II 116TH CONGRESS 1ST SESSION S. 2057 To establish a National Climate Bank. IN THE SENATE OF THE UNITED STATES JULY 8, 2019 Mr. MARKEY (for himself, Mr. VAN HOLLEN, Mr. SCHATZ, and Mr. BLUMENTHAL) introduced the following bill; which was read twice and re- ferred to the Committee on Environment and Public Works A BILL To establish a National Climate Bank. Be it enacted by the Senate and House of Representa- 1 tives of the United States of America in Congress assembled, 2 SECTION 1. SHORT TITLE. 3 This Act may be cited as the ‘‘National Climate Bank 4 Act’’. 5 SEC. 2. NATIONAL CLIMATE BANK. 6 (a) IN GENERAL.—Title LXII of the Revised Stat- 7 utes (12 U.S.C. 21 et seq.) is amended by adding at the 8 end the following: 9 VerDate Sep 11 2014 04:52 Jul 09, 2019 Jkt 089200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\S2057.IS S2057 kjohnson on DSK79L0C42 with BILLS 2 •S 2057 IS ‘‘CHAPTER FIVE—NATIONAL CLIMATE 1 BANK 2 ‘‘Sec. ‘‘5245. Findings. ‘‘5245A. Definitions. ‘‘5245B. Establishment. ‘‘5245C. Purpose. ‘‘5245D. Investments and procurements division. ‘‘5245E. Start-up division. ‘‘5245F. Project types. ‘‘5245G. Cash for carbon program. ‘‘5245H. Project and Investment attributes. ‘‘5245I. Board of Directors. ‘‘5245J. Administration. ‘‘5245K. Establishment of risk and audit committees. ‘‘5245L. External oversight. ‘‘5245M. Maximum contingent liability. ‘‘SEC. 5245. FINDINGS. 3 ‘‘Congress finds that— 4 ‘‘(1) the October 2018 report entitled ‘Special 5 Report on Global Warming of 1.5 C’ by the Inter- 6 governmental Panel on Climate Change and the No- 7 vember 2018 Fourth National Climate Assessment 8 report found that— 9 ‘‘(A) human activity is the dominant cause 10 of observed climate change over the past cen- 11 tury; 12 ‘‘(B) a changing climate is causing sea lev- 13 els to rise and an increase in wildfires, severe 14 storms, droughts, and other extreme weather 15 events that threaten human life, healthy com- 16 munities, and critical infrastructure; 17 VerDate Sep 11 2014 04:52 Jul 09, 2019 Jkt 089200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\S2057.IS S2057 kjohnson on DSK79L0C42 with BILLS 3 •S 2057 IS ‘‘(C) global warming at or above 2 degrees 1 Celsius beyond pre-industrialized levels will 2 cause— 3 ‘‘(i) mass migration from the regions 4 most affected by climate change; 5 ‘‘(ii) more than $500,000,000,000 in 6 lost annual economic output in the United 7 States by the year 2100; 8 ‘‘(iii) wildfires that, by 2050, will an- 9 nually burn at least twice as much forest 10 area in the western United States than 11 was typically burned by wildfires in the 12 years preceding 2019; 13 ‘‘(iv) a loss of more than 99 percent 14 of all coral reefs on Earth; 15 ‘‘(v) more than 350,000,000 more 16 people to be exposed globally to deadly 17 heat stress by 2050; and 18 ‘‘(vi) a risk of damage to 19 $1,000,000,000,000 of public infrastruc- 20 ture and coastal real estate in the United 21 States; and 22 ‘‘(D) global temperatures must be kept 23 below 1.5 degrees Celsius above pre-industri- 24 VerDate Sep 11 2014 04:52 Jul 09, 2019 Jkt 089200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\S2057.IS S2057 kjohnson on DSK79L0C42 with BILLS 4 •S 2057 IS alized levels to avoid the most severe impacts of 1 a changing climate, which will require— 2 ‘‘(i) global reductions in greenhouse 3 gas emissions from human sources of 40 to 4 60 percent from 2010 levels by 2030; and 5 ‘‘(ii) net-zero global emissions by 6 2050; 7 ‘‘(2)(A) according to Bloomberg New Energy 8 Finance, in 2018, approximately $64,000,000,000 9 was invested in renewable energy in the United 10 States; and 11 ‘‘(B) according to the International Energy 12 Agency, in 2018, approximately $42,000,000,000 13 was invested in energy efficiency in North America; 14 ‘‘(3) investments in renewable energy and en- 15 ergy efficiency have a demonstrated track record of 16 increasing jobs while lowering the cost of new renew- 17 able energy investments, which benefits the clean en- 18 ergy economy; 19 ‘‘(4) green banks can be used to accelerate in- 20 vestment in— 21 ‘‘(A) new and emerging technologies; and 22 ‘‘(B) new and innovative financing prod- 23 ucts to leverage private sector financing; 24 VerDate Sep 11 2014 04:52 Jul 09, 2019 Jkt 089200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\S2057.IS S2057 kjohnson on DSK79L0C42 with BILLS 5 •S 2057 IS ‘‘(5) green banking has a demonstrated track 1 record of success at increasing investment in the 2 clean energy economy; 3 ‘‘(6) green banks have led to $3,670,000,000 of 4 investment in cost-effective clean energy projects 5 across the United States, lowering energy costs for 6 end-users, with that investment total composed of— 7 ‘‘(A) $1,079,000,000 in public funds; and 8 ‘‘(B) $2,591,000,000 in private and phil- 9 anthropic capital; 10 ‘‘(7) in 2018, green banks were operating in a 11 number of States and other jurisdictions, includ- 12 ing— 13 ‘‘(A) the District of Columbia; and 14 ‘‘(B) the States of— 15 ‘‘(i) Colorado; 16 ‘‘(ii) Connecticut; 17 ‘‘(iii) Florida; 18 ‘‘(iv) Hawaii; 19 ‘‘(v) Maryland; 20 ‘‘(vi) Michigan; 21 ‘‘(vii) Nevada; 22 ‘‘(viii) New York; and 23 ‘‘(ix) Rhode Island; 24 VerDate Sep 11 2014 04:52 Jul 09, 2019 Jkt 089200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\S2057.IS S2057 kjohnson on DSK79L0C42 with BILLS 6 •S 2057 IS ‘‘(8) in the many different types of electricity 1 markets around the country, achieving 100 percent 2 market penetration of clean energy will require deliv- 3 ery of clean electric energy that is cheaper than al- 4 ternative fossil-fuel based electricity; 5 ‘‘(9) market-based clean energy financing tools, 6 such as those used by existing State and local green 7 banks, can be used— 8 ‘‘(A) to accelerate the deployment of clean 9 energy; 10 ‘‘(B) to reduce greenhouse gas emissions in 11 the United States by substituting fossil-fuel 12 based energy with lower-cost clean energy; 13 ‘‘(C) to unlock private investment by offer- 14 ing complementary capital that can change the 15 dynamics of a capital stack and make new 16 projects worth investing in for private sector 17 capital providers; and 18 ‘‘(D) to open new markets for greater in- 19 vestment and increase opportunities for commu- 20 nities and the private sector; and 21 ‘‘(10) the Federal Government can accelerate 22 and rapidly expand the deployment of clean energy 23 technologies by creating a dedicated financial insti- 24 tution that can support the work of existing green 25 VerDate Sep 11 2014 04:52 Jul 09, 2019 Jkt 089200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\S2057.IS S2057 kjohnson on DSK79L0C42 with BILLS 7 •S 2057 IS banks and provide greater capital for efforts to re- 1 duce emissions, increasing the overall scale of clean 2 energy investment and the pace of substitution of 3 clean energy technologies for fossil-fuel based tech- 4 nologies. 5 ‘‘SEC. 5245A. DEFINITIONS. 6 ‘‘In this chapter: 7 ‘‘(a) BANK.—The term ‘Bank’ means the National 8 Climate Bank established under section 5245B. 9 ‘‘(b) BOARD.—The term ‘Board’ means the Board of 10 Directors of the National Climate Bank established under 11 section 5245I. 12 ‘‘(c) CHIEF EXECUTIVE OFFICER.—The term ‘Chief 13 Executive Officer’ means the Chief Executive Officer of 14 the Board appointed under section 5245I(i). 15 ‘‘(d) GREEN BANK.—The term ‘green bank’ means 16 a dedicated public or nonprofit specialized finance entity 17 that— 18 ‘‘(1) is designed to drive private capital into 19 market gaps for low- and zero-emission goods and 20 services; 21 ‘‘(2) uses finance tools to mitigate climate 22 change; 23 ‘‘(3) does not take deposits; 24 VerDate Sep 11 2014 04:52 Jul 09, 2019 Jkt 089200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\S2057.IS S2057 kjohnson on DSK79L0C42 with BILLS 8 •S 2057 IS ‘‘(4) is funded by government, public, private, 1 or charitable contributions; and 2 ‘‘(5) invests— 3 ‘‘(A) alone; or 4 ‘‘(B) in conjunction with other investors. 5 ‘‘(e) PROCUREMENT.—The term ‘procurement’ 6 means the purchase, lease, or acquisition of real or per- 7 sonal property on a bid, negotiated, or open-market basis, 8 including through a sole-source procurement or in such 9 other manner as the Board and Chief Executive Officer 10 determine to be appropriate and in the best interests of 11 reducing emissions. 12 ‘‘SEC. 5245B. ESTABLISHMENT. 13 ‘‘(a) IN GENERAL.—Not later than 1 year after the 14 date of enactment of this chapter, there shall be estab- 15 lished in the District of Columbia a bank, to be known 16 as the ‘National Climate Bank’, in accordance with this 17 chapter. 18 ‘‘(b) LEGAL STATUS.—The Bank shall be an inde- 19 pendent, nonprofit entity outside of the Federal Govern- 20 ment. 21 ‘‘(c) FULL FAITH AND CREDIT.—The full faith and 22 credit of the United States shall not extend to the Bank. 23 VerDate Sep 11 2014 04:52 Jul 09, 2019 Jkt 089200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 E:\BILLS\S2057.IS S2057 kjohnson on DSK79L0C42 with BILLS 9 •S 2057 IS ‘‘SEC. 5245C. PURPOSE. 1 ‘‘The purpose of the Bank is to make the United 2 States a world leader in combating the causes and effects 3 of climate change and reducing emissions in the United 4 States for every dollar spent by the Bank, through the 5 rapid deployment of mature technologies and the commer- 6 cialization and scaling of new technologies, including by— 7 ‘‘(1) providing financing support for invest- 8 ments in the United States in clean and low-emis- 9 sions technologies and processes; 10 ‘‘(2) conducting low-cost procurements in the 11 United States that will be used to lower emissions; 12 ‘‘(3) catalyzing and mobilizing private capital 13 through Federal investment and supporting a more 14 robust marketplace for clean technologies, while 15 minimizing competition with private investment; 16 ‘‘(4) enabling low- and moderate-income indi- 17 viduals and communities to benefit from and afford 18 projects and investments that reduce emissions; 19 ‘‘(5) increasing the efficiency and effectiveness 20 of Federal financing programs that support positive 21 climate outcomes, such as reduced emissions; and 22 ‘‘(6) supporting the creation of green banks 23 within the United States where green banks do not 24 exist. 25 VerDate Sep 11 2014 04:52 Jul 09, 2019 Jkt 089200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6201 E:\BILLS\S2057.IS S2057 kjohnson on DSK79L0C42 with BILLS 10 •S 2057 IS ‘‘SEC. 5245D. INVESTMENTS AND PROCUREMENTS DIVI- 1 SION. 2 ‘‘(a) IN GENERAL.—There shall be within the Bank 3 an investments and procurements division, which shall be 4 responsible for— 5 ‘‘(1) equity investments in clean energy 6 projects; 7 ‘‘(2) ensuring appropriate debt and risk mitiga- 8 tion products are offered; 9 ‘‘(3) overseeing prudent, noncontrolling equity 10 investments; 11 ‘‘(4) procurements that will be used to reduce 12 emissions and the cost of emissions reductions 13 through aggregation of demand and other market- 14 based approaches; and 15 ‘‘(5) greenhouse gas emissions mitigation ef- 16 forts. 17 ‘‘(b) INVESTMENT COMMITTEE.—The suite of debt 18 and risk mitigation products and equity investments made 19 by the Bank shall be— 20 ‘‘(1) approved by an investment committee of 21 the Board; and 22 ‘‘(2) consistent with an investment policy that 23 has been established by the investment committee of 24 the Board in consultation with the risk management 25 committee of the Board. 26 VerDate Sep 11 2014 04:52 Jul 09, 2019 Jkt 089200 PO 00000 Frm 00010 Fmt 6652 Sfmt 6201 E:\BILLS\S2057.IS S2057 kjohnson on DSK79L0C42 with BILLS 11 •S 2057 IS ‘‘(c) DEBT PRODUCTS.—Debt products and invest- 1 ments by the Bank shall include direct lending, colending, 2 and credit enhancements. 3 ‘‘SEC. 5245E. START-UP DIVISION. 4 ‘‘There shall be within the Bank a start-up division, 5 which shall be responsible for providing technical assist- 6 ance to States and other political subdivisions that do not 7 have green banks to establish independent, nonprofit 8 green banks in those States and political subdivisions, in- 9 cluding by working with relevant stakeholders in those 10 States and political subdivisions. 11 ‘‘SEC. 5245F. PROJECT TYPES. 12 ‘‘The Bank shall seek to facilitate affordable invest- 13 ment and procurement, including in low-income commu- 14 nities and communities of color, in the following key areas: 15 ‘‘(1) Renewable energy. 16 ‘‘(2) Energy storage. 17 ‘‘(3) Transportation, including— 18 ‘‘(A) low- and zero-emission vehicle infra- 19 structure; 20 ‘‘(B) transit-oriented development; and 21 ‘‘(C) active transportation. 22 ‘‘(4) Transmission for clean energy. 23 ‘‘(5) Climate resiliency measures. 24 VerDate Sep 11 2014 04:52 Jul 09, 2019 Jkt 089200 PO 00000 Frm 00011 Fmt 6652 Sfmt 6201 E:\BILLS\S2057.IS S2057 kjohnson on DSK79L0C42 with BILLS 12 •S 2057 IS ‘‘(6) Energy and water efficiency, including res- 1 idential, commercial, and industrial efficiency. 2 ‘‘(7) Reforestation of degraded land. 3 ‘‘(8) Agricultural projects. 4 ‘‘(9) Electrification and decarbonization of in- 5 dustrial processes. 6 ‘‘(10) Any other key area identified by the 7 Board as consistent with the purpose of the Bank 8 described in section 5245C. 9 ‘‘SEC. 5245G. CASH FOR CARBON PROGRAM. 10 ‘‘(a) ESTABLISHMENT.—Pursuant to guidance and 11 rules issued by the Board, the Bank shall explore the es- 12 tablishment of a cash for carbon program to remove green- 13 house gas emissions from the power system. 14 ‘‘(b) PURPOSE.—Any program established under sub- 15 section (a) may use market mechanisms to expedite the 16 retirement of carbon-intensive power generation facilities, 17 such as coal-fired power generation facilities, acquire car- 18 bon assets for the purpose of reducing emissions, and in- 19 vest in communities negatively affected by the loss of those 20 facilities or assets, including market mechanisms such 21 as— 22 ‘‘(1) reverse auctions; 23 ‘‘(2) securitization; 24 VerDate Sep 11 2014 04:52 Jul 09, 2019 Jkt 089200 PO 00000 Frm 00012 Fmt 6652 Sfmt 6201 E:\BILLS\S2057.IS S2057 kjohnson on DSK79L0C42 with BILLS 13 •S 2057 IS ‘‘(3) the offering of bidder’s credits to facilities 1 that pose significant environmental justice or health 2 concerns, particularly in low-income, minority, and 3 distressed neighborhoods (within the meaning of sec- 4 tion 910 of the Housing and Community Develop- 5 ment Act of 1992 (12 U.S.C. 2901 note; Public Law 6 102–550)); and 7 ‘‘(4) the provision of investment and technical 8 assistance to the local community and site of a facil- 9 ity, including, where necessary, in cooperation 10 with— 11 ‘‘(A) the Administrator of the Environ- 12 mental Protection Agency; or 13 ‘‘(B) other Federal, State, or local authori- 14 ties. 15 ‘‘(c) E [Text truncated for display. 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