A bill to amend title 31, United States Code, to provide for the issuance of Green Bonds and to establish the United States Green Bank, and for other purposes.

II 116TH CONGRESS 1ST SESSION S. 1528 To amend title 31, United States Code, to provide for the issuance of Green Bonds and to establish the United States Green Bank, and for other purposes. IN THE SENATE OF THE UNITED STATES MAY 16, 2019 Mr. MURPHY (for himself, Mr. VAN HOLLEN, Mr. WHITEHOUSE, Mr. BLUMENTHAL, and Mr. MARKEY) introduced the following bill; which was read twice and referred to the Committee on Finance A BILL To amend title 31, United States Code, to provide for the issuance of Green Bonds and to establish the United States Green Bank, and for other purposes. Be it enacted by the Senate and House of Representa- 1 tives of the United States of America in Congress assembled, 2 SECTION 1. CAPITALIZATION, METHOD OF CAPITAL STOCK 3 PAYMENTS, ISSUANCE OF GREEN BONDS. 4 Chapter 31 of title 31, United States Code, is amend- 5 ed by adding after section 3102 the following new section: 6 ‘‘§ 3102A. Green Bonds 7 ‘‘(a) INITIAL CAPITALIZATION.—The Secretary of the 8 Treasury shall issue bonds (in this section referred to as 9 VerDate Sep 11 2014 23:45 May 28, 2019 Jkt 089200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\S1528.IS S1528 pamtmann on DSKBFK8HB2PROD with BILLS 2 •S 1528 IS ‘Green Bonds’) in the amount of $10,000,000,000 on the 1 credit of the United States to acquire capital stock of the 2 United States Green Bank (established under section 3 9801 of this title). Stock certificates evidencing ownership 4 in the United States Green Bank shall be issued by the 5 Green Bank to the Secretary of the Treasury, to the ex- 6 tent of payments made for the capital stock of the Green 7 Bank. 8 ‘‘(b) FUTURE CAPITALIZATION.—Upon the request 9 of the United States Green Bank, the Secretary of the 10 Treasury shall issue additional Green Bonds on the credit 11 of the United States to acquire additional capital stock 12 of the United States Green Bank in an aggregate amount 13 not to exceed $50,000,000,000 outstanding at any one 14 time. 15 ‘‘(c) DENOMINATIONS AND MATURITY.—Green 16 Bonds shall be in such forms and denominations, and shall 17 mature within such periods, as determined by the Sec- 18 retary of the Treasury. 19 ‘‘(d) INTEREST.—Green Bonds shall bear interest at 20 a rate not less than the current average yield on out- 21 standing market obligations of the United States of com- 22 parable maturity during the month preceding the issuance 23 of the obligation as determined by the Secretary of the 24 Treasury. 25 VerDate Sep 11 2014 23:45 May 28, 2019 Jkt 089200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\S1528.IS S1528 pamtmann on DSKBFK8HB2PROD with BILLS 3 •S 1528 IS ‘‘(e) GUARANTEED.—Green Bonds shall be fully and 1 unconditionally guaranteed both as to interest and prin- 2 cipal by the United States, and such guaranty shall be 3 expressed on the face of each bond. 4 ‘‘(f) LAWFUL INVESTMENTS.—Green Bonds shall be 5 lawful investments, and may be accepted as security for 6 all fiduciary, trust, and public funds, the investment or 7 deposit of which shall be under the authority or control 8 of the United States or any officer or officers thereof.’’. 9 SEC. 2. GREEN BANK. 10 Title 31, United States Code, is amended by adding 11 the following new chapter at the end thereof: 12 ‘‘CHAPTER 98—GREEN BANK 13 ‘‘§ 9801. United States Green Bank 14 ‘‘(a) SHORT TITLE.—This section may be cited as the 15 ‘United States Green Bank Act of 2019’. 16 ‘‘(b) PURPOSES.—The purposes of this section are as 17 follows: 18 ‘‘(1) To significantly increase the pace and 19 amount of investment in clean energy, energy effi- 20 ciency, and other climate change mitigation and ad- 21 aptation projects at the State and local level. 22 ‘‘(2) To improve the standard of living for 23 Americans by delivering clean electricity more effi- 24 ciently and at lower cost and by funding projects 25 VerDate Sep 11 2014 23:45 May 28, 2019 Jkt 089200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\S1528.IS S1528 pamtmann on DSKBFK8HB2PROD with BILLS 4 •S 1528 IS that will create high-paying, long-term jobs and 1 make affordable financing available to low- and mod- 2 erate-income families. 3 ‘‘(3) To address the main impediment to invest- 4 ment at the State and local level—limited capital 5 and tight balance sheets—by establishing a national 6 Green Bank to capitalize legitimate Regional, State, 7 and Municipal Green Banks. 8 ‘‘(4) To facilitate— 9 ‘‘(A) efficient tax equity markets for quali- 10 fied clean energy projects; and 11 ‘‘(B) the financing of long-term clean en- 12 ergy purchasing by governmental and non- 13 governmental not-for-profit entities. 14 ‘‘(5) To foster— 15 ‘‘(A) the development and consistent appli- 16 cation of transparent underwriting standards, 17 standard contractual terms, and measurement 18 and verification protocols for qualified clean en- 19 ergy projects, qualified energy efficiency 20 projects, and qualified climate change mitiga- 21 tion or adaptation projects; 22 ‘‘(B) the creation of performance data that 23 enables effective underwriting, risk manage- 24 ment, and pro forma modeling of financial per- 25 VerDate Sep 11 2014 23:45 May 28, 2019 Jkt 089200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\S1528.IS S1528 pamtmann on DSKBFK8HB2PROD with BILLS 5 •S 1528 IS formance of qualified clean energy projects and 1 qualified energy efficiency projects to support 2 primary financing markets and stimulate devel- 3 opment of secondary investment markets for 4 clean energy projects, energy efficiency projects, 5 and climate change mitigation or adaptation 6 projects; and 7 ‘‘(C) the level of financing support for 8 qualified clean energy projects, qualified energy 9 efficiency projects, and qualified climate mitiga- 10 tion and adaptation projects necessary to ad- 11 vance vital national objectives, including— 12 ‘‘(i) achieving energy independence 13 from foreign energy sources; 14 ‘‘(ii) abating climate change by in- 15 creasing zero or low carbon electricity gen- 16 eration and transportation capabilities; 17 ‘‘(iii) adapting to the impacts result- 18 ing from climate change; 19 ‘‘(iv) realizing energy efficiency poten- 20 tial in existing infrastructure; 21 ‘‘(v) easing the economic effects of 22 transitioning from a carbon-based economy 23 to a clean energy economy; 24 VerDate Sep 11 2014 23:45 May 28, 2019 Jkt 089200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\S1528.IS S1528 pamtmann on DSKBFK8HB2PROD with BILLS 6 •S 1528 IS ‘‘(vi) achieving job creation through 1 the construction and operation of qualified 2 clean energy projects, qualified energy effi- 3 ciency projects, and qualified climate 4 change mitigation or adaptation projects; 5 ‘‘(vii) fostering long-term domestic 6 manufacturing capacity in the clean en- 7 ergy, energy efficiency, and climate change 8 mitigation or adaptation industries; and 9 ‘‘(viii) complementing and supple- 10 menting other clean energy, energy effi- 11 ciency, and climate change mitigation and 12 adaptation legislation at the regional, 13 State, municipal, and county level. 14 ‘‘(c) DEFINITIONS.—In this section: 15 ‘‘(1) BANK.—The term ‘Bank’ means the 16 United States Green Bank established under sub- 17 section (d). 18 ‘‘(2) BOARD.—The term ‘Board’ means the 19 Board of Directors of the Bank. 20 ‘‘(3) CLEAN ENERGY PROJECT.—The term 21 ‘clean energy project’ means any electricity genera- 22 tion, transmission, storage, heating, cooling, trans- 23 portation, distribution, industrial process, or manu- 24 facturing project whose primary purpose is the de- 25 VerDate Sep 11 2014 23:45 May 28, 2019 Jkt 089200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\S1528.IS S1528 pamtmann on DSKBFK8HB2PROD with BILLS 7 •S 1528 IS ployment, development, or production of an energy 1 system or technology that avoids, reduces, or seques- 2 ters air pollutants or anthropogenic greenhouse 3 gases, including the following: 4 ‘‘(A) Solar. 5 ‘‘(B) Wind. 6 ‘‘(C) Geothermal. 7 ‘‘(D) Biomass. 8 ‘‘(E) Hydropower. 9 ‘‘(F) Ocean and hydrokinetic. 10 ‘‘(G) Fuel cell. 11 ‘‘(H) Advanced battery. 12 ‘‘(I) Carbon capture and sequestration. 13 ‘‘(J) Next generation biofuels from 14 nonfood feedstocks. 15 ‘‘(K) Alternative fuel vehicle infrastruc- 16 ture. 17 ‘‘(L) Alternative fuel vehicles. 18 ‘‘(4) CLIMATE CHANGE MITIGATION OR ADAP- 19 TATION PROJECT.—The term ‘climate change miti- 20 gation or adaptation project’ means any project that 21 reduces the emissions of greenhouse gases by 22 sources or enhance their removal from the atmos- 23 phere by sinks, or reduce the vulnerability of social 24 and biological systems to relatively sudden change 25 VerDate Sep 11 2014 23:45 May 28, 2019 Jkt 089200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\S1528.IS S1528 pamtmann on DSKBFK8HB2PROD with BILLS 8 •S 1528 IS and thus offset the effects of global warming, includ- 1 ing— 2 ‘‘(A) afforestation, reforestation, and land 3 conservation; 4 ‘‘(B) regenerative agriculture; 5 ‘‘(C) transit-oriented development and 6 mass transit infrastructure; 7 ‘‘(D) waste and recycling; 8 ‘‘(E) water treatment; and 9 ‘‘(F) wetland protection.’’. 10 ‘‘(5) ELIGIBLE CLEAN ENERGY FINANCING IN- 11 STITUTION.—The term ‘Eligible Clean Energy Fi- 12 nancing Institution’ means a not-for-profit, inde- 13 pendent entity, quasi-independent entity, or a gov- 14 ernmental entity within an agency or financing au- 15 thority, established or designated by a State, group 16 of States, the District of Columbia, a territory of the 17 United States, or an Eligible State Political Subdivi- 18 sion to— 19 ‘‘(A) provide low-cost or long-term financ- 20 ing support or credit enhancements, including 21 loan guarantees and loan loss reserves, for 22 Qualified Clean Energy Projects, Qualified En- 23 ergy Efficiency Projects, or Qualified Mitigation 24 or Adaptation Projects; and 25 VerDate Sep 11 2014 23:45 May 28, 2019 Jkt 089200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 E:\BILLS\S1528.IS S1528 pamtmann on DSKBFK8HB2PROD with BILLS 9 •S 1528 IS ‘‘(B) create liquid markets for these 1 projects including warehousing and 2 securitization, or take other steps to reduce fi- 3 nancial barriers to the deployment of existing 4 and innovative clean energy, energy efficiency 5 projects, and climate change mitigation or ad- 6 aptation projects. Eligible Clean Energy Fi- 7 nancing Institutions may enter into partner- 8 ships with private entities. 9 ‘‘(6) ELIGIBLE STATE POLITICAL SUBDIVI- 10 SION.—The term ‘Eligible State Political Subdivi- 11 sion’ means— 12 ‘‘(A) any municipality, county or other po- 13 litical subdivision within a State that, based on 14 the population data from the most recent U.S. 15 Census Bureau— 16 ‘‘(i) with respect to a municipality, 17 has a population of not fewer than 18 200,000 people; 19 ‘‘(ii) with respect to a county, parish 20 or borough, has a population of not fewer 21 than 800,000 people; or 22 ‘‘(iii) with respect to a municipality, 23 county, parish, or borough, has a popu- 24 lation— 25 VerDate Sep 11 2014 23:45 May 28, 2019 Jkt 089200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6201 E:\BILLS\S1528.IS S1528 pamtmann on DSKBFK8HB2PROD with BILLS 10 •S 1528 IS ‘‘(I) of not fewer than 84,000 1 people; and 2 ‘‘(II) that constitutes not less 3 than 5 percent of the total population 4 of the State in which the municipality, 5 county, parish, or borough is located; 6 and 7 ‘‘(B) any political subdivision that— 8 ‘‘(i) is located in a State that collabo- 9 rates as 1 region for the purposes of this 10 Act; or 11 ‘‘(ii)(I) collaborates with another po- 12 litical subdivision; and 13 ‘‘(II) when combined with the political 14 subdivision described in subclause (I), 15 meets the requirements described in sub- 16 paragraph (A). 17 ‘‘(7) ENERGY EFFICIENCY PROJECT.—The term 18 ‘energy efficiency project’ means any project, tech- 19 nology, function, or measure that results in the re- 20 duction of energy use required to achieve the same 21 level of service or output prior to the application of 22 such project, technology, function, or measure, or 23 substantially reduces greenhouse gas emissions rel- 24 ative to emissions that would have occurred prior to 25 VerDate Sep 11 2014 23:45 May 28, 2019 Jkt 089200 PO 00000 Frm 00010 Fmt 6652 Sfmt 6201 E:\BILLS\S1528.IS S1528 pamtmann on DSKBFK8HB2PROD with BILLS 11 •S 1528 IS the application of such project, technology, function, 1 or measure. 2 ‘‘(8) GREEN BOND.—The term ‘Green Bond’ 3 means a bond issued pursuant to section 3102A of 4 this title. 5 ‘‘(9) QUALIFIED CLEAN ENERGY PROJECT.— 6 The term ‘qualified clean energy project’ means a 7 clean energy project that— 8 ‘‘(A) is a Clean Energy Project carried out 9 domestically within the territorial borders of the 10 United States; 11 ‘‘(B) stays in good standing with its fi- 12 nancing entity; 13 ‘‘(C) to the extent otherwise required by 14 law, pays wages in accordance with subchapter 15 IV of chapter 31 of title 40, United States Code 16 (commonly referred to as the Davis-Bacon Act); 17 ‘‘(D) if for nuclear power, is funded by the 18 Bank only after all other existing Federal fi- 19 nancial support has been expended; 20 ‘‘(E) if for Alternative fuel vehicles, is for 21 the purchase or lease of eligible vehicles and not 22 the design or manufacture thereof; and 23 VerDate Sep 11 2014 23:45 May 28, 2019 Jkt 089200 PO 00000 Frm 00011 Fmt 6652 Sfmt 6201 E:\BILLS\S1528.IS S1528 pamtmann on DSKBFK8HB2PROD with BILLS 12 •S 1528 IS ‘‘(F) satisfies any other conditions estab- 1 lished by the Bank and published in the Fed- 2 eral Register. 3 ‘‘(10) QUALIFIED ENERGY EFFICIENCY 4 PROJECT.—The term ‘qualified energy efficiency 5 project’ means an energy efficiency project, includ- 6 ing smart grid technologies and functions character- 7 ized in section 1301 of the Energy Independence 8 and Security Act of 2007 and end-use technologies 9 for efficiency gains in new construction and across 10 existing infrastructure that— 11 ‘‘(A) is an Energy Efficiency Project car- 12 ried out domestically within the territorial bor- 13 ders of the United States; 14 ‘‘(B) stays current on interest and debt 15 payment obligations; 16 ‘‘(C) to the extent otherwise required by 17 law, pays wages in accordance with subchapter 18 IV of chapter 31 of title 40, United States Code 19 (commonly referred to as the Davis-Bacon Act); 20 and 21 ‘‘(D) satisfies any other conditions estab- 22 lished by the Bank and published in the Fed- 23 eral Register. 24 ‘‘(d) GREEN BANK.— 25 VerDate Sep 11 2014 23:45 May 28, 2019 Jkt 089200 PO 00000 Frm 00012 Fmt 6652 Sfmt 6201 E:\BILLS\S1528.IS S1528 pamtmann on DSKBFK8HB2PROD with BILLS 13 •S 1528 IS ‘‘(1) ESTABLISHMENT OF CORPORATION.— 1 There is established a corporation to be known as 2 the United S [Text truncated for display. 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