SECTION 1. SHORT TITLE, REFERENCES, AND TABLE OF CONTENTS.

    (a) Short Title.--This Act may be cited as the ``Clean Air Act 
Amendments of 1996''.
    (b) References.--Whenever in this Act an amendment or repeal is 
expressed in terms of an amendment to, or repeal of, a section or other 
provision, the reference shall be considered to be made to a section or 
other provision of the Clean Air Act.
    (c) Table of Contents.--The table of contents is as follows:

Sec. 1. Short title, references, and table of contents.
Sec. 2. Operating permits.
Sec. 3. Enhanced monitoring.
Sec. 4. Recognition of effective controls.
Sec. 5. Sanctions.
Sec. 6. Hazardous air pollutants.
Sec. 7. Voluntary controls adopted prior to nonattainment.
Sec. 8. Attainment date determinations.
Sec. 9. Attainment redesignations.
Sec. 10. Credit for episodic controls.
Sec. 11. Opt-in reformulated gas areas.
Sec. 12. NOx reductions for reformulated gas.
Sec. 13. Establishing national primary ambient air quality standards.
Sec. 14. Transportation conformity.
Sec. 15. Overwhelming transport.
Sec. 16. Automobile inspection and maintenance.
Sec. 17. Emissions trading.

SEC. 2. OPERATING PERMITS.

    (a) Definition of Applicable Requirement.--Section 501 (42 U.S.C. 
7661) is amended by adding the following new paragraph after paragraph 
(4):
            ``(5) Applicable requirement.--The term `applicable 
        requirement' means any requirement promulgated by the 
        Administrator pursuant to section 111 (42 U.S.C. 7411), section 
        112 (42 U.S.C. 7412) with the exception of section 112(r), 
        section 129 (42 U.S.C. 7429), Section 165 (42 U.S.C. 7475), 
        subsections (e) and (f) of section 183 (42 U.S.C. 7511b), 
        section 328 (42 U.S.C. 7627), title IV or title VI (unless the 
        permitting authority determines that a requirement imposed 
        pursuant to title VI need not be contained in a permit issued 
        under this title) and any limitation on emissions or operations 
        contained in a construction permit issued pursuant to Parts C 
        or D of title I. The term `applicable requirement' also 
        includes any other requirement provided for in an applicable 
        state implementation plan, except that a requirement imposed 
        pursuant to a State minor new source review program under 
        section 110(a)(2) (42 U.S.C. 7410(a)(2)) shall not be 
        considered an applicable requirement for purposes of this 
        title. Notwithstanding this paragraph, any permitting authority 
        may provide for the terms of permits issued under its minor new 
        source review to be appended to or incorporated in an operating 
        permit issued under this subchapter. Nothing in this paragraph 
        shall affect the authority of any person to enforce any 
        requirement imposed under any rule, permit, or implementation 
        plan under this Act.''.
    (b) Assurance of Operating Flexibility.--(1) Section 502 (b)(10) 
(42 U.S.C. 766la(b)(10)), is amended to read as follows:
            ``(10) The permitting authority may not require any source 
        to obtain or modify a permit issued under this title for any 
        physical or operational change at the source or for taking any 
other action prior to the date 7 days after the physical or operational 
change or other action is initiated. Nothing in this title shall be 
construed to alter the requirements of any other title of this Act that 
a permit be obtained before construction or modification of a source. 
Nothing in this paragraph shall preclude any State from continuing to 
impose any requirement or employ any procedure separate and apart from 
the program required under this title, provided that such requirements 
and procedures shall not be applicable requirements under this 
title.''.
            (2) Section 502(b) (42 U.S.C. 766la(b)) is amended by 
        adding the following paragraph after paragraph (10):
            ``(11) A provision giving major stationary sources the 
        option of obtaining permits that would allow emissions 
        increases and decreases at various units within the major 
        stationary source without permit revisions if overall emissions 
        limits for the major stationary source are not exceeded and 
        preconstruction review is not required under title I. Nothing 
        in this paragraph shall preclude any State from continuing to 
        impose any requirement or employ any procedure separate and 
        apart from the program required under this title, provided that 
        such requirements and procedures shall not be applicable 
        requirements under this title.''.
    (c) Sanctions and Federal Implementation.--Section 502(d) (42 
U.S.C. 7661a(d)) is amended by inserting before the period at the end 
of subparagraphs (A) and (B) of paragraph (2) and before the period at 
the end of (3) the following: ``in any case in which the Administrator 
determines that such failure will cause the State to fail to attain a 
national primary ambient air quality standard by the applicable 
attainment date''.
    (d) Permit Term.--Section 502(b)(5)(B) is amended by striking out 
``5 years'' and inserting ``10 years''.

SEC. 3. ENHANCED MONITORING.

    Section 114(a) (42 U.S.C. 7414(a)(3)) is amended by striking 
paragraph (3) and inserting the following:
            ``(3) The Administrator shall in the case of any person 
        which is the owner or operator of a major source, and may, in 
        the case of any other person, require submission of compliance 
        certifications. Compliance certifications shall include (A) 
        identification of the applicable requirement that is the basis 
        of the certification, (B) the method used for determining the 
        compliance status of the source, and (C) its compliance status. 
        Compliance certifications and monitoring data shall be subject 
        to subsection (c) of this section. Submission of a compliance 
        certification shall in no way limit the Administrator's 
        authorities to investigate or otherwise implement this Act.
            ``(4) Nothing in this section or in title V shall authorize 
        the Administrator to revise significantly, or to require 
        significant revision of, an existing compliance method without 
        employing procedures, such as a rulemaking, to allow meaningful 
        comment on that revision and to assess the effect of the 
        revision on the stringency of the underlying emission standard 
        or limitation. Nothing in this section or section 113 (42 
        U.S.C. 7413) shall authorize the use of evidence other than the 
        applicable compliance method or test method to establish a 
        violation of the numerical component of an emission limitation 
        or standard. For purposes of this paragraph, compliance method 
        as test method shall meet the requirements contained in a 
        regulation or permit for monitoring or testing to determine 
        compliance with the applicable emission standard or limitation. 
        Nothing in this subparagraph shall limit the authority of the 
        Administrator to increase the stringency of controls or to 
        impose new controls, as required under any other section of 
        this Act.

SEC. 4. RECOGNITION OF EFFECTIVE CONTROLS.

    Section 302 (42 U.S.C. 7602) is amended by adding the following at 
the end thereof:
    ``(aa) Potential To Emit.--The term `potential to emit' means the 
maximum capacity of a stationary source to emit any regulated air 
pollutant under its physical and operational design. Any physical or 
operational limit on the capacity of a source to emit any regulated air 
pollutant, including any limit enforceable under Federal, State, or 
local law and including any pollution control equipment and 
restrictions on hours of operation or on the type or amount of material 
used, produced, stored, combusted or processed at such source shall be 
treated as part of its design if the limitation is effective.''.

SEC. 5. SANCTIONS.

    The first sentence of section 179(a) (42 U.S.C. 7509(a)) is amended 
by striking ``one of the sanctions referred to in subsection (b) shall 
apply, as selected by the Administrator'' and all that follows down 
through the period at the end thereof and inserting ``the Administrator 
may apply one of the sanction referred to in subsection (b) if the 
Administrator finds that such deficiency is likely to result in a 
failure by the State to attain a national primary ambient air quality 
standard by the applicable attainment date.''.

SEC. 6. HAZARDOUS AIR POLLUTANTS.

    Section 112(j)(6) is amended in the second sentence by striking all 
after ``the Administrator shall revise such permit'' and inserting ``to 
comply with such standard and such revision shall take effect on the 
date 10 years after the date such standard is promulgated.''.

SEC. 7. VOLUNTARY CONTROLS ADOPTED PRIOR TO NONATTAINMENT.

    Section 182(b)(1)(C) is amended by adding the following at the end 
thereof: ``Any measures that were not expressly required by this Act, 
but that were voluntarily implemented, prior to the designation of the 
area as a nonattainment area shall be credited as additional reductions 
for purposes of any revised plan adopted for the area pursuant to this 
part following designation of the area as an ozone nonattainment 
area.''.

SEC. 8. ATTAINMENT DATE DETERMINATIONS.

    (a) Paragraph (5) Extensions.--Section 181(a)(5)(B) is amended to 
read as follows:
            ``(B)(i) no more than one exceedance of the national 
        ambient air quality standard for ozone has occurred in the area 
        in the year preceding the Extension Year,
            ``(ii) the design value of the area (based on data from the 
        year preceding the extension year) does not exceed the design 
        value for the current classification of the area as specified 
        in table 1 of paragraph (1), or
            ``(iii) the Administrator determines that infrequent 
        episodic variations in air pollution levels caused by weather 
        impact an area's ability to demonstrate attainment.''.
    (b) Additional Extension for Certain Areas.--Section 181(a) is 
amended by adding the following at the end thereof:
            ``(6) Attainment followed by violation.--Upon application 
        by any State, the Administrator may extend, for up to an 
        additional 3 years, the date specified in Table I of paragraph 
        (1) of this subsection and the dates specified in section 
        182(b) regarding reasonable further progress, if--
                    ``(A) the area has in a 3-year period prior to the 
                attainment date, qualified for redesignation as 
                attainment for ozone, but
                    ``(B) subsequent to such 3-year period, the area 
                has violated the ozone standard.
        No more than one extension may be issued under this paragraph 
        for a single nonattainment area.''.

SEC. 9. ATTAINMENT REDESIGNATIONS.

    Section 107(d)(3) is amended as follows:
            (1) By amending the second sentence of subparagraph (D) to 
        read as follows: ``The Administrator shall publish notice in 
        the Federal Register of the Administrator's receipt of a 
        request for redesignation. The Administrator shall also publish 
        notice in the Federal Register of the Administrator's proposed 
        approval or denial within 90 days after receipt of a complete 
        State redesignation submittal and approve or deny such 
        redesignation within 90 days thereafter.''.
            (2) By adding the following at the end of subparagraph (E):
``If a State requests the Administrator to redesignate an area as 
attainment and submits information to the Administrator regarding such 
area adequate to demonstrate compliance with clauses (ii) through (v) 
and compliance (for a period of 3 years prior to the submission) with 
clause (i) and if the Administrator fails to publish notice in the 
Federal Register of the Administrator's proposed approval or denial of 
such request within 90 days after receipt of a complete State 
redesignation request or fails to approve or deny such request within 
90 days thereafter, the area shall be deemed to be redesignated as an 
attainment area by operation of law on the date 180 days after the 
Administrator's receipt of a complete State redesignation request.''.

SEC. 10. CREDIT FOR EPISODIC CONTROLS.

    Section 110(a) is amended by inserting the following new 
subparagraph immediately after paragraph (3):
    ``(4) In determining whether the provisions of any plan or plan 
revision submitted under this Act are adequate to attain and maintain 
any national primary or secondary ambient air quality standard, the 
Administrator shall provide appropriate credits for plan provisions 
which are designed to control air pollution only during certain periods 
when levels of one or more air pollutants are, or are likely to be, at 
higher levels than at other periods.''.

SEC. 11. OPT-IN REFORMULATED GAS AREAS.

    Section 211(k)(6)(A) of the Clean Air Act is amended as follows:
            (1) By inserting the following after the second sentence: 
        ``No area included in the coverage of the prohibition set forth 
        in paragraph (5) pursuant to an application under this 
        paragraph may continue to be included in such prohibition after 
        December 31, 1999, unless the Governor of the State in which 
        such area is located has notified the Administrator of such 
        continued inclusion prior to December 31, 1997, and the 
        Administrator has published such notice in the Federal 
        Register.''.
            (2) By adding the following at the end thereof: ``An area 
        that has been included in the coverage of the prohibition set 
        forth in paragraph (5) pursuant to an application under this 
        paragraph may subsequently be excluded from such coverage 
        pursuant to an application by the Governor to the 
        Administrator, but such exclusion shall not take effect for a 
        period of 1-year after the application is approved (in the case 
        of Phase I Reformulated Gas Regulations) or 8-years after the 
        date on which the area was first included in the coverage of 
        such prohibition (in the case of Phase II Reformulated Gas 
        Regulations). After an area is excluded from coverage pursuant 
        to the preceding sentence, any subsequent inclusion (or 
        subsequent exclusion) of the area from such coverage shall not 
        take effect for a period of 1-year after the Governor's 
        application is approved. A Governor's application shall be 
        treated as approved under this subparagraph on the date on 
        which the Administrator publishes notice of such approval in 
        the Federal Register.''.

SEC. 12. NO&lt;greek-KH&gt; REDUCTIONS FOR REFORMULATED GAS.

    Section 211(k)(2)(A) of the Clean Air Act is amended by adding the 
following at the end thereof: ``The Administrator may not require that 
emissions of oxides of nitrogen (NO&lt;greek-KH&gt;) from baseline vehicles 
when using the reformulated gasoline be less than emissions from such 
vehicles when using baseline gasoline.''.

SEC. 13. ESTABLISHING NATIONAL PRIMARY AMBIENT AIR QUALITY STANDARDS.

    Section 109 of the Clean Air Act is amended as follows:
            (1) At the end of subsection (a) add the following:
    ``(3) Within two years after the enactment of this paragraph the 
Administrator shall promulgate national primary ambient air quality 
goals and revised national primary ambient air quality standards.''.
            (2) In subsection (b)(1), strike ``prescribed, under 
        subsection (a)'' and insert ``prescribed under subsection 
        (a)(1)''.
            (3) Strike the last sentence of subsection (a)(1) and 
        insert ``The national primary ambient air quality goals 
        promulgated under subsection (a)(3) shall set forth a level of 
        ambient air quality, based on such criteria and allowing an 
        adequate margin of safety, that is requisite to protect the 
        public health. In establishing such level the Administrator 
        shall not take into account infrequent episodic variations in 
        air pollution levels that are caused by weather. The revised 
        national primary ambient air quality standards promulgated 
        under subsection (a)(3) shall be as close to such national 
        primary ambient air quality goals as feasible such that the 
        incremental costs of attaining such standard do not exceed the 
        incremental benefits of attaining the standard.''.

SEC. 14. TRANSPORTATION CONFORMITY.

    Section 176 is amended to read as follows:

``SEC. 176. TRANSPORTATION CONFORMITY.

    ``Beginning on November 15, 1996, and at 4-year intervals 
thereafter, each State shall submit a revised inventory and performance 
plan for review by the Administrator. Such plan shall include a 
certification by the State that the plan has been developed so as to 
meet air quality goals. The applicability of a State approved 
implementation plan shall become effective for the purposes of this 
section upon signature of the Governor and shall continue unless 
disapproved by the Administrator within 30 days. The form and content 
of the inventory and performance plan shall solely be within the 
purview of each State and the Administrator shall not disapprove such 
plan unless the Administrator determines that a State has developed an 
inventory and plan without adhering to such State's own processes and 
procedures. If not disapproved within 30 days, such inventories and 
plans shall be considered approved. Nothing in this section shall 
require the submission of an inventory or plan more than once every 4 
years.''.

SEC. 15. OVERWHELMING TRANSPORT.

    Section 181 is amended by adding the following at the end thereof:
    ``(d) Overwhelming Transport.--If, based on photochemical grid 
modeling demonstrations or any other analytical method determined by 
the Administrator to be as effective, the Administrator determines that 
the area is a downwind nonattainment area receiving ozone or ozone 
precursor transport from outside the area and control of ozone 
concentrations is beyond the ability of the area to control because 
volatile organic compounds and oxides of nitrogen from sources within 
such area do not make a significant contribution to ozone 
concentrations in such area (or in any other ozone nonattainment area), 
the Administrator may redesignate the area as attainment or as having a 
lower classification.''.

SEC. 16. AUTOMOBILE INSPECTION AND MAINTENANCE.

    Section 182(c)(3)(C)(iv) is amended by inserting ``safety 
inspection approval or'' after ``denial of''.

SEC. 17. EMISSIONS TRADING.

    Section 110 is amended by inserting the following new subsection 
immediately before subsection (f):
    ``(e) Emissions Trading Programs.--The Administrator shall approve 
any emissions trading program submitted under this section as part of 
an applicable implementation plan or implementation plan revision for 
any area unless the Administrator determines that such program would 
result in the failure of a nonattainment area to attain the national 
primary or secondary ambient air quality standards by the applicable 
attainment date or in the failure of an area that has been designated 
as attainment to maintain such standards. The Administrator shall not 
be required to approve any plan which will result in increased 
emissions (beyond the maintenance plan level) of the criteria pollutant 
for which the area is classified as nonattainment.''.
Clean Air Act Amendments of 1996 - Amends the Clean Air Act to define permit program "applicable requirements."  Revises Environmental Protection Agency (EPA) standards for permit programs regarding:  (1) permitting authorities' requirements that a source obtain or modify a permit for a physical or operational change or another action prior to a date seven days after the change or action has begun; and (2) major stationary source permits that allow emissions increases and decreases at various units within the source without permit revision if certain overall emissions standards are met. Doubles the allowable term of a permit. 
Requires, before permit program-related sanctions are imposed, a determination by the EPA Administrator that such failure will cause the State to fail to attain a national primary ambient air quality standard by the applicable date. 
(Sec. 3) Repeals the authority of the Administrator to require enhanced monitoring of major stationary sources and revises compliance certification and method requirements. 
(Sec. 4) Adds a definition of "potential to emit" to treat physical or operational limits on a source's capacity to emit regulated air pollutants as part of the source's design if the limitation is effective. 
(Sec. 5) Requires, before sanctions are imposed for non-submittal, disapproval, or failure to implement requirements of a plan for a nonattainment area, a determination that the deficiency is likely to result in a failure by the State to attain a national primary ambient air quality standard by the applicable date.  Makes the imposition of sanctions discretionary. 
(Sec. 6) Modifies the procedure for permit revision where the Administrator promulgates a hazardous air pollutant emission standard, after the permit's issuance, that would be applicable to the source in lieu of the limitation established by permit. 
(Sec. 7) Provides, with respect to plans for Moderate ozone nonattainment areas, for the crediting as reductions of certain voluntary measures implemented before designation as a nonattainment area. 
(Sec. 8) Expands the factors allowing extension, upon State application, of the primary standard attainment date for ozone.  Allows extension for certain areas that qualified for attainment designation but subsequently violated the ozone standard. 
(Sec. 9) Shortens the time period and modifies the procedure for redesignation, upon State application, of an air quality control region. 
(Sec. 10) Requires the Administrator, when evaluating the adequacy of State implementation plans for national primary and secondary ambient air quality standards, to credit provisions designed to control air pollution only during certain periods during which pollutant levels are elevated. 
(Sec. 11) Imposes limitations on the inclusion, at a State's option, of ozone nonattainment areas in the prohibition requiring the sale of reformulated gasoline. 
(Sec. 12) Prohibits the Administrator from requiring that nitrogen oxide emissions from baseline (representative) vehicles using reformulated gasoline be less than emissions from such vehicles using "baseline" gasoline. 
(Sec. 13) Requires the promulgation of:  (1) national primary ambient air quality goals that discount certain episodic weather-related variations; and (2) revised standards, using a cost-benefit analysis, as close to the air quality goals as is feasible. 
(Sec. 14) Removes limitations on Federal assistance for transportation activities not conforming to a State implementation plan.  Considers the form and content of a State inventory and performance plan solely within the purview of a State and declares such a plan effective upon the Governor's approval unless disapproved by EPA within 30 days.  Makes the standard for approval the plan's adherence to the State's own processes and procedures. 
(Sec. 15) Allows the upgrading of an ozone nonattainment area if the Administrator makes a specified determination concerning the inability of the area to control ozone concentrations resulting from downwind transport of ozone or precursors from another area. 
(Sec. 16) Requires inclusion, in an enhanced vehicle inspection and maintenance program for a Serious ozone nonattainment area, of enforcement through denial of safety inspection approval (as an alternative to denial of registration, as under current law). 
(Sec. 17) Requires the Administrator to approve an emissions trading program as part of an implementation plan unless certain attainment failures would result.
Clean Air Act Amendments of 1996