National Climate Bank Act

I 116TH CONGRESS 1ST SESSION H. R. 5416 To establish a National Climate Bank. IN THE HOUSE OF REPRESENTATIVES DECEMBER 12, 2019 Mrs. DINGELL (for herself, Mr. TONKO, Ms. BLUNT ROCHESTER, and Mrs. AXNE) introduced the following bill; which was referred to the Committee on Energy and Commerce, and in addition to the Committees on Finan- cial Services, Ways and Means, Agriculture, and Transportation and In- frastructure, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the juris- diction of the committee concerned 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. TABLE OF CONTENTS. 6 The table of contents of this Act is as follows: 7 Sec. 1. Short title. Sec. 2. Table of contents. Sec. 3. National Climate Bank. VerDate Sep 11 2014 02:55 Dec 17, 2019 Jkt 099200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6211 E:\BILLS\H5416.IH H5416 kjohnson on DSK79L0C42 with BILLS 2 •HR 5416 IH ‘‘Subtitle C—National Climate Bank ‘‘Sec. 1621. Definitions. ‘‘Sec. 1622. Establishment. ‘‘Sec. 1623. Mandate. ‘‘Sec. 1624. Finance and investment division. ‘‘Sec. 1625. Start-up Division. ‘‘Sec. 1626. Zero-emissions fleet and related infrastructure financing pro- gram. ‘‘Sec. 1627. Project prioritization and requirements. ‘‘Sec. 1628. Board of Directors. ‘‘Sec. 1629. Administration. ‘‘Sec. 1630. Establishment of risk management committee and audit com- mittee. ‘‘Sec. 1631. Oversight. ‘‘Sec. 1632. Maximum contingent liability. SEC. 3. NATIONAL CLIMATE BANK. 1 Title XVI of the Energy Policy Act of 2005 (Public 2 Law 109–58, as amended) is amended by adding at the 3 end the following new subtitle: 4 ‘‘Subtitle C—National Climate 5 Bank 6 ‘‘SEC. 1621. DEFINITIONS. 7 ‘‘In this subtitle: 8 ‘‘(1) BANK.—The term ‘Bank’ means the Na- 9 tional Climate Bank established under section 1622. 10 ‘‘(2) BOARD.—The term ‘Board’ means the 11 Board of Directors of the Bank. 12 ‘‘(3) CHIEF EXECUTIVE OFFICER.—The term 13 ‘chief executive officer’ means the chief executive of- 14 ficer of the Bank. 15 ‘‘(4) CLIMATE-IMPACTED COMMUNITIES.—The 16 term ‘climate-impacted communities’ includes— 17 VerDate Sep 11 2014 02:55 Dec 17, 2019 Jkt 099200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H5416.IH H5416 kjohnson on DSK79L0C42 with BILLS 3 •HR 5416 IH ‘‘(A) communities of color, which include 1 any geographically distinct area the population 2 of color of which is higher than the average 3 population of color of the State in which the 4 community is located; 5 ‘‘(B) communities that are already or are 6 likely to be the first communities to feel the di- 7 rect negative effects of climate change; 8 ‘‘(C) distressed neighborhoods, dem- 9 onstrated by indicators of need, including pov- 10 erty, childhood obesity rates, academic failure, 11 and rates of juvenile delinquency, adjudication, 12 or incarceration; 13 ‘‘(D) low-income communities, defined as 14 any census block group in which 30 percent or 15 more of the population are individuals with low 16 income; 17 ‘‘(E) low-income households, defined as a 18 household with annual income equal to, or less 19 than, the greater of— 20 ‘‘(i) an amount equal to 80 percent of 21 the median income of the area in which the 22 household is located, as reported by the 23 Department of Housing and Urban Devel- 24 opment; and 25 VerDate Sep 11 2014 02:55 Dec 17, 2019 Jkt 099200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H5416.IH H5416 kjohnson on DSK79L0C42 with BILLS 4 •HR 5416 IH ‘‘(ii) 200 percent of the Federal pov- 1 erty line; and 2 ‘‘(F) rural areas, which include any area 3 other than— 4 ‘‘(i) a city or town that has a popu- 5 lation of greater than 50,000 inhabitants; 6 and 7 ‘‘(ii) any urbanized area contiguous 8 and adjacent to a city or town described in 9 clause (i). 10 ‘‘(5) CLIMATE RESILIENT INFRASTRUCTURE.— 11 The term ‘climate resilient infrastructure’ means 12 any project that builds or enhances infrastructure so 13 that such infrastructure— 14 ‘‘(A) is planned, designed, and operated in 15 a way that anticipates, prepares for, and adapts 16 to changing climate conditions; and 17 ‘‘(B) can withstand, respond to, and re- 18 cover rapidly from disruptions caused by these 19 climate conditions. 20 ‘‘(6) ELECTRIFICATION.—The term ‘electrifica- 21 tion’ means the installation, construction, or use of 22 end-use electric technology that replaces existing fos- 23 sil-fuel-based technology. 24 VerDate Sep 11 2014 02:55 Dec 17, 2019 Jkt 099200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\H5416.IH H5416 kjohnson on DSK79L0C42 with BILLS 5 •HR 5416 IH ‘‘(7) ENERGY EFFICIENCY.—The term ‘energy 1 efficiency’ means any project, technology, function, 2 or measure that results in the reduction of energy 3 use required to achieve the same level of service or 4 output prior to the application of such project, tech- 5 nology, function, or measure, or substantially re- 6 duces greenhouse gas emissions relative to emissions 7 that would have occurred prior to the application of 8 such project, technology, function, or measure. 9 ‘‘(8) FUEL SWITCHING.—The term ‘fuel switch- 10 ing’ means any project that replaces a fossil-fuel- 11 based heating system with an electric-powered sys- 12 tem or one powered by biomass-generated heat. 13 ‘‘(9) GREEN BANK.—The term ‘green bank’ 14 means a dedicated public or nonprofit specialized fi- 15 nance entity that— 16 ‘‘(A) is designed to drive private capital 17 into market gaps for low- and zero-emission 18 goods and services; 19 ‘‘(B) uses finance tools to mitigate climate 20 change; 21 ‘‘(C) does not take deposits; 22 ‘‘(D) is funded by government, public, pri- 23 vate, or charitable contributions; and 24 ‘‘(E) invests or finances projects— 25 VerDate Sep 11 2014 02:55 Dec 17, 2019 Jkt 099200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\H5416.IH H5416 kjohnson on DSK79L0C42 with BILLS 6 •HR 5416 IH ‘‘(i) alone; or 1 ‘‘(ii) in conjunction with other inves- 2 tors. 3 ‘‘(10) QUALIFIED PROJECTS.—The terms 4 ‘qualified projects’ means the following kinds of 5 technologies and activities that are eligible for fi- 6 nancing and investment from the National Climate 7 Bank, either directly or through State and local 8 green banks funded by the National Climate Bank: 9 ‘‘(A) Renewable energy generation, includ- 10 ing the following: 11 ‘‘(i) Solar. 12 ‘‘(ii) Wind. 13 ‘‘(iii) Geothermal. 14 ‘‘(iv) Hydropower. 15 ‘‘(v) Ocean and hydrokinetic. 16 ‘‘(vi) Fuel cell. 17 ‘‘(B) Building energy efficiency, fuel 18 switching, and electrification. 19 ‘‘(C) Industrial decarbonization. 20 ‘‘(D) Grid technology such as trans- 21 mission, distribution, and storage to support 22 clean energy distribution, including smart-grid 23 applications. 24 VerDate Sep 11 2014 02:55 Dec 17, 2019 Jkt 099200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\H5416.IH H5416 kjohnson on DSK79L0C42 with BILLS 7 •HR 5416 IH ‘‘(E) Agriculture projects that reduce net 1 greenhouse gas emissions including reforest- 2 ation, afforestation, forestry management, and 3 regenerative agriculture. 4 ‘‘(F) Clean transportation, including the 5 following: 6 ‘‘(i) Battery electric vehicles. 7 ‘‘(ii) Plug-in hybrid electric vehicles. 8 ‘‘(iii) Hydrogen vehicles. 9 ‘‘(iv) Other zero-emissions fueled vehi- 10 cles. 11 ‘‘(v) Related vehicle charging and 12 fueling infrastructure. 13 ‘‘(G) Climate resilient infrastructure. 14 ‘‘(H) Any other key areas identified by the 15 Board as consistent with the mandate of the 16 Bank as described in section 1623. 17 ‘‘(11) RENEWABLE ENERGY GENERATION.— 18 The term ‘renewable energy generation’ means elec- 19 tricity created by sources that are continually replen- 20 ished by nature, such as the sun, wind, and water. 21 ‘‘SEC. 1622. ESTABLISHMENT. 22 ‘‘(a) IN GENERAL.—Not later than 1 year after the 23 date of enactment of this subtitle, there shall be estab- 24 VerDate Sep 11 2014 02:55 Dec 17, 2019 Jkt 099200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\H5416.IH H5416 kjohnson on DSK79L0C42 with BILLS 8 •HR 5416 IH lished a nonprofit corporation to be known as the ‘Na- 1 tional Climate Bank’. 2 ‘‘(b) LIMITATION.—The Bank shall not be an agency 3 or instrumentality of the Federal Government. 4 ‘‘(c) FULL FAITH AND CREDIT.—The full faith and 5 credit of the United States shall not extend to the Bank. 6 ‘‘(d) NONPROFIT STATUS.—The Bank shall— 7 ‘‘(1) be an organization described in section 8 501(c) of the Internal Revenue Code of 1986 and 9 exempt from taxation under section 501(a) of that 10 Code; 11 ‘‘(2) ensure that no part of the income or assets 12 of the Bank shall inure to the benefit of any direc- 13 tor, officer, or employee, except as reasonable com- 14 pensation for services or reimbursement for ex- 15 penses; and 16 ‘‘(3) not contribute to or otherwise support any 17 political party or candidate for elective office. 18 ‘‘SEC. 1623. MANDATE. 19 ‘‘The Bank shall make the United States a world 20 leader in combating the causes and effects of climate 21 change through the rapid deployment of mature tech- 22 nologies and the commercialization and scaling of new 23 technologies by maximizing the reduction of emissions in 24 VerDate Sep 11 2014 02:55 Dec 17, 2019 Jkt 099200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 E:\BILLS\H5416.IH H5416 kjohnson on DSK79L0C42 with BILLS 9 •HR 5416 IH the United States for every dollar deployed by the Bank, 1 including by— 2 ‘‘(1) providing financing support for invest- 3 ments in the United States in low- and zero-emis- 4 sions technologies and processes in order to rapidly 5 accelerate market penetration; 6 ‘‘(2) catalyzing and mobilizing private capital 7 through Federal investment and supporting a more 8 robust marketplace for clean technologies, while 9 minimizing competition with private investment; 10 ‘‘(3) enabling climate-impacted communities to 11 benefit from and afford projects and investments 12 that reduce emissions; 13 ‘‘(4) providing support for workers and commu- 14 nities impacted by the transition to a low-carbon 15 economy; 16 ‘‘(5) supporting the creation of green banks 17 within the United States where green banks do not 18 exist; and 19 ‘‘(6) causing the rapid transition to a clean en- 20 ergy economy without raising energy costs to end 21 users and seeking to lower costs where possible. 22 VerDate Sep 11 2014 02:55 Dec 17, 2019 Jkt 099200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6201 E:\BILLS\H5416.IH H5416 kjohnson on DSK79L0C42 with BILLS 10 •HR 5416 IH ‘‘SEC. 1624. FINANCE AND INVESTMENT DIVISION. 1 ‘‘(a) IN GENERAL.—There shall be within the Bank 2 a finance and investment division, which shall be respon- 3 sible for— 4 ‘‘(1) the Bank’s greenhouse gas emissions miti- 5 gation efforts by directly financing qualifying 6 projects or doing so indirectly by providing capital to 7 State and local green banks; 8 ‘‘(2) originating, evaluating, underwriting, and 9 closing the Bank’s financing and investment trans- 10 actions in qualified projects; 11 ‘‘(3) partnering with private capital providers 12 and capital markets to attract coinvestment from 13 private banks, investors, and others in order to drive 14 new investment into underpenetrated markets, to in- 15 crease the efficiency of private capital markets with 16 respect to investing in greenhouse gas reduction 17 projects, and to increase total investment caused by 18 the Bank; 19 ‘‘(4) managing the Bank’s portfolio of assets to 20 ensure performance and monitor risk; 21 ‘‘(5) ensuring appropriate debt and risk mitiga- 22 tion products are offered; and 23 ‘‘(6) overseeing prudent, noncontrolling equity 24 investments. 25 VerDate Sep 11 2014 02:55 Dec 17, 2019 Jkt 099200 PO 00000 Frm 00010 Fmt 6652 Sfmt 6201 E:\BILLS\H5416.IH H5416 kjohnson on DSK79L0C42 with BILLS 11 •HR 5416 IH ‘‘(b) PRODUCTS AND INVESTMENT TYPES.—The fi- 1 nance and investment division of the Bank may provide 2 capital to qualified projects in the form of— 3 ‘‘(1) senior, mezzanine, and subordinated debt; 4 ‘‘(2) credit enhancements including loan loss re- 5 serves and loan guarantees; 6 ‘‘(3) aggregation and warehousing; 7 ‘‘(4) equity capital; and 8 ‘‘(5) any other financial product approved by 9 the Board. 10 ‘‘(c) STATE AND LOCAL GREEN BANK CAPITALIZA- 11 TION.—The finance and investment division of the Bank 12 shall make capital available to State and local green banks 13 to enable such banks to finance qualifying projects in their 14 markets that are better served by a locally based entity, 15 rather than through direct investment by the Bank. 16 ‘‘(d) INVESTMENT COMMITTEE.—The debt, risk miti- 17 gation, and equity investments made by the Bank shall 18 be— 19 ‘‘(1) approved by the investment committee of 20 the Board; and 21 ‘‘(2) consistent with an investment policy that 22 has been established by the investment committee of 23 the Board in consultation with the risk management 24 committee of the Board. 25 VerDate Sep 11 2014 02:55 Dec 17, 2019 Jkt 099200 PO 00000 Frm 00011 Fmt 6652 Sfmt 6201 E:\BILLS\H5416.IH H5416 kjohnson on DSK79L0C42 with BILLS 12 •HR 5416 IH ‘‘SEC. 1625. START-UP DIVISION. 1 ‘‘There shall be within the Bank a Start-up Division, 2 which shall be responsible for providing technical assist- 3 ance and start-up funding to States and other political 4 subdivisions that do not have green banks to establish 5 green banks in those States and political subdivisions, in- 6 cluding by working with relevant stakeholders in those 7 States and political subdivisions. 8 ‘‘SEC. 1626. ZERO-EMISSIONS FLEET AND RELATED INFRA- 9 STRUCTURE FINANCING PROGRAM. 10 ‘‘Not later than 1 year after the date of establishment 11 of the Bank, the Bank shall explore the establishment of 12 a program to provide low- and zero-interest loans, up to 13 30 years in length, to any school, metropolitan planning 14 organization, or nonprofit organization seeking financing 15 for the acquisition of zero-emissions vehicle fleets or asso- 16 ciated infrastructure to support zero-emissions vehicle 17 fleets. 18 ‘‘SEC. 1627. PROJECT PRIORITIZATION AND REQUIRE- 19 MENTS. 20 ‘‘(a) EMISSIONS REDUCTION MANDATE.—In invest- 21 ing in projects that mitigate greenhouse gas emissions, the 22 Bank shall maximize the reduction of emissions in the 23 United States for every dollar deployed by the Bank. 24 ‘‘(b) ENVIRONMENTAL JUSTICE PRIORITIZATION.— 25 VerDate Sep 11 2014 02:55 Dec 17, 2019 Jkt 099200 PO 00000 Frm 00012 Fmt 6652 Sfmt 6201 E:\BILLS\H5416.IH H5416 kjohnson on DSK79L0C42 with BILLS 13 •HR 5416 IH ‘‘(1) IN GENERAL. [Text truncated for display. Full text available on Congress.gov.]