AMERICAN CLEAN ENERGY AND SECURITY ACT OF 2009
(House of Representatives - June 26, 2009)

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[Pages H7471-H7686]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                              {time}  1245
             AMERICAN CLEAN ENERGY AND SECURITY ACT OF 2009

  Mr. WAXMAN. Madam Speaker, pursuant to H. Res. 587, I call up the 
bill (H.R. 2454) to create clean-energy jobs, achieve energy 
independence, reduce global warming pollution and transition to a 
clean-energy economy, and ask for its immediate consideration in the 
House.
  The Clerk read the title of the bill.
  The SPEAKER pro tempore. Pursuant to House Resolution 587, in lieu of 
the amendment recommended by the Committee on Energy and Commerce 
printed in the bill, the amendment in the nature of a substitute 
consisting of the text of H.R. 2998, modified by the amendment printed 
in part A of House Report 111-185 is adopted and the bill, as amended, 
is considered read.
  The text of the bill, as amended, is as follows:

                               H.R. 2998

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

     SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

       (a) Short Title.--This Act may be cited as the ``American 
     Clean Energy and Security Act of 2009''.
       (b) Table of Contents.--The table of contents for this Act 
     is as follows:

Sec. 1. Short title; table of contents.
Sec. 2. Definitions.
Sec. 3. International participation.

                         TITLE I--CLEAN ENERGY

   Subtitle A--Combined Efficiency and Renewable Electricity Standard

Sec. 101. Combined efficiency and renewable electricity standard.
Sec. 102. Clarifying State authority to adopt renewable energy 
              incentives.
Sec. 103. Federal renewable energy purchases.

              Subtitle B--Carbon Capture and Sequestration

Sec. 111. National strategy.
Sec. 112. Regulations for geologic sequestration sites.
``Sec. 813. Geologic sequestration sites.
Sec. 113. Studies and reports.
Sec. 114. Carbon capture and sequestration demonstration and early 
              deployment program.
Sec. 115. Commercial deployment of carbon capture and sequestration 
              technologies.
``Sec. 786. Commercial deployment of carbon capture and sequestration 
              technologies.
Sec. 116. Performance standards for coal-fueled power plants.
``Sec. 812. Performance standards for new coal-fired power plants.

                    Subtitle C--Clean Transportation

Sec. 121. Electric vehicle infrastructure.
Sec. 122. Large-scale vehicle electrification program.
Sec. 123. Plug-in electric drive vehicle manufacturing.
Sec. 124. Investment in clean vehicles.
Sec. 125. Advanced technology vehicle manufacturing incentive loans.
Sec. 126. Amendment to renewable fuels standard.
Sec. 127. Open fuel standard.
Sec. 128. Diesel emissions reduction.
Sec. 129. Loan guarantees for projects to construct renewable fuel 
              pipelines.
Sec. 130. Fleet vehicles.
Sec. 130A. Report on natural gas vehicle emissions reductions.

     Subtitle D--State Energy and Environment Development Accounts

Sec. 131. Establishment of SEED Accounts.
Sec. 132. Support of State renewable energy and energy efficiency 
              programs.
Sec. 133. Support of Indian renewable energy and energy efficiency 
              programs.

                   Subtitle E--Smart Grid Advancement

Sec. 141. Definitions.
Sec. 142.  Assessment of Smart Grid cost effectiveness in products.
Sec. 143. Inclusions of Smart Grid capability on appliance ENERGY GUIDE 
              labels.
Sec. 144. Smart Grid peak demand reduction goals.
Sec. 145.  Reauthorization of energy efficiency public information 
              program to include Smart Grid information.
Sec. 146. Inclusion of Smart Grid features in appliance rebate program.

                   Subtitle F--Transmission Planning

Sec. 151. Transmission planning and siting.
Sec. 152. Net metering for Federal agencies.
Sec. 153. Support for qualified advanced electric transmission 
              manufacturing plants, qualified high efficiency 
              transmission property, and qualified advanced electric 
              transmission property.

            Subtitle G--Technical Corrections to Energy Laws

Sec. 161. Technical corrections to Energy Independence and Security Act 
              of 2007.
Sec. 162. Technical corrections to Energy Policy Act of 2005.

         Subtitle H--Energy and Efficiency Centers and Research

Sec. 171. Energy Innovation Hubs.
Sec. 172. Advanced energy research.
Sec. 173. Building Assessment Centers.
Sec. 174. Centers for Energy and Environmental Knowledge and Outreach.

             Subtitle I--Nuclear and Advanced Technologies

Sec. 181. Revisions to loan guarantee program authority.
Sec. 182. Purpose.
Sec. 183. Definitions.
Sec. 184. Clean energy investment fund.
Sec. 185. Energy technology deployment goals.
Sec. 186. Clean energy deployment administration.
Sec. 187. Direct support.

[[Page H7472]]

Sec. 188. Indirect support.
Sec. 189. Federal credit authority.
Sec. 190. General provisions.
Sec. 191. Conforming amendments.

                       Subtitle J--Miscellaneous

Sec. 195. Increased hydroelectric generation at existing Federal 
              facilities.
Sec. 196. Clean technology business competition grant program.
Sec. 197. National Bioenergy Partnership.
Sec. 198. Office of Consumer Advocacy.
Sec. 199. Development corporation for renewable power borrowing 
              authority.
Sec. 199A. Study.

                      TITLE II--ENERGY EFFICIENCY

            Subtitle A--Building Energy Efficiency Programs

Sec. 201. Greater energy efficiency in building codes.
Sec. 202. Building retrofit program.
Sec. 203. Energy efficient manufactured homes.
Sec. 204. Building energy performance labeling program.
Sec. 205. Tree planting programs.
Sec. 206. Energy efficiency for data center buildings.
Sec. 207. Community building code.
Sec. 208. Solar energy systems building permit requirement for receipt 
              of community development block grant funds.

     Subtitle B--Lighting and Appliance Energy Efficiency Programs

Sec. 211. Lighting efficiency standards.
Sec. 212. Other appliance efficiency standards.
Sec. 213. Appliance efficiency determinations and procedures.
Sec. 214. Best-in-Class Appliances Deployment Program.
Sec. 215. WaterSense.
Sec. 216. Federal procurement of water efficient products.
Sec. 216A. Transmission planning.
Sec. 216B. Siting and construction in the western interconnection.
Sec. 217. Water efficient product rebate programs.
Sec. 218. Certified stoves program.
Sec. 219. Energy Star standards.

                 Subtitle C--Transportation Efficiency

Sec. 221. Emissions standards.

                        ``Part B--Mobile Sources

``Sec. 821. Greenhouse gas emission standards for mobile sources.
Sec. 222. Greenhouse gas emissions reductions through transportation 
              efficiency.

                   ``Part D--Transportation Emissions

``Sec. 841. Greenhouse gas emissions reductions through transportation 
              efficiency.
Sec. 223. SmartWay transportation efficiency program.
``Sec. 822. SmartWay transportation efficiency program.
Sec. 224. State vehicle fleets.

           Subtitle D--Industrial Energy Efficiency Programs

Sec. 241. Industrial plant energy efficiency standards.
Sec. 242. Electric and thermal waste energy recovery award program.
Sec. 243. Clarifying election of waste heat recovery financial 
              incentives.
Sec. 244. Motor market assessment and commercial awareness program.
Sec. 245. Motor efficiency rebate program.

   Subtitle E--Improvements in Energy Savings Performance Contracting

Sec. 251. Energy savings performance contracts.

                    Subtitle F--Public Institutions

Sec. 261. Public institutions.
Sec. 262. Community energy efficiency flexibility.
Sec. 263. Small community joint participation.
Sec. 264. Low income community energy efficiency program.
Sec. 265. Consumer behavior research.

                       Subtitle G--Miscellaneous

Sec. 271. Energy efficient information and communications technologies.
Sec. 272. National energy efficiency goals.
Sec. 273. Affiliated island energy independence team.
Sec. 274. Product carbon disclosure program.

              TITLE III--REDUCING GLOBAL WARMING POLLUTION

Sec. 301. Short title.

             Subtitle A--Reducing Global Warming Pollution

Sec. 311. Reducing global warming pollution.

        ``TITLE VII--GLOBAL WARMING POLLUTION REDUCTION PROGRAM

     ``Part A--Global Warming Pollution Reduction Goals and Targets

``Sec. 701. Findings and purpose.
``Sec. 702. Economy-wide reduction goals.
``Sec. 703. Reduction targets for specified sources.
``Sec. 704. Supplemental pollution reductions.
``Sec. 705. Review and program recommendations.
``Sec. 706. National Academy review.
``Sec. 707. Presidential response and recommendations.

       ``Part B--Designation and Registration of Greenhouse Gases

``Sec. 711. Designation of greenhouse gases.
``Sec. 712. Carbon dioxide equivalent value of greenhouse gases.
``Sec. 713. Greenhouse gas registry.

                        ``Part C--Program Rules

``Sec. 721. Emission allowances.
``Sec. 722. Prohibition of excess emissions.
``Sec. 723. Penalty for noncompliance.
``Sec. 724. Trading.
``Sec. 725. Banking and borrowing.
``Sec. 726. Strategic reserve.
``Sec. 727. Permits.
``Sec. 728. International emission allowances.

                           ``Part D--Offsets

``Sec. 731. Offsets Integrity Advisory Board.
``Sec. 732. Establishment of offsets program.
``Sec. 733. Eligible project types.
``Sec. 734. Requirements for offset projects.
``Sec. 735. Approval of offset projects.
``Sec. 736. Verification of offset projects.
``Sec. 737. Issuance of offset credits.
``Sec. 738. Audits.
``Sec. 739. Program review and revision.
``Sec. 740. Early offset supply.
``Sec. 741. Environmental considerations.
``Sec. 742. Trading.
``Sec. 743. International offset credits.

 ``Part E--Supplemental Emissions Reductions From Reduced Deforestation

``Sec. 751. Definitions.
``Sec. 752. Findings.
``Sec. 753. Supplemental emissions reductions through reduced 
              deforestation.
``Sec. 754. Requirements for international deforestation reduction 
              program.
``Sec. 755. Reports and reviews.
``Sec. 756. Legal effect of part.
Sec. 312. Definitions.
``Sec. 700. Definitions.

                 Subtitle B--Disposition of Allowances

Sec. 321. Disposition of allowances for global warming pollution 
              reduction program.

                  ``Part H--Disposition of Allowances

``Sec. 781. Allocation of allowances for supplemental reductions.
``Sec. 782. Allocation of emission allowances.
``Sec. 783. Electricity consumers.
``Sec. 784. Natural gas consumers.
``Sec. 785. Home heating oil, propane, and kerosene consumers.
``Sec. 787. Allocations to refineries.
``Sec. 788. [SECTION RESERVED].
``Sec. 789. Climate change consumer refunds.
``Sec. 790. Exchange for State-issued allowances.
``Sec. 791. Auction procedures.
``Sec. 792. Auctioning allowances for other entities.
``Sec. 793. Establishment of funds.
``Sec. 794. Oversight of allocations.

            Subtitle C--Additional Greenhouse Gas Standards

Sec. 331. Greenhouse gas standards.

           ``TITLE VIII--ADDITIONAL GREENHOUSE GAS STANDARDS

``Sec. 801. Definitions.

                 ``Part A--Stationary Source Standards

``Sec. 811. Standards of performance.

                ``Part C--Exemptions From Other Programs

``Sec. 831. Criteria pollutants.
``Sec. 832. International air pollution.
``Sec. 833. Hazardous air pollutants.
``Sec. 834. New source review.
``Sec. 835. Title V permits.
Sec. 332. HFC Regulation.
Sec. 333. Black carbon.

                         ``Part E--Black Carbon

``Sec. 851. Black carbon.
Sec. 334. States.
Sec. 335. State programs.

                        ``Part F--Miscellaneous

``Sec. 861. State programs.
``Sec. 862. Grants for support of air pollution control programs.
Sec. 336. Enforcement.
Sec. 337. Conforming amendments.
Sec. 338. Davis-Bacon compliance.
Sec. 339. National strategy for domestic biological carbon 
              sequestration.

                  Subtitle D--Carbon Market Assurance

Sec. 341. Carbon market assurance.
Sec. 342. Carbon derivative markets.

                Subtitle E--Additional Market Assurance

Sec. 351. Regulation of certain transactions in derivatives involving 
              energy commodities.
Sec. 352. No effect on authority of the Federal Energy Regulatory 
              Commission.
Sec. 353. Inspector General of the Commodity Futures Trading 
              Commission.
Sec. 354. Settlement and clearing through registered derivatives 
              clearing organizations.
Sec. 355. Limitation on eligibility to purchase a credit default swap.
Sec. 356. Transaction fees.
Sec. 357. No effect on antitrust law or authority of the Federal Trade 
              Commission.
Sec. 358. Effect of derivatives regulatory reform legislation.
Sec. 359. Cease-and-desist authority.
Sec. 360. Presidential review of regulations.

[[Page H7473]]

           TITLE IV--TRANSITIONING TO A CLEAN ENERGY ECONOMY

      Subtitle A--Ensuring Real Reductions in Industrial Emissions

Sec. 401. Ensuring real reductions in industrial emissions.

       ``Part F--Ensuring Real Reductions in Industrial Emissions

``Sec. 761. Purposes.
``Sec. 762. International negotiations.
``Sec. 763. Definitions.

             ``subpart 1--emission allowance rebate program

``Sec. 764. Eligible industrial sectors.
``Sec. 765. Distribution of emission allowance rebates.

          ``subpart 2--international reserve allowance program

``Sec. 766. International reserve allowance program.

                ``subpart 3--presidential determination

``Sec. 767. Presidential reports and determinations.

              Subtitle B--Green Jobs and Worker Transition

                           Part 1--Green Jobs

Sec. 421. Clean energy curriculum development grants.
Sec. 422. Increased funding for energy worker training program.

          Part 2--Climate Change Worker Adjustment Assistance

Sec. 425. Petitions, eligibility requirements, and determinations.
Sec. 426. Program benefits.
Sec. 427. General provisions.

                    Subtitle C--Consumer Assistance

Sec. 431. Energy refund program.
Sec. 432. Modification of earned income credit amount for individuals 
              with no qualifying children.
Sec. 433. Protection of Social Security and Medicare trust funds.

                 Subtitle D--Exporting Clean Technology

Sec. 441. Findings and purposes.
Sec. 442. Definitions.
Sec. 443. Governance.
Sec. 444. Determination of eligible countries.
Sec. 445. Qualifying activities.
Sec. 446. Assistance.

                 Subtitle E--Adapting to Climate Change

                      Part 1--Domestic Adaptation

         subpart a--national climate change adaptation program

Sec. 451. Global change research and data management.
Sec. 452. National Climate Service.
Sec. 453. State programs to build resilience to climate change impacts.

              subpart b--public health and climate change

Sec. 461. Sense of Congress on public health and climate change.
Sec. 462. Relationship to other laws.
Sec. 463. National strategic action plan.
Sec. 464. Advisory board.
Sec. 465. Reports.
Sec. 466. Definitions.
Sec. 467. Climate Change Health Protection and Promotion Fund.

                 subpart c--natural resource adaptation

Sec. 471. Purposes.
Sec. 472. Natural resources climate change adaptation policy.
Sec. 473. Definitions.
Sec. 474. Council on Environmental Quality.
Sec. 475. Natural Resources Climate Change Adaptation Panel.
Sec. 476. Natural Resources Climate Change Adaptation Strategy.
Sec. 477. Natural resources adaptation science and information.
Sec. 478. Federal natural resource agency adaptation plans.
Sec. 479. State natural resources adaptation plans.
Sec. 480. Natural Resources Climate Change Adaptation Fund.
Sec. 481. National Wildlife Habitat and Corridors Information Program.
Sec. 482. Additional provisions regarding Indian tribes.

        Part 2--International Climate Change Adaptation Program

Sec. 491. Findings and purposes.
Sec. 492. Definitions.
Sec. 493. International Climate Change Adaptation Program.
Sec. 494. Distribution of allowances.
Sec. 495. Bilateral assistance.

     SEC. 2. DEFINITIONS.

       For purposes of this Act:
       (1) Administrator.--The term ``Administrator'' means the 
     Administrator of the Environmental Protection Agency.
       (2) State.--The term ``State'' has the meaning given that 
     term in section 302 of the Clean Air Act.

     SEC. 3. INTERNATIONAL PARTICIPATION.

       The Administrator, in consultation with the Department of 
     State and the United States Trade Representative, shall 
     annually prepare and certify a report to the Congress 
     regarding whether China and India have adopted greenhouse gas 
     emissions standards at least as strict as those standards 
     required under this Act. If the Administrator determines that 
     China and India have not adopted greenhouse gas emissions 
     standards at least as stringent as those set forth in this 
     Act, the Administrator shall notify each Member of Congress 
     of his determination, and shall release his determination to 
     the media.

                         TITLE I--CLEAN ENERGY

   Subtitle A--Combined Efficiency and Renewable Electricity Standard

     SEC. 101. COMBINED EFFICIENCY AND RENEWABLE ELECTRICITY 
                   STANDARD.

       (a) In General.--Title VI of the Public Utility Regulatory 
     Policies Act of 1978 (16 U.S.C. 2601 and following) is 
     amended by adding at the end the following:

     ``SEC. 610. COMBINED EFFICIENCY AND RENEWABLE ELECTRICITY 
                   STANDARD.

       ``(a) Definitions.--For purposes of this section:
       ``(1) CHP savings.--The term `CHP savings' means--
       ``(A) CHP system savings from a combined heat and power 
     system that commences operation after the date of enactment 
     of this section; and
       ``(B) the increase in CHP system savings from, at any time 
     after the date of the enactment of this section, upgrading, 
     replacing, expanding, or increasing the utilization of a 
     combined heat and power system that commenced operation on or 
     before the date of enactment of this section.
       ``(2) CHP system savings.--The term `CHP system savings' 
     means the increment of electric output of a combined heat and 
     power system that is attributable to the higher efficiency of 
     the combined system (as compared to the efficiency of 
     separate production of the electric and thermal outputs).
       ``(3) Combined heat and power system.--The term `combined 
     heat and power system' means a system that uses the same 
     energy source both for the generation of electrical or 
     mechanical power and the production of steam or another form 
     of useful thermal energy, provided that--
       ``(A) the system meets such requirements relating to 
     efficiency and other operating characteristics as the 
     Commission may promulgate by regulation; and
       ``(B) the net sales of electricity by the facility to 
     customers not consuming the thermal output from that facility 
     will not exceed 50 percent of total annual electric 
     generation by the facility.
       ``(4) Customer facility savings.--The term `customer 
     facility savings' means a reduction in end-use electricity 
     consumption (including recycled energy savings) at a facility 
     of an end-use consumer of electricity served by a retail 
     electric supplier, as compared to--
       ``(A) in the case of a new facility, consumption at a 
     reference facility of average efficiency;
       ``(B) in the case of an existing facility, consumption at 
     such facility during a base period, except as provided in 
     subparagraphs (C) and (D);
       ``(C) in the case of new equipment that replaces existing 
     equipment with remaining useful life, the projected 
     consumption of the existing equipment for the remaining 
     useful life of such equipment, and thereafter, consumption of 
     new equipment of average efficiency of the same equipment 
     type; and
       ``(D) in the case of new equipment that replaces existing 
     equipment at the end of the useful life of the existing 
     equipment, consumption by new equipment of average efficiency 
     of the same equipment type.
       ``(5) Distributed renewable generation facility.--The term 
     `distributed renewable generation facility' means a facility 
     that--
       ``(A) generates renewable electricity;
       ``(B) primarily serves 1 or more electricity consumers at 
     or near the facility site; and
       ``(C) is no greater than--
       ``(i) 2 megawatts in capacity; or
       ``(ii) 4 megawatts in capacity, in the case of a facility 
     that is placed in service after the date of enactment of this 
     section and generates electricity from a renewable energy 
     resource other than by means of combustion.
       ``(6) Electricity savings.--The term `electricity savings' 
     means reductions in electricity consumption, relative to 
     business-as-usual projections, achieved through measures 
     implemented after the date of enactment of this section, 
     limited to--
       ``(A) customer facility savings of electricity, adjusted to 
     reflect any associated increase in fuel consumption at the 
     facility;
       ``(B) reductions in distribution system losses of 
     electricity achieved by a retail electricity distributor, as 
     compared to losses attributable to new or replacement 
     distribution system equipment of average efficiency;
       ``(C) CHP savings; and
       ``(D) fuel cell savings.
       ``(7) Central procurement state.--The term `central 
     procurement State' means a State that, as of January 1, 2009, 
     had adopted and implemented a legally enforceable mandate 
     that, in lieu of requiring utilities to submit credits or 
     certificates issued based on generation of electricity from 
     (or to purchase or generate electricity from) resources 
     defined by the State as renewable, requires retail electric 
     suppliers to collect payments from electricity ratepayers 
     within the State that are used for central procurement, by a 
     State agency or a public benefit corporation established 
     pursuant to State law, of credits or certificates issued 
     based on generation of electricity from resources defined by 
     the State as renewable.
       ``(8) Federal renewable electricity credit.--The term 
     `Federal renewable electricity credit' means a credit, 
     representing one megawatt hour of renewable electricity, 
     issued pursuant to subsection (e).
       ``(9) Fuel cell.--The term `fuel cell' means a device that 
     directly converts the chemical energy of a fuel and an 
     oxidant into electricity by electrochemical processes 
     occurring at separate electrodes in the device.

[[Page H7474]]

       ``(10) Fuel cell savings.--The term `fuel cell savings' 
     means the electricity saved by a fuel cell that is installed 
     after the date of enactment of this section, or by upgrading 
     a fuel cell that commenced operation on or before the date of 
     enactment of this section, as a result of the greater 
     efficiency with which the fuel cell transforms fuel into 
     electricity as compared with sources of electricity delivered 
     through the grid, provided that--
       ``(A) the fuel cell meets such requirements relating to 
     efficiency and other operating characteristics as the 
     Commission may promulgate by regulation; and
       ``(B) the net sales of electricity from the fuel cell to 
     customers not consuming the thermal output from the fuel 
     cell, if any, do not exceed 50 percent of the total annual 
     electricity generation by the fuel cell.
       ``(12) Other qualifying energy resource.--The term `other 
     qualifying energy resource' means any of the following:
       ``(A) Landfill gas.
       ``(B) Wastewater treatment gas.
       ``(C) Coal mine methane used to generate electricity at or 
     near the mine mouth.
       ``(D) Qualified waste-to-energy.
       ``(13) Qualified hydropower.--The term `qualified 
     hydropower' means--
       ``(A) energy produced from increased efficiency achieved, 
     or additions of capacity made, on or after January 1, 1988, 
     at a hydroelectric facility that was placed in service before 
     that date and does not include additional energy generated as 
     a result of operational changes not directly associated with 
     efficiency improvements or capacity additions; or
       ``(B) energy produced from generating capacity added to a 
     dam on or after January 1, 1988, provided that the Commission 
     certifies that--
       ``(i) the dam was placed in service before the date of the 
     enactment of this section and was operated for flood control, 
     navigation, or water supply purposes and was not producing 
     hydroelectric power prior to the addition of such capacity;
       ``(ii) the hydroelectric project installed on the dam is 
     licensed (or is exempt from licensing) by the Commission and 
     is in compliance with the terms and conditions of the license 
     or exemption, and with other applicable legal requirements 
     for the protection of environmental quality, including 
     applicable fish passage requirements; and
       ``(iii) the hydroelectric project installed on the dam is 
     operated so that the water surface elevation at any given 
     location and time that would have occurred in the absence of 
     the hydroelectric project is maintained, subject to any 
     license or exemption requirements that require changes in 
     water surface elevation for the purpose of improving the 
     environmental quality of the affected waterway.
       ``(14) Qualified waste-to-energy.--The term `qualified 
     waste-to-energy' means energy from the combustion of 
     municipal solid waste or construction, demolition, or 
     disaster debris, or from the gasification or pyrolization of 
     such waste or debris and the combustion of the resulting gas 
     at the same facility, provided that--
       ``(A) such term shall include only the energy derived from 
     the non-fossil biogenic portion of such waste or debris;
       ``(B) the Commission determines, with the concurrence of 
     the Administrator of the Environmental Protection Agency, 
     that the total lifecycle greenhouse gas emissions 
     attributable to the generation of electricity from such waste 
     or debris are lower than those attributable to the likely 
     alternative method of disposing of such waste or debris; and
       ``(C) the owner or operator of the facility generating 
     electricity from such energy provides to the Commission, on 
     an annual basis--
       ``(i) a certification that the facility is in compliance 
     with all applicable State, tribal, and Federal environmental 
     permits;
       ``(ii) in the case of a facility that commenced operation 
     before the date of enactment of this section, a certification 
     that the facility meets emissions standards promulgated under 
     sections 112 or 129 of the Clean Air Act (42 U.S.C. 7412 or 
     7429) that apply as of the date of enactment of this section 
     to new facilities within the relevant source category; and
       ``(iii) in the case of the combustion, pyrolization, or 
     gasification of municipal solid waste, a certification that 
     each local government unit from which such waste originates 
     operates, participates in the operation of, contracts for, or 
     otherwise provides for, recycling services for its residents.
       ``(15) Recycled energy savings.--The term `recycled energy 
     savings' means a reduction in electricity consumption that 
     results from a modification of an industrial or commercial 
     system that commenced operation before the date of enactment 
     of this section, in order to recapture electrical, 
     mechanical, or thermal energy that would otherwise be wasted.
       ``(16) Renewable biomass.--The term `renewable biomass' 
     means any of the following:
       ``(A) 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 stands, late-successional stands 
     (except for dead, severely damaged, or badly infested trees), 
     components of the National Landscape Conservation System, 
     National Monuments, National Conservation Areas, Designated 
     Primitive Areas, or Wild and Scenic Rivers corridors;
       ``(ii) harvested in environmentally sustainable quantities, 
     as determined by the appropriate Federal land manager; and
       ``(iii) harvested in accordance with Federal and State law, 
     and applicable land management plans.
       ``(B) Any organic matter that is available on a renewable 
     or recurring basis from non-Federal land or land belonging to 
     an Indian or Indian tribe that is held in trust by the United 
     States or subject to a restriction against alienation imposed 
     by the United States, including--
       ``(i) renewable plant material, including--

       ``(I) feed grains;
       ``(II) other agricultural commodities;
       ``(III) other plants and trees; and
       ``(IV) algae; and

       ``(ii) waste material, including--

       ``(I) crop residue;
       ``(II) other vegetative waste material (including wood 
     waste and wood residues);
       ``(III) animal waste and byproducts (including fats, oils, 
     greases, and manure);
       ``(IV) construction waste; and
       ``(V) food waste and yard waste.

       ``(C) Residues and byproducts from wood, pulp, or paper 
     products facilities.''.
       ``(17) Renewable electricity.--The term `renewable 
     electricity' means electricity generated (including by means 
     of a fuel cell) from a renewable energy resource or other 
     qualifying energy resources.
       ``(18) Renewable energy resource.--The term `renewable 
     energy resource' means each of the following:
       ``(A) Wind energy.
       ``(B) Solar energy.
       ``(C) Geothermal energy.
       ``(D) Renewable biomass.
       ``(E) Biogas derived exclusively from renewable biomass.
       ``(F) Biofuels derived exclusively from renewable biomass.
       ``(G) Qualified hydropower.
       ``(H) Marine and hydrokinetic renewable energy, as that 
     term is defined in section 632 of the Energy Independence and 
     Security Act of 2007 (42 U.S.C. 17211).
       ``(19) Retail electric supplier.--
       ``(A) In general.--The term `retail electric supplier' 
     means, for any given year, an electric utility that sold not 
     less than 4,000,000 megawatt hours of electric energy to 
     electric consumers for purposes other than resale during the 
     preceding calendar year.
       ``(B) Inclusions and limitations.--For purposes of 
     determining whether an electric utility qualifies as a retail 
     electric supplier under subparagraph (A)--
       ``(i) the sales of any affiliate of an electric utility to 
     electric consumers, other than sales to the affiliate's 
     lessees or tenants, for purposes other than resale shall be 
     considered to be sales of such electric utility; and
       ``(ii) sales by any electric utility to an affiliate, 
     lessee, or tenant of such electric utility shall not be 
     treated as sales to electric consumers.
       ``(C) Affiliate.--For purposes of this paragraph, the term 
     `affiliate' when used in relation to a person, means another 
     person that directly or indirectly owns or controls, is owned 
     or controlled by, or is under common ownership or control 
     with, such person, as determined under regulations 
     promulgated by the Commission.
       ``(20) Retail electric supplier's base amount.--The term 
     `retail electric supplier's base amount' means the total 
     amount of electric energy sold by the retail electric 
     supplier, expressed in megawatt hours, to electric customers 
     for purposes other than resale during the relevant calendar 
     year, excluding--
       ``(A) electricity generated by a hydroelectric facility 
     that is not qualified hydropower;
       ``(B) electricity generated by a nuclear generating unit 
     placed in service after the date of enactment of this 
     section; and
       ``(C) the proportion of electricity generated by a fossil-
     fueled generating unit that is equal to the proportion of 
     greenhouse gases produced by such unit that are captured and 
     geologically sequestered.
       ``(21) Retire and retirement.--The terms `retire' and 
     `retirement' with respect to a Federal renewable electricity 
     credit, means to disqualify such credit for any subsequent 
     use under this section, regardless of whether the use is a 
     sale, transfer, exchange, or submission in satisfaction of a 
     compliance obligation.
       ``(22) Third-party efficiency provider.--The term `third-
     party efficiency provider' means any retailer, building 
     owner, energy service company, financial institution or other 
     commercial, industrial or nonprofit entity that is capable of 
     providing electricity savings in accordance with the 
     requirements of this section.
       ``(23) Total annual electricity savings.--The term `total 
     annual electricity savings' means electricity savings during 
     a specified calendar year from measures implemented since the 
     date of the enactment of this section, taking into account 
     verified measure lifetimes or verified annual savings 
     attrition

[[Page H7475]]

     rates, as determined in accordance with such regulations as 
     the Commission may promulgate and measured in megawatt hours.
       ``(b) Annual Compliance Obligation.--
       ``(1) In general.--For each of calendar years 2012 through 
     2039, not later than March 31 of the following calendar year, 
     each retail electric supplier shall submit to the Commission 
     an amount of Federal renewable electricity credits and 
     demonstrated total annual electricity savings that, in the 
     aggregate, is equal to such retail electric supplier's annual 
     combined target as set forth in subsection (d), except as 
     otherwise provided in subsection (h).
       ``(2) Demonstration of savings.--For purposes of this 
     subsection, submission of demonstrated total annual 
     electricity savings means submission of a report that 
     demonstrates, in accordance with the requirements of 
     subsection (f), the total annual electricity savings achieved 
     by the retail electric supplier within the relevant 
     compliance year.
       ``(3) Renewable electricity credits portion.--Except as 
     provided in paragraph (4), each retail electric supplier must 
     submit Federal renewable electricity credits equal to at 
     least three quarters of the retail electric supplier's annual 
     combined target.
       ``(4) State petition.--
       ``(A) In general.--Upon written request from the Governor 
     of any State (including, for purposes of this paragraph, the 
     Mayor of the District of Columbia), the Commission shall 
     increase, to not more than two fifths, the proportion of the 
     annual combined targets of retail electric suppliers located 
     within such State that may be met through submission of 
     demonstrated total annual electricity savings, provided that 
     such increase shall be effective only with regard to the 
     portion of a retail electric supplier's annual combined 
     target that is attributable to electricity sales within such 
     State.
       ``(B) Contents.--A Governor's request under this paragraph 
     shall include an explanation of the Governor's rationale for 
     determining, after consultation with the relevant State 
     regulatory authority and other retail electricity ratemaking 
     authorities within the State, to make such request. The 
     request shall specify the maximum proportion of annual 
     combined targets (not more than two fifths) that can be met 
     through demonstrated total annual electricity savings, and 
     the period for which such proportion shall be effective.
       ``(C) Revision.--The Governor of any State may, after 
     consultation with the relevant State regulatory authority and 
     other retail electricity ratemaking authorities within the 
     State, submit a written request for revocation or revision of 
     a previous request submitted under this paragraph. The 
     Commission shall grant such request, provided that--
       ``(i) any revocation or revision shall not apply to the 
     combined annual target for any year that is any earlier than 
     2 calendar years after the calendar year in which such 
     request is submitted, so as to provide retail electric 
     suppliers with adequate notice of such change; and
       ``(ii) any revision shall meet the requirements of 
     subparagraph (A).
       ``(c) Establishment of Program.--Not later than 1 year 
     after the date of enactment of this section, the Commission 
     shall promulgate regulations to implement and enforce the 
     requirements of this section. In promulgating such 
     regulations, the Commission shall, to the extent 
     practicable--
       ``(1) preserve the integrity, and incorporate best 
     practices, of existing State and tribal renewable electricity 
     and energy efficiency programs;
       ``(2) rely upon existing and emerging State, tribal, or 
     regional tracking systems that issue and track non-Federal 
     renewable electricity credits; and
       ``(3) cooperate with the States and Indian tribes to 
     facilitate coordination between State, tribal, and Federal 
     renewable electricity and energy efficiency programs and to 
     minimize administrative burdens and costs to retail electric 
     suppliers.
       ``(d) Annual Compliance Requirement.--
       ``(1) Annual combined targets.--For each of calendar years 
     2012 through 2039, a retail electric supplier's annual 
     combined target shall be the product of--
       ``(A) the required annual percentage for such year, as set 
     forth in paragraph (2); and
       ``(B) the retail electric supplier's base amount for such 
     year.
       ``(2) Required annual percentage.--For each of calendar 
     years 2012 through 2039, the required annual percentage shall 
     be as follows:

``Calendar year                              Required annual percentage
2012................................................................6.0
2013................................................................6.0
2014................................................................9.5
2015................................................................9.5
2016...............................................................13.0
2017...............................................................13.0
2018...............................................................16.5
2019...............................................................16.5
2020...............................................................20.0
2021 through 2039..................................................20.0

       ``(e) Federal Renewable Electricity Credits.--
       ``(1) In general.--The regulations promulgated under this 
     section shall include provisions governing the issuance, 
     tracking, and verification of Federal renewable electricity 
     credits. Except as provided in paragraphs (2), (3), and (4) 
     of this subsection, the Commission shall issue to each 
     generator of renewable electricity, 1 Federal renewable 
     electricity credit for each megawatt hour of renewable 
     electricity generated by such generator after December 31, 
     2011. The Commission shall assign a unique serial number to 
     each Federal renewable electricity credit.
       ``(2) Generation from certain state renewable electricity 
     programs.--``(A) Except as provided in subparagraph (B), 
     where renewable electricity is generated with the support of 
     payments from a retail electric supplier pursuant to a State 
     renewable electricity program (whether through State 
     alternative compliance payments or through payments to a 
     State renewable electricity procurement fund or entity), the 
     Commission shall issue Federal renewable electricity credits 
     to such retail electric supplier for the proportion of the 
     relevant renewable electricity generation that is 
     attributable to the retail electric supplier's payments, as 
     determined pursuant to regulations issued by the Commission. 
     For any remaining portion of the relevant renewable 
     electricity generation, the Commission shall issue Federal 
     renewable electricity credits to the generator, as provided 
     in paragraph (1), except that in no event shall more than 1 
     Federal renewable electricity credit be issued for the same 
     megawatt hour of electricity. In determining how Federal 
     renewable electricity credits will be apportioned among 
     retail electric suppliers and generators in such 
     circumstances, the Commission shall consider information and 
     guidance furnished by the relevant State or States.
       ``(B) In the case of a central procurement State that 
     pursuant to subsection (g) has assumed responsibility for 
     compliance with the requirements of subsection (b), the 
     Commission shall issue directly to the State Federal 
     renewable electricity credits for any renewable electricity 
     for which the State, pursuant to a mandate described in 
     subsection (a)(7), has centrally procured credits or 
     certificates issued based on generation of such renewable 
     electricity.
       ``(3) Certain power sales contracts.--Except as otherwise 
     provided in paragraph (2), when a generator has sold 
     renewable electricity to a retail electric supplier under a 
     contract for power from a facility placed in service before 
     the date of enactment of this section, and the contract does 
     not provide for the determination of ownership of the Federal 
     renewable electricity credits associated with such 
     generation, the Commission shall issue such Federal renewable 
     electricity credits to the retail electric supplier for the 
     duration of the contract.
       ``(4) Credit multiplier for distributed renewable 
     generation.--
       ``(A) In general.--Except as provided in subparagraph (B), 
     the Commission shall issue 3 Federal renewable electricity 
     credits for each megawatt hour of renewable electricity 
     generated by a distributed renewable generation facility.
       ``(B) Adjustment.--Except as provided in subparagraph (C), 
     not later than January 1, 2014, and not less frequently than 
     every 4 years thereafter, the Commission shall review the 
     effect of this paragraph and shall, as necessary, reduce the 
     number of Federal renewable electricity credits per megawatt 
     hour issued under this paragraph for any given energy source 
     or technology, but not below 1, to ensure that such number is 
     no higher than the Commission determines is necessary to make 
     distributed renewable generation facilities using such source 
     or technology cost competitive with other sources of 
     renewable electricity generation.
       ``(C) Facilities placed in service after enactment.--For 
     any distributed renewable generation facility placed in 
     service after the date of enactment of this section, 
     subparagraph (B) shall not apply for the first 10 years after 
     the date on which the facility is placed in service. For each 
     year during such 10-year period, the Commission shall issue 
     to the facility the same number of Federal renewable 
     electricity credits per megawatt hour as are issued to that 
     facility in the year in which such facility is placed in 
     service. After such 10-year period, the Commission shall 
     issue Federal renewable electricity credits to the facility 
     in accordance with the current multiplier as determined 
     pursuant to subparagraph (B).
       ``(5) Credits based on qualified hydropower.--For purposes 
     of this subsection, the number of Federal renewable 
     electricity credits issued for qualified hydropower shall be 
     calculated--
       ``(A) based solely on the increase in average annual 
     generation directly resulting from the efficiency 
     improvements or capacity additions described in subsection 
     (a)(13)(A); and
       ``(B) using the same water flow information used to 
     determine a historic average annual generation baseline for 
     the hydroelectric facility, as certified by the Commission.
       ``(6) Generation from qualified waste-to-energy.--In the 
     case of electricity generated from the combustion of any 
     municipal solid waste or construction, demolition, or 
     disaster debris that is included in the definition of 
     renewable biomass, or from the gasification or pyrolization 
     of such waste or debris and the combustion of the resulting 
     gas at the same facility, the Commission shall issue Federal 
     renewable electricity credits only for electricity generated 
     from qualified waste-to-energy.
       ``(7) Generation from mixed renewable and nonrenewable 
     resources.--If electricity is generated using both a 
     renewable energy resource or other qualifying energy

[[Page H7476]]

     resource and an energy source that is not a renewable energy 
     resource or other qualifying energy resource (as, for 
     example, in the case of co-firing of renewable biomass and 
     fossil fuel), the Commission shall issue Federal renewable 
     electricity credits based on the proportion of the 
     electricity that is attributable to the renewable energy 
     resource or other qualifying energy resource.
       ``(8) Prohibition against double-counting.--Except as 
     provided in paragraph (4) of this subsection, the Commission 
     shall ensure that no more than 1 Federal renewable 
     electricity credit will be issued for any megawatt hour of 
     renewable electricity and that no Federal renewable 
     electricity credit will be used more than once for compliance 
     with this section.
       ``(9) Trading.--The lawful holder of a Federal renewable 
     electricity credit may sell, exchange, transfer, submit for 
     compliance in accordance with subsection (b), or submit such 
     credit for retirement by the Commission.
       ``(10) Banking.--A Federal renewable electricity credit may 
     be submitted in satisfaction of the compliance obligation set 
     forth in subsection (b) for the compliance year in which the 
     credit was issued or for any of the 3 immediately subsequent 
     compliance years. The Commission shall retire any Federal 
     renewable electricity credit that has not been retired by 
     April 2 of the calendar year that is 3 years after the 
     calendar year in which the credit was issued.
       ``(11) Retirement.--The Commission shall retire a Federal 
     renewable electricity credit immediately upon submission by 
     the lawful holder of such credit, whether in satisfaction of 
     a compliance obligation under subsection (b) or on some other 
     basis.
       ``(f) Electricity Savings.--
       ``(1) Standards for measurement of savings.--As part of the 
     regulations promulgated under this section, the Commission 
     shall prescribe standards and protocols for defining and 
     measuring electricity savings and total annual electricity 
     savings that can be counted towards the compliance obligation 
     set forth in subsection (b). Such protocols and standards 
     shall, at minimum--
       ``(A) specify the types of energy efficiency and energy 
     conservation measures that can be counted;
       ``(B) require that energy consumption estimates for 
     customer facilities or portions of facilities in the 
     applicable base and current years be adjusted, as 
     appropriate, to account for changes in weather, level of 
     production, and building area;
       ``(C) account for the useful life of measures;
       ``(D) include deemed savings values for specific, commonly 
     used measures;
       ``(E) allow for savings from a program to be estimated 
     based on extrapolation from a representative sample of 
     participating customers;
       ``(F) include procedures for counting CHP savings, recycled 
     energy savings, and fuel cell savings;
       ``(G) include procedures for documenting measurable and 
     verifiable electricity savings achieved as a result of market 
     transformation efforts;
       ``(H) include procedures for counting electricity savings 
     achieved by solar water heating and solar light pipe 
     technology that has the capability to provide measurable data 
     on the amount of megawatt-hours displaced;
       ``(I) avoid double-counting of savings used for compliance 
     with this section, including savings that are transferred 
     pursuant to paragraph (3);
       ``(J) ensure that, except as provided in subparagraph (L), 
     the retail electric supplier claiming the savings played a 
     significant role in achieving the savings (including through 
     the activities of a designated agent of the supplier or 
     through the purchase of transferred savings);
       ``(K) include savings from programs administered by a 
     retail electric supplier (or a retail electricity distributor 
     that is not a retail electric supplier) that are funded by 
     State, Federal, or other sources;
       ``(L) in any State in which the State regulatory authority 
     has designated 1 or more entities to administer electric 
     ratepayer-funded efficiency programs approved by such State 
     regulatory authority, provide that electricity savings 
     achieved through such programs shall be distributed equitably 
     among retail electric suppliers in accordance with the 
     direction of the relevant State regulatory authority; and
       ``(M) exclude savings achieved as a result of compliance 
     with mandatory appliance and equipment efficiency standards 
     or building codes.
       ``(2) Standards for third-party verification of savings.--
     The regulations promulgated under this section shall 
     establish procedures and standards requiring third-party 
     verification of all reported electricity savings, including 
     requirements for accreditation of third-party verifiers to 
     ensure that such verifiers are professionally qualified and 
     have no conflicts of interest.
       ``(3) Transfers of savings.--
       ``(A) Bilateral contracts for savings transfers.--Subject 
     to the limitations of this paragraph, a retail electric 
     supplier may use electricity savings transferred, pursuant to 
     a bilateral contract, from another retail electric supplier, 
     an owner of an electric distribution facility that is not a 
     retail electric supplier, a State, or a third-party 
     efficiency provider to meet the applicable compliance 
     obligation under subsection (b).
       ``(B) Requirements.--Electricity savings transferred and 
     used for compliance pursuant to this paragraph shall be--
       ``(i) measured and verified in accordance with the 
     procedures specified under this subsection;
       ``(ii) reported in accordance with paragraph (4) of this 
     subsection; and
       ``(iii) achieved within the same State as is served by the 
     retail electric supplier.
       ``(C) Regulatory approval.--Nothing in this paragraph shall 
     limit or affect the authority of a State regulatory authority 
     to require a retail electric supplier that is regulated by 
     such authority to obtain such authority's authorization or 
     approval of a contract for transfer of savings under this 
     paragraph.
       ``(4) Reporting savings.--
       ``(A) Requirements.--The regulations promulgated under this 
     section shall establish requirements governing the submission 
     of reports to demonstrate, in accordance with the protocols 
     and standards for measurement and third-party verification 
     established under this subsection, the total annual 
     electricity savings achieved by a retail electric supplier 
     within the relevant year.
       ``(B) Review and approval.--The Commission shall review 
     each report submitted to the Commission by a retail electric 
     supplier and shall exclude any electricity savings that have 
     not been adequately demonstrated in accordance with the 
     requirements of this subsection.
       ``(5) State administration.--
       ``(A) Delegation of authority.--Upon receipt of an 
     application from the Governor of a State (including, for 
     purposes of this subsection, the Mayor of the District of 
     Columbia), the Commission may delegate to the State the 
     authority to review and verify reported electricity savings 
     for purposes of determining demonstrated total annual 
     electricity savings that may be counted towards a retail 
     electric supplier's compliance obligation under subsection 
     (b). The Commission shall make a substantive determination 
     approving or disapproving a State application under this 
     subparagraph, after notice and comment, within 180 days of 
     receipt of a complete application.
       ``(B) Alternative measurement and verification procedures 
     and standards.--As part of an application submitted under 
     subparagraph (A), a State may request to use alternative 
     measurement and verification procedures and standards to 
     those specified in paragraphs (1) and (2), provided the State 
     demonstrates that such alternative procedures and standards 
     provide a level of accuracy of measurement and verification 
     at least equivalent to the Federal procedures and standards 
     promulgated under paragraphs (1) and (2).
       ``(C) Review of state implementation.--The Commission 
     shall, not less frequently than once every 4 years, review 
     each State's implementation of delegated authority under this 
     paragraph to ensure conformance with the requirements of this 
     section. The Commission may, at any time, revoke the 
     delegation of authority under this section upon a finding 
     that the State is not implementing its delegated 
     responsibilities in conformity with this paragraph. As a 
     condition of maintaining its delegated authority under this 
     paragraph, the Commission may require a State to submit a 
     revised application under subparagraph (A) if the Commission 
     has--
       ``(i) promulgated new or substantially revised measurement 
     and verification procedures and standards under this 
     subsection; or
       ``(ii) otherwise substantially revised the program 
     established under this section.
       ``(g) Alternative Compliance Payments.--
       ``(1) In general.--A retail electric supplier ``, or a 
     central procurement State that, pursuant to subsection (g), 
     has assumed responsibility for compliance with the 
     requirements of subsection (b),'' may satisfy the 
     requirements of subsection (b) in whole or in part by 
     submitting in accordance with this subsection, in lieu of 
     each Federal renewable electricity credit or megawatt hour of 
     demonstrated total annual electricity savings that would 
     otherwise be due, a payment equal to $25, adjusted for 
     inflation on January 1 of each year following calendar year 
     2009, in accordance with such regulations as the Commission 
     may promulgate.
       ``(2) Payment to state funds.--Except as otherwise provided 
     in this paragraph and paragraph (4), payments made under this 
     subsection shall be made directly to the State or States in 
     which the retail electric supplier is located, in proportion 
     to the portion of the retail electric supplier's base amount 
     that is sold within each relevant State, provided that such 
     payments are deposited directly into a fund in the State 
     treasury established for this purpose and that the State uses 
     such funds in accordance with paragraphs (3) and (5) and with 
     paragraph (4) where applicable. If the Commission determines 
     at any time that a State is in substantial noncompliance with 
     paragraph (3) or (5), or with paragraph (4) where applicable, 
     the Commission shall direct that any future alternative 
     compliance payments that would otherwise be paid to such 
     State under this subsection shall instead be paid to the 
     Commission and deposited in the United States Treasury.
       ``(3) State use of funds.--As a condition of continued 
     receipt of alternative compliance payments pursuant to this 
     subsection, a State shall use such payments exclusively for 
     the purposes of--
       ``(A) deploying technologies that generate electricity from 
     renewable energy resources; or

[[Page H7477]]

       ``(B) implementing cost-effective energy efficiency 
     programs to achieve electricity savings.
       ``(4) Central procurement states.--
       ``(A) In general.--A central procurement State that, 
     pursuant to subsection (g), has assumed responsibility for 
     compliance with the requirements of subsection (b) shall 
     deposit any alternative compliance payments under this 
     subsection in a unique fund in the State treasury created and 
     used solely for this purpose.
       ``(B) Requirements.--As a precondition of making 
     alternative compliance payments under this subsection, a 
     central procurement State shall certify to the Commission, in 
     accordance with such requirements as the Commission may 
     prescribe, that--
       ``(i) making such payments is the lowest cost alternative 
     to meet the requirements of subsection (b); and
       ``(ii) moneys used by the State to make such payments are 
     in addition to any spending that the State, and any separate 
     entity charged with administering the State central 
     procurement requirement identified under subsection (a)(7), 
     otherwise collectively would direct to the purposes 
     identified in paragraph (3).
       ``(C) Uses.--A central procurement State that makes 
     alternative compliance payments under this subsection shall 
     certify to the Commission that, in using such payments in 
     accordance with paragraph (3), it has, to the extent 
     practicable, maximized the level of deployment of renewable 
     electricity generation (measured in megawatt hours) and 
     electricity savings per dollar that are achieved through such 
     expenditures.
       ``(5) Reporting.--As a condition of continued receipt of 
     alternative compliance payments pursuant to this subsection, 
     a State shall, within 12 months of receipt of any such 
     payments and at 12-month intervals thereafter until such 
     payments are expended, provide a report to the Commission, in 
     accordance with such regulations as the Commission may 
     prescribe, giving a full accounting of the use of such 
     payments, including a detailed description of the activities 
     funded thereby and demonstrating compliance with the 
     requirements of this subsection.
       ``(g) Central Procurement States.--
       ``(1) In general.--A central procurement State may, upon 
     submission of a written request by the Governor of such State 
     to the Commission, assume responsibility for compliance with 
     the requirements of subsection (b) on behalf of retail 
     electric suppliers located in such State, exclusively with 
     regard to the portion of such retail electric suppliers' base 
     amount that is sold within the State.
       ``(2) Demonstration of electricity savings.--If a central 
     procurement State opts to meet any part of the requirements 
     of subsection (b) based on the achievement of demonstrated 
     total annual electricity savings, regardless of whether such 
     State has received delegated authority pursuant to subsection 
     (f)(5), such State shall submit such demonstrated total 
     annual electricity savings to the Commission through an 
     annual report in accordance with requirements prescribed by 
     the Commission by regulation, which shall be of equivalent 
     stringency to those applicable to retail electric suppliers 
     under subsection (f).
       ``(3) Noncompliance.--If a central procurement State that 
     pursuant to this subsection has assumed responsibility for 
     compliance with the requirements of subsection (b), fails to 
     satisfy the requirements of subsection (b) or (h) for any 
     year, the State's assumption of responsibility under this 
     subsection shall be discontinued immediately, and retail 
     electric suppliers located in such State henceforth shall be 
     directly subject to the requirements of this section.
       ``(h) Information Collection.--The Commission may require 
     any retail electric supplier, renewable electricity 
     generator, or such other entities as the Commission deems 
     appropriate, to provide any information the Commission 
     determines appropriate to carry out this section. Failure to 
     submit such information or submission of false or misleading 
     information under this subsection shall be a violation of 
     this section.
       ``(i) Enforcement and Judicial Review.--
       ``(1) Failure to submit credits or demonstrate savings.--If 
     any person ``, other than any central procurement State that 
     pursuant to subsection (g) has assumed responsibility for 
     compliance with the requirements of subsection (b),'' fails 
     to comply with the requirements of subsection (b) or (h), 
     such person shall be liable to pay to the Commission a civil 
     penalty equal to the product of--
       ``(A) double the alternative compliance payment calculated 
     under subsection (h)(1), and
       ``(B) the aggregate quantity of Federal renewable 
     electricity credits, total annual electricity savings, or 
     equivalent alternative compliance payments that the person 
     failed to submit in violation of the requirements of 
     subsections (b) and (h).
       ``(2) Enforcement.--The Commission shall assess a civil 
     penalty under paragraph (1) in accordance with the procedures 
     described in section 31(d) of the Federal Power Act (16 
     U.S.C. 823b(d)).
       ``(3) Violation of requirement of regulations or orders.--
     Any person ``, other than any central procurement State that 
     pursuant to subsection (g) has assumed responsibility for 
     compliance with the requirements of subsection (b),''. who 
     violates, or fails or refuses to comply with, any requirement 
     of a regulation promulgated or order issued under this 
     section shall be subject to a civil penalty under section 
     316A(b) of the Federal Power Act (16 U.S.C. 825o-1). Such 
     penalty shall be assessed by the Commission in the same 
     manner as in the case of a violation referred to in section 
     316A(b) of such Act.
       ``(j) Judicial Review.--Any person aggrieved by a final 
     action taken by the Commission under this section, other than 
     the assessment of a civil penalty under subsection (j), may 
     use the procedures for review described in section 313 of the 
     Federal Power Act (16 U.S.C. 825l). For purposes of this 
     paragraph, references to an order in section 313 of such Act 
     shall be deemed to refer also to all other final actions of 
     the Commission under this section other than the assessment 
     of a civil penalty under subsection (i).
       ``(k) Savings Provisions.--Nothing in this section shall--
       ``(1) diminish or qualify any authority of a State, a 
     political subdivision of a State, or an Indian tribe to--
       ``(A) adopt or enforce any law or regulation respecting 
     renewable electricity or energy efficiency, including any law 
     or regulation establishing requirements more stringent than 
     those established by this section, provided that no such law 
     or regulation may relieve any person of any requirement 
     otherwise applicable under this section; or
       ``(B) regulate the acquisition and disposition of Federal 
     renewable electricity credits by retail electric suppliers 
     within the jurisdiction of such State, political subdivision, 
     or Indian tribe, including the authority to require such 
     retail electric supplier to acquire and submit to the 
     Secretary for retirement Federal renewable electricity 
     credits in excess of those submitted under this section; or
       ``(2) affect the application of, or the responsibility for 
     compliance with, any other provision of law or regulation, 
     including environmental and licensing requirements.
       ``(l) Sunset.--This section expires on December 31, 
     2040.''.
       (b) Conforming Amendment.--The table of contents set forth 
     in section 1(b) of the Public Utility Regulatory Policies Act 
     of 1978 (16 U.S.C. 2601 and following) is amended by 
     inserting after the item relating to section 609 the 
     following:

``Sec. 610. Combined efficiency and renewable electricity standard.''.

     SEC. 102. CLARIFYING STATE AUTHORITY TO ADOPT RENEWABLE 
                   ENERGY INCENTIVES.

        Section 210 of the Public Utility Regulatory Policies Act 
     of 1978 is amended by adding at the end thereof:
       ``(o) Clarification of State Authority to Adopt Renewable 
     Energy Incentives.--Notwithstanding any other provision of 
     this Act or the Federal Power Act, a State legislature or 
     regulatory authority may set the rates for a sale of electric 
     energy by a facility generating electric energy from 
     renewable energy sources pursuant to a State-approved 
     production incentive program under which the facility 
     voluntarily sells electric energy. For purposes of this 
     subsection, `State-approved production incentive program' 
     means a requirement imposed pursuant to State law, or by a 
     State regulatory authority acting within its authority under 
     State law, that an electric utility purchase renewable energy 
     (as defined in section 609 of this Act) at a specified 
     rate.''.

     SEC. 103. FEDERAL RENEWABLE ENERGY PURCHASES.

       (a) Requirement.--For each of calendar years 2012 through 
     2039, the President shall ensure that, of the total amount of 
     electricity Federal agencies consume in the United States 
     during each calendar year, the following percentage shall be 
     renewable electricity:


 
                                                             Required
                      Calendar year                           annual
                                                            percentage
 
2012....................................................             6.0
2013....................................................             6.0
2014....................................................             9.5
2015....................................................             9.5
2016....................................................            13.0
2017....................................................            13.0
2018....................................................            16.5
2019....................................................            16.5
2020....................................................            20.0
2021 through 2039.......................................            20.0
 

       (b) Definitions.--For purposes of this section:
       (1) Renewable electricity.--The term ``renewable 
     electricity'' shall have the meaning given in section 610 of 
     the Public Utility Regulatory Policies Act of 1978 (16 U.S.C. 
     2601 and following).
       (2) Renewable energy resource.--The term ``renewable energy 
     resource'' shall have the meaning given in section 610 of the 
     Public Utility Regulatory Policies Act of 1978 (16 U.S.C. 
     2601 and following).
       (c) Modification of Requirement.--If the President 
     determines that the Federal Government cannot feasibly meet 
     the requirement established in subsection (a) in a specific 
     calendar year, the President may, by written order, reduce 
     such requirement for such calendar year to a percentage the 
     President determines the Federal Government can feasibly 
     meet.
       (d) Reports.--Not later than April 1, 2013, and each year 
     thereafter, the Secretary of Energy shall provide a report to 
     Congress on the percentage of each Federal agency's 
     electricity consumption in the United States that was 
     renewable electricity in the previous calendar year.

[[Page H7478]]

       (e) Contracts for Renewable Energy.--(1) Notwithstanding 
     section 501(b)(1)(B) of title 40, United States Code, a 
     contract for the acquisition of electricity generated from a 
     renewable energy resource for the Federal Government may be 
     made for a period of not more than 20 years.
       (2) Not later than 90 days after the date of enactment of 
     this subsection, the Secretary of Energy, through the Federal 
     Energy Management Program, shall publish a standardized 
     renewable energy purchase agreement, setting forth commercial 
     terms and conditions, that Federal agencies may use to 
     acquire electricity generated from a renewable energy 
     resource.
       (3) The Secretary of Energy shall provide technical 
     assistance to assist Federal agencies in implementing this 
     subsection.

              Subtitle B--Carbon Capture and Sequestration

     SEC. 111. NATIONAL STRATEGY.

       (a) In General.--Not later than 1 year after the date of 
     enactment of this Act, the Administrator, in consultation 
     with the Secretary of Energy, the Secretary of the Interior, 
     and the heads of such other relevant Federal agencies as the 
     President may designate, shall submit to Congress a report 
     setting forth a unified and comprehensive strategy to address 
     the key legal, regulatory and other barriers to the 
     commercial-scale deployment of carbon capture and 
     sequestration.
       (b) Barriers.-- The report under this section shall--
       (1) identify those regulatory, legal, and other gaps and 
     barriers that could be addressed by a Federal agency using 
     existing statutory authority, those, if any, that require 
     Federal legislation, and those that would be best addressed 
     at the State, tribal, or regional level;
       (2) identify regulatory implementation challenges, 
     including those related to approval of State and tribal 
     programs and delegation of authority for permitting; and
       (3) recommend rulemakings, Federal legislation, or other 
     actions that should be taken to further evaluate and address 
     such barriers.

     SEC. 112. REGULATIONS FOR GEOLOGIC SEQUESTRATION SITES.

       (a) Coordinated Certification and Permitting Process.--
     Title VIII of the Clean Air Act, as added by section 331 of 
     this Act, is amended by adding after section 812 (as added by 
     section 116 of this Act) the following:

     ``SEC. 813. GEOLOGIC SEQUESTRATION SITES.

       ``(a) Coordinated Process.--The Administrator shall 
     establish a coordinated approach to certifying and permitting 
     geologic sequestration, taking into consideration all 
     relevant statutory authorities. In establishing such 
     approach, the Administrator shall--
       ``(1) take into account, and reduce redundancy with, the 
     requirements of section 1421 of the Safe Drinking Water Act 
     (42 U.S.C. 300h), as amended by section 112(b) of the 
     American Clean Energy and Security Act of 2009, including the 
     rulemaking for geologic sequestration wells described at 73 
     Fed. Reg. 43491-541 (July 25, 2008); and
       ``(2) to the extent practicable, reduce the burden on 
     certified entities and implementing authorities.
       ``(b) Regulations.--Not later than 2 years after the date 
     of enactment of this title, the Administrator shall 
     promulgate regulations to protect human health and the 
     environment by minimizing the risk of escape to the 
     atmosphere of carbon dioxide injected for purposes of 
     geologic sequestration.
       ``(c) Requirements.--The regulations under subsection (b) 
     shall include--
       ``(1) a process to obtain certification for geologic 
     sequestration under this section; and
       ``(2) requirements for--
       ``(A) monitoring, record keeping, and reporting for 
     emissions associated with injection into, and escape from, 
     geologic sequestration sites, taking into account any 
     requirements or protocols developed under section 713;
       ``(B) public participation in the certification process 
     that maximizes transparency;
       ``(C) the sharing of data between States, Indian tribes, 
     and the Environmental Protection Agency; and
       ``(D) other elements or safeguards necessary to achieve the 
     purpose set forth in subsection (b).
       ``(d) Report.--Not later than 2 years after the 
     promulgation of regulations under subsection (b), and at 3-
     year intervals thereafter, the Administrator shall deliver to 
     the Committee on Energy and Commerce of the House of 
     Representatives and the Committee on Environment and Public 
     Works of the Senate a report on geologic sequestration in the 
     United States, and, to the extent relevant, other countries 
     in North America. Such report shall include--
       ``(1) data regarding injection, emissions to the 
     atmosphere, if any, and performance of active and closed 
     geologic sequestration sites, including those where enhanced 
     hydrocarbon recovery operations occur;
       ``(2) an evaluation of the performance of relevant Federal 
     environmental regulations and programs in ensuring 
     environmentally protective geologic sequestration practices;
       ``(3) recommendations on how such programs and regulations 
     should be improved or made more effective; and
       ``(4) other relevant information.''.
       (b) Safe Drinking Water Act Standards.--Section 1421 of the 
     Safe Drinking Water Act (42 U.S.C. 300h) is amended by 
     inserting after subsection (d) the following:
       ``(e) Carbon Dioxide Geologic Sequestration Wells.--
       ``(1) In general.--Not later than 1 year after the date of 
     enactment of this subsection, the Administrator shall 
     promulgate regulations under subsection (a) for carbon 
     dioxide geologic sequestration wells.
       ``(2) Financial responsibility.--The regulations referred 
     to in paragraph (1) shall include requirements for 
     maintaining evidence of financial responsibility, including 
     financial responsibility for emergency and remedial response, 
     well plugging, site closure, and post-injection site care. 
     Financial responsibility may be established for carbon 
     dioxide geologic sequestration wells in accordance with 
     regulations promulgated by the Administrator by any one, or 
     any combination, of the following: insurance, guarantee, 
     trust, standby trust, surety bond, letter of credit, 
     qualification as a self-insurer, or any other method 
     satisfactory to the Administrator.''.

     SEC. 113. STUDIES AND REPORTS.

       (a) Study of Legal Framework for Geologic Sequestration 
     Sites.--
       (1) Establishment of task force.--As soon as practicable, 
     but not later than 6 months after the date of enactment of 
     this Act, the Administrator shall establish a task force to 
     be composed of an equal number of subject matter experts, 
     nongovernmental organizations with expertise in environmental 
     policy, academic experts with expertise in environmental law, 
     State and tribal officials with environmental expertise, 
     representatives of State and tribal Attorneys General, 
     representatives from the Environmental Protection Agency, the 
     Department of the Interior, the Department of Energy, the 
     Department of Transportation, and other relevant Federal 
     agencies, and members of the private sector, to conduct a 
     study of--
       (A) existing Federal environmental statutes, State 
     environmental statutes, and State common law that apply to 
     geologic sequestration sites for carbon dioxide, including 
     the ability of such laws to serve as risk management tools;
       (B) the existing statutory framework, including Federal and 
     State laws, that apply to harm and damage to the environment 
     or public health at closed sites where carbon dioxide 
     injection has been used for enhanced hydrocarbon recovery;
       (C) the statutory framework, environmental health and 
     safety considerations, implementation issues, and financial 
     implications of potential models for Federal, State, or 
     private sector assumption of liabilities and financial 
     responsibilities with respect to closed geologic 
     sequestration sites;
       (D) private sector mechanisms, including insurance and 
     bonding, that may be available to manage environmental, 
     health and safety risk from closed geologic sequestration 
     sites; and
       (E) the subsurface mineral rights, water rights, or 
     property rights issues associated with geologic sequestration 
     of carbon dioxide, including issues specific to Federal 
     lands.
       (2) Report.--Not later than 18 months after the date of 
     enactment of this Act, the task force established under 
     paragraph (1) shall submit to Congress a report describing 
     the results of the study conducted under that paragraph 
     including any consensus recommendations of the task force.
       (b) Environmental Statutes.--
       (1) Study.--The Administrator shall conduct a study 
     examining how, and under what circumstances, the 
     environmental statutes for which the Environmental Protection 
     Agency has responsibility would apply to carbon dioxide 
     injection and geologic sequestration activities.
       (2) Report.--Not later than 1 year after the date of 
     enactment of this Act, the Administrator shall submit to 
     Congress a report describing the results of the study 
     conducted under paragraph (1).

     SEC. 114. CARBON CAPTURE AND SEQUESTRATION DEMONSTRATION AND 
                   EARLY DEPLOYMENT PROGRAM.

       (a) Definitions.--For purposes of this section:
       (1) Secretary.--The term ``Secretary'' means the Secretary 
     of Energy.
       (2) Distribution utility.--The term ``distribution 
     utility'' means an entity that distributes electricity 
     directly to retail consumers under a legal, regulatory, or 
     contractual obligation to do so.
       (3) Electric utility.--The term ``electric utility'' has 
     the meaning provided by section 3(22) of the Federal Power 
     Act (16 U.S.C. 796(22)).
       (4) Fossil fuel-based electricity.--The term ``fossil fuel-
     based electricity'' means electricity that is produced from 
     the combustion of fossil fuels.
       (5) Fossil fuel.--The term ``fossil fuel'' means coal, 
     petroleum, natural gas or any derivative of coal, petroleum, 
     or natural gas.
       (6) Corporation.--The term ``Corporation'' means the Carbon 
     Storage Research Corporation established in accordance with 
     this section.
       (7) Qualified industry organization.--The term ``qualified 
     industry organization'' means the Edison Electric Institute, 
     the American Public Power Association, the National Rural 
     Electric Cooperative Association, a successor organization of 
     such organizations, or a group of owners or operators of 
     distribution utilities delivering fossil fuel-based 
     electricity who collectively represent at least 20 percent of 
     the volume of fossil

[[Page H7479]]

     fuel-based electricity delivered by distribution utilities to 
     consumers in the United States.
       (8) Retail consumer.--The term ``retail consumer'' means an 
     end-user of electricity.
       (b) Carbon Storage Research Corporation.--
       (1) Establishment.--
       (A) Referendum.--Qualified industry organizations may 
     conduct, at their own expense, a referendum among the owners 
     or operators of distribution utilities delivering fossil 
     fuel-based electricity for the creation of a Carbon Storage 
     Research Corporation. Such referendum shall be conducted by 
     an independent auditing firm agreed to by the qualified 
     industry organizations. Voting rights in such referendum 
     shall be based on the quantity of fossil fuel-based 
     electricity delivered to consumers in the previous calendar 
     year or other representative period as determined by the 
     Secretary pursuant to subsection (f). Upon approval of those 
     persons representing two-thirds of the total quantity of 
     fossil fuel-based electricity delivered to retail consumers, 
     the Corporation shall be established unless opposed by the 
     State regulatory authorities pursuant to subparagraph (B). 
     All distribution utilities voting in the referendum shall 
     certify to the independent auditing firm the quantity of 
     fossil fuel-based electricity represented by their vote.
       (B) State regulatory authorities.--Upon its own motion or 
     the petition of a qualified industry organization, each State 
     regulatory authority shall consider its support or opposition 
     to the creation of the Corporation under subparagraph (A). 
     State regulatory authorities may notify the independent 
     auditing firm referred to in subparagraph (A) of their views 
     on the creation of the Corporation within 180 days after the 
     date of enactment of this Act. If 40 percent or more of the 
     State regulatory authorities submit to the independent 
     auditing firm written notices of opposition, the Corporation 
     shall not be established notwithstanding the approval of the 
     qualified industry organizations as provided in subparagraph 
     (A).
       (2) Termination.--The Corporation shall be authorized to 
     collect assessments and conduct operations pursuant to this 
     section for a 10-year period from the date 6 months after the 
     date of enactment of this Act. After such 10-year period, the 
     Corporation is no longer authorized to collect assessments 
     and shall be dissolved on the date 15 years after such date 
     of enactment, unless the period is extended by an Act of 
     Congress.
       (3) Governance.--The Corporation shall operate as a 
     division or affiliate of the Electric Power Research 
     Institute (referred to in this section as ``EPRI'') and be 
     managed by a Board of not more than 15 voting members 
     responsible for its operations, including compliance with 
     this section. EPRI, in consultation with the Edison Electric 
     Institute, the American Public Power Association and the 
     National Rural Electric Cooperative Association shall appoint 
     the Board members under clauses (i), (ii), and (iii) of 
     subparagraph (A) from among candidates recommended by those 
     organizations. At least a majority of the Board members 
     appointed by EPRI shall be representatives of distribution 
     utilities subject to assessments under subsection (d).
       (A) Members.--The Board shall include at least one 
     representative of each of the following:
       (i) Investor-owned utilities.
       (ii) Utilities owned by a State agency, a municipality, and 
     an Indian tribe.
       (iii) Rural electric cooperatives.
       (iv) Fossil fuel producers.
       (v) Nonprofit environmental organizations.
       (vi) Independent generators or wholesale power providers.
       (vii) Consumer groups.
       (B) Nonvoting members.--The Board shall also include as 
     additional nonvoting Members the Secretary of Energy or his 
     designee and 2 representatives of State regulatory 
     authorities as defined in section 3(17) of the Public Utility 
     Regulatory Policies Act of 1978 (16 U.S.C. 2602(17)), each 
     designated by the National Association of State Regulatory 
     Utility Commissioners from States that are not within the 
     same transmission interconnection.
       (4) Compensation.--Corporation Board members shall receive 
     no compensation for their services, nor shall Corporation 
     Board members be reimbursed for expenses relating to their 
     service.
       (5) Terms.--Corporation Board members shall serve terms of 
     4 years and may serve not more than 2 full consecutive terms. 
     Members filling unexpired terms may serve not more than a 
     total of 8 consecutive years. Former members of the 
     Corporation Board may be reappointed to the Corporation Board 
     if they have not been members for a period of 2 years. 
     Initial appointments to the Corporation Board shall be for 
     terms of 1, 2, 3, and 4 years, staggered to provide for the 
     selection of 3 members each year.
       (6) Status of corporation.--The Corporation shall not be 
     considered to be an agency, department, or instrumentality of 
     the United States, and no officer or director or employee of 
     the Corporation shall be considered to be an officer or 
     employee of the United States Government, for purposes of 
     title 5 or title 31 of the United States Code, or for any 
     other purpose, and no funds of the Corporation shall be 
     treated as public money for purposes of chapter 33 of title 
     31, United States Code, or for any other purpose.
       (c) Functions and Administration of the Corporation.--
       (1) In general.--The Corporation shall establish and 
     administer a program to accelerate the commercial 
     availability of carbon dioxide capture and storage 
     technologies and methods, including technologies which 
     capture and store, or capture and convert, carbon dioxide. 
     Under such program competitively awarded grants, contracts, 
     and financial assistance shall be provided and entered into 
     with eligible entities. Except as provided in paragraph (8), 
     the Corporation shall use all funds derived from assessments 
     under subsection (d) to issue grants and contracts to 
     eligible entities.
       (2) Purpose.--The purposes of the grants, contracts, and 
     assistance under this subsection shall be to support 
     commercial-scale demonstrations of carbon capture or storage 
     technology projects capable of advancing the technologies to 
     commercial readiness. Such projects should encompass a range 
     of different coal and other fossil fuel varieties, be 
     geographically diverse, involve diverse storage media, and 
     employ capture or storage, or capture and conversion, 
     technologies potentially suitable either for new or for 
     retrofit applications. The Corporation shall seek, to the 
     extent feasible, to support at least 5 commercial-scale 
     demonstration projects integrating carbon capture and 
     sequestration or conversion technologies.
       (3) Eligible entities.--Entities eligible for grants, 
     contracts or assistance under this subsection may include 
     distribution utilities, electric utilities and other private 
     entities, academic institutions, national laboratories, 
     Federal research agencies, State and tribal research 
     agencies, nonprofit organizations, or consortiums of 2 or 
     more entities. Pilot-scale and similar small-scale projects 
     are not eligible for support by the Corporation. Owners or 
     developers of projects supported by the Corporation shall, 
     where appropriate, share in the costs of such projects.
       (4) Grants for early movers.--Fifty percent of the funds 
     raised under this section shall be provided in the form of 
     grants to electric utilities that had, prior to the award of 
     any grant under this section, committed resources to deploy a 
     large scale electricity generation unit with integrated 
     carbon capture and sequestration or conversion applied to a 
     substantial portion of the unit's carbon dioxide emissions.   
     Grant funds shall be provided to defray costs incurred by 
     such electricity utilities for at least 5 such electricity 
     generation units.
       (5) Administration.--The members of the Board of Directors 
     of the Corporation shall elect a Chairman and other officers 
     as necessary, may establish committees and subcommittees of 
     the Corporation, and shall adopt rules and bylaws for the 
     conduct of business and the implementation of this section. 
     The Board shall appoint an Executive Director and 
     professional support staff who may be employees of the 
     Electric Power Research Institute (EPRI). After consultation 
     with the Technical Advisory Committee established under 
     subsection (j), the Secretary, and the Director of the 
     National Energy Technology Laboratory to obtain advice and 
     recommendations on plans, programs, and project selection 
     criteria, the Board shall establish priorities for grants, 
     contracts, and assistance; publish requests for proposals for 
     grants, contracts, and assistance; and award grants, 
     contracts, and assistance competitively, on the basis of 
     merit, after the establishment of procedures that provide for 
     scientific peer review by the Technical Advisory Committee. 
     The Board shall give preference to applications that reflect 
     the best overall value and prospect for achieving the 
     purposes of the section, such as those which demonstrate an 
     integrated approach for capture and storage or capture and 
     conversion technologies. The Board members shall not 
     participate in making grants or awards to entities with whom 
     they are affiliated.
       (6) Uses of grants, contracts, and assistance.--A grant, 
     contract, or other assistance provided under this subsection 
     may be used to purchase carbon dioxide when needed to conduct 
     tests of carbon dioxide storage sites, in the case of 
     established projects that are storing carbon dioxide 
     emissions, or for other purposes consistent with the purposes 
     of this section. The Corporation shall make publicly 
     available at no cost information learned as a result of 
     projects which it supports financially.
       (7) Intellectual property.--The Board shall establish 
     policies regarding the ownership of intellectual property 
     developed as a result of Corporation grants and other forms 
     of technology support. Such policies shall encourage 
     individual ingenuity and invention.
       (8) Administrative expenses.--Up to 5 percent of the funds 
     collected in any fiscal year under subsection (d) may be used 
     for the administrative expenses of operating the Corporation 
     (not including costs incurred in the determination and 
     collection of the assessments pursuant to subsection (d)).
       (9) Programs and budget.--Before August 1 each year, the 
     Corporation, after consulting with the Technical Advisory 
     Committee and the Secretary and the Director of the 
     Department's National Energy Technology Laboratory and other 
     interested parties to obtain advice and recommendations, 
     shall publish for public review and comment its proposed 
     plans, programs, project selection criteria, and projects to 
     be funded by the Corporation for the next calendar year. The 
     Corporation shall also publish for public review and comment 
     a budget plan for the next calendar year, including the 
     probable costs of all programs, projects, and contracts and a 
     recommended rate of assessment sufficient to cover such 
     costs. The Secretary may

[[Page H7480]]

     recommend programs and activities the Secretary considers 
     appropriate. The Corporation shall include in the first 
     publication it issues under this paragraph a strategic plan 
     or roadmap for the achievement of the purposes of the 
     Corporation, as set forth in paragraph (2).
       (10) Records; audits.--The Corporation shall keep minutes, 
     books, and records that clearly reflect all of the acts and 
     transactions of the Corporation and make public such 
     information. The books of the Corporation shall be audited by 
     a certified public accountant at least once each fiscal year 
     and at such other times as the Corporation may designate. 
     Copies of each audit shall be provided to the Congress, all 
     Corporation board members, all qualified industry 
     organizations, each State regulatory authority and, upon 
     request, to other members of the industry. If the audit 
     determines that the Corporation's practices fail to meet 
     generally accepted accounting principles the assessment 
     collection authority of the Corporation under subsection (d) 
     shall be suspended until a certified public accountant 
     renders a subsequent opinion that the failure has been 
     corrected. The Corporation shall make its books and records 
     available for review by the Secretary or the Comptroller 
     General of the United States.
       (11) Public access.--The Corporation Board's meetings shall 
     be open to the public and shall occur after at least 30 days 
     advance public notice. Meetings of the Board of Directors may 
     be closed to the public where the agenda of such meetings 
     includes only confidential matters pertaining to project 
     selection, the award of grants or contracts, personnel 
     matters, or the receipt of legal advice. The minutes of all 
     meetings of the Corporation shall be made available to and 
     readily accessible by the public.
       (12) Annual report.--Each year the Corporation shall 
     prepare and make publicly available a report which includes 
     an identification and description of all programs and 
     projects undertaken by the Corporation during the previous 
     year. The report shall also detail the allocation or planned 
     allocation of Corporation resources for each such program and 
     project. The Corporation shall provide its annual report to 
     the Congress, the Secretary, each State regulatory authority, 
     and upon request to the public. The Secretary shall, not less 
     than 60 days after receiving such report, provide to the 
     President and Congress a report assessing the progress of the 
     Corporation in meeting the objectives of this section.
       (d) Assessments.--
       (1) Amount.--(A) In all calendar years following its 
     establishment, the Corporation shall collect an assessment on 
     distribution utilities for all fossil fuel-based electricity 
     delivered directly to retail consumers (as determined under 
     subsection (f)). The assessments shall reflect the relative 
     carbon dioxide emission rates of different fossil fuel-based 
     electricity, and initially shall be not less than the 
     following amounts for coal, natural gas, and oil:

Fuel type                                             Rate of assessment
                                                      per kilowatt hour
  Coal..............................................           $0.00043
  Natural Gas.......................................           $0.00022
  Oil...............................................          $0.00032.
 

       (B) The Corporation is authorized to adjust the assessments 
     on fossil fuel-based electricity to reflect changes in the 
     expected quantities of such electricity from different fuel 
     types, such that the assessments generate not less than $1.0 
     billion and not more than $1.1 billion annually. The 
     Corporation is authorized to supplement assessments through 
     additional financial commitments.
       (2) Investment of funds.--Pending disbursement pursuant to 
     a program, plan, or project, the Corporation may invest funds 
     collected through assessments under this subsection, and any 
     other funds received by the Corporation, only in obligations 
     of the United States or any agency thereof, in general 
     obligations of any State or any political subdivision 
     thereof, in any interest-bearing account or certificate of 
     deposit of a bank that is a member of the Federal Reserve 
     System, or in obligations fully guaranteed as to principal 
     and interest by the United States.
       (3) Reversion of unused funds.--If the Corporation does not 
     disburse, dedicate or assign 75 percent or more of the 
     available proceeds of the assessed fees in any calendar year 
     7 or more years following its establishment, due to an 
     absence of qualified projects or similar circumstances, it 
     shall reimburse the remaining undedicated or unassigned 
     balance of such fees, less administrative and other expenses 
     authorized by this section, to the distribution utilities 
     upon which such fees were assessed, in proportion to their 
     collected assessments.
       (e)  ERCOT.--
       (1) Assessment, collection, and remittance.--(A) 
     Notwithstanding any other provision of this section, within 
     ERCOT, the assessment provided for in subsection (d) shall 
     be--
       (i) levied directly on qualified scheduling entities, or 
     their successor entities;
       (ii) charged consistent with other charges imposed on 
     qualified scheduling entities as a fee on energy used by the 
     load-serving entities; and
       (iii) collected and remitted by ERCOT to the Corporation in 
     the amounts and in the same manner as set forth in subsection 
     (d).
       (B) The assessment amounts referred to in subparagraph (A) 
     shall be--
       (i) determined by the amount and types of fossil fuel-based 
     electricity delivered directly to all retail customers in the 
     prior calendar year beginning with the year ending 
     immediately prior to the period described in subsection 
     (b)(2); and
       (ii) take into account the number of renewable energy 
     credits retired by the load-serving entities represented by a 
     qualified scheduling entity within the prior calendar year.
       (2) Administration expenses.--Up to 1 percent of the funds 
     collected in any fiscal year by ERCOT under the provisions of 
     this subsection may be used for the administrative expenses 
     incurred in the determination, collection and remittance of 
     the assessments to the Corporation.
       (3) Audit.--ERCOT shall provide a copy of its annual audit 
     pertaining to the administration of the provisions of this 
     subsection to the Corporation.
       (4) Definitions.--For the purposes of this subsection:
       (A) The term ``ERCOT'' means the Electric Reliability 
     Council of Texas.
       (B) The term ``load-serving entities'' has the meaning 
     adopted by ERCOT Protocols and in effect on the date of 
     enactment of this Act.
       (C) The term ``qualified scheduling entities'' has the 
     meaning adopted by ERCOT Protocols and in effect on the date 
     of enactment of this Act.
       (D) The term ``renewable energy credit'' has the meaning as 
     promulgated and adopted by the Public Utility Commission of 
     Texas pursuant to section 39.904(b) of the Public Utility 
     Regulatory Act of 1999, and in effect on the date of 
     enactment of this Act.
       (f) Determination of Fossil Fuel-based Electricity 
     Deliveries.--
       (1) Findings.--The Congress finds that:
       (A) The assessments under subsection (d) are to be 
     collected based on the amount of fossil fuel-based 
     electricity delivered by each distribution utility.
       (B) Since many distribution utilities purchase all or part 
     of their retail consumer's electricity needs from other 
     entities, it may not be practical to determine the precise 
     fuel mix for the power sold by each individual distribution 
     utility.
       (C) It may be necessary to use average data, often on a 
     regional basis with reference to Regional Transmission 
     Organization (``RTO'') or NERC regions, to make the 
     determinations necessary for making assessments.
       (2) DOE proposed rule.--The Secretary, acting in close 
     consultation with the Energy Information Administration, 
     shall issue for notice and comment a proposed rule to 
     determine the level of fossil fuel electricity delivered to 
     retail customers by each distribution utility in the United 
     States during the most recent calendar year or other period 
     determined to be most appropriate. Such proposed rule shall 
     balance the need to be efficient, reasonably precise, and 
     timely, taking into account the nature and cost of data 
     currently available and the nature of markets and regulation 
     in effect in various regions of the country. Different 
     methodologies may be applied in different regions if 
     appropriate to obtain the best balance of such factors.
       (3) Final rule.--Within 6 months after the date of 
     enactment of this Act, and after opportunity for comment, the 
     Secretary shall issue a final rule under this subsection for 
     determining the level and type of fossil fuel-based 
     electricity delivered to retail customers by each 
     distribution utility in the United States during the 
     appropriate period. In issuing such rule, the Secretary may 
     consider opportunities and costs to develop new data sources 
     in the future and issue recommendations for the Energy 
     Information Administration or other entities to collect such 
     data. After notice and opportunity for comment the Secretary 
     may, by rule, subsequently update and modify the methodology 
     for making such determinations.
       (4) Annual determinations.--Pursuant to the final rule 
     issued under paragraph (3), the Secretary shall make annual 
     determinations of the amounts and types for each such utility 
     and publish such determinations in the Federal Register. Such 
     determinations shall be used to conduct the referendum under 
     subsection (b) and by the Corporation in applying any 
     assessment under this subsection.
       (5) Rehearing and judicial review.--The owner or operator 
     of any distribution utility that believes that the Secretary 
     has misapplied the methodology in the final rule in 
     determining the amount and types of fossil fuel electricity 
     delivered by such distribution utility may seek rehearing of 
     such determination within 30 days of publication of the 
     determination in the Federal Register. The Secretary shall 
     decide such rehearing petitions within 30 days. The 
     Secretary's determinations following rehearing shall be final 
     and subject to judicial review in the United States Court of 
     Appeals for the District of Columbia.
       (g) Compliance With Corporation Assessments.--The 
     Corporation may bring an action in the appropriate court of 
     the United States to compel compliance with an assessment 
     levied by the Corporation under this section. A successful 
     action for compliance under this subsection may also require 
     payment by the defendant of the costs incurred by the 
     Corporation in bringing such action.

[[Page H7481]]

       (h) Midcourse Review.--Not later than 5 years following 
     establishment of the Corporation, the Comptroller General of 
     the United States shall prepare an analysis, and report to 
     Congress, assessing the Corporation's activities, including 
     project selection and methods of disbursement of assessed 
     fees, impacts on the prospects for commercialization of 
     carbon capture and storage technologies, adequacy of funding, 
     and administration of funds. The report shall also make such 
     recommendations as may be appropriate in each of these areas. 
     The Corporation shall reimburse the Government Accountability 
     Office for the costs associated with performing this 
     midcourse review.
       (i) Recovery of Costs.--
       (1) In general.--A distribution utility whose transmission, 
     delivery, or sales of electric energy are subject to any form 
     of rate regulation shall not be denied the opportunity to 
     recover the full amount of the prudently incurred costs 
     associated with complying with this section, consistent with 
     applicable State or Federal law.
       (2) Ratepayer rebates.--Regulatory authorities that approve 
     cost recovery pursuant to paragraph (1) may order rebates to 
     ratepayers to the extent that distribution utilities are 
     reimbursed undedicated or unassigned balances pursuant to 
     subsection (d)(3).
       (j) Technical Advisory Committee.--
       (1) Establishment.--There is established an advisory 
     committee, to be known as the ``Technical Advisory 
     Committee''.
       (2) Membership.--The Technical Advisory Committee shall be 
     comprised of not less than 7 members appointed by the Board 
     from among academic institutions, national laboratories, 
     independent research institutions, and other qualified 
     institutions. No member of the Committee shall be affiliated 
     with EPRI or with any organization having members serving on 
     the Board. At least one member of the Committee shall be 
     appointed from among officers or employees of the Department 
     of Energy recommended to the Board by the Secretary of 
     Energy.
       (3) Chairperson and vice chairperson.--The Board shall 
     designate one member of the Technical Advisory Committee to 
     serve as Chairperson of the Committee and one to serve as 
     Vice Chairperson of the Committee.
       (4) Compensation.--The Board shall provide compensation to 
     members of the Technical Advisory Committee for travel and 
     other incidental expenses and such other compensation as the 
     Board determines to be necessary.
       (5) Purpose.--The Technical Advisory Committee shall 
     provide independent assessments and technical evaluations, as 
     well as make non-binding recommendations to the Board, 
     concerning Corporation activities, including but not limited 
     to the following:
       (A) Reviewing and evaluating the Corporation's plans and 
     budgets described in subsection (c)(9), as well as any other 
     appropriate areas, which could include approaches to 
     prioritizing technologies, appropriateness of engineering 
     techniques, monitoring and verification technologies for 
     storage, geological site selection, and cost control 
     measures.
       (B) Making annual non-binding recommendations to the Board 
     concerning any of the matters referred to in subparagraph 
     (A), as well as what types of investments, scientific 
     research, or engineering practices would best further the 
     goals of the Corporation.
       (6) Public availability.--All reports, evaluations, and 
     other materials of the Technical Advisory Committee shall be 
     made available to the public by the Board, without charge, at 
     time of receipt by the Board.
       (k) Lobbying Restrictions.--No funds collected by the 
     Corporation shall be used in any manner for influencing 
     legislation or elections, except that the Corporation may 
     recommend to the Secretary and the Congress changes in this 
     section or other statutes that would further the purposes of 
     this section.
       (l) Davis-Bacon Compliance.--The Corporation shall ensure 
     that entities receiving grants, contracts, or other financial 
     support from the Corporation for the project activities 
     authorized by this section are in compliance with the Davis-
     Bacon Act (40 U.S.C. 276a-276a-5).

     SEC. 115. COMMERCIAL DEPLOYMENT OF CARBON CAPTURE AND 
                   SEQUESTRATION TECHNOLOGIES.

       Part H of title VII of the Clean Air Act (as added by 
     section 321 of this Act) is amended by adding the following 
     new section after section 785:

     ``SEC. 786. COMMERCIAL DEPLOYMENT OF CARBON CAPTURE AND 
                   SEQUESTRATION TECHNOLOGIES.

       ``(a) Regulations.--Not later than 2 years after the date 
     of enactment of this title, the Administrator shall 
     promulgate regulations providing for the distribution of 
     emission allowances allocated pursuant to section 782(f), 
     pursuant to the requirements of this section, to support the 
     commercial deployment of carbon capture and sequestration 
     technologies in both electric power generation and industrial 
     operations.
       ``(b) Eligibility Criteria.--For an owner or operator of a 
     project to be eligible to receive emission allowances under 
     this section, the project must--
       ``(1) implement carbon capture and sequestration 
     technology--
       ``(A) at an electric generating unit that--
       ``(i) has a nameplate capacity of 200 megawatts or more;
       ``(ii) in the case of a retrofit application, applies the 
     carbon capture and sequestration technology to the flue gas 
     from at least 200 megawatts of the total nameplate generating 
     capacity of the unit, provided that clause (i) shall apply 
     without exception;
       ``(iii) derives at least 50 percent of its annual fuel 
     input from coal, petroleum coke, or any combination of these 
     2 fuels; and
       ``(iv) upon implementation of capture and sequestration 
     technology, will achieve an emission limit that is at least a 
     50 percent reduction in emissions of the carbon dioxide 
     produced by--

       ``(I) the unit, measured on an annual basis, determined in 
     accordance with section 812(b)(2); or
       ``(II) in the case of retrofit applications under clause 
     (ii), the treated portion of flue gas from the unit, measured 
     on an annual basis, determined in accordance with section 
     812(b)(2); or

       ``(B) at an industrial source that--
       ``(i) absent carbon capture and sequestration, would emit 
     greater than 50,000 tons per year of carbon dioxide;
       ``(ii) upon implementation, will achieve an emission limit 
     that is at least a 50 percent reduction in emissions of the 
     carbon dioxide produced by the emission point, measured on an 
     annual basis, determined in accordance with section 
     812(b)(2); and
       ``(iii) does not produce a liquid transportation fuel from 
     a solid fossil-based feedstock;
       ``(2) geologically sequester carbon dioxide at a site that 
     meets all applicable permitting and certification 
     requirements for geologic sequestration, or, pursuant to such 
     requirements as the Administrator may prescribe by 
     regulation, convert captured carbon dioxide to a stable form 
     that will safely and permanently sequester such carbon 
     dioxide;
       ``(3) meet all other applicable State, tribal, and Federal 
     permitting requirements; and
       ``(4) be located in the United States.
       ``(c) Phase I Distribution to Electric Generating Units.--
       ``(1) Application.--This subsection shall apply only to 
     projects at the first 6 gigawatts of electric generating 
     units, measured in cumulative generating capacity of such 
     units, that receive allowances under this section.
       ``(2) Distribution.--The Administrator shall distribute 
     emission allowances allocated under section 782(f) to the 
     owner or operator of each eligible project at an electric 
     generating unit in a quantity equal to the quotient obtained 
     by dividing--
       ``(A) the product obtained by multiplying--
       ``(i) the number of metric tons of carbon dioxide emissions 
     avoided through capture and sequestration of emissions by the 
     project, as determined pursuant to such methodology as the 
     Administrator shall prescribe by regulation; and
       ``(ii) a bonus allowance value, pursuant to paragraph (3); 
     by
       ``(B) the average fair market value of an emission 
     allowance during the preceding year.
       ``(3) Bonus allowance values.--
       ``(A) For a generating unit achieving the capture and 
     sequestration of 85 percent or more of the carbon dioxide 
     that otherwise would be emitted by such unit, the bonus 
     allowance value shall be $90 per ton.
       ``(B) The Administrator shall by regulation establish a 
     bonus allowance value for each rate of lower capture and 
     sequestration achieved by a generating unit, from a minimum 
     of $50 per ton for a 50 percent rate and varying directly 
     with increasing rates of capture and sequestration up to $90 
     per ton for an 85 percent rate.
       ``(C) For a generating unit that achieves the capture and 
     sequestration of at least 50 percent of the carbon dioxide 
     that otherwise would be emitted by such unit by not later 
     than January 1, 2017, the otherwise applicable bonus 
     allowance value under this paragraph shall be increased by 
     $10, provided that the owner of such unit notifies the 
     Administrator by not later than January 1, 2012, of its 
     intent to achieve such rate of capture and sequestration.
       ``(D) For a carbon capture and sequestration project 
     sequestering in a geological formation for purposes of 
     enhanced hydrocarbon recovery, the Administrator shall, by 
     regulation, reduce the applicable bonus allowance value under 
     this paragraph to reflect the lower net cost of the project 
     when compared to sequestration into geological formations 
     solely for purposes of sequestration.
       ``(E) The Administrator shall annually adjust for inflation 
     the bonus allowance values established under this paragraph.
       ``(d) Phase II Distribution to Electric Generating Units.--
       ``(1) Application.--This subsection shall apply only to the 
     distribution of emission allowances for carbon capture and 
     sequestration projects at electric generating units after the 
     capacity threshold identified in subsection (c)(1) is 
     reached.
       ``(2) Regulations.--Not later than 2 years prior to the 
     date on which the capacity threshold identified in subsection 
     (c)(1) is projected to be reached, the Administrator shall 
     promulgate regulations to govern the distribution of emission 
     allowances to the owners or operators of eligible projects 
     under this subsection.
       ``(3) Reverse auctions.--
       ``(A) In general.--Except as provided in paragraph (4), the 
     regulations promulgated under paragraph (2) shall provide for 
     the distribution of emission allowances to the owners or 
     operators of eligible projects under this subsection through 
     reverse auctions, which shall be held no less frequently than

[[Page H7482]]

     once each calendar year. The Administrator may establish a 
     separate auction for each of no more than 5 different project 
     categories, defined on the basis of coal type, capture 
     technology, geological formation type, new unit versus 
     retrofit application, such other factors as the Administrator 
     may prescribe, or any combination thereof. The Administrator 
     may establish appropriate minimum rates of capture and 
     sequestration in implementing this paragraph.
       ``(B) Auction process.--At each reverse auction--
       ``(i) the Administrator shall solicit bids from eligible 
     projects;
       ``(ii) eligible projects participating in the auction shall 
     submit a bid including the desired level of carbon dioxide 
     sequestration incentive per ton and the estimated quantity of 
     carbon dioxide that the project will permanently sequester 
     over 10 years; and
       ``(iii) the Administrator shall select bids, within each 
     auction, for the sequestration amount submitted, beginning 
     with the eligible project submitting the bid for the lowest 
     level of sequestration incentive on a per ton basis and 
     meeting such other requirements as the Administrator may 
     specify, until the amount of funds available for the reverse 
     auction is committed.
       ``(C) Form of distribution.--The Administrator shall 
     distribute emission allowances to the owners or operators of 
     eligible projects selected through a reverse auction under 
     this paragraph pursuant to a formula equivalent to that 
     described in subsection (c)(2), except that the bonus 
     allowance value that is bid by the entity shall be 
     substituted for the bonus allowance values set forth in 
     subsection (c)(3).
       ``(4) Alternative distribution method.--
       ``(A) In general.--If the Administrator determines that 
     reverse auctions would not provide for efficient and cost-
     effective commercial deployment of carbon capture and 
     sequestration technologies, the Administrator may instead, 
     through regulations promulgated under paragraph (2) or (5), 
     prescribe a schedule for the award of bonus allowances to the 
     owners or operators of eligible projects under this 
     subsection, in accordance with the requirements of this 
     paragraph.
       ``(B) Multiple tranches.--The Administrator shall divide 
     emission allowances available for distribution to the owners 
     or operators of eligible projects into a series of tranches, 
     each supporting the deployment of a specified quantity of 
     cumulative electric generating capacity utilizing carbon 
     capture and sequestration technology, each of which shall not 
     be greater than 6 gigawatts.
       ``(C) Method of distribution.--The Administrator shall 
     distribute emission allowances within each tranche, on a 
     first-come, first-served basis--
       ``(i) based on the date of full-scale operation of capture 
     and sequestration technology; and
       ``(ii) pursuant to a formula, similar to that set forth in 
     subsection (c)(2) (except that the Administrator shall 
     prescribe bonus allowance values different than those set 
     forth in subsection (c)(3)), establishing the number of 
     allowances to be distributed per ton of carbon dioxide 
     sequestered by the project.
       ``(D) Requirements.--For each tranche established pursuant 
     to subparagraph (B), the Administrator shall establish a 
     schedule for distributing emission allowances that--
       ``(i) is based on a sliding scale that provides higher 
     bonus allowance values for projects achieving higher rates of 
     capture and sequestration;
       ``(ii) for each capture and sequestration rate, establishes 
     a bonus allowance value that is lower than that established 
     for such rate in the previous tranche (or, in the case of the 
     first tranche, than that established for such rate under 
     subsection (c)(3)); and
       ``(iii) may establish different bonus allowance levels for 
     no more than 5 different project categories, defined by coal 
     type, capture technology, geological formation type, new unit 
     versus retrofit application, such other factors as the 
     Administrator may prescribe, or any combination thereof.
       ``(E) Criteria for establishing bonus allowance values.--In 
     setting bonus allowance values under this paragraph, the 
     Administrator shall seek to cover no more than the reasonable 
     incremental capital and operating costs of a project that are 
     attributable to implementation of carbon capture, 
     transportation, and sequestration technologies, taking into 
     account--
       ``(i) the reduced cost of compliance with section 722 of 
     this Act;
       ``(ii) the reduced cost associated with sequestering in a 
     geological formation for purposes of enhanced hydrocarbon 
     recovery when compared to sequestration into geological 
     formations solely for purposes of sequestration;
       ``(iii) the relevant factors defining the project category; 
     and
       ``(iv) such other factors as the Administrator determines 
     are appropriate.
       ``(5) Revision of regulations.--The Administrator shall 
     review, and as appropriate revise, the applicable regulations 
     under this subsection no less frequently than every 8 years.
       ``(e) Limits for Certain Electric Generating Units.--
       ``(1) Definitions.--For purposes of this subsection, the 
     terms `covered EGU' and `initially permitted' shall have the 
     meaning given those terms in section 812 of this Act.
       ``(2) Covered egus initially permitted from 2009 through 
     2014.--For a covered EGU that is initially permitted on or 
     after January 1, 2009, and before January 1, 2015, the 
     Administrator shall reduce the quantity of emission 
     allowances that the owner or operator of such covered EGU 
     would otherwise be eligible to receive under this section as 
     follows:
       ``(A) In the case of a unit commencing operation on or 
     before January 1, 2019, if the date in clause (ii)(I) is 
     earlier than the date in clause (ii)(II), by the product of--
       ``(i) 20 percent; and
       ``(ii) the number of years, if any, that have elapsed 
     between--

       ``(I) the earlier of January 1, 2020, or the date that is 5 
     years after the commencement of operation of such covered 
     EGU; and
       ``(II) the first year that such covered EGU achieves (and 
     thereafter maintains) an emission limit that is at least a 50 
     percent reduction in emissions of the carbon dioxide produced 
     by the unit, measured on an annual basis, as determined in 
     accordance with section 812(b)(2).

       ``(B) In the case of a unit commencing operation after 
     January 1, 2019, by the product of--
       ``(i) 20 percent; and
       ``(ii) the number of years between--

       ``(I) the commencement of operation of such covered EGU; 
     and
       ``(II) the first year that such covered EGU achieves (and 
     thereafter maintains) an emission limit that is at least a 50 
     percent reduction in emissions of the carbon dioxide produced 
     by the unit, measured on an annual basis, as determined in 
     accordance with section 812(b)(2).

       ``(3) Covered egus initially permitted from 2015 through 
     2019.--The owner or operator of a covered EGU that is 
     initially permitted on or after January 1, 2015, and before 
     January 1, 2020, shall be ineligible to receive emission 
     allowances pursuant to this section if such unit, upon 
     commencement of operations (and thereafter), does not achieve 
     and maintain an emission limit that is at least a 50 percent 
     reduction in emissions of the carbon dioxide produced by the 
     unit, measured on an annual basis, as determined in 
     accordance with section 812(b)(2).
       ``(f) Industrial Sources.--
       ``(1) Allowances.--The Administrator may distribute not 
     more than 15 percent of the allowances allocated under 
     section 782(f) for any vintage year to the owners or 
     operators of eligible industrial sources to support the 
     commercial-scale deployment of carbon capture and 
     sequestration technologies at such sources.
       ``(2) Distribution.--The Administrator shall, by 
     regulation, prescribe requirements for the distribution of 
     emission allowances to the owners or operators of industrial 
     sources under this subsection, based on a bonus allowance 
     formula that awards allowances to qualifying projects on the 
     basis of tons of carbon dioxide captured and permanently 
     sequestered. The Administrator may provide for the 
     distribution of emission allowances pursuant to--
       ``(A) a reverse auction method, similar to that described 
     under subsection (d)(3), including the use of separate 
     auctions for different project categories; or
       ``(B) an incentive schedule, similar to that described 
     under subsection (d)(4), which shall ensure that incentives 
     are set so as to satisfy the requirement described in 
     subsection (d)(4)(E).
       ``(3) Revision of regulations.--The Administrator shall 
     review, and as appropriate revise, the applicable regulations 
     under this subsection no less frequently than every 8 years.
       ``(g) Limitations.--Allowances may be distributed under 
     this section only for tons of carbon dioxide emissions that 
     have already been captured and sequestered. A qualifying 
     project may receive annual emission allowances under this 
     section only for the first 10 years of operation. No greater 
     than 72 gigawatts of total cumulative generating capacity 
     (including industrial applications, measured by such 
     equivalent metric as the Administrator may designate) may 
     receive emission allowances under this section. Upon reaching 
     the limit described in the preceding sentence, any emission 
     allowances that are allocated for carbon capture and 
     sequestration deployment under section 782(f) and are not yet 
     obligated under this section shall be treated as allowances 
     not designated for distribution for purposes of section 
     782(r).
       ``(h) Exhaustion of Account and Annual Roll-over of Surplus 
     Allowances.--
       ``(1) In distributing emission allowances under this 
     section, the Administrator shall ensure that qualifying 
     projects receiving allowances receive distributions for 10 
     years.
       ``(2) If the Administrator determines that the emission 
     allowances allocated under section 782(f) with a vintage year 
     that matches the year of distribution will be exhausted once 
     the estimated full 10-year distributions will be provided to 
     current eligible participants, the Administrator shall 
     provide to new eligible projects allowances from vintage 
     years after the year of the distribution.
       ``(i) Retrofit Applications.--(1) In calculating bonus 
     allowance values for retrofit applications eligible under 
     subsection (b)(1)(A)(ii) and (iv)(II), the Administrator 
     shall apply the required capture rates with respect to the 
     treated portion of flue gas from the unit.
       ``(2) No additional projects shall be eligible for 
     allowances under subsection (b)(1)(A)(ii) and (iv)(II) as of 
     such time as the Administrator reports, pursuant to section 
     812(d), that carbon capture and sequestration retrofit 
     projects at electric generating units that are eligible for 
     allowances under this

[[Page H7483]]

     section have been applied, in the aggregate, to the flue gas 
     generated by 1 gigawatt of total cumulative generating 
     capacity. ``The limitation in the preceding sentence shall 
     not apply to projects that meet the eligibility criteria in 
     subsection (b)(1)(A)(iv)(I).'' after ``generating 
     capacity.''.
       ``(j) Davis-Bacon Compliance.--All laborers and mechanics 
     employed on projects funded directly by or assisted in whole 
     or in part by this section through the use of emission 
     allowances shall be paid wages at rates not less than those 
     prevailing on projects of a character similar in the locality 
     as determined by the Secretary of Labor in accordance with 
     subchapter IV, chapter 31, part A of subtitle II of title 40, 
     United States Code. With respect to the labor standards 
     specified in this subsection, the Secretary of Labor shall 
     have the authority and functions set forth in Reorganization 
     Plan Numbered 14 of 1950 (64 Stat. 1267; 5 U.S.C. App.) and 
     section 3145 of title 40, United States Code.''.

     SEC. 116. PERFORMANCE STANDARDS FOR COAL-FUELED POWER PLANTS.

       (a) In General.--Title VIII of the Clean Air Act (as added 
     by section 331 of this Act) is amended by adding the 
     following new section after section 811:

     ``SEC. 812. PERFORMANCE STANDARDS FOR NEW COAL-FIRED POWER 
                   PLANTS.

       ``(a) Definitions.--For purposes of this section:
       ``(1) Covered egu.--The term `covered EGU' means a utility 
     unit that is required to have a permit under section 503(a) 
     and is authorized under state or federal law to derive at 
     least 30 percent of its annual heat input from coal, 
     petroleum coke, or any combination of these fuels.
       ``(2) Initially permitted.--The term `initially permitted' 
     means that the owner or operator has received a Clean Air Act 
     preconstruction approval or permit, for the covered EGU as a 
     new (not a modified) source, but administrative review or 
     appeal of such approval or permit has not been exhausted. A 
     subsequent modification of any such approval or permits, 
     ongoing administrative or court review, appeals, or 
     challenges, or the existence or tolling of any time to pursue 
     further review, appeals, or challenges shall not affect the 
     date on which a covered EGU is considered to be initially 
     permitted under this paragraph.
       ``(b) Standards.--(1) A covered EGU that is initially 
     permitted on or after January 1, 2020, shall achieve an 
     emission limit that is a 65 percent reduction in emissions of 
     the carbon dioxide  produced by the  unit, as measured on an 
     annual basis, or meet such more stringent standard as the 
     Administrator may establish pursuant to subsection (c).
       ``(2) A covered EGU that is initially permitted after 
     January 1, 2009, and before January 1, 2020, shall, by the 
     applicable compliance date established under this paragraph, 
     achieve an emission limit that is a 50 percent reduction in 
     emissions of the carbon dioxide produced by the  unit, as 
     measured on an annual basis. Compliance with the requirement 
     set forth in this paragraph shall be required by the earliest 
     of the following:
       ``(A) Four years after the date the Administrator has 
     published pursuant to subsection (d) a report that there are 
     in commercial operation in the United States electric 
     generating units or other stationary sources equipped with 
     carbon capture and sequestration technology that, in the 
     aggregate--
       ``(i) have a total of at least 4 gigawatts of nameplate 
     generating capacity of which--
       ``(I) at least 3 gigawatts must be electric generating 
     units; and
       ``(II) up to 1 gigawatt may be industrial applications, for 
     which capture and sequestration of 3 million tons of carbon 
     dioxide per year on an aggregate annualized basis shall be 
     considered equivalent to 1 gigawatt;
       ``(ii) include at least 2 electric generating units, each 
     with a nameplate generating capacity of 250 megawatts or 
     greater, that capture, inject, and sequester carbon dioxide 
     into geologic formations other than oil and gas fields; and
       ``(iii) are capturing and sequestering in the aggregate at 
     least 12 million tons of carbon dioxide per year, calculated 
     on an aggregate annualized basis.
       ``(B) January 1, 2025.
       ``(3) If the deadline for compliance with paragraph (2) is 
     January 1, 2025, the Administrator may extend the deadline 
     for compliance by a covered EGU by up to 18 months if the 
     Administrator makes a determination, based on a showing by 
     the owner or operator of the unit, that it will be 
     technically infeasible for the unit to meet the standard by 
     the deadline. The owner or operator must submit a request for 
     such an extension by no later than January 1, 2022, and the 
     Administrator shall provide for public notice and comment on 
     the extension request.
       ``(c) Review and Revision of Standards.--Not later than 
     2025 and at 5-year intervals thereafter, the Administrator 
     shall review the standards for new covered EGUs under this 
     section and shall, by rule, reduce the maximum carbon dioxide 
     emission rate for new covered EGUs to a rate which reflects 
     the degree of emission limitation achievable through the 
     application of the best system of emission reduction which 
     (taking into account the cost of achieving such reduction and 
     any nonair quality health and environmental impact and energy 
     requirements) the Administrator determines has been 
     adequately demonstrated.
       ``(d)  Reports.--Not later than the date 18 months after 
     the date of enactment of this title and semiannually 
     thereafter, the Administrator shall publish a report on the 
     nameplate capacity of units (determined pursuant to 
     subsection (b)(2)(A)) in commercial operation in the United 
     States equipped with carbon capture and sequestration 
     technology, including the information described in subsection 
     (b)(2)(A) (including the cumulative generating capacity to 
     which carbon capture and sequestration retrofit projects 
     meeting the criteria described in section 786(b)(1)(A)(ii) 
     and (b)(1)(A)(iv)(II) has been applied and the quantities of 
     carbon dioxide captured and sequestered by such projects).
       ``(e) Regulations.--Not later than 2 years after the date 
     of enactment of this title, the Administrator shall 
     promulgate regulations to carry out the requirements of this 
     section.''.

                    Subtitle C--Clean Transportation

     SEC. 121. ELECTRIC VEHICLE INFRASTRUCTURE.

       (a) Amendment of PURPA.--Section 111(d) of the Public 
     Utility Regulatory Policies Act of 1978 (16 U.S.C. 2621(d)) 
     is amended by adding at the end the following:
       ``(20) Plug-in electric drive vehicle infrastructure.--
       ``(A) Utility plan for infrastructure.--Each electric 
     utility shall develop a plan to support the use of plug-in 
     electric drive vehicles, including heavy-duty hybrid electric 
     vehicles. The plan may provide for deployment of electrical 
     charging stations in public or private locations, including 
     street parking, parking garages, parking lots, homes, gas 
     stations, and highway rest stops. Any such plan may also 
     include--
       ``(i) battery exchange, fast charging infrastructure and 
     other services;
       ``(ii) triggers for infrastructure deployment based upon 
     market penetration of plug-in electric drive vehicles; and
       ``(iii) such other elements as the State determines 
     necessary to support plug-in electric drive vehicles.
     Each plan under this paragraph shall provide for the 
     deployment of the charging infrastructure or other 
     infrastructure necessary to adequately support the use of 
     plug-in electric drive vehicles.
       ``(B) Support requirements.--Each State regulatory 
     authority (in the case of each electric utility for which it 
     has ratemaking authority) and each utility (in the case of a 
     nonregulated utility) shall--
       ``(i) require that charging infrastructure deployed is 
     interoperable with products of all auto manufacturers to the 
     extent possible; and
       ``(ii) consider adopting minimum requirements for 
     deployment of electrical charging infrastructure and other 
     appropriate requirements necessary to support the use of 
     plug-in electric drive vehicles.
       ``(C) Cost recovery.--Each State regulatory authority (in 
     the case of each electric utility for which it has ratemaking 
     authority) and each utility (in the case of a nonregulated 
     utility) shall consider whether, and to what extent, to allow 
     cost recovery for plans and implementation of plans.
       ``(D) Smart grid integration.--The State regulatory 
     authority (in the case of each electric utility for which it 
     has ratemaking authority) and each utility (in the case of a 
     nonregulated utility) shall, in accordance with regulations 
     issued by the Federal Energy Regulatory Commission pursuant 
     to section 1305(d) of the Energy Independence and Security 
     Act of 2007--
       ``(i) establish any appropriate protocols and standards for 
     integrating plug-in electric drive vehicles into an 
     electrical distribution system, including Smart Grid systems 
     and devices as described in title XIII of the Energy 
     Independence and Security Act of 2007;
       ``(ii) include, to the extent feasible, the ability for 
     each plug-in electric drive vehicle to be identified 
     individually and to be associated with its owner's electric 
     utility account, regardless of the location that the vehicle 
     is plugged in, for purposes of appropriate billing for any 
     electricity required to charge the vehicle's batteries as 
     well as any crediting for electricity provided to the 
     electric utility from the vehicle's batteries; and
       ``(iii) review the determination made in response to 
     section 1252 of the Energy Policy Act of 2005 in light of 
     this section, including whether time-of-use pricing should be 
     employed to enable the use of plug-in electric drive vehicles 
     to contribute to meeting peak-load and ancillary service 
     power needs.''.
       (b) Compliance.--
       (1) Time limitations.--Section 112(b) of the Public Utility 
     Regulatory Policies Act of 1978 (16 U.S.C. 2622(b)) is 
     amended by adding the following at the end thereof:
       ``(7)(A) Not later than 3 years after the date of enactment 
     of this paragraph, each State regulatory authority (with 
     respect to each electric utility for which it has ratemaking 
     authority) and each nonregulated utility shall commence the 
     consideration referred to in section 111, or set a hearing 
     date for consideration, with respect to the standard 
     established by paragraph (20) of section 111(d).
       ``(B) Not later than 4 years after the date of enactment of 
     the this paragraph, each State regulatory authority (with 
     respect to each electric utility for which it has ratemaking 
     authority), and each nonregulated electric utility, shall 
     complete the consideration, and shall make the determination, 
     referred to in section 111 with respect to the standard 
     established by paragraph (20) of section 111(d).''.
       (2) Failure to comply.--Section 112(c) of the Public 
     Utility Regulatory Policies Act of

[[Page H7484]]

     1978 (16 U.S.C. 2622(c)) is amended by adding the following 
     at the end: ``In the case of the standards established by 
     paragraph (20) of section 111(d), the reference contained in 
     this subsection to the date of enactment of this Act shall be 
     deemed to be a reference to the date of enactment of such 
     paragraph.''.
       (3) Prior state actions.--Section 112(d) of the Public 
     Utility Regulatory Policies Act of 1978 (16 U.S.C. 2622(d)) 
     is amended by striking ``(19)'' and inserting ``(20)'' before 
     ``of section 111(d)''.

     SEC. 122. LARGE-SCALE VEHICLE ELECTRIFICATION PROGRAM.

       (a) Deployment Program.--The Secretary of Energy shall 
     establish a program to deploy and integrate plug-in electric 
     drive vehicles into the electricity grid in multiple regions. 
     In carrying out the program, the Secretary may provide 
     financial assistance described under subsection (d), 
     consistent with the goals under subsection (b). The Secretary 
     shall select regions based upon applications for assistance 
     received pursuant to subsection (c).
       (b) Goals.--The goals of the program established pursuant 
     to subsection (a) shall be--
       (1) to demonstrate the viability of a vehicle-based 
     transportation system that is not overly dependent on 
     petroleum as a fuel and contributes to lower carbon emissions 
     than a system based on conventional vehicles;
       (2) to facilitate the integration of advanced vehicle 
     technologies into electricity distribution areas to improve 
     system performance and reliability;
       (3) to demonstrate the potential benefits of coordinated 
     investments in vehicle electrification on personal mobility 
     and a regional grid;
       (4) to demonstrate protocols and standards that facilitate 
     vehicle integration into the grid; and
       (5) to investigate differences in each region and 
     regulatory environment regarding best practices in 
     implementing vehicle electrification.
       (c) Applications.--Any State, Indian tribe, or local 
     government (or group of State, Indian tribe, or local 
     governments) may apply to the Secretary of Energy for 
     financial assistance in furthering the regional deployment 
     and integration into the electricity grid of plug-in electric 
     drive vehicles. Such applications may be jointly sponsored by 
     electric utilities, automobile manufacturers, technology 
     providers, car sharing companies or organizations, or other 
     persons or entities.
       (d) Use of Funds.--Pursuant to applications received under 
     subsection (c), the Secretary may make financial assistance 
     available to any applicant or joint sponsor of the 
     application to be used for any of the following:
       (1) Assisting persons located in the regional deployment 
     area, including fleet owners, in the purchase of new plug-in 
     electric drive vehicles by offsetting in whole or in part the 
     incremental cost of such vehicles above the cost of 
     comparable conventionally fueled vehicles.
       (2) Supporting the use of plug-in electric drive vehicles 
     by funding projects for the deployment of any of the 
     following:
       (A) Electrical charging infrastructure for plug-in electric 
     drive vehicles, including battery exchange, fast charging 
     infrastructure, and other services, in public or private 
     locations, including street parking, parking garages, parking 
     lots, homes, gas stations, and highway rest stops.
       (B) Smart Grid equipment and infrastructure, as described 
     in title XIII of the Energy Independence and Security Act of 
     2007, to facilitate the charging and integration of plug-in 
     electric drive vehicles.
       (3) Such other projects as the Secretary determines 
     appropriate to support the large-scale deployment of plug-in 
     electric drive vehicles in regional deployment areas.
       (e) Program Requirements.--The Secretary, in consultation 
     with the Administrator and the Secretary of Transportation, 
     shall determine design elements and requirements of the 
     program established pursuant to subsection (a), including--
       (1) the type of financial mechanism with which to provide 
     financial assistance;
       (2) criteria for evaluating applications submitted under 
     subsection (c), including the anticipated ability to promote 
     deployment and market penetration of vehicles that are less 
     dependent on petroleum as a fuel source; and
       (3) reporting requirements for entities that receive 
     financial assistance under this section, including a 
     comprehensive set of performance data characterizing the 
     results of the deployment program.
       (f) Information Clearinghouse.--The Secretary shall, as 
     part of the program established pursuant to subsection (a), 
     collect and make available to the public information 
     regarding the cost, performance, and other technical data 
     regarding the deployment and integration of plug-in electric 
     drive vehicles.
       (g) Authorization.--There are authorized to be appropriated 
     to carry out this section such sums as may be necessary.

     SEC. 123. PLUG-IN ELECTRIC DRIVE VEHICLE MANUFACTURING.

       (a) Vehicle Manufacturing Assistance Program.--The 
     Secretary of Energy shall establish a program to provide 
     financial assistance to automobile manufacturers to 
     facilitate the manufacture of plug-in electric drive 
     vehicles, as defined in section 131(a)(5) of the Energy 
     Independence and Security Act of 2007, that are developed and 
     produced in the United States.
       (b) Financial Assistance.--The Secretary of Energy may 
     provide financial assistance to an automobile manufacturer 
     under the program established pursuant to ``subsection (a) 
     for the reconstruction or retooling of facilities for the 
     manufacture of plug-in electric drive vehicles or batteries 
     for such vehicles that are developed and produced in the 
     United States.''.
       (c) Coordination With Regional Deployment.--The Secretary 
     may provide financial assistance under subsection (b) in 
     conjunction with the award of financial assistance under the 
     large scale vehicle electrification program established 
     pursuant to section 122 of this Act.
       (d) Program Requirements.--The Secretary shall determine 
     design elements and requirements of the program established 
     pursuant to subsection (a), including--
       (1) the type of financial mechanism with which to provide 
     financial assistance;
       (2) criteria, in addition to the criteria described under 
     subsection (e), for evaluating applications for financial 
     assistance; and
       (3) reporting requirements for automobile manufacturers 
     that receive financial assistance under this section.
       (e) Criteria.--In selecting recipients of financial 
     assistance from among applicant automobile manufacturers, the 
     Secretary shall give preference to proposals that--
       (1) are most likely to be successful; and
       (2) are located in local markets that have the greatest 
     need for the facility.
       (f) Reports.--The Secretary shall annually submit to 
     Congress a report on the program established pursuant to this 
     section.
       (g) Authorization of Appropriations.--There are authorized 
     to be appropriated such sums as are necessary to carry out 
     this section.

     SEC. 124. INVESTMENT IN CLEAN VEHICLES.

       (a) Definitions.--In this section:
       (1) Advanced technology vehicles and qualifying 
     components.--The terms ``advanced technology vehicles'' and 
     ``qualifying components'' shall have the definition of such 
     terms in section 136 of the Energy Independence and Security 
     Act of 2007, except that for purposes of this section, the 
     average base year as described in such section 136(a)(1)(C) 
     shall be the following:
       (A) In each of the years 2012 through 2016, model year 
     2009.
       (B) In 2017, the Administrator shall, notwithstanding such 
     section 136(a)(1)(C), determine an appropriate baseline based 
     on technological and economic feasibility.
       (2) Plug-in electric drive vehicle.--The term ``plug-in 
     electric drive vehicle'' shall have the definition of such 
     term in section 131 of the Energy Independence and Security 
     Act of 2007.
       (b) Distribution of Allowances.--The Administrator shall, 
     in accordance with this section, distribute emission 
     allowances allocated pursuant to section 782(i) of the Clean 
     Air Act not later than September 30 of 2012 and each calendar 
     year thereafter through 2025.
       (c) Plug-in Electric Drive Vehicle Manufacturing and 
     Deployment.--
       (1) In general.--The Administrator shall, at the direction 
     of the Secretary of Energy, provide emission allowances 
     allocated pursuant to section 782(i) to applicants, joint 
     sponsors and automobile manufacturers pursuant to sections 
     122 and 123 of this Act.
       (2) Annual amount.--In each of the years 2012 through 2017, 
     one-quarter of the portion of the emission allowances 
     allocated pursuant to section 782(i) of the Clean Air Act 
     shall be available to carry out paragraph (1) such that--
       (A) one-eighth of the portion shall be available to carry 
     out section 122; and,
       (B) one-eighth of the portion shall be available to carry 
     out section 123.
       (3) Preference.--In directing the provision of emission 
     allowances under this subsection to carry out section 122, 
     the Secretary shall give preference to applications under 
     section 122(c) that are jointly sponsored by one or more 
     automobile manufacturers.
       (4) Multi-year commitments.--The Administrator shall commit 
     to providing emission allowances to an applicant, joint 
     sponsor, or automobile manufacturer for up to five 
     consecutive years if--
       (A) an application under section 122 or 123 of this Act 
     requests a multi-year commitment;
       (B) such application meets the criteria for support 
     established by the Secretary of Energy under sections 122 or 
     123 of this Act;
       (C) the Administrator confirms to the Secretary that 
     emission allowances will be available for a multi-year 
     commitment;
       (D) the Secretary of Energy determines that a multi-year 
     commitment for such application will advance the goals of 
     section 122 or 123; and
       (E) the Secretary of Energy directs the Administrator to 
     make a multi-year commitment.
       (5) Insufficient applications.--If, in any year, emission 
     allowances available under paragraph (2) cannot be provided 
     because of insufficient numbers of submitted applications 
     that meet the criteria for support established by the 
     Secretary of Energy under sections 122 or 123 of this Act, 
     the remaining emission allowances shall be distributed 
     according to subsection (d).
       (d) Advanced Technology Vehicles.--
       (1) In general.--The Administrator shall, at the direction 
     of the Secretary of Energy, provide any emission allowances 
     allocated pursuant to section 782(i) of the Clean Air Act 
     that are not provided under subsection

[[Page H7485]]

     (c) to automobile manufacturers and component suppliers to 
     pay not more than 30 percent of the cost of--
       (A) reequipping, expanding, or establishing a manufacturing 
     facility in the United States to produce--
       (i) qualifying advanced technology vehicles; or
       (ii) qualifying components; and
       (B) engineering integration performed in the United States 
     of qualifying vehicles and qualifying components.
       (2) Preference.--In directing the provision of emission 
     allowances under this subsection during the years 2012 
     through 2017, the Secretary shall give preference to 
     applications for projects that save the maximum number of 
     gallons of fuel.

     SEC. 125. ADVANCED TECHNOLOGY VEHICLE MANUFACTURING INCENTIVE 
                   LOANS.

       Section 136(d)(1) of the Energy Independence and Security 
     Act of 2007 (42 U.S.C. 17013(d)(1)) is amended by striking 
     ``$25,000,000,000'' and inserting ``$50,000,000,000''.

     SEC. 126. DEFINITION OF RENEWABLE BIOMASS.

       Section 211(o)(1)(I) of the Clean Air Act (42 U.S.C. 
     7545(o)(1)(I)) is amended to read as follows:
       ``(I) Renewable biomass.--The term `renewable biomass' 
     means any of the following:
       ``(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 stands, late-successional stands 
     (except for dead, severely damaged, or badly infested trees), 
     components of the National Landscape Conservation System, 
     National Monuments, National Conservation Areas, Designated 
     Primitive Areas, or Wild and Scenic Rivers corridors;
       ``(II) harvested in environmentally sustainable quantities, 
     as determined by the appropriate Federal land manager; and
       ``(III) harvested in accordance with Federal and State law, 
     and applicable land management plans.

       ``(ii) Any organic matter that is available on a renewable 
     or recurring basis from non-Federal land or land belonging to 
     an Indian or Indian tribe that is held in trust by the United 
     States or subject to a restriction against alienation imposed 
     by the United States, including--

       ``(I) renewable plant material, including--

       ``(aa) feed grains;
       ``(bb) other agricultural commodities;
       ``(cc) other plants and trees; and
       ``(dd) algae; and

       ``(II) waste material, including--

       ``(aa) crop residue;
       ``(bb) other vegetative waste material (including wood 
     waste and wood residues);
       ``(cc) animal waste and byproducts (including fats, oils, 
     greases, and manure);
       ``(dd) construction waste;
       ``(ee) food waste and yard waste; and
       ``(ff) the non-fossil biogenic portion of municipal solid 
     waste and construction, demolition, and disaster debris.
       ``(iii) Residues and byproducts from wood, pulp, or paper 
     products facilities.''.
       (c) Reduction.--The last sentence of section 211(o)(7)(D) 
     of the Clean Air Act (42 U.S.C. 7545(o)(7)(D)) is amended to 
     read as follows: ``For any calendar year in which the 
     Administrator makes such a reduction, the Administrator shall 
     also reduce the applicable volume of renewable fuel and 
     advanced biofuels requirement established under paragraph 
     (2)(B) by the same volume.''.

     SEC. 127. OPEN FUEL STANDARD.

       (a) Findings.--The Congress finds that--
       (1) the status of oil as a strategic commodity, which 
     derives from its domination of the transportation sector, 
     presents a clear and present danger to the United States;
       (2) in a prior era, when salt was a strategic commodity, 
     salt mines conferred national power and wars were fought over 
     the control of such mines;
       (3) technology, in the form of electricity and 
     refrigeration, decisively ended salt's monopoly of meat 
     preservation and greatly reduced its strategic importance;
       (4) fuel competition and consumer choice would similarly 
     serve to end oil's monopoly in the transportation sector and 
     strip oil of its strategic status;
       (5) the current closed fuel market has allowed a cartel of 
     petroleum exporting countries to inflate fuel prices, 
     effectively imposing a harmful tax on the economy of the 
     United States;
       (6) much of the inflated petroleum revenues the oil cartel 
     earns at the expense of the people of the United States are 
     used for purposes antithetical to the interests of the United 
     States and its allies;
       (7) alcohol fuels, including ethanol and methanol, could 
     potentially provide significant supplies of additional fuels 
     that could be produced in the United States and in many other 
     countries in the Western Hemisphere that are friendly to the 
     United States;
       (8) alcohol fuels can only play a major role in securing 
     the energy independence of the United States if a substantial 
     portion of vehicles in the United States are capable of 
     operating on such fuels;
       (9) it is not in the best interest of United States 
     consumers or the United States Government to be constrained 
     to depend solely upon petroleum resources for vehicle fuels 
     if alcohol fuels are potentially available;
       (10) existing technology, in the form of flexible fuel 
     vehicles, allows internal combustion engine cars and trucks 
     to be produced at little or no additional cost, which are 
     capable of operating on conventional gasoline, alcohol fuels, 
     or any combination of such fuels, as availability or cost 
     advantage dictates, providing a platform on which fuels can 
     compete;
       (11) the necessary distribution system for such alcohol 
     fuels will not be developed in the United States until a 
     substantial fraction of the vehicles in the United States are 
     capable of operating on such fuels;
       (12) the establishment of such a vehicle fleet and 
     distribution system would provide a large market that would 
     mobilize private resources to substantially advance the 
     technology and expand the production of alcohol fuels in the 
     United States and abroad;
       (13) the United States has an urgent national security 
     interest to develop alcohol fuels technology, production, and 
     distribution systems as rapidly as possible;
       (14) new cars sold in the United States that are equipped 
     with an internal combustion engine should allow for fuel 
     competition by being flexible fuel vehicles, and new diesel 
     cars should be capable of operating on biodiesel; and
       (15) such an open fuel standard would help to protect the 
     United States economy from high and volatile oil prices and 
     from the threats caused by global instability, terrorism, and 
     natural disaster.
       (b) Open Fuel Standard for Transportation.--(1) Chapter 329 
     of title 49, United States Code, is amended by adding at the 
     end the following:

     ``Sec. 32920. Open fuel standard for transportation

       ``(a) Definitions.--In this section:
       ``(1) E85.--The term `E85' means a fuel mixture containing 
     85 percent ethanol and 15 percent gasoline by volume.
       ``(2) Flexible fuel automobile.--The term `flexible fuel 
     automobile' means an automobile that has been warranted by 
     its manufacturer to operate on gasoline, E85, and M85.
       ``(3) Fuel choice-enabling automobile.--The term `fuel 
     choice-enabling automobile' means--
       ``(A) a flexible fuel automobile; or
       ``(B) an automobile that has been warranted by its 
     manufacturer to operate on biodiesel.
       ``(4) Light-duty automobile.--The term `light-duty 
     automobile' means--
       ``(A) a passenger automobile; or
       ``(B) a non-passenger automobile.
       ``(5) Light-duty automobile manufacturer's annual covered 
     inventory.--The term `light-duty automobile manufacturer's 
     annual covered inventory' means the number of light-duty 
     automobiles powered by an internal combustion engine that a 
     manufacturer, during a given calendar year, manufactures in 
     the United States or imports from outside of the United 
     States for sale in the United States.
       ``(6) M85.--The term `M85' means a fuel mixture containing 
     85 percent methanol and 15 percent gasoline by volume.
       ``(b) Open Fuel Standard for Transportation.--
       ``(1) In general.--The Secretary may promulgate regulations 
     to require each light-duty automobile manufacturer's annual 
     covered inventory to be comprised of a minimum percentage of 
     fuel-choice enabling automobiles, with sufficient lead time, 
     if the Secretary, in coordination with the Secretary of 
     Energy and the Administrator of the Environmental Protection 
     Agency, determines such requirement is a cost-effective way 
     to achieve the Nation's energy independence and environmental 
     objectives. The cost-effective determination shall consider 
     the future availability of both alternative fuel supply and 
     infrastructure to deliver the alternative fuel to the fuel-
     choice enabling vehicles.
       ``(2) Temporary exemption from requirements.--
       ``(A) Application.--A manufacturer may request an exemption 
     from the requirement described in paragraph (1) by submitting 
     an application to the Secretary, at such time, in such 
     manner, and containing such information as the Secretary may 
     require by regulation. Each such application shall specify 
     the models, lines, and types of automobiles affected.
       ``(B) Evaluation.--After evaluating an application received 
     from a manufacturer, the Secretary may at any time, under 
     such terms and conditions, and to such extent as the 
     Secretary considers appropriate, temporarily exempt, or renew 
     the exemption of, a light-duty automobile from the 
     requirement described in paragraph (1) if the Secretary 
     determines that unavoidable events not under the control of 
     the manufacturer prevent the manufacturer of such automobile 
     from meeting its required production volume of fuel choice-
     enabling automobiles, including--
       ``(i) a disruption in the supply of any component required 
     for compliance with the regulations;

[[Page H7486]]

       ``(ii) a disruption in the use and installation by the 
     manufacturer of such component; or
       ``(iii) application to plug-in electric drive vehicles 
     causing such vehicles to fail to meet State air quality 
     requirements.
       ``(C) Consolidation.--The Secretary may consolidate 
     applications received from multiple manufacturers under 
     subparagraph (A) if they are of a similar nature.
       ``(D) Conditions.--Any exemption granted under subparagraph 
     (B) shall be conditioned upon the manufacturer's commitment 
     to recall the exempted automobiles for installation of the 
     omitted components within a reasonable time proposed by the 
     manufacturer and approved by the Secretary after such 
     components become available in sufficient quantities to 
     satisfy both anticipated production and recall volume 
     requirements.
       ``(E) Notice.--The Secretary shall publish in the Federal 
     Register--
       ``(i) notice of each application received from a 
     manufacturer;
       ``(ii) notice of each decision to grant or deny a temporary 
     exemption; and
       ``(iii) the reasons for granting or denying such 
     exemptions.''.
       (2) The table of contents in chapter 329 of such title is 
     amended by adding at the end the following:

``32920. Open fuel standard for transportation.''.

     SEC. 128. DIESEL EMISSIONS REDUCTION.

       Subtitle G of title VII of the Energy Policy Act of 2005 
     (42 U.S.C. 16131 et seq.) is amended--
       (1) in the matter preceding clause (i) in section 
     791(3)(B), by inserting ``in any State'' after ``nonprofit 
     organization or institution'';
       (2) in section 791(9), by striking ``The term `State' 
     includes the District of Columbia.'' and inserting ``The term 
     `State' includes the District of Columbia, American Samoa, 
     Guam, the Commonwealth of the Northern Mariana Islands, 
     Puerto Rico, and the Virgin Islands.'':
       (3) in section 793(c)--
       (A) in paragraph (2)(A), by striking ``51 States'' and 
     inserting ``56 States'';
       (B) in paragraph (2)(A), by striking ``1.96 percent'' and 
     inserting ``1.785 percent'';
       (C) in paragraph (2)(B), by striking ``51 States'' and 
     inserting ``56 States''; and
       (D) in paragraph (2)(B), by amending clause (ii) to read as 
     follows:
       ``(ii) the amount of funds remaining after each State 
     described in paragraph (1) receives the 1.785-percent 
     allocation under this paragraph.''; and
       (4) in section 797, by striking ``2011'' and inserting 
     ``2016''.

     SEC. 129. LOAN GUARANTEES FOR PROJECTS TO CONSTRUCT RENEWABLE 
                   FUEL PIPELINES.

       (a) Definitions.--Section 1701 of the Energy Policy Act of 
     2005 (42 U.S.C. 16511) is amended by adding at the end the 
     following:
       ``(6) Renewable fuel.--The term `renewable fuel' has the 
     meaning given the term in section 211(o)(1) of the Clean Air 
     Act (42 U.S.C. 7545(o)(1)), except that the term shall 
     include all ethanol and biodiesel.
       ``(7) Renewable fuel pipeline.--The term `renewable fuel 
     pipeline' means a common carrier pipeline for transporting 
     renewable fuel.''.
       (b) Renewable Fuel Pipeline Eligibility.--Section 1703(b) 
     of the Energy Policy Act of 2005 (42 U.S.C. 16513) is amended 
     by adding at the end the following:
       ``(11) Renewable fuel pipelines.''.

     SEC. 130. FLEET VEHICLES.

       Section 508 of the Energy Policy Act of 1992 (42 U.S.C. 
     13258) is amended as follows:
       (1) By adding the following new paragraph at the end of 
     subsection (a):
       ``(6) Repowered or converted alternative fueled vehicles.--
     As used in this paragraph, the term `repowered or converted 
     alternative fueled vehicle' includes light-, medium- or 
     heavy-duty motor vehicles that have been modified with an EPA 
     or CARB compliant engine or vehicle or aftermarket system so 
     that the vehicle or engine is capable of operating on an 
     alternative fuel.''.
       (2) By adding the following new paragraph at the end of 
     subsection (b):
       ``(3) Repowered or converted vehicles. Not later than 
     January 1, 2010, the Secretary shall allocate credits to 
     fleets that repower or convert an existing vehicle so that it 
     is capable of operating on an alternative fuel. In the case 
     of any medium- or heavy-duty vehicle that is repowered or 
     converted so that it is capable of operating on an 
     alternative fuel, the Secretary shall allocate additional 
     credits for such vehicles if he determines that such vehicles 
     displace more petroleum than light duty alternative fueled 
     vehicles. Such rules shall also include a requirement that 
     such vehicles remain in the fleet for a period of no less 
     than 2 years in order to continue to qualify for credit. The 
     Secretary also shall extend the flexibility afforded in this 
     paragraph to Federal fleets subject to the purchase 
     provisions contained in section 303 of this Act.''.

     SEC. 130A. REPORT ON NATURAL GAS VEHICLE EMISSIONS 
                   REDUCTIONS.

       Within 360 days after the date of enactment of this Act, 
     the Administrator, in consultation with the Secretaries of 
     Energy and Transportation, and the Administrator of the 
     General Services Administration, and after an examination of 
     available scientific studies or analysis, shall submit to the 
     Congress a report on--
       (1) the contribution that light and heavy duty natural gas 
     vehicles, by category and State, have made during the last 
     decade to the reduction of greenhouse gases and criteria 
     pollutants under the Clean Air Act, and the reduced 
     consumption of petroleum-based fuels;
       (2) the contribution that light and heavy duty natural gas 
     vehicles are expected to make from 2010 to 2020 in reducing 
     greenhouse gas and criteria pollutants under the Clean Air 
     Act based, among other things, on additional Federal 
     incentives for the manufacture and deployment of natural gas 
     vehicles provided in this Act, and other Federal legislation; 
     and
       (3) additional Federal measures, including legislation, 
     that could, if implemented, maximize the potential for 
     natural gas used in both stationary and mobile sources to 
     contribute to the reduction of greenhouse gases and criteria 
     pollutants under the Clean Air Act.

     Subtitle D--State Energy and Environment Development Accounts

     SEC. 131. ESTABLISHMENT OF SEED ACCOUNTS.

       (a) Definitions.--In this section:
       (1) SEED account.--The term ``SEED Account'' means a State 
     Energy and Environment Development Account established 
     pursuant to this section.
       (2) State energy office.--The term ``State Energy Office'' 
     means a State entity eligible for grants under part D of 
     title III of the Energy Policy and Conservation Act (42 
     U.S.C. 6321 et seq.).
       (b) Establishment of Program.--The Administrator shall 
     establish a program under which a State, through its State 
     Energy Office or other State agency designated by the State, 
     may operate a State Energy and Environment Development 
     Account.
       (c) Purpose.--The purpose of each SEED Account is to serve 
     as a common State-level repository for managing and 
     accounting for emission allowances provided to States 
     designated for renewable energy and energy efficiency 
     purposes.
       (d) Regulations.--Not later than one year after the date of 
     enactment of this Act, the Administrator shall promulgate 
     regulations to carry out this section, including 
     regulations--
       (1) to ensure that each State operates its SEED Account and 
     any subaccounts thereof efficiently and in accordance with 
     this Act and applicable State and Federal laws;
       (2) to prevent waste, fraud, and abuse;
       (3) to indicate the emission allowances that may be 
     deposited in a State's SEED Account pending distribution or 
     use;
       (4) to indicate the programs and objectives authorized by 
     Federal law for which emission allowances in a SEED Account 
     may be distributed or used;
       (5) to identify the forms of financial assistance and 
     incentives that States may provide through distribution or 
     use of SEED Accounts; and
       (6) to prescribe the form and content of reports that the 
     States are required to submit under this section on the use 
     of SEED Accounts.
       (e) Operation.--
       (1) Deposits.--
       (A) In general.--In the allowance tracking system 
     established pursuant to section 724(d) of the Clean Air Act, 
     the Administrator shall establish a SEED Account for each 
     State and place in it the allowances allocated pursuant to 
     section 782(g) of the Clean Air Act to be distributed to 
     States pursuant to sections 132 and 201 of this Act.
       (B) Financial account.--A State may create a financial 
     account associated with its SEED Account to deposit, retain, 
     and manage any proceeds of any sale of any allowance provided 
     pursuant to this Act pending expenditure or disbursement of 
     those proceeds for purposes permitted under this section. The 
     funds in such an account shall not be commingled with other 
     funds not derived from the sale of allowances provided to the 
     State; however, loans made by the State from such funds 
     pursuant to paragraph (2)(C)(i) may be repaid into such a 
     financial account, including any interest charged.
       (2) Withdrawals.--
       (A) In general.--All allowances distributed pursuant to 
     sections 132 and 201, including the proceeds of any sale of 
     such allowances, shall support renewable energy and energy 
     efficiency programs authorized or approved by the Federal 
     Government.
       (B) Dedicated allowances.--Allowances distributed pursuant 
     to sections 132 and 201 that are required by law to be used 
     for specific purposes for a specified period shall be used 
     according to those requirements during that period.
       (C) Undedicated allowances.--To the extent that allowances 
     distributed pursuant to sections 132 and 201 are not required 
     by law to be used for specific purposes for a specified 
     period as described in subparagraph (B), such allowances or 
     the proceeds of their sale may be used for any of the 
     following purposes:
       (i) Loans.--Loans of allowances, or the proceeds from the 
     sale of allowances, may be provided, interest on commercial 
     loans may be subsidized at an interest rate as low as zero, 
     and other credit support may be provided to support programs 
     authorized to use SEED Account allowance value or any other 
     renewable energy or energy efficiency purpose authorized or 
     approved by the Federal Government.
       (ii) Grants.--Grants of allowances or the proceeds of their 
     sale may be provided to support programs authorized to use 
     SEED

[[Page H7487]]

     Account allowance value or any other renewable energy or 
     energy efficiency purpose authorized or approved by the 
     Federal Government.
       (iii) Other forms of support.--Allowances or the proceeds 
     of the sale of allowances may be provided for other forms of 
     support for programs authorized to use SEED Account allowance 
     value or any other renewable energy or energy efficiency 
     purpose authorized or approved by the Federal Government.
       (iv) Administrative costs.--Except to the extent provided 
     in Federal law authorizing or allocating allowances deposited 
     in a SEED Account, not more than 5 percent of the allowance 
     value in a SEED Account in any year may be used to cover 
     administrative expenses of the SEED Account.
       (D) Subaccounts.--A State may request that the 
     Administrator establish accounts for local governments that 
     request such subaccounts to hold allowances distributed to 
     local governments for renewable energy or energy efficiency 
     programs authorized or approved by the Federal Government.
       (E) Intended use plans.--
       (i) In general.--After providing for public review and 
     comment, each State administering a SEED Account shall 
     annually prepare a plan that identifies the intended uses of 
     the allowances or proceeds from the sale of allowances in its 
     SEED Account.
       (ii) Contents.--An intended use plan shall include--

       (I) a list of the projects or programs for which 
     withdrawals from the SEED Account are intended in the next 
     fiscal year that begins after the date of the plan, including 
     a description of each project;
       (II) the relationship of each of the projects or programs 
     to an identified Federal purpose authorized by this Act, or 
     any other Federal statute;
       (III) the expected terms of use of allowance value to 
     provide assistance;
       (IV) the criteria and methods established for the 
     distribution of allowances or allowance value;
       (V) a description of the equivalent financial value and 
     status of the SEED Account; and
       (VI) a statement of the mid-term and long-term goals of the 
     State for use of its SEED Account.

       (3) Accountability and transparency.--
       (A) Controls and procedures.--Any State that has a SEED 
     Account shall establish fiscal controls and recordkeeping and 
     accounting procedures for the SEED Account sufficient to 
     ensure proper accounting during appropriate accounting 
     periods for distributions into the SEED Account, transfers 
     from the SEED Account, and SEED Account balances, including 
     any related financial accounts. Such controls and procedures 
     shall conform to generally accepted government accounting 
     principles. Any State that has a SEED Account shall retain 
     records for a period of at least 5 years.
       (B) Audits.--Any State that has a SEED Account shall have 
     an annual audit conducted of the SEED Account by an 
     independent public accountant in accordance with generally 
     accepted auditing standards, and shall transmit the results 
     of that audit to the Administrator.
       (C) State report.--Each State administering a SEED Account 
     shall make publicly available and submit to the Administrator 
     a report every 2 years on its activities related to its SEED 
     Account.
       (D) Public information.--Any--
       (i) controls and procedures established under subparagraph 
     (A); and
       (ii) information obtained through audits conducted under 
     subparagraph (B), except to the extent that it would be 
     protected from disclosure, if it were information held by the 
     Federal Government, under section 552(b) of title 5, United 
     States Code,
     shall be made publicly available.
       (E) Other protections.--The Administrator shall require 
     such additional procedures and protections as are necessary 
     to ensure that any State that has a SEED Account will operate 
     the SEED Account in an accountable and transparent manner.
       (f) Requirements for Eligibility.--A State's eligibility to 
     receive allowances in its SEED Account shall depend on that 
     State's compliance with the requirements of this Act (and the 
     amendments made by this Act).
       (g) Authorization of Appropriations.--There are authorized 
     to be appropriated to the Administrator such sums as may be 
     necessary for SEED Account operations.

     SEC. 132. SUPPORT OF STATE RENEWABLE ENERGY AND ENERGY 
                   EFFICIENCY PROGRAMS.

       (a) Definitions.--For purposes of this section:
       (1) Allowance.--The term ``allowance'' means an emission 
     allowance established under section 721 of the Clean Air Act 
     (as added by section 311 of this Act).
       (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 or measure, including avoided supply and 
     delivery costs and deferred or avoided investments, is 
     greater than the net present value of the economic costs over 
     the life of the program, including program costs and 
     incremental costs borne by the energy consumer.
       (3) Renewable energy resource.--The term ``renewable energy 
     resource'' shall have the meaning given that term in section 
     610 of the Public Utility Regulatory Policies Act of 1978 (as 
     added by section 101 of this Act).
       (4) Vintage year.--The term ``vintage year'' shall the 
     meaning given that term in section 700 of the Clean Air Act 
     (as added by section 311 of this Act).
       (b) Distribution Among States.--Not later than September 30 
     of each calendar year from 2011 through 2049, the 
     Administrator shall, in accordance with this section, 
     distribute allowances allocated pursuant to section 782(g)(1) 
     of the Clean Air Act (as added by section 311 of this Act) 
     for the following vintage year. The Administrator shall 
     distribute 0.5 percent of such allowances pursuant to section 
     133 of this Act. The Administrator shall distribute the 
     remaining allowances to States for renewable energy and 
     energy efficiency programs to be deposited in and 
     administered through the State Energy and Environment 
     Development (SEED) Accounts established pursuant to section 
     131. The Administrator shall distribute allowances among the 
     States under this section each year in accordance with the 
     following formula:
       (1) One third of the allowances shall be divided equally 
     among the States.
       (2) One third of the allowances shall be distributed 
     ratably among the States based on the population of each 
     State, as contained in the most recent reliable census data 
     available from the Bureau of the Census, Department of 
     Commerce, for all States at the time the Administrator 
     calculates the formula for distribution.
       (3) One third of the allowances shall be distributed 
     ratably among the States on the basis of the energy 
     consumption of each State as contained in the most recent 
     State Energy Data Report available from the Energy 
     Information Administration (or such alternative reliable 
     source as the Administrator may designate).
       (c) Uses.--The allowances distributed to each State 
     pursuant to this section shall be used exclusively in 
     accordance with the following requirements:
       (1) Not less than 12.5 percent shall be distributed by the 
     State to units of local government within such State to be 
     used exclusively to support the energy efficiency and 
     renewable energy purposes listed in paragraphs (2) and (3).
       (2) Not less than 20 percent shall be used exclusively for 
     the following energy efficiency purposes, provided that not 
     less than 1 percent shall be used for the purpose described 
     in subparagraph (D) and not less than 5.5 percent shall be 
     used for the purpose described in subparagraph (E):
       (A) Implementation and enforcement of building codes 
     adopted in compliance with section 201.
       (B) Implementation of the energy efficient manufactured 
     homes program established pursuant to section 203.
       (C) Implementation of the building energy performance 
     labeling program established pursuant to section 204.
       (D) Low-income community energy efficiency programs that 
     are consistent with the grant program established under 
     section 264 of this Act.
       (E) Implementation of the Retrofit for Energy and 
     Environmental Performance (REEP) program established pursuant 
     to section 202.
       (3) Not less than 20 percent shall be used exclusively for 
     capital grants, tax credits, production incentives, loans, 
     loan guarantees, forgivable loans, direct provision of 
     allowances, and interest rate buy-downs for--
       (A) re-equipping, expanding, or establishing a 
     manufacturing facility that receives certification from the 
     Secretary of Energy pursuant to section 1302 of the American 
     Recovery and Reinvestment Act of 2009 for the production of--
       (i) property designed to be used to produce energy from 
     renewable energy sources; and
       (ii) electricity storage systems;
       (B) deployment of technologies to generate electricity from 
     renewable energy sources; and
       (C) deployment of facilities or equipment, such as solar 
     panels, to generate electricity or thermal energy from 
     renewable energy resources in and on buildings in an urban 
     environment.
       (4) The remaining 47.5 percent shall be used exclusively 
     for any of the following purposes:
       (A) Energy efficiency purposes described in paragraph (2).
       (B) Renewable energy purposes described in paragraph (3)(B) 
     and (C).
       (C) Cost-effective energy efficiency programs for end-use 
     consumers of electricity, natural gas, home heating oil, or 
     propane, including, where appropriate, programs or mechanisms 
     administered by local governments and entities other than the 
     State.
       (D) Enabling the development of a Smart Grid (as described 
     in section 1301 of the Energy Independence and Security Act 
     of 2007 (42 U.S.C. 17381)) for State, local government, and 
     other public buildings and facilities, including integration 
     of renewable energy resources and distributed generation, 
     demand response, demand side management, and systems 
     analysis.
       (E) Providing the non-Federal share of support for surface 
     transportation capital projects under--
       (i) sections 5307, 5308, 5309, 5310, 5311 and 5319 of title 
     49, United States Code; and
       (ii) sections 142, 146, and 149 of title 23, United States 
     Code,
     provided that not more than 10 percent of allowances 
     distributed to each State pursuant to this section shall be 
     used for such purpose.

[[Page H7488]]

       (5) For any allowances used for the purpose described in 
     paragraph (4)(C), the State shall--
       (A) prioritize expansion of existing energy efficiency 
     programs approved and overseen by the State or the 
     appropriate State regulatory authority; and
       (B) demonstrate that such allowances have been used to 
     supplement, and not to supplant, existing and otherwise 
     available State, local, and ratepayer funding for such 
     purpose.
       (d) Reporting.--Each State receiving allowances under this 
     section shall include in its biennial reports required under 
     section 131, in accordance with such requirements as the 
     Administrator may prescribe
       (1) a list of entities receiving allowances or allowance 
     value under this section, including entities receiving such 
     allowances or allowance value from units of local government 
     pursuant to subsection (c)(1);
       (2) the amount and nature of allowances or allowance value 
     received by each such recipient;
       (3) the specific purposes for which such allowances or 
     allowance value was conveyed to each such recipient;
       (4) documentation of the amount of energy savings, emission 
     reductions, renewable energy deployment, and new or retooled 
     manufacturing capacity resulting from the use of such 
     allowances or allowance value; and
       (5) for any energy efficiency program supported under 
     subsection (c)(4)(C)--
       (A) an assessment demonstrating the cost-effectiveness of 
     such program; and
       (B) a demonstration that the requirements set forth in 
     subsection (c)(5) have been satisfied.
       (e) Enforcement.--If the Administrator determines that a 
     State is not in compliance with this section, the 
     Administrator may withhold up to twice the number of 
     allowances that the State failed to use in accordance with 
     the requirements of this section, that such State would 
     otherwise be eligible to receive under this section in later 
     years. Allowances withheld pursuant to this subsection shall 
     be distributed among the remaining States in accordance with 
     the requirements of subsection (b).

     SEC. 133. SUPPORT OF INDIAN RENEWABLE ENERGY AND ENERGY 
                   EFFICIENCY PROGRAMS.

       (a) Definitions.--For purposes of this section:
       (1) Allowance; cost-effective; renewable energy resource.--
     The terms ``allowance'', ``cost-effective'', and ``renewable 
     energy resource'' have the meaning given those terms in 
     section 132 of this Act.
       (2) 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).
       (3) Secretary.--The term ``Secretary'' means the Secretary 
     of Energy.
       (b) Establishment.--Not later than 18 months after the date 
     of enactment of this Act, the Secretary shall, in 
     consultation with the Administrator and the Secretary of the 
     Interior, promulgate regulations establishing a program to 
     distribute allowances to Indian tribes on a competitive basis 
     for the following purposes:
       (1) Energy efficiency.--Cost-effective energy efficiency 
     programs for end-use consumers of electricity, natural gas, 
     home heating oil, or propane.
       (2) Renewable energy.--Deployment of technologies to 
     generate electricity from renewable energy resources.
       (c) Requirements.--The regulations promulgated pursuant to 
     subsection (b) shall prescribe design elements and 
     requirements of the program established under this section, 
     including--
       (1) objective criteria for evaluating proposals submitted 
     by Indian tribes, and for selecting projects and programs to 
     receive support, under this section;
       (2) reporting requirements for Indian tribes that receive 
     allowances under this section; and
       (3) other appropriate elements and requirements.
       (d) Distribution.--The Administrator shall, at the 
     direction of the Secretary, distribute to Indian tribes 
     allowances that are set aside, pursuant to section 132, for 
     use under this section.

                   Subtitle E--Smart Grid Advancement

     SEC. 141. DEFINITIONS.

       For purposes of this subtitle:
       (1) The term ``applicable baseline'' means the average of 
     the highest three annual peak demands a load-serving entity 
     has experienced during the 5 years immediately prior to the 
     date of enactment of this Act.
       (2) The term ``Commission'' means Federal Energy Regulatory 
     Commission.
       (3) The term ``load-serving entity'' means an entity that 
     provides electricity directly to retail consumers with the 
     responsibility to assure power quality and reliability, 
     including such entities that are investor-owned, publicly 
     owned, owned by rural electric cooperatives, or other 
     entities.
       (4) The term ``peak demand'' means the highest point of 
     electricity demand, net of any distributed electricity 
     generation or storage from sources on the load-serving 
     entity's customers' premises, during any hour on the system 
     of a load serving entity during a calendar year, expressed in 
     Megawatts (MW), or more than one such high point as a 
     function of seasonal demand changes.
       (5) The term ``peak demand reduction'' means the reduction 
     in annual peak demand as compared to a previous baseline year 
     or period, expressed in Megawatts (MW), whether accomplished 
     by--
       (A) diminishing the end-use requirements for electricity;
       (B) use of locally stored energy or generated electricity 
     to meet those requirements from distributed resources on the 
     load-serving entity's customers' premises and without use of 
     high-voltage transmission; or
       (C) energy savings from efficient operation of the 
     distribution grid resulting from the use of a Smart Grid.
       (6) The term ``peak demand reduction plan'' means a plan 
     developed by or for a load-serving entity that it will 
     implement to meet its peak demand reduction goals.
       (7) The term ``peak period'' means the time period on the 
     system of a load-serving entity relative to peak demand that 
     may warrant special measures or electricity resources to 
     maintain system reliability while meeting peak demand.
       (8) The term ``Secretary'' means the Secretary of Energy.
       (9) The term ``Smart Grid'' has the meaning provided by 
     section 1301 of the Energy Independence and Security Act of 
     2007 (15 U.S.C. 17381).

     SEC. 142. ASSESSMENT OF SMART GRID COST EFFECTIVENESS IN 
                   PRODUCTS.

       (a) Assessment.--Within one year after the date of 
     enactment of this Act, the Secretary and the Administrator 
     shall each assess the potential for cost-effective 
     integration of Smart Grid technologies and capabilities in 
     all products that are reviewed by the Department of Energy 
     and the Environmental Protection Agency, respectively, for 
     potential designation as Energy Star products.
       (b) Analysis.--(1) Within 2 years after the date of 
     enactment of this Act, the Secretary and the Administrator 
     shall each prepare an analysis of the potential energy 
     savings, greenhouse gas emission reductions, and electricity 
     cost savings that could accrue for each of the products 
     identified by the assessment in subsection (a) in the 
     following optimal circumstances:
       (A) The products possessed Smart Grid capability and 
     interoperability that is tested and proven reliable.
       (B) The products were utilized in an electricity utility 
     service area which had Smart Grid capability and offered 
     customers rate or program incentives to use the products.
       (C) The utility's rates reflected national average costs, 
     including average peak and valley seasonal and daily 
     electricity costs.
       (D) Consumers using such products took full advantage of 
     such capability.
       (E) The utility avoided incremental investments and rate 
     increases related to such savings.
       (2) The analysis under paragraph (1) shall be considered 
     the ``best case'' Smart Grid analysis. On the basis of such 
     an analysis for each product, the Secretary and the 
     Administrator shall determine whether the installation of 
     Smart Grid capability for such a product would be cost 
     effective. For purposes of this paragraph, the term ``cost 
     effective'' means that the cumulative savings from using the 
     product under the best case Smart Grid circumstances for a 
     period of one-half of the product's expected useful life will 
     be greater than the incremental cost of the Smart Grid 
     features included in the product.
       (3) To the extent that including Smart Grid capability in 
     any products analyzed under paragraph (2) is found to be cost 
     effective in the best case, the Secretary and the 
     Administrator shall, not later than 3 years after the date of 
     enactment of this Act take each of the following actions:
       (A) Inform the manufacturer of such product of such finding 
     of cost effectiveness.
       (B) Assess the potential contributions the development and 
     use of products with Smart Grid technologies bring to 
     reducing peak demand and promoting grid stability.
       (C) Assess the potential national energy savings and 
     electricity cost savings that could be realized if Smart Grid 
     potential were installed in the relevant products reviewed by 
     the Energy Star program.
       (D) Assess and identify options for providing consumers 
     information on products with Smart Grid capabilities, 
     including the necessary conditions for cost-effective 
     savings.
       (E) Submit a report to Congress summarizing the results of 
     the assessment for each class of products, and presenting the 
     potential energy and greenhouse gas savings that could result 
     if Smart Grid capability were installed and utilized on such 
     products.

     SEC. 143. INCLUSIONS OF SMART GRID CAPABILITY ON APPLIANCE 
                   ENERGY GUIDE LABELS.

       Section 324(a)(2) of the Energy Policy and Conservation Act 
     (42 U.S.C. 6294(a)(2)) is amended by adding the following at 
     the end:
       ``(J)(i) Not later than 1 year after the date of enactment 
     of this subparagraph, the Federal Trade Commission shall 
     initiate a rulemaking to consider making a special note in a 
     prominent manner on any ENERGY GUIDE label for any product 
     actually including Smart Grid capability that--
       ``(I) Smart Grid capability is a feature of that product;
       ``(II) the use and value of that feature depended on the 
     Smart Grid capability of the utility system in which the 
     product was installed and the active utilization of that 
     feature by the customer; and
       ``(III) on a utility system with Smart Grid capability, the 
     use of the product's Smart Grid capability could reduce the 
     customer's cost of the product's annual operation by an

[[Page H7489]]

     estimated dollar amount range representing the result of 
     incremental energy and electricity cost savings that would 
     result from the customer taking full advantage of such Smart 
     Grid capability.
       ``(ii) Not later than 3 years after the date of enactment 
     of this subparagraph, the Commission shall complete the 
     rulemaking initiated under clause (i).''.

     SEC. 144. SMART GRID PEAK DEMAND REDUCTION GOALS.

       (a) Goals.--Not later than one year after the date of 
     enactment of this section, each load-serving entity, or, at 
     the option of the State, each State with respect to load-
     serving entities that the State regulates, shall determine 
     and publish peak demand reduction goals for any load-serving 
     entities that have an applicable baseline in excess of 250 
     megawatts.
       (b) Baselines.--(1) The Commission, in consultation with 
     the Secretary and the Administrator, shall develop and 
     publish, after an opportunity for public comment, but not 
     later than 180 days after enactment of this section, a 
     methodology to provide for adjustments or normalization to a 
     load-serving entity's applicable baseline over time to 
     reflect changes in the number of customers served, weather 
     conditions, general economic conditions, and any other 
     appropriate factors external to peak demand management, as 
     determined by the Commission.
       (2) The Commission shall support load-serving entities 
     (including any load-serving entities with an applicable 
     baseline of less than 250 megawatts that volunteer to 
     participate in achieving the purposes of this section) in 
     determining their applicable baselines, and in developing 
     their peak demand reduction goals.
       (3) The Secretary, in consultation with the Commission, the 
     Administrator, and the North American Electric Reliability 
     Corporation, shall develop a system and rules for measurement 
     and verification of demand reductions.
       (c) Peak Demand Reduction Goals.--(1) Peak demand reduction 
     goals may be established for an individual load-serving 
     entity, or, at the determination of a State, tribal, or 
     regional entity, by that State, tribal, or regional entity 
     for a larger region that shares a common system peak demand 
     and for which peak demand reduction measures would offer 
     regional benefit.
       (2) A State or regional entity establishing peak demand 
     reduction goals shall cooperate, as necessary and 
     appropriate, with the Commission, the Secretary, State 
     regulatory commissions, State energy offices, the North 
     American Electric Reliability Corporation, and other relevant 
     authorities.
       (3) In determining the applicable peak demand reduction 
     goals--
       (A) States and other jurisdictional entities may utilize 
     the results of the 2009 National Demand Response Potential 
     Assessment, as authorized by section 571 of the National 
     Energy Conservation Policy Act (42 U.S.C. 8279); and
       (B) the relative economics of peak demand reduction and 
     generation required to meet peak demand shall be evaluated in 
     a neutral and objective manner.
       (4) The applicable peak demand reduction goals shall 
     provide that--
       (A) load-serving entities will reduce or mitigate peak 
     demand by a minimum percentage amount from the applicable 
     baseline to a lower peak demand during calendar year 2012;
       (B) load-serving entities will reduce or mitigate peak 
     demand by a minimum percentage greater amount from the 
     applicable baseline to a lower peak demand during calendar 
     year 2015; and
       (C) the minimum percentage reductions established as peak 
     demand reduction goals shall be the maximum reductions that 
     are realistically achievable with an aggressive effort to 
     deploy Smart Grid and peak demand reduction technologies and 
     methods, including but not limited to those listed in 
     subsection (d).
       (d) Plan.--Each load-serving entity shall prepare a peak 
     demand reduction plan that demonstrates its ability to meet 
     each applicable goal by any or a combination of the following 
     options:
       (1) Direct reduction in megawatts of peak demand through--
       (A) energy efficiency measures (including efficient 
     transmission wire technologies which significantly reduce 
     line loss compared to traditional wire technology) with 
     reliable and continued application during peak demand 
     periods; or
       (B) use of a Smart Grid.
       (2) Demonstration that an amount of megawatts equal to a 
     stated portion of the applicable goal is contractually 
     committed to be available for peak reduction through one or 
     more of the following:
       (A) Megawatts enrolled in demand response programs.
       (B) Megawatts subject to the ability of a load-serving 
     entity to call on demand response programs, smart appliances, 
     smart electricity or energy storage devices, distributed 
     generation resources on the entity's customers' premises, or 
     other measures directly capable of actively, controllably, 
     reliably, and dynamically reducing peak demand (``dynamic 
     peak management control'').
       (C) Megawatts available from distributed dynamic 
     electricity or energy storage under agreement with the owner 
     of that storage.
       (D) Megawatts committed from dispatchable distributed 
     generation demonstrated to be reliable under peak period 
     conditions and in compliance with air quality regulations.
       (E) Megawatts available from smart appliances and equipment 
     with Smart Grid capability available for direct control by 
     the utility through agreement with the customer owning the 
     appliances or equipment or with a third party pursuant to 
     such agreements.
       (F) Megawatts from a demonstrated and assured minimum of 
     distributed solar electric generation capacity in instances 
     where peak period and peak demand conditions are directly 
     related to solar radiation and accompanying heat.
       (3) If any of the methods listed in subparagraph (C), (D), 
     or (E) of paragraph (2) are relied upon to meet its peak 
     demand reduction goals, the load-serving entity must 
     demonstrate this capability by operating a test during the 
     applicable calendar year.
       (4) Nothing in this section shall require the publication 
     in peak demand reduction goals or in any peak demand 
     reduction plan of any information that is confidential for 
     competitive or other reasons or that identifies individual 
     customers.
       (e) Existing Authority and Requirements.--Nothing in this 
     section diminishes or supersedes any authority of a State or 
     political subdivision of a State to adopt or enforce any law 
     or regulation respecting peak demand management, demand 
     response, distributed energy storage, use of distributed 
     generation, or the regulation of load-serving entities. The 
     Commission, in consultation with States and Indian tribes 
     having such peak management, demand response and distributed 
     energy storage programs, shall to the maximum extent 
     practicable, facilitate coordination between the Federal 
     program and such State and tribal programs.
       (f) Relief.--The Commission may, for good cause, grant 
     relief to load-serving entities from the requirements of this 
     section.
       (g) Other Laws.--Except as provided in subsections (e) and 
     (f), no law or regulation shall relieve any person of any 
     requirement otherwise applicable under this section.
       (h) Compliance.--(1) The Commission shall within one year 
     after the date of enactment of this Act establish a public 
     website where the Commission will provide information and 
     data demonstrating compliance by States, Indian tribes 
     regional entities, and load-serving entities with this 
     section, including the success of load-serving entities in 
     meeting applicable peak demand reduction goals.
       (2) The Commission shall, by April 1 of each year beginning 
     in 2012, provide a report to Congress on compliance with this 
     section and success in meeting applicable peak demand 
     reduction goals and, as appropriate, shall make 
     recommendations as to how to increase peak demand reduction 
     efforts.
       (3) The Commission shall note in each such report any 
     State, political subdivision of a State, or load-serving 
     entity that has failed to comply with this section, or is not 
     a part of any region or group of load-serving entities 
     serving a region that has complied with this section.
       (4) The Commission shall have and exercise the authority to 
     take reasonable steps to modify the process of establishing 
     peak demand reduction goals and to accept adjustments to them 
     as appropriate when sought by load-serving entities.
       (i) Assistance and Funding.--
       (1) Assistance to states and tribes.--Any costs incurred by 
     States for activities undertaken pursuant to this section 
     shall be supported by the use of emission allowances 
     allocated to the States' SEED Accounts or to the tribes 
     pursuant to section 132 of this Act. To the extent that a 
     State provides allowances to local governments within the 
     State to implement this program, that shall be deemed a 
     distribution of such allowances to units of local government 
     pursuant to subsection (c)(1) of that section.
       (2) Funding.--There are authorized to be appropriated such 
     sums as may be necessary to the Commission, the Secretary, 
     and the Administrator to carry out the provisions of this 
     section.

     SEC. 145. REAUTHORIZATION OF ENERGY EFFICIENCY PUBLIC 
                   INFORMATION PROGRAM TO INCLUDE SMART GRID 
                   INFORMATION.

       (a) In General.--Section 134 of the Energy Policy Act of 
     2005 (42 U.S.C. 15832) is amended as follows:
       (1) By amending the section heading to read as follows: 
     ``ENERGY EFFICIENCY AND SMART GRID PUBLIC INFORMATION 
     INITIATIVE''.
       (2) In paragraph (1) of subsection (a) by striking ``reduce 
     energy consumption during the 4-year period beginning on the 
     date of enactment of this Act'' and inserting ``increase 
     energy efficiency and to adopt Smart Grid technology and 
     practices''.
       (3) In paragraph (2) of subsection (a) by striking 
     ``benefits to consumers of reducing'' and inserting 
     ``economic and environmental benefits to consumers and the 
     United States of optimizing''.
       (4) In subsection (a) by inserting at the beginning of 
     paragraph (3) ``the effect of energy efficiency and Smart 
     Grid capability in reducing energy and electricity prices 
     throughout the economy, together with''.
       (5) In subsection (a)(4) by redesignating subparagraph (D) 
     as (E), by striking ``and'' at the end of subparagraph (C), 
     and by inserting after subparagraph (C) the following:
       ``(D) purchasing and utilizing equipment that includes 
     Smart Grid features and capability; and''.
       (6) In subsection (c), by striking ``Not later than July 1, 
     2009,'' and inserting, ``For each year when appropriations 
     pursuant to the authorization in this section exceed 
     $10,000,000,''.

[[Page H7490]]

       (7) In subsection (d) by striking ``2010'' and inserting 
     ``2020''.
       (8) In subsection (e) by striking ``2010'' and inserting 
     ``2020''.
       (b) Table of Contents.--The item relating to section 134 in 
     the table of contents for the Energy Policy Act of 2005 (42 
     U.S.C. 15801 and following) is amended to read as follows:

``Sec. 134. Energy efficiency and Smart Grid public information 
              initiative.''.

     SEC. 146. INCLUSION OF SMART GRID FEATURES IN APPLIANCE 
                   REBATE PROGRAM.

       (a) Amendments.--Section 124 of the Energy Policy Act of 
     2005 (42 U.S.C. 15821) is amended as follows:
       (1) By amending the section heading to read as follows: 
     ``ENERGY EFFICIENT AND SMART APPLIANCE REBATE PROGRAM.''.
       (2) By redesignating paragraphs (4) and (5) of subsection 
     (a) as paragraphs (5) and (6), respectively, and inserting 
     after paragraph (3) the following:
       ``(4) Smart appliance.--The term `smart appliance' means a 
     product that the Administrator of the Environmental 
     Protection Agency or the Secretary of Energy has determined 
     qualifies for such a designation in the Energy Star program 
     pursuant to section 142 of the American Clean Energy and 
     Security Act of 2009, or that the Secretary or the 
     Administrator has separately determined includes the relevant 
     Smart Grid capabilities listed in section 1301 of the Energy 
     Independence and Security Act of 2007 (15 U.S.C. 17381).''.
       (3) In subsection (b)(1) by inserting ``and smart'' after 
     ``efficient'' and by inserting after ``products'' the first 
     place it appears ``, including products designated as being 
     smart appliances''.
       (4) In subsection (b)(3), by inserting ``the administration 
     of'' after ``carry out''.
       (5) In subsection (d), by inserting ``the administration 
     of'' after ``carrying out'' and by inserting ``, and up to 
     100 percent of the value of the rebates provided pursuant to 
     this section'' before the period at the end.
       (6) In subsection (e)(3), by inserting ``, with separate 
     consideration as applicable if the product is also a smart 
     appliance,'' after ``Energy Star product'' the first place it 
     appears and by inserting ``or smart appliance'' before the 
     period at the end.
       (7) In subsection (f), by striking ``$50,000,000'' through 
     the period at the end and inserting ``$100,000,000 for each 
     fiscal year from 2010 through 2015.''.
       (b) Table of Contents.--The item relating to section 124 in 
     the table of contents for the Energy Policy Act of 2005 (42 
     U.S.C. 15801 and following) is amended to read as follows:

``Sec. 124. Energy efficient and smart appliance rebate program.''.

                   Subtitle F--Transmission Planning

     SEC. 151. TRANSMISSION PLANNING AND SITING.

       (a) In General.--Section 216 of the Federal Power Act (16 
     U.S.C. 824p) is amended as follows:
       (1) In subsection (b), in paragraph (5), by striking ``; 
     and'' and inserting a semicolon, in paragraph (6) by striking 
     the period and inserting ``; and'' and by adding the 
     following at the end thereof:
       ``(7) the facility is interstate in nature or is an 
     intrastate segment integral to a proposed interstate 
     facility;''.
       (2) In subsection (k), by inserting at the end the 
     following: ``Subsections (a), (b), (c), and (h) of this 
     section shall not apply in the Western interconnection.''.
       (3) In subsections (d) and (e), by striking ``subsection 
     (b)'' in each place and inserting ``subsection (b) or section 
     216B'', and by striking ``permit'' and inserting ``permit or 
     certificate'' in each place it appears.
       (b) New Sections.--The Federal Power Act (16 U.S.C. 824p) 
     is amended by inserting the following new sections after 
     section 216:

     ``SEC. 216A TRANSMISSION PLANNING.

       ``(a) Federal Policy for Transmission Planning.--
       ``(1) Objectives.--It is the policy of the United States 
     that regional electric grid planning should facilitate the 
     deployment of renewable and other zero-carbon and low-carbon 
     energy sources for generating electricity to reduce 
     greenhouse gas emissions while ensuring reliability, reducing 
     congestion, ensuring cyber-security, minimizing environmental 
     harm, and providing for cost-effective electricity services 
     throughout the United States, in addition to serving the 
     objectives stated in section 217(b)(4).
       ``(2) Options.--In addition to the policy under paragraph 
     (1), it is the policy of the United States that regional 
     electric grid planning to meet these objectives should result 
     from an open, inclusive and transparent process, taking into 
     account all significant demand-side and supply-side options, 
     including energy efficiency, distributed generation, 
     renewable energy and zero-carbon electricity generation 
     technologies, smart-grid technologies and practices, demand 
     response, electricity storage, voltage regulation 
     technologies, high capacity conductors with at least 25 
     percent greater efficiency than traditional ACSR (aluminum 
     stranded conductors steel reinforced) conductors, 
     superconductor technologies, underground transmission 
     technologies, and new conventional electric transmission 
     capacity and corridors.
       ``(b) Planning.--
       ``(1) Planning principles.--Not later than 1 year after the 
     date of enactment of this section, the Commission shall 
     adopt, after notice and opportunity for comment, national 
     electricity grid planning principles derived from the Federal 
     policy established under subsection (a) to be applied in 
     ongoing and future transmission planning that may implicate 
     interstate transmission of electricity.
       ``(2) Regional planning entities.--Not later than 3 months 
     after the date of adoption by the Commission of national 
     electricity grid planning principles pursuant to paragraph 
     (1), entities that conduct or may conduct transmission 
     planning pursuant to State, tribal, or Federal law or 
     regulation, including States, Indian tribes, entities 
     designated by States and Indian tribes, Federal Power 
     Marketing Administrations, transmission providers, operators 
     and owners, regional organizations, and electric utilities, 
     and that are willing to incorporate the national electricity 
     grid planning principles adopted by the Commission in their 
     electric grid planning, shall identify themselves and the 
     regions for which they propose to develop plans to the 
     Commission.
       ``(3) Coordination of regional planning entities.--The 
     Commission shall encourage regional planning entities 
     described under paragraph (2) to cooperate and coordinate 
     across regions and to harmonize regional electric grid 
     planning with planning in adjacent or overlapping 
     jurisdictions to the maximum extent feasible. The Commission 
     shall work with States, Indian tribes, Federal land 
     management agencies, State energy, environment, natural 
     resources, and land management agencies and commissions, 
     Federal power marketing administrations, electric utilities, 
     transmission providers, load-serving entities, transmission 
     operators, regional transmission organizations, independent 
     system operators, and other organizations to resolve any 
     conflict or competition among proposed planning entities in 
     order to build consensus and promote the Federal policy 
     established under subsection (a). The Commission shall seek 
     to ensure that planning that is consistent with the national 
     electricity grid planning principles adopted pursuant to 
     paragraph (1) is conducted in all regions of the United 
     States and the territories, but in a manner that, to the 
     extent feasible, avoids uncoordinated planning by more than 
     one planning entity for the same area.
       ``(4) Relation to existing planning policy.--In 
     implementing the Federal policy established under subsection 
     (a), the Commission shall
       ``(A) incorporate and coordinate with any ongoing planning 
     efforts undertaken pursuant to section 217 and Commission 
     Order No. 890;
       ``(B) coordinate with the Secretary of Energy in providing 
     to the regional planning entities an annual summary of 
     national energy policy priorities and goals;
       ``(C) coordinate with corridor designation and planning 
     functions carried out pursuant to section 216 by the 
     Secretary of Energy, who shall provide financial support from 
     available funds to support the purposes of this section; and
       ``(D) coordinate with the Secretaries of the Interior and 
     Agriculture and Indian tribes in carrying out the 
     Secretaries' or tribal governments' existing responsibilities 
     for the planning or siting of transmission facilities on 
     Federal or tribal lands, consistent with law, policy, and 
     regulations relating to the management of federal public 
     lands .
       ``(5) Assistance.--
       ``(A) In general.--The Commission shall provide support to 
     and may participate if invited to do so in the regional grid 
     planning processes conducted by regional planning entities. 
     The Secretary of Energy and the Commission may provide 
     planning resources and assistance as required or as requested 
     by regional planning entities, including system data, cost 
     information, system analysis, technical expertise, modeling 
     support, dispute resolution services, and other assistance to 
     regional planning entities, as appropriate.
       ``(B) Authorization.--There are authorized to be 
     appropriated such sums as may be necessary to carry out this 
     paragraph.
       ``(6) Conflict resolution.--In the event that regional grid 
     plans conflict, the Commission shall assist the regional 
     planning entities in resolving such conflicts in order to 
     achieve the objectives of the Federal policy established 
     under subsection (a).
       ``(7) Submission of plans.--The Commission shall require 
     regional planning entities to submit initial regional 
     electric grid plans to the Commission not later than 18 
     months after the date the Commission promulgates national 
     electricity grid planning principles pursuant to paragraph 
     (1), with updates to such plans not less than every 3 years 
     thereafter. The Commission shall review such plans for 
     consistency with the national grid planning principles and 
     may return a plan to one or more planning entities for 
     further consideration, along with the Commission's own 
     recommendations for resolution of any conflict or for 
     improvement.
       ``(8) Integration of plans.--Regional electric grid plans 
     should, in general, be developed from sub-regional 
     requirements and plans, including planning input reflecting 
     individual utility service areas. Regional plans may then in 
     turn be combined into larger regional plans, up to 
     interconnection-wide and national plans, as appropriate and 
     necessary as determined by the Commission. In no case shall a 
     multi-regional plan impose inclusion of a facility on a 
     region that has submitted a valid plan that, after efforts to 
     resolve the conflict, does not include such facility. To the 
     extent practicable, all plans submitted to the Commission 
     shall be public documents and available on the Commission's 
     Web site.
       ``(9) Multi-regional meetings.--As regional grid plans are 
     submitted to the Commission, the Commission may convene 
     multi-regional meetings to discuss regional

[[Page H7491]]

     grid plan consistency and integration, including requirements 
     for multi-regional projects, and to resolve any conflicts 
     that emerge from such multi-regional projects. The Commission 
     shall provide its recommendations for eliminating any inter-
     regional conflicts.
       ``(10) Report to congress.--Not later than 3 years after 
     the date of enactment of this section and each 3 years 
     thereafter, the Commission shall provide a report to Congress 
     containing the results of the regional grid planning process, 
     including summaries of the adopted regional plans and the 
     extent to which the Federal policy objectives in subsection 
     (a) have been successfully achieved. The Commission shall 
     provide an electronic version of its report on its website 
     with links to all regional and sub-regional plans taken into 
     account. The Commission shall note and provide its 
     recommended resolution for any conflicts not resolved during 
     the planning process. The Commission shall make any 
     recommendations to Congress on the appropriate Federal role 
     or support required to address the needs of the electric 
     grid, including recommendations for addressing any needs that 
     are beyond the reach of existing State, tribal, and Federal 
     authority.

     ``SEC. 216B. SITING AND CONSTRUCTION IN THE WESTERN 
                   INTERCONNECTION.

       ``(a) Applicability.--This section applies only to States 
     located in the Western Interconnection and does not apply to 
     States located in the Eastern Interconnection, to the States 
     of Alaska or Hawaii, or to ERCOT.
       ``(b) Certificate of Public Convenience and Necessity.--The 
     Commission may, after notice and opportunity for hearing, 
     issue a certificate of public convenience and necessity for 
     the construction or modification of a transmission facility 
     if the Commission finds that--
       ``(1) the facility was identified and included in one or 
     more relevant and final regional or interconnection-wide 
     electric grid plans submitted to the Commission pursuant to 
     subsection (b) of 216A;
       ``(2) any conflict among regional electric grid plans 
     concerning the need for the facility was resolved;
       ``(3) such relevant regional electric grid plans are 
     consistent with the national grid planning principles adopted 
     by the Commission pursuant to subsection (b);
       ``(4) the facility was identified as needed in significant 
     measure to meet demand for renewable energy in such plans;
       ``(5) the facility is a multistate facility;
       ``(6) the developer of such facility filed a complete 
     application seeking approval for the siting of the facility 
     with a state commission or other entity that has authority to 
     approve the siting of the facility;
       ``(7) a State commission or other entity that has authority 
     to approve the siting of the facility--
       ``(A) did not issue a decision on an application seeking 
     approval for the siting of the facility within 1 year after 
     the date the applicant submitted a completed application to 
     the State;
       ``(B) denied a complete application seeking approval for 
     the siting of the facility; or
       ``(C) authorized the siting of the facility subject to 
     conditions that unreasonably interfere with the development 
     of the facility; and
       ``(8) the siting of the facility can be accomplished in a 
     manner consistent with the Federal policy established in 
     subsection (a) of section 216A and the national grid planning 
     principles adopted by the Commission pursuant to subsection 
     (b) of section 216A.
       ``(c) State Recommendations on Resource Protection.--In 
     issuing a final certificate of public convenience and 
     necessity pursuant to subsection (b), the Commission shall--
       ``(1) consider any siting constraints and mitigation 
     measures based on habitat protection, health and safety 
     considerations, environmental considerations, or cultural 
     site protection identified by relevant State or local 
     authorities; and
       ``(2) incorporate those identified siting constraints or 
     mitigation measures, including recommendations related to 
     project routing, as conditions in the final certificate of 
     public convenience and necessity, or if the Commission 
     determines that a recommended siting constraint or mitigation 
     measure is infeasible, excessively costly, or inconsistent 
     with the Federal policy established in subsection (a) of 
     section 216A or the national grid planning principles adopted 
     by the Commission pursuant to subsection (b) of section 
     216A--
       ``(A) consult with State regulatory agencies to seek to 
     resolve the issue;
       ``(B) incorporate as conditions on the certificate such 
     recommended siting constraints or mitigation measures as are 
     determined to be appropriate by the Commission, based on 
     consultation by the Commission with State regulatory 
     agencies, the Federal policy established in subsection (a) of 
     section 216A and the national grid planning principles 
     adopted by the Commission pursuant to subsection (b)of 
     section 216A, and the record before the Commission; and
       ``(C) if, after consultation, the Commission does not adopt 
     in whole or in part a recommendation of an agency, publish a 
     finding that the adoption of the recommendation is 
     infeasible, not cost effective, or inconsistent with this 
     section or other applicable provisions of law.
       ``(d) Certificate Applications.--(1) An application for a 
     preliminary or final certificate of public convenience and 
     necessity under this subsection shall be made in writing to 
     the Commission.
       ``(2) The Commission shall issue rules specifying--
       ``(A) the form of the application;
       ``(B) the information to be contained in the application; 
     and
       ``(C) the manner of service of notice of the application on 
     interested persons.
       ``(e) Coordination of Federal Authorizations for 
     Transmission Facilities.--
       ``(1) In this subsection, the term `Federal authorization' 
     shall have the same meaning and include the same actions as 
     in section 216(h).
       ``(2) The Federal Energy Regulatory Commission shall act as 
     the lead agency for purposes of coordinating all applicable 
     Federal authorizations and related environmental reviews of 
     the facility, provided, however, that to the extent the 
     facility is proposed to be sited on Federal lands, the 
     Department of the Interior will assume such lead-agency 
     duties as agreed between the Commission and the Department of 
     Interior.
       ``(3) To the maximum extent practicable under applicable 
     Federal law, the Commission, and to the extent agreed, the 
     Secretary of Interior, shall coordinate the Federal 
     authorization and review process under this subsection with 
     any Indian tribes, multistate entities, and State agencies 
     that are responsible for conducting any separate permitting 
     and environmental reviews of the facility, to ensure timely 
     and efficient review and permit decisions.
       ``(4)(A) As head of the lead agency, the Chairman of the 
     Commission, in consultation with the Secretary of Interior 
     and with those entities referred to in paragraph (3) that are 
     willing to coordinate their own separate permitting and 
     environmental reviews with the Federal authorization and 
     environmental reviews, shall establish prompt and binding 
     intermediate milestones and ultimate deadlines for the review 
     of, and Federal authorization decisions relating to, the 
     proposed facility.
       ``(B) The Chairman of the Commission, or the Secretary of 
     Interior, as agreed under paragraph (2), shall ensure that, 
     once an application has been submitted with such data as the 
     lead agency considers necessary, all permit decisions and 
     related environmental reviews under all applicable Federal 
     laws shall be completed--
       ``(i) within 1 year; or
       ``(ii) if a requirement of another provision of Federal law 
     does not permit compliance with clause (i), as soon 
     thereafter as is practicable.
       ``(C) The Commission shall provide an expeditious pre-
     application mechanism for prospective applicants to confer 
     with the agencies involved to have each such agency determine 
     and communicate to the prospective applicant not later than 
     60 days after the prospective applicant submits a request for 
     such information concerning--
       ``(i) the likelihood of approval for a potential facility; 
     and
       ``(ii) key issues of concern to the agencies and public.
       ``(5)(A) As lead agency head, the Chairman of the 
     Commission, in consultation with the affected agencies, shall 
     prepare a single environmental review document, which shall 
     be used as the basis for all decisions on the proposed 
     project under Federal law.
       ``(B) The Chairman of the Commission and the heads of other 
     agencies shall streamline the review and permitting of 
     transmission within corridors designated under section 503 of 
     the Federal Land Policy and Management Act (43 U.S.C. 1763) 
     by fully taking into account prior analyses and decisions 
     relating to the corridors.
       ``(C) The document shall include consideration by the 
     relevant agencies of any applicable criteria or other matters 
     as required under applicable law.
       ``(6)(A) If any agency has denied a Federal authorization 
     required for a transmission facility, or has failed to act by 
     the deadline established by the Commission pursuant to this 
     section for deciding whether to issue the authorization, the 
     applicant or any State in which the facility would be located 
     may file an appeal with the President, who shall, in 
     consultation with the affected agency, review the denial or 
     failure to take action on the pending application.
       ``(B) Based on the overall record and in consultation with 
     the affected agency, the President may--
       ``(i) issue the necessary authorization with any 
     appropriate conditions; or
       ``(ii) deny the application.
       ``(C) The President shall issue a decision not later than 
     90 days after the date of the filing of the appeal.
       ``(D) In making a decision under this paragraph, the 
     President shall comply with applicable requirements of 
     Federal law, including any requirements of--
       ``(i) the National Forest Management Act of 1976 (16 U.S.C. 
     472a et seq.);
       ``(ii) the Endangered Species Act of 1973 (16 U.S.C. 1531 
     et seq.);
       ``(iii) the Federal Water Pollution Control Act (33 U.S.C. 
     1251 et seq.);
       ``(iv) the National Environmental Policy Act of 1969 (42 
     U.S.C. 4321 et seq.); and
       ``(v) the Federal Land Policy and Management Act of 1976 
     (43 U.S.C. 1701 et seq.).
       ``(7)(A) Not later than 18 months after August 8, 2005, the 
     Commission or, as requested, the Secretary or Interior, shall 
     issue any regulations necessary to implement this subsection.
       ``(B)(i) Not later than 1 year after August 8, 2005, the 
     Commission, the Secretary of Interior, and the heads of all 
     Federal agencies

[[Page H7492]]

     with authority to issue Federal authorizations shall enter 
     into a memorandum of understanding to ensure the timely and 
     coordinated review and permitting of electricity transmission 
     facilities.
       ``(ii) Interested Indian tribes, multistate entities, and 
     State agencies may enter the memorandum of understanding.
       ``(C) The head of each Federal agency with authority to 
     issue a Federal authorization shall designate a senior 
     official responsible for, and dedicate sufficient other staff 
     and resources to ensure, full implementation of the 
     regulations and memorandum required under this paragraph.
       ``(8)(A) Each Federal land use authorization for an 
     electricity transmission facility shall be issued--
       ``(i) for a duration, as determined by the Secretary of 
     Interior, commensurate with the anticipated use of the 
     facility; and
       ``(ii) with appropriate authority to manage the right-of-
     way for reliability and environmental protection.
       ``(B) On the expiration of the authorization (including an 
     authorization issued before August 8, 2005), the 
     authorization shall be reviewed for renewal taking fully into 
     account reliance on such electricity infrastructure, 
     recognizing the importance of the authorization for public 
     health, safety, and economic welfare and as a legitimate use 
     of Federal land.
       ``(9) In exercising the responsibilities under this 
     section, the Commission shall consult regularly with--
       ``(A) electric reliability organizations (including related 
     regional entities) approved by the Commission; and
       ``(B) Transmission Organizations approved by the 
     Commission.''.

     SEC. 152. NET METERING FOR FEDERAL AGENCIES.

       (a) Standard.--Subsection (b) of section 113 of the Public 
     Utility Regulatory Policies Act of 1978 (16 U.S.C. 2623) is 
     amended by adding the following new paragraph at the end 
     thereof:
       ``(6) Net metering for federal agencies.--Each electric 
     utility shall offer to arrange (either directly or through a 
     third party) to make interconnection and net metering 
     available to Federal Government agencies, offices, or 
     facilities in accordance with the requirements of section 
     115(j). The standard under this paragraph shall apply only to 
     electric utilities that sold over 4,000,000 megawatt hours of 
     electricity in the preceding year to the ultimate consumers 
     thereof. In the case of a standard under this paragraph, a 
     period of 1 year after the date of the enactment of this 
     section shall be substituted for the 2-year period referred 
     to in other provisions of this section.''.
       (b) Special Rules.--Section 115 of the Public Utility 
     Regulatory Policies Act of 1978 (16 U.S.C. 2625) is amended 
     by adding the following new subsection at the end thereof:
       ``(j) Net Metering for Federal Agencies.--(1) The standard 
     under paragraph (6) of section 113(b) shall require that 
     rates and charges and contract terms and conditions for the 
     sale of electric energy to the Federal Government or agency 
     shall be the same as the rates and charges and contract terms 
     and conditions that would be applicable if the agency did not 
     own or operate a qualified generation unit and use a net 
     metering system.
       ``(2)(A) The standard under paragraph (6) of section 113(b) 
     shall require that each electric utility shall arrange to 
     provide to the Government office or agency that qualifies for 
     net metering an electrical energy meter capable of net 
     metering and measuring, to the maximum extent practicable, 
     the flow of electricity to or from the customer, using a 
     single meter and single register, the cost of which shall be 
     recovered from the customer.
       ``(B) In a case in which it is not practicable to provide a 
     meter under subparagraph (A), the utility (either directly or 
     through a third party) shall, at the expense of the utility 
     install 1 or more of those electric energy meters.
       ``(3)(A) The standard under paragraph (6) of section 113(b) 
     shall require that each electric utility shall calculate the 
     electric energy consumption for the Government office or 
     agency using a net metering system that meets the 
     requirements of this subsection and paragraph (6) of section 
     113(b) and shall measure the net electricity produced or 
     consumed during the billing period using the metering 
     installed in accordance with this paragraph.
       ``(B) If the electricity supplied by the retail electric 
     supplier exceeds the electricity generated by the Government 
     office or agency during the billing period, the Government 
     office or agency shall be billed for the net electric energy 
     supplied by the retail electric supplier in accordance with 
     normal billing practices.
       ``(C) If electric energy generated by the Government office 
     or agency exceeds the electric energy supplied by the retail 
     electric supplier during the billing period, the Government 
     office or agency shall be billed for the appropriate customer 
     charges for that billing period and credited for the excess 
     electric energy generated during the billing period, with the 
     credit appearing as a kilowatt-hour credit on the bill for 
     the following billing period.
       ``(D) Any kilowatt-hour credits provided to the Government 
     office or agency as provided in this subsection shall be 
     applied to the Government office or agency electric energy 
     consumption on the following billing period bill (except for 
     a billing period that ends in the next calendar year). At the 
     beginning of each calendar year, any unused kilowatt-hour 
     credits remaining from the preceding year will carry over to 
     the new year.
       ``(4) The standard under paragraph (6) of section 113(b) 
     shall require that each electric utility shall offer a meter 
     and retail billing arrangement that has time-differentiated 
     rates. The kilowatt-hour credit shall be based on the ratio 
     representing the difference in retail rates for each time-of-
     use rate, or the credits shall be reflected on the bill of 
     the Government office or agency as a monetary credit 
     reflecting retail rates at the time of generation of the 
     electric energy by the customer-generator.
       ``(5) The standard under paragraph (6) of section 113(b) 
     shall require that the qualified generation unit, 
     interconnection standards, and net metering system used by 
     the Government office or agency shall meet all applicable 
     safety and performance and reliability standards established 
     by the National Electrical Code, the Institute of Electrical 
     and Electronics Engineers, Underwriters Laboratories, and the 
     American National Standards Institute.
       ``(6) The standard under paragraph (6) of section 113(b) 
     shall require that electric utilities shall not make 
     additional charges, including standby charges, for equipment 
     or services for safety or performance that are in addition to 
     those necessary to meet the other standards and requirements 
     of this subsection and paragraph (6) of section 113(b).
       ``(7) For purposes of this subsection and paragraph (6) of 
     section 113(b):
       ``(A) The term `Government' means any office, facility, or 
     agency of the Federal Government.
       ``(B) The term `customer-generator' means the owner or 
     operator of a electricity generation unit.
       ``(C) The term `electric generation unit' means any 
     renewable electric generation unit that is owned, operated, 
     or sited on a Federal Government facility.
       ``(D) The term `net metering' means the process of--
       ``(i) measuring the difference between the electricity 
     supplied to a customer-generator and the electricity 
     generated by the customer-generator that is delivered to a 
     utility at the same point of interconnection during an 
     applicable billing period; and
       ``(ii) providing an energy credit to the customer-generator 
     in the form of a kilowatt-hour credit for each kilowatt-hour 
     of electricity produced by the customer-generator from an 
     electric generation unit.''.
       (c) Savings Provision.--If this section or a portion of 
     this section is determined to be invalid or unenforceable, 
     that shall not affect the validity or enforceability of any 
     other provision of this Act.

     SEC. 153. SUPPORT FOR QUALIFIED ADVANCED ELECTRIC 
                   TRANSMISSION MANUFACTURING PLANTS, QUALIFIED 
                   HIGH EFFICIENCY TRANSMISSION PROPERTY, AND 
                   QUALIFIED ADVANCED ELECTRIC TRANSMISSION 
                   PROPERTY.

       (a) Loan Guarantees Prior to September 30, 2011.--Section 
     1705(a) of the Energy Policy Act of 2005 (42 U.S.C. 
     16515(a)), as added by section 406 of the American Recovery 
     and Reinvestment Act of 2009 (Public Law 109-58; 119 Stat. 
     594) is amended by adding the following new paragraph at the 
     end thereof:
       ``(5) The development, construction, acquisition, 
     retrofitting, or engineering integration of a qualified 
     advanced electric transmission manufacturing plant or the 
     construction of a qualified high efficiency transmission 
     property or a qualified advanced electric transmission 
     property (whether by construction of new facilities or the 
     modification of existing facilities). For purposes of this 
     paragraph:
       ``(A) The term `qualified advanced electric transmission 
     property' means any high voltage electric transmission cable, 
     related substation, converter station, or other integrated 
     facility that--
       ``(i) utilizes advanced ultra low resistance 
     superconductive material or other advanced technology that 
     has been determined by the Secretary of Energy as--

       ``(I) reasonably likely to become commercially viable 
     within 10 years after the date of enactment of this 
     paragraph;
       ``(II) capable of reliably transmitting at least 5 
     gigawatts of high-voltage electric energy for distances 
     greater than 300 miles with energy losses not exceeding 3 
     percent of the total power transported; and
       ``(III) not creating an electromagnetic field;

       ``(ii) has been determined by an appropriate energy 
     regulatory body, upon application, to be in the public 
     interest and thereby eligible for inclusion in regulated 
     rates; and
       ``(iii) can be located safely and economically in a 
     permanent underground right of way not to exceed 25 feet in 
     width.

     The term `qualified advanced electric transmission property' 
     shall not include any property placed in service after 
     December 31, 2016.
       ``(B)(i) The term `qualified high efficiency transmission 
     property' means any high voltage overhead electric 
     transmission line, related substation, or other integrated 
     facility that--
       ``(I) utilizes advanced conductor core technology that--

       ``(aa) has been determined by the Secretary of Energy as 
     reasonably likely to become commercially viable within 10 
     years after the date of enactment of this paragraph;

[[Page H7493]]

       ``(bb) is suitable for use on transmission lines up to 
     765kV; and
       ``(cc) exhibits power losses at least 30 percent lower than 
     that of transmission lines using conventional `ACSR' 
     conductors;

       ``(II) has been determined by an appropriate energy 
     regulatory body, upon application, to be in the public 
     interest and thereby eligible for inclusion in regulated 
     rates; and
       ``(III) can be located safely and economically in a right 
     of way not to exceed that used by conventional `ACSR' 
     conductors; and
       ``(ii) The term `qualified high efficiency transmission 
     property' shall not include any property placed in service 
     after December 31, 2016.
       ``(C) The term `qualified advanced electric transmission 
     manufacturing plant' means any industrial facility located in 
     the United States which can be equipped, re-equipped, 
     expanded, or established to produce in whole or in part 
     qualified advanced electric transmission property.''.
       (b) Additional Loan Guarantee Authority.--Section 1703 of 
     the Energy Policy Act of 2005 (42 U.S.C. 16513) is amended by 
     adding the following new paragraph at the end of subsection 
     (b):
       ``(12) The development, construction, acquisition, 
     retrofitting, or engineering integration of a qualified 
     advanced electric transmission manufacturing plant or the 
     construction of a qualified advanced electric transmission 
     property (whether by construction of new facilities or the 
     modification of existing facilities). For purposes of this 
     paragraph, the terms `qualified advanced electric 
     transmission property' and `qualified advanced electric 
     transmission manufacturing plant' have the meanings provided 
     by section 1705(a)(5).''.
       (c) Grants.--The Secretary of Energy is authorized to 
     provide grants for up to 50 percent of costs incurred in 
     connection with the development, construction, acquisition of 
     components for, or engineering of a qualified advanced 
     electric transmission property defined in paragraph (5) of 
     section 1705(a) of the Energy Policy Act of 2005 (42 U.S.C. 
     16515(a)). Such grants may only be made to the first project 
     which qualifies under that paragraph. There are authorized to 
     be appropriated for purposes of this subsection not more than 
     $100,000,000 for fiscal year 2010. The United States shall 
     take no equity or other ownership interest in the qualified 
     advanced electric transmission manufacturing plant or 
     qualified advanced electric transmission property for which 
     funding is provided under this subsection.

            Subtitle G--Technical Corrections to Energy Laws

     SEC. 161. TECHNICAL CORRECTIONS TO ENERGY INDEPENDENCE AND 
                   SECURITY ACT OF 2007.

       (a) Title III--Energy Savings Through Improved Standards 
     for Appliance and Lighting.--(1) Section 325(u) of the Energy 
     Policy and Conservation Act (42 U.S.C. 6295(u)) (as amended 
     by section 301(c) of the Energy Independence and Security Act 
     of 2007 (121 Stat. 1550)) is amended--
       (A) by redesignating paragraph (7) as paragraph (4); and
       (B) in paragraph (4) (as so redesignated), by striking 
     ``supplies is'' and inserting ``supply is''.
       (2) Section 302 of the Energy Independence and Security Act 
     of 2007 (121 Stat. 1551)) is amended--
       (A) in subsection (a), by striking ``end of the paragraph'' 
     and inserting ``end of subparagraph (A)''; and
       (B) in subsection (b), by striking ``6313(a)'' and 
     inserting ``6314(a)''.
       (3) Section 343(a)(1) of the Energy Policy and Conservation 
     Act (42 U.S.C. 6313(a)(1)) (as amended by section 302(b) of 
     the Energy Independence and Security Act of 2007 (121 Stat. 
     1551)) is amended--
       (A) by striking ``Test procedures'' and all that follows 
     through ``At least once'' and inserting ``Test procedures.--
     At least once''; and
       (B) by redesignating clauses (i) and (ii) as subparagraphs 
     (A) and (B), respectively (and by moving the margins of such 
     subparagraphs 2 ems to the left).
       (4) Section 342(a)(6) of the Energy Policy and Conservation 
     Act (42 U.S.C. 6313(a)(6)) (as amended by section 305(b)(2) 
     of the Energy Independence and Security Act of 2007 (121 
     Stat. 1554)) is amended--
       (A) in subparagraph (B)--
       (i) by striking ``If the Secretary'' and inserting the 
     following:
       ``(i) In general.--If the Secretary'';
       (ii) by striking ``clause (ii)(II)'' and inserting 
     ``subparagraph (A)(ii)(II)'';
       (iii) by striking ``clause (i)'' and inserting 
     ``subparagraph (A)(i)''; and
       (iv) by adding at the end the following:
       ``(ii) Factors.--In determining whether a standard is 
     economically justified for the purposes of subparagraph 
     (A)(ii)(II), the Secretary shall, after receiving views and 
     comments furnished with respect to the proposed standard, 
     determine whether the benefits of the standard exceed the 
     burden of the proposed standard by, to the maximum extent 
     practicable, considering--

       ``(I) the economic impact of the standard on the 
     manufacturers and on the consumers of the products subject to 
     the standard;
       ``(II) the savings in operating costs throughout the 
     estimated average life of the product in the type (or class) 
     compared to any increase in the price of, or in the initial 
     charges for, or maintenance expenses of, the products that 
     are likely to result from the imposition of the standard;
       ``(III) the total projected quantity of energy savings 
     likely to result directly from the imposition of the 
     standard;
       ``(IV) any lessening of the utility or the performance of 
     the products likely to result from the imposition of the 
     standard;
       ``(V) the impact of any lessening of competition, as 
     determined in writing by the Attorney General, that is likely 
     to result from the imposition of the standard;
       ``(VI) the need for national energy conservation; and
       ``(VII) other factors the Secretary considers relevant.

       ``(iii) Administration.--

       ``(I) Energy use and efficiency.--The Secretary may not 
     prescribe any amended standard under this paragraph that 
     increases the maximum allowable energy use, or decreases the 
     minimum required energy efficiency, of a covered product.
       ``(II) Unavailability.--

       ``(aa) In general.--The Secretary may not prescribe an 
     amended standard under this subparagraph if the Secretary 
     finds (and publishes the finding) that interested persons 
     have established by a preponderance of the evidence that a 
     standard is likely to result in the unavailability in the 
     United States in any product type (or class) of performance 
     characteristics (including reliability, features, sizes, 
     capacities, and volumes) that are substantially the same as 
     those generally available in the United States at the time of 
     the finding of the Secretary.
       ``(bb) Other types or classes.--The failure of some types 
     (or classes) to meet the criterion established under this 
     subclause shall not affect the determination of the Secretary 
     on whether to prescribe a standard for the other types or 
     classes.''; and
       (B) in subparagraph (C)(iv), by striking ``An amendment 
     prescribed under this subsection'' and inserting 
     ``Notwithstanding subparagraph (D), an amendment prescribed 
     under this subparagraph''.
       (5) Section 342(a)(6)(B)(iii) of the Energy Policy and 
     Conservation Act (as added by section 306(c) of the Energy 
     Independence and Security Act of 2007) is transferred and 
     redesignated as clause (vi) of section 342(a)(6)(C) of the 
     Energy Policy and Conservation Act (as amended by section 
     305(b)(2) of the Energy Independence and Security Act of 
     2007).
       (6) Section 340 of the Energy Policy and Conservation Act 
     (42 U.S.C. 6311) (as amended by sections 312(a)(2) and 314(a) 
     of the Energy Independence and Security Act of 2007 (121 
     Stat. 1564, 1569)) is amended by redesignating paragraphs 
     (22) and (23) (as added by section 314(a) of that Act) as 
     paragraphs (23) and (24), respectively.
       (7) Section 345 of the Energy Policy and Conservation Act 
     (42 U.S.C. 6316) (as amended by section 312(e) of the Energy 
     Independence and Security Act of 2007 (121 Stat. 1567)) is 
     amended--
       (A) by striking ``subparagraphs (B) through (G)'' each 
     place it appears and inserting ``subparagraphs (B), (C), (D), 
     (I), (J), and (K)'';
       (B) by striking ``part A'' each place it appears and 
     inserting ``part B''; and
       (C) in subsection (h)(3), by striking ``section 342(f)(3)'' 
     and inserting ``section 342(f)(4)''.
       (8) Section 340(13) of the Energy Policy and Conservation 
     Act (42 U.S.C. 6311(13)) (as amended by section 313(a) of the 
     Energy Independence and Security Act of 2007 (121 Stat. 
     1568)) is amended--
       (A) by striking subparagraphs (A) and (B) and inserting the 
     following:
       ``(A) In general.--The term `electric motor' means any 
     motor that is--
       ``(i) a general purpose T-frame, single-speed, foot-
     mounting, polyphase squirrel-cage induction motor of the 
     National Electrical Manufacturers Association, Design A and 
     B, continuous rated, operating on 230/460 volts and constant 
     60 Hertz line power as defined in NEMA Standards Publication 
     MG1-1987; or
       ``(ii) a motor incorporating the design elements described 
     in clause (i), but is configured to incorporate one or more 
     of the following variations--

       ``(I) U-frame motor;
       ``(II) NEMA Design C motor;
       ``(III) close-coupled pump motor;
       ``(IV) footless motor;
       ``(V) vertical solid shaft normal thrust motor (as tested 
     in a horizontal configuration);
       ``(VI) 8-pole motor; or
       ``(VII) poly-phase motor with a voltage rating of not more 
     than 600 volts (other than 230 volts or 460 volts, or both, 
     or can be operated on 230 volts or 460 volts, or both).''; 
     and

       (B) by redesignating subparagraphs (C) through (I) as 
     subparagraphs (B) through (H), respectively.
       (9)(A) Section 342(b) of the Energy Policy and Conservation 
     Act (42 U.S.C. 6313(b)) is amended--
       (i) in paragraph (1), by striking ``paragraph (2)'' and 
     inserting ``paragraph (3)'';
       (ii) by redesignating paragraphs (2) and (3) as paragraphs 
     (3) and (4);
       (iii) by inserting after paragraph (1) the following:
       ``(2) Standards effective beginning december 19, 2010.--
       ``(A) In general.--Except for definite purpose motors, 
     special purpose motors, and those motors exempted by the 
     Secretary under paragraph (3) and except as provided for in 
     subparagraphs (B), (C), and (D), each electric motor 
     manufactured with power ratings from 1 to 200 horsepower 
     (alone or as a component of another piece of equipment) on

[[Page H7494]]

      or after December 19, 2010, shall have a nominal full load 
     efficiency of not less than the nominal full load efficiency 
     described in NEMA MG-1 (2006) Table 12-12.
       ``(B) Fire pump electric motors.--Except for those motors 
     exempted by the Secretary under paragraph (3), each fire pump 
     electric motor manufactured with power ratings from 1 to 200 
     horsepower (alone or as a component of another piece of 
     equipment) on or after December 19, 2010, shall have a 
     nominal full load efficiency that is not less than the 
     nominal full load efficiency described in NEMA MG-1 (2006) 
     Table 12-11.
       ``(C) NEMA design b electric motors.--Except for those 
     motors exempted by the Secretary under paragraph (3), each 
     NEMA Design B electric motor with power ratings of more than 
     200 horsepower, but not greater than 500 horsepower, 
     manufactured (alone or as a component of another piece of 
     equipment) on or after December 19, 2010, shall have a 
     nominal full load efficiency of not less than the nominal 
     full load efficiency described in NEMA MG-1 (2006) Table 12-
     11.
       ``(D) Motors incorporating certain design elements.--Except 
     for those motors exempted by the Secretary under paragraph 
     (3), each electric motor described in section 340(13)(A)(ii) 
     manufactured with power ratings from 1 to 200 horsepower 
     (alone or as a component of another piece of equipment) on or 
     after December 19, 2010, shall have a nominal full load 
     efficiency of not less than the nominal full load efficiency 
     described in NEMA MG-1 (2006) Table 12-11.''; and
       (iv) in paragraph (3) (as redesignated by clause (ii)), by 
     striking ``paragraph (1)'' each place it appears in 
     subparagraphs (A) and (D) and inserting ``paragraphs (1) and 
     (2)''.
       (B) Section 313 of the Energy Independence and Security Act 
     of 2007 (121 Stat. 1568) is repealed.
       (C) The amendments made by--
       (i) subparagraph (A) shall take effect on December 19, 
     2010; and
       (ii) subparagraph (B) shall take effect on December 19, 
     2007.
       (10) Section 321(30)(D)(i)(III) of the Energy Policy and 
     Conservation Act (42 U.S.C. 6291(30)(D)(i)(III)) (as amended 
     by section 321(a)(1)(A) of the Energy Independence and 
     Security Act of 2007 (121 Stat. 1574)) is amended by 
     inserting before the semicolon the following: ``or, in the 
     case of a modified spectrum lamp, not less than 232 lumens 
     and not more than 1,950 lumens''.
       (11) Section 321(30)(T) of the Energy Policy and 
     Conservation Act (42 U.S.C. 6291(30)(T) (as amended by 
     section 321(a)(1)(B) of the Energy Independence and Security 
     Act of 2007 (121 Stat. 1574)) is amended--
       (A) in clause (i)--
       (i) by striking the comma after ``household appliance'' and 
     inserting ``and''; and
       (ii) by striking ``and is sold at retail,''; and
       (B) in clause (ii), by inserting ``when sold at retail,'' 
     before ``is designated''.
       (12) Section 325 of the Energy Policy and Conservation Act 
     (42 U.S.C. 6295) (as amended by sections 321(a)(3)(A) and 
     322(b) of the Energy Independence and Security Act of 2007 
     (121 Stat. 1577, 1588)) is amended by striking subsection (i) 
     and inserting the following:
       ``(i) General Service Fluorescent Lamps, General Service 
     Incandescent Lamps, Intermediate Base Incandescent Lamps, 
     Candelabra Base Incandescent Lamps, and Incandescent 
     Reflector Lamps.--
       ``(1) Energy efficiency standards.--
       ``(A) In general.--Each of the following general service 
     fluorescent lamps, general service incandescent lamps, 
     intermediate base incandescent lamps, candelabra base 
     incandescent lamps, and incandescent reflector lamps 
     manufactured after the effective date specified in the tables 
     listed in this subparagraph shall meet or exceed the 
     following lamp efficacy, new maximum wattage, and CRI 
     standards:

                                               ``FLUORESCENT LAMPS
----------------------------------------------------------------------------------------------------------------
                                                                                                  Effective Date
           Lamp Type               Nominal Lamp       Minimum CRI       Minimum Average Lamp        (Period of
                                      Wattage                              Efficacy (LPW)            Months)
----------------------------------------------------------------------------------------------------------------
4-foot medium bi-pin...........        >35 W              69                    75.0                    36
                                       35 W               45                    75.0                    36
2-foot U-shaped................        >35 W              69                    68.0                    36
                                        35 W              45                    64.0                    36
8-foot slimline................         65 W              69                    80.0                    18
                                       65 W               45                    80.0                    18
8-foot high output.............       >100 W              69                    80.0                    18
                                       100 W              45                    80.0                    18
----------------------------------------------------------------------------------------------------------------


                     ``INCANDESCENT REFLECTOR LAMPS
------------------------------------------------------------------------
                                                          Effective Date
     Nominal Lamp Wattage         Minimum Average Lamp      (Period of
                                     Efficacy (LPW)           Months)
------------------------------------------------------------------------
 40-50.......................             10.5                  36
 51-66.......................             11.0                  36
 67-85.......................             12.5                  36
 86-115......................             14.0                  36
116-155......................             14.5                  36
156-205......................             15.0                  36
------------------------------------------------------------------------



                                      ``GENERAL SERVICE INCANDESCENT LAMPS
----------------------------------------------------------------------------------------------------------------
                                                                                         Minimum
                       Rated Lumen Ranges                            Maximum Rated        Rated       Effective
                                                                        Wattage         Lifetime        Date
----------------------------------------------------------------------------------------------------------------
1490-2600                                                                        72     1,000 hrs      1/1/2012
1050-1489                                                                        53     1,000 hrs      1/1/2013
750-1049                                                                         43     1,000 hrs      1/1/2014
310-749                                                                          29     1,000 hrs      1/1/2014
----------------------------------------------------------------------------------------------------------------



                             ``MODIFIED SPECTRUM GENERAL SERVICE INCANDESCENT LAMPS
----------------------------------------------------------------------------------------------------------------
                                                                                         Minimum
                       Rated Lumen Ranges                            Maximum Rated        Rated       Effective
                                                                        Wattage         Lifetime        Date
----------------------------------------------------------------------------------------------------------------
1118-1950                                                                        72     1,000 hrs      1/1/2012
788-1117                                                                         53     1,000 hrs      1/1/2013
563-787                                                                          43     1,000 hrs      1/1/2014
232-562                                                                          29     1,000 hrs      1/1/2014
----------------------------------------------------------------------------------------------------------------

       ``(B) Application.--
       ``(i) Application criteria.--This subparagraph applies to 
     each lamp that--

       ``(I) is intended for a general service or general 
     illumination application (whether incandescent or not);
       ``(II) has a medium screw base or any other screw base not 
     defined in ANSI C81.61-2006;

[[Page H7495]]

       ``(III) is capable of being operated at a voltage at least 
     partially within the range of 110 to 130 volts; and
       ``(IV) is manufactured or imported after December 31, 2011.

       ``(ii) Requirement.--For purposes of this paragraph, each 
     lamp described in clause (i) shall have a color rendering 
     index that is greater than or equal to--

       ``(I) 80 for nonmodified spectrum lamps; or
       ``(II) 75 for modified spectrum lamps.

       ``(C) Candelabra incandescent lamps and intermediate base 
     incandescent lamps.--
       ``(i) Candelabra base incandescent lamps.--Effective 
     beginning January 1, 2012, a candelabra base incandescent 
     lamp shall not exceed 60 rated watts.
       ``(ii) Intermediate base incandescent lamps.--Effective 
     beginning January 1, 2012, an intermediate base incandescent 
     lamp shall not exceed 40 rated watts.
       ``(D) Exemptions.--
       ``(i) Statutory exemptions.--The standards specified in 
     subparagraph (A) shall not apply to the following types of 
     incandescent reflector lamps:

       ``(I) Lamps rated at 50 watts or less that are ER30, BR30, 
     BR40, or ER40 lamps.
       ``(II) Lamps rated at 65 watts that are BR30, BR40, or ER40 
     lamps.
       ``(III) R20 incandescent reflector lamps rated 45 watts or 
     less.

       ``(ii) Administrative exemptions.--

       ``(I) Petition.--Any person may petition the Secretary for 
     an exemption for a type of general service lamp from the 
     requirements of this subsection.
       ``(II) Criteria.--The Secretary may grant an exemption 
     under subclause (I) only to the extent that the Secretary 
     finds, after a hearing and opportunity for public comment, 
     that it is not technically feasible to serve a specialized 
     lighting application (such as a military, medical, public 
     safety, or certified historic lighting application) using a 
     lamp that meets the requirements of this subsection.
       ``(III) Additional criterion.--To grant an exemption for a 
     product under this clause, the Secretary shall include, as an 
     additional criterion, that the exempted product is unlikely 
     to be used in a general service lighting application.

       ``(E) Extension of coverage.--
       ``(i) Petition.--Any person may petition the Secretary to 
     establish standards for lamp shapes or bases that are 
     excluded from the definition of general service lamps.
       ``(ii) Increased sales of exempted lamps.--The petition 
     shall include evidence that the availability or sales of 
     exempted incandescent lamps have increased significantly 
     since the date on which the standards on general service 
     incandescent lamps were established.
       ``(iii) Criteria.--The Secretary shall grant a petition 
     under clause (i) if the Secretary finds that--

       ``(I) the petition presents evidence that demonstrates that 
     commercial availability or sales of exempted incandescent 
     lamp types have increased significantly since the standards 
     on general service lamps were established and likely are 
     being widely used in general lighting applications; and
       ``(II) significant energy savings could be achieved by 
     covering exempted products, as determined by the Secretary 
     based in part on sales data provided to the Secretary from 
     manufacturers and importers.

       ``(iv) No presumption.--The grant of a petition under this 
     subparagraph shall create no presumption with respect to the 
     determination of the Secretary with respect to any criteria 
     under a rulemaking conducted under this section.
       ``(v) Expedited proceeding.--If the Secretary grants a 
     petition for a lamp shape or base under this subparagraph, 
     the Secretary shall--

       ``(I) conduct a rulemaking to determine standards for the 
     exempted lamp shape or base; and
       ``(II) complete the rulemaking not later than 18 months 
     after the date on which notice is provided granting the 
     petition.

       ``(F) Effective dates.--
       ``(i) In general.--In this paragraph, except as otherwise 
     provided in a table contained in subparagraph (A) or in 
     clause (ii), the term `effective date' means the last day of 
     the month specified in the table that follows October 24, 
     1992.
       ``(ii) Special effective dates.--

       ``(I) ER, br, and bpar lamps.--The standards specified in 
     subparagraph (A) shall apply with respect to ER incandescent 
     reflector lamps, BR incandescent reflector lamps, BPAR 
     incandescent reflector lamps, and similar bulb shapes on and 
     after January 1, 2008, or the date that is 180 days after the 
     date of enactment of the Energy Independence and Security Act 
     of 2007.
       ``(II) Lamps between 2.25-2.75 inches in diameter.--The 
     standards specified in subparagraph (A) shall apply with 
     respect to incandescent reflector lamps with a diameter of 
     more than 2.25 inches, but not more than 2.75 inches, on and 
     after the later of January 1, 2008, or the date that is 180 
     days after the date of enactment of the Energy Independence 
     and Security Act of 2007.

       ``(2) Compliance with existing law.--Notwithstanding 
     section 332(a)(5) and section 332(b), it shall not be 
     unlawful for a manufacturer to sell a lamp that is in 
     compliance with the law at the time the lamp was 
     manufactured.
       ``(3) Rulemaking before october 24, 1995.--
       ``(A) In general.--Not later than 36 months after October 
     24, 1992, the Secretary shall initiate a rulemaking procedure 
     and shall publish a final rule not later than the end of the 
     54-month period beginning on October 24, 1992, to determine 
     whether the standards established under paragraph (1) should 
     be amended.
       ``(B) Administration.--The rule shall contain the 
     amendment, if any, and provide that the amendment shall apply 
     to products manufactured on or after the 36-month period 
     beginning on the date on which the final rule is published.
       ``(4) Rulemaking before october 24, 2000.--
       ``(A) In general.--Not later than 8 years after October 24, 
     1992, the Secretary shall initiate a rulemaking procedure and 
     shall publish a final rule not later than 9 years and 6 
     months after October 24, 1992, to determine whether the 
     standards in effect for fluorescent lamps and incandescent 
     lamps should be amended.
       ``(B) Administration.--The rule shall contain the 
     amendment, if any, and provide that the amendment shall apply 
     to products manufactured on or after the 36-month period 
     beginning on the date on which the final rule is published.
       ``(5) Rulemaking for additional general service fluorescent 
     lamps.--
       ``(A) In general.--Not later than the end of the 24-month 
     period beginning on the date labeling requirements under 
     section 324(a)(2)(C) become effective, the Secretary shall--
       ``(i) initiate a rulemaking procedure to determine whether 
     the standards in effect for fluorescent lamps and 
     incandescent lamps should be amended so that the standards 
     would be applicable to additional general service fluorescent 
     lamps; and
       ``(ii) publish, not later than 18 months after initiating 
     the rulemaking, a final rule including the amended standards, 
     if any.
       ``(B) Administration.--The rule shall provide that the 
     amendment shall apply to products manufactured after a date 
     which is 36 months after the date on which the rule is 
     published.
       ``(6) Standards for general service lamps.--
       ``(A) Rulemaking before january 1, 2014.--
       ``(i) In general.--Not later than January 1, 2014, the 
     Secretary shall initiate a rulemaking procedure to determine 
     whether--

       ``(I) standards in effect for general service lamps should 
     be amended; and
       ``(II) the exclusions for certain incandescent lamps should 
     be maintained or discontinued based, in part, on excluded 
     lamp sales collected by the Secretary from manufacturers.

       ``(ii) Scope.--The rulemaking--

       ``(I) shall not be limited to incandescent lamp 
     technologies; and
       ``(II) shall include consideration of a minimum standard of 
     45 lumens per watt for general service lamps.

       ``(iii) Amended standards.--If the Secretary determines 
     that the standards in effect for general service lamps should 
     be amended, the Secretary shall publish a final rule not 
     later than January 1, 2017, with an effective date that is 
     not earlier than 3 years after the date on which the final 
     rule is published.
       ``(iv) Phased-in effective dates.--The Secretary shall 
     consider phased-in effective dates under this subparagraph 
     after considering--

       ``(I) the impact of any amendment on manufacturers, 
     retiring and repurposing existing equipment, stranded 
     investments, labor contracts, workers, and raw materials; and
       ``(II) the time needed to work with retailers and lighting 
     designers to revise sales and marketing strategies.

       ``(v) Backstop requirement.--If the Secretary fails to 
     complete a rulemaking in accordance with clauses (i) through 
     (iv) or if the final rule does not produce savings that are 
     greater than or equal to the savings from a minimum efficacy 
     standard of 45 lumens per watt, effective beginning January 
     1, 2020, the Secretary shall prohibit the manufacture of any 
     general service lamp that does not meet a minimum efficacy 
     standard of 45 lumens per watt.
       ``(vi) State preemption.--Neither section 327(c) nor any 
     other provision of law shall preclude California or Nevada 
     from adopting, effective beginning on or after January 1, 
     2018--

       ``(I) a final rule adopted by the Secretary in accordance 
     with clauses (i) through (iv);
       ``(II) if a final rule described in subclause (I) has not 
     been adopted, the backstop requirement under clause (v); or
       ``(III) in the case of California, if a final rule 
     described in subclause (I) has not been adopted, any 
     California regulations relating to these covered products 
     adopted pursuant to State statute in effect as of the date of 
     enactment of the Energy Independence and Security Act of 
     2007.

       ``(B) Rulemaking before january 1, 2020.--
       ``(i) In general.--Not later than January 1, 2020, the 
     Secretary shall initiate a rulemaking procedure to determine 
     whether--

       ``(I) standards in effect for general service lamps should 
     be amended; and
       ``(II) the exclusions for certain incandescent lamps should 
     be maintained or discontinued based, in part, on excluded 
     lamp sales data collected by the Secretary from 
     manufacturers.

       ``(ii) Scope.--The rulemaking shall not be limited to 
     incandescent lamp technologies.
       ``(iii) Amended standards.--If the Secretary determines 
     that the standards in effect for general service lamps should 
     be amended, the Secretary shall publish a final rule not 
     later than January 1, 2022, with an effective date that is 
     not earlier than 3 years

[[Page H7496]]

     after the date on which the final rule is published.
       ``(iv) Phased-in effective dates.--The Secretary shall 
     consider phased-in effective dates under this subparagraph 
     after considering--

       ``(I) the impact of any amendment on manufacturers, 
     retiring and repurposing existing equipment, stranded 
     investments, labor contracts, workers, and raw materials; and
       ``(II) the time needed to work with retailers and lighting 
     designers to revise sales and marketing strategies.

       ``(7) Federal actions.--
       ``(A) Comments of secretary.--
       ``(i) In general.--With respect to any lamp to which 
     standards are applicable under this subsection or any lamp 
     specified in section 346, the Secretary shall inform any 
     Federal entity proposing actions that would adversely impact 
     the energy consumption or energy efficiency of the lamp of 
     the energy conservation consequences of the action.
       ``(ii) Consideration.--The Federal entity shall carefully 
     consider the comments of the Secretary.
       ``(B) Amendment of standards.--Notwithstanding section 
     325(n)(1), the Secretary shall not be prohibited from 
     amending any standard, by rule, to permit increased energy 
     use or to decrease the minimum required energy efficiency of 
     any lamp to which standards are applicable under this 
     subsection if the action is warranted as a result of other 
     Federal action (including restrictions on materials or 
     processes) that would have the effect of either increasing 
     the energy use or decreasing the energy efficiency of the 
     product.
       ``(8) Compliance.--
       ``(A) In general.--Not later than the date on which 
     standards established pursuant to this subsection become 
     effective, or, with respect to high-intensity discharge lamps 
     covered under section 346, the effective date of standards 
     established pursuant to that section, each manufacturer of a 
     product to which the standards are applicable shall file with 
     the Secretary a laboratory report certifying compliance with 
     the applicable standard for each lamp type.
       ``(B) Contents.--The report shall include the lumen output 
     and wattage consumption for each lamp type as an average of 
     measurements taken over the preceding 12-month period.
       ``(C) Other lamp types.--With respect to lamp types that 
     are not manufactured during the 12-month period preceding the 
     date on which the standards become effective, the report 
     shall--
       ``(i) be filed with the Secretary not later than the date 
     that is 12 months after the date on which manufacturing is 
     commenced; and
       ``(ii) include the lumen output and wattage consumption for 
     each such lamp type as an average of measurements taken 
     during the 12-month period.''.
       (13) Section 325(l)(4)(A) of the Energy Policy and 
     Conservation Act (42 U.S.C. 6295(l)(4)(A)) (as amended by 
     section 321(a)(3)(B) of the Energy Independence and Security 
     Act of 2007 (121 Stat. 1581)) is amended by striking 
     ``only''.
       (14) Section 327(b)(1)(B) of the Energy Policy and 
     Conservation Act (42 U.S.C. 6297(b)(1)(B)) (as amended by 
     section 321(d)(3) of the Energy Independence and Security Act 
     of 2007 (121 Stat. 1585)) is amended--
       (A) in clause (i), by inserting ``and'' after the semicolon 
     at the end;
       (B) in clause (ii), by striking ``; and'' and inserting a 
     period; and
       (C) by striking clause (iii).
       (15) Section 321(e) of the Energy Independence and Security 
     Act of 2007 (121 Stat. 1586) is amended--
       (A) in the matter preceding paragraph (1), by striking ``is 
     amended'' and inserting ``(as amended by section 306(b)) is 
     amended''; and
       (B) by striking paragraphs (1) and (2) and inserting the 
     following:
       ``(1) in paragraph (5), by striking `or' after the 
     semicolon at the end;
       ``(2) in paragraph (6), by striking the period at the end 
     and inserting `; or'; and''.
       (16) Section 332(a) of the Energy Policy and Conservation 
     Act (42 U.S.C. 6302(a)) (as amended by section 321(e) of the 
     Energy Independence and Security Act of 2007 (121 Stat. 
     1586)) is amended by redesignating the second paragraph (6) 
     as paragraph (7).
       (17) Section 321(30)(C)(ii) of the Energy Policy and 
     Conservation Act (42 U.S.C. 6291(30)(C)(ii)) (as amended by 
     section 322(a)(1)(B) of the Energy Independence and Security 
     Act of 2007 (121 Stat. 1587)) is amended by inserting a 
     period after ``40 watts or higher''.
       (18) Section 322(b) of the Energy Independence and Security 
     Act of 2007 (121 Stat. 1588)) is amended by striking 
     ``6995(i)'' and inserting ``6295(i)''.
       (19) Section 327(c) of the Energy Policy and Conservation 
     Act (42 U.S.C. 6297(c)) (as amended by sections 324(f) of the 
     Energy Independence and Security Act of 2007 (121 Stat. 
     1594)) is amended--
       (A) in paragraph (6), by striking ``or'' after the 
     semicolon at the end;
       (B) in paragraph (8)(B), by striking ``and'' after the 
     semicolon at the end;
       (C) in paragraph (9)--
       (i) by striking ``except that--'' and all that follows 
     through ``if the Secretary fails to issue'' and inserting 
     ``except that if the Secretary fails to issue'';
       (ii) by redesignating clauses (i) and (ii) as subparagraphs 
     (A) and (B), respectively (and by moving the margins of such 
     subparagraphs 2 ems to the left); and
       (iii) by striking the period at the end and inserting a 
     semicolon; and
       (D) by adding at the end the following:
       ``(10) is a regulation for general service lamps that 
     conforms with Federal standards and effective dates;
       ``(11) is an energy efficiency standard for general service 
     lamps enacted into law by the State of Nevada prior to 
     December 19, 2007, if the State has not adopted the Federal 
     standards and effective dates pursuant to subsection 
     (b)(1)(B)(ii); or''.
       (20) Section 325(b) of the Energy Independence and Security 
     Act of 2007 (121 Stat. 1596)) is amended by striking 
     ``6924(c)'' and inserting ``6294(c)''.
       (b) Title IV--Energy Savings in Buildings and Industry.--
     (1) Section 401 of the Energy Independence and Security Act 
     of 2007 (42 U.S.C. 17061) is amended--
       (A) in paragraph (2), by striking ``484'' and inserting 
     ``494''; and
       (B) in paragraph (13), by striking ``Agency'' and inserting 
     ``Administration''.
       (2) Section 422 of the Energy Conservation and Production 
     Act (42 U.S.C. 6872) (as amended by section 411(a) of the 
     Energy Independence and Security Act of 2007 (121 Stat. 
     1600)) is amended by striking 1 of the 2 periods at the end 
     of paragraph (5).
       (3) Section 305(a)(3)(D)(i) of the Energy Conservation and 
     Production Act (42 U.S.C. 6834(a)(3)(D)(i)) (as amended by 
     section 433(a) of the Energy Independence and Security Act of 
     2007 (121 Stat. 1612)) is amended--
       (A) in subclause (I)--
       (i) by striking ``in fiscal year 2003 (as measured by 
     Commercial Buildings Energy Consumption Survey or Residential 
     Energy Consumption Survey data from the Energy Information 
     Agency'' and inserting ``as measured by the calendar year 
     2003 Commercial Buildings Energy Consumption Survey or the 
     calendar year 2005 Residential Energy Consumption Survey data 
     from the Energy Information Administration''; and
       (ii) in the table at the end, by striking ``Fiscal Year'' 
     and inserting ``Calendar Year''; and
       (B) in subclause (II)--
       (i) by striking ``(II) Upon petition'' and inserting the 
     following:

       ``(II) Downward adjustment of numeric requirement.--

       ``(aa) In general.--On petition''; and
       (ii) by striking the last sentence and inserting the 
     following:
       ``(bb) Exceptions to requirement for concurrence of 
     secretary.--
         ``(AA) In general.--The requirement to petition and 
     obtain the concurrence of the Secretary under this subclause 
     shall not apply to any Federal building with respect to which 
     the Administrator of General Services is required to transmit 
     a prospectus to Congress under section 3307 of title 40, 
     United States Code, or to any other Federal building 
     designed, constructed, or renovated by the Administrator if 
     the Administrator certifies, in writing, that meeting the 
     applicable numeric requirement under subclause (I) with 
     respect to the Federal building would be technically 
     impracticable in light of the specific functional needs for 
     the building.
         ``(BB) Adjustment.--In the case of a building described 
     in subitem (AA), the Administrator may adjust the applicable 
     numeric requirement of subclause (I) downward with respect to 
     the building.''.
       (4) Section 436(c)(3) of the Energy Independence and 
     Security Act of 2007 (42 U.S.C. 17092(c)(3)) is amended by 
     striking ``474'' and inserting ``494''.
       (5) Section 440 of the Energy Independence and Security Act 
     of 2007 (42 U.S.C. 17096) is amended by striking ``and 482''.
       (6) Section 373(c) of the Energy Policy and Conservation 
     Act (42 U.S.C. 6343(c)) (as amended by section 451(a) of the 
     Energy Independence and Security Act of 2007 (121 Stat. 
     1628)) is amended by striking ``Administrator'' and inserting 
     ``Secretary''.
       (c) Date of Enactment.--Section 1302 of the Energy 
     Independence and Security Act of 2007 (42 U.S.C. 17382) is 
     amended in the first sentence by striking ``enactment'' and 
     inserting ``the date of enactment of this Act''.
       (d) Reference.--Section 1306(c)(3) of the Energy 
     Independence and Security Act of 2007 (42 U.S.C. 17386(c)(3)) 
     is amended by striking ``section 1307 (paragraph (17) of 
     section 111(d) of the Public Utility Regulatory Policies Act 
     of 1978)'' and inserting ``paragraph (19) of section 111(d) 
     of the Public Utility Regulatory Policies Act of 1978 (16 
     U.S.C. 2621(d))''.
       (e) Effective Date.--This section and the amendments made 
     by this section take effect as if included in the Energy 
     Independence and Security Act of 2007 (Public Law 110-140; 
     121 Stat. 1492).

     SEC. 162. TECHNICAL CORRECTIONS TO ENERGY POLICY ACT OF 2005.

       (a) Title I--Energy Efficiency.--Section 325(g)(8)(C)(ii) 
     of the Energy Policy and Conservation Act (42 U.S.C. 
     6295(g)(8)(C)(ii)) (as added by section 135(c)(2)(B) of the 
     Energy Policy Act of 2005) is amended by striking ``20F'' 
     and inserting ``-20F''.
       (b) Effective Date.--This section and the amendments made 
     by this section take effect as if included in the Energy 
     Policy Act of 2005 (Public Law 109-58; 119 Stat. 594).

         Subtitle H--Energy and Efficiency Centers and Research

     SEC. 171. ENERGY INNOVATION HUBS.

       (a) Purpose.--The Secretary shall carry out a program to 
     establish Energy Innovation Hubs to enhance the Nation's 
     economic, environmental, and energy security by promoting 
     commercial application of clean, indigenous energy 
     alternatives to oil and other

[[Page H7497]]

     fossil fuels, reducing greenhouse gas emissions, and ensuring 
     that the United States maintains a technological lead in the 
     development and commercial application of state-of-the-art 
     energy technologies. To achieve these purposes the program 
     shall--
       (1) leverage the expertise and resources of the university 
     and private research communities, industry, venture capital, 
     national laboratories, and other participants in energy 
     innovation to support cross-disciplinary research and 
     development in areas not being served by the private sector 
     in order to develop and transfer innovative clean energy 
     technologies into the marketplace;
       (2) expand the knowledge base and human capital necessary 
     to transition to a low-carbon economy; and
       (3) promote regional economic development by cultivating 
     clusters of clean energy technology firms, private research 
     organizations, suppliers, and other complementary groups and 
     businesses.
       (b) Definitions.--For purposes of this section:
       (1) Allowance.--The term ``allowance'' means an emission 
     allowance established under section 721 of the Clean Air Act 
     (as added by section 311 of this Act).
       (2) Clean energy technology.--The term ``clean energy 
     technology'' means a technology that--
       (A) produces energy from solar, wind, geothermal, biomass, 
     tidal, wave, ocean, and other renewable energy resources (as 
     such term is defined in section 610 of the Public Utility 
     Regulatory Policies Act of 1978);
       (B) more efficiently transmits, distributes, or stores 
     energy;
       (C) enhances energy efficiency for buildings and industry, 
     including combined heat and power;
       (D) enables the development of a Smart Grid (as described 
     in section 1301 of the Energy Independence and Security Act 
     of 2007 (42 U.S.C. 17381)), including integration of 
     renewable energy resources and distributed generation, demand 
     response, demand side management, and systems analysis;
       (E) produces an advanced or sustainable material with 
     energy or energy efficiency applications;
       (F) enhances water security through improved water 
     management, conservation, distribution, and end use 
     applications; or
       (G) improves energy efficiency for transportation, 
     including electric vehicles.
       (3) Cluster.--The term ``cluster'' means a network of 
     entities directly involved in the research, development, 
     finance, and commercialization of clean energy technologies 
     whose geographic proximity facilitates utilization and 
     sharing of skilled human resources, infrastructure, research 
     facilities, educational and training institutions, venture 
     capital, and input suppliers.
       (4) Hub.--The term ``Hub'' means an Energy Innovation Hub 
     established in accordance with this section.
       (5) Project.--The term ``project'' means an activity with 
     respect to which a Hub provides support under subsection (e).
       (6) Qualifying entity.--The term ``qualifying entity'' 
     means each of the following:
       (A) A research university.
       (B) A State or Federal institution with a focus on the 
     advancement of clean energy technologies.
       (C) A nongovernmental organization with research or 
     commercialization expertise in clean energy technology 
     development.
       (7) Secretary.--The term ``Secretary'' means the Secretary 
     of Energy.
       (8) Technology development focus.--The term ``technology 
     development focus'' means the unique technology development 
     areas in which a Hub will specialize, and may include solar 
     electricity, fuels from solar energy, batteries and energy 
     storage, electricity grid systems and devices, energy 
     efficient building systems and design, advanced materials, 
     modeling and simulation, and other clean energy technology 
     development areas designated by the Secretary.
       (9) Translational research.--The term ``translational 
     research'' means coordination of basic or applied research 
     with technical and commercial applications to enable 
     promising discoveries or inventions to attract investment 
     sufficient for market penetration and diffusion.
       (10) Vintage year.--The term ``vintage year'' has the 
     meaning given that term in section 700 of the Clean Air Act 
     (as added by section 312 of this Act).
       (c) Role of the Secretary.--The Secretary shall--
       (1) have ultimate responsibility for, and oversight of, all 
     aspects of the program under this section;
       (2) provide for the distribution of allowances allocated 
     under section 782(h)(1) of the Clean Air Act (as added by 
     section 321 of this Act) to support the establishment of 8 
     Hubs, each with a unique designated technology development 
     focus, pursuant to this section;
       (3) coordinate the innovation activities of Hubs with those 
     occurring through other Department of Energy entities, 
     including the National Laboratories, the Advanced Research 
     Projects Agency--Energy, and Energy Frontier Research 
     Collaborations, and within industry, including by annually--
       (A) issuing guidance regarding national energy research and 
     development priorities and strategic objectives; and
       (B) convening a conference of staff of the Department of 
     Energy and representatives from such other entities to share 
     research results, program plans, and opportunities for 
     collaboration.
       (d) Entities Eligible for Support.--A consortium shall be 
     eligible to receive allowances to support the establishment 
     of a Hub under this section if--
       (1) it is composed of--
       (A) 2 research universities with a combined annual research 
     budget of $500,000,000; and
       (B) 1 or more additional qualifying entities;
       (2) its members have established a binding agreement that 
     documents--
       (A) the structure of the partnership agreement;
       (B) a governance and management structure to enable cost-
     effective implementation of the program;
       (C) an intellectual property management policy;
       (D) a conflicts of interest policy consistent with 
     subsection (e)(4);
       (E) an accounting structure that meets the requirements of 
     the Department of Energy and can be audited under subsection 
     (f)(5); and
       (F) that it has an Advisory Board consistent with 
     subsection (e)(3);
       (3) it receives financial contributions from States, 
     consortium participants, or other non-Federal sources, to be 
     used to support project awards pursuant to subsection (e);
       (4) it is part of an existing cluster or demonstrates high 
     potential to develop a new cluster; and
       (5) it operates as a nonprofit organization.
       (e) Energy Innovation Hubs.--
       (1) Role.--Hubs receiving allowances under this section 
     shall support translational research activities leading to 
     commercial application of clean energy technologies, in 
     accordance with the purposes of this section, through 
     issuance of awards to projects managed by qualifying entities 
     and other entities meeting the Hub's project criteria, 
     including national laboratories. Each such Hub shall--
       (A) develop and publish for public review and comment 
     proposed plans, programs, project selection criteria, and 
     terms for individual project awards under this subsection;
       (B) submit an annual report to the Secretary summarizing 
     the Hub's activities, organizational expenditures, and Board 
     members, which shall include a certification of compliance 
     with conflict of interest policies and a description of each 
     project in the research portfolio;
       (C) establish policies--
       (i) regarding intellectual property developed as a result 
     of Hub awards and other forms of technology support that 
     encourage individual ingenuity and invention while speeding 
     technology transfer and facilitating the establishment of 
     rapid commercialization pathways;
       (ii) to prevent resources provided to the Hub from being 
     used to displace private sector investment otherwise likely 
     to occur, including investment from private sector entities 
     that are members of the consortium;
       (iii) to facilitate the participation of private investment 
     firms or other private entities that invest in clean energy 
     technologies to perform due diligence on award proposals, to 
     participate in the award review process, and to provide 
     guidance to projects supported by the Hub; and
       (iv) to facilitate the participation of entrepreneurs with 
     a demonstrated history of developing and commercializing 
     clean energy technologies;
       (D) oversee project solicitations, review proposed 
     projects, and select projects for awards; and
       (E) monitor project implementation.
       (2) Distribution of awards by hubs.--A Hub shall distribute 
     awards under this subsection to support clean energy 
     technology projects conducting translational research and 
     related activities, provided that at least 50 percent of such 
     support shall be provided to projects related to the Hub's 
     technology development focus.
       (3) Advisory boards.--
       (A) In general.--Each Hub shall establish an Advisory 
     Board, the members of which shall have extensive and relevant 
     scientific, technical, industry, financial, or research 
     management expertise. The Advisory Board shall review the 
     Hub's proposed plans, programs, project selection criteria, 
     and projects and shall ensure that projects selected for 
     awards meet the conflict of interest policies of the Hub. 
     Advisory Board members other than those representing 
     consortium members shall serve for no more than 3 years. All 
     Advisory Board members shall comply with the Hub's conflict 
     of interest policies and procedures.
       (B) Members.--Each Advisory Board shall consist of--
       (i) 5 members selected by the consortium's research 
     universities;
       (ii) 2 members selected by the consortium's other 
     qualifying entities;
       (iii) 2 members selected at large by other Advisory Board 
     members to represent the entrepreneur and venture capital 
     communities; and
       (iv) 1 member appointed by the Secretary.
       (D) Compensation.--Members of an Advisory Board may receive 
     reimbursement for travel expenses and a reasonable stipend.
       (4) Conflict of interest.--
       (A) Procedures.--Hubs shall establish procedures to ensure 
     that any employee or consortia designee for Hub activities 
     who serves in a decisionmaking capacity shall--
       (i) disclose any financial interests in, or financial 
     relationships with, applicants for or recipients of awards 
     under this subsection, including those of his or her spouse 
     or minor child, unless such relationships or interests

[[Page H7498]]

     would be considered to be remote or inconsequential; and
       (ii) recuse himself or herself from any funding decision 
     for projects in which he or she has a personal financial 
     interest.
       (B) Disqualification and revocation.--The Secretary may 
     disqualify an application or revoke allowances distributed to 
     the Hub or awards provided under this subsection, if 
     cognizant officials of the Hub fail to comply with procedures 
     required under subparagraph (A).
       (f) Distribution of Allowances to Energy Innovation Hubs.--
       (1) Distribution of allowances.--Not later than September 
     30 of 2011 and each calendar year thereafter through 2049, 
     the Secretary shall, in accordance with the requirements of 
     this section, distribute to eligible consortia allowances 
     allocated for the following vintage year under section 
     782(h)(1) of the Clean Air Act (as added by section 321 of 
     this Act). Not less than 10 percent and not more than 30 
     percent of the allowances available for distribution in any 
     given year shall be distributed to support any individual Hub 
     under this section.
       (2) Selection and schedule.--Allowances to support the 
     establishment of a Hub shall be distributed to eligible 
     consortia (as defined in subsection (d)) selected through a 
     competitive process. Not later than 120 days after the date 
     of enactment of this Act, the Secretary shall solicit 
     proposals from eligible consortia to establish Hubs, which 
     shall be submitted not later than 180 days after the date of 
     enactment of this Act. The Secretary shall select the program 
     consortia not later than 270 days after the date of enactment 
     of this Act. For at least 3 awards to consortia under this 
     section, the Secretary shall give special consideration to 
     applications in which 1 or more of the institutions under 
     subsection (d)(1)(A) are 1890 Land Grant Institutions (as 
     defined in section 2 of the Agricultural Research, Extension, 
     and Education Reform Act of 1998 (7 U.S.C. 7061)), 
     Predominantly Black Institutions (as defined in section 318 
     of the Higher Education Act of 1965 (20 U.S.C. 1059e)), 
     Tribal Colleges or Universities (as defined in section 316(b) 
     of the Higher Education Act of 1965 (20 U.S.C. 1059c(b)), or 
     Hispanic Serving Institutions (as defined in section 318 of 
     the Higher Education Act of 1965 (20 U.S.C. 1059e)).
       (3) Amount and term of awards.--For each Hub selected to 
     receive an award under this subsection, the Secretary shall 
     define a quantity of allowances that shall be distributed to 
     such Hub each year for an initial period not to exceed 5 
     years. The Secretary may extend the term of such award by up 
     to 5 additional years, and a Hub may compete to receive an 
     increase in the quantity of allowances per year that it shall 
     receive during any such extension. A Hub shall be eligible to 
     compete for a new award after the expiration of the term of 
     any award, including any extension of such term, under this 
     subsection.
       (4) Use of allowances.--Allowances distributed under this 
     section shall be used exclusively to support project awards 
     pursuant to subsection (e)(1) and (2), provided that a Hub 
     may use not more than 10 percent of the value of such 
     allowances for its administrative expenses related to making 
     such awards. Allowances distributed under this section shall 
     not be used for construction of new buildings or facilities 
     for Hubs, and construction of new buildings or facilities 
     shall not be considered as part of the non-Federal share of a 
     cost sharing agreement under this section.
       (5) Audit.--Each Hub shall conduct, in accordance with such 
     requirements as the Secretary may prescribe, an annual audit 
     to determine the extent to which allowances distributed to 
     the Hub under this subsection, and awards under subsection 
     (e), have been utilized in a manner consistent with this 
     section. The auditor shall transmit a report of the results 
     of the audit to the Secretary and to the Government 
     Accountability Office. The Secretary shall include such 
     report in an annual report to Congress, along with a plan to 
     remedy any deficiencies cited in the report. The Government 
     Accountability Office may review such audits as appropriate 
     and shall have full access to the books, records, and 
     personnel of the Hub to ensure that allowances distributed to 
     the Hub under this subsection, and awards made under 
     subsection (e), have been utilized in a manner consistent 
     with this section.
       (6) Revocation of allowances.--The Secretary shall have 
     authority to review awards made under this subsection and to 
     revoke such awards if the Secretary determines that a Hub has 
     used the award in a manner not consistent with the 
     requirements of this section.

     SEC. 172. ADVANCED ENERGY RESEARCH.

       (a) Definitions.--For purposes of this section:
       (1) Allowance.--The term ``allowance'' means an emission 
     allowance established under section 721 of the Clean Air Act 
     (as added by section 311 of this Act).
       (2) Director.--The term ``Director'' means Director of the 
     Advanced Research Projects Agency-Energy.
       (b) In General.--Not later than September 30 of 2011 and 
     each calendar year thereafter through 2049, the Director 
     shall distribute allowances allocated for the following 
     vintage year under section 782(h)(2) of the Clean Air Act (as 
     added by section 321 of this Act). Such allowances shall be 
     distributed on a competitive basis to institutions of higher 
     education, companies, research foundations, trade and 
     industry research collaborations, or consortia of such 
     entities, or other appropriate research and development 
     entities to achieve the goals of the Advanced Research 
     Projects Agency-Energy (as described in section 5012(c) of 
     the America COMPETES Act) through targeted acceleration of--
       (1) novel early-stage energy research with possible 
     technology applications;
       (2) development of techniques, processes, and technologies, 
     and related testing and evaluation;
       (3) development of manufacturing processes for 
     technologies; and
       (4) demonstration and coordination with nongovernmental 
     entities for commercial applications of technologies and 
     research applications.
       (c) Responsibilities.--The Director shall be responsible 
     for assessing the success of programs and terminating 
     programs carried out under this section that are not 
     achieving the goals of the programs, consistent with 
     5012(e)(2) and (4) of the America COMPETES Act. The Director 
     shall designate program managers whose responsibilities are 
     consistent with 5012(f)(1)(B) of the America COMPETES Act. 
     The Director's reporting and coordination requirements 
     established through 5012(g) and (h) of the America COMPETES 
     Act shall apply to activities funded through this section.
       (d) Supplement Not Supplant.--Assistance provided under 
     this section shall be used to supplement, and not to 
     supplant, any other Federal resources available to carry out 
     activities described in this section.

     SEC. 173. BUILDING ASSESSMENT CENTERS.

       (a) In General.--The Secretary of Energy (in this section 
     referred to as the ``Secretary'') shall provide funding to 
     institutions of higher education for Building Assessment 
     Centers to--
       (1) identify opportunities for optimizing energy efficiency 
     and environmental performance in existing buildings;
       (2) promote high-efficiency building construction 
     techniques and materials options;
       (3) promote applications of emerging concepts and 
     technologies in commercial and institutional buildings;
       (4) train engineers, architects, building scientists, and 
     building technicians in energy-efficient design and 
     operation;
       (5) assist local community colleges, trade schools, 
     registered apprenticeship programs and other accredited 
     training programs in training building technicians;
       (6) promote research and development for the use of 
     alternative energy sources to supply heat and power, for 
     buildings, particularly energy-intensive buildings; and
       (7) coordinate with and assist State-accredited technical 
     training centers and community colleges, while ensuring 
     appropriate services to all regions of the United States.
       (b) Coordination With Regional Centers for Energy and 
     Environmental Knowledge and Outreach.--A Building Assessment 
     Center may serve as a Center for Energy and Environmental 
     Knowledge and Outreach established pursuant to section 174.
       (c) Coordination and Duplication.--The Secretary shall 
     coordinate efforts under this section with other programs of 
     the Department of Energy and other Federal agencies to avoid 
     duplication of effort.
       (d) Authorization of Appropriations.--There are authorized 
     to be appropriated to the Secretary to carry out this section 
     $50,000,000 for fiscal year 2010 and each fiscal year 
     thereafter.

     SEC. 174. CENTERS FOR ENERGY AND ENVIRONMENTAL KNOWLEDGE AND 
                   OUTREACH.

       (a) Regional Centers for Energy and Environmental Knowledge 
     and Outreach.--
       (1) Establishment.--The Secretary shall establish not more 
     than 10 regional Centers for Energy and Environmental 
     Knowledge and Outreach at institutions of higher education to 
     coordinate with and advise industrial research and assessment 
     centers, Building Assessment Centers, and Clean Energy 
     Application Centers located in the region of such Center for 
     Energy and Environmental Knowledge and Outreach.
       (2) Technical assistance programs.--Each Center for Energy 
     and Environmental Knowledge and Outreach shall consist of at 
     least one, new or existing, high performing, of the 
     following:
       (A) An industrial research and assessment center.
       (B) A Clean Energy Application Center.
       (C) A Building Assessment Center.
       (3) Selection criteria.--The Secretary shall select Centers 
     for Energy and Environmental Knowledge and Outreach through a 
     competitive process, based on the following:
       (A) Identification of the highest performing industrial 
     research and assessment centers, Clean Energy Application 
     Centers, and Building Assessment Centers.
       (B) The degree to which an institution of higher education 
     maintains credibility among regional private sector 
     organizations such as trade associations, engineering 
     associations, and environmental organizations.
       (C) The degree to which an institution of higher education 
     is providing or has provided technical assistance, academic 
     leadership, and market leadership in the energy arena in a 
     manner that is consistent with the areas of focus of 
     industrial research and assessment centers, Clean Energy 
     Application Centers, and Building Assessment Centers.
       (D) The presence of an additional industrial research and 
     assessment center, Clean

[[Page H7499]]

     Energy Application Center, or Building Assessment Center at 
     the institution of higher education.
       (4) Geographic diversity.--In selecting Centers for Energy 
     and Environmental Knowledge and Outreach under this 
     subsection, the Secretary shall ensure such Centers are 
     distributed geographically in a relatively uniform manner to 
     ensure all regions of the Nation are represented.
       (5) Regional leadership.--Each Center for Energy and 
     Environmental Knowledge and Outreach shall, to the extent 
     possible, provide leadership to all other industrial research 
     and assessment centers, Clean Energy Application Centers, and 
     Building Assessment Centers located in the Center's 
     geographic region, as determined by the Secretary. Such 
     leadership shall include--
       (A) developing regional goals specific to the purview of 
     the industrial research and assessment centers, Clean Energy 
     Application Centers, and Building Assessment Centers 
     programs;
       (B) developing regionally specific technical resources; and
       (C) outreach to interested parties in the region to inform 
     them of the information, resources, and services available 
     through the associated industrial research and assessment 
     centers, Clean Energy Application Centers, and Building 
     Assessment Centers.
       (6) Further coordination.--To increase the value and 
     capabilities of the regionally associated industrial research 
     and assessment centers, Clean Energy Application Centers, and 
     Building Assessment Centers programs, Centers for Energy and 
     Environmental Knowledge and Outreach shall--
       (A) coordinate with Manufacturing Extension Partnership 
     Centers of the National Institute of Science and Technology;
       (B) coordinate with the relevant programs in the Department 
     of Energy, including the Building Technology Program and 
     Industrial Technologies Program;
       (C) increase partnerships with the National Laboratories of 
     the Department of Energy to leverage the expertise and 
     technologies of the National Laboratories to achieve the 
     goals of the industrial research and assessment centers, 
     Clean Energy Application Centers, and Building Assessment 
     Centers;
       (D) work with relevant municipal, county, and State 
     economic development entities to leverage relevant financial 
     incentives for capital investment and other policy tools for 
     the protection and growth of local business and industry;
       (E) partner with local professional and private trade 
     associations and business development interests to leverage 
     existing knowledge of local business challenges and 
     opportunities;
       (F) work with energy utilities and other administrators of 
     publicly funded energy programs to leverage existing energy 
     efficiency and clean energy programs;
       (G) identify opportunities for reducing greenhouse gas 
     emissions; and
       (H) promote sustainable business practices for those served 
     by the industrial research and assessment centers, Clean 
     Energy Application Centers, and Building Assessment Centers.
       (7) Workforce training.--
       (A) In general.--The Secretary shall require each Center 
     for Energy and Environmental Knowledge and Outreach to 
     establish or maintain an internship program for the region of 
     such Center, designed to encourage students who perform 
     energy assessments to continue working with a particular 
     company, building, or facility to help implement the 
     recommendations contained in any such assessment provided to 
     such company, building, or facility. Each Center for Energy 
     and Environmental Knowledge and Outreach shall act as 
     internship coordinator to help match students to available 
     opportunities.
       (B) Federal share.--The Federal share of the cost of 
     carrying out internship programs described under subparagraph 
     (A) shall be 50 percent.
       (C) Funding.--Subject to the availability of 
     appropriations, of the funds made available to carry out this 
     subsection, the Secretary shall use to carry out this 
     paragraph not less than $5,000,000 for fiscal year 2010 and 
     each fiscal year thereafter.
       (8) Small business loans.--The Administrator of the Small 
     Business Administration shall, to the maximum practicable, 
     expedite consideration of applications from eligible small 
     business concerns for loans under the Small Business Act (15 
     U.S.C. 631 et seq.) for loans to implement recommendations of 
     any industrial research and assessment center, Clean Energy 
     Application Center, or Building Assessment Center.
       (9) Definitions.--In this subsection:
       (A) Industrial research and assessment center.--The term 
     ``industrial research and assessment center'' means a center 
     established or maintained pursuant to section 452(e) of the 
     Energy Independence and Security Act of 2007 (42 U.S.C. 
     17111(e)).
       (B) Clean energy application center.--The term ``Clean 
     Energy Application Center'' means a center redesignated and 
     described section under section 375 of the Energy Policy and 
     Conservation Act (42 U.S.C. 6345).
       (C) Building assessment center.--The term ``Building 
     Assessment Center'' means an institution of higher education-
     based center established pursuant to section 173.
       (D) Secretary.--The term ``Secretary'' means the Secretary 
     of Energy.
       (10) Funding.--There are authorized to be appropriated to 
     the Secretary to carry out this subsection $10,000,000 for 
     fiscal year 2010 and each fiscal year thereafter. Subject to 
     the availability of appropriations, of the funds made 
     available to carry out this subsection, the Secretary shall 
     provide to each Center for Energy and Environmental Knowledge 
     and Outreach not less than $500,000 for fiscal year 2010 and 
     each fiscal year thereafter.
       (b) Integration of Other Technical Assistance Programs.--
       (1) Clean energy application centers.--Section 375 of the 
     Energy Policy and Conservation Act (42 U.S.C. 6345) is 
     amended--
       (A) by redesignating subsection (f) as subsection (g); and
       (B) by adding after subsection (e) the following new 
     subsection:
       ``(f) Coordination With Centers for Energy and 
     Environmental Knowledge and Outreach.--A Clean Energy 
     Application Center may serve as a Center for Energy and 
     Environmental Knowledge and Outreach established pursuant to 
     section 174 of the American Clean Energy and Security Act of 
     2009.''.
       (2) Industrial research and assessment centers.--Section 
     452(e) of the Energy Independence and Security Act of 2007 
     (42 U.S.C. 17111(e)) is amended--
       (A) by striking ``The Secretary'' and all that follows 
     through ``shall be--'' and inserting the following:
       ``(1) In general.--The Secretary shall provide funding to 
     institution of higher education-based industrial research and 
     assessment centers, whose purposes shall be--'';
       (B) by redesignating paragraphs (1) through (5) as 
     subparagraphs (A) through (E), respectively (and by moving 
     the margins of such subparagraphs 2 ems to the right); and
       (C) by adding at the end the following new paragraph:
       ``(2) Coordination with centers for energy and 
     environmental knowledge and outreach.--An industrial research 
     and assessment center may serve as a Center for Energy and 
     Environmental Knowledge and Outreach established pursuant to 
     section 174 of the American Clean Energy and Security Act of 
     2009.''.
       (c) Additional Funding for Clean Energy Application 
     Centers.--Subsection (g) of section 375 of the Energy Policy 
     and Conservation Act (42 U.S.C. 6345(f)), as redesignated by 
     subsection (b)(1) of this section, is amended by striking 
     ``$10,000,000 for each of fiscal years 2008 through 2012'' 
     and inserting ``$30,000,000 for fiscal year 2010 and each 
     fiscal year thereafter''.

     SEC. 175. HIGH EFFICIENCY GAS TURBINE RESEARCH, DEVELOPMENT, 
                   AND DEMONSTRATION.

       (a) In General.--The Secretary of Energy shall carry out a 
     multiyear, multiphase program of research, development, and 
     technology demonstration to improve the efficiency of gas 
     turbines used in combined cycle power generation systems and 
     to identify the technologies that ultimately will lead to gas 
     turbine combined cycle efficiency of 65 percent.
       (b) Program Elements.--The program under this section 
     shall--
       (1) support first-of-a-kind engineering and detailed gas 
     turbine design for utility-scale electric power generation, 
     including--
       (A) high temperature materials, including superalloys, 
     coatings, and ceramics;
       (B) improved heat transfer capability;
       (C) manufacturing technology required to construct complex 
     three-dimensional geometry parts with improved aerodynamic 
     capability;
       (D) combustion technology to produce higher firing 
     temperature while lowering nitrogen oxide and carbon monoxide 
     emissions per unit of output;
       (E) advanced controls and systems integration;
       (F) advanced high performance compressor technology; and
       (G) validation facilities for the testing of components and 
     subsystems;
       (2) include technology demonstration through component 
     testing, subscale testing, and full scale testing in existing 
     fleets;
       (3) include field demonstrations of the developed 
     technology elements so as to demonstrate technical and 
     economic feasibility; and
       (4) assess overall combined cycle system performance.
       (c) Program Goals.--The goals of the multiphase program 
     established under subsection (a) shall be--
       (1) in phase I--
       (A) to develop the conceptual design of advanced high 
     efficiency gas turbines that can achieve at least 62 percent 
     combined cycle efficiency on a lower heating value basis; and
       (B) to develop and demonstrate the technology required for 
     advanced high efficiency gas turbines that can achieve at 
     least 62 percent combined cycle efficiency on a lower heating 
     value basis; and
       (2) in phase II, to develop the conceptual design for 
     advanced high efficiency gas turbines that can achieve at 
     least 65 percent combined cycle efficiency on a lower heating 
     value basis.
       (d) Proposals.--Within 180 days after the date of enactment 
     of this section, the Secretary shall solicit proposals for 
     conducting activities under this section. In selecting 
     proposals, the Secretary shall emphasize--
       (1) the extent to which the proposal will stimulate the 
     creation or increased retention of jobs in the United States; 
     and
       (2) the extent to which the proposal will promote and 
     enhance United States technology leadership.
       (e) Cost Sharing.--Section 988 of the Energy Policy Act of 
     2005 (42 U.S.C. 16352) shall

[[Page H7500]]

     apply to an award of financial assistance made under this 
     section.
       (f) Limits on Participation.--The limits on participation 
     applicable under section 999E of the Energy Policy Act of 
     2005 (42 U.S.C. 16375) shall apply to financial assistance 
     awarded under this section.
       (g) Authorization of Appropriations.--There are authorized 
     to be appropriated to the Secretary for carrying out this 
     section $65,000,000 for each of fiscal years 2011 through 
     2014.

             Subtitle I--Nuclear and Advanced Technologies

     SEC. 181. REVISIONS TO LOAN GUARANTEE PROGRAM AUTHORITY.

       (a) Definition of Conditional Commitment.--Section 1701 of 
     the Energy Policy Act of 2005 (42 U.S.C. 16511), as amended 
     by section 130(a) of this Act, is amended by adding after 
     paragraph (7) the following:
       ``(8) Conditional commitment.--The term `conditional 
     commitment' means a final term sheet negotiated between the 
     Secretary and a project sponsor or sponsors, which term sheet 
     shall be binding on both parties and become a final loan 
     guarantee agreement if all conditions precedent established 
     in the term sheet, which shall include the acquisition of all 
     necessary permits and licenses, are satisfied.''.
       (b) Specific Appropriation or Contribution.--Section 1702 
     of the Energy Policy Act of 2005 (42 U.S.C. 16512) is amended 
     by striking subsection (b) and inserting the following:
       ``(b) Specific Appropriation or Contribution.--
       ``(1) In general.--No guarantee shall be made unless--
       ``(A) an appropriation for the cost has been made;
       ``(B) the Secretary has received from the borrower a 
     payment in full for the cost of the obligation and deposited 
     the payment into the Treasury; or
       ``(C) a combination of appropriations or payments from the 
     borrower has been made sufficient to cover the cost of the 
     obligation.
       ``(2) Limitation.--The source of payments received from a 
     borrower under paragraph (1)(B) shall not be a loan or other 
     debt obligation that is made or guaranteed by the Federal 
     Government.''.
       (c) Fees.--Section 1702(h) of the Energy Policy Act of 2005 
     (42 U.S.C. 16512(h)) is amended by striking paragraph (2) and 
     inserting the following:
       ``(2) Availability.--Fees collected under this subsection 
     shall--
       ``(A) be deposited by the Secretary into a special fund in 
     the Treasury to be known as the `Incentives For Innovative 
     Technologies Fund'; and
       ``(B) remain available to the Secretary for expenditure, 
     without further appropriation or fiscal year limitation, for 
     administrative expenses incurred in carrying out this 
     title.''.
       (d) Wage Rate Requirements.--Section 1702 of the Energy 
     Policy Act of 2005 (42 U.S.C. 16512) is amended by adding at 
     the end the following new subsection:
       ``(k) Wage Rate Requirements.--No loan guarantee shall be 
     made under this title unless the borrower has provided to the 
     Secretary reasonable assurances that all laborers and 
     mechanics employed by contractors and subcontractors in the 
     performance of construction work financed in whole or in part 
     by the guaranteed loan will be paid wages at rates not less 
     than those prevailing on projects of a character similar to 
     the contract work in the civil subdivision of the State in 
     which the contract work is to be performed as determined by 
     the Secretary of Labor in accordance with subchapter IV of 
     chapter 31 of part A of subtitle II of title 40, United 
     States Code. With respect to the labor standards specified in 
     this subsection, the Secretary of Labor shall have the 
     authority and functions set forth in Reorganization Plan 
     Numbered 14 of 1950 (64 Stat. 1267; 5 U.S.C. App.) and 
     section 3145 of title 40, United States Code.''.
       (e) Subrogation.--Section 1702(g)(2) of the Energy Policy 
     Act of 2005 (42 U.S.C. 16512(g)(2)) is amended by striking 
     subparagraphs (B) and (C) and inserting the following:
       ``(B) Superiority of rights.--Except as provided in 
     subparagraph (C), the rights of the Secretary, with respect 
     to any property acquired pursuant to a guarantee or related 
     agreements, shall be superior to the rights of any other 
     person with respect to the property.
       ``(C) Terms and conditions.--A guarantee agreement shall 
     include such detailed terms and conditions as the Secretary 
     determines appropriate to--
       ``(i) protect the financial interests of the United States 
     in the case of default;
       ``(ii) have available all the patents and technology 
     necessary for any person selected, including the Secretary, 
     to complete and operate the project;
       ``(iii) provide for sharing the proceeds received from the 
     sale of project assets with other creditors or control the 
     disposition of project assets if necessary to protect the 
     financial interests of the United States in the case of 
     default; and
       ``(iv) provide such lien priority in project assets as 
     necessary to protect the financial interests of the United 
     States in the case of a default.''.

     SEC. 182. PURPOSE.

       The purpose of sections 183 through 189 of this subtitle is 
     to promote the domestic development and deployment of clean 
     energy technologies required for the 21st century through the 
     establishment of a self-sustaining Clean Energy Deployment 
     Administration that will provide for an attractive investment 
     environment through partnership with and support of the 
     private capital market in order to promote access to 
     affordable financing for accelerated and widespread 
     deployment of--
       (1) clean energy technologies;
       (2) advanced or enabling energy infrastructure 
     technologies;
       (3) energy efficiency technologies in residential, 
     commercial, and industrial applications, including end-use 
     efficiency in buildings; and
       (4) manufacturing technologies for any of the technologies 
     or applications described in this section.

     SEC. 183. DEFINITIONS.

       In this subtitle:
       (1) Administration.--The term ``Administration'' means the 
     Clean Energy Deployment Administration established by section 
     186.
       (2) Advisory council.--The term ``Advisory Council'' means 
     the Energy Technology Advisory Council of the Administration.
       (3) Breakthrough technology.--The term ``breakthrough 
     technology'' means a clean energy technology that--
       (A) presents a significant opportunity to advance the goals 
     developed under section 185, as assessed under the 
     methodology established by the Advisory Council; but
       (B) has generally not been considered a commercially ready 
     technology as a result of high perceived technology risk or 
     other similar factors.
       (4) Clean energy technology.--The term ``clean energy 
     technology'' means a technology related to the production, 
     use, transmission, storage, control, or conservation of 
     energy--
       (A) that will contribute to a stabilization of atmospheric 
     greenhouse gas concentrations thorough reduction, avoidance, 
     or sequestration of energy-related emissions and--
       (i) reduce the need for additional energy supplies by using 
     existing energy supplies with greater efficiency or by 
     transmitting, distributing, or transporting energy with 
     greater effectiveness through the infrastructure of the 
     United States; or
       (ii) diversify the sources of energy supply of the United 
     States to strengthen energy security and to increase supplies 
     with a favorable balance of environmental effects if the 
     entire technology system is considered; and
       (B) for which, as determined by the Administrator, 
     insufficient commercial lending is available at affordable 
     rates to allow for widespread deployment.
       (5) Cost.--The term ``cost'' has the meaning given the term 
     in section 502 of the Federal Credit Reform Act of 1990 (2 
     U.S.C. 661a).
       (6) Direct loan.--The term ``direct loan'' has the meaning 
     given the term in section 502 of the Federal Credit Reform 
     Act of 1990 (2 U.S.C. 661a).
       (7) Fund.--The term ``Fund'' means the Clean Energy 
     Investment Fund established by section 184(a).
       (8) Green bonds.--The term ``Green Bonds'' means bonds 
     issued pursuant to section 184.
       (8) Loan guarantee.--The term ``loan guarantee'' has the 
     meaning given the term in section 502 of the Federal Credit 
     Reform Act of 1990 (2 U.S.C. 661a).
       (9) National laboratory.--The term ``National Laboratory'' 
     has the meaning given the term in section 2 of the Energy 
     Policy Act of 2005 (42 U.S.C. 15801).
       (10) Secretary.--The term ``Secretary'' means the Secretary 
     of Energy.
       (11) State.--The term ``State'' means--
       (A) a State;
       (B) the District of Columbia;
       (C) the Commonwealth of Puerto Rico; and
       (D) any other territory or possession of the United States.
       (12) Technology risk.--The term ``technology risk'' means 
     the risks during construction or operation associated with 
     the design, development, and deployment of clean energy 
     technologies (including the cost, schedule, performance, 
     reliability and maintenance, and accounting for the perceived 
     risk), from the perspective of commercial lenders, that may 
     be increased as a result of the absence of adequate 
     historical construction, operating, or performance data from 
     commercial applications of the technology.

     SEC. 184. CLEAN ENERGY INVESTMENT FUND.

       (a) Establishment.--There is established in the Treasury of 
     the United States a revolving fund, to be known as the 
     ``Clean Energy Investment Fund'', consisting of--
       (1) such amounts as are deposited in the Fund under this 
     subtitle; and
       (2) such sums as may be appropriated to supplement the 
     Fund.
       (b) Authorization of Appropriations.--There are authorized 
     to be appropriated to the Fund such sums as are necessary to 
     carry out this subtitle.
       (c) Expenditures From Fund.--
       (1) In general.--Amounts in the Fund shall be available to 
     the Administrator of the Administration for obligation 
     without fiscal year limitation, to remain available until 
     expended.
       (2) Administrative expenses.--
       (A) Fees.--Fees collected for administrative expenses shall 
     be available without limitation to cover applicable expenses.
       (B) Fund.--To the extent that administrative expenses are 
     not reimbursed through

[[Page H7501]]

     fees, an amount not to exceed 1.5 percent of the amounts in 
     the Fund as of the beginning of each fiscal year shall be 
     available to pay the administrative expenses for the fiscal 
     year necessary to carry out this subtitle.
       (d) Transfers of Amounts.--
       (1) In general.--The amounts required to be transferred to 
     the Fund under this section shall be transferred at least 
     monthly from the general fund of the Treasury to the Fund on 
     the basis of estimates made by the Secretary of the Treasury.
       (2) Adjustments.--Proper adjustment shall be made in 
     amounts subsequently transferred to the extent prior 
     estimates were in excess of or less than the amounts required 
     to be transferred.
       (3) Cash flows.--Cash flows associated with costs of the 
     Fund described in section 502(5)(B) of the Federal Credit 
     Reform Act of 1990 (2 U.S.C. 661a(5)(B)) shall be transferred 
     to appropriate credit accounts.
       (e) Green Bonds.--
       (1) Initial capitalization.--The Secretary of the Treasury 
     shall issue Green Bonds in the amount of $7,500,000,000 on 
     the credit of the United States to acquire capital stock of 
     the Administration. Stock certificates evidencing ownership 
     in the Administration shall be issued by the Administration 
     to the Secretary of the Treasury, to the extent of payments 
     made for the capital stock of the Administration.
       (2) Denominations and maturity.--Green Bonds shall be in 
     such forms and denominations, and shall mature within such 
     periods, as determined by the Secretary of the Treasury.
       (3) Interest.--Green Bonds shall bear interest at a rate 
     not less than the current average yield on outstanding market 
     obligations of the United States of comparable maturity 
     during the month preceding the issuance of the obligation as 
     determined by the Secretary of the Treasury.
       (4) Lawful investments.--Green Bonds shall be lawful 
     investments, and may be accepted as security for all 
     fiduciary, trust, and public funds, the investment or deposit 
     of which shall be under the authority or control of the 
     United States or any officer or officers thereof.

     SEC. 185. ENERGY TECHNOLOGY DEPLOYMENT GOALS.

       (a) Goals.--Not later than 1 year after the date of 
     enactment of this Act, the Secretary, after consultation with 
     the Advisory Council, shall develop and publish for review 
     and comment in the Federal Register recommended near-, 
     medium-, and long-term goals (including numerical performance 
     targets at appropriate intervals to measure progress toward 
     those goals) for the deployment of clean energy technologies 
     through the credit support programs established by section 
     187 to promote--
       (1) sufficient electric generating capacity using clean 
     energy technologies to meet the energy needs of the United 
     States;
       (2) clean energy technologies in vehicles and fuels that 
     will substantially reduce the reliance of the United States 
     on foreign sources of energy and insulate consumers from the 
     volatility of world energy markets;
       (3) a domestic commercialization and manufacturing capacity 
     that will establish the United States as a world leader in 
     clean energy technologies across multiple sectors;
       (4) installation of sufficient infrastructure to allow for 
     the cost-effective deployment of clean energy technologies 
     appropriate to each region of the United States;
       (5) the transformation of the building stock of the United 
     States to zero net energy consumption;
       (6) the recovery, use, and prevention of waste energy;
       (7) domestic manufacturing of clean energy technologies on 
     a scale that is sufficient to achieve price parity with 
     conventional energy sources;
       (8) domestic production of commodities and materials (such 
     as steel, chemicals, polymers, and cement) using clean energy 
     technologies so that the United States will become a world 
     leader in environmentally sustainable production of the 
     commodities and materials;
       (9) a robust, efficient, and interactive electricity 
     transmission grid that will allow for the incorporation of 
     clean energy technologies, distributed generation, and 
     demand-response in each regional electric grid;
       (10) sufficient availability of financial products to allow 
     owners and users of residential, retail, commercial, and 
     industrial buildings to make energy efficiency and 
     distributed generation technology investments with reasonable 
     payback periods; and
       (11) sufficient availability of financial services and 
     support to small businesses developing and deploying clean 
     energy technologies through partnerships with private 
     entities that have relevant creidt expertise; and
       (12) such other goals as the Secretary, in consultation 
     with the Advisory Council, determines to be consistent with 
     the purpose stated in section 182.
       (b) Revisions.--The Secretary shall revise the goals 
     established under subsection (a), from time to time as 
     appropriate, to account for advances in technology and 
     changes in energy policy.

     SEC. 186. CLEAN ENERGY DEPLOYMENT ADMINISTRATION.

       (a) Establishment.--
       (1) Establishment of corporation.--There is established a 
     corporation to be known as the Clean Energy Deployment 
     Administration that shall be wholly owned by the United 
     States.
       (2) Independent corporation.--The Administration shall be 
     an independent corporation. Neither the Administration nor 
     any of its functions, powers, or duties shall be transferred 
     to or consolidated with any other department, agency, or 
     corporation of the Government unless the Congress provides 
     otherwise.
       (3) Charter.--The Administration shall be chartered for 20 
     years from the date of enactment of this section.
       (4) Status.--
       (A) Inspector general.--Section 12 of the Inspector General 
     Act of 1978 (5 U.S.C. App.) is amended--
       (i) in paragraph (1), by inserting ``the Administrator of 
     the Clean Energy Deployment Administration;'' after ``Export-
     Import Bank;''; and
       (ii) in paragraph (2), by inserting ``the Clean Energy 
     Deployment Administration,'' after ``Export-Import Bank,''.
       (3) Offices.--
       (A) Principal office.--The Administration shall--
       (i) maintain the principal office of the Administration in 
     the national capital region; and
       (ii) for purposes of venue in civil actions, be considered 
     to be a resident of the District of Columbia.
       (B) Other offices.--The Administration may establish other 
     offices in such other places as the Administration considers 
     necessary or appropriate for the conduct of the business of 
     the Administration.
       (b) Administrator.--
       (1) In general.--The Administrator of the Administration 
     shall be--
       (A) appointed by the President, with the advice and consent 
     of the Senate, for a 5-year term; and
       (B) compensated at the prevailing rate for compensation for 
     similar positions in industry.
       (2) Duties.--The Administrator of the Administration 
     shall--
       (A) serve as the Chief Executive Officer of the 
     Administration and Chairman of the Board;
       (B) ensure that--
       (i) the Administration operates in a safe and sound manner, 
     including maintenance of adequate capital and internal 
     controls (consistent with section 404 of the Sarbanes-Oxley 
     Act of 2002 (15 U.S.C. 7262));
       (ii) the operations and activities of the Administration 
     foster liquid, efficient, competitive, and resilient energy 
     and energy efficiency finance markets;
       (iii) the Administration carries out the purpose stated in 
     section 182 only through activities that are authorized under 
     and consistent with sections 182 through 189; and
       (iv) the activities of the Administration and the manner in 
     which the Administration is operated are consistent with the 
     public interest;
       (C) develop policies and procedures for the Administration 
     that will--
       (i) promote a self-sustaining portfolio of investments that 
     will maximize the value of investments to effectively promote 
     clean energy technologies;
       (ii) promote transparency and openness in Administration 
     operations;
       (iii) afford the Administration with sufficient flexibility 
     to meet the purpose stated in section 182; and
       (iv) provide for the efficient processing of applications; 
     and
       (D) with the concurrence of the Board, set expected loss 
     reserves for the support provided by the Administration 
     consistent with section 187(c).
       (c) Board of Directors.--
       (1) In general.--The Board of Directors of the 
     Administration shall consist of--
       (A) the Secretary or the designee of the Secretary, who 
     shall serve as an ex-officio member of the Board of 
     Directors;
       (B) the Secretary of the Treasury or the designee of the 
     Secretary, who shall serve as an ex-officio member of the 
     Board of Directors;
       (C) the Secretary of the Interior or the designee of the 
     Secretary, who shall serve as an ex-officio member of the 
     Board of Directors;
       (D) the Secretary of Agriculture or the designee of the 
     Secretary, who shall serve as an ex officio member of the 
     Board of Directors;
       (E) the Administrator of the Administration, who shall 
     serve as the Chairman of the Board of Directors; and
       (F) 4 additional members who shall--
       (i) be appointed by the President, with the advice and 
     consent of the Senate, for staggered 5-year terms; and
       (ii) have experience in banking, financial services, 
     technology assessment, energy regulation, or risk management, 
     including individuals with substantial experience in the 
     development of energy projects, the electricity generation 
     sector, the transportation sector, the manufacturing sector, 
     and the energy efficiency sector.
       (2) Duties.--The Board of Directors shall--
       (A) oversee the operations of the Administration and ensure 
     industry best practices are followed in all financial 
     transactions involving the Administration;
       (B) consult with the Administrator of the Administration on 
     the general policies and procedures of the Administration to 
     ensure the interests of the taxpayers are protected;
       (C) ensure the portfolio of investments are consistent with 
     purpose stated in section 182 and with the long-term 
     financial stability of the Administration;

[[Page H7502]]

       (D) ensure that the operations and activities of the 
     Administration are consistent with the development of a 
     robust private sector that can provide commercial loans or 
     financing products; and
       (E) not serve on a full-time basis, except that the Board 
     of Directors shall meet at least quarterly to review, as 
     appropriate, applications for credit support and set policies 
     and procedures as necessary.
       (3) Removal.--An appointed member of the Board of Directors 
     may be removed from office by the President for good cause.
       (4) Vacancies.--An appointed seat on the Board of Directors 
     that becomes vacant shall be filled by appointment by the 
     President, but only for the unexpired portion of the term of 
     the vacating member.
       (5) Compensation of members.--An appointed member of the 
     Board of Directors shall be compensated at the prevailing 
     rate for compensation for similar positions in industry.
       (d) Energy Technology Advisory Council.--
       (1) In general.--The Administration shall have an Energy 
     Technology Advisory Council consisting of 8 members selected 
     by the Board of Directors of the Administration.
       (2) Qualifications.--The members of the Advisory Council 
     shall--
       (A) have clean energy project development, clean energy 
     finance, commercial, and/or relevant scientific expertise; 
     and
       (B) include representatives of--
       (i) the academic community;
       (ii) the private research community;
       (iii) National Laboratories;
       (iv) the technology or project development community; and
       (v) the commercial energy financing and operations sector.
       (3) Duties.--The Advisory Council shall--
       (A) develop and publish for comment in the Federal Register 
     a methodology for assessment of clean energy technologies 
     that will allow the Administration to evaluate projects based 
     on the progress likely to be achieved per-dollar invested in 
     maximizing the attributes of the definition of clean energy 
     technology, taking into account the extent to which support 
     for a clean energy technology is likely to accrue subsequent 
     benefits that are attributable to a commercial scale 
     deployment taking place earlier than that which otherwise 
     would have occurred without the support; and
       (B) advise on the technological approaches that should be 
     supported by the Administration to meet the technology 
     deployment goals established by the Secretary pursuant to 
     section 185.
       (4) Term.--
       (A) In general.--Members of the Advisory Council shall have 
     5-year staggered terms, as determined by the Administrator of 
     the Administration.
       (B) Reappointment.--A member of the Advisory Council may be 
     reappointed.
       (5) Compensation.--A member of the Advisory Council, who is 
     not otherwise compensated as a Federal employee, shall be 
     compensated at a rate equal to the daily equivalent of the 
     annual rate of basic pay prescribed for level IV of the 
     Executive Schedule under section 5315 of title 5, United 
     States Code, for each day (including travel time) during 
     which the member is engaged in the performance of the duties 
     of the Advisory Council.
       (e) Staff.--
       (1) In general.--The Administrator of the Administration, 
     in consultation with the Board of Directors, may--
       (A) appoint and terminate such officers, attorneys, 
     employees, and agents as are necessary to carry out this 
     subtitle; and
       (B) vest those personnel with such powers and duties as the 
     Administrator of the Administration may determine.
       (f) Conflicts of Interest.--No director, officer, attorney, 
     agent, or employee of the Administration shall in any manner, 
     directly or indirectly, participate in the deliberation upon, 
     or the determination of, any question affecting such 
     individual's personal interests, or the interests of any 
     corporation, partnership, or association in which such 
     individual is directly or indirectly personally interested.
       (g) Sunset.--
       (1) Expiration of charter.--The Administration shall 
     continue to exercise its functions until all obligations and 
     commitments of the Administration are discharged, even after 
     its charter has expired.
       (2) Prior obligations.--No provisions of this subsection 
     shall be construed as preventing the Administration from--
       (A) undertaking obligations prior to the date of the 
     expiration of its charter which mature subsequent to such 
     date;
       (B) assuming, prior to the date of the expiration of its 
     charter, liability as guarantor, endorser, or acceptor of 
     obligations which mature subsequent to such date; or
       (C) continuing as a corporation and exercising any of its 
     functions subsequent to the date of the expiration of its 
     charter for purposes of orderly liquidation, including the 
     administration of its assets and the collection of any 
     obligations held by the Administration.

     SEC. 187. DIRECT SUPPORT.

       (a) In General.--The Administration may issue direct loans, 
     letters of credit, and loan guarantees to deploy clean energy 
     technologies if the Administrator of the Administration has 
     determined that deployment of the technologies would benefit 
     or be accelerated by the support.
       (b) Eligibility Criteria.--In carrying out this section and 
     awarding credit support to projects, the Administrator of the 
     Administration shall account for--
       (1) how the technology rates based on an evaluation 
     methodology established by the Advisory Council;
       (2) how the project fits with the goals established under 
     section 185; and
       (3) the potential for the applicant to successfully 
     complete the project.
       (c) Risk.--
       (1) Expected loan loss reserve.--The Administrator of the 
     Administration shall establish an expected loan loss reserve 
     to account for estimated losses attributable to activities 
     under this section that is consistent with the purposes of--
       (A) developing breakthrough technologies to the point at 
     which technology risk is largely mitigated;
       (B) achieving widespread deployment and advancing the 
     commercial viability of clean energy technologies; and
       (C) advancing the goals established under section 185.
       (2) Initial expected loan loss reserve.--Until such time as 
     the Administrator of the Administration determines sufficient 
     data exist to establish an expected loan loss reserve that is 
     appropriate, the Administrator of the Administration shall 
     consider establishing an initial rate of 10 percent for the 
     portfolio of investments under this subtitle.
       (3) Portfolio investment approach.--The Administration 
     shall--
       (A) use a portfolio investment approach to mitigate risk 
     and diversify investments across technologies and ensure that 
     no particular technology is provided more than 30 percent of 
     the financial support available;
       (B) to the maximum extent practicable and consistent with 
     long-term self-sufficiency, weigh the portfolio of 
     investments in projects to advance the goals established 
     under section 185;
       (C) consistent with the expected loan loss reserve 
     established under this subsection, the purpose stated in 
     section 182, and section 186(b)(2)(B), provide the maximum 
     practicable percentage of support to promote breakthrough 
     technologies; and
       (D) give the highest priority to investments that promote 
     technologies that will achieve the maximum greenhouse gas 
     emission reductions within a reasonable period of time per 
     dollar invested and the earliest reductions in greenhouse gas 
     emissions.
       (4) Loss rate review.--
       (A) In general.--The Board of Directors shall review on an 
     annual basis the loss rates of the portfolio to determine the 
     adequacy of the reserves.
       (B) Report.--Not later than 90 days after the date of the 
     initiation of the review, the Administrator of the 
     Administration shall submit to the Committee on Energy and 
     Natural Resources and the Committee on Finance of the Senate, 
     and the Committee on Energy and Commerce and the Committee on 
     Ways and Means of the House of Representatives a report 
     describing the results of the review and any recommended 
     policy changes.
       (5) Federal cost share.--Direct loans, letters of credit 
     and loan guarantees by the Administration shall not exceed an 
     amount equal to 80 percent of the project cost of the 
     facility that is the subject of the loan, letter of credit or 
     loan guarantee, as estimated at the time at which the loan, 
     letter of credit or loan guarantee is issued.
       (d) Application Review.--
       (1) In general.--To the maximum extent practicable and 
     consistent with sound business practices, the Administration 
     shall seek to consolidate reviews of applications for credit 
     support under this subtitle such that final decisions on 
     applications can generally be issued not later than 180 days 
     after the date of submission of a completed application.
       (2) Environmental review.--In carrying out this subtitle, 
     the Administration shall, to the maximum extent practicable--
       (A) avoid duplicating efforts that have already been 
     undertaken by other agencies (including State agencies acting 
     under Federal programs); and
       (B) with the advice of the Council on Environmental Quality 
     and any other applicable agencies, use the administrative 
     records of similar reviews conducted throughout the executive 
     branch to develop the most expeditious review process 
     practicable.
       (e) Wage Rate Requirements.--
       (1) In general.--No credit support shall be issued under 
     this section unless the borrower has provided to the 
     Administrator of the Administration reasonable assurances 
     that all laborers and mechanics employed by contractors and 
     subcontractors in the performance of construction work 
     financed in whole or in part by the Administration will be 
     paid wages at rates not less than those prevailing on 
     projects of a character similar to the contract work in the 
     civil subdivision of the State in which the contract work is 
     to be performed as determined by the Secretary of Labor in 
     accordance with subchapter IV of chapter 31 of part A of 
     subtitle II of title 40, United States Code.
       (2) Labor standards.--With respect to the labor standards 
     specified in this subsection, the Secretary of Labor shall 
     have the authority and functions set forth in Reorganization 
     Plan Numbered 14 of 1950 (64 Stat. 1267; 5 U.S.C. App.) and 
     section 3145 of title 40, United States Code.
       (f) Limitations.--(1) The Administration shall not provide 
     direct support as defined

[[Page H7503]]

     under this section or indirect support as defined under 
     section 188 to an individual clean energy technology project 
     that obtained a loan guarantee under title XVII of the Energy 
     Policy Act of 2005.
       (2) No direct or indirect support provided by the 
     Administration may be used to pay any part of the cost of an 
     obligation or a loan guarantee under Title XVII of the Energy 
     Policy Act of 2005.

     SEC. 188. INDIRECT SUPPORT.

       (a) In General.--For the purpose of enhancing the 
     availability of private financing for clean energy technology 
     deployment, the Administration may--
       (1) provide credit support to portfolios of taxable debt 
     obligations originated by state, local, and private sector 
     entities that enable owners and users of buildings and 
     industrial facilities to--
       (A) significantly increase the energy efficiency of such 
     buildings or facilities; or
       (B) install systems that individually generate electricity 
     from renewable energy resources and have a capacity of no 
     more than 2 megawatts;
       (2) facilitate financing transactions in tax equity markets 
     and long-term purchasing of clean energy by state, local, and 
     non-governmental not-for-profit entities, to the degree and 
     extent that the Administration determines such financing 
     activity is appropriate and consistent with carrying out the 
     purposes described in Section 182 of this Act; and
       (3) provide credit support to portfolios of taxable debt 
     obligations originated by state, local, and private sector 
     entities that enable the deployment of energy storage 
     applications for electric drive vehicles, stationary 
     applications, and electricity transmission and distribution.
       (b) Definitions.--For purposes of the section:
       (1) Credit support.--The term ``credit support'' means--
       (A) direct loans, letters of credit, loan guarantees, and 
     insurance products; and
       (B) the purchase or commitment to purchase, or the sale or 
     commitment to sell, debt instruments (including subordinated 
     securities).
       (2) Renewable energy resource.--The term ``renewable energy 
     resource'' shall have the meaning given that term in section 
     610 of the Public Utility Regulatory Policies Act of 1978 (as 
     added by section 101 of this Act).
       (c) Transparency.--The Administration shall seek to foster 
     through its credit support activities--
       (1) the development and consistent application of standard 
     contractual terms, transparent underwriting standards and 
     consistent measurement and verification protocols, as 
     applicable; and
       (2) the creation of performance data that promotes 
     effective underwriting and risk management to support lending 
     markets and stimulate the development of private investment 
     markets.
       (d) Exempt Securities.--All securities insured or 
     guaranteed by the Administration shall, to the same extent as 
     securities that are direct obligations of or obligations 
     guaranteed as to the principal or interest by the United 
     States, be considered to be exempt securities within the 
     meaning of the laws administered by the Securities and 
     Exchange Commission.

     SEC. 189. FEDERAL CREDIT AUTHORITY.

       (a) Payments of Liabilities.--
       (1) In general.--Any payment made to discharge liabilities 
     arising from agreements under this subtitle shall be paid 
     exclusively out of the Fund or the associated credit account, 
     as appropriate.
       (2) Security.--Subject to paragraph (1), the full faith and 
     credit of the United States is pledged to the payment of all 
     obligations entered into by the Administration pursuant to 
     this subtitle.
       (b) Fees.--
       (1) In general.--Consistent with achieving the purpose 
     stated in section 182, the Administrator of the 
     Administration shall charge fees or collect compensation 
     generally in accordance with commercial rates.
       (2) Availability of fees.--All fees collected by the 
     Administration may be retained by the Administration and 
     placed in the Fund and may remain available to the 
     Administration, without further appropriation or fiscal year 
     limitation, for use in carrying out the purpose stated in 
     section 182.
       (3) Breakthrough technologies.--The Administration shall 
     charge the minimum amount in fees or compensation practicable 
     for breakthrough technologies, consistent with the long-term 
     viability of the Administration, unless the Administration 
     first determines that a higher charge will not impede the 
     development of the technology.
       (4) Alternative fee arrangements.--The Administration may 
     use such alternative arrangements (such as profit 
     participation, contingent fees, and other valuable contingent 
     interests) as the Administration considers appropriate to 
     compensate the Administration for the expenses of the 
     Administration and the risk inherent in the support of the 
     Administration.
       (c) Cost Transfer Authority.--Amounts collected by the 
     Administration for the cost of a loan or loan guarantee shall 
     be transferred by the Administration to the respective credit 
     accounts.

     SEC. 190. GENERAL PROVISIONS.

       (a) Immunity From Impairment, Limitation, or Restriction.--
       (1) In general.--All rights and remedies of the 
     Administration (including any rights and remedies of the 
     Administration on, under, or with respect to any mortgage or 
     any obligation secured by a mortgage) shall be immune from 
     impairment, limitation, or restriction by or under--
       (A) any law (other than a law enacted by Congress expressly 
     in limitation of this paragraph) that becomes effective after 
     the acquisition by the Administration of the subject or 
     property on, under, or with respect to which the right or 
     remedy arises or exists or would so arise or exist in the 
     absence of the law; or
       (B) any administrative or other action that becomes 
     effective after the acquisition.
       (2) State law.--The Administrator of the Administration may 
     conduct the business of the Administration without regard to 
     any qualification or law of any State relating to 
     incorporation.
       (b) Use of Other Agencies.--With the consent of a 
     department, establishment, or instrumentality (including any 
     field office), the Administration may--
       (1) use and act through any department, establishment, or 
     instrumentality; and
       (2) use, and pay compensation for, information, services, 
     facilities, and personnel of the department, establishment, 
     or instrumentality.
       (c) Financial Matters.--
       (1) Investments.--Funds of the Administration may be 
     invested in such investments as the Board of Directors may 
     prescribe. Earnings from such funds, other than fees 
     collected under section 189, may be spent by the 
     Administration only to such extent or in such amounts as are 
     provided in advance by appropriation Acts.
       (2) Fiscal agents.--Any Federal Reserve bank or any bank as 
     to which at the time of the designation of the bank by the 
     Administrator of the Administration there is outstanding a 
     designation by the Secretary of the Treasury as a general or 
     other depository of public money, may be designated by the 
     Administrator of the Administration as a depositary or 
     custodian or as a fiscal or other agent of the 
     Administration.
       (d) Periodic Reports.--Not later than 1 year after 
     commencement of operation of the Administration and at least 
     biannually thereafter, the Administrator of the 
     Administration shall submit to the Committee on Energy and 
     Natural Resources and the Committee on Finance of the Senate 
     and the Committee on Energy and Commerce and the Committee on 
     Ways and Means of the House of Representatives a report that 
     includes a description of--
       (1) the technologies supported by activities of the 
     Administration and how the activities advance the purpose 
     stated in section 182; and
       (2) the performance of the Administration on meeting the 
     goals established under section 185.
       (g) Audits by the Comptroller General.--
       (1) In general.--The programs, activities, receipts, 
     expenditures, and financial transactions of the 
     Administration shall be subject to audit by the Comptroller 
     General of the United States under such rules and regulations 
     as may be prescribed by the Comptroller General.
       (2) Access.--The representatives of the Government 
     Accountability Office shall--
       (A) have access to the personnel and to all books, 
     accounts, documents, records (including electronic records), 
     reports, files, and all other papers, automated data, things, 
     or property belonging to, under the control of, or in use by 
     the Administration, or any agent, representative, attorney, 
     advisor, or consultant retained by the Administration, and 
     necessary to facilitate the audit;
       (B) be afforded full facilities for verifying transactions 
     with the balances or securities held by depositories, fiscal 
     agents, and custodians;
       (C) be authorized to obtain and duplicate any such books, 
     accounts, documents, records, working papers, automated data 
     and files, or other information relevant to the audit without 
     cost to the Comptroller General; and
       (D) have the right of access of the Comptroller General to 
     such information pursuant to section 716(c) of title 31, 
     United States Code.
       (3) Assistance and cost.--
       (A) In general.--For the purpose of conducting an audit 
     under this subsection, the Comptroller General may, in the 
     discretion of the Comptroller General, employ by contract, 
     without regard to section 3709 of the Revised Statutes (41 
     U.S.C. 5), professional services of firms and organizations 
     of certified public accountants for temporary periods or for 
     special purposes.
       (B) Reimbursement.--
       (i) In general.--On the request of the Comptroller General, 
     the Administration shall reimburse the Government 
     Accountability Office for the full cost of any audit 
     conducted by the Comptroller General under this subsection.
       (ii) Crediting.--Such reimbursements shall--

       (I) be credited to the appropriation account entitled 
     ``Salaries and Expenses, Government Accountability Office'' 
     at the time at which the payment is received; and
       (II) remain available until expended.

       (h) Annual Independent Audits.--
       (1) In general.--The Administrator of the Administration 
     shall--
       (A) have an annual independent audit made of the financial 
     statements of the Administration by an independent public 
     accountant

[[Page H7504]]

     in accordance with generally accepted auditing standards; and
       (B) submit to the Secretary and to the Committee on Energy 
     and Natural Resources and the Committee on Finance of the 
     Senate and the Committee on Energy and Commerce and the 
     Committee on Ways and Means of the House the results of the 
     audit.
       (2) Content.--In conducting an audit under this subsection, 
     the independent public accountant shall determine and report 
     on whether the financial statements of the Administration--
       (A) are presented fairly in accordance with generally 
     accepted accounting principles; and
       (B) comply with any disclosure requirements imposed under 
     this subtitle.
       (i) Financial Reports.--
       (1) In general.--The Administrator of the Administration 
     shall submit to the Secretary and to the Committee on Energy 
     and Natural Resources and the Committee on Finance of the 
     Senate and the Committee on Energy and Commerce and the 
     Committee on Ways and Means of the House annual and quarterly 
     reports of the financial condition and operations of the 
     Administration, which shall be in such form, contain such 
     information, and be submitted on such dates as the Secretary 
     shall require.
       (2) Contents of annual reports.--Each annual report shall 
     include--
       (A) financial statements prepared in accordance with 
     generally accepted accounting principles;
       (B) any supplemental information or alternative 
     presentation that the Secretary may require; and
       (C) an assessment (as of the end of the most recent fiscal 
     year of the Administration), signed by the chief executive 
     officer and chief accounting or financial officer of the 
     Administration, of--
       (i) the effectiveness of the internal control structure and 
     procedures of the Administration; and
       (ii) the compliance of the Administration with applicable 
     safety and soundness laws.
       (3) Special reports.--The Secretary may require the 
     Administrator of the Administration to submit other reports 
     on the condition (including financial condition), management, 
     activities, or operations of the Administration, as the 
     Secretary considers appropriate.
       (4) Accuracy.--Each report of financial condition shall 
     contain a declaration by the Administrator of the 
     Administration or any other officer designated by the Board 
     of Directors of the Administration to make the declaration, 
     that the report is true and correct to the best of the 
     knowledge and belief of the officer.
       (5) Availability of reports.--Reports required under this 
     section shall be published and made publicly available as 
     soon as is practicable after receipt by the Secretary.
       (j) Spending Safeguards and Reporting.--
       (1) In general.--The Administrator--
       (A) shall require any entity receiving financing support 
     from the Administration to report quarterly, in a format 
     specified by the Administrator, on such entity's use of such 
     support and its progress fulfilling the objectives for which 
     such support was granted, and the Administrator shall make 
     these reports available to the public;
       (B) may establish additional reporting and information 
     requirements for any recipient of financing support from the 
     Administration;
       (C) shall establish appropriate mechanisms to ensure 
     appropriate use and compliance with all terms of any 
     financing support from the Administration;
       (D) shall create and maintain a fully searchable database, 
     accessible on the Internet (or successor protocol) at no cost 
     to the public, that contains at least--
       (i) a list of each entity that has applied for financing 
     support;
       (ii) a description of each application;
       (iii) the status of each such application;
       (iv) the name of each entity receiving financing support;
       (v) the purpose for which such entity is receiving such 
     financing support;
       (vi) each quarterly report submitted by the entity pursuant 
     to this section; and
       (vii) such other information sufficient to allow the public 
     to understand and monitor the financial support provided by 
     the Administration;
       (E) shall make all financing transactions available for 
     public inspection, including formal annual reviews by both a 
     private auditor and the Comptroller General; and
       (F) shall at all times be available to receive public 
     comment in writing on the activities of the Administration.
       (2) Protection of confidential business information.--To 
     the extent necessary and appropriate, the Administrator may 
     redact any information regarding applicants and borrowers to 
     protect confidential business information.

     SEC. 191. CONFORMING AMENDMENTS.

       (a) Tax Exempt Status.--Subsection (l) of section 501 of 
     the Internal Revenue Code of 1986 is amended by adding at the 
     end the following:
       ``(4) The Clean Energy Deployment Administration 
     established under section 186 of the American Clean Energy 
     and Security Act of 2009''.
       (b) Wholly Owned Government Corporation.--Paragraph (3) of 
     section 9101 of title 31, United States Code, is amended by 
     adding at the end the following:
       ``(S) the Clean Energy Deployment Administration.''.

                       Subtitle J--Miscellaneous

     SEC. 195. INCREASED HYDROELECTRIC GENERATION AT EXISTING 
                   FEDERAL FACILITIES.

       (a) In General.--The Secretary of the Interior, the 
     Secretary of Energy, and the Secretary of the Army shall 
     jointly update the study of the potential for increasing 
     electric power production capability at federally owned or 
     operated water regulation, storage, and conveyance facilities 
     required in section 1834 of the Energy Policy Act of 2005.
       (b) Content.--The update under this section shall include 
     identification and description in detail of each facility 
     that is capable, with or without modification, of producing 
     additional hydroelectric power, including estimation of the 
     existing potential for the facility to generate hydroelectric 
     power.
       (c) Report.--The Secretaries shall submit to the Committees 
     on Energy and Commerce, Natural Resources, and Transportation 
     and Infrastructure of the House of Representatives and the 
     Committee on Energy and Natural Resources of the Senate a 
     report on the findings, conclusions, and recommendations of 
     the update of the study under this section by not later than 
     12 months after the date of enactment of this Act. The report 
     shall include each of the following:
       (1) The identifications, descriptions, and estimations 
     referred to in subsection (b).
       (2) A description of activities currently conducted or 
     considered, or that could be considered, to produce 
     additional hydroelectric power from each identified facility.
       (3) A summary of prior actions taken by the Secretaries to 
     produce additional hydroelectric power from each identified 
     facility.
       (4) The costs to install, upgrade, or modify equipment or 
     take other actions to produce additional hydroelectric power 
     from each identified facility, and the level of Federal power 
     customer involvement in the determination of such costs.
       (5) The benefits that would be achieved by such 
     installation, upgrade, modification, or other action, 
     including quantified estimates of any additional energy or 
     capacity from each facility identified under subsection (b).
       (6) A description of actions that are planned, underway, or 
     might reasonably be considered to increase hydroelectric 
     power production by replacing turbine runners, by performing 
     generator upgrades or rewinds, or by construction of pumped 
     storage facilities.
       (7) The impact of increased hydroelectric power production 
     on irrigation, water supply, fish, wildlife, Indian tribes, 
     river health, water quality, navigation, recreation, fishing, 
     and flood control.
       (8) Any additional recommendations to increase 
     hydroelectric power production from, and reduce costs and 
     improve efficiency at, federally owned or operated water 
     regulation, storage, and conveyance facilities.

     SEC. 196. CLEAN TECHNOLOGY BUSINESS COMPETITION GRANT 
                   PROGRAM.

       (a) In General.--The Secretary of Energy is authorized to 
     provide grants to organizations to conduct business 
     competitions that provide incentives, training, and 
     mentorship to entrepreneurs including minority-owned and 
     woman-owned and early stage start-up companies throughout the 
     United States to meet high priority economic, environmental, 
     and energy security goals in areas to include energy 
     efficiency, renewable energy, air quality, water quality and 
     conservation, transportation, smart grid, green building, and 
     waste management. Such competitions shall have the purpose of 
     accelerating the development and deployment of clean 
     technology businesses and green jobs; stimulating green 
     economic development; providing business training and 
     mentoring to early stage clean technology companies; and 
     strengthening the competitiveness of United States clean 
     technology industry in world trade markets. Priority shall be 
     given to business competitions that are private sector led, 
     encourage regional and interregional cooperation, and can 
     demonstrate market-driven practices and show the creation of 
     cost-effective green jobs through an annual publication of 
     competition activities and directory of companies.
       (b) Eligibility.--An organization eligible for a grant 
     under subsection (a) is--
       (1) any organization described in section 501(c)(3) of the 
     Internal Revenue Code of 1986 and exempt from tax under 
     section 501(a) of such Code; and
       (2) any sponsored entity of an organization described in 
     paragraph (1) that is operated as a nonprofit entity.
       (c) Priority.--In making grants under this section, the 
     Secretary shall give priority to those organizations that can 
     demonstrate broad funding support from private and other non-
     Federal funding sources to leverage Federal investment.
       (d) Authorization of Appropriations.--For the purpose of 
     carrying out this section, there are authorized to be 
     appropriated $20,000,000.

     SEC. 197. NATIONAL BIOENERGY PARTNERSHIP.

       (a) In General.--The Secretary of Energy shall establish a 
     National Bioenergy Partnership to provide coordination among 
     programs of State governments, the Federal Government, and 
     the private sector that support the institutional and 
     physical infrastructure necessary to promote the deployment 
     of sustainable biomass fuels and bioenergy technologies for 
     the United States.
       (b) Program.--The National Bioenergy Partnership shall 
     consist of five regions, to be administered by the CONEG 
     Policy Research Center, the Council of Great Lakes

[[Page H7505]]

     Governors, the Southern States Energy Board, the Western 
     Governors Association, and the Pacific Regional Biomass 
     Energy Partnership led by the Washington State University 
     Energy Program.
       (c) Authorization of Appropriations.--There are authorized 
     to be appropriated for each of fiscal years 2010 through 2014 
     to carry out this section--
       (1) $5,000,000, to be allocated among the 5 regions 
     described in subsection (b) on the basis of the number of 
     States in each region, for distribution among the member 
     States of that region based on procedures developed by the 
     member States of the region; and
       (2) $2,500,000, to be allocated equally among the 5 regions 
     described in subsection (b) for region-wide activities, 
     including technical assistance and regional studies and 
     coordination.

     SEC. 198. OFFICE OF CONSUMER ADVOCACY.

       Section 319 of the Federal Power Act is amended to read as 
     follows:

     ``SEC. 319. OFFICE OF CONSUMER ADVOCACY.

       ``(a) Office.--
       ``(1) Establishment.--There is established within the 
     Commission an Office of Consumer Advocacy to serve as an 
     advocate for the public interest. The Office of 
     Administrative Litigation within the Commission shall be 
     incorporated into the Office of Consumer Advocacy.
       ``(2) Director.--The Office shall be headed by a Director 
     to be appointed by the President by and with the advice and 
     consent of the Senate from among individuals who are licensed 
     attorneys admitted to the Bar of any State or of the District 
     of Columbia and who have experience in public utility 
     proceedings.
       ``(3) Duties.--The Office may--
       ``(A) represent the interests of energy customers--
       ``(i) on matters before the Commission concerning rates or 
     service of public utilities and natural gas companies under 
     the jurisdiction of the Commission;
       ``(ii) as amicus curiae, in the review in the courts of the 
     United States of rulings by the Commission in such matters; 
     and
       ``(iii) as amicus, in hearings and proceedings in other 
     Federal regulatory agencies and commissions related to such 
     matters;
       ``(B) monitor and review energy customer complaints and 
     grievances on matters concerning rates or service of public 
     utilities and natural gas companies under the jurisdiction of 
     the Commission;
       ``(C) investigate independently, or within the context of 
     formal proceedings, the services provided by, the rates 
     charged by, and the valuation of the properties of, public 
     utilities and natural gas companies under the jurisdiction of 
     the Commission;
       ``(D) develop means, such as public dissemination of 
     information, consultative services, and technical assistance, 
     to ensure, to the maximum extent practicable, that the 
     interests of energy consumers are adequately represented in 
     the course of any hearing or proceeding described in 
     subparagraph (A);
       ``(E) collect data concerning rates or service of public 
     utilities and natural gas companies under the jurisdiction of 
     the Commission; and
       ``(F) prepare and issue reports and recommendations.
       ``(4) Compensation and powers.--The Director shall be 
     compensated at Level IV of the Executive Schedule. The 
     Director may--
       ``(A) employ not more than 25 full-time professional 
     employees at appropriate levels in the GS Scale and such 
     additional support personnel as required; and
       ``(B) procure temporary and intermittent services as 
     needed.
       ``(5) Information from other federal agencies.--The 
     Director may request, from any department, agency, or 
     instrumentality of the United States such information as he 
     deems necessary to carry out his functions under this 
     section. Upon such request, the head of the department, 
     agency, or instrumentality concerned shall, to the extent 
     practicable and authorized by law, provide such information 
     to the Office.
       ``(b) Consumer Advocacy Advisory Committee.--
       ``(1) Establishment.--The Director shall establish an 
     advisory committee to be known as Consumer Advocacy Advisory 
     Committee (in this section referred to as the `Advisory 
     Committee') to review rates, services, and disputes and to 
     make recommendations to the Director.
       ``(2) Composition.--The Director shall appoint 5 members to 
     the Advisory Committee including--
       ``(A) 2 individuals representing State utility consumer 
     advocates; and
       ``(B) 1 individual, from a nongovernmental organization 
     representing consumers.
       ``(3) Meetings.--The Advisory Committee shall meet at such 
     frequency as may be required to carry out its duties.
       ``(4) Reports.--The Director shall provide for the 
     publication of recommendations of the Advisory Committee on 
     the public website established for the Office.
       ``(5) Duration.--Notwithstanding any other provision of 
     law, the Advisory Committee shall continue in operation 
     during the period for which the Office exists.
       ``(c) Definitions.--
       ``(1) Energy customer.--The term `energy customer' means a 
     residential customer or a small commercial customer that 
     receives products or services directly or indirectly from a 
     public utility or natural gas company under the jurisdiction 
     of the Commission.
       ``(2) Natural gas company.--The term `natural gas company' 
     has the meaning given the term in section 2 of the Natural 
     Gas Act (15 U.S.C. 717a), as modified by section 601(a) of 
     the Natural Gas Policy Act of 1978 (15 U.S.C. 3431(a)).
       ``(3) Office.--The term `Office' means the Office of 
     Consumer Advocacy established under this section.
       ``(4) Public utility.--The term `public utility' has the 
     meaning given the term in section 201(e) of this Act.
       ``(5) Small commercial customer.--The term `small 
     commercial customer' means a commercial customer that has a 
     peak demand of not more than 1,000 kilowatts per hour.
       ``(d) Authorization of Appropriations.--There are 
     authorized to be appropriated such sums as necessary to carry 
     out this section.
       ``(e) Savings Clause.--Nothing in this section affects the 
     rights or obligations of any State utility consumer 
     advocate.''.

     SEC. 199. DEVELOPMENT CORPORATION FOR RENEWABLE POWER 
                   BORROWING AUTHORITY

       (a) Determination.--No later than 6 months after the date 
     of enactment of this Act, the Secretary of Energy, in 
     coordination with the Secretary of Commerce, shall--
       (1) determine any geographic area within the contiguous 
     United States that lacks a Federal power marketing agency;
       (2) develop a plan or criteria for the geographic areas 
     identified in paragraph (1) regarding investment in renewable 
     energy and associated infrastructure within an area 
     identified in paragraph (1); and
       (3) identify any Federal agency within an area in paragraph 
     (1) that has, or could develop, the ability to facilitate the 
     investment in paragraph (2).
       (b) Report.--The Secretary of Energy, in coordination with 
     the Secretary of Commerce, shall provide the determinations 
     made under subsection (a) to the Committee on Energy and 
     Commerce of the House of Representatives.
       (c) Establishment.--Based upon the determinations made 
     pursuant to subsection (a), the Secretary of Energy, in 
     coordination with the Secretary of Commerce, shall recommend 
     to the Committee on Energy and Commerce of the House of 
     Representatives the establishment of any new Federal lending 
     authority, including authorization of additional lending 
     authority for existing Federal agencies, not to exceed 
     $3,500,000,000 per geographic area identified in subsection 
     (a)(1).
       (d) Authorization.--$25,000,000 is authorized to be 
     appropriated for fiscal year 2010 to carry out the provisions 
     of this section.

     SEC. 199A. STUDY.

       Not later than February 1, 2011, the Secretary of Energy 
     shall transmit to the Congress a report showing the results 
     of a study on the use of thorium-fueled nuclear reactors for 
     national energy needs. Such report shall include a response 
     to the International Atomic Energy Agency study entitled 
     ``Thorium fuel cycle - Potential benefits and challenges'' 
     (IAEA-TECDOC-1450).

                      TITLE II--ENERGY EFFICIENCY

            Subtitle A--Building Energy Efficiency Programs

     SEC. 201. GREATER ENERGY EFFICIENCY IN BUILDING CODES.

       Section 304 of the Energy Conservation and Production Act 
     (42 U.S.C. 6833) is amended to read as follows:

     ``SEC. 304. GREATER ENERGY EFFICIENCY IN BUILDING CODES.

       ``(a) Energy Efficiency Targets.--
       ``(1) In general.--Except as provided in paragraph (2) or 
     (3), the national building code energy efficiency target for 
     the national average percentage improvement of a building's 
     energy performance when built to a code meeting the target 
     shall be--
       ``(A) effective on the date of enactment of the American 
     Clean Energy and Security Act of 2009, 30 percent reduction 
     in energy use relative to a comparable building constructed 
     in compliance with the baseline code;
       ``(B) effective January 1, 2014, for residential buildings, 
     and January 1, 2015, for commercial buildings, 50 percent 
     reduction in energy use relative to the baseline code; and
       ``(C) effective January 1, 2017, for residential buildings, 
     and January 1, 2018, for commercial buildings, and every 3 
     years thereafter, respectively, through January 1, 2029, and 
     January 1, 2030, 5 percent additional reduction in energy use 
     relative to the baseline code.
       ``(2) Consensus-based codes.--If on any effective date 
     specified in paragraph (1)(A), (B), or (C) a successor code 
     to the baseline codes provides for greater reduction in 
     energy use than is required under paragraph (1), the overall 
     percentage reduction in energy use provided by that successor 
     code shall be the national building code energy efficiency 
     target.
       ``(3) Targets established by secretary.--The Secretary may 
     by rule establish a national building code energy efficiency 
     target for residential or commercial buildings achieving 
     greater reductions in energy use than the targets prescribed 
     in paragraph (1) or (2) if the Secretary determines that such 
     greater reductions in energy use can be achieved with a code 
     that is life cycle cost-justified and technically feasible. 
     The Secretary may by rule establish a national building code 
     energy efficiency target for residential or commercial 
     buildings achieving a reduction in energy use that is greater

[[Page H7506]]

     than zero but less than the targets prescribed in paragraph 
     (1) or (2) if the Secretary determines that such lesser 
     target is the maximum reduction in energy use that can be 
     achieved through a code that is life cycle cost-justified and 
     technically feasible.
       ``(4) Additional reductions in energy use.--Effective on 
     January 1, 2033, and once every 3 years thereafter, the 
     Secretary shall determine, after notice and opportunity for 
     comment, whether further energy efficiency building code 
     improvements for residential or commercial buildings, 
     respectively, are life cycle cost-justified and technically 
     feasible, and shall establish updated national building code 
     energy efficiency targets that meet such criteria.
       ``(5) Zero-net-energy buildings.--In setting targets under 
     this subsection, the Secretary shall consider ways to support 
     the deployment of distributed renewable energy technology, 
     and shall seek to achieve the goal of zero-net-energy 
     commercial buildings established in section 422 of the Energy 
     Independence and Security Act of 2007 (42 U.S.C. 17082).
       ``(6) Baseline code.--For purposes of this section, the 
     term `baseline code' means--
       ``(A) for residential buildings, the 2006 International 
     Energy Conservation Code (IECC) published by the 
     International Code Council (ICC); and
       ``(B) for commercial buildings, the code published in 
     ASHRAE Standard 90.1-2004.
       ``(7) Consultation.--In establishing the targets required 
     by this section, the Secretary shall consult with the 
     Director of the National Institute of Standards and 
     Technology.
       ``(b) National Energy Efficiency Building Codes.--
       ``(1) Requirement.--
       ``(A) In general.--There shall be established national 
     energy efficiency building codes under this subsection, for 
     residential and commercial buildings, sufficient to meet each 
     of the national building code energy efficiency targets 
     established under subsection (a), not later than the date 
     that is one year after the deadline for establishment of each 
     such target, except that the national energy efficiency 
     building code established to meet the target described in 
     subsection (a)(1)(A) shall be established by not later than 
     15 months after the effective date of that target.
       ``(B) Existing code.--If the Secretary finds prior to the 
     date provided in subparagraph (A) for establishing a national 
     code for any target that one or more energy efficiency 
     building codes published by a recognized developer of 
     national energy codes and standards meet or exceed the 
     established target, the Secretary shall select the code that 
     meets the target with the highest efficiency in the most 
     cost-effective manner, and such code shall be the national 
     energy efficiency building code.
       ``(C) Requirement to establish code.--If the Secretary does 
     not make a finding under subparagraph (B), the national 
     energy efficiency building code shall be established by rule 
     by the Secretary under paragraph (2).
       ``(2) Establishment by secretary.--
       ``(A) Procedure.--In order to establish a national energy 
     efficiency building code as required under paragraph (1)(C), 
     the Secretary shall--
       ``(i) not later than six months prior to the effective date 
     for each target, review existing and proposed codes published 
     or under review by recognized developers of national energy 
     codes and standards;
       ``(ii) determine the percentage of energy efficiency 
     improvements that are or would be achieved in such published 
     or proposed code versions relative to the target;
       ``(iii) propose improvements to such published or proposed 
     code versions sufficient to meet or exceed the target; and
       ``(iv) unless a finding is made under paragraph (1)(B) with 
     respect to a code published by a recognized developer of 
     national energy codes and standards, adopt a code that meets 
     or exceeds the relevant national building code energy 
     efficiency target by not later than one year after the 
     effective date of each such target, and by not later than 15 
     months after the target is established under subsection 
     (a)(1)(A).
       ``(B) Calculations.--Each national energy efficiency 
     building code established by the Secretary under this 
     paragraph shall be set at the maximum level the Secretary 
     determines is life cycle cost-justified and technically 
     feasible, in accordance with the following:
       ``(i) Savings calculations.--Calculations of energy savings 
     shall take into account the typical lifetimes of different 
     products, measures, and system configurations.
       ``(ii) Cost-effectiveness calculations.--Calculations of 
     life cycle cost-effectiveness shall be based on life cycle 
     cost methods and procedures under section 544 of the National 
     Energy Conservation Policy Act (42 U.S.C. 8254), but shall 
     incorporate to the extent feasible externalities such as 
     impacts on climate change and on peak energy demand that are 
     not already incorporated in assumed energy costs.
       ``(C) Considerations.--In developing a national energy 
     efficiency building code under this paragraph, the Secretary 
     shall consider--
       ``(i) for residential national energy efficiency building 
     codes--

       ``(I) residential building standards published or proposed 
     by ASHRAE;
       ``(II) building codes published or proposed by the 
     International Code Council (ICC);
       ``(III) data from the Residential Energy Services Network 
     (RESNET) on compliance measures utilized by consumers to 
     qualify for the residential energy efficiency tax credits 
     established under the Energy Policy Act of 2005;
       ``(IV) data and information from the Department of Energy's 
     Building America Program;
       ``(V) data and information from the Energy Star New Homes 
     program;
       ``(VI) data and information from the New Building Institute 
     and similar organizations; and
       ``(VII) standards for practices and materials to achieve 
     cool roofs in residential buildings, taking into 
     consideration reduced air conditioning energy use as a 
     function of cool roofs, the potential reduction in global 
     warming from increased solar reflectance from buildings, and 
     cool roofs criteria in State and local building codes and in 
     national and local voluntary programs, without reduction of 
     otherwise applicable ceiling insulation standards; and

       ``(ii) for commercial national energy efficiency building 
     codes--

       ``(I) commercial building standards proposed by ASHRAE;
       ``(II) building codes proposed by the International Code 
     Council (ICC);
       ``(III) the Core Performance Criteria published by the New 
     Buildings Institute;
       ``(IV) data and information developed by the Director of 
     the Commercial High-Performance Green Building Office of the 
     Department of Energy and any public-private partnerships 
     established under that Office;
       ``(V) data and information from the Energy Star for 
     Buildings program;
       ``(VI) data and information from the New Building 
     Institute, RESNET, and similar organizations; and
       ``(VII) standards for practices and materials to achieve 
     cool roofs in commercial buildings, taking into consideration 
     reduced air conditioning energy use as a function of cool 
     roofs, the potential reduction in global warming from 
     increased solar reflectance from buildings, and cool roofs 
     criteria in State and local building codes and in national 
     and local voluntary programs, without reduction of otherwise 
     applicable ceiling insulation standards.

       ``(D) Consultation.--In establishing any national energy 
     efficiency building code required by this section, the 
     Secretary shall consult with the Director of the National 
     Institute of Standards and Technology.
       ``(3) Consensus standard assistance.--(A) To support the 
     development of consensus standards that may provide the basis 
     for national energy efficiency building codes, minimize 
     duplication of effort, encourage progress through consensus, 
     and facilitate the development of greater building 
     efficiency, the Secretary shall provide assistance to 
     recognized developers of national energy codes and standards 
     to develop, and where the relevant code has been adopted as 
     the national code, disseminate consensus based energy 
     efficiency building codes as provided in this paragraph.
       ``(B) Upon a finding by the Secretary that a code developed 
     by such a developer meets a target established under 
     subsection (a), the Secretary shall--
       ``(i) send notice of the Secretary's finding to all duly 
     authorized or appointed State, tribal, and local code 
     agencies; and
       ``(ii) provide sufficient support to such a developer to 
     make the code available on the Internet, or to accomplish 
     distribution of such code to all such State, tribal, and 
     local code agencies at no cost to the State, tribal, and 
     local code agencies.
       ``(C) The Secretary may contract with such a developer and 
     with other organizations with expertise on codes to provide 
     training for State, tribal, and local code officials and 
     building inspectors in the implementation and enforcement of 
     such code.
       ``(D) The Secretary may provide grants and other support to 
     such a developer to--
       ``(i) develop appropriate refinements to such code; and
       ``(ii) support analysis of options for improvements in the 
     code to meet the next scheduled target.
       ``(4) Code developed by secretary.--If the Secretary 
     establishes a national energy efficiency building code under 
     paragraph (2), the Secretary shall--
       ``(A) to the extent that such code is based on a prior code 
     developed by a recognized developer of national energy codes 
     and standards, negotiate and provide appropriate compensation 
     to such developer for the use of the code materials that 
     remain in the code established by the Secretary; and
       ``(B) disseminate the national energy efficiency building 
     codes to State, tribal, and local code officials, and support 
     training and provide guidance and technical assistance to 
     such officials as appropriate.
       ``(c) State Adoption of Energy Efficiency Building Codes.--
       ``(1) Requirement.--Not later than 1 year after a national 
     energy efficiency building code for residential or commercial 
     buildings is established or revised under subsection (b), 
     each State--
       ``(A) shall--
       ``(i) review and update the provisions of its building code 
     regarding energy efficiency to meet or exceed the target met 
     in the new national energy efficiency building code, to 
     achieve equivalent or greater energy savings;
       ``(ii) document, where local governments establish building 
     codes, that local governments representing not less than 80 
     percent

[[Page H7507]]

     of the State's urban population have adopted the new national 
     code, or have adopted local codes that meet or exceed the 
     target met in the new national code to achieve equivalent or 
     greater energy savings; or
       ``(iii) adopt the new national code; and
       ``(B) shall provide a certification to the Secretary 
     demonstrating that energy efficiency building code provisions 
     that apply pursuant to subparagraph (A) in that State meet or 
     exceed the target met by the new national code, to achieve 
     equivalent or greater energy savings.
       ``(2) Confirmation.--
       ``(A) Requirement.--Not later than 90 days after a State 
     certification is provided under paragraph (1)(B), the 
     Secretary shall determine whether the State's energy 
     efficiency building code provisions meet the requirements of 
     this subsection.
       ``(B) Acceptance by secretary.--If the Secretary determines 
     under subparagraph (A) that the State's energy efficiency 
     building code or codes meet the requirements of this 
     subsection, the Secretary shall accept the certification.
       ``(C) Deficiency notice.--If the Secretary determines under 
     subparagraph (A) that the State's building code or codes do 
     not meet the requirements of this subsection, the Secretary 
     shall identify the deficiency in meeting the national 
     building code energy efficiency target, and, to the extent 
     possible, indicate areas where further improvement in the 
     State's code provisions would allow the deficiency to be 
     eliminated.
       ``(D) Revision of code and recertification.--A State may 
     revise its code or codes and submit a recertification under 
     paragraph (1)(B) to the Secretary at any time.
       ``(3) Compliant code.--For the purposes of meeting the 
     target described in subsection (a)(1)(A) for residential 
     buildings, a State that adopts the code represented in 
     California's Title 24-2009 by the date 27 months after the 
     date of enactment of the American Clean Energy and Security 
     Act of 2009 shall be considered to have met the requirements 
     of this subsection for the applicable period.
       ``(d) Application of National Code to State and Local 
     Jurisdictions.--
       ``(1) In general.--Upon the expiration of 18 months after a 
     national energy efficiency building code is established under 
     subsection (b), in any jurisdiction where the State has not 
     had a certification relating to that code accepted by the 
     Secretary under subsection (c)(2)(B), and the local 
     government has not had a certification relating to that code 
     accepted by the Secretary under subsection (e)(5), the 
     national energy efficiency building code shall become the 
     applicable energy efficiency building code for such 
     jurisdiction.
       ``(2) Conflicts.--In the event of a conflict between a 
     provision of the national energy efficiency building code and 
     a provision of other applicable energy codes, the national 
     energy efficiency building code shall apply. If there is a 
     conflict between a provision of the national energy 
     efficiency building code and a provision of any applicable 
     fire code, life safety code, egress code, or accessibility 
     code, the Secretary shall take appropriate actions to resolve 
     such conflict in a manner that does not compromise the 
     objectives of such codes.
       ``(3) State legislative adoption.--In a State in which the 
     relevant building energy code is adopted legislatively, the 
     deadline in paragraph (1) shall not be earlier than 1 year 
     after the first day that the legislature meets following 
     establishment of a national energy efficiency building code.
       ``(4) Notice of intent to enforce.--A State or locality 
     that enforces building codes may assume responsibility for 
     enforcing the national energy efficiency building code by 
     notifying the Secretary to that effect not later than three 
     months after the date established under paragraph (1).
       ``(5) Violations.--Violations of this section shall be 
     defined as follows:
       ``(A) If the building is subject to the requirements of a 
     State energy efficiency building code with respect to which a 
     certification has been accepted by the Secretary under 
     subsection (c)(2)(B) or a local energy efficiency building 
     code with respect to which a certification has been accepted 
     by the Secretary pursuant to subsection (e)(5), or the 
     requirements of the national energy efficiency building code 
     in a State where the State or locality has notified the 
     Secretary of its intent to enforce the provisions of the 
     national energy efficiency building code, a violation shall 
     be determined pursuant to the relevant provisions of State or 
     local law.
       ``(B) If the building is subject to the requirements of a 
     national energy efficiency building code made applicable 
     under paragraph (1) of this subsection, except as provided in 
     subparagraph (A), a violation shall be defined by the 
     Secretary pursuant to subsection (g).
       ``(e) State Enforcement of Energy Efficiency Building 
     Codes.--
       ``(1) In general.--Each State, or where applicable under 
     State law each local government, shall implement and enforce 
     applicable State or local codes with respect to which a 
     certification was accepted by the Secretary under subsection 
     (c)(2)(B) or paragraph (5) of this subsection, or the 
     national energy efficiency building codes, as provided in 
     this subsection.
       ``(2) State certification.--Not later than 2 years after 
     the date of a certification under subsection (c)(1) or the 
     application of a national energy efficiency building code 
     under subsection (d)(1), each State shall certify that it 
     has--
       ``(A) achieved compliance with--
       ``(i) State codes, or, as provided under State law, local 
     codes, with respect to which a certification was accepted by 
     the Secretary under subsection (c)(2)(B); or
       ``(ii) the national energy efficiency building code, as 
     applicable; or
       ``(B) for any certification submitted within 7 years after 
     the date of enactment of the American Clean Energy and 
     Security Act of 2009, made significant progress toward 
     achieving such compliance.
       ``(3) Achieving compliance.--A State shall be considered to 
     achieve compliance with a code described in paragraph (2)(A) 
     if at least 90 percent of new and substantially renovated 
     building space in that State in the preceding year upon 
     inspection meets the requirements of the code. A 
     certification under paragraph (2) shall include documentation 
     of the rate of compliance based on--
       ``(A) independent inspections of a random sample of the new 
     and substantially renovated buildings covered by the code in 
     the preceding year; or
       ``(B) an alternative method that yields an accurate measure 
     of compliance as determined by the Secretary.
       ``(4) Significant progress.--A State shall be considered to 
     have made significant progress toward achieving compliance 
     with a code described in paragraph (2)(A) if--
       ``(A) the State has developed a plan, including for hiring 
     enforcement staff, providing training, providing manuals and 
     checklists, and instituting enforcement programs, designed to 
     achieve full compliance within 5 years after the date of the 
     adoption of the code;
       ``(B) the State is taking significant, timely, and 
     measurable action to implement that plan;
       ``(C) the State has not reduced its expenditures for code 
     enforcement; and
       ``(D) at least 50 percent of new and substantially 
     renovated building space in the State in the preceding year 
     upon inspection meets the requirements of the code.
       ``(5) Secretary's determination.--Not later than 90 days 
     after a State certification under paragraph (2), the 
     Secretary shall determine whether the State has demonstrated 
     that it has complied with the requirements of this 
     subsection, including accurate measurement of compliance, or 
     that it has made significant progress toward compliance. If 
     such determination is positive, the Secretary shall accept 
     the certification. If the determination is negative, the 
     Secretary shall identify the areas of deficiency.
       ``(6) Out of compliance.--
       ``(A) In general.--Any State for which the Secretary has 
     not accepted a certification under paragraph (5) by the dates 
     specified in paragraph (2) is out of compliance with this 
     section.
       ``(B) Local compliance.--In any State that is out of 
     compliance with this section as provided in subparagraph (A), 
     a local government may be in compliance with this section by 
     meeting all certification requirements of this subsection.
       ``(C) Noncompliance.--Any State that is not in compliance 
     with this section, as provided in subparagraph (A), shall, 
     until the State regains such compliance, be ineligible to 
     receive--
       ``(i) emission allowances pursuant to subsection (h)(1);
       ``(ii) Federal funding in excess of that State's share 
     (calculated according to the allocation formula in section 
     363 of the Energy Policy and Conservation Act (42 U.S.C. 
     6323)) of $125,000,000 each year; and
       ``(iii) for--

       ``(I) the first year for which the State is out of 
     compliance, 25 percent of any additional funding or other 
     items of monetary value otherwise provided under the American 
     Clean Energy and Security Act of 2009;
       ``(II) the second year for which the State is out of 
     compliance, 50 percent of any additional funding or other 
     items of monetary value otherwise provided under the American 
     Clean Energy and Security Act of 2009;
       ``(III) the third year for which the State is out of 
     compliance, 75 percent of any additional funding or other 
     items of monetary value otherwise provided under the American 
     Clean Energy and Security Act of 2009; and
       ``(IV) the fourth and subsequent years for which the State 
     is out of compliance, 100 percent of any additional funding 
     or other items of monetary value otherwise provided under the 
     American Clean Energy and Security Act of 2009.

       ``(f) Federal Enforcement and Training.--Where a State 
     fails and local governments in that State also fail to 
     enforce the applicable State or national energy efficiency 
     building codes, the Secretary shall enforce such codes, as 
     follows:
       ``(1) The Secretary shall establish, by rule, within 2 
     years after the date of enactment of the American Clean 
     Energy and Security Act of 2009, an energy efficiency 
     building code enforcement capability.
       ``(2) Such enforcement capability shall be designed to 
     achieve 90 percent compliance with such code in any State 
     within 1 year after the date of the Secretary's determination 
     that such State is out of compliance with this section.
       ``(3) The Secretary may set and collect reasonable 
     inspection fees to cover the costs of inspections required 
     for such enforcement. Revenue from fees collected shall be 
     available to the Secretary to carry out the requirements of 
     this section upon appropriation.

[[Page H7508]]

       ``(4) In any jurisdiction to which this subsection applies, 
     the Secretary shall coordinate enforcement of the national 
     energy efficiency building code with State and local code 
     enforcement of other building codes.
       ``(5) In any jurisdiction to which this subsection applies, 
     the Secretary shall enhance compliance by conducting training 
     and education of builders and other professionals in the 
     jurisdiction concerning the national energy efficiency 
     building code.
       ``(6) The Secretary shall coordinate with professional 
     organizations representing code officials, architects, 
     engineers, builders, and other experts to develop training 
     curricula concerning the national energy efficiency building 
     code.
       ``(7) If the Secretary enforces such codes under this 
     subsection, the Secretary may, as appropriate, redefine 
     violations of such codes.
       ``(g) Enforcement Procedures.--The Secretary shall propose 
     and, not later than three years after the date of enactment 
     of the American Clean Energy and Security Act of 2009, shall 
     define by rule violations of the energy efficiency building 
     codes to be enforced by the Secretary pursuant to this 
     section, and the penalties that shall apply to violators, in 
     any jurisdiction in which the national energy efficiency 
     building code has been made applicable under subsection 
     (d)(1). To the extent that the Secretary determines that the 
     authority to adopt and impose such violations and penalties 
     by rule requires further statutory authority, the Secretary 
     shall report such determination to Congress as soon as such 
     determination is made, but not later than one year after the 
     enactment of the American Clean Energy and Security Act of 
     2009.
       ``(h) Federal Support.--
       ``(1) Allowance allocation for state compliance.--For each 
     vintage year from 2012 through 2050, the Administrator shall 
     distribute allowances allocated pursuant to section 782(g)(2) 
     of the Clean Air Act to the SEED Account for each State. Such 
     allowances shall be distributed according to a formula 
     established by the Secretary as follows:
       ``(A) One-fifth in an equal amount to each of the 50 States 
     and United States territories.
       ``(B) Two-fifths as a function of the relative energy use 
     in all buildings in each State in the most recent year for 
     which data is available.
       ``(C) Two-fifths based on the number of building 
     construction starts recorded in each State, the number of new 
     building permits applied for in each State, or other relevant 
     available data indicating building activity in each State, in 
     the judgment of the Secretary, for the year prior to the year 
     of the distribution.
       ``(2) Allowance allocation to local governments.--In the 
     instance that the Secretary certifies that one or more local 
     governments are in compliance with this section pursuant to 
     subsection (e)(6)(B), the Administrator shall provide to each 
     such local government the portion of the emission allowances 
     that would have been provided to that State as a function of 
     the population of that locality as a proportion of the 
     population of that State as a whole.
       ``(3) Unallocated allowances.--To the extent that 
     allowances are not provided to State or local governments for 
     lack of certification in any year, those allowances shall be 
     added to the amount provided to those States and local 
     governments that are certified as eligible in that year.
       ``(4) Use of allowances.--Each State or each local 
     government shall use such emission allowances as it receives 
     pursuant to this section exclusively for the purposes of this 
     section, including covering a reasonable portion of the costs 
     of the development, adoption, implementation, and enforcement 
     of a State or local energy efficiency building code that 
     meets the national building code energy efficiency targets, 
     or the national energy efficiency building code. In a State 
     where local governments provide substantially all building 
     code enforcement, a minimum of 50 percent of the allowance 
     value received pursuant to this section shall be distributed 
     to local governments as a function of the relative 
     populations of such localities. In a State where local and 
     State governments share building code enforcement duties, the 
     State and local shares of allowance value required for 
     enforcement shall be allocated in proportion to the number of 
     building inspections performed by each level of government, 
     and the share for local governments shall be distributed as a 
     function of the relative populations of such localities. 
     States shall further ensure that the allowance value made 
     available pursuant to section 782 of the Clean Air Act and 
     section 132 of the American Clean Energy and Security Act of 
     2009 is provided to the applicable State or local 
     governmental entities as necessary to adopt and implement 
     energy efficiency building codes, provide training for 
     inspectors, ensure compliance, and provide such other 
     functions as necessary. Actions taken by local authorities 
     pursuant to this section shall constitute an acceptable use 
     of funds authorized pursuant to the Energy Efficiency and 
     Conservation Block Grant program under section 544 of the 
     Energy Independence and Security Act of 2007 (42 U.S.C. 
     17154).
       ``(i) Authorization of Appropriations.--There are 
     authorized to be appropriated to the Secretary of Energy 
     $25,000,000, and such additional sums as may be necessary to 
     provide enforcement of a national energy efficiency building 
     code, for each of fiscal years 2010 through 2020, and such 
     sums thereafter as may be necessary to support the purposes 
     of this section.
       ``(j) Annual Reports by Secretary.--The Secretary shall 
     annually submit to Congress, and publish in the Federal 
     Register, a report on--
       ``(1) the status of national energy efficiency building 
     codes;
       ``(2) the status of energy efficiency building code 
     adoption and compliance in the States;
       ``(3) the implementation of this section;
       ``(4) the status of Federal enforcement of building codes, 
     including coordination with State and local enforcement, and 
     the extent and resolution of any conflicts between the 
     national energy efficiency building code and other 
     residential and commercial building codes in force in the 
     same jurisdictions; and
       ``(5) impacts of past action under this section, and 
     potential impacts of further action, on lifetime energy use 
     by buildings, including resulting energy and cost savings.''.

     SEC. 202. BUILDING RETROFIT PROGRAM.

       (a) Definitions.--For purposes of this section:
       (1) Assisted housing.--The term ``assisted housing'' means 
     those properties receiving project-based assistance pursuant 
     to section 202 of the Housing Act of 1959 (12 U.S.C. 1701q), 
     section 811 of the Cranston-Gonzalez National Affordable 
     Housing Act (42 U.S.C. 8013), section 8 of the United States 
     Housing Act of 1937 (42 U.S.C. 1437f), or similar programs.
       (2) Nonresidential building.--The term ``nonresidential 
     building'' means a building with a primary use or purpose 
     other than residential housing, including any building used 
     for commercial offices, schools, academic and other public 
     and private institutions, nonprofit organizations including 
     faith-based organizations, hospitals, hotels, and other 
     nonresidential purposes. Such buildings shall include mixed-
     use properties used for both residential and nonresidential 
     purposes in which more than half of building floor space is 
     nonresidential.
       (3) Performance-based building retrofit program.--The term 
     ``performance-based building retrofit program'' means a 
     program that determines building energy efficiency success 
     based on actual measured savings after a retrofit is 
     complete, as evidenced by energy invoices or evaluation 
     protocols.
       (4) Prescriptive building retrofit program.--The term 
     ``prescriptive building retrofit program'' means a program 
     that projects building retrofit energy efficiency success 
     based on the known effectiveness of measures prescribed to be 
     included in a retrofit.
       (5) Public housing.--The term ``public housing'' means 
     properties receiving assistance under section 9 of the United 
     States Housing Act of 1937 (42 U.S.C. 1437g).
       (6) Recommissioning; retrocommissioning.--The terms 
     ``recommissioning'' and ``retrocommissioning'' have the 
     meaning given those terms in section 543(f)(1) of the 
     National Energy Conservation Policy Act (42 U.S.C. 
     8253(f)(1)).
       (7) Residential building.--The term ``residential 
     building'' means a building whose primary use is residential. 
     Such buildings shall include single-family homes (both 
     attached and detached), owner-occupied units in larger 
     buildings with their own dedicated space-conditioning 
     systems, apartment buildings, multi-unit condominium 
     buildings, public housing, assisted housing, and buildings 
     used for both residential and nonresidential purposes in 
     which more than half of building floor space is residential.
       (8) State energy program.--The term ``State Energy 
     Program'' means the program under part D of title III of the 
     Energy Policy and Conservation Act (42 U.S.C. 6321 et seq.).
       (b) Establishment.--The Administrator shall develop and 
     implement, in consultation with the Secretary of Energy, 
     standards for a national energy and environmental building 
     retrofit policy for single-family and multifamily residences. 
     The Administrator shall develop and implement, in 
     consultation with the Secretary of Energy and the Director of 
     Commercial High-Performance Green Buildings, standards for a 
     national energy and environmental building retrofit policy 
     for nonresidential buildings. The programs to implement the 
     residential and nonresidential policies based on the 
     standards developed under this section shall together be 
     known as the Retrofit for Energy and Environmental 
     Performance (REEP) program.
       (c) Purpose.--The purpose of the REEP program is to 
     facilitate the retrofitting of existing buildings across the 
     United States to achieve maximum cost-effective energy 
     efficiency improvements and significant improvements in water 
     use and other environmental attributes.
       (d) Federal Administration.--
       (1) Existing programs.--In creating and operating the REEP 
     program--
       (A) the Administrator shall make appropriate use of 
     existing programs, including the Energy Star program and in 
     particular the Environmental Protection Agency Energy Star 
     for Buildings program; and
       (B) the Secretary of Energy shall make appropriate use of 
     existing programs, including delegating authority to the 
     Director of Commercial High-Performance Green Buildings 
     appointed under section 421 of the Energy Independence and 
     Security Act of 2007 (42 U.S.C. 17081), who shall designate 
     and provide funding to support a high-performance

[[Page H7509]]

     green building partnership consortium pursuant to subsection 
     (f) of such section to support efforts under this section.
       (2) Consultation and coordination.--The Administrator and 
     the Secretary of Energy shall consult with and coordinate 
     with the Secretary of Housing and Urban Development in 
     carrying out the REEP program with regard to retrofitting of 
     public housing and assisted housing. As a result of such 
     consultation, the Administrator shall establish standards to 
     ensure that retrofits of public housing and assisted housing 
     funded pursuant to this section are cost-effective, including 
     opportunities to address the potential co-performance of 
     repair and replacement needs that may be supported with other 
     forms of Federal assistance. ``Owners of public housing or 
     assited housing receiving funding through the REEP program 
     shall agree to continue to provide affordable housing 
     consistent with the provisions of the authorizing legislation 
     governing each program for an additional period commensurate 
     with the funding received, as determined in accordance with 
     guidelines established by the Secretary of Housing and Urban 
     Development.''
       (3) Assistance.--The Administrator and the Secretary of 
     Energy shall provide consultation and assistance to State and 
     local agencies for the establishment of revolving loan funds, 
     loan guarantees, or other forms of financial assistance under 
     this section.
       (e) State and Local Administration.--
       (1) Designation and delegation.--A State may designate one 
     or more agencies or entities, including those regulated by 
     the State, to carry out the purposes of this section, but 
     shall designate one entity or individual as the principal 
     point of contact for the Administrator regarding the REEP 
     Program. The designated State agency, agencies, or entities 
     may delegate performance of appropriate elements of the REEP 
     program, upon their request and subject to State law, to 
     counties, municipalities, appropriate public agencies, and 
     other divisions of local government, as well as to entities 
     regulated by the State. In making any such designation or 
     delegation, a State shall give priority to entities that 
     administer existing comprehensive retrofit programs, 
     including those under the supervision of State utility 
     regulators. States shall maintain responsibility for meeting 
     the standards and requirements of the REEP program. In any 
     State that elects not to administer the REEP program, a unit 
     of local government may propose to do so within its 
     jurisdiction, and if the Administrator finds that such local 
     government is capable of administering the program, the 
     Administrator may provide allowances to that local 
     government, prorated according to the population of the local 
     jurisdiction relative to the population of the State, for 
     purposes of the REEP program.
       (2) Employment.--States and local government entities may 
     administer a REEP program in a manner that authorizes public 
     or regulated investor-owned utilities, building auditors and 
     inspectors, contractors, nonprofit organizations, for-profit 
     companies, and other entities to perform audits and retrofit 
     services under this section. A State may provide incentives 
     for retrofits without direct participation by the State or 
     its agents, so long as the resulting savings are measured and 
     verified. A State or local administrator of a REEP program 
     shall seek to ensure that sufficient qualified entities are 
     available to support retrofit activities so that building 
     owners have a competitive choice among qualified auditors, 
     raters, contractors, and providers of services related to 
     retrofits. Nothing in this section is intended to deny the 
     right of a building owner to choose the specific providers of 
     retrofit services to engage for a retrofit project in that 
     owner's building.
       (3) Equal incentives for equal improvement.--In general, 
     the States should strive to offer the same levels of 
     incentives for retrofits that meet the same efficiency 
     improvement goals, regardless of whether the State, its 
     agency or entity, or the building owner has conducted the 
     retrofit achieving the improvement, provided the improvement 
     is measured and verified.
       (f) Elements of Reep Program.--The Administrator, in 
     consultation with the Secretary of Energy, shall establish 
     goals, guidelines, practices, and standards for accomplishing 
     the purpose stated in subsection (c), and shall annually 
     review and, as appropriate, revise such goals, guidelines, 
     practices, and standards. The program under this section 
     shall include the following:
       (1) Residential Energy Services Network (RESNET) or 
     Building Performance Institute (BPI) analyst certification of 
     residential building energy and environment auditors, 
     inspectors, and raters, or an equivalent certification system 
     as determined by the Administrator.
       (2) BPI certification or licensing by States of residential 
     building energy and environmental retrofit contractors, or an 
     equivalent certification or licensing system as determined by 
     the Administrator.
       (3) Provision of BPI, RESNET, or other appropriate 
     information on equipment and procedures, as determined by the 
     Administrator, that contractors can use to test the energy 
     and environmental efficiency of buildings effectively (such 
     as infrared photography and pressurized testing, and tests 
     for water use and indoor air quality).
       (4) Provision of clear and effective materials to describe 
     the testing and retrofit processes for typical buildings.
       (5) Guidelines for offering and managing prescriptive 
     building retrofit programs and performance-based building 
     retrofit programs for residential and nonresidential 
     buildings.
       (6) Guidelines for applying recommissioning and 
     retrocommissioning principles to improve a building's 
     operations and maintenance procedures.
       (7) A requirement that building retrofits conducted 
     pursuant to a REEP program utilize, especially in all air-
     conditioned buildings, roofing materials with high solar 
     energy reflectance, unless inappropriate due to green roof 
     management, solar energy production, or for other reasons 
     identified by the Administrator, in order to reduce energy 
     consumption within the building, increase the albedo of the 
     building's roof, and decrease the heat island effect in the 
     area of the building, without reduction of otherwise 
     applicable ceiling insulation standards.
       (8) Determination of energy savings in a performance-based 
     building retrofit program through--
       (A) for residential buildings, comparison of before and 
     after retrofit scores on the Home Energy Rating System (HERS) 
     Index, where the final score is produced by an objective 
     third party;
       (B) for nonresidential buildings, Environmental Protection 
     Agency Portfolio Manager benchmarks; or
       (C) for either residential or nonresidential buildings, use 
     of an Administrator-approved simulation program by a 
     contractor with the appropriate certification, subject to 
     appropriate software standards and verification of at least 
     15 percent of all work done, or such other percentage as the 
     Administrator may determine.
       (9) Guidelines for utilizing the Energy Star Portfolio 
     Manager, the Home Energy Rating System (HERS) rating system, 
     Home Performance with Energy Star program approvals, and any 
     other tools associated with the retrofit program.
       (10) Requirements and guidelines for post-retrofit 
     inspection and confirmation of work and energy savings.
       (11) Detailed descriptions of funding options for the 
     benefit of State and local governments, along with model 
     forms, accounting aids, agreements, and guides to best 
     practices.
       (12) Guidance on opportunities for--
       (A) rating or certifying retrofitted buildings as Energy 
     Star buildings, or as green buildings under a recognized 
     green building rating system;
       (B) assigning Home Energy Rating System (HERS) or similar 
     ratings; and
       (C) completing any applicable building performance labels.
       (13) Sample materials for publicizing the program to 
     building owners, including public service announcements and 
     advertisements.
       (14) Processes for tracking the numbers and locations of 
     buildings retrofitted under the REEP program, with 
     information on projected and actual savings of energy and its 
     value over time.
       (g) Requirements.--As a condition of receiving allowances 
     for the REEP program pursuant to this Act, a State or 
     qualifying local government shall--
       (1) adopt the standards for training, certification of 
     contractors, certification of buildings, and post-retrofit 
     inspection as developed by the Administrator for residential 
     and nonresidential buildings, respectively, except as 
     necessary to match local conditions, needs, efficiency 
     opportunities, or other local factors, or to accord with 
     State laws or regulations, and then only after the 
     Administrator approves such a variance;
       (2) establish fiscal controls and accounting procedures 
     (which conform to generally accepted government accounting 
     principles) sufficient to ensure proper accounting during 
     appropriate accounting periods for payments received and 
     disbursements, and for fund balances; and
       (3) agree to make not less than 10 percent of allowance 
     value received pursuant to section 132(c)(2) for dedicated 
     funding of its REEP program available on a preferential basis 
     for retrofit projects proposed for public housing and 
     assisted housing, provided that--
       (A) none of such funds shall be used for demolition of such 
     housing;
       (B) such retrofits shall not be used to justify any 
     increase in rents charged to residents of such housing; and
       (C) owners of such housing shall agree to continue to 
     provide affordable housing consistent with the provisions of 
     the authorizing legislation governing each program for an 
     additional period commensurate with the funding received.

     The Administrator shall conduct or require each State to have 
     such independent financial audits of REEP-related funding as 
     the Administrator considers necessary or appropriate to carry 
     out the purposes of this section.
       (h) Options to Support Reep Program.--The emission 
     allowances provided pursuant to this Act to the States SEED 
     Accounts shall support the implementation through State REEP 
     programs of alternate means of creating incentives for, or 
     reducing financial barriers to, improved energy and 
     environmental performance in buildings, consistent with this 
     section, including--
       (1) implementing prescriptive building retrofit programs 
     and performance-based building retrofit programs;
       (2) providing credit enhancement, interest rate subsidies, 
     loan guarantees, or other credit support;

[[Page H7510]]

       (3) providing initial capital for public revolving fund 
     financing of retrofits, with repayments by beneficiary 
     building owners over time through their tax payments, 
     calibrated to create net positive cash flow to the building 
     owner;
       (4) providing funds to support utility-operated retrofit 
     programs with repayments over time through utility rates, 
     calibrated to create net positive cash flow to the building 
     owner, and transferable from one building owner to the next 
     with the building's utility services;
       (5) providing funds to local government programs to provide 
     REEP services and financial assistance; and
       (6) other means proposed by State and local agencies, 
     subject to the approval of the Administrator.
       (i) Support for Program.--
       (1) Use of allowances.--Direct Federal support for the REEP 
     program is provided through the emission allowances allocated 
     to the States' SEED Accounts pursuant to section 132 of this 
     Act. To the extent that a State provides allowances to local 
     governments within the State to implement elements of the 
     REEP Program, that shall be deemed a distribution of such 
     allowances to units of local government pursuant to 
     subsection (c)(1) of that section.
       (2) Initial award limits.--Except as provided in paragraph 
     (3), State and local REEP programs may make per-building 
     direct expenditures for retrofit improvements, or their 
     equivalent in indirect or other forms of financial support, 
     from funds derived from the sale of allowances received 
     directly from the Administrator in amounts not to exceed the 
     following amounts per unit:
       (A) Residential building program.--
       (i) Awards.--For residential buildings--

       (I) support for a free or low-cost detailed building energy 
     audit that prescribes measures sufficient to achieve at least 
     a 20 percent reduction in energy use, by providing an 
     incentive equal to the documented cost of such audit, but not 
     more than $200, in addition to any earned by achieving a 20 
     percent or greater efficiency improvement;
       (II) a total of $1,000 for a combination of measures, 
     prescribed in an audit conducted under subclause (I), 
     designed to reduce energy consumption by more than 10 
     percent, and $2,000 for a combination of measures prescribed 
     in such an audit, designed to reduce energy consumption by 
     more than 20 percent;
       (III) $3,000 for demonstrated savings of 20 percent, 
     pursuant to a performance-based building retrofit program; 
     and
       (IV) $1,000 for each additional 5 percentage points of 
     energy savings achieved beyond savings for which funding is 
     provided under subclause (II) or (III).

     Funding shall not be provided under clauses (II) and (III) 
     for the same energy savings.
       (ii) Maximum percentage.--Awards under clause (i) shall not 
     exceed 50 percent of retrofit costs for each building. For 
     buildings with multiple residential units, awards under 
     clause (i) shall not be greater than 50 percent of the total 
     cost of retrofitting the building, prorated among individual 
     residential units on the basis of relative costs of the 
     retrofit. In the case of public housing and assisted housing, 
     the 50 percent contribution matching the contribution from 
     REEP program funds may come from any other source, including 
     other Federal funds.
       (iii) Additional awards.--Additional awards may be provided 
     for purposes of increasing energy efficiency, for buildings 
     achieving at least 20 percent energy savings using funding 
     provided under clause (i), in the form of grants of not more 
     than $600 for measures projected or measured (using an 
     appropriate method approved by the Administrator) to achieve 
     at least 35 percent potable water savings through equipment 
     or systems with an estimated service life of not less than 
     seven years, and not more than an additional $20 may be 
     provided for each additional one percent of such savings, up 
     to a maximum total grant of $1,200.
       (B) Nonresidential building program.--
       (i) Awards.--For nonresidential buildings--

       (I) support for a free or low-cost detailed building energy 
     audit that prescribes, as part of a energy-reducing measures 
     sufficient to achieve at least a 20 percent reduction in 
     energy use, by providing an incentive equal to the documented 
     cost of such audit, but not more than $500, in addition to 
     any award earned by achieving a 20 percent or greater 
     efficiency improvement;
       (II) $0.15 per square foot of retrofit area for 
     demonstrated energy use reductions from 20 percent to 30 
     percent;
       (III) $0.75 per square foot for demonstrated energy use 
     reductions from 30 percent to 40 percent;
       (IV) $1.60 per square foot for demonstrated energy use 
     reductions from 40 percent to 50 percent; and
       (V) $2.50 per square foot for demonstrated energy use 
     reductions exceeding 50 percent.

       (ii) Maximum percentage.--Amounts provided under subclauses 
     (II) through (V) of clause (i) combined shall not exceed 50 
     percent of the total retrofit cost of a building. In 
     nonresidential buildings with multiple units, such awards 
     shall be prorated among individual units on the basis of 
     relative costs of the retrofit.
       (iii) Additional awards.--Additional awards may be 
     provided, for buildings achieving at least 20 percent energy 
     savings using funding provided under clause (i), as follows:

       (I) Water.--For purposes of increasing energy efficiency, 
     grants may be made for whole building potable water use 
     reduction (using an appropriate method approved by the 
     Administrator) for up to 50 percent of the total retrofit 
     cost, including amounts up to--

       (aa) $24.00 per thousand gallons per year of potable water 
     savings of 40 percent or more;
       (bb) $27.00 per thousand gallons per year of potable water 
     savings of 50 percent or more; and
       (cc) $30.00 per thousand gallons per year of potable water 
     savings of 60 percent or more.

       (II) Environmental improvements.--Additional awards of up 
     to $1,000 may be granted for the inclusion of other 
     environmental attributes that the Administrator, in 
     consultation with the Secretary, identifies as contributing 
     to energy efficiency. Such attributes may include, but are 
     not limited to waste diversion and the use of environmentally 
     preferable materials (including salvaged, renewable, or 
     recycled materials, and materials with no or low-VOC 
     content). The Administrator may recommend that States develop 
     such standards as are necessary to account for local or 
     regional conditions that may affect the feasibility or 
     availability of identified resources and attributes.

       (iv) Indoor air quality minimum.--Nonresidential buildings 
     receiving incentives under this section must satisfy at a 
     minimum the most recent version of ASHRAE Standard 62.1 for 
     ventilation, or the equivalent as determined by the 
     Administrator. A State may issue a waiver from this 
     requirement to a building project on a showing that such 
     compliance is infeasible due to the physical constraints of 
     the building's existing ventilation system, or such other 
     limitations as may be specified by the Administrator.
       (C) Disaster damaged buildings.--Any source of funds, 
     including Federal funds provided through the Robert T. 
     Stafford Disaster Relief and Emergency Assistance Act, shall 
     qualify as the building owner's 50 percent contribution, in 
     order to match the contribution of REEP funds, so long as the 
     REEP funds are only used to improve the energy efficiency of 
     the buildings being reconstructed. In addition, the 
     appropriate Federal agencies providing assistance to building 
     owners through the Robert T. Stafford Disaster Relief and 
     Emergency Assistance Act shall make information available, 
     following a disaster, to building owners rebuilding disaster 
     damaged buildings with assistance from the Act, that REEP 
     funds may be used for energy efficiency improvements.
       (D) Historic buildings.--Notwithstanding subparagraphs (A) 
     and (B), a building in or eligible for the National Register 
     of Historic Places shall be eligible for awards under this 
     paragraph in amounts up to 120 percent of the amounts set 
     forth in subparagraphs (A) and (B).
       (E) Supplemental support.--State and local governments may 
     supplement the per-building expenditures under this paragraph 
     with funding from other sources.
       (3) Adjustment.--The Administrator may adjust the specific 
     dollar limits funded by the sale of allowances pursuant to 
     paragraph (2) in years subsequent to the second year after 
     the date of enactment of this Act, and every 2 years 
     thereafter, as the Administrator determines necessary to 
     achieve optimum cost-effectiveness and to maximize incentives 
     to achieve energy efficiency within the total building award 
     amounts provided in that paragraph, and shall publish and 
     hold constant such revised limits for at least 2 years.
       (j) Report to Congress.--The Administrator shall conduct an 
     annual assessment of the achievements of the REEP program in 
     each State, shall prepare an annual report of such 
     achievements and any recommendations for program 
     modifications, and shall provide such report to Congress at 
     the end of each fiscal year during which funding or other 
     resources were made available to the States for the REEP 
     Program.
       (k) Other Sources of Federal Support.--
       (1) Additional state energy program funds.--Any Federal 
     funding provided to a State Energy Program that is not 
     required to be expended for a different federally designated 
     purpose may be used to support a REEP program.
       (2) Program administration.--State Energy Offices or 
     designated State agencies may expend up to 10 percent of 
     available allowance value provided under this section for 
     program administration.
       (3) Authorization of appropriations.--There are authorized 
     to be appropriated for the purposes of this section, for each 
     of fiscal years 2010, 2011, 2012, and 2013--
       (A) $50,000,000 to the Administrator for program 
     administration costs; and
       (B) $20,000,000 to the Secretary of Energy for program 
     administration costs.

     SEC. 203. ENERGY EFFICIENT MANUFACTURED HOMES.

       (a) Definitions.--In this section:
       (1) Manufactured home.--The term ``manufactured home'' has 
     the meaning given such term in section 603 of the National 
     Manufactured Housing Construction and Safety Standards Act of 
     1974 (42 U.S.C. 5402).
       (2) Energy star qualified manufactured home.--The term 
     ``Energy Star qualified manufactured home'' means a 
     manufactured home that has been designed, produced, and 
     installed in accordance with Energy Star's guidelines by an 
     Energy Star certified plant.
       (b) Purpose.--The purpose of this section is to assist low-
     income households residing in manufactured homes constructed 
     prior to 1976 to save energy and energy expenditures by 
     providing support toward the purchase of

[[Page H7511]]

     new Energy Star qualified manufactured homes.
       (c) State Implementation of Program.--
       (1) Manufactured home replacement program.--Any State may 
     provide to the owner of a manufactured home constructed prior 
     to 1976 a rebate to use toward the purchase of a new Energy 
     Star qualified manufactured home pursuant to this section.
       (2) Use of allowances.--Direct Federal support for the 
     program established in this section is provided through the 
     emission allowances allocated to the States' SEED Accounts 
     pursuant to section 132 of this Act. To the extent that a 
     State provides allowances to local governments within the 
     State to implement this program, that shall be deemed a 
     distribution of such allowances to units of local government 
     pursuant to subsection (c)(1) of that section.
       (3) Rebates.--
       (A) Primary residence requirement.--A rebate described 
     under paragraph (1) may only be made to an owner of a 
     manufactured home constructed prior to 1976 that is used on a 
     year-round basis as a primary residence.
       (B) Dismantling and replacement.--A rebate described under 
     paragraph (1) may be made only if the manufactured home 
     constructed prior to 1976 will be--
       (i) rendered unusable for human habitation (including 
     appropriate recycling); and
       (ii) replaced, in the same general location, as determined 
     by the applicable State agency, with an Energy Star qualified 
     manufactured home.
       (C) Single rebate.--A rebate described under paragraph (1) 
     may not be provided to any owner of a manufactured home 
     constructed prior to 1976 that was or is a member of a 
     household for which any other member of the household was 
     provided a rebate pursuant to this section.
       (D) Eligible households.--To be eligible to receive a 
     rebate described under paragraph (1), an owner of a 
     manufactured home constructed prior to 1976 shall demonstrate 
     to the applicable State agency that the total income of all 
     members the owner's household does not exceed 200 percent of 
     the Federal poverty level for income in the applicable area.
       (E) Advance availability.--A rebate may be provided under 
     this section in a manner to facilitate the purchase of a new 
     Energy Star qualified manufactured home.
       (4) Rebate limitation.--Rebates provided by States under 
     this section shall not exceed $7,500 per manufactured home 
     from any value derived from the use of emission allowances 
     provided to the State pursuant to section 132.
       (5) Use of state funds.--A State providing rebates under 
     this section may supplement the amount of such rebates under 
     paragraph (4) by any additional amount is from State funds 
     and other sources, including private donations or grants from 
     charitable organizations.
       (6) Coordination with similar programs.--
       (A) State programs.--A State conducting an existing program 
     that has the purpose of replacing manufactured homes 
     constructed prior to 1976 with Energy Star qualified 
     manufactured homes, may use allowance value provided under 
     section 782 of the Clean Air Act to support such a program, 
     provided such funding does not exceed the rebate limitation 
     amount under paragraph (4).
       (B) Federal programs.--The Secretary of Energy shall 
     coordinate with and seek to achieve the purpose of this 
     section through similar Federal programs including--
       (i) the Weatherization Assistance Program under part A of 
     title IV of the Energy Conservation and Production Act (42 
     U.S.C. 6861 et seq.); and
       (ii) the program under part D of title III of the Energy 
     Policy and Conservation Act (42 U.S.C. 6321 et seq.).
       (C) Coordination with other state agencies.--A State agency 
     using allowance value to administer the program under this 
     section may coordinate its efforts, and share funds for 
     administration, with other State agencies involved in low-
     income housing programs.
       (7) Administrative expenses.--A State using allowance value 
     under this section may expend not more than 10 percent of 
     such value for administrative expenses related to this 
     program.

     SEC. 204. BUILDING ENERGY PERFORMANCE LABELING PROGRAM.

       (a) Establishment.--
       (1) Purpose.--The Administrator shall establish a building 
     energy performance labeling program with broad applicability 
     to the residential and commercial markets to enable and 
     encourage knowledge about building energy performance by 
     owners and occupants and to inform efforts to reduce energy 
     consumption nationwide.
       (2) Components.--In developing such program, the 
     Administrator shall--
       (A) consider existing programs, such as Environmental 
     Protection Agency's Energy Star program, the Home Energy 
     Rating System (HERS) Index, and programs at the Department of 
     Energy;
       (B) support the development of model performance labels for 
     residential and commercial buildings; and
       (C) utilize incentives and other means to spur use of 
     energy performance labeling of public and private sector 
     buildings nationwide.
       (b) Data Assessment for Building Energy Performance.--
       (1) Initial report.--Not later than 90 days after the date 
     of enactment of this Act, the Administrator shall provide to 
     Congress, as well as to the Secretary of Energy and the 
     Office of Management and Budget, a report identifying--
       (A) all principal building types for which statistically 
     significant energy performance data exists to serve as the 
     basis of measurement protocols and labeling requirements for 
     achieved building energy performance; and
       (B) those building types for which additional data are 
     required to enable the development of such protocols and 
     requirements.
       (2) Additional reports.--Additional updated reports shall 
     be provided under this subsection as often as The 
     Administrator considers practicable, but not less than every 
     2 years.
       (c) Building Data Acquisition.--
       (1) Resource requirements.--For all principal building 
     types identified under subsection (b), the Secretary of 
     Energy, not later than 90 days after a report by the 
     Administrator under subsection (b), shall provide to 
     Congress, the Administrator, and the Office of Management and 
     Budget a statement of additional resources needed, if any, to 
     fully develop the relevant data, as well as the anticipated 
     timeline for data development.
       (2) Consultation.--The Secretary of Energy shall consult 
     with the Administrator concerning the Administrator's ability 
     to use data series for these additional building types to 
     support the achieved performance component in the labeling 
     program.
       (3) Improvements to building energy consumption 
     databases.--
       (A) Commercial database.--The Secretary of Energy shall 
     support improvements to the Commercial Buildings Energy 
     Consumption Survey (CBECS) as authorized by section 205(k) of 
     the Department of Energy Organization Act (42 U.S.C. 
     7135(k))--
       (i) to enable complete and robust data for the actual 
     energy performance of principal building types currently 
     covered by survey;
       (ii) to cover additional building types as identified by 
     the Administrator under subsection (b)(1)(B), to enable the 
     development of achieved performance measurement protocols are 
     developed for at least 90 percent of all major commercial 
     building types within 5 years after the date of enactment of 
     this Act; and
       (iii) to include third-party audits of random data 
     samplings to ensure the quality and accuracy of survey 
     information.
       (B) Residential databases.--The Administrator, in 
     consultation with the Energy Information Administration and 
     the Secretary of Energy, shall support improvements to the 
     Residential Energy Consumption Survey (RECS) as authorized by 
     section 205(k) of the Department of Energy Organization Act 
     (42 U.S.C. 7135(k)), or such other residential energy 
     performance databases as the Administrator considers 
     appropriate, to aid the development of achieved performance 
     measurement protocols for residential building energy use for 
     at least 90 percent of the residential market within 5 years 
     after the date of enactment of this Act.
       (C) Consultation.--The Secretary of Energy and the 
     Administrator shall consult with public, private, and 
     nonprofit sector representatives from the building industry 
     and real estate industry to assist in the evaluation and 
     improvement of building energy performance databases and 
     labeling programs.
       (d) Identification of Measurement Protocols for Achieved 
     Performance.--
       (1) Proposed protocols and requirements.--At the earliest 
     practicable date, but not later than 1 year after identifying 
     a building type under subsection (b)(1)(A), the Administrator 
     shall propose a measurement protocol for that building type 
     and a requirement detailing how to use that protocol in 
     completing applicable commercial or residential performance 
     labels created pursuant to this section.
       (2) Final rule.--After providing for notice and comment, 
     the Administrator shall publish a final rule containing a 
     measurement protocol and the corresponding requirements for 
     applying that protocol. Such a rule--
       (A) shall define the minimum period for measurement of 
     energy use by buildings of that type and other details for 
     determining achieved performance, to include leased buildings 
     or parts thereof;
       (B) shall identify necessary data collection and record 
     retention requirements; and
       (C) may specify transition rules and exemptions for classes 
     of buildings within the building type.
       (e) Procedures for Evaluating Designed Performance.--The 
     Administrator shall develop protocols for evaluating the 
     designed performance of individual building types. The 
     Administrator may conduct such feasibility studies and 
     demonstration projects as are necessary to evaluate the 
     sufficiency of proposed protocols for designed performance.
       (f) Creation of Building Energy Performance Labeling 
     Program.--
       (1) Model label.--Not later than 1 year after the date of 
     enactment of this Act, the Administrator shall propose a 
     model building energy label that provides a format--
       (A) to display achieved performance and designed 
     performance data;
       (B) that may be tailored for residential and commercial 
     buildings, and for single-occupancy and multitenanted 
     buildings; and
       (C) to display other appropriate elements identified during 
     the development of measurement protocols under subsections 
     (d) and (e).

[[Page H7512]]

       (2) Inclusions.--Nothing in this section shall require the 
     inclusion on such a label of designed performance data where 
     impracticable or not cost effective, or to preclude the 
     display of both achieved performance and designed performance 
     data for a particular building where both such measures are 
     available, practicable, and cost effective.
       (3) Existing programs.--In developing the model label, the 
     Administrator shall consider existing programs, including--
       (A) the Environmental Protection Agency's Energy Star 
     Portfolio Manager program and the California HERS II Program 
     Custom Approach for the achieved performance component of the 
     label;
       (B) the Home Energy Rating System (HERS) Index system for 
     the designed performance component of the label; and
       (C) other Federal and State programs, including the 
     Department of Energy's related programs on building 
     technologies and those of the Federal Energy Management 
     Program.
       (4) Final rule.--After providing for notice and comment, 
     the Administrator shall publish a final rule containing the 
     label applicable to covered building types.
       (g) Demonstration Projects for Labeling Program.--
       (1) In general.--The Administrator shall conduct building 
     energy performance labeling demonstration projects for 
     different building types--
       (A) to ensure the sufficiency of the current Commercial 
     Buildings Energy Consumption Survey and other data to serve 
     as the basis for new measurement protocols for the achieved 
     performance component of the building energy performance 
     labeling program;
       (B) to inform the development of measurement protocols for 
     building types not currently covered by the Commercial 
     Buildings Energy Consumption Survey; and
       (C) to identify any additional information that needs to be 
     developed to ensure effective use of the model label.
       (2) Participation.--Such demonstration projects shall 
     include participation of--
       (A) buildings from diverse geographical and climate 
     regions;
       (B) buildings in both urban and rural areas;
       (C) single-family residential buildings;
       (D) multihousing residential buildings with more than 50 
     units, including at least one project that provides 
     affordable housing to individuals of diverse incomes;
       (E) single-occupant commercial buildings larger than 30,000 
     square feet;
       (F) multitenanted commercial buildings larger than 50,000 
     square feet; and
       (G) buildings from both the public and private sectors.
       (3) Priority.--Priority in the selection of demonstration 
     projects shall be given to projects that facilitate large-
     scale implementation of the labeling program for samples of 
     buildings across neighborhoods, geographic regions, cities, 
     or States.
       (4) Findings.--The Administrator shall report any findings 
     from demonstration projects under this subsection, including 
     an identification of any areas of needed data improvement, to 
     the Department of Energy's Energy Information Administration 
     and Building Technologies Program.
       (5) Coordination.--The Administrator and the Secretary of 
     Energy shall coordinate demonstration projects undertaken 
     pursuant to this subsection with those undertaken as part of 
     the Zero-Net-Energy Commercial Buildings Initiative adopted 
     under section 422 of the Energy Independence and Security Act 
     of 2007 (42 U.S.C. 17082).
       (h) Implementation of Labeling Program.--
       (1) In general.--The Administrator, in consultation with 
     the Secretary of Energy, shall work with all State Energy 
     Offices established pursuant to part D of title III of the 
     Energy Policy and Conservation Act (42 U.S.C. 6321 et seq.) 
     or other State authorities as necessary for the purpose of 
     implementing the labeling program established under this 
     section for commercial and residential buildings.
       (2) Outreach to local authorities.--The Administrator 
     shall, acting in consultation and coordination with the 
     respective States, encourage use of the labeling program by 
     counties and other localities to broaden access to 
     information about building energy use, for example, through 
     disclosure of building label contents in tax, title, and 
     other records those localities maintain. For this purpose, 
     the Administrator shall develop an electronic version of the 
     label and information that can be readily transmitted and 
     read in widely-available computer programs but is protected 
     from unauthorized manipulation.
       (3) Means of implementation.--In adopting the model 
     labeling program established under this section, a State 
     shall seek to ensure that labeled information be made 
     accessible to the public in a manner so that owners, lenders, 
     tenants, occupants, or other relevant parties can utilize it. 
     Such accessibility may be accomplished through--
       (A) preparation, and public disclosure of the label through 
     filing with tax and title records at the time of--
       (i) a building audit conducted with support from Federal or 
     State funds;
       (ii) a building energy-efficiency retrofit conducted in 
     response to such an audit;
       (iii) a final inspection of major renovations or additions 
     made to a building in accordance with a building permit 
     issued by a local government entity;
       (iv) a sale that is recorded for title and tax purposes 
     consistent with paragraph (8);
       (v) a new lien recorded on the property for more than a set 
     percentage of the assessed value of the property, if that 
     lien reflects public financial assistance for energy-related 
     improvements to that building; or
       (vi) a change in ownership or operation of the building for 
     purposes of utility billing; or
       (B) other appropriate means.
       (4) State implementation of program.--
       (A) Eligibility.--A State may become eligible to utilize 
     allowance value to implement this program by--
       (i) adopting by statute or regulation a requirement that 
     buildings be assessed and labeled, consistent with the 
     labeling requirements of the program established under this 
     section; or
       (ii) adopting a plan to implement a model labeling program 
     consistent with this section within one year of enactment of 
     this Act, including the establishment of that program within 
     3 years after the date of enactment of this Act, and 
     demonstrating continuous progress under that plan.
       (B) Use of allowances.--Direct Federal support for the 
     program established in this section is provided through the 
     emission allowances allocated to the States' SEED Accounts 
     pursuant to section 132 of this Act. To the extent that a 
     State provides allowances to local governments within the 
     State to implement this program, that shall be deemed a 
     distribution of such allowances to units of local government 
     pursuant to subsection (c)(1) of that section.
       (5) Guidance.--The Administrator may create or identify 
     model programs and resources to provide guidance to offer to 
     States and localities for creating labeling programs 
     consistent with the model program established under this 
     section.
       (6) Progress report.--The Administrator, in consultation 
     with the Secretary of Energy, shall provide a progress report 
     to Congress not later than 3 years after the date of 
     enactment of this Act that--
       (A) evaluates the effectiveness of efforts to advance use 
     of the model labeling program by States and localities;
       (B) recommends any legislative changes necessary to broaden 
     the use of the model labeling program; and
       (C) identifies any changes to broaden the use of the model 
     labeling program that the Administrator has made or intends 
     to make that do not require additional legislative authority.
       (7) State information.--The Administrator may require 
     States to report to the Administrator information that the 
     Administrator requires to provide the report required under 
     paragraph (6).
       (8) Prevention of disruption of sales transactions.--No 
     State shall implement a new labeling program pursuant to this 
     section in a manner that requires the labeling of a building 
     to occur after a contract has been executed for the sale of 
     that building and before the sales transaction is completed.
       (i) Implementation of Labeling Program in Federal 
     Buildings.--
       (1) Use of labeling program.--The Secretary of Energy and 
     the Administrator shall use the labeling program established 
     under this section to evaluate energy performance in the 
     facilities of the Department of Energy and the Environmental 
     Protection Agency, respectively, to the extent practicable, 
     and shall encourage and support implementation efforts in 
     other Federal agencies.
       (2) Annual progress report.--The Secretary of Energy and 
     Administrator shall provide an annual progress report to 
     Congress and the Office of Management and Budget detailing 
     efforts to implement this subsection, as well as any best 
     practices or needed resources identified as a result of such 
     efforts.
       (j) Public Outreach.--The Secretary of Energy and the 
     Administrator, in consultation with nonprofit and industry 
     stakeholders with specialized expertise, and in conjunction 
     with other energy efficiency public awareness efforts, shall 
     establish a business and consumer education program to 
     increase awareness about the importance of building energy 
     efficiency and to facilitate widespread use of the labeling 
     program established under this section.
       (k) Definitions.--In this section:
       (1) Building type.--The term ``building type'' means a 
     grouping of buildings as identified by their principal 
     building activities, or as grouped by their use, including 
     office buildings, laboratories, libraries, data centers, 
     retail establishments, hotels, warehouses, and educational 
     buildings.
       (2) Measurement protocol.--The term ``measurement 
     protocol'' means the methodology, prescribed by the 
     Administrator, for defining a benchmark for building energy 
     performance for a specific building type and for measuring 
     that performance against the benchmark.
       (3) Achieved performance.--The term ``achieved 
     performance'' means the actual energy consumption of a 
     building as compared to a baseline building of the same type 
     and size, determined by actual consumption data normalized 
     for appropriate variables.
       (4) Designed performance.--The term ``designed 
     performance'' means the energy consumption performance a 
     building would achieve if operated consistent with its design 
     intent for building energy use, utilizing a standardized set 
     of operational conditions informed by data collected or 
     confirmed during an energy audit.
       (l) Authorization of Appropriations.--There are authorized 
     to be appropriated--

[[Page H7513]]

       (1) to the Administrator $50,000,000 for implementation of 
     this section for each fiscal year from 2010 through 2020; and
       (2) to the Secretary of Energy $20,000,000 for 
     implementation of this section for fiscal year 2010 and 
     $10,000,000 for fiscal years 2011 through 2020.
       (m) New Construction.--This section shall apply only to 
     construction beginning after the date of enactment of this 
     Act.

     SEC. 205. TREE PLANTING PROGRAMS.

       (a) Findings.--The Congress finds that--
       (1) the utility sector is the largest single source of 
     greenhouse gas emissions in the United States today, 
     producing approximately one-third of the country's emissions;
       (2) heating and cooling homes accounts for nearly 60 
     percent of residential electricity usage in the United 
     States;
       (3) shade trees planted in strategic locations can reduce 
     residential cooling costs by as much as 30 percent;
       (4) shade trees have significant clean-air benefits 
     associated with them;
       (5) every 100 healthy large trees removes about 300 pounds 
     of air pollution (including particulate matter and ozone) and 
     about 15 tons of carbon dioxide from the air each year;
       (6) tree cover on private property and on newly-developed 
     land has declined since the 1970s, even while emissions from 
     transportation and industry have been rising; and
       (7) in over a dozen test cities across the United States, 
     increasing urban tree cover has generated between two and 
     five dollars in savings for every dollar invested in such 
     tree planting.
       (b) Definitions.--As used in this section:
       (1) The term ``Secretary'' refers to the Secretary of 
     Energy.
       (2) The term ``retail power provider'' means any entity 
     authorized under applicable State or Federal law to generate, 
     distribute, or provide retail electricity, natural gas, or 
     fuel oil service.
       (3) The term ``tree-planting organization'' means any 
     nonprofit or not-for-profit group which exists, in whole or 
     in part, to--
       (A) expand urban and residential tree cover;
       (B) distribute trees for planting;
       (C) increase awareness of the environmental and energy-
     related benefits of trees;
       (D) educate the public about proper tree planting, care, 
     and maintenance strategies; or
       (E) carry out any combination of the foregoing activities.
       (4) The term ``tree-siting guidelines'' means a 
     comprehensive list of science-based measurements outlining 
     the species and minimum distance required between trees 
     planted pursuant to this section, in addition to the minimum 
     required distance to be maintained between such trees and--
       (A) building foundations;
       (B) air conditioning units;
       (C) driveways and walkways;
       (D) property fences;
       (E) preexisting utility infrastructure;
       (F) septic systems;
       (G) swimming pools; and
       (H) other infrastructure as deemed appropriate.
       (5) The terms ``small office'', ``small office buildings'', 
     and ``small office settings'' means nonresidential buildings 
     or structures zoned for business purposes that are 20,000 
     square feet or less in total area.
       (c) Purposes.--The purpose of this section is to establish 
     a grant program to assist retail power providers with the 
     establishment and operation of targeted tree-planting 
     programs in residential and small office settings, for the 
     following purposes:
       (1) Reducing the peak-load demand for electricity from 
     residences and small office buildings during the summer 
     months through direct shading of buildings provided by 
     strategically planted trees.
       (2) Reducing wintertime demand for energy from residences 
     and small office buildings by blocking cold winds from 
     reaching such structures, which lowers interior temperatures 
     and drives heating demand.
       (3) Protecting public health by removing harmful pollution 
     from the air.
       (4) Utilizing the natural photosynthetic and transpiration 
     process of trees to lower ambient temperatures and absorb 
     carbon dioxide, thus mitigating the effects of climate 
     change.
       (5) Lowering electric bills for residential and small 
     office ratepayers by limiting electricity consumption without 
     reducing benefits.
       (6) Relieving financial and demand pressure on retail power 
     providers that stems from large peak-load energy demand.
       (7) Protecting water quality and public health by reducing 
     stormwater runoff and keeping harmful pollutants from 
     entering waterways.
       (8) Ensuring that trees are planted in locations that limit 
     the amount of public money needed to maintain public and 
     electric infrastructure.
       (d) General Authority.--
       (1) Assistance.--The Secretary is authorized to provide 
     financial, technical, and related assistance to retail power 
     providers to assist with the establishment of new, or 
     continued operation of existing, targeted tree-planting 
     programs for residences and small office buildings.
       (2) Public recognition initiative.--In carrying out the 
     authority provided under this section, the Secretary shall 
     also create a national public recognition initiative to 
     encourage participation in tree-planting programs by retail 
     power providers.
       (3) Eligibility.--Only those programs which utilize 
     targeted, strategic tree-siting guidelines to plant trees in 
     relation to building location, sunlight, and prevailing wind 
     direction shall be eligible for assistance under this 
     section.
       (4) Requirements.--In order to qualify for assistance under 
     this section, a tree-planting program shall meet each of the 
     following requirements:
       (A) The program shall provide free or discounted shade-
     providing or wind-reducing trees to residential and small 
     office consumers interested in lowering their home energy 
     costs.
       (B) The program shall optimize the electricity-consumption 
     reduction benefit of each tree by planting in strategic 
     locations around a given residence or small office.
       (C) The program shall either--
       (i) provide maximum amounts of shade during summer 
     intervals when residences and small offices are exposed to 
     the most sun intensity; or
       (ii) provide maximum amounts of wind protection during fall 
     and winter intervals when residences and small offices are 
     exposed to the most wind intensity.
       (D) The program shall use the best available science to 
     create tree siting guidelines which dictate where the optimum 
     tree species are best planted in locations that achieve 
     maximum reductions in consumer energy demand while causing 
     the least disruption to public infrastructure, considering 
     overhead and underground facilities.
       (E) The program shall receive certification from the 
     Secretary that it is designed to achieve the goals set forth 
     in subparagraphs (A) through (D). In designating criteria for 
     such certification, the Secretary shall collaborate with the 
     United States Forest Service's Urban and Community Forestry 
     Program to ensure that certification requirements are 
     consistent with such above goals.
       (5) New program funding share.--The Secretary shall ensure 
     that no less than 30 percent of the funds made available 
     under this section are distributed to retail power providers 
     which--
       (A) have not previously established or operated qualified 
     tree-planting programs; or
       (B) are operating qualified tree-planting programs which 
     were established no more than three years prior to the date 
     of enactment of this section.
       (e) Agreements Between Electricity Providers and Tree-
     planting Organizations.--
       (1) Grant authorization.--In providing assistance under 
     this section, the Secretary is authorized to award grants 
     only to retail power providers that have entered into binding 
     legal agreements with nonprofit tree-planting organizations.
       (2) Conditions of agreement.--Those agreements between 
     retail power providers and tree-planting organizations shall 
     set forth conditions under which nonprofit tree-planting 
     organizations shall provide targeted tree-planting programs 
     which may require these organizations to--
       (A) participate in local technical advisory committees 
     responsible for drafting general tree-siting guidelines and 
     choosing the most effective species of trees to plant in 
     given locations;
       (B) coordinate volunteer recruitment to assist with the 
     physical act of planting trees in residential locations;
       (C) undertake public awareness campaigns to educate local 
     residents about the benefits, cost savings, and availability 
     of free shade trees;
       (D) establish education and information campaigns to 
     encourage recipients to maintain their shade trees over the 
     long term;
       (E) serve as the point of contact for existing and 
     potential residential participants who have questions or 
     concerns regarding the tree-planting program;
       (F) require tree recipients to sign agreements committing 
     to voluntary stewardship and care of provided trees;
       (G) monitor and report on the survival, growth, overall 
     health, and estimated energy savings of provided trees up 
     until the end of their establishment period which shall be no 
     less than five years; and
       (H) ensure that trees planted near existing power lines 
     will not interfere with energized electricity distribution 
     lines when mature, and that no new trees will be planted 
     under or adjacent to high-voltage electric transmission lines 
     without prior consultation with the applicable retail power 
     provider receiving assistance under this section.
       (3) Lack of nonprofit organization.--If qualified nonprofit 
     or not-for-profit tree planting organizations do not exist or 
     operate within areas served by retail power providers 
     applying for assistance under this section, the requirements 
     of this section shall apply to binding legal agreements 
     entered into by such retail power providers and one of the 
     following entities:
       (A) Local municipal governments with jurisdiction over the 
     urban or suburban forest.
       (B) The State Forester for the State in which the tree 
     planting program will operate.
       (C) The United States Forest Service's Urban and Community 
     Forestry representative for the State in which the tree-
     planting program will operate.
       (D) A landscaping services company that is--
       (i) identified in consultation with a national or State 
     nonprofit or not-for-profit tree-planting organization;

[[Page H7514]]

       (ii) licensed to operate in the State in which the tree-
     planting program will operate; and
       (iii) a business as defined by the United States Census 
     Bureau's 2007 North American Industry Classification System 
     Code 561730.
       (f) Technical Advisory Committees.--
       (1) Description.--In order to qualify for assistance under 
     this section, the retail power provider shall establish and 
     consult with a local technical advisory committee which shall 
     provide advice and consultation to the program, and may--
       (A) design and adopt an approved plant list that emphasizes 
     the use of hardy, noninvasive tree species and, where 
     geographically appropriate, the use of native, or site-
     adapted, or low water-use shade trees;
       (B) design and adopt planting, installation, and 
     maintenance specifications and create a process for 
     inspection and quality control;
       (C) ensure that tree recipients are educated to care for 
     and maintain their trees over the long term;
       (D) help the public become more engaged and educated in the 
     planting and care of shade trees;
       (E) prioritize which sites receive trees, giving preference 
     to locations with the most potential for energy conservation 
     and secondary preference to areas where the average annual 
     income is below the regional median; and
       (F) assist with monitoring and collection of data on tree 
     health, tree survival, and energy conservation benefits 
     generated under this section.
       (2) Compensation.--Individuals serving on local technical 
     advisory committees shall not receive compensation for their 
     service.
       (3) Composition.--Local technical advisory committees shall 
     be composed of representatives from public, private, and 
     nongovernmental agencies with expertise in demand-side energy 
     efficiency management, urban forestry, or arboriculture, and 
     shall be composed of the following:
       (A) Up to 4 persons, but no less than one person, 
     representing the retail power provider receiving assistance 
     under this section.
       (B) Up to 4 persons, but no less than one person, 
     representing the local tree-planting organization which will 
     partner with the retail power provider to carry out this 
     section.
       (C) Up to 3 persons representing local nonprofit 
     conservation or environmental organizations. Preference shall 
     be given to those entities which are organized under section 
     501(c)(3) of the Internal Revenue Code of 1986, and which 
     have demonstrated expertise engaging the public in energy 
     conservation, energy efficiency, or green building practices 
     or a combination thereof, such that no single organization is 
     represented by more than one individual under this paragraph.
       (D) Up to 2 persons representing a local affordable housing 
     agency, affordable housing builder, or community development 
     corporation.
       (E) Up to 3, but no less than one, persons representing 
     local city or county government for each municipality where a 
     shade tree-planting program will take place; at least one of 
     these representatives shall be the city or county forester, 
     city or county arborist, or functional equivalent.
       (F) Up to one person representing the local government 
     agency responsible for management of roads, sewers, and 
     infrastructure, including but not limited to public works 
     departments, transportation agencies, or equivalents.
       (G) Up to 3 persons representing the nursery and 
     landscaping industry.
       (H) Up to 3 persons representing the research community or 
     academia with expertise in natural resources or energy 
     management issues.
       (4) Chairperson.--Each local technical advisory committee 
     shall elect a chairperson to preside over Committee meetings, 
     act as a liaison to governmental and other outside entities, 
     and direct the general operation of the committee; only 
     committee representatives from paragraph (3)(A) or paragraph 
     (3)(B) of this subsection shall be eligible to act as local 
     technical advisory committee chairpersons.
       (5) Credentials.--At least one of the members of each local 
     technical advisory committee shall be certified with one or 
     more of the following credentials: International Society of 
     Arboriculture; Certified Arborist, ISA; Certified Arborist 
     Municipal Specialist, ISA; Certified Arborist Utility 
     Specialist, ISA; Board Certified Master Arborist; or 
     Registered Landscape Architect recommended by the American 
     Society of Landscape Architects.
       (g) Cost-share Program.--
       (1) Federal share.--The Federal share of support for 
     projects funded under this section shall not exceed 50 
     percent of the cost of such project and shall be provided on 
     a matching basis.
       (2) Non-federal share.--The non-Federal share of such costs 
     may be paid or contributed by any governmental or 
     nongovernmental entity other than from funds derived directly 
     or indirectly from an agency or instrumentality of the United 
     States.
       (h) Rulemaking.--
       (1) Rulemaking period.--The Secretary shall be authorized 
     to solicit comments and initiate a rulemaking period that 
     shall last no more than 6 months after the date of enactment 
     of this section.
       (2) Competitive grant rule.--At the conclusion of the 
     rulemaking period under paragraph (1), the Secretary shall 
     promulgate a rule governing a public, competitive grants 
     process through which retail power providers may apply for 
     Federal support under this section.
       (i) Nonduplicity.--Nothing in this section shall be 
     construed to supersede, duplicate, cancel, or negate the 
     programs or authorities provided under section 9 of the 
     Cooperative Forestry Assistance Act of 1978 (92 Stat. 369; 
     Public Law 95-313; 16 U.S.C. 2105).
       (j) Authorization of Appropriations.--There are hereby 
     authorized to be appropriated such sums as may be necessary 
     for the implementation of this section.

     SEC. 206. ENERGY EFFICIENCY FOR DATA CENTER BUILDINGS.

       Section 453(c)(1) of the Energy Independence and Security 
     Act of 2007 (42 U.S.C. 17112(c)(1)) is amended by inserting 
     ``but not later than 2 years after the date of enactment of 
     this Act'' after ``described in subsection (b)''.

     SEC. 207. COMMUNITY BUILDING CODE ADMINISTRATION GRANTS.

       (a) Grant Program Authorized.--
       (1) Grant authorization.--The Secretary of Housing and 
     Urban Development shall to the extent amounts are made 
     available for grants under this section provide grants to 
     local building code enforcement departments.
       (2) Competitive awards.--The Secretary shall award grants 
     under paragraph (1) on a competitive basis taking into 
     consideration the following:
       (A) The financial need of each building code enforcement 
     department.
       (B) The benefit to the jurisdiction of having an adequately 
     funded building code enforcement department.
       (C) The demonstrated ability of each building code 
     enforcement department to work cooperatively with other local 
     code enforcement offices, health departments, and local 
     prosecutorial agencies.
       (3) Maximum amount.--The maximum amount of any grant 
     awarded under this subsection shall not exceed $1,000,000.
       (4) Coordination.--The Secretary of Housing and Urban 
     Development shall coordinate with the Secretary of Energy to 
     ensure that any unnecessarily duplicative funding through 
     grants under this section of activities otherwise funded 
     through the Department of Energy is minimized or eliminated.
       (b) Required Elements in Grant Proposals.--In order to be 
     eligible for a grant under subsection (a), a building code 
     enforcement department of a jurisdiction shall submit to the 
     Secretary the following:
       (1) A demonstration of the jurisdiction's needs in 
     executing building code enforcement administration.
       (2) A plan for the use of any funds received from a grant 
     under this section that addresses the needs discussed in 
     paragraph (1) and that is consistent with the authorized uses 
     established in subsection (c).
       (3) A plan for local governmental actions to be taken to 
     establish and sustain local building code enforcement 
     administration functions, without continuing Federal support, 
     at a level at least equivalent to that proposed in the grant 
     application.
       (4) A plan to create and maintain a program of public 
     outreach that includes a regularly updated and readily 
     accessible means of public communication, interaction, and 
     reporting regarding the services and work of the building 
     code enforcement department to be supported by the grant.
       (5) A plan for ensuring the timely and effective 
     administrative enforcement of building safety and fire 
     prevention violations.
       (c) Use of Funds; Matching Funds.--
       (1) Authorized uses.--Amounts from grants awarded under 
     subsection (a) may be used by the grant recipient to 
     supplement existing State or local funding for administration 
     of building code enforcement, or to supplement allowance 
     value received pursuant to this Act for implementation and 
     enforcement of energy efficiency building codes. Such amounts 
     may be used to increase staffing, provide staff training, 
     increase staff competence and professional qualifications, or 
     support individual certification or departmental 
     accreditation, or for capital expenditures specifically 
     dedicated to the administration of the building code 
     enforcement department.
       (2) Additional requirement.--Each building code enforcement 
     department receiving a grant under subsection (a) shall 
     empanel a code administration and enforcement team consisting 
     of at least 1 full-time building code enforcement officer, a 
     city planner, and a health planner or similar officer.
       (3) Matching funds required.--
       (A) In general.--To be eligible to receive a grant under 
     this section, a building code enforcement department shall 
     provide matching, non-Federal funds in the following amount:
       (i) In the case of a building code enforcement department 
     serving an area with a population of more than 50,000, an 
     amount equal to not less than 50 percent of the total amount 
     of any grant to be awarded under this section.
       (ii) In the case of a building code enforcement department 
     serving an area with a population of between 20,001 and 
     50,000, an amount equal to not less than 25 percent of the 
     total amount of any grant to be awarded under this section.
       (iii) In the case of a building code enforcement department 
     serving an area with a population of less than 20,000, an 
     amount equal to not less than 12.5 percent of the total 
     amount of any grant to be awarded under this section.
       (B) Economic distress.--

[[Page H7515]]

       (i) In general.--The Secretary may waive the matching fund 
     requirements under subparagraph (A), and institute, by 
     regulation, new matching fund requirements based upon the 
     level of economic distress of the jurisdiction in which the 
     local building code enforcement department seeking such grant 
     is located.
       (ii) Content of regulations.--Any regulations instituted 
     under clause (i) shall include--

       (I) a method that allows for a comparison of the degree of 
     economic distress among the local jurisdictions of grant 
     applicants, as measured by the differences in the extent of 
     growth lag, the extent of poverty, and the adjusted age of 
     housing in such jurisdiction; and
       (II) any other factor determined to be relevant by the 
     Secretary in assessing the comparative degree of economic 
     distress among such jurisdictions.

       (4) In-kind contributions.--In determining the non-Federal 
     share required to be provided under paragraph (3), the 
     Secretary shall consider in-kind contributions, not to exceed 
     50 percent of the amount that the department contributes in 
     non-Federal funds.
       (5) Waiver of matching requirement.--The Secretary shall 
     waive the matching fund requirements under paragraph (3) for 
     any recipient jurisdiction that has dedicated all building 
     code permitting fees to the conduct of local building code 
     enforcement.
       (d) Evaluation and Report.--
       (1) In general.--Grant recipients under this section 
     shall--
       (A) be obligated to fully account and report for the use of 
     all grants funds; and
       (B) provide a report to the Secretary on the effectiveness 
     of the program undertaken by the grantee and any other 
     criteria requested by the Secretary for the purpose of 
     indicating the effectiveness of, and ideas for, refinement of 
     the grant program.
       (2) Report.--The report required under paragraph (1)(B) 
     shall include a discussion of--
       (A) the specific capabilities and functions in local 
     building code enforcement administration that were addressed 
     using funds received under this section;
       (B) the lessons learned in carrying out the plans supported 
     by the grant; and
       (C) the manner in which the programs supported by the grant 
     are to be maintained by the grantee.
       (3) Content of reports.--The Secretary shall--
       (A) require each recipient of a grant under this section to 
     file interim and final reports under paragraph (2) to ensure 
     that grant funds are being used as intended and to measure 
     the effectiveness and benefits of the grant program; and
       (B) develop and maintain a means whereby the public can 
     access such reports, at no cost, via the Internet.
       (e) Definitions.--For purposes of this section, the 
     following definitions shall apply:
       (1) Building code enforcement.--The term ``building code 
     enforcement'' means the enforcement of any code, adopted by a 
     State or local government, that regulates the construction of 
     buildings and facilities to mitigate hazards to life or 
     property. Such term includes building codes, electrical 
     codes, energy codes, fire codes, fuel gas codes, mechanical 
     codes, and plumbing codes.
       (2) Building code enforcement department.--The term 
     ``building code enforcement department'' means an inspection 
     or enforcement agency of a jurisdiction that is responsible 
     for conducting building code enforcement.
       (3) Jurisdiction.--The term ``jurisdiction'' means a city, 
     county, parish, city and county authority, or city and parish 
     authority having local authority to enforce building codes 
     and regulations and to collect fees for building permits.
       (4) Secretary.--The term ``Secretary'' means the Secretary 
     of Housing and Urban Development.
       (f) Authorization of Appropriations.--
       (1) In general.--There are authorized to be appropriated 
     $20,000,000 for each of fiscal years 2010 through 2014 to the 
     Secretary of Housing and Urban Development to carry out the 
     provisions of this section.
       (2) Reservation.--From the amount made available under 
     paragraph (1), the Secretary may reserve not more than 5 
     percent for administrative costs.
       (3) Availability.--Any funds appropriated pursuant to 
     paragraph (1) shall remain available until expended.

     SEC. 208. SOLAR ENERGY SYSTEMS BUILDING PERMIT REQUIREMENTS 
                   FOR RECEIPT OF COMMUNITY DEVELOPMENT BLOCK 
                   GRANT FUNDS.

       Section 104 of the Housing and Community Development Act of 
     1974 (42 U.S.C. 5304) is amended by adding at the end the 
     following new subsection:
       ``(n) Requirements for Building Permits Regarding Solar 
     Energy Systems.--
       ``(1) In general.--A grant under section 106 for a fiscal 
     year may be made only if the grantee certifies to the 
     Secretary that--
       ``(A) in the case of a grant under section 106(a) for any 
     Indian tribe or insular area, during such fiscal year the 
     cost of any permit or license, for construction or 
     installation of any solar energy system for any structure, 
     that is required by the tribe or insular area or by any other 
     unit of general local government or other political 
     subdivision of such tribe or insular area, complies with 
     paragraph (2);
       ``(B) in the case of a grant under section 106(b) for any 
     metropolitan city or urban county, during such fiscal year 
     the cost of any permit or license, for construction or 
     installation of any solar energy system for any structure, 
     that is required by the metropolitan city or urban county, or 
     by any other political subdivision of such city or county, 
     complies with paragraph (2); and
       ``(C) in the case of a grant under section 106(d) for any 
     State, during such fiscal year the cost of any permit or 
     license, for construction or installation of any solar energy 
     system for any structure, that is required by the State, or 
     by any other unit of general local government within any 
     nonentitlement area of such State, or other political 
     subdivision within any nonentitlement area of such State or 
     such a unit of general local government, complies with 
     paragraph (2).
       ``(2) Limitation on cost.--The cost of permit or license 
     for construction or installation of any solar energy system 
     complies with this paragraph only if such cost does not 
     exceed the following amount:
       ``(A) Residential structures.--In the case of a structure 
     primarily for residential use, $500.
       ``(B) Nonresidential structures.--In the case of a 
     structure primarily for nonresidential use, 1.0 percent of 
     the total cost of the installation or construction of the 
     solar energy system, but not in excess of $10,000.
       ``(3) Noncompliance.--If the Secretary determines that a 
     grantee of a grant made under section 106 is not in 
     compliance with a certification under paragraph (1)--
       ``(A) the Secretary shall notify the grantee of such 
     determination; and
       ``(B) if the grantee has not corrected such noncompliance 
     before the expiration of the 6-month period beginning upon 
     notification under subparagraph (A), such grantee shall not 
     be eligible for 5 percent of any amounts awarded under a 
     grant under section 106 for the first fiscal year that 
     commences after the expiration of such 6-month period.
       ``(4) Solar energy system.--For purposes of this 
     subsection, the term `solar energy system' means, with 
     respect to a structure, equipment that uses solar energy to 
     generate electricity for, or to heat or cool (or provide hot 
     water for use in), such structure.''.

     SEC. 209. PROHIBITION OF RESTRICTIONS ON RESIDENTIAL 
                   INSTALLATION OF SOLAR ENERGY SYSTEM.

       (a) Regulations.--Within 180 days after the enactment of 
     this Act, the Secretary of Housing and Urban Development, in 
     consultation with the Secretary of Energy, shall issue 
     regulations--
       (1) to prohibit any private covenant, contract provision, 
     lease provision, homeowners' association rule or bylaw, or 
     similar restriction, that impairs the ability of the owner or 
     lessee of any residential structure designed for occupancy by 
     1 family to install, construct, maintain, or use a solar 
     energy system on such residential property; and
       (2) to require that whenever any such covenant, provision, 
     rule or bylaw, or restriction requires approval for the 
     installation or use of a solar energy system, the application 
     for approval shall be processed and approved by the 
     appropriate approving entity in the same manner as an 
     application for approval of an architectural modification to 
     the property, and shall not be willfully avoided or delayed.
       (b) Contents.--The regulations required under subsection 
     (a) shall provide that--
       (1) such a covenant, provision, rule or bylaw, or 
     restriction impairs the installation, construction, 
     maintenance, or use of a solar energy system if it--
       (A) unreasonably delays or prevents installation, 
     maintenance, or use;
       (B) unreasonably increases the cost of installation, 
     maintenance, or use; or
       (C) precludes use of such a system; and
       (2) any fee or cost imposed on the owner or lessee of such 
     a residential structure by such a covenant, provision, rule 
     or bylaw, or restriction shall be considered unreasonable 
     if--
       (A) such fee or cost is not reasonable in comparison to the 
     cost of the solar energy system or the value of its use; or
       (B) treatment of solar energy systems by the covenant, 
     provision, rule or bylaw, or restriction is not reasonable in 
     comparison with treatment of comparable systems by the same 
     covenant, provision, rule or bylaw, or restriction.
       (c) Solar Energy System.--For purposes of this section, the 
     term ``solar energy system'' means, with respect to a 
     structure, equipment that uses solar energy to generate 
     electricity for, or to heat or cool (or provide hot water for 
     use in), such structure.

     Subtitle B--Lighting and Appliance Energy Efficiency Programs

     SEC. 211. LIGHTING EFFICIENCY STANDARDS.

       (a) Outdoor Lighting.--
       (1) Definitions.--
       (A) Section 340(1) of the Energy Policy and Conservation 
     Act (42 U.S.C. 6311(1)) is amended by striking subparagraph 
     (L) and inserting the following:
       ``(L) Outdoor luminaires.
       ``(M) Outdoor high light output lamps.
       ``(N) Any other type of industrial equipment which the 
     Secretary classifies as covered equipment under section 
     341(b).''.
       (B) Section 340 of the Energy Policy and Conservation Act 
     (42 U.S.C. 6311) is amended as adding at the end the 
     following:
       ``(25) The term `luminaire' means a complete lighting unit 
     consisting of one or more light sources and ballast(s), 
     together with parts designed to distribute the light, to 
     position and protect such lamps, and to connect such light 
     sources to the power supply.
       ``(26) The term `outdoor luminaire' means a luminaire that 
     is listed as suitable for wet locations pursuant to 
     Underwriters Laboratories Inc. standard UL 1598 and is 
     labeled as

[[Page H7516]]

     `Suitable for Wet Locations' consistent with section 410.4(A) 
     of the National Electrical Code 2005, or is designed for 
     roadway illumination and meets the requirements of Addendum A 
     for IESNA TM-15-07: Backlight, Uplight, and Glare (BUG) 
     Ratings, except for--
       ``(A) luminaires designed for outdoor video display images 
     that cannot be used in general lighting applications;
       ``(B) portable luminaires designed for use at construction 
     sites;
       ``(C) luminaires designed for continuous immersion in 
     swimming pools and other water features;
       ``(D) seasonal luminaires incorporating solely individual 
     lamps rated at 10 watts or less;
       ``(E) luminaires designed to be used in emergency 
     conditions that incorporate a means of charging a battery and 
     a device to switch the power supply to emergency lighting 
     loads automatically upon failure of the normal power supply;
       ``(F) components used for repair of installed luminaries 
     and that meet the requirements of section 342(h);
       ``(G) a luminaire utilizing an electrode-less fluorescent 
     lamp as the light source;
       ``(H) decorative gas lighting systems;
       ``(I) luminaires designed explicitly for lighting for 
     theatrical purposes, including performance, stage, film 
     production, and video production;
       ``(J) luminaires designed as theme elements in theme/
     amusement parks and that cannot be used in most general 
     lighting applications;
       ``(K) luminaires designed explicitly for vehicular roadway 
     tunnels designed to comply with ANSI/IESNA RP-22-05;
       ``(L) luminaires designed explicitly for hazardous 
     locations meeting UL Standard 844;
       ``(M) searchlights;
       ``(N) luminaires that are designed to be recessed into a 
     building, and that cannot be used in most general lighting 
     applications;
       ``(O) a luminaire rated only for residential applications 
     utilizing a light source or sources regulated under the 
     amendments made by section 321 of the Energy Independence and 
     Security Act of 2007 and with a light output no greater than 
     2,600 lumens;
       ``(P) a residential pole-mounted luminaire that is not 
     rated for commercial use utilizing a light source or sources 
     meeting the efficiency requirements of section 231 of the 
     Energy Independence and Security Act of 2007 and mounted on a 
     post or pole not taller than 10.5 feet above ground and with 
     a light output not greater than 2,600 lumens;
       ``(Q) a residential fixture with E12 (Candelabra) bases 
     that is rated for not more than 300 watts total; or
       ``(R) a residential fixture with medium screw bases that is 
     rated for not more than 145 watts.
       ``(27) The term `outdoor high light outputlamp' means a 
     lamp that--
       ``(A) has a rated lumen output not less than 2601 lumens;
       ``(B) is capable of being operated at a voltage not less 
     than 110 volts and not greater than 300 volts, or driven at a 
     constant current of 6.6 amperes;
       ``(C) is not a Parabolic Aluminized Reflector lamp; and
       ``(D) is not a J-type double-ended (T-3) halogen quartz 
     lamp, utilizing R-7S bases, that is manufactured before 
     January 1, 2015.
       ``(28) The term `outdoor lighting control' means a device 
     incorporated in a luminaire that receives a signal, from 
     either a sensor (such as an occupancy sensor, motion sensor, 
     or daylight sensor) or an input signal (including analog or 
     digital signals communicated through wired or wireless 
     technology), and can adjust the light level according to the 
     signal.''.
       (2) Standards.-- Section 342 of the Energy Policy and 
     Conservation Act (42 U.S.C. 6313) is amended by adding at the 
     end the following:
       ``(g) Outdoor Luminaires.--
       ``(1) Each outdoor luminaire manufactured on or after 
     January 1, 2011, shall--
       ``(A) have an initial luminaire efficacy of at least 50 
     lumens per watt; and
       ``(B) be designed to use a light source with a lumen 
     maintenance, calculated as mean rated lumens divided by 
     initial lumens, of at least 0.6.
     ``(2) Each outdoor luminaire manufactured on or after January 
     1, 2018, shall--
     ``(A) have an initial luminaire efficacy of at least 70 
     lumens per watt; and
     ``(B) be designed to use a light source with a lumen 
     maintenance, calculated as mean rated lumens divided by 
     initial lumens, of at least 0.6.
       ``(3) In addition to the requirements of paragraphs (1) 
     through (3), each outdoor luminaire manufactured on or after 
     January 1, 2016, shall have the capability of producing at 
     least two different light levels, including 100 percent and 
     60 percent of full lamp output as tested with the maximum 
     rated lamp per UL1598 or the manufacturer's maximum specified 
     for the luminaire under test, outdoor luminaires used for 
     roadway lighting applications shall be exempt from the 2 
     light level requirements.
       ``(4)(A) Not later than January 1, 2022, the Secretary 
     shall issue a final rule amending the applicable standards 
     established in paragraph (3) if technologically feasible and 
     economically justified.
       ``(B) A final rule issued under subparagraph (A) shall 
     establish efficiency standards at the maximum level that is 
     technically feasible and economically justified, as provided 
     in subsections (o) and (p) of section 325. The Secretary may 
     also, in such rulemaking, amend or discontinue the product 
     exclusions listed in section 340(26)(A) through (P), or amend 
     the lumen maintenance requirements in paragraph (2) if the 
     Secretary determines that such amendments are consistent with 
     the purposes of this Act.
       ``(C) If the Secretary issues a final rule under 
     subparagraph (A) establishing amended standards, the final 
     rule shall provide that the amended standards apply to 
     products manufactured on or after January 1, 2025, or one 
     year after the date on which the final amended standard is 
     published, whichever is later.
       ``(h) Outdoor High Light Output Lamps.--Each outdoor high 
     light output lamp manufactured on or after January 1, 2017, 
     shall have a lighting efficiency of at least 45 lumens per 
     watt.''.
       (3) Test procedures.-- Section 343(a) of the Energy Policy 
     and Conservation Act (42 U.S.C. 6314(a)) is amended by adding 
     at the end the following:
       ``(10) Outdoor lighting.--
       ``(A) With respect to outdoor luminaires and outdoor high 
     light output lamps, the test procedures shall be based upon 
     the test procedures specified in illuminating engineering 
     society procedures LM-79 as of March 1, 2009, and LM-31, and/
     or other appropriate consensus test procedures developed by 
     the Illuminating Engineering Society or other appropriate 
     consensus standards bodies.
       ``(B) If illuminating engineering society procedure LM--79 
     is amended, the Secretary shall amend the test procedures 
     established in subparagraph (A) as necessary to be consistent 
     with the amended LM-79 test procedure, unless the Secretary 
     determines, by rule, published in the Federal Register and 
     supported by clear and convincing evidence, that to do so 
     would not meet the requirements for test procedures under 
     paragraph (2).
       ``(C) The Secretary may revise the test procedures for 
     outdoor luminaires or outdoor high light output lamps by rule 
     consistent with paragraph (2), and may incorporate as 
     appropriate consensus test procedures developed by the 
     Illuminating Engineering Society or other appropriate 
     consensus standards bodies.''.
       (4) Preemption.-- Section 345 of the Energy Policy and 
     Conservation Act (42 U.S.C. 6316) is amended by adding at the 
     end the following:
       ``(i)(1) Except as provided in paragraph (2), section 327 
     shall apply to outdoor luminaires to the same extent and in 
     the same manner as the section applies under part B.
       ``(2) Any State standard that is adopted on or before 
     January 1, 2015, pursuant to a statutory requirement to adopt 
     efficiency standards for reducing outdoor lighting energy use 
     enacted prior to January 31, 2008, shall not be preempted.''.
       (5) Energy efficiency standards for certain luminaires.--
     Not later than 1 year after the date of enactment of this 
     Act, the Secretary of Energy shall, in consultation with the 
     National Electrical Manufacturers Association, collect data 
     for United States sales of luminaires described in section 
     340(26)(H) and (M) of the Energy Policy and Conservation Act, 
     to determine the historical growth rate. If the Secretary 
     finds that the growth in market share of such luminaires 
     exceeds twice the year to year rate of the average of the 
     previous three years, then the Secretary shall within 12 
     months initiate a rulemaking to determine if such exclusion 
     should be eliminated, if substitute products exist that 
     perform more efficiently and fulfill the performance 
     functions of these luminaires.
       (b) Portable Lighting.--
       (1) Portable light fixtures.--
       (A) Definitions.--Section 321 of the Energy Policy and 
     Conservation Act (42 U.S.C. 6291) is amended by adding at the 
     end the following:
       ``(67) Art work light fixture.--The term `art work light 
     fixture' means a light fixture designed only to be mounted 
     directly to an art work and for the purpose of illuminating 
     that art work.
       ``(68) LED light engine.--The term `LED light engine' or 
     `LED light engine with integral heat sink' means a subsystem 
     of an LED light fixture that--
       ``(A) includes 1 or more LED components, including--
       ``(i) an LED driver power source with electrical and 
     mechanical interfaces; and
       ``(ii) an integral heat sink to provide thermal 
     dissipation; and
       ``(B) may be designed to accept additional components that 
     provide aesthetic, optical, and environmental control.
       ``(69) LED light fixture.--The term `LED light fixture' 
     means a complete lighting unit consisting of--
       ``(A) an LED light source with 1 or more LED lamps or LED 
     light engines; and
       ``(B) parts--
       ``(i) to distribute the light;
       ``(ii) to position and protect the light source; and
       ``(iii) to connect the light source to electrical power.
       ``(70) Light fixture.--The term `light fixture' means a 
     product designed to provide light that includes--
       ``(A) at least 1 lamp socket; and
       ``(B) parts--
       ``(i) to distribute the light;
       ``(ii) position and protect 1 or more lamps; and

[[Page H7517]]

       ``(iii) to connect 1 or more lamps to a power supply.
       ``(71) Portable light fixture.--
       ``(A) In general.--The term `portable light fixture' means 
     a light fixture that has a flexible cord and an attachment 
     plug for connection to a nominal 120-volt circuit that--
       ``(i) allows the user to relocate the product without any 
     rewiring; and
       ``(ii) typically can be controlled with a switch located on 
     the product or the power cord of the product.
       ``(B) Exclusions.--The term `portable light fixture' does 
     not include--
       ``(i) direct plug-in night lights, sun or heat lamps, 
     medical or dental lights, portable electric hand lamps, signs 
     or commercial advertising displays, photographic lamps, 
     germicidal lamps, or light fixtures for marine use or for use 
     in hazardous locations (as those terms are defined in ANSI/
     NFPA 70 of the National Electrical Code); or
       ``(ii) decorative lighting strings, decorative lighting 
     outfits, or electric candles or candelabra without lamp 
     shades that are covered by Underwriter Laboratories (UL) 
     standard 588, `Seasonal and Holiday Decorative Products'.''.
       (B) Coverage.--
       (i) In general.--Section 322(a) of the Energy Policy and 
     Conservation Act (42 U.S.C. 6292(a)) is amended--

       (I) by redesignating paragraph (20) as paragraph (24); and
       (II) by inserting after paragraph (19) the following:

       ``(20) Portable light fixtures.''.
       (ii) Conforming amendments.--Section 325(l) of the Energy 
     Policy and Conservation Act (42 U.S.C. 6295(l)) is amended by 
     striking ``paragraph (19)'' each place it appears in 
     paragraphs (1) and (2) and inserting ``paragraph (24)''.
       (C) Test procedures.--Section 323(b) of the Energy Policy 
     and Conservation Act (42 U.S.C. 6293(b)) is amended by adding 
     at the end the following:
       ``(19) LED fixtures and led light engines.--Test procedures 
     for LED fixtures and LED light engines shall be based on 
     Illuminating Engineering Society of North America (IESNA) 
     test procedure LM-79, Approved Method for Electrical and 
     Photometric Testing of Solid-State Lighting Devices, and 
     IESNA-approved test procedure for testing LED light 
     engines.''.
       (D) Standards.--Section 325 of the Energy Policy and 
     Conservation Act (42 U.S.C. 6295) is amended--
       (i) by redesignating subsection (ii) as subsection (oo);
       (ii) in subsection (oo)(2), as redesignated in clause (i) 
     of this subparagraph, by striking ``(hh)'' each place it 
     appears and inserting ``(mm)''; and
       (iii) by inserting after subsection (hh) the following:
       ``(ii) Portable Light Fixtures.--
       ``(1) In general.--Subject to paragraphs (2) and (3), 
     portable light fixtures manufactured on or after January 1, 
     2012, shall meet 1 or more of the following requirements:
       ``(A) Be a fluorescent light fixture that meets the 
     requirements of the Energy Star Program for Residential Light 
     Fixtures, Version 4.2.
       ``(B) Be equipped with only 1 or more GU-24 line-voltage 
     sockets, not be rated for use with incandescent lamps of any 
     type (as defined in ANSI standards), and meet the 
     requirements of version 4.2 of the Energy Star program for 
     residential light fixtures.
       ``(C) Be an LED light fixture or a light fixture with an 
     LED light engine and comply with the following minimum 
     requirements:
       ``(i) Minimum light output: 200 lumens (initial).
       ``(ii) Minimum LED light engine efficacy: 40 lumens/watt 
     installed in fixtures that meet the minimum light fixture 
     efficacy of 29 lumens/watt or, alternatively, a minimum LED 
     light engine efficacy of 60 lumens/watt for fixtures that do 
     not meet the minimum light fixture efficacy of 29 lumens/
     watt.
       ``(iii) All portable fixtures shall have a minimum LED 
     light fixture efficacy of 29 lumens/watt and a minimum LED 
     light engine efficacy of 60 lumens/watt by January 1, 2016.
       ``(iv) Color Correlated Temperature (CCT): 2700K through 
     4000K.
       ``(v) Minimum Color Rendering Index (CRI): 75.
       ``(vi) Power factor equal to or greater than 0.70.
       ``(vii) Portable luminaries that have internal power 
     supplies shall have zero standby power when the luminaire is 
     turned off.
       ``(viii) LED light sources shall deliver at least 70 
     percent of initial lumens for at least 25,000 hours.
       ``(D)(i) Be equipped with an ANSI-designated E12, E17, or 
     E26 screw-based socket and be prepackaged and sold together 
     with 1 screw-based compact fluorescent lamp or screw-based 
     LED lamp for each screw-based socket on the portable light 
     fixture.
       ``(ii) The compact fluorescent or LED lamps prepackaged 
     with the light fixture shall be fully compatible with any 
     light fixture controls incorporated into the light fixture 
     (for example, light fixtures with dimmers shall be packed 
     with dimmable lamps).
       ``(iii) Compact fluorescent lamps prepackaged with light 
     fixtures shall meet the requirements of the Energy Star 
     Program for CFLs Version 4.0.
       ``(iv) Screw-based LED lamps shall comply with the minimum 
     requirements described in subparagraph (C).
       ``(E) Be equipped with 1 or more single-ended, non-screw 
     based halogen lamp sockets (line or low voltage), a dimmer 
     control or high-low control, and be rated for a maximum of 
     100 watts.
       ``(2) Review.--
       ``(A) Review.--The Secretary shall review the criteria and 
     standards established under paragraph (1) to determine if 
     revised standards are technologically feasible and 
     economically justified.
       ``(B) Components.--The review shall include consideration 
     of--
       ``(i) whether a separate compliance procedure is still 
     needed for halogen fixtures described in subparagraph (E) 
     and, if necessary, what an appropriate standard for halogen 
     fixtures shall be;
       ``(ii) whether the specific technical criteria described in 
     subparagraphs (A), (C), and (D)(iii) should be modified; and
       ``(iii) which fixtures should be exempted from the light 
     fixture efficacy standard as of January 1, 2016, because the 
     fixtures are primarily decorative in nature (as defined by 
     the Secretary) and, even if exempted, are likely to be sold 
     in limited quantities.
       ``(C) Timing.--
       ``(i) Determination.--Not later than January 1, 2014, the 
     Secretary shall publish amended standards, or a determination 
     that no amended standards are justified, under this 
     subsection.
       ``(ii) Standards.--Any standards under this paragraph shall 
     take effect on January 1, 2016.
       ``(3) Art work light fixtures.--Art work light fixtures 
     manufactured on or after January 1, 2012, shall--
       ``(A) comply with paragraph (1); or
       ``(B)(i) contain only ANSI-designated E12 screw-based line-
     voltage sockets;
       ``(ii) have not more than 3 sockets;
       ``(iii) be controlled with an integral high/low switch;
       ``(iv) be rated for not more than 25 watts if fitted with 1 
     socket; and
       ``(v) be rated for not more than 15 watts per socket if 
     fitted with 2 or 3 sockets.
       ``(4) Exception from preemption.--Notwithstanding section 
     327, Federal preemption shall not apply to a regulation 
     concerning portable light fixtures adopted by the California 
     Energy Commission on or before January 1, 2014.''.
       (2) GU-24 base lamps.--
       (A) Definitions.--Section 321 of the Energy Policy and 
     Conservation Act (42 U.S.C. 6291) (as amended by paragraph 
     (1)(A)) is amended by adding at the end the following:
       ``(72) GU-24.--The term `GU-24' means the designation of a 
     lamp socket, based on a coding system by the International 
     Electrotechnical Commission, under which--
       ``(A) `G' indicates a holder and socket type with 2 or more 
     projecting contacts, such as pins or posts;
       ``(B) `U' distinguishes between lamp and holder designs of 
     similar type that are not interchangeable due to electrical 
     or mechanical requirements; and
       ``(C) 24 indicates the distance in millimeters between the 
     electrical contact posts.
       ``(73) GU-24 adaptor.--
       ``(A) In general.--The term `GU-24 Adaptor' means a 1-piece 
     device, pig-tail, wiring harness, or other such socket or 
     base attachment that--
       ``(i) connects to a GU-24 socket on 1 end and provides a 
     different type of socket or connection on the other end; and
       ``(ii) does not alter the voltage.
       ``(B) Exclusion.--The term `GU-24 Adaptor' does not include 
     a fluorescent ballast with a GU-24 base.
       ``(74) GU-24 base lamp.--`GU-24 base lamp' means a light 
     bulb designed to fit in a GU-24 socket.''.
       (B) Standards.--Section 325 of the Energy Policy and 
     Conservation Act (42 U.S.C. 6295) (as amended by paragraph 
     (1)(D)) is amended by inserting after subsection (ii) the 
     following:
       ``(jj) GU-24 Base Lamps.--
       ``(1) In general.--A GU-24 base lamp shall not be an 
     incandescent lamp as defined by ANSI.
       ``(2) GU-24 adaptors.--GU-24 adaptors shall not adapt a GU-
     24 socket to any other line voltage socket.''.
       (3) Standards for certain incandescent reflector lamps.--
     Section 325(i) of the Energy Policy and Conservation Act (42 
     U.S.C. 6295(i)), as amended by section 161(a)(12) of this 
     Act, is amended by adding at the end the following:
       ``(9) Certain incandescent reflector lamps.--(A) No later 
     than 12 months after enactment of this paragraph, the 
     Secretary shall publish a final rule establishing standards 
     for incandescent reflector lamp types described in paragraph 
     (1)(D). Such standards shall be effective on July 1, 2013.
       ``(B) Any rulemaking for incandescent reflector lamps 
     completed after enactment of this section shall consider 
     standards for all incandescent reflector lamps, inclusive of 
     those specified in paragraph (1)(C).
       ``(10) Reflector lamps.--No later than January 1, 2015, the 
     Secretary shall publish a final rule establishing and 
     amending standards for reflector lamps, including 
     incandescent reflector lamps. Such standards shall be 
     effective no sooner than three years after publication of the 
     final rule. Such rulemaking shall consider incandescent and 
     nonincandescent technologies. Such rulemaking shall consider 
     a new metric other than lumens-per-watt based on the 
     photometric distribution of light from such lamps.''.

[[Page H7518]]

     SEC. 212. OTHER APPLIANCE EFFICIENCY STANDARDS.

       (a) Standards for Water Dispensers, Hot Food Holding 
     Cabinets, and Portable Electric Spas.--
       (1) Definitions.--Section 321 of the Energy Policy and 
     Conservation Act (42 U.S.C. 6291), as amended by section 211 
     of this Act, is further amended by adding at the end the 
     following:
       ``(75) The term `water dispenser' means a factory-made 
     assembly that mechanically cools and heats potable water and 
     that dispenses the cooled or heated water by integral or 
     remote means.
       ``(76) The term `bottle-type water dispenser' means a 
     drinking water dispenser designed for dispensing both hot and 
     cold water that uses a removable bottle or container as the 
     source of potable water.
       ``(77) The term `commercial hot food holding cabinet' means 
     a heated, fully-enclosed compartment with one or more solid 
     or glass doors that is designed to maintain the temperature 
     of hot food that has been cooked in a separate appliance. 
     Such term does not include heated glass merchandizing 
     cabinets, drawer warmers, commercial hot food holding 
     cabinets with interior volumes of less than 8 cubic feet, or 
     cook-and-hold appliances.
       ``(78) The term `portable electric spa' means a factory-
     built electric spa or hot tub, supplied with equipment for 
     heating and circulating water.''.
       (2) Coverage.--Section 322(a) of the Energy Policy and 
     Conservation Act (42 U.S.C. 6292(a)), as amended by section 
     211(b)(1)(B) of this Act, is further amended by inserting 
     after paragraph (20) the following new paragraphs:
       ``(21) Bottle type water dispensers.
       ``(22) Commercial hot food holding cabinets.
       ``(23) Portable electric spas.''.
       (3) Test procedures.--Section 323(b) of the Energy Policy 
     and Conservation Act (42 U.S.C. 6293(b)), as amended by 
     section 211(b)(1)(C) of this Act, is further amended by 
     adding at the end the following:
       ``(20) Bottle type water dispensers.--Test procedures for 
     bottle type water dispensers shall be based on `Energy Star 
     Program Requirements for Bottled Water Coolers version 1.1' 
     published by the Environmental Protection Agency. Units with 
     an integral, automatic timer shall not be tested using 
     section 4D, `Timer Usage,' of the test criteria.
       ``(21) Commercial hot food holding cabinets.--Test 
     procedures for commercial hot food holding cabinets shall be 
     based on the test procedures described in ANSI/ASTM F2140-01 
     (Test for idle energy rate-dry test). Interior volume shall 
     be based on the method shown in the Environmental Protection 
     Agency's `Energy Star Program Requirements for Commercial Hot 
     Food Holding Cabinets' as in effect on August 15, 2003.
       ``(22) Portable electric spas.--Test procedures for 
     portable electric spas shall be based on the test method for 
     portable electric spas contained in section 1604, title 20, 
     California Code of Regulations as amended on December 3, 
     2008. When the American National Standards Institute 
     publishes a test procedure for portable electric spas, the 
     Secretary shall revise the Department of Energy's 
     procedure.''.
       (4) Standards.--Section 325 of the Energy Policy and 
     Conservation Act (42 U.S.C. 6295), as amended by section 211 
     of this Act, is further amended by adding after subsection 
     (jj) the following:
       ``(kk) Bottle Type Water Dispensers.--Effective January 1, 
     2012, bottle-type water dispensers designed for dispensing 
     both hot and cold water shall not have standby energy 
     consumption greater than 1.2 kilowatt-hours per day.
       ``(ll) Commercial Hot Food Holding Cabinets.--Effective 
     January 1, 2012, commercial hot food holding cabinets with 
     interior volumes of 8 cubic feet or greater shall have a 
     maximum idle energy rate of 40 watts per cubic foot of 
     interior volume.
       ``(mm) Portable Electric Spas.--Effective January 1, 2012, 
     portable electric spas shall not have a normalized standby 
     power greater than 5(V\2/3\) Watts where V=the fill volume in 
     gallons.
       ``(nn) Revisions.--The Secretary of Energy shall consider 
     revisions to the standards in subsections (kk), (ll), and 
     (mm) in accordance with subsection (o) and publish a final 
     rule no later than January 1, 2013 establishing such revised 
     standards, or make a finding that no revisions are 
     technically feasible and economically justified. Any such 
     revised standards shall take effect January 1, 2016.''.
       (b) Commercial Furnace Efficiency Standards.--Section 
     342(a) of the Energy Policy and Conservation Act (42 U.S.C. 
     6312(a)) is amended by inserting after paragraph (10) the 
     following new paragraph:
       ``(11) Warm air furnaces.--Each warm air furnace with an 
     input rating of 225,000 Btu per hour or more and manufactured 
     after January 1, 2011, shall meet the following standard 
     levels:
       ``(A) Gas-fired units.--
       ``(i) Minimum thermal efficiency of 80 percent.
       ``(ii) Include an interrupted or intermittent ignition 
     device.
       ``(iii) Have jacket losses not exceeding 0.75 percent of 
     the input rating.
       ``(iv) Have either power venting or a flue damper.
       ``(B) Oil-fired units.--
       ``(i) Minimum thermal efficiency of 81 percent.
       ``(ii) Have jacket losses not exceeding 0.75 percent of the 
     input rating.
       ``(iii) Have either power venting or a flue damper.''.

     SEC. 213. APPLIANCE EFFICIENCY DETERMINATIONS AND PROCEDURES.

       (a) Definition of Energy Conservation Standard.--Section 
     321(6) of the Energy Policy and Conservation Act (42 U.S.C. 
     6291(6)) is amended to read as follows:
       ``(6) Energy conservation standard.--
       ``(A) In general.--The term `energy conservation standard' 
     means 1 or more performance standards that--
       ``(i) for covered products (excluding clothes washers, 
     dishwashers, showerheads, faucets, water closets, and 
     urinals), prescribe a minimum level of energy efficiency or a 
     maximum quantity of energy use, determined in accordance with 
     test procedures prescribed under section 323;
       ``(ii) for showerheads, faucets, water closets, and 
     urinals, prescribe a minimum level of water efficiency or a 
     maximum quantity of water use, determined in accordance with 
     test procedures prescribed under section 323; and
       ``(iii) for clothes washers and dishwashers--

       ``(I) prescribe a minimum level of energy efficiency or a 
     maximum quantity of energy use, determined in accordance with 
     test procedures prescribed under section 323; and
       ``(II) may include a minimum level of water efficiency or a 
     maximum quantity of water use, determined in accordance with 
     those test procedures.

       ``(B) Inclusions.--The term `energy conservation standard' 
     includes--
       ``(i) 1 or more design requirements, if the requirements 
     were established--

       ``(I) on or before the date of enactment of this subclause;
       ``(II) as part of a direct final rule under section 
     325(p)(4); or
       ``(III) as part of a final rule published on or after 
     January 1, 2012, and

       ``(ii) any other requirements that the Secretary may 
     prescribe under section 325(r).
       ``(C) Exclusion.--The term `energy conservation standard' 
     does not include a performance standard for a component of a 
     finished covered product, unless regulation of the component 
     is specifically authorized or established pursuant to this 
     title.''.
       (b) Adopting Consensus Test Procedures and Test Procedures 
     in Use Elsewhere.--Section 323(b) of the Energy Policy and 
     Conservation Act (42 U.S.C. 6293(b)), as amended by sections 
     211 and 212 of this Act, is further amended by adding the 
     following new paragraph after paragraph (22):
       ``(23) Consensus and alternate test procedures.--
       ``(A) Receipt of joint recommendation or alternate testing 
     procedure.--On receipt of--
       ``(i) a statement that is submitted jointly by interested 
     persons that are fairly representative of relevant points of 
     view (including representatives of manufacturers of covered 
     products, States, and efficiency advocates), as determined by 
     the Secretary, and contains recommendations with respect to 
     the testing procedure for a covered product; or
       ``(ii) a submission of a testing procedure currently in use 
     for a covered product by a State, nation, or group of 
     nations--

       ``(I) if the Secretary determines that the recommended 
     testing procedure contained in the statement or submission is 
     in accordance with subsection (b)(3), the Secretary may issue 
     a final rule that establishes an energy or water conservation 
     testing procedure that is published simultaneously with a 
     notice of proposed rulemaking that proposes a new or amended 
     energy or water conservation testing procedure that is 
     identical to the testing procedure established in the final 
     rule to establish the recommended testing procedure (referred 
     to in this paragraph as a `direct final rule'); or
       ``(II) if the Secretary determines that a direct final rule 
     cannot be issued based on the statement or submission, the 
     Secretary shall publish a notice of the determination, 
     together with an explanation of the reasons for the 
     determination.

       ``(B) Public comment.--The Secretary shall solicit public 
     comment for a period of at least 110 days with respect to 
     each direct final rule issued by the Secretary under 
     subparagraph (A)(ii)(I).
       ``(C) Withdrawal of direct final rules.--
       ``(i) In general.--Not later than 120 days after the date 
     on which a direct final rule issued under subparagraph 
     (A)(ii)(I) is published in the Federal Register, the 
     Secretary shall withdraw the direct final rule if--

       ``(I) the Secretary receives 1 or more adverse public 
     comments relating to the direct final rule under subparagraph 
     (B)or any alternative joint recommendation; and
       ``(II) based on the rulemaking record relating to the 
     direct final rule, the Secretary determines that such adverse 
     public comments or alternative joint recommendation may 
     provide a reasonable basis for withdrawing the direct final 
     rule under paragraph (3) or any other applicable law.

       ``(ii) Action on withdrawal.--On withdrawal of a direct 
     final rule under clause (i), the Secretary shall--

       ``(I) proceed with the notice of proposed rulemaking 
     published simultaneously with the direct final rule as 
     described in subparagraph (A)(ii)(I); and
       ``(II) publish in the Federal Register the reasons why the 
     direct final rule was withdrawn.

[[Page H7519]]

       ``(iii) Treatment of withdrawn direct final rules.--A 
     direct final rule that is withdrawn under clause (i) shall 
     not be considered to be a final rule for purposes of 
     subsection (b).
       ``(D) Effect of paragraph.--Nothing in this paragraph 
     authorizes the Secretary to issue a direct final rule based 
     solely on receipt of more than 1 statement containing 
     recommended test procedures relating to the direct final 
     rule.''.
       (c) Updating Television Test Methods.--Section 323(b) of 
     the Energy Policy and Conservation Act (42 U.S.C. 6293(b)), 
     as amended by sections 211 and 212 of this Act, and 
     subsection (b) of this section, is further amended by adding 
     at the end the following new paragraph:
       ``(24) Televisions.--(A) On the date of enactment of this 
     paragraph, Appendix H to Subpart B of Part 430 of the United 
     States Code of Federal Regulations, `Uniform Test Method for 
     Measuring the Energy Consumption of Television Sets', is 
     repealed.
       ``(B) No later than 12 months after the date of enactment 
     of this paragraph the Secretary shall publish in the Federal 
     Register a final rule prescribing a new test method for 
     televisions.''.
       (d) Criteria for Prescribing New or Amended Standards.--(1) 
     Section 325(o)(2)(B)(i) of the Energy Policy and Conservation 
     Act (42 U.S.C. 6295(o)(2)(B)(i)) is amended as follows:
       (A) By striking ``and'' at the end of subclause (VI).
       (B) By redesignating subclause (VII) as subclause (XI).
       (C) By inserting the following new subclauses after 
     subclause (VI):
       ``(VII) the estimated value of the carbon dioxide and other 
     emission reductions that will be achieved by virtue of the 
     higher energy efficiency of the covered products resulting 
     from the imposition of the standard;
       ``(VIII) the estimated impact of standards for a particular 
     product on average consumer energy prices;
       ``(IX) the increased energy efficiency that may be 
     attributable to the installation of Smart Grid technologies 
     or capabilities in the covered products, if applicable in the 
     determination of the Secretary;
       ``(X) the availability in the United States or in other 
     nations of examples or prototypes of covered products that 
     achieve significantly higher efficiency standards for energy 
     or for water; and''.
       (2) Section 325(o)(2)(B)(iii) of such Act is amended as 
     follows:
       (A) By striking ``three'' and inserting ``5''.
       (B) By inserting after the first sentence the following 
     ``For products with an average expected useful life of less 
     than 5 years, such rebuttable presumption shall be determined 
     utilizing 75 percent of the product's average expected useful 
     life as a multiplier instead of 5.''.
       (C) By striking the last sentence and inserting the 
     following: ``Such a presumption may be rebutted only if the 
     Secretary finds, based on clear, convincing, and reliable 
     evidence, that--
       ``(I) such standard level would cause serious and 
     unavoidable hardship to the average consumer of the product, 
     or to manufacturers supplying a significant portion of the 
     market for the product, that substantially outweighs the 
     standard level's benefits;
       ``(II) the standard and implementing regulations cannot be 
     designed to avoid or mitigate the hardship identified under 
     subclause (I), through the adoption of regional standards 
     consistent with paragraph (6) of this subsection, or other 
     reasonable means consistent with this part;
       ``(III) the same or substantially similar hardship would 
     not occur under a standard adopted in the absence of the 
     presumption, but that otherwise meets the requirements of 
     this section; and
       ``(IV) the hardship cannot be avoided or mitigated pursuant 
     the procedures specified in section 504 of the Department of 
     Energy Organization Act (42 U.S.C. 7194).
     A determination by the Secretary that the criteria triggering 
     such presumption are not met, or that the criterion for 
     rebutting the presumption are met shall not be taken into 
     consideration in the Secretary's determination of whether a 
     standard is economically justified.''.
       (e) Obtaining Appliance Information From Manufacturers.--
     Section 326(d) of the Energy Policy and Conservation Act (42 
     U.S.C. 6295(d)) is amended to read as follows:
       ``(d) Information Requirements.--(1) For purposes of 
     carrying out this part, the Secretary shall publish proposed 
     regulations not later than one year after the date of 
     enactment of the American Clean Energy and Security Act of 
     2009, and after receiving public comment, final regulations 
     not later than 18 months from such date of enactment under 
     this part or other provision of law administered by the 
     Secretary, which shall require each manufacturer of a covered 
     product to submit information or reports to the Secretary on 
     an annual basis in a form adopted by the Secretary. Such 
     reports shall include information or data with respect to--
       ``(A) the manufacturers' compliance with all requirements 
     applicable pursuant to this part;
       ``(B) the economic impact of any proposed energy 
     conservation standard;
       ``(C) the manufacturers' annual shipments of each class or 
     category of covered products, organized, to the maximum 
     extent practicable, by--
       ``(i) energy efficiency, energy use, and, if applicable, 
     water use;
       ``(ii) the presence or absence of such efficiency related 
     or energy consuming operational characteristics or components 
     as the Secretary determines are relevant for the purposes of 
     carrying out this part; and
       ``(iii) the State or regional location of sale, for covered 
     products for which the Secretary may adopt regional 
     standards; and
       ``(D) such other categories of information as the Secretary 
     deems relevant to carry out this part, including such other 
     information as may be necessary to establish and revise test 
     procedures, labeling rules, and energy conservation standards 
     and to insure compliance with the requirements of this part.
       ``(2) In adopting regulations under this subsection, the 
     Secretary shall consider existing public sources of 
     information, including nationally recognized certification 
     programs of trade associations.
       ``(3) The Secretary shall exercise authority under this 
     section in a manner designed to minimize unnecessary burdens 
     on manufacturers of covered products.
       ``(4) To the extent that they do not conflict with the 
     duties of the Secretary in carrying out this part, the 
     provisions of section 11(d) of the Energy Supply and 
     Environmental Coordination Act of 1974 (15 U.S.C. 796(d)) 
     shall apply with respect to information obtained under this 
     subsection to the same extent and in the same manner as they 
     apply with respect to other energy information obtained under 
     such section.''.
       (f) State Waiver.--Section 327(c) of the Energy Policy and 
     Conservation Act (42 U.S.C. 6297(c)), as amended by section 
     161(a)(19) of this Act, is further amended by adding at the 
     end the following:
       ``(12) is a regulation concerning standards for hot food 
     holding cabinets, drinking water dispensers and portable 
     electric spas adopted by the California Energy Commission on 
     or before January 1, 2013.''.
       (g) Waiver of Federal Preemption.--Paragraph (1) of section 
     327(d) of the Energy Policy and Conservation Act (42 U.S.C. 
     6297(d)) is amended as follows:
       (1) In subparagraph (A) by striking ``State regulation'' 
     each place it appears and inserting ``State statute or 
     regulation''.
       (2) In subparagraph (B) by adding at the end the following 
     new sentence: ``In making such a finding, the Secretary may 
     not reject a petition for failure of the petitioning State or 
     river basin commission to produce confidential information 
     maintained by any manufacturer or distributor, or group or 
     association of manufacturers or distributors, and which the 
     petitioning party does not have the legal right to obtain.''.
       (3) In clause (ii) of subparagraph (C) by striking 
     ``costs'' each place it appears and inserting ``estimated 
     costs''.
       (4) In subparagraph (C) by striking ``within the context of 
     the State's energy plan and forecast, and,''.
       (h) Inclusion of Carbon Output on Appliance ``Energyguide'' 
     Labels.--(1) Section 324(a)(2) of the Energy Policy and 
     Conservation Act (42 U.S.C. 6294(a)(2)) is amended by adding 
     the following at the end:
       ``(I)(i) Not later than 90 days after the date of enactment 
     of this subparagraph, the Commission shall initiate a 
     rulemaking to implement the additional labeling requirements 
     specified in subsection (c)(1)(C) of this section with an 
     effective date for the revised labeling requirement not later 
     than 12 months from issuance of the final rule.
       ``(ii) Not later than 24 months after the date of enactment 
     of this subparagraph, the Commission shall complete the 
     rulemaking initiated under clause (i).
       ``(iii) Not later than 90 days after issuance of the final 
     rule as provided in this subparagraph, the Secretary shall 
     issue calculation methods required to effectuate the labeling 
     requirements specified in subsection (c)(1)(C) of this 
     section.''.
       (2) Section 324(c)(1) of the Energy Policy and Conservation 
     Act (42 U.S.C. 6294(c)(1)) is amended--
       (A) by striking ``and'' at the end of subparagraph (A);
       (B) by striking the period at the end of subparagraph (B) 
     and inserting a semicolon; and
       (C) by adding at the end the following new subparagraphs:
       ``(C) for products or groups of products providing a 
     comparable function (including the group of products 
     comprising the heating function of heat pumps and furnaces) 
     among covered products listed in paragraphs (3), (4), (5), 
     (8), (9), (10), and (11) of section 322(a) of this part, and 
     others designated by the Secretary, the estimated total 
     annual atmospheric carbon dioxide emissions (or their 
     equivalent in other greenhouse gases) associated with, or 
     caused by, the product, calculated utilizing--
       ``(i) national average energy use for the product including 
     energy consumed at the point of end use based on test 
     procedures developed under section 323 of this part;
       ``(ii) national average energy consumed or lost in the 
     production, generation, transportation, storage, and 
     distribution of energy to the point of end use; and
       ``(iii) any direct emissions of greenhouse gases from the 
     product during normal use;
       ``(D) in determining the national average energy 
     consumption and total annual atmospheric carbon dioxide 
     emissions, the Secretary shall utilize Federal Government 
     sources, including the Energy Information Administration 
     Annual Energy Review, the Environmental Protection Agency 
     eGRID data base, Environmental Protection Agency AP-42 
     Emission Factors as amended, and other sources determined to 
     be appropriate by the Secretary; and

[[Page H7520]]

       ``(E) information presenting, for each product (or group of 
     products providing the comparable function) identified in 
     section (c)(1)(C) of this section, the estimated annual 
     carbon dioxide emissions calculated within the range of 
     emissions calculated for all models of the product or group 
     according to its function, including those models consuming 
     fuels and those models not consuming fuels.''.
       (i) Permitting States to Seek Injunctive Enforcement.--(1) 
     Section 334 of the Energy Policy and Conservation Act (42 
     U.S.C. 6304) is amended to read as follows:

     ``SEC. 334. JURISDICTION AND VENUE.

       ``(a) Jurisdiction.--The United States district courts 
     shall have jurisdiction to restrain--
       ``(1) any violation of section 332; and
       ``(2) any person from distributing in commerce any covered 
     product which does not comply with an applicable rule under 
     section 324 or 325.
       ``(b) Authority.--Any action referred to in subsection (a) 
     shall be brought by the Commission or by the attorney general 
     of a State in the name of the State, except that--
       ``(1) any such action to restrain any violation of section 
     332(a)(3) which relates to requirements prescribed by the 
     Secretary or any violation of section 332(a)(4) which relates 
     to request of the Secretary under section 326(b)(2) shall be 
     brought by the Secretary; and
       ``(2) any violation of section 332(a)(5) or 332(a)(7) shall 
     be brought by the Secretary or by the attorney general of a 
     State in the name of the State.
       ``(c) Venue and Service of Process.--Any such action may be 
     brought in the United States district court for a district 
     wherein any act, omission, or transaction constituting the 
     violation occurred, or in such court of the district wherein 
     the defendant is found or transacts business. In any action 
     under this section, process may be served on a defendant in 
     any other district in which the defendant resides or may be 
     found.''.
       (2) The item relating to section 334 in the table of 
     contents for such Act is amended to read as follows:
``Sec. 334. Jurisdiction and venue.''.
       (j) Treatment of Appliances Within Building Codes.--(1) 
     Section 327(f)(3) of the Energy Policy and Conservation Act 
     (42 U.S.C. 6297(f)(3)) is amended by striking subparagraphs 
     (B) through (G) and inserting the following:
       ``(B) The code meets at least one of the following 
     requirements:
       ``(i) The code does not require that the covered product 
     have an energy efficiency exceeding--
       ``(I) the applicable energy conservation standard 
     established in or prescribed under section 325;
       ``(II) the level required by a regulation of that State for 
     which the Secretary has issued a rule granting a waiver under 
     subsection (d) of this section; or
       ``(III) the required level established in the International 
     Energy Conservation Code or in a standard of the American 
     Society of Heating, Refrigerating and Air-Conditioning 
     Engineers, or by the Secretary pursuant to section 304 of the 
     Energy Conservation and Production Act.
       ``(ii) If the code uses one or more baseline building 
     designs against which all submitted building designs are to 
     be evaluated and such baseline building designs contain a 
     covered product subject to an energy conservation standard 
     established in or prescribed under section 325, the baseline 
     building designs are based on an efficiency level for such 
     covered product which meets but does not exceed one of the 
     levels specified in clause (i).
       ``(iii) If the code sets forth one or more optional 
     combinations of items which meet the energy consumption or 
     conservation objective, in at least one combination that the 
     State has found to be reasonably achievable using 
     commercially available technologies the efficiency of the 
     covered product meets but does not exceed one of the levels 
     specified in clause (i).
       ``(C) The credit to the energy consumption or conservation 
     objective allowed by the code for installing covered products 
     having energy efficiencies exceeding one of the levels 
     specified in subparagraph (B)(i) is on a one-for-one 
     equivalent energy use or equivalent energy cost basis, taking 
     into account the typical lifetime of the product.
       ``(D) The energy consumption or conservation objective is 
     specified in terms of an estimated total consumption of 
     energy (which may be calculated from energy loss- or gain-
     based codes) utilizing an equivalent amount of energy (which 
     may be specified in units of energy or its equivalent cost) 
     and equivalent lifetimes.
       ``(E) The estimated energy use of any covered product 
     permitted or required in the code, or used in calculating the 
     objective, is determined using the applicable test procedures 
     prescribed under section 323, except that the State may 
     permit the estimated energy use calculation to be adjusted to 
     reflect the conditions of the areas where the code is being 
     applied if such adjustment is based on the use of the 
     applicable test procedures prescribed under section 323 or 
     other technically accurate documented procedure.''.
       (2) Section 327(f)(4)(B) of the Energy Policy and 
     Conservation Act (42 U.S.C. 6297(f)(4)(B)) is amended to read 
     as follows:
       ``(B) If a building code requires the installation of 
     covered products with efficiencies exceeding the levels and 
     requirements specified in paragraph (3)(B), such requirement 
     of the building code shall not be applicable unless the 
     Secretary has granted a waiver for such requirement under 
     subsection (d) of this section.''.

     SEC. 214. BEST-IN-CLASS APPLIANCES DEPLOYMENT PROGRAM.

       (a) In General.--Not later than 1 year after the date of 
     enactment of this Act, the Secretary of Energy, in 
     consultation with the Administrator, shall establish a 
     program to be known as the ``Best-in-Class Appliances 
     Deployment Program'' to--
       (1) provide bonus payments to retailers or distributors 
     under subsection (c) for sales of best-in-class high-
     efficiency household appliance models, high-efficiency 
     installed building equipment, and high-efficiency consumer 
     electronics, with the goal of reducing life-cycle costs for 
     consumers, encouraging innovation, and maximizing energy 
     savings and public benefit;
       (2) provide bounties under subsection (d) to retailers and 
     manufacturers for the replacement, retirement, and recycling 
     of old, inefficient, and environmentally harmful products; 
     and
       (3) provide premium awards under subsection (e) to 
     manufacturers for developing and producing new Superefficient 
     Best-in-Class Products.
       (b) Designation of Best-in-Class Product Models.--
       (1) In general.--The Secretary of Energy shall designate 
     product models of appliances, equipment, or electronics as 
     Best-in-Class Product models. The Secretary shall publicly 
     announce the Best-in-Class Product models designated under 
     this subsection. The Secretary shall define product classes 
     broadly and, except as provided in paragraph (2), shall 
     designate as Best-in-Class Product models no more than the 
     most efficient 10 percent of the commercially available 
     product models in a class that demonstrate, as a group, a 
     distinctly greater energy efficiency than the average energy 
     efficiency of that class of appliances, equipment, or 
     electronics. In designating models, the Secretary shall--
       (A) identify commercially available models in the relevant 
     class of products;
       (B) identify the subgroup of those models that share the 
     distinctly higher energy-efficiency characteristics that 
     warrant designation as best-in-class; and
       (C) add other models in that class to the list of Best-in-
     Class Product models as they demonstrate their ability to 
     meet the higher-efficiency characteristics on which the 
     designation was made.
       (2) Percentage exception.--If there are fewer than 10 
     product models in a class of products, the Secretary may 
     designate one or more of such models as Best-in-Class 
     Products.
       (3) Review of best-in-class standards.--The Secretary shall 
     review annually the product-specific criteria for 
     designating, and the product models that qualify as, Best-in-
     Class Products and, after notice and a 30-day comment period, 
     make upwards adjustments in the efficiency criteria as 
     necessary to maintain an appropriate ratio of such product 
     models to the total number of product models in the product 
     class.
       (4) Smart grid energy efficiency savings.--The Secretary 
     shall include energy efficiency savings achieved by a 
     commercially available product having smart grid capability 
     in determining the efficiency level of a product for purposes 
     of a Best-In-Class Product designation pursuant to this 
     subsection. In measuring energy efficiency savings achieved 
     by smart grid capability, the Secretary shall use a metric 
     that--
       (A) is based on the time-differentiated value and amount of 
     energy consumption;
       (B) accounts for the capability of the product to respond 
     to a smart grid in which the physical capability of the 
     product to save or delay energy because of a smart grid 
     feature is weighted by the likelihood that the feature will 
     be used;
       (C) is based on the value of a unit of electric or gas 
     consumption as a function of time of day and season; and
       (D) includes a test method by which the manufacturer shall 
     determine the energy efficiency of smart grid capable 
     products.
       (c) Bonuses for Sales of Best-in-Class Products.--
       (1) In general.--The Secretary of Energy shall make bonus 
     payments to retailers or, as provided in paragraph (5)(B), 
     distributors for the sale of Best-in-Class Products.
       (2) Bonus program.--The Secretary shall--
       (A) publicly announce the availability and amount of the 
     bonus to be paid for each sale of a Best-in-Class Product of 
     a model designated under subsection (b); and
       (B) make bonus payments in at least that amount for each 
     Best-in-Class Product of that model sold during the 3-year 
     period beginning on the date the model is designated under 
     subsection (b).
       (3) Upgrade of best-in-class product eligibility.--In 
     conducting a review under subsection (b)(3), the Secretary 
     shall--
       (A) consider designating as a Best-in-Class Product model a 
     Superefficient Best-in-Class Product model that has been 
     designated pursuant to subsection (e);
       (B) announce any change in the bonus payment as necessary 
     to increase the market share of Best-in-Class Product models;
       (C) list models that will be eligible for bonuses in the 
     new amount; and
       (D) continue paying bonus payments at the original level, 
     for the sale of any models that previously qualified as Best-
     in-Class Products but do not qualify at the new level, for

[[Page H7521]]

     the remainder of the 3-year period announced with the 
     original designation.
       (4) Size of individual bonus payments.--(A) The size of 
     each bonus payment under this subsection shall be the product 
     of--
       (i) an amount determined by the Secretary; and
       (ii) the difference in energy consumption between the Best-
     in-Class Product and the average product in the product 
     class.
       (B) The Secretary shall determine the amount under 
     subparagraph (A)(i) for each product type, in consultation 
     with State and utility efficiency program administrators as 
     well as the Administrator, based on estimates of the amount 
     of bonus payment that would provide significant incentive to 
     increase the market share of Best-in-Class Products.
       (5) Eligible bonus recipient.--(A) The Secretary shall 
     ensure that not more than 1 bonus payment is provided under 
     this subsection for each Best-in-Class Product.
       (B) The Secretary may make distributors eligible to receive 
     bonus payments under this subsection for sales that are not 
     to the final end-user, to the extent that the Secretary 
     determines that for a particular product category 
     distributors are well situated to increase sales of Best-in-
     Class Products.
       (d) Bounties for Replacement, Retirement, and Recycling of 
     Existing Low-Efficiency Products.--
       (1) In general.--The Secretary of Energy shall make bounty 
     payments to--
       (A) retailers for the replacement, retirement, and 
     recycling of older operating low-efficiency products that 
     might otherwise continue in operation; and
       (B) manufacturers of Superefficient Best-in-Class Products 
     for the retirement and recycling of older operating low-
     efficiency products that perform the same function and which 
     might otherwise continue in operation.
       (2) Bounties.--Bounties shall be payable--
       (A) to a retailer upon documentation that the sale of a 
     Best-in-Class Product was accompanied by the replacement, 
     retirement, and recycling of--
       (i) an inefficient but still-functioning product; or
       (ii) a nonfunctioning product containing a refrigerant, by 
     the consumer to whom the Best-in-Class Product was sold; and
       (B) to a manufacturer upon documentation of the retirement 
     and recycling of--
       (i) an inefficient but still-functioning product from a 
     consumer to whom a Superefficient Best-in-Class Product was 
     delivered; or
       (ii) a nonfunctioning product containing a refrigerant from 
     a consumer to whom a Superefficient Best-in-Class Product was 
     delivered.
       (3) Amount.--
       (A) Functioning products.--The bounty payment payable under 
     this subsection for a product described in paragraphs 
     (2)(A)(i) and (2)(B)(i) shall be based on the difference 
     between the estimated energy use of the product replaced and 
     the energy use of an average new product in the product 
     class, over the estimated remaining lifetime of the product 
     that was replaced.
       (B) Nonfunctioning products containing refrigerants.--The 
     bounty payment payable under this subsection for a product 
     described in paragraphs (2)(A)(ii) and (2)(B)(ii) shall be in 
     the amount that the Secretary of Energy, in consultation with 
     the Administrator, determines is sufficient to promote the 
     recycling of such products, up to the amount of bounty for a 
     comparable product described in paragraphs (2)(A) and (2)(B).
       (4) Retirement.--The Secretary shall ensure that no product 
     for which a bounty is paid under this subsection is returned 
     to active service, but that it is instead destroyed, and 
     recycled to the extent feasible.
       (5) Recycling appliances containing refrigerants.--
     Exclusively for the purpose of implementing the bounty 
     payment program for products containing a refrigerant under 
     this section, the Administrator shall establish standards for 
     environmentally responsible methods of recycling and disposal 
     of refrigerant-containing appliances that, at a minimum, meet 
     the requirements set by the Responsible Appliance Disposal 
     (RAD) Program for refrigerant disposal. The Secretary shall 
     ensure that such standards are met before a bounty payment is 
     made under this subsection for a product containing a 
     refrigerant. Nothing in this section shall be interpreted to 
     alter the requirements of section 608 of the Clean Air Act or 
     to relieve any person from complying with those requirements.
       (e) Premium Awards for Development and Production of 
     Superefficient Best-in-Class Products.--
       (1) In general.--(A) The Secretary of Energy shall provide 
     premium awards to manufacturers for the development and 
     production of Superefficient Best-in-Class Products. The 
     Secretary shall set and periodically revise standards for 
     eligibility of products for designation as a Superefficient 
     Best-in-Class Product.
       (B) The Secretary may establish a standard for a 
     Superefficient Best-in-Class Product even if no product 
     meeting that standard exists, if the Secretary has reasonable 
     grounds to conclude that a mass-producible product could be 
     made to meet that standard.
       (C) The Secretary may also establish a Superefficient Best-
     in-Class Product standard that is met by one or more existing 
     Best-in-Class Product models, if those product models have 
     distinct energy efficiency attributes and performance 
     characteristics that make them significantly better than 
     other product models qualifying as best-in-class. The 
     Secretary may not designate as Superefficient Best-in-Class 
     Products under this subparagraph models that represent more 
     than 10 percent of the currently qualifying Best-in-Class 
     Product models. This subparagraph shall not apply to products 
     designated pursuant to paragraph (4)(A).
       (D) In making its finding on the efficiency level a product 
     can achieve for purposes of a Superefficient Best-In-Class 
     Product designation pursuant to this paragraph, the Secretary 
     shall include energy efficiency savings that would be 
     achieved by a product as a result of smart grid capability 
     when a product having such capability can be produced and 
     sold commercially to mass market consumers. In measuring 
     energy efficiency savings achieved by smart grid capability, 
     the Secretary shall use a metric that--
       (i) is based on the time-differentiated value and amount of 
     energy consumption;
       (ii) accounts for the capability of the product to respond 
     to a smart grid in which the physical capability of the 
     product to save or delay energy because of a smart grid 
     feature is weighted by the likelihood that the feature will 
     be used;
       (iii) is based on the value of a unit of electric or gas 
     consumption as a function of time of day and season; and
       (iv) includes a test method by which the manufacturer shall 
     determine the energy efficiency of smart grid capable 
     products.
       (2) Premium awards.--(A) The premium award payment provided 
     to a manufacturer under this subsection shall be in addition 
     to any bonus payments made under subsection (c).
       (B) The amount of the premium award paid per unit of 
     Superefficient Best-in-Class Products sold to retailers or 
     distributors shall, except as provided by subparagraph (F), 
     be the product of--
       (i) an amount determined by the Secretary; and
       (ii) the difference in energy consumption between the 
     Superefficient Best-in-Class Product and the average product 
     in the product class.
       (C) The Secretary shall determine the amount under 
     subparagraph (B)(i) for each product type, in consultation 
     with State and utility efficiency program administrators as 
     well as the Administrator, based on consideration of the 
     present value to the Nation of the energy (and water or other 
     resources or inputs) saved over the useful life of the 
     product. The Secretary may also take into consideration the 
     methods used to increase sales of qualifying products in 
     determining such amount.
       (D) The Secretary may adjust the value described in 
     subparagraph (C) upward or downward as appropriate, including 
     based on the effect of the premium awards on the sales of 
     products in different classes that may be affected by the 
     program under this subsection.
       (E) Premium award payments shall be applied to sales of any 
     Superefficient Best-in-Class Product for the first 3 years 
     after designation as a Superefficient Best-in-Class Product.
       (F) For years 2011 through 2013, the Secretary shall make 
     bonus payments to manufacturers of the products designated in 
     paragraph (4)(A) for each product produced in the following 
     amounts:
       (i) $75 for each dishwasher.
       (ii) $250 for each clothes washer.
       (iii) $200 for each refrigerator or refrigerator-freezer.
       (iv) $250 for each clothes dryer.
       (v) $200 for each cooking product.
       (vi) $300 for each water heater.
       (3) Coordination of incentives.--No product for which 
     Federal tax credit is received under section 45M of the 
     Internal Revenue Code of 1986 shall be eligible to receive 
     premium award payments pursuant to this subsection.
       (4) Designations.--
       (A) Initial designations.--Notwithstanding any other 
     provisions of this section, the products the Secretary shall 
     designate as a Superefficient Best-In-Class Product include, 
     but are not limited to, the following products manufactured 
     in 2011 through 2013:
       (i) A dishwasher, clothes washer, refrigerator, or 
     refrigerator-freezer that meets the highest efficiency 
     performance standards in its product category as provided in 
     Section 305(b) of the Emergency Economic Stabilization Act of 
     2008 and has the smart grid capability specified in paragraph 
     (5).
       (ii) A water heater that meets an efficiency standard that 
     is the same or equivalent to the standard provided in Section 
     1333 of the Energy Policy Act of 2005 and has the smart grid 
     capability specified in paragraph (5).
       (iii) A clothes dryer or cooking product that the Secretary 
     determines meets the standards specified in subsection 
     (j)(3), which the Secretary shall promulgate no later than 
     one year after the date of enactment, and has the smart grid 
     capability specified in paragraph (5).
       (B) Extension of initial designations.--
       (i) General.--The Secretary shall in 2013 extend the 
     Superefficient Best-In-Class Product designation of each 
     product specified in subparagraph (A)(i) through (iii) 
     through 2017, provided that for each product designation 
     extended--

       (I) the extension will result in significant energy 
     efficiency savings;
       (II) the product meets the Superefficient Best-In-Class 
     Product criteria specified in paragraph (1);

[[Page H7522]]

       (III) the eligibility standards of the product include the 
     smart grid capability specified in paragraph (5); and
       (IV) the Secretary makes appropriate revisions to the 
     eligibility standards of the product as provided by paragraph 
     (1).

       (ii) Awards.--If a Superefficient Best-In-Class Product 
     designation for a product is extended pursuant to this 
     subparagraph, the premium award for the product shall be 
     determined in accordance with paragraph (2).
       (5) Smart grid capability.--
       (A) Until the Secretary promulgates criteria under 
     subparagraph (B), the term ``smart grid capability'' means 
     capability of receiving and interpreting time-of-use pricing 
     and peak-load-shed signals from a utility and--
       (i) in the case of a cooking product, reducing a minimum of 
     20 percent during peak demand as measured by the tested 
     average wattage over the course of a typical operating cycle 
     of the product; or
       (ii) in the case of a clothes washer, a refrigerator, a 
     dishwasher, a dryer and a water heater, reducing a minimum of 
     50 percent during peak demand as measured by the tested 
     average wattage over the course of a typical operating cycle 
     of the product, provided that the typical operating cycle of 
     a refrigerator and a water heater shall be a 24-hour period.
       (B) After completion of the analysis required under section 
     142(b) of this Act, the Secretary shall expeditiously 
     promulgate, after notice and a 30-day public comment period, 
     criteria for what constitutes ``smart grid capability.''
       (f) Reporting.--The Secretary of Energy shall require, as a 
     condition of receiving a bonus, bounty, or premium award 
     under this section, that a report containing the following 
     documentation be provided:
       (1) For retailers and distributors, the number of units 
     sold within each product type, and model-specific wholesale 
     purchase prices and retail sale prices, on a monthly basis.
       (2) For manufacturers, model-specific energy efficiency and 
     consumption data.
       (3) For manufacturers, on an immediate basis, information 
     concerning any product design or function changes that affect 
     the energy consumption of the unit.
       (4) The methods used to increase the sales of qualifying 
     products.
       (g) Monitoring and Verification Protocols.--The Secretary 
     of Energy shall establish monitoring and verification 
     protocols for energy consumption tests for each product model 
     and for sales of energy-efficient models. The Secretary shall 
     estimate actual savings of energy from the use of Smart Grid 
     capability in appliances for which premium award payments are 
     made pursuant to subsection (e) as a function of utility and 
     consumer readiness to utilize such capability.
       (h) Disclosure.--The Secretary of Energy may require that 
     manufacturers, retailers and distributors disclose publicly 
     and to consumers their participation in the program under 
     this section.
       (i) Cost-Effectiveness Requirement.--
       (1) Requirement.--The Secretary of Energy shall make cost-
     effectiveness a top priority in designing the program under, 
     and administering, this section, except that the cost-
     effectiveness of providing premium awards to manufacturers 
     under subsection (e), in aggregate, may be lower by this 
     measure than that of the bonuses and bounties to retailers 
     and distributors under subsections (c) and (d).
       (2) Definitions.--In this subsection:
       (A) Cost-effectiveness.--The term ``cost-effectiveness'' 
     means a measure of aggregate savings in the cost of energy 
     over the lifetime of a product in relation to the cost to the 
     Secretary of the bonuses, bounties, and premium awards 
     provided under this section for a product.
       (B) Savings.--The term ``savings'' means the cumulative 
     megawatt-hours of electricity or million British thermal 
     units of other fuels saved by a product during the projected 
     useful life of the product, in comparison to projected energy 
     consumption of the average product in the same class, taking 
     into consideration the impact of any documented measures to 
     replace, retire, and recycle low-efficiency products at the 
     time of purchase of highly-efficient substitutes.
       (j) Definitions.--In this section--
       (1) the term ``distributor'' mean an individual, 
     organization, or company that sells products in multiple lots 
     and not directly to end-users;
       (2) the term ``retailer'' means an individual, 
     organization, or company that sells products directly to end-
     users;
       (3) the term ``manufacturer'' means an individual, 
     organization, or company that transforms raw materials into 
     mass-producible finished goods; and
       (4) the term ``Superefficient Best-in-Class Product'' means 
     a product that--
       (A) can be mass produced; and
       (B) achieves the highest level of efficiency that the 
     Secretary of Energy finds can, given the current state of 
     technology, be produced and sold commercially to mass-market 
     consumers.
       (k) Authorization of Appropriations.--There are authorized 
     to be appropriated $600,000,000 for each of the fiscal years 
     2011 through 2013 to the Secretary of Energy for purposes of 
     this section, and such sums as may be necessary for 
     subsequent fiscal years. Of funds appropriated, not more than 
     10 percent for any fiscal year may be expended on program 
     administration, and not less than 40 percent of any funds 
     appropriated during fiscal years 2011 through 2013 shall be 
     for purposes of subsection (e).

     SEC. 215. WATERSENSE.

       (a) In General.--There is established within the 
     Environmental Protection Agency a WaterSense program to 
     identify and promote water efficient products, buildings and 
     landscapes, and services in order--
       (1) to reduce water use;
       (2) to reduce the strain on water, wastewater, and 
     stormwater infrastructure;
       (3) to conserve energy used to pump, heat, transport, and 
     treat water; and
       (4) to preserve water resources for future generations,
     through voluntary labeling of, or other forms of 
     communications about, products, buildings and landscapes, and 
     services that meet the highest water efficiency and 
     performance standards.
       (b) Duties.--The Administrator shall--
       (1) promote WaterSense labeled products, buildings and 
     landscapes, and services in the market place as the preferred 
     technologies and services for--
       (A) reducing water use; and
       (B) ensuring product and service performance;
       (2) work to enhance public awareness of the WaterSense 
     label through public outreach, education, and other means;
       (3) establish and maintain performance standards so that 
     products, buildings and landscapes, and services labeled with 
     the WaterSense label perform as well or better than their 
     less efficient counterparts;
       (4) publicize the need for proper installation and 
     maintenance of WaterSense products by a licensed, and where 
     certification guidelines exist, WaterSense-certified 
     professional to ensure optimal performance;
       (5) preserve the integrity of the WaterSense label;
       (6) regularly review and, when appropriate, update 
     WaterSense criteria for categories of products, buildings and 
     landscapes, and services, at least once every four years;
       (7) to the extent practical, regularly estimate and make 
     available to the public the production and relative market 
     shares of WaterSense labeled products, buildings and 
     landscapes, and services, at least annually;
       (8) to the extent practical, regularly estimate and make 
     available to the public the water and energy savings 
     attributable to the use of WaterSense labeled products, 
     buildings and landscapes, and services, at least annually;
       (9) solicit comments from interested parties and the public 
     prior to establishing or revising a WaterSense category, 
     specification, installation criterion, or other criterion (or 
     prior to effective dates for any such category, 
     specification, installation criterion, or other criterion);
       (10) provide reasonable notice to interested parties and 
     the public of any changes (including effective dates), on the 
     adoption of a new or revised category, specification, 
     installation criterion, or other criterion, along with--
       (A) an explanation of changes; and
       (B) as appropriate, responses to comments submitted by 
     interested parties;
       (11) provide appropriate lead time (as determined by the 
     Administrator) prior to the applicable effective date for a 
     new or significant revision to a category, specification, 
     installation criterion, or other criterion, taking into 
     account the timing requirements of the manufacturing, 
     marketing, training, and distribution process for the 
     specific product, building and landscape, or service category 
     addressed; and
       (12) identify and, where appropriate, implement other 
     voluntary approaches in commercial, institutional, 
     residential, municipal, and industrial sectors to encourage 
     reuse and recycling technologies, improve water efficiency, 
     or lower water use while meeting, where applicable, the 
     performance standards established under paragraph (3).
       (c) Authorization of Appropriations.--There are authorized 
     to be appropriated $7,500,000 for fiscal year 2010, 
     $10,000,000 for fiscal year 2011, $20,000,000 for fiscal year 
     2012, and $50,000,000 for fiscal year 2013 and each year 
     thereafter, adjusted for inflation, to carry out this 
     section.

     SEC. 216. FEDERAL PROCUREMENT OF WATER EFFICIENT PRODUCTS.

       (a) Definitions.--In this section:
       (1) Agency.--The term ``agency'' has the meaning given that 
     term in section 7902(a) of title 5, United States Code.
       (2) Watersense product or service.--The term ``WaterSense 
     product or service'' means a product or service that is rated 
     for water efficiency under the WaterSense program.
       (3) Watersense program.--The term ``WaterSense program'' 
     means the program established by section 215 of this Act.
       (4) FEMP designated product.--The term ``FEMP designated 
     product'' means a product that is designated under the 
     Federal Energy Management Program of the Department of Energy 
     as being among the highest 25 percent of equivalent products 
     for efficiency.
       (5) Product and service.--The terms ``product'' and 
     ``service'' do not include any water consuming product or 
     service designed or procured for combat or combat-related 
     missions. The terms also exclude products or services already 
     covered by the Federal procurement regulations established 
     under section 553 of the National Energy Conservation Policy 
     Act (42 U.S.C. 8259b).
       (b) Procurement of Water Efficient Products.--
       (1) Requirement.--To meet the requirements of an agency for 
     a water consuming product or service, the head of the agency

[[Page H7523]]

     shall, except as provided in paragraph (2), procure--
       (A) a WaterSense product or service; or
       (B) a FEMP designated product.
     A WaterSense plumbing product should preferably, when 
     possible, be installed by a licensed and, when WaterSense 
     certification guidelines exist, WaterSense-certified plumber 
     or mechanical contractor, and a WaterSense irrigation system 
     should preferably, when possible, be installed, maintained, 
     and audited by a WaterSense-certified irrigation professional 
     to ensure optimal performance.
       (2) Exceptions.--The head of an agency is not required to 
     procure a WaterSense product or service or FEMP designated 
     product under paragraph (1) if the head of the agency finds 
     in writing that--
       (A) a WaterSense product or service or FEMP designated 
     product is not cost-effective over the life of the product, 
     taking energy and water cost savings into account; or
       (B) no WaterSense product or service or FEMP designated 
     product is reasonably available that meets the functional 
     requirements of the agency.
       (3) Procurement planning.--The head of an agency shall 
     incorporate into the specifications for all procurements 
     involving water consuming products and systems, including 
     guide specifications, project specifications, and 
     construction, renovation, and services contracts that include 
     provision of water consuming products and systems, and into 
     the factors for the evaluation of offers received for the 
     procurement, criteria used for rating WaterSense products and 
     services and FEMP designated products. The head of an agency 
     shall consider, to the maximum extent practicable, additional 
     measures for reducing agency water consumption, including 
     water reuse technologies, leak detection and repair, and use 
     of waterless products that perform similar functions to 
     existing water-consuming products.
       (c) Regulations.--Not later than 180 days after the date of 
     enactment of this Act, the Secretary of Energy, working in 
     coordination with the Administrator, shall issue guidelines 
     to carry out this section.

     SEC. 217. EARLY ADOPTER WATER EFFICIENT PRODUCT INCENTIVE 
                   PROGRAMS.

       (a) Definitions.--In this section:
       (1) Eligible state.--The term ``eligible entity'' means a 
     State government, local or county government, tribal 
     government, wastewater or sewerage utility, municipal water 
     authority, energy utility, water utility, or nonprofit 
     organization that meets the requirements of subsection (b).
       (2) Incentive program.--The term ``incentive program'' 
     means a program for administering financial incentives for 
     consumer purchase and installation of residential water 
     efficient products and services as described in subsection 
     (b)(1).
       (3) Residential water efficient product or service.--The 
     term ``residential water efficient product or service'' means 
     a product or service for a single-family or multifamily 
     residence or its landscape that is rated for water efficiency 
     and performance--
       (A) by the WaterSense program; or
       (B) where a WaterSense specification does not exist; by an 
     incentive program.
     Categories of water efficient products and services may 
     include faucets, irrigation technologies and services, point-
     of-use water treatment devices, reuse and recycling 
     technologies, toilets, and showerheads.
       (4) Watersense program.--The term ``WaterSense program'' 
     means the program established by section 215 of this Act.
       (b) Eligible Entities..--An entity shall be eligible to 
     receive an allocation under subsection (c) if the entity--
       (1) establishes (or has established) an incentive program 
     to provide rebates, vouchers, other financial incentives, or 
     direct installs to consumers for the purchase of residential 
     water efficient products or services;
       (2) submits an application for the allocation at such time, 
     in such form, and containing such information as the 
     Administrator may require; and
       (3) provides assurances satisfactory to the Administrator 
     that the entity will use the allocation to supplement, but 
     not supplant, funds made available to carry out the incentive 
     program.
       (c) Amount of Allocations.--For each fiscal year, the 
     Administrator shall determine the amount to allocate to each 
     eligible entity to carry out subsection (d) taking into 
     consideration--
       (1) the population served by the eligible entity in the 
     most recent calendar year for which data are available;
       (2) the targeted population of the eligible entity's 
     incentive program, such as general households, low-income 
     households, or first-time homeowners, and the probable 
     effectiveness of the incentive program for that population;
       (3) for existing programs, the effectiveness of the 
     incentive program in encouraging the adoption of water 
     efficient products and services; and
       (4) any prior year's allocation to the eligible entity that 
     remains unused.
       (d) Use of Allocated Funds.--Funds allocated to an entity 
     under subsection (c) may be used to pay up to 50 percent of 
     the cost of establishing and carrying out an incentive 
     program.
       (e) Fixture Recycling.--Entities are encouraged to promote 
     or implement fixture recycling programs to manage the 
     disposal of older fixtures replaced due to the incentive 
     program under this section.
       (f) Issuance of Incentives.--Financial incentives may be 
     provided to consumers that meet the requirements of the 
     incentive program. The entity may issue all financial 
     incentives directly to consumers or, with approval of the 
     Administrator, delegate some or all financial incentive 
     administration to other organizations including, but not 
     limited to local governments, municipal water authorities, 
     and water utilities. The amount of a financial incentive 
     shall be determined by the entity, taking into 
     consideration--
       (1) the amount of the allocation to the entity under 
     subsection (c);
       (2) the amount of any Federal, State, or other 
     organization's tax or financial incentive available for the 
     purchase of the residential water efficient product or 
     service;
       (3) the amount necessary to change consumer behavior to 
     purchase water efficient products and services; and
       (4) the consumer expenditures for onsite preparation, 
     assembly, and original installation of the product.
       (g) Authorization of Appropriations.--There are authorized 
     to be appropriated to the Administrator to carry out this 
     section $50,000,000 for fiscal years 2010, $100,000,000 for 
     fiscal year 2011, $150,000,000 for fiscal year 2012, 
     $100,000,000 for fiscal year 2013, and $50,000,000 for fiscal 
     year 2014.

     SEC. 218. CERTIFIED STOVES PROGRAM.

       (a) Definitions.--In this section:
       (1) Agency.--The term ``Agency'' means the Environmental 
     Protection Agency.
       (2) Wood stove or pellet stove.--The term ``wood stove or 
     pellet stove'' means a wood stove, pellet stove, or fireplace 
     insert that uses wood or pellets for fuel.
       (3) Certified stove.--The term ``certified stove'' means a 
     wood stove or pellet stove that meets the standards of 
     performance for new residential wood heaters under subpart 
     AAA of part 60 of subchapter C of chapter I of title 40, Code 
     of Federal Regulations (or successor regulations), as 
     certified by the Administrator. Pellet stoves and fireplace 
     inserts using pellets for fuel that are exempt from testing 
     by the Administrator but meet the same standards of 
     performance as wood stoves are considered certified for the 
     purposes of this section.
       (4) Eligible entity.--The term ``eligible entity'' means--
       (A) a State, a local government, or a federally recognized 
     Indian tribe;
       (B) Alaskan Native villages or regional or village 
     corporations (as defined in, or established under, the 
     Alaskan Native Claims Settlement Act (43 U.S.C. 1601 et 
     seq.)); and
       (C) a nonprofit organization or institution that--
       (i) represents or provides pollution reduction or 
     educational services relating to wood smoke minimization to 
     persons, organizations, or communities; or
       (ii) has, as its principal purpose, the promotion of air 
     quality or energy efficiency.
       (b) Establishment.--The Administrator shall establish and 
     carry out a program to assist in the replacement of wood 
     stoves or pellet stoves that do not meet the standards of 
     performance referred to in subsection (a)(4) by--
       (1) requiring that each wood stove or pellet stove sold in 
     the United States on and after the date of enactment of this 
     Act meet the standards of performance referred to in 
     subsection (a)(4);
       (2) requiring that no wood stove or pellet stove replaced 
     under this program is sold or returned to active service, but 
     that it is instead destroyed and recycled to the maximum 
     extent feasible;
       (3) providing funds to an eligible entity to replace a wood 
     stove or pellet stove that does not meet the standards of 
     performance in subsection (a)(4) with a certified stove, 
     including funds to pay for--
       (A) installation of a replacement certified stove; and
       (B) necessary replacement of or repairs to ventilation, 
     flues, chimneys, or other relevant items necessary for safe 
     installation of a replacement certified stove;
       (4) in addition to any funds that may be appropriated for 
     the program under this subsection, using existing Federal, 
     State, and local programs and incentives, to the greatest 
     extent practicable;
       (5) prioritizing the replacement of wood stoves or pellet 
     stoves manufactured before July 1, 1990; and
       (6) carrying out such other activities as the Administrator 
     determines appropriate to facilitate the replacement of wood 
     stoves or pellet stoves that do not meet the standards of 
     performance referred to in subsection (a)(3).
       (c) Regulations.--The Administrator may promulgate such 
     regulations as are necessary to carry out the program 
     established under subsection (b).
       (d) Funding.--
       (1) Authorization of appropriations.--There are authorized 
     to be appropriated to carry out the program under this 
     section $20,000,000 for the period of fiscal years 2010 
     through 2014.
       (2) Designated use.--Of amounts appropriated pursuant to 
     this subsection--
       (A) 25 percent shall be designated for use to carry out the 
     program under this section on lands held in trust for the 
     benefit of a federally recognized Indian tribe;
       (B) 3 percent shall be designated for use to carry out the 
     program under this section in Alaskan Native villages or 
     regional or village corporations (as defined in, or 
     established under, the Alaskan Native Claims Settlement Act 
     (43 U.S.C. 1601 et seq.)); and

[[Page H7524]]

       (C) 72 percent shall be designated for use to carry out the 
     program under this section nationwide.
       (3) Regulatory programs.--
       (A) In general.--No grant or loan provided under this 
     section shall be used to fund the costs of emissions 
     reductions that are mandated under Federal, State, or local 
     law.
       (B) Mandated.--For purposes of subparagraph (A), voluntary 
     or elective emission reduction measures shall not be 
     considered ``mandated'', regardless of whether the reductions 
     are included in the implementation plan of a State.
       (e) EPA Authority to Accept Wood Stove or Pellet Stove 
     Replacement Supplemental Environmental Projects.--
       (1) In general.--The Administrator may accept 
     (notwithstanding sections 3302 and 1301 of title 31, United 
     States Code) wood stove or pellet stove replacement 
     Supplemental Environmental Projects if such projects, as part 
     of a settlement of any alleged violation of environmental 
     law--
       (A) protect human health or the environment;
       (B) are related to the underlying alleged violation;
       (C) do not constitute activities that the defendant would 
     otherwise be legally required to perform; and
       (D) do not provide funds for the staff of the Agency or for 
     contractors to carry out the Agency's internal operations.
       (2) Certification.--In any settlement agreement regarding 
     an alleged violation of environmental law in which a 
     defendant agrees to perform a wood stove or pellet stove 
     replacement Supplemental Environmental Project, the 
     Administrator shall require the defendant to include in the 
     settlement documents a certification under penalty of law 
     that the defendant would have agreed to perform a comparably 
     valued, alternative project other than a wood stove or pellet 
     stove replacement Supplemental Environmental Project if the 
     Administrator were precluded by law from accepting a wood 
     stove or pellet stove replacement Supplemental Environmental 
     Project. A failure by the Administrator to include this 
     language in such a settlement agreement shall not create a 
     cause of action against the United States under the Clean Air 
     Act or any other law or create a basis for overturning a 
     settlement agreement entered into by the United States.

     SEC. 219. ENERGY STAR STANDARDS.

       (a) Energy Star.--Section 324A(c) of the Energy Policy and 
     Conservation Act is amended--
       (1) in paragraph (6)(B), by striking ``and'' after the 
     semicolon at the end;
       (2) in paragraph (7), by striking the period at the end and 
     inserting a semicolon; and
       (3) by adding at the end the following:
       ``(8) not later than 18 months after the date of enactment 
     of this paragraph, establish and implement a rating system 
     for products identified as Energy Star products pursuant to 
     this section to provide consumers with the most helpful 
     information on the relative energy efficiency, including cost 
     effectiveness from the consumer's perspective, and relative 
     length of time for consumers to recover costs attributable to 
     the energy efficient features, of those products, unless the 
     Administrator and the Secretary communicate to Congress that 
     establishing such a system would diminish the value of the 
     Energy Star brand to consumers;
       ``(9)(A) review the Energy Star product criteria for the 10 
     product models in each product category with the greatest 
     energy consumption at least once every 3 years; and
       ``(B) based on the review, update and publish the Energy 
     Star product criteria for each such category, as necessary; 
     and
       ``(10) require periodic verification of compliance with the 
     Energy Star product criteria by products identified as Energy 
     Star products pursuant to this section, including--
       ``(A) purchase and testing of products from the market; or
       ``(B) other appropriate testing and compliance 
     approaches.''.
       (b) Authorization of Appropriations.--There are authorized 
     to be appropriated to carry out the amendments made by this 
     section $5,000,000 for fiscal year 2010 and for each fiscal 
     year thereafter.

                 Subtitle C--Transportation Efficiency

     SEC. 221. EMISSIONS STANDARDS.

       Title VIII of the Clean Air Act, as added by section 331 of 
     this Act, is amended by inserting after part A the following 
     new part:

                        ``PART B--MOBILE SOURCES

     ``SEC. 821. GREENHOUSE GAS EMISSION STANDARDS FOR MOBILE 
                   SOURCES.

       ``(a) New Motor Vehicles and New Motor Vehicle Engines.--
     (1) Pursuant to section 202(a)(1), by December 31, 2010, the 
     Administrator shall promulgate standards applicable to 
     emissions of greenhouse gases from new heavy-duty motor 
     vehicles or new heavy-duty motor vehicle engines, excluding 
     such motor vehicles covered by the Tier II standards (as 
     established by the Administrator as of the date of the 
     enactment of this section). The Administrator may revise 
     these standards from time to time.
       ``(2) Regulations issued under section 202(a)(1) applicable 
     to emissions of greenhouse gases from new heavy-duty motor 
     vehicles or new heavy-duty motor vehicle engines, excluding 
     such motor vehicles covered by the Tier II standards (as 
     established by the Administrator as of the date of the 
     enactment of this section), shall contain standards that 
     reflect the greatest degree of emissions reduction achievable 
     through the application of technology which the Administrator 
     determines will be available for the model year to which such 
     standards apply, giving appropriate consideration to cost, 
     energy, and safety factors associated with the application of 
     such technology. Any such regulations shall take effect after 
     such period as the Administrator finds necessary to permit 
     the development and application of the requisite technology, 
     and, at a minimum, shall apply for a period no less than 3 
     model years beginning no earlier than the model year 
     commencing 4 years after such regulations are promulgated.
       ``(3) Regulations issued under section 202(a)(1) applicable 
     to emissions of greenhouse gases from new heavy-duty motor 
     vehicles or new heavy-duty motor vehicle engines, excluding 
     such motor vehicles covered by the Tier II standards (as 
     established by the Administrator as of the date of the 
     enactment of this section), shall supersede and satisfy any 
     and all of the rulemaking and compliance requirements of 
     section 32902(k) of title 49, United States Code.
       ``(4) Other than as specifically set forth in paragraph (3) 
     of this subsection, nothing in this section shall affect or 
     otherwise increase or diminish the authority of the Secretary 
     of Transportation to adopt regulations to improve the overall 
     fuel efficiency of the commercial goods movement system.
       ``(b) Nonroad Vehicles and Engines.--(1) Pursuant to 
     section 213(a)(4) and (5), the Administrator shall identify 
     those classes or categories of new nonroad vehicles or 
     engines, or combinations of such classes or categories, that, 
     in the judgment of the Administrator, both contribute 
     significantly to the total emissions of greenhouse gases from 
     nonroad engines and vehicles, and provide the greatest 
     potential for significant and cost-effective reductions in 
     emissions of greenhouse gases. The Administrator shall 
     promulgate standards applicable to emissions of greenhouse 
     gases from these new nonroad engines or vehicles by December 
     31, 2012. The Administrator shall also promulgate standards 
     applicable to emissions of greenhouse gases for such other 
     classes and categories of new nonroad vehicles and engines as 
     the Administrator determines appropriate and in the timeframe 
     the Administrator determines appropriate. The Administrator 
     shall base such determination, among other factors, on the 
     relative contribution of greenhouse gas emissions, and the 
     costs for achieving reductions, from such classes or 
     categories of new nonroad engines and vehicles. The 
     Administrator may revise these standards from time to time.
       ``(2) Standards under section 213(a)(4) and (5) applicable 
     to emissions of greenhouse gases from those classes or 
     categories of new nonroad engines or vehicles identified in 
     the first sentence of paragraph (1) of this subsection, shall 
     achieve the greatest degree of emissions reduction achievable 
     based on the application of technology which the 
     Administrator determines will be available at the time such 
     standards take effect, taking into consideration cost, 
     energy, and safety factors associated with the application of 
     such technology. Any such regulations shall take effect at 
     the earliest possible date after such period as the 
     Administrator finds necessary to permit the development and 
     application of the requisite technology, giving appropriate 
     consideration to the cost of compliance within such period, 
     the applicable compliance dates for other standards, and 
     other appropriate factors, including the period of time 
     appropriate for the transfer of applicable technology from 
     other applications, including motor vehicles, and the period 
     of time in which previously promulgated regulations have been 
     in effect.
       ``(3) For purposes of this section and standards under 
     section 213(a)(4) or (5) applicable to emissions of 
     greenhouse gases, the term `nonroad engines and vehicles' 
     shall include non-internal combustion engines and the 
     vehicles these engines power (such as electric engines and 
     electric vehicles), for those non-internal combustion engines 
     and vehicles which would be in the same category and have the 
     same uses as nonroad engines and vehicles that are powered by 
     internal combustion engines.
       ``(c) Averaging, Banking, and Trading of Emissions 
     Credits.--In establishing standards applicable to emissions 
     of greenhouse gases pursuant to this section and sections 
     202(a), 213(a)(4) and (5), and 231(a), the Administrator may 
     establish provisions for averaging, banking, and trading of 
     greenhouse gas emissions credits within or across classes or 
     categories of motor vehicles and motor vehicle engines, 
     nonroad vehicles and engines (including marine vessels), and 
     aircraft and aircraft engines, to the extent the 
     Administrator determines appropriate and considering the 
     factors appropriate in setting standards under those 
     sections. Such provisions may include reasonable and 
     appropriate provisions concerning generation, banking, 
     trading, duration, and use of credits.
       ``(d) Reports.--The Administrator shall, from time to time, 
     submit a report to Congress that projects the amount of 
     greenhouse gas emissions from the transportation sector, 
     including transportation fuels, for the years 2030 and 2050, 
     based on the standards adopted under this section.
       ``(e) Greenhouse Gases.--Notwithstanding the provisions of 
     section 711, hydrofluorocarbons shall be considered a 
     greenhouse gas for purposes of this section.''.

[[Page H7525]]

     SEC. 222. GREENHOUSE GAS EMISSIONS REDUCTIONS THROUGH 
                   TRANSPORTATION EFFICIENCY.

       (a) Environmental Protection Agency.--Title VIII of the 
     Clean Air Act, as added by section 331 of this Act, is 
     further amended by inserting after part C the following new 
     part:

                   ``PART D--TRANSPORTATION EMISSIONS

     ``SEC. 841. GREENHOUSE GAS EMISSIONS REDUCTIONS THROUGH 
                   TRANSPORTATION EFFICIENCY.

       ``(a) In General.--The Administrator, in consultation with 
     the Secretary of Transportation, shall promulgate, and update 
     from time to time, regulations to establish national 
     transportation-related greenhouse gas emissions reduction 
     goals, standardized models and methodologies for use in 
     developing surface transportation-related greenhouse gas 
     emissions reduction targets pursuant to sections 134 and 135 
     of title 23 of the United States Code and methods for 
     collection of data on transportation-related greenhouse gas 
     emissions. Such goals shall be commensurate with the 
     emissions reductions goals established under the American 
     Clean Energy and Security Act of 2009. In establishing such 
     goals, models, and methodologies, the Administrator shall 
     consult with States and metropolitan planning organizations 
     and may utilize existing models and methodologies.
       ``(b) Timing.--The Administrator shall--
       ``(1) publish proposed regulations under subsection (a) not 
     later than 12 months after the date of enactment of this 
     section; and
       ``(2) promulgate final regulations under subsection (a) not 
     later than 18 months after the date of enactment of this 
     section.
       ``(c) Assessment.--At least every 6 years after 
     promulgating final regulations under subsection (a), the 
     Administrator, jointly with the Secretary of Transportation, 
     shall assess current and projected progress in reducing 
     national transportation-related greenhouse gas emissions. The 
     assessment shall examine the contributions to emissions 
     reductions attributable to improvements in vehicle 
     efficiency, greenhouse gas performance of transportation 
     fuels, increased efficiency in utilizing transportation 
     systems and the effects of local and State planning.''.
       (b) Metropolitan Planning Organizations.--Section 134 of 
     title 23 of the United States Code is amended as follows:
       (1) In subsection (a)(1)--
       (A) by striking ``minimizing'' and inserting ``reducing''; 
     and
       (B) by inserting ``, reliance on oil, impacts on the 
     environment, transportation-related greenhouse gas 
     emissions'' after ``consumption''.
       (2) In subsection (h)(1)(E)--
       (A) by inserting ``sustainability and livability, reduce 
     surface transportation-related greenhouse gas emissions and 
     reliance on oil, adapt to the effects of climate change,'' 
     after ``energy conservation'';
       (B) by inserting ``and public health'' after ``quality of 
     life''; and
       (C) by inserting ``, including housing and land use 
     patterns'' after ``development patterns''.
       (3) In subsection (i)(4)(A) by inserting ``air quality, 
     public health, housing, transportation,'' after 
     ``conservation,''.
       (4) In subsection (k) by inserting at the end the following 
     new paragraph:
       ``(6) Emissions reduction process.--
       ``(A) In general.--Within a metropolitan planning area 
     serving a transportation management area, the transportation 
     planning process under this section shall address 
     transportation-related greenhouse gas emissions by including 
     emission reduction targets and strategies.
       ``(B) Establishment of emissions reduction targets and 
     strategies.--
       ``(i) In general.--Not later than one year after the 
     promulgation of the final regulations required under section 
     841 of the Clean Air Act, each metropolitan planning 
     organization shall develop surface transportation-related 
     greenhouse gas emission reduction targets, as well as 
     strategies to meet such targets, as part of the 
     transportation planning process under this section. If more 
     than one metropolitan planning organization has been 
     designated within a metropolitan planning area serving a 
     transportation management area, each such metropolitan 
     planning organization shall work cooperatively with other 
     such organization to develop the surface transportation-
     related greenhouse gas emission reduction targets required 
     under this subparagraph.
       ``(ii) Minimum requirements.--Each metropolitan planning 
     organization that develops targets and strategies required 
     under clause (i) shall demonstrate progress in stabilizing 
     and reducing transportation-related greenhouse gas emissions 
     in each metropolitan planning area serving a surface 
     transportation management area. The targets and strategies 
     shall, at a minimum--

       ``(I) be based on the models and methodologies established 
     in the final regulations required under section 841 of the 
     Clean Air Act;
       ``(II) address sources of surface transportation-related 
     greenhouse gas emissions and contribute to achievement of the 
     national transportation-related greenhouse gas emissions 
     reduction goals;
       ``(III) include efforts to increase public transportation 
     ridership; and
       ``(IV) include efforts to increase walking, bicycling, and 
     other forms of nonmotorized transportation.

       ``(C) Public notice.--Each metropolitan planning 
     organization shall make its emission reduction targets and 
     strategies, and an analysis of the anticipated effects 
     thereof, available to the public through its Web site.
       ``(D) Enforcement.--If the Secretary finds that a 
     metropolitan planning organization has failed to develop, 
     submit or publish its emission reduction targets and 
     strategies, the Secretary shall not certify that the 
     requirements of this section are met with respect to the 
     metropolitan planning process of such organization.''.
       (c) States.--Section 135 of title 23 of the United States 
     Code is amended as follows:
       (1) In subsection (d)(1)(E)--
       (A) by inserting ``sustainability and livability, reduce 
     surface transportation-related greenhouse gas emissions and 
     reliance on oil, adapt to the effects of climate change,'' 
     after ``energy conservation'';
       (B) by inserting ``and public health'' after ``quality of 
     life''; and
       (C) by inserting ``, including housing and land use 
     patterns'' after ``development patterns''.
       (2) In subsection (f)(2)(D)(i) by inserting ``air quality, 
     public health, housing, transportation,'' after 
     ``conservation,''.
       (3) In subsection (f) by inserting at the end the following 
     new paragraph:
       ``(9) Emissions reduction process.--
       ``(A) In general.--Within a State, the transportation 
     planning process under this section shall address 
     transportation-related greenhouse gas emissions by including 
     emission reduction targets and strategies.
       ``(B) Establishment of emissions reduction targets and 
     strategies.--
       ``(i) In general.--Not later than one year after the 
     promulgation of the final regulations required under section 
     841 of the Clean Air Act, each State shall develop surface 
     transportation-related greenhouse gas emission reduction 
     targets, as well as strategies to meet such targets, as part 
     of the transportation planning process under this section.
       ``(ii) Minimum requirements.--Each State that develops 
     targets and strategies required under clause (i) shall 
     demonstrate progress in stabilizing and reducing 
     transportation-related greenhouse gas emissions in such 
     State. The targets and strategies shall, at a minimum,

       ``(I) be based on the models and methodologies established 
     in the final regulations required under section 841 of the 
     Clean Air Act;
       ``(II) address sources of surface transportation-related 
     greenhouse gas emissions and contribute to achievement of the 
     national transportation-related greenhouse gas emissions 
     reduction goals;
       ``(III) include efforts to increase public transportation 
     ridership; and
       ``(IV) include efforts to increase walking, bicycling, and 
     other forms of nonmotorized transportation.

       ``(D) Public notice.--Each State shall make its emission 
     reduction targets and strategies, and an analysis of the 
     anticipated effects thereof, available to the public through 
     its Web site.
       ``(E) Enforcement.--If the Secretary finds that a State has 
     failed to develop, submit or publish its emission reduction 
     targets and strategies, the Secretary shall not certify that 
     the requirements of this section are met with respect to the 
     statewide planning process of such State.''.
       (d) Department of Transportation.--The Secretary of 
     Transportation shall establish appropriate requirements, 
     including performance measures, to ensure that transportation 
     plans developed under sections 134 and 135 of title 23 of the 
     United States Code sufficiently meet the requirements of this 
     section, including achieving progress towards national 
     transportation-related greenhouse gas emissions reduction 
     goals.

     SEC. 223. SMARTWAY TRANSPORTATION EFFICIENCY PROGRAM.

       Part B of title VIII of the Clean Air Act, as added by 
     section 221 of this Act is amended by adding after section 
     821 the following section:

     ``SEC. 822. SMARTWAY TRANSPORTATION EFFICIENCY PROGRAM.

       ``(a) In General.--There is established within the 
     Environmental Protection Agency a SmartWay Transport Program 
     to quantify, demonstrate, and promote the benefits of 
     technologies, products, fuels, and operational strategies 
     that reduce petroleum consumption, air pollution, and 
     greenhouse gas emissions from the mobile source sector.
       ``(b) General Duties.--Under the program established under 
     this section, the Administrator shall carry out each of the 
     following:
       ``(1) Development of measurement protocols to evaluate the 
     energy consumption and greenhouse gas impacts from 
     technologies and strategies in the mobile source sector, 
     including those for passenger transport and goods movement.
       ``(2) Development of qualifying thresholds for certifying, 
     verifying, or designating energy-efficient, low-greenhouse 
     gas SmartWay technologies and strategies for each mode of 
     passenger transportation and goods movement.
       ``(3) Development of partnership and recognition programs 
     to promote best practices and drive demand for energy-
     efficient, low-greenhouse gas transportation performance.
       ``(4) Promotion of the availability of, and encouragement 
     of the adoption of, SmartWay certified or verified 
     technologies and strategies, and publication of the 
     availability of financial incentives, such as assistance from 
     loan programs and other Federal and State incentives.
       ``(c) Smartway Transport Freight Partnership.--The 
     Administrator shall establish a SmartWay Transport Freight 
     Partnership

[[Page H7526]]

     program with shippers and carriers of goods to promote 
     energy-efficient, low-greenhouse gas transportation. In 
     carrying out such partnership, the Administrator shall 
     undertake each of the following:
       ``(1) Certification of the energy and greenhouse gas 
     performance of participating freight carriers, including 
     those operating rail, trucking, marine, and other goods 
     movement operations.
       ``(2) Publication of a comprehensive energy and greenhouse 
     gas performance index of freight modes (including rail, 
     trucking, marine, and other modes of transporting goods) and 
     individual freight companies so that shippers can choose to 
     deliver their goods more efficiently.
       ``(3) Development of tools for--
       ``(A) carriers to calculate their energy and greenhouse gas 
     performance; and
       ``(B) shippers to calculate the energy and greenhouse gas 
     impacts of moving their products and to evaluate the relative 
     impacts from transporting their goods by different modes and 
     corporate carriers.
       ``(4) Provision of recognition opportunities for 
     participating shipper and carrier companies demonstrating 
     advanced practices and achieving superior levels of 
     greenhouse gas performance.
       ``(d) Improving Freight Greenhouse Gas Performance 
     Databases.--The Administrator shall, in coordination with 
     other appropriate agencies, define and collect data on the 
     physical and operational characteristics of the Nation's 
     truck population, with special emphasis on data related to 
     energy efficiency and greenhouse gas performance to inform 
     the performance index published under subsection (c)(2) of 
     this section, and other means of goods transport as 
     necessary, at least every 5 years.
       ``(e) Establishment of Financing Program.--The 
     Administrator shall establish a SmartWay Financing Program to 
     competitively award funding to eligible entities identified 
     by the Administrator in accordance with the program 
     requirements in subsection (g).
       ``(f) Purpose.--Under the SmartWay Financing Program, 
     eligible entities shall--
       ``(1) use funds awarded by the Administrator to provide 
     flexible loan and lease terms that increase approval rates or 
     lower the costs of loans and leases in accordance with 
     guidance developed by the Administrator; and
       ``(2) make such loans and leases available to public and 
     private entities for the purpose of adopting low-greenhouse 
     gas technologies or strategies for the mobile source sector 
     that are designated by the Administrator.
       ``(g) Program Requirements.--The Administrator shall 
     determine program design elements and requirements, 
     including--
       ``(1) the type of financial mechanism with which to award 
     funding, in the form of grants or contracts;
       ``(2) the designation of eligible entities to receive 
     funding, including State, tribal, and local governments, 
     regional organizations comprised of governmental units, 
     nonprofit organizations, or for-profit companies;
       ``(3) criteria for evaluating applications from eligible 
     entities, including anticipated--
       ``(A) cost-effectiveness of loan or lease program on a 
     metric-ton-of-greenhouse gas-saved-per-dollar basis;
       ``(B) ability to promote the loan or lease program and 
     associated technologies and strategies to the target 
     audience; and
       ``(4) reporting requirements for entities that receive 
     awards, including--
       ``(A) actual cost-effectiveness and greenhouse gas savings 
     from the loan or lease program based on a methodology 
     designated by the Administrator;
       ``(B) the total number of applications and number of 
     approved applications; and
       ``(C) terms granted to loan and lease recipients compared 
     to prevailing market practices.
       ``(h) Authorization of Appropriations.--Such sums as 
     necessary are authorized to be appropriated to the 
     Administrator to carry out this section.''.

     SEC. 224. STATE VEHICLE FLEETS.

       Section 507(o) of the Energy Policy Act of 1992 (42 U.S.C. 
     13257) is amended by adding the following new paragraph at 
     the end thereof:
       ``(3) The Secretary shall revise the rules under this 
     subsection with respect to the types of alternative fueled 
     vehicles required for compliance with this subsection to 
     ensure those rules are consistent with any guidance issued 
     pursuant to section 303 of this Act.''.

           Subtitle D--Industrial Energy Efficiency Programs

     SEC. 241. INDUSTRIAL PLANT ENERGY EFFICIENCY STANDARDS.

       The Secretary of Energy shall continue to support the 
     development of the American National Standards Institute 
     (ANSI) voluntary industrial plant energy efficiency 
     certification program, pending International Standards 
     Organization (ISO) consensus standard 50001, and other 
     related ANSI/ISO standards. In addition, the Department shall 
     undertake complementary activities through the Department of 
     Energy's Industry Technologies Program that support the 
     voluntary implementation of such standards by manufacturing 
     firms. There are authorized to be appropriated to the 
     Secretary such sums as are necessary to carry out these 
     activities. The Secretary shall report to Congress on the 
     status of standards development and plans for further 
     standards development pursuant to this section by not later 
     than 18 months after the date of enactment of this Act, and 
     shall prepare a second such report 18 months thereafter.

     SEC. 242. ELECTRIC AND THERMAL WASTE ENERGY RECOVERY AWARD 
                   PROGRAM.

       (a) Electric and Thermal Waste Energy Recovery Awards.--The 
     Secretary of Energy shall establish a program to make 
     monetary awards to the owners and operators of new and 
     existing electric energy generation facilities or thermal 
     energy production facilities using fossil or nuclear fuel, to 
     encourage them to use innovative means of recovering any 
     thermal energy that is a potentially useful byproduct of 
     electric power generation or other processes to--
       (1) generate additional electric energy; or
       (2) make sales of thermal energy not used for electric 
     generation, in the form of steam, hot water, chilled water, 
     or desiccant regeneration, or for other commercially valid 
     purposes.
       (b) Amount of Awards.--
       (1) Eligibility.--Awards shall be made under subsection (a) 
     only for the use of innovative means that achieve net energy 
     efficiency at the facility concerned significantly greater 
     than the current standard technology in use at similar 
     facilities.
       (2) Amount.--The amount of an award made under subsection 
     (a) shall equal an amount up to the value of 25 percent of 
     the energy projected to be recovered or generated during the 
     first 5 years of operation of the facility using the 
     innovative energy recovery method, or such lesser amount that 
     the Secretary determines to be the minimum amount that can 
     cost-effectively stimulate such innovation.
       (3) Limitation.--No person may receive an award under this 
     section if a grant under the waste energy incentive grant 
     program under section 373 of the Energy Policy and 
     Conservation Act (42 U.S.C. 6343) is made for the same energy 
     savings resulting from the same innovative method.
       (c) Regulatory Status.--The Secretary of Energy shall--
       (1) assist State regulatory commissions to identify and 
     make changes in State regulatory programs for electric 
     utilities to provide appropriate regulatory status for 
     thermal energy byproduct businesses of regulated electric 
     utilities to encourage those utilities to enter businesses 
     making the sales referred to in subsection (a)(2); and
       (2) encourage self-regulated utilities to enter businesses 
     making the sales referred to in subsection (a)(2).
       (d) Authorization of Appropriations.--There are authorized 
     to be appropriated to the Secretary of Energy such sums as 
     are necessary for the purposes of this section.

     SEC. 243. CLARIFYING ELECTION OF WASTE HEAT RECOVERY 
                   FINANCIAL INCENTIVES.

       Section 373(e) of the Energy Policy and Conservation Act 
     (42 U.S.C. 6343(e)) is amended--
       (1) by striking ``that qualifies for'' and inserting ``who 
     elects to claim''; and
       (2) by inserting ``from that project'' after ``for waste 
     heat recovery''.

     SEC. 244. MOTOR MARKET ASSESSMENT AND COMMERCIAL AWARENESS 
                   PROGRAM.

       (a) Findings.--Congress finds that--
       (1) electric motor systems account for about half of the 
     electricity used in the United States;
       (2) electric motor energy use is determined by both the 
     efficiency of the motor and the system in which the motor 
     operates;
       (3) Federal Government research on motor end use and 
     efficiency opportunities is more than a decade old; and
       (4) the Census Bureau has discontinued collection of data 
     on motor and generator importation, manufacture, shipment, 
     and sales.
       (b) Definitions.--In this section:
       (1) Department.--The term ``Department'' means the 
     Department of Energy.
       (2) Interested parties.--The term ``interested parties'' 
     includes--
       (A) trade associations;
       (B) motor manufacturers;
       (C) motor end users;
       (D) electric utilities; and
       (E) individuals and entities that conduct energy efficiency 
     programs.
       (3) Secretary.--The term ``Secretary'' means the Secretary 
     of Energy, in consultation with interested parties.
       (c) Assessment.--The Secretary shall conduct an assessment 
     of electric motors and the electric motor market in the 
     United States that shall--
       (1) include important subsectors of the industrial and 
     commercial electric motor market (as determined by the 
     Secretary), including--
       (A) the stock of motors and motor-driven equipment;
       (B) efficiency categories of the motor population; and
       (C) motor systems that use drives, servos, and other 
     control technologies;
       (2) characterize and estimate the opportunities for 
     improvement in the energy efficiency of motor systems by 
     market segment, including opportunities for--
       (A) expanded use of drives, servos, and other control 
     technologies;
       (B) expanded use of process control, pumps, compressors, 
     fans or blowers, and material handling components; and
       (C) substitution of existing motor designs with existing 
     and future advanced motor designs, including electronically 
     commutated permanent magnet, interior permanent magnet, and 
     switched reluctance motors; and

[[Page H7527]]

       (3) develop an updated profile of motor system purchase and 
     maintenance practices, including surveying the number of 
     companies that have motor purchase and repair specifications, 
     by company size, number of employees, and sales.
       (d) Recommendations; Update.--Based on the assessment 
     conducted under subsection (c), the Secretary shall--
       (1) develop--
       (A) recommendations to update the detailed motor profile on 
     a periodic basis;
       (B) methods to estimate the energy savings and market 
     penetration that is attributable to the Save Energy Now 
     Program of the Department; and
       (C) recommendations for the Director of the Census Bureau 
     on market surveys that should be undertaken in support of the 
     motor system activities of the Department; and
       (2) prepare an update to the Motor Master+ program of the 
     Department.
       (e) Program.--Based on the assessment, recommendations, and 
     update required under subsections (c) and (d), the Secretary 
     shall establish a proactive, national program targeted at 
     motor end-users and delivered in cooperation with interested 
     parties to increase awareness of--
       (1) the energy and cost-saving opportunities in commercial 
     and industrial facilities using higher efficiency electric 
     motors;
       (2) improvements in motor system procurement and management 
     procedures in the selection of higher efficiency electric 
     motors and motor-system components, including drives, 
     controls, and driven equipment; and
       (3) criteria for making decisions for new, replacement, or 
     repair motor and motor system components.

     SEC. 245. MOTOR EFFICIENCY REBATE PROGRAM.

       (a) In General.--Part C of title III of the Energy Policy 
     and Conservation Act (42 U.S.C. 6311 et seq.) is amended by 
     adding at the end the following:

     ``SEC. 347. MOTOR EFFICIENCY REBATE PROGRAM.

       ``(a) Establishment.--Not later than January 1, 2010, in 
     accordance with subsection (b), the Secretary shall establish 
     a program to provide rebates for expenditures made by 
     entities--
       ``(1) for the purchase and installation of a new electric 
     motor that has a nominal full load efficiency that is not 
     less than the nominal full load efficiency as defined in--
       ``(A) table 12-12 of NEMA Standards Publication MG 1-2006 
     for random wound motors rated 600 volts or lower; or
       ``(B) table 12-13 of NEMA Standards Publication MG 1-2006 
     for form wound motors rated 5000 volts or lower; and
       ``(2) to replace an installed motor of the entity the 
     specifications of which are established by the Secretary by a 
     date that is not later than 90 days after the date of 
     enactment of this section.
       ``(b) Requirements.--
       ``(1) Application.--To be eligible to receive a rebate 
     under this section, an entity shall submit to the Secretary 
     an application in such form, at such time, and containing 
     such information as the Secretary may require, including--
       ``(A) demonstrated evidence that the entity purchased an 
     electric motor described in subsection (a)(1) to replace an 
     installed motor described in subsection (a)(2);
       ``(B) demonstrated evidence that the entity--
       ``(i) removed the installed motor of the entity from 
     service; and
       ``(ii) properly disposed the installed motor of the entity; 
     and
       ``(C) the physical nameplate of the installed motor of the 
     entity.
       ``(2) Authorized amount of rebate.--The Secretary may 
     provide to an entity that meets each requirement under 
     paragraph (1) a rebate the amount of which shall be equal to 
     the product obtained by multiplying--
       ``(A) the nameplate horsepower of the electric motor 
     purchased by the entity in accordance with subsection (a)(1); 
     and
       ``(B) $25.00.
       ``(3) Payments to distributors of qualifying electric 
     motors.--To assist in the payment for expenses relating to 
     processing and motor core disposal costs, the Secretary shall 
     provide to the distributor of an electric motor described in 
     subsection (a)(1), the purchaser of which received a rebate 
     under this section, an amount equal to the product obtained 
     by multiplying--
       ``(A) the nameplate horsepower of the electric motor; and
       ``(B) $5.00.
       ``(c) Authorization of Appropriations.--There are 
     authorized to be appropriated to carry out this section, to 
     remain available until expended--
       ``(1) $80,000,000 for fiscal year 2011;
       ``(2) $75,000,000 for fiscal year 2012;
       ``(3) $70,000,000 for fiscal year 2013;
       ``(4) $65,000,000 for fiscal year 2014; and
       ``(5) $60,000,000 for fiscal year 2015.''.
       (b) Table of Contents.--The table of contents of the Energy 
     Policy and Conservation Act (42 U.S.C. prec. 6201) is amended 
     by adding at the end of the items relating to part C of title 
     III the following:

``Sec. 347. Motor efficiency rebate program.''.

     SEC. 246. CLEAN ENERGY MANUFACTURING REVOLVING LOAN FUND 
                   PROGRAM.

       The National Institute of Standards and Technology Act (15 
     U.S.C. 271 et seq.) is amended by inserting after section 26 
     the following:

     ``SEC. 27. CLEAN ENERGY MANUFACTURING REVOLVING LOAN FUND 
                   PROGRAM.

       ``(a) Purposes.--The purposes of this section are as 
     follows:
       ``(1) To develop the long-term manufacturing capacity of 
     the United States.
       ``(2) To create jobs through the retooling and expansion of 
     manufacturing facilities to produce clean energy technology 
     products and energy efficient products.
       ``(3) To improve the long-term competitiveness of domestic 
     manufacturing by increasing the energy efficiency of 
     manufacturing facilities.
       ``(4) To assist small and medium-sized manufacturers 
     diversify operations to respond to emerging clean energy 
     technology product markets.
       ``(b) Definitions.--In this section:
       ``(1) Clean energy technology product.--The term `clean 
     energy technology product' means technology products relating 
     to the following:
       ``(A) Wind turbines.
       ``(B) Solar energy.
       ``(C) Fuel cells.
       ``(D) Advanced batteries, battery systems, or storage 
     devices.
       ``(E) Biomass equipment.
       ``(F) Geothermal equipment.
       ``(G) Advanced biofuels.
       ``(H) Ocean energy equipment.
       ``(I) Carbon capture and storage.
       ``(J) Such other products as the Secretary determines--
       ``(i) relate to the production, use, transmission, storage, 
     control, or conservation of energy;
       ``(ii) reduce greenhouse gas concentrations;
       ``(iii) achieve the earliest and maximum emission 
     reductions within a reasonable period per dollar invested;
       ``(iv) result in the fewest non-greenhouse gas 
     environmental impacts; and
       ``(v) either--

       ``(I) reduce the need for additional energy supplies by--

       ``(aa) using existing energy supplies with greater 
     efficiency; or
       ``(bb) by transmitting, distributing, or transporting 
     energy with greater effectiveness through the infrastructure 
     of the United States; or

       ``(II) diversity the sources of energy supply of the United 
     States--

       ``(aa) to strengthen energy security; and
       ``(bb) to increase supplies with a favorable balance of 
     environmental effects if the entire technology system is 
     considered.
       ``(2) Energy efficient product.--The term `energy efficient 
     product' means a product that, as determined by the Secretary 
     in consultation with the Secretary of Energy--
       ``(A) consumes significantly less energy than the average 
     amount that all similar products consumed on the day before 
     the date of the enactment of this Act; or
       ``(B) is a component, system, or group of subsystems that 
     is designed, developed, and validated to optimize the energy 
     efficiency of a product.
       ``(3) Hollings manufacturing extension center.--The term 
     `Hollings Manufacturing Extension Center' means a center 
     established under section 25.
       ``(4) Hollings manufacturing partnership program.--The term 
     `Hollings Manufacturing Partnership Program' means the 
     program established under sections 25 and 26.
       ``(5) Program.--The term `Program' means the grant program 
     established pursuant to subsection (c)(1).
       ``(6) Revolving loan fund.--The term `revolving loan fund' 
     means a revolving loan fund described in subsection (d).
       ``(7) Secretary.--Except as otherwise provided, the term 
     `Secretary' means the Secretary of Commerce.
       ``(8) Small or medium-sized manufacturer.--The term `small 
     or medium-sized manufacturer' means a manufacturer that 
     employs fewer than 500 full-time equivalent employees at a 
     manufacturing facility that is not owned or controlled by an 
     automobile manufacturer.
       ``(c) Grant Program.--
       ``(1) Establishment.--Not later than 120 days after the 
     date of the enactment of this section, the Secretary shall 
     establish a program under which the Secretary shall award 
     grants to States to establish revolving loan funds to provide 
     loans to small and medium-sized manufacturers to finance the 
     cost of--
       ``(A) reequipping, expanding, or establishing (including 
     applicable engineering costs) a manufacturing facility in the 
     United States to produce--
       ``(i) clean energy technology products;
       ``(ii) energy efficient products; or
       ``(iii) integral component parts of clean energy technology 
     products or energy efficient products; or
       ``(B) reducing the energy intensity or greenhouse gas 
     production of a manufacturing facility in the United States, 
     including using energy intensive feedstocks.
       ``(2) Maximum amount.--The Secretary may not award a grant 
     under the Program in an amount that exceeds $500,000,000 in 
     any fiscal year.
       ``(d) Criteria for Awarding Grants.--
       ``(1) Matching funds.--The Secretary may make a grant to a 
     State under the Program only if the State agrees to ensure 
     that for each loan provided by the State under the Program, 
     not less than 20 percent of the amount of each loan will come 
     from a non-Federal source.
       ``(2) Administrative costs.--A State receiving a grant 
     under the Program may only use such amount of the grant for 
     the costs of

[[Page H7528]]

     administering the revolving loan fund as the Secretary shall 
     provide in regulations.
       ``(3) Application.--Each State seeking a grant under the 
     Program shall submit to the Secretary an application therefor 
     in such form and in such manner as the Secretary considers 
     appropriate.
       ``(4) Evaluation.--The Secretary shall evaluate and 
     prioritize an application submitted by a State for a grant 
     under the Program on the basis of--
       ``(A) the description of the revolving loan fund to be 
     established with the grant and how such revolving loan fund 
     will achieve the purposes described in subsection (a);
       ``(B) whether the State will be able to provide loans from 
     the revolving loan fund to small or medium-sized 
     manufacturers before the date that is 120 days after the date 
     on which the State receives the grant;
       ``(C) a description of how the State will administer the 
     revolving loan fund in coordination with other State and 
     Federal programs, including programs administered by the 
     Assistant Secretary for Economic Development;
       ``(D) a description of the actual or potential clean energy 
     manufacturing supply chains, including significant component 
     parts, in the region served by the revolving loan fund;
       ``(E) how the State will target the provision of loans 
     under the Program to manufacturers located in regions 
     characterized by high unemployment and sudden and severe 
     economic dislocation, in particular where mass layoffs have 
     resulted in a precipitous increase in unemployment;
       ``(F) the availability of a skilled manufacturing workforce 
     in the region served by the revolving loan fund and the 
     capacity of the region's workforce and education systems to 
     provide pathways for unemployed or low-income workers into 
     skilled manufacturing employment;
       ``(G) a description of how the State will target loans to 
     small or medium-sized manufacturers who are--
       ``(i) manufacturers of automobile components; and
       ``(ii) either--

       ``(I) increasing the energy efficiency of their 
     manufacturing facilities; or
       ``(II) retooling to manufacture clean energy products or 
     energy efficient products, including manufacturing components 
     to improve the compliance of an automobile with fuel economy 
     standards prescribed under section 32902 of title 49, United 
     States Code;

       ``(H) a description of how the State will use the loan fund 
     to achieve the earliest and maximum greenhouse gas emission 
     reductions within a reasonable period of time per dollar 
     invested and with the fewest non-greenhouse gas environmental 
     impacts; and
       ``(I) such other factors as the Secretary considers 
     appropriate to ensure that grants awarded under the Program 
     effectively and efficiently achieve the purposes described in 
     subsection (a).
       ``(e) Revolving Loan Funds.--
       ``(1) In general.--A State receiving a grant under the 
     Program shall establish, maintain, and administer a revolving 
     loan fund in accordance with this subsection.
       ``(2) Deposits.--A revolving loan fund shall consist of the 
     following:
       ``(A) Amounts from grants awarded under this section.
       ``(B) All amounts held or received by the State incident to 
     the provision of loans described in subsection (f), including 
     all collections of principal and interest.
       ``(3) Expenditures.--Amounts in the revolving loan fund 
     shall be available for the provision and administration of 
     loans in accordance with subsection (f).
       ``(4) Limitation.--No funds provided pursuant to this 
     section may be leveraged through use of tax-exempt bonding 
     authority by a State or a political subdivision of a State.
       ``(f) Loans.--
       ``(1) In general.--A State receiving a grant under this 
     section shall use the amount in the revolving loan fund to 
     provide loans to small and medium-sized manufacturers as 
     described in subsection (c)(1).
       ``(2) Loan terms and conditions.--The following shall apply 
     with respect to loans provided under paragraph (1):
       ``(A) Terms.--Loans shall have a term determined by the 
     State receiving the grant as follows:
       ``(i) For fixed assets, the term of the loan shall not 
     exceed the useful life of the asset and shall be less than 15 
     years.
       ``(ii) For working capital, the term of the loan shall not 
     exceed 36 months.
       ``(B) Interest rates.--Loans shall bear an interest rate 
     determined by the State receiving the grant as follows:
       ``(i) The interest rate shall enable the loan recipient to 
     accomplish the activities described in subparagraphs (A) and 
     (B) of subsection (c)(1).
       ``(ii) The interest rate may be set below-market interest 
     rates.
       ``(iii) The interest rate may not be less than zero 
     percent.
       ``(iv) The interest rate may not exceed the current prime 
     rate plus 500 basis points.
       ``(C) Description and budget for use of loan funds.--Each 
     recipient of a loan from a State under the Program shall 
     develop and submit to the State and the Secretary a 
     description and budget for the use of loan amounts, including 
     a description of the following:
       ``(i) Any new business expected to be developed with the 
     loan.
       ``(ii) Any improvements to manufacturing operations to be 
     developed with the loan.
       ``(iii) Any technology expected to be commercialized with 
     the loan.
       ``(D) Priority in review and preference in selection for 
     certain loan applicants.--
       ``(i) Review.--In reviewing applications submitted by small 
     or medium-sized manufacturers for a loan, a recipient of a 
     grant under the Program shall give priority to small or 
     medium-sized manufacturers described in clause (iii).
       ``(ii) Selection.--In selecting small or medium-sized 
     manufacturers to receive a loan, a recipient of a grant under 
     the Program shall give preference to small or medium-sized 
     manufacturers described in clause (iii).
       ``(iii) Priority and preferred small or medium-sized 
     manufacturers.--A small or medium-sized manufacturer 
     described in this clause is a manufacturer that--

       ``(I) is certified by a Hollings Manufacturing Extension 
     Center or a manufacturing-related local intermediary 
     designated by the Secretary for purposes of providing such 
     certification; or
       ``(II) provides individuals employed at the manufacturing 
     facilities of the manufacturer--

       ``(aa) pay in amounts that are, on average, equal to or 
     more than the average wage of an individual working in a 
     manufacturing facility in the State; and
       ``(bb) health benefits.
       ``(iv) Certification by hollings manufacturing extension 
     center.--A Hollings Manufacturing Extension Center or other 
     entity designated by the Secretary for purposes of providing 
     certification under clause (iii)(I) shall only certify 
     applications for a loan after carrying out a qualitative and 
     quantitative review of the applicant's business strategy, 
     manufacturing operations, and technological ability to 
     contribute to the purposes described in subsection (a).
       ``(E) Repayment upon relocation outside united states.--
       ``(i) In general.--If a person receives a loan under 
     paragraph (1) to finance the cost of reequipping, expanding, 
     or establishing a manufacturing facility as described in 
     subsection (c)(1)(A) or to reduce the energy intensity of a 
     manufacturing facility and such person relocates the 
     production activities of such manufacturing facility outside 
     the United States during the term of the loan, the recipient 
     shall repay such loan in full with interest as described in 
     clause (ii) and for a duration described in clause (iii).
       ``(ii) Payment of interest.--Any amount owed by the 
     recipient of a loan under paragraph (1) who is required to 
     repay the loan under clause (i) shall bear interest at a 
     penalty rate determined by the Secretary to deter recipients 
     of loans under paragraph (1) from relocating production 
     activities as described in clause (i).
       ``(iii) Period of repayment.--Repayment of a loan under 
     clause (i) shall be for a duration determined by the 
     Secretary.
       ``(F) Compliance with wage rate requirements.--Each 
     recipient of a loan shall undertake and agree to incorporate 
     or cause to be incorporated into all contracts for 
     construction, alteration or repair, which are paid for in 
     whole or in part with funds obtained pursuant to such loan, a 
     requirement that all laborers and mechanics employed by 
     contractors and subcontractors performing construction, 
     alteration or repair shall be paid wages at rates not less 
     than those determined by the Secretary of Labor, in 
     accordance with subchapter IV of chapter 31 of title 40, 
     United States Code (known as the `Davis-Bacon Act'), to be 
     prevailing for the corresponding classes of laborers and 
     mechanics employed on projects of a character similar to the 
     contract work in the same locality in which the work is to be 
     performed. The Secretary of Labor shall have, with respect to 
     the labor standards specified in this subparagraph, the 
     authority and functions set forth in Reorganization Plan 
     Numbered 14 of 1950 (15 F.R. 3176; 64 Stat. 1267) and section 
     3145 of title 40, United States Code.
       ``(G) Annual reports by loan recipients.--Each recipient of 
     a loan issued by a State under paragraph (1) shall, not less 
     frequently than once each year during the term of the loan, 
     submit to such State a report containing such information as 
     the Secretary may specify for purposes of the Program, 
     including information that the Secretary can use to determine 
     whether a recipient of a loan is required to repay the loan 
     under subparagraph (E).
       ``(3) Annual reports by grant recipients.--Each recipient 
     of a grant under the Program shall, not less frequently than 
     once each year, submit to the Secretary a report on the 
     impact of each loan issued by the State under the Program and 
     the aggregate impact of all loans so issued, including the 
     following:
       ``(A) The sales increased or retained.
       ``(B) Cost savings or costs avoided.
       ``(C) Additional investment encouraged.
       ``(D) Jobs created or retained.
       ``(g) Authorization of Appropriations.--There is authorized 
     to be appropriated to carry out this section $15,000,000,000 
     for each of fiscal years 2010 and 2011.''.

     SEC. 247. CLEAN ENERGY AND EFFICIENCY MANUFACTURING 
                   PARTNERSHIPS.

       (a) Hollings Manufacturing Partnership Program.--Section 
     25(b) of the National Institute of Standards and Technology 
     Act (15 U.S.C. 278k(b)) is amended--
       (1) in paragraph (2), by striking ``and'' at the end;

[[Page H7529]]

       (2) in paragraph (3), by striking the period at the end and 
     inserting ``; and''; and
       (3) by adding at the end the following:
       ``(4) the establishment of a clean energy manufacturing 
     supply chain initiative--
       ``(A) to support manufacturers in their identification of 
     and diversification to new markets, including support for 
     manufacturers transitioning to the use of clean energy supply 
     chains;
       ``(B) to assist manufacturers improve their competitiveness 
     by reducing energy intensity and greenhouse gas production, 
     including the use of energy intensive feedstocks;
       ``(C) to increase adoption and implementation of innovative 
     manufacturing technologies;
       ``(D) to coordinate and leverage the expertise of the 
     National Laboratories and Technology Centers and the 
     Industrial Assessment Centers of the Department of Energy to 
     meet the needs of manufacturers; and
       ``(E) to identify, assist, and certify manufacturers 
     seeking loans under section 27(e)(1).''.
       (b) Reduction in Cost Share Requirements.--Section 25(c) of 
     such Act (15 U.S.C. 278k(c)) is amended--
       (1) in paragraph (1), by inserting ``or as provided in 
     paragraph (5)'' after ``not to exceed six years'';
       (2) in paragraph (3)(B), by striking ``not less than 50 
     percent of the costs incurred for the first 3 years and an 
     increasing share for each of the last 3 years'' and inserting 
     ``50 percent of the costs incurred or such lesser percentage 
     of the costs incurred as determined appropriate by the 
     Secretary by rule''; and
       (3) in paragraph (5)--
       (A) by striking ``at declining levels'';
       (B) by striking ``one third'' and inserting ``50 percent''; 
     and
       (C) by inserting ``, or such lesser percentage as 
     determined appropriate by the Secretary by rule,'' after 
     ``maintenance costs''.
       (c) Authorization of Appropriations.--There are authorized 
     to be appropriated to the Secretary of Commerce for the 
     Hollings Manufacturing Partnership Program authorized under 
     sections 25 of the National Institute of Standards and 
     Technology Act (15 U.S.C. 278k) and for the provision of 
     assistance under section 26 of such Act (15 U.S.C. 278l)--
       (1) $200,000,000 for fiscal year 2010;
       (2) $250,000,000 for fiscal year 2011;
       (3) $300,000,000 for fiscal year 2012;
       (4) $350,000,000 for fiscal year 2013; and
       (5) $400,000,000 for fiscal year 2014.

     SEC. 248. TECHNICAL AMENDMENTS.

       (a) Amendment to National Institute of Standards and 
     Technology Act.--Section 25 of the National Institute of 
     Standards and Technology Act (15 U.S.C. 278k(b)) is amended--
       (1) in subsection (a), by striking ``(hereafter in this Act 
     referred to as the `Centers')''; and
       (2) by adding at the end the following:
       ``(g) Designation.--
       ``(1) Hollings manufacturing partnership program.--The 
     program under this section shall be known as the `Hollings 
     Manufacturing Partnership Program'.
       ``(2) Hollings manufacturing extension centers.--The 
     Regional Centers for the Transfer of Manufacturing Technology 
     created and supported under subsection (a) shall be known as 
     the `Hollings Manufacturing Extension Centers' (in this Act 
     referred to as the `Centers').''.
       (b) Amendment to Consolidated Appropriations Act, 2005.--
     Division B of title II of the Consolidated Appropriations 
     Act, 2005 (Public Law 108-09447; 118 Stat. 2879; 15 U.S.C. 
     278k note) is amended under the heading ``industrial 
     technology services'' by striking ``2007: Provided further, 
     That'' and all that follows through ``Extension Centers.'' 
     and inserting ``2007.''.

   Subtitle E--Improvements in Energy Savings Performance Contracting

     SEC. 251. ENERGY SAVINGS PERFORMANCE CONTRACTS.

       (a) Competition Requirements for Task or Delivery Orders 
     Under Energy Savings Performance Contracts.--
       (1) Competition requirements.--Subsection (a) of section 
     801 of the National Energy Conservation Policy Act (42 U.S.C. 
     8287(a)) is amended by adding at the end the following 
     paragraph:
       ``(3)(A) The head of a Federal agency may issue a task or 
     delivery order under an energy savings performance contract 
     by--
       ``(i) notifying all contractors that have received an award 
     under such contract that the agency proposes to discuss 
     energy savings performance services for some or all of its 
     facilities and, following a reasonable period of time to 
     provide a proposal in response to the notice, soliciting an 
     expression of interest in performing site surveys or 
     investigations and feasibility designs and studies and the 
     submission of qualifications from such contractors, and 
     including in such notice summary information concerning 
     energy use for any facilities that the agency has specific 
     interest in including in such contract;
       ``(ii) reviewing all expressions of interest and 
     qualifications submitted pursuant to the notice under clause 
     (i);
       ``(iii) selecting two or more contractors (from among those 
     reviewed under clause (ii)) to conduct discussions concerning 
     the contractors' respective qualifications to implement 
     potential energy conservation measures, including requesting 
     references demonstrating experience on similar efforts and 
     the resulting energy savings of such similar efforts, and 
     providing an opportunity for a post-award debriefing to all 
     contractors that submitted expressions of interest and 
     qualifications under clause (ii) pursuant to the notice;
       ``(iv) selecting and authorizing--
       ``(I) more than one contractor (from among those selected 
     under clause (iii)) to conduct site surveys, investigations, 
     feasibility designs and studies or similar assessments for 
     the energy savings performance contract services (or for 
     discrete portions of such services), for the purpose of 
     allowing each such contractor to submit a firm, fixed-price 
     proposal to implement specific energy conservation measures; 
     or
       ``(II) one contractor (from among those selected under 
     clause (iii)) to conduct a site survey, investigation, a 
     feasibility design and study or similar for the purpose of 
     allowing the contractor to submit a firm, fixed-price 
     proposal to implement specific energy conservation measures;
       ``(v) negotiating a task or delivery order for energy 
     savings performance contracting services with the contractor 
     or contractors selected under clause (iv) based on the energy 
     conservation measures identified; and
       ``(vi) issuing a task or delivery order for energy savings 
     performance contracting services to such contractor or 
     contractors.
       ``(B) The issuance of a task or delivery order for energy 
     savings performance contracting services pursuant to 
     subparagraph (A) is deemed to satisfy the task and delivery 
     order competition requirements in section 2304c(d) of title 
     10, United States Code, and section 303J(d) of the Federal 
     Property and Administrative Services Act of 1949 (41 U.S.C. 
     253j(d)).
       ``(C) The Secretary may issue guidance as necessary to 
     agencies issuing task or delivery orders pursuant to 
     subparagraph (A).''.
       (2) Effective date.--The amendment made by paragraph (1) is 
     inapplicable to task or delivery orders issued before the 
     date of enactment of this section.
       (b) Inclusion of Thermal Renewable Energy.--Section 203 of 
     the Energy Policy Act of 2005 (42 U.S.C. 15852) is amended--
       (1) in subsection (a), by striking ``electric''; and
       (2) in subsection (b)(2), by inserting ``or thermal'' after 
     ``means electric''.
       (c)  Credit for Renewable Energy Produced and Used on 
     Site.--Subsection (c) of section 203 of the Energy Policy Act 
     of 2005 (42 U.S.C. 15852) is amended to read as follows:
       ``(c) Calculation.--Renewable energy produced at a Federal 
     facility, on Federal lands, or on Indian lands (as defined in 
     title XXVI of the Energy Policy Act of 1992 (25 U.S.C. 3501 
     et seq.)) shall be calculated separately from renewable 
     energy consumed at a Federal facility, and each may be used 
     to comply with the consumption requirement under subsection 
     (a).''.
       (d) Financing Flexibility.--Section 801(a)(2)(E) of the 
     National Energy Conservation Policy Act (42 U.S.C. 
     8287(a)(2)(E)) is amended by striking ``In'' and inserting 
     ``Notwithstanding any other provision of law, in''.

                    Subtitle F--Public Institutions

     SEC. 261. PUBLIC INSTITUTIONS.

       Section 399A of the Energy Policy and Conservation Act (42 
     U.S.C. 6371h-1) is amended--
       (1) in subsection (a)(5), by striking ``or a designee'' and 
     inserting ``an Indian tribe, a not-for-profit hospital or 
     not-for-profit inpatient health care facility, or a 
     designated agent'';
       (2) in subsection (c)(1), by striking subparagraph (C);
       (3) in subsection (f)(3)(A), by striking ``$1,000,000'' and 
     inserting ``$2,500,000''; and
       (4) in subsection (i)(1), by striking ``$250,000,000 for 
     each of fiscal years 2009 through 2013'' and inserting 
     ``$250,000,000 for each of fiscal years 2010 through 2015''.

     SEC. 262. COMMUNITY ENERGY EFFICIENCY FLEXIBILITY.

       Section 545(b)(3) of the Energy Independence and Security 
     Act of 2007 (42 U.S.C. 17155(b)(3)) is amended--
       (1) by striking ``Indian tribe may use'' and all that 
     follows through ``for administrative expenses'' and inserting 
     ``Indian tribe may use for administrative expenses'';
       (2) by striking subparagraphs (B) and (C);
       (3) by redesignating the remaining clauses (i) and (ii) as 
     subparagraphs (A) and (B), respectively and adjusting the 
     margin of those subparagraphs accordingly; and
       (4) by striking the semicolon at the end and inserting a 
     period.

     SEC. 263. SMALL COMMUNITY JOINT PARTICIPATION.

       (a) Section 541(3)(A) of the Energy Independence and 
     Security Act of 2007 is amended in clause (i) by striking 
     ``and'' at the end of subclause (II), in clause (ii) by 
     striking the period at the end of subclause (II) and 
     inserting ``; or'', and by inserting the following new clause 
     (iii):
       ``(iii) a group of adjacent, contiguous, or geographically 
     proximate units of local government that reach agreement to 
     act jointly for purposes of this section and that represent a 
     combined population of not less than 35,000.''.
       (b) Section 541(3)(B) of the Energy Independence and 
     Security Act of 2007 is amended in clause (i) by striking 
     ``or'', in clause (ii) by striking the period at the end and 
     inserting ``; or'', and by inserting the following new clause 
     (iii):

[[Page H7530]]

       ``(iii) a group of adjacent, contiguous, or geographically 
     proximate units of local government that reach agreement to 
     act jointly for purposes of this section and that represent a 
     combined population of not less than 50,000.''.

     SEC. 264. LOW INCOME COMMUNITY ENERGY EFFICIENCY PROGRAM.

       (a) In General.--The Secretary of Energy is authorized to 
     make grants to private, nonprofit, mission-driven community 
     development organizations including community development 
     corporations and community development financial institutions 
     to provide financing to businesses and projects that improve 
     energy efficiency; identify and develop alternative, 
     renewable, and distributed energy supplies; provide technical 
     assistance and promote job and business opportunities for 
     low-income residents; and increase energy conservation in low 
     income rural and urban communities.
       (b) Grants.--The purpose of such grants is to increase the 
     flow of capital and benefits to low income communities, 
     minority-owned and woman-owned businesses and entrepreneurs 
     and other projects and activities located in low income 
     communities in order to reduce environmental degradation, 
     foster energy conservation and efficiency and create job and 
     business opportunities for local residents. The Secretary may 
     make grants on a competitive basis for--
       (1) investments that develop alternative, renewable, and 
     distributed energy supplies;
       (2) capitalizing loan funds that lend to energy efficiency 
     projects and energy conservation programs;
       (3) technical assistance to plan, develop, and manage an 
     energy efficiency financing program; and
       (4) technical and financial assistance to assist small-
     scale businesses and private entities develop new renewable 
     and distributed sources of power or combined heat and power 
     generation.
       (c) Authorization of Appropriations.--For the purposes of 
     this section there is authorized to be appropriated 
     $50,000,000 for each of the fiscal years 2010 through 2015.

     SEC. 265. CONSUMER BEHAVIOR RESEARCH.

       (a) In General.--The Secretary of Energy is authorized to 
     establish a research program to identify the factors 
     affecting consumer actions to conserve energy and make 
     improvements in energy efficiency. Through the program the 
     Secretary will make grants to public and private institutions 
     of higher education to study the effects of consumer behavior 
     on total energy use; potential energy savings from changes in 
     consumption habits; the ability to reduce greenhouse gas 
     emissions through changes in energy consumption habits; 
     increase public awareness of Federal climate adaptation and 
     mitigation programs; and the potential for alterations in 
     consumer behavior to further American energy independence. 
     Grants may also fund projects that evaluate or inform public 
     knowledge of the effects of energy consumption habits on 
     these topics.
       (b) Grants.--The purpose of the program is to provide 
     grants to public and private institutions of higher education 
     to carry out projects which will improve understanding of the 
     effects of consumer behavior on energy consumption and 
     conservation. The Secretary shall make grants on a 
     competitive basis for--
       (1) studies of the effects of consumer habits on energy 
     consumption and conservation;
       (2) development of strategies that communicate the 
     importance of energy efficiency and conservation to 
     consumers;
       (3) identification of best practices to improve consumer 
     energy use habits;
       (4) education programs that inform consumers about the 
     implications of consumption habits on energy use and climate 
     change;
       (5) evaluation of the effectiveness of programs designed to 
     promote public awareness of Federal Government climate 
     adaptation and mitigation activities; and
       (6) other projects that advance the mission of the program.
       (c) Report.--The Secretary of Energy shall provide Congress 
     with a report on progress towards establishing the program 
     within 120 days after the date of enactment of this Act.
       (d) Authorization of Appropriations.--There are authorized 
     to be appropriated such sums as may be necessary to carry out 
     this section.

                       Subtitle G--Miscellaneous

     SEC. 271. ENERGY EFFICIENT INFORMATION AND COMMUNICATIONS 
                   TECHNOLOGIES.

       Section 543 of the National Energy Conservation Policy Act 
     (42 U.S.C. 8253) is amended to read as follows:

     ``SEC. 543. ENERGY EFFICIENT INFORMATION AND COMMUNICATIONS 
                   TECHNOLOGIES.

       ``(a) In General.--Not later than 1 year after the date of 
     enactment of the American Clean Energy and Security Act of 
     2009, each Federal agency shall collaborate with the Director 
     of the Office of Management and Budget (referred to in this 
     section as the `Director') to create an implementation 
     strategy, including best practices and measurement and 
     verification techniques, for the purchase and use of energy 
     efficient information and communications technologies and 
     practices. Wherever possible, existing standards, 
     specifications, performance metrics, and best management 
     practices that have been or are being developed in open 
     collaboration and with broad stakeholder input and review 
     should be incorporated. In addition, agency strategies shall 
     be flexible, cost-effective, and based on the specific 
     operating requirements and statutory mission of each agency.
       ``(b) Energy Efficient Information and Communications 
     Technologies.--In developing an implementation strategy, each 
     agency shall--
       ``(1) consider information and communications technologies 
     and infrastructure, including, but not limited to, advanced 
     metering infrastructure, information and communications 
     technology services and products, efficient data center 
     strategies, applications modernization and rationalization, 
     building systems energy efficiency, and telework; and
       ``(2) ensure that agencies are eligible to realize the 
     savings and rewards brought about through increased 
     efficiencies.
       ``(c) Performance Goals.--Not later than 6 months after the 
     date of enactment of the American Clean Energy and Security 
     Act of 2009, the Director shall establish performance goals 
     for evaluating the efforts of the agencies in improving the 
     maintenance, purchase and use of energy efficiency of 
     information and communications technology systems. These 
     performance goals should measure information technology costs 
     over a specific time horizon (3 to 5 years), providing a 
     complete picture of all costs, including energy.
       ``(d) Report.--Not later than 18 months after the date of 
     enactment of the American Clean Energy and Security Act of 
     2009, and annually thereafter, the Director shall submit a 
     report to Congress on--
       ``(1) the progress of each agency in reducing energy use 
     through its implementation strategy; and
       ``(2) new and emerging technologies that would help achieve 
     increased energy efficiency.''.

     SEC. 272. NATIONAL ENERGY EFFICIENCY GOALS.

       (a) Goals.--The energy efficiency goals of the United 
     States are--
       (1) to achieve an improvement in the overall energy 
     productivity of the United States (measured in gross domestic 
     product per unit of energy input) of at least 2.5 percent per 
     year by the year 2012; and
       (2) to maintain that annual rate of improvement each year 
     through 2030.
       (b) Strategic Plan.--
       (1) In general.--Not later than 1 year after the date of 
     enactment of this Act, the Secretary of Energy (referred to 
     in this section as the ``Secretary''), in cooperation with 
     the Administrator and the heads of other appropriate Federal 
     agencies, shall develop a strategic plan to achieve the 
     national goals for improvement in energy productivity 
     established under subsection (a).
       (2) Public input and comment.--The Secretary shall develop 
     the plan in a manner that provides appropriate opportunities 
     for public input and comment.
       (c) Plan Contents.--The strategic plan shall--
       (1) identify future regulatory, funding, and policy 
     priorities that would assist the United States in meeting the 
     national goals;
       (2) include energy savings estimates for each sector; and
       (3) include data collection methodologies and compilations 
     used to establish baseline and energy savings data.
       (d) Plan Updates.--
       (1) In general.--The Secretary shall--
       (A) update the strategic plan biennially; and
       (B) include the updated strategic plan in the national 
     energy policy plan required by section 801 of the Department 
     of Energy Organization Act (42 U.S.C. 7321).
       (2) Contents.--In updating the plan, the Secretary shall--
       (A) report on progress made toward implementing efficiency 
     policies to achieve the national goals established under 
     subsection (a); and
       (B) verify, to the maximum extent practicable, energy 
     savings resulting from the policies.
       (e) Report to Congress and the Public.--The Secretary shall 
     submit to Congress, and make available to the public, the 
     initial strategic plan developed under subsection (b) and 
     each updated plan.

     SEC. 273. AFFILIATED ISLAND ENERGY INDEPENDENCE TEAM.

       (a) Definitions.--In this section:
       (1) Affiliated island.--The term ``affiliated island'' 
     means--
       (A) the Commonwealth of Puerto Rico;
       (B) Guam;
       (C) American Samoa;
       (D) the Commonwealth of the Northern Mariana Islands;
       (E) the Federated States of Micronesia;
       (F) the Republic of the Marshall Islands;
       (G) the Republic of Palau; and
       (H) the United States Virgin Islands.
       (2) Secretary.--The term ``Secretary'' means the Secretary 
     of Energy (acting through the Assistant Secretary of Energy 
     Efficiency and Renewable Energy), in consultation with the 
     Secretary of the Interior and the Secretary of State.
       (3) Team.--The term ``team'' means the team established by 
     the Secretary under subsection (b).
       (b) Establishment.--As soon as practicable after the date 
     of enactment of this Act, the Secretary shall assemble a team 
     of technical, policy, and financial experts to address the 
     energy needs of each affiliated island--
       (1) to reduce the reliance and expenditure of each 
     affiliated island on imported fossil fuels;
       (2) to increase the use by each affiliated island of 
     indigenous, nonfossil fuel energy sources;

[[Page H7531]]

       (3) to improve the performance of the energy infrastructure 
     of the affiliated island through projects--
       (A) to improve the energy efficiency of power generation, 
     transmission, and distribution; and
       (B) to increase consumer energy efficiency;
       (4) to improve the performance of the energy infrastructure 
     of each affiliated island through enhanced planning, 
     education, and training;
       (5) to adopt research-based and public-private partnership-
     based approaches as appropriate;
       (6) to stimulate economic development and job creation; and
       (7) to enhance the engagement by the Federal Government in 
     international efforts to address island energy needs.
       (c) Duties of Team.--
       (1) Energy action plans.--
       (A) In general.--In accordance with subparagraph (B), the 
     team shall provide technical, programmatic, and financial 
     assistance to each utility of each affiliated island, and the 
     government of each affiliated island, as appropriate, to 
     develop and implement an energy Action Plan for each 
     affiliated island to reduce the reliance of each affiliated 
     island on imported fossil fuels through increased efficiency 
     and use of indigenous clean-energy resources.
       (B) Requirements.--Each Action Plan described in 
     subparagraph (A) for each affiliated island shall require and 
     provide for--
       (i) the conduct of 1 or more studies to assess 
     opportunities to reduce fossil fuel use through--

       (I) the improvement of the energy efficiency of the 
     affiliated island; and
       (II) the increased use by the affiliated island of 
     indigenous clean-energy resources;

       (ii) the identification and implementation of the most 
     cost-effective strategies and projects to reduce the 
     dependence of the affiliated island on fossil fuels;
       (iii) the promotion of education and training activities to 
     improve the capacity of the local utilities of the affiliated 
     island, and the government of the affiliated island, as 
     appropriate, to plan for, maintain, and operate the energy 
     infrastructure of the affiliated island through the use of 
     local or regional institutions, as appropriate;
       (iv) the coordination of the activities described in clause 
     (iii) to leverage the expertise and resources of 
     international entities, the Department of Energy, the 
     Department of the Interior, and the regional utilities of the 
     affiliated island;
       (v) the identification, and development, as appropriate, of 
     research-based and private-public, partnership approaches to 
     implement the Action Plan; and
       (vi) any other component that the Secretary determines to 
     be necessary to reduce successfully the use by each 
     affiliated island of fossil fuels.
       (2) Reports to secretary.--Not later than 1 year after the 
     date on which the Secretary establishes the team and 
     biennially thereafter, the team shall submit to the Secretary 
     a report that contains a description of the progress of each 
     affiliated island in--
       (A) implementing the Action Plan of the affiliated island 
     developed under paragraph (1)(A); and
       (B) reducing the reliance of the affiliated island on 
     fossil fuels.
       (d) Use of Regional Utility Organizations.--To provide 
     expertise to affiliated islands to assist the affiliated 
     islands in meeting the purposes of this section, the 
     Secretary shall consider--
       (1) including regional utility organizations in the 
     establishment of the team; and
       (2) providing assistance through regional utility 
     organizations.
       (e) Annual Reports to Congress.--Not later than 30 days 
     after the date on which the Secretary receives a report 
     submitted by the team under subsection (c)(2), the Secretary 
     shall submit to the appropriate committees of Congress a 
     report that contains a summary of the report of the team.
       (f) Authorization of Appropriations.--There are authorized 
     to be appropriated such sums as are necessary to carry out 
     this section.

     SEC. 274. PRODUCT CARBON DISCLOSURE PROGRAM.

       (a) EPA Study.--The Administrator shall conduct a study to 
     determine the feasibility of establishing a national program 
     for measuring, reporting, publicly disclosing, and labeling 
     products or materials sold in the United States for their 
     carbon content, and shall, not later than 18 months after the 
     date of enactment of this Act, transmit a report to Congress 
     which shall include the following:
       (1) A determination of whether a national product carbon 
     disclosure program and labeling program would be effective in 
     achieving the intended goals of achieving greenhouse gas 
     reductions and an examination of existing programs globally 
     and their strengths and weaknesses.
       (2) Criteria for identifying and prioritizing sectors and 
     products and processes that should be covered in such program 
     or programs.
       (3) An identification of products, processes, or sectors 
     whose inclusion could have a substantial carbon impact 
     (prioritizing industrial products such as iron and steel, 
     aluminum, cement, chemicals, and paper products, and also 
     including food, beverage, hygiene, cleaning, household 
     cleaners, construction, metals, clothing, semiconductor, and 
     consumer electronics).
       (4) Suggested methodology and protocols for measuring the 
     carbon content of the products across the entire carbon 
     lifecycle of such products for use in a carbon disclosure 
     program and labeling program.
       (5) A review of existing greenhouse gas product accounting 
     standards, methodologies, and practices including the 
     Greenhouse Gas Protocol, ISO 14040/44, ISO 14067, and 
     Publically Available Specification 2050, and including a 
     review of the strengths and weaknesses of each.
       (6) A survey of secondary databases including the 
     Manufacturing Energy Consumption Survey and evaluate the 
     quality of data for use in a product carbon disclosure 
     program and product carbon labeling program and an 
     identification of gaps in the data relative to the potential 
     purposes of a national product carbon disclosure program and 
     product carbon labeling program and development of 
     recommendations for addressing these data gaps.
       (7) An assessment of the utility of comparing products and 
     the appropriateness of product carbon standards.
       (8) An evaluation of the information needed on a label for 
     clear and accurate communication, including what pieces of 
     quantitative and qualitative information needs to be 
     disclosed.
       (9) An evaluation of the appropriate boundaries of the 
     carbon lifecycle analysis for different sectors and products.
       (10) An analysis of whether default values should be 
     developed for products whose producer does not participate in 
     the program or does not have data to support a disclosure or 
     label and determine best ways to develop such default values.
       (11) A recommendation of certification and verification 
     options necessary to assure the quality of the information 
     and avoid greenwashing or the use of insubstantial or 
     meaningless environmental claims to promote a product.
       (12) An assessment of options for educating consumers about 
     product carbon content and the product carbon disclosure 
     program and product carbon labeling program.
       (13) An analysis of the costs and timelines associated with 
     establishing a national product carbon disclosure program and 
     product carbon labeling program, including options for a 
     phased approach. Costs should include those for businesses 
     associated with the measurement of carbon footprints and 
     those associated with creating a product carbon label and 
     managing and operating a product carbon labeling program, and 
     options for minimizing these costs.
       (14) An evaluation of incentives (such as financial 
     incentives, brand reputation, and brand loyalty) to determine 
     whether reductions in emissions can be accelerated through 
     encouraging more efficient manufacturing or by encouraging 
     preferences for lower-emissions products to substitute for 
     higher-emissions products whose level of performance is no 
     better.
       (b) Development of National Carbon Disclosure Program.--
     Upon conclusion of the study, and not more than 36 months 
     after the date of enactment of this Act, the Administrator 
     shall establish a national product carbon disclosure program, 
     participation in which shall be voluntary, and which may 
     involve a product carbon label with broad applicability to 
     the wholesale and consumer markets to enable and encourage 
     knowledge about carbon content by producers and consumers and 
     to inform efforts to reduce energy consumption (carbon 
     dioxide equivalent emissions) nationwide. In developing such 
     a program, the Administrator shall--
       (1) consider the results of the study conducted under 
     subsection (a);
       (2) consider existing and planned programs and proposals 
     and measurement standards (including the Publicly Available 
     Specification 2050, standards to be developed by the World 
     Resource Institute/World Business Council for Sustainable 
     Development, the International Standards Organization, and 
     the bill AB19 pending in the California legislature);
       (3) consider the compatibility of a national product carbon 
     disclosure program with existing programs;
       (4) utilize incentives and other means to spur the adoption 
     of product carbon disclosure and product carbon labeling;
       (5) develop protocols and parameters for a product carbon 
     disclosure program, including a methodology and formula for 
     assessing, verifying, and potentially labeling a product's 
     greenhouse gas content, and for data quality requirements to 
     allow for product comparison;
       (6) create a means to--
       (A) document best practices;
       (B) ensure clarity and consistency;
       (C) work with suppliers, manufacturers, and retailers to 
     encourage participation;
       (D) ensure that protocols are consistent and comparable 
     across like products; and
       (E) evaluate the effectiveness of the program;
       (7) make publicly available information on product carbon 
     content to ensure transparency;
       (8) provide for public outreach, including a consumer 
     education program to increase awareness;
       (9) develop training and education programs to help 
     businesses learn how to measure and communicate their carbon 
     footprint and easy tools and templates for businesses to use 
     to reduce cost and time to measure their products' carbon 
     lifecycle;
       (10) consult with the Secretary of Energy, the Secretary of 
     Commerce, the Federal

[[Page H7532]]

     Trade Commission, and other Federal agencies, as necessary;
       (11) gather input from stakeholders through consultations, 
     public workshops or hearings with representatives of consumer 
     product manufacturers, consumer groups, and environmental 
     groups;
       (12) utilize systems for verification and product 
     certification that will ensure that claims manufacturers make 
     about their products are valid;
       (13) create a process for reviewing the accuracy of product 
     carbon label information and protecting the product carbon 
     label in the case of a change in the product's energy source, 
     supply chain, ingredients, or other factors, and specify the 
     frequency to which data should be updated; and
       (14) develop a standardized, easily understandable carbon 
     label, if appropriate, and create a process for responding to 
     inaccuracies and misuses of such a label.
       (c) Report to Congress.--Not later than 5 years after the 
     program is established pursuant to subsection (b), the 
     Administrator shall report to Congress on the effectiveness 
     and impact of the program, the level of voluntary 
     participation, and any recommendations for additional 
     measures.
       (d) Definitions.--As used in this section--
       (1) the term ``carbon content'' means the amount of 
     greenhouse gas emissions and their warming impact on the 
     atmosphere expressed in carbon dioxide equivalent associated 
     with a product's value chain;
       (2) the term ``carbon footprint'' means the level of 
     greenhouse gas emissions produced by a particular activity, 
     service, or entity; and
       (3) the term ``carbon lifecycle'' means the greenhouse gas 
     emissions that are released as part of the processes of 
     creating, producing, processing or manufacturing, modifying, 
     transporting, distributing, storing, using, recycling, or 
     disposing of goods and services.
       (e) Authorization of Appropriations.--There is authorized 
     to be appropriated to the Administrator $5,000,000 for the 
     study required by subsection (a) and $25,000,000 for each of 
     fiscal years 2010 through 2025 for the program required under 
     subsection (b).

     SEC. 275. INDUSTRIAL ENERGY EFFICIENCY EDUCATION AND TRAINING 
                   INITIATIVE.

       (a) In General.--The Secretary of Energy shall carry out a 
     national education and awareness program for the purpose of 
     informing building, facility, and industrial plant owners and 
     managers and decisionmakers, government leaders, and industry 
     leaders about the large energy-saving potential of greater 
     use of mechanical insulation, and other benefits.
       (b) Purpose and Goals.--
       (1) Purpose.--The purpose of the initiative shall be to 
     increase the energy efficiency of the commercial and 
     industrial sectors through an ongoing program that will 
     include--
       (A) education and training sessions;
       (B) Web-based information; and
       (C) advertising.
       (2) Goals.--The goals of the initiative shall be to--
       (A) educate and motivate commercial building owners and 
     industrial facility managers to utilize mechanical insulation 
     in new and existing facilities;
       (B) preserve and create jobs while reducing energy and 
     greenhouse gas emissions;
       (C) create a safer working environment and make businesses 
     more competitive in a global economy; and
       (D) motivate and empower the industry to make better use of 
     mechanical insulation through awareness, education, and 
     training.
       (c) Report.--Not later than July 1, 2013, the Secretary 
     shall submit to Congress a report describing the extent by 
     which the initiative has been enacted and the actual and 
     projected effectiveness of the program under this section, 
     including the energy efficiency, greenhouse gas emissions 
     reductions, cost savings, and safety benefits at 
     manufacturing facilities, power plants, refineries, 
     hospitals, universities, government buildings, and other 
     commercial and industrial locations.
       (d) Authorization of Appropriations.--There are authorized 
     to be appropriated $3,500,000 for each of fiscal years 2010 
     through 2014 to carry out this section.   The Secretary may 
     enter into a cooperative agreement, including grant funding, 
     with an industry association and union working 
     collaboratively and having expertise on the installation, 
     maintenance, measure of efficiencies and standards, and 
     certification of mechanical insulation in buildings and 
     facilities.
       (e) Termination of Authority.--The program carried out 
     under this section shall terminate on December 31, 2014.

     SEC. 276. SENSE OF CONGRESS.

       It is the sense of Congress that the United States should--
       (1) continue to actively promote, within the International 
     Civil Aviation Organization, the development of a global 
     framework for the regulation of greenhouse gas emissions from 
     civil aircraft that recognizes the uniquely international 
     nature of the industry and treats commercial aviation 
     industries in all countries fairly; and
       (2) work with foreign governments towards a global 
     agreement that reconciles foreign carbon emissions reduction 
     programs to minimize duplicative requirements and avoids 
     unnecessary complication for the aviation industry, while 
     still achieving the environmental goals.

     Subtitle H--Green Resources for Energy Efficient Neighborhoods

     SEC. 281. SHORT TITLE.

       This subtitle may be cited as the ``Green Resources for 
     Energy Efficient Neighborhoods Act of 2009'' or the ``GREEN 
     Act of 2009''.

     SEC. 282. DEFINITIONS.

       For purposes of this subtitle, the following definitions 
     shall apply:
       (1) Green building standards.--The term ``green building 
     standards'' means standards to require use of sustainable 
     design principles to reduce the use of nonrenewable 
     resources, encourage energy-efficient construction and 
     rehabilitation and the use of renewable energy resources, 
     minimize the impact of development on the environment, and 
     improve indoor air quality.
       (2) HUD.--The term ``HUD'' means the Department of Housing 
     and Urban Development.
       (3) HUD assistance.--The term ``HUD assistance'' means 
     financial assistance that is awarded, competitively or 
     noncompetitively, allocated by formula, or provided by HUD 
     through loan insurance or guarantee.
       (4) Nonresidential structure.--The term ``nonresidential 
     structures'' means only nonresidential structures that are 
     appurtenant to single-family or multifamily housing 
     residential structures, or those that are funded by the 
     Secretary of Housing and Urban Development through the HUD 
     Community Development Block Grant program.
       (5) Secretary.--The term ``Secretary'', unless otherwise 
     specified, means the Secretary of Housing and Urban 
     Development.

     SEC. 283. IMPLEMENTATION OF ENERGY EFFICIENCY PARTICIPATION 
                   INCENTIVES FOR HUD PROGRAMS.

       (a) In General.--Not later than 180 days after the date of 
     the enactment of this Act, the Secretary shall issue such 
     regulations as may be necessary to establish annual energy 
     efficiency participation incentives to encourage participants 
     in programs administered by the Secretary, including 
     recipients under programs for which HUD assistance is 
     provided, to achieve substantial improvements in energy 
     efficiency.
       (b) Requirement for Appropriation of Funds.--The 
     requirement under subsection (a) for the Secretary to provide 
     annual energy efficiency participation incentives pursuant to 
     the provisions of this subtitle shall be subject to the 
     annual appropriation of necessary funds.

     SEC. 284. BASIC HUD ENERGY EFFICIENCY STANDARDS AND STANDARDS 
                   FOR ADDITIONAL CREDIT.

       (a) Basic HUD Standard.--
       (1) Residential structures.--A residential single-family or 
     multifamily structure shall be considered to comply with the 
     energy efficiency standards under this subsection if--
       (A) the structure complies with an energy efficiency 
     building code that has been certified as in compliance with 
     section 304 of the Energy Conservation and Production Act (42 
     U.S.C. 6833) as amended by section 201 of this Act, or a 
     national energy efficiency building code adopted pursuant to 
     that section;
       (B) the structure complies with the applicable provisions 
     of the American Society of Heating, Refrigerating, and Air-
     Conditioning Engineers Standard 90.1-2007, as such standard 
     or successor standard is in effect for purposes of this 
     section pursuant subsection (c);
       (C) the structure complies with the applicable provisions 
     of the 2009 International Energy Conservation Code, as such 
     standard or successor standard is in effect for purposes of 
     this section pursuant subsection (c);
       (D) in the case only of an existing structure, where 
     determined cost effective, the structure has undergone 
     rehabilitation or improvements, completed after the date of 
     the enactment of this Act, and the energy consumption for the 
     structure has been reduced by at least 20 percent from the 
     previous level of consumption, as determined in accordance 
     with energy audits performed both before and after any 
     rehabilitation or improvements undertaken to reduce such 
     consumption; or
       (E) the structure complies with the applicable provisions 
     of such other energy efficiency requirements, standards, 
     checklists, or ratings systems as the Secretary may adopt and 
     apply by regulation, as may be necessary, for purposes of 
     this section for specific types of residential single-family 
     or multifamily structures or otherwise, except that the 
     Secretary shall make a determination regarding whether to 
     adopt and apply any such requirements, standards, checklists, 
     or rating system for purposes of this section not later than 
     the expiration of the 180-day period beginning upon the date 
     of receipt of any written request, made in such form as the 
     Secretary shall provide, for such adoption and application.

     In addition to compliance with any of subparagraphs (A) 
     through (E), the Secretary shall by regulation require, for 
     any newly constructed residential single-family or 
     multifamily structure to be considered to comply with the 
     energy efficiency standards under this subsection, that the 
     structure have appropriate electrical outlets with the 
     facility and capacity to recharge a standard electric 
     passenger vehicle, including an electric hybrid vehicle, 
     where such vehicle would normally be parked.
       (2) Nonresidential structures.--For purposes of this 
     section, the Secretary shall identify and adopt by 
     regulation, as may be necessary, energy efficiency 
     requirements,

[[Page H7533]]

     standards, checklists, or rating systems applicable to 
     nonresidential structures that are constructed or 
     rehabilitated with HUD assistance. A nonresidential structure 
     shall be considered to comply with the energy efficiency 
     standards under this subsection if the structure complies 
     with the applicable provisions of any such energy efficiency 
     requirements, standards, checklist, or rating systems 
     identified and adopted by the Secretary pursuant to this 
     paragraph, as such standards are in effect for purposes of 
     this section pursuant to subsection (c).
       (3) Effect.--Nothing in this subsection may be construed to 
     require any structure to comply with any standard established 
     or adopted pursuant to this subsection, or identified in this 
     subsection, or to provide any benefit or credit under any 
     Federal program for any structure that complies with any such 
     standard, except to the extent that--
       (A) any provision of law other than this subsection 
     provides a benefit or credit under a Federal program for 
     compliance with a standard established or adopted pursuant to 
     this subsection, or identified in this subsection; or
       (B) the Secretary specifically provides pursuant to 
     subsection (c) for the applicability of such standard.
       (b) Enhanced Energy Efficiency Standards for Purposes of 
     Providing Additional Credit Under Certain Federally Assisted 
     Housing Programs.--
       (1) Purpose and effect.--
       (A) Purpose.--The purpose of this subsection is to 
     establish energy efficiency and conservation standards and 
     green building standards that--
       (i) provide for greater energy efficiency and conservation 
     in structures than is required for compliance with the energy 
     efficiency standards under subsection (a) and then in effect;
       (ii) provide for green and sustainable building standards 
     not required by such standards; and
       (iii) can be used in connection with Federal housing, 
     housing finance, and development programs to provide 
     incentives for greater energy efficiency and conservation and 
     for green and sustainable building methods, elements, 
     practices, and materials.
       (B) Effect.--Nothing in this subsection may be construed to 
     require any structure to comply with any standard established 
     pursuant to this subsection or to provide any benefit or 
     credit under any Federal program for any structure, except to 
     the extent that any provision of law other than this 
     subsection provides a benefit or credit under a Federal 
     program for compliance with a standard established pursuant 
     to this subsection.
       (2) Compliance.--A residential or nonresidential structure 
     shall be considered to comply with the enhanced energy 
     efficiency and conservation standards or the green building 
     standards under this subsection, to the extent that such 
     structure complies with the applicable provisions of the 
     standards under paragraph (3) or (4), respectively (as such 
     standards are in effect for purposes of this section, 
     pursuant to paragraph (7)), in a manner that is not required 
     for compliance with the energy efficiency standards under 
     subsection (a) then in effect and subject to the Secretary's 
     determination of which standards are applicable to which 
     structures.
       (3) Energy efficiency and conservation standards.--The 
     energy efficiency and conservation standards under this 
     paragraph are as follows:
       (A) Residential structures.--With respect to residential 
     structures:
       (i) New construction.--For new construction, the Energy 
     Star standards established by the Environmental Protection 
     Agency, as such standards are in effect for purposes of this 
     subsection pursuant to paragraph (7);
       (ii) Existing structures.--For existing structures, a 
     reduction in energy consumption from the previous level of 
     consumption for the structure, as determined in accordance 
     with energy audits performed both before and after any 
     rehabilitation or improvements undertaken to reduce such 
     consumption, that exceeds the reduction necessary for 
     compliance with the energy efficiency standards under 
     subsection (a) then in effect and applicable to existing 
     structures.
       (B) Nonresidential structures.--With respect to 
     nonresidential structures, such energy efficiency and 
     conservation requirements, standards, checklists, or rating 
     systems for nonresidential structures as the Secretary shall 
     identify and adopt by regulation, as may be necessary, for 
     purposes of this paragraph.
       (4) Green building standards.--The green building standards 
     under this paragraph are as follows:
       (A) The national Green Communities criteria checklist for 
     residential construction that provides criteria for the 
     design, development, and operation of affordable housing, as 
     such checklist or successor checklist is in effect for 
     purposes of this section pursuant to paragraph (7).
       (B) The gold certification level for the LEED for New 
     Construction rating system, the LEED for Homes rating system, 
     the LEED for Core and Shell rating system, as applicable, as 
     such systems or successor systems are in effect for purposes 
     of this section pursuant to paragraph (7).
       (C) The Green Globes assessment and rating system of the 
     Green Buildings Initiative.
       (D) For manufactured housing, energy star rating with 
     respect to fixtures, appliances, and equipment in such 
     housing, as such standard or successor standard is in effect 
     for purposes of this section pursuant to paragraph (7).
       (E) The National Green Building Standard.
       (F) Any other requirements, standards, checklists, or 
     rating systems for green building or sustainability as the 
     Secretary may identify and adopt by regulation, as may be 
     necessary for purposes of this paragraph, except that the 
     Secretary shall make a determination regarding whether to 
     adopt and apply any such requirements, standards, checklist, 
     or rating system for purposes of this section not later than 
     the expiration of the 180-day period beginning upon date of 
     receipt of any written request, made in such form as the 
     Secretary shall provide, for such adoption and application.
       (5) Green building.--For purposes of this subsection, the 
     term ``green building'' means, with respect to standards for 
     structures, standards to require use of sustainable design 
     principles to reduce the use of nonrenewable resources, 
     minimize the impact of development on the environment, and to 
     improve indoor air quality.
       (6) Energy audits.--The Secretary shall establish standards 
     and requirements for energy audits for purposes of paragraph 
     (3)(A)(ii) and, in establishing such standards, may consult 
     with any advisory committees established pursuant to section 
     285(c)(2) of this subtitle.
       (7) Applicability and updating of standards.--
       (A) Applicability.--Except as provided in subparagraph (B), 
     the requirements, standards, checklists, and rating systems 
     referred to in this subsection that are in effect for 
     purposes of this subsection are such requirements, standards, 
     checklists, and systems are as in existence upon the date of 
     the enactment of this Act.
       (B) Updating.--For purposes of this section, the Secretary 
     may adopt and apply by regulation, as may be necessary, 
     future amendments and supplements to, and editions of, the 
     requirements, standards, checklists, and rating systems 
     referred to in this subsection, including applicable energy 
     efficiency building codes that are certified as in compliance 
     with section 304 of the Energy Conservation and Production 
     Act (42 U.S.C. 6833) as amended by section 201 of this Act, 
     or national energy efficiency building codes adopted pursuant 
     to that section.
       (c) Authority of Secretary To Apply Standards to Federally 
     Assisted Housing and Programs.--
       (1) HUD housing and programs.--The Secretary of Housing and 
     Urban Development may, by regulation, provide for the 
     applicability of the energy efficiency standards under 
     subsection (a) or the enhanced energy efficiency and 
     conservation standards and green building standards under 
     subsection (b), or both, with respect to any covered 
     federally assisted housing described in paragraph (3)(A) or 
     any HUD assistance, subject to minimum Federal codes or 
     standards then in effect.
       (2) Rural housing.--The Secretary of Agriculture may, by 
     regulation, provide for the applicability of the energy 
     efficiency standards under subsection (a) or the enhanced 
     energy efficiency and conservation standards and green 
     building standards under subsection (b), or both, with 
     respect to any covered federally assisted housing described 
     in paragraph (3)(B) or any assistance provided with respect 
     to rural housing by the Rural Housing Service of the 
     Department of Agriculture, subject to minimum Federal codes 
     or standards then in effect.
       (3) Covered federally assisted housing.--For purposes of 
     this subsection, the term ``covered federally assisted 
     housing'' means--
       (A) any residential or nonresidential structure for which 
     any HUD assistance is provided; and
       (B) any new construction of single-family housing (other 
     than manufactured homes) subject to mortgages insured, 
     guaranteed, or made by the Secretary of Agriculture under 
     title V of the Housing Act of 1949 (42 U.S.C. 1471 et seq.).

     SEC. 285. ENERGY EFFICIENCY AND CONSERVATION DEMONSTRATION 
                   PROGRAM FOR MULTIFAMILY HOUSING PROJECTS 
                   ASSISTED WITH PROJECT-BASED RENTAL ASSISTANCE.

       (a) Authority.--For multifamily housing projects for which 
     project-based rental assistance is provided under a covered 
     multifamily assistance program, the Secretary shall, subject 
     to the availability of amounts provided in advance in 
     appropriation Acts, carry out a program to demonstrate the 
     effectiveness of funding a portion of the costs of meeting 
     the enhanced energy efficiency standards under section 
     284(b). At the discretion of the Secretary, the demonstration 
     program may include incentives for housing that is assisted 
     with Indian housing block grants provided pursuant to the 
     Native American Housing Assistance and Self-Determination Act 
     of 1996, but only to the extent that such inclusion does not 
     violate such Act, its regulations, and the goal of such Act 
     of tribal self-determination.
       (b) Goals.--The demonstration program under this section 
     shall be carried out in a manner that--
       (1) protects the financial interests of the Federal 
     Government;
       (2) reduces the proportion of funds provided by the Federal 
     Government and by owners and residents of multifamily housing 
     projects that are used for costs of utilities for the 
     projects;

[[Page H7534]]

       (3) encourages energy efficiency and conservation by owners 
     and residents of multifamily housing projects and 
     installation of renewable energy improvements, such as 
     improvements providing for use of solar, wind, geothermal, or 
     biomass energy sources;
       (4) creates incentives for project owners to carry out such 
     energy efficiency renovations and improvements by allowing a 
     portion of the savings in operating costs resulting from such 
     renovations and improvements to be retained by the project 
     owner, notwithstanding otherwise applicable limitations on 
     dividends;
       (5) promotes the installation, in existing residential 
     buildings, of energy-efficient and cost-effective 
     improvements and renewable energy improvements, such as 
     improvements providing for use of solar, wind, geothermal, or 
     biomass energy sources;
       (6) tests the efficacy of a variety of energy efficiency 
     measures for multifamily housing projects of various sizes 
     and in various geographic locations;
       (7) tests methods for addressing the various, and often 
     competing, incentives that impede owners and residents of 
     multifamily housing projects from working together to achieve 
     energy efficiency or conservation; and
       (8) creates a database of energy efficiency and 
     conservation, and renewable energy, techniques, energy-
     savings management practices, and energy efficiency and 
     conservation financing vehicles.
       (c) Approaches.--In carrying out the demonstration program 
     under this section, the Secretary may--
       (1) enter into agreements with the Building America Program 
     of the Department of Energy and other consensus committees 
     under which such programs, partnerships, or committees assume 
     some or all of the functions, obligations, and benefits of 
     the Secretary with respect to energy savings;
       (2) establish advisory committees to advise the Secretary 
     and any such third-party partners on technological and other 
     developments in the area of energy efficiency and the 
     creation of an energy efficiency and conservation credit 
     facility and other financing opportunities, which committees 
     shall include representatives of homebuilders, realtors, 
     architects, nonprofit housing organizations, environmental 
     protection organizations, renewable energy organizations, and 
     advocacy organizations for the elderly and persons with 
     disabilities; any advisory committees established pursuant to 
     this paragraph shall not be subject to the Federal Advisory 
     Committee Act (5 U.S.C. App.);
       (3) approve, for a period not to exceed 10 years, 
     additional adjustments in the maximum monthly rents or 
     additional project rental assistance, or additional Indian 
     housing block grant funds under the Native American Housing 
     Assistance and Self-Determination Act of 1996, as applicable, 
     for dwelling units in multifamily housing projects that are 
     provided project-based rental assistance under a covered 
     multifamily assistance program, in such amounts as may be 
     necessary to amortize a portion of the cost of energy 
     efficiency and conservation measures for such projects;
       (4) develop a competitive process for the award of such 
     additional assistance for multifamily housing projects 
     seeking to implement energy efficiency, renewable energy 
     sources, or conservation measures; and
       (5) waive or modify any existing statutory or regulatory 
     provision that would otherwise impair the implementation or 
     effectiveness of the demonstration program under this 
     section, including provisions relating to methods for rent 
     adjustments, comparability standards, maximum rent schedules, 
     and utility allowances; notwithstanding the preceding 
     provisions of this paragraph, the Secretary may not waive any 
     statutory requirement relating to fair housing, 
     nondiscrimination, labor standards, or the environment, 
     except pursuant to existing authority to waive nonstatutory 
     environmental and other applicable requirements.
       (d) Requirement.--During the 4-year period beginning 12 
     months after the date of the enactment of this Act, the 
     Secretary shall carry out demonstration programs under this 
     section with respect to not fewer than 50,000 dwelling units.
       (e) Selection.--
       (1) Scope.--In order to provide a broad and representative 
     profile for use in designing a program which can become 
     operational and effective nationwide, the Secretary shall 
     carry out the demonstration program under this section with 
     respect to dwelling units located in a wide variety of 
     geographic areas and project types assisted by the various 
     covered multifamily assistance programs and using a variety 
     of energy efficiency and conservation and funding techniques 
     to reflect differences in climate, types of dwelling units 
     and technical and scientific methodologies, and financing 
     options. The Secretary shall ensure that the geographic areas 
     included in the demonstration program include dwelling units 
     on Indian lands (as such term is defined in section 2601 of 
     the Energy Policy Act of 1992 (25 U.S.C. 3501), to the extent 
     that dwelling units on Indian land have the type of 
     residential structures that are the focus of the 
     demonstration program.
       (2) Priority.--The Secretary shall provide priority for 
     selection for participation in the program under this section 
     based on the extent to which, as a result of assistance 
     provided, the project will comply with the energy efficiency 
     standards under subsection (a), (b), or (c) of section 284 of 
     this subtitle.
       (f) Use of Existing Partnerships.--To the extent feasible, 
     the Secretary shall--
       (1) utilize the Partnership for Advancing Technology in 
     Housing of the Department of Housing and Urban Development to 
     assist in carrying out the requirements of this section and 
     to provide education and outreach regarding the demonstration 
     program authorized under this section; and
       (2) consult with the Secretary of Energy, the Administrator 
     of the Environmental Protection Agency, and the Secretary of 
     the Army regarding utilizing the Building America Program of 
     the Department of Energy, the Energy Star Program, and the 
     Army Corps of Engineers, respectively, to determine the 
     manner in which they might assist in carrying out the goals 
     of this section and providing education and outreach 
     regarding the demonstration program authorized under this 
     section.
       (g) Limitation.--No amounts made available under the 
     American Recovery and Reinvestment Act of 2009 (Public Law 
     111-5) may be used to carry out the demonstration program 
     under this section.
       (h) Reports.--
       (1) Annual.--Not later than the expiration of the 2-year 
     beginning upon the date of the enactment of this Act, and for 
     each year thereafter during the term of the demonstration 
     program, the Secretary shall submit a report to the Congress 
     annually that describes and assesses the demonstration 
     program under this section.
       (2) Final.--Not later than 6 months after the expiration of 
     the 4-year period described in subsection (d), the Secretary 
     shall submit a final report to the Congress assessing the 
     demonstration program, which--
       (A) shall assess the potential for expanding the 
     demonstration program on a nationwide basis; and
       (B) shall include descriptions of--
       (i) the size of each multifamily housing project for which 
     assistance was provided under the program;
       (ii) the geographic location of each project assisted, by 
     State and region;
       (iii) the criteria used to select the projects for which 
     assistance is provided under the program;
       (iv) the energy efficiency and conservation measures and 
     financing sources used for each project that is assisted 
     under the program;
       (v) the difference, before and during participation in the 
     demonstration program, in the amount of the monthly 
     assistance payments under the covered multifamily assistance 
     program for each project assisted under the program;
       (vi) the average length of the term of the such assistance 
     provided under the program for a project;
       (vii) the aggregate amount of savings generated by the 
     demonstration program and the amount of savings expected to 
     be generated by the program over time on a per-unit and 
     aggregate program basis;
       (viii) the functions performed in connection with the 
     implementation of the demonstration program that were 
     transferred or contracted out to any third parties;
       (ix) an evaluation of the overall successes and failures of 
     the demonstration program; and
       (x) recommendations for any actions to be taken as a result 
     of the such successes and failures.
       (3) Contents.--Each annual report pursuant to paragraph (1) 
     and the final report pursuant to paragraph (2) shall 
     include--
       (A) a description of the status of each multifamily housing 
     project selected for participation in the demonstration 
     program under this section; and
       (B) findings from the program and recommendations for any 
     legislative actions.
       (i) Covered Multifamily Assistance Program.--For purposes 
     of this section, the term ``covered multifamily assistance 
     program'' means--
       (1) the program under section 8 of the United States 
     Housing Act of 1937 (42 U.S.C. 1437f) for project-based 
     rental assistance;
       (2) the program under section 202 of the Housing Act of 
     1959 (12 U.S.C. 1701q) for assistance for supportive housing 
     for the elderly;
       (3) the program under section 811 of the Cranston-Gonzalez 
     National Affordable Housing Act (42 U.S.C. 8013) for 
     supportive housing for persons with disabilities;
       (4) the program under section 236 of the National Housing 
     Act (12 U.S.C. 1715z-1 for assistance for rental housing 
     projects;
       (5) the program under section 515 of the Housing Act of 
     1949 (42 U.S.C. 1485) for rural rental housing; and
       (6) the program for assistance under the Native American 
     Housing Assistance and Self-Determination Act of 1996 (25 
     U.S.C. 4111).
       (j) Authorization of Appropriations.--There is authorized 
     to be appropriated to carry out this section, including 
     providing rent adjustments, additional project rental 
     assistance, and incentives, $50,000,000 for each fiscal year 
     in which the demonstration program under this section is 
     carried out.
       (k) Regulations.--Not later than the expiration of the 180-
     day period beginning on the date of the enactment of this 
     Act, the Secretary shall issue any regulations necessary to 
     carry out this section.

     SEC. 286. ADDITIONAL CREDIT FOR FANNIE MAE AND FREDDIE MAC 
                   HOUSING GOALS FOR ENERGY-EFFICIENT AND 
                   LOCATION-EFFICIENT MORTGAGES.

       Section 1336(a) of the Housing and Community Development 
     Act of 1992 (12 U.S.C. 4566(a)), as amended by the Federal 
     Housing

[[Page H7535]]

     Finance Regulatory Reform Act of 2008 (Public Law 110-289; 
     122 Stat. 2654), is amended--
       (1) in paragraph (2), by striking ``paragraph (5)'' and 
     inserting ``paragraphs (5) and (6)''; and
       (2) by adding at the end the following new paragraph:
       ``(6) Additional credit.--
       ``(A) In general.--In assigning credit toward achievement 
     under this section of the housing goals for mortgage purchase 
     activities of the enterprises, the Director shall assign--
       ``(i) more than 125 percent credit, for any such purchase 
     that both--

       ``(I) complies with the requirements of such goals; and
       ``(II)(aa) supports housing that meets the energy 
     efficiency standards under section 284(a) of the Green 
     Resources for Energy Efficient Neighborhoods Act of 2009; or
       ``(bb) is a location-efficient mortgage, as such term is 
     defined in section 1335(e); and

       ``(ii) credit in addition to credit under clause (i), for 
     any such purchase that both--

       ``(I) complies with the requirements of such goals, and
       ``(II) supports housing that complies with the enhanced 
     energy efficiency and conservation standards, or the green 
     building standards, under section 284(b) of such Act, or 
     both,

     and such additional credit shall be given based on the extent 
     to which the housing supported with such purchases complies 
     with such standards.
       ``(B) Treatment of additional credit.--The availability of 
     additional credit under this paragraph shall not be used to 
     increase any housing goal, subgoal, or target established 
     under this subpart.''.

     SEC. 287. DUTY TO SERVE UNDERSERVED MARKETS FOR ENERGY-
                   EFFICIENT AND LOCATION-EFFICIENT MORTGAGES.

       Section 1335 of Federal Housing Enterprises Financial 
     Safety and Soundness Act of 1992 (12 U.S.C. 4565), as amended 
     by the Federal Housing Finance Regulatory Reform Act of 2008 
     (Public Law 110-289; 122 Stat. 2654), is amended--
       (1) in subsection (a)(1), by adding at the end the 
     following new subparagraph:
       ``(D) Markets for energy-efficient and location-efficient 
     mortgages.--
       ``(i) Duty.--Subject to clause (ii), the enterprise shall 
     develop loan products and flexible underwriting guidelines to 
     facilitate a secondary market for energy-efficient and 
     location-efficient mortgages on housing for very low-, low-, 
     and moderate-income families, and for second and junior 
     mortgages made for purposes of energy efficiency or renewable 
     energy improvements, or both.
       ``(ii) Authority to suspend.--Notwithstanding any other 
     provision of this section, the Director may suspend the 
     applicability of the requirement under clause (i) with 
     respect to an enterprise, for such period as is necessary, if 
     the Director determines that exigent circumstances exist and 
     such suspension is appropriate to ensure the safety and 
     soundness of the portfolio holdings of the enterprise.'';
       (2) by adding at the end the following new subsection:
       ``(e) Definitions.--For purposes of this section, the 
     following definitions shall apply:
       ``(1) Energy-efficient mortgage.--The term `energy-
     efficient mortgage' means a mortgage loan under which the 
     income of the borrower, for purposes of qualification for 
     such loan, is considered to be increased by not less than $1 
     for each $1 of savings projected to be realized by the 
     borrower as a result of cost-effective energy-saving design, 
     construction or improvements (including use of renewable 
     energy sources, such as solar, geothermal, biomass, and wind, 
     super-insulation, energy-saving windows, insulating glass and 
     film, and radiant barrier) for the home for which the loan is 
     made.
       ``(2) Location-efficient mortgage.--The term `location-
     efficient mortgage' means a mortgage loan under which--
       ``(A) the income of the borrower, for purposes of 
     qualification for such loan, is considered to be increased by 
     not less than $1 for each $1 of savings projected to be 
     realized by the borrower because the location of the home for 
     which loan is made will result in decreased transportation 
     costs for the household of the borrower; or
       ``(B) the sum of the principal, interest, taxes, and 
     insurance due under the mortgage loan is decreased by not 
     less than $1 for each $1 of savings projected to be realized 
     by the borrower because the location of the home for which 
     loan is made will result in decreased transportation costs 
     for the household of the borrower.''.

     SEC. 288. CONSIDERATION OF ENERGY EFFICIENCY UNDER FHA 
                   MORTGAGE INSURANCE PROGRAMS AND NATIVE AMERICAN 
                   AND NATIVE HAWAIIAN LOAN GUARANTEE PROGRAMS.

       (a) FHA Mortgage Insurance.--
       (1) Requirement.--Title V of the National Housing Act is 
     amended by adding after section 542 (12 U.S.C. 1735f-20) the 
     following new section:

     ``SEC. 543. CONSIDERATION OF ENERGY EFFICIENCY.

       ``(a) Underwriting Standards.--The Secretary shall 
     establish a method to consider, in its underwriting standards 
     for mortgages on single-family housing meeting the energy 
     efficiency standards under section 284(a) of the Green 
     Resources for Energy Efficient Neighborhoods Act of 2009 that 
     are insured under this Act, the impact that savings on 
     utility costs has on the income of the mortgagor.
       ``(b) Goal.--It is the sense of the Congress that, in 
     carrying out this Act, the Secretary should endeavor to 
     insure mortgages on single-family housing meeting the energy 
     efficiency standards under section 284(a) of the Green 
     Resources for Energy Efficient Neighborhoods Act of 2009 such 
     that at least 50,000 such mortgages are insured during the 
     period beginning upon the date of the enactment of such Act 
     and ending on December 31, 2012.''.
       (2) Reporting on defaults.--Section 540(b) of the National 
     Housing Act (12 U.S.C. 1735f-18(b)) is amended by adding at 
     the end the following new paragraph:
       ``(3) With respect to each collection period that commences 
     after December 31, 2011, the total number of mortgages on 
     single-family housing meeting the energy efficiency standards 
     under section 284(a) of the Green Resources for Energy 
     Efficient Neighborhoods Act of 2009 that are insured by the 
     Secretary during the applicable collection period, the number 
     of defaults and foreclosures occurring on such mortgages 
     during such period, the percentage of the total of such 
     mortgages insured during such period on which defaults and 
     foreclosure occurred, and the rate for such period of 
     defaults and foreclosures on such mortgages compared to the 
     overall rate for such period of defaults and foreclosures on 
     mortgages for single-family housing insured under this Act by 
     the Secretary.''.
       (b) Indian Housing Loan Guarantees.--
       (1) Requirement.--Section 184 of the Housing and Community 
     Development Act of 1992 (12 U.S.C. 1715z-13a) is amended--
       (A) by redesignating subsection (l) as subsection (m); and
       (B) by inserting after subsection (k) the following new 
     subsection:
       ``(l) Consideration of Energy Efficiency.--The Secretary 
     shall establish a method to consider, in its underwriting 
     standards for loans for single-family housing meeting the 
     energy efficiency standards under section 284(a) of the Green 
     Resources for Energy Efficient Neighborhoods Act of 2009 that 
     are guaranteed under this section, the impact that savings on 
     utility costs has on the income of the borrower.''.
       (2) Reporting on defaults.--Section 540(b) of the National 
     Housing Act (12 U.S.C. 1735f-18(b)), as amended by subsection 
     (a)(2) of this section, is further amended by adding at the 
     end the following new paragraph:
       ``(4) With respect to each collection period that commences 
     after December 31, 2011, the total number of loans guaranteed 
     under section 184 of the Housing and Community Development 
     Act of 1992 (12 U.S.C. 1715z-13a) on single-family housing 
     meeting the energy efficiency standards under section 284(a) 
     of the Green Resources for Energy Efficient Neighborhoods Act 
     of 2009 that are guaranteed by the Secretary during the 
     applicable collection period, the number of defaults and 
     foreclosures occurring on such loans during such period, the 
     percentage of the total of such loans guaranteed during such 
     period on which defaults and foreclosure occurred, and the 
     rate for such period of defaults and foreclosures on such 
     loans compared to the overall rate for such period of 
     defaults and foreclosures on loans for single-family housing 
     guaranteed under such section 184 by the Secretary.''.
       (c) Native Hawaiian Housing Loan Guarantees.--
       (1) Requirement.--Section 184A of the Housing and Community 
     Development Act of 1992 (12 U.S.C. 1715z-13b) is amended by 
     inserting after subsection (l) the following new subsection:
       ``(m) Energy-Efficient Housing Requirement.--The Secretary 
     shall establish a method to consider, in its underwriting 
     standards for loans for single-family housing meeting the 
     energy efficiency standards under section 284(a) of the Green 
     Resources for Energy Efficient Neighborhoods Act of 2009 that 
     are guaranteed under this section, the impact that savings on 
     utility costs has on the income of the borrower.''.
       (2) Reporting on defaults.--Section 540(b) of the National 
     Housing Act (12 U.S.C. 1735f-18(b)), as amended by the 
     preceding provisions of this section, is further amended by 
     adding at the end the following new paragraph:
       ``(5) With respect to each collection period that commences 
     after December 31, 2011, the total number of loans guaranteed 
     under section 184A of the Housing and Community Development 
     Act of 1992 (12 U.S.C. 1715z-13b) on single-family housing 
     meeting the energy efficiency standards under section 284(a) 
     of the Green Resources for Energy Efficient Neighborhoods Act 
     of 2009 that are guaranteed by the Secretary during the 
     applicable collection period, the number of defaults and 
     foreclosures occurring on such loans during such period, the 
     percentage of the total of such loans guaranteed during such 
     period on which defaults and foreclosure occurred, and the 
     rate for such period of defaults and foreclosures on such 
     loans compared to the overall rate for such period of 
     defaults and foreclosures on loans for single-family housing 
     guaranteed under such section 184A by the Secretary.''.

     SEC. 289. ENERGY-EFFICIENT MORTGAGES AND LOCATION-EFFICIENT 
                   MORTGAGES EDUCATION AND OUTREACH CAMPAIGN.

       Section 106 of the Energy Policy Act of 1992 (12 U.S.C. 
     1701z-16) is amended by adding at the end the following new 
     subsection:
       ``(g) Education and Outreach Campaign.--
       ``(1) Development of energy- and location-efficient 
     mortgages outreach program.--

[[Page H7536]]

       ``(A) Commission.--The Secretary, in consultation and 
     coordination with the Secretary of Energy, the Secretary of 
     Education, the Secretary of Agriculture, and the 
     Administrator of the Environmental Protection Agency, shall 
     establish a commission to develop and recommend model 
     mortgage products and underwriting guidelines that provide 
     market-based incentives to prospective home buyers, lenders, 
     and sellers to incorporate energy efficiency upgrades and 
     location efficiencies in new mortgage loan transactions.
       ``(B) Report.--Not later than 24 months after the date of 
     the enactment of this Act, the Secretary shall provide a 
     written report to the Congress on the results of work of the 
     commission established pursuant to subparagraph (A) and that 
     identifies model mortgage products and underwriting 
     guidelines that may encourage energy and location efficiency.
       ``(2) Implementation.--After submission of the report under 
     paragraph (1)(B), the Secretary, in consultation and 
     coordination with the Secretary of Energy, the Secretary of 
     Education, and the Administrator of the Environmental 
     Protection Agency, shall carry out a public awareness, 
     education, and outreach campaign based on the findings of the 
     commission established pursuant to paragraph (1) to inform 
     and educate residential lenders and prospective borrowers 
     regarding the availability, benefits, advantages, and terms 
     of energy-efficient mortgages and location-efficient 
     mortgages made available pursuant to this section, energy-
     efficient and location-efficient mortgages that meet the 
     requirements of section 1335 of the Housing and Community 
     Development Act of 1992 (42 U.S.C. 4565), and other 
     mortgages, including mortgages for multifamily housing, that 
     have energy improvement features or location efficiency 
     features and to publicize such availability, benefits, 
     advantages, and terms. Such actions may include entering into 
     a contract with an appropriate entity to publicize and market 
     such mortgages through appropriate media.
       ``(3) Renewable energy home product expos.--The Congress 
     hereby encourages the Secretary of Housing and Urban 
     Development to work with appropriate entities to organize and 
     hold renewable energy expositions that provide an opportunity 
     for the public to view and learn about renewable energy 
     products for the home that are currently on the market.
       ``(4) Authorization of appropriations.--There is authorized 
     to be appropriated to the Secretary to carry out this 
     subsection $5,000,000 for each of fiscal years 2010 through 
     2014.''.

     SEC. 290. COLLECTION OF INFORMATION ON ENERGY-EFFICIENT AND 
                   LOCATION-EFFICIENT MORTGAGES THROUGH HOME 
                   MORTGAGE DISCLOSURE ACT.

       (a) In General.--Section 304(b) of the Home Mortgage 
     Disclosure Act of 1975 (12 U.S.C. 2803(b)) is amended--
       (1) in paragraph (3), by striking ``and'' at the end;
       (2) in paragraph (4), by striking the period at the end and 
     inserting a semicolon; and
       (3) by adding at the end the following new paragraphs:
       ``(5) the number and dollar amount of mortgage loans for 
     single-family housing and for multifamily housing that are 
     energy-efficient mortgages (as such term is defined in 
     section 1335 of Housing and Community Development Act of 
     1992); and
       ``(6) the number and dollar amount of mortgage loans for 
     single-family housing and for multifamily housing that are 
     location-efficient mortgages (as such term is defined in 
     section 1335 of Housing and Community Development Act of 
     1992).''.
       (b) Applicability.--The amendment made by subsection (a) 
     shall apply with respect to the first calendar year that 
     begins after the expiration of the 30-day period beginning on 
     the date of the enactment of this Act.

     SEC. 291. ENSURING AVAILABILITY OF HOMEOWNERS INSURANCE FOR 
                   HOMES NOT CONNECTED TO ELECTRICITY GRID.

       (a) Congressional Intent.--The Congress intends that--
       (1) consumers shall not be denied homeowners insurance for 
     a dwelling (as such term is defined in subsection (c)) based 
     solely on the fact that the dwelling is not connected to or 
     able to receive electricity service from any wholesale or 
     retail electric power provider;
       (2) States should ensure that consumers are able to obtain 
     homeowners insurance for such dwellings;
       (3) States should support insurers that develop voluntary 
     incentives to provide such insurance; and
       (4) States may not prohibit insurers from offering a 
     homeowners insurance product specifically designed for such 
     dwellings.
       (b) Insuring Homes and Related Property in Indian Areas.--
     Notwithstanding any other provision of law, dwellings located 
     in Indian areas (as such term is defined in section 4 of the 
     Native American Housing Assistance and Self-Determination Act 
     of 1996 (25 U.S.C. 4103)) and constructed or maintained using 
     assistance, loan guarantees, or other authority under the 
     Native American Housing Assistance and Self-Determination Act 
     of 1996 may be insured by any tribally owned self-insurance 
     risk pool approved by the Secretary of Housing and Urban 
     Development.
       (c) Dwelling.--For purposes of this section, the term 
     ``dwelling'' means a residential structure that--
       (1) consists of one to four dwelling units;
       (2) is provided electricity from renewable energy sources; 
     and
       (3) is not connected to any wholesale or retail electrical 
     power grid.

     SEC. 292. MORTGAGE INCENTIVES FOR ENERGY-EFFICIENT 
                   MULTIFAMILY HOUSING.

       (a) In General.--The Secretary of Housing and Urban 
     Development shall establish incentives for increasing the 
     energy efficiency of multifamily housing that is subject to a 
     mortgage to be insured under title II of the National Housing 
     Act (12 U.S.C. 1707 et seq.) so that the housing meets the 
     energy efficiency standards under section 284(a) of this 
     subtitle and incentives to encourage compliance of such 
     housing with the energy efficiency and conservation 
     standards, and the green building standards, under section 
     284(b) of this subtitle, to the extent that such incentives 
     are based on the impact that savings on utility costs has on 
     the operating costs of the housing, as determined by the 
     Secretary.
       (b) Incentives.--Such incentives may include, for any such 
     multifamily housing that complies with the energy efficiency 
     standards under section 284(a)--
       (1) providing a discount on the chargeable premiums for the 
     mortgage insurance for such housing from the amount otherwise 
     chargeable for such mortgage insurance;
       (2) allowing mortgages to exceed the dollar amount limits 
     otherwise applicable under law to the extent such additional 
     amounts are used to finance improvements or measures designed 
     to meet the standards referred to in subsection (a); and
       (3) reducing the amount that the owner of such multifamily 
     housing meeting the standards referred to in subsection (a) 
     is required to contribute.

     SEC. 293. ENERGY-EFFICIENT CERTIFICATIONS FOR MANUFACTURED 
                   HOUSING WITH MORTGAGES.

       Section 526 of the National Housing Act (12 U.S.C. 1735f-
     4(a)) is amended--
       (1) in subsection (a)--
       (A) by striking ``, other than manufactured homes,'' each 
     place such term appears;
       (B) by inserting after the period at the end the following: 
     ``The energy performance requirements developed and 
     established by the Secretary under this section for 
     manufactured homes shall require energy star rating for wall 
     fixtures, appliances, and equipment in such housing.'';
       (C) by inserting ``(1)'' after ``(a)''; and
       (D) by adding at the end the following new paragraphs:
       ``(2) The Secretary shall require, with respect to any 
     single- or multi-family residential housing subject to a 
     mortgage insured under this Act, that any approval or 
     certification of the housing for meeting any energy 
     efficiency or conservation criteria, standards, or 
     requirements pursuant to this title and any approval or 
     certification required pursuant to this title with respect to 
     energy-conserving improvements or any renewable energy 
     sources, such as wind, solar energy geothermal, or biomass, 
     shall be conducted only by an individual certified by a home 
     energy rating system provider who has been accredited to 
     conduct such ratings by the Home Energy Ratings System 
     Council, the Residential Energy Services Network, or such 
     other appropriate national organization, as the Secretary may 
     provide, or by licensed professional architect or engineer. 
     If any organization makes a request to the Secretary for 
     approval to accredit individuals to conduct energy efficiency 
     or conservation ratings, the Secretary shall review and 
     approve or disapprove such request not later than the 
     expiration of the 6-month period beginning upon receipt of 
     such request.
       ``(3) The Secretary shall periodically examine the method 
     used to conduct inspections for compliance with the 
     requirements under this section, analyze various other 
     approaches for conducting such inspections, and review the 
     costs and benefits of the current method compared with other 
     methods.''; and
       (2) in subsection (b), by striking ``, other than a 
     manufactured home,''.

     SEC. 294. ASSISTED HOUSING ENERGY LOAN PILOT PROGRAM.

       (a) Authority.--Not later than the expiration of the 12-
     month period beginning on the date of the enactment of this 
     Act, the Secretary shall develop and implement a pilot 
     program under this section to facilitate the financing of 
     cost-effective capital improvements for covered assisted 
     housing projects to improve the energy efficiency and 
     conservation of such projects.
       (b) Loans.--The pilot program under this section shall 
     involve not less than three and not more than five lenders, 
     and shall provide for a privately financed loan to be made 
     for a covered assisted housing project, which shall--
       (1) finance capital improvements for the project that meet 
     such requirements as the Secretary shall establish, and may 
     involve contracts with third parties to perform such capital 
     improvements, including the design of such improvements by 
     licensed professional architects or engineers;
       (2) have a term to maturity of not more than 20 years, 
     which shall be based upon the duration necessary to realize 
     cost savings sufficient to repay the loan;
       (3) be secured by a mortgage subordinate to the mortgage 
     for the project that is insured under the National Housing 
     Act; and
       (4) provide for a reduction in the remaining principal 
     obligation under the loan based on

[[Page H7537]]

     the actual resulting cost savings realized from the capital 
     improvements financed with the loan.
       (c) Underwriting Standards.--The Secretary shall establish 
     underwriting requirements for loans made under the pilot 
     program under this section, which shall--
       (1) require the cost savings projected to be realized from 
     the capital improvements financed with the loan, during the 
     term of the loan, to exceed the costs of repaying the loan;
       (2) allow the designer or contractor involved in designing 
     capital improvements to be financed with a loan under the 
     program to carry out such capital improvements; and
       (3) include such energy, audit, property, financial, 
     ownership, and approval requirements as the Secretary 
     considers appropriate.
       (d) Treatment of Savings.--The pilot program under this 
     section shall provide that the project owner shall receive 
     the full financial benefit from any reduction in the cost of 
     utilities resulting from capital improvements financed with a 
     loan made under the program.
       (e) Covered Assisted Housing Projects.--For purposes of 
     this section, the term ``covered assisted housing project'' 
     means a housing project that--
       (1) is financed by a loan or mortgage that is--
       (A) insured by the Secretary under--
       (i) subsection (d)(3) of section 221 of the National 
     Housing Act (12 U.S.C. 1715l), and bears interest at a rate 
     determined under the proviso of section 221(d)(5) of such 
     Act; or
       (ii) subsection (d)(4) of such section 221.
       (B) insured or assisted under section 236 of the National 
     Housing Act (12 U.S.C. 1715z-1);
       (2) at the time a loan under this section is made, is 
     provided project-based rental assistance under section 8 of 
     the United States Housing Act of 1937 (42 U.S.C. 1437f) for 
     50 percent or more of the dwelling units in the project; and
       (3) is not a housing project owned or held by the 
     Secretary, or subject to a mortgage held by the Secretary.

     SEC. 295. MAKING IT GREEN.

       (a) Partnerships With Tree-Planting Organizations.--The 
     Secretary shall establish and provide incentives for 
     developers of housing for which any HUD financial assistance, 
     as determined by the Secretary, is provided for development, 
     maintenance, operation, or other costs, to enter into 
     agreements and partnerships with tree-planting organizations, 
     nurseries, and landscapers to certify that trees, shrubs, 
     grasses, and other plants are planted in the proper manner, 
     are provided adequate maintenance, and survive for at least 3 
     years after planting or are replaced. The financial 
     assistance determined by the Secretary as eligible under this 
     section shall take into consideration such factors as cost 
     effectiveness and affordability.
       (b) Making It Green Plan.--In the case of any new or 
     substantially rehabilitated housing for which HUD financial 
     assistance, as determined in accordance with subsection (a), 
     is provided by the Secretary for the development, 
     construction, maintenance, rehabilitation, improvement, 
     operation, or costs of the housing, including financial 
     assistance provided through the Community Development Block 
     Grant program under title I of the Housing and Community 
     Development Act of 1974 (42 U.S.C. 5301 et seq.), the 
     Secretary shall require the development of a plan that 
     provides for--
       (1) in the case of new construction and improvements, 
     siting of such housing and improvements in a manner that 
     provides for energy efficiency and conservation to the extent 
     feasible, taking into consideration location and project 
     type;
       (2) minimization of the effects of construction, 
     rehabilitation, or other development on the condition of 
     existing trees;
       (3) selection and installation of indigenous trees, shrubs, 
     grasses, and other plants based upon applicable design 
     guidelines and standards of the International Society for 
     Arboriculture;
       (4) post-planting care and maintenance of the landscaping 
     relating to or affected by the housing in accordance with 
     best management practices; and
       (5) establishment of a goal for minimum greenspace or tree 
     canopy cover for the housing site for which such financial 
     assistance is provided, including guidelines and timetables 
     within which to achieve compliance with such minimum 
     requirements.
       (c) Partnerships.--In carrying out this section, the 
     Secretary is encouraged to consult, as appropriate, with 
     national organizations dedicated to providing housing 
     assistance and related services to low-income families, such 
     as the Alliance for Community Trees and its affiliates, the 
     American Nursery and Landscape Association, the American 
     Society of Landscape Architects, and the National Arbor Day 
     Foundation.

     SEC. 296. RESIDENTIAL ENERGY EFFICIENCY BLOCK GRANT PROGRAM.

       Title I of the Housing and Community Development Act of 
     1974 (42 U.S.C. 5301 et seq.) is amended by adding at the end 
     the following new section:

     ``SEC. 123. RESIDENTIAL ENERGY EFFICIENCY BLOCK GRANT 
                   PROGRAM.

       ``(a) In General.--To the extent amounts are made available 
     for grants under this section, the Secretary shall make 
     grants under this section to States, metropolitan cities and 
     urban counties, Indian tribes, and insular areas to carry out 
     energy efficiency improvements in new and existing single-
     family and multifamily housing.
       ``(b) Allocations.--
       ``(1) In general.--Of the total amount made available for 
     each fiscal year for grants under this section that remains 
     after reserving amounts pursuant to paragraph (2), the 
     Secretary shall allocate for insular areas, for metropolitan 
     cities and urban counties, and for States, an amount that 
     bears the same ratio to such total amount as the amount 
     allocated for such fiscal year under section 106 for Indian 
     tribes, for insular areas, for metropolitan cities and urban 
     counties, and for States, respectively, bears to the total 
     amount made available for such fiscal year for grants under 
     section 106.
       ``(2) Set aside for indian tribes.--Of the total amount 
     made available for each fiscal year for grants under this 
     section, the Secretary shall allocate not less than 1 percent 
     to Indian tribes.
       ``(c) Grant Amounts.--
       ``(1) Entitlement communities.--From the amounts allocated 
     pursuant to subsection (b) for metropolitan cities and urban 
     counties for each fiscal year, the Secretary shall make a 
     grant for such fiscal year to each metropolitan city and 
     urban county that complies with the requirement under 
     subsection (d), in the amount that bears the same ratio such 
     total amount so allocated as the amount of the grant for such 
     fiscal year under section 106 for such metropolitan city or 
     urban county bears to the aggregate amount of all grants for 
     such fiscal year under section 106 for all metropolitan 
     cities and urban counties.
       ``(2) States.--From the amounts allocated pursuant to 
     subsection (b) for States for each fiscal year, the Secretary 
     shall make a grant for such fiscal year to each State that 
     complies with the requirement under subsection (d), in the 
     amount that bears the same ratio such total amount so 
     allocated as the amount of the grant for such fiscal year 
     under section 106 for such State bears to the aggregate 
     amount of all grants for such fiscal year under section 106 
     for all States. Grant amounts received by a State shall be 
     used only for eligible activities under subsection (e) 
     carried out in nonentitlement areas of the State.
       ``(3) Indian tribes.--From the amounts allocated pursuant 
     to subsection (b) for Indian tribes, the Secretary shall make 
     grants to Indian tribes that comply with the requirement 
     under subsection (d) on the basis of a competition conducted 
     pursuant to specific criteria, as the Secretary shall 
     establish by regulation, for the selection of Indian tribes 
     to receive such amount.
       ``(4) Insular areas.--From the amounts allocated pursuant 
     to subsection (b) for insular areas, the Secretary shall make 
     a grant to each insular area that complies with the 
     requirement under subsection (d) on the basis of the ratio of 
     the population of the insular area to the aggregate 
     population of all insular areas. In determining the 
     distribution of amounts to insular areas, the Secretary may 
     also include other statistical criteria as data become 
     available from the Bureau of Census of the Department of 
     Labor, but only if such criteria are set forth by regulation 
     issued after notice and an opportunity for comment.
       ``(d) Statement of Activities.--
       ``(1) Requirement.--Before receipt the receipt in any 
     fiscal year of a grant under subsection (c) by any grantee, 
     the grantee shall have prepared a final statement of housing 
     energy efficiency objectives and projected use of funds as 
     the Secretary shall require and shall have provided the 
     Secretary with such certifications regarding such objectives 
     and use as the Secretary may require. In the case of 
     metropolitan cities, urban counties, units of general local 
     government, and insular areas receiving grants, the statement 
     of projected use of funds shall consist of proposed housing 
     energy efficiency activities. In the case of States receiving 
     grants, the statement of projected use of funds shall consist 
     of the method by which the States will distribute funds to 
     units of general local government.
       ``(2) Public participation.--The Secretary may establish 
     requirements to ensure the public availability of information 
     regarding projected use of grant amounts and public 
     participation in determining such projected use.
       ``(e) Eligible Activities.--
       ``(1) Requirement.--Amounts from a grant under this section 
     may be used only to carry out activities for single-family or 
     multifamily housing that are designed to improve the energy 
     efficiency of the housing so that the housing complies with 
     the energy efficiency standards under section 284(a) of the 
     Green Resources for Energy Efficient Neighborhoods Act of 
     2009, including such activities to provide energy for such 
     housing from renewable sources, such as wind, waves, solar, 
     biomass, and geothermal sources.
       ``(2) Preference for compliance beyond basic 
     requirements.--In selecting activities to be funded with 
     amounts from a grant under this section, a grantee shall give 
     more preference to activities based on the extent to which 
     the activities will result in compliance by the housing with 
     the enhanced energy efficiency and conservation standards, 
     and the green building standards, under section 284(b) of 
     such Act.
       ``(f) Reports.--Each grantee of a grant under this section 
     for a fiscal year shall submit to the Secretary, at a time 
     determined by the Secretary, a performance and evaluation 
     report concerning the use of grant amounts, which shall 
     contain an assessment by the grantee of the relationship of 
     such use

[[Page H7538]]

     to the objectives identified in the grantees statement under 
     subsection (d).
       ``(g) Applicability of CDBG Provisions.--Sections 109, 110, 
     and 111 of the Housing and Community Development Act of 1974 
     (42 U.S.C. 5309, 5310, 5311) shall apply to assistance 
     received under this section to the same extent and in the 
     same manner that such sections apply to assistance received 
     under title I of such Act.
       ``(h) Authorization of Appropriations.--There is authorized 
     to be appropriated for grants under this section 
     $2,500,000,000 for fiscal year 2010 and such sums as may be 
     necessary for each fiscal year thereafter.''.

     SEC. 297. INCLUDING SUSTAINABLE DEVELOPMENT AND 
                   TRANSPORTATION STRATEGIES IN COMPREHENSIVE 
                   HOUSING AFFORDABILITY STRATEGIES.

       Section 105(b) of the Cranston-Gonzalez National Affordable 
     Housing Act (42 U.S.C. 12705(b)) is amended--
       (1) by striking ``and'' at the end of paragraph (19);
       (2) by striking the period at the end of paragraph (20) and 
     inserting ``; and'';
       (3) and by inserting after paragraph (20) the following new 
     paragraphs:
       ``(21) describe the jurisdiction's strategies to encourage 
     sustainable development for affordable housing, including 
     single-family and multifamily housing, as measured by--
       ``(A) greater energy efficiency and use of renewable energy 
     sources, including any strategies regarding compliance with 
     the energy efficiency standards under section 284(a) of the 
     Green Resources for Energy Efficient Neighborhoods Act of 
     2009 and with the enhanced energy efficiency and conservation 
     standards, and the green building standards, under section 
     284(b) of such Act;
       ``(B) increased conservation, recycling, and reuse of 
     resources;
       ``(C) more effective use of existing infrastructure;
       ``(D) use of building materials and methods that are 
     healthier for residents of the housing, including use of 
     building materials that are free of added known carcinogens 
     that are classified as Group 1 Known Carcinogens by the 
     International Agency for Research on Cancer; and
       ``(E) such other criteria as the Secretary determines, in 
     consultation with the Secretary of Energy, the Secretary of 
     Agriculture, and the Administrator of the Environmental 
     Protection Agency, are in accordance with the purposes of 
     this paragraph; and
       ``(22) describe the jurisdiction's efforts to coordinate 
     its housing strategy with its transportation planning 
     strategies to ensure to the extent practicable that residents 
     of affordable housing have access to public 
     transportation.''.

     SEC. 298. GRANT PROGRAM TO INCREASE SUSTAINABLE LOW-INCOME 
                   COMMUNITY DEVELOPMENT CAPACITY.

       (a) In General.--The Secretary may make grants to nonprofit 
     organizations to use for any of the following purposes:
       (1) Training, educating, supporting, or advising an 
     eligible community development organization or qualified 
     youth service and conservation corps in improving energy 
     efficiency, resource conservation and reuse, design 
     strategies to maximize energy efficiency, installing or 
     constructing renewable energy improvements (such as wind, 
     wave, solar, biomass, and geothermal energy sources), and 
     effective use of existing infrastructure in affordable 
     housing and economic development activities in low-income 
     communities, taking into consideration energy efficiency 
     standards under section 284(a) of this subtitle and with the 
     enhanced energy efficiency and conservation standards, and 
     the green building standards, under section 284(b) of this 
     subtitle.
       (2) Providing loans, grants, or predevelopment assistance 
     to eligible community development organizations or qualified 
     youth service and conservation corps to carry out energy 
     efficiency improvements that comply with the energy 
     efficiency standards under section 284(a) of this subtitle, 
     resource conservation and reuse, and effective use of 
     existing infrastructure in affordable housing and economic 
     development activities in low-income communities. In 
     providing assistance under this paragraph, the Secretary 
     shall give more preference to activities based on the extent 
     to which the activities will result in compliance with the 
     enhanced energy efficiency and conservation standards, and 
     the green building standards, under section 284(b) of this 
     subtitle.
       (3) Such other purposes as the Secretary determines are in 
     accordance with the purposes of this subsection.
       (b) Application Requirement.--To be eligible for a grant 
     under this section, a nonprofit organization shall prepare 
     and submit to the Secretary an application at such time, in 
     such manner, and containing such information as the Secretary 
     may require.
       (c) Award of Contracts.--Contracts for architectural or 
     engineering services funded with amounts from grants made 
     under this section shall be awarded in accordance with 
     chapter 11 of title 40, United States Code (relating to 
     selection of architects and engineers).
       (d) Matching Requirement.--A grant made under this section 
     may not exceed the amount that the nonprofit organization 
     receiving the grant certifies, to the Secretary, will be 
     provided (in cash or in-kind) from nongovernmental sources to 
     carry out the purposes for which the grant is made.
       (e) Definitions.--For purposes of this section, the 
     following definitions shall apply:
       (1) The term ``nonprofit organization'' has the meaning 
     given such term in section 104 of the Cranston-Gonzalez 
     National Affordable Housing Act (42 U.S.C. 12704).
       (2) The term ``eligible community development 
     organization'' means--
       (A) a unit of general local government (as defined in 
     section 104 of the Cranston-Gonzalez National Affordable 
     Housing Act (42 U.S.C. 12704));
       (B) a community housing development organization (as 
     defined in section 104 of the Cranston-Gonzalez National 
     Affordable Housing Act (42 U.S.C. 12704));
       (C) an Indian tribe or tribally designated housing entity 
     (as such terms are defined in section 4 of the Native 
     American Housing Assistance and Self-Determination Act of 
     1996 (25 U.S.C. 4103)); or
       (D) a public housing agency, as such term is defined in 
     section 3(b) of the United States Housing Act of 1937 (42 
     U.S.C. 1437(b)).
       (3) The term ``low-income community'' means a census tract 
     in which 50 percent or more of the households have an income 
     which is less than 80 percent of the greater of--
       (A) the median gross income for such year for the area in 
     which such census tract is located; or
       (B) the median gross income for such year for the State in 
     which such census tract is located.
       (f) Authorization of Appropriations.--There are authorized 
     to be appropriated to the Secretary to carry out this section 
     $10,000,000 for each of fiscal years 2010 through 2014.

     SEC. 299. HOPE VI GREEN DEVELOPMENTS REQUIREMENT.

       (a) Mandatory Component.--Section 24(e) of the United 
     States Housing Act of 1937 (42 U.S.C. 1437v(e)) is amended by 
     adding at the end the following new paragraph:
       ``(4) Green developments requirement.--
       ``(A) Requirement.--The Secretary may not make a grant 
     under this section to an applicant unless the proposed 
     revitalization plan of the applicant to be carried out with 
     such grant amounts meets the following requirements:
       ``(i) Green communities criteria checklist.--All 
     residential construction under the proposed plan complies 
     with the national Green Communities criteria checklist for 
     residential construction that provides criteria for the 
     design, development, and operation of affordable housing, as 
     such checklist is in effect for purposes of this paragraph 
     pursuant to subparagraph (D) at the date of the application 
     for the grant, or any substantially equivalent standard or 
     standards as determined by the Secretary, as follows:

       ``(I) The proposed plan shall comply with all items of the 
     national Green Communities criteria checklist for residential 
     construction that are identified as mandatory.
       ``(II) The proposed plan shall comply with such other 
     nonmandatory items of such national Green Communities 
     criteria checklist so as to result in a cumulative number of 
     points attributable to such nonmandatory items under such 
     checklist of not less than--

       ``(aa) 25 points, in the case of any proposed plan (or 
     portion thereof) consisting of new construction; and
       ``(bb) 20 points, in the case of any proposed plan (or 
     portion thereof) consisting of rehabilitation.
       ``(ii) Green buildings certification system.--All 
     nonresidential construction under the proposed plan complies 
     with all minimum required levels of the green building rating 
     systems and levels identified by the Secretary pursuant to 
     subparagraph (C), as such systems and levels are in effect 
     for purposes of this paragraph pursuant to subparagraph (D) 
     at the time of the application for the grant.
       ``(B) Verification.--
       ``(i) In general.--The Secretary shall verify, or provide 
     for verification, sufficient to ensure that each proposed 
     revitalization plan carried out with amounts from a grant 
     under this section complies with the requirements under 
     subparagraph (A) and that the revitalization plan is carried 
     out in accordance with such requirements and plan.
       ``(ii) Timing.--In providing for such verification, the 
     Secretary shall establish procedures to ensure such 
     compliance with respect to each grantee, and shall report to 
     the Congress with respect to the compliance of each grantee, 
     at each of the following times:

       ``(I) Not later than 6 months after execution of the grant 
     agreement under this section for the grantee.
       ``(II) Upon completion of the revitalization plan of the 
     grantee.

       ``(C) Identification of green buildings rating systems and 
     levels.--
       ``(i) In general.--For purposes of this paragraph, the 
     Secretary shall identify rating systems and levels for green 
     buildings that the Secretary determines to be the most likely 
     to encourage a comprehensive and environmentally sound 
     approach to ratings and standards for green buildings. The 
     identification of the ratings systems and levels shall be 
     based on the criteria specified in clause (ii), shall 
     identify the highest levels the Secretary determines are 
     appropriate above the minimum levels required under the 
     systems selected. Within 90 days of the completion of each 
     study required by clause (iii), the Secretary shall review 
     and update the rating systems and levels, or identify 
     alternative systems and levels for purposes of this 
     paragraph, taking into account the conclusions of such study.

[[Page H7539]]

       ``(ii) Criteria.--In identifying the green rating systems 
     and levels, the Secretary shall take into consideration--

       ``(I) the ability and availability of assessors and 
     auditors to independently verify the criteria and measurement 
     of metrics at the scale necessary to implement this 
     paragraph;
       ``(II) the ability of the applicable ratings system 
     organizations to collect and reflect public comment;
       ``(III) the ability of the standards to be developed and 
     revised through a consensus-based process;
       ``(IV) An evaluation of the robustness of the criteria for 
     a high-performance green building, which shall give credit 
     for promoting--

       ``(aa) efficient and sustainable use of water, energy, and 
     other natural resources;
       ``(bb) use of renewable energy sources;
       ``(cc) improved indoor and outdoor environmental quality 
     through enhanced indoor and outdoor air quality, thermal 
     comfort, acoustics, outdoor noise pollution, day lighting, 
     pollutant source control, sustainable landscaping, and use of 
     building system controls and low- or no-emission materials, 
     including preference for materials with no added carcinogens 
     that are classified as Group 1 Known Carcinogens by the 
     International Agency for Research on Cancer; and
       ``(dd) such other criteria as the Secretary determines to 
     be appropriate; and

       ``(V) national recognition within the building industry.

       ``(iii) 5-year evaluation.--At least once every 5 years, 
     the Secretary shall conduct a study to evaluate and compare 
     available third-party green building rating systems and 
     levels, taking into account the criteria listed in clause 
     (ii).
       ``(D) Applicability and updating of standards.--
       ``(i) Applicability.--Except as provided in clause (ii) of 
     this subparagraph, the national Green Communities criteria 
     checklist and green building rating systems and levels 
     referred to in clauses (i) and (ii) of subparagraph (A) that 
     are in effect for purposes of this paragraph are such 
     checklist systems, and levels as in existence upon the date 
     of the enactment of the Green Resources for Energy Efficient 
     Neighborhoods Act of 2009.
       ``(ii) Updating.--The Secretary may, by regulation, adopt 
     and apply, for purposes of this paragraph, future amendments 
     and supplements to, and editions of, the national Green 
     Communities criteria checklist, any standard or standards 
     that the Secretary has determined to be substantially 
     equivalent to such checklist, and the green building ratings 
     systems and levels identified by the Secretary pursuant to 
     subparagraph (C).''.
       (b) Selection Criteria; Graded Component.--Section 24(e)(2) 
     of the United States Housing Act of 1937 (42 U.S.C. 
     1437v(e)(2)) is amended--
       (1) in subparagraph (K), by striking ``and'' at the end;
       (2) by redesignating subparagraph (L) as subparagraph (M); 
     and
       (3) by inserting after subparagraph (K) the following new 
     subparagraph:
       ``(L) the extent to which the proposed revitalization 
     plan--
       ``(i) in the case of residential construction, complies 
     with the nonmandatory items of the national Green Communities 
     criteria checklist identified in paragraph (4)(A)(i), or any 
     substantially equivalent standard or standards as determined 
     by the Secretary, but only to the extent such compliance 
     exceeds the compliance necessary to accumulate the number of 
     points required under such paragraph; and
       ``(ii) in the case of nonresidential construction, complies 
     with the components of the green building rating systems and 
     levels identified by the Secretary pursuant to paragraph 
     (4)(C), but only to the extent such compliance exceeds the 
     minimum level required under such systems and levels; and''.

     SEC. 299A. CONSIDERATION OF ENERGY EFFICIENCY IMPROVEMENTS IN 
                   APPRAISALS.

       (a) Appraisals in Connection With Federally Related 
     Transactions.--
       (1) Requirement.--Section 1110 of the Financial 
     Institutions Reform, Recovery, and Enforcement Act of 1989 
     (12 U.S.C. 3339) is amended--
       (A) in paragraph (1), by striking ``and'' at the end;
       (B) by redesignating paragraph (2) as paragraph (3); and
       (C) by inserting after paragraph (1) the following new 
     paragraph:
       ``(2) that such appraisals be performed in accordance with 
     appraisal standards that require, in determining the value of 
     a property, consideration of any renewable energy sources 
     for, or energy efficiency or energy-conserving improvements 
     or features of, the property; and''.
       (2) Revision of appraisal standards.--Each Federal 
     financial institutions regulatory agency shall, not later 
     than 6 months after the date of the enactment of this Act, 
     revise its standards for the performance of real estate 
     appraisals in connection with federally related transactions 
     under the jurisdiction of the agency to comply with the 
     requirement under the amendments made by paragraph (1) of 
     this subsection.
       (b) Appraiser Certification and Licensing Requirements.--
     Section 1116 of the Financial Institutions Reform, Recovery, 
     and Enforcement Act of 1989 (12 U.S.C. 3345) is amended--
       (1) in subsection (a), by inserting before the period at 
     the end the following: ``, and meets the requirements 
     established pursuant to subsection (f) for qualifications 
     regarding consideration of any renewable energy sources for, 
     or energy efficiency or energy-conserving improvements or 
     features of, the property'';
       (2) in subsection (c), by inserting before the period at 
     the end the following: ``, which shall include compliance 
     with the requirements established pursuant to subsection (f) 
     regarding consideration of any renewable energy sources for, 
     or energy efficiency or energy-conserving improvements or 
     features of, the property'';
       (3) in subsection (e), by striking ``The'' and inserting 
     ``Except as provided in subsection (f), the''; and
       (4) by adding at the end the following new subsection:
       ``(f) Requirements for Appraisers Regarding Energy 
     Efficiency Features.--The Appraisal Subcommittee shall 
     establish requirements for State certification of State 
     certified real estate appraisers and for State licensing of 
     State licensed appraisers, to ensure that appraisers consider 
     and are qualified to consider, in determining the value of a 
     property, any renewable energy sources for, or energy 
     efficiency or energy-conserving improvements or features of, 
     the property.''.
       (c) Guidelines for Appraising Photovoltaic Measures and 
     Training of Appraisers.--Section 1122 of the Financial 
     Institutions Reform, Recovery, and Enforcement Act of 1989 
     (12 U.S.C. 3351) is amended by adding at the end the 
     following new subsection:
       ``(g) Guidelines for Appraising Photovoltaic Measures and 
     Training of Appraisers.--The Appraisal Subcommittee shall, in 
     consultation with the Secretary of Housing and Urban 
     Development, the Federal National Mortgage Association, and 
     the Federal Home Loan Mortgage Corporation, establish 
     specific guidelines for--
       ``(1) appraising off- and on-grid photovoltaic measures for 
     compliance with the appraisal standards prescribed pursuant 
     to section 1110(2);
       ``(2) requirements under section 1116(f) for certification 
     of State certified real estate appraisers and for State 
     licensing of State licensed appraisers, to ensure that 
     appraisers consider, and are qualified to consider, such 
     photovoltaic measures in determining the value of a property; 
     and
       ``(3) training of appraisers to meet the requirements 
     established pursuant to paragraph (2) of this subsection.''.

     SEC. 299B. HOUSING ASSISTANCE COUNCIL.

       The Secretary shall require the Housing Assistance 
     Council--
       (1) to encourage each organization that receives assistance 
     from the Council with any amounts made available from the 
     Secretary to provide that any structures and buildings 
     developed or assisted under projects, programs, and 
     activities funded with such amounts complies with the energy 
     efficiency standards under section 284(a) of this subtitle; 
     and
       (2) to establish incentives to encourage each such 
     organization to provide that any such structures and 
     buildings comply with the energy efficiency and conservation 
     standards, and the green building standards, under section 
     284(b) of such Act.

     SEC. 299C. RURAL HOUSING AND ECONOMIC DEVELOPMENT ASSISTANCE.

       The Secretary shall--
       (1) require each tribe, agency, organization, corporation, 
     and other entity that receives any assistance from the Office 
     of Rural Housing and Economic Development of the Department 
     of Housing and Urban Development to provide that any 
     structures and buildings developed or assisted under 
     activities funded with such amounts complies with the energy 
     efficiency standards under section 284(a) of this subtitle; 
     and
       (2) establish incentives to encourage each such tribe, 
     agency, organization, corporation, and other entity to 
     provide that any such structures and buildings comply with 
     the enhanced energy efficiency and conservation standards, 
     and the green building standards, under section 284(b) of 
     such Act.

     SEC. 299D. LOANS TO STATES AND INDIAN TRIBES TO CARRY OUT 
                   RENEWABLE ENERGY SOURCES ACTIVITIES.

       (a) Establishment of Fund.--There is established in the 
     Treasury of the United States a fund, to be known as the 
     ``Alternative Energy Sources State Loan Fund''.
       (b) Expenditures.--
       (1) In general.--Subject to paragraph (2), on request by 
     the Secretary, the Secretary of the Treasury shall transfer 
     from the Fund to the Secretary such amounts as the Secretary 
     determines are necessary to provide loans under subsection 
     (c)(1).
       (2) Administrative expenses.--Of the amounts in the Fund, 
     not more than 5 percent shall be available for each fiscal 
     year to pay the administrative expenses of the Department of 
     Housing and Urban Development to carry out this section.
       (c) Loans to States and Indian Tribes.--
       (1) In general.--The Secretary shall use amounts in the 
     Fund to provide loans to States and Indian tribes to provide 
     incentives to owners of single-family and multifamily 
     housing, commercial properties, and public buildings to 
     provide--
       (A) renewable energy sources for such structures, such as 
     wind, wave, solar, biomass, or geothermal energy sources, 
     including incentives to companies and business to change 
     their source of energy to such renewable energy sources and 
     for changing the sources of energy for public buildings to 
     such renewable energy sources;

[[Page H7540]]

       (B) energy efficiency and energy conserving improvements 
     and features for such structures; or
       (C) infrastructure related to the delivery of electricity 
     and hot water for structures lacking such amenities.
       (2) Eligibility.--To be eligible to receive a loan under 
     this subsection, a State or Indian tribe, directly or through 
     an appropriate State or tribal agency, shall submit to the 
     Secretary an application at such time, in such manner, and 
     containing such information as the Secretary may require.
       (3) Criteria for approval.--The Secretary may approve an 
     application of a State or Indian tribe under paragraph (2) 
     only if the Secretary determines that the State or tribe will 
     use the funds from the loan under this subsection to carry 
     out a program to provide incentives described in paragraph 
     (1) that--
       (A) requires that any such renewable energy sources, and 
     energy efficiency and energy conserving improvements and 
     features, developed pursuant to assistance under the program 
     result in compliance of the structure so improved with energy 
     efficiency requirements determined by the Secretary; and
       (B) includes such compliance and audit requirements as the 
     Secretary determines are necessary to ensure that the program 
     is operated in a sound and effective manner.
       (4) Preference.--In making loans during each fiscal year, 
     the Secretary shall give preference to States and Indian 
     tribes that have not previously received a loan under this 
     subsection.
       (5) Maximum amount.--The aggregate outstanding principal 
     amount from loans under this subsection to any single State 
     or Indian tribe may not exceed $500,000,000.
       (6) Loan terms.--Each loan under this subsection shall have 
     a term to maturity of not more than 10 years and shall bear 
     interest at annual rate, determined by the Secretary, that 
     shall not exceed interest rate charged by the Federal Reserve 
     Bank of New York to commercial banks and other depository 
     institutions for very short-term loans under the primary 
     credit program, as most recently published in the Federal 
     Reserve Statistical Release on selected interest rates (daily 
     or weekly), and commonly referred to as the H.15 release, 
     preceding the date of a determination for purposes of 
     applying this paragraph.
       (7) Loan repayment.--The Secretary shall require full 
     repayment of each loan made under this section.
       (d) Investment of Amounts.--
       (1) In general.--The Secretary of the Treasury shall invest 
     such amounts in the Fund that are not, in the judgment of the 
     Secretary of the Treasury, required to meet needs for current 
     withdrawals.
       (2) Obligations of united states.--Investments may be made 
     only in interest-bearing obligations of the United States.
       (e) Reports.--
       (1) Reports to secretary.--For each year during the term of 
     a loan made under subsection (c), the State or Indian tribe 
     that received the loan shall submit to the Secretary a report 
     describing the State or tribal alternative energy sources 
     program for which the loan was made and the activities 
     conducted under the program using the loan funds during that 
     year.
       (2) Report to congress.--Not later than September 30 of 
     each year that loans made under subsection (c) are 
     outstanding, the Secretary shall submit a report to the 
     Congress describing the total amount of such loans provided 
     under subsection (c) to each eligible State and Indian tribe 
     during the fiscal year ending on such date, and an evaluation 
     on effectiveness of the Fund.
       (f) Authorization of Appropriations.--There is authorized 
     to be appropriated to the Fund $5,000,000,000.
       (g) Definitions.--For purposes of this section, the 
     following definitions shall apply:
       (1) Indian tribe.--The term ``Indian tribe'' has the 
     meaning given such term in section 4 of the Native American 
     Housing Assistance and Self-Determination Act of 1996 (25 
     U.S.C. 4103).
       (2) State.--The term ``State'' means each of the several 
     States, the Commonwealth of Puerto Rico, the District of 
     Columbia, the Commonwealth of the Northern Mariana Islands, 
     Guam, the Virgin Islands, American Samoa, the Trust 
     Territories of the Pacific, or any other possession of the 
     United States.

     SEC. 299E. GREEN BANKING CENTERS.

       (a) Insured Depository Institutions.--Section 8 of the 
     Federal Deposit Insurance Act (12 U.S.C. 1818) is amended by 
     adding at the end the following new subsection:
       ``(x) `Green Banking' Centers.--
       ``(1) In general.--The Federal banking agencies shall 
     prescribe guidelines encouraging the establishment and 
     maintenance of `green banking' centers by insured depository 
     institutions to provide any consumer who seeks information on 
     obtaining a mortgage, home improvement loan, home equity 
     loan, or renewable energy lease with additional information 
     on--
       ``(A) obtaining an home energy rating or audit for the 
     residence for which such mortgage or loan is sought;
       ``(B) obtaining financing for cost-effective energy-saving 
     improvements to such property; and
       ``(C) obtaining beneficial terms for any mortgage or loan, 
     or qualifying for a larger mortgage or loan, secured by a 
     residence which meets or will meet energy efficiency 
     standards.
       ``(2) Information and referrals.--The information made 
     available to consumers under paragraph (1) may include--
       ``(A) information on obtaining a home energy rating and 
     contact information on qualified energy raters in the area of 
     the residence;
       ``(B) information on the secondary market guidelines that 
     permit lenders to provide more favorable terms by allowing 
     lenders to increase the ratio on debt-to-income requirements 
     or to use the projected utility savings as a compensating 
     factor;
       ``(C) information including eligibility information about, 
     and contact information for, any conservation or renewable 
     energy programs, grants, or loans offered by the Secretary of 
     Housing and Urban Development, including the Energy Efficient 
     Mortgage Program;
       ``(D) information including eligibility information about, 
     and contact information for, any conservation or renewable 
     energy programs, grants, or loans offered for qualified 
     military personal, reservists, and veterans by the Secretary 
     of Veterans Affairs;
       ``(E) information about, and contact information for, the 
     Office of Efficiency and Renewable Energy at the Department 
     of Energy, including the weatherization assistance program;
       ``(F) information about, and contact information for, the 
     Energy Star Program of the Environmental Protection Agency;
       ``(G) information from, and contact information for, the 
     Federal Citizen Information Center of the General Services 
     Administration on energy-efficient mortgages and loans, home 
     energy rating systems, and the availability of energy-
     efficient mortgage information from a variety of Federal 
     agencies; and
       ``(H) such other information as the agencies or the insured 
     depository institution may determine to be appropriate or 
     useful.''.
       (b) Insured Credit Unions.--Section 206 of the Federal 
     Credit Union Act (12 U.S.C. 1786) is amended by adding at the 
     end the following new subsection:
       ``(x) `Green Banking' Centers.--
       ``(1) In general.--The Board shall prescribe guidelines 
     encouraging the establishment and maintenance of `green 
     banking' centers by insured credit unions to provide any 
     member who seeks information on obtaining a mortgage, home 
     improvement loan, home equity loan, or renewable energy lease 
     with additional information on--
       ``(A) obtaining an home energy rating or audit for the 
     residence for which such mortgage or loan is sought;
       ``(B) obtaining financing for cost-effective energy-saving 
     improvements to such property; and
       ``(C) obtaining beneficial terms for any mortgage or loan, 
     or qualifying for a larger mortgage or loan, secured by a 
     residence which meets or will meet energy efficiency 
     standards.
       ``(2) Information and referrals.--The information made 
     available to members under paragraph (1) may include--
       ``(A) information on obtaining a home energy rating and 
     contact information on qualified energy raters in the area of 
     the residence;
       ``(B) information on the secondary market guidelines that 
     permit lenders to provide more favorable terms by allowing 
     lenders to increase the ratio on debt-to-income requirements 
     or to use the projected utility savings as a compensating 
     factor;
       ``(C) information including eligibility information about, 
     and contact information for, any conservation or renewable 
     energy programs, grants, or loans offered by the Secretary of 
     Housing and Urban Development, including the Energy Efficient 
     Mortgage Program;
       ``(D) information including eligibility information about, 
     and contact information for, any conservation or renewable 
     energy programs, grants, or loans offered for qualified 
     military personal, reservists, and veterans by the Secretary 
     of Veterans Affairs;
       ``(E) information about, and contact information for, the 
     Office of Efficiency and Renewable Energy at the Department 
     of Energy, including the weatherization assistance program;
       ``(F) information from, and contact information for, the 
     Federal Citizen Information Center of the General Services 
     Administration on energy-efficient mortgages and loans, home 
     energy rating systems, and the availability of energy-
     efficient mortgage information from a variety of Federal 
     agencies; and
       ``(G) such other information as the Board or the insured 
     credit union may determine to be appropriate or useful.''.

     SEC. 299F. GAO REPORTS ON AVAILABILITY OF AFFORDABLE 
                   MORTGAGES.

       (a) Study.--The Comptroller General of the United States 
     shall periodically, as necessary to comply with subsection 
     (b), examine the impact of this subtitle and the amendments 
     made by this subtitle on the availability of affordable 
     mortgages in various areas throughout the United States, 
     including cities having older infrastructure and limited 
     space for the development of new housing.
       (b) Triennial Reports.--The Comptroller General shall 
     submit a report once every 3 years to the Committee on 
     Financial Services of the House of Representatives and the 
     Committee on Banking, Housing, and Urban Affairs of the 
     Senate that shall include--
       (1) a detailed statement of the most recent findings 
     pursuant to subsection (a); and
       (2) if the Comptroller General finds that this subtitle or 
     the amendments made by

[[Page H7541]]

     this subtitle have directly or indirectly resulted in 
     consequences that limit the availability or affordability of 
     mortgages in any area or areas within the United States, 
     including any city having older infrastructure and limited 
     space for the development of new housing, any recommendations 
     for any additional actions at the Federal, State, or local 
     levels that the Comptroller General considers necessary or 
     appropriate to mitigate such effects.

     The first report under this subsection shall be submitted not 
     later than the expiration of the 3-year period beginning on 
     the date of the enactment of this Act.

     SEC. 299G. PUBLIC HOUSING ENERGY COST REPORT.

       (a) Collection of Information by HUD.--The Secretary of 
     Housing and Urban Development shall obtain from each public 
     housing agency, by such time as may be necessary to comply 
     with the reporting requirement under subsection (b), 
     information regarding the energy costs for public housing 
     administered or operated by the agency. For each public 
     housing agency, such information shall include the monthly 
     energy costs associated with each separate building and 
     development of the agency, for the most recently completed 
     12-month period for which such information is available, and 
     such other information as the Secretary determines is 
     appropriate in determining which public housing buildings and 
     developments are most in need of repairs and improvements to 
     reduce energy needs and costs and become more energy 
     efficient.
       (b) Report.--Not later than the expiration of the 12-month 
     period beginning on the date of the enactment of this Act, 
     the Secretary of Housing and Urban Development shall submit a 
     report to the Congress setting forth the information 
     collected pursuant to subsection (a).

     SEC. 299H. SECONDARY MARKET FOR RESIDENTIAL RENEWABLE ENERGY 
                   LEASE INSTRUMENTS.

       (a) Purposes.--The purposes of this section are--
       (1) to encourage residential use of renewable energy 
     systems by minimizing up-front costs and providing immediate 
     utility cost savings to consumers through leasing of such 
     systems to homeowners;
       (2) to reduce carbon emissions and the use of nonrenewable 
     resources;
       (3) to encourage energy-efficient residential construction 
     and rehabilitation;
       (4) to encourage the use of renewable resources by 
     homeowners;
       (5) to minimize the impact of development on the 
     environment;
       (6) to reduce consumer utility costs; and
       (7) to encourage private investment in the green economy.
       (b) Residual Value of Renewable Energy Asset.--The 
     Secretary of Housing and Urban Development shall establish a 
     means of determining the residual value of a renewable energy 
     asset such that a secondary market for residential renewable 
     energy lease instruments may be facilitated. Such means may 
     include, without limitation, the calculation of residual 
     value based on the net present value of projected future 
     energy production of the renewable energy asset.

     SEC. 299I. GREEN GUARANTEES.

       (a) Authority To Guarantee ``Green Portion'' of Eligible 
     Mortgages.--
       (1) In general.--The Secretary of Housing and Urban 
     Development may make commitments to guarantee under this 
     section and may guarantee, the repayment of the portions of 
     the principal obligations of eligible mortgages that are used 
     to finance eligible sustainable building elements for the 
     housing that is subject to the mortgage.
       (2) Amount of guarantee.--A guarantee under this section by 
     the Secretary in connection with an eligible mortgage shall 
     not exceed a percentage of the green portion (as such term is 
     defined in subsection (g)) of the mortgage, as shall be 
     established by the Secretary and may be established on a 
     regional basis as the Secretary determines appropriate.
       (b) Eligible Mortgages.--To be considered an eligible 
     mortgage for purposes of this section, a mortgage shall 
     comply with all of the following requirements:
       (1) Acquisition or construction of housing.--The mortgage 
     shall be made for the acquisition or construction of single- 
     or multifamily housing and repayment of the mortgage shall be 
     secured by an interest in such housing.
       (2) Financing of eligible sustainable building elements 
     through green portion of mortgage.--A portion of the 
     principal obligation of the mortgage, which meets the 
     requirements under subsection (c), shall be used only for 
     financing the provision of eligible sustainable building 
     elements for the housing for which the mortgage was made.
       (3) Maximum mortgage amount.--The principal obligation of 
     the mortgage (including the eligible portion of such 
     mortgage, and such initial service charges, appraisal, 
     inspection, and other fees as the Secretary shall approve) 
     may not exceed the following amounts:
       (A) Single-family housing.--Such dollar amounts for single-
     family housing as the Secretary shall establish, which may be 
     established on the basis of the number of dwelling units in 
     the housing, as the Secretary considers appropriate.
       (B) Multifamily housing.--Such dollar amounts for 
     multifamily housing as the Secretary shall establish, which 
     may be established on the basis of the number of dwelling 
     units in the housing and the number of bedrooms in such 
     dwelling units, as the Secretary considers appropriate.
       (4) Repayment.--The mortgage meets such requirements as the 
     Secretary shall establish to ensure that there is a 
     reasonable prospect of repayment of the principal and 
     interest on the obligation by the mortgagor.
       (5) Mortgage terms.--The mortgage shall meet such 
     requirements with respect to loan-to-value ratio, mortgagor 
     credit scores, debt-to-income ratio, and other underwriting 
     standards, term to maturity, interest rates and amortization, 
     including amortization of the green portion of the mortgage, 
     and other mortgage terms as the Secretary shall establish.
       (c) Limitations on Green Portion of Mortgage.--The 
     requirements under this subsection with respect to the green 
     portion of an eligible mortgage are as follows:
       (1) Percentage limitation.--Such portion shall not exceed, 
     in the case of single-family or multifamily housing, 10 
     percent of the total principal obligation of the mortgage.
       (2) Dollar amount limitation.--Such portion shall not 
     exceed--
       (A) in the case of single-family housing, such maximum 
     dollar amount limitation as the Secretary shall establish, 
     which may be established on the basis of the number of 
     dwelling units in the housing, as the Secretary considers 
     appropriate; and
       (B) in the case of multifamily housing, such maximum dollar 
     amount limitation as the Secretary shall establish, which 
     limitation may be established on the basis of the number of 
     dwelling units in the housing and the number of bedrooms in 
     such dwelling units, as the Secretary considers appropriate.
       (3) Cost-effectiveness limitation.--Such portion shall not 
     exceed the total present value of the savings (as determined 
     in accordance with subsection (d)) attributable to the 
     incorporation of the eligible sustainable building elements 
     to be financed with the green portion of the mortgage that 
     are to be realized over the useful life of such elements.
       (d) Eligible Sustainable Building Elements.--The Secretary 
     may not guarantee any eligible mortgage under this section 
     unless the mortgagor has demonstrated, in accordance with 
     such requirements as the Secretary shall establish, the 
     amount of savings attributable to incorporation of the 
     sustainable building elements to be financed with the green 
     portion of the mortgage, as measured by the National Green 
     Building Standard for all residential construction developed 
     by the National Association of Home Builders and the U.S. 
     Green Building Council, and approved by the American National 
     Standards Institute, as updated and in effect at the time of 
     such demonstration.
       (e) Guarantee Fee.--
       (1) Assessment and collection.--The Secretary shall assess 
     and collect fees for guarantees under this section in amounts 
     that the Secretary determines are sufficient to cover the 
     costs (as such term is defined in section 502 of the Federal 
     Credit Reform Act of 1990 (2 U.S.C. 661a)) of such 
     guarantees.
       (2) Availability.--Fees collected under this subsection 
     shall be deposited by the Secretary in the Treasury of the 
     United States and shall remain available until expended, 
     subject to such other conditions as are contained in annual 
     appropriations Acts.
       (f) Payment of Guarantee.--
       (1) Default.--
       (A) Right to payment.--If a mortgagor under a mortgage 
     guaranteed under this section defaults (as defined in 
     regulations issued by the Secretary and specified in the 
     guarantee contract) on the obligation under the mortgage--
       (i) the holder of the guarantee shall have the right to 
     demand payment of the unpaid amount of the guaranteed portion 
     of the mortgage, to the extent provided under subsection 
     (a)(2), from the Secretary; and
       (ii) within such period as may be specified in the 
     guarantee or related agreements, the Secretary shall pay to 
     the holder of the guarantee, to the extent provided under 
     subsection (a)(2), the unpaid interest on, and unpaid 
     principal of the portion of guaranteed portion of the 
     mortgage with respect to which the borrower has defaulted, 
     unless the Secretary finds that there was no default by the 
     borrower in the payment of interest or principal or that the 
     default has been remedied.
       (B) Forbearance.--Nothing in this paragraph precludes any 
     forbearance by the holder of an eligible mortgage for the 
     benefit of the mortgagor which may be agreed upon by the 
     parties to the mortgage and approved by the Secretary.
       (2) Subrogation.--
       (A) In general.--If the Secretary makes a payment under 
     paragraph (1), the Secretary shall be subrogated to the 
     rights of the recipient of the payment as specified in the 
     guarantee or related agreements including, if appropriate, 
     the authority (notwithstanding any other provision of law)--
       (i) to complete, maintain, operate, lease, or otherwise 
     dispose of any property acquired pursuant to such guarantee 
     or related agreements; or
       (ii) to permit the mortgagor, pursuant to an agreement with 
     the Secretary, to continue to occupy the property subject to 
     the mortgage, if the Secretary determines such occupancy to 
     be appropriate.
       (B) Superiority of rights.--The rights of the Secretary, 
     with respect to any property acquired pursuant to a guarantee 
     or related agreements, shall be superior to the rights of

[[Page H7542]]

     any other person with respect to the property.
       (C) Terms and conditions.--A guarantee agreement shall 
     include such detailed terms and conditions as the Secretary 
     determines appropriate to protect the interests of the United 
     States in the case of default.
       (3) Full faith and credit.--The full faith and credit of 
     the United States is pledged to the payment of all guarantees 
     issued under this section with respect to principal and 
     interest.
       (g) Definitions.--For purposes of this section, the 
     following definitions shall apply:
       (1) Eligible mortgage.--The term ``eligible mortgage'' 
     means a mortgage that meets the requirements under subsection 
     (b).
       (2) Green portion.--The term ``green portion'' means, with 
     respect to an eligible mortgage, the portion of the mortgage 
     principal referred to in subsection (b)(2) that is 
     attributable, as determined in accordance with regulations 
     issued by the Secretary, to the increased costs incurred in 
     financing provision of sustainable building elements for the 
     housing for which the mortgage was made, as compared to the 
     costs that would have been incurred in financing the 
     provision of other building elements for the housing for the 
     same purposes that are commonly or conventionally used but 
     are not sustainable building elements.
       (3) Guaranteed portion.--The term ``guaranteed portion'' 
     means, with respect to an eligible mortgage guaranteed under 
     this section, the green portion of the mortgage that is so 
     guaranteed.
       (4) Mortgage.--The term ``mortgage'' has the meaning given 
     such term in section 201 of the National Housing Act (12 
     U.S.C. 1707).
       (5) Multifamily housing.--The term ``multifamily housing'' 
     means a residential property consisting of five or more 
     dwelling units.
       (6) Secretary.--The term ``Secretary'' means the Secretary 
     of Housing and Urban Development.
       (7) Single-family housing.--The term ``single-family 
     housing'' means a residential property consisting of one to 
     four dwelling units.
       (8) Sustainable building element.--The term ``sustainable 
     building element'' means such building elements, as the 
     Secretary shall define, that have energy efficiency or 
     environmental sustainability qualities that are superior to 
     such qualities for other building elements for the same 
     purposes that are commonly or conventionally used.
       (h) Authorization of Appropriations.--There is authorized 
     to be appropriated for costs (as such term is defined in 
     section 502 of the Federal Credit Reform Act of 1990 (2 
     U.S.C. 661a) of guarantees under this section $500,000,000 
     for each of fiscal years 2010 through 2014.
       (i) Regulations.--The Secretary shall issue any regulations 
     necessary to carry out this section.

              TITLE III--REDUCING GLOBAL WARMING POLLUTION

     SEC. 301. SHORT TITLE.

       This title, and sections 112, 116, 221, 222, 223, and 401 
     of this Act, and the amendments made by this title and those 
     sections, may be cited as the ``Safe Climate Act''.

             Subtitle A--Reducing Global Warming Pollution

     SEC. 311. REDUCING GLOBAL WARMING POLLUTION.

       The Clean Air Act (42 U.S.C. and following) is amended by 
     adding after title VI the following new title:

        ``TITLE VII--GLOBAL WARMING POLLUTION REDUCTION PROGRAM

     ``PART A--GLOBAL WARMING POLLUTION REDUCTION GOALS AND TARGETS

     ``SEC. 701. FINDINGS AND PURPOSE.

       ``(a) Findings.--The Congress finds as follows:
       ``(1) Global warming poses a significant threat to the 
     national security, economy, public health and welfare, and 
     environment of the United States, as well as of other 
     nations.
       ``(2) Reviews of scientific studies, including by the 
     Intergovernmental Panel on Climate Change and the National 
     Academy of Sciences, demonstrate that global warming is the 
     result of the combined anthropogenic greenhouse gas emissions 
     from numerous sources of all types and sizes. Each increment 
     of emission, when combined with other emissions, causes or 
     contributes materially to the acceleration and extent of 
     global warming and its adverse effects for the lifetime of 
     such gas in the atmosphere. Accordingly, controlling 
     emissions in small as well as large amounts is essential to 
     prevent, slow the pace of, reduce the threats from, and 
     mitigate global warming and its adverse effects.
       ``(3) Because they induce global warming, greenhouse gas 
     emissions cause or contribute to injuries to persons in the 
     United States, including--
       ``(A) adverse health effects such as disease and loss of 
     life;
       ``(B) displacement of human populations;
       ``(C) damage to property and other interests related to 
     ocean levels, acidification, and ice changes;
       ``(D) severe weather and seasonal changes;
       ``(E) disruption, costs, and losses to business, trade, 
     employment, farms, subsistence, aesthetic enjoyment of the 
     environment, recreation, culture, and tourism;
       ``(F) damage to plants, forests, lands, and waters;
       ``(G) harm to wildlife and habitat;
       ``(H) scarcity of water and the decreased abundance of 
     other natural resources;
       ``(I) worsening of tropospheric air pollution;
       ``(J) substantial threats of similar damage; and
       ``(K) other harm.
       ``(4) That many of these effects and risks of future 
     effects of global warming are widely shared does not minimize 
     the adverse effects individual persons have suffered, will 
     suffer, and are at risk of suffering because of global 
     warming.
       ``(5) That some of the adverse and potentially catastrophic 
     effects of global warming are at risk of occurring and not a 
     certainty does not negate the harm persons suffer from 
     actions that increase the likelihood, extent, and severity of 
     such future impacts.
       ``(6) Nations of the world look to the United States for 
     leadership in addressing the threat of and harm from global 
     warming. Full implementation of the Safe Climate Act is 
     critical to engage other nations in an international effort 
     to mitigate the threat of and harm from global warming.
       ``(7) Global warming and its adverse effects are occurring 
     and are likely to continue and increase in magnitude, and to 
     do so at a greater and more harmful rate, unless the Safe 
     Climate Act is fully implemented and enforced in an 
     expeditious manner.
       ``(b) Purpose.--It is the general purpose of the Safe 
     Climate Act to help prevent, reduce the pace of, mitigate, 
     and remedy global warming and its adverse effects. To fulfill 
     such purpose, it is necessary to--
       ``(1) require the timely fulfillment of all governmental 
     acts and duties, both substantive and procedural, and the 
     prompt compliance of covered entities with the requirements 
     of the Safe Climate Act;
       ``(2) establish and maintain an effective, transparent, and 
     fair market for emission allowances and preserve the 
     integrity of the cap on emissions and of offset credits;
       ``(3) advance the production and deployment of clean energy 
     and energy efficiency technologies; and
       ``(4) ensure effective enforcement of the Safe Climate Act 
     by citizens, States, Indian tribes, and all levels of 
     government because each violation of the Safe Climate Act is 
     likely to result in an additional increment of greenhouse gas 
     emission and will slow the pace of implementation of the Safe 
     Climate Act and delay the achievement of the goals set forth 
     in section 702, and cause or contribute to global warming and 
     its adverse effects.

     ``SEC. 702. ECONOMY-WIDE REDUCTION GOALS.

       ``The goals of the Safe Climate Act are to reduce steadily 
     the quantity of United States greenhouse gas emissions such 
     that--
       ``(1) in 2012, the quantity of United States greenhouse gas 
     emissions does not exceed 97 percent of the quantity of 
     United States greenhouse gas emissions in 2005;
       ``(2) in 2020, the quantity of United States greenhouse gas 
     emissions does not exceed 80 percent of the quantity of 
     United States greenhouse gas emissions in 2005;
       ``(3) in 2030, the quantity of United States greenhouse gas 
     emissions does not exceed 58 percent of the quantity of 
     United States greenhouse gas emissions in 2005; and
       ``(4) in 2050, the quantity of United States greenhouse gas 
     emissions does not exceed 17 percent of the quantity of 
     United States greenhouse gas emissions in 2005.

     ``SEC. 703. REDUCTION TARGETS FOR SPECIFIED SOURCES.

       ``(a) In General.--The regulations issued under section 721 
     shall cap and reduce annually the greenhouse gas emissions of 
     capped sources each calendar year beginning in 2012 such 
     that--
       ``(1) in 2012, the quantity of greenhouse gas emissions 
     from capped sources does not exceed 97 percent of the 
     quantity of greenhouse gas emissions from such sources in 
     2005;
       ``(2) in 2020, the quantity of greenhouse gas emissions 
     from capped sources does not exceed 83 percent of the 
     quantity of greenhouse gas emissions from such sources in 
     2005;
       ``(3) in 2030, the quantity of greenhouse gas emissions 
     from capped sources does not exceed 58 percent of the 
     quantity of greenhouse gas emissions from such sources in 
     2005; and
       ``(4) in 2050, the quantity of greenhouse gas emissions 
     from capped sources does not exceed 17 percent of the 
     quantity of greenhouse gas emissions from such sources in 
     2005.
       ``(b) Definition.--For purposes of this section, the term 
     `greenhouse gas emissions from such sources in 2005' means 
     emissions to which section 722 would have applied if the 
     requirements of this title for the specified year had been in 
     effect for 2005.

     ``SEC. 704. SUPPLEMENTAL POLLUTION REDUCTIONS.

       ``For the purposes of decreasing the likelihood of 
     catastrophic climate change, preserving tropical forests, 
     building capacity to generate offset credits, and 
     facilitating international action on global warming, the 
     Administrator shall set aside the percentage specified in 
     section 781 of the quantity of emission allowances 
     established under section 721(a) for each year, to be used to 
     achieve a reduction of greenhouse gas emissions from 
     deforestation in developing countries in accordance with part 
     E. In 2020, activities supported under part E shall provide 
     greenhouse gas reductions in an amount equal to an additional 
     10 percentage points of reductions from United States 
     greenhouse

[[Page H7543]]

     gas emissions in 2005. The Administrator shall distribute 
     these allowances with respect to activities in countries that 
     enter into and implement agreements or arrangements relating 
     to reduced deforestation as described in section 754(a)(2).

     ``SEC. 705. REVIEW AND PROGRAM RECOMMENDATIONS.

       ``(a) In General.--The Administrator shall, in consultation 
     with appropriate Federal agencies, submit to Congress a 
     report not later than July 1, 2013, and every 4 years 
     thereafter, that includes--
       ``(1) an analysis of key findings based on the latest 
     scientific information and data relevant to global climate 
     change;
       ``(2) an analysis of capabilities to monitor and verify 
     greenhouse gas reductions on a worldwide basis, including for 
     the United States, as required under the Safe Climate Act; 
     and
       ``(3) an analysis of the status of worldwide greenhouse gas 
     reduction efforts, including implementation of the Safe 
     Climate Act and other policies, both domestic and 
     international, for reducing greenhouse gas emissions, 
     preventing dangerous atmospheric concentrations of greenhouse 
     gases, preventing significant irreversible consequences of 
     climate change, and reducing vulnerability to the impacts of 
     climate change.
       ``(b) Exception.--Paragraph (3) of subsection (a) shall not 
     apply to the first report submitted under such subsection.
       ``(c) Latest Scientific Information.--The analysis required 
     under subsection (a)(1) shall--
       ``(1) address existing scientific information and reports, 
     considering, to the greatest extent possible, the most recent 
     assessment report of the Intergovernmental Panel on Climate 
     Change, reports by the United States Global Change Research 
     Program, the Natural Resources Climate Change Adaptation 
     Panel established under section 475 of the American Clean 
     Energy and Security Act of 2009, and Federal agencies, and 
     the European Union's global temperature data assessment; and
       ``(2) review trends and projections for--
       ``(A) global and country-specific annual emissions of 
     greenhouse gases, and cumulative greenhouse gas emissions 
     produced between 1850 and the present, including--
       ``(i) global cumulative emissions of anthropogenic 
     greenhouse gases;
       ``(ii) global annual emissions of anthropogenic greenhouse 
     gases; and
       ``(iii) by country, annual total, annual per capita, and 
     cumulative anthropogenic emissions of greenhouse gases for 
     the top 50 emitting nations;
       ``(B) significant changes, both globally and by region, in 
     annual net non-anthropogenic greenhouse gas emissions from 
     natural sources, including permafrost, forests, or oceans;
       ``(C) global atmospheric concentrations of greenhouse 
     gases, expressed in annual concentration units as well as 
     carbon dioxide equivalents based on 100-year global warming 
     potentials;
       ``(D) major climate forcing factors, such as aerosols;
       ``(E) global average temperature, expressed as seasonal and 
     annual averages in land, ocean, and land-plus-ocean averages; 
     and
       ``(F) sea level rise;
       ``(3) assess the current and potential impacts of global 
     climate change on--
       ``(A) human populations, including impacts on public 
     health, economic livelihoods, subsistence, human 
     infrastructure, and displacement or permanent relocation due 
     to flooding, severe weather, extended drought, erosion, or 
     other ecosystem changes;
       ``(B) freshwater systems, including water resources for 
     human consumption and agriculture and natural and managed 
     ecosystems, flood and drought risks, and relative humidity;
       ``(C) the carbon cycle, including impacts related to the 
     thawing of permafrost, the frequency and intensity of 
     wildfire, and terrestrial and ocean carbon sinks;
       ``(D) ecosystems and animal and plant populations, 
     including impacts on species abundance, phenology, and 
     distribution;
       ``(E) oceans and ocean ecosystems, including effects on sea 
     level, ocean acidity, ocean temperatures, coral reefs, ocean 
     circulation, fisheries, and other indicators of ocean 
     ecosystem health;
       ``(F) the cryosphere, including effects on ice sheet mass 
     balance, mountain glacier mass balance, and sea-ice extent 
     and volume;
       ``(G) changes in the intensity, frequency, or distribution 
     of severe weather events, including precipitation, tropical 
     cyclones, tornadoes, and severe heat waves;
       ``(H) agriculture and forest systems; and
       ``(I) any other indicators the Administrator deems 
     appropriate;
       ``(4) summarize any significant socio-economic impacts of 
     climate change in the United States, including the 
     territories of the United States, drawing on work by Federal 
     agencies and the academic literature, including impacts on--
       ``(A) public health;
       ``(B) economic livelihoods and subsistence;
       ``(C) displacement or permanent relocation due to flooding, 
     severe weather, extended drought, erosion, or other ecosystem 
     changes;
       ``(D) human infrastructure, including coastal 
     infrastructure vulnerability to extreme events and sea level 
     rise, river floodplain infrastructure, and sewer and water 
     management systems;
       ``(E) agriculture and forests, including effects on 
     potential growing season, distribution, and yield;
       ``(F) water resources for human consumption, agriculture 
     and natural and managed ecosystems, flood and drought risks, 
     and relative humidity;
       ``(G) energy supply and use; and
       ``(H) transportation;
       ``(5) in assessing risks and impacts, use a risk management 
     framework, including both qualitative and quantitative 
     measures, to assess the observed and projected impacts of 
     current and future climate change, accounting for--
       ``(A) both monetized and non-monetized losses;
       ``(B) potential nonlinear, abrupt, or essentially 
     irreversible changes in the climate system;
       ``(C) potential nonlinear increases in the cost of impacts;
       ``(D) potential low-probability, high impact events; and
       ``(E) whether impacts are transitory or essentially 
     permanent; and
       ``(6) based on the findings of the Administrator under this 
     section, as well as assessments produced by the 
     Intergovernmental Panel on Climate Change, the United States 
     Global Change Research program, and other relevant scientific 
     entities--
       ``(A) describe increased risks to natural systems and 
     society that would result from an increase in global average 
     temperature 3.6 degrees Fahrenheit (2 degrees Celsius) above 
     the pre-industrial average or an increase in atmospheric 
     greenhouse gas concentrations above 450 parts per million 
     carbon dioxide equivalent; and
       ``(B) identify and assess--
       ``(i) significant residual risks not avoided by the 
     thresholds described in subparagraph (A);
       ``(ii) alternative thresholds or targets that may more 
     effectively limit the risks identified pursuant to clause 
     (i); and
       ``(iii) thresholds above those described in subparagraph 
     (A) which significantly increase the risk of certain impacts 
     or render them essentially permanent.
       ``(d) Status of Monitoring and Verification Capabilities To 
     Evaluate Greenhouse Gas Reduction Efforts.--The analysis 
     required under subsection (a)(2) shall evaluate the 
     capabilities of the monitoring, reporting, and verification 
     systems used to quantify progress in achieving reductions in 
     greenhouse gas emissions both globally and in the United 
     States (as described in section 702), including--
       ``(1) quantification of emissions and emission reductions 
     by entities participating in the cap and trade program under 
     this title;
       ``(2) quantification of emissions and emission reductions 
     by entities participating in the offset program under this 
     title;
       ``(3) quantification of emission and emissions reductions 
     by entities regulated by performance standards;
       ``(4) quantification of aggregate net emissions and 
     emissions reductions by the United States; and
       ``(5) quantification of global changes in net emissions and 
     in sources and sinks of greenhouse gases.
       ``(e) Status of Greenhouse Gas Reduction Efforts.--The 
     analysis required under subsection (a)(3) shall address--
       ``(1) whether the programs under Safe Climate Act and other 
     Federal statutes are resulting in sufficient United States 
     greenhouse gas emissions reductions to meet the emissions 
     reduction goals described in section 702, taking into account 
     the use of offsets; and
       ``(2) whether United States actions, taking into account 
     international actions, commitments, and trends, and 
     considering the range of plausible emissions scenarios, are 
     sufficient to avoid--
       ``(A) atmospheric greenhouse gas concentrations above 450 
     parts per million carbon dioxide equivalent;
       ``(B) global average surface temperature 3.6 degrees 
     Fahrenheit (2 degrees Celsius) above the pre-industrial 
     average, or such other temperature thresholds as the 
     Administrator deems appropriate; and
       ``(C) other temperature or greenhouse gas thresholds 
     identified pursuant to subsection (c)(6)(B).
       ``(f) Recommendations.--
       ``(1) Latest scientific information.--Based on the analysis 
     described in subsection (a)(1), each report under subsection 
     (a) shall identify actions that could be taken to--
       ``(A) improve the characterization of changes in the earth-
     climate system and impacts of global climate change;
       ``(B) better inform decision making and actions related to 
     global climate change;
       ``(C) mitigate risks to natural and social systems; and
       ``(D) design policies to better account for climate risks.
       ``(2) Monitoring, reporting and verification.--Based on the 
     analysis described in subsection (a)(2), each report under 
     subsection (a) shall identify key gaps in measurement, 
     reporting, and verification capabilities and make 
     recommendations to improve the accuracy and reliability of 
     those capabilities.
       ``(3) Status of greenhouse gas reduction efforts.--Based on 
     the analysis described in subsection (a)(3), taking into 
     account international actions, commitments, and trends, and 
     considering the range of plausible emissions scenarios, each 
     report under subsection (a) shall identify--

[[Page H7544]]

       ``(A) the quantity of additional reductions required to 
     meet the emissions reduction goals in section 702;
       ``(B) the quantity of additional reductions in global 
     greenhouse gas emissions needed to avoid the concentration 
     and temperature thresholds identified in subsection (e); and
       ``(C) possible strategies and approaches for achieving 
     additional reductions.
       ``(g) Authorization of Appropriations.--There are 
     authorized to be appropriated to carry out this section such 
     sums as may be necessary.

     ``SEC. 706. NATIONAL ACADEMY REVIEW.

       ``(a) In General.--Not later than 1 year after the date of 
     enactment of this title, the Administrator shall offer to 
     enter into a contract with the National Academy of Sciences 
     (in this section referred to as the `Academy') under which 
     the Academy shall, not later than July 1, 2014, and every 4 
     years thereafter, submit to Congress and the Administrator a 
     report that includes--
       ``(1) a review of the most recent report and 
     recommendations issued under section 705; and
       ``(2) an analysis of technologies to achieve reductions in 
     greenhouse gas emissions.
       ``(b) Failure to Issue a Report.--In the event that the 
     Administrator has not issued all or part of the most recent 
     report required under section 705, the Academy shall conduct 
     its own review and analysis of the required information.
       ``(c) Technological Information.--The analysis required 
     under subsection (a)(2) shall--
       ``(1) review existing technological information and 
     reports, including the most recent reports by the Department 
     of Energy, the United States Global Change Research Program, 
     the Intergovernmental Panel on Climate Change, and the 
     International Energy Agency and any other relevant 
     information on technologies or practices that reduce or limit 
     greenhouse gas emissions;
       ``(2) include the participation of technical experts from 
     relevant private industry sectors;
       ``(3) review the current and future projected deployment of 
     technologies and practices in the United States that reduce 
     or limit greenhouse gas emissions, including--
       ``(A) technologies for capture and sequestration of 
     greenhouse gases;
       ``(B) technologies to improve energy efficiency;
       ``(C) low- or zero-greenhouse gas emitting energy 
     technologies;
       ``(D) low- or zero-greenhouse gas emitting fuels;
       ``(E) biological sequestration practices and technologies; 
     and
       ``(F) any other technologies the Academy deems relevant; 
     and
       ``(4) review and compare the emissions reduction potential, 
     commercial viability, market penetration, investment trends, 
     and deployment of the technologies described in paragraph 
     (3), including--
       ``(A) the need for additional research and development, 
     including publicly funded research and development;
       ``(B) the extent of commercial deployment, including, where 
     appropriate, a comparison to the cost and level of deployment 
     of conventional fossil fuel-fired energy technologies and 
     devices; and
       ``(C) an evaluation of any substantial technological, 
     legal, or market-based barriers to commercial deployment.
       ``(d) Recommendations.--
       ``(1) Latest scientific information.--Based on the review 
     described in subsection (a)(1), the Academy shall identify 
     actions that could be taken to--
       ``(A) improve the characterization of changes in the earth-
     climate system and impacts of global climate change;
       ``(B) better inform decision making and actions related to 
     global climate change;
       ``(C) mitigate risks to natural and social systems;
       ``(D) design policies to better account for climate risks; 
     and
       ``(E) improve the accuracy and reliability of capabilities 
     to monitor, report, and verify greenhouse gas emissions 
     reduction efforts.
       ``(2) Technological information.--Based on the analysis 
     described in subsection (a)(2), the Academy shall identify--
       ``(A) additional emissions reductions that may be possible 
     as a result of technologies described in the analysis;
       ``(B) barriers to the deployment of such technologies; and
       ``(C) actions that could be taken to speed deployment of 
     such technologies.
       ``(3) Status of greenhouse gas reduction efforts.--Based on 
     the review described in subsection (a)(1), the Academy shall 
     identify--
       ``(A) the quantity of additional reductions required to 
     meet the emissions reduction goals described in section 702; 
     and
       ``(B) the quantity of additional reductions in global 
     greenhouse gas emissions needed to avoid the concentration 
     and temperature thresholds described in section 705(c)(6)(A) 
     or identified pursuant to section 705(c)(6)(B).
       ``(e) Authorization of Appropriations.--There are 
     authorized to be appropriated to carry out this section such 
     sums as may be necessary.

     ``SEC. 707. PRESIDENTIAL RESPONSE AND RECOMMENDATIONS.

       ``(a) Agency Actions.--The President shall direct relevant 
     Federal agencies to use existing statutory authority to take 
     appropriate actions identified in the reports submitted under 
     sections 705 and 706, and to address any shortfalls 
     identified in such reports, not later than July 1, 2015, and 
     every 4 years thereafter.
       ``(b) Plan.--In the event that the Administrator or the 
     National Academy of Sciences has concluded, in the most 
     recent report submitted under section 705 or 706 
     respectively, that the United States will not achieve the 
     necessary domestic greenhouse gas emissions reductions, or 
     that global actions will not maintain safe global average 
     surface temperature and atmospheric greenhouse gas 
     concentration thresholds, the President shall, not later than 
     July 1, 2015, and every 4 years thereafter, submit to 
     Congress a plan identifying domestic and international 
     actions that will achieve necessary additional greenhouse gas 
     reductions, including any recommendations for legislative 
     action.

       ``PART B--DESIGNATION AND REGISTRATION OF GREENHOUSE GASES

     ``SEC. 711. DESIGNATION OF GREENHOUSE GASES.

       ``(a) Greenhouse Gases.--For purposes of this title, the 
     following are greenhouse gases:
       ``(1) Carbon dioxide.
       ``(2) Methane.
       ``(3) Nitrous oxide.
       ``(4) Sulfur hexafluoride.
       ``(5) Hydrofluorocarbons emitted from a chemical 
     manufacturing process at an industrial stationary source.
       ``(6) Any perfluorocarbon.
       ``(7) Nitrogen trifluoride.
       ``(8) Any other anthropogenic gas designated as a 
     greenhouse gas by the Administrator under this section.
       ``(b) Determination on Administrator's Initiative.--The 
     Administrator shall, by rule--
       ``(1) determine whether 1 metric ton of another 
     anthropogenic gas makes the same or greater contribution to 
     global warming over 100 years as 1 metric ton of carbon 
     dioxide;
       ``(2) determine the carbon dioxide equivalent value for 
     each gas with respect to which the Administrator makes an 
     affirmative determination under paragraph (1);
       ``(3) for each gas with respect to which the Administrator 
     makes an affirmative determination under paragraph (1) and 
     that is used as a substitute for a class I or class II 
     substance under title VI, determine the extent to which to 
     regulate that gas under section 619 and specify appropriate 
     compliance obligations under section 619;
       ``(4) designate as a greenhouse gas for purposes of this 
     title each gas for which the Administrator makes an 
     affirmative determination under paragraph (1), to the extent 
     that it is not regulated under section 619; and
       ``(5) specify the appropriate compliance obligations under 
     this title for each gas designated as a greenhouse gas under 
     paragraph (4).
       ``(c) Petitions to Designate a Greenhouse Gas.--
       ``(1) In general.--Any person may petition the 
     Administrator to designate as a greenhouse gas any 
     anthropogenic gas 1 metric ton of which makes the same or 
     greater contribution to global warming over 100 years as 1 
     metric ton of carbon dioxide.
       ``(2) Contents of petition.--The petitioner shall provide 
     sufficient data, as specified by rule by the Administrator, 
     to demonstrate that the gas is likely to be designated as a 
     greenhouse gas and is likely to be produced, imported, used, 
     or emitted in the United States. To the extent practicable, 
     the petitioner shall also identify producers, importers, 
     distributors, users, and emitters of the gas in the United 
     States.
       ``(3) Review and action by the administrator.--Not later 
     than 90 days after receipt of a petition under paragraph (2), 
     the Administrator shall determine whether the petition is 
     complete and notify the petitioner and the public of the 
     decision.
       ``(4) Additional information.--The Administrator may 
     require producers, importers, distributors, users, or 
     emitters of the gas to provide information on the 
     contribution of the gas to global warming over 100 years 
     compared to carbon dioxide.
       ``(5) Treatment of petition.--For any substance used as a 
     substitute for a class I or class II substance under title 
     VI, the Administrator may elect to treat a petition under 
     this subsection as a petition to list the substance as a 
     class II, group II substance under section 619, and may 
     require the petition to be amended to address listing 
     criteria promulgated under that section.
       ``(6) Determination.--Not later than 2 years after receipt 
     of a complete petition, the Administrator shall, after notice 
     and an opportunity for comment--
       ``(A) issue and publish in the Federal Register--
       ``(i) a determination that 1 metric ton of the gas does not 
     make a contribution to global warming over 100 years that is 
     equal to or greater than that made by 1 metric ton of carbon 
     dioxide; and
       ``(ii) an explanation of the decision; or
       ``(B) determine that 1 metric ton of the gas makes a 
     contribution to global warming over 100 years that is equal 
     to or greater than that made by 1 metric ton of carbon 
     dioxide, and take the actions described in subsection (b) 
     with respect to such gas.
       ``(7) Grounds for denial.--The Administrator may not deny a 
     petition under this subsection solely on the basis of 
     inadequate Environmental Protection Agency resources or time 
     for review.
       ``(d) Science Advisory Board Consultation.--

[[Page H7545]]

       ``(1) Consultation.--The Administrator shall--
       ``(A) give notice to the Science Advisory Board prior to 
     making a determination under subsection (b)(1), (c)(6), or 
     (e)(2)(B);
       ``(B) consider the written recommendations of the Science 
     Advisory Board under paragraph (2) regarding the 
     determination; and
       ``(C) consult with the Science Advisory Board regarding 
     such determination, including consultation subsequent to 
     receipt of such written recommendations.
       ``(2) Formulation of recommendations.--Upon receipt of 
     notice under paragraph (1)(A) regarding a pending 
     determination under subsection (b)(1), (c)(6), or (e)(2)(B), 
     the Science Advisory Board shall--
       ``(A) formulate recommendations regarding such 
     determination, subject to a peer review process; and
       ``(B) submit such recommendations in writing to the 
     Administrator.
       ``(e) Manufacturing and Emission Notices.--
       ``(1) Notice requirement.--
       ``(A) In general.--Effective 24 months after the date of 
     enactment of this title, no person may manufacture or 
     introduce into interstate commerce a fluorinated gas, or emit 
     a significant quantity, as determined by the Administrator, 
     of any fluorinated gas that is generated as a byproduct 
     during the production or use of another fluorinated gas, 
     unless--
       ``(i) the gas is designated as a greenhouse gas under this 
     section or is an ozone-depleting substance listed as a class 
     I or class II substance under title VI;
       ``(ii) the Administrator has determined that 1 metric ton 
     of such gas does not make a contribution to global warming 
     over 100 years that is equal to or greater than that made by 
     1 metric ton of carbon dioxide; or
       ``(iii) the person manufacturing or importing the gas for 
     distribution into interstate commerce, or emitting the gas, 
     has submitted to the Administrator, at least 90 days before 
     the start of such manufacture, introduction into commerce, or 
     emission, a notice of such person's manufacture, introduction 
     into commerce, or emission of such gas, and the Administrator 
     has not determined that that notice or a substantially 
     similar notice submitted by that person is incomplete.
       ``(B) Alternative compliance.--For a gas that is a 
     substitute for a class I or class II substance under title VI 
     and either has been listed as acceptable for use under 
     section 612 or is currently subject to evaluation under 
     section 612, the Administrator may accept the notice and 
     information provided pursuant to that section as fulfilling 
     the obligation under clause (iii) of subparagraph (A).
       ``(2) Review and action by the administrator.--
       ``(A) Completeness.--Not later than 90 days after receipt 
     of notice under paragraph (1)(A)(iii) or (B), the 
     Administrator shall determine whether the notice is complete.
       ``(B) Determination.--If the Administrator determines that 
     the notice is complete, the Administrator shall, after notice 
     and an opportunity for comment, not later than 12 months 
     after receipt of the notice--
       ``(i) issue and publish in the Federal Register--

       ``(I) a determination that 1 metric ton of the gas does not 
     make a contribution to global warming over 100 years that is 
     equal to or greater than that made by 1 metric ton of carbon 
     dioxide; and
       ``(II) an explanation of the decision; or

       ``(ii) determine that 1 metric ton of the gas makes a 
     contribution to global warming over 100 years that is equal 
     to or greater than that made by 1 metric ton of carbon 
     dioxide, and take the actions described in subsection (b) 
     with respect to such gas.
       ``(f) Regulations.--Not later than one year after the date 
     of enactment of this title, the Administrator shall 
     promulgate regulations to carry out this section. Such 
     regulations shall include--
       ``(1) requirements for the contents of a petition submitted 
     under subsection (c);
       ``(2) requirements for the contents of a notice required 
     under subsection (e); and
       ``(3) methods and standards for evaluating the carbon 
     dioxide equivalent value of a gas.
       ``(g) Gases Regulated Under Title VI.--The Administrator 
     shall not designate a gas as a greenhouse gas under this 
     section to the extent that the gas is regulated under title 
     VI.
       ``(h) Savings Clause.--Nothing in this section shall be 
     interpreted to relieve any person from complying with the 
     requirements of section 612.

     ``SEC. 712. CARBON DIOXIDE EQUIVALENT VALUE OF GREENHOUSE 
                   GASES.

       ``(a) Measure of Quantity of Greenhouse Gases.--Any 
     provision of this title or title VIII that refers to a 
     quantity or percentage of a quantity of greenhouse gases 
     shall mean the quantity or percentage of the greenhouse gases 
     expressed in carbon dioxide equivalents.
       ``(b) Initial Value.--Except as provided by the 
     Administrator under this section or section 711--
       ``(1) the carbon dioxide equivalent value of greenhouse 
     gases for purposes of this Act shall be as follows:

     ``CARBON DIOXIDE EQUIVALENT OF 1 TON OF LISTED GREENHOUSE GASES
------------------------------------------------------------------------
                                                        Carbon dioxide
            Greenhouse gas (1 metric ton)             equivalent (metric
                                                             tons)
------------------------------------------------------------------------
Carbon dioxide......................................                  1
------------------------------------------------------------------------
Methane.............................................                 25
------------------------------------------------------------------------
Nitrous oxide.......................................                298
------------------------------------------------------------------------
HFC-23..............................................             14,800
------------------------------------------------------------------------
HFC-125.............................................              3,500
------------------------------------------------------------------------
HFC-134a............................................              1,430
------------------------------------------------------------------------
HFC-143a............................................              4,470
------------------------------------------------------------------------
HFC-152a............................................                124
------------------------------------------------------------------------
HFC-227ea...........................................              3,220
------------------------------------------------------------------------
HFC-236fa...........................................              9,810
------------------------------------------------------------------------
HFC-4310mee.........................................              1,640
------------------------------------------------------------------------
CF4.................................................              7,390
------------------------------------------------------------------------
C2F6................................................             12,200
------------------------------------------------------------------------
C4F10...............................................              8,860
------------------------------------------------------------------------
C6F14...............................................              9,300
------------------------------------------------------------------------
SF6.................................................             22,800
------------------------------------------------------------------------
NF3.................................................             17,200
------------------------------------------------------------------------

     ; and
       ``(2) the carbon dioxide equivalent value for purposes of 
     this Act for any greenhouse gas not listed in the table under 
     paragraph (1) shall be the 100-year Global Warming Potentials 
     provided in the Intergovernmental Panel on Climate Change 
     Fourth Assessment Report.
       ``(c) Periodic Review.--
       ``(1) Not later than February 1, 2017, and (except as 
     provided in paragraph (3)) not less than every 5 years 
     thereafter, the Administrator shall--
       ``(A) review and, if appropriate, revise the carbon dioxide 
     equivalent values established under this section or section 
     711(b)(2), based on a determination of the number of metric 
     tons of carbon dioxide that makes the same contribution to 
     global warming over 100 years as 1 metric ton of each 
     greenhouse gas; and
       ``(B) publish in the Federal Register the results of that 
     review and any revisions.
       ``(2) A revised determination published in the Federal 
     Register under paragraph (1)(B) shall take effect for 
     greenhouse gas emissions starting on January 1 of the first 
     calendar year starting at least 9 months after the date on 
     which the revised determination was published.
       ``(3) The Administrator may decrease the frequency of 
     review and revision under paragraph (1) if the Administrator 
     determines that such decrease is appropriate in order to 
     synchronize such review and revision with any similar review 
     process carried out pursuant to the United Nations Framework 
     Convention on Climate Change, done at New York on May 9, 
     1992, or to an agreement negotiated under that convention, 
     except that in no event shall the Administrator carry out 
     such review and revision any less frequently than every 10 
     years.
       ``(d) Methodology.--In setting carbon dioxide equivalent 
     values, for purposes of this section or section 711, the 
     Administrator shall take into account publications by the 
     Intergovernmental Panel on Climate Change or a successor 
     organization under the auspices of the United Nations 
     Environmental Programme and the World Meteorological 
     Organization.

     ``SEC. 713. GREENHOUSE GAS REGISTRY.

       ``(a) Definitions.--For purposes of this section:
       ``(1) Climate registry.--The term `Climate Registry' means 
     the greenhouse gas emissions registry jointly established and 
     managed by more than 40 States and Indian tribes in 2007 to 
     collect high-quality greenhouse gas emission data from 
     facilities, corporations, and other organizations to support 
     various greenhouse gas emission reporting and reduction 
     policies for the member States and Indian tribes.
       ``(2) Reporting entity.--The term `reporting entity' 
     means--
       ``(A) a covered entity;
       ``(B) an entity that--
       ``(i) would be a covered entity if it had emitted, 
     produced, imported, manufactured, or delivered in 2008 or any 
     subsequent year more than the applicable threshold level in 
     the definition of covered entity in paragraph (13) of section 
     700; and
       ``(ii) has emitted, produced, imported, manufactured, or 
     delivered in 2008 or any subsequent year more than the 
     applicable threshold level in the definition of covered 
     entity in paragraph (13) of section 700, provided that the 
     figure of 25,000 tons of carbon dioxide equivalent is read 
     instead as 10,000 tons of carbon dioxide equivalent and the 
     figure of 460,000,000 cubic feet is read instead as 
     184,000,000 cubic feet;
       ``(C) any other entity that emits a greenhouse gas, or 
     produces, imports, manufactures, or delivers material whose 
     use results or may result in greenhouse gas emissions if the 
     Administrator determines that reporting under this section by 
     such entity will help achieve the purposes of this title or 
     title VIII;
       ``(D) any vehicle fleet with emissions of more than 25,000 
     tons of carbon dioxide equivalent on an annual basis, if the 
     Administrator determines that the inclusion of

[[Page H7546]]

     such fleet will help achieve the purposes of this title or 
     title VIII; or
       ``(E) any entity that delivers electricity to a facility in 
     an energy-intensive 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 
     facilities in an energy-intensive industrial sector that 
     meets the energy or greenhouse gas intensity criteria in 
     section 764(b)(2)(A)(i);
       ``(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 at least as protective as 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.

[[Page H7547]]

                        ``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, nor does any offset credit or other instrument 
     established or issued under the American Clean Energy and 
     Security Act of 2009, and the amendments made thereby, for 
     the purpose of demonstrating compliance with this title.
       ``(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, offset credits, or term offset 
     credits.''
       ``(3) Other provisions unaffected.--Except as otherwise 
     specified in this Act, nothing in this Act relating to 
     allowances, offset credits, or term 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
------------------------------------------------------------------------


------------------------------------------------------------------------
          ``Calendar year             Emission allowances (in millions)
------------------------------------------------------------------------
                      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.

[[Page H7548]]

       ``(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 
     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 shifting such emissions to noncovered 
     sources.
       ``(g) Fluorinated Gases Assessment.--No later than March 
     31, 2014, the Administrator shall complete 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, competitiveness 
     and other relevant considerations consistent with the 
     purposes of this title, 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 and the compliance obligations under section 
     722 with respect to non-HFC fluorinated gases accordingly, 
     consistent with the purposes of this title, and establish 
     such other 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 offset 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 offset 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.
       ``(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) generated by a covered entity is used as an 
     input in the production of algae-based fuels, the 
     Administrator shall ensure that emission allowances are 
     required to be held either for the carbon dioxide generated 
     by a covered entity that is used to grow the algae or for the 
     portion of the carbon dioxide emitted from combustion of the 
     fuel produced from such algae that is attributable to carbon 
     dioxide generated by a covered entity, 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.--For natural gas liquids, the 
     covered entity subject to the requirement stated in paragraph 
     (2) shall be the owner of the natural gas liquids at the 
     point the natural gas liquids are separated into merchantable 
     products.
       ``(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.
       ``(14) Application to fractions of tons.--In applying 
     paragraphs (1) through (8), any amount less than 1 ton of 
     carbon dioxide equivalent of emissions or attributable 
     greenhouse gas emissions shall be treated as 1 ton of such 
     carbon dioxide equivalent.
       ``(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.--

[[Page H7549]]

       ``(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 emission 
     allowance prices, are likely to offset less than 0.9 billion 
     tons of greenhouse gas emissions (measured in tons of carbon 
     dioxide equivalents), for purposes of compliance 
     demonstration in that year the Administrator shall--
       ``(i) increase the percentage of emissions that can be 
     offset through the use of international offset credits to 
     reflect the amount that 1.0 billion exceeds the number of 
     domestic offset credits the Administrator determines is 
     available, at prices generally equal to or less than emission 
     allowance prices, for that year, up to a maximum of 0.5 
     billion tons of greenhouse gas emissions; and
       ``(ii) decrease the percentage of emissions that can be 
     offset through the use of domestic offset credits by the same 
     amount.
       ``(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) Term offsett credits.--
       ``(A) In general.--Covered entities may, in accordance with 
     this paragraph, use non-expired term offset credits instead 
     of domestic offset credits for purposes of temporarily 
     demonstrating compliance with this section.
       ``(B) Amount.--The combined quantity of term offset credits 
     and domestic offset credits used by a covered entity to 
     demonstrate compliance for its emissions or attributable 
     greenhouse gas emissions in any given year shall not exceed 
     the quantity of domestic offset credits that a covered entity 
     is entitled to use for that year to demonstrate compliance in 
     accordance with paragraph (1).
       ``(C) Expiration.--A term offset credit shall expire in the 
     year after its term ends. The term of a term offset credit 
     shall be calculated by adding to the year of issuance the 
     number of years equal to the length of the crediting period 
     for the practice or project for which the term offset credit 
     was issued, but in no case shall be later than the date 5 
     years from the date of issuance.
       ``(D) Demonstrating compliance upon expiration of term 
     offset credit.--With respect to the emissions for which a 
     covered entity is using term offset credits to demonstrate 
     compliance temporarily with 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 the calendar year in 
     which a term offset credit expires, the owner or operator 
     holds--
       ``(i) for purposes of finally demonstrating compliance, an 
     allowance or a domestic offset credit; or
       ``(ii) for purposes of temporarily demonstrating 
     compliance, a non-expired term offset credit.

     Domestic offset credits used for purposes of finally 
     demonstrating compliance under this subparagraph shall not be 
     subject to the percentage limitations in subparagraph (B).
       ``(E) Financial assurance.--A covered entity may not use a 
     term offset credit to demonstrate compliance temporarily 
     unless it simultaneously provides to the Administrator 
     financial assurance that, at the end of the term offset 
     credit's crediting term, the covered entity will have 
     sufficient resources to obtain the quantity of allowances or 
     credits necessary to demonstrate final compliance. The 
     Administrator shall issue regulations establishing 
     requirements for such financial assurance, which shall take 
     into account the increased risk associated with longer 
     crediting terms. These regulations shall take into account 
     the total number of tons of carbon dioxide equivalent of 
     greenhouse gas emissions for which a covered entity is 
     demonstrating compliance temporarily, and may set a limit on 
     this amount. In the event that a covered entity that used 
     term offset credits to demonstrate compliance temporarily 
     fails to meet the requirements of subparagraph (D) at the end 
     of the term offset credits' crediting term, if the financial 
     assurance mechanism fails to provide to the Administrator the 
     number of allowances or offset credits for which the 
     crediting term has expired, then the Administrator shall 
     retire that number of allowances with the vintage year 2 
     years after the year in which the term offset credit expires 
     in the same amount. Allowances so retired shall not be 
     counted as emission allowances established for that calendar 
     year under section 721(a).
       ``(3) 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).
       ``(4) 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 threshold that is used to define covered 
     entities in such category. After consideration of--
       ``(1) emissions from covered entities in 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 offset 
     credits or receiving allowances or offset credits from the 
     Administrator under this title, submit to the Administrator a 
     certificate of representation designating 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 shall be a separate violation. 
     In the

[[Page H7550]]

     event that a covered entity fails to demonstrates compliance 
     at the expiration of a term offset credit's crediting term as 
     required by section 722(d)(2)(D), the year of the violation 
     shall be the year in which the term offset credit expires.
       ``(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), (d)(2) 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 
     demonstrate compliance under section 722 on the deadline; by
       ``(B) twice the auction clearing price for the earliest 
     vintage year emission allowances in the last auction carried 
     out pursuant to section 791 before such deadline.
       ``(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), (d)(2) 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 
     greenhouse gas emissions or attributable greenhouse gas 
     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, offset credit or term 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, offset 
     credits, and term 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 offset credit, or term offset credit, 
     established or issued under the American Clean Energy and 
     Security Act of 2009 or the amendments made thereby 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, offset credits, 
     or term offset credits or the allowance tracking system.
       ``(2) General rule.--Allowance, offset credit, or term 
     offset credit, established or issued under the American Clean 
     Energy and Security Act of 2009 or the amendments made 
     thereby, shall not expire unless--
       ``(A) it is retired by the Administrator pursuant to 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 
     pursuant to 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 demonstrate compliance under section 722 or comply 
     with 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 section 722 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, and the Administrator shall retire, 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) deposit emission allowances established under 
     subsection (g) from auction proceeds 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

[[Page H7551]]

     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 combined greenhouse gas emissions and attributable 
     greenhouse gas emissions during the most recent year for 
     which allowances or offset 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 combined 
     greenhouse gas emissions and attributable 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 greenhouse gas 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

[[Page H7552]]

     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) by promulgating new regulations 
     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 or Indian 
     tribe with an approved permit program, shall require the 
     owner or operator of a covered entity to hold 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 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 
     allowances and offset credits 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 or Indian tribe 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 
     allowances or offset credits, except that any such covered 
     entity may be subject to the applicable enforcement provision 
     of section 113.
       ``(e) Regulations.--Not later than 2 years after the date 
     of enactment of this title, 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 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, 
     apply a limit to the percentage of the combined greenhouse 
     gas emissions and attributable greenhouse gas emissions of a 
     covered entity with respect to which compliance may be 
     demonstrated by holding 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

[[Page H7553]]

       ``(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 with respect to section 734, 
     including methodologies to address the issues of 
     additionality, activity baselines, quantification methods, 
     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, and reductions achieved through 
     destruction of chlorofluorocarbons or other ozone depleting 
     substances, if permitted by the Administrator under section 
     619(b)(9) and subject to the conditions specified in section 
     619(b)(9), based on the carbon dioxide equivalent value of 
     the substance destroyed.
       ``(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 establishing methodologies pursuant to 
     section 734, the Administrator shall give priority to 
     methodologies for offset project 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 the 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; and
       ``(C) 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.

[[Page H7554]]

       ``(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 
     to an offset project for which offset credits are reserved 
     under this paragraph, the Administrator shall retire offset 
     credits or emission allowances from the offsets reserve 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 make the approval petition 
     publicly available, approve or deny the petition in writing 
     and if the petition is denied, provide the reasons for 
     denial, and make the Administrator's written decision 
     publicly available. 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 gases, 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 gases 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.

[[Page H7555]]

       ``(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 that have been reduced or avoided, or 
     greenhouse gases that have been sequestered, by the offset 
     project; and
       ``(3) notify the offset project developer in writing of 
     such determination and make such determination publicly 
     available.
       ``(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 or tribal 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 an activity if 
     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 
     activity; 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, sequestration of greenhouse gases, or destruction 
     of chlorofluorocarbons (subject to the conditions specified 
     in section 619(b)(9) and based on the carbon dioxide 
     equivalent value of the substance destroyed), 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 
     regulation; 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 or regulation 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 or regulation that the Administrator determines 
     meet the criteria of subsection (a)(2). The Administrator 
     shall make a determination on any application received under 
     this section by no later than 180 days from the date of 
     receipt of the application.

     ``SEC. 741. ENVIRONMENTAL CONSIDERATIONS.

       ``If the Administrator lists forestry or other relevant 
     land management-related offset 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 such 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 the case of forestry offset projects, 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 
     eligible under section 733 or as provided in subsection (c), 
     (d), or (e) of this section.
       ``(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

[[Page H7556]]

     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 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 domestically 
     enforceable baseline level of absolute emissions 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 on an absolute basis and at levels of greenhouse 
     gas emissions consistent with the thresholds identified in 
     section 705(e)(2) and 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. 
     Starting January 1, 2016, the Administrator shall issue no 
     offset credit pursuant to this subsection if the activity 
     generating the greenhouse gas emissions reductions or 
     avoidance, or greenhouse gas sequestration, occurs in a 
     country and sector identified by the Administrator under 
     subsection (c).
       ``(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;

[[Page H7557]]

       ``(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 with respect 
     to emissions from forest and land use activities.
       ``(3) Protection of interests.--With respect to an 
     agreement or arrangement described in subsection (b)(2)(A) 
     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) and (2).
       ``(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 within 2 years after the date of 
     enactment of this title, 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 or province deforestation baseline.--A state or 
     province 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 or 
     province 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 within 2 years after the date of 
     enactment of this title, and periodically review and update, 
     a list of developing countries each of which--
       ``(i) the Administrator determines, based on recent, 
     credible, and reliable emissions data, accounts 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) has, or in the determination of the Administrator is 
     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 relevant to the specific project or program 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 pursuant to 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 
     paragraph by up to 8 years with respect to eligible 
     activities taking place in a least developed country, which 
     for purposes of this paragraph is defined as 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, if the 
     Administrator, in consultation with the Secretary of State 
     and the Administrator of the United States Agency for 
     International Development, determines the country--
       ``(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.
       ``(8) Consultation.--In implementing this subsection, the 
     Administrator shall consult with the Secretary of Agriculture 
     on relevant matters within such Secretary's area of 
     expertise.
       ``(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.

[[Page H7558]]

       ``(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, assistance under 
     this part 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 reduce 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) Authorized activities.--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 a 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 subsection (b)(2), the Administrator shall 
     distribute emission allowances as provided in paragraph (1) 
     of this subsection 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 subsection (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 under this part 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 regulations 
     establishing standards to ensure that supplemental emissions 
     reductions achieved through supported activities are 
     additional, measurable, verifiable, permanent, and 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;

[[Page H7559]]

       ``(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 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 forest management practices;
       ``(B) to promote or restore native forest species and 
     ecosystems where 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 country in which the activities occur, 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) Scope.--(1) The Administrator shall include within 
     the scope of activities under this part reduced emissions 
     from forest degradation.
       ``(2) 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 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.
       ``(j) Not Eligible for Offset Credit.--Activities that 
     receive support under this part shall not be issued offset 
     credits for the greenhouse gas emissions reductions or 
     avoidance, or greenhouse gas sequestration, produced by such 
     activities.

     ``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, 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, consistent with the requirements of 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) and (2);
       ``(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) subnational and 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

[[Page H7560]]

     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. Such term 
     includes an emission allowance, a compensatory allowance, and 
     an international emission allowance, but does not include an 
     international reserve allowance established under section 
     766.
       ``(6) Attributable greenhouse gas emissions.--The term 
     `attributable greenhouse gas emissions', for a given calendar 
     year, 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 
     during that calendar year 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 any gas described in clauses 
     (i) through (vi) of paragraph (13)(C)--
       ``(i) produced or imported by such covered entity during 
     that 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 that 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,