I 

109TH CONGRESS 

1ST SESSION H. R. 1873 

To amend the Clean Air Act to establish a national uniform multiple air 

pollutant regulatory program for the electric generating sector. 

IN THE HOUSE OF REPRESENTATIVES 

APRIL 27, 2005 

Mr. BASS (for himself, Mr. DAVIS of Florida, Mr. COOPER, and Mr. BRADLEY

of New Hampshire) introduced the following bill; which was referred to 

the Committee on Energy and Commerce 

A BILL 

To amend the Clean Air Act to establish a national uniform 

multiple air pollutant regulatory program for the electric 

generating sector. 

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; TABLE OF CONTENTS. 

4 (a) SHORT TITLE.—This Act may be cited as the 

5 ‘‘Clean Air Planning Act of 2005’’. 

6 (b) TABLE OF CONTENTS.—The table of contents of 

7 this Act is as follows: 

Sec. 1. Short title; table of contents. 

Sec. 2. Findings and purposes. 

Sec. 3. Integrated air quality planning for the electric generating sector. 

Sec. 4. New source review program. 
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Sec. 5. Revisions to sulfur dioxide allowance program. 

Sec. 6. Relationship to other law. 

1 SEC. 2. FINDINGS AND PURPOSES. 

2 (a) FINDINGS.—Congress finds that— 

3 (1) fossil fuel-fired electric generating facilities, 

4 consisting of facilities fueled by coal, fuel oil, and 

natural gas, produce nearly 2 5 ⁄3 of the electricity gen6 erated in the United States; 

7 (2) fossil fuel-fired electric generating facilities 

produce approximately 2 8 ⁄3 of the total sulfur dioxide 

emissions, 1 9 ⁄3 of the total nitrogen oxides emissions, 

1⁄3 of the total carbon dioxide emissions, and 1 10 ⁄3 of 

11 the total mercury emissions, in the United States; 

12 (3)(A) many electric generating facilities have 

13 been exempt from the emission limitations applicable 

14 to new units based on the expectation that over time 

15 the units would be retired or updated with new pol16 lution control equipment; but 

17 (B) many of the exempted units continue to op18 erate and emit pollutants at relatively high rates; 

19 (4) pollution from existing electric generating 

20 facilities can be reduced through adoption of modern 

21 technologies and practices; 

22 (5) the electric generating industry is being re23 structured with the objective of providing lower elec24 tricity rates and higher quality service to consumers; 
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1 (6) the full benefits of competition will not be 

2 realized if the environmental impacts of generation 

3 of electricity are not uniformly internalized; and 

4 (7) the ability of owners of electric generating 

5 facilities to effectively plan for the future is impeded 

6 by the uncertainties surrounding future environ7 mental regulatory requirements that are imposed in8 efficiently on a piecemeal basis. 

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

10 (1) to protect and preserve the environment and 

11 safeguard public health by ensuring that substantial 

12 emission reductions are achieved at fossil fuel-fired 

13 electric generating facilities; 

14 (2) to significantly reduce the quantities of 

15 mercury, carbon dioxide, sulfur dioxide, and nitrogen 

16 oxides that enter the environment as a result of the 

17 combustion of fossil fuels; 

18 (3) to encourage the development and use of re19 newable energy; 

20 (4) to internalize the cost of protecting the val21 ues of public health, air, land, and water quality in 

22 the context of a competitive market in electricity; 

23 (5) to ensure fair competition among partici24 pants in the competitive market in electricity that 
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1 will result from fully restructuring the electric gener2 ating industry; 

3 (6) to provide a period of environmental regu4 latory stability for owners and operators of electric 

5 generating facilities so as to promote improved man6 agement of existing assets and new capital invest7 ments; and 

8 (7) to achieve emission reductions from electric 

9 generating facilities in a cost-effective manner. 

10 SEC. 3. INTEGRATED AIR QUALITY PLANNING FOR THE 

11 ELECTRIC GENERATING SECTOR. 

12 The Clean Air Act (42 U.S.C. 7401 et seq.) is amend13 ed by adding at the end the following: 

14 ‘‘TITLE VII—INTEGRATED AIR 

15 QUALITY PLANNING FOR THE 

16 ELECTRIC GENERATING SEC17 TOR 

‘‘Sec. 701. Definitions. 

‘‘Sec. 702. National pollutant tonnage limitations. 

‘‘Sec. 703. Nitrogen oxide and mercury allowance trading programs. 

‘‘Sec. 704. Carbon dioxide allowance trading program. 

18 ‘‘SEC. 701. DEFINITIONS. 

19 ‘‘In this title: 

20 ‘‘(1) AFFECTED UNIT.— 

21 ‘‘(A) MERCURY.—The term ‘affected unit’, 

22 with respect to mercury, means a coal-fired 
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1 electric generating facility (including a cogener2 ating facility) that— 

3 ‘‘(i) has a nameplate capacity greater 

4 than 25 megawatts; and 

5 ‘‘(ii) generates electricity for sale. 

6 ‘‘(B) NITROGEN OXIDES AND CARBON DI7 OXIDE.—The term ‘affected unit’, with respect 

8 to nitrogen oxides and carbon dioxide, means a 

9 fossil fuel-fired electric generating facility (in10 cluding a cogenerating facility) that— 

11 ‘‘(i) has a nameplate capacity greater 

12 than 25 megawatts; and 

13 ‘‘(ii) generates electricity for sale. 

14 ‘‘(C) SULFUR DIOXIDE.—The term ‘af15 fected unit’, with respect to sulfur dioxide, has 

16 the meaning given the term in section 402. 

17 ‘‘(2) CARBON DIOXIDE ALLOWANCE.—The term 

18 ‘carbon dioxide allowance’ means an authorization 

19 allocated by the Administrator under this title to 

20 emit 1 ton of carbon dioxide during or after a speci21 fied calendar year. 

22 ‘‘(3) COVERED UNIT.—The term ‘covered unit’ 

23 means— 

24 ‘‘(A) an affected unit; 
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1 ‘‘(B) a nuclear generating unit with re2 spect to incremental nuclear generation; and 

3 ‘‘(C) a renewable energy unit. 

4 ‘‘(4) GREENHOUSE GAS.—The term ‘greenhouse 

5 gas’ means— 

6 ‘‘(A) carbon dioxide; 

7 ‘‘(B) methane; 

8 ‘‘(C) nitrous oxide; 

9 ‘‘(D) hydrofluorocarbons; 

10 ‘‘(E) perfluorocarbons; and 

11 ‘‘(F) sulfur hexafluoride. 

12 ‘‘(5) INCREMENTAL NUCLEAR GENERATION.— 

13 The term ‘incremental nuclear generation’ means 

14 the difference between— 

15 ‘‘(A) the quantity of electricity generated 

16 by a nuclear generating unit in a calendar year; 

17 and 

18 ‘‘(B) the quantity of electricity generated 

19 by the nuclear generating unit in calendar year 

20 1990; 

21 as determined by the Administrator and measured in 

22 megawatt hours. 

23 ‘‘(6) MERCURY ALLOWANCE.—The term ‘mer24 cury allowance’ means an authorization allocated by 
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1 the Administrator under this title to emit 1 pound 

2 of mercury during or after a specified calendar year. 

3 ‘‘(7) NEW RENEWABLE ENERGY UNIT.—The 

4 term ‘new renewable energy unit’ means a renewable 

5 energy unit that has operated for a period of not 

6 more than 3 years. 

7 ‘‘(8) NEW UNIT.—The term ‘new unit’ means 

8 an affected unit that has operated for not more than 

9 3 years and is not eligible to receive— 

10 ‘‘(A) sulfur dioxide allowances under sec11 tion 417(b); 

12 ‘‘(B) nitrogen oxide allowances or mercury 

13 allowances under section 703(c)(2); or 

14 ‘‘(C) carbon dioxide allowances under sec15 tion 704(c)(2). 

16 ‘‘(9) NITROGEN OXIDE ALLOWANCE.—The term 

17 ‘nitrogen oxide allowance’ means an authorization 

18 allocated by the Administrator under this title to 

19 emit 1 ton of nitrogen oxides during or after a speci20 fied calendar year. 

21 ‘‘(10) NUCLEAR GENERATING UNIT.—The term 

22 ‘nuclear generating unit’ means an electric gener23 ating facility that— 

24 ‘‘(A) uses nuclear energy to supply elec25 tricity to the electric power grid; and 
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1 ‘‘(B) commenced operation in calendar 

2 year 1990 or earlier. 

3 ‘‘(11) RENEWABLE ENERGY.—The term ‘renew4 able energy’ means electricity generated from— 

5 ‘‘(A) wind; 

6 ‘‘(B) organic waste (excluding incinerated 

7 municipal solid waste); 

8 ‘‘(C) biomass (including anaerobic diges9 tion from farm systems and landfill gas recov10 ery); 

11 ‘‘(D) fuel cells; or 

12 ‘‘(E) a hydroelectric, geothermal, solar 

13 thermal, photovoltaic, or other nonfossil fuel, 

14 nonnuclear source. 

15 ‘‘(12) RENEWABLE ENERGY UNIT.—The term 

16 ‘renewable energy unit’ means an electric generating 

17 facility that uses exclusively renewable energy to 

18 supply electricity to the electric power grid. 

19 ‘‘(13) SEQUESTRATION.—The term ‘sequestra20 tion’ means the action of sequestering carbon by— 

21 ‘‘(A) enhancing a natural carbon sink 

22 (such as through afforestation); or 

23 ‘‘(B) (i) capturing the carbon dioxide emit24 ted from a fossil fuel-based energy system; and 
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1 ‘‘(ii) (I) storing the carbon in a geologic 

2 formation or in a deep area of an ocean; or 

3 ‘‘(II) converting the carbon to a benign 

4 solid material through a biological or chemical 

5 process. 

6 ‘‘(14) SULFUR DIOXIDE ALLOWANCE.—The 

7 term ‘sulfur dioxide allowance’ has the meaning 

8 given the term ‘allowance’ in section 402. 

9 ‘‘SEC. 702. NATIONAL POLLUTANT TONNAGE LIMITATIONS. 

10 ‘‘(a) SULFUR DIOXIDE.—The annual tonnage limita11 tion for emissions of sulfur dioxide from affected units in 

12 the United States shall be equal to— 

13 ‘‘(1) for each of calendar years 2010 through 

14 2013, 4,500,000 tons; 

15 ‘‘(2) for each of calendar years 2014 through 

16 2016, 3,500,000 tons; and 

17 ‘‘(3) for calendar year 2017 and each calendar 

18 year thereafter, 2,250,000 tons. 

19 ‘‘(b) NITROGEN OXIDES.—The annual tonnage limi20 tation for emissions of nitrogen oxides from affected units 

21 in the United States shall be equal to— 

22 ‘‘(1) for each of calendar years 2009 through 

23 2014, 1,870,000 tons; and 

24 ‘‘(2) for calendar year 2015 and each calendar 

25 year thereafter, 1,700,000 tons. 
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1 ‘‘(c) MERCURY.— 

2 ‘‘(1) IN GENERAL.—The annual tonnage limita3 tion for emissions of mercury from affected units in 

4 the United States shall be equal to the following: 

5 ‘‘(A) For each of calendar years 2010 

6 through 2014, 24 tons. 

7 ‘‘(B) For calendar year 2015 and each cal8 endar year thereafter, 10 tons. 

9 ‘‘(2) MAXIMUM EMISSIONS OF MERCURY FROM

10 EACH AFFECTED UNIT.— 

11 ‘‘(A) CALENDAR YEARS 2010 THROUGH

12 2014.—For each of calendar years 2010 through 

13 2014, the emissions of mercury from each af14 fected unit shall not exceed either, at the option 

15 of the operator of the affected unit— 

16 ‘‘(i) 50 percent of the total quantity 

17 of mercury present in the coal delivered to 

18 the affected unit in the calendar year; or 

19 ‘‘(ii) an annual output-based emission 

20 rate for mercury that shall be determined 

21 by the Administrator based on an input22 based rate of 4 pounds per trillion British 

23 thermal units. 

24 ‘‘(B) CALENDAR YEAR 2015 AND THERE25 AFTER.—For calendar year 2015 and each cal-
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1 endar year thereafter, the emissions of mercury 

2 from each affected unit shall not exceed— 

3 ‘‘(i) 30 percent of the total quantity 

4 of mercury present in the coal delivered to 

5 the affected unit in the calendar year; or 

6 ‘‘(ii) an annual output-based emission 

7 rate for mercury that shall be determined 

8 by the Administrator. 

9 ‘‘(d) CARBON DIOXIDE.—Subject to section 704(d), 

10 the annual tonnage limitation for emissions of carbon di11 oxide from covered units in the United States shall be 

12 equal to— 

13 ‘‘(1) for each of calendar years 2010 through 

14 2014, the quantity of emissions project to be emitted 

15 from affected units in calendar year 2006, as deter16 mined by the Energy Information Administration of 

17 the Department of Energy based on the projections 

18 of the Administration the publication of which most 

19 closely precedes the date of enactment of this title; 

20 and 

21 ‘‘(2) for calendar year 2015 and each calendar 

22 year thereafter, the quantity of emissions emitted 

23 from affected units in calendar year 2001, as deter24 mined by the Energy Information Administration of 

25 the Department of Energy. 
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1 ‘‘(e) REVIEW OF ANNUAL TONNAGE LIMITATIONS.— 

2 ‘‘(1) PERIOD OF EFFECTIVENESS.—The annual 

3 tonnage limitations established under subsections (a) 

4 through (d) shall remain in effect until the date that 

5 is 20 years after the date of enactment of this title. 

6 ‘‘(2) DETERMINATION BY ADMINISTRATOR.— 

7 Not later than 15 years after the date of enactment 

8 of this title, the Administrator, after considering im9 pacts on human health, the environment, the econ10 omy, and costs, shall determine whether 1 or more 

11 of the annual tonnage limitations should be revised. 

12 ‘‘(3) DETERMINATION NOT TO REVISE.—If the 

13 Administrator determines under paragraph (2) that 

14 none of the annual tonnage limitations should be re15 vised, the Administrator shall publish in the Federal 

16 Register a notice of the determination and the rea17 sons for the determination. 

18 ‘‘(4) DETERMINATION TO REVISE.— 

19 ‘‘(A) IN GENERAL.—If the Administrator 

20 determines under paragraph (2) that 1 or more 

21 of the annual tonnage limitations should be re22 vised, the Administrator shall publish in the 

23 Federal Register— 

24 ‘‘(i) not later than 15 years and 180 

25 days after the date of enactment of this 
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1 title, proposed regulations implementing 

2 the revisions; and 

3 ‘‘(ii) not later than 16 years and 180 

4 days after the date of enactment of this 

5 title, final regulations implementing the re6 visions. 

7 ‘‘(B) EFFECTIVE DATE OF REVISIONS.— 

8 Any revisions to the annual tonnage limitations 

9 under subparagraph (A) shall take effect on the 

10 date that is 20 years after the date of enact11 ment of this title. 

12 ‘‘(f) REDUCTION OF EMISSIONS FROM SPECIFIED

13 AFFECTED UNITS.—Subject to the requirements of this 

14 Act concerning national ambient air quality standards es15 tablished under part A of title I, notwithstanding the an16 nual tonnage limitations established under this section, 

17 the Federal Government or a State government may re18 quire that emissions from a specified affected unit be re19 duced to address a local air quality problem. 

20 ‘‘SEC. 703. NITROGEN OXIDE AND MERCURY ALLOWANCE 

21 TRADING PROGRAMS. 

22 ‘‘(a) REGULATIONS.— 

23 ‘‘(1) PROMULGATION.— 

24 ‘‘(A) IN GENERAL.—Not later than 180 

25 days after enactment of this section, the Ad-
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1 ministrator shall promulgate regulations to es2 tablish for affected units in the United States— 

3 ‘‘(i) a nitrogen oxide allowance trad4 ing program; and 

5 ‘‘(ii) a mercury allowance trading pro6 gram. 

7 ‘‘(B) REQUIREMENTS.—Regulations pro8 mulgated under subparagraph (A) shall estab9 lish requirements for the allowance trading pro10 grams under this section, including require11 ments concerning— 

12 ‘‘(i)(I) the generation, allocation, 

13 issuance, recording, tracking, transfer, and 

14 use of nitrogen oxide allowances and mer15 cury allowances; and 

16 ‘‘(II) the public availability of all in17 formation concerning the activities de18 scribed in subclause (I) that is not con19 fidential; 

20 ‘‘(ii) compliance with subsection 

21 (e)(1); 

22 ‘‘(iii) the monitoring and reporting of 

23 emissions under paragraphs (2) and (3) of 

24 subsection (e); and 
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1 ‘‘(iv) excess emission penalties under 

2 subsection (e)(4). 

3 ‘‘(2) MIXED FUEL, CO-GENERATION FACILITIES

4 AND COMBINED HEAT AND POWER FACILITIES.— 

5 The Administrator shall promulgate such regulations 

6 as are necessary to ensure the equitable issuance of 

7 allowances to— 

8 ‘‘(A) facilities that use more than 1 energy 

9 source to produce electricity; and 

10 ‘‘(B) facilities that produce electricity in 

11 addition to another service or product. 

12 ‘‘(3) REPORT TO CONGRESS ON USE OF CAP13 TURED OR RECOVERED MERCURY.— 

14 ‘‘(A) IN GENERAL.—Not later than 18 

15 months after the date of enactment of this title, 

16 the Administrator shall submit to Congress a 

17 report on the public health and environmental 

18 impacts from mercury that is or may be— 

19 ‘‘(i) captured or recovered by air pol20 lution control technology; and 

21 ‘‘(ii) incorporated into products such 

22 as soil amendments and cement. 

23 ‘‘(B) REQUIRED ELEMENTS.—The report 

24 shall— 

25 ‘‘(i) review— 
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1 ‘‘(I) technologies, in use as of the 

2 date of the report, for incorporating 

3 mercury into products; and 

4 ‘‘(II) potential technologies that 

5 might further minimize the release of 

6 mercury; and 

7 ‘‘(ii)(I) address the adequacy of legal 

8 authorities and regulatory programs in ef9 fect as of the date of the report to protect 

10 public health and the environment from 

11 mercury in products described in subpara12 graph (A)(ii); and 

13 ‘‘(II) to the extent necessary, make 

14 recommendations to improve those authori15 ties and programs. 

16 ‘‘(b) NEW UNIT RESERVES.— 

17 ‘‘(1) ESTABLISHMENT.—The Administrator 

18 shall establish by regulation a reserve of nitrogen 

19 oxide allowances and a reserve of mercury allow20 ances to be set aside for use by new units. 

21 ‘‘(2) DETERMINATION OF QUANTITY.—The Ad22 ministrator, in consultation with the Secretary of 

23 Energy, shall determine, based on projections of 

24 electricity output for new units— 
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1 ‘‘(A) not later than June 30, 2006, the 

2 quantity of nitrogen oxide allowances and mer3 cury allowances required to be held in reserve 

4 for new units for each of calendar years 2009 

5 through 2014; and 

6 ‘‘(B) not later than June 30 of each fifth 

7 calendar year thereafter, the quantity of nitro8 gen oxide allowances and mercury allowances 

9 required to be held in reserve for new units for 

10 the following 5-calendar year period. 

11 ‘‘(c) NITROGEN OXIDE AND MERCURY ALLOWANCE

12 ALLOCATIONS.— 

13 ‘‘(1) TIMING OF ALLOCATIONS.—The Adminis14 trator shall allocate nitrogen oxide allowances and 

15 mercury allowances to affected units— 

16 ‘‘(A) not later than December 31, 2006, 

17 for calendar year 2010; and 

18 ‘‘(B) not later than December 31 of cal19 endar year 2007 and each calendar year there20 after, for the fourth calendar year that begins 

21 after that December 31. 

22 ‘‘(2) ALLOCATIONS TO AFFECTED UNITS THAT

23 ARE NOT NEW UNITS.— 

24 ‘‘(A) QUANTITY OF NITROGEN OXIDE AL25 LOWANCES ALLOCATED.—The Administrator 
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1 shall allocate to each affected unit that is not 

2 a new unit a quantity of nitrogen oxide allow3 ances that is equal to the product obtained by 

4 multiplying— 

5 ‘‘(i) 1.5 pounds of nitrogen oxides per 

6 megawatt hour; and 

7 ‘‘(ii) the quotient obtained by divid8 ing— 

9 ‘‘(I) the average annual net 

10 quantity of electricity generated by 

11 the affected unit during the most re12 cent 3-calendar year period for which 

13 data are available, measured in mega14 watt hours; by 

15 ‘‘(II) 2,000 pounds of nitrogen 

16 oxides per ton. 

17 ‘‘(B) QUANTITY OF MERCURY ALLOW18 ANCES ALLOCATED.—The Administrator shall 

19 allocate to each affected unit that is not a new 

20 unit a quantity of mercury allowances that is 

21 equal to the product obtained by multiplying— 

22 ‘‘(i) 0.0000227 pounds of mercury per 

23 megawatt hour; and 

24 ‘‘(ii) the average annual net quantity 

25 of electricity generated by the affected unit 
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1 during the most recent 3-calendar year pe2 riod for which data are available, measured 

3 in megawatt hours. 

4 ‘‘(C) ADJUSTMENT OF ALLOCATIONS.— 

5 ‘‘(i) IN GENERAL.—If, for any cal6 endar year, the total quantity of allowances 

7 allocated under subparagraph (A) or (B) is 

8 not equal to the applicable quantity deter9 mined under clause (ii), the Administrator 

10 shall adjust the quantity of allowances allo11 cated to affected units that are not new 

12 units on a pro-rata basis so that the quan13 tity is equal to the applicable quantity de14 termined under clause (ii). 

15 ‘‘(ii) APPLICABLE QUANTITY.—The 

16 applicable quantity referred to in clause (i) 

17 is the difference between— 

18 ‘‘(I) the applicable annual ton19 nage limitation for emissions from af20 fected units specified in subsection (b) 

21 or (c) of section 702 for the calendar 

22 year; and 

23 ‘‘(II) the quantity of nitrogen 

24 oxide allowances or mercury allow25 ances, respectively, placed in the ap-
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1 plicable new unit reserve established 

2 under subsection (b) for the calendar 

3 year. 

4 ‘‘(3) ALLOCATION TO NEW UNITS.— 

5 ‘‘(A) METHODOLOGY.—The Administrator 

6 shall promulgate regulations to establish a 

7 methodology for allocating nitrogen oxide allow8 ances and mercury allowances to new units. 

9 ‘‘(B) QUANTITY OF NITROGEN OXIDE AL10 LOWANCES AND MERCURY ALLOWANCES ALLO11 CATED.—The Administrator shall determine the 

12 quantity of nitrogen oxide allowances and mer13 cury allowances to be allocated to each new unit 

14 based on the projected emissions from the new 

15 unit. 

16 ‘‘(4) ALLOWANCE NOT A PROPERTY RIGHT.—A 

17 nitrogen oxide allowance or mercury allowance— 

18 ‘‘(A) is not a property right; and 

19 ‘‘(B) may be terminated or limited by the 

20 Administrator. 

21 ‘‘(5) NO JUDICIAL REVIEW.—An allocation of 

22 nitrogen allowances or mercury allowances by the 

23 Administrator under this subsection shall not be 

24 subject to judicial review. 
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1 ‘‘(d) NITROGEN OXIDE ALLOWANCE AND MERCURY

2 ALLOWANCE TRANSFER SYSTEM.— 

3 ‘‘(1) USE OF ALLOWANCES.—The regulations 

4 promulgated under subsection (a)(1)(A) shall— 

5 ‘‘(A) prohibit the use (but not the transfer 

6 in accordance with paragraph (3)) of any nitro7 gen oxide allowance or mercury allowance be8 fore the calendar year for which the allowance 

9 is allocated; 

10 ‘‘(B) provide that unused nitrogen oxide 

11 allowances and mercury allowances may be car12 ried forward and added to nitrogen oxide allow13 ances and mercury allowances, respectively, al14 located for subsequent years; and 

15 ‘‘(C) provide that unused nitrogen oxide al16 lowances and mercury allowances may be trans17 ferred by— 

18 ‘‘(i) the person to which the allow19 ances are allocated; or 

20 ‘‘(ii) any person to which the allow21 ances are transferred. 

22 ‘‘(2) USE BY PERSONS TO WHICH ALLOWANCES

23 ARE TRANSFERRED.—Any person to which nitrogen 

24 oxide allowances or mercury allowances are trans25 ferred under paragraph (1)(C)— 
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1 ‘‘(A) may use the nitrogen oxide allow2 ances or mercury allowances in the calendar 

3 year for which the nitrogen oxide allowances or 

4 mercury allowances were allocated, or in a sub5 sequent calendar year, to demonstrate compli6 ance with subsection (e)(1); or 

7 ‘‘(B) may transfer the nitrogen oxide al8 lowances or mercury allowances to any other 

9 person for the purpose of demonstration of that 

10 compliance. 

11 ‘‘(3) CERTIFICATION OF TRANSFER.—A trans12 fer of a nitrogen oxide allowance or mercury allow13 ance shall not take effect until a written certification 

14 of the transfer, authorized by a responsible official 

15 of the person making the transfer, is received and 

16 recorded by the Administrator. 

17 ‘‘(4) PERMIT REQUIREMENTS.—An allocation 

18 or transfer of nitrogen oxide allowances or mercury 

19 allowances to an affected unit shall, after recording 

20 by the Administrator, be considered to be part of the 

21 federally enforceable permit of the affected unit 

22 under this Act, without a requirement for any fur23 ther review or revision of the permit. 

24 ‘‘(e) COMPLIANCE AND ENFORCEMENT.— 
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1 ‘‘(1) IN GENERAL.—For calendar year 2009 

2 and each calendar year thereafter, the operator of 

3 each affected unit shall surrender to the Adminis4 trator— 

5 ‘‘(A) a quantity of nitrogen oxide allow6 ances that is equal to the total tons of nitrogen 

7 oxides emitted by the affected unit during the 

8 calendar year; and 

9 ‘‘(B) a quantity of mercury allowances that 

10 is equal to the total pounds of mercury emitted 

11 by the affected unit during the calendar year. 

12 ‘‘(2) MONITORING SYSTEM.—The Administrator 

13 shall promulgate regulations requiring the accurate 

14 monitoring of the quantities of nitrogen oxides and 

15 mercury that are emitted at each affected unit. 

16 ‘‘(3) REPORTING.— 

17 ‘‘(A) IN GENERAL.—Not less often than 

18 quarterly, the owner or operator of an affected 

19 unit shall submit to the Administrator a report 

20 on the monitoring of emissions of nitrogen ox21 ides and mercury carried out by the owner or 

22 operator in accordance with the regulations pro23 mulgated under paragraph (2). 

24 ‘‘(B) AUTHORIZATION.—Each report sub25 mitted under subparagraph (A) shall be author-
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1 ized by a responsible official of the affected 

2 unit, who shall certify the accuracy of the re3 port. 

4 ‘‘(C) PUBLIC REPORTING.—The Adminis5 trator shall make available to the public, 

6 through 1 or more published reports and 1 or 

7 more forms of electronic media, data concerning 

8 the emissions of nitrogen oxides and mercury 

9 from each affected unit. 

10 ‘‘(4) EXCESS EMISSIONS.— 

11 ‘‘(A) IN GENERAL.—The owner or operator 

12 of an affected unit that emits nitrogen oxides or 

13 mercury in excess of the nitrogen oxide allow14 ances or mercury allowances that the owner or 

15 operator holds for use for the affected unit for 

16 the calendar year shall— 

17 ‘‘(i) pay an excess emissions penalty 

18 determined under subparagraph (B); and 

19 ‘‘(ii) offset the excess emissions by an 

20 equal quantity in the following calendar 

21 year or such other period as the Adminis22 trator shall prescribe. 

23 ‘‘(B) DETERMINATION OF EXCESS EMIS24 SIONS PENALTY.— 
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1 ‘‘(i) NITROGEN OXIDES.—The excess 

2 emissions penalty for nitrogen oxides shall 

3 be equal to the product obtained by multi4 plying— 

5 ‘‘(I) the number of tons of nitro6 gen oxides emitted in excess of the 

7 total quantity of nitrogen oxide allow8 ances held; and 

9 ‘‘(II) $5,000, adjusted (in ac10 cordance with regulations promul11 gated by the Administrator) for 

12 changes in the Consumer Price Index 

13 for All-Urban Consumers published by 

14 the Department of Labor. 

15 ‘‘(ii) MERCURY.—The excess emis16 sions penalty for mercury shall be equal to 

17 the product obtained by multiplying— 

18 ‘‘(I) the number of pounds of 

19 mercury emitted in excess of the total 

20 quantity of mercury allowances held; 

21 and 

22 ‘‘(II) $10,000, adjusted (in ac23 cordance with regulations promul24 gated by the Administrator) for 

25 changes in the Consumer Price Index 
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1 for All-Urban Consumers published by 

2 the Department of Labor. 

3 ‘‘SEC. 704. CARBON DIOXIDE ALLOWANCE TRADING PRO4 GRAM. 

5 ‘‘(a) REGULATIONS.— 

6 ‘‘(1) IN GENERAL.—Not later than 180 days 

7 after the enactment of this section, the Adminis8 trator shall promulgate regulations to establish a 

9 carbon dioxide allowance trading program for cov10 ered units in the United States. 

11 ‘‘(2) REQUIRED ELEMENTS.—Regulations pro12 mulgated under paragraph (1) shall establish re13 quirements for the carbon dioxide allowance trading 

14 program under this section, including requirements 

15 concerning— 

16 ‘‘(A)(i) the generation, allocation, issuance, 

17 recording, tracking, transfer, and use of carbon 

18 dioxide allowances; and 

19 ‘‘(ii) the public availability of all informa20 tion concerning the activities described in clause 

21 (i) that is not confidential; 

22 ‘‘(B) compliance with subsection (f)(1); 

23 ‘‘(C) the monitoring and reporting of emis24 sions under paragraphs (2) and (3) of sub25 section (f); 
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1 ‘‘(D) excess emission penalties under sub2 section (f)(4); and 

3 ‘‘(E) standards, guidelines, and procedures 

4 concerning the generation, certification, and use 

5 of additional carbon dioxide allowances made 

6 available under subsection (d). 

7 ‘‘(b) NEW UNIT RESERVE.— 

8 ‘‘(1) ESTABLISHMENT.—The Administrator 

9 shall establish by regulation a reserve of carbon di10 oxide allowances to be set aside for use by new units 

11 and new renewable energy units. 

12 ‘‘(2) DETERMINATION OF QUANTITY.—The Ad13 ministrator, in consultation with the Secretary of 

14 Energy, shall determine, based on projections of 

15 electricity output for new units and new renewable 

16 energy units— 

17 ‘‘(A) not later than June 30, 2006, the 

18 quantity of carbon dioxide allowances required 

19 to be held in reserve for new units and new re20 newable energy units for each of calendar years 

21 2010 through 2013; and 

22 ‘‘(B) not later than June 30 of each fifth 

23 calendar year thereafter, the quantity of carbon 

24 dioxide allowances required to be held in reserve 
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1 for new units and renewable energy units for 

2 the following 5-calendar year period. 

3 ‘‘(c) CARBON DIOXIDE ALLOWANCE ALLOCATION.— 

4 ‘‘(1) TIMING OF ALLOCATIONS.—The Adminis5 trator shall allocate carbon dioxide allowances to 

6 covered units— 

7 ‘‘(A) not later than December 31, 2006, 

8 for calendar year 2010; and 

9 ‘‘(B) not later than December 31 of cal10 endar year 2007 and each calendar year there11 after, for the fourth calendar year that begins 

12 after that December 31. 

13 ‘‘(2) ALLOCATIONS TO COVERED UNITS THAT

14 ARE NOT NEW UNITS.— 

15 ‘‘(A) IN GENERAL.—The Administrator 

16 shall allocate to each affected unit that is not 

17 a new unit, to each nuclear generating unit 

18 with respect to incremental nuclear generation, 

19 and to each renewable energy unit that is not 

20 a new renewable energy unit, a quantity of car21 bon dioxide allowances that is equal to the 

22 product obtained by multiplying— 

23 ‘‘(i) the quantity of carbon dioxide al24 lowances available for allocation under sub25 paragraph (B); and 
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1 ‘‘(ii) the quotient obtained by divid2 ing— 

3 ‘‘(I) the average net quantity of 

4 electricity generated by the unit in a 

5 calendar year during the most recent 

6 3-calendar year period for which data 

7 are available, measured in megawatt 

8 hours; and 

9 ‘‘(II) the total of the average net 

10 quantities described in subclause (I) 

11 with respect to all such units. 

12 ‘‘(B) QUANTITY TO BE ALLOCATED.—For 

13 each calendar year, the quantity of carbon diox14 ide allowances allocated under subparagraph 

15 (A) shall be equal to the difference between— 

16 ‘‘(i) the annual tonnage limitation for 

17 emissions of carbon dioxide from affected 

18 units specified in section 702(d) for the 

19 calendar year; and 

20 ‘‘(ii) the quantity of carbon dioxide al21 lowances placed in the new unit reserve es22 tablished under subsection (b) for the cal23 endar year. 

24 ‘‘(3) ALLOCATION TO NEW UNITS AND NEW RE25 NEWABLE ENERGY UNITS.— 
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1 ‘‘(A) METHODOLOGY.—The Administrator 

2 shall promulgate regulations to establish a 

3 methodology for allocating carbon dioxide allow4 ances to new units and new renewable energy 

5 units. 

6 ‘‘(B) QUANTITY OF CARBON DIOXIDE AL7 LOWANCES ALLOCATED.—The Administrator 

8 shall determine the quantity of carbon dioxide 

9 allowances to be allocated to each new unit and 

10 each new renewable energy unit based on the 

11 unit’s projected share of the total electric power 

12 generation attributable to covered units. 

13 ‘‘(d) ISSUANCE AND USE OF ADDITIONAL CARBON

14 DIOXIDE ALLOWANCES.— 

15 ‘‘(1) IN GENERAL.— 

16 ‘‘(A) ALLOWANCES FOR PROJECTS CER17 TIFIED BY INDEPENDENT REVIEW BOARD.—In 

18 addition to carbon dioxide allowances allocated 

19 under subsection (c), the Administrator shall 

20 make carbon dioxide allowances available to 

21 projects that are certified, in accordance with 

22 paragraph (3), by the independent review board 

23 established under paragraph (2) as eligible to 

24 receive the carbon dioxide allowances. 
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1 ‘‘(B) ALLOWANCES OBTAINED UNDER

2 OTHER PROGRAMS.—The regulations promul3 gated under subsection (a)(1) shall— 

4 ‘‘(i) allow covered units to comply 

5 with subsection (f)(1) by purchasing and 

6 using carbon dioxide allowances that are 

7 traded under any other United States or 

8 internationally recognized carbon dioxide 

9 reduction program that is specified under 

10 clause (ii); 

11 ‘‘(ii) specify, for the purpose of clause 

12 (i), programs that meet the goals of this 

13 section; and 

14 ‘‘(iii) apply such conditions to the use 

15 of carbon dioxide allowances traded under 

16 programs specified under clause (ii) as are 

17 necessary to achieve the goals of this sec18 tion. 

19 ‘‘(2) INDEPENDENT REVIEW BOARD.— 

20 ‘‘(A) IN GENERAL.— 

21 ‘‘(i) ESTABLISHMENT.—The Adminis22 trator shall establish an independent re23 view board to assist the Administrator in 

24 certifying projects as eligible for carbon di-
32 

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1 oxide allowances made available under 

2 paragraph (1)(A). 

3 ‘‘(ii) REVIEW AND APPROVAL.—Each 

4 certification by the independent review 

5 board of a project shall be subject to the 

6 review and approval of the Administrator. 

7 ‘‘(iii) REQUIREMENTS.—Subject to 

8 this subsection, requirements relating to 

9 the creation, composition, duties, respon10 sibilities, and other aspects of the inde11 pendent review board shall be included in 

12 the regulations promulgated by the Admin13 istrator under subsection (a). 

14 ‘‘(B) MEMBERSHIP.—The independent re15 view board shall be composed of 12 members, 

16 of whom— 

17 ‘‘(i) 10 members shall be appointed by 

18 the Administrator, of whom— 

19 ‘‘(I) 1 member shall represent 

20 the Environmental Protection Agency 

21 (who shall serve as chairperson of the 

22 independent review board); 

23 ‘‘(II) 3 members shall represent 

24 State governments; 
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1 ‘‘(III) 3 members shall represent 

2 the electric generating sector; and 

3 ‘‘(IV) 3 members shall represent 

4 environmental organizations; 

5 ‘‘(ii) 1 member shall be appointed by 

6 the Secretary of Energy to represent the 

7 Department of Energy; and 

8 ‘‘(iii) 1 member shall be appointed by 

9 the Secretary of Agriculture to represent 

10 the Department of Agriculture. 

11 ‘‘(C) STAFF AND OTHER RESOURCES.— 

12 The Administrator shall provide such staff and 

13 other resources to the independent review board 

14 as the Administrator determines to be nec15 essary. 

16 ‘‘(D) DEVELOPMENT OF GUIDELINES.— 

17 ‘‘(i) IN GENERAL.—The independent 

18 review board shall develop guidelines for 

19 certifying projects in accordance with para20 graph (3), including— 

21 ‘‘(I) criteria that address the va22 lidity of claims that projects result in 

23 the generation of carbon dioxide al24 lowances; 
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1 ‘‘(II) guidelines for certifying in2 cremental carbon sequestration in ac3 cordance with clause (ii); and 

4 ‘‘(III) guidelines for certifying 

5 geological sequestration of carbon di6 oxide in accordance with clause (iii). 

7 ‘‘(ii) GUIDELINES FOR CERTIFYING

8 INCREMENTAL CARBON SEQUESTRATION.— 

9 The guidelines for certifying incremental 

10 carbon sequestration in forests, agricul11 tural soil, rangeland, or grassland shall in12 clude development, reporting, monitoring, 

13 and verification guidelines, to be used in 

14 quantifying net carbon sequestration from 

15 land use projects, that are based on— 

16 ‘‘(I) measurement of increases in 

17 carbon storage in excess of the carbon 

18 storage that would have occurred in 

19 the absence of such a project; 

20 ‘‘(II) comprehensive carbon ac21 counting that— 

22 ‘‘(aa) reflects net increases 

23 in carbon reservoirs; and 

24 ‘‘(bb) takes into account any 

25 carbon emissions resulting from 
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1 disturbance of carbon reservoirs 

2 in existence as of the date of 

3 commencement of the project; 

4 ‘‘(III) adjustments to account 

5 for— 

6 ‘‘(aa) emissions of carbon 

7 that may result at other locations 

8 as a result of the impact of the 

9 project on timber supplies; or 

10 ‘‘(bb) potential displacement 

11 of carbon emissions to other land 

12 owned by the entity that carries 

13 out the project; and 

14 ‘‘(IV) adjustments to reflect the 

15 expected carbon storage over various 

16 time periods, taking into account the 

17 likely duration of the storage of the 

18 carbon stored in a carbon reservoir. 

19 ‘‘(iii) GUIDELINES FOR CERTIFYING

20 GEOLOGICAL SEQUESTRATION OF CARBON

21 DIOXIDE.—The guidelines for certifying 

22 geological sequestration of carbon dioxide 

23 produced by a covered unit shall— 

24 ‘‘(I) provide that a project shall 

25 be certified only to the extent that the 
36 

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1 geological sequestration of carbon di2 oxide produced by a covered unit is in 

3 addition to any carbon dioxide used by 

4 the covered unit in 2010 for enhanced 

5 oil recovery; and 

6 ‘‘(II) include requirements for de7 velopment, reporting, monitoring, and 

8 verification for quantifying net carbon 

9 sequestration— 

10 ‘‘(aa) to ensure the perma11 nence of the sequestration; and 

12 ‘‘(bb) to ensure that the se13 questration will not cause or con14 tribute to significant adverse ef15 fects on the environment. 

16 ‘‘(iv) DEADLINES FOR DEVELOP17 MENT.—The guidelines under clause (i) 

18 shall be developed— 

19 ‘‘(I) with respect to projects de20 scribed in paragraph (3)(A), not later 

21 than January 1, 2006; and 

22 ‘‘(II) with respect to projects de23 scribed in paragraph (3)(B), not later 

24 than January 1, 2007. 
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1 ‘‘(v) UPDATING OF GUIDELINES.— 

2 The independent review board shall peri3 odically update the guidelines as the inde4 pendent review board determines to be ap5 propriate. 

6 ‘‘(E) CERTIFICATION OF PROJECTS.— 

7 ‘‘(i) IN GENERAL.—Subject to clause 

8 (ii), subparagraph (A)(ii), and paragraph 

9 (3), the independent review board shall 

10 certify projects as eligible for additional 

11 carbon dioxide allowances. 

12 ‘‘(ii) LIMITATION.—The independent 

13 review board shall not certify a project 

14 under this subsection if the carbon dioxide 

15 emission reductions achieved by the project 

16 will be used to satisfy any requirement im17 posed on any foreign country or any indus18 trial sector to reduce the quantity of green19 house gases emitted by the foreign country 

20 or industrial sector. 

21 ‘‘(3) PROJECTS ELIGIBLE FOR ADDITIONAL

22 CARBON DIOXIDE ALLOWANCES.— 

23 ‘‘(A) PROJECTS CARRIED OUT IN CAL24 ENDAR YEARS 1990 THROUGH 2009.— 
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1 ‘‘(i) IN GENERAL.—The independent 

2 review board may certify as eligible for 

3 carbon dioxide allowances a project that— 

4 ‘‘(I) is carried out on or after 

5 January 1, 1990, and before January 

6 1, 2010; and 

7 ‘‘(II) consists of— 

8 ‘‘(aa) a carbon sequestration 

9 project carried out in the United 

10 States or a foreign country; 

11 ‘‘(bb) a project reported 

12 under section 1605(b) of the En13 ergy Policy Act of 1992 (42 

14 U.S.C. 13385(b)); or 

15 ‘‘(cc) any other project to 

16 reduce emissions of greenhouse 

17 gases that is carried out in the 

18 United States or a foreign coun19 try. 

20 ‘‘(ii) MAXIMUM QUANTITY OF ADDI21 TIONAL CARBON DIOXIDE ALLOWANCES.— 

22 The Administrator may make available to 

23 projects certified under clause (i) a quan24 tity of allowances that is not greater than 

25 10 percent of the tonnage limitation for 
39 

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1 calendar year 2010 for emissions of carbon 

2 dioxide from affected units specified in sec3 tion 702(d)(1). 

4 ‘‘(iii) USE OF ALLOWANCES.—Allow5 ances made available under clause (ii) may 

6 be used to comply with subsection (f)(1) in 

7 calendar year 2010 or any calendar year 

8 thereafter. 

9 ‘‘(B) PROJECTS CARRIED OUT IN CAL10 ENDAR YEAR 2010 AND THEREAFTER.—The 

11 independent review board may certify as eligible 

12 for carbon dioxide allowances a project that— 

13 ‘‘(i) is carried out on or after January 

14 1, 2010; and 

15 ‘‘(ii) consists of— 

16 ‘‘(I) a carbon sequestration 

17 project carried out in the United 

18 States or a foreign country; or 

19 ‘‘(II) a project to reduce the 

20 greenhouse gas emissions (on a car21 bon dioxide equivalency basis deter22 mined by the independent review 

23 board) of a source of greenhouse 

24 gases that is not an affected unit. 
40 

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1 ‘‘(e) CARBON DIOXIDE ALLOWANCE TRANSFER SYS2 TEM.— 

3 ‘‘(1) USE OF ALLOWANCES.—The regulations 

4 promulgated under subsection (a)(1) shall— 

5 ‘‘(A) prohibit the use (but not the transfer 

6 in accordance with paragraph (3)) of any car7 bon dioxide allowance before the calendar year 

8 for which the carbon dioxide allowance is allo9 cated; 

10 ‘‘(B) provide that unused carbon dioxide 

11 allowances may be carried forward and added 

12 to carbon dioxide allowances allocated for sub13 sequent years; 

14 ‘‘(C) provide that unused carbon dioxide 

15 allowances may be transferred by— 

16 ‘‘(i) the person to which the carbon 

17 dioxide allowances are allocated; or 

18 ‘‘(ii) any person to which the carbon 

19 dioxide allowances are transferred; and 

20 ‘‘(D) provide that carbon dioxide allow21 ances allocated and transferred under this sec22 tion may be transferred into any other market23 based carbon dioxide emission trading program 

24 that is— 

25 ‘‘(i) approved by the President; and 
41 

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1 ‘‘(ii) implemented in accordance with 

2 regulations developed by the Administrator 

3 or the head of any other Federal agency. 

4 ‘‘(2) USE BY PERSONS TO WHICH CARBON DI5 OXIDE ALLOWANCES ARE TRANSFERRED.—Any per6 son to which carbon dioxide allowances are trans7 ferred under paragraph (1)(C)— 

8 ‘‘(A) may use the carbon dioxide allow9 ances in the calendar year for which the carbon 

10 dioxide allowances were allocated, or in a subse11 quent calendar year, to demonstrate compliance 

12 with subsection (f)(1); or 

13 ‘‘(B) may transfer the carbon dioxide al14 lowances to any other person for the purpose of 

15 demonstration of that compliance. 

16 ‘‘(3) CERTIFICATION OF TRANSFER.—A trans17 fer of a carbon dioxide allowance shall not take ef18 fect until a written certification of the transfer, au19 thorized by a responsible official of the person mak20 ing the transfer, is received and recorded by the Ad21 ministrator. 

22 ‘‘(4) PERMIT REQUIREMENTS.—An allocation 

23 or transfer of carbon dioxide allowances to a covered 

24 unit, or for a project carried out on behalf of a cov25 ered unit, under subsection (c) or (d) shall, after re-
42 

•HR 1873 IH 

1 cording by the Administrator, be considered to be 

2 part of the federally enforceable permit of the cov3 ered unit under this Act, without a requirement for 

4 any further review or revision of the permit. 

5 ‘‘(f) COMPLIANCE AND ENFORCEMENT.— 

6 ‘‘(1) IN GENERAL.—For calendar year 2010 

7 and each calendar year thereafter— 

8 ‘‘(A) the operator of each affected unit and 

9 each renewable energy unit shall surrender to 

10 the Administrator a quantity of carbon dioxide 

11 allowances that is equal to the total tons of car12 bon dioxide emitted by the affected unit or re13 newable energy unit during the calendar year; 

14 and 

15 ‘‘(B) the operator of each nuclear gener16 ating unit that has incremental nuclear genera17 tion shall surrender to the Administrator a 

18 quantity of carbon dioxide allowances that is 

19 equal to the total tons of carbon dioxide emitted 

20 by the nuclear generating unit during the cal21 endar year from incremental nuclear genera22 tion. 

23 ‘‘(2) MONITORING SYSTEM.—The Administrator 

24 shall promulgate regulations requiring the accurate 
43 

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1 monitoring of the quantity of carbon dioxide that is 

2 emitted at each covered unit. 

3 ‘‘(3) REPORTING.— 

4 ‘‘(A) IN GENERAL.—Not less often than 

5 quarterly, the owner or operator of a covered 

6 unit, or a person that carries out a project cer7 tified under subsection (d) on behalf of a cov8 ered unit, shall submit to the Administrator a 

9 report on the monitoring of carbon dioxide 

10 emissions carried out at the covered unit in ac11 cordance with the regulations promulgated 

12 under paragraph (2). 

13 ‘‘(B) AUTHORIZATION.—Each report sub14 mitted under subparagraph (A) shall be author15 ized by a responsible official of the covered unit, 

16 who shall certify the accuracy of the report. 

17 ‘‘(C) PUBLIC REPORTING.—The Adminis18 trator shall make available to the public, 

19 through 1 or more published reports and 1 or 

20 more forms of electronic media, data concerning 

21 the emissions of carbon dioxide from each cov22 ered unit. 

23 ‘‘(4) EXCESS EMISSIONS.— 

24 ‘‘(A) IN GENERAL.—The owner or operator 

25 of a covered unit that emits carbon dioxide in 
44 

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1 excess of the carbon dioxide allowances that the 

2 owner or operator holds for use for the covered 

3 unit for the calendar year shall— 

4 ‘‘(i) pay an excess emissions penalty 

5 determined under subparagraph (B); and 

6 ‘‘(ii) offset the excess emissions by an 

7 equal quantity in the following calendar 

8 year or such other period as the Adminis9 trator shall prescribe. 

10 ‘‘(B) DETERMINATION OF EXCESS EMIS11 SIONS PENALTY.—The excess emissions penalty 

12 shall be equal to the product obtained by multi13 plying— 

14 ‘‘(i) the number of tons of carbon di15 oxide emitted in excess of the total quan16 tity of carbon dioxide allowances held; and 

17 ‘‘(ii) $100, adjusted (in accordance 

18 with regulations promulgated by the Ad19 ministrator) for changes in the Consumer 

20 Price Index for All-Urban Consumers pub21 lished by the Department of Labor. 

22 ‘‘(g) ALLOWANCE NOT A PROPERTY RIGHT.—A car23 bon dioxide allowance— 

24 ‘‘(1) is not a property right; and 
45 

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1 ‘‘(2) may be terminated or limited by the Ad2 ministrator. 

3 ‘‘(h) NO JUDICIAL REVIEW.—An allocation of carbon 

4 dioxide allowances by the Administrator under subsection 

5 (c) or (d) shall not be subject to judicial review.’’. 

6 SEC. 4. NEW SOURCE REVIEW PROGRAM. 

7 Section 165 of the Clean Air Act (42 U.S.C. 7475) 

8 is amended by adding at the end the following: 

9 ‘‘(f) REVISIONS TO NEW SOURCE REVIEW PRO10 GRAM.— 

11 ‘‘(1) DEFINITIONS.—In this subsection: 

12 ‘‘(A) COVERED UNIT.—The term ‘covered 

13 unit’ has the meaning given the term in section 

14 701. 

15 ‘‘(B) NEW SOURCE REVIEW PROGRAM.— 

16 The term ‘new source review program’ means 

17 the program to carry out section 111 and this 

18 part. 

19 ‘‘(2) REGULATIONS.—In accordance with this 

20 subsection, the Administrator shall promulgate revi21 sions to the new source review program. 

22 ‘‘(3) APPLICABILITY CRITERIA.—Beginning 

23 January 1, 2009, the new source review program 

24 shall apply only to— 
46 

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1 ‘‘(A) construction of a new covered unit, 

2 which shall include the replacement of an exist3 ing boiler; and 

4 ‘‘(B) activities that result in any increase 

5 in the maximum hourly rate of emissions from 

6 a covered unit of air pollutants regulated under 

7 the new source review program (measured in 

8 pounds per megawatt hour), after netting 

9 among covered units at a source. 

10 ‘‘(4) PERFORMANCE STANDARDS.—Beginning 

11 in 2020, all affected units, as that term is defined 

12 under section 701 for nitrogen oxides and carbon di13 oxide, on which construction commenced before Au14 gust 17, 1971, shall meet the following performance 

15 standards: 

16 ‘‘(A) 4.5 lbs/MWh for sulfur dioxide; and 

17 ‘‘(B) 2.5 lbs/MWh for nitrogen oxides. 

18 ‘‘(5) BI-ANNUAL DEFINITION OF BEST AVAIL19 ABLE CONTROL TECHNOLOGY AND LOWEST ACHIEV20 ABLE EMISSION RATE.—The definitions of ‘best 

21 available control technology’ under section 169 and 

22 of ‘lowest achievable emission rate’ under section 

23 171 shall be revised to require the Administrator to 

24 define on a bi-annual basis best available control 
47 

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1 technology and lowest achievable emission rate as 

2 those terms apply to covered units. 

3 ‘‘(6) LOWEST ACHIEVABLE EMISSION RATE.— 

4 The regulations shall revise the definition of ‘lowest 

5 achievable emission rate’ under section 171, with re6 spect to technology required to be installed by the 

7 electric generating sector, to allow costs to be con8 sidered in the determination of the lowest achievable 

9 emission rate, so that, beginning January 1, 2010, 

10 a covered unit (as defined in section 701) shall not 

11 be required to install technology required to meet a 

12 lowest achievable emission rate if the cost of the 

13 technology exceeds a maximum amount (in dollars 

14 per ton) that is determined by the Administrator. In 

15 no event shall such cost be more than twice the 

16 amount of the applicable cost guideline for best 

17 available control technology. 

18 ‘‘(7) EMISSION OFFSETS.—No source within 

19 the electric generating sector that locates in a non20 attainment area after December 31, 2009, shall be 

21 required to obtain offsets for emissions of air pollut22 ants. 

23 ‘‘(8) NO EFFECT ON OTHER REQUIREMENTS.— 

24 Nothing in this subsection affects the obligation of 

25 any State or local government to comply with the re-
48 

•HR 1873 IH 

1 quirements established under this section con2 cerning— 

3 ‘‘(A) national ambient air quality stand4 ards; 

5 ‘‘(B) maximum allowable air pollutant in6 creases or maximum allowable air pollutant 

7 concentrations; or 

8 ‘‘(C) protection of visibility and other air 

9 quality-related values in areas designated as 

10 class I areas under part C of title I. Addition11 ally, States are required to identify areas with 

12 adverse local air quality impacts and to impose 

13 such facility-specific and other measures as are 

14 necessary to remedy such impacts in light of 

15 the national pollutant tonnage limitations in 

16 section 702.’’. 

17 SEC. 5. REVISIONS TO SULFUR DIOXIDE ALLOWANCE PRO18 GRAM. 

19 (a) IN GENERAL.—Title IV of the Clean Air Act (re20 lating to acid deposition control) (42 U.S.C. 7651 et seq.) 

21 is amended by adding at the end the following: 
49 

•HR 1873 IH 

1 ‘‘SEC. 417. REVISIONS TO SULFUR DIOXIDE ALLOWANCE 

2 PROGRAM. 

3 ‘‘(a) DEFINITIONS.—In this section, the terms ‘af4 fected unit’ and ‘new unit’ have the meanings given the 

5 terms in section 701. 

6 ‘‘(b) REGULATIONS.—Not later than January 1, 

7 2006, the Administrator shall promulgate such revisions 

8 to the regulations to implement this title as the Adminis9 trator determines to be necessary to implement section 

10 702(a). 

11 ‘‘(c) NEW UNIT RESERVE.— 

12 ‘‘(1) ESTABLISHMENT.—Subject to the annual 

13 tonnage limitation for emissions of sulfur dioxide 

14 from affected units specified in section 702(a), the 

15 Administrator shall establish by regulation a reserve 

16 of allowances to be set aside for use by new units. 

17 ‘‘(2) DETERMINATION OF QUANTITY.—The Ad18 ministrator, in consultation with the Secretary of 

19 Energy, shall determine, based on projections of 

20 electricity output for new units— 

21 ‘‘(A) not later than June 30, 2006, the 

22 quantity of allowances required to be held in re23 serve for new units for each of calendar years 

24 2010 through 2014; and 

25 ‘‘(B) not later than June 30 of each fifth 

26 calendar year thereafter, the quantity of allow-
50 

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1 ances required to be held in reserve for new 

2 units for the following 5-calendar year period. 

3 ‘‘(3) ALLOCATION.— 

4 ‘‘(A) REGULATIONS.—The Administrator 

5 shall promulgate regulations to establish a 

6 methodology for allocating allowances to new 

7 units. 

8 ‘‘(B) NO JUDICIAL REVIEW.—An allocation 

9 of allowances by the Administrator under this 

10 subsection shall not be subject to judicial re11 view. 

12 ‘‘(d) EXISTING UNITS.— 

13 ‘‘(1) ALLOCATION.— 

14 ‘‘(A) REGULATIONS.—Subject to the an15 nual tonnage limitation for emissions of sulfur 

16 dioxide from affected units specified in section 

17 702(a), and subject to the reserve of allowances 

18 for new units under subsection (c), the Admin19 istrator shall promulgate regulations to govern 

20 the allocation of allowances to affected units 

21 that are not new units. 

22 ‘‘(B) REQUIRED ELEMENTS.—The regula23 tions shall provide for— 

24 ‘‘(i) the allocation of allowances on a 

25 fair and equitable basis between affected 
51 

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1 units that received allowances under sec2 tion 405 and affected units that are not 

3 new units and that did not receive allow4 ances under that section, using for both 

5 categories of units the same or similar allo6 cation methodology as was used under sec7 tion 405; and 

8 ‘‘(ii) the pro-rata distribution of allow9 ances to all units described in clause (i), 

10 subject to the annual tonnage limitation 

11 for emissions of sulfur dioxide from af12 fected units specified in section 702(a). 

13 ‘‘(2) TIMING OF ALLOCATIONS.—The Adminis14 trator shall allocate allowances to affected units— 

15 ‘‘(A) not later than December 31, 2006, 

16 for calendar year 2010; and 

17 ‘‘(B) not later than December 31 of cal18 endar year 2007 and each calendar year there19 after, for the fourth calendar year that begins 

20 after that December 31. 

21 ‘‘(3) NO JUDICIAL REVIEW.—An allocation of 

22 allowances by the Administrator under this sub23 section shall not be subject to judicial review. 

24 ‘‘(e) WESTERN REGIONAL AIR PARTNERSHIP.— 

25 ‘‘(1) DEFINITIONS.—In this subsection: 
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1 ‘‘(A) COVERED STATE.—The term ‘covered 

2 State’ means each of the States of Arizona, 

3 California, Colorado, Idaho, Nevada, New Mex4 ico, Oregon, Utah, and Wyoming. 

5 ‘‘(B) COVERED YEAR.—The term ‘covered 

6 year’ means— 

7 ‘‘(i)(I)(aa) the third calendar year 

8 after the first calendar year in which the 

9 Administrator determines by regulation 

10 that the total of the annual emissions of 

11 sulfur dioxide from all affected units in the 

12 covered States is projected to exceed 

13 271,000 tons in calendar year 2018 or any 

14 calendar year thereafter; but 

15 ‘‘(bb) not earlier than calendar year 

16 2016; or 

17 ‘‘(II) if the Administrator does not 

18 make the determination described in sub19 clause (I)(aa)— 

20 ‘‘(aa) the third calendar year 

21 after the first calendar year with re22 spect to which the total of the annual 

23 emissions of sulfur dioxide from all af24 fected units in the covered States first 

25 exceeds 271,000 tons; but 
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1 ‘‘(bb) not earlier than calendar 

2 year 2021; and 

3 ‘‘(ii) each calendar year after the cal4 endar year determined under clause (i). 

5 ‘‘(2) MAXIMUM EMISSIONS OF SULFUR DIOXIDE

6 FROM EACH AFFECTED UNIT.—In each covered year, 

7 the emissions of sulfur dioxide from each affected 

8 unit in a covered State shall not exceed the number 

9 of allowances that are allocated under paragraph (3) 

10 and held by the affected unit for the covered year. 

11 ‘‘(3) ALLOCATION OF ALLOWANCES.— 

12 ‘‘(A) IN GENERAL.—Not later than Janu13 ary 1, 2015, the Administrator shall promul14 gate regulations to establish— 

15 ‘‘(i) a methodology for allocating al16 lowances to affected units in covered 

17 States under this subsection; and 

18 ‘‘(ii) the timing of the allocations. 

19 ‘‘(B) NO JUDICIAL REVIEW.—An allocation 

20 of allowances by the Administrator under this 

21 paragraph shall not be subject to judicial re22 view.’’. 

23 (b) DEFINITION OF ALLOWANCE.—Section 402 of 

24 the Clean Air Act (relating to acid deposition control) (42 
54 

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1 U.S.C. 7651a) is amended by striking paragraph (3) and 

2 inserting the following: 

3 ‘‘(3) ALLOWANCE.—The term ‘allowance’ 

4 means an authorization, allocated by the Adminis5 trator to an affected unit under this title, to emit, 

6 during or after a specified calendar year, a quantity 

7 of sulfur dioxide determined by the Administrator 

8 and specified in the regulations promulgated under 

9 section 417(b).’’. 

10 (c) TECHNICAL AMENDMENTS.— 

11 (1) Title IV of the Clean Air Act (relating to 

12 noise pollution) (42 U.S.C. 7641 et seq.)— 

13 (A) is amended by redesignating sections 

14 401 through 403 as sections 801 through 803, 

15 respectively; and 

16 (B) is redesignated as title VIII and moved 

17 to appear at the end of that Act. 

18 (2) The table of contents for title IV of the 

19 Clean Air Act (relating to acid deposition control) 

20 (42 U.S.C. prec. 7651) is amended by adding at the 

21 end the following: 

‘‘417. Revisions to sulfur dioxide allowance program.’’. 

22 SEC. 6. RELATIONSHIP TO OTHER LAW. 

23 (a) EXEMPTION FROM HAZARDOUS AIR POLLUTANT

24 REQUIREMENTS RELATING TO MERCURY.—Section 112 

25 of the Clean Air Act (42 U.S.C. 7412) is amended— 
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1 (1) in subsection (f), by adding at the end the 

2 following: 

3 ‘‘(7) MERCURY EMITTED FROM CERTAIN AF4 FECTED UNITS.—Not later than 8 years after the 

5 date of enactment of this paragraph, the Adminis6 trator shall carry out the duties of the Administrator 

7 under this subsection with respect to mercury emit8 ted from affected units (as defined in section 701).’’; 

9 and 

10 (2) in subsection (n)(1)(A)— 

11 (A) by striking ‘‘(A) The Administrator’’ 

12 and inserting the following: 

13 ‘‘(A) STUDY, REPORT, AND REGULA14 TIONS.— 

15 ‘‘(i) STUDY AND REPORT TO CON16 GRESS.—The Administrator’’; 

17 (B) by striking ‘‘The Administrator’’ in 

18 the fourth sentence and inserting the following: 

19 ‘‘(ii) REGULATIONS.— 

20 ‘‘(I) IN GENERAL.—The Admin21 istrator’’; and 

22 (C) in clause (ii) (as designated by sub23 paragraph (B)), by adding at the end the fol24 lowing: 
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1 ‘‘(II) EXEMPTION FOR CERTAIN

2 AFFECTED UNITS RELATING TO MER3 CURY.—An affected unit (as defined 

4 in section 701) that would otherwise 

5 be subject to mercury emission stand6 ards under subclause (I) shall not be 

7 subject to mercury emission standards 

8 under subclause (I) or subsection 

9 (c).’’. 

10 (b) TEMPORARY EXEMPTION FROM VISIBILITY PRO11 TECTION REQUIREMENTS.—Section 169A(c) of the Clean 

12 Air Act (42 U.S.C. 7491(c)) is amended— 

13 (1) in paragraph (3), by striking ‘‘this sub14 section’’ and inserting ‘‘paragraph (1)’’; and 

15 (2) by adding at the end the following: 

16 ‘‘(4) TEMPORARY EXEMPTION FOR CERTAIN AF17 FECTED UNITS.—An affected unit (as defined in sec18 tion 701) shall not be subject to subsection 

19 (b)(2)(A) during the period— 

20 ‘‘(A) beginning on the date of enactment of 

21 this paragraph; and 

22 ‘‘(B) ending on the date that is 20 years 

23 after the date of enactment of this paragraph.’’. 

24 (c) NO EFFECT ON OTHER FEDERAL AND STATE

25 REQUIREMENTS.—Except as otherwise specifically pro-
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1 vided in this Act, nothing in this Act or an amendment 

2 made by this Act— 

3 (1) affects any permitting, monitoring, or en4 forcement obligation of the Administrator of the En5 vironmental Protection Agency under the Clean Air 

6 Act (42 U.S.C. 7401 et seq.) or any remedy pro7 vided under that Act; 

8 (2) affects any requirement applicable to, or li9 ability of, an electric generating facility under that 

10 Act; 

11 (3) requires a change in, affects, or limits any 

12 State law that regulates electric utility rates or 

13 charges, including prudency review under State law; 

14 or 

15 (4) precludes a State or political subdivision of 

16 a State from adopting and enforcing any require17 ment for the control or abatement of air pollution, 

18 except that a State or political subdivision may not 

19 adopt or enforce any emission standard or limitation 

20 that is less stringent than the requirements imposed 

21 under that Act. 

Æ