more factors for a year under section 767(c)(3)(A), the highest factor set (not exceeding 100 percent) shall be used for that year instead

of the factor specified in subparagraph (B).

`(f) Deployment of Carbon Capture and Sequestration Technology-

`(1) ANNUAL ALLOCATION- The Administrator shall allocate emission allowances for the deployment of carbon capture and sequestration technology to be distributed in

accordance with section 786 in the following amounts:

`(A) For vintage years 2014 through 2017, 1.75 percent of the emission allowances established for each year under section 721(a).

`(B) For vintage years 2018 and 2019, 4.75 percent of the emission allowances established for each year under section 721(a).

`(C) For vintage years 2020 through 2050, 5 percent of the emission allowances established for each year under section 721(a).

`(2) CARRYOVER- If the Administrator has not distributed all of the allowances allocated pursuant to this subsection for a given vintage year by the end of that year, the

Administrator shall--

`(A) auction those emission allowances under section 791 not later than March 31 of the year following that vintage year; and

`(B) increase the allocation under this subsection for the vintage year after the vintage year for which emission allowances were undisbursed by the amount of undisbursed

emission allowances, but only to the extent that allowances for that later year are to be auctioned.

`(g) Investment in Energy Efficiency and Renewable Energy- The Administrator shall allocate emission allowances to invest in energy efficiency and renewable energy as follows:

`(1) To be distributed in accordance with section 132 of the American Clean Energy and Security Act of 2009 in the following amounts:

`(A) For vintage years 2012 through 2015, 9.5 percent of the emission allowances established for each year under section 721(a).

`(B) For vintage years 2016 through 2017, 6.5 percent of the emission allowances established for each year under section 721(a).

`(C) For vintage years 2018 through 2021, 5.5 percent of the emission allowances established for each year under section 721(a).

`(D) For vintage years 2022 through 2025, 1.0 percent of the emission allowances established for each year under section 721(a).

`(E) For vintage years 2026 through 2050, 4.5 percent of the emission allowances established for each year under section 721(a).

`(F) At the same time the vintage year 2022 through 2025 allowances are distributed, 3.55 percent of emission allowances established under section 721(a) for the vintage

year four years greater shall also be distributed (which shall be in addition to the emission allowances in subparagraph (E)).

`(2) To be distributed in accordance with section 201 of the American Clean Energy and Security Act of 2009, for each vintage year from 2012 through 2050, 0.5 percent of

emission allowances established under section 721(a).

`(h) Clean Energy Innovation Centers- For each vintage year from 2012 through 2050, the Administrator shall allocate for Clean Energy Innovation Centers, 1.5 percent of emission

allowances established under section 721(a), to be distributed in accordance with section 171 of the American Clean Energy and Security Act of 2009.

`(i) Investment in Clean Vehicle Technology- The Administrator shall allocate emission allowances to invest in the development and deployment of clean vehicles, to be distributed

in accordance with section 124 of the American Clean Energy and Security Act of 2009 in the following amounts:

`(1) For vintage years 2012 through 2017, 3 percent of the emission allowances established for each year under section 721(a).

`(2) For vintage years 2018 through 2025, 1 percent of the emission allowances established for each year under section 721(a).

`(j) Domestic Fuel Production- For vintage years 2014 through 2026, the Administrator shall allocate 2.0 percent of the emission allowances established under section 721(a) to

domestic refiners, to be distributed in accordance with section 787.

`(k) Investment in Workers- The Administrator shall auction pursuant to section 791 emission allowances for workers in the following amounts and shall report to the Secretary of

Labor the amount of proceeds from the sale of these allowances:

`(1) For vintage years 2012 through 2021, 0.5 percent of the emission allowances established for each year under section 721(a).

`(2) For vintage years 2022 through 2050, 1.0 percent of the emission allowances established for each year under section 721(a).

`(l) Domestic Adaptation- The Administrator shall allocate emission allowances for domestic adaptation as follows:

`(1) To be distributed in accordance with section 453 of the American Clean Energy and Security Act of 2009 in the following amounts:

`(A) For vintage years 2012 through 2021, 0.9 percent of the emission allowances established for each year under section 721(a).

`(B) For vintage years 2022 through 2026, 1.9 percent of the emission allowances established for each year under section 721(a).

`(C) For vintage years 2027 through 2050, 3.9 percent of the emission allowances established for each year under section 721(a).

`(2) For vintage year 2012 and thereafter, the Administrator shall auction, pursuant to section 791, 0.1 percent of the emission allowances established for each year under

section 721(a), and shall deposit the proceeds in the Climate Change Health Protection and Promotion Fund established by section 467 of the American Clean Energy and Security

Act of 2009.

`(m) Wildlife and Natural Resource Adaptation- The Administrator shall allocate emission allowances for wildlife and natural resource adaptation as follows:

`(1) To be distributed to State agencies in accordance with section 480(c)(1) of the American Clean Energy and Security Act of 2009 in the following amounts:

`(A) For vintage years 2012 through 2021, 0.385 percent of the emission allowances established for each year under section 721(a).

`(B) For vintage years 2022 through 2026, 0.77 percent of the emission allowances established for each year under section 721(a).

`(C) For vintage years 2027 through 2050, 1.54 percent of the emission allowances established for each year under section 721(a).

`(2) To be auctioned pursuant to section 791, with the proceeds to be deposited in the Natural Resources Climate Change Adaptation Fund established pursuant to section

480(a), in the following amounts:

`(A) For vintage years 2012 through 2021, 0.615 percent of the emission allowances established for each year under section 721(a).

`(B) For vintage years 2022 through 2026, 1.23 percent of the emission allowances established for each year under section 721(a).

`(C) For vintage years 2027 through 2050, 2.46 percent of the emission allowances established for each year under section 721(a).

`(n) International Adaptation- The Administrator shall allocate emission allowances for international adaptation to be distributed in accordance with part 2 of subtitle E of title IV of

the American Clean Energy and Security Act of 2009 in the following amounts:

`(1) For vintage years 2012 through 2021, 1.0 percent of the emission allowances established for each year under section 721(a).

`(2) For vintage years 2022 through 2026, 2.0 percent of the emission allowances established for each year under section 721(a).

`(3) For vintage years 2027 through 2050, 4.0 percent of the emission allowances established for each year under section 721(a).

`(o) International Clean Technology Deployment- The Administrator shall allocate emission allowances for international clean technology deployment for distribution in

accordance with subtitle D of title IV of the American Clean Energy and Security Act of 2009 in the following amounts:

`(1) For vintage years 2012 through 2021, 1.0 percent of the emission allowances established for each year under section 721(a).

`(2) For vintage years 2022 through 2026, 2.0 percent of the emission allowances established for each year under section 721(a).

`(3) For vintage years 2027 through 2050, 4.0 percent of the emission allowances established for each year under section 721(a).

`(p) Release of Future Allowances- The Administrator shall make future year allowances available by auctioning allowances, pursuant to section 791, in the following amounts:

`(1) In each of calendar years 2014 through 2019, a string of 0.70 billion allowances with vintage years 12 to 17 years after the year of the auction, with an equal number of

allowances from each vintage year in the string.

`(2) In each of calendar years 2020 through 2025, a string of 0.50 billion allowances with vintage years 12 to 17 years after the year of the auction, with an equal number of

allowances from each vintage year in the string.

`(3) In each of calendar years 2026 through 2030, a string of 0.3 billion allowances with vintage years 12 to 17 years after the year of the auction, with an equal number of

allowances from each vintage year in the string.

`(q) Deficit Reduction-

`(1) For each of vintage years 2012 through 2025, any allowances not designated for distribution or auction pursuant to section 781, subsections (a) through (o) of this section,

or section 790 shall be auctioned by the Administrator pursuant to section 791 and the proceeds shall be deposited into the Treasury.

`(2) Unless otherwise specified, any allowances allocated pursuant to subsections (a) through (o) and not distributed by March 31 of the calendar year following the

allowance's vintage year, shall be auctioned by the Administrator and the proceeds shall be deposited into the Treasury.

`(3) For auctions conducted through calendar year 2020 pursuant to subsection (p), the auction proceeds shall be deposited into the Treasury.

`(r) Climate Change Consumer Refund-

`(1) For each of vintage years 2026 through 2050, the Administrator shall auction the following allowances established under section 721(a) and deposit the proceeds into the

Climate Change Consumer Refund Account:

`(A) Any allowances not designated for distribution or auction pursuant to section 781, subsections (a) through (p) of this section, or section 790.

`(B) Unless otherwise specified, any allowances allocated pursuant to subsections (a) through (o) and not distributed by March 31 of the calendar year following the

allowance's vintage year.

`(2) For auctions conducted pursuant to subsection (p) in calendar years 2021 and thereafter, the Administrator shall place the proceeds from the sales of the these

allowances into the Climate Change Consumer Refund Account. Funds deposited into the Climate Change Consumer Refund Account shall be used as specified in section 789 and

shall be available for expenditure, without further appropriation or fiscal year limitation.

`SEC. 783. ELECTRICITY CONSUMERS.

`(a) Definitions- For purposes of this section:

`(1) ELECTRICITY LOCAL DISTRIBUTION COMPANY- The term `electricity local distribution company' means an electric utility--

`(A) that has a legal, regulatory, or contractual obligation to deliver electricity directly to retail consumers in the United States, regardless of whether that entity or another

entity sells the electricity as a commodity to those retail consumers; and

`(B) the retail rates of which, except in the case of a registered electric cooperative, are regulated by a State regulatory authority, regulatory commission, municipality, public

utility, or by an Indian tribe pursuant to tribal law.

`(2) LONG-TERM CONTRACT GENERATOR- The term `long-term contract generator' means a qualifying small power production facility or a qualifying cogeneration facility

(within the meaning of section 3(17)(C) or 3(18)(B) of the Federal Power Act), or a new independent power production facility (within the meaning of section 416(a)(2) of this Act,

except that subparagraph (C) of such definition shall not apply for purposes of this paragraph), that is--

`(A) a covered entity;

`(B) as of the commencement of operation, a facility consisting of one or more utility units with total installed net output capacity (in MWe) of no more than 130 percent of the

facility's total planned net output capacity (in MWe);

`(C) as of the date of enactment of this title, a facility with a power sales agreement executed before January 1, 2007, that governs the facility's electricity sales and provides

for sales at a price (whether a fixed price or a price formula) for electricity that does not allow for recovery of the costs of compliance with the limitation on greenhouse gas emissions

under this title; and

`(D) not a merchant coal generator.

`(3) MERCHANT COAL GENERATOR- The term `merchant coal generator' means an electric generation facility that--

`(A) is a covered entity;

`(B) derives at least 85 percent of its heat input from coal, petroleum coke, or any combination of these 2 fuels;

`(C) is not owned by a Federal, State, or regional agency or power authority; and

`(D) generates electricity for sale to others, provided that such sales are not subject to--

`(i) retail rate regulation by a State public utility commission; or

`(ii) self-regulation of rates by a local government, State agency, or electric cooperative.

`(4) STATE REGULATORY AUTHORITY- The term `State regulatory authority' has the meaning given that term in section 3(17) of the Public Utility Regulatory Policies Act of 1978

(16 U.S.C. 2602(17)).

`(b) Electricity Local Distribution Companies-

`(1) ALLOCATION- Not later than June 30 of 2011 and each calendar year thereafter through 2028, the Administrator shall distribute to electricity local distribution companies for

the benefit of retail ratepayers the quantity of emission allowances allocated for the electricity sector for the following vintage year pursuant to section 782(a), provided that the

Administrator shall first subtract from such quantity and distribute or reserve for distribution the quantity of emission allowances for the relevant vintage year that are required for

distribution under subsections (c) and (d) of this section.

`(2) DISTRIBUTION OF ALLOWANCES BASED ON EMISSIONS-

`(A) IN GENERAL- For each vintage year, 50 percent of the emission allowances available for distribution under paragraph (1) shall be distributed by the Administrator

among individual electricity local distribution companies ratably based on the annual average carbon dioxide emissions attributable to generation of electricity delivered at retail by

each such company during the base period determined under subparagraph (B).

`(B) BASE PERIOD-

`(i) VINTAGE YEARS 2012 AND 2013- For vintage years 2012 and 2013, an electricity local distribution company's base period shall be--

`(I) calendar years 2006 through 2008; or

`(II) any 3 consecutive calendar years between 1999 and 2008, inclusive, that such company selects, provided that the company timely informs the Administrator of

such selection.

`(ii) VINTAGE YEARS 2014 AND THEREAFTER- For vintage years 2014 and thereafter, the base period shall be--

`(I) the base period selected under clause (i); or

`(II) any 3 consecutive calendar years between 2009 through 2012, inclusive, or, for local distribution companies with new units that are not fully operational before

2012, solely calendar year 2012, provided that such company selects a period from among these options and timely informs the Administrator of such selection.

`(C) DETERMINATION OF EMISSIONS- As part of the regulations promulgated pursuant to subsection (e), the Administrator, after consultation with the Energy Information

Administration, shall determine the average amount of carbon dioxide emissions attributable to generation of electricity delivered at retail by each electricity local distribution company

for each of the years 1999 through 2009 or the most recent calendar year for which appropriate data are available, taking into account entities' electricity generation, electricity

purchases, and electricity sales. Not later than March 31, 2013, the Administrator, after consultation with the Energy Information Administration, shall update such determination to

include emissions for any additional calendar years through 2012. Such determinations shall be as precise as practicable, taking into account the nature of data currently available

and the nature of markets and regulation in effect in various regions of the country. The following requirements shall apply to such determinations:

`(i) The Administrator shall determine the amount of fossil fuel-based electricity delivered at retail by each electricity local distribution company, and shall use appropriate

emission factors to calculate carbon dioxide emissions associated with the generation of such electricity.

`(ii) Where it is not practical to determine the precise fuel mix for the electricity delivered at retail by an individual electricity local distribution company, the Administrator

may use the best available data, including average data on a regional basis with reference to Regional Transmission Organizations or regional entities (as that term is defined in

section 215(a)(7) of the Federal Power Act (16 U.S.C. 824o(a)(7)), to estimate fuel mix and emissions. Different methodologies may be applied in different regions if appropriate to

obtain the most accurate estimate.

`(3) DISTRIBUTION OF ALLOWANCES BASED ON DELIVERIES-

`(A) INITIAL ALLOCATION FORMULA- Except as provided in subparagraph (B), for each vintage year, the Administrator shall distribute 50 percent of the emission

allowances allocated under paragraph (1) of this subsection among individual electricity local distribution companies ratably based on each electricity local distribution company's

annual average retail electricity deliveries for 2006 through 2008, unless the owner or operator of the company selects 3 other consecutive years between 1999 and 2008, inclusive,

and timely notifies the Administrator of its selection.

`(B) UPDATING- Prior to distributing 2015 vintage emission allowances under this subparagraph and at 3-year intervals thereafter, the Administrator shall update the

distribution formula under this subparagraph to reflect changes in each electricity local distribution company's service territory since the most recent formula was established. For

each successive 3-year period, the Administrator shall distribute allowances ratably among individual electricity local distribution companies based on the product of--

`(i) each electricity local distribution company's average annual deliveries per customer during calendar years 2006 through 2008, or during the 3 alternative consecutive

years selected by such company under subparagraph (A); and

`(ii) the number of customers of such electricity local distribution company in the most recent year in which the formula is updated under this clause.

`(4) USE OF ALLOWANCES-

`(A) RATEPAYER BENEFIT- Emission allowances distributed to an electricity local distribution company under this subsection shall be used exclusively for the benefit of

retail ratepayers of such electricity local distribution company and may not be used to support electricity sales or deliveries to entities or persons other than such ratepayers.

`(B) RATEPAYER CLASSES- In using emission allowances distributed under this section for the benefit of ratepayers, an electricity local distribution company shall ensure

that ratepayer benefits are distributed--

`(i) among ratepayer classes ratably based on electricity deliveries to each class; and

`(ii) equitably among individual ratepayers within each ratepayer class, including entities that receive emission allowances pursuant to part F.

`(C) LIMITATION- An electricity local distribution company shall not use the value of emission allowances distributed under this subsection to provide to any ratepayer a

rebate that is based solely on the quantity of electricity delivered to such ratepayer. To the extent an electricity local distribution company uses the value of emission allowances

distributed under this subsection to provide rebates, it shall, to the maximum extent practicable, provide such rebates with regard to the fixed portion of ratepayers' bills or as a fixed

credit or rebate on electricity bills.

`(D) GUIDELINES- As part of the regulations promulgated under subsection (e), the Administrator shall prescribe specific guidelines for the implementation of the

requirements of this paragraph.

`(5) REGULATORY PROCEEDINGS-

`(A) REQUIREMENT- No electricity local distribution company shall be eligible to receive emission allowances under this subsection unless the State regulatory authority

with authority over such company, or the entity with authority to regulate retail electricity rates of an electricity local distribution company not regulated by a State regulatory authority,

has--

`(i) promulgated a regulation or completed a rate proceeding (or the equivalent, in the case of a ratemaking entity other than a State regulatory authority) that provides for

the full implementation of the requirements of paragraph (4) of this subsection; and

`(ii) made available to the Administrator and the public a report describing, in adequate detail, the manner in which the requirements of paragraph (4) will be

implemented.

`(B) UPDATING- The Administrator shall require, as a condition of continued receipt of emission allowances under this subsection by an electricity local distribution

company, that a new regulation be promulgated or rate proceeding be completed, and a new report be made available to the Administrator and the public, pursuant to subparagraph

(A), not less frequently than every 5 years.

`(6) PLANS AND REPORTING-

`(A) REGULATIONS- As part of the regulations promulgated under subsection (e), the Administrator shall prescribe requirements governing plans and reports to be

submitted in accordance with this paragraph.

`(B) PLANS- Not later than April 30 of 2011 and every 5 years thereafter through 2026, each electricity local distribution company shall submit to the Administrator a plan,

approved by the State regulatory authority or other entity charged with regulating the retail rates of such company, describing such company's plans for the disposition of the value of

emission allowances to be received pursuant to this subsection, in accordance with the requirements of this subsection.

`(C) REPORTS- Not later than June 30 of 2013 and each calendar year thereafter through 2031, each electricity local distribution company shall submit a report to the

Administrator, and to the relevant State regulatory authority or other entity charged with regulating the retail electricity rates of such company, describing the disposition of the value of

any emission allowances received by such company in the prior calendar year pursuant to this subsection, including--

`(i) a description of sales, transfer, exchange, or use by the company for compliance with obligations under this title, of any such emission allowances;

`(ii) the monetary value received by the company, whether in money or in some other form, from the sale, transfer, or exchange of emission allowances received by the

company under this subsection;

`(iii) the manner in which the company's disposition of emission allowances received under this subsection complies with the requirements of this subsection,

including each of the requirements of paragraph (4); and

`(iv) such other information as the Administrator may require pursuant to subparagraph (A).

`(D) PUBLICATION- The Administrator shall make available to the public all plans and reports submitted under this subsection, including by publishing such plans and

reports on the Internet.

`(7) AUDITS- Each year, the Administrator shall audit a representative sample of electricity local distribution companies to ensure that emission allowances distributed under

this subsection have been used exclusively for the benefit of retail ratepayers and that such companies are complying with the requirements of this subsection. In selecting

companies for audit, the Administrator shall take into account any credible evidence of noncompliance with such requirements. The Administrator shall make available to the public a

report describing the results of each such audit, including by publishing such report on the Internet.

`(8) ENFORCEMENT- A violation of any requirement of this subsection shall be a violation of this Act. Each emission allowance the value of which is used in violation of the

requirements of this subsection shall be a separate violation.

`(c) Merchant Coal Generators-

`(1) QUALIFYING EMISSIONS- The qualifying emissions for a merchant coal generator for a given calendar year shall be the product of the number of megawatt hours of

electricity generated by such generator in such calendar year and the average carbon dioxide emissions per megawatt hour generated by such generator during calendar years 2006

through 2008, provided that the number of megawatt hours in a given calendar year for purposes of such calculation shall be reduced in proportion to the portion of such generator's

carbon dioxide emissions that are either--

`(A) captured and sequestered in such calendar year; or

`(B) attributable to the combustion or gasification of renewable biomass, such that the generator is not required to hold emission allowances for such emissions.

`(2) PHASE-DOWN SCHEDULE- The Administrator shall identify an annual phase-down factor, applicable to distributions to merchant coal generators for each of vintage years

2012 through 2029, that corresponds to the overall decline in the amount of emission allowances to be allocated to the electricity sector in such years pursuant to section 782(a).

Such factor shall--

`(A) for vintage year 2012, be equal to 1.0;

`(B) for each of vintage years 2013 through 2029, correspond to the quotient of--

`(i) the quantity of emission allowances allocated to the electricity sector under section 782(a) for such vintage year; divided by

`(ii) the quantity of emission allowances allocated to the electricity sector under section 782(a) for vintage year 2012.

`(3) DISTRIBUTION OF EMISSION ALLOWANCES- Not later than March 1 of 2013 and each calendar year through 2030, the Administrator shall distribute emission allowances

of the preceding vintage year to the owner or operator of each merchant coal generator equal to the product of--

`(A) 0.5;

`(B) the qualifying emissions for such merchant coal generator for the preceding year, as determined under paragraph (1); and

`(C) the phase-down factor for the preceding calendar year, as identified under paragraph (2).

`(4) ADJUSTMENT-

`(A) STUDY- Not later than July 1, 2014, the Administrator, in consultation with the Federal Energy Regulatory Commission, shall complete a study to determine whether the

allocation formula under paragraph (3) is resulting in, or is likely to result in, windfall profits to merchant coal generators or substantially disparate treatment of merchant coal

generators operating in different markets or regions.

`(B) REGULATION- If the Administrator, in consultation with the Federal Energy Regulatory Commission, makes an affirmative finding of windfall profits or disparate

treatment under subparagraph (A), the Administrator shall, not later than 18 months after the completion of the study described in subparagraph (A), promulgate regulations providing

for the adjustment of the allocation formula under paragraph (3) to mitigate, to the extent practicable, such windfall profits, if any, and such disparate treatment, if any.

`(5) LIMITATION ON ALLOWANCES- Notwithstanding paragraph (3) or (4), for any vintage year the Administrator shall distribute under this subsection no more than 10 percent

of the total quantity of emission allowances available for such vintage year for distribution to the electricity sector under section 782(a). If the quantity of emission allowances that

would otherwise be distributed pursuant to paragraph (3) or (4) for any vintage year would exceed such limit, the Administrator shall distribute 10 percent of the total emission

allowances available for distribution under section 782(a) for such vintage year ratably among merchant coal generators based on the applicable formula under paragraph (3) or (4).

`(d) Generators With Long-Term Power Purchase Agreements-

`(1) RESERVED ALLOWANCES- Notwithstanding subsections (b) and (c) of this section, the Administrator shall withhold from distribution to electricity local distribution

companies a number of emission allowances equal to 105 percent of the emission allowances the Administrator anticipates will be distributed to long-term contract generators

under this subsection. If not required to distribute all of these reserved allowances under this subsection, the Administrator shall distribute any remaining emission allowances to the

electricity local distribution companies in accordance with subsection (b).

`(2) DISTRIBUTION- Not later than March 1 of 2013 and each calendar year through 2030, the Administrator shall distribute to the owner or operator of each long-term contract

generator the number of emission allowances of the preceding vintage year that are equal to the number of tons of carbon dioxide emitted as a result of a qualifying long-term power

purchase agreement referred to in subsection (a)(2)(C).

`(3) DURATION- A long-term contract generator shall cease to be eligible to receive allocations under this subsection upon the earliest of the following dates:

`(A) The date when the facility no longer qualifies as a qualifying small power production facility or a qualifying cogeneration facility (within the meaning of section 3(17)(C) or

3(18)(B) of the Federal Power Act), or a new independent power production facility (within the meaning of section 416(a)(2) of this Act, except that subparagraph (C) of such definition

shall not apply for purposes of this clause).

`(B) The date when the facility no longer meets the total installed net output capacity criterion required to be met as of the commencement of operation in subsection

(a)(2)(B).

`(C) The date when the power purchase agreement referred to in subsection (a)(2)(C)--

`(i) expires;

`(ii) is terminated; or

`(iii) is amended in any way that changes the location of the facility, the price (whether a fixed price or price formula) for electricity sold under such agreement, the quantity

of electricity sold under the agreement, or the expiration or termination date of the agreement.

`(4) ELIGIBILITY- To be eligible to receive allowance distributions under this subsection, the owner or operator of a long-term contract generator shall submit each of the

following in writing to the Administrator within 180 days after the date of enactment of this title, and not later than September 30 of each vintage year for which such generator wishes

to receive emission allowances:

`(A) A certificate of representation described in section 700(15).

`(B) An identification of each owner and each operator of the facility.

`(C) An identification of the units at the facility and the location of the facility.

`(D) A written certification by the designated representative that the facility meets all the requirements of the definition of a long-term contract generator.

`(E) The expiration date of the power purchase agreement referred to in subsection (a)(2)(C).

`(F) A copy of the power purchase agreement referred to in subsection (a)(2)(C).

`(5) NOTIFICATION- Not later than 30 days after a facility loses, in accordance with paragraph (3), its eligibility for emission allowances distributed pursuant to this subsection,

the designated representative of such facility shall notify the Administrator in writing when, and on what basis, the facility lost its eligibility to receive emission allowances.

`(e) Regulations- Not later than 2 years after the date of enactment of this title, the Administrator, in consultation with the Federal Energy Regulatory Commission, shall promulgate

regulations to implement the requirements of this section.

`SEC. 784. NATURAL GAS CONSUMERS.

`(a) Definitions- For purposes of this section:

`(1) NATURAL GAS LOCAL DISTRIBUTION COMPANY- The term `natural gas local distribution company' means a natural gas local distribution company that is a covered

entity.

`(2) COST-EFFECTIVE- The term `cost-effective', with respect to an energy efficiency program, means that the program meets the Total Resource Cost Test, which requires that

the net present value of economic benefits over the life of the program, including avoided supply and delivery costs and deferred or avoided investments, is greater than the net

present value of the economic costs over the life of the program, including program costs and incremental costs borne by the energy consumer.

`(b) Allocation- Not later than June 30 of 2015 and each calendar year thereafter through 2028, the Administrator shall distribute to natural gas local distribution companies for the

benefit of retail ratepayers the quantity of emission allowances allocated for the following vintage year pursuant to section 782(b). Such allowances shall be distributed among local

natural gas distribution companies based on the following formula:

`(1) INITIAL FORMULA- Except as provided in paragraph (2), for each vintage year, the Administrator shall distribute emission allowances among natural gas local distribution

companies ratably based on each such company's annual average retail natural gas deliveries for 2006 through 2008, unless the owner or operator of the company selects 3 other

consecutive years between 1999 and 2008, inclusive, and timely notifies the Administrator of its selection.

`(2) UPDATING- Prior to distributing 2019 vintage emission allowances and at 3-year intervals thereafter, the Administrator shall update the distribution formula under this

subsection to reflect changes in each natural gas local distribution company's service territory since the most recent formula was established. For each successive 3-year period, the

Administrator shall distribute allowances ratably among natural gas local distribution companies based on the product of--

`(A) each natural gas local distribution company's average annual natural gas deliveries per customer during calendar years 2006 through 2008, or during the 3 alternative

consecutive years selected by such company under paragraph (1); and

`(B) the number of customers of such natural gas local distribution company in the most recent year in which the formula is updated under this paragraph.

`(c) Use of Allowances-

`(1) RATEPAYER BENEFIT- Emission allowances distributed to a natural gas local distribution company under this section shall be used exclusively for the benefit of retail

ratepayers of such natural gas local distribution company and may not be used to support natural gas sales or deliveries to entities or persons other than such ratepayers.

`(2) RATEPAYER CLASSES- In using emission allowances distributed under this section for the benefit of ratepayers, a natural gas local distribution company shall ensure

that ratepayer benefits are distributed--

`(A) among ratepayer classes ratably based on natural gas deliveries to each class; and

`(B) equitably among individual ratepayers within each ratepayer class.

`(3) LIMITATION- A natural gas local distribution company shall not use the value of emission allowances distributed under this section to provide to any ratepayer a rebate that

is based solely on the quantity of natural gas delivered to such ratepayer. To the extent a natural gas local distribution company uses the value of emission allowances distributed

under this section to provide rebates, it shall, to the maximum extent practicable, provide such rebates with regard to the fixed portion of ratepayers' bills or as a fixed creditor rebate

on natural gas bills.

`(4) ENERGY EFFICIENCY PROGRAMS- The value of no less than one third of the emission allowances distributed to natural gas local distribution companies pursuant to this

section in any calendar year shall be used for cost-effective energy efficiency programs for natural gas consumers. Such programs must be authorized and overseen by the State

regulatory authority, or by the entity with regulatory authority over retail natural gas rates in the case of a natural gas local distribution company that is not regulated by a State

regulatory authority.

`(5) GUIDELINES- As part of the regulations promulgated under subsection (h), the Administrator shall prescribe specific guidelines for the implementation of the

requirements of this subsection.

`(d) Regulatory Proceedings-

`(1) REQUIREMENT- No natural gas local distribution company shall be eligible to receive emission allowances under this section unless the State regulatory authority with

authority over such company, or the entity with authority to regulate retail rates of a natural gas local distribution company not regulated by a State regulatory authority, has--

`(A) promulgated a regulation or completed a rate proceeding (or the equivalent, in the case of a ratemaking entity other than a State regulatory authority) that provides for the

full implementation of the requirements of subsection (c); and

`(B) made available to the Administrator and the public a report describing, in adequate detail, the manner in which the requirements of subsection (c) will be implemented.

`(2) UPDATING- The Administrator shall require, as a condition of continued receipt of emission allowances under this section, that a new regulation be promulgated or rate

proceeding be completed, and a new report be made available to the Administrator and the public, pursuant to paragraph (1), not less frequently than every 5 years.

`(e) Plans and Reporting-

`(1) REGULATIONS- As part of the regulations promulgated under subsection (h), the Administrator shall prescribe requirements governing plans and reports to be submitted

in accordance with this subsection.

`(2) PLANS- Not later than April 30 of 2015 and every 5 years thereafter through 2025, each natural gas local distribution company shall submit to the Administrator a plan,

approved by the State regulatory authority or other entity charged with regulating the retail rates of such company, describing such company's plans for the disposition of the value of

emission allowances to be received pursuant to this section, in accordance with the requirements of this section.

`(3) REPORTS- Not later than June 30 of 2017 and each calendar year thereafter through 2031, each natural gas local distribution company shall submit a report to the

Administrator, approved by the relevant State regulatory authority or other entity charged with regulating the retail natural gas rates of such company, describing the disposition of the

value of any emission allowances received by such company in the prior calendar year pursuant to this subsection, including--

`(A) a description of sales, transfer, exchange, or use by the company for compliance with obligations under this title, of any such emission allowances;

`(B) the monetary value received by the company, whether in money or in some other form, from the sale, transfer, or exchange of emission allowances received by the

company under this section;

`(C) the manner in which the company's disposition of emission allowances received under this subsection complies with the requirements of this section, including each

of the requirements of subsection (c);

`(D) the cost-effectiveness of, and energy savings achieved by, energy efficiency programs supported through such emission allowances; and

`(E) such other information as the Administrator may require pursuant to paragraph (1).

`(4) PUBLICATION- The Administrator shall make available to the public all plans and reports submitted by natural gas local distribution companies under this subsection,

including by publishing such plans and reports on the Internet.

`(f) Audits- Each year, the Administrator shall audit a representative sample of natural gas local distribution companies to ensure that emission allowances distributed under this

section have been used exclusively for the benefit of retail ratepayers and that such companies are complying with the requirements of this section. In selecting companies for audit,

the Administrator shall take into account any credible evidence of noncompliance with such requirements. The Administrator shall make available to the public a report describing the

results of each such audit, including by publishing such report on the Internet.

`(g) Enforcement- A violation of any requirement of this section shall be a violation of this Act. Each emission allowance the value of which is used in violation of the requirements

of this section shall be a separate violation.

`(h) Regulations- Not later than January 1, 2014, the Administrator, in consultation with the Federal Energy Regulatory Commission, shall promulgate regulations to implement the

requirements of this section.

`SEC. 785. HOME HEATING OIL AND PROPANE CONSUMERS.

`(a) Definitions- For purposes of this section:

`(1) CARBON CONTENT- The term `carbon content' means the amount of carbon dioxide that would be emitted as a result of the combustion of a fuel.

`(2) COST-EFFECTIVE- The term `cost-effective' has the meaning given that term in section 784(a)(2).

`(b) Allocation- Not later than September 30 of each of calendar years 2012 through 2029, the Administrator shall distribute among the States, in accordance with this section, the

quantity of emission allowances allocated pursuant to section 782(c).

`(c) Distribution Among States- The Administrator shall distribute emission allowances among the States under this section each year ratably based on the ratio of--

`(1) the carbon content of home heating oil and propane sold to consumers within each State in the preceding year for residential or commercial uses; to

`(2) the carbon content of home heating oil and propane sold to consumers within the United States in the preceding year for residential or commercial uses.

`(d) Use of Allowances-

`(1) IN GENERAL- States shall use emission allowances distributed under this section exclusively for the benefit of consumers of home heating oil or propane for residential or

commercial purposes. Such proceeds shall be used exclusively for--

`(A) cost-effective energy efficiency programs for consumers that use home heating oil or propane for residential or commercial purposes; or

`(B) rebates or other direct financial assistance programs for consumers of home heating oil or propane used for residential or commercial purposes.

`(2) ADMINISTRATION AND DELIVERY MECHANISMS- In administering programs supported by this section, States shall--

`(A) use no less than 50 percent of the value of emission allowances received under this section for cost-effective energy efficiency programs to reduce consumers' overall

fuel costs;

`(B) to the extent practicable, deliver consumer support under this section through existing energy efficiency and consumer energy assistance programs or delivery

mechanisms, including, where appropriate, programs or mechanisms administered by parties other than the State; and

`(C) seek to coordinate the administration and delivery of energy efficiency and consumer energy assistance programs supported under this section, with one another and

with existing programs for various fuel types, so as to deliver comprehensive, fuel-blind, coordinated programs to consumers.

`(e) Reporting- Each State receiving emission allowances under this section shall submit to the Administrator, within 12 months of each receipt of such allowances, a report, in

accordance with such requirements as the Administrator may prescribe, that--

`(1) describes the State's use of emission allowances distributed under this section, including a description of the energy efficiency and consumer assistance programs

supported with such allowances;

`(2) demonstrates the cost-effectiveness of, and the energy savings achieved by, energy efficiency programs supported under this section; and

`(3) includes a report prepared by an independent third party, in accordance with such regulations as the Administrator may promulgate, evaluating the performance of the

energy efficiency and consumer assistance programs supported under this section.

`(f) Enforcement- If the Administrator determines that a State is not in compliance with this section, the Administrator may withhold a portion of the emission allowances, the

quantity of which is equal to up to twice the quantity of the allowances that the State failed to use in accordance with the requirements of this section, that such State would otherwise

be eligible to receive under this section in later years. Allowances withheld pursuant to this subsection shall be distributed among the remaining States ratably in accordance with the

formula in subsection (c).

`SEC. 787. ALLOCATIONS TO REFINERIES.

`(a) Purpose- To provide emission allowance rebates to petroleum refiners in the United States in a manner that promotes energy efficiency and a reduction in greenhouse gas

emissions at such facilities.

`(b) Definitions- In this section:

`(1) EMISSIONS- The term `emissions' means the greenhouse gas emissions in the calendar year preceding the calendar year in which emission allowances are being

distributed. The term includes direct emissions from fuel combustion, process emissions, and indirect emissions from the generation of electricity used to produce the output of the

petroleum refinery or sector.

`(2) INTENSITY- The term `intensity' means tons of carbon dioxide equivalent emissions per unit of output in a given year.

`(3) INTENSITY FACTOR- The term `intensity factor' means the intensity of the petroleum refining sector divided by the intensity for an individual petroleum refinery.

`(4) OUTPUT- The term `output' means the average annual number of gallons of refined fuel produced in the three calendar years preceding the calendar year in which

emission allowances are being distributed.

`(5) PETROLEUM REFINERY- The term `petroleum refinery' means a facility classified under 324110 of the North American Industrial Classification System of 2002.

`(6) PRODUCTION FACTOR- The term `production factor' means the output of an individual petroleum refinery divided by the output of the petroleum refining sector.

`(c) In General- For each vintage year between 2014 and 2026, the Administrator shall distribute allowances pursuant to this section to owners and operators of petroleum

refineries in the United States.

`(d) Distribution Schedule- The Administrator shall distribute emission allowances of each vintage year no later than October 31 of the preceding calendar year.

`(e) Calculation of Emission Allowance Rebates-

`(1) For each petroleum refinery, the Administrator shall calculate an individual allocation factor for each vintage year, based upon the product of the intensity factor for such

refinery multiplied by the production factor for such refinery.

`(2) The Administrator shall also calculate a total allocation factor for each vintage year, based upon the sum of all of the individual allocation factors.

`(3) The Administrator shall calculate the number of emission allowances to be provided to each petroleum refinery in each vintage year by dividing the individual allocation

factor for such refinery by the total allocation factor, then multiplying the result by the number of emission allowances allocated to the program under this section for that vintage year.

`(f) Data Sources-

`(1) The Administrator shall use data from the greenhouse gas registry, established under section 713, where it is available.

`(2) The Administrator shall determine, by rule, the methodology by which to calculate indirect emissions for a refinery. The Administrator shall also determine, by rule, the

methodology by which to take into account the value of allowances provided at no cost to local distribution companies that is passed through to a refinery. Each person selling

electricity to the owner or operator of a petroleum refinery shall provide the owner or operator and the Administrator, on an annual basis, such data as the Administrator determines is

necessary to implement this section.

`SEC. 788. [Struck out->][ SECTION RESERVED ][<-Struck out] .

`SEC. 789. CLIMATE CHANGE CONSUMER REFUNDS.

`(a) Refund- In each year after deposits are made to the Climate Change Consumer Refund Account, the Secretary of the Treasury shall provide tax refunds on a per capita basis

to each household in the United States that shall collectively equal the amount deposited into the Climate Change Consumer Refund Account.

`(b) Limitations- The Secretary of the Treasury shall establish procedures to ensure that individuals who are not--

`(1) citizens or nationals of the United States; or

`(2) immigrants lawfully residing in the United States,

are excluded for the purpose of calculating and distributing refunds under this section.

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

`(a) In General- Not later than one year after the date of enactment of this title, the Administrator shall issue regulations allowing any person in the United States to exchange

greenhouse gas emission allowances issued before December 31, 2011, by the State of California or for the Regional Greenhouse Gas Initiative, or the Western Climate Initiative (in

this section referred to as `State allowances') for emission allowances established by the Administrator under section 721(a).

`(b) Regulations- Regulations issued under subsection (a) shall--

`(1) provide that a person exchanging State allowances under this section receive emission allowances established under section 721(a) in the amount that is sufficient to

compensate for the cost of obtaining and holding such State allowances;

`(2) establish a deadline by which persons must exchange the State allowances; and

`(3) provide that the Federal emission allowances disbursed pursuant to this section shall be deducted from the allowances to be auctioned pursuant to section 782(b).

`(c) Cost of Obtaining State Allowance- For purposes of this section, the cost of obtaining a State allowance shall be the average auction price, for emission allowances issued in

the year in which the State allowance was issued, under the program under which the State allowance was issued.

`SEC. 791. AUCTION PROCEDURES.

`(a) In General- To the extent that auctions of emission allowances by the Administrator are authorized by this part, such auctions shall be carried out pursuant to this section and

the regulations established hereunder.

`(b) Initial Regulations- Not later than 12 months after the date of enactment of this title, the Administrator, in consultation with other agencies, as appropriate, shall promulgate

regulations governing the auction of allowances under this section. Such regulations shall include the following requirements:

`(1) FREQUENCY; FIRST AUCTION- Auctions shall be held four times per year at regular intervals, with the first auction to be held no later than March 31, 2011.

`(2) AUCTION SCHEDULE; CURRENT AND FUTURE VINTAGES- The Administrator shall, at each quarterly auction under this section, offer for sale both a portion of the

allowances with the same vintage year as the year in which the auction is being conducted and a portion of the allowances with vintage years from future years. The preceding

sentence shall not apply to auctions held before 2012, during which period, by necessity, the Administrator shall auction only allowances with a vintage year that is later than the year

in which the auction is held. Beginning with the first auction and at each quarterly auction held thereafter, the Administrator may offer for sale allowances with vintage years of up to

four years after the year in which the auction is being conducted, except as provided in section 782(p).

`(3) AUCTION FORMAT- Auctions shall follow a single-round, sealed-bid, uniform price format.

`(4) PARTICIPATION; FINANCIAL ASSURANCE- Auctions shall be open to any person, except that the Administrator may establish financial assurance requirements to ensure

that auction participants can and will perform on their bids.

`(5) DISCLOSURE OF BENEFICIAL OWNERSHIP- Each bidder in the auction shall be required to disclose the person or entity sponsoring or benefitting from the bidder's

participation in the auction if such person or entity is, in whole or in part, other than the bidder.

`(6) PURCHASE LIMITS- No person may, directly or in concert with another participant, purchase more than 5 percent of the allowances offered for sale at any quarterly auction.

`(7) PUBLICATION OF INFORMATION- After the auction, the Administrator shall, in a timely fashion, publish the identities of winning bidders, the quantity of allowances

obtained by each winning bidder, and the auction clearing price.

`(8) OTHER REQUIREMENTS- The Administrator may include in the regulations such other requirements or provisions as the Administrator, in consultation with other

agencies, as appropriate, considers appropriate to promote effective, efficient, transparent, and fair administration of auctions under this section.

`(c) Revision of Regulations- The Administrator may, in consultation with other agencies, as appropriate, at any time, revise the initial regulations promulgated under subsection

(b). Such revised regulations need not meet the requirements identified in subsection (b) if the Administrator determines that an alternative auction design would be more effective,

taking into account factors including costs of administration, transparency, fairness, and risks of collusion or manipulation. In determining whether and how to revise the initial

regulations under this subsection, the Administrator shall not consider maximization of revenues to the Federal Government.

`(d) Reserve Auction Price- The minimum reserve auction price shall be $10 (in constant 2009 dollars) for auctions occurring in 2012. The minimum reserve price for auctions

occurring in years after 2012 shall be the minimum reserve auction price for the previous year increased by 5 percent plus the rate of inflation (as measured by the Consumer Price

Index for all urban consumers).

`(e) Delegation or Contract- Pursuant to regulations under this section, the Administrator may by delegation or contract provide for the conduct of auctions under the Administrator's

supervision by other departments or agencies of the Federal Government or by nongovernmental agencies, groups, or organizations.

`SEC. 792. AUCTIONING ALLOWANCES FOR OTHER ENTITIES.

`(a) Consignment- Any entity holding emission allowances or compensatory allowances may request that the Administrator auction, pursuant to section 791, the allowances on

consignment.

`(b) Pricing- When the Administrator acts under this section as the agent of an entity in possession of emission allowances, the Administrator is not obligated to obtain the highest

price possible for the emission allowances, and instead shall auction consignment allowances in the same manner and pursuant to the same rules as auctions of other allowances

under section 791. The Administrator may permit the entity offering the allowance for sale to condition the sale of its allowances pursuant to this section on a minimum reserve price

that is different than the reserve auction price set pursuant to section 791(d).

`(c) Proceeds- For emission allowances and compensatory allowances auctioned pursuant to this section, notwithstanding section 3302 of title 31, United States Code, or any

other provision of law, within 90 days of receipt, the United States shall transfer the proceeds from the auction to the entity which held the allowances auctioned. No funds transferred

from a purchaser to a seller of emission allowances or compensatory allowances under this subsection shall be held by any officer or employee of the United States or treated for

any purpose as public monies.

`(d) Regulations- The Administrator shall issue regulations within 24 months after the date of enactment of this title to implement this section.

`SEC. 793. ESTABLISHMENT OF FUNDS.

`There is established in the Treasury of the United States the following funds:

`(1) The Strategic Reserve Fund.

`(2) The Climate Change Consumer Refund Fund.

`SEC. 794. OVERSIGHT OF ALLOCATIONS.

`(a) In General- Not later than January 1, 2014, and every 2 years thereafter, the Comptroller General of the United States shall carry out a review of programs administered by the

Federal Government that distribute emission allowances or funds from any Federal auction of allowances.

`(b) Contents- Each such report shall include a comprehensive evaluation of the administration and effectiveness of each program, including--

`(1) the efficiency, transparency, and soundness of the administration of each program;

`(2) the performance of activities receiving assistance under each program;

`(3) the cost-effectiveness of each program in achieving the stated purposes of the program; and

`(4) recommendations, if any, for regulatory or administrative changes to each program to improve its effectiveness.

`(c) Focus- In evaluating program performance, each review under this section review shall address the effectiveness of such programs in--

`(1) creating and preserving jobs;

`(2) ensuring a manageable transition for working families and workers;

`(3) reducing the emissions, or enhancing sequestration, of greenhouse gases;

`(4) developing clean technologies; and

`(5) building resilience to the impacts of climate change.'.

Subtitle C--Additional Greenhouse Gas Standards

SEC. 331. GREENHOUSE GAS STANDARDS.

The Clean Air Act (42 U.S.C. 7401 and following), as amended by subtitles A and B of this title, is further amended by adding the following new title after title VII:

`TITLE VIII--ADDITIONAL GREENHOUSE GAS STANDARDS

`SEC. 801. DEFINITIONS.

`For purposes of this title, terms that are defined in title VII, except for the term `stationary source', shall have the meaning given those terms in title VII.

`PART A--STATIONARY SOURCE STANDARDS

`SEC. 811. STANDARDS OF PERFORMANCE.

`(a) Uncapped Stationary Sources-

`(1) INVENTORY OF SOURCE CATEGORIES- (A) Within 12 months after the date of enactment of this title, the Administrator shall publish under section 111(b)(1)(A) an

inventory of categories of stationary sources that consist of those categories that contain sources that individually had uncapped greenhouse gas emissions greater than 10,000 tons

of carbon dioxide equivalent and that, in the aggregate, were responsible for emitting at least 20 percent annually of the uncapped greenhouse gas emissions.

`(B) The Administrator shall include in the inventory under this paragraph each source category that is responsible for at least 10 percent of the uncapped methane emissions

in 2005. Notwithstanding any other provision, the inventory required by this section shall not include sources of enteric fermentation. The list under this paragraph shall include

industrial sources, the emissions from which, when added to the capped emissions from industrial sources, constitute at least 95 percent of the greenhouse gas emissions of the

industrial sector.

`(C) For purposes of this subsection, emissions shall be calculated using tons of carbon dioxide equivalents. In promulgating the inventory required by this paragraph and the

schedule required under by paragraph (2)(C), the Administrator shall use the most current emissions data available at the time of promulgation, except as provided in subparagraph

(B).

`(D) Notwithstanding any other provisions, the Administrator may list under 111(b) any source category identified in the inventory required by this subsection without making a

finding that the source category causes or contributes significantly to, air pollution with may be reasonably anticipated to endanger public health or welfare.

`(2) STANDARDS AND SCHEDULE- (A) For each category identified as provided in paragraph (1), the Administrator shall promulgate standards of performance under section

111 for the uncapped emissions of greenhouse gases from stationary sources in that category and shall promulgate corresponding regulations under section 111(d).

`(B) The Administrator shall promulgate standards as required by this subsection for stationary sources in categories identified as provided in paragraph (1) as expeditiously

as practicable, assuring that--

`(i) standards for identified source categories that, combined, emitted 80 percent or more of the greenhouse gas emissions of the identified source categories shall be

promulgated not later than 3 years after the date of enactment of this title and shall include standards for natural gas extraction; and

`(ii) for all other identified source categories--

`(I) standards for not less than an additional 25 percent of the identified categories shall be promulgated not later than 5 years after the date of enactment of this title;

`(II) standards for not less than an additional 25 percent of the identified categories shall be promulgated not later than 7 years after the date of enactment of this title;

and

`(III) standards for all the identified categories shall be promulgated not later than 10 years after the date of enactment of this title.

`(C) Not later than 24 months after the date of enactment of this title and after notice and opportunity for comment, the Administrator shall publish a schedule establishing a

date for the promulgation of standards for each category of sources identified pursuant to paragraph (1). The date for each category shall be consistent with the requirements of

subparagraph (B). The determination of priorities for the promulgation of standards pursuant to this paragraph is not a rulemaking and shall not be subject to judicial review, except

that failure to promulgate any standard pursuant to the schedule established by this paragraph shall be subject to review under section 304(a)(2).

`(D) Notwithstanding section 307, no action of the Administrator listing a source category under paragraph (1) shall be a final agency action subject to judicial review, except

that any such action may be reviewed under section 307 when the Administrator issues performance standards for such category.

`(b) Capped Sources- No standard of performance shall be established under section 111 for capped greenhouse gas emissions from a capped source unless the Administrator

determines that such standards are appropriate because of effects that do not include climate change effects. In promulgating a standard of performance under section 111 for the

emission from capped sources of any air pollutant that is not a greenhouse gas, the Administrator shall treat the emission of any greenhouse gas by those entities as a nonair quality

public health and environmental impact within the meaning of section 111(a)(1).

`(c) Performance Standards- For purposes of setting a performance standard for source categories identified pursuant to subsection (a)--

`(1) The Administrator shall take into account the goal of reducing total United States greenhouse gas emissions as set forth in section 702.

`(2) The Administrator may promulgate a design, equipment, work practice, or operational standard, or any combination thereof, under section 111 in lieu of a standard of

performance under that section without regard to any determination of feasibility that would otherwise be required under section 111(h).

`(3) Notwithstanding any other provision, in setting the level of each standard required by this section, the Administrator shall take into account projections of allowance prices,

such that the marginal cost of compliance (expressed as dollars per ton of carbon dioxide equivalent reduced) imposed by the standard would not, in the judgement of the

Administrator, be expected to exceed the Administrator's projected allowance prices over the time period spanning from the date of initial compliance to the date that the next revisions

of the standard would come into effect pursuant to the schedule under section 111(b)(1)(B).

`(d) Definitions- In this section, the terms `uncapped greenhouse gas emissions' and `uncapped methane emissions' mean those greenhouse gas or methane emissions,

respectively, to which section 722 would not have applied if the requirements of this title had been in effect for the same year as the emissions data upon which the list is based.

`(e) Study of the Effects of Performance Standards-

`(1) STUDY- The Administrator shall conduct a study of the impacts of performance standards required under this section, which shall evaluate the effect of such standards on

the--

`(A) costs of achieving compliance with the economy-wide reduction goals specified in section 702 and the reduction targets specified in section 703;

`(B) available supply of offset credits; and

`(C) ability to achieve the economy-wide reduction goals specified in section 702 and any other benefits of such standards.

`(2) REPORT- The Administrator shall submit to the House Energy and Commerce Committee a report that describes the results of the study not later than 18 months after the

publication of the standards required under subsection (a)(2)(B)(i).

`PART C--EXEMPTIONS FROM OTHER PROGRAMS

`SEC. 831. CRITERIA POLLUTANTS.

`As of the date of the enactment of the Safe Climate Act, no greenhouse gas may be added to the list under section 108(a) on the basis of its effect on global climate change.

`SEC. 832. INTERNATIONAL AIR POLLUTION.

`Section 115 shall not apply to an air pollutant with respect to that pollutant's contribution to global warming.

`SEC. 833. HAZARDOUS AIR POLLUTANTS.

`No greenhouse gas may be added to the list of hazardous air pollutants under section 112 unless such greenhouse gas meets the listing criteria of section 112(b) independent

of its effects on global climate change.

`SEC. 834. NEW SOURCE REVIEW.

`The provisions of part C of title I shall not apply to a major emitting facility that is initially permitted or modified after January 1, 2009, on the basis of its emissions of any

greenhouse gas.

`SEC. 835. TITLE V PERMITS.

`Notwithstanding any provision of title III or V, no stationary source shall be required to apply for, or operate pursuant to, a permit under title V, solely because the source emits any

greenhouse gases that are regulated solely because of their effect on global climate change.'.

SEC. 332. HFC REGULATION.

(a) In General- Title VI of the Clean Air Act (42 U.S.C. 7671 et seq.) (relating to stratospheric ozone protection) is amended by adding at the end the following:

`SEC. 619. HYDROFLUOROCARBONS (HFCS).

`(a) Treatment as Class II, Group II Substances- Except as otherwise provided in this section, hydrofluorocarbons shall be treated as class II substances for purposes of applying

the provisions of this title. The Administrator shall establish two groups of class II substances. Class II, group I substances shall include all hydrochlorofluorocarbons (HCFCs) listed

pursuant to section 602(b). Class II, group II substances shall include each of the following:

`(1) Hydrofluorocarbon-23 (HFC-23).

`(2) Hydrofluorocarbon-32 (HFC-32).

`(3) Hydrofluorocarbon-41 (HFC-41).

`(4) Hydrofluorocarbon-125 (HFC-125).

`(5) Hydrofluorocarbon-134 (HFC-134).

`(6) Hydrofluorocarbon-134a (HFC-134a).

`(7) Hydrofluorocarbon-143 (HFC-143).

`(8) Hydrofluorocarbon-143a (HFC-143a).

`(9) Hydrofluorocarbon-152 (HFC-152).

`(10) Hydrofluorocarbon-152a (HFC-152a).

`(11) Hydrofluorocarbon-227ea (HFC-227ea).

`(12) Hydrofluorocarbon-236cb (HFC-236cb).

`(13) Hydrofluorocarbon-236ea (HFC-236ea).

`(14) Hydrofluorocarbon-236fa (HFC-236fa).

`(15) Hydrofluorocarbon-245ca (HFC-245ca).

`(16) Hydrofluorocarbon-245fa (HFC-245fa).

`(17) Hydrofluorocarbon-365mfc (HFC-365mfc).

`(18) Hydrofluorocarbon-43-10mee (HFC-43-10mee).

`(19) Hydrofluoroolefin-1234yf (HFO-1234yf).

`(20) Hydrofluoroolefin-1234ze (HFO-1234ze).

Not later than 6 months after the date of enactment of this title, the Administrator shall publish an initial list of class II, group II substances, which shall include the substances

listed in this subsection. The Administrator may add to the list of class II, group II substances any other substance used as a substitute for a class I or II substance if the Administrator

determines that 1 metric ton of the substance makes the same or greater contribution to global warming over 100 years as 1 metric ton of carbon dioxide. Within 24 months after the

date of enactment of this section, the Administrator shall amend the regulations under this title (including the regulations referred to in sections 603, 608, 609, 610, 611, 612, and

613) to apply to class II, group II substances.

`(b) Consumption and Production of Class II, Group II Substances-

`(1) IN GENERAL-

`(A) CONSUMPTION PHASE DOWN- In the case of class II, group II substances, in lieu of applying section 605 and the regulations thereunder, the Administrator shall

promulgate regulations phasing down the consumption of class II, group II substances in the United States, and the importation of products containing any class II, group II

substance, in accordance with this subsection within 18 months after the date of enactment of this section. Effective January 1, 2012, it shall be unlawful for any person to produce

any class II, group II substance, import any class II, group II substance, or import any product containing any class II, group II substance without holding one consumption allowance

or one destruction offset credit for each carbon dioxide equivalent ton of the class II, group II substance. Any person who exports a class II, group II substance for which a

consumption allowance was retired may receive a refund of that allowance from the Administrator following the export.

`(B) PRODUCTION- If the United States becomes a party or otherwise adheres to a multilateral agreement, including any amendment to the Montreal Protocol on

Substances That Deplete the Ozone Layer, that restricts the production of class II, group II substances, the Administrator shall promulgate regulations establishing a baseline for the

production of class II, group II substances in the United States and phasing down the production of class II, group II substances in the United States, in accordance with such

multilateral agreement and subject to the same exceptions and other provisions as are applicable to the phase down of consumption of class II, group II substances under this

section (except that the Administrator shall not require a person who obtains production allowances from the Administrator to make payment for such allowances if the person is

making payment for a corresponding quantity of consumption allowances of the same vintage year). Upon the effective date of such regulations, it shall be unlawful for any person to

produce any class II, group II substance without holding one consumption allowance and one production allowance, or one destruction offset credit, for each carbon dioxide

equivalent ton of the class II, group II substance.

`(C) INTEGRITY OF CAP- To maintain the integrity of the class II, group II cap, the Administrator may, through rulemaking, limit the percentage of each person's compliance

obligation that may be met through the use of destruction offset credits or banked allowances.

`(D) COUNTING OF VIOLATIONS- Each emission allowance or destruction offset credit not held as required by this section shall be a separate violation of this section.

`(2) SCHEDULE- Pursuant to the regulations promulgated pursuant to paragraph (1), the number of class II, group II consumption allowances established by the Administrator

for each calendar year beginning in 2012 shall be the following percentage of the baseline, as established by the Administrator pursuant to paragraph (3):

----------------------------------------

`Calendar Year Percent of Baseline

----------------------------------------

2012 90

2013 87.5

2014 85

2015 82.5

2016 80

2017 77.5

2018 75

2019 71

2020 67

2021 63

2022 59

2023 54

2024 50

2025 46

2026 42

2027 38

2028 34

2029 30

2030 25

2031 21

2032 17

after 2032 15

----------------------------------------

`(3) BASELINE- (A) Within 12 months after the date of enactment of this section, the Administrator shall promulgate regulations to establish the baseline for purposes of

paragraph (2). The baseline shall be the sum, expressed in tons of carbon dioxide equivalents, of--

`(i) the annual average consumption of all class II substances in calendar years 2004, 2005, and 2006; plus

`(ii) the annual average quantity of all class II substances contained in imported products in calendar years 2004, 2005, and 2006.

`(B) Notwithstanding subparagraph (A), if the Administrator determines that the baseline is higher than 370 million metric tons of carbon dioxide equivalents, then the

Administrator shall establish the baseline at 370 million metric tons of carbon dioxide equivalents.

`(C) Notwithstanding subparagraph (A), if the Administrator determines that the baseline is lower than 280 million metric tons of carbon dioxide equivalents, then the

Administrator shall establish the baseline at 280 million metric tons of carbon dioxide equivalents.

`(4) DISTRIBUTION OF ALLOWANCES-

`(A) IN GENERAL- Pursuant to the regulations promulgated under paragraph (1), for each calendar year beginning in 2012, the Administrator shall sell consumption

allowances in accordance with this paragraph.

`(B) ESTABLISHMENT OF POOLS- The Administrator shall establish two allowance pools. Eighty percent of the consumption allowances available for a calendar year shall

be placed in the producer-importer pool, and 20 percent of the consumption allowances available for a calendar year shall be placed in the secondary pool.

`(C) PRODUCER-IMPORTER POOL-

`(i) AUCTION- (I) For each calendar year, the Administrator shall offer for sale at auction the following percentage of the consumption allowances in the

producer-importer pool:

-----------------------------------------------------------

`Calendar Year Percent Available for Auction

-----------------------------------------------------------

2012 10

2013 20

2014 30

2015 40

2016 50

2017 60

2018 70

2019 80

2020 and thereafter 90

-----------------------------------------------------------

`(II) Any person who produced or imported any class II substance during calendar year 2004, 2005, or 2006 may participate in the auction. No other persons may

participate in the auction unless permitted to do so pursuant to subclause (III).

`(III) Not later than three years after the date of the initial auction and from time to time thereafter, the Administrator shall determine through rulemaking whether any

persons who did not produce or import a class II substance during calendar year 2004, 2005, or 2006 will be permitted to participate in future auctions. The Administrator shall base

this determination on the duration, consistency, and scale of such person's purchases of consumption allowances in the secondary pool under subparagraph (D), as well as

economic or technical hardship and other factors deemed relevant by the Administrator.

`(IV) The Administrator shall set a minimum bid per consumption allowance of the following:

`(aa) For vintage year 2012, $1.00.

`(bb) For vintage year 2013, $1.20.

`(cc) For vintage year 2014, $1.40.

`(dd) For vintage year 2015, $1.60.

`(ee) For vintage year 2016, $1.80.

`(ff) For vintage year 2017, $2.00.

`(gg) For vintage year 2018 and thereafter, $2.00 adjusted for inflation after vintage year 2017 based upon the producer price index as published by the Department of

Commerce.

`(ii) NON-AUCTION SALE- (I) For each calendar year, as soon as practicable after auction, the Administrator shall offer for sale the remaining consumption allowances

in the producer-importer pool at the following prices:

`(aa) A fee of $1.00 per vintage year 2012 allowance.

`(bb) A fee of $1.20 per vintage year 2013 allowance.

`(cc) A fee of $1.40 per vintage year 2014 allowance.

`(dd) For each vintage year 2015 allowance, a fee equal to the average of $1.10 and the auction clearing price for vintage year 2014 allowances.

`(ee) For each vintage year 2016 allowance, a fee equal to the average of $1.30 and the auction clearing price for vintage year 2015 allowances.

`(ff) For each vintage year 2017 allowance, a fee equal to the average of $1.40 and the auction clearing price for vintage year 2016 allowances.

`(gg) For each allowance of vintage year 2018 and subsequent vintage years, a fee equal to the auction clearing price for that vintage year.

`(II) The Administrator shall offer to sell the remaining consumption allowances in the producer-importer pool to producers of class II, group II substances and importers

of class II, group II substances in proportion to their relative allocation share.

`(III) Such allocation share for such sale shall be determined by the Administrator using such producer's or importer's annual average data on class II substances from

calendar years 2004, 2005, and 2006, on a carbon dioxide equivalent basis, and--

`(aa) shall be based on a producer's production, plus importation, plus acquisitions and purchases from persons who produced class II substances in the United

States during calendar years 2004, 2005, or 2006, less exportation, less transfers and sales to persons who produced class II substances in the United States during calendar years

2004, 2005, or 2006; and

`(bb) for an importer of class II substances that did not produce in the United States any class II substance during calendar years 2004, 2005, and 2006, shall be

based on the importer's importation less exportation.

For purposes of item (aa), the Administrator shall account for 100 percent of class II, group II substances and 60 percent of class II, group I substances. For purposes of

item (bb), the Administrator shall account for 100 percent of class II, group II substances and 100 percent of class II, group I substances.

`(IV) Any consumption allowances made available for nonauction sale to a specific producer or importer of class II, group II substances but not purchased by the specific

producer or importer shall be made available for sale to any producer or importer of class II substances during calendar years 2004, 2005, or 2006. If demand for such consumption

allowances exceeds supply of such consumption allowances, the Administrator shall develop and utilize criteria for the sale of such consumption allowances that may include pro

rata shares, historic production and importation, economic or technical hardship, or other factors deemed relevant by the Administrator. If the supply of such consumption allowances

exceeds demand, the Administrator may offer such consumption allowances for sale in the secondary pool as set forth in subparagraph (D).

`(D) SECONDARY POOL- (i) For each calendar year, as soon as practicable after the auction required in subparagraph (C), the Administrator shall offer for sale the

consumption allowances in the secondary pool at the prices listed in subparagraph (C)(ii).

`(ii) The Administrator shall accept applications for purchase of secondary pool consumption allowances from--

`(I) importers of products containing class II, group II substances;

`(II) persons who purchased any class II, group II substance directly from a producer or importer of class II, group II substances for use in a product containing a class II,

group II substance, a manufacturing process, or a reclamation process;

`(III) persons who did not produce or import a class II substance during calendar year 2004, 2005, or 2006, but who the Administrator determines have subsequently

taken significant steps to produce or import a substantial quantity of any class II, group II substance; and

`(IV) persons who produced or imported any class II substance during calendar year 2004, 2005, or 2006.

`(iii) If the supply of consumption allowances in the secondary pool equals or exceeds the demand for consumption allowances in the secondary pool as presented in the

applications for purchase, the Administrator shall sell the consumption allowances in the secondary pool to the applicants in the amounts requested in the applications for purchase.

Any consumption allowances in the secondary pool not purchased in a calendar year may be rolled over and added to the quantity available in the secondary pool in the following

year.

`(iv) If the demand for consumption allowances in the secondary pool as presented in the applications for purchase exceeds the supply of consumption allowances in the

secondary pool, the Administrator shall sell the consumption allowances as follows:

`(I) The Administrator shall first sell the consumption allowances in the secondary pool to any importers of products containing class II, group II substances in the

amounts requested in their applications for purchase. If the demand for such consumption allowances exceeds supply of such consumption allowances, the Administrator shall

develop and utilize criteria for the sale of such consumption allowances among importers of products containing class II, group II substances that may include pro rata shares,

historic importation, economic or technical hardship, or other factors deemed relevant by the Administrator.

`(II) The Administrator shall next sell any remaining consumption allowances to persons identified in subclauses (II) and (III) of clause (ii) in the amounts requested in

their applications for purchase. If the demand for such consumption allowances exceeds remaining supply of such consumption allowances, the Administrator shall develop and

utilize criteria for the sale of such consumption allowances among subclauses (II) and (III) applicants that may include pro rata shares, historic use, economic or technical hardship,

or other factors deemed relevant by the Administrator.

`(III) The Administrator shall then sell any remaining consumption allowances to persons who produced or imported any class II substance during calendar year 2004,

2005, or 2006 in the amounts requested in their applications for purchase. If demand for such consumption allowances exceeds remaining supply of such consumption allowances,

the Administrator shall develop and utilize criteria for the sale of such consumption allowances that may include pro rata shares, historic production and importation, economic or

technical hardship, or other factors deemed relevant by the Administrator.

`(IV) Each person who purchases consumption allowances in a non-auction sale under this subparagraph shall be required to disclose the person or entity sponsoring

or benefitting from the purchases if such person or entity is, in whole or in part, other than the purchaser or the purchaser's employer.

`(E) DISCRETION TO WITHHOLD ALLOWANCES- Nothing in this paragraph prevents the Administrator from exercising discretion to withhold and retire consumption

allowances that would otherwise be available for auction or nonauction sale. Not later than 18 months after the date of enactment of this section, the Administrator shall promulgate

regulations establishing criteria for withholding and retiring consumption allowances.

`(5) BANKING- A consumption allowance or destruction offset credit may be used to meet the compliance obligation requirements of paragraph (1) in--

`(A) the vintage year for the allowance or destruction offset credit; or

`(B) any calendar year subsequent to the vintage year for the allowance or destruction offset credit.

`(6) AUCTIONS-

`(A) INITIAL REGULATIONS- Not later than 18 months after the date of enactment of this section, the Administrator shall promulgate regulations governing the auction of

allowances under this section. Such regulations shall include the following requirements:

`(i) FREQUENCY; FIRST AUCTION- Auctions shall be held one time per year at regular intervals, with the first auction to be held no later than October 31, 2011.

`(ii) AUCTION FORMAT- Auctions shall follow a single-round, sealed-bid, uniform price format.

`(iii) FINANCIAL ASSURANCE- The Administrator may establish financial assurance requirements to ensure that auction participants can and will perform on their bids.

`(iv) DISCLOSURE OF BENEFICIAL OWNERSHIP- Each bidder in the auction shall be required to disclose the person or entity sponsoring or benefitting from the

bidder's participation in the auction if such person or entity is, in whole or in part, other than the bidder or the bidder's employer.

`(v) PUBLICATION OF INFORMATION- After the auction, the Administrator shall, in a timely fashion, publish the number of bidders, number of winning bidders, the

quantity of allowances sold, and the auction clearing price.

`(vi) BIDDING LIMITS IN 2012- In the vintage year 2012 auction, no auction participant may, directly or in concert with another participant, bid for or purchase more

allowances offered for sale at the auction than the greater of--

`(I) the number of allowances which, when added to the number of allowances available for purchase by the participant in the producer-importer pool non-auction

sale, would equal the participant's annual average consumption of class II, group II substances in calendar years 2004, 2005, and 2006; or

`(II) the number of allowances equal to the product of--

`(aa) 1.20 multiplied by the participant's allocation share of the producer-importer pool non-auction sale as determined under paragraph (4)(C)(ii); and

`(bb) the number of vintage year 2012 allowances offered at auction.

`(vii) BIDDING LIMITS IN 2013- In the vintage year 2013 auction, no auction participant may, directly or in concert with another participant, bid for or purchase more

allowances offered for sale at the auction than the product of--

`(I) 1.15 multiplied by the ratio of the total number of vintage year 2012 allowances purchased by the participant from the auction and from the producer-importer pool

non-auction sale to the total number of vintage year 2012 allowances in the producer-importer pool; and

`(II) the number of vintage year 2013 allowances offered at auction.

`(viii) BIDDING LIMITS IN SUBSEQUENT YEARS- In the auctions for vintage year 2014 and subsequent vintage years, no auction participant may, directly or in concert

with another participant, bid for or purchase more allowances offered for sale at the auction than the product of--

`(I) 1.15 multiplied by the ratio of the highest number of allowances held by the participant in any of the three prior vintage years to meet its compliance obligation

under paragraph (1) to the total number of allowances in the producer-importer pool for such vintage year; and

`(II) the number of allowances offered at auction for that vintage year.

`(ix) OTHER REQUIREMENTS- The Administrator may include in the regulations such other requirements or provisions as the Administrator considers necessary to

promote effective, efficient, transparent, and fair administration of auctions under this section.

`(B) REVISION OF REGULATIONS- The Administrator may, at any time, revise the initial regulations promulgated under subparagraph (A) based on the Administrator's

experience in administering allowance auctions. Such revised regulations need not meet the requirements identified in subparagraph (A) if the Administrator determines that an

alternative auction design would be more effective, taking into account factors including costs of administration, transparency, fairness, and risks of collusion or manipulation. In

determining whether and how to revise the initial regulations under this paragraph, the Administrator shall not consider maximization of revenues to the Federal Government.

`(C) DELEGATION OR CONTRACT- Pursuant to regulations under this section, the Administrator may, by delegation or contract, provide for the conduct of auctions under

the Administrator's supervision by other departments or agencies of the Federal Government or by nongovernmental agencies, groups, or organizations.

`(7) PAYMENTS FOR ALLOWANCES-

`(A) INITIAL REGULATIONS- Not later than 18 months after the date of enactment of this section, the Administrator shall promulgate regulations governing the payment for

allowances purchased in auction and non-auction sales under this section. Such regulations shall include the requirement that, in the event that full payment for purchased

allowances is not made on the date of purchase, equal payments shall be made one time per calendar quarter with all payments for allowances of a vintage year made by the end of

that vintage year.

`(B) REVISION OF REGULATIONS- The Administrator may, at any time, revise the initial regulations promulgated under subparagraph (A) based on the Administrator's

experience in administering collection of payments. Such revised regulations need not meet the requirements identified in subparagraph (A) if the Administrator determines that an

alternative payment structure or frequency would be more effective, taking into account factors including cost of administration, transparency, and fairness. In determining whether and

how to revise the initial regulations under this paragraph, the Administrator shall not consider maximization of revenues to the Federal Government.

`(C) PENALTIES FOR NON-PAYMENT- Failure to pay for purchased allowances in accordance with the regulations promulgated pursuant to this paragraph shall be a

violation of the requirements of subsection (b). Section 113(c)(3) shall apply in the case of any person who knowingly fails to pay for purchased allowances in accordance with the

regulations promulgated pursuant to this paragraph.

`(8) IMPORTED PRODUCTS- If the United States becomes a party or otherwise adheres to a multilateral agreement, including any amendment to the Montreal Protocol on

Substances That Deplete the Ozone Layer, which restricts the production and consumption of class II, group II substances--

`(A) as of the date on which such agreement or amendment enters into force, it shall no longer be unlawful for any person to import from a party to such agreement or

amendment any product containing any class II, group II substance whose production and consumption are regulated by such agreement or amendment without holding one

consumption allowance or one destruction offset credit for each carbon dioxide equivalent ton of the class II, group II substance;

`(B) the Administrator shall promulgate regulations within 12 months of the date the United States becomes a party or otherwise adheres to such agreement or

amendment, or the date on which such agreement or amendment enters into force, whichever is later, to establish a new baseline for purposes of paragraph (2), which new baseline

shall be the original baseline less the carbon dioxide equivalent of the annual average quantity of any class II substances regulated by such agreement or amendment contained in

products imported from parties to such agreement or amendment in calendar years 2004, 2005, and 2006;

`(C) as of the date on which such agreement or amendment enters into force, no person importing any product containing any class II, group II substance may, directly or in

concert with another person, purchase any consumption allowances for sale by the Administrator for the importation of products from a party to such agreement or amendment that

contain any class II, group II substance restricted by such agreement or amendment; and

`(D) the Administrator may adjust the two allowance pools established in paragraph (4) such that up to 90 percent of the consumption allowances available for a calendar

year are placed in the producer-importer pool with the remaining consumption allowances placed in the secondary pool.

`(9) OFFSETS-

`(A) CHLOROFLUOROCARBON DESTRUCTION- Within 18 months after the date of enactment of this section, the Administrator shall promulgate regulations to provide for

the issuance of offset credits for the destruction, in the calendar year 2012 or later, of chlorofluorocarbons in the United States. The Administrator shall establish and distribute to the

destroying entity a quantity of destruction offset credits equal to 0.8 times the number of tons of carbon dioxide equivalents of reduction achieved through the destruction. No

destruction offset credits shall be established for the destruction of a class II, group II substance.

`(B) DEFINITION- For purposes of this paragraph, the term `destruction' means the conversion of a substance by thermal, chemical, or other means to another substance

with little or no carbon dioxide equivalent value and no ozone depletion potential.

`(C) REGULATIONS- The regulations promulgated under this paragraph shall include standards and protocols for project eligibility, certification of destroyers, monitoring,

tracking, destruction efficiency, quantification of project and baseline emissions and carbon dioxide equivalent value, and verification. The Administrator shall ensure that destruction

offset credits represent real and verifiable destruction of chlorofluorocarbons or other class I or class II, group I, substances authorized under subparagraph (D).

`(D) OTHER SUBSTANCES- The Administrator may promulgate regulations to add to the list of class I and class II, group I, substances that may be destroyed for

destruction offset credits, taking into account a candidate substance's carbon dioxide equivalent value, ozone depletion potential, prevalence in banks in the United States, and

emission rates, as well as the need for additional cost containment under the class II, group II cap and the integrity of the class II, group II cap. The Administrator shall not add a class

I or class II, group I substance to the list if the consumption of the substance has not been completely phased-out internationally (except for essential use exemptions or other similar

exemptions) pursuant to the Montreal Protocol.

`(E) EXTENSION OF OFFSETS- (i) At any time after the Administrator promulgates regulations pursuant to subparagraph (A), the Administrator may add the types of

destruction projects authorized to receive destruction offset credits under this paragraph to the list of types of projects eligible for offset credits under section 733. Nothing in this

paragraph shall affect the issuance of offset credits under section 740.

`(ii) The Administrator shall not make the addition under clause (i) unless the Administrator finds that insufficient destruction is occurring or is projected to occur under this

paragraph and that the addition would increase destruction.

`(iii) In no event shall more than one destruction offset credit be issued under title VII and this section for the destruction of the same quantity of a substance.

`(10) LEGAL STATUS OF ALLOWANCES AND CREDITS- None of the following constitutes a property right:

`(A) A production or consumption allowance.

`(B) A destruction offset credit.

`(c) Deadlines for Compliance- Notwithstanding the deadlines specified for class II substances in sections 608, 609, 610, 612, and 613 that occur prior to January 1, 2009, the

deadline for promulgating regulations under those sections for class II, group II substances shall be January 1, 2012.

`(d) Exceptions for Essential Uses- Notwithstanding any phase down of production and consumption required by this section, to the extent consistent with any applicable

multilateral agreement to which the United States is a party or otherwise adheres, the Administrator may provide the following exceptions for essential uses:

`(1) MEDICAL DEVICES- The Administrator, after notice and opportunity for public comment, and in consultation with the Commissioner of the Food and Drug Administration,

may provide an exception for the production and consumption of class II, group II substances solely for use in medical devices.

`(2) AVIATION SAFETY- The Administrator, after notice and opportunity for public comment, may authorize the production and consumption of limited quantities of class II, group

II substances solely for the purposes of aviation safety if the Administrator of the Federal Aviation Administration, in consultation with the Administrator, determines that no safe and

effective substitute has been developed and that such authorization is necessary for aviation safety purposes.

`(e) Developing Countries- Notwithstanding any phase down of production required by this section, the Administrator, after notice and opportunity for public comment, may

authorize the production of limited quantities of class II, group II substances in excess of the amounts otherwise allowable under this section solely for export to, and use in,

developing countries. Any production authorized under this subsection shall be solely for purposes of satisfying the basic domestic needs of such countries as provided in applicable

international agreements, if any, to which the United States is a party or otherwise adheres.

`(f) National Security; Fire Suppression, etc- The provisions of subsection (f) and paragraphs (1) and (2) of subsection (g) of section 604 shall apply to any consumption and

production phase down of class II, group II substances in the same manner and to the same extent, consistent with any applicable international agreement to which the United States

is a party or otherwise adheres, as such provisions apply to the substances specified in such subsection.

`(g) Accelerated Schedule- In lieu of section 606, the provisions of paragraphs (1), (2), and (3) of this subsection shall apply in the case of class II, group II substances.

`(1) IN GENERAL- The Administrator shall promulgate initial regulations not later than 18 months after the date of enactment of this section, and revised regulations any time

thereafter, which establish a schedule for phasing down the consumption (and, if the condition in subsection (b)(1)(B) is met, the production) of class II, group II substances that is

more stringent than the schedule set forth in this section if, based on the availability of substitutes, the Administrator determines that such more stringent schedule is practicable,

taking into account technological achievability, safety, and other factors the Administrator deems relevant, or if the Montreal Protocol, or any applicable international agreement to

which the United States is a party or otherwise adheres, is modified or established to include a schedule or other requirements to control or reduce production, consumption, or use

of any class II, group II substance more rapidly than the applicable schedule under this section.

`(2) PETITION- Any person may submit a petition to promulgate regulations under this subsection in the same manner and subject to the same procedures as are provided in

section 606(b).

`(3) INCONSISTENCY- If the Administrator determines that the provisions of this section regarding banking, allowance rollover, or destruction offset credits create a significant

potential for inconsistency with the requirements of any applicable international agreement to which the United States is a party or otherwise adheres, the Administrator may

promulgate regulations restricting the availability of banking, allowance rollover, or destruction offset credits to the extent necessary to avoid such inconsistency.

`(h) Exchange- Section 607 shall not apply in the case of class II, group II substances. Production and consumption allowances for class II, group II substances may be freely

exchanged or sold but may not be converted into allowances for class II, group I substances.

`(i) Labeling- (1) In applying section 611 to products containing or manufactured with class II, group II substances, in lieu of the words `destroying ozone in the upper atmosphere'

on labels required under section 611 there shall be substituted the words `contributing to global warming'.

`(2) The Administrator may, through rulemaking, exempt from the requirements of section 611 products containing or manufactured with class II, group II substances determined

to have little or no carbon dioxide equivalent value compared to other substances used in similar products.

`(j) Nonessential Products- For the purposes of section 610, class II, group II substances shall be regulated under section 610(b), except that in applying section 610(b) the word

`hydrofluorocarbon' shall be substituted for the word `chlorofluorocarbon' and the term `class II, group II' shall be substituted for the term `class I'. Class II, group II substances shall

not be subject to the provisions of section 610(d).

`(k) International Transfers- In the case of class II, group II substances, in lieu of sections 616(a) and 616(b), this subsection shall apply. To the extent consistent with any

applicable international agreement to which the United States is a party or otherwise adheres, including any amendment to the Montreal Protocol, the United States may engage in

transfers with other parties to such agreement or amendment under the following conditions:

`(1) The United States may transfer production allowances to another party to such agreement or amendment if, at the time of the transfer, the Administrator establishes

revised production limits for the United States accounting for the transfer in accordance with regulations promulgated pursuant to this subsection.

`(2) The United States may acquire production allowances from another party to such agreement or amendment if, at the time of the transfer, the Administrator finds that the

other party has revised its domestic production limits in the same manner as provided with respect to transfers by the United States in the regulations promulgated pursuant to this

subsection.

`(l) Relationship to Other Laws-

`(1) STATE LAWS- For purposes of section 116, the requirements of this section for class II, group II substances shall be treated as requirements for the control and

abatement of air pollution.

`(2) MULTILATERAL AGREEMENTS- Section 614 shall apply to the provisions of this section concerning class II, group II substances, except that for the words `Montreal

Protocol' there shall be substituted the words `Montreal Protocol, or any applicable multilateral agreement to which the United States is a party or otherwise adheres that restricts the

production or consumption of class II, group II substances,' and for the words `Article 4 of the Montreal Protocol' there shall be substituted `any provision of such multilateral

agreement regarding trade with non-parties'.

`(3) FEDERAL FACILITIES- For purposes of section 118, the requirements of this section for class II, group II substances and corresponding State, interstate, and local

requirements, administrative authority, and process and sanctions shall be treated as requirements for the control and abatement of air pollution within the meaning of section 118.

`(m) Carbon Dioxide Equivalent Value- (1) In lieu of section 602(e), the provisions of this subsection shall apply in the case of class II, group II substances. Simultaneously with

establishing the list of class II, group II substances, and simultaneously with any addition to that list, the Administrator shall publish the carbon dioxide equivalent value of each listed

class II, group II substance, based on a determination of the number of metric tons of carbon dioxide that makes the same contribution to global warming over 100 years as 1 metric

ton of each class II, group II substance.

`(2) Not later than February 1, 2017, and not less than every 5 years thereafter, the Administrator shall--

`(A) review, and if appropriate, revise the carbon dioxide equivalent values established for class II, group II substances based on a determination of the number of metric tons

of carbon dioxide that makes the same contributions to global warming over 100 years as 1 metric ton of each class II, group II substance; and

`(B) publish in the Federal Register the results of that review and any revisions.

`(3) A revised determination published in the Federal Register under paragraph (2)(B) shall take effect for production of class II, group II substances, consumption of class II,

group II substances, and importation of products containing class II, group II substances starting on January 1 of the first calendar year starting at least 9 months after the date on

which the revised determination was published.

`(4) The Administrator may decrease the frequency of review and revision under paragraph (2) if the Administrator determines that such decrease is appropriate in order to

synchronize such review and revisions with any similar review process carried out pursuant to the United Nations Framework Convention on Climate Change, an agreement

negotiated under that convention, The Vienna Convention for the Protection of the Ozone Layer, or an agreement negotiated under that convention, except that in no event shall the

Administrator carry out such review and revision any less frequently than every 10 years.

`(n) Reporting Requirements- In lieu of subsections (b) and (c) of section 603, paragraphs (1) and (2) of this subsection shall apply in the case of class II, group II substances:

`(1) IN GENERAL- On a quarterly basis, or such other basis (not less than annually) as determined by the Administrator, each person who produced, imported, or exported a

class II, group II substance, or who imported a product containing a class II, group II substance, shall file a report with the Administrator setting forth the carbon dioxide equivalent

amount of the substance that such person produced, imported, or exported, as well as the amount that was contained in products imported by that person, during the preceding

reporting period. Each such report shall be signed and attested by a responsible officer. If all other reporting is complete, no such report shall be required from a person after April 1

of the calendar year after such person permanently ceases production, importation, and exportation of the substance, as well as importation of products containing the substance,

and so notifies the Administrator in writing. If the United States becomes a party or otherwise adheres to a multilateral agreement, including any amendment to the Montreal Protocol

on Substances That Deplete the Ozone Layer, that restricts the production and consumption of class II, group II substances, then, if all other reporting is complete, no such report

shall be required from a person with respect to importation from parties to such agreement or amendment of products containing any class II, group II substance restricted by such

agreement or amendment, after April 1 of the calendar year following the year during which such agreement or amendment enters into force.

`(2) BASELINE REPORTS FOR CLASS II, GROUP II SUBSTANCES-

`(A) IN GENERAL- Unless such information has been previously reported to the Administrator, on the date on which the first report under paragraph (1) of this subsection is

required to be filed, each person who produced, imported, or exported a class II, group II substance, or who imported a product containing a class II substance, (other than a

substance added to the list of class II, group II substances after the publication of the initial list of such substances under this section), shall file a report with the Administrator setting

forth the amount of such substance that such person produced, imported, exported, or that was contained in products imported by that person, during each of calendar years 2004,

2005, and 2006.

`(B) PRODUCERS- In reporting under subparagraph (A), each person who produced in the United States a class II substance during calendar years 2004, 2005, or 2006

shall--

`(i) report all acquisitions or purchases of class II substances during each of calendar years 2004, 2005, and 2006 from all other persons who produced in the United

States a class II substance during calendar years 2004, 2005, or 2006, and supply evidence of such acquisitions and purchases as deemed necessary by the Administrator; and

`(ii) report all transfers or sales of class II substances during each of calendar years 2004, 2005, and 2006 to all other persons who produced in the United States a

class II substance during calendar years 2004, 2005, or 2006, and supply evidence of such transfers and sales as deemed necessary by the Administrator.

`(C) ADDED SUBSTANCES- In the case of a substance added to the list of class II, group II substances after publication of the initial list of such substances under this

section, each person who produced, imported, exported, or imported products containing such substance in calendar year 2004, 2005, or 2006 shall file a report with the

Administrator within 180 days after the date on which such substance is added to the list, setting forth the amount of the substance that such person produced, imported, and

exported, as well as the amount that was contained in products imported by that person, in calendar years 2004, 2005, and 2006.

`(o) Stratospheric Ozone and Climate Protection Fund-

`(1) IN GENERAL- There is established in the Treasury of the United States a Stratospheric Ozone and Climate Protection Fund.

`(2) DEPOSITS- The Administrator shall deposit all proceeds from the auction and non-auction sale of allowances under this section into the Stratospheric Ozone and Climate

Protection Fund.

`(3) USE- Amounts deposited into the Stratospheric Ozone and Climate Protection Fund shall be available, subject to appropriations, exclusively for the following purposes:

`(A) RECOVERY, RECYCLING, AND RECLAMATION- The Administrator may utilize funds to establish a program to incentivize the recovery, recycling, and reclamation of any

Class II substances in order to reduce emissions of such substances.

`(B) MULTILATERAL FUND- If the United States becomes a party or otherwise adheres to a multilateral agreement, including any amendment to the Montreal Protocol on

Substances That Deplete the Ozone Layer, which restricts the production and consumption of class II, group II substances, the Administrator may utilize funds to meet any related

contribution obligation of the United States to the Multilateral Fund for the Implementation of the Montreal Protocol or similar multilateral fund established under such multilateral

agreement.

`(C) BEST-IN-CLASS APPLIANCES DEPLOYMENT PROGRAM- The Secretary of Energy is authorized to utilize funds to carry out the purposes of section 214 of the American

Clean Energy and Security Act of 2009.

`(D) LOW GLOBAL WARMING PRODUCT TRANSITION ASSISTANCE PROGRAM-

`(i) IN GENERAL- The Administrator, in consultation with the Secretary of Energy, may utilize funds in fiscal years 2012 through 2022 to establish a program to provide

financial assistance to manufacturers of products containing class II, group II substances to facilitate the transition to products that contain or utilize alternative substances with no or

low carbon dioxide equivalent value and no ozone depletion potential.

`(ii) DEFINITION- In this subparagraph, the term `products' means refrigerators, freezers, dehumidifiers, air conditioners, foam insulation, technical aerosols, fire

protection systems, and semiconductors.

`(iii) FINANCIAL ASSISTANCE- The Administrator may provide financial assistance to manufacturers pursuant to clause (i) for--

`(I) the design and configuration of new products that use alternative substances with no or low carbon dioxide equivalent value and no ozone depletion potential; and

`(II) the redesign and retooling of facilities for the manufacture of products in the United States that use alternative substances with no or low carbon dioxide

equivalent value and no ozone depletion potential.

`(iv) REPORTS- For any fiscal year during which the Administrator provides financial assistance pursuant to this subparagraph, the Administrator shall submit a report to

the Congress within 3 months of the end of such fiscal year detailing the amounts, recipients, specific purposes, and results of the financial assistance provided.'.

(b) Table of Contents- The table of contents of title VI of the Clean Air Act (42 U.S.C. 7671 et seq.) is amended by adding the following new item at the end thereof:

`Sec. 619. Hydrofluorocarbons (HFCs).'.

(c) Fire Suppression Agents- Section 605(a) of the Clean Air Act (42 U.S.C. 7671(a)) is amended--

(1) by striking `or' at the end of paragraph (2);

(2) by striking the period at the end of paragraph (3) and inserting `; or'; and

(3) by adding the following new paragraph after paragraph (3):

`(4) is listed as acceptable for use as a fire suppression agent for nonresidential applications in accordance with section 612(c).'.

(d) Motor Vehicle Air Conditioners-

(1) Section 609(e) of the Clean Air Act (42 U.S.C. 7671h(e)) is amended by inserting `, group I' after each reference to `class II' in the text and heading.

(2) Section 609 of the Clean Air Act (42 U.S.C. 7671h) is amended by adding the following new subsection after subsection (e):

`(f) Class II, Group II Substances-

`(1) REPAIR- The Administrator may promulgate regulations establishing requirements for repair of motor vehicle air conditioners prior to adding a class II, group II substance.

`(2) SMALL CONTAINERS- (A) The Administrator may promulgate regulations establishing servicing practices and procedures for recovery of class II, group II substances from

containers which contain less than 20 pounds of such class II, group II substances.

`(B) Not later than 18 months after enactment of this subsection, the Administrator shall either promulgate regulations requiring that containers which contain less than 20

pounds of a class II, group II substance be equipped with a device or technology that limits refrigerant emissions and leaks from the container and limits refrigerant emissions and

leaks during the transfer of refrigerant from the container to the motor vehicle air conditioner or issue a determination that such requirements are not necessary or appropriate.

`(C) Not later than 18 months after enactment of this subsection, the Administrator shall promulgate regulations establishing requirements for consumer education materials

on best practices associated with the use of containers which contain less than 20 pounds of a class II, group II substance and prohibiting the sale or distribution, or offer for sale or

distribution, of any class II, group II substance in any container which contains less than 20 pounds of such class II, group II substance, unless consumer education materials

consistent with such requirements are displayed and available at point-of-sale locations, provided to the consumer, or included in or on the packaging of the container which contain

less than 20 pounds of a class II, group II substance.

`(D) The Administrator may, through rulemaking, extend the requirements established under this paragraph to containers which contain 30 pounds or less of a class II, group II

substance if the Administrator determines that such action would produce significant environmental benefits.

`(3) RESTRICTION OF SALES- Effective January 1, 2014, no person may sell or distribute or offer to sell or distribute or otherwise introduce into interstate commerce any motor

vehicle air conditioner refrigerant in any size container unless the substance has been found acceptable for use in a motor vehicle air conditioner under section 612.'.

(e) Safe Alternatives Policy- Section 612(e) of the Clean Air Act (42 U.S.C. 7671k(e)) is amended by inserting `or class II' after each reference to `class I'.

SEC. 333. BLACK CARBON.

(a) Definition- As used in this section, the term `black carbon' means primary light absorbing aerosols, as defined by the Administrator, based on the best available science.

(b) Black Carbon Abatement Report- Not later than one year after the date of enactment of this section, the Administrator shall, in consultation with other appropriate Federal

agencies, submit to Congress a report regarding black carbon emissions. The report shall include the following:

(1) A summary of the current information and research that identifies--

(A) an inventory of the major sources of black carbon emissions in the United States and throughout the world, including--

(i) an estimate of the quantity of current and projected future emissions; and

(ii) the net climate forcing of the emissions from such sources, including consideration of co-emissions of other pollutants;

(B) effective and cost-effective control technologies, operations, and strategies for additional domestic and international black carbon emissions reductions, such as diesel

retrofit technologies on existing on-road, non-road, and stationary engines and programs to address residential cookstoves, and forest and agriculture-based burning;

(C) potential metrics and approaches for quantifying the climatic effects of black carbon emissions, including its radiative forcing and warming effects, that may be used to

compare the climate benefits of different mitigation strategies, including an assessment of the uncertainty in such metrics and approaches; and

(D) the public health and environmental benefits associated with additional controls for black carbon emissions.

(2) Recommendations regarding--

(A) development of additional emissions monitoring techniques and capabilities, modeling, and other black carbon-related areas of study;

(B) areas of focus for additional study of technologies, operations, and strategies with the greatest potential to reduce emissions of black carbon and associated public

health, economic, and environmental impacts associated with these emissions; and

(C) actions, in addition to those identified by the Administrator under section 851 of the Clean Air Act (as added by subsection (c)), the Federal Government may take to

encourage or require reductions in black carbon emissions.

(c) Black Carbon Mitigation- Title VIII of the Clean Air Act, as added by section 331 of this Act, and amended by section 222 of this Act, is further amended by adding after part D the

following new part:

`PART E--BLACK CARBON

`SEC. 851. BLACK CARBON.

`(a) Domestic Black Carbon Mitigation- Not later than 18 months after the date of enactment of this section, the Administrator, taking into consideration the public health and

environmental impacts of black carbon emissions, including the effects on global and regional warming, the Arctic, and other snow and ice-covered surfaces, shall propose

regulations under the existing authorities of this Act to reduce emissions of black carbon or propose a finding that existing regulations promulgated pursuant to this Act adequately

regulate black carbon emissions. Not later than two years after the date of enactment of this section, the Administrator shall promulgate final regulations under the existing authorities

of this Act or finalize the proposed finding.

`(b) International Black Carbon Mitigation-

`(1) REPORT- Not later than one year after the date of enactment of this section, the Administrator, in coordination with the Secretary of State and other appropriate Federal

agencies, shall transmit a report to Congress on the amount, type, and direction of all present United States financial, technical, and related assistance to foreign countries to reduce,

mitigate, and otherwise abate black carbon emissions.

`(2) OTHER OPPORTUNITIES- The report required under paragraph (1) shall also identify opportunities and recommendations, including action under existing authorities, to

achieve significant black carbon emission reductions in foreign countries through technical assistance or other approaches to--

`(A) promote sustainable solutions to bring clean, efficient, safe, and affordable stoves, fuels, or both stoves and fuels to residents of developing countries that are reliant on

solid fuels such as wood, dung, charcoal, coal, or crop residues for home cooking and heating, so as to help reduce the public health, environmental, and economic impacts of black

carbon emissions from these sources by--

`(i) identifying key regions for large-scale demonstration efforts, and key partners in each such region; and

`(ii) developing for each such region a large-scale implementation strategy with a goal of collectively reaching 20,000,000 homes over 5 years with interventions that

will--

`(I) increase stove efficiency by over 50 percent (or such other goal as determined by the Administrator);

`(II) reduce emissions of black carbon by over 60 percent (or such other goal as determined by the Administrator); and

`(III) reduce the incidence of severe pneumonia in children under 5 years old by over 30 percent (or such other goal as determined by the Administrator);

`(B) make technological improvements to diesel engines and provide greater access to fuels that emit less or no black carbon;

`(C) reduce unnecessary agricultural or other biomass burning where feasible alternatives exist;

`(D) reduce unnecessary fossil fuel burning that produces black carbon where feasible alternatives exist;

`(E) reduce other sources of black carbon emissions; and

`(F) improve capacity to achieve greater compliance with existing laws to address black carbon emissions.'.

(d) Authorization of Appropriations- There are authorized to be appropriated such sums as are necessary to carry out this section.

SEC. 334. STATES.

Section 116 of the Clean Air Act (42 U.S.C. 7416) is amended by adding the following at the end thereof: `For the purposes of this section, the phrases `standard or limitation

respecting emissions of air pollutants' and `requirements respecting control or abatement of air pollution' shall include any provision to: cap greenhouse gas emissions, require

surrender to the State or a political subdivision thereof of emission allowances or offset credits established or issued under this Act, and require the use of such allowances or

credits as a means of demonstrating compliance with requirements established by a State or political subdivision thereof.'.

SEC. 335. STATE PROGRAMS.

Title VIII of the Clean Air Act, as added by section 331 of this Act and amended by several sections of this Act, is further amended by adding after part E (as added by section 333(c)

of this Act) the following new part:

`PART F--MISCELLANEOUS

`SEC. 861. STATE PROGRAMS.

`Notwithstanding section 116, no State or political subdivision thereof shall implement or enforce a cap and trade program that covers any capped emissions emitted during the

years 2012 through 2017. For purposes of this section, the term `cap and trade program' means a system of greenhouse gas regulation under which a State or political subdivision

issues a limited number of tradable instruments in the nature of emission allowances and requires that sources within its jurisdiction surrender such tradeable instruments for each

unit of greenhouse gases emitted during a compliance period. For purposes of this section, a `cap-and-trade program' does not include a target or limit on greenhouse gas

emissions adopted by a State or political subdivision that is implemented other than through the issuance and surrender of a limited number of tradable instruments in the nature of

emission allowances, nor does it include any other standard, limit, regulation, or program to reduce greenhouse gas emissions that is not implemented through the issuance and

surrender of a limited number of tradeable instruments in the nature of emission allowances. For purposes of this section, the term `cap and trade program' does not include, among

other things, fleet-wide motor vehicle emission requirements that allow greater emissions with increased vehicle production, or requirements that fuels, or other products, meet an

average pollution emission rate or lifecycle greenhouse gas standard.

`SEC. 862. GRANTS FOR SUPPORT OF AIR POLLUTION CONTROL PROGRAMS.

`The Administrator is authorized to make grants to air pollution control agencies pursuant to section 105 for purposes of assisting in the implementation of programs to address

global warming established under the Safe Climate Act.'.

SEC. 336. ENFORCEMENT.

(a) Remand- Section 307(b) of the Clean Air Act (42 U.S.C. 7607(b)) is amended by adding the following new paragraph at the end thereof:

`(3) If the court determines that any action of the Administrator is arbitrary, capricious, or otherwise unlawful, the court may remand such action, without vacatur, if vacatur would

impair or delay protection of the environment or public health or otherwise undermine the timely achievement of the purposes of this Act.'.

(b) Petition for Reconsideration- Section 307(d)(7)(B) of the Clean Air Act (42 U.S.C. 7607(d)(7)(B)) is amended as follows:

(1) By inserting after the second sentence `If a petition for reconsideration is filed, the Administrator shall take final action on such petition, including promulgation of final action

either revising or determining not to revise the action for which reconsideration is sought, within 150 days after the petition is received by the Administrator or the petition shall be

deemed denied for the purpose of judicial review.'.

(2) By amending the third sentence to read as follows: `Such person may seek judicial review of such denial, or of any other final action, by the Administrator, in response to a

petition for reconsideration, in the United States court of appeals for the appropriate circuit (as provided in subsection (b)).'.

SEC. 337. CONFORMING AMENDMENTS.

(a) Federal Enforcement- Section 113 of the Clean Air Act (42 U.S.C. 7413) is amended as follows:

(1) In subsection (a)(3), by striking `or title VI,' and inserting `title VI, title VII, or title VIII'.

(2) In subsection (b), by striking `or a major stationary source' and inserting `a major stationary source, or a covered EGU under title VIII' in the material preceding paragraph

(1).

(3) In paragraph (2) of subsection (b), by striking `or title VI' and inserting `title VI, title VII, or title VIII'.

(4) In subsection (c)--

(A) in the first sentence of paragraph (1), by striking `or title VI (relating to stratospheric ozone control),' and inserting `title VI, title VII, or title VIII,'; and

(B) in the first sentence of paragraph (3), by striking `or VI' and inserting `VI, VII, or VIII'.

(5) In subsection (d)(1)(B), by striking `or VI' and inserting `VI, VII, or VIII'.

(6) In subsection (f), in the first sentence, by striking `or VI' and inserting `VI, VII, or VIII'.

(b) Retention of State Authority- Section 116 of the Clean Air Act (42 U.S.C. 7416) is amended as follows:

(1) By striking `and 233' and inserting `233'.

(2) By striking `of moving sources)' and inserting `of moving sources), and 861 (preempting certain State greenhouse gas programs for a limited time)'.

(c) Inspections, Monitoring, and Entry- Section 114(a) of the Clean Air Act (42 U.S.C. 7414(a)) is amended by striking `section 112,' and all that follows through `(ii)' and inserting

the following: `section 112, or any regulation of greenhouse gas emissions under title VII or VIII, (ii)'.

(d) Enforcement- Subsection (f) of section 304 of the Clean Air Act (42 U.S.C. 7604(f)) is amended as follows:

(1) By striking `; or' at the end of paragraph (3) thereof and inserting a comma.

(2) By striking the period at the end of paragraph (4) thereof and inserting `, or'.

(3) By adding the following after paragraph (4) thereof:

`(5) any requirement of title VII or VIII.'.

(e) Administrative Proceedings and Judicial Review- Section 307 of the Clean Air Act (42 U.S.C. 7607) is amended as follows:

(1) In subsection (a), by striking `, or section 306' and inserting `section 306, or title VII or VIII'.

(2) In subsection (b)(1)--

(A) by striking `,,' and inserting `,' in each place such punctuation appears; and

(B) by striking `section 120,' in the first sentence and inserting `section 120, any final action under title VII or VIII,'.

(3) In subsection (d)(1) by amending subparagraph (S) to read as follows:

`(S) the promulgation or revision of any regulation under title VII or VIII,'.

SEC. 338. DAVIS-BACON COMPLIANCE.

(a) In General- Notwithstanding any other provision of law and in a manner consistent with other provisions in this Act, to receive emission allowances or funding under this Act the

recipient shall provide reasonable assurances that all laborers and mechanics employed by contractors and subcontractors on projects funded directly by or assisted in whole or in

part by and through the Federal Government pursuant to this Act, or by any entity established in accordance with this Act, including the Carbon Storage Research Corporation, will be

paid wages at rates not less than those prevailing on projects of a character similar in the locality as determined by the Secretary of Labor in accordance with subchapter IV of chapter

31 of title 40, United States Code (commonly known as the `Davis-Bacon Act'). With respect to the labor standards specified in this section, the Secretary of Labor shall have the

authority and functions set forth in Reorganization Plan Numbered 14 of 1950 (64 Stat. 1267; 5 U.S.C. App.) and section 3145 of title 40, United States Code.

(b) Exemption- Neither subsection (a) nor the requirements of subchapter IV of chapter 31 of title 40, United States Code, shall apply to retrofitting of any residential building (as

defined in section 202(a)(5)), or to retrofitting of a nonresidential building (as defined in section 202(a)(1)) if the net interior space of such nonresidential building is less than 6,500

square feet, or if such nonresidential building is designed for residential use for less than 4 families.

Subtitle D--Carbon Market Assurance

SEC. 341. CARBON MARKET ASSURANCE.

The Federal Power Act (16 U.S.C. 791a and following) is amended by adding at the end the following:

`PART IV--CARBON MARKET ASSURANCE

`SEC. 401. OVERSIGHT AND ASSURANCE OF CARBON MARKETS.

`(a) Definitions- In this section:

`(1) CONTRACT OF SALE- The term `contract of sale' includes sales, agreements of sale, and agreements to sell.

`(2) COVERED ENTITY- The term `covered entity' shall have the meaning given in section 700 of the Clean Air Act.

`(3) FUTURE DELIVERY- The term `future delivery' does not include any sale of any cash commodity for deferred shipment or delivery.

`(4) OFFSET CREATION CONTRACT- The term `offset creation contract' mean a written agreement for the origination and development of an offset project, and the related

issuance of offset credits, pursuant to title VII of the Clean Air Act.

`(5) REGULATED ALLOWANCE- The term `regulated allowance' means any emission allowance, compensatory allowance, offset credit, or Federal renewable electricity credit

established or issued under the American Clean Energy and Security Act of 2009.

`(6) REGULATED ALLOWANCE DERIVATIVE- The term `regulated allowance derivative' means an instrument that is, or includes, an instrument--

`(A) which--

`(i) is of the character of, or is commonly known to the trade as, a `put option', `call option', `privilege', `indemnity', `advance guaranty', `decline guaranty', or `swap

agreement'; or

`(ii) is a contract of sale for future delivery other than an offset creation contract; and

`(B) the value of which, in whole or in part, is expressly linked to the price of a regulated allowance or another regulated allowance derivative.

`(7) REGULATED INSTRUMENT- The term `regulated instrument' means a regulated allowance or a regulated allowance derivative.

`(b) Regulated Allowance Market-

`(1) AUTHORITY- The Commission shall promulgate regulations for the establishment, operation, and oversight of markets for regulated allowances not later than 18 months

after the date of the enactment of this section, and from time to time thereafter as may be appropriate.

`(2) REGULATIONS- The regulations promulgated pursuant to paragraph (1) shall--

`(A) provide for effective and comprehensive market oversight;

`(B) prohibit fraud, market manipulation (including an entity's fraudulent or manipulative conduct with respect to regulated allowance derivatives that benefits the entity in

regulated allowance markets), and excess speculation, and provide measures to limit unreasonable fluctuation in the prices of regulated allowances;

`(C) facilitate compliance with title VII of the Clean Air Act by covered entities;

`(D) ensure market transparency and recordkeeping deemed necessary and appropriate by the Commission to provide for efficient price discovery; prevention of fraud,

market manipulation, and excess speculation; and compliance with title VII of the Clean Air Act and section 610 of the Public Utility Regulatory Policies Act of 1978;

`(E) as necessary, ensure that position limitations for individual market participants are established with respect to each class of regulated allowances;

`(F) as necessary, ensure that margin requirements are established for each class of regulated allowances;

`(G) provide for the formation and operation of a fair, orderly and liquid national market system that allows for the best execution in the trading of regulated allowances;

`(H) limit or eliminate counterparty risks, market power concentration risks, and other risks associated with over-the-counter trading; and

`(I) establish standards for qualification as, and operation of, trading facilities for regulated allowances;

`(J) establish standards for qualification as, and operation of, clearing organizations for trading facilities for regulated allowances; and

`(K) include such other requirements as necessary to preserve market integrity and facilitate compliance with title VII of the Clean Air Act and section 610 of the Public Utility

Regulatory Policies Act of 1978 and the regulations promulgated under such title and such section.

`(3) ENFORCEMENT-

`(A) IN GENERAL- If the Commission determines, after notice and an opportunity for a hearing on the record, that any entity has violated any rule or order issued by the

Commission under this subsection, the Commission may issue an order--

`(i) prohibiting the entity from trading on a trading facility for regulated allowances registered with the Commission, and requiring all such facilities to refuse the entity all

privileges for such period as may be specified in the order;

`(ii) if the entity is registered with the Commission in any capacity, suspending for a period of not more than 6 months, or revoking, the registration of the entity;

`(iii) assessing the entity a civil penalty of not more than $1,000,000 per day per violation for as long as the violation continues (and in determining the amount of a civil

penalty, the Commission shall take into account the nature and seriousness of the violation and the efforts to remedy the violation); and

`(iv) requiring disgorgement of unjust profits, restitution to entities harmed by the violation as determined by the Commission, or both.

`(B) AUTHORITY TO SUSPEND OR REVOKE REGISTRATION- The Commission may suspend for a period of not more than 6 months, or revoke, the registration of a

trading facility for regulated allowances or of a clearing organization registered by the Commission if, after notice and opportunity for a hearing on the record, the Commission finds

that--

`(i) the entity violated any rule or order issued by the Commission under this subsection; or

`(ii) a director, officer, employee, or agent of the entity has violated any rule or order issued by the Commission under this subsection.

`(C) CEASE AND DESIST PROCEEDINGS-

`(i) IN GENERAL- If the Commission determines that any entity may be violating, may have violated, or may be about to violate any provision of this part, or any regulation

promulgated by, or any restriction, condition, or order made or imposed by, the Commission under this Act, and if the Commission finds that the alleged violation or threatened

violation, or the continuation of the violation, is likely to result in significant harm to covered entities or market participants, or significant harm to the public interest, the Commission

may issue a temporary order requiring the entity--

`(I) to cease and desist from the violation or threatened violation;

`(II) to take such action as is necessary to prevent the violation or threatened violation; and

`(III) to prevent, as the Commission determines to be appropriate--

`(aa) significant harm to covered entities or market participants;

`(bb) significant harm to the public interest; and

`(cc) frustration of the ability of the Commission to conduct the proceedings or to redress the violation at the conclusion of the proceedings.

`(ii) TIMING OF ENTRY- An order issued under clause (i) shall be entered only after notice and opportunity for a hearing, unless the Commission determines that notice

and hearing before entry would be impracticable or contrary to the public interest.

`(iii) EFFECTIVE DATE- A temporary order issued under clause (i) shall--

`(I) become effective upon service upon the entity; and

`(II) unless set aside, limited, or suspended by the Commission or a court of competent jurisdiction, remain effective and enforceable pending the completion of the

proceedings.

`(D) PROCEEDINGS REGARDING DISSIPATION OR CONVERSION OF ASSETS-

`(i) IN GENERAL- In a proceeding involving an alleged violation of a regulation or order promulgated or issued by the Commission, if the Commission determines that

the alleged violation or related circumstances are likely to result in significant dissipation or conversion of assets, the Commission may issue a temporary order requiring the

respondent to take such action as is necessary to prevent the dissipation or conversion of assets.

`(ii) TIMING OF ENTRY- An order issued under clause (i) shall be entered only after notice and opportunity for a hearing, unless the Commission determines that notice

and hearing before entry would be impracticable or contrary to the public interest.

`(iii) EFFECTIVE DATE- A temporary order issued under clause (i) shall--

`(I) become effective upon service upon the respondent; and

`(II) unless set aside, limited, or suspended by the Commission or a court of competent jurisdiction, remain effective and enforceable pending the completion of the

proceedings.

`(E) REVIEW OF TEMPORARY ORDERS-

`(i) APPLICATION FOR REVIEW- At any time after a respondent has been served with a temporary cease-and-desist order pursuant to subparagraph (C) or order

regarding the dissipation or conversion of assets pursuant to subparagraph (D), the respondent may apply to the Commission to have the order set aside, limited, or suspended.

`(ii) NO PRIOR HEARING- If a respondent has been served with a temporary order entered without a prior hearing of the Commission--

`(I) the respondent may, not later than 10 days after the date on which the order was served, request a hearing on the application; and

`(II) the Commission shall hold a hearing and render a decision on the application at the earliest practicable time.

`(iii) JUDICIAL REVIEW-

`(I) IN GENERAL- An entity shall not be required to submit a request for rehearing of a temporary order before seeking judicial review in accordance with this

subparagraph.

`(II) TIMING OF REVIEW- Not later than 10 days after the date on which a respondent is served with a temporary cease-and-desist order entered with a prior hearing

of the Commission, or 10 days after the date on which the Commission renders a decision on an application and hearing under clause (i) with respect to any temporary order entered

without such a prior hearing--

`(aa) the respondent may obtain a review of the order in a United States circuit court having jurisdiction over the circuit in which the respondent resides or has a principal place of

business, or in the United States Court of Appeals for the District of Columbia Circuit, for an order setting aside, limiting, or suspending the effectiveness or enforcement of the order;

and

`(bb) the court shall have jurisdiction to enter such an order.

`(III) NO PRIOR HEARING- A respondent served with a temporary order entered without a prior hearing of the Commission may not apply to the applicable court

described in subclause (II) except after a hearing and decision by the Commission on the application of the respondent under clauses (i) and (ii).

`(iv) PROCEDURES- Section 222 and Part III shall apply to--

`(I) an application for review of an order under clause (i); and

`(II) an order subject to review under clause (iii).

`(v) NO AUTOMATIC STAY OF TEMPORARY ORDER- The commencement of proceedings under clause (iii) shall not, unless specifically ordered by the court, operate as

a stay of the order of the Commission.

`(F) ACTIONS TO COLLECT CIVIL PENALTIES- If any person fails to pay a civil penalty assessed under this subsection after an order assessing the penalty has become

final and unappealable, the Commission shall bring an action to recover the amount of the penalty in any appropriate United States district court. In any such action, the validity or

appropriateness of the final assessment order or judgment shall not be subject to review.

`(4) TRANSACTION FEES-

`(A) IN GENERAL- The Commission shall, in accordance with this paragraph, establish and collect transaction fees designed to recover the costs to the Federal

Government of the supervision and regulation of regulated allowance markets and market participants, including related costs for enforcement activities, policy and rulemaking

activities, administration, legal services, and international regulatory activities.

`(B) INITIAL FEE RATE- Each trading facility on or through which regulated allowances are transacted shall pay to the Commission a fee at a rate of not more than $15 per

$1,000,000 of the aggregate dollar amount of sales of regulated allowances transacted through the facility.

`(C) ANNUAL ADJUSTMENT OF FEE RATE- The Commission shall, on an annual basis--

`(i) assess the rate at which fees are to be collected as necessary to meet the cost recovery requirement in subparagraph (A); and

`(ii) consistent with subparagraph (B), adjust the rate as necessary in order to meet the requirement.

`(D) REPORT ON ADEQUACY OF FEES IN RECOVERING COSTS- The Commission, shall, on an annual basis, report to the Committee on Energy and Commerce of the

House of Representatives and the Committee on Energy and Natural Resources of the Senate on the adequacy of the transaction fees in providing funding for the Commission to

regulate the regulated allowance markets.

`(5) JUDICIAL REVIEW- Judicial review of actions taken by the Commission under this subsection shall be pursuant to part III.

`(6) INFORMATION-SHARING- Within 6 months after a Federal agency with jurisdiction over regulated allowance derivatives is delegated authority pursuant to subsection

(c)(1), the agency shall enter into a memorandum of understanding with the Commission relating to information sharing, which shall include provisions ensuring that information

requests to markets within the respective jurisdiction of the agency are properly coordinated to facilitate, among other things, effective information-sharing while minimizing duplicative

information requests, and provisions regarding the treatment of proprietary information.

`(7) ADDITIONAL EMPLOYEES REPORT AND APPOINTMENT- Within 18 months after the date of the enactment of this section, the Commission shall submit to the President,

the Committee on Energy and Commerce of the House of Representatives, and the Committee on Energy and Natural Resources of the Senate, a report that contains

recommendations as to how many additional employees would be necessary to provide robust oversight and enforcement of the regulations promulgated under this subsection. As

soon as practicable after the completion of the report, subject to appropriations, the Commission shall appoint the recommended number of additional employees for such

purposes.

`(c) Delegation of Authority by the President-

`(1) DELEGATION- The President, taking into consideration the recommendations of the interagency working group established in subsection (d), shall delegate to members

of the working group and the heads of other appropriate Federal agencies the authority to promulgate regulations for the establishment, operation, and oversight of all markets for

regulated allowance derivatives.

`(2) REGULATIONS- The regulations promulgated pursuant to paragraph (1) shall--

`(A) provide for effective and comprehensive market oversight;

`(B) prohibit fraud, market manipulation, and excess speculation, and provide measures to limit unreasonable fluctuation in the prices of regulated allowance derivatives;

`(C) facilitate compliance with title VII of the Clean Air Act by covered entities;

`(D) ensure market transparency and recordkeeping necessary to provide for efficient price discovery; prevention of fraud, market manipulation, and excess speculation; and

compliance with title VII of the Clean Air Act and section 610 of the Public Utility Regulatory Policies Act of 1978;

`(E) ensure that position limitations for individual market participants are established with respect to each regulated allowance derivative and aggregate position limitations

for individual market participants are established with respect to all regulated allowance derivative markets;

`(F) ensure that margin requirements are established for each regulated allowance derivative;

`(G) provide for the formation and operation of a market system that allows for best execution in the trading of regulated allowance derivatives;

`(H) to the extent the regulations deviate from the rule set forth in paragraph (4)(B), limit or eliminate counterparty risks, market power concentration risks, and other risks

associated with over-the-counter trading, and promulgate reporting and market transparency rules for large traders;

`(I) ensure that market participants do not evade position limits or otherwise undermine the integrity and effectiveness of the regulations promulgated under subparagraph

(C) through participation in markets not subject to the position limits and regulations;

`(J) establish standards, as necessary, for qualification as, and operation of, trading facilities for regulated allowance derivatives;

`(K) establish standards, as necessary, for qualification as, and operation of, clearing organizations for trading facilities for regulated allowance derivatives;

`(L) provide boards of trade designated as contract markets under the Commodity Exchange Act, and market participants, with an adequate transition period for compliance

with any new regulatory requirements established under this paragraph;

`(M) determine whether and to what extent offset creation contracts, to the extent incorporating regulated allowance derivatives, should be governed by the same regulations

that apply to other regulated allowance derivatives; and

`(N) include such other requirements as necessary to preserve market integrity and facilitate compliance with title VII of the Clean Air Act and section 610 of the Public Utility

Regulatory Policies Act of 1978 and the regulations promulgated under such title and such section.

`(3) DEADLINE- The agencies authorized to promulgate regulations for the establishment, operation, and oversight of markets for regulated allowance derivatives pursuant to

paragraph (1) shall promulgate such regulations not later than 18 months after the date of the enactment of this section, and from time to time thereafter as may be appropriate.

`(4) DEFAULT RULES-

`(A) An individual market participant, directly or in concert with another participant, shall not control more than 10 percent of the open interest in any regulated allowance

derivative.

`(B) All contracts for the purchase or sale of any regulated allowance derivative shall be executed on or through a board of trade designated as a contract market under the

Commodity Exchange Act.

`(C) To the extent that regulations promulgated under this subsection provide different rules with respect to the matters described in subparagraph (A) or (B), the regulations

shall supersede subparagraph (A) or (B), as the case may be.

`(d) Working Group-

`(1) ESTABLISHMENT- Not later than 30 days after the date of the enactment of this section, the President shall establish an interagency working group on carbon market

oversight, which shall include the Administrator of the Environmental Protection Agency and representatives of other relevant agencies, to make recommendations to the President

regarding proposed regulations for the establishment, operation, and oversight of markets for regulated allowance derivatives.

`(2) REPORT- Not later than 180 days after the date of the enactment of this section, and biennially thereafter, the interagency working group shall submit a written report to the

President and Congress that includes its recommendations to the President regarding proposed regulations for the establishment, operation, and oversight of markets for regulated

allowance derivatives and any recommendations to Congress for statutory changes needed to ensure the establishment, operation, and oversight of transparent, fair, stable, and

efficient markets for regulated allowance derivatives.

`(e) Enforcement of Regulations- Each Federal agency that promulgates under subsection (c) a regulation of conduct with respect to a regulated allowance derivative shall have

the same authority to enforce compliance with the regulation as the Commodity Futures Trading Commission has to enforce compliance with any regulation of similar conduct with

respect to a contract, agreement, or transaction over which the Commodity Futures Trading Commission has jurisdiction, except that any enforcement by the Federal Energy

Regulatory Commission shall be pursuant to section 222 and Part III.

`(f) Prohibition on Price or Market Manipulation, Fraud, and False or Misleading Statements or Reports- (1) It shall be a felony punishable by a fine of not more than $25,000,000

(or $5,000,000 in the case of a person who is an individual) or imprisonment for not more than 20 years, or both, together with the costs of prosecution for any person, directly or

indirectly--

`(A) in connection with a transaction involving a regulated instrument, to knowingly--

`(i) use any manipulative or deceptive device or contrivance in violation of regulations promulgated pursuant to this section;

`(ii) corner or attempt to corner the regulated instrument; or

`(iii) cheat or defraud, or attempt to cheat or defraud, any other person;

`(B) to knowingly deliver or cause to be delivered a false, misleading, or inaccurate report concerning information or conditions that affect or tend to affect the price of a

regulated instrument;

`(C) to knowingly make, or cause to be made, in an application, report, or document required to be filed under any regulation promulgated pursuant to this section, a statement

which is false or misleading with respect to a material fact, or to omit any material fact required to be stated therein or necessary to make the statements therein not misleading; or

`(D) to knowingly falsify, conceal, or cover up by any trick, scheme, or artifice a material fact, make any false, fictitious, or fraudulent statements or representations, or make or

use any false writing or document that contains a false, fictitious, or fraudulent statement or entry, to an entity on or through which transactions in regulated instruments occur, or are

settled or cleared, acting in furtherance of its official duties under this section or regulations promulgated under this section.

`(2) If a person is found guilty of a felony established in paragraph (1), the person may be prohibited from holding or trading regulated instruments for a period of not more than 5

years pursuant to the regulations promulgated under this section, except that, if the person is a covered entity, the person shall be allowed to hold sufficient regulated allowances to

meet its compliance obligations.

`(g) Relation to State Law- Nothing in this section shall preclude, diminish or qualify any authority of a State or political subdivision thereof to adopt or enforce any unfair

competition, antitrust, consumer protection, securities, commodities or any other law or regulation, except that no such State law or regulation may relieve any person of any

requirement otherwise applicable under this section.

`(h) Market Reports-

`(1) COLLECTION AND ANALYSIS OF INFORMATION- The Commission, in conjunction with the Federal agency with jurisdiction over regulated allowance derivatives pursuant

to subsection (c)(1), shall, on a continuous basis, collect and analyze the following information on the functioning of the markets for regulated instruments established under this part:

`(A) The status of, and trends in, the markets, including prices, trading volumes, transaction types, and trading channels and mechanisms.

`(B) Spikes, collapses, and volatility in prices of regulated instruments, and the causes therefor.

`(C) The relationship between the market for regulated allowances and allowance derivatives, and the spot and futures markets for energy commodities, including

electricity.

`(D) Evidence of fraud or manipulation in any such market, the effects on any such market of any such fraud or manipulation (or threat of fraud or manipulation) that the

Commission, in conjunction with the Federal agency, has identified, and the effectiveness of corrective measures undertaken by the Commission, in conjunction with the Federal

agency, to address the fraud, manipulation, or threat.

`(E) The economic effects of the markets, including to macro- and micro-economic effects of unexpected significant increases and decreases in the price of regulated

instruments.

`(F) Any changes in the roles, activities, or strategies of various market participants.

`(G) Regional, industrial, and consumer responses to the markets, and energy investment responses to the markets.

`(H) Any other issue related to the markets that the Commission, in conjunction with the entities, deems appropriate.

`(2) ANNUAL REPORTS TO THE CONGRESS- Not later than 1 month after the end of each calendar year, the Commission, in conjunction with the Federal agency, shall

submit to the President, the Committee on Energy and Commerce of the House of Representatives, and the Committee on Energy and Natural Resources of the Senate, and make

available to the public, a report on the matters described in paragraph (1) with respect to the year, including recommendations for any administrative or statutory measures the

Commission, in conjunction with the Federal agency, considers necessary to address any threats to the transparency, fairness, or integrity of the markets in regulated instruments.

`SEC. 402. APPLICABILITY OF PART III PROVISIONS.

`(a) Sections 301, 304, and 306- Sections 301, 304, and 306 shall not apply to this part.

`(b) Sections 307, 309, and 314- Sections 307, 309, and 314 shall only apply to section 401(c) to the extent that the Commission is delegated authority to promulgate regulations

for the establishment, operation, and oversight of markets for regulated allowance derivatives (as defined in section 401). If the Commission is not delegated authority to promulgate

regulations for the establishment, operation, and oversight of markets for regulated allowance derivatives, sections 307, 309, and 314 shall not apply to section 401(f) in the case of

regulated allowance derivatives.

`(c) Section 315- In applying section 315(a) to this part, the words `person or entity' shall be substituted for the words `licensee or public utility'. In applying section 315(b) to this

part, the words `an entity' shall be substituted for the words `a licensee or public utility' and the words `such entity' shall be substituted for the words `such licensee or public utility.'

`(d) Section 316- Section 316(a) shall not apply to section 401(f).'.

Subtitle E--Additional Market Assurance

SEC. 351. REGULATION OF CERTAIN TRANSACTIONS IN DERIVATIVES INVOLVING ENERGY COMMODITIES.

(a) Energy Commodity Defined- Section 1a of the Commodity Exchange Act (7 U.S.C. 1a) is amended--

(1) in paragraph (14), by inserting `, an energy commodity,' after `excluded commodity';

(2) by redesignating paragraphs (13) through (21) and paragraphs (22) through (34) as paragraphs (14) through (22) and paragraphs (24) through (36), respectively;

(3) by inserting after paragraph (12) the following:

`(13) ENERGY COMMODITY- The term `energy commodity' means--

`(A) coal;

`(B) crude oil, gasoline, diesel fuel, jet fuel, heating oil, and propane;

`(C) electricity (excluding financial transmission rights which are subject to regulation and oversight by the Federal Energy Regulatory Commission);

`(D) natural gas; and

`(E) any other substance (other than an excluded commodity, a metal, or an agricultural commodity) that is used as a source of energy, as the Commission, in its discretion,

deems appropriate.'; and

(4) by inserting after paragraph (22) (as so redesignated by paragraph (2) of this subsection) the following:

`(23) INCLUDED ENERGY TRANSACTION- The term `included energy transaction' means a contract, agreement, or transaction in an energy commodity for future delivery that

provides for a delivery point of the energy commodity in the United States or a territory or possession of the United States, or that is offered or transacted on or through a computer

terminal located in the United States.'.

(b) Extension of Regulatory Authority to Swaps Involving Energy Transactions- Section 2(g) of such Act (7 U.S.C. 2(g)) is amended by inserting `or an energy commodity' after

`agricultural commodity'.

(c) Elimination of Exemption for Over-the-Counter Swaps Involving Energy Commodities- Section 2(h)(1) of such Act (7 U.S.C. 2(h)(1)) is amended by inserting `(other than an

energy commodity)' after `exempt commodity'.

(d) Extension of Regulatory Authority to Included Energy Transactions on Foreign Boards of Trade- Section 4 of such Act (7 U.S.C. 6) is amended--

(1) in subsection (a), by inserting `, and which is not an included energy transaction' after `territories or possessions' the 2nd place it appears; and

(2) in subsection (b), by adding at the end the following: `The preceding sentence shall not apply with respect to included energy transactions.'.

(e) Limitation of General Exemptive Authority of the CFTC With Respect to Included Energy Transactions-

(1) IN GENERAL- Section 4(c) of such Act (7 U.S.C. 6(c)) is amended by adding at the end the following:

`(6) The Commission may not exempt any included energy transaction from the requirements of subsection (a), unless the Commission provides 60 days advance notice to the

Congress and the Position Limit Energy Advisory Group and solicits public comment about the exemption request and any proposed Commission action.'.

(2) NULLIFICATION OF NO-ACTION LETTER EXEMPTIONS TO CERTAIN REQUIREMENTS APPLICABLE TO INCLUDED ENERGY TRANSACTIONS- Beginning 180 days after

the date of the enactment of this Act, any exemption provided by the Commodity Futures Trading Commission that has allowed included energy transactions (as defined in section

1a(13) of the Commodity Exchange Act) to be conducted without regard to the requirements of section 4(a) of such Act shall be null and void.

(f) Requirement to Establish Uniform Speculative Position Limits for Energy Transactions-

(1) IN GENERAL- Section 4a(a) of such Act (7 U.S.C. 6a(a)) is amended--

(A) by inserting `(1)' after `(a)';

(B) by inserting after the 2nd sentence the following: `With respect to energy transactions, the Commission shall fix limits on the aggregate number of positions which may

be held by any person for each month across all markets subject to the jurisdiction of the Commission.';

(C) in the 4th sentence by inserting `, consistent with the 3rd sentence,' after `Commission'; and

(D) by adding after and below the end the following:

`(2)(A) Not later than 60 days after the date of the enactment of this paragraph, the Commission shall convene a Position Limit Energy Advisory Group consisting of

representatives from--

`(i) 7 predominantly commercial short hedgers of the actual energy commodity for future delivery;

`(ii) 7 predominantly commercial long hedgers of the actual energy commodity for future delivery;

`(iii) 4 non-commercial participants in markets for energy commodities for future delivery; and

`(iv) each designated contract market or derivatives transaction execution facility upon which a contract in the energy commodity for future delivery is traded, and each electronic

trading facility that has a significant price discovery contract in the energy commodity.

`(B) Not later than 60 days after the date on which the advisory group is convened under subparagraph (A), and annually thereafter, the advisory group shall submit to the

Commission advisory recommendations regarding the position limits to be established in paragraph (1).

`(C) The Commission shall have exclusive authority to grant exemptions for bona fide hedging transactions and positions from position limits imposed under this Act on energy

transactions.'.

(2) CONFORMING AMENDMENTS-

(A) SIGNIFICANT PRICE DISCOVERY CONTRACTS- Section 2(h)(7) of such Act (7 U.S.C. 2(h)(7)) is amended--

(i) in subparagraph (A)--

(I) by inserting `of this paragraph and section 4a(a)' after `(B) through (D)'; and

(II) by inserting `of this paragraph' before the period; and

(ii) in subparagraph (C)(ii)(IV)--

(I) in the heading, by striking `LIMITATIONS OR'; and

(II) by striking `position limitations or'.

(B) CONTRACTS TRADED ON OR THROUGH DESIGNATED CONTRACT MARKETS- Section 5(d)(5) of such Act (7 U.S.C. 7(d)(5)) is amended--

(i) in the heading by striking `LIMITATIONS OR'; and

(ii) by striking `position limitations or'.

(C) CONTRACTS TRADED ON OR THROUGH DERIVATIVES TRANSACTION EXECUTION FACILITIES- Section 5a(d)(4) of such Act (7 U.S.C. 7a(d)(4)) is amended--

(i) in the heading by striking `LIMITATIONS OR'; and

(ii) by striking `position limits or'.

(g) Elimination of the Swaps Loophole- Section 4a(c) of such Act (7 U.S.C. 6a(c)) is amended--

(1) by inserting `(1)' after `(c)'; and

(2) by adding after and below the end the following:

`(2) For the purposes of contracts of sale for future delivery and options on such contracts or commodities, the Commission shall define what constitutes a bona fide hedging

transaction or position as a transaction or position that--

`(A)(i) represents a substitute for transactions made or to be made or positions taken or to be taken at a later time in a physical marketing channel;

`(ii) is economically appropriate to the reduction of risks in the conduct and management of a commercial enterprise; and

`(iii) arises from the potential change in the value of--

`(I) assets that a person owns, produces, manufactures, processes, or merchandises or anticipates owning, producing, manufacturing, processing, or merchandising;

`(II) liabilities that a person owns or anticipates incurring; or

`(III) services that a person provides, purchases, or anticipates providing or purchasing; or

`(B) reduces risks attendant to a position resulting from a transaction that--

`(i) was executed pursuant to subsection (d), (g), (h)(1), or (h)(2) of section 2, or an exemption issued by the Commission by rule, regulation or order; and

`(ii) was executed opposite a counterparty for which the transaction would qualify as a bona fide hedging transaction pursuant to paragraph (2)(A) of this subsection.'.

(h) Detailed Reporting and Disaggregation of Market Data- Section 4 of such Act (7 U.S.C. 6) is amended by adding at the end the following:

`(e) Detailed Reporting and Disaggregation of Market Data-

`(1) INDEX TRADERS AND SWAP DEALERS REPORTING- The Commission shall issue a proposed rule defining and classifying index traders and swap dealers (as those

terms are defined by the Commission) for purposes of data reporting requirements and setting routine detailed reporting requirements for any positions of such entities in contracts

traded on designated contract markets, over-the-counter markets, derivatives transaction execution facilities, foreign boards of trade subject to section 4(f), and electronic trading

facilities with respect to significant price discovery contracts not later than 120 days after the date of the enactment of this subsection, and issue a final rule within 180 days after such

date of enactment.

`(2) DISAGGREGATION OF INDEX FUNDS AND OTHER DATA IN MARKETS- Subject to section 8 and beginning within 60 days of the issuance of the final rule required by

paragraph (1), the Commission shall disaggregate and make public weekly--

`(A) the number of positions and total notional value of index funds and other passive, long-only and short-only positions (as defined by the Commission) in all markets to

the extent such information is available; and

`(B) data on speculative positions relative to bona fide physical hedgers in those markets to the extent such information is available.

`(3) DISCLOSURE OF IDENTITY OF HOLDERS OF POSITIONS IN INDEXES IN EXCESS OF POSITION LIMITS- The Commission shall include in its weekly Commitment of

Trader reports the identity of each person who holds a position in an index in excess of a limit imposed under section 4i.'.

(i) Authority to Set Limits to Prevent Excessive Speculation in Indexes-

(1) IN GENERAL- Section 4a of such Act (7 U.S.C. 6a) is amended by adding at the end the following:

`(f) The provisions of this section shall apply to the amounts of trading which may be done or positions which may be held by any person under contracts of sale of an index for

future delivery on or subject to the rules of any contract market, derivatives transaction execution facility, or over-the-counter market, or on an electronic trading facility with respect to a

significant price discovery contract, in the same manner in which this section applies to contracts of sale of a commodity for future delivery.'.

(2) REGULATIONS- The Commodity Futures Trading Commission shall issue regulations under section 4a(f) of the Commodity Exchange Act within 180 days after the date of

the enactment of this Act.

SEC. 352. NO EFFECT ON AUTHORITY OF THE FEDERAL ENERGY REGULATORY COMMISSION.

Section 2 of the Commodity Exchange Act (7 U.S.C. 2) is amended by adding at the end the following:.

`(j) This Act shall not be interpreted to affect the jurisdiction of the Federal Energy Regulatory Commission with respect to the authority of the Federal Energy Regulatory

Commission under the Federal Power Act (16 U.S.C. 791a et seq.), the Natural Gas Act (15 U.S.C. 717 et seq.), or other law to obtain information, carry out enforcement actions, or

otherwise carry out the responsibilities of the Federal Energy Regulatory Commission.'.

SEC. 353. INSPECTOR GENERAL OF THE COMMODITY FUTURES TRADING COMMISSION.

(a) Elevation of Office-

(1) INCLUSION OF CFTC IN DEFINITION OF ESTABLISHMENT-

(A) Section 12(1) of the Inspector General Act of 1978 (5 U.S.C. App.) is amended by striking `or the Federal Cochairpersons of the Commissions established under section

15301 of title 40, United States Code;' and inserting `the Federal Cochairpersons of the Commissions established under section 15301 of title 40, United States Code; or the

Chairman of the Commodity Futures Trading Commission;'.

(B) Section 12(2) of the Inspector General Act of 1978 (5 U.S.C. App.) is amended by striking `or the Commissions established under section 15301 of title 40, United States

Code,' and inserting `the Commissions established under section 15301 of title 40, United States Code, or the Commodity Futures Trading Commission,'.

(2) EXCLUSION OF CFTC FROM DEFINITION OF DESIGNATED FEDERAL ENTITY- Section 8G(a)(2) of the Inspector General Act of 1978 (5 U.S.C. App.) is amended by striking

`the Commodity Futures Trading Commission,'.

(b) Effective Date; Transition Rule-

(1) EFFECTIVE DATE- The amendments made by this section shall take effect 30 days after the date of the enactment of this Act.

(2) TRANSITION RULE- An individual serving as Inspector General of the Commodity Futures Trading Commission on the effective date of this section pursuant to an

appointment made under section 8G of the Inspector General Act of 1978 (5 U.S.C. App.)--

(A) may continue so serving until the President makes an appointment under section 3(a) of such Act consistent with the amendments made by this section; and

(B) shall, while serving under subparagraph (A), remain subject to the provisions of section 8G of such Act which apply with respect to the Commodity Futures Trading

Commission.

SEC. 354. SETTLEMENT AND CLEARING THROUGH REGISTERED DERIVATIVES CLEARING ORGANIZATIONS.

(a) In General-

(1) APPLICATION TO EXCLUDED DERIVATIVE TRANSACTIONS-

(A) Section 2(d)(1) of the Commodity Exchange Act (7 U.S.C. 2(d)(1)) is amended--

(i) by striking `and' at the end of subparagraph (A);

(ii) by striking the period at the end of subparagraph (B) and inserting `; and'; and

(iii) by adding at the end the following:

`(C) except as provided in section 4(f), the agreement, contract, or transaction is settled and cleared through a derivatives clearing organization registered with the

Commission.'.

(B) Section 2(d)(2) of such Act (7 U.S.C. 2(d)(2)) is amended--

(i) by striking `and' at the end of subparagraph (B);

(ii) by striking the period at the end of subparagraph (C) and inserting `; and'; and

(iii) by adding at the end the following:

`(D) except as provided in section 4(f), the agreement, contract, or transaction is settled and cleared through a derivatives clearing organization registered with the

Commission.'.

(2) APPLICATION TO CERTAIN SWAP TRANSACTIONS- Section 2(g) of such Act (7 U.S.C. 2(g)) is amended--

(A) by striking `and' at the end of paragraph (2);

(B) by striking the period at the end of paragraph (3) and inserting `; and'; and

(C) by adding at the end the following:

`(4) except as provided in section 4(f), settled and cleared through a derivatives clearing organization registered with the Commission.'.

(3) APPLICATION TO CERTAIN TRANSACTIONS IN EXEMPT COMMODITIES-

(A) Section 2(h)(1) of such Act ( 7 U.S.C. 2(h)(1)) is amended--

(i) by striking `and' at the end of subparagraph (A);

(ii) by striking the period at the end of subparagraph (B) and inserting `; and'; and

(iii) by adding at the end the following:

`(C) except as provided in section 4(f), is settled and cleared through a derivatives clearing organization registered with the Commission.'.

(B) Section 2(h)(3) of such Act (7 U.S.C. 2(h)(3)) is amended--

(i) by striking `and' at the end of subparagraph (A);

(ii) by striking the period at the end of subparagraph (B) and inserting `; and'; and

(iii) by adding at the end the following:

`(C) except as provided in section 4(f), settled and cleared through a derivatives clearing organization registered with the Commission.'.

(4) GENERAL EXEMPTIVE AUTHORITY- Section 4(c)(1) of such Act (7 U.S.C. 6(c)(1)) is amended by inserting `the agreement, contract, or transaction, except as provided in

section 4(h), will be settled and cleared through a derivatives clearing organization registered with the Commission and' before `the Commission determines'.

(5) CONFORMING AMENDMENT RELATING TO SIGNIFICANT PRICE DISCOVERY CONTRACTS- Section 2(h)(7)(D) of such Act (7 U.S.C. 2(h)(7)(D)) is amended by striking the

designation and heading for the subparagraph and all that follows through `As part of' and inserting the following:

`(D) REVIEW OF IMPLEMENTATION- As part of'.

(b) Alternatives to Clearing Through Designated Clearing Organizations- Section 4 of such Act (7 U.S.C. 6), as amended by section 351(h) of this Act, is amended by adding at the

end the following:

`(f) Alternatives to Clearing Through Designated Clearing Organizations-

`(1) SETTLEMENT AND CLEARING THROUGH CERTAIN OTHER REGULATED ENTITIES- An agreement, contract, or transaction, or class thereof, relating to an excluded

commodity, that would otherwise be required to be settled and cleared by section 2(d)(1)(C), 2(d)(2)(D), 2(g)(4), 2(h)(1)(C), or 2(h)(3)(C) of this Act, or subsection (c)(1) of this section

may be settled and cleared through an entity listed in subsections (a) or (b) of section 409 of the Federal Deposit Insurance Corporation Improvement Act of 1991.

`(2) WAIVER OF CLEARING REQUIREMENT-

`(A) The Commission, in its discretion, may exempt an agreement, contract, or transaction, or class thereof, that would otherwise be required by section 2(d)(1)(C),

2(d)(2)(D), 2(g)(4), 2(h)(1)(C), or 2(h)(3)(C) of this Act, or subsection (c)(1) of this section to be settled and cleared through a derivatives clearing organization registered with the

Commission from such requirement.

`(B) In granting exemptions pursuant to subparagraph (A), the Commission shall consult with the Securities and Exchange Commission and the Board of Governors of the

Federal Reserve System regarding exemptions that relate to excluded commodities or entities for which the Securities Exchange Commission or the Board of Governors of the

Federal Reserve System serve as the primary regulator.

`(C) Before granting an exemption pursuant to subparagraph (A), the Commission shall find that the agreement, contract, or transaction, or class thereof--

`(i) is highly customized as to its material terms and conditions;

`(ii) is transacted infrequently;

`(iii) does not serve a significant price-discovery function in the marketplace; and

`(iv) is being entered into by parties who can demonstrate the financial integrity of the agreement, contract, or transaction and their own financial integrity, as such terms

and standards are determined by the Commission. The standards may include, with respect to any federally regulated financial entity for which net capital requirements are imposed,

a net capital requirement associated with any agreement, contract, or transaction subject to an exemption from the clearing requirement that is higher than the net capital requirement

that would be associated with such a transaction were it cleared

`(D) Any agreement, contract, or transaction, or class thereof, which is exempted pursuant to subparagraph (A) shall be reported to the Commission in a manner

designated by the Commission, or to such other entity the Commission deems appropriate.

`(E) The Commission, the Securities and Exchange Commission and the Board of Governors of the Federal Reserve System shall enter into a memorandum of

understanding by which the information reported to the Commission pursuant to subparagraph (D) with regard to excluded commodities or entities for which the Securities Exchange

Commission or the Board of Governors of the Federal Reserve System serve as the primary regulator may be provided to the other agencies.

`(g) Spot and Forward Exclusion- The settlement and clearing requirements of section 2(d)(1)(C), 2(d)(2)(D), 2(g)(4), 2(h)(1)(C), 2(h)(3)(C), or 4(c)(1) shall not apply to an

agreement, contract, or transaction of any cash commodity for immediate or deferred shipment or delivery, as defined by the Commission.'.

(c) Additional Requirements Applicable to Applicants for Registration as a Derivative Clearing Organization- Section 5b(c)(2) of such Act (7 U.S.C. 7a-1(c)(2)) is amended by

adding at the end the following:

`(O) DISCLOSURE OF GENERAL INFORMATION- The applicant shall disclose publicly and to the Commission information concerning--

`(i) the terms and conditions of contracts, agreements, and transactions cleared and settled by the applicant;

`(ii) the conventions, mechanisms, and practices applicable to the contracts, agreements, and transactions;

`(iii) the margin-setting methodology and the size and composition of the financial resource package of the applicant; and

`(iv) other information relevant to participation in the settlement and clearing activities of the applicant.

`(P) DAILY PUBLICATION OF TRADING INFORMATION- The applicant shall make public daily information on settlement prices, volume, and open interest for contracts

settled or cleared pursuant to the requirements of section 2(d)(1)(C), 2(d)(2)(D), 2(g)(4), 2(h)(1)(C), 2(h)(3)(C) or 4(c)(1) of this Act by the applicant if the Commission determines that

the contracts perform a significant price discovery function for transactions in the cash market for the commodity underlying the contracts.

`(Q) FITNESS STANDARDS- The applicant shall establish and enforce appropriate fitness standards for directors, members of any disciplinary committee, and members of

the applicant, and any other persons with direct access to the settlement or clearing activities of the applicant, including any parties affiliated with any of the persons described in this

subparagraph.'.

(d) Amendments-

(1) Section 409 of the Federal Deposit Insurance Corporation Improvement Act of 1991 (12 U.S.C. 4422) is amended by adding at the end the following:

`(c) Clearing Requirement- A multilateral clearing organization described in subsections (a) or (b) of this section shall comply with requirements similar to the requirements of

sections 5b and 5c of the Commodity Exchange Act.'.

(2) Section 407 of the Legal Certainty for Bank Products Act of 2000 (7 U.S.C. 27e) is amended by inserting `and the settlement and clearing requirements of sections

2(d)(1)(C), 2(d)(2)(D), 2(g)(4), 2(h)(1)(C), 2(h)(3)(C), and 4(c)(1) of such Act' after `the clearing of covered swap agreements'.

(e) Effective Date- The amendments made by this section shall take effect 150 days after the date of the enactment of this Act.

(f) Transition Rule- Any agreement, contract, or transaction entered into before the date of the enactment of this Act or within 150 days after such date of enactment, in reliance on

subsection (d), (g), (h)(1), or (h)(3) of section 2 of the Commodity Exchange Act or any other exemption issued by the Commission Futures Trading Commission by rule, regulation, or

order shall, within 90 days after such date of enactment, unless settled and cleared through an entity registered with the Commission as a derivatives clearing organization or another

clearing entity pursuant to section 4(f) of such Act, be reported to the Commission in a manner designated by the Commission, or to such other entity as the Commission deems

appropriate.

SEC. 355. LIMITATION ON ELIGIBILITY TO PURCHASE A CREDIT DEFAULT SWAP.

(a) In General- Section 4c of the Commodity Exchange Act (7 U.S.C. 6c) is amended by adding at the end the following:

`(h) Limitation on Eligibility to Purchase a Credit Default Swap- It shall be unlawful for any person to enter into a credit default swap unless the person--

`(1) owns a credit instrument which is insured by the credit default swap;

`(2) would experience financial loss if an event that is the subject of the credit default swap occurs with respect to the credit instrument; and

`(3) meets such minimum capital adequacy standards as may be established by the Commission, in consultation with the Board of Governors of the Federal Reserve System,

or such more stringent minimum capital adequacy standards as may be established by or under the law of any State in which the swap is originated or entered into, or in which

possession of the contract involved takes place.'.

(b) Elimination of Preemption of State Bucketing Laws Regarding Naked Credit Default Swaps- Section 12(e)(2)(B) of such Act (7 U.S.C. 16(e)(2)(B)) is amended by inserting

`(other than a credit default swap in which the purchaser of the swap would not experience financial loss if an event that is the subject of the swap occurred)' before `that is excluded'.

(c) Definition of Credit Default Swap- Section 1a of such Act (7 U.S.C. 1a), as amended by section 351(a) of this Act, is amended by adding at the end the following:

`(37) CREDIT DEFAULT SWAP- The term `credit default swap' means a contract which insures a party to the contract against the risk that an entity may experience a loss of

value as a result of an event specified in the contract, such as a default or credit downgrade. A credit default swap that is traded on or cleared by a registered entity shall be excluded

from the definition of a security as defined in this Act and in section 2(a)(1) of the Securities Act of 1933 or section 3(a)(10) of the Securities Exchange Act of 1934, except it shall be

deemed a security solely for purpose of enforcing prohibitions against insider trading in sections 10 and 16 of the Securities Exchange Act of 1934.'.

(d) Effective Date- The amendments made by this section shall be effective for credit default swaps (as defined in section 1a(37) of the Commodity Exchange Act) entered into after

60 days after the date of the enactment of this section.

SEC. 356. TRANSACTION FEES.

(a) In General- Section 12 of the Commodity Exchange Act (7 U.S.C. 16) is amended by redesignating subsections (e), (f), and (g) as subsections (f), (g), and (h), respectively, and

inserting after subsection (d) the following:

`(e) Clearing Fees-

`(1) IN GENERAL- The Commission shall, in accordance with this subsection, charge and collect from each registered clearing organization, and each such organization shall

pay to the Commission, transaction fees at a rate calculated to recover the costs to the Federal Government of the supervision and regulation of futures markets, except those directly

related to enforcement.

`(2) FEES ASSESSED PER SIDE OF CLEARED CONTRACTS-

`(A) IN GENERAL- The Commission shall determine the fee rate referred to in paragraph (1), and shall apply the fee rate per side of any transaction cleared.

`(B) AUTHORITY TO DELEGATE- The Commission may determine the procedures by which the fee rate is to be applied on the transactions subject to the fee, or delegate

the authority to make the determination to any appropriate derivatives clearing organization.

`(3) EXEMPTIONS- The Commission may not impose a fee under paragraph (1) on--

`(A) a class of contracts or transactions if the Commission finds that it is in the public interest to exempt the class from the fee; or

`(B) a contract or transaction cleared by a registered derivatives clearing organization that is--

`(i) subject to fees under section 31 of the Securities Exchange Act of 1934; or

`(ii) a security as defined in the Securities Act of 1933 or the Securities Exchange Act of 1934.

`(4) DATES FOR PAYMENT OF FEES- The fees imposed under paragraph (1) shall be paid on or before--

`(A) March 15 of each year, with respect to transactions occurring on or after the preceding September 1 and on or before the preceding December 31; and

`(B) September 15 of each year, with respect to transactions occurring on or after the preceding January 1 and on or before the preceding August 31.

`(5) ANNUAL ADJUSTMENT OF FEE RATES-

`(A) IN GENERAL- Not later than April 30 of each fiscal year , the Commission shall, by order, adjust each fee rate determined under paragraph (2) for the fiscal year to a

uniform adjusted rate that, when applied to the estimated aggregate number of cleared sides of transactions for the fiscal year, is reasonably likely to produce aggregate fee receipts

under this subsection for the fiscal year equal to the target offsetting receipt amount for the fiscal year.

`(B) DEFINITIONS- In subparagraph (A):

`(i) ESTIMATED AGGREGATE NUMBER OF CLEARED SIDES OF TRANSACTIONS- The term `estimated aggregate number of cleared sides of transactions' means, with

respect to a fiscal year, the aggregate number of cleared sides of transactions to be cleared by registered derivatives clearing organizations during the fiscal year, as estimated by the

Commission, after consultation with the Office of Management and Budget, using the methodology required for making projections pursuant to section 257 of the Balanced Budget

and Emergency Deficit Control Act of 1985.

`(ii) TARGET OFFSETTING RECEIPT AMOUNT- The term `target offsetting receipt amount' means, with respect to a fiscal year, the total level of Commission budget

authority for all non-enforcement activities of the Commission, as contained in the regular appropriations Acts for the fiscal year.

`(C) NO JUDICIAL REVIEW- An adjusted fee rate prescribed under subparagraph (A) shall not be subject to judicial review.

`(6) PUBLICATION- Not later than April 30 of each fiscal year, the Commission shall cause to be published in the Federal Register notices of the fee rates applicable under this

subsection for the succeeding fiscal year, and any estimate or projection on which the fee rates are based.

`(7) INAPPLICABILITY OF CERTAIN PROCEDURAL RULES- Section 553 of title 5, United States Code, shall not apply with respect to any exercise of authority under this

subsection.

`(8) ESTABLISHMENT OF FUTURES AND OPTIONS TRANSACTION FEE ACCOUNT; DEPOSIT OF FEES- There is established in the Treasury of the United States an account

which shall be known as the `Futures and Options Transaction Fee Account'. All fees collected under this subsection for a fiscal year shall be deposited in the account. Amounts in

the account are authorized to be appropriated to fund the expenditures of the Commission.'.

(b) Effective Date- The amendments made by subsection (a) shall apply to fiscal years beginning 30 or more days after the date of the enactment of this Act.

(c) Transition Rule- If this section becomes law after March 31 and before September 1 of a fiscal year, then paragraphs (5)(A) and (6) of section 12(e) of the Commodity Exchange

Act shall be applied, in the case of the 1st fiscal year beginning after the date of the enactment of this Act, by substituting `August 31' for `April 30'.

SEC. 357. NO EFFECT ON AUTHORITY OF THE FEDERAL TRADE COMMISSION.

Nothing in this subtitle shall be interpreted to affect or diminish the jurisdiction or authority of the Federal Trade Commission with respect to its authorities under the Federal Trade

Commission Act (15 U.S.C. 41 et seq.) or the Energy Independence and Security Act of 2007 (Public Law 110-140) to obtain information, to carry out enforcement activities or

otherwise carry out the responsibilities of the Federal Trade Commission.

SEC. 358. REGULATION OF CARBON DERIVATIVES MARKETS.

(a) Default Rule- Section 2 of the Commodity Exchange Act (7 U.S.C. 2), as amended by section 352 of this Act, is amended by adding at the end the following:

`(k) The Commission shall have jurisdiction over the establishment, operations, and oversight of markets for regulated allowance derivatives (as defined in section 401 of the

Federal Power Act (16 U.S.C. 791a and following)), and shall provide for the establishment, operation, and oversight of the markets in accordance with the same regulations that

apply under this Act to included energy transactions.'.

(b) Presidential Determinations- To the extent that the President delegates the authority to promulgate regulations for the establishment, operation, and oversight of all markets for

regulated allowance derivatives to a Federal agency other than the Commodity Futures Trading Commission pursuant to section 401 of the Federal Power Act, such determination

shall supersede subsection (a). To the extent that the President determines that regulations promulgated pursuant to section 401(c)(2) of the Federal Power Act would provide for

more stringent and effective market oversight, such regulations shall supersede subsection (a). Nothing in this section shall be construed to affect the operation of the default rules

established in section 401(c)(4) of the Federal Power Act.

SEC. 359. CEASE-AND-DESIST AUTHORITY.

(a) Natural Gas Act- Section 20 of the Natural Gas Act (15 U.S.C. 717s) is amended by adding the following at the end:

`(e) Cease-and-Desist Proceedings; Temporary Orders; Authority of the Commission-

`(1) IN GENERAL- If the Commission finds, after notice and opportunity for hearing, that any entity may be violating, may have violated, or may be about to violate any provision of

this Act, or any rule, regulation, restriction, condition, or order made or imposed by the Commission under the authority of this Act, the Commission may publish its findings and issue

an order requiring such entity, and any other entity that is, was, or would be a cause of the violation, due to an act or omission the entity knew or should have known would contribute

to such violation, to cease and desist from committing or causing such violation and any future violation of the same provision, rule, or regulation. Such order may, in addition to

requiring an entity to cease and desist from committing or causing a violation, require such entity to comply, to provide an accounting and disgorgement, or to take steps to effect

compliance, with such provision, rule, or regulation, upon such terms and conditions and within such time as the Commission may specify in such order. Any such order may, as the

Commission deems appropriate, require future compliance or steps to effect future compliance, either permanently or for such period of time as the Commission may specify.

`(2) TIMING OF ENTRY- An order issued under this subsection shall be entered only after notice and opportunity for a hearing, unless the Commission determines that notice

and hearing prior to entry would be impracticable or contrary to the public interest.

`(f) Hearing- The notice instituting proceedings pursuant to subsection (e) shall fix a hearing date not earlier than 30 days nor later than 60 days after service of the notice unless

an earlier or a later date is set by the Commission with the consent of any respondent so served.

`(g) Temporary Order- Whenever the Commission determines that---

`(1) a respondent may take actions to dissipate or convert assets prior to the completion of the proceedings referred to in subsection (e), and such assets would be necessary

to comply with or otherwise satisfy a final enforcement order of the Commission pursuant to alleged violations or threatened violations specified in the notice instituting proceedings;

or

`(2) a respondent is engaged in actual or threatened violations of this Act or a Commission rule, regulation, restriction or order referred to in subsection (e),

the Commission may issue a temporary order requiring the respondent to take such action to prevent dissipation or conversion of assets, significant harm to energy consumers,

or substantial harm to the public interest, frustration of the Commission's ability to conduct the proceedings, or frustration of the Commission's ability to redress said violation at the

conclusion of the proceedings, as the Commission deems appropriate pending completion of such proceedings.

`(h) Review of Temporary Orders-

`(1) COMMISSION REVIEW- At any time after the respondent has been served with a temporary cease-and-desist order pursuant to subsection (g), the respondent may apply to

the Commission to have the order set aside, limited, or suspended. If the respondent has been served with a temporary cease-and-desist order entered without a prior Commission

hearing, the respondent may, within 10 days after the date on which the order was served, request a hearing on such application and the Commission shall hold a hearing and

render a decision on such application at the earliest possible time.

`(2) JUDICIAL REVIEW- Within--

`(A) 10 days after the date the respondent was served with a temporary cease-and-desist order entered with a prior Commission hearing; or

`(B) 10 days after the Commission renders a decision on an application and hearing under paragraph (1),

with respect to any temporary cease-and-desist order entered without a prior Commission hearing, the respondent may apply to the United States district court for the district in

which the respondent resides or has its principal place of business, or for the District of Columbia, for an order setting aside, limiting, or suspending the effectiveness or enforcement

of the order, and the court shall have jurisdiction to enter such an order. A respondent served with a temporary cease-and-desist order entered without a prior Commission hearing

may not apply to the court except after hearing and decision by the Commission on the respondent's application under paragraph (1) of this subsection.

`(3) NO AUTOMATIC STAY OF TEMPORARY ORDER- The commencement of proceedings under paragraph (2) of this subsection shall not, unless specifically ordered by the

court, operate as a stay of the Commission's order.

`(4) EXCLUSIVE REVIEW- Sections 19(d) and 24 shall not apply to a temporary order entered pursuant to this section.

`(i) Implementation- The Commission is authorized to adopt rules, regulations, and orders as it deems appropriate to implement this section.'.

(c) Natural Gas Policy Act of 1978- Section 504 of the Natural Gas Policy Act of 1978 (15 U.S.C. 3414) is amended by adding the following at the end:

`(d) Cease-and-Desist Proceedings; Temporary Orders; Authority of the Commission-

`(1) IN GENERAL- If the Commission finds, after notice and opportunity for hearing, that any entity may be violating, may have violated, or may be about to violate any provision of

this Act, or any rule, regulation, restriction, condition, or order made or imposed by the Commission under the authority of this Act, the Commission may publish its findings and issue

an order requiring such entity, and any other entity that is, was, or would be a cause of the violation, due to an act or omission the entity knew or should have known would contribute

to such violation, to cease and desist from committing or causing such violation and any future violation of the same provision, rule, or regulation. Such order may, in addition to

requiring an entity to cease and desist from committing or causing a violation, require such entity to comply, to provide an accounting and disgorgement, or to take steps to effect

compliance, with such provision, rule, or regulation, upon such terms and conditions and within such time as the Commission may specify in such order. Any such order may, as the

Commission deems appropriate, require future compliance or steps to effect future compliance, either permanently or for such period of time as the Commission may specify.

`(2) TIMING OF ENTRY- An order issued under this subsection shall be entered only after notice and opportunity for a hearing, unless the Commission determines that notice

and hearing prior to entry would be impracticable or contrary to the public interest.

`(3) HEARING- The notice instituting proceedings pursuant to paragraph (1) shall fix a hearing date not earlier than 30 days nor later than 60 days after service of the notice

unless an earlier or a later date is set by the Commission with the consent of any respondent so served.

`(4) TEMPORARY ORDER- Whenever the Commission determines that--

`(A) a respondent may take actions to dissipate or convert assets prior to the completion of the proceedings referred to in paragraph (1) and such assets would be

necessary to comply with or otherwise satisfy a final enforcement order of the Commission pursuant to alleged violations or threatened violations specified in the notice instituting

proceedings; or

`(B) a respondent is engaged in actual or threatened violations of this Act or a Commission rule, regulation, restriction or order referred to in paragraph (1),

the Commission may issue a temporary order requiring the respondent to take such action to prevent dissipation or conversion of assets, significant harm to energy

consumers, or substantial harm to the public interest, frustration of the Commission's ability to conduct the proceedings, or frustration of the Commission's ability to redress said

violation at the conclusion of the proceedings, as the Commission deems appropriate pending completion of such proceedings.

`(5) REVIEW OF TEMPORARY ORDERS-

`(A) COMMISSION REVIEW- At any time after the respondent has been served with a temporary cease-and-desist order pursuant to paragraph (4), the respondent may

apply to the Commission to have the order set aside, limited, or suspended. If the respondent has been served with a temporary cease-and-desist order entered without a prior

Commission hearing, the respondent may, within 10 days after the date on which the order was served, request a hearing on such application and the Commission shall hold a

hearing and render a decision on such application at the earliest possible time.

`(B) JUDICIAL REVIEW- Within--

`(i) 10 days after the date the respondent was served with a temporary cease-and-desist order entered with a prior Commission hearing; or

`(ii) 10 days after the Commission renders a decision on an application and hearing under subparagraph (A), with respect to any temporary cease-and-desist order

entered without a prior Commission hearing, the respondent may apply to the United States district court for the district in which the respondent resides or has its principal place of

business, or for the District of Columbia, for an order setting aside, limiting, or suspending the effectiveness or enforcement of the order, and the court shall have jurisdiction to enter

such an order. A respondent served with a temporary cease-and-desist order entered without a prior Commission hearing may not apply to the court except after hearing and

decision by the Commission on the respondent's application under paragraph (1) of this subsection.

`(C) NO AUTOMATIC STAY OF TEMPORARY ORDER- The commencement of proceedings under subparagraph (B) of this paragraph shall not, unless specifically ordered

by the court, operate as a stay of the Commission's order.

`(6) IMPLEMENTATION- The Commission is authorized to adopt rules, regulations, and orders as it deems appropriate to implement this subsection.'.

TITLE IV--TRANSITIONING TO A CLEAN ENERGY ECONOMY

Subtitle A--Ensuring Real Reductions in Industrial Emissions

SEC. 401. ENSURING REAL REDUCTIONS IN INDUSTRIAL EMISSIONS.

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

`PART F--ENSURING REAL REDUCTIONS IN INDUSTRIAL EMISSIONS

`SEC. 761. PURPOSES.

`(a) Purpose of Part- The purposes of this part are--

`(1) to promote a strong global effort to significantly reduce greenhouse gas emissions, and, through this global effort, stabilize greenhouse gas concentrations in the

atmosphere at a level that will prevent dangerous anthropogenic interference with the climate system; and

`(2) to prevent an increase in greenhouse gas emissions in countries other than the United States as a result of direct and indirect compliance costs incurred under this title.

`(b) Purposes of Subpart 1- The purposes of subpart 1 are additionally--

`(1) to rebate the owners and operators of entities in domestic eligible industrial sectors for their greenhouse gas emission costs incurred under this title, but not for costs

associated with other related or unrelated market dynamics;

`(2) to design such rebates in a way that will prevent carbon leakage while also rewarding innovation and facility-level investments in energy efficiency performance

improvements; and

`(3) to eliminate or reduce distribution of emission allowances under this part when such distribution is no longer necessary to prevent carbon leakage from eligible industrial

sectors.

`SEC. 762. INTERNATIONAL NEGOTIATIONS.

`(a) Finding- Congress finds that the purposes of this part, as set forth in section 761, can be most effectively addressed and achieved through agreements negotiated between

the United States and foreign countries.

`(b) Statement of Policy- It is the policy of the United States to work proactively under the United Nations Framework Convention on Climate Change, and in other appropriate

forums, to establish binding agreements, including sectoral agreements, committing all major greenhouse gas-emitting nations to contribute equitably to the reduction of global

greenhouse gas emissions.

`(c) Notification of Foreign Countries- Not later than January 1, 2020, the President shall notify foreign countries that an International Reserve Allowance Program, as described in

subpart 2, may apply to primary products produced in a foreign country by a sector for which the President has made a determination described in section 767(c).

`SEC. 763. DEFINITIONS.

`In this part:

`(1) CARBON LEAKAGE- The term `carbon leakage' means any substantial increase (as determined by the Administrator) in greenhouse gas emissions by industrial entities

located in other countries if such increase is caused by an incremental cost of production increase in the United States resulting from the implementation of this title.

`(2) ELIGIBLE INDUSTRIAL SECTOR- The term `eligible industrial sector' means an industrial sector determined by the Administrator under section 764(b) to be eligible to

receive emission allowance rebates under subpart 1.

`(3) INDUSTRIAL SECTOR- The term `industrial sector' means any sector that is in the manufacturing sector (as defined in NAICS codes 31, 32, and 33).

`(4) NAICS- The term `NAICS' means the North American Industrial Classification System of 2002.

`(5) OUTPUT- The term `output' means the total tonnage or other standard unit of production (as determined by the Administrator) produced by an entity in an industrial sector.

The output of the cement sector is hydraulic cement, and not clinker.

`(6) PRIMARY PRODUCT- The term `primary product' means a product manufactured by an eligible industrial sector that is--

`(A) iron, steel, steel mill products (including pipe and tube), aluminum, cement, glass (including flat, container, and specialty glass and fiberglass), pulp, paper, chemicals,

or industrial ceramics; or

`(B) any other manufactured product that is sold in bulk for purposes of further manufacture or inclusion in a finished product.

`Subpart 1--Emission Allowance Rebate Program

`SEC. 764. ELIGIBLE INDUSTRIAL SECTORS.

`(a) List-

`(1) INITIAL LIST- Not later than June 30, 2011, the Administrator shall publish in the Federal Register a list of eligible industrial sectors pursuant to subsection (b). Such list

shall include the amount of the emission allowance rebate per unit of production that shall be provided to entities in each eligible industrial sector in the following two calendar years

pursuant to section 765.

`(2) SUBSEQUENT LISTS- Not later than February 1, 2013, and every four years thereafter, the Administrator shall publish in the Federal Register an updated version of the list

published under paragraph (1).

`(b) Eligible Industrial Sectors-

`(1) IN GENERAL- Not later than June 30, 2011, the Administrator shall promulgate a rule designating, based on the criteria under paragraph (2), the industrial sectors eligible

for emission allowance rebates under this subpart.

`(2) PRESUMPTIVELY ELIGIBLE INDUSTRIAL SECTORS-

`(A) ELIGIBILITY CRITERIA- An owner or operator of an entity shall be eligible to receive emission allowance rebates under this subpart if such entity is in an industrial

sector that is included in a six-digit classification of the NAICS that meets the criteria in both clauses (i) and (ii), or the criteria in clause (iii).

`(i) ENERGY OR GREENHOUSE GAS INTENSITY- As determined by the Administrator, the industrial sector had--

`(I) an energy intensity of at least 5 percent, calculated by dividing the cost of purchased electricity and fuel costs of the sector by the value of the shipments of the

sector, based on data described in subparagraph (E); or

`(II) a greenhouse gas intensity of at least 5 percent, calculated by dividing--

`(aa) the number 20 multiplied by the number of tons of carbon dioxide equivalent greenhouse gas emissions (including direct emissions from fuel combustion, process emissions,

and indirect emissions from the generation of electricity used to produce the output of the sector) of the sector based on data described in subparagraph (E); by

`(bb) the value of the shipments of the sector, based on data described in subparagraph (E).

`(ii) TRADE INTENSITY- As determined by the Administrator, the industrial sector had a trade intensity of at least 15 percent, calculated by dividing the value of the total

imports and exports of such sector by the value of the shipments plus the value of imports of such sector, based on data described in subparagraph (E).

`(iii) VERY HIGH ENERGY OR GREENHOUSE GAS INTENSITY- As determined by the Administrator, the industrial sector had an energy or greenhouse gas intensity, as

calculated under clause (i)(I) or (II), of at least 20 percent.

`(B) IRON AND STEEL SECTOR- For purposes of this subpart, in carrying out this section and section 765, the Administrator shall consider as in different industrial

sectors--

`(i) entities using integrated iron and steelmaking technologies (including coke ovens, blast furnaces, and other iron-making technologies); and

`(ii) entities using electric arc furnace technologies.

`(C) METAL AND PHOSPHATE PRODUCTION CLASSIFIED UNDER MORE THAN ONE NAICS CODE- For purposes of this subpart, in carrying out this section and section

765, the Administrator shall--

`(i) aggregate data for the beneficiation or other processing of iron and copper ores and phosphate with subsequent steps in the process of metal and phosphate

manufacturing regardless of the NAICS code under which such activity is classified; and

`(ii) aggregate data for the manufacturing of steel with the manufacturing of steel pipe and tube made from purchased steel in a nonintegrated process.

`(D) EXCLUSION- The petroleum refining sector shall not be an eligible industrial sector.

`(E) DATA SOURCES-

`(i) ELECTRICITY AND FUEL COSTS, VALUE OF SHIPMENTS- The Administrator shall determine electricity and fuel costs and the value of shipments under this

subsection from data from the United States Census of Mineral Industries and the United States Census Annual Survey of Manufacturers. The Administrator shall take the average of

data from as many of the years of 2004, 2005, and 2006 for which such data are available. If such data are unavailable, the Administrator shall make a determination based upon

2002 or 2006 data from the most detailed industrial classification level of Energy Information Agency's Manufacturing Energy Consumption Survey (using 2006 data if it is available)

and the 2002 or 2007 Economic Census of the United States (using 2007 data if it is available). If data from the Manufacturing Energy Consumption Survey are unavailable for any

sector at the six-digit classification level in the NAICS, then the Administrator may extrapolate the information necessary to determine the eligibility of a sector under this paragraph

from available Manufacturing Energy Consumption Survey data pertaining to a broader industrial category classified in the NAICS. Fuel cost data shall not include the cost of fuel used

as feedstock by an industrial sector.

`(ii) IMPORTS AND EXPORTS- The Administrator shall base the value of imports and exports under this subsection on United States International Trade Commission

data. The Administrator shall take the average of data from as many of the years of 2004, 2005, and 2006 for which such data are available.

`(iii) PERCENTAGES- The Administrator shall round the energy intensity, greenhouse gas intensity, and trade intensity percentages under subparagraph (A) to the

nearest whole number.

`(iv) GREENHOUSE GAS EMISSION CALCULATIONS- When calculating the tons of carbon dioxide equivalent greenhouse gas emissions for each sector under

subparagraph (A)(i)(II)(aa), the Administrator--

`(I) shall use the best available data from as many of the years 2004, 2005, and 2006 for which such data is available; and

`(II) may, to the extent necessary with respect to a sector, use economic and engineering models and the best available information on technology performance

levels for such sector.

`(3) ADMINISTRATIVE DETERMINATION OF ADDITIONAL ELIGIBLE INDUSTRIAL SECTORS-

`(A) INDIVIDUAL SHOWING PETITION-

`(i) PETITION- The owner or operator of an entity in an industrial sector may petition the Administrator to designate as eligible industrial sectors under this subpart an

entity or a group of entities that--

`(I) represent a subsector of a six-digit section of the NAICS code; and

`(II) meet the eligibility criteria in both clauses (i) and (ii) of paragraph (2)(A), or the eligibility criteria in clause (iii) of paragraph (2)(A).

`(ii) DATA- In making a determination under this subparagraph, the Administrator shall consider data submitted by the petitioner that is specific to the entity, data

solicited by the Administrator from other entities in the subsector, if such other entities exist, and data specified in paragraph (2)(E).

`(iii) BASIS OF SUBSECTOR DETERMINATION- The Administrator shall determine an entity or group of entities to be a subsector of a six-digit section of the NAICS code

based only upon the products manufactured and not the industrial process by which the products are manufactured, except that the Administrator may determine an entity or group of

entities that manufacture a product from a virgin material to be a separate subsector from another entity or group of entities that manufacture the same product from recycled material.

`(iv) FINAL ACTION- The Administrator shall take final action on such petition no later than 6 months after the petition is received by the Administrator.

`(B) UPDATED TRADE INTENSITY DATA- The Administrator shall designate as eligible to receive emission allowance rebates under this subpart an industrial sector that--

`(i) met the energy or greenhouse gas intensity criteria in paragraph (2)(A)(i) as of the date of promulgation of the rule under paragraph (1); and

`(ii) meets the trade intensity criteria in paragraph (2)(A)(ii), using data from any year after 2006.

`(C) USE OF MOST RECENT DATA- In determining whether to designate a sector or subsector as an eligible industrial sector under this paragraph, the Administrator shall

use the most recent data available from the sources described in paragraph (2)(E), rather than the data from the years specified in paragraph (2)(E), to determine the trade intensity of

such sector or subsector, but only for determining such trade intensity.

`SEC. 765. DISTRIBUTION OF EMISSION ALLOWANCE REBATES.

`(a) Distribution Schedule-

`(1) IN GENERAL- For each vintage year, the Administrator shall distribute allowances pursuant to this section no later than October 31 of the preceding calendar year. The

Administrator shall make such annual distributions to the owners and operators of each entity in an eligible industrial sector in the amount of emission allowances calculated under

subsection (b), except that--

`(A) for vintage years 2012 and 2013, the distribution for a covered entity shall be the entity's indirect carbon factor as calculated under subsection (b)(3); and

`(B) for vintage year 2026 and thereafter, the distribution shall be the amount calculated under subsection (b) multiplied by, except as modified by the President pursuant to

section 767(c)(3)(A) for a sector--

`(i) 90 percent for vintage year 2026;

`(ii) 80 percent for vintage year 2027;

`(iii) 70 percent for vintage year 2028;

`(iv) 60 percent for vintage year 2029;

`(v) 50 percent for vintage year 2030;

`(vi) 40 percent for vintage year 2031;

`(vii) 30 percent for vintage year 2032;

`(viii) 20 percent for vintage year 2033;

`(ix) 10 percent for vintage year 2034; and

`(x) 0 percent for vintage year 2035 and thereafter.

`(2) RESUMPTION OF REDUCTION- If the President has modified the percentage stated in paragraph (1)(B) under section 767(c)(3)(A), and the President subsequently

makes a determination under section 767(b) for an eligible industrial sector that more than 70 percent of global output for that sector is produced or manufactured in countries that

have met at least one of the criteria in that subsection, then the reduction schedule set forth in paragraph (1)(B) of this subsection shall begin in the next vintage year, with the

percentage reduction based on the amount of the distribution of emission allowances under this section in the previous year.

`(3) NEWLY ELIGIBLE SECTORS- In addition to receiving a distribution of emission allowances under this section in the first distribution occurring after an industrial sector is

designated as eligible under section 764(b)(3), the owner or operator of an entity in that eligible industrial sector may receive a prorated share of any emission allowances made

available for distribution under this section that were not distributed for the year in which the petition for eligibility was granted under section 764(b)(3)(A).

`(b) Calculation of Direct and Indirect Carbon Factors-

`(1) IN GENERAL-

`(A) COVERED ENTITIES- Except as provided in subsection (a), for covered entities that are in eligible industrial sectors, the amount of emission allowance rebates shall

be based on the sum of the covered entity's direct and indirect carbon factors.

`(B) OTHER ELIGIBLE ENTITIES- For entities that are in eligible industrial sectors but are not covered entities, the amount of emission allowance rebates shall be based on

the entity's indirect carbon factor.

`(C) NEW ENTITIES- Not later than 2 years after the date of enactment of this title, the Administrator shall issue regulations governing the distribution of emission allowance

rebates for the first and second years of operation of a new entity in an eligible industrial sector. These regulations shall provide for--

`(i) the distribution of emission allowance rebates to such entities based on comparable entities in the same sector; and

`(ii) an adjustment in the third and fourth years of operation to reconcile the total amount of emission allowance rebates received during the first and second years of

operation to the amount the entity would have received during the first and second years of operation had the appropriate data been available.

`(2) DIRECT CARBON FACTOR- The direct carbon factor for a covered entity for a vintage year is the product of--

`(A) the average output of the covered entity for the two years preceding the year of the distribution; and

`(B) the most recent calculation of the average direct greenhouse gas emissions (expressed in tons of carbon dioxide equivalent) per unit of output for all covered entities in

the sector, as determined by the Administrator under paragraph (4).

`(3) INDIRECT CARBON FACTOR-

`(A) IN GENERAL- The indirect carbon factor for an entity for a vintage year is the product obtained by multiplying the average output of the entity for the two years preceding

the years of the distribution by both the electricity emissions intensity factor determined pursuant to subparagraph (B) and the electricity efficiency factor determined pursuant to

subparagraph (C) for the year concerned.

`(B) ELECTRICITY EMISSIONS INTENSITY FACTOR- Each person selling electricity to the owner or operator of an entity in any sector designated as an eligible industrial

sector under section 764(b) shall provide the owner or operator of the entity and the Administrator, on an annual basis, the electricity emissions intensity factor for the entity. The

electricity emissions intensity factor for the entity, expressed in tons of carbon dioxide equivalents per kilowatt hour, is determined by dividing--

`(i) the annual sum of the hourly product of--

`(I) the electricity purchased by the entity from that person in each hour (expressed in kilowatt hours), multiplied by

`(II) the marginal or weighted average tons of carbon dioxide equivalent per kilowatt hour that the person selling the electricity charges to the entity, taking into account

the entity's retail rate arrangements, by

`(ii) the total kilowatt hours of electricity purchased by the entity from that person during that year.

`(C) ELECTRICITY EFFICIENCY FACTOR- The electricity efficiency factor is the average amount of electricity (in kilowatt hours) used per unit of output for all entities in the

relevant sector, as determined by the Administrator based on the best available data, including data provided under paragraph (6).

`(D) INDIRECT CARBON FACTOR REDUCTION- If an electricity provider received a free allocation of emission allowances pursuant to section 782(a), the Administrator

shall adjust the indirect carbon factor to avoid rebates to the eligible entity for costs that the Administrator determines were not incurred by the industrial entity because the allowances

were freely allocated to the eligible entity's electricity provider and used for the benefit of industrial consumers.

`(4) GREENHOUSE GAS INTENSITY CALCULATIONS- The Administrator shall calculate the average direct greenhouse gas emissions (expressed in tons of carbon dioxide

equivalent) per unit of output for all covered entities in each eligible industrial sector every four years using an average of the two most recent years of the best available data.

`(5) ENSURING EFFICIENCY IMPROVEMENTS- When making greenhouse gas calculations, the Administrator shall--

`(A) limit the average direct greenhouse gas emissions per unit of output, calculated under paragraph (4), for any eligible industrial sector to an amount that is not greater

than it was in any previous calculation under this subsection; and

`(B) limit the electricity emissions intensity factor, calculated under paragraph (3)(B) and resulting from a change in electricity supply, for any entity to an amount that is not

greater than it was during any previous year.

`(6) DATA SOURCES- For the purposes of this subsection--

`(A) the Administrator shall use data from the greenhouse gas registry, established under section 713, where it is available; and

`(B) each owner or operator of an entity in an eligible industrial sector and each department, agency, and instrumentality of the United States shall provide the Administrator

with such information as the Administrator finds necessary to determine the direct carbon factor and the indirect carbon factor for each entity subject to this section.

`(c) Total Maximum Distribution- Notwithstanding subsections (a) and (b), the Administrator shall not distribute more allowances for any vintage year pursuant to this section than

are allocated for use under this part pursuant to section 782 for that vintage year. For any vintage year for which the total emission allowance rebates calculated pursuant to this

section exceed the number of allowances allocated pursuant to section 782, the Administrator shall reduce each entity's distribution on a pro rata basis so that the total distribution

under this section equals the number of allowances allocated under section 782.

`Subpart 2--International Reserve Allowance Program

`SEC. 766. INTERNATIONAL RESERVE ALLOWANCE PROGRAM.

`(a) Establishment-

`(1) IN GENERAL- If the President takes an action described in section 767(c)(3)(B) with respect to a sector then, not later than 24 months after that determination, the

Administrator shall issue regulations--

`(A) determining an appropriate price for and offering for sale to United States importers international reserve allowances;

`(B) requiring the submission of appropriate amounts of such allowances in conjunction with the importation into the United States of a primary product produced or

manufactured by that sector;

`(C) exempting from the requirements of subparagraph (B) primary products produced in--

`(i) foreign countries that the United Nations has identified as among the least developed of developing countries; or

`(ii) foreign countries that the President has determined to be responsible for less than 0.5 percent of total global greenhouse gas emissions; and

`(D) prohibiting the introduction into interstate commerce of a primary product without submitting the required number of international reserve allowances in accordance

with such regulations, unless the product was produced by a covered entity under this title, or by an entity that is or could be regulated under this title.

`(2) PURPOSE OF PROGRAM- The Administrator shall establish the program under paragraph (1) in a manner that addresses, consistent with international agreements to

which the United States is a party, the competitive imbalance in the costs of producing or manufacturing primary products in industrial sectors resulting from the difference between--

`(A) the direct and indirect costs of complying with this title; and

`(B) the direct and indirect costs, if any, of complying in other countries with greenhouse gas regulatory programs, requirements, export tariffs, or other measures adopted or

imposed to reduce greenhouse gas emissions.

`(3) EMISSION ALLOWANCE REBATES- The Administrator shall take into account the value of emission allowance rebates distributed under subpart 1 when making

calculations under paragraph (2).

`(4) LIMITATION- The International Reserve Allowance Program may not begin before January 1, 2025.

`(b) Covered Entities- International reserve allowances may not be held by covered entities to comply with section 722.

`Subpart 3--Presidential Determination

`SEC. 767. PRESIDENTIAL REPORTS AND DETERMINATIONS.

`(a) Report- Not later than January 1, 2018, the President shall submit a report to Congress on the effectiveness of the distribution of emission allowance rebates under subpart 1

in mitigating carbon leakage in industrial sectors. Such report shall also include--

`(1) recommendations on how to better achieve the purposes of this part, including an assessment of the feasibility and usefulness of an International Reserve Allowance

Program; and

`(2) an assessment of the amount and duration of assistance, including distribution of free allowances, being provided to eligible industrial sectors in other developed

countries to mitigate costs of compliance with domestic greenhouse gas reduction programs in such countries.

`(b) Presidential Determination- Not later than June 30, 2022, and every four years thereafter, the President, in consultation with the Administrator and other appropriate agencies,

shall determine, for each eligible industrial sector, whether more than 70 percent of global output for that sector is produced or manufactured in countries that have met at least one of

the following criteria:

`(1) The country is a party to an international agreement to which the United States is a party that includes a nationally enforceable greenhouse gas emissions reduction

commitment for that country that is at least as stringent as that of the United States.

`(2) The country is a party to a multilateral or bilateral emission reduction agreement for that sector to which the United States is a party.

`(3) The country has an annual energy or greenhouse gas intensity, as described in section 764(b)(2)(A)(i), for the sector that is equal to or less than the energy or greenhouse

gas intensity for such sector in the United States in the most recent calendar year for which data are available.

`(4) The country has implemented policies, including sectoral caps, export tariffs, production fees, electricity generation regulations, or greenhouse gas emissions fees, that

individually or collectively impose an incremental increase on the cost of production associated with greenhouse gas emissions from the sector that is at least 60 percent of the cost

of complying with this title in the United States for such sector, averaged over a two-year period.

`(c) Effect of Presidential Determination- If the President makes a determination under subsection (b) with respect to an eligible industrial sector that 70 percent or less of the

global output for the sector is produced or manufactured in countries that have met one or more of the criteria in subsection (b), then the President shall, not later than June 30, 2022,

and every four years thereafter--

`(1) assess the extent to which the emission allowance rebates provided pursuant to subpart 1 have mitigated or addressed, or could mitigate or address, carbon leakage in

that sector;

`(2) assess the extent to which an International Reserve Allowance Program has mitigated or addressed, or could mitigate or address, carbon leakage in that sector and the

feasibility of establishing such a program; and

`(3) with respect to that sector--

`(A) modify the percentage by which direct and indirect carbon factors will be multiplied under section 765(a)(1)(B);

`(B) implement an International Reserve Allowance Program under section 766 for the products of the sector; or

`(C) take the actions in both subparagraph (A) and (B).

`(d) Report to Congress- Not later than June 30, 2022, and every four years thereafter, the President shall transmit to the Congress a report providing notice of any determination

made under subsection (b), explaining the reasons for such determination, and identifying the actions taken by the President under subsection (c).

`(e) Limitation- The President may only implement an International Reserve Allowance Program for sectors producing primary products.

`(f) Iron and Steel Sector- For the purposes of this subpart, the Administrator shall consider to be in the same industrial sector--

`(1) entities using integrated iron and steelmaking technologies (including coke ovens, blast furnaces, and other iron-making technologies); and

`(2) entities using electric arc furnace technologies.'.

Subtitle B--Green Jobs and Worker Transition

PART 1--GREEN JOBS

SEC. 421. CLEAN ENERGY CURRICULUM DEVELOPMENT GRANTS.

(a) Authorization- The Secretary of Education is authorized to award grants, on a competitive basis, to eligible partnerships to develop programs of study (containing the

information described in section 122(c)(1)(A) of the Carl D. Perkins Career and Technical Education Act of 2006 (20 U.S.C. 2342), that are focused on emerging careers and jobs in

renewable energy, energy efficiency, and climate change mitigation. The Secretary of Education shall consult with the Secretary of Labor and the Secretary of Energy prior to the

issuance of a solicitation for grant applications.

(b) Eligible Partnerships- For purposes of this section, an eligible partnership shall include--

(1) at least 1 local educational agency eligible for funding under section 131 of the Carl D. Perkins Career and Technical Education Act of 2006 (20 U.S.C. 2351) or an area

career and technical education school or education service agency described in such section;

(2) at least 1 postsecondary institution eligible for funding under section 132 of such Act (20 U.S.C. 2352); and

(3) representatives of the community including business, labor organizations, and industry that have experience in clean energy.

(c) Application- An eligible partnership seeking a grant under this section shall submit an application to the Secretary at such time and in such manner as the Secretary may

require. Applications shall include--

(1) a description of the eligible partners and partnership, the roles and responsibilities of each partner, and a demonstration of each partner's capacity to support the program;

(2) a description of the career area or areas within the field of clean energy to be developed, the reason for the choice, and evidence of the labor market need to prepare

students in that area;

(3) a description of the new or existing program of study and both secondary and postsecondary components;

(4) a description of the students to be served by the new program of study;

(5) a description of how the program of study funded by the grant will be replicable and disseminated to schools outside of the partnership, including urban and rural areas;

(6) a description of applied learning that will be incorporated into the program of study and how it will incorporate or reinforce academic learning;

(7) a description of how the program of study will be delivered;

(8) a description of how the program will provide accessibility to students, especially economically disadvantaged, low performing, and urban and rural students;

(9) a description of how the program will address placement of students in nontraditional fields as described in section 3(20) of the Carl D. Perkins Career and Technical

Education Act of 2006 (20 U.S.C. 2302(20)); and

(10) a description of how the applicant proposes to consult or has consulted with a labor organization, labor management partnership, apprenticeship program, or joint

apprenticeship and training program that provides education and training in the field of study for which the applicant proposes to develop a curriculum.

(d) Priority- The Secretary shall give priority to applications that--

(1) use online learning or other innovative means to deliver the program of study to students, educators, and instructors outside of the partnership; and

(2) focus on low performing students and special populations as defined in section 3(29) of the Carl D. Perkins Career and Technical Education Act of 2006 (20 U.S.C.

2302(29)).

(e) Peer Review- The Secretary shall convene a peer review process to review applications for grants under this section and to make recommendations regarding the selection of

grantees. Members of the peer review committee shall include--

(1) educators who have experience implementing curricula with comparable purposes; and

(2) business and industry experts in clean energy-related fields.

(f) Uses of Funds- Grants awarded under this section shall be used for the development, implementation, and dissemination of programs of study (as described in section

122(c)(1)(A) of the Carl D. Perkins Career and Technical Education Act (20 U.S.C. 342(c)(1)(A))) in career areas related to clean energy, renewable energy, energy efficiency, and

climate change mitigation.

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

Section 171(e)(8) of the Workforce Investment Act of 1998 (29 U.S.C. 2916(e)(8)) is amended by striking `$125,000,000' and inserting `$150,000,000'.

PART 2--CLIMATE CHANGE WORKER ADJUSTMENT ASSISTANCE

SEC. 425. PETITIONS, ELIGIBILITY REQUIREMENTS, AND DETERMINATIONS.

(a) Petitions-

(1) FILING- A petition for certification of eligibility to apply for adjustment assistance for a group of workers under this part may be filed by any of the following:

(A) The group of workers.

(B) The certified or recognized union or other duly authorized representative of such workers.

(C) Employers of such workers, one-stop operators or one-stop partners (as defined in section 101 of the Workforce Investment Act of 1998 (29 U.S.C. 2801)), including

State employment security agencies, or the State dislocated worker unit established under title I of such Act, on behalf of such workers.

The petition shall be filed simultaneously with the Secretary of Labor and with the Governor of the State in which such workers' employment site is located.

(2) ACTION BY GOVERNORS- Upon receipt of a petition filed under paragraph (1), the Governor shall--

(A) ensure that rapid response activities and appropriate core and intensive services (as described in section 134 of the Workforce Investment Act of 1998 (29 U.S.C. 2864))

authorized under other Federal laws are made available to the workers covered by the petition to the extent authorized under such laws; and

(B) assist the Secretary in the review of the petition by verifying such information and providing such other assistance as the Secretary may request.

(3) ACTION BY THE SECRETARY- Upon receipt of the petition, the Secretary shall promptly publish notice in the Federal Register and on the website of the Department of

Labor that the Secretary has received the petition and initiated an investigation.

(4) HEARINGS- If the petitioner, or any other person found by the Secretary to have a substantial interest in the proceedings, submits not later than 10 days after the date of the

Secretary's publication under paragraph (3) a request for a hearing, the Secretary shall provide for a public hearing and afford such interested persons an opportunity to be present, to

produce evidence, and to be heard.

(b) Eligibility-

(1) IN GENERAL- A group of workers shall be certified by the Secretary as eligible to apply for adjustment assistance under this part pursuant to a petition filed under

subsection (a) if--

(A) the group of workers is employed in--

(i) energy producing and transforming industries;

(ii) industries dependent upon energy industries;

(iii) energy-intensive manufacturing industries;

(iv) consumer goods manufacturing; or

(v) other industries whose employment the Secretary determines has been adversely affected by any requirement of title VII of the Clean Air Act;

(B) the Secretary determines that a significant number or proportion of the workers in such workers' employment site have become totally or partially separated, or are

threatened to become totally or partially separated from employment; and

(C) the sales, production, or delivery of goods or services have decreased as a result of any requirement of title VII of the Clean Air Act, including--

(i) the shift from reliance upon fossil fuels to other sources of energy, including renewable energy, that results in the closing of a facility or layoff of employees at a facility

that mines, produces, processes, or utilizes fossil fuels to generate electricity;

(ii) a substantial increase in the cost of energy required for a manufacturing facility to produce items whose prices are competitive in the marketplace, to the extent the

cost is not offset by allowance allocation to the facility pursuant to title VII of the Clean Air Act; or

(iii) other documented occurrences that the Secretary determines are indicators of an adverse impact on an industry described in subparagraph (A) as a result of any

requirement of title VII of the Clean Air Act.

(2) WORKERS IN PUBLIC AGENCIES- A group of workers in a public agency shall be certified by the Secretary as eligible to apply for climate change adjustment assistance

pursuant to a petition filed if the Secretary determines that a significant number or proportion of the workers in the public agency have become totally or partially separated from

employment, or are threatened to become totally or partially separated as a result of any requirement of title VII of the Clean Air Act.

(3) ADVERSELY AFFECTED SERVICE WORKERS- A group of workers shall be certified as eligible to apply for climate change adjustment assistance pursuant to a petition

filed if the Secretary determines that--

(A) a significant number or proportion of the service workers at an employment site where a group of workers has been certified by the Secretary as eligible to apply for

adjustment assistance under this part pursuant to paragraph (1) have become totally or partially separated from employment, or are threatened to become totally or partially

separated; and

(B) a loss of business in the firm providing service workers to an employment site is directly attributable to one or more of the documented occurrences listed in paragraph

(1)(C).

(c) Authority to Investigate and Collect Information-

(1) IN GENERAL- The Secretary shall, in determining whether to certify a group of workers under subsection (d), obtain information the Secretary determines to be necessary to

make the certification, through questionnaires and in such other manner as the Secretary determines appropriate from--

(A) the workers' employer;

(B) officials of certified or recognized unions or other duly authorized representatives of the group of workers; or

(C) one-stop operators or one-stop partners (as defined in section 101 of the Workforce Investment Act of 1998 (29 U.S.C. 2801)); or

(2) VERIFICATION OF INFORMATION- The Secretary shall require an employer, union, or one-stop operator or partner to certify all information obtained under paragraph (1)

from the employer, union, or one-stop operator or partner (as the case may be) on which the Secretary relies in making a determination under subsection (d), unless the Secretary

has a reasonable basis for determining that such information is accurate and complete without being certified.

(3) PROTECTION OF CONFIDENTIAL INFORMATION- The Secretary may not release information obtained under paragraph (1) that the Secretary considers to be confidential

business information unless the employer submitting the confidential business information had notice, at the time of submission, that the information would be released by the

Secretary, or the employer subsequently consents to the release of the information. Nothing in this paragraph shall be construed to prohibit the Secretary from providing such

confidential business information to a court in camera or to another party under a protective order issued by a court.

(d) Determination by the Secretary of Labor-

(1) IN GENERAL- As soon as possible after the date on which a petition is filed under subsection (a), but in any event not later than 40 days after that date, the Secretary, in

consultation with the Secretary of Energy and the Administrator, as necessary, shall determine whether the petitioning group meets the requirements of subsection (b) and shall

issue a certification of eligibility to apply for assistance under this part covering workers in any group which meets such requirements. Each certification shall specify the date on

which the total or partial separation began or threatened to begin. Upon reaching a determination on a petition, the Secretary shall promptly publish a summary of the determination in

the Federal Register and on the website of the Department of Labor, together with the Secretary's reasons for making such determination.

(2) ONE YEAR LIMITATION- A certification under this section shall not apply to any worker whose last total or partial separation from the employment site before the worker's

application under section 426(a) occurred more than 1 year before the date of the petition on which such certification was granted.

(3) REVOCATION OF CERTIFICATION- Whenever the Secretary determines, with respect to any certification of eligibility of the workers of an employment site, that total or partial

separations from such site are no longer a result of the factors specified in subsection (b)(1), the Secretary shall terminate such certification and promptly have notice of such

termination published in the Federal Register and on the website of the Department of Labor, together with the Secretary's reasons for making such determination. Such termination

shall apply only with respect to total or partial separations occurring after the termination date specified by the Secretary.

(e) Industry Notification of Assistance- Upon receiving a notification of a determination under subsection (d) with respect to a domestic industry the Secretary of Labor shall notify

the representatives of the domestic industry affected by the determination, employers publicly identified by name during the course of the proceeding relating to the determination, and

any certified or recognized union or, to the extent practicable, other duly authorized representative of workers employed by such representatives of the domestic industry, of--

(1) the adjustment allowances, training, and other benefits available under this part;

(2) the manner in which to file a petition and apply for such benefits; and

(3) the availability of assistance in filing such petitions;

(4) notify the Governor of each State in which one or more employers in such industry are located of the Secretary's determination and the identity of the employers; and

(5) upon request, provide any assistance that is necessary to file a petition under subsection (a).

(f) Benefit Information to Workers, Providers of Training-

(1) IN GENERAL- The Secretary shall provide full information to workers about the adjustment allowances, training, and other benefits available under this part and about the

petition and application procedures, and the appropriate filing dates, for such allowances, training and services. The Secretary shall provide whatever assistance is necessary to

enable groups of workers to prepare petitions or applications for program benefits. The Secretary shall make every effort to insure that cooperating State agencies fully comply with

the agreements entered into under section 426(a) and shall periodically review such compliance. The Secretary shall inform the State Board for Vocational Education or equivalent

agency, the one-stop operators or one-stop partners (as defined in section 101 of the Workforce Investment Act of 1998 (29 U.S.C. 2801), and other public or private agencies,

institutions, and employers, as appropriate, of each certification issued under subsection (d) and of projections, if available, of the needs for training under as a result of such

certification.

(2) NOTICE BY MAIL- The Secretary shall provide written notice through the mail of the benefits available under this part to each worker whom the Secretary has reason to

believe is covered by a certification made under subsection (d)--

(A) at the time such certification is made, if the worker was partially or totally separated from the adversely affected employment before such certification, or--

(B) at the time of the total or partial separation of the worker from the adversely affected employment, if subparagraph (A) does not apply.

(3) NEWSPAPERS; WEBSITE- The Secretary shall publish notice of the benefits available under this part to workers covered by each certification made under subsection (d) in

newspapers of general circulation in the areas in which such workers reside and shall make such information available on the website of the Department of Labor.

SEC. 426. PROGRAM BENEFITS.

(a) Climate Change Adjustment Allowance-

(1) ELIGIBILITY- Payment of a climate change adjustment allowance shall be made to an adversely affected worker covered by a certification under section 425(b) who files an

application for such allowance for any week of unemployment which begins on or after the date of such certification, if the following conditions are met:

(A) Such worker's total or partial separation before the worker's application under this part occurred--

(i) on or after the date, as specified in the certification under which the worker is covered, on which total or partial separation began or threatened to begin in the

adversely affected employment;

(ii) before the expiration of the 2-year period beginning on the date on which the determination under section 425(d) was made; and

(iii) before the termination date, if any, determined pursuant to section 425(d)(3).

(B) Such worker had, in the 52-week period ending with the week in which such total or partial separation occurred, at least 26 weeks of full-time employment or 1,040

hours of part time employment in adversely affected employment, or, if data with respect to weeks of employment are not available, equivalent amounts of employment computed

under regulations prescribed by the Secretary. For the purposes of this paragraph, any week in which such worker--

(i) is on employer-authorized leave for purposes of vacation, sickness, injury, maternity, or inactive duty or active duty military service for training;

(ii) does not work because of a disability that is compensable under a workmen's compensation law or plan of a State or the United States;

(iii) had his employment interrupted in order to serve as a full-time representative of a labor organization in such firm; or

(iv) is on call-up for purposes of active duty in a reserve status in the Armed Forces of the United States, provided such active duty is `Federal service' as defined in

section 8521(a)(1) of title 5, United States Code,

shall be treated as a week of employment.

(C) Such worker is enrolled in a training program approved by the Secretary under subsection (b)(2).

(2) INELIGIBILITY FOR CERTAIN OTHER BENEFITS- An adversely affected worker receiving a payment under this section shall be ineligible to receive any other form of

unemployment insurance for the period in which such worker is receiving a climate change adjustment allowance under this section.

(3) REVOCATION- If--

(A) the Secretary determines that--

(i) the adversely affected worker--

(I) has failed to begin participation in the training program the enrollment in which meets the requirement of paragraph (1)(C); or

(II) has ceased to participate in such training program before completing such training program; and

(ii) there is no justifiable cause for such failure or cessation; or

(B) the certification made with respect to such worker under section 425(d) is revoked under paragraph (3) of such section,

no adjustment allowance may be paid to the adversely affected worker under this part for the week in which such failure, cessation, or revocation occurred, or any succeeding

week, until the adversely affected worker begins or resumes participation in a training program approved by the Secretary under section (b)(2).

(4) WAIVERS OF TRAINING REQUIREMENTS- The Secretary may issue a written statement to an adversely affected worker waiving the requirement to be enrolled in training

described in subsection (b)(2) if the Secretary determines that it is not feasible or appropriate for the worker, because of 1 or more of the following reasons:

(A) RECALL- The worker has been notified that the worker will be recalled by the employer from which the separation occurred.

(B) MARKETABLE SKILLS-

(i) IN GENERAL- The worker possesses marketable skills for suitable employment (as determined pursuant to an assessment of the worker, which may include the

profiling system under section 303(j) of the Social Security Act (42 U.S.C. 503(j)), carried out in accordance with guidelines issued by the Secretary) and there is a reasonable

expectation of employment at equivalent wages in the foreseeable future.

(ii) MARKETABLE SKILLS DEFINED- For purposes of clause (i), the term `marketable skills' may include the possession of a postgraduate degree from an institution of

higher education (as defined in section 102 of the Higher Education Act of 1965 (20 U.S.C. 1002)) or an equivalent institution, or the possession of an equivalent postgraduate

certification in a specialized field.

(C) RETIREMENT- The worker is within 2 years of meeting all requirements for entitlement to either--

(i) old-age insurance benefits under title II of the Social Security Act (42 U.S.C. 401 et seq.) (except for application therefor); or

(ii) a private pension sponsored by an employer or labor organization.

(D) HEALTH- The worker is unable to participate in training due to the health of the worker, except that a waiver under this subparagraph shall not be construed to exempt a

worker from requirements relating to the availability for work, active search for work, or refusal to accept work under Federal or State unemployment compensation laws.

(E) ENROLLMENT UNAVAILABLE- The first available enrollment date for the training of the worker is within 60 days after the date of the determination made under this

paragraph, or, if later, there are extenuating circumstances for the delay in enrollment, as determined pursuant to guidelines issued by the Secretary.

(F) TRAINING NOT AVAILABLE- Training described in subsection (b)(2) is not reasonably available to the worker from either governmental agencies or private sources

(which may include area career and technical education schools, as defined in section 3 of the Carl D. Perkins Career and Technical Education Act of 2006 (20 U.S.C. 2302), and

employers), no training that is suitable for the worker is available at a reasonable cost, or no training funds are available.

(5) WEEKLY AMOUNTS- The climate change adjustment allowance payable to an adversely affected worker for a week of unemployment shall be an amount equal to 70

percent of the average weekly wage of such worker, but in no case shall such amount exceed the average weekly wage for all workers in the State where the adversely affected worker

resides.

(6) MAXIMUM DURATION OF BENEFITS- An eligible worker may receive a climate change adjustment allowance under this subsection for a period of not longer than 156

weeks.

(b) Employment Services and Training-

(1) INFORMATION AND EMPLOYMENT SERVICES- The Secretary shall make available, directly or through agreements with the States under section 427(a) to adversely

affected workers covered by a certification under section 425(a) the following information and employment services:

(A) Comprehensive and specialized assessment of skill levels and service needs, including through--

(i) diagnostic testing and use of other assessment tools; and

(ii) in-depth interviewing and evaluation to identify employment barriers and appropriate employment goals.

(B) Development of an individual employment plan to identify employment goals and objectives, and appropriate training to achieve those goals and objectives.

(C) Information on training available in local and regional areas, information on individual counseling to determine which training is suitable training, and information on

how to apply for such training.

(D) Information on training programs and other services provided by a State pursuant to title I of the Workforce Investment Act of 1998 and available in local and regional

areas, information on individual counseling to determine which training is suitable training, and information on how to apply for such training.

(E) Information on how to apply for financial aid, including referring workers to educational opportunity centers described in section 402F of the Higher Education Act of 1965

(20 U.S.C. 1070a-16), where applicable, and notifying workers that the workers may request financial aid administrators at institutions of higher education (as defined in section 102

of such Act (20 U.S.C. 1002)) to use the administrators' discretion under section 479A of such Act (20 U.S.C. 1087tt) to use current year income data, rather than preceding year

income data, for determining the amount of need of the workers for Federal financial assistance under title IV of such Act (20 U.S.C. 1070 et seq.).

(F) Short-term prevocational services, including development of learning skills, communications skills, interviewing skills, punctuality, personal maintenance skills, and

professional conduct to prepare individuals for employment or training.

(G) Individual career counseling, including job search and placement counseling, during the period in which the individual is receiving a climate change adjustment

allowance or training under this part, and after receiving such training for purposes of job placement.

(H) Provision of employment statistics information, including the provision of accurate information relating to local, regional, and national labor market areas, including--

(i) job vacancy listings in such labor market areas;

(ii) information on jobs skills necessary to obtain jobs identified in job vacancy listings described in subparagraph (A);

(iii) information relating to local occupations that are in demand and earnings potential of such occupations; and

(iv) skills requirements for local occupations described in subparagraph (C).

(I) Information relating to the availability of supportive services, including services relating to child care, transportation, dependent care, housing assistance, and

need-related payments that are necessary to enable an individual to participate in training.

(2) TRAINING-

(A) APPROVAL OF AND PAYMENT FOR TRAINING- If the Secretary determines, with respect to an adversely affected worker that--

(i) there is no suitable employment (which may include technical and professional employment) available for an adversely affected worker;

(ii) the worker would benefit from appropriate training;

(iii) there is a reasonable expectation of employment following completion of such training;

(iv) training approved by the Secretary is reasonably available to the worker from either governmental agencies or private sources (including area career and technical

education schools, as defined in section 3 of the Carl D. Perkins Career and Technical Education Act of 2006, and employers);

(v) the worker is qualified to undertake and complete such training; and

(vi) such training is suitable for the worker and available at a reasonable cost,

the Secretary shall approve such training for the worker. Upon such approval, the worker shall be entitled to have payment of the costs of such training (subject to the

limitations imposed by this section) paid on the worker's behalf by the Secretary directly or through a voucher system.

(B) DISTRIBUTION- The Secretary shall establish procedures for the distribution of the funds to States to carry out the training programs approved under this paragraph,

and shall make an initial distribution of the funds made available as soon as practicable after the beginning of each fiscal year.

(C) ADDITIONAL RULES REGARDING APPROVAL OF AND PAYMENT FOR TRAINING-

(i) For purposes of applying subparagraph (A)(iii), a reasonable expectation of employment does not require that employment opportunities for a worker be available, or

offered, immediately upon the completion of training approved under such subparagraph.

(ii) If the costs of training an adversely affected worker are paid by the Secretary under subparagraph (A), no other payment for such costs may be made under any other

provision of Federal law. No payment may be made under subparagraph (A) of the costs of training an adversely affected worker or an adversely affected incumbent worker if such

costs--

(I) have already been paid under any other provision of Federal law; or

(II) are reimbursable under any other provision of Federal law and a portion of such costs have already been paid under such other provision of Federal law.

The provisions of this clause shall not apply to, or take into account, any funds provided under any other provision of Federal law which are used for any purpose other

than the direct payment of the costs incurred in training a particular adversely affected worker, even if such use has the effect of indirectly paying or reducing any portion of the costs

involved in training the adversely affected worker.

(D) TRAINING PROGRAMS- The training programs that may be approved under subparagraph (A) include--

(i) employer-based training, including--

(I) on-the-job training if approved by the Secretary under subsection (c); and

(II) joint labor-management apprenticeship programs;

(ii) any training program provided by a State pursuant to title I of the Workforce Investment Act of 1998;

(iii) any training program approved by a private industry council established under section 102 of such Act;

(iv) any programs in career and technical education described in section 3(5) of the Carl D. Perkins Career and Technical Education Act of 2006;

(v) any program of remedial education;

(vi) any program of prerequisite education or coursework required to enroll in training that may be approved under this paragraph;

(vii) any training program for which all, or any portion, of the costs of training the worker are paid--

(I) under any Federal or State program other than this part; or

(II) from any source other than this part;

(viii) any training program or coursework at an accredited institution of higher education (described in section 102 of the Higher Education Act of 1965 (20 U.S.C. 1002)),

including a training program or coursework for the purpose of--

(I) obtaining a degree or certification; or

(II) completing a degree or certification that the worker had previously begun at an accredited institution of higher education; and

(ix) any other training program approved by the Secretary.

(3) Supplemental assistance- The Secretary may, as appropriate, authorize supplemental assistance that is necessary to defray reasonable transportation and subsistence

expenses for separate maintenance in a case in which training for a worker is provided in a facility that is not within commuting distance of the regular place of residence of the

worker.

(c) On-the-Job Training Requirements-

(1) IN GENERAL- The Secretary may approve on-the-job training for any adversely affected worker if--

(A) the Secretary determines that on-the-job training--

(i) can reasonably be expected to lead to suitable employment with the employer offering the on-the-job training;

(ii) is compatible with the skills of the worker;

(iii) includes a curriculum through which the worker will gain the knowledge or skills to become proficient in the job for which the worker is being trained; and

(iv) can be measured by benchmarks that indicate that the worker is gaining such knowledge or skills; and

(B) the State determines that the on-the-job training program meets the requirements of clauses (iii) and (iv) of subparagraph (A).

(2) MONTHLY PAYMENTS- The Secretary shall pay the costs of on-the-job training approved under paragraph (1) in monthly installments.

(3) CONTRACTS FOR ON-THE-JOB TRAINING-

(A) IN GENERAL- The Secretary shall ensure, in entering into a contract with an employer to provide on-the-job training to a worker under this subsection, that the skill

requirements of the job for which the worker is being trained, the academic and occupational skill level of the worker, and the work experience of the worker are taken into

consideration.

(B) TERM OF CONTRACT- Training under any such contract shall be limited to the period of time required for the worker receiving on-the-job training to become proficient in

the job for which the worker is being trained, but may not exceed 156 weeks in any case.

(4) EXCLUSION OF CERTAIN EMPLOYERS- The Secretary shall not enter into a contract for on-the-job training with an employer that exhibits a pattern of failing to provide

workers receiving on-the-job training from the employer with--

(A) continued, long-term employment as regular employees; and

(B) wages, benefits, and working conditions that are equivalent to the wages, benefits, and working conditions provided to regular employees who have worked a similar

period of time and are doing the same type of work as workers receiving on-the-job training from the employer.

(d) Administrative and Employment Services Funding-

(1) ADMINISTRATIVE FUNDING- In addition to any funds made available to a State to carry out this section for a fiscal year, the State shall receive for the fiscal year a payment in

an amount that is equal to 15 percent of the amount of such funds and shall--

(A) use not more than 2/3 of such payment for the administration of the climate change adjustment assistance for workers program under this part, including for--

(i) processing waivers of training requirements under subsection (a)(4); and

(ii) collecting, validating, and reporting data required under this part; and

(B) use not less than 1/3 of such payment for information and employment services under subsection (b)(1).

(2) EMPLOYMENT SERVICES FUNDING-

(A) IN GENERAL- In addition to any funds made available to a State to carry out subsection (b)(2) and the payment under paragraph (1) for a fiscal year, the Secretary shall

provide to the State for the fiscal year a reasonable payment for the purpose of providing employment and services under subsection (b)(1).

(B) VOLUNTARY RETURN OF FUNDS- A State that receives a payment under subparagraph (A) may decline or otherwise return such payment to the Secretary.

(e) Job Search Allowances- The Secretary of Labor may provide adversely affected workers a one-time job search allowance in accordance with regulations prescribed by the

Secretary. Any job search allowance provided shall be available only under the following circumstances and conditions:

(1) The worker is no longer eligible for the climate change adjustment allowance under subsection (a) and has completed the training program required by subsection

(a)(1)(E).

(2) The Secretary determines that the worker cannot reasonably be expected to secure suitable employment in the commuting area in which the worker resides.

(3) An allowance granted shall provide reimbursement to the worker of all necessary job search expenses as prescribed by the Secretary in regulations. Such reimbursement

under this subsection may not exceed $1,500 for any worker.

(f) Relocation Allowance Authorized-

(1) IN GENERAL- Any adversely affected worker covered by a certification issued under section 425 may file an application for a relocation allowance with the Secretary, and the

Secretary may grant the relocation allowance, subject to the terms and conditions of this subsection.

(2) CONDITIONS FOR GRANTING ALLOWANCE- A relocation allowance may be granted if all of the following terms and conditions are met:

(A) ASSIST AN ADVERSELY AFFECTED WORKER- The relocation allowance will assist an adversely affected worker in relocating within the United States.

(B) LOCAL EMPLOYMENT NOT AVAILABLE- The Secretary determines that the worker cannot reasonably be expected to secure suitable employment in the commuting

area in which the worker resides.

(C) TOTAL SEPARATION- The worker is totally separated from employment at the time relocation commences.

(D) SUITABLE EMPLOYMENT OBTAINED- The worker--

(i) has obtained suitable employment affording a reasonable expectation of long-term duration in the area in which the worker wishes to relocate; or

(ii) has obtained a bona fide offer of such employment.

(E) APPLICATION- The worker filed an application with the Secretary at such time and in such manner as the Secretary shall specify by regulation.

(3) AMOUNT OF ALLOWANCE- The relocation allowance granted to a worker under paragraph (1) includes--

(A) all reasonable and necessary expenses (including, subsistence and transportation expenses at levels not exceeding amounts prescribed by the Secretary in

regulations) incurred in transporting the worker, the worker's family, and household effects; and

(B) a lump sum equivalent to 3 times the worker's average weekly wage, up to a maximum payment of $1,500.

(4) LIMITATIONS- A relocation allowance may not be granted to a worker unless--

(A) the relocation occurs within 182 days after the filing of the application for relocation assistance; or

(B) the relocation occurs within 182 days after the conclusion of training, if the worker entered a training program approved by the Secretary under subsection (b)(2).

(g) Health Insurance Continuation- Not later than 1 year after the date of enactment of this part, the Secretary of Labor shall prescribe regulations to provide, for the period in which

an adversely affected worker is participating in a training program described in subsection (b)(2), 80 percent of the monthly premium of any health insurance coverage that an

adversely affected worker was receiving from such worker's employer prior to the separation from employment described in section 425(b), to be paid to any health care insurance

plan designated by the adversely affected worker receiving an allowance under this section.

SEC. 427. GENERAL PROVISIONS.

(a) Agreements With States-

(1) IN GENERAL- The Secretary is authorized on behalf of the United States to enter into an agreement with any State, or with any State agency (referred to in this section as

`cooperating States' and `cooperating States agencies' respectively). Under such an agreement, the cooperating State agency--

(A) as agent of the United States, shall receive applications for, and shall provide, payments on the basis provided in this part;

(B) in accordance with paragraph (6), shall make available to adversely affected workers covered by a certification under section 425(d) the employment services described

in section 426(b)(1);

(C) shall make any certifications required under section 425(d);

(D) shall otherwise cooperate with the Secretary and with other State and Federal agencies in providing payments and services under this part.

Each agreement under this section shall provide the terms and conditions upon which the agreement may be amended, suspended, or terminated.

(2) FORM AND MANNER OF DATA- Each agreement under this section shall--

(A) provide the Secretary with the authority to collect any data the Secretary determines necessary to meet the requirements of this part; and

(B) specify the form and manner in which any such data requested by the Secretary shall be reported.

(3) RELATIONSHIP TO UNEMPLOYMENT INSURANCE- Each agreement under this section shall provide that an adversely affected worker receiving a climate change

adjustment allowance under this part shall not be eligible for unemployment insurance otherwise payable to such worker under the laws of the State.

(4) REVIEW- A determination by a cooperating State agency with respect to entitlement to program benefits under an agreement is subject to review in the same manner and to

the same extent as determinations under the applicable State law and only in that manner and to that extent.

(5) COORDINATION- Any agreement entered into under this section shall provide for the coordination of the administration of the provisions for employment services, training,

and supplemental assistance under section 426 and under title I of the Workforce Investment Act of 1998 upon such terms and conditions as are established by the Secretary in

consultation with the States and set forth in such agreement. Any agency of the State jointly administering such provisions under such agreement shall be considered to be a

cooperating State agency for purposes of this part.

(6) RESPONSIBILITIES OF COOPERATING AGENCIES- Each cooperating State agency shall, in carrying out paragraph (1)(B)--

(A) advise each worker who applies for unemployment insurance of the benefits under this part and the procedures and deadlines for applying for such benefits;

(B) facilitate the early filing of petitions under section 425(a) for any workers that the agency considers are likely to be eligible for benefits under this part;

(C) advise each adversely affected worker to apply for training under section 426(b) before, or at the same time, the worker applies for climate change adjustment

allowances under section 426(a);

(D) perform outreach to, intake of, and orientation for adversely affected workers and adversely affected incumbent workers covered by a certification under section 426(a)

with respect to assistance and benefits available under this part;

(E) make employment services described in section 426(b)(1) available to adversely affected workers and adversely affected incumbent workers covered by a certification

under section 425(d) and, if funds provided to carry out this part are insufficient to make such services available, make arrangements to make such services available through other

Federal programs; and

(F) provide the benefits and reemployment services under this part in a manner that is necessary for the proper and efficient administration of this part, including the use of

state agency personnel employed in accordance with a merit system of personnel administration standards, including--

(i) making determinations of eligibility for, and payment of, climate change readjustment allowances and health care benefit replacement amounts;

(ii) developing recommendations regarding payments as a bridge to retirement and lump sum payments to pension plans in accordance with this subsection; and

(iii) the provision of reemployment services to eligible workers, including referral to training services.

(7) In order to promote the coordination of workforce investment activities in each State with activities carried out under this part, any agreement entered into under this section

shall provide that the State shall submit to the Secretary, in such form as the Secretary may require, the description and information described in paragraphs (8) and (14) of section

112(b) of the Workforce Investment Act of 1998 (29 U.S.C. 2822(b)) and a description of the State's rapid response activities under section 221(a)(2)(A).

(8) CONTROL MEASURES-

(A) IN GENERAL- The Secretary shall require each cooperating State and cooperating State agency to implement effective control measures and to effectively oversee the

operation and administration of the climate change adjustment assistance program under this part, including by means of monitoring the operation of control measures to improve

the accuracy and timeliness of the data being collected and reported.

(B) DEFINITION- For purposes of subparagraph (A), the term `control measures' means measures that--

(i) are internal to a system used by a State to collect data; and

(ii) are designed to ensure the accuracy and verifiability of such data.

(9) DATA REPORTING-

(A) IN GENERAL- Any agreement entered into under this section shall require the cooperating State or cooperating State agency to report to the Secretary on a quarterly

basis comprehensive performance accountability data, to consist of--

(i) the core indicators of performance described in subparagraph (B)(i);

(ii) the additional indicators of performance described in subparagraph (B)(ii), if any; and

(iii) a description of efforts made to improve outcomes for workers under the climate change adjustment assistance program.

(B) CORE INDICATORS DESCRIBED-

(i) IN GENERAL- The core indicators of performance described in this subparagraph are--

(I) the percentage of workers receiving benefits under this part who are employed during the second calendar quarter following the calendar quarter in which the

workers cease receiving such benefits;

(II) the percentage of such workers who are employed in each of the third and fourth calendar quarters following the calendar quarter in which the workers cease

receiving such benefits; and

(III) the earnings of such workers in each of the third and fourth calendar quarters following the calendar quarter in which the workers cease receiving such benefits.

(ii) ADDITIONAL INDICATORS- The Secretary and a cooperating State or cooperating State agency may agree upon additional indicators of performance for the climate

change adjustment assistance program under this part, as appropriate.

(C) STANDARDS WITH RESPECT TO RELIABILITY OF DATA- In preparing the quarterly report required by subparagraph (A), each cooperating State or cooperating State

agency shall establish procedures that are consistent with guidelines to be issued by the Secretary to ensure that the data reported are valid and reliable.

(10) VERIFICATION OF ELIGIBILITY FOR PROGRAM BENEFITS-

(A) IN GENERAL- An agreement under this section shall provide that the State shall periodically redetermine that a worker receiving benefits under this part who is not a

citizen or national of the United States remains in a satisfactory immigration status. Once satisfactory immigration status has been initially verified through the immigration status

verification system described in section 1137(d) of the Social Security Act (42 U.S.C. 1320b-7(d)) for purposes of establishing a worker's eligibility for unemployment compensation,

the State shall reverify the worker's immigration status if the documentation provided during initial verification will expire during the period in which that worker is potentially eligible to

receive benefits under this part. The State shall conduct such redetermination in a timely manner, utilizing the immigration status verification system described in section 1137(d) of

the Social Security Act (42 U.S.C. 1320b-7(d)).

(B) PROCEDURES- The Secretary shall establish procedures to ensure the uniform application by the States of the requirements of this paragraph.

(b) Administration Absent State Agreement-

(1) In any State where there is no agreement in force between a State or its agency under subsection (a), the Secretary shall promulgate regulations for the performance of all

necessary functions under section 426, including provision for a fair hearing for any worker whose application for payments is denied.

(2) A final determination under paragraph (1) with respect to entitlement to program benefits under section 426 is subject to review by the courts in the same manner and to the

same extent as is provided by section 205(g) of the Social Security Act (42 U.S.C. 405(g)).

(c) Prohibition on Contracting With Private Entities- Neither the Secretary nor a State may contract with any private for-profit or nonprofit entity for the administration of the climate

change adjustment assistance program under this part.

(d) Payment to the States-

(1) IN GENERAL- The Secretary shall from time to time certify to the Secretary of the Treasury for payment to each cooperating State the sums necessary to enable such State

as agent of the United States to make payments provided for by this part.

(2) RESTRICTION- All money paid a State under this subsection shall be used solely for the purposes for which it is paid; and money so paid which is not used for such

purposes shall be returned, at the time specified in the agreement under this section, to the Secretary of the Treasury.

(3) BONDS- Any agreement under this section may require any officer or employee of the State certifying payments or disbursing funds under the agreement or otherwise

participating in the performance of the agreement, to give a surety bond to the United States in such amount as the Secretary may deem necessary, and may provide for the payment

of the cost of such bond from funds for carrying out the purposes of this part.

(e) Labor Standards-

(1) PROHIBITION ON DISPLACEMENT- An individual in an apprenticeship program or on-the-job training program under this part shall not displace (including a partial

displacement, such as a reduction in the hours of non-overtime work, wages, or employment benefits) any employed employee.

(2) PROHIBITION ON IMPAIRMENT OF CONTRACTS- An apprenticeship program or on-the-job raining program under this Act shall not impair an existing contract for services

or collective bargaining agreement, and no such activity that would be inconsistent with the terms of a collective bargaining agreement shall be undertaken without the written

concurrence of the labor organization and employer concerned.

(3) ADDITIONAL STANDARDS- The Secretary, or a State acting under an agreement described in subsection (a) may pay the costs of on-the-job training, notwithstanding any

other provision of this section, only if--

(A) in the case of training which would be inconsistent with the terms of a collective bargaining agreement, the written concurrence of the labor organization concerned has

been obtained;

(B) the job for which such adversely affected worker is being trained is not being created in a promotional line that will infringe in any way upon the promotional opportunities

of currently employed individuals;

(C) such training is not for the same occupation from which the worker was separated and with respect to which such worker's group was certified pursuant to section

425(d);

(D) the employer is provided reimbursement of not more than 50 percent of the wage rate of the participant, for the cost of providing the training and additional supervision

related to the training; and

(E) the employer has not received payment under with respect to any other on-the-job training provided by such employer which failed to meet the requirements of

subparagraphs (A) through (D).

(f) Definitions- As used in this part the following definitions apply:

(1) The term `adversely affected employment' means employment at an employment site, if workers at such site are eligible to apply for adjustment assistance under this part.

(2) The term `adversely affected worker' means an individual who has been totally or partially separated from employment and is eligible to apply for adjustment assistance

under this part.

(3) The term `average weekly wage' means 1/13 of the total wages paid to an individual in the quarter in which the individual's total wages were highest among the first 4 of the

last 5 completed calendar quarters immediately before the quarter in which occurs the week with respect to which the computation is made. Such week shall be the week in which

total separation occurred, or, in cases where partial separation is claimed, an appropriate week, as defined in regulations prescribed by the Secretary.

(4) The term `average weekly hours' means the average hours worked by the individual (excluding overtime) in the employment from which he has been or claims to have been

separated in the 52 weeks (excluding weeks during which the individual was sick or on vacation) preceding the week specified in the last sentence of paragraph (4).

(5) The term `benefit period' means, with respect to an individual--

(A) the benefit year and any ensuing period, as determined under applicable State law, during which the individual is eligible for regular compensation, additional

compensation, or extended compensation; or

(B) the equivalent to such a benefit year or ensuing period provided for under the applicable Federal unemployment insurance law.

(6) The term `consumer goods manufacturing' means the electrical equipment, appliance, and component manufacturing industry and transportation equipment

manufacturing.

(7) The term `employment site' means a single facility or site of employment.

(8) The term `energy-intensive manufacturing industries' means all industrial sectors, entities, or groups of entities that meet the energy or greenhouse gas intensity criteria in

section 765(b)(2)(A)(i) of the Clean Air Act based on the most recent data available.

(9) The term `energy producing and transforming industries' means the coal mining industry, oil and gas extraction, electricity power generation, transmission and distribution,

and natural gas distribution.

(10) The term `industries dependent on energy industries' means rail transportation and pipeline transportation.

(11) The term `on-the-job training' means training provided by an employer to an individual who is employed by the employer.

(12) The terms `partial separation' and `partially separated' refer, with respect to an individual who has not been totally separated, that such individual has had--

(A) his or her hours of work reduced to 80 percent or less of his average weekly hours in adversely affected employment; and

(B) his or her wages reduced to 80 percent or less of his average weekly wage in such adversely affected employment.

(13) The term `public agency' means a department or agency of a State or political subdivision of a State or of the Federal government.

(14) The term `Secretary' means the Secretary of Labor.

(15) The term `service workers' means workers supplying support or auxiliary services to an employment site.

(16) The term `State' includes the District of Columbia and the Commonwealth of Puerto Rico: and the term `United States' when used in the geographical sense includes

such Commonwealth.

(17) The term `State agency' means the agency of the State which administers the State law.

(18) The term `State law' means the unemployment insurance law of the State approved by the Secretary of Labor under section 3304 of the Internal Revenue Code of 1954.

(19) The terms `total separation' and `totally separated' refer to the layoff or severance of an individual from employment with an employer in which adversely affected

employment exists.

(20) The term `unemployment insurance' means the unemployment compensation payable to an individual under any State law or Federal unemployment compensation law,

including chapter 85 of title 5, United States Code, and the Railroad Unemployment Insurance Act. The terms `regular compensation', `additional compensation', and `extended

compensation' have the same respective meanings that are given them in section 205(2), (3), and (4) of the Federal-State Extended Unemployment Compensation Act of 1970 (26

U.S.C. 3304 note.)

(21) The term `week' means a week as defined in the applicable State law.

(22) The term `week of unemployment' means a week of total, part-total, or partial unemployment as determined under the applicable State law or Federal unemployment

insurance law.

(g) Special Rule With Respect to Military Service-

(1) IN GENERAL- Notwithstanding any other provision of this part, the Secretary may waive any requirement of this part that the Secretary determines is necessary to ensure

that an adversely affected worker who is a member of a reserve component of the Armed Forces and serves a period of duty described in paragraph (2) is eligible to receive a climate

change adjustment allowance, training, and other benefits under this part in the same manner and to the same extent as if the worker had not served the period of duty.

(2) PERIOD OF DUTY DESCRIBED- An adversely affected worker serves a period of duty described in this paragraph if, before completing training under this part, the worker--

(A) serves on active duty for a period of more than 30 days under a call or order to active duty of more than 30 days; or

(B) in the case of a member of the Army National Guard of the United States or Air National Guard of the United States, performs full-time National Guard duty under section

502(f) of title 32, United States Code, for 30 consecutive days or more when authorized by the President or the Secretary of Defense for the purpose of responding to a national

emergency declared by the President and supported by Federal funds.

(h) Fraud and Recovery of Overpayments-

(1) RECOVERY OF PAYMENTS TO WHICH AN INDIVIDUAL WAS NOT ENTITLED- If the Secretary or a court of competent jurisdiction determines that any person has received

any payment under this part to which the individual was not entitled, such individual shall be liable to repay such amount to the Secretary, as the case may be, except that the

Secretary shall waive such repayment if such agency or the Secretary determines that--

(A) the payment was made without fault on the part of such individual; and

(B) requiring such repayment would cause a financial hardship for the individual (or the individual's household, if applicable) when taking into consideration the income and

resources reasonably available to the individual (or household) and other ordinary living expenses of the individual (or household).

(2) MEANS OF RECOVERY- Unless an overpayment is otherwise recovered, or waived under paragraph (1), the Secretary shall recover the overpayment by deductions from

any sums payable to such person under this part, under any Federal unemployment compensation law or other Federal law administered by the Secretary which provides for the

payment of assistance or an allowance with respect to unemployment. Any amount recovered under this section shall be returned to the Treasury of the United States.

(3) PENALTIES FOR FRAUD- Any person who--

(A) makes a false statement of a material fact knowing it to be false, or knowingly fails to disclose a material fact, for the purpose of obtaining or increasing for that person or

for any other person any payment authorized to be furnished under this part; or

(B) makes a false statement of a material fact knowing it to be false, or knowingly fails to disclose a material fact, when providing information to the Secretary during an

investigation of a petition under section 425(c),

shall be imprisoned for not more than one year, or fined under title 18, United States Code, or both, and be ineligible for any further payments under this part.

(i) Regulations- The Secretary shall prescribe such regulations as may be necessary to carry out the provisions of this part.

(j) Study on Older Workers- The Secretary shall conduct a study examine the circumstances of older adversely affected workers and the ability of such workers to access their

retirement benefits. The Secretary shall transmit a report to Congress not later than 2 years after the date of enactment of this part on the findings of the study and the Secretary's

recommendations on how to ensure that adversely affected workers within 2 years of retirement are able to access their retirement benefits.

[Struck out->][ (k) Spending Limit- For each fiscal year, the total amount of funds disbursed for the purposes described in section 426 shall not exceed the amount deposited in

that fiscal year into the Climate Change Worker Assistance Fund established under section [Struck out->][ 782(j) ][<-Struck out] of the Clean Air Act. The annual spending limit for any

succeeding year shall be increased by the difference, if any, between the amount of the prior year's disbursements and the spending limitation for that year. The Secretary shall

promulgate rules to ensure that this spending limit is not exceeded. Such rules shall provide that workers who receive any of the benefits described in section 426 receive full

benefits, and shall include the establishment of a waiting list for workers in the event that the requests for assistance exceed the spending limit. ][<-Struck out]

Subtitle C--Consumer Assistance

SEC. 431. ENERGY TAX CREDIT.

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

`SEC. 36B. ENERGY TAX CREDIT.

`(a) Allowance of Credit- In the case of an eligible individual, there shall be allowed as a credit against the tax imposed by this subtitle for the taxable year an amount equal to--

`(1) for an eligible individual with applicable income of less than $6,000, the phase in rate times the applicable income;

`(2) for an eligible individual with applicable income that is greater than or equal to $6,000 and is less than or equal to the phase down amount, the maximum energy tax credit;

and

`(3) for an individual with applicable income that exceeds the phase down amount, an amount equal to--

`(A) the maximum energy tax credit minus; or

`(B) the difference between the individual's applicable income and the phase down amount multiplied by .2.

`(b) Coordination With Energy Refund Received Through State Human Service Agencies- The amount described in subsection (a) shall be reduced by 1/12 for each month in

which the individual or his or her spouse received a refund under section 432 of the American Clean Energy and Security Act of 2009.

`(1) The Secretary of the Treasury shall promulgate regulations that instruct States on how to inform adult individuals who receive a refund under section 432 of the American

Clean Energy and Security Act of 2009 of the number of months he or she received a refund and how such information shall be provided to the Internal Revenue Service.

`(2) The Secretary of the Treasury shall establish a telephone and online system that allows an individual to inquire about the number of months she or he received such a

refund.

`(3) In the case of an individual that does not report the number of months a refund was provided under section 432 of the American Clean Energy and Security Act of 2009 or

recorded an incorrect number of months, the Secretary of the Treasury shall adjust the energy tax credit based on the information received from States, provided that the Secretary of

the Treasury has made a determination that the information meets a sufficient standard for accuracy.

`(c) Definitions and Special Rules- For purposes of this section:

`(1) ELIGIBLE INDIVIDUAL-

`(A) IN GENERAL- The term `eligible individual' means any individual other than--

`(i) any nonresident alien individual;

`(ii) any individual with respect to whom a deduction under section 151 is allowable to another taxpayer for a taxable year beginning in the calendar year in which the

individual's taxable year begins; and

`(iii) an estate or trust.

`(B) IDENTIFICATION NUMBER REQUIREMENT- Such term shall not include any individual who--

`(i) in the case of a return that is not a joint return, does not include the social security number of the individual; and

`(ii) in the case of joint return, does not include the social security number of at least one of the taxpayers on such return.

For purposes of the preceding sentence, the social security number shall not include a TIN issued by the Internal Revenue Service.

`(2) APPLICABLE INCOME- Applicable income means the larger of--

`(A) earned income as defined in section 32(c)(2), except that such term shall not include net earnings from self-employment which are not taken into account in computing

taxable income; and

`(B) adjusted gross income.

`(3) PHASE IN RATE- The Secretary of the Treasury shall compute the phase in rates each year for the energy credit for joint returns and for returns that are not filed jointly with

respect to each relevant number of qualifying individuals such that the phase in rate equals the maximum energy tax credit divided by $6,000.

`(4) MAXIMUM ENERGY TAX CREDIT-

`(A) IN GENERAL-

`(i) The maximum energy tax credit shall vary based on the number of individuals in the tax filing unit.

`(ii) The maximum energy tax credit for a filing unit of a particular size shall be equal to the average annual reduction in purchasing power for low-income households of

that household size, as calculated by the Environmental Protection Agency, that results from the regulation of greenhouse gas emissions under title VII of the Clean Air Act.

`(iii) The Environmental Protection Agency, in consultation with other appropriate Federal agencies, shall calculate the maximum energy tax credit by August 31 of each

year for the following calendar year using the most recent, reliable data available.

`(B) ENERGY TAX CREDIT CALCULATION-

`(i) DISTRIBUTION- For each calendar year, the Environmental Protection Agency shall determine pursuant to subparagraph (B)(iii) the aggregate reduction in

purchasing power among all United States households that results from the regulation of greenhouse gas emissions under title VII of the Clean Air Act and distribute that aggregate

reduction in purchasing power among all United States households based on--

`(I) households' share of total consumption by all households;

`(II) the carbon intensity and covered-emissions intensity of households' consumption; and

`(III) the share of households' carbon and covered-emissions consumption that is not financed by Federal benefits subject to a cost of living adjustment that offsets

increased carbon costs.

`(ii) MAXIMUM ENERGY TAX CREDIT- The maximum energy tax credit shall be equal to the arithmetic mean value of the amount allocated under clause (i) to households

of a specified household size in the lowest income quintile. Tax filing units that include 5 or more individuals shall be eligible for the arithmetic mean value of the amount allocated

under clause (i) to households that includes 5 or more individuals.

`(iii) AGGREGATE REDUCTION IN PURCHASING POWER- For purposes of this section, the aggregate reduction in purchasing power shall be based on the projected

total market value of the emissions allowances used to demonstrate compliance with title VII of the Clean Air Act in that year, adjusted to reflect costs that were not incurred by

households as a result of allowances freely allocated pursuant to section 782 of the Clean Air Act, as estimated by the Environmental Protection Agency, and calculated in a way

generally recognized as suitable by experts in evaluating such purchasing power impacts.

`(iv) INCOME QUINTILES- Income quintiles shall be determined by ranking households according to income adjusted for household size, and shall be constructed so

that each quintile contains an equal number of people.

`(5) PHASE DOWN AMOUNT-

`(A) In the case of an eligible individual who has no qualifying individuals, the phase down amount shall be--

`(i) $20,000 in the case of an individual who does not file a joint return; and

`(ii) $25,000 in the case of a joint return.

`(B) In the case of an eligible individual who files a joint return and has at least one qualifying individual--

`(i) If the eligible individual has one qualifying individual, the lowest income level that exceeds the phaseout amount as defined in section 32(b)(2) at which a married

couple with one qualifying child is ineligible for the earned income credit for the taxable year.

`(ii) If the eligible individual has two qualifying individuals, the lowest income level that exceeds the phaseout amount as defined in section 32(b)(2) at which a married

couple with two qualifying children is ineligible for the earned income credit for the taxable year.

`(iii) If the eligible individual claims three or more qualifying individuals, the lowest income level that exceeds the phaseout amount as defined in section 32(b)(2) at

which a married couple with three or more qualifying children is ineligible for the earned income credit for the taxable year.

`(C) In the case of an eligible individual who does not file a joint return and has at least one individual qualifying individual--

`(i) If the eligible individual has one qualifying individual, the lowest income level that exceeds the phaseout amount as defined in section 32(b)(2) at which a single

individual with one qualifying child is ineligible for the earned income credit for the taxable year.

`(ii) If the eligible individual has two qualifying individuals, the lowest income level that exceeds the phaseout amount as defined in section 32(b)(2) at which a single

individual with two qualifying children is ineligible for the earned income credit for the taxable year.

`(iii) If the eligible individual has three or more qualifying individuals, the lowest income level that exceeds the phaseout amount as defined in section 32(b)(2) at which a

single individual with three or more qualifying children is ineligible for the earned income credit for the taxable year.

`(6) QUALIFYING INDIVIDUAL- A qualifying individual is an individual whom the eligible individual claims as a dependent under section 151, or as a qualifying child for the

earned income credit under section 32(c)(3) or the child tax credit under section 24, or both. The term qualifying individual does not include--

`(A) someone claimed as a dependent under section 151 if that dependent is claimed as a qualifying child for the earned income tax credit or the child tax credit on a tax

form by someone other than the eligible individual; and

`(B) the eligible individual and, if a joint return, his or her spouse.

`(7) NUMBER OF PEOPLE IN THE TAX FILING UNIT- The number of people in the tax filing unit shall equal the sum of the number of qualifying individuals plus--

`(A) in the case of a joint return, 2; and

`(B) in the case of a return that is not filed jointly, 1.

`(d) Treatment of Possessions-

`(1) PAYMENTS TO POSSESSIONS-

`(A) MIRROR CODE POSSESSION- The Secretary of the Treasury shall pay to each possession of the United States with a mirror code tax system amounts equal to the

loss to that possession by reason of the amendments made by this section. Such amounts shall be determined by the Secretary of the Treasury based on information provided by the

Government of the respective possession.

`(B) OTHER POSSESSIONS- The Secretary of the Treasury shall pay to each possession of the United States which does not have a mirror code tax system amounts

estimated by the Secretary of the Treasury as being equal to the aggregate benefits that would have been provided to residents of such possession by reason of the amendments

made by this section if a mirror code tax system had been in effect in such possession. The preceding sentence shall not apply for a given taxable year with respect to any

possession of the United States unless such possession has a plan, which has been approved by the Secretary of the Treasury, under which such possession will promptly

distribute such payments to residents of such possession.

`(2) COORDINATION WITH CREDIT ALLOWED AGAINST UNITED STATES INCOME TAXES- No credit shall be allowed against United States income taxes for any taxable year

under this section to any person--

`(A) to whom a credit is allowed against taxes imposed by the possession by reason of the amendments made by this section for such taxable year; or

`(B) who is eligible for a payment under a plan described in paragraph (1)(B) with respect to such taxable year.

`(e) Amount of Credit to Be Determined Under Tables- The amount of the credit allowed by this section shall be determined under tables prescribed by the Secretary.

`(f) Inflation Adjustments- In the case of any taxable year beginning after 2009, dollar amounts in subsection (c)(4)(A) shall be increased by an amount equal to such dollar

amount, multiplied by the cost-of-living adjustment determined under section 1(f)(3) of the Internal Revenue Code of 1986.

`(g) Treatment in Other Programs- The energy tax credit provided under this section shall not be considered income or resources for any purpose under any Federal, State, or local

laws, including, but not limited to, laws relating to an income tax or public assistance program (including, but not limited to, health care, cash aid, child care, nutrition programs, and

housing assistance), and no participating State or political subdivision thereof shall decrease any assistance otherwise provided an individual or individuals because of the receipt of

an energy tax credit under this Act.'.

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

(a) Energy Refund Program-

(1) The Administrator of the Environmental Protection Agency, or the agency designated by the Administrator shall formulate and administer the `Energy Refund Program'.

(2) At the request of the State agency, eligible low-income households within the State shall receive a monthly cash energy refund equal to the estimated loss in purchasing

power resulting from this Act.

(b) Eligibility-

(1) ELIGIBLE HOUSEHOLDS- Participation in the Energy Refund Program shall be limited to a household that--

(A) the State agency determines to be participating in (i) the Supplemental Nutrition Assistance Program authorized by the Food and Nutrition Act of 2008 (7 U.S.C. 2011 et

seq.); (ii) the Food Distribution Program on Indian Reservations authorized by section 4(b) of such Act (7 U.S.C. 2013(b)); or (iii) the program for nutrition assistance in Puerto Rico or

American Samoa under section 19 of the such Act (7 U.S.C. 2028);

(B) has gross income that does not exceed 150 percent of the poverty line; or

(C) consists of a single individual or a married couple and (i) receives the subsidy described in section 1860D-14 of the Social Security Act (42 U.S.C. 1395w-114); or (ii)(I)

participates in the program under section XVIII of the Social Security Act; and (II) meets the income requirements described in section 1860D-14(a)(1) or (a)(2) of such Act (42 U.S.C.

1395w-114(a)(1) or (a)(2)).

(2) STREAMLINED ELIGIBILITY FOR CERTAIN BENEFICIARIES- The Administrator, in consultation with the Secretary of Health and Human Services, the Commissioner of

Social Security, the Railroad Retirement Board, the Secretary of Veterans Affairs, and the State agencies shall develop procedures to ensure that low-income beneficiaries of the

benefit programs they administer receive the energy refund for which they are eligible.

(3) LIMITATION- Notwithstanding any provision of law, the Administrator shall establish procedures to ensure that individuals that qualify for the refund under paragraph (1)(B)

and that do not participate in the Supplemental Nutrition Assistance Program are United States citizens, United States nationals, or individuals lawfully residing in the United States.

(4) NATIONAL STANDARDS- The Administrator shall establish uniform national standards of eligibility in accordance with the provisions of this section. No State agency shall

impose any other standard or requirement as a condition of eligibility or refund receipt under the program. Assistance in the Energy Refund Program shall be furnished promptly to all

eligible households who make application for such participation.

(c) Monthly Energy Refund Amount-

(1) MONTHLY ENERGY REFUND- The monthly refund under this subsection for households of 1, 2, 3, 4, and 5 or more members shall be equal to the maximum energy tax

credit amount calculated under section 36B(c)(4) of the Internal Revenue Code of 1986 for each household size, divided by 12 and rounded to the nearest whole dollar amount.

(2) MONTHLY ELIGIBILITY- A household shall not be eligible for the refund under this section for months that the household has not established eligibility under subsection

(b).

(d) Delivery Mechanism-

(1) Subject to standards and an implementation schedule set by the Administrator, the energy refund shall be provided in monthly installments via--

(A) direct deposit into the eligible household's designated bank account;

(B) the State's electronic benefit transfer system; or

(C) another Federal or State mechanism, if such a mechanism is approved by the Administrator.

(2) Such standards shall include--

(A)(i) defining the required level of recipient protection regarding privacy;

(ii) guidance on how recipients are offered choices, when relevant, about the delivery mechanism;

(iii) guidance on ease of use and access to the refund, including the prohibition of fees charged to recipients for withdrawals or other services; and

(iv) cost-effective protections against improper accessing of the energy refund;

(B) operating standards that provide for interoperability between States and law enforcement monitoring; and

(C) other standards, as determined by the Administrator or the Administrator's designee.

(e) Information About Refund Provided to Households and Internal Revenue Service-

(1) By January 31 of each year, for each adult that was a member of a household that received an energy refund under this section in the State during the prior calendar year,

each State shall issue a form that conforms to standards established by the Secretary of the Treasury under section 36B(b) of the Internal Revenue Code of 1986, containing--

(A) the name, address, and social security number of the adult household member; and

(B) the number of months the individual was a member of a household that received an energy refund under this section.

(2) States shall provide this information to the Internal Revenue Service in accordance to standards and regulations set forth by the Secretary of the Treasury.

(f) Administration-

(1) IN GENERAL- The State agency of each participating State shall assume responsibility for the certification of applicant households and for the issuance of refunds and the

control and accountability thereof.

(2) PROCEDURES- Under standards established by the Administrator, the State agency shall establish procedures governing the administration of the Energy Refund

Program that the State agency determines best serve households in the State, including households with special needs, such as households with elderly or disabled members,

households in rural areas, homeless individuals, and households residing on reservations as defined in the Indian Child Welfare Act of 1978 and the Indian Financing Act of 1974. In

carrying out this paragraph, a State agency--

(A) shall provide timely, accurate, and fair service to applicants for, and participants in, the Energy Refund Program;

(B) shall permit an applicant household to apply to participate in the program at the time that the household first contacts the State agency, and shall consider an application

that contains the name, address, and signature of the applicant to be sufficient to constitute an application for participation;

(C) shall screen any applicant household for the Supplemental Nutrition Assistance Program, the State's medical assistance program under section XIX of the Social

Security Act, State Childrens Health Insurance Program under section XXI of the Social Security Act, and a State program that provides basic assistance under a State program funded

under title IV of the Social Security Act or with qualified State expenditures as defined in section 409(a)(7) of the Social Security Act for eligibility for the Energy Refund Program and, if

eligible, shall enroll such applicant household in the Energy Refund Program;

(D) shall complete certification of and provide a refund to any eligible household not later than thirty days following its filing of an application;

(E) shall use appropriate bilingual personnel and materials in the administration of the program in those portions of the State in which a substantial number of members of

low-income households speak a language other than English; and

(F) shall utilize State agency personnel who are employed in accordance with the current standards for a Merit System of Personnel Administration or any standards later

prescribed by the Office of Personnel Management pursuant to section 208 of the Intergovernmental Personnel Act of 1970 (42 U.S.C. 4728) modifying or superseding such

standards relating to the establishment and maintenance of personnel standards on a merit basis to make all tentative and final determinations of eligibility and ineligibility.

(3) REGULATIONS-

(A) Except as provided in subparagraph (B) the Administrator shall issue such regulations consistent with this section as the Administrator deems necessary or appropriate

for the effective and efficient administration of the Energy Refund Program and shall promulgate all such regulations in accordance with the procedures set forth in section 553 of title

5, United States Code.

(B) Without regard to section 553 of title 5 of such Code, the Administrator may, during the period beginning with the effective date of this section and ending two years after

such date, by rule promulgate as final any procedures that are substantially the same as the procedures governing the Supplemental Nutrition Assistance Program at 7 C.F.R. 273.2,

273.12.273.15.

(g) Treatment- The value of the refund provided under this Act shall not be considered income or resources for any purpose under any Federal, State, or local laws, including, but

not limited to, laws relating to an income tax, or public assistance programs (including, but not limited to, health care, cash aid, child care, nutrition programs, and housing

assistance) and no participating State or political subdivision thereof shall decrease any assistance otherwise provided an individual or individuals because of the receipt of a refund

under this Act.

(h) Program Integrity- For purposes of ensuring program integrity and complying with the requirements of the Improper Payment Information Act of 2002, the Administrator shall--

(1) to the maximum extent possible rely on and coordinate with the quality control sample and review procedures of section 16(c)(2), (3), (4), and (5) of the Supplemental

Nutrition Assistance Program; and

(2) develop procedures to monitor the compliance with and accuracy of State agencies in providing forms to household members and the Internal Revenue Service under

subsection (f).

(i) Definitions-

(1) ADMINISTRATOR- The term `Administrator' means the Administrator of the Environmental Protection Agency or the head of another agency designated by the Administrator.

(2) ELECTRONIC BENEFIT TRANSFER SYSTEM- The term `electronic benefit transfer system' means a system by which household benefits or refunds defined under

subsection (d) are issued from and stored in a central databank via electronic benefit transfer cards.

(3) GROSS INCOME- The term `gross income' means the gross income of a household that is determined in accordance with standards and procedures established under

section 5 of the Food and Nutrition Act of 2008 (7 U.S.C. 2014) and its implementing regulations.

(4) HOUSEHOLD- The term `household' means--

(A)(i) except as provided in subparagraph (C), an individual or a group of individuals who are a household under section 3(n) of the Food and Nutrition Act of 2008 (7 U.S.C.

2012(n)); and

(ii) a single individual or married couple that receive benefits under section 1860D-14 of the Social Security Act (42 U.S.C. 1395w-114).

(B) The Administrator shall establish rules for providing the energy refund in an equitable and administratively simple manner to households where the group of individuals

who live together includes a combination of members described in clauses (i) and (ii) of subparagraph (A), or includes additional members not described in clause (i) or clause (ii) of

subparagraph (A).

(C) The Administrator shall establish rules regarding the eligibility and delivery of the energy refund to groups of individuals described in section 3(n)(4) or (5) of the Food

and Nutrition Act of 2008 (7 U.S.C. 2012(n)).

(5) POVERTY LINE- The term `poverty line' has the meaning given the term in section 673(2) of the Community Services Block Grant Act (42 U.S.C. 9902(2)), including any

revision required by that section.

(6) STATE- The term `State' means the 50 States, the District of Columbia, the Commonwealth of Puerto Rico, American Samoa, the United States Virgin Islands, Guam, and

the Commonwealth of the Northern Mariana Islands.

(7) STATE AGENCY- The term `State agency' means an agency of State government, including the local offices thereof, that has responsibility for administration of the 1 or

more federally aided public assistance programs within the State, and in those States where such assistance programs are operated on a decentralized basis, the term shall include

the counterpart local agencies administering such programs.

(8) OTHER TERMS- Other terms not defined in this Act shall have the same meaning applied in the Supplemental Nutrition Assistance Program unless the Administrator finds

for good cause that application of a particular definition would be detrimental to the purposes of the Energy Refund Program.

Subtitle D--Exporting Clean Technology

SEC. 441. FINDINGS AND PURPOSES.

(a) Findings- Congress finds the following:

(1) Protecting Americans from the impacts of climate change requires global reductions in greenhouse gas emissions.

(2) Although developing countries are historically least responsible for the cumulative greenhouse gas emissions that are causing climate change and continue to have very

low per capita greenhouse gas emissions, their overall greenhouse gas emissions are increasing as they seek to grow their economies and reduce energy poverty for their

populations.

(3) Many developing countries lack the financial and technical resources to adopt clean energy technologies and absent assistance their greenhouse gas emissions will

continue to increase.

(4) Investments in clean energy technology cooperation can substantially reduce global greenhouse gas emissions while providing developing countries with incentives to

adopt policies that will address competitiveness concerns related to regulation of United States greenhouse gas emissions.

(5) Investments in clean technology in developing countries will increase demand for clean energy products, open up new markets for United States companies, spur

innovation, and lower costs.

(6) Under Article 4 of the United Nations Framework Convention on Climate Change, developed country parties, including the United States, committed to `take all practicable

steps to promote, facilitate, and finance, as appropriate, the transfer of, or access to, environmentally sound technologies and know-how to other parties, particularly developing

country parties, to enable them to implement the provisions of the Convention'.

(7) Under the Bali Action Plan, developed country parties to the United Nations Framework Convention on Climate Change, including the United States, committed to

`enhanced action on the provision of financial resources and investment to support action on mitigation and adaptation and technology cooperation,' including, inter alia,

consideration of `improved access to adequate, predictable, and sustainable financial resources and financial and technical support, and the provision of new and additional

resources, including official and concessional funding for developing country parties'.

(b) Purposes- The purposes of this subtitle are--

(1) to provide United States assistance and leverage private resources to encourage widespread implementation, in developing countries, of activities that reduce, sequester,

or avoid greenhouse gas emissions; and

(2) to provide such assistance in a manner that--

(A) encourages such countries to adopt policies and measures, including sector-based and cross-sector policies and measures, that substantially reduce, sequester, or

avoid greenhouse gas emissions; and

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

SEC. 442. DEFINITIONS.

In this subtitle:

(1) ALLOWANCE- The term `allowance' means an emission allowance established under section 721 of the Clean Air Act.

(2) APPROPRIATE CONGRESSIONAL COMMITTEES- The term `appropriate congressional committees' means--

(A) the Committees on Energy and Commerce, Foreign Affairs, and Financial Services of the House of Representatives; and

(B) the Committees on Environment and Public Works, Energy and Natural Resources, and Foreign Relations of the Senate.

(3) CONVENTION- The term `Convention' means the United Nations Framework Convention on Climate Change, done at New York on May 9, 1992, and entered into force on

March 21, 1994.

(4) DEVELOPING COUNTRY- The term `developing country' means a country eligible to receive official development assistance according to the income guidelines of the

Development Assistance Committee of the Organization for Economic Cooperation and Development.

(5) ELIGIBLE COUNTRY- The term `eligible country' means a developing country that is determined by the interagency group under section 444 to be eligible to receive

assistance from the International Clean Technology Account.

(6) INTERAGENCY GROUP- The term `interagency group' means the group established by the President under section 443 to administer distributions from the International

Clean Technology Account.

(7) INTERNATIONAL CLEAN TECHNOLOGY ACCOUNT- The term `International Clean Technology Account' means the account to which the Administrator allocates

allowances under section 782(o) of the Clean Air Act.

(8) LEAST DEVELOPED COUNTRY- The term `least developed country' means a foreign country the United Nations has identified as among the least developed of developing

countries.

(9) QUALIFYING ACTIVITY- The term `qualifying activity' means an activity that meets the criteria in section 445.

(10) QUALIFYING ENTITY- The term `qualifying entity' means a national, regional, or local government in, or a nongovernmental organization or private entity located or

operating in, an eligible country.

SEC. 443. GOVERNANCE.

(a) Oversight- The Secretary of State, or such other Federal agency head as the President may designate, in consultation with the interagency group established under subsection

(b), shall oversee distributions of allowances from the International Clean Technology Account.

(b) Interagency Group- The President shall establish an interagency group to administer the International Clean Technology Account. The Members of the interagency group shall

include--

(1) the Secretary of State;

(2) the Administrator of the Environmental Protection Agency;

(3) the Secretary of Energy;

(4) the Secretary of the Treasury;

(5) the Administrator of the United States Agency for International Development; and

(6) any other head of a Federal agency or executive branch appointee that the President may designate.

(c) Chairperson- The Secretary of State shall serve as the chairperson of the interagency group.

(d) Supplement Not Supplant- Allowances distributed from the International Clean Technology Account shall be used to supplement, and not to supplant, any other Federal, State,

or local resources available to carry out activities that are qualifying activities under this subtitle.

SEC. 444. DETERMINATION OF ELIGIBLE COUNTRIES.

(a) In General- The interagency group shall determine a country to be an eligible country for the purposes of this subtitle if a country meets the following criteria:

(1) The country is a developing country that--

(A) has entered into an international agreement to which the United States is a party, under which such country agrees to take actions to produce measurable, reportable,

and verifiable greenhouse gas emissions mitigation; or

(B) is determined by the interagency group to have in force national policies and measures that are capable of producing measurable, reportable, and verifiable

greenhouse gas emissions mitigation.

(2) The country has developed a nationally appropriate mitigation strategy that seeks to achieve substantial reductions, sequestration, or avoidance of greenhouse gas

emissions, relative to business-as-usual levels.

(3) Subject to subsection (b)(1), such other criteria as the President determines will serve the purposes of this subtitle or other United States national security, foreign policy,

environmental, or economic objectives.

(b) Exceptions-

(1) Subsection (a)(3) applies only to bilateral assistance under section 446(c).

(2) The eligibility criteria in this section do not apply in the case of least developed countries receiving assistance under section 445(7) for the purpose of building capacity to

meet such eligibility criteria.

SEC. 445. QUALIFYING ACTIVITIES.

Assistance under this subtitle may be provided only to qualifying entities for clean technology activities (including building relevant technical and institutional capacity) that

contribute to substantial, measurable, reportable, and verifiable reductions, sequestration, or avoidance of greenhouse gas emissions including--

(1) deployment of technologies to capture and sequester carbon dioxide emissions from electric generating units or large industrial sources (except that assistance under this

subtitle for such deployment shall be limited to the cost of retrofitting existing facilities with such technologies or the incremental cost of purchasing and installing such technologies

at new facilities);

(2) deployment of renewable electricity generation from wind, solar, sustainably-produced biomass, geothermal, marine, or hydrokinetic sources;

(3) substantial increases in the efficiency of electricity transmission, distribution, and consumption;

(4) deployment of low- or zero emissions technologies that are facing financial or other barriers to their widespread deployment which could be addressed through support

under this subtitle in order to reduce, sequester, or avoid emission;

(5) reduction in transportation sector emissions through increased transportation system and vehicle efficiency or use of transportation fuels that have lifecycle greenhouse

gas emissions that are substantially lower than those attributable to fossil fuel-based alternatives;

(6) reduction in black carbon emissions; or

(7) capacity building activities, including--

(A) developing and implementing methodologies and programs for measuring and quantifying greenhouse gas emissions and verifying emissions mitigation;

(B) assessing, developing, and implementing technology and policy options for greenhouse gas emissions mitigation and avoidance of future emissions, including sector

and cross-sector mitigation strategies; and

(C) providing other forms of technical assistance to facilitate the qualification for, and receipt of, assistance under this Act.

SEC. 446. ASSISTANCE.

(a) In General- The Secretary of State, or such other Federal agency head as the President may designate, is authorized to provide assistance, through the distribution of

allowances, from the International Clean Technology Account for qualifying activities that take place in eligible countries.

(b) Distribution of Allowances-

(1) IN GENERAL- The Secretary of State, or such other Federal agency head as the President may designate, after consultation with the interagency group, shall distribute

allowances from the International Clean Technology Account--

(A) in the form of bilateral assistance in accordance with paragraph (4);

(B) to multilateral funds or institutions pursuant to the Convention or an agreement negotiated under the Convention; or

(C) through some combination of the mechanisms identified in subparagraphs (A) and (B).

(2) GLOBAL ENVIRONMENT FACILITY- For any allowances provided to the Global Environment Facility pursuant to paragraph (1)(B), the President shall designate the

Secretary of the Treasury to distribute those allowances to the Global Environment Facility.

(3) DISTRIBUTION THROUGH INTERNATIONAL FUND OR INSTITUTION- If allowances are distributed to a multilateral fund or institution, as authorized in paragraph (1), the

Secretary of State, or such other Federal agency head as the President may designate, shall seek to ensure the establishment and implementation of adequate mechanisms to--

(A) apply and enforce the criteria for determination of eligible countries and qualifying activities under sections 444 and 445, respectively; and

(B) require public reporting describing the process and methodology for selecting the ultimate recipients of assistance and a description of each activity that received

assistance, including the amount of obligations and expenditures for assistance.

(4) BILATERAL ASSISTANCE-

(A) IN GENERAL- Bilateral assistance under paragraph (1) shall be carried out by the Administrator of the United States Agency for International Development, in

consultation with the interagency group.

(B) LIMITATIONS- Not more than 15 percent of allowances made available to carry out bilateral assistance under this subtitle in any year shall be distributed to support

activities in any single country.

(C) SELECTION CRITERIA- Not later than 2 years after the date of enactment of this subtitle, the Administrator of the United States Agency for International Development,

after consultation with the interagency group, shall develop and publish a set of criteria to be used in evaluating activities within eligible countries for bilateral assistance under this

subtitle.

(D) CRITERIA REQUIREMENTS- The criteria under subparagraph (C) shall require that--

(i) the activity is a qualifying activity;

(ii) the activity will be conducted as part of an eligible country's nationally appropriate mitigation strategy or as part of an eligible country's actions towards providing a

nationally appropriate mitigation strategy to reduce, sequester, or avoid emissions being implemented by the eligible country;

(iii) the activity will not have adverse effects on human health, safety, or welfare, the environment, or natural resources;

(iv) any technologies deployed through bilateral assistance under this subtitle will be properly implemented and maintained;

(v) the activity will not cause any net loss of United States jobs or displacement of United States production;

(vi) costs of the activity will be shared by the host country government, private sector parties, or a multinational development bank, except that this clause does not apply

to least developed countries; and

(vii) the activity meets such other requirements as the interagency group determines appropriate to further the purposes of this subtitle.

(E) CRITERIA PREFERENCES- The criteria under subparagraph (C) shall give preference to activities that--

(i) promise to achieve large-scale greenhouse gas reductions, sequestration, or avoidance at a national, sectoral or cross-sectoral level;

(ii) have the potential to catalyze a shift within the host country towards widespread deployment of low- or zero-carbon energy technologies;

(iii) build technical and institutional capacity and other activities that are unlikely to be attractive to private sector funding; or

(iv) maximize opportunities to leverage other sources of assistance and catalyze private-sector investment.

(c) Monitoring, Evaluation, and Enforcement- The Secretary of State, or such other Federal agency head as the President may designate, in consultation with the interagency group,

shall establish and implement a system to monitor and evaluate the performance of activities receiving assistance under this subtitle. The Secretary of State, or such other Federal

agency head as the President may designate, shall have the authority to suspend or terminate assistance in whole or in part for an activity if it is determined that the activity is not

operating in compliance with the approved proposal.

(d) Coordination With U.S. Foreign Assistance- Subject to the direction of the President, the Secretary of State shall, to the extent practicable, seek to align activities under this

section with broader development, poverty alleviation, or natural resource management objectives and initiatives in the recipient country.

(e) Annual Reports- Not later than March 1, 2012, and annually thereafter, the President shall submit to the appropriate congressional committees a report on the assistance

provided under this subtitle during the prior fiscal year. Such report shall include--

(1) a description of the amount and value of allowances distributed during the prior fiscal year;

(2) a description of each activity that received assistance during the prior fiscal year, and a description of the anticipated and actual outcomes;

(3) an assessment of any adverse effects to human health, safety, or welfare, the environment, or natural resources as a result of activities supported under this subtitle;

(4) an assessment of the success of the assistance provided under this subtitle to improving the technical and institutional capacity to implement substantial emissions

reductions; and

(5) an estimate of the greenhouse gas emissions reductions, sequestration, or avoidance achieved by assistance provided under this subtitle during the prior fiscal year.

Subtitle E--Adapting to Climate Change

PART 1--DOMESTIC ADAPTATION

Subpart A--National Climate Change Adaptation Program

SEC. 451. NATIONAL CLIMATE CHANGE ADAPTATION PROGRAM.

The President shall establish within the United States Global Change Research Program a National Climate Change Adaptation Program for the purpose of increasing the overall

effectiveness of Federal climate change adaptation efforts.

SEC. 452. CLIMATE SERVICES.

The Secretary of Commerce, acting through the Administrator of the National Oceanic and Atmospheric Administration (NOAA), shall establish within NOAA a National Climate

Service to develop climate information, data, forecasts, and warnings at national and regional scales, and to distribute information related to climate impacts to State, local, and tribal

governments and the public to facilitate the development and implementation of strategies to reduce society's vulnerability to climate variability and change.

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

(a) Distribution of Allowances-

(1) IN GENERAL- Not later than September 30, 2012, and annually thereafter through 2050, the Administrator shall distribute allowances allocated for purposes of this subpart

pursuant to section 782 of the Clean Air Act ratably among the State governments based on the product of--

(A) each State's population; and

(B) each State's allocation factor as determined under paragraph (2).

(2) STATE ALLOCATION FACTORS-

(A) IN GENERAL- Except as provided in subparagraph (B), the allocation factor for a State shall be the quotient of--

(i) the per capita income of all individuals in the United States, divided by

(ii) the per capita income of all individuals in such State.

(B) LIMITATION- If the allocation factor for a State as calculated under subparagraph (A) would exceed 1.2, then the allocation factor for such State shall be 1.2. If the

allocation factor for a State as calculated under subparagraph (A) would be less than 0.8, then the allocation factor for such State shall be 0.8.

(C) PER CAPITA INCOME- For purposes of this paragraph, per capita income shall be--

(i) determined at 2-year intervals; and

(ii) subject to subparagraph (D), equal to the average of the annual per capita incomes for the most recent period of 3 consecutive years for which satisfactory data are

available from the Department of Commerce at the time such determination is made.

(D) REVENUE DIRECTLY RESULTING FROM A PRESIDENTIALLY DECLARED MAJOR DISASTER- For purposes of this paragraph, per capita income from one or more of

the following sources shall be reduced or excluded if the Secretary of Commerce (in consultation with the Administrator and the secretaries or administrators of the departments or

agencies involved) determines that the income accrues to persons as the result of a Major Disaster (as declared by the President of the United States) and if the Secretary finds that

the inclusion of one or more of these income sources, in whole or in part, results in a transitory, rather than a sustainable, increase in a State's per capita income level relative to the

national average:

(i) Property and casualty insurance (including homeowners and renters insurance).

(ii) The National Flood Insurance Program of the Federal Emergency Management Agency .

(iii) The Individual and Family Grants Program of the Federal Emergency Management Agency.

(iv) The Disaster Housing Program of the Federal Emergency Management Agency.

(v) The Community Development Block Grant Program of the Department of Housing and Urban Development.

(vi) The Disaster Unemployment Assistance Program of the Department of Labor.

(vii) Any other source determined appropriate by the Administrator.

(b) Sale of Allowances- Each State receiving emission allowances under this section shall sell such allowances within 1 year of receipt, either directly or through consignment to

the Administrator for auction. States shall deposit the proceeds of such sales within the State Energy and Environment Development (SEED) Fund established pursuant to section

131 of this Act . Emission allowances distributed under this section that are not sold within 1 year of receipt by a State shall be returned to the Administrator, who shall distribute such

allowances to the remaining States ratably in accordance with the formula in subsection (a).

(c) Use of Proceeds- States shall, in accordance with a State climate adaptation plan approved pursuant to subsection (e), use the proceeds of sales of emission allowances

distributed under this section exclusively for the implementation of projects, programs, or measures to build resilience to the impacts of climate change, including--

(1) extreme weather events such as flooding and tropical cyclones;

(2) more frequent heavy precipitation events;

(3) water scarcity and adverse impacts on water quality;

(4) stronger and longer heat waves;

(5) more frequent and severe droughts;

(6) rises in sea level;

(7) ecosystem disruption;

(8) increased air pollution; and

(9) effects on public health.

(d) Priority in Projects to Reduce Flood Events- When implementing any project, program, or measure funded under this section and designed to reduce flood events, a State

should consider prioritizing projects that seek to--

(1) mitigate the destructive impacts of climate-related increases in the duration, frequency, or magnitude of rainfall or runoff, including snowmelt runoff, as well as hurricanes;

(2) improve flood protection for densely populated urban areas; and

(3) mitigate the destructive impact of ocean-related climate change effects, including effects on bays, estuaries, populated barrier islands and other ocean-related features,

through a variety of means and measures, including the construction of jetties, levies, and other coastal structures in densely populated coastal areas impacted by climate change.

(e) State Climate Adaptation Plans-

(1) IN GENERAL- Not later than 2 years after the date of enactment of this Act, the Administrator, or such other Federal agency head or heads as the President may designate,

shall promulgate regulations establishing requirements for submission and approval of State climate adaptation plans under this section. Receipt of emission allowances pursuant

to this section shall be contingent on approval of a State climate adaptation plan meeting the requirements of such guidelines.

(2) REQUIREMENTS- Regulations promulgated under this subsection shall require, at minimum, that--

(A) State climate adaptation plans assess and prioritize the State's vulnerability to a broad range of impacts of climate change, based on the best available science;

(B) State climate adaptation plans include an assessment of potential for carbon reduction through changes to land management policies (including enhancement, or

protection, of forest carbon sinks);

(C) State climate adaptation plans identify and prioritize specific cost-effective projects, programs, and measures to build resilience to predicted impacts of climate change;

(D) State climate adaptation plans ensure that the State fully considers and undertakes, to the maximum extent practicable, initiatives that--

(i) protect or enhance natural ecosystem functions, including protection, maintenance, or restoration of natural infrastructure such as wetlands, reefs, and barrier islands

to buffer communities from floodwaters or storms, watershed protection to maintain water quality and groundwater recharge, or floodplain restoration to improve natural flood control

capacity; or

(ii) use non-structural approaches including practices that utilize, enhance, or mimic the natural hydrologic cycle processes of infiltration, evapotranspiration, and reuse;

(E) in order to be eligible to receive emission allowances under this section, a State shall submit a revised State climate adaptation plan for approval not less frequently

than every 5 years; and

(F) State climate adaptation plans be consistent with Federal conservation and environmental laws and, to the maximum extent practicable, avoid environmental

degradation.

(3) COORDINATION WITH PRIOR PLANNING EFFORTS- In promulgating regulations under this subsection, the Administrator, or such other Federal agency head or heads as

the President may designate, shall--

(A) draw upon lessons learned and best practices from preexisting State climate adaptation planning efforts;

(B) seek to avoid duplication of such efforts; and

(C) ensure that the plans developed under this section reflect and are fully consistent with State natural resources adaptation plans developed under section 479.

(f) Reporting- Each State receiving emission allowances under this section shall submit to the Administrator, or such other Federal agency head or heads as the President may

designate, within 12 months after each receipt of such allowances and once every 2 years thereafter until the proceeds from the sale of emission allowances received under this

section are fully expended, a report that--

(1) provides a full accounting for the State's use of proceeds of sales of emission allowances distributed under this section, including a description of the projects, programs,

or measures funded through such proceeds;

(2) includes a report prepared by an independent third party, in accordance with such regulations as are promulgated by the Administrator or such other Federal agency head

or heads as the President may designate, evaluating the performance of the projects, programs, or measures funded under this section; and

(3) identifies any use by the State of proceeds of sales of emission allowances distributed under this section for the reduction of flood and storm damage and the effects of

climate change on water and flood protection infrastructure.

(g) Enforcement- If the Administrator, or such other Federal agency head or heads as the President may designate, determines that a State is not in compliance with this section,

the Administrator may withhold a portion of the allowances, the value of which is equal to up to twice the value of the allowances that the State failed to use in accordance with the

requirements of this section, that such State would otherwise be eligible to receive under this section in 1 or more later years. Allowances withheld pursuant to this subsection shall

be distributed among the remaining States ratably in accordance with the formula in subsection (a).

(h) Supplement, Not Supplant- It is the intent of the Congress that emission allowances distributed to carry out this subpart should be used to supplement, and not replace,

existing sources of funding used to build resilience to the impacts of climate change identified in subsection (c).

Subpart B--Public Health and Climate Change

SEC. 461. SENSE OF CONGRESS ON PUBLIC HEALTH AND CLIMATE CHANGE.

It is the sense of the Congress that the Federal Government, in cooperation with international, State, tribal, and local governments, concerned public and private organizations, and

citizens, should use all practicable means and measures--

(1) to assist the efforts of public health and health care professionals, first responders, States, tribes, municipalities, and local communities to incorporate measures to

prepare health systems to respond to the impacts of climate change;

(2) to ensure--

(A) that the Nation's health professionals have sufficient information to prepare for and respond to the adverse health impacts of climate change;

(B) the utility and value of scientific research in advancing understanding of--

(i) the health impacts of climate change; and

(ii) strategies to prepare for and respond to the health impacts of climate change;

(C) the identification of communities vulnerable to the health effects of climate change and the development of strategic response plans to be carried out by health

professionals for those communities;

(D) the improvement of health status and health equity through efforts to prepare for and respond to climate change; and

(E) the inclusion of health policy in the development of climate change responses;

(3) to encourage further research, interdisciplinary partnership, and collaboration among stakeholders in order to--

(A) understand and monitor the health impacts of climate change; and

(B) improve public health knowledge and response strategies to climate change;

(4) to enhance preparedness activities, and public health infrastructure, relating to climate change and health;

(5) to encourage each and every American to learn about the impacts of climate change on health; and

(6) to assist the efforts of developing nations to incorporate measures to prepare health systems to respond to the impacts of climate change.

SEC. 462. RELATIONSHIP TO OTHER LAWS.

Nothing in this subpart in any manner limits the authority provided to or responsibility conferred on any Federal department or agency by any provision of any law (including

regulations) or authorizes any violation of any provision of any law (including regulations), including any health, energy, environmental, transportation, or any other law or regulation.

SEC. 463. NATIONAL STRATEGIC ACTION PLAN.

(a) Requirement-

(1) IN GENERAL- The Secretary of Health and Human Services, within 2 years after the date of the enactment of this Act, on the basis of the best available science, and in

consultation pursuant to paragraph (2), shall publish a strategic action plan to assist health professionals in preparing for and responding to the impacts of climate change on public

health in the United States and other nations, particularly developing nations.

(2) CONSULTATION- In developing or making any revision to the national strategic action plan, the Secretary shall--

(A) consult with the Director of the Centers for Disease Control and Prevention, the Administrator of the Environmental Protection Agency, the Director of the National

Institutes of Health, the Secretary of Energy, other appropriate Federal agencies, Indian tribes, State and local governments, public health organizations, scientists, and other

interested stakeholders; and

(B) provide opportunity for public input.

(b) Contents-

(1) IN GENERAL- The Secretary, acting through the Director of the Centers for Disease Control and Prevention and other appropriate Federal agencies, shall assist health

professionals in preparing for and responding effectively and efficiently to the health effects of climate change through measures including--

(A) developing, improving, integrating, and maintaining domestic and international disease surveillance systems and monitoring capacity to respond to health-related

effects of climate change, including on topics addressing--

(i) water, food, and vector borne infectious diseases and climate change;

(ii) pulmonary effects, including responses to aeroallergens;

(iii) cardiovascular effects, including impacts of temperature extremes;

(iv) air pollution health effects, including heightened sensitivity to air pollution;

(v) hazardous algal blooms;

(vi) mental and behavioral health impacts of climate change;

(vii) the health of refugees, displaced persons, and vulnerable communities;

(viii) the implications for communities vulnerable to health effects of climate change, as well as strategies for responding to climate change within these communities;

and

(ix) local and community-based health interventions for climate-related health impacts;

(B) creating tools for predicting and monitoring the public health effects of climate change on the international, national, regional, State, and local levels, and providing

technical support to assist in their implementation;

(C) developing public health communications strategies and interventions for extreme weather events and disaster response situations;

(D) identifying and prioritizing communities and populations vulnerable to the health effects of climate change, and determining actions and communication strategies that

should be taken to inform and protect these communities and populations from the health effects of climate change;

(E) developing health communication, public education, and outreach programs aimed at public health and health care professionals, as well as the general public, to

promote preparedness and response strategies relating to climate change and public health, including the identification of greenhouse gas reduction behaviors that are

health-promoting; and

(F) developing academic and regional centers of excellence devoted to--

(i) researching relationships between climate change and health;

(ii) expanding and training the public health workforce to strengthen the capacity of such workforce to respond to and prepare for the health effects of climate change;

(iii) creating and supporting academic fellowships focusing on the health effects of climate change; and

(iv) training senior health ministry officials from developing nations to strengthen the capacity of such nations to--

(I) prepare for and respond to the health effects of climate change; and

(II) build an international network of public health professionals with the necessary climate change knowledge base;

(G) using techniques, including health impact assessments, to assess various climate change public health preparedness and response strategies on international,

national, State, regional, tribal, and local levels, and make recommendations as to those strategies that best protect the public health;

(H)(i) assisting in the development, implementation, and support of State, regional, tribal, and local preparedness, communication, and response plans (including with

respect to the health departments of such entities) to anticipate and reduce the health threats of climate change; and

(ii) pursuing collaborative efforts to develop, integrate, and implement such plans;

(I) creating a program to advance research as it relates to the effects of climate change on public health across Federal agencies, including research to--

(i) identify and assess climate change health effects preparedness and response strategies;

(ii) prioritize critical public health infrastructure projects related to potential climate change impacts that affect public health; and

(iii) coordinate preparedness for climate change health impacts, including the development of modeling and forecasting tools;

(J) providing technical assistance for the development, implementation, and support of preparedness and response plans to anticipate and reduce the health threats of

climate change in developing nations; and

(K) carrying out other activities determined appropriate by the Secretary to plan for and respond to the impacts of climate change on public health.

(c) Revision- The Secretary shall revise the national strategic action plan not later than July 1, 2014, and every 4 years thereafter, to reflect new information collected pursuant to

implementation of the national strategic action plan and otherwise, including information on--

(1) the status of critical environmental health parameters and related human health impacts;

(2) the impacts of climate change on public health; and

(3) advances in the development of strategies for preparing for and responding to the impacts of climate change on public health.

(d) Implementation-

(1) IMPLEMENTATION THROUGH HHS- The Secretary shall exercise the Secretary's authority under this subpart and other provisions of Federal law to achieve the goals and

measures of the national strategic action plan.

(2) OTHER PUBLIC HEALTH PROGRAMS AND INITIATIVES- The Secretary and Federal officials of other relevant Federal agencies shall administer public health programs

and initiatives authorized by provisions of law other than this subpart, subject to the requirements of such statutes, in a manner designed to achieve the goals of the national strategic

action plan.

(3) CDC- In furtherance of the national strategic action plan, the Secretary, acting through the Director of the Centers for Disease Control and Prevention and the head of any

other appropriate Federal agency, shall--

(A) conduct scientific research to assist health professionals in preparing for and responding to the impacts of climate change on public health; and

(B) provide funding for--

(i) research on the health effects of climate change; and

(ii) preparedness planning on the international, national, State, regional, and local levels to respond to or reduce the burden of health effects of climate change; and

(C) carry out other activities determined appropriate by the Director or the head of such agency to prepare for and respond to the impacts of climate change on public health.

SEC. 464. ADVISORY BOARD.

(a) Establishment- The Secretary shall establish a permanent science advisory board comprised of not less than 10 and not more than 20 members.

(b) Appointment of Members- The Secretary shall appoint the members of the science advisory board from among individuals--

(1) who have expertise in public health and human services, climate change, and other relevant disciplines; and

(2) at least 1/2 of whom are recommended by the President of the National Academy of Sciences.

(c) Functions- The science advisory board shall--

(1) provide scientific and technical advice and recommendations to the Secretary on the domestic and international impacts of climate change on public health, populations

and regions particularly vulnerable to the effects of climate change, and strategies and mechanisms to prepare for and respond to the impacts of climate change on public health;

and

(2) advise the Secretary regarding the best science available for purposes of issuing the national strategic action plan.

SEC. 465. REPORTS.

(a) Needs Assessment-

(1) IN GENERAL- The Secretary shall seek to enter into, by not later than 6 months after the date of the enactment of this Act, an agreement with the National Research Council

and the Institute of Medicine to complete a report that--

(A) assesses the needs for health professionals to prepare for and respond to climate change impacts on public health; and

(B) recommends programs to meet those needs.

(2) SUBMISSION- The agreement under paragraph (1) shall require the completed report to be submitted to the Congress and the Secretary and made publicly available not

later than 1 year after the date of the agreement.

(b) Climate Change Health Protection and Promotion Reports-

(1) IN GENERAL- The Secretary, in consultation with the advisory board established under section 464, shall ensure the issuance of reports to aid health professionals in

preparing for and responding to the adverse health effects of climate change that--

(A) review scientific developments on health impacts of climate change; and

(B) recommend changes to the national strategic action plan.

(2) SUBMISSION- The Secretary shall submit the reports required by paragraph (1) to the Congress and make such reports publicly available not later than July 1, 2013, and

every 4 years thereafter.

SEC. 466. DEFINITIONS.

In this subpart:

(1) HEALTH IMPACT ASSESSMENT- The term `health impact assessment' means a combination of procedures, methods, and tools by which a policy, program, or project may

be judged as to its potential effects on the health of a population, and the distribution of those effects within the population.

(2) NATIONAL STRATEGIC ACTION PLAN- The term `national strategic action plan' means the plan issued and revised under section 463.

(3) SECRETARY- Unless otherwise specified, the term `Secretary' means the Secretary of Health and Human Services.

SEC. 467. CLIMATE CHANGE HEALTH PROTECTION AND PROMOTION FUND.

(a) Establishment of Fund- There is hereby established in the Treasury a separate account that shall be known as the Climate Change Health Protection and Promotion Fund.

(b) Availability of Amounts- All amounts deposited into the Climate Change Health Protection and Promotion Fund shall be available to the Secretary to carry out this subpart

subject to further appropriation.

(c) Distribution of Funds by HHS- In carrying out this subpart, the Secretary may make funds deposited in the Climate Change Health Protection and Promotion Fund available to--

(1) other departments, agencies, and offices of the Federal Government;

(2) foreign, State, tribal, and local governments; and

(3) such other entities as the Secretary determines appropriate.

(d) Supplement, Not Replace- It is the intent of Congress that funds made available to carry out this subpart should be used to supplement, and not replace, existing sources of

funding for public health.

Subpart C--Natural Resource Adaptation

SEC. 471. PURPOSES.

The purposes of this subpart are to--

(1) establish an integrated Federal program to protect, restore, and conserve the Nation's natural resources in response to the threats of climate change and ocean

acidification; and

(2) provide financial support and incentives for programs, strategies, and activities that protect, restore, and conserve the Nation's natural resources in response to the threats

of climate change and ocean acidification.

SEC. 472. NATURAL RESOURCES CLIMATE CHANGE ADAPTATION POLICY.

It is the policy of the Federal Government, in cooperation with State and local governments, Indian tribes, and other interested stakeholders to use all practicable means and

measures to protect, restore, and conserve natural resources to enable them to become more resilient, adapt to, and withstand the impacts of climate change and ocean

acidification.

SEC. 473. DEFINITIONS.

In this subpart:

(1) COASTAL STATE- The term `coastal State' has the meaning given the term in section 304 of the Coastal Zone Management Act of 1972 (16 U.S.C. 1453).

(2) CORRIDORS- The term `corridors' means areas that provide connectivity, over different time scales (including seasonal or longer), of habitat or potential habitat and that

facilitate the ability of terrestrial, marine, estuarine, and freshwater fish, wildlife, or plants to move within a landscape as needed for migration, gene flow, or dispersal, or in response

to the impacts of climate change and ocean acidification or other impacts.

(3) ECOLOGICAL PROCESSES- The term `ecological processes' means biological, chemical, or physical interaction between the biotic and abiotic components of an

ecosystem and includes--

(A) nutrient cycling;

(B) pollination;

(C) predator-prey relationships;

(D) soil formation;

(E) gene flow;

(F) disease epizootiology;

(G) larval dispersal and settlement;

(H) hydrological cycling;

(I) decomposition; and

(J) disturbance regimes such as fire and flooding.

(4) HABITAT- The term `habitat' means the physical, chemical, and biological properties that are used by fish, wildlife, or plants for growth, reproduction, survival, food, water,

and cover, on a tract of land, in a body of water, or in an area or region.

(5) INDIAN TRIBE- The term `Indian tribe' has the meaning given the term in section 4 of the Indian Self-Determination and Education Assistance Act (25 U.S.C. 450b).

(6) NATURAL RESOURCES- The term `natural resources' means the terrestrial, freshwater, estuarine, and marine fish, wildlife, plants, land, water, habitats, and ecosystems

of the United States.

(7) NATURAL RESOURCES ADAPTATION- The term `natural resources adaptation' means the protection, restoration, and conservation of natural resources to enable them to

become more resilient, adapt to, and withstand the impacts of climate change and ocean acidification.

(8) RESILIENCE- Each of the terms `resilience' and `resilient' means the ability to resist or recover from disturbance and preserve diversity, productivity, and sustainability.

(9) STATE- The term `State' means--

(A) a State of the United States;

(B) the District of Columbia; and

(C) the Commonwealth of Puerto Rico, Guam, the United States Virgin Islands, the Northern Mariana Islands, and American Samoa.

SEC. 474. COUNCIL ON ENVIRONMENTAL QUALITY.

The Chair of the Council on Environmental Quality shall--

(1) advise the President on implementation and development of--

(A) a Natural Resources Climate Change Adaptation Strategy required under section 476; and

(B) Federal natural resource agency adaptation plans required under section 478;

(2) serve as the Chair of the Natural Resources Climate Change Adaptation Panel established under section 475; and

(3) coordinate Federal agency strategies, plans, programs, and activities related to protecting, restoring, and maintaining natural resources to become more resilient, adapt to,

and withstand the impacts of climate change and ocean acidification.

SEC. 475. NATURAL RESOURCES CLIMATE CHANGE ADAPTATION PANEL.

(a) Establishment- Not later than 90 days after the date of the enactment of this subpart, the President shall establish a Natural Resources Climate Change Adaptation Panel,

consisting of--

(1) the head, or their designee, of each of--

(A) the National Oceanic and Atmospheric Administration;

(B) the Forest Service;

(C) the National Park Service;

(D) the United States Fish and Wildlife Service;

(E) the Bureau of Land Management;

(F) the United States Geological Survey;

(G) the Bureau of Reclamation;

(H) the Bureau of Indian Affairs;

(I) the Environmental Protection Agency; and

(J) the Army Corps of Engineers;

(2) the Chair of the Council on Environmental Quality; and

(3) the heads of such other Federal agencies or departments with jurisdiction over natural resources of the United States, as determined by the President.

(b) Functions- The Panel shall serve as a forum for interagency consultation on and the coordination of the development and implementation of a national Natural Resources

Climate Change Adaptation Strategy required under section 476.

(c) Chair- The Chair of the Council on Environmental Quality shall serve as the Chair of the Panel.

SEC. 476. NATURAL RESOURCES CLIMATE CHANGE ADAPTATION STRATEGY.

(a) In General- Not later than one year after the date of the enactment of this subpart, the President, through the Natural Resources Climate Change Adaptation Panel established

under section 475, shall develop a Natural Resources Climate Change Adaptation Strategy to protect, restore, and conserve natural resources to enable them to become more

resilient, adapt to, and withstand the impacts of climate change and ocean acidification and to identify opportunities to mitigate those impacts.

(b) Development and Revision- In developing and revising the Strategy, the Panel shall--

(1) base the strategy on the best available science;

(2) develop the strategy in close cooperation with States and Indian tribes;

(3) coordinate with other Federal agencies as appropriate;

(4) consult with local governments, conservation organizations, scientists, and other interested stakeholders;

(5) provide public notice and opportunity for comment; and

(6) review and revise the Strategy every 5 years to incorporate new information regarding the impacts of climate change and ocean acidification on natural resources and

advances in the development of strategies for becoming more resilient and adapting to those impacts.

(c) Contents- The National Resources Adaptation Strategy shall include--

(1) an assessment of the vulnerability of natural resources to climate change and ocean acidification, including the short-term, medium-term, long-term, cumulative, and

synergistic impacts;

(2) a description of current research, observation, and monitoring activities at the Federal, State, tribal, and local level related to the impacts of climate change and ocean

acidification on natural resources, as well as identification of research and data needs and priorities;

(3) identification of natural resources that are likely to have the greatest need for protection, restoration, and conservation because of the adverse effects of climate change and

ocean acidification;

(4) specific protocols for integrating climate change and ocean acidification adaptation strategies and activities into the conservation and management of natural resources by

Federal departments and agencies to ensure consistency across agency jurisdictions and resources;

(5) specific actions that Federal departments and agencies shall take to protect, conserve, and restore natural resources to become more resilient, adapt to, and withstand the

impacts of climate change and ocean acidification, including a timeline to implement those actions;

(6) specific mechanisms for ensuring communication and coordination among Federal departments and agencies, and between Federal departments and agencies and

State natural resource agencies, United States territories, Indian tribes, private landowners, conservation organizations, and other nations that share jurisdiction over natural

resources with the United States;

(7) specific actions to develop and implement consistent natural resources inventory and monitoring protocols through interagency coordination and collaboration; and

(8) a process for guiding the development of detailed agency- and department-specific adaptation plans required under section 478 to address the impacts of climate change

and ocean acidification on the natural resources in the jurisdiction of each agency.

(d) Implementation- Consistent with its authorities under other laws and with Federal trust responsibilities with respect to Indian lands, each Federal department or agency with

representation on the National Resources Climate Change Adaptation Panel shall consider the impacts of climate change and ocean acidification and integrate the elements of the

strategy into agency plans, environmental reviews, programs, and activities related to the conservation, restoration, and management of natural resources.

SEC. 477. NATURAL RESOURCES ADAPTATION SCIENCE AND INFORMATION.

(a) Coordination- Not later than 90 days after the date of the enactment of this subpart, the Secretary of Commerce, acting through the Administrator of the National Oceanic and

Atmospheric Administration, and the Secretary of the Interior, acting through the Director of the United States Geological Survey, shall establish a coordinated process for developing

and providing science and information needed to assess and address the impacts of climate change and ocean acidification on natural resources. The process shall be led by the

National Climate Change and Wildlife Science Center established within the United States Geological Survey under subsection (d) and the National Climate Service of the National

Oceanic and Atmospheric Administration.

(b) Functions- The Secretaries shall ensure that such process avoids duplication and that the National Oceanic and Atmospheric Administration and the United States Geological

Survey shall--

(1) provide technical assistance to Federal departments and agencies, State and local governments, Indian tribes, and interested private landowners in their efforts to assess

and address the impacts of climate change and ocean acidification on natural resources;

(2) conduct and sponsor research and provide Federal departments and agencies, State and local governments, Indian tribes, and interested private landowners with

research products, decision and monitoring tools and information, to develop strategies for assisting natural resources to become more resilient, adapt to, and withstand the impacts

of climate change and ocean acidification; and

(3) assist Federal departments and agencies in the development of the adaptation plans required under section 478.

(c) Survey- Not later than one year after the date of enactment of this subpart and every 5 years thereafter, the Secretary of Commerce and the Secretary of the Interior shall

undertake a climate change and ocean acidification impact survey that--

(1) identifies natural resources considered likely to be adversely affected by climate change and ocean acidification;

(2) includes baseline monitoring and ongoing trend analysis;

(3) uses a stakeholder process to identify and prioritize needed monitoring and research that is of greatest relevance to the ongoing needs of natural resource managers to

address the impacts of climate change and ocean acidification; and

(4) identifies decision tools necessary to develop strategies for assisting natural resources to become more resilient and adapt to and withstand the impacts of climate

change and ocean acidification.

(d) National Climate Change and Wildlife Science Center-

(1) ESTABLISHMENT- The Secretary of the Interior shall establish the National Climate Change and Wildlife Science Center within the United States Geological Survey.

(2) FUNCTIONS- The Center shall, in collaboration with Federal and State natural resources agencies and departments, Indian tribes, universities, and other partner

organizations--

(A) assess and synthesize current physical and biological knowledge and prioritize scientific gaps in such knowledge in order to forecast the ecological impacts of climate

change on fish and wildlife at the ecosystem, habitat, community, population, and species levels;

(B) develop and improve tools to identify, evaluate, and, where appropriate, link scientific approaches and models for forecasting the impacts of climate change and

adaptation on fish, wildlife, plants, and their habitats, including monitoring, predictive models, vulnerability analyses, risk assessments, and decision support systems to help

managers make informed decisions;

(C) develop and evaluate tools to adaptively manage and monitor the effects of climate change on fish and wildlife at national, regional, and local scales; and

(D) develop capacities for sharing standardized data and the synthesis of such data.

(e) Science Advisory Board-

(1) ESTABLISHMENT- Not later than 180 days after the date of enactment of this subpart, the Secretary of Commerce and the Secretary of the Interior shall establish and

appoint the members of a Science Advisory Board, to be comprised of not fewer than 10 and not more than 20 members--

(A) who have expertise in fish, wildlife, plant, aquatic, and coastal and marine biology, ecology, climate change, ocean acidification, and other relevant scientific disciplines;

(B) who represent a balanced membership among Federal, State, Indian tribes, and local representatives, universities, and conservation organizations; and

(C) at least 1/2 of whom are recommended by the President of the National Academy of Sciences.

(2) DUTIES- The Science Advisory Board shall--

(A) advise the Secretaries on the state-of-the-science regarding the impacts of climate change and ocean acidification on natural resources and scientific strategies and

mechanisms for protecting, restoring, and conserving natural resources to enable them to become more resilient, adapt to, and withstand the impacts of climate change and ocean

acidification; and

(B) identify and recommend priorities for ongoing research needs on such issues.

(3) COLLABORATION- The Science Advisory Board shall collaborate with other climate change and ecosystem research entities in other Federal agencies and departments.

(4) AVAILABILITY TO THE PUBLIC- The advice and recommendations of the Science Advisory Board shall be made available to the public.

SEC. 478. FEDERAL NATURAL RESOURCE AGENCY ADAPTATION PLANS.

(a) Development- Not later than 1 year after the date of the development of a Natural Resources Climate Change Adaptation Strategy under section 476, each department or

agency that has a representative on the Natural Resources Climate Change Adaptation Panel established under section 475 shall--

(1) complete an adaptation plan for that department or agency, respectively, implementing the Natural Resources Climate Change Adaptation Strategy under section 476 and

consistent with the Natural Resources Climate Change Adaptation Policy under section 472, detailing the department's or agency's current and projected efforts to address the

potential impacts of climate change and ocean acidification on natural resources within the department's or agency's jurisdiction and necessary additional actions, including a

timeline for implementation of those actions;

(2) provide opportunities for review and comment on that adaptation plan by the public, including in the case of a plan by the Bureau of Indian Affairs, review by Indian tribes;

and

(3) submit such plan to the President for approval.

(b) Review by President and Submission to Congress-

(1) REVIEW BY PRESIDENT- The President shall--

(A) approve an adaptation plan submitted under subsection (a)(3) if the plan meets the requirements of subsection (c) and is consistent with the strategy developed under

section 476;

(B) decide whether to approve the plan within 60 days after submission; and

(C) if the President disapproves a plan, direct the department or agency to submit a revised plan to the President under subsection (a)(3) within 60 days after such

disapproval.

(2) SUBMISSION TO CONGRESS- Not later than 30 days after the date of approval of such adaptation plan by the President, the department or agency shall submit the

approved plan to the Committee on Natural Resources of the House of Representatives, the Committee on Energy and Natural Resources of the Senate, and the committees of the

House of Representatives and the Senate with principal jurisdiction over the department or agency.

(c) Requirements- Each adaptation plan shall--

(1) establish programs for assessing the current and future impacts of climate change and ocean acidification on natural resources within the department's or agency's,

respectively, jurisdiction, including cumulative and synergistic effects, and for identifying and monitoring those natural resources that are likely to be adversely affected and that have

need for conservation;

(2) identify and prioritize the department's or agency's strategies and specific conservation actions to address the current and future impacts of climate change and ocean

acidification on natural resources within the scope of the department's or agency's jurisdiction and to develop and implement strategies to protect, restore, and conserve such

resources to become more resilient, adapt to, and better withstand those impacts, including--

(A) the protection, restoration, and conservation of terrestrial, marine, estuarine, and freshwater habitats and ecosystems;

(B) the establishment of terrestrial, marine, estuarine, and freshwater habitat linkages and corridors;

(C) the restoration and conservation of ecological processes;

(D) the protection of a broad diversity of native species of fish, wildlife, and plant populations across their range; and

(E) the protection of fish, wildlife, and plant health, recognizing that climate can alter the distribution and ecology of parasites, pathogens, and vectors;

(3) describe how the department or agency will integrate such strategies and conservation activities into plans, programs, activities, and actions of the department or agency,

related to the conservation and management of natural resources and establish new plans, programs, activities, and actions as necessary;

(4) establish methods for assessing the effectiveness of strategies and conservation actions taken to protect, restore, and conserve natural resources to enable them to

become more resilient, adapt to, and withstand the impacts of climate change and ocean acidification, and for updating those strategies and actions to respond to new information

and changing conditions;

(5) include a description of current and proposed mechanisms to enhance cooperation and coordination of natural resources adaptation efforts with other Federal agencies,

State and local governments, Indian tribes, and nongovernmental stakeholders;

(6) include specific written guidance to resource managers to--

(A) explain how managers are expected to address the effects of climate change and ocean acidification;

(B) identify how managers are to obtain any site-specific information that may be necessary; and

(C) reflect best practices shared among relevant agencies, while also recognizing the unique missions, objectives, and responsibilities of each agency; and

(7) identify and assess data and information gaps necessary to develop natural resources adaptation plans and strategies.

(d) Implementation-

(1) IN GENERAL- Upon approval by the President, each department or agency that serves on the Natural Resources Climate Change Adaptation Panel shall implement its

adaptation plan through existing and new plans, policies, programs, activities, and actions to the extent not inconsistent with existing authority.

(2) CONSIDERATION OF IMPACTS-

(A) IN GENERAL- To the maximum extent practicable and consistent with applicable law, every natural resource management decision made by the department or agency

shall consider the impacts of climate change and ocean acidification on those natural resources.

(B) GUIDANCE- The Council on Environmental Quality shall issue guidance for Federal departments and agencies for considering those impacts.

(e) Revision and Review- Not less than every 5 years, each adaptation plan under this section shall be reviewed and revised to incorporate the best available science and other

information regarding the impacts of climate change and ocean acidification on natural resources.

SEC. 479. STATE NATURAL RESOURCES ADAPTATION PLANS.

(a) Requirement- In order to be eligible for funds under section 480, not later than 1 year after the development of a Natural Resources Climate Change Adaptation Strategy

required under section 476 each State shall prepare a State natural resources adaptation plan detailing the State's current and projected efforts to address the potential impacts of

climate change and ocean acidification on natural resources and coastal areas within the State's jurisdiction.

(b) Review or Approval-

(1) IN GENERAL- Each State adaptation plan shall be reviewed and approved or disapproved by the Secretary of the Interior and, as applicable, the Secretary of Commerce.

Such approval shall be granted if the plan meets the requirements of subsection (c) and is consistent with the Natural Resources Climate Change Adaptation Strategy required under

section 476.

(2) APPROVAL OR DISAPPROVAL- Within 180 days after transmittal of such a plan, or a revision to such a plan, the Secretary of the Interior and, as applicable, the Secretary of

Commerce shall approve or disapprove the plan by written notice.

(3) RESUBMITTAL- Within 90 days after transmittal of a resubmitted adaptation plan as a result of disapproval under paragraph (3), the Secretary of the Interior and, as

applicable, the Secretary of Commerce, shall approve or disapprove the plan by written notice.

(c) Contents- A State natural resources adaptation plan shall--

(1) include a strategy for addressing the impacts of climate change and ocean acidification on terrestrial, marine, estuarine, and freshwater fish, wildlife, plants, habitats,

ecosystems, wildlife health, and ecological processes, that--

(A) describes the impacts of climate change and ocean acidification on the diversity and health of the fish, wildlife and plant populations, habitats, ecosystems, and

associated ecological processes;

(B) establishes programs for monitoring the impacts of climate change and ocean acidification on fish, wildlife, and plant populations, habitats, ecosystems, and

associated ecological processes;

(C) describes and prioritizes proposed conservation actions to assist fish, wildlife, plant populations, habitats, ecosystems, and associated ecological processes in

becoming more resilient, adapting to, and better withstanding those impacts;

(D) includes strategies, specific conservation actions, and a time frame for implementing conservation actions for fish, wildlife, and plant populations, habitats, ecosystems,

and associated ecological processes;

(E) establishes methods for assessing the effectiveness of strategies and conservation actions taken to assist fish, wildlife, and plant populations, habitats, ecosystems,

and associated ecological processes in becoming more resilient, adapt to, and better withstand the impacts of climate changes and ocean acidification and for updating those

strategies and actions to respond appropriately to new information or changing conditions;

(F) is incorporated into a revision of the State wildlife action plan (also known as the State comprehensive wildlife strategy)--

(i) that has been submitted to the United States Fish and Wildlife Service; and

(ii) that has been approved by the Service or on which a decision on approval is pending; and

(G) is developed--

(i) with the participation of the State fish and wildlife agency, the State coastal agency, the State agency responsible for administration of Land and Water Conservation

Fund grants, the State Forest Legacy program coordinator, and other State agencies considered appropriate by the Governor of such State; and

(ii) in coordination with the Secretary of the Interior, and where applicable, the Secretary of Commerce and other States that share jurisdiction over natural resources with

the State; and

(2) include, in the case of a coastal State, a strategy for addressing the impacts of climate change and ocean acidification on the coastal zone that--

(A) identifies natural resources that are likely to be impacted by climate change and ocean acidification and describes those impacts;

(B) identifies and prioritizes continuing research and data collection needed to address those impacts including--

(i) acquisition of high resolution coastal elevation and nearshore bathymetry data;

(ii) historic shoreline position maps, erosion rates, and inventories of shoreline features and structures;

(iii) measures and models of relative rates of sea level rise or lake level changes, including effects on flooding, storm surge, inundation, and coastal geological

processes;

(iv) habitat loss, including projected losses of coastal wetlands and potentials for inland migration of natural shoreline habitats;

(v) ocean and coastal species and ecosystem migrations, and changes in species population dynamics;

(vi) changes in storm frequency, intensity, or rainfall patterns;

(vii) saltwater intrusion into coastal rivers and aquifers;

(viii) changes in chemical or physical characteristics of marine and estuarine systems;

(ix) increased harmful algal blooms; and

(x) spread of invasive species;

(C) identifies and prioritizes adaptation strategies to protect, restore, and conserve natural resources to enable them to become more resilient, adapt to, and withstand the

impacts of climate change and ocean acidification, including--

(i) protection, maintenance, and restoration of ecologically important coastal lands, coastal and ocean ecosystems, and species biodiversity and the establishment of

habitat buffer zones, migration corridors, and climate refugia; and

(ii) improved planning, siting policies, and hazard mitigation strategies;

(D) establishes programs for the long-term monitoring of the impacts of climate change and ocean acidification on the ocean and coastal zone and to assess and adjust,

when necessary, such adaptive management strategies;

(E) establishes performance measures for assessing the effectiveness of adaptation strategies intended to improve resilience and the ability of natural resources in the

coastal zone to adapt to and withstand the impacts of climate change and ocean acidification and of adaptation strategies intended to minimize those impacts on the coastal zone

and to update those strategies to respond to new information or changing conditions; and

(F) is developed with the participation of the State coastal agency and other appropriate State agencies and in coordination with the Secretary of Commerce and other

appropriate Federal agencies.

(d) Public Input- States shall provide for solicitation and consideration of public and independent scientific input in the development of their plans.

(e) Coordination With Other Plans- The State plan shall take into consideration research and information contained in, and coordinate with and integrate the goals and measures

identified in, as appropriate, other natural resources conservation strategies, including--

(1) the national fish habitat action plan;

(2) plans under the North American Wetlands Conservation Act (16 U.S.C. 4401 et seq.);

(3) the Federal, State, and local partnership known as `Partners in Flight';

(4) federally approved coastal zone management plans under the Coastal Zone Management Act of 1972 (16 U.S.C. 1451 et seq.);

(5) federally approved regional fishery management plants and habitat conservation activities under the Magnuson-Stevens Fishery Conservation and Management Act (16

U.S.C. 1801 et seq.);

(6) the national coral reef action plan;

(7) recovery plans for threatened species and endangered species under section 4(f) of the Endangered Species Act of 1973 (16 U.S.C. 1533(f));

(8) habitat conservation plans under section 10 of that Act (16 U.S.C. 1539);

(9) other Federal, State, and tribal plans for imperiled species;

(10) State or tribal hazard mitigation plans;

(11) State or tribal water management plans; and

(12) other State-based strategies that comprehensively implement adaptation activities to remediate the effects of climate change and ocean acidification on terrestrial, marine,

and freshwater fish, wildlife, plants, and other natural resources.

(f) Updating- Each State plan shall be updated not less than every 5 years.

(g) Funding-

(1) IN GENERAL- Funds allocated to States under section 480 shall be used only for activities that are consistent with a State natural resources adaptation plan that has been

approved by the Secretaries of Interior and Commerce.

(2) FUNDING PRIOR TO THE APPROVAL OF A STATE PLAN- Until the earlier of the date that is 3 years after the date of the enactment of this subpart or the date on which a

State receives approval for the State strategy, a State shall be eligible to receive funding under section 480 for adaptation activities that are--

(A) consistent with the comprehensive wildlife strategy of the State and, where appropriate, other natural resources conservation strategies; and

(B) in accordance with a workplan developed in coordination with--

(i) the Secretary of the Interior; and

(ii) the Secretary of Commerce, for any coastal State subject to the condition that coordination with the Secretary of Commerce shall be required only for those portions of

the strategy relating to activities affecting the coastal zone.

(3) PENDING APPROVAL- During the period for which approval by the applicable Secretary of a State plan is pending, the State may continue receiving funds under section 480

pursuant to the workplan described in paragraph (2)(B).

SEC. 480. NATURAL RESOURCES CLIMATE CHANGE ADAPTATION FUND.

(a) Allocations to States- 100 percent of the emission allowances made available for each year to carry out this subpart shall be provided to States to carry out natural resources

adaptation activities in accordance with State natural resources adaptation plans approved under section 479. Specifically--

(1) 84.4 percent shall be available to State wildlife agencies in accordance with the apportionment formula established under the second subsection (c) of section 4 of the

Pittman-Robertson Wildlife Restoration Act (16 U.S.C. 669c), as added by section 902(e) of H.R. 5548 as introduced in the 106th Congress and enacted into law by section 1(a)(2) of

Public Law 106-553 (114 Stat. 2762A-119); and

(2) 15.6 percent shall be available to State coastal agencies pursuant to the formula established by the Secretary of Commerce under section 306(c) of the Coastal

Management Act of 1972 (16 U.S.C. 1455(c)).

(b) Establishment of Fund-

(1) ESTABLISHMENT- There is hereby established in the Treasury a separate account that shall be known as the Natural Resources Climate Change Adaptation Fund.

(2) AUTHORIZATION OF APPROPRIATIONS- There are authorized to be appropriated for section 480(c) such sums as are deposited in the Natural Resources Climate

Change Fund, and the amounts appropriated for section 480(c) shall be no less than the total estimated annual deposits in the Natural Resources Climate Change Adaptation Fund.

Such appropriations shall be offset by the amounts deposited in such fund pursuant to section 782(m).

(c) Allocations to Federal Agencies-

(1) DEPARTMENT OF THE INTERIOR- Of the amounts made available for each fiscal year to carry out this subpart--

(A) 27.6 percent shall be allocated to the Secretary of the Interior for use in funding--

(i) natural resources adaptation activities carried out--

(I) under endangered species, migratory species, and other fish and wildlife programs administered by the National Park Service, the United States Fish and Wildlife

Service, the Bureau of Indian Affairs, and the Bureau of Land Management;

(II) on wildlife refuges, National Park Service land, and other public land under the jurisdiction of the United States Fish and Wildlife Service, the Bureau of Land

Management, the Bureau of Indian Affairs, or the National Park Service; or

(III) within Federal water managed by the Bureau of Reclamation and the National Park Service; and

(ii) for the implementation of the National Fish and Wildlife Habitat and Corridors Identification Program pursuant to section 481;

(B) 8.1 percent shall be allocated to the Secretary of the Interior for natural resources adaptation activities carried out under cooperative grant programs, including--

(i) the cooperative endangered species conservation fund authorized under section 6 of the Endangered Species Act of 1973 (16 U.S.C. 1535);

(ii) programs under the North American Wetlands Conservation Act (16 U.S.C. 4401 et seq.);

(iii) the Neotropical Migratory Bird Conservation Fund established by section 478(a) of the Neotropical Migratory Bird Conservation Act (16 U.S.C. 6108(a));

(iv) the Coastal Program of the United States Fish and Wildlife Service;

(v) the National Fish Habitat Action Plan;

(vi) the Partners for Fish and Wildlife Program;

(vii) the Landowner Incentive Program;

(viii) the Wildlife Without Borders Program of the United States Fish and Wildlife Service; and

(ix) the Migratory Species Program and Park Flight Migratory Bird Program of the National Park Service; and

(C) 4.9 percent shall be allocated to the Secretary of the Interior to provide financial assistance to Indian tribes to carry out natural resources adaptation activities through the

Tribal Wildlife Grants Program of the United States Fish and Wildlife Service.

(2) LAND AND WATER CONSERVATION FUND-

(A) DEPOSITS-

(i) IN GENERAL- Of the amounts made available for each fiscal year to carry out this subpart, 19.5 percent shall be deposited into the Land and Water Conservation

Fund established under section 2 of the Land and Water Conservation Fund Act of 1965 (16 U.S.C. 460l-5).

(ii) USE OF DEPOSITS- (I) Deposits into the Land and Water Conservation Fund under this paragraph shall be supplemental to authorizations provided under section 3

of the Land and Water Conservation Fund Act of 1965 (16 U.S.C. 460l-6), which shall remain available for nonadaptation needs.

(II) There are authorized to be appropriated for activities in this subpart such sums as are deposited in the Land and Water Conservation Fund pursuant to section

480(c)(3)(A)(ii), and the amounts appropriated for this paragraph shall be no less than the total estimated annual deposits in the Land and Water Conservation Fund. Such

appropriations shall be offset by the amounts deposited in such Fund pursuant to section 782(m).

(B) ALLOCATIONS- Of the amounts deposited under this paragraph into the Land and Water Conservation Fund--

(i) 1/6 shall be allocated to the Secretary of the Interior and made available on a competitive basis to carry out natural resources adaptation activities through the

acquisition of land and interests in land under section 6 of the Land and Water Conservation Fund Act of 1965 (16 U.S.C. 460l-8)--

(I) to States in accordance with their natural resources adaptation plans, and to Indian tribes;

(II) notwithstanding section 5 of that Act (16 U.S.C. 460l-7); and

(III) in addition to any funds provided pursuant to annual appropriations Acts, the Energy Policy Act of 2005 (42 U.S.C. 15801 et seq.), or any other authorization for

nonadaptation needs;

(ii) 1/3 shall be allocated to the Secretary of the Interior to carry out natural resources adaptation activities through the acquisition of lands and interests in land under

section 7 of the Land and Water Conservation Fund Act of 1965 (16 U.S.C. 460l-9);

(iii) 1/6 shall be allocated to the Secretary of Agriculture and made available to the States and Indian tribes to carry out natural resources adaptation activities through the

acquisition of land and interests in land under section 7 of the Forest Legacy Program under the Cooperative Forestry Assistance Act of 1978 (16 U.S.C. 2103c); and

(iv) 1/3 shall be allocated to the Secretary of Agriculture to carry out natural resources adaptation activities through the acquisition of land and interests in land under

section 7 of the Land and Water Conservation Fund Act of 1965 (16 U.S.C. 460l-9).

(C) EXPENDITURE OF FUNDS- In allocating funds under subparagraph (B), the Secretary of the Interior and the Secretary of Agriculture shall take into consideration factors

including--

(i) the availability of non-Federal contributions from State, local, or private sources;

(ii) opportunities to protect fish and wildlife corridors or otherwise to link or consolidate fragmented habitats;

(iii) opportunities to reduce the risk of catastrophic wildfires, drought, extreme flooding, or other climate-related events that are harmful to fish and wildlife and people;

and

(iv) the potential for conservation of species or habitat types at serious risk due to climate change, ocean acidification, and other stressors.

(3) FOREST SERVICE- Of the amounts made available for each fiscal year to carry out this subpart, 8.1 percent shall be allocated to the Secretary of Agriculture for use in

funding natural resources adaptation activities carried out on national forests and national grasslands under the jurisdiction of the Forest Service.

(4) DEPARTMENT OF COMMERCE- Of the amounts made available for each fiscal year to carry out this subpart, 11.5 percent shall be allocated to the Secretary of Commerce

for use in funding natural resources adaptation activities to protect, maintain, and restore coastal, estuarine, and marine resources, habitats, and ecosystems, including such

activities carried out under--

(A) the coastal and estuarine land conservation program;

(B) the community-based restoration program;

(C) the Coastal Zone Management Act of 1972 (16 U.S.C. 1451 et seq.), that are specifically designed to strengthen the ability of coastal, estuarine, and marine resources,

habitats, and ecosystems to adapt to and withstand the impacts of climate change and ocean acidification;

(D) the Open Rivers Initiative;

(E) the Magnuson-Stevens Fishery Conservation and Management Act (16 U.S.C. 1801 et seq.);

(F) the Marine Mammal Protection Act of 1972 (16 U.S.C. 1361 et seq.);

(G) the Endangered Species Act of 1973 (16 U.S.C. 1531 et seq.);

(H) the Marine Protection, Research, and Sanctuaries Act of 1972 (33 U.S.C. 1401 et seq.);

(I) the Coral Reef Conservation Act of 2000 (16 U.S.C. 6401 et seq.); and

(J) the Estuary Restoration Act of 2000 (33 U.S.C. 2901 et seq.).

(5) ENVIRONMENTAL PROTECTION AGENCY- Of the amounts made available each fiscal year to carry out this section, 12.2 percent shall be allocated to the Administrator for

use in natural resources adaptation activities restoring and protecting--

(A) large-scale freshwater aquatic ecosystems, such as the Everglades, the Great Lakes, Flathead Lake, the Missouri River, the Mississippi River, the Colorado River, the

Sacramento-San Joaquin Rivers, the Ohio River, the Columbia-Snake River System, the Apalachicola, Chattahoochee, and Flint River System, the Connecticut River, and the

Yellowstone River;

(B) large-scale estuarine ecosystems, such as Chesapeake Bay, Long Island Sound, Puget Sound, the Mississippi River Delta, the San Francisco Bay Delta, Narragansett

Bay, and Albemarle-Pamlico Sound; and

(C) freshwater and estuarine ecosystems, watersheds, and basins identified as priorities by the Administrator, working in cooperation with other Federal agencies, States,

Indian tribes, local governments, scientists, and other conservation partners.

(6) CORPS OF ENGINEERS- Of the amounts made available each fiscal year to carry out this section, 8.1 percent shall be available to the Secretary of the Army for use by the

Corps of Engineers to carry out natural resources adaptation activities restoring--

(A) large-scale freshwater aquatic ecosystems, such as the ecosystems described in paragraph (5)(A);

(B) large-scale estuarine ecosystems, such as the ecosystems described in paragraph (5)(B);

(C) freshwater and estuarine ecosystems, watersheds, and basins identified as priorities by the Corps of Engineers, working in cooperation with other Federal agencies,

States, Indian tribes, local governments, scientists, and other conservation partners; and

(D) habitats and ecosystems through the implementation of estuary habitat restoration projects authorized by the Estuary Restoration Act of 2000 (33 U.S.C. 2901 et seq.),

project modifications for improvement of the environment, aquatic restoration and protection projects authorized by section 206 of the Water Resources Development Act of 1996 (33

U.S.C. 2330), and other appropriate programs and activities.

(d) Use of Funds by Federal Departments and Agencies- Funds allocated to Federal departments and agencies under this section shall only be used for natural resources

adaptation activities that are consistent with an adaptation plan developed and approved by the President under section 478.

(e) State Cost Sharing- Notwithstanding any other provision of law, a State that receives a grant with amounts allocated under this section shall use funds from non-Federal

sources to pay 10 percent of the costs of each activity carried out using amounts provided under the grant.

SEC. 481. NATIONAL WILDLIFE HABITAT AND CORRIDORS INFORMATION PROGRAM.

(a) Establishment- Within 6 months of the date of enactment of this subpart, the Secretary of the Interior, in cooperation with the States and Indian tribes, shall establish a National

Fish and Wildlife Habitat and Corridors Information Program in accordance with the requirements of this section.

(b) Purpose- The purpose of this program is to--

(1) support States and Indian tribes in the development of a geographic information system database of fish and wildlife habitat and corridors that would inform planning and

development decisions within each State, enable each State to model climate impacts and adaptation, and provide geographically specific enhancements of State wildlife action

plans;

(2) ensure the collaborative development, with the States and Indian tribes, of a comprehensive, national geographic information system database of maps, models, data,

surveys, informational products, and other geospatial information regarding fish and wildlife habitat and corridors, that--

(A) is based on consistent protocols for sampling and mapping across landscapes that take into account regional differences; and

(B) that utilizes--

(i) existing and planned State- and tribal-based geographic information system databases; and

(ii) existing databases, analytical tools, metadata activities, and other information products available through the National Biological Information Infrastructure

maintained by the Secretary and nongovernmental organizations; and

(3) facilitate the use of such databases by Federal, State, local, and tribal decisionmakers to incorporate qualitative information on fish and wildlife habitat and corridors at the

earliest possible stage to--

(A) prioritize and target natural resources adaptation strategies and activities;

(B) avoid, minimize, and mitigate the impacts on fish and wildlife habitat and corridors in siting energy development, water, transmission, transportation, and other land use

projects;

(C) assess the impacts of existing development on habitats and corridors; and

(D) develop management strategies to enhance the ability of fish, wildlife, and plant species to migrate or respond to shifting habitats within existing habitats and corridors.

(c) Habitat and Corridors Information System-

(1) IN GENERAL- The Secretary, in cooperation with the States and Indian tribes, shall develop a Habitat and Corridors Information System.

(2) CONTENTS- The System shall--

(A) include maps, data, and descriptions of fish and wildlife habitat and corridors, that--

(i) have been developed by Federal agencies, State wildlife agencies and natural heritage programs, Indian tribes, local governments, nongovernmental organizations,

and industry;

(ii) meet accepted Geospatial Interoperability Framework data and metadata protocols and standards;

(B) include maps and descriptions of projected shifts in habitats and corridors of fish and wildlife species in response to climate change;

(C) assure data quality and make the data, models, and analyses included in the System available at scales useful to decisionmakers--

(i) to prioritize and target natural resources adaptation strategies and activities;

(ii) to assess the impacts of proposed energy development, water, transmission, transportation, and other land use projects and avoid, minimize, and mitigate those

impacts on habitats and corridors;

(iii) to assess the impacts of existing development on habitats and corridors; and

(iv) to develop management strategies to enhance the ability of fish, wildlife, and plant species to migrate or respond to shifting habitats within existing habitats and

corridors;

(D) establish a process for updating maps and other information as landscapes, habitats, corridors, and wildlife populations change or as other information becomes

available;

(E) encourage the development of collaborative plans by Federal and State agencies and Indian tribes to monitor and evaluate the efficacy of the System to meet the needs

of decisionmakers;

(F) identify gaps in habitat and corridor information, mapping, and research that should be addressed to fully understand and assess current data and metadata, and to

prioritize research and future data collection activities for use in updating the System and provide support for those activities;

(G) include mechanisms to support collaborative research, mapping, and planning of habitats and corridors by Federal and State agencies, Indian tribes, and other

interested stakeholders;

(H) incorporate biological and geospatial data on species and corridors found in energy development and transmission plans, including renewable energy initiatives,

transportation, and other land use plans;

(I) be based on the best scientific information available; and

(J) identify, prioritize, and describe key parcels of non-Federal land located within the boundaries of units of the National Park System, National Wildlife Refuge System,

National Forest System, or National Grassland System that are critical to maintenance of wildlife habitat and migration corridors.

(d) Financial and Other Support- The Secretary may provide support to the States and Indian tribes, including financial and technical assistance, for activities that support the

development and implementation of the System.

(e) Coordination- The Secretary, in cooperation with the States and Indian tribes, shall make recommendations on how the information developed in the System may be

incorporated into existing relevant State and Federal plans affecting fish and wildlife, including land management plans, the State Comprehensive Wildlife Conservation Strategies,

and appropriate tribal conservation plans, to ensure that they--

(1) prevent unnecessary habitat fragmentation and disruption of corridors;

(2) promote the landscape connectivity necessary to allow wildlife to move as necessary to meet biological needs, adjust to shifts in habitat, and adapt to climate change; and

(3) minimize the impacts of energy, development, water, transportation, and transmission projects and other activities expected to impact habitat and corridors.

(f) Definitions- In this section:

(1) GEOSPATIAL INTEROPERABILITY FRAMEWORK- The term `Geospatial Interoperability Framework' means the strategy utilized by the National Biological Information

Infrastructure that is based upon accepted standards, specifications, and protocols adopted through the International Standards Organization, the Open Geospatial Consortium, and

the Federal Geographic Data Committee, to manage, archive, integrate, analyze, and make accessible geospatial and biological data and metadata.

(2) SECRETARY- The term `Secretary' means the Secretary of the Interior.

SEC. 482. ADDITIONAL PROVISIONS REGARDING INDIAN TRIBES.

(a) Federal Trust Responsibility- Nothing in this subpart is intended to amend, alter, or give priority over the Federal trust responsibility to Indian tribes.

(b) Exemption From FOIA- If a Federal department or agency receives any information related to sacred sites or cultural activities identified by an Indian tribe as confidential, such

information shall be exempt from disclosure under section 552 of title 5, United States Code, popularly known as the Freedom of Information Act (5 U.S.C. 552).

(c) Application of Other Law- The Secretary of the Interior may apply the provisions of Public Law 93-638 where appropriate in the implementation of this subpart.

PART 2--INTERNATIONAL CLIMATE CHANGE ADAPTATION PROGRAM

SEC. 491. FINDINGS AND PURPOSES.

(a) Findings- Congress finds the following:

(1) Global climate change is a potentially significant national and global security threat multiplier and is likely to exacerbate competition and conflict over agricultural, vegetative,

marine, and water resources and to result in increased displacement of people, poverty, and hunger within developing countries.

(2) The strategic, social, political, economic, cultural, and environmental consequences of global climate change are likely to have disproportionate adverse impacts on

developing countries, which have less economic capacity to respond to such impacts.

(3) The countries most vulnerable to climate change, due both to greater exposure to harmful impacts and to lower capacity to adapt, are developing countries with very low

industrial greenhouse gas emissions that have contributed less to climate change than more affluent countries.

(4) To a much greater degree than developed countries, developing countries rely on the natural and environmental systems likely to be affected by climate change for

sustenance, livelihoods, and economic growth and stability.

(5) Within developing countries there may be varying climate change adaptation and resilience needs among different communities and populations, including impoverished

communities, children, women, and indigenous peoples.

(6) The consequences of global climate change, including increases in poverty and destabilization of economies and societies, are likely to pose long-term challenges to the

national security, foreign policy, and economic interests of the United States.

(7) It is in the national security, foreign policy, and economic interests of the United States to recognize, plan for, and mitigate the international strategic, social, political, cultural,

environmental, health, and economic effects of climate change and to assist developing countries to increase their resilience to those effects.

(8) Under Article 4 of the United Nations Framework Convention on Climate Change, developed country parties, including the United States, committed to `assist the

developing country parties that are particularly vulnerable to the adverse effects of climate change in meeting costs of adaptation to those adverse effects'.

(9) Under the Bali Action Plan, developed country parties to the United Nations Framework Convention on Climate Change, including the United States, committed to

`enhanced action on the provision of financial resources and investment to support action on mitigation and adaptation and technology cooperation,' including, inter alia,

consideration of `improved access to adequate, predictable, and sustainable financial resources and financial and technical support, and the provision of new and additional

resources, including official and concessional funding for developing country parties'.

(b) Purposes- The purposes of this part are--

(1) to provide new and additional assistance from the United States to the most vulnerable developing countries, including the most vulnerable communities and populations

therein, in order to support the development and implementation of climate change adaptation programs and activities that reduce the vulnerability and increase the resilience of

communities to climate change impacts, including impacts on water availability, agricultural productivity, flood risk, coastal resources, timing of seasons, biodiversity, economic

livelihoods, health and diseases, and human migration; and

(2) to provide such assistance in a manner that protects and promotes the national security, foreign policy, environmental, and economic interests of the United States to the

extent such interests may be advanced by minimizing, averting, or increasing resilience to climate change impacts.

SEC. 492. DEFINITIONS.

In this part:

(1) ALLOWANCE- The term `allowance' means an emission allowance established under section 721 of the Clean Air Act.

(2) APPROPRIATE CONGRESSIONAL COMMITTEES- The term `appropriate congressional committees' means--

(A) the Committees on Energy and Commerce, Financial Services, and Foreign Affairs of the House of Representatives; and

(B) the Committees on Environment and Public Works and Foreign Relations of the Senate.

(3) DEVELOPING COUNTRY- The term `developing country' means a country eligible to receive official development assistance according to the income guidelines of the

Development Assistance Committee of the Organization for Economic Cooperation and Development.

(4) MOST VULNERABLE DEVELOPING COUNTRIES- The term `most vulnerable developing countries' means, as determined by the Administrator of USAID, developing

countries that are at risk of substantial adverse impacts of climate change and have limited capacity to respond to such impacts, considering the approaches included in any

international treaties and agreements.

(5) MOST VULNERABLE COMMUNITIES AND POPULATIONS- The term `most vulnerable communities and populations' means communities and populations that are at risk

of substantial adverse impacts of climate change and have limited capacity to respond to such impacts, including impoverished communities, children, women, and indigenous

peoples.

(6) PROGRAM- The term `Program' means the International Climate Change Adaptation Program established under section 493.

(7) USAID- The term `USAID' means the United States Agency for International Development.

(8) UNITED NATIONS FRAMEWORK CONVENTION ON CLIMATE CHANGE- The term `United Nations Framework Convention on Climate Change' or `Convention' means the

United Nations Framework Convention on Climate Change done at New York on May 9, 1992, and entered into force on March 21, 1994.

SEC. 493. INTERNATIONAL CLIMATE CHANGE ADAPTATION PROGRAM.

(a) Establishment- The Secretary of State, in consultation with the Administrator of USAID, the Secretary of the Treasury, and the Administrator of the Environmental Protection

Agency, shall establish an International Climate Change Adaptation Program in accordance with the requirements of this part.

(b) Allowance Account- Allowances allocated pursuant to section 782(n) of the Clean Air Act shall be available for distribution to carry out the Program established under

subsection (a).

(c) Supplement Not Supplant- Assistance provided under this part shall be used to supplement, and not to supplant, any other Federal, State, or local resources available to carry

out activities of the type carried out under the Program.

SEC. 494. DISTRIBUTION OF ALLOWANCES.

(a) In General- The Secretary of State, or such other Federal agency head as the President may designate, after consultation with the Secretary of the Treasury, the Administrator of

USAID, and the Administrator of the Environmental Protection Agency, shall direct the distribution of allowances to carry out the Program--

(1) in the form of bilateral assistance pursuant to the requirements under section 495;

(2) to multilateral funds or international institutions pursuant to the Convention or an agreement negotiated under the Convention; or

(3) through a combination of the mechanisms identified under paragraphs (1) and (2).

(b) Limitation-

(1) CONDITIONAL DISTRIBUTION TO MULTILATERAL FUNDS OR INTERNATIONAL INSTITUTIONS- In any fiscal year, the Secretary of State, or such other Federal agency

head as the President may designate, in consultation with the Administrator of USAID, the Secretary of the Treasury, and the Administrator of the Environmental Protection Agency,

shall distribute at least 40 percent and up to 60 percent of the allowances available to carry out the Program to one or more multilateral funds or international institutions that meet the

requirements of paragraph (2), if any such fund or institution exists, and shall annually certify in a report to the appropriate congressional committees that any multilateral fund or

international institution receiving allowances under this section meets the requirements of paragraph (2) or that no multilateral fund or international institution that meets the

requirements of paragraph (2) exists, as the case may be. The Secretary of State shall notify the appropriate congressional committees not less than 15 days prior to any transfer of

allowances to a multilateral fund or international institution pursuant to this section.

(2) MULTILATERAL FUND OR INTERNATIONAL INSTITUTION ELIGIBILITY- A multilateral fund or international institution is eligible to receive allowances available to carry out

the Program--

(A) if--

(i) such fund or institution is established pursuant to--

(I) the Convention; or

(II) an agreement negotiated under the Convention; or

(ii) the allowances are directed to one or more multilateral development banks or international development institutions, pursuant to an agreement negotiated under

such Convention; and

(B) if such fund or institution--

(i) specifies the terms and conditions under which the United States is to provide allowances to the fund or institution, and under which the fund or institution is to

provide assistance to recipient countries;

(ii) ensures that assistance from the United States to the fund or institution and the principal and income of the fund or institution are disbursed only for purposes that

are consistent with those described in section 491(b)(1);

(iii) requires a regular meeting of a governing body of the fund or institution that includes representation from countries among the most vulnerable developing countries

and provides public access;

(iv) requires that local communities and indigenous peoples in areas where any activities or programs are planned are engaged through adequate disclosure of

information, public participation, and consultation; and

(v) prepares and makes public an annual report that--

(I) describes the process and methodology for selecting the recipients of assistance from the fund or institution, including assessments of vulnerability;

(II) describes specific programs and activities supported by the fund or institution and the extent to which the assistance is addressing the adaptation needs of the

most vulnerable developing countries, and the most vulnerable communities and populations therein;

(III) describes the performance goals for assistance authorized under the fund or institution and expresses such goals in an objective and quantifiable form, to the

extent practicable;

(IV) describes the performance indicators to be used in measuring or assessing the achievement of the performance goals described in subclause (III);

(V) provides a basis for recommendations for adjustments to assistance authorized under this part to enhance the impact of such assistance; and

(VI) describes the participation of other nations and international organizations in supporting and governing the fund or institution.

(c) Oversight-

(1) DISTRIBUTION TO MULTILATERAL FUNDS OR INTERNATIONAL INSTITUTIONS- The Secretary of State, or such other Federal agency head as the President may

designate, in consultation with the Administrator of USAID, shall oversee the distribution of allowances available to carry out the Program to a multilateral fund or international

institution under subsection (b).

(2) BILATERAL ASSISTANCE- The Administrator of USAID, in consultation with the Secretary of State, shall oversee the distribution of allowances available to carry out the

Program for bilateral assistance under section 495.

SEC. 495. BILATERAL ASSISTANCE.

(a) Activities and Foreign Aid-

(1) IN GENERAL- In order to achieve the purposes of this part, the Administrator of USAID may carry out programs and activities and distribute allowances to any private or

public group (including international organizations and faith-based organizations), association, or other entity engaged in peaceful activities to--

(A) provide assistance to the most vulnerable developing countries for--

(i) the development of national or regional climate change adaptation plans, including a systematic assessment of socioeconomic vulnerabilities in order to identify the

most vulnerable communities and populations;

(ii) associated national policies; and

(iii) planning, financing, and execution of adaptation programs and activities;

(B) support investments, capacity-building activities, and other assistance, to reduce vulnerability and promote community-level resilience related to climate change and its

impacts in the most vulnerable developing countries, including impacts on water availability, agricultural productivity, flood risk, coastal resources, timing of seasons, biodiversity,

economic livelihoods, health, human migration, or other social, economic, political, cultural, or environmental matters;

(C) support climate change adaptation research in or for the most vulnerable developing countries;

(D) reduce vulnerability and provide increased resilience to climate change for local communities and livelihoods in the most vulnerable developing countries by

encouraging--

(i) the protection and rehabilitation of natural systems;

(ii) the enhancement and diversification of agricultural, fishery, and other livelihoods; and

(iii) the reduction of disaster risks;

(E) support the deployment of technologies to help the most vulnerable developing countries respond to the destabilizing impacts of climate change and encourage the

identification and adoption of appropriate renewable and efficient energy technologies that are beneficial in increasing community-level resilience to the impacts of global climate

change in those countries; and

(F) encourage the engagement of local communities through disclosure of information, consultation, and the communities' informed participation relating to the

development of plans, programs, and activities to increase community-level resilience to climate change impacts.

(2) LIMITATIONS- Not more than 10 percent of the allowances made available to carry out bilateral assistance under this part in any year shall be distributed to support

activities in any single country.

(3) PRIORITIZING ASSISTANCE- In providing assistance under this section, the Administrator of USAID shall give priority to countries, including the most vulnerable

communities and populations therein, that are most vulnerable to the adverse impacts of climate change, determined by the likelihood and severity of such impacts and the country's

capacity to adapt to such impacts.

(b) Community Engagement-

(1) IN GENERAL- The Administrator of USAID shall ensure that local communities, including the most vulnerable communities and populations therein, in areas where any

programs or activities are carried out pursuant to this section are engaged in, through disclosure of information, public participation, and consultation, the design, implementation,

monitoring, and evaluation of such programs and activities.

(2) CONSULTATION AND DISCLOSURE- For each country receiving assistance under this section, the Administrator of USAID shall establish a process for consultation with,

and disclosure of information to, local, national, and international stakeholders regarding any programs and activities carried out pursuant to this section.

(c) Coordination-

(1) ALIGNMENT OF ACTIVITIES- Subject to the direction of the President and the Secretary of State, the Administrator of USAID shall, to the extent practicable, seek to align

activities under this section with broader development, poverty alleviation, or natural resource management objectives and initiatives in the recipient country.

(2) COORDINATION OF ACTIVITIES- The Administrator of USAID shall ensure that there is coordination among the activities under this section, subtitle D of this title, and part E

of title VII of the Clean Air Act, in order to maximize the effectiveness of United States assistance to developing countries.

(d) Reporting-

(1) INITIAL REPORT- Not later than 180 days after the date of enactment of this part, the Administrator of USAID, in consultation with the Secretary of State, shall submit to the

President and the appropriate congressional committees an initial report that--

(A) based on the most recent information available from reliable public sources or knowledge obtained by USAID on a reliable basis, as determined by the Administrator of

USAID, identifies the developing countries, including the most vulnerable communities and populations therein, that are most vulnerable to climate change impacts and in which

assistance may have the greatest and most sustainable benefit in reducing vulnerability to climate change; and

(B) describes the process and methodology for selecting the recipients of assistance under subsection (a)(1).

(2) ANNUAL REPORTS- Not later than 18 months after the date on which the initial report is submitted pursuant to paragraph (1), and annually thereafter, the Administrator of

USAID, in consultation with the Secretary of State, shall submit to the President and the appropriate congressional committees a report that--

(A) describes the extent to which global climate change, through its potential negative impacts on sensitive populations and natural resources in the most vulnerable

developing countries, may threaten, cause, or exacerbate political, economic, environmental, cultural, or social instability or international conflict in those regions;

(B) describes the ramifications of any potentially destabilizing impacts climate change may have on the national security, foreign policy, and economic interests of the

United States, including--

(i) the creation of environmental migrants and internally displaced peoples;

(ii) international or internal armed conflicts over water, food, land, or other resources;

(iii) loss of agricultural and other livelihoods, cultural stability, and other causes of increased poverty and economic destabilization;

(iv) decline in availability of resources needed for survival, including water;

(v) increased impact of natural disasters (including droughts, flooding, and other severe weather events);

(vi) increased prevalence or virulence of climate-related diseases; and

(vii) intensified urban migration;

(C) describes how allowances available under this section were distributed during the previous fiscal year to enhance the national security, foreign policy, and economic

interests of the United States and assist in avoiding the economically, politically, environmentally, culturally, and socially destabilizing impacts of climate change in most vulnerable

developing countries;

(D) identifies and recommends the developing countries, including the most vulnerable communities and populations therein, that are most vulnerable to climate change

impacts and in which assistance may have the greatest and most sustainable benefit in reducing vulnerability to climate change, including in the form of deploying technologies,

investments, capacity-building activities, and other types of assistance for adaptation to climate change impacts and approaches to reduce greenhouse gases in ways that may also

provide community-level resilience to climate change impacts; and

(E) describes cooperation undertaken with other nations and international organizations to carry out this part.

(e) Monitoring and Evaluation-

(1) IN GENERAL- The Administrator of USAID shall establish and implement a system to monitor and evaluate the effectiveness and efficiency of assistance provided under

this section in order to maximize the long-term sustainable development impact of such assistance, including the extent to which such assistance is meeting the purposes of this

part and addressing the adaptation needs of developing countries.

(2) REQUIREMENTS- In carrying out paragraph (1), the Administrator of USAID shall--

(A) in consultation with national governments in recipient countries, establish performance goals for assistance authorized under this section and express such goals in an

objective and quantifiable form, to the extent practicable;

(B) establish performance indicators to be used in measuring or assessing the achievement of the performance goals described in subparagraph (A), including an

evaluation of--

(i) the extent to which assistance under this section provided for disclosure of information to, consultation with, and informed participation by local communities;

(ii) the extent to which local communities participated in the design, implementation, and evaluation of programs and activities implemented pursuant to this section;

and

(iii) the impacts of such participation on the goals and objectives of the programs and activities implemented under this section;

(C) provide a basis for recommendations for adjustments to assistance authorized under this section to enhance the impact of such assistance; and

(D) include, in the annual report to the appropriate congressional committees and other relevant agencies required under subsection (d)(2), findings resulting from the

monitoring and evaluation of programs and activities under this section.

Union Calendar No. 90

111th CONGRESS

1st Session

H. R. 2454

[Report No. 111-137, Part I]

A BILL

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

June 19, 2009

The Committees on Financial Services, Science and Technology, Transportation and Infrastructure, Natural Resources, Agriculture, and Ways and Means discharged; committed to

the Committee of the Whole House on the State of the Union and ordered to be printed

END

Sovereign

Sovereign

Cutting Through The Matrix

The Corbett Report

The International Forecaster

Alex Jones: Prison Planet News Feed

Films: Predictive Programming

Essential Tools: Tools

Essential Tools: News

Books You Need To Read

Grooveshark Widget

Tyrione

Books: Eugenics & Population Control

Radio Project Front Page Podcast

Cutting Through the Matrix with Alan Watt Podcast (.xml Format)

Blacklisted News Widget

Prison Planet Widget

Main Stream Media: C-SPAN

Main Stream Media/Overseas: The Japan Times

Main Stream Media: AL JAZEERA ENGLISH (AJE)

Main Stream Media: Bloomberg

Other: Haaretz

Message

Audio: Jeff Kuhner on the climate bill

Video: Playing God

Text: HR 2454 RH PART 2 OF 2

Endgame: Blueprint For Global Enslavement

Previous Posts

Films: Essential Films

Loose Change

Links

Free Europe

The Occult History of the Third Reich

Charles H. Fort

We Are Change Chicago

Attorney At Law

Makes Blogs Yummy

Links

Government of The United Kingdom:Official Documents

Keywords

Sovereign

Sovereign

Cutting Through The Matrix

The Corbett Report

The International Forecaster

Alex Jones: Prison Planet News Feed

Films: Predictive Programming

Essential Tools: Tools

Essential Tools: News

Books You Need To Read

Grooveshark Widget

Tyrione

Books: Eugenics & Population Control

Subscribe To Fractasol

Radio Project Front Page Podcast

Cutting Through the Matrix with Alan Watt Podcast (.xml Format)

Blacklisted News Widget

Prison Planet Widget

Main Stream Media: C-SPAN

Main Stream Media/Overseas: The Japan Times

Main Stream Media: AL JAZEERA ENGLISH (AJE)

Main Stream Media: Bloomberg

Other: Haaretz

Message

Audio: Jeff Kuhner on the climate bill

Video: Playing God

Text: HR 2454 RH PART 2 OF 2

Endgame: Blueprint For Global Enslavement

Previous Posts

Films: Essential Films

Loose Change

Links

Free Europe

The Occult History of the Third Reich

Charles H. Fort

We Are Change Chicago

Attorney At Law

Makes Blogs Yummy

Links

Government of The United Kingdom:Official Documents

Keywords