[Congressional Bills 117th Congress]
[From the U.S. Government Publishing Office]
[S. 283 Introduced in Senate (IS)]
<DOC>
117th CONGRESS
1st Session
S. 283
To establish a National Climate Bank.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
February 8, 2021
Mr. Markey (for himself, Mr. Van Hollen, Mr. Blumenthal, Mr. Schatz,
and Mr. Heinrich) introduced the following bill; which was read twice
and referred to the Committee on Environment and Public Works
_______________________________________________________________________
A BILL
To establish a National Climate Bank.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``National Climate Bank Act''.
SEC. 2. NATIONAL CLIMATE BANK.
(a) In General.--Title LXII of the Revised Statutes (12 U.S.C. 21
et seq.) is amended by adding at the end the following:
``CHAPTER FIVE--NATIONAL CLIMATE BANK
``Sec.
``5245. Findings.
``5245A. Definitions.
``5245B. Establishment.
``5245C. Purpose.
``5245D. Investments and procurements division.
``5245E. Start-up division.
``5245F. Project types.
``5245G. Cash for carbon program.
``5245H. Project and Investment attributes.
``5245I. Board of Directors.
``5245J. Administration.
``5245K. Establishment of risk and audit committees.
``5245L. External oversight.
``5245M. Maximum contingent liability.
``SEC. 5245. FINDINGS.
``Congress finds that--
``(1) the October 2018 report entitled `Special Report on
Global Warming of 1.5C' by the Intergovernmental Panel on
Climate Change and the November 2018 Fourth National Climate
Assessment report found that--
``(A) human activity is the dominant cause of
observed climate change over the past century;
``(B) a changing climate is causing sea levels to
rise and an increase in wildfires, severe storms,
droughts, and other extreme weather events that
threaten human life, healthy communities, and critical
infrastructure;
``(C) global warming at or above 2 degrees Celsius
beyond pre-industrialized levels will cause--
``(i) mass migration from the regions most
affected by climate change;
``(ii) more than $500,000,000,000 in lost
annual economic output in the United States by
the year 2100;
``(iii) wildfires that, by 2050, will
annually burn at least twice as much forest
area in the western United States than was
typically burned by wildfires in the years
preceding 2019;
``(iv) a loss of more than 99 percent of
all coral reefs on Earth;
``(v) more than 350,000,000 more people to
be exposed globally to deadly heat stress by
2050; and
``(vi) a risk of damage to
$1,000,000,000,000 of public infrastructure and
coastal real estate in the United States; and
``(D) global temperatures must be kept below 1.5
degrees Celsius above pre-industrialized levels to
avoid the most severe impacts of a changing climate,
which will require--
``(i) global reductions in greenhouse gas
emissions from human sources of 40 to 60
percent from 2010 levels by 2030; and
``(ii) net-zero global emissions by 2050;
``(2)(A) according to Bloomberg New Energy Finance, in
2018, approximately $64,000,000,000 was invested in renewable
energy in the United States; and
``(B) according to the International Energy Agency, in
2018, approximately $42,000,000,000 was invested in energy
efficiency in North America;
``(3) investments in renewable energy and energy efficiency
have a demonstrated track record of increasing jobs while
lowering the cost of new renewable energy investments, which
benefits the clean energy economy;
``(4) green banks can be used to accelerate investment in--
``(A) new and emerging technologies; and
``(B) new and innovative financing products to
leverage private sector financing;
``(5) green banking has a demonstrated track record of
success at increasing investment in the clean energy economy;
``(6) green banks have led to $3,670,000,000 of investment
in cost-effective clean energy projects across the United
States, lowering energy costs for end-users, with that
investment total composed of--
``(A) $1,079,000,000 in public funds; and
``(B) $2,591,000,000 in private and philanthropic
capital;
``(7) in 2018, green banks were operating in a number of
States and other jurisdictions, including--
``(A) the District of Columbia; and
``(B) the States of--
``(i) Colorado;
``(ii) Connecticut;
``(iii) Florida;
``(iv) Hawaii;
``(v) Maryland;
``(vi) Michigan;
``(vii) Nevada;
``(viii) New York; and
``(ix) Rhode Island;
``(8) in the many different types of electricity markets
around the country, achieving 100 percent market penetration of
clean energy will require delivery of clean electric energy
that is cheaper than alternative fossil-fuel based electricity;
``(9) market-based clean energy financing tools, such as
those used by existing State and local green banks, can be
used--
``(A) to accelerate the deployment of clean energy;
``(B) to reduce greenhouse gas emissions in the
United States by substituting fossil-fuel based energy
with lower-cost clean energy;
``(C) to unlock private investment by offering
complementary capital that can change the dynamics of a
capital stack and make new projects worth investing in
for private sector capital providers; and
``(D) to open new markets for greater investment
and increase opportunities for communities and the
private sector; and
``(10) the Federal Government can accelerate and rapidly
expand the deployment of clean energy technologies by creating
a dedicated financial institution that can support the work of
existing green banks and provide greater capital for efforts to
reduce emissions, increasing the overall scale of clean energy
investment and the pace of substitution of clean energy
technologies for fossil-fuel based technologies.
``SEC. 5245A. DEFINITIONS.
``In this chapter:
``(a) Bank.--The term `Bank' means the National Climate Bank
established under section 5245B.
``(b) Board.--The term `Board' means the Board of Directors of the
National Climate Bank established under section 5245I.
``(c) Chief Executive Officer.--The term `Chief Executive Officer'
means the Chief Executive Officer of the Board appointed under section
5245I(i).
``(d) Green Bank.--The term `green bank' means a dedicated public
or nonprofit specialized finance entity that--
``(1) is designed to drive private capital into market gaps
for low- and zero-emission goods and services;
``(2) uses finance tools to mitigate climate change;
``(3) does not take deposits;
``(4) is funded by government, public, private, or
charitable contributions; and
``(5) invests--
``(A) alone; or
``(B) in conjunction with other investors.
``(e) Procurement.--The term `procurement' means the purchase,
lease, or acquisition of real or personal property on a bid,
negotiated, or open-market basis, including through a sole-source
procurement or in such other manner as the Board and Chief Executive
Officer determine to be appropriate and in the best interests of
reducing emissions.
``SEC. 5245B. ESTABLISHMENT.
``(a) In General.--Not later than 1 year after the date of
enactment of this chapter, there shall be established in the District
of Columbia a bank, to be known as the `National Climate Bank', in
accordance with this chapter.
``(b) Legal Status.--The Bank shall be an independent, nonprofit
entity outside of the Federal Government.
``(c) Full Faith and Credit.--The full faith and credit of the
United States shall not extend to the Bank.
``SEC. 5245C. PURPOSE.
``The purpose of the Bank is to make the United States a world
leader in combating the causes and effects of climate change and
reducing emissions in the United States for every dollar spent by the
Bank, through the rapid deployment of mature technologies and the
commercialization and scaling of new technologies, including by--
``(1) providing financing support for investments in the
United States in clean and low-emissions technologies and
processes;
``(2) conducting low-cost procurements in the United States
that will be used to lower emissions;
``(3) catalyzing and mobilizing private capital through
Federal investment and supporting a more robust marketplace for
clean technologies, while minimizing competition with private
investment;
``(4) enabling low- and moderate-income individuals and
communities to benefit from and afford projects and investments
that reduce emissions;
``(5) increasing the efficiency and effectiveness of
Federal financing programs that support positive climate
outcomes, such as reduced emissions; and
``(6) supporting the creation of green banks within the
United States where green banks do not exist.
``SEC. 5245D. INVESTMENTS AND PROCUREMENTS DIVISION.
``(a) In General.--There shall be within the Bank an investments
and procurements division, which shall be responsible for--
``(1) equity investments in clean energy projects;
``(2) ensuring appropriate debt and risk mitigation
products are offered;
``(3) overseeing prudent, noncontrolling equity
investments;
``(4) procurements that will be used to reduce emissions
and the cost of emissions reductions through aggregation of
demand and other market-based approaches; and
``(5) greenhouse gas emissions mitigation efforts.
``(b) Investment Committee.--The suite of debt and risk mitigation
products and equity investments made by the Bank shall be--
``(1) approved by an investment committee of the Board; and
``(2) consistent with an investment policy that has been
established by the investment committee of the Board in
consultation with the risk management committee of the Board.
``(c) Debt Products.--Debt products and investments by the Bank
shall include direct lending, colending, and credit enhancements.
``SEC. 5245E. START-UP DIVISION.
``There shall be within the Bank a start-up division, which shall
be responsible for providing technical assistance to States and other
political subdivisions that do not have green banks to establish
independent, nonprofit green banks in those States and political
subdivisions, including by working with relevant stakeholders in those
States and political subdivisions.
``SEC. 5245F. PROJECT TYPES.
``The Bank shall seek to facilitate affordable investment and
procurement, including in low-income communities and communities of
color, in the following key areas:
``(1) Renewable energy.
``(2) Energy storage.
``(3) Transportation, including--
``(A) low- and zero-emission vehicle
infrastructure;
``(B) transit-oriented development; and
``(C) active transportation.
``(4) Transmission for clean energy.
``(5) Climate resiliency measures.
``(6) Energy and water efficiency, including residential,
commercial, and industrial efficiency.
``(7) Reforestation of degraded land.
``(8) Agricultural projects.
``(9) Electrification and decarbonization of industrial
processes.
``(10) Any other key area identified by the Board as
consistent with the purpose of the Bank described in section
5245C.
``SEC. 5245G. CASH FOR CARBON PROGRAM.
``(a) Establishment.--Pursuant to guidance and rules issued by the
Board, the Bank shall explore the establishment of a cash for carbon
program to remove greenhouse gas emissions from the power system.
``(b) Purpose.--Any program established under subsection (a) may
use market mechanisms to expedite the retirement of carbon-intensive
power generation facilities, such as coal-fired power generation
facilities, acquire carbon assets for the purpose of reducing
emissions, and invest in communities negatively affected by the loss of
those facilities or assets, including market mechanisms such as--
``(1) reverse auctions;
``(2) securitization;
``(3) the offering of bidder's credits to facilities that
pose significant environmental justice or health concerns,
particularly in low-income, minority, and distressed
neighborhoods (within the meaning of section 910 of the Housing
and Community Development Act of 1992 (12 U.S.C. 2901 note;
Public Law 102-550)); and
``(4) the provision of investment and technical assistance
to the local community and site of a facility, including, where
necessary, in cooperation with--
``(A) the Administrator of the Environmental
Protection Agency; or
``(B) other Federal, State, or local authorities.
``(c) Expansion of Program.--The Board may expand any program
established under subsection (a) to additional carbon-intensive
economic sectors beyond power generation, as determined to be
appropriate by the Board.
``SEC. 5245H. PROJECT AND INVESTMENT ATTRIBUTES.
``(a) In General.--The Bank may--
``(1) provide financing to regional, State, and local green
banks; and
``(2) invest directly in projects that reduce emissions
across the United States.
``(b) Priority.--In carrying out subsection (a), the Bank shall--
``(1) ensure that not less than 40 percent of the
investment activity of the Bank is directed towards
disadvantaged communities facing climate impacts, as determined
by the Board through a public engagement process;
``(2) give priority to projects that--
``(A) provide jobs;
``(B) mitigate greenhouse gas emissions; and
``(C) serve--
``(i) low-income, minority, and distressed
neighborhoods (within the meaning of section
910 of the Housing and Community Development
Act of 1992 (12 U.S.C. 2901 note; Public Law
102-550)); or
``(ii) low-income, minority, and rural
consumers (within the meaning of the final rule
of the Bureau of Consumer Financial Protection
entitled `Ability-to-Repay and Qualified
Mortgage Standards Under the Truth in Lending
Act (Regulation Z)' (78 Fed. Reg. 6408 (January
30, 2013)));
``(3) ensure that projects provide access to low-carbon
infrastructure, including clean power, clean water, and
reliable, high-quality transportation, at affordable rates to
families in--
``(A) low-income, minority, and distressed
neighborhoods (within the meaning of section 910 of the
Housing and Community Development Act of 1992 (12
U.S.C. 2901 note; Public Law 102-550)); or
``(B) a rural area (as defined in section 343(a) of
the Consolidated Farm and Rural Development Act (7
U.S.C. 1991(a)));
``(4) ensure that any residential energy efficiency or
distributed clean energy project in which the Bank invests
directly under subsection (a)(2) and provides financing to a
consumer directly or through a program funded directly or
indirectly by the Bank complies with the requirements of the
Consumer Credit Protection Act (15 U.S.C. 1601 et seq.),
including, in the case of a financial product that is a
residential mortgage loan, any requirements of title I of that
Act relating to residential mortgage loans (including any
regulations promulgated by the Bureau of Consumer Financial
Protection under section 129C(b)(3)(C) of that Act (15 U.S.C.
1639(b)(3)(C))); and
``(5) ensure that projects financed directly by the Bank,
the total capital costs of which are not less than
$100,000,000, utilize a project-labor agreement.
``(c) Wage Rate Requirements.--
``(1) In general.--Notwithstanding any other provision of
law, all laborers and mechanics employed by contractors and
subcontractors on projects financed directly by the Bank shall
be paid wages at rates not less than those prevailing on
projects of a similar character in the locality, as determined
by the Secretary of Labor in accordance with subchapter IV of
chapter 31 of part A of subtitle II of title 40, United States
Code (commonly referred to as the `Davis-Bacon Act').
``(2) Authority.--With respect to the labor standards
specified in paragraph (1), the Secretary of Labor shall have
the authority and functions set forth in Reorganization Plan
Numbered 14 of 1950 (64 Stat. 1267; 5 U.S.C. App.) and section
3145 of title 40, United States Code.
``SEC. 5245I. BOARD OF DIRECTORS.
``(a) In General.--The Bank shall operate under the direction of a
Board of Directors, which shall be composed of 7 members from private,
government, nonprofit, and other groups, of whom--
``(1) 1 shall be the Secretary of the Treasury (or a
designee);
``(2) 1 shall be the Secretary of Energy (or a designee);
``(3) 1 shall be the Director of the Bureau of Consumer
Financial Protection (or a designee); and
``(4) 4 shall be appointed by the President, with the
advice and consent of the Senate, of whom--
``(A) 1 shall have expertise regarding renewable
energy or energy efficiency;
``(B) 1 shall have expertise regarding finance;
``(C) 1 shall have expertise in industrial
processes and manufacturing; and
``(D) 1 shall have expertise regarding sustainable
transportation.
``(b) Quorum.--5 members of the Board shall constitute a quorum.
``(c) Bylaws.--
``(1) In general.--The Board shall adopt, and may amend,
such bylaws as are necessary for the proper management and
functioning of the Bank.
``(2) Officers.--In the bylaws described in paragraph (1),
the Board shall--
``(A) designate the officers of the Bank; and
``(B) prescribe the duties of those officers.
``(d) Terms.--
``(1) Initial terms.--The initial terms of the members of
the Board shall be 5 years.
``(2) Subsequent terms.--For terms beginning after the date
that is 5 years after the date of enactment of this section,
the Board shall create staggered terms of 3, 4, and 5 years for
members of the Board.
``(e) Vacancies.--Any vacancy on the Board shall be filled in the
same manner in which the original appointment was made.
``(f) Interim Appointments.--A member appointed to fill a vacancy
occurring before the expiration of the term for which the predecessor
of that member was appointed shall serve for the remainder of the term
for which the predecessor of that member was appointed.
``(g) Reappointment.--A Member of the Board may be reappointed for
not more than 1 additional term of service as a member of the Board.
``(h) Continuation of Service.--A member of the Board whose term
has expired may continue to serve on the Board until the date on which
a successor member is appointed and confirmed.
``(i) Chief Executive Officer.--The Board shall appoint a Chief
Executive Officer who shall be responsible for--
``(1) hiring employees of the Bank;
``(2) establishing the 2 divisions of the Bank described in
sections 5245D and 5245E; and
``(3) performing any other tasks necessary for the day-to-
day operations of the Bank.
``(j) Advisory Committee.--
``(1) Establishment.--The Bank shall establish an advisory
committee, which shall be composed of not more than 13 members
appointed by the Board on the recommendation of the president
of the Bank.
``(2) Members.--Members of the advisory committee shall be
broadly representative of interests concerned with the
environment, production, commerce, finance, agriculture, labor,
services, and State government, of whom--
``(A) not fewer than 3 shall be representatives of
the small business community;
``(B) not fewer than 2 shall be representatives of
the labor community, except that no 2 members may be
from the same labor union;
``(C) not fewer than 2 shall be representatives of
the environmental nongovernmental organization
community, except that no 2 members may be from the
same environmental organization;
``(D) not fewer than 2 shall be representatives of
the environmental justice nongovernmental organization
community, except that no 2 members may be from the
same environmental organization; and
``(E) not fewer than 2 shall be representatives of
the consumer protection and fair lending community,
except that no 2 members may be from the same consumer
protection or fair lending organization.
``(3) Meetings.--The advisory committee shall meet not less
frequently than once each quarter.
``(4) Duties.--The advisory committee shall--
``(A) advise the Bank on the programs undertaken by
the Bank; and
``(B) submit to Congress an annual report with
comments from the advisory committee on the extent to
which the Bank is meeting the mandate described in
section 5245C, including any suggestions for
improvement.
``(k) Chief Risk Officer.--
``(1) Appointment.--Subject to the approval of the Board,
the Chief Executive Officer shall appoint a Chief Risk Officer
from among individuals with experience at a senior level in
financial risk management, who--
``(A) shall report directly to the Board; and
``(B) shall be removable only by a majority vote of
the Board.
``(2) Duties.--The Chief Risk Officer, in coordination with
the audit and risk management committees established under
section 5245K, shall develop, implement, and manage a
comprehensive process for identifying, assessing, monitoring,
and limiting risks to the Bank, including the overall portfolio
diversification of the Bank.
``SEC. 5245J. ADMINISTRATION.
``(a) Capitalization.--
``(1) In general.--The Bank shall be capitalized--
``(A) with $50,000,000,000 on the date on which the
Bank is established under section 5245B; and
``(B) with $10,000,000,000 for each of the 5 years
following that date.
``(2) Funding.--
``(A) Initial capitalization.--On the date on which
the Bank is established under section 5245B, out of any
funds in the Treasury not otherwise appropriated, the
Secretary of the Treasury shall transfer to the Bank
the amount specified in paragraph (1)(A).
``(B) Subsequent transfers.--On October 1 of each
fiscal year following the date on which the Bank is
established under section 5245B, out of any funds in
the Treasury not otherwise appropriated, the Secretary
of the Treasury shall transfer to the Bank the amount
specified in paragraph (1)(B).
``(b) Charter.--The Bank shall establish a charter, the term of
which shall be 30 years.
``(c) Operational Funds.--To sustain operations, the Bank shall
manage revenue from financing fees, interest, repaid loans, and other
types of funding.
``(d) Report.--The Bank shall submit on a quarterly basis to the
relevant committees of Congress a report that describes the financial
activities, emissions reductions, and private capital mobilization
metrics of the Bank for the previous quarter.
``(e) Restriction.--The Bank shall not accept deposits.
``(f) Committees.--The Board shall establish committees and
subcommittees, including--
``(1) an investment committee; and
``(2) in accordance with section 5245K--
``(A) a risk management committee; and
``(B) an audit committee.
``(g) Private Contributions.--The Bank may accept and use
philanthropic funds.
``SEC. 5245K. ESTABLISHMENT OF RISK MANAGEMENT COMMITTEE AND AUDIT
COMMITTEE.
``(a) In General.--To assist the Board in fulfilling the duties and
responsibilities of the Board under this Chapter, the Board shall
establish a risk management committee and an audit committee.
``(b) Duties and Responsibilities of Risk Management Committee.--
Subject to the direction of the Board, the risk management committee
established under subsection (a) shall establish policies for and have
oversight responsibility of--
``(1) formulating the risk management policies of the
operations of the Bank;
``(2) reviewing and providing guidance on operation of the
global risk management framework of the Bank;
``(3) developing policies for--
``(A) investment;
``(B) enterprise risk management;
``(C) monitoring; and
``(D) management of strategic, reputational,
regulatory, operational, developmental, environmental,
social, and financial risks; and
``(4) developing the risk profile of the Bank, including--
``(A) a risk management and compliance framework;
and
``(B) a governance structure to support that
framework.
``(c) Duties and Responsibilities of Audit Committee.--Subject to
the direction of the Board, the audit committee established under
subsection (a) shall have oversight responsibility of--
``(1) the integrity of--
``(A) the financial reporting of the Bank; and
``(B) the systems of internal controls regarding
finance and accounting;
``(2) the integrity of the financial statements of the
Bank;
``(3) the performance of the internal audit function of the
Bank; and
``(4) compliance with the legal and regulatory requirements
related to the finances of the Bank.
``SEC. 5245L. EXTERNAL OVERSIGHT.
``The Bank shall be subject to the oversight of the Comptroller of
the Currency in accordance with section 5169(c).
``SEC. 5245M. MAXIMUM CONTINGENT LIABILITY.
``The maximum contingent liability of the Bank that may be
outstanding at any 1 time shall be not more than $70,000,000,000 in the
aggregate.''.
(b) External Oversight.--Section 5169 of the Revised Statutes (12
U.S.C. 27) is amended by adding at the end the following:
``(c) National Climate Bank.--The Comptroller shall exempt, expand,
or alter specific regulations applicable to the National Climate Bank
to better suit the purpose and business model of the National Climate
Bank as an independent, nonprofit, nondepository banking
institution.''.
(c) Inspector General of the National Climate Bank.--
(1) In general.--Section 8G(a) of the Inspector General Act
of 1978 (5 U.S.C. App.) is amended--
(A) in paragraph (2), by inserting ``the National
Climate Bank,'' after ``the National Archives and
Records Administration,''; and
(B) in paragraph (4)--
(i) in subparagraph (I), by striking
``and'' at the end;
(ii) in subparagraph (J), by inserting
``and'' after ``Corporation;'' and
(iii) by adding at the end the following:
``(K) with respect to the National Climate Bank,
such term means the Board of Directors of the National
Climate Bank;''.
(2) Appointment.--Notwithstanding the first sentence of
section 8G(b) of the Inspector General Act of 1978 (5 U.S.C.
App.), not later than 180 days after the National Climate Bank
is established under chapter five of title LXII of the Revised
Statutes--
(A) the first Inspector General of the National
Climate Bank shall be appointed; and
(B) the Office of the Inspector General of the
National Climate Bank shall be established.
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