,i  #aai? ,,congress  #a/ ,session  ,h4 
,r4 #bagg  ,,9 ,,! ,,h\se ,,(           
,,repres5tatives  ,m>* #ah1 #bjbe,mr4   
,ca/5 introduc$ ! foll[+ bill2 :i* 0    
ref]r$ to ! ,committee on ,en]gy &      
,comm]ce  ,a ,,bill  ,to am5d ! ,clean  
,air ,act to e/abli% a tradeable en]gy  
p]=mance /&>d = l>ge electricity        
g5]ators & !rmal en]gy us]s1 & = o!r    
purposes4  #a4 ,%ort title ,?is ,act may
 be cit$ z ! ,tradeable ,en]gy ,p]=mance
 ,/&>ds ,act4  #b4 ,e/abli%+ tradeable  
en]gy p]=mance /&>ds ,! ,clean ,air ,act
 7#db ,u4,s4,c4 #gdja et seq47 is am5d$ 
by add+ aft] title ,,vi ! foll[+3  ,,vii
 ,,tradeable ,,en]gy ,,p]=mance ,,/&>ds 
,sec4 #gja4 ,def9itions4,sec4 #gjb4     
,emission all[ance submission           
requirem5t4,sec4 #gjc4 ,emission        
all[ance di/ribution4,sec4 #gjd4 ,trad+ 
( emission all[ances4,sec4 #gje4        
,emission all[ance bilat]al pur*ase     
agreem5ts4,sec4 #gjf4 ,volunt>y program 
p>ticipation4,sec4 #gjg4 ,emission      
all[ance track+ sy/em4,sec4 #gjh4 ,(fset

 program4,sec4 #gji4 ,p5alty =          
noncompliance4,sec4 #gaj4 ,comptroll]   
g5]al reports4,sec4 #gaa4 ,f9al         
regulations4,sec4 #gab4 ,sav+s          
provisions4  #gja4 ,def9itions ,9 ?is   
title3 7#a7 ,alt]native compliance      
paym5t ,! t]m ,alt]native ,compliance   
,paym5t means a paym5t made "u section  
#gjc7;e7 9 lieu ( ! submission ( an     
emission all[ance4  7#b7 ,bilat]al      
pur*ase agreem5t ,! t]m bilat]al pur*ase
 agreem5t means an agreem5t-- 7,a7 ent]$
 into aft] ! date ( enactm5t ( ?is      
title2  7,b7 = a t]m ( at lea/ #aj ye>s2
  7,c7 betwe5 ! own] or op]ator ( an    
,exi/+ ,cov]$ ,facility & ! own] or     
op]ator ( a ,newly ,con/ruct$           
,l[-,emission ,cov]$ ,facility2 &  7,d7 
9 :i* ! own] or op]ator ( an ,exi/+     
,cov]$ ,facility agrees to pur*ase "s or
 all ( ! emissions all[ances di/ribut$  
to ! own] or op]ator ( a ,newly         
,con/ruct$ ,l[-,emission ,cov]$         
,facility4  7#c7 ,cov]$ cog5]ation      
facility ,! t]m ,cov]$ ,cog5]ation      

,facility means a facility t            
simultane\sly produces useful !rmal     
en]gy output & electricity &-- 7,a7 has 
a rat$ electric capacity ( #b megawatts 
or great]2 or  7,b7 is a facility = :i* 
! ,adm9i/rator has approv$ a reque/ "u  
section #gjf7;a77#c74  7#d7 ,cov]$      
electric facility ,! t]m ,cov]$         
,electric ,facility means a facility t  
produces electricity &-- 7,a7 has a rat$
 electric capacity ( #b megawatts or    
great]2 or  7,b7 is a facility = :i* !  
,adm9i/rator has approv$ a reque/ "u    
section #gjf7;a77#a74  7#e7 ,cov]$      
facility ,! t]m ,cov]$ ,facility means a
 ,cov]$ ,electric ,facility1 a ,cov]$   
,!rmal ,facility1 or a ,cov]$           
,cog5]ation ,facility4  7#f7 ,cov]$     
!rmal facility ,! t]m ,cov]$ ,!rmal     
,facility means a facility-- 7,a7 t     
produces useful !rmal en]gy output at a 
,rat$ ,fuel-,bas$ ,capacity ( at lea/   
#ej million ,briti% !rmal units p] h\r1 
calculat$ on a high] heat+ value basis1 
exclud+ any facility t ! ,adm9i/rator   

det]m9es is us$ to :olly or p>tially    
provide c>bon z a *emical +r$i5t = a    
process to manufacture goods2 or  7,b7 =
 :i* ! ,adm9i/rator has approv$ a reque/
 "u section #gjf7;a77#b74  7#g7         
,designat$ repres5tative ,! t]m         
designat$ repres5tative means an        
individual = :i* a c]tificate (         
repres5tation has be5 submitt$ "u       
section #gjc7;e77#c74  7#h7 ,emission   
all[ance ,! t]m emission all[ance means 
a limit$ au?orization to emit #a metric 
ton ( c>bon dioxide t is di/ribut$ "u   
section #gjc4  7#i7 ,exi/+ ,cov]$       
,facility ,! t]m ,exi/+ ,cov]$ ,facility
 means a ,cov]$ ,facility-- 7,a7 ! own] 
or op]ator ( :i* is a p>ty to a bilat]al
 pur*ase agreem5t2 &  7,b7 t produc$    
electricity or useful !rmal en]gy output
 z ( ! date on :i* ! own] or op]ator    
ent]$ into su* agreem5t4  7#aj7 ,fossil 
fuel ,! t]m fossil fuel-- 7,a7 means a  
c>bon comp\nd =m$ 9 ! cru/ ( ! ,e>? f   
decay$ organic mat]ial2 &  7,b7 includes
 natural gas1 petroleum1 & coal4  7#aa7 

,high] heat+ value basis ,! t]m high]   
heat+ value basis means t a giv5        
calculation reg>d+ ! total en]gy cont5t 
( a fuel is made on ! basis ( ! heat    
produc$ p] unit ( fuel :5-- 7,a7        
complete combu/ion takes place at       
con/ant pressure2  7,b7 ! products (    
combu/ion are cool$ to ! initial        
temp]ature ( ! fuel & air2 &  7,c7 !    
wat] vapor =m$ dur+ combu/ion is        
cond5s$4  7#ab7 ,hold ,! t]m hold means1
 ) respect to an emission all[ance1 to h
 9 ! appropriate acc\nt creat$ pursuant 
to ! process "u section #gjg7;a77#b74   
7#ac7 ,newly con/ruct$ l[-emission cov]$
 facility ,! t]m ,newly ,con/ruct$      
,l[-,emission ,cov]$ ,facility means a  
,cov]$ ,facility-- 7,a7 ! own] or       
op]ator ( :i* is a p>ty to a bilat]al   
pur*ase agreem5t2  7,b7 t did n produce 
electricity or useful !rmal en]gy output
 prior to ! date on :i* ! own] or       
op]ator ent]$ into su* agreem5t2  7,c7  
t1 9 ! fir/ full cal5d> ye> dur+ :i* !  
,cov]$ ,facility produces electricity or

 useful !rmal en]gy output1 emits a     
less] quantity ( c>bon dioxide p]       
megawatt-h\r ( electricity production or
 p] million ,briti% !rmal units ( useful
 !rmal en]gy output ?an ! av]age ,cov]$ 
,facility4  7#ad7 ,output-bas$ co#b     
emissions ,! t]m ,output-,bas$ ,,co#b   
,emissions means ! foll[+3 7,a7 ,cov]$  
,electric ,facility ,= a ,cov]$         
,electric ,facility1 ! numb] t equals-- 
7i7 ! total numb] ( metric tons ( c>bon 
dioxide emissions releas$ by all ,cov]$ 
,electric ,facilities 9 a cal5d> ye>2   
divid$ by  7ii7 ! total numb] (         
megawatt-h\rs ( electricity produc$ by  
all ,cov]$ ,electric ,facilities 9 su*  
cal5d> ye>4  7,b7 ,cov]$ ,!rmal         
,facility ,= a ,cov]$ ,!rmal ,facility1 
! numb] t equals-- 7i7 ! total numb] (  
metric tons ( c>bon dioxide emissions f 
all ,cov]$ ,!rmal ,facilities 9 a cal5d>
 ye>2 divid$ by  7ii7 ! total numb] (   
millions ( ,briti% !rmal units ( useful 
!rmal en]gy output f all ,cov]$ ,!rmal  
,facilities 9 su* cal5d> ye>4  7#ae7    

,output-bas$ co#b emissions basel9e ,!  
t]m ,output-,bas$ ,,co#b ,emissions     
,basel9e means1 ) respect to a category 
( ,cov]$ ,facility1 ! ,output-,bas$     
,,co#b ,emissions 9 cal5d> ye> #bjbg4   
7#af7 ,output-bas$ co#b emissions t>get 
,! t]m ,output-,bas$ ,,co#b ,emissions  
,t>get means ! numb] ( metric tons (    
c>bon dioxide p] megawatt-h\r or p]     
million ,briti% !rmal units1 z          
applicable1 t is us$ to calculate !     
numb] ( emission all[ances di/ribut$ by 
! ,adm9i/rator to ea* ,cov]$ ,facility  
"u section #gjc4  7#ag7 ,p]man5tly      
seque/]$ ,! t]m ,p]man5tly ,seque/]$1 ) 
respect to c>bon dioxide1 means ! c>bon 
dioxide %all n ent] ! atmosph]e = at    
lea/ #bjj ye>s1 accord+ to ! be/        
available sci5ce4  7#ah7 ,rat$ fuel-bas$
 capacity ,! t]m ,rat$ ,fuel-,bas$      
,capacity means-- 7,a7 = facilities t   
produce useful !rmal en]gy output ) !   
combu/ion ( fuel1 ! peak fuel combu/ion 
rate1 express$ 9 millions ( ,briti%     
!rmal units p] h\r2 &  7,b7 = facilities

 t produce useful !rmal en]gy output )\t
 ! combu/ion ( fuel1 ! peak useful !rmal
 en]gy output rate divid$ by #j4g1      
express$ 9 millions ( ,briti% !rmal     
units p] h\r4  7#ai7 ,social co/ ( c>bon
 ,! t]m ,social ,co/ ( ,c>bon means !   
am\nt1 9 doll>s1 ( ! economic damages t 
w\ld result f emitt+ "o additional      
metric ton ( c>bon dioxide into !       
atmosph]e1 z det]m9$ by ! ,adm9i/rator 9
 accordance ) ! me?od describ$ 9 !      
docum5t titl$ ,report on ! ,social ,co/ 
( ,gre5h\se ,gases3 ,e/imates           
,incorporat+ ,rec5t ,sci5tific ,advances
 z publi%$ by ! ,environm5tal           
,protection ,ag5cy 9 ,novemb] #bjbc4    
7#bj7 ,total emission adju/m5t index ,! 
t]m ,total ,emission ,adju/m5t ,index   
means1 ) respect to a giv5 ye>1 ! numb] 
us$ to adju/ ! am\nt ( emission         
all[ances di/ribut$ = ea* megawatt-h\r &
 = ea* million ,briti% !rmal units1 z   
applicable1 z describ$ "u section       
#gjc7;c74  7#ba7 ,total u4s4 co#b       
emissions ,! t]m ,total ,u4,s4 ,,co#b   

,emissions means1 ) respect to a giv5   
cal5d> ye>1 ! total am\nt ( c>bon       
dioxide t w\ld be produc$ if all !      
fossil fuels import$ into ! ,unit$      
,/ates or extract$ )9 ! ,unit$ ,/ates 7 
fully combu/$4  7#bb7 ,useful !rmal     
en]gy output ,! t]m useful !rmal en]gy  
output-- 7,a7 means ! net am\nt ( !rmal 
en]gy produc$ by a facility1 includ+    
!rmal en]gy produc$ ?r\gh ! use (       
electricity2 &  7,b7 does n include     
en]gy 9 inlet combu/ion air1 fe$wat]1 or
 o!r fluids n us$ z fuels = combu/ion4  
#gjb4 ,emission all[ance submission     
requirem5t  7a7 ,9 g5]al ,beg9n+ 9      
cal5d> ye> #bjbh1 n lat] ?an ,june #a ( 
ea* cal5d> ye>1 ! own] or op]ator ( ea* 
,cov]$ ,facility %all submit to !       
,adm9i/rator "o emission all[ance = ea* 
metric ton ( c>bon dioxide releas$      
directly to ! atmosph]e by ! facility   
dur+ ! prec$+ cal5d> ye>4  7b7          
,acquisition ( emission all[ances ,!    
own] or op]ator ( a ,cov]$ ,facility may
 acquire an emission all[ance-- 7#a7 by 

receiv+ an emission all[ance di/ribut$  
"u section #gjc2 &  7#b7 by pur*as+1    
ex*ang+1 or transf]r+ an emission       
all[ance 9 accordance ) section #gjd4   
7c7 ,p]iod ( use ,an emission all[ance  
may be us$ by ! own] or op]ator ( a     
,cov]$ ,facility to comply ) subsection 
7a7 only =-- 7#a7 ! cal5d> ye> = :i* !  
emission all[ance is di/ribut$2 or  7#b7
 ! foll[+ cal5d> ye>4  7d7 ,r\nd+ (     
emission all[ances ,any fraction ( an   
emission all[ance %all be r\nd$ to !    
ne>e/ :ole emission all[ance4  #gjc4    
,emission all[ance di/ribution  7a7     
,di/ribution  7#a7 ,cov]$ electric      
facilities ,= ea* ( cal5d> ye>s #bjbh   
?r\gh #bjdh1 ! ,adm9i/rator %all1 n lat]
 ?an ,m>* #a ( a giv5 cal5d> ye>1       
di/ribute to ! own] or op]ator ( ea*    
,cov]$ ,electric ,facility a numb] (    
emission all[ances equal to ! product   
(-- 7,a7 ! numb] ( megawatt-h\rs (      
electricity produc$ by ! ,cov]$         
,electric ,facility dur+ ! previ\s      
cal5d> ye>2 &  7,b7 ! ,output-,bas$     

,,co#b ,emissions ,t>get = ! cal5d> ye>4
  7#b7 ,cov]$ !rmal facilities ,= ea* ( 
cal5d> ye>s #bjbh ?r\gh #bjdh1 !        
,adm9i/rator %all1 n lat] ?an ,m>* #a ( 
a giv5 cal5d> ye>1 di/ribute to ! own]  
or op]ator ( ea* ,cov]$ ,!rmal ,facility
 a numb] ( emission all[ances equal to !
 product (-- 7,a7 ! numb] ( millions (  
,briti% !rmal units ( useful !rmal en]gy
 output produc$ by ! ,cov]$ ,!rmal      
,facility dur+ ! previ\s cal5d> ye>2 &  
7,b7 ! ,output-,bas$ ,,co#b ,emissions  
,t>get = ! cal5d> ye>4  7#c7 ,cov]$     
cog5]ation facilities ,= ea* ( cal5d>   
ye>s #bjbh ?r\gh #bjdh1 ! ,adm9i/rator  
%all1 n lat] ?an ,m>* #a ( a giv5 cal5d>
 ye>1 di/ribute to ! own] or op]ator (  
ea* ,cov]$ ,cog5]ation ,facility-- 7,a7 
= ea* megawatt h\r ( electricity produc$
 by ! ,cov]$ ,cog5]ation ,facility1 a   
numb] ( emission all[ances calculat$ 9  
accordance ) p>agraph 7#a72 &  7,b7 =   
ea* million ,briti% !rmal units ( useful
 !rmal en]gy output produc$ by ! ,cov]$ 
,cog5]ation ,facility1 a numb] (        

emission all[ances calculat$ 9          
accordance ) p>agraph 7#b74  7b7        
,calculation ( ! output-,bas$ co#b      
emissions t>get  7#a7 #bjbh ,!          
,output-,bas$ ,,co#b ,emissions ,t>get =
 cal5d> ye> #bjbh %all equal !          
,output-,bas$ ,,co#b ,emissions         
,basel9e4  7#b7 ,subsequ5t ye>s ,9 a    
giv5 cal5d> ye> o!r ?an cal5d> ye>      
#bjbh1 ! ,output-,bas$ ,,co#b ,emissions
 ,t>get %all be ! great] (-- 7,a7 z]o2 &
  7,b7 ! less] (-- 7i7 ! ,output-,bas$  
,,co#b ,emissions ,t>get ( ! prec$+     
cal5d> ye> m9us #e p]c5t ( !            
,output-,bas$ ,,co#b ,emissions         
,basel9e2  7ii7 ! ,output-,bas$ ,,co#b  
,emissions ( ! prec$+ cal5d> ye> m9us #e
 p]c5t ( ! ,output-,bas$ ,,co#b         
,emissions ,basel9e2  7iii7 !           
,output-,bas$ ,,co#b ,emissions ,t>get (
 prec$+ cal5d> ye> m9us #aj p]c5t ( !   
,output-,bas$ ,,co#b ,emissions ,basel9e
 m9us ! ,total ,emission ,adju/m5t      
,index ( ! giv5 cal5d> ye>2 &  7iv7 !   
,output-,bas$ ,,co#b ,emissions ( prec$+

 cal5d> ye> m9us #aj p]c5t ( !          
,output-,bas$ ,,co#b ,emissions ,basel9e
 m9us ! ,total ,emission ,adju/m5t      
,index ( ! giv5 cal5d> ye>4  7c7        
,calculation ( total emission adju/m5t  
index ,) respect to a giv5 cal5d> ye>1 !
 ,total ,emission ,adju/m5t ,index %all 
be calculat$ z #a m9us ! ratio (-- 7#a7 
! ,total ,u4,s4 ,,co#b ,emissions 9 !   
previ\s cal5d> ye>2 to  7#b7 ! ,total   
,u4,s4 ,,co#b ,emissions 9 ! cal5d> ye> 
t began two ye>s be=e ! giv5 ye>4  7d7  
,g5]al rules  7#a7 ,id5tification numb]s
 ,! ,adm9i/rator %all assign to ea*     
emission all[ance di/ribut$ "u ?is      
section a unique id5tification numb]4   
7#b7 ,designat$ repres5tatives ,! own]  
or op]ator ( ea* ,cov]$ ,facility1 & !  
own] or op]ator ( ea* o!r entity hold+  
an emission all[ance or receiv+ an      
emission all[ance f ! ,adm9i/rator "u   
?is title1 %all submit to ! ,adm9i/rator
 a c]tificate ( repres5tation designat+ 
a designat$ repres5tative4  7#c7        
,prev5tion ( d\ble c\nt+ ,! ,adm9i/rator

 %all n consid] any ,cov]$ ,facility to 
:i* ! ,adm9i/rator di/ributes emission  
all[ances "u ?is section to be m ?an "o 
type ( facility z def9$ "u p>agraphs    
7#c71 7#d71 or 7#f7 ( section #gja4  7e7
 ,alt]native compliance paym5ts  7#a7 ,9
 g5]al ,! own] or op]ator ( a ,cov]$    
,facility may satisfy ! requirem5ts (   
section #gjb7;a71 9 :ole or 9 "p1 )     
respect to any cal5d> ye>1 by submitt+  
to ! ,adm9i/rator an ,alt]native        
,compliance ,paym5t 9 lieu ( an emission
 all[ance t w\ld o!rwise be due4  7#b7  
,am\nts  7,a7 ,cal5d> ye>s #bjbh ?r\gh  
#bjch ,= cal5d> ye>s #bjbh ?r\gh #bjch1 
! am\nt ( an ,alt]native ,compliance    
,paym5t %all be z foll[s1 except z !    
,adm9i/rator %all adju/ = inflation3    
,cal5d> ,year,alternative ,compliance   
,paym5t#bjbhej4jjbjbieb4jjbjcjed4jjbjcae
f4jjbjcbeh4jjbjccfj4jjbjcdfb4jjbjcefd4jj
bjcfff4jjbjcgfh4jjbjchgj4jj  7,b7       
,cal5d> ye>s #bjci ?r\gh #bjdh ,= cal5d>
 ye>s #bjci ?r\gh #bjdh1 ! am\nt ( !    
,alt]native ,compliance ,paym5t = a giv5

 ye> %all annually increase by an equal 
am\nt f #gj 9 #bjch1 adju/$ = inflation 
"u subp>agraph 7,a71 to ! ,social ,co/ (
 ,c>bon 9 #bjdh4  7,c7 ,cal5d> ye> #bjdh
 & !reaft] ,! am\nt ( an ,alt]native    
,compliance ,paym5t = cal5d> ye> #bjdh &
 !reaft] %all be equal to ! ,social ,co/
 ( ,c>bon4  #gjd4 ,trad+ ( emission     
all[ances  7a7 ,p]mitt$ transactions ,an
 entity t holds an emission all[ance    
may-- 7#a7 submit ! emission all[ances  
to ! ,adm9i/rator2 &  7#b7 sell1        
ex*ange1 & transf] ! emission all[ance  
to ano!r entity 9 accordance )          
subsection 7c74  7b7 ,legal /atus (     
emission all[ances  7#a7 ,9 g5]al ,an   
emission all[ance di/ribut$ by !        
,adm9i/rator "u ?is title does n        
con/itute a prop]ty "r4  7#b7 ,t]m9ation
 or limitation ,no?+ 9 ?is title %all be
 con/ru$ to limit or alt] ! au?ority ( !
 ,unit$ ,/ates to t]m9ate or limit !    
sale1 ex*ange1 transf]1 hold+1 or       
submission ( emission all[ances4  7c7   
,effectiv5ess ( emission all[ance       

transactions ,no sale1 ex*ange1 transf]1
 or submission ( an emission all[ance   
%all be effective = purposes ( ?is title
 until a c]tification ( ! sale1 transf]1
 ex*ange1 or submission is-- 7#a7 sign$ 
by ! designat$ repres5tative ( ! entity 
hold+ ! emission all[ance2 &  7#b7      
receiv$ & record$ by ! ,adm9i/rator 9   
accordance ) regulations issu$ "u       
section #gjg4  #gje4 ,emission all[ance 
bilat]al pur*ase agreem5ts  7a7         
,di/ribution ( all[ances to an ,exi/+   
,cov]$ ,facility  7#a7 ,9 g5]al ,= a    
cal5d> ye> t is cov]$ by a bilat]al     
pur*ase agreem5t1 beg9n+ ) ! fir/ full  
cal5d> ye> dur+ :i* ! ,newly ,con/ruct$ 
,l[-,emission ,cov]$ ,facility produces 
electricity or useful !rmal en]gy       
output1 ! ,adm9i/rator %all di/ribute to
 ! own] or op]ator ( ! ,exi/+ ,cov]$    
,facility-- 7,a7 = megawatt h\rs (      
electricity or million ,briti% !rmal    
units ( useful !rmal en]gy output1 z    
applicable1 produc$ by ! ,exi/+ ,cov]$  
,facility t are cov]$ by ! agreem5t1 a  

numb] ( emission all[ances t is equal   
to-- 7i7 su* numb] ( megawatt h\rs or   
million ,briti% !rmal units1 z          
applicable2 multipli$ by  7ii7 !        
,output-,bas$ ,,co#b ,emissions = ,cov]$
 ,electric ,facilities or ,cov]$ ,!rmal 
,facilities1 z applicable1 = su* fir/   
full cal5d> ye>2 &  7,b7 = megawatt h\rs
 ( electricity or million ,briti% !rmal 
units ( useful !rmal en]gy output1 z    
applicable1 produc$ by ! ,exi/+         
,facility t are n cov]$ by ! agreem5t1 !
 numb] ( emission all[ances calculat$ "u
 section #gjc7;a74  7#b7 ,calculation ( 
megawatt h\rs or million ,briti% !rmal  
units cov]$ by agreem5t ,= purposes (   
p>agraph 7#a71 ! numb] ( megawatt h\rs (
 electricity or million ,briti% !rmal   
units ( useful !rmal en]gy output1 z    
applicable1 produc$ by an ,exi/+ ,cov]$ 
,facility t are cov]$ by ! agreem5t %all
 be equal to-- 7,a7 ! numb] ( emission  
all[ances sold to ! own] or op]ator ( ! 
,exi/+ ,cov]$ ,facility pursuant to !   
agreem5t = ! fir/ full cal5d> ye>       

describ$ 9 p>agraph 7#a71 divid$ by !   
diff]5ce (-- 7i7 ! numb] ( emission     
all[ances submitt$ to ! ,adm9i/rator by 
! own] or op]ator ( ! ,exi/+ ,cov]$     
,facility = su* fir/ full cal5d> ye>2   
m9us  7ii7 ! numb] ( emission all[ances 
di/ribut$ to ! own] or op]ator ( !      
,exi/+ ,cov]$ ,facility by !            
,adm9i/rator = su* fir/ full cal5d> ye>2
 multipli$ by  7,b7 ! total numb] (     
megawatt h\rs ( electricity or million  
,briti% !rmal units ( useful !rmal en]gy
 output1 z applicable1 produc$ by !     
,exi/+ ,cov]$ ,facility 9 su* fir/ full 
cal5d> ye>4  7b7 ,di/ribution (         
all[ances to a ,newly ,con/ruct$        
,l[-,emission ,cov]$ ,facility  7#a7 ,9 
g5]al ,= cal5d> ye>s t are cov]$ by an  
agreem5t describ$ 9 subsection 7a71     
beg9n+ ) ! fir/ full cal5d> ye> dur+ :i*
 ! ,newly ,con/ruct$ ,l[-,emission      
,cov]$ ,facility produces at lea/ #a    
megawatt-h\r ( electricity or #a million
 ,briti% !rmal units ( useful !rmal     
en]gy output1 ! ,adm9i/rator %all       

di/ribute to ! own] or op]ator ( !      
,newly ,con/ruct$ ,l[-,emission ,cov]$  
,facility-- 7,a7 = megawatt h\rs (      
electricity or million ,briti% !rmal    
units ( useful !rmal en]gy output1 z    
applicable1 produc$ by ! ,newly         
,con/ruct$ ,l[-,emission ,cov]$         
,facility t are cov]$ by ! agreem5t1 a  
numb] ( emission all[ances t is equal   
to-- 7i7 su* numb] ( megawatt h\rs or   
million ,briti% !rmal units ( useful    
!rmal en]gy output2 multipli$ by  7ii7 !
 ,output-,bas$ ,,co#b ,emissions =      
,cov]$ ,electric ,facilities or ,cov]$  
,!rmal ,facilities1 z applicable1 = su* 
fir/ full cal5d> ye>2 &  7,b7 = megawatt
 h\rs ( electricity or million ,briti%  
!rmal units ( useful !rmal en]gy output1
 z applicable1 produc$ by ! ,newly      
,con/ruct$ ,l[-,emission ,cov]$         
,facility t are n cov]$ by ! agreem5t1 !
 numb] ( emission all[ances calculat$ "u
 section #gjc7;a74  7#b7 ,calculation ( 
megawatt h\rs or million ,briti% !rmal  
units cov]$ by agreem5t ,= purposes (   

p>agraph 7#a71 ! numb] ( megawatt h\rs (
 electricity or million ,briti% !rmal   
units ( useful !rmal en]gy output1 z    
applicable1 produc$ by a ,newly         
,con/ruct$ ,l[-,emission ,cov]$         
,facility t are cov]$ by ! agreem5t %all
 be equal to-- 7,a7 ! numb] ( emission  
all[ances sold to ! own] or op]ator ( ! 
,exi/+ ,cov]$ ,facility pursuant to !   
agreem5t = ! fir/ full cal5d> ye>       
describ$ 9 p>agraph 7#a71 divid$ by !   
diff]5ce (-- 7i7 ! numb] ( emission     
all[ances submitt$ to ! ,adm9i/rator by 
! own] or op]ator ( ! ,newly ,con/ruct$ 
,l[-,emission ,cov]$ ,facility = su*    
fir/ full cal5d> ye>2 m9us  7ii7 ! numb]
 ( emission all[ances di/ribut$ to !    
own] or op]ator ( ! ,newly ,con/ruct$   
,l[-,emission ,cov]$ ,facility by !     
,adm9i/rator = su* fir/ full cal5d> ye>2
 multipli$ by  7,b7 ! total numb] (     
megawatt h\rs ( electricity or million  
,briti% !rmal units ( useful !rmal en]gy
 output1 z applicable1 produc$ by !     
,exi/+ ,facility 9 su* fir/ full cal5d> 

ye>4  7c7 ,conditions ,! own] or op]ator
 ( an exi/+ ,cov]$ ,facility or ,newly  
,con/ruct$ ,l[-,emission ,cov]$         
,facility t is a p>ty to a bilat]al     
pur*ase agreem5t may receive emission   
all[ances "u ?is section only if su*    
own] or op]ator provides to !           
,adm9i/rator a copy (-- 7#a7 !          
applicable bilat]al pur*ase agreem5t2 & 
7#b7 any am5dm5t to su* bilat]al pur*ase
 agreem5t )9 #cj days ( ! am5dm5t be+   
made4  7d7 ,regulations ,! ,adm9i/rator 
%all promulgate regulation to ensure !  
integrity & en=ceability ( contracts    
execut$ "u ?is section4  #gjf4 ,volunt>y
 program p>ticipation  7a7 ,eligible    
entities ,! ,adm9i/rator may1 ^u !      
reque/ ( ! own] or op]ator1 classify--  
7#a7 z a ,cov]$ ,electric ,facility1 any
 facility t produces electricity at a   
,rat$ ,fuel-,bas$ ,capacity ( less ?an  
#b megawatts2  7#b7 z a ,cov]$ ,!rmal   
,facility1 any facility t produces      
useful !rmal en]gy output at a ,rat$    
,fuel-,bas$ ,capacity ( less ?an #ej    

million ,briti% !rmal units p] h\r1     
calculat$ on a high] heat+ value basis2 
&  7#c7 z a ,cov]$ ,cog5]ation          
,facility1 any facility t-- 7,a7        
simultane\sly produces useful !rmal     
en]gy output & electricity2 &  7,b7 has 
a rat$ electric capacity ( less ?an #b  
megawatts4  7b7 ,designation (          
repres5tative ,! ,adm9i/rator %all      
approve a reque/ submitt$ "u subsection 
7a7 if ! own] or op]ator ( ! facility   
designates a repres5tative "u section   
#gjc7;d77#b74  7c7 ,deadl9e =           
notification ,n lat] ?an #ij days aft]  
receipt ( a reque/ submitt$ "u          
subsection 7a71 ! ,adm9i/rator %all     
notify ! own] or op]ator ( ! facility   
:e!r ! ,adm9i/rator approves or         
disapproves ! reque/4  7d7 ,t]m9ation ( 
classification ,! ,adm9i/rator %all     
t]m9ate ! classification ( a facility z 
a ,cov]$ ,facility "u subsection 7a7 if1
 dur+ ! previ\s cal5d> ye>1 ! facility  
did n-- 7#a7 produce electricity2 or    
7#b7 produce useful !rmal en]gy output4 

#gjg4 ,emission all[ance track+ sy/em   
7a7 ,regulations ,! ,adm9i/rator %all   
issue regulations to provide =-- 7#a7 ! 
e/abli%m5t ( a sy/em to process !       
di/ribution ( emission all[ances to     
,cov]$ ,facilities "u section #gjc &    
section #gje2  7#b7 a process to create 
acc\nts 9 :i* ,cov]$ ,facilities & o!r  
entities may hold emission all[ances2   
7#c7 ! e/abli%m5t ( an emission all[ance
 track+ sy/em to track-- 7,a7 ! numb] ( 
emission all[ances sold1 ex*ang$1       
transf]r$1 & submitt$2  7,b7 ! price or 
monet>y value ( su* emission all[ances2 
7,c7 ! date ( ea* su* sale1 ex*ange1    
transf]1 & submission2  7,d7 ! p>ties   
involv$ 9 ea* su* sale1 ex*ange1        
transf]1 & submission2 &  7,e7 any      
additional in=mation ! ,adm9i/rator     
det]m9es necess>y to ensure ! integrity 
& effici5cy ( ! m>ket = emission        
all[ances2 &  7#d7 ! weekly publication 
by ! ,adm9i/rator on ! website ( !      
,environm5tal ,protection ,ag5cy1 9 a   
publicly available & se>*able =mat1 (-- 

7,a7 a summ>y ( av]age prices or monet>y
 values ( emission all[ances1 ! total   
numb] ( emission all[ances sold1        
ex*ang$1 transf]r$1 or submitt$1 & any  
o!r additional in=mation det]m9$ by !   
,adm9i/rator z necess>y to ensure !     
integrity & effici5cy ( ! m>ket =       
emission all[ances2  7,b7 ! numb] (     
emission all[ances di/ribut$ by !       
,adm9i/rator "u section #gjc & section  
#gje2  7,c7 ! numb] ( emission all[ances
 di/ribut$ by ! ,adm9i/rator "u section 
#gjc & section #gje dur+ ! cal5d> ye>   
be=e ! ye> ( publication t are held at !
 end ( ea* mon? ( ! curr5t cal5d> ye> by
 ea* category ( ,cov]$ ,facility2 &     
7,d7 ! numb] ( emission all[ances       
submitt$ to ! ,adm9i/rator ea* ye> by   
ea* category ( ,cov]$ ,facility4  7b7   
,position limits ,! ,adm9i/rator1 9     
consultation ) ! ,commodity ,futures    
,trad+ ,commission1 %all e/abli% by     
regulation limits on ! numb] ( emission 
all[ances t an entity may hold s t1 9 ! 
det]m9ation ( ! ,adm9i/rator-- 7#a7 no  

entity %all hold a numb] ( emission     
all[ances t may influ5ce ! price or     
monet>y value ( emission all[ances2 &   
7#b7 adequate liquidity = buy]s & sell]s
 ( emission all[ances %all be ensur$4   
7c7 ,/atus ( submitt$ emission all[ances
 ,once an emission all[ance is submitt$ 
to ! ,adm9i/rator "u section #gjb1 !    
emission all[ance %all be disqualifi$ f 
subsequ5t use "u ?is title1 includ+     
subsequ5t sale1 ex*ange1 transf]1 &     
submission4  7d7 ,ord]ly & competitive  
m>ket ,! ,adm9i/rator %all issue        
regulations z necess>y 9 ! det]m9ation (
 ! ,adm9i/rator = an ord]ly &           
competitive m>ket = sell+1 ex*ang+1     
transf]r+1 & submitt+ emission          
all[ances4  #gjh4 ,(fset program  7a7   
,c>bon mitigation fund  7#a7 ,creation (
 fund ,! ,adm9i/rator %all e/abli% a    
fund to be kn[n z ! ,c>bon ,mitigation  
,fund4  7#b7 ,adm9i/ration ,! ,c>bon    
,mitigation ,fund %all be adm9i/]$ by ! 
,adm9i/rator4  7#c7 ,deposits ,!re %all 
be deposit$ into ! ,c>bon ,mitigation   

,fund ! foll[+3 7,a7 ,! am\nts paid z   
,alt]native ,compliance ,paym5ts        
pursuant to section #gjc7;e74  7,b7 ,!  
am\nts collect$ z civil p5alties "u     
section #gji4  7#d7 ,appropriation      
,am\nts 9 ! ,c>bon ,mitigation ,fund    
%all be available )\t fur!r             
appropriation or fiscal ye> limitation  
to c>ry out ! ,(fset ,program "u        
subsection 7b74  7b7 ,(fset program     
7#a7 ,9 g5]al ,! ,adm9i/rator %all c>ry 
out a program 7to be kn[n z ! ,(fset    
,program7 to aw>d grants to entities to 
c>ry out activities t avoid emissions ( 
gre5h\se gases or p]man5tly seque/]     
c>bon dioxide f ! atmosph]e1 z det]m9$ 9
 accordance ) p>agraph 7#c74  7#b7      
,activities ,! activities describ$ 9    
p>agraph 7#a7 may include-- 7,a7        
improvem5ts to ! en]gy effici5cy ( exi/+
 facilities & devices2  7,b7 improvem5ts
 to ! electrical grid2  7,c7 !          
replacem5t ( natural gas space heat]s1  
natural gas wat] heat]s1 & natural gas  
/oves ) electric appliances2  7,d7 !    

replacem5t ( fossil fuel-p[]$ vehicles  
own$ by ,/ate or local ag5cies )        
electric vehicles or o!r l[-c>bon fuel  
vehicles2  7,e7 ! replacem5t ( fossil   
fuel-p[]$ gr\nd airport & seaport       
vehicles ) electric vehicles or o!r     
l[-c>bon fuel vehicles2  7,f7           
in/allation ( *>g+ /ations = electric   
vehicles along highways & o!r public    
roads 9 urban areas & rural areas 9 :i* 
! availability ( su* *>g+ /ations is    
significantly bel[ ! national av]age2 & 
7,g7 b5eficial electrification-relat$   
r$uctions n o!rwise id5tifi$ 9 ?is      
p>agraph4  7#c7 ,crit]ia ,! ,adm9i/rator
 may only aw>d grants "u ! ,(fset       
,program = an activity = :i* !          
,adm9i/rator det]m9es t-- 7,a7 ! am\nt (
 gre5h\se gas emissions to be avoid$ or 
p]man5tly seque/]$ f ! atmosph]e by !   
activity w be adequately confirm$ ?r\gh 
monitor+1 report+1 & v]ification2  7,b7 
! risk t "s am\nt ( ! c>bon dioxide t is
 to be seque/]$ f ! atmosph]e by !      
activity may re5t] ! atmosph]e at a lat]

 date is adequately reflect$ ?r\gh a    
disc\nt+ ( ! am\nt describ$ 9 p>agraph  
7#d77;,c77ii72  7,c7 ! risk t "s am\nt (
 ! gre5h\se gases1 ! emission ( :i* is  
avoid$ by ! activity1 may ent] !        
atmosph]e at a lat] date is adequately  
reflect$ ?r\gh a disc\nt+ ( ! am\nt     
describ$ 9 p>agraph 7#d77;,c77i72  7,d7 
! risk t ! activity may directly or     
indirectly increase ! release ( gre5h\se
 gases f ano!r location has be5         
adequately address$2  7,e7 ! activity is
 n requir$1 or be+ support$ f9ancially  
7except pursuant to ?is subsection71 by 
a ,f$]al1 ,/ate1 or local law1 program1 
or activity2 &  7,f7 if ! activity      
involves l& use1 ! activity-- 7i7 aligns
 ) ! ,su/a9able ,developm5t ,goals1 z   
adopt$ by ( ! ,unit$ ,nations "u !      
,po/-#bjae ,developm5t ,ag5da1 & am5d$  
by ! ,unit$ ,nations1 includ+ be+       
consi/5t ) ! cons]vation ( biological   
div]sity & natural ecosy/ems 7includ+   
=e/s & grassl&s72 &  7ii7 ma9ta9s       
ecosy/em s]vices & o!r social &         

environm5tal b5efits4  7#d7 ,proposals  
,9 ord] to apply = a grant aw>d$ "u !   
,(fset ,program1 an entity %all submit  
to ! ,adm9i/rator a proposal t-- 7,a7   
describes ! activity to be c>ri$ out ) !
 grant2  7,b7 id5tifies ! am\nt ( money 
= :i* ! entity is apply+2  7,c7         
id5tifies ! am\nt 7to be measur$ 9      
"o-ye> increm5ts7 (1 z applicable-- 7i7 
gre5h\se gas emissions to be avoid$ by !
 activity2 &  7ii7 c>bon dioxide to be  
p]man5tly seque/]$ f ! atmosph]e by !   
activity2  7,d7 id5tifies ! bid am\nt1  
express$ z doll>s p] metric ton1 :i*    
%all be ! quoti5t obta9$ by divid+ !    
am\nt id5tifi$ "u subp>agraph 7,b7 by ! 
am\nt id5tifi$ "u subp>agraph 7,c72     
7,e7 provides any in=mation requir$ by !
 ,adm9i/rator 9 ord] to make a          
det]m9ation describ$ 9 p>agraph 7#c72 & 
7,f7 provides any o!r c]tifications !   
,adm9i/rator det]m9es appropriate4  7#e7
 ,deadl9es  7,a7 ,solicitation ,n lat]  
?an ,febru>y #a1 #bjbh1 & ea* ,febru>y  
#a !reaft]1 ! ,adm9i/rator %all solicit 

proposals = activities describ$ 9       
p>agraph 7#a7 = :i* ! ,adm9i/rator may  
aw>d grants "u ! ,(fset ,program4  7,b7 
,id5tification ,n lat] ?an ,june #a1    
#bjbh1 & ea* ,june #a !reaft]1 !        
,adm9i/rator %all id5tify & publi% a li/
 ( proposals t h be5 submitt$ by ,m>* #a
 ( ! applicable ye> = activities        
describ$ 9 p>agraph 7#a7 t qualify = an 
aw>d ( a grant "u ! ,(fset ,program4    
7,c7 ,aw>d ( grants ,n lat] ?an ,augu/  
#a1 #bjbh1 & ea* ,augu/ #a !reaft]1 !   
,adm9i/rator %all1 to ! ext5t am\nts are
 available 9 ! ,c>bon ,mitigation ,fund1
 aw>d grants to entities t submitt$ a   
proposal t is li/$ pursuant to          
subp>agraph 7,b74  7#f7 ,aw>ds to mo/   
co/-effective activities ,! ,adm9i/rator
 %all aw>d funds to entities =          
activities describ$ 9 proposals id5tifi$
 "u p>agraph 7#e77;,b7-- 7,a7 beg9n+ by 
aw>d+ funds to ! entity submitt+ su* a  
proposal ) ! l[e/ bid am\nt id5tifi$    
pursuant to p>agraph 7#d77;,d72 &  7,b7 
!n aw>d+ funds to entities sequ5tially  

by entity submitt+ su* a proposal ) !   
next l[e/ bid am\nt s id5tifi$ until all
 funds are aw>d$4  7c7 ,regulations     
reg>d+ c>bon dioxide seque/ration  7#a7 
,regulations ,"u section #gaa1 !        
,adm9i/rator %all issue regulations     
e/abli%+-- 7,a7 ! conditions "u :i*     
c>bon dioxide may be safely & p]man5tly 
seque/]$2  7,b7 ! me?ods & processes by 
:i* c>bon dioxide may be safely &       
p]man5tly seque/]$1 includ+ by          
incorporat+ ! c>bon 9 a comm]cial       
product2 &  7,c7 requirem5ts to acc\nt =
 ! risk t "s fraction ( ! c>bon dioxide 
int5d$ to be p]man5tly seque/]$ may be  
emitt$ into ! atmosph]e4  7#b7 ,exi/+   
requirem5ts ,9 issu+ regulations        
describ$ 9 ?is subsection1 !            
,adm9i/rator %all incorporate to ! ext5t
 practicable any exi/+ requirem5ts = !  
seque/ration ( c>bon dioxide1 includ+   
any requirem5ts promulgat$ "u section   
#de,q ( ! ,int]nal ,rev5ue ,code (      
#aihf4  7d7 ,consultation ,!            
,adm9i/rator %all consult ) ! ,secret>y 

( ! ,int]ior & ! ,secret>y (            
,agriculture 9 issu+ regulations to     
measure1 monitor1 & v]ify any natural   
seque/ration activities c>ri$ out us+ a 
grant aw>d$ "u ! ,(fset ,program4  #gji4
 ,p5alty = noncompliance  7a7 ,civil    
p5alty  7#a7 ,9 g5]al ,! own] or op]ator
 ( a ,cov]$ ,facility t fails to submit 
an emission all[ance z requir$ by       
section #gjb7;a7 %all be liable = paym5t
 to ! ,adm9i/rator ( a p5alty 9 ! am\nt 
describ$ 9 p>agraph 7#b74  7#b7 ,am\nt  
,! am\nt ( a p5alty describ$ 9 ?is      
p>agraph %all be equal to ! product (-- 
7,a7 ?ree times ! highe/ price or       
monet>y value dur+ ! previ\s cal5d> ye> 
7z indicat$ by ! emission all[ance      
track+ sy/em e/abli%$ pursuant to       
section #gjg7 = ! sale1 ex*ange1 or     
transf] ( an emission all[ance2 &  7,b7 
! numb] ( emission all[ances t ! own] or
 op]ator ( ! ,cov]$ ,facility fail$ to  
submit z describ$ 9 p>agraph 7#a74  7#c7
 ,tim+ ,a p5alty requir$ "u ?is         
subsection %all be imm$iately due to !  

,adm9i/rator1 )\t dem& by !             
,adm9i/rator4  7#d7 ,no effect on       
liability ,a p5alty due by ! own] or    
op]ator ( a ,cov]$ ,facility "u ?is     
subsection %all n dim9i% ! liability ( !
 own] or op]ator = any f9e1 p5alty1 or  
assessm5t aga9/ ! own] or op]ator = !   
same violation "u any o!r provision (   
?is ,act or any o!r law4  7b7           
,replacem5t emission all[ances ,! own]  
or op]ator ( a ,cov]$ ,facility t fails 
to submit "o or m emission all[ances z  
requir$ "u section #gjb7;a7 = a cal5d>  
ye> %all submit a numb] ( emission      
all[ances t is equal to sum ( ! numb] ! 
own] or op]ator fail$ to submit & !     
emission all[ances o!rwise requir$ to be
 submitt$ by ! ,april #a deadl9e ( !    
second succe$+ cal5d> ye>4  #gaj4       
,comptroll] g5]al reports ,n lat] ?an   
,janu>y #a1 #bjbi1 & e #b ye>s !reaft]1 
! ,comptroll] ,g5]al ( ! ,unit$ ,/ates  
%all submit to ,congress a report on !  
results ( implem5tation ( ?is title1 :i*
 %all include-- 7#a7 a compreh5sive     

evaluation (-- 7,a7 ! effici5cy1        
transp>5cy1 & integrity ( ! di/ribution 
( emission all[ances "u section #gjc &  
section #gje2  7,b7 ! co/-effectiv5ess (
 ?is title 9 r$uc+ gre5h\se gas         
emissions2 &  7,c7 ! effectiv5ess ( ?is 
title 9-- 7i7 creat+ & pres]v+ jobs2    
7ii7 ensur+ a manageable transition to a
 z]o-emission economy = work+ families &
 work]s2  7iii7 driv+ ! innovation &    
deploym5t ( z]o-emission te*nologies2 & 
7iv7 ma9ta9+ an ord]ly & competitive    
m>ket = sell+1 ex*ang+1 transf]r+1 &    
submitt+ emission all[ances2 &  7#b7    
recomm5dations1 if any1 = legislative1  
regulatory1 or adm9i/rative *anges )    
respect to ?is title to improve its     
effectiv5ess4  #gaa4 ,f9al regulations  
,! ,adm9i/rator %all issue f9al         
regulations to c>ry out ?is title n lat]
 ?an #bd mon?s aft] ! date ( enactm5t ( 
?is title4  #gab4 ,sav+s provisions     
,no?+ 9 ?is title %all be int]pret$ to  
affect ! requirem5ts ( any o!r title (  
?is ,act4  4