I

106TH CONGRESS

1ST SESSION H. R. 657

To reduce acid deposition under the Clean Air Act, and for other purposes.

IN THE HOUSE OF REPRESENTATIVES

FEBRUARY 9, 1999

Mr. SWEENEY (for himself, Mr. MCHUGH, Mr. WALSH, Mr. TOWNS, Mr.

MCNULTY, Mr. LAZIO, Mr. NADLER, Mr. HINCHEY, Mr. LAFALCE, Mr.

HOUGHTON, Mr. ACKERMAN, Mrs. LOWEY, and Mrs. MALONEY of New

York) introduced the following bill; which was referred to the Committee

on Commerce

A BILL

To reduce acid deposition under the Clean Air Act, and

for other purposes.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,

3 SECTION 1. SHORT TITLE.

4 This Act may be cited as the ‘‘Acid Deposition Con5 trol Act’’.

6 SEC. 2. FINDINGS AND PURPOSES.

7 (a) FINDINGS.—Congress finds that—

8 (1) reductions of atmospheric nitrogen oxide

9 and sulfur dioxide from utility plants, in addition to
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1 the reductions required under the Clean Air Act (42

2 U.S.C. 7401 et seq.), are needed to reduce acid dep3 osition and its serious adverse effects on public

4 health, natural resources, building structures, sen5 sitive ecosystems, and visibility;

6 (2) nitrogen oxide and sulfur dioxide contribute

7 to the development of fine particulates, suspected of

8 causing human mortality and morbidity to a signifi9 cant extent;

10 (3) regional nitrogen oxide reductions of 50

11 percent in the Eastern United States, in addition to

12 the reductions required under the Clean Air Act,

13 may be necessary to protect sensitive watersheds

14 from the effects of nitrogen deposition;

15 (4) without reductions in nitrogen oxide and

16 sulfur dioxide, the number of acidic lakes in the Adi17 rondacks in the State of New York is expected to in18 crease by up to 40 percent by 2040; and

19 (5) nitrogen oxide is highly mobile and can lead

20 to ozone formation hundreds of miles from the emit21 ting source.

22 (b) PURPOSES.—The purposes of this Act are—

23 (1) to recognize the current scientific under24 standing that emissions of nitrogen oxide and sulfur

25 dioxide, and the acid deposition resulting from emis-
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1 sions of nitrogen oxide and sulfur dioxide, present a

2 substantial human health and environmental risk;

3 (2) to require reductions in nitrogen oxide and

4 sulfur dioxide emissions;

5 (3) to support the efforts of the Ozone Trans6 port Assessment Group to reduce ozone pollution;

7 (4) to reduce utility emissions of nitrogen oxide

8 by 70 percent from 1990 levels; and

9 (5) to reduce utility emissions of sulfur dioxide

10 by 50 percent after the implementation of phase II

11 sulfur dioxide requirements under section 405 of the

12 Clean Air Act (42 U.S.C. 7651d).

13 SEC. 3. DEFINITIONS.

14 In this Act:

15 (1) ADMINISTRATOR.—The term ‘‘Adminis16 trator’’ means the Administrator of the Environ17 mental Protection Agency.

18 (2) AFFECTED FACILITY.—The term ‘‘affected

19 facility’’ means a facility with 1 or more combustion

20 units that serve at least 1 electricity generator with

21 a capacity equal to or greater than 25 megawatts.

22 (3) NOx ALLOWANCE.—The term ‘‘NOx allow23 ance’’ means a limited authorization to emit, in ac24 cordance with this Act—
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1 (A) 1 ton of nitrogen oxide during each of

2 the months of October, November, December,

3 January, February, March, and April of any

4 year; and

(B) 1 5 ⁄2 ton of nitrogen oxide during each of

6 the months of May, June, July, August, and

7 September of any year.

8 (4) MMBTU.—The term ‘‘mmBtu’’ means 1

9 million British thermal units.

10 (5) PROGRAM.—The term ‘‘Program’’ means

11 the Nitrogen Oxide Allowance Program established

12 under section 4.

13 (6) STATE.—The term ‘‘State’’ means the 48

14 contiguous States and the District of Columbia.

15 SEC. 4. NITROGEN OXIDE ALLOWANCE PROGRAM.

16 (a) IN GENERAL.—

17 (1) ESTABLISHMENT.—Not later than 18

18 months after the date of enactment of this Act, the

19 Administrator shall establish a program to be known

20 as the ‘‘Nitrogen Oxide Allowance Program’’.

21 (2) SCOPE.—The Program shall be conducted

22 in the 48 contiguous States and the District of Co23 lumbia.

24 (3) NOx ALLOWANCES.—The Administrator

25 shall allocate under paragraph (4)—
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1 (A) for each of calendar years 2002

2 through 2004, 5,400,000 NOx allowances; and

3 (B) for calendar year 2005 and each cal4 endar year thereafter, 3,000,000 NOx allow5 ances.

6 (4) ALLOCATION.—

7 (A) DEFINITION OF TOTAL ELECTRIC

8 POWER.—For purposes of this paragraph, the

9 term ‘‘total electric power’’ means all electric

10 power generated by utility and nonutility gen11 erators for distribution, including electricity

12 generated from solar wind, hydro power, nu13 clear power, and the combustion of fossil fuel.

14 (B) ALLOCATION OF ALLOWANCES.—The

15 Administrator shall allocate annual NOx allow16 ances to each of the States in proportion to the

17 State’s share of the total electric power gen18 erated in the 48 contiguous States and the Dis19 trict of Columbia.

20 (C) PUBLICATION.—The Administrator

21 shall publish in the Federal Register a list of

22 each State’s NOx allowance allocation—

23 (i) by December 1, 2000, for calendar

24 years 2002 and 2004;
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1 (ii) by December 1, 2002, for calendar

2 years 2005 through 2012; and

3 (iii) by December 1 of each calendar

4 year after 2002, for the calendar year 5

5 years previous.

6 (5) INTRASTATE DISTRIBUTION.—

7 (A) IN GENERAL.—A State may submit a

8 report to the Administrator detailing the dis9 tribution of NOx allowances of the State to af10 fected facilities in the State—

11 (i) not later than September 30,

12 2001, for calendar years 2002 through

13 2004;

14 (ii) not later than September 30,

15 2003, for calendar years 2005 through

16 2012; and

17 (iii) not later than September 30 of

18 each calendar year after 2003, for the cal19 endar year 5 years previous.

20 (B) ACTION BY THE ADMINISTRATOR.—If

21 a State submits a report under subparagraph

22 (A) not later than September 30 of the calendar

23 year specified in subparagraph (A), the Admin24 istrator shall distribute the NOx allowances to
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1 affected facilities in the State as detailed in the

2 report.

3 (C) LATE SUBMISSION OF REPORT.—A re4 port submitted by a State after September 30

5 of the specified year shall have no force or ef6 fect.

7 (D) DISTRIBUTION IN ABSENCE OF A RE8 PORT.—

9 (i) IN GENERAL.—Subject to sub10 section (e), if a State does not submit a re11 port under subparagraph (A) not later

12 than September 30 of the calendar year

13 specified in subparagraph (A), the Admin14 istrator shall, not later than November 30

15 of that calendar year, distribute the NOx

16 allowances for the calendar years specified

17 in subparagraph (A) to each affected facil18 ity in the State in proportion to the af19 fected facility’s share of the total net elec20 tric power generated in the State.

21 (ii) DETERMINATION OF FACILITY’S

22 SHARE.—In determining an affected facili23 ty’s share of total net electric power gen24 erated in a State, the Administrator shall
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1 consider the net electric power generated

2 by the facility and the State to be—

3 (I) for calendar years 2002

4 through 2004, the average annual

5 amount of net electric power gen6 erated, by the facility and the State,

7 respectively, in calendar years 1997

8 through 1999;

9 (II) for calendar years 2005

10 through 2012, the average annual

11 amount of net electric power gen12 erated, by the facility and the State,

13 respectively, in calendar years 1999

14 through 2001; and

15 (III) for calendar year 2013 and

16 each calendar year thereafter, the

17 amount of net electric power gen18 erated, by the facility and the State,

19 respectively, in the calendar year 5

20 years previous to the year for which

21 the determination is made.

22 (E) JUDICIAL REVIEW.—A distribution of

23 NOx allowances by the Administrator under

24 subparagraph (D) shall not be subject to judi25 cial review.
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1 (b) NOx ALLOWANCE TRANSFER SYSTEM.—

2 (1) IN GENERAL.—Not later than 18 months

3 after the date of enactment of this Act, the Adminis4 trator shall promulgate NOx allowance system regu5 lations under which a NOx allowance allocated under

6 this Act may be transferred among affected facilities

7 and any other person.

8 (2) ESTABLISHMENT.—The regulations shall

9 establish the NOx allowance system under this sec10 tion, including requirements for the allocation,

11 transfer, and use of NOx allowances under this Act.

12 (3) USE OF NOx ALLOWANCES.—The regula13 tions shall—

14 (A) prohibit the use (but not the transfer

15 in accordance with paragraph (5)) of any NOx

16 allowance before the calendar year for which

17 the NOx allowance is allocated; and

18 (B) provide that the unused NOx allow19 ances shall be carried forward and added to

20 NOx allowances allocated for subsequent years.

21 (4) CERTIFICATION OF TRANSFER.—A transfer

22 of a NOx allowance shall not be effective until a

23 written certification of the transfer, signed by a re24 sponsible official of the person making the transfer,

25 is received and recorded by the Administrator.
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1 (c) NOx ALLOWANCE TRACKING SYSTEM.—Not later

2 than 18 months after the date of enactment of this Act,

3 the Administrator shall promulgate regulations for

4 issuing, recording, and tracking the use and transfer of

5 NOx allowances that shall specify all necessary procedures

6 and requirements for an orderly and competitive function7 ing of the NOx allowance system.

8 (d) PERMIT REQUIREMENTS.—A NOx allowance allo9 cation or transfer shall, on recordation by the Adminis10 trator, be considered to be a part of each affected facility’s

11 operating permit requirements, without the requirement

12 for any further permit review and revision.

13 (e) NEW SOURCE RESERVE.—

14 (1) IN GENERAL.—For a State for which the

15 Administrator distributes NOx allowances under

16 subsection (a)(5)(D), the Administrator shall place

17 10 percent of the total annual NOx allowances of the

18 State in a new source reserve to be distributed by

19 the Administrator—

20 (A) for calendar years 2002 through 2005,

21 to sources that commence operation after 1997;

22 (B) for calendar years 2006 through 2011,

23 to sources that commence operation after 1999;

24 and
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1 (C) for calendar year 2012 and each cal2 endar year thereafter, to sources that com3 mence operation after the calendar year that is

4 5 years previous to the year for which the dis5 tribution is made.

6 (2) SHARE.—For a State for which the Admin7 istrator distributes NOx allowances under subsection

8 (a)(5)(D), the Administrator shall distribute to each

9 new source a number of NOx allowances sufficient to

10 allow emissions by the source at a rate equal to the

11 lesser of the new source performance standard or

12 the permitted level for the full nameplate capacity of

13 the source, adjusted pro rata for the number of

14 months of the year during which the source oper15 ates.

16 (3) UNUSED NOx ALLOWANCES.—

17 (A) IN GENERAL.—During the period of

18 calendar years 2002 through 2007, the Admin19 istrator shall conduct auctions at which a NOx

20 allowance remaining in the new source reserve

21 that has not been distributed under paragraph

22 (2) shall be offered for sale.

23 (B) OPEN AUCTIONS.—An auction under

24 subparagraph (A) shall be open to any person.

25 (C) CONDUCT OF AUCTION.—
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1 (i) METHOD OF BIDDING.—A person

2 wishing to bid for a NOx allowance at an

3 auction under subparagraph (A) shall sub4 mit (by a date set by the Administrator) to

5 the Administrator (on a sealed bid sched6 ule provided by the Administrator) an offer

7 to purchase a specified number of NOx al8 lowances at a specified price.

9 (ii) SALE BASED ON BID PRICE.—A

10 NOx allowance auctioned under subpara11 graph (A) shall be sold on the basis of bid

12 price, starting with the highest priced bid

13 and continuing until all NOx allowances

14 for sale at the auction have been sold.

15 (iii) NO MINIMUM PRICE.—A mini16 mum price shall not be set for the pur17 chase of a NOx allowance auctioned under

18 subparagraph (A).

19 (iv) REGULATIONS.—The Adminis20 trator, in consultation with the Secretary

21 of the Treasury, shall promulgate regula22 tions to carry out this paragraph.

23 (D) USE OF NOx ALLOWANCES.—A NOx

24 allowance purchased at an auction under sub25 paragraph (A) may be used for any purpose
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1 and at and at any time after the auction that

2 is permitted for use of a NOx allowance under

3 this Act.

4 (E) PROCEEDS OF AUCTION.—The pro5 ceeds from an auction under this paragraph

6 shall be distributed to the owner of an affected

7 source in proportion to the number of allow8 ances that the owner would have received but

9 for this subsection.

10 (f) NATURE OF NOx ALLOWANCES.—

11 (1) NOT A PROPERTY RIGHT.—A NOx allow12 ance shall not be considered to be a property right.

13 (2) LIMITATION OF NOx ALLOWANCES.—Not14 withstanding any other provision of law, the Admin15 istrator may terminate or limit a NOx allowance.

16 (g) PROHIBITIONS.—

17 (1) IN GENERAL.—After January 1, 2002, it

18 shall be unlawful—

19 (A) for the owner or operator of an af20 fected facility to operate the affected facility in

21 such a manner that the affected facility emits

22 nitrogen oxides in excess of the amount per23 mitted by the quantity of NOx allowances held

24 by the designated representative of the affected

25 facility; or
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1 (B) for any person to hold, use, or transfer

2 a NOx allowance allocated under this Act, ex3 cept as provided under this Act.

4 (2) OTHER EMISSION LIMITATIONS.—Section

5 407 of the Clean Air Act (42 U.S.C. 7651f) is re6 pealed.

7 (3) TIME OF USE.—A NOx allowance may not

8 be used before the calendar year for which the NOx

9 allowance is allocated.

10 (4) PERMITTING, MONITORING, AND ENFORCE11 MENT.—Nothing in this section affects—

12 (A) the permitting, monitoring, and en13 forcement obligations of the Administrator

14 under the Clean Air Act (42 U.S.C. 7401 et

15 seq.); or

16 (B) the requirements and liabilities of an

17 affected facility under the Clean Air Act (42

18 U.S.C. 7401 et seq.).

19 (h) SAVINGS PROVISIONS.—Nothing in this section—

20 (1) affects the application of, or compliance

21 with, the Clean Air Act (42 U.S.C. 7401 et seq.) for

22 an affected facility, including the provisions related

23 to applicable national ambient air quality standards

24 and State implementation plans;
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1 (2) requires a change in, affects, or limits any

2 State law regulating electric utility rates or charges,

3 including prudency review under State law;

4 (3) affects the application of the Federal Power

5 Act (16 U.S.C. 791a et seq.) or the authority of the

6 Federal Energy Regulatory Commission under that

7 Act; or

8 (4) interferes with or impairs any program for

9 competitive bidding for power supply in a State in

10 which the Program is established.

11 SEC. 5. INDUSTRIAL SOURCE MONITORING.

12 Section 412(a) of the Clean Air Act (42 U.S.C.

13 7651k(a)) is amended in the first sentence by inserting

14 ‘‘, or of any industrial facility with a capacity of 100 or

15 more mmBtu’s per hour,’’ after ‘‘The owner and operator

16 of any source subject to this title’’.

17 SEC. 6. EXCESS EMISSIONS PENALTY.

18 (a) IN GENERAL.—

19 (1) LIABILITY.—The owner or operator of an

20 affected facility that emits nitrogen oxides in any

21 calendar year in excess of the NOx allowances the

22 owner or operator holds for use for the facility for

23 that year shall be liable for the payment of an excess

24 emissions penalty.
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1 (2) CALCULATION.—The excess emissions pen2 alty shall be calculated by multiplying $12,000 by

3 the quantity that is equal to—

4 (A) the quantity of NOx allowances that

5 would authorize the nitrogen oxides emitted by

6 the facility for the calendar year; minus

7 (B) the quantity of NOx allowances that

8 the owner or operator holds for use for the fa9 cility for that year.

10 (3) OVERLAPPING PENALTIES.—A penalty

11 under this section shall not diminish the liability of

12 the owner or operator of an affected facility for any

13 fine, penalty, or assessment against the owner or op14 erator for the same violation under any other provi15 sion of law.

16 (b) EXCESS EMISSIONS OFFSET.—

17 (1) IN GENERAL.—The owner or operator of an

18 affected facility that emits nitrogen oxide during a

19 calendar year in excess of the NOx allowances held

20 for the facility for the calendar year shall offset in

21 the following calendar year a quantity of NOx allow22 ances equal to twice the number of NOx allowances

23 that would authorize the excess nitrogen oxides emit24 ted.
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1 (2) PROPOSED PLAN.—Not later than 60 days

2 after the end of the year in which excess emissions

3 occur, the owner or operator of an affected facility

4 shall submit to the Administrator and the State in

5 which the affected facility is located a proposed plan

6 to achieve the offset required under paragraph (1).

7 (3) CONDITION OF PERMIT.—On approval of

8 the proposed plan by the Administrator, as submit9 ted, modified, or conditioned by the Administrator,

10 the plan shall be considered a condition of the oper11 ating permit for the affected facility without further

12 review or revision of the permit.

13 (c) PENALTY ADJUSTMENT.—The Administrator

14 shall annually adjust the penalty specified in subsection

15 (a) to reflect changes in the Consumer Price Index for

16 all urban consumers published by the Bureau of Labor

17 Statistics.

18 SEC. 7. SULFUR DIOXIDE ALLOWANCE PROGRAM REVI19 SIONS.

20 Section 402(3) of the Clean Air Act (as added by sec21 tion 401 of Public Law 101–549 (104 Stat. 2584)) (42

22 U.S.C. 7651a(3)) is amended by inserting before the pe23 riod at the end the following: ‘‘for allowances allocated for

calendar years through 2004, and 1 24 ⁄2 ton of sulfur dioxide
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1 for allowances allocated for calendar year 2005 and each

2 calendar year thereafter.’’.

3 SEC. 8. REGIONAL ECOSYSTEMS.

4 (a) REPORT.—

5 (1) IN GENERAL.—Not later than December 31,

6 2004, the Administrator shall submit to Congress a

7 report identifying objectives for scientifically credible

8 environmental indicators, as determined by the Ad9 ministrator, that are sufficient to protect sensitive

10 ecosystems of the Adirondack Mountains, Mid-Appa11 lachian Mountains, and Southern Blue Ridge Moun12 tains and water bodies of the Great Lakes, Lake

13 Champlain, Long Island Sound, and the Chesapeake

14 Bay.

15 (2) ACID NEUTRALIZING CAPACITY.—The re16 port under paragraph (1) shall—

17 (A) include acid neutralizing capacity as

18 an indicator; and

19 (B) identify as an objective under para20 graph (1) the objective to increase the propor21 tion of water bodies in sensitive receptor areas

22 with an acid neutralizing capacity greater than

23 zero from the proportion identified in surveys

24 begun in 1984.
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1 (3) UPDATED REPORT.—Not later than Decem2 ber 31, 2008, the Administrator shall submit to

3 Congress a report updating the report under para4 graph (1) and assessing the status and trends of

5 various environmental indicators for the regional

6 ecosystems referred to in paragraph (1).

7 (4) REPORTS UNDER THE NATIONAL ACID PRE8 CIPITATION ASSESSMENT PROGRAM.—The reports

9 under this subsection shall satisfy the report require10 ments set forth in section 103(j)(3)(E) of the Clean

11 Air Act (42 U.S.C. 7403(j)(3)(E)) for the years

12 2004 and 2008.

13 (b) REGULATIONS.—

14 (1) DETERMINATION.—Not later than Decem15 ber 31, 2008, the Administrator shall determine

16 whether emissions reductions under section 4 are

17 sufficient to ensure achievement of the objectives

18 identified in subsection (a)(1).

19 (2) PROMULGATION.—If the Administrator de20 termines under paragraph (1) that emissions reduc21 tions under section 4 are not sufficient to ensure

22 achievement of the objectives identified in subsection

23 (a)(1), the Administrator shall promulgate, not later

24 than 2 years after making the finding, such regula25 tions, including modification of nitrogen oxide and
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1 sulfur dioxide allowance allocations or any such

2 measure, as the Administrator determines are nec3 essary to protect the sensitive ecosystems described

4 in subsection (a)(1).

5 SEC. 9. GENERAL COMPLIANCE WITH OTHER PROVISIONS.

6 Except as expressly provided in this Act, compliance

7 with this Act shall not exempt or exclude the owner or

8 operator of an affected facility from compliance with any

9 other law.

10 SEC. 10. MERCURY EMISSION STUDY AND CONTROL.

11 (a) STUDY AND REPORT.—The Administrator

12 shall—

13 (1) study the practicality of monitoring mercury

14 emissions from all combustion units that have a ca15 pacity equal to or greater than 250 mmBtu’s per

16 hour; and

17 (2) not later than 2 years after the date of en18 actment of this Act, submit to Congress a report on

19 the results of the study.

20 (b) REGULATIONS CONCERNING MONITORING.—Not

21 later than 1 year after the date of submission of the report

22 under subsection (a), the Administrator shall promulgate

23 regulations requiring the reporting of mercury emissions

24 from units that have a capacity equal to or greater than

25 250 mmBtu’s per hour.
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1 (c) EMISSION CONTROLS.—

2 (1) IN GENERAL.—Not later than 1 year after

3 the commencement of monitoring activities under

4 subsection (b), the Administrator shall promulgate

5 regulations controlling electric utility and industrial

6 source emissions of mercury.

7 (2) FACTORS.—The regulations shall take into

8 account technological feasibility, cost, and the pro9 jected levels of mercury emissions that will result

10 from implementation of this Act.

11 SEC. 11. DEPOSITION RESEARCH BY THE ENVIRONMENTAL

12 PROTECTION AGENCY.

13 (a) IN GENERAL.—The Administrator shall establish

14 a competitive grant program to fund research related to

15 the effects of nitrogen deposition on sensitive watersheds

16 and coastal estuaries in the Eastern United States.

17 (b) CHEMISTRY OF LAKES AND STREAMS.—Not later

18 than September 30, 2001, and September 30, 2008, the

19 Administrator shall submit to the Committee on Environ20 ment and Public Works of the Senate and the Committee

21 on Resources of the House of Representatives a report on

22 the health and chemistry of lakes and streams of the Adi23 rondacks that were subjects of the report transmitted

24 under section 404 of Public Law 101–549 (commonly
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1 known as the ‘‘Clean Air Act Amendments of 1990’’) (104

2 Stat. 2632).

3 (c) AUTHORIZATION OF APPROPRIATIONS.—There

4 are authorized to be appropriated—

5 (1) to carry out subsection (a), $1,000,000 for

6 each of fiscal years 2000 through 2005; and

7 (2) to carry out subsection (b), $1,000,000 for

8 each of fiscal years 2000, 2001, 2007, and 2008.

Æ