II

106TH CONGRESS

1ST SESSION S. 172

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

IN THE SENATE OF THE UNITED STATES

JANUARY 19, 1999

Mr. MOYNIHAN (for himself, Mr. SCHUMER, and Mr. LIEBERMAN) introduced

the following bill; which was read twice and referred to the Committee

on Environment and Public Works

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 and

5 Ozone Control 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

10 the reductions required under the Clean Air Act (42
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1 U.S.C. 7401 et seq.), are needed to reduce acid dep2 osition and its serious adverse effects on public

3 health, natural resources, building structures, sen4 sitive ecosystems, and visibility;

5 (2) nitrogen oxide and sulfur dioxide contribute

6 to the development of fine particulates, suspected of

7 causing human mortality and morbidity to a signifi8 cant extent;

9 (3) regional nitrogen oxide reductions of 50

10 percent in the Eastern United States, in addition to

11 the reductions required under the Clean Air Act,

12 may be necessary to protect sensitive watersheds

13 from the effects of nitrogen deposition;

14 (4) without reductions in nitrogen oxide and

15 sulfur dioxide, the number of acidic lakes in the Adi16 rondacks in the State of New York is expected to in17 crease by up to 40 percent by 2040; and

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

19 to ozone formation hundreds of miles from the emit20 ting source.

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

22 (1) to recognize the current scientific under23 standing that emissions of nitrogen oxide and sulfur

24 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 under section

24 4(3) to emit, in accordance with this Act, quantities

25 of nitrogen oxide.
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1 (4) MMBTU.—The term ‘‘mmBtu’’ means

2 1,000,000 British thermal units.

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

4 the Nitrogen Oxide Allowance Program established

5 under section 4.

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

7 contiguous States and the District of Columbia.

8 SEC. 4. NITROGEN OXIDE ALLOWANCE PROGRAM.

9 (a) IN GENERAL.—

10 (1) ESTABLISHMENT.—Not later than 18

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

12 Administrator shall establish a program to be known

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

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

15 in the 48 contiguous States and the District of Co16 lumbia.

17 (3) NOx ALLOWANCES.—

18 (A) ALLOCATION.—The Administrator

19 shall allocate under paragraph (4)—

20 (i) for each of calendar years 2002

21 through 2004, 5,400,000 NOx allowances;

22 and

23 (ii) for calendar year 2005 and each

24 calendar year thereafter, 3,000,000 NOx

25 allowances.
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1 (B) USE.—Each NOx allowance shall au2 thorize an affected facility to emit—

3 (i) 1 ton of nitrogen oxide during each

4 of the months of October, November, De5 cember, January, February, March, and

6 April of any year; or

(ii) 1 7 ⁄2 ton of nitrogen oxide during

8 each of the months of May, June, July,

9 August, and September of any year.

10 (4) ALLOCATION.—

11 (A) DEFINITION OF TOTAL ELECTRIC

12 POWER.—In this paragraph, the term ‘‘total

13 electric power’’ means all electric power gen14 erated by utility and nonutility generators for

15 distribution, including electricity generated

16 from solar, wind, hydro power, nuclear power,

17 cogeneration facilities, and the combustion of

18 fossil fuel.

19 (B) ALLOCATION OF ALLOWANCES.—The

20 Administrator shall allocate annual NOx allow21 ances to each of the States in proportion to the

22 State’s share of the total electric power gen23 erated in all of the States.
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1 (C) PUBLICATION.—The Administrator

2 shall publish in the Federal Register a list of

3 each State’s NOx allowance allocation—

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

5 years 2002 through 2004;

6 (ii) by December 1, 2002, for calendar

7 years 2005 through 2007; and

8 (iii) by December 1 of each calendar

9 year after 2002, for the calendar year that

10 begins 61 months thereafter.

11 (5) INTRASTATE DISTRIBUTION.—

12 (A) IN GENERAL.—A State may submit to

13 the Administrator a report detailing the dis14 tribution of NOx allowances of the State to af15 fected facilities in the State—

16 (i) not later than September 30,

17 2001, for calendar years 2002 through

18 2004;

19 (ii) not later than September 30,

20 2003, for calendar years 2005 through

21 2012; and

22 (iii) not later than September 30 of

23 each calendar year after 2013, for the cal24 endar year that begins 61 months there25 after.
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1 (B) ACTION BY THE ADMINISTRATOR.—If

2 a State submits a report under subparagraph

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

4 year specified in subparagraph (A), the Admin5 istrator shall distribute the NOx allowances to

6 affected facilities in the State as detailed in the

7 report.

8 (C) LATE SUBMISSION OF REPORT.—A re9 port submitted by a State after September 30

10 of a specified year shall be of no effect.

11 (D) DISTRIBUTION IN ABSENCE OF A RE12 PORT.—

13 (i) IN GENERAL.—Subject to sub14 section (e), if a State does not submit a re15 port under subparagraph (A) not later

16 than September 30 of the calendar year

17 specified in subparagraph (A), the Admin18 istrator shall, not later than November 30

19 of that calendar year, distribute the NOx

20 allowances for the calendar years specified

21 in subparagraph (A) to each affected facil22 ity in the State in proportion to the af23 fected facility’s share of the total electric

24 power generated in the State.
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1 (ii) DETERMINATION OF FACILITY’S

2 SHARE.—In determining an affected facili3 ty’s share of total electric power generated

4 in a State, the Administrator shall con5 sider the net electric power generated by

6 the facility and the State to be—

7 (I) for calendar years 2002

8 through 2004, the average annual

9 amount of electric power generated,

10 by the facility and the State, respec11 tively, in calendar years 1997 through

12 1999;

13 (II) for calendar years 2005

14 through 2012, the average annual

15 amount of electric power generated,

16 by the facility and the State, respec17 tively, in calendar years 1999 through

18 2001; and

19 (III) for calendar year 2013 and

20 each calendar year thereafter, the

21 amount of electric power generated,

22 by the facility and the State, respec23 tively, in the calendar year 5 years

24 previous to the year for which the de25 termination is made.
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1 (E) JUDICIAL REVIEW.—A distribution of

2 NOx allowances by the Administrator under

3 subparagraph (D) shall not be subject to judi4 cial review.

5 (b) NOx ALLOWANCE TRANSFER SYSTEM.—

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

7 after the date of enactment of this Act, the Adminis8 trator shall promulgate a NOx allowance system reg9 ulation under which a NOx allowance allocated

10 under this Act may be transferred among affected

11 facilities and any other person.

12 (2) ESTABLISHMENT.—The regulation shall es13 tablish the NOx allowance system under this section,

14 including requirements for the allocation, transfer,

15 and use of NOx allowances under this Act.

16 (3) USE OF NOx ALLOWANCES.—The regulation

17 shall—

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

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

20 allowance before the calendar year for which

21 the NOx allowance is allocated; and

22 (B) provide that the unused NOx allow23 ances shall be carried forward and added to

24 NOx allowances allocated for subsequent years.
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1 (4) CERTIFICATION OF TRANSFER.—A transfer

2 of a NOx allowance shall not be effective until a

3 written certification of the transfer, signed by a re4 sponsible official of the person making the transfer,

5 is received and recorded by the Administrator.

6 (c) NOx ALLOWANCE TRACKING SYSTEM.—Not later

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

8 the Administrator shall promulgate regulations for

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

10 NOx allowances that shall specify all necessary procedures

11 and requirements for an orderly and competitive function12 ing of the NOx allowance system.

13 (d) PERMIT REQUIREMENTS.—A NOx allowance allo14 cation or transfer shall, on recordation by the Adminis15 trator, be considered to be a part of each affected facility’s

16 operating permit requirements, without a requirement for

17 any further permit review or revision.

18 (e) NEW SOURCE RESERVE.—

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

20 Administrator distributes NOx allowances under

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

22 10 percent of the total annual NOx allowances of the

23 State in a new source reserve to be distributed by

24 the Administrator—
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1 (A) for calendar years 2002 through 2005,

2 to sources that commence operation after 1998;

3 (B) for calendar years 2006 through 2011,

4 to sources that commence operation after 2000;

5 and

6 (C) for calendar year 2012 and each cal7 endar year thereafter, to sources that com8 mence operation after the calendar year that is

9 5 years previous to the year for which the dis10 tribution is made.

11 (2) SHARE.—For a State for which the Admin12 istrator distributes NOx allowances under subsection

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

14 new source a number of NOx allowances sufficient to

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

16 lesser of the new source performance standard or

17 the permitted level for the full nameplate capacity of

18 the source, adjusted pro rata for the number of

19 months of the year during which the source oper20 ates.

21 (3) UNUSED NOx ALLOWANCES.—

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

23 calendar years 2000 through 2005, the Admin24 istrator shall conduct auctions at which a NOx

25 allowance remaining in the new source reserve
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1 that has not been distributed under paragraph

2 (2) shall be offered for sale.

3 (B) OPEN AUCTIONS.—An auction under

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

5 (C) CONDUCT OF AUCTION.—

6 (i) METHOD OF BIDDING.—A person

7 wishing to bid for a NOx allowance at an

8 auction under subparagraph (A) shall sub9 mit (by a date set by the Administrator) to

10 the Administrator (on a sealed bid sched11 ule provided by the Administrator) an offer

12 to purchase a specified number of NOx al13 lowances at a specified price.

14 (ii) SALE BASED ON BID PRICE.—A

15 NOx allowance auctioned under subpara16 graph (A) shall be sold on the basis of bid

17 price, starting with the highest priced bid

18 and continuing until all NOx allowances

19 for sale at the auction have been sold.

20 (iii) NO MINIMUM PRICE.—A mini21 mum price shall not be set for the pur22 chase of a NOx allowance auctioned under

23 subparagraph (A).

24 (iv) REGULATIONS.—The Adminis25 trator, in consultation with the Secretary
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1 of the Treasury, shall promulgate a regula2 tion to carry out this paragraph.

3 (D) USE OF NOx ALLOWANCES.—A NOx

4 allowance purchased at an auction under sub5 paragraph (A) may be used for any purpose

6 and at any time after the auction that is per7 mitted for use of a NOx allowance under this

8 Act.

9 (E) PROCEEDS OF AUCTION.—The pro10 ceeds from an auction under this paragraph

11 shall be distributed to the owner of an affected

12 source in proportion to the number of allow13 ances that the owner would have received but

14 for this subsection.

15 (f) NATURE OF NOx ALLOWANCES.—

16 (1) NOT A PROPERTY RIGHT.—A NOx allow17 ance shall not be considered to be a property right.

18 (2) LIMITATION OF NOx ALLOWANCES.—Not19 withstanding any other provision of law, the Admin20 istrator may terminate or limit a NOx allowance.

21 (g) PROHIBITIONS.—

22 (1) IN GENERAL.—After January 1, 2000, it

23 shall be unlawful—

24 (A) for the owner or operator of an af25 fected facility to operate the affected facility in
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1 such a manner that the affected facility emits

2 nitrogen oxides in excess of the amount per3 mitted by the quantity of NOx allowances held

4 by the designated representative of the affected

5 facility; or

6 (B) for any person to hold, use, or transfer

7 a NOx allowance allocated under this Act, ex8 cept as provided under this Act.

9 (2) OTHER EMISSION LIMITATIONS.—Section

10 407 of the Clean Air Act (42 U.S.C. 7651f) is re11 pealed.

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

13 be used before the calendar year for which the NOx

14 allowance is allocated.

15 (4) PERMITTING, MONITORING, AND ENFORCE16 MENT.—Nothing in this section affects—

17 (A) the permitting, monitoring, and en18 forcement obligations of the Administrator

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

20 seq.); or

21 (B) the requirements and liabilities of an

22 affected facility under that Act.

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

24 (1) affects the application of, or compliance

25 with, the Clean Air Act (42 U.S.C. 7401 et seq.) for
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1 an affected facility, including the provisions related

2 to applicable national ambient air quality standards

3 and State implementation plans;

4 (2) requires a change in, affects, or limits any

5 State law regulating electric utility rates or charges,

6 including prudency review under State law;

7 (3) affects the application of the Federal Power

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

9 Federal Energy Regulatory Commission under that

10 Act; or

11 (4) interferes with or impairs any program for

12 competitive bidding for power supply in a State in

13 which the Program is established.

14 SEC. 5. INDUSTRIAL SOURCE MONITORING.

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

16 7651k(a)) is amended in the first sentence by inserting

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

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

19 of any source subject to this title’’.

20 SEC. 6. EXCESS EMISSIONS PENALTY.

21 (a) IN GENERAL.—

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

23 affected facility that emits nitrogen oxides in any

24 calendar year in excess of the NOx allowances the

25 owner or operator holds for use for the facility for
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1 that year shall be liable for the payment of an excess

2 emissions penalty.

3 (2) CALCULATION.—The excess emissions pen4 alty shall be calculated by multiplying $6,000 by the

5 quantity that is equal to—

6 (A) the quantity of NOx allowances that

7 would authorize the nitrogen oxides emitted by

8 the facility for the calendar year; minus

9 (B) the quantity of NOx allowances that

10 the owner or operator holds for use for the fa11 cility for that year.

12 (3) OVERLAPPING PENALTIES.—A penalty

13 under this section shall not diminish the liability of

14 the owner or operator of an affected facility for any

15 fine, penalty, or assessment against the owner or op16 erator for the same violation under any other provi17 sion of law.

18 (b) EXCESS EMISSIONS OFFSET.—

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

20 affected facility that emits nitrogen oxide during a

21 calendar year in excess of the NOx allowances held

22 for the facility for the calendar year shall offset in

23 the following calendar year a quantity of NOx allow24 ances equal to the number of NOx allowances that

25 would authorize the excess nitrogen oxides emitted.
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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, or as modified or conditioned by the Adminis10 trator, the plan shall be considered a condition of

11 the operating permit for the affected facility without

12 further review or revision of the permit.

13 (c) PENALTY ADJUSTMENT.—The Administrator

14 shall annually adjust the amount of the penalty specified

15 in subsection (a) to reflect changes in the Consumer Price

16 Index for all urban consumers published by the Bureau

17 of Labor Statistics.

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

20 Section 402 of the Clean Air Act (42 U.S.C. 7651a)

21 is amended by striking paragraph (3) and inserting the

22 following:

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

24 means an authorization, allocated to an affected unit
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1 by the Administrator under this title, to emit, during

2 or after a specified calendar year—

3 ‘‘(A) in the case of allowances allocated for

4 calendar years 1997 through 2004, 1 ton of

5 sulfur dioxide; and

6 ‘‘(B) in the case of allowances allocated for

7 calendar year 2005 and each calendar year

thereafter, 1 8 ⁄2 ton of sulfur dioxide.’’.

9 SEC. 8. REGIONAL ECOSYSTEMS.

10 (a) REPORT.—

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

12 2002, the Administrator shall submit to Congress a

13 report identifying objectives for scientifically credible

14 environmental indicators, as determined by the Ad15 ministrator, that are sufficient to protect sensitive

16 ecosystems of the Adirondack Mountains, mid-Appa17 lachian Mountains, Rocky Mountains, and Southern

18 Blue Ridge Mountains and water bodies of the Great

19 Lakes, Lake Champlain, Long Island Sound, and

20 the Chesapeake Bay.

21 (2) ACID NEUTRALIZING CAPACITY.—The re22 port under paragraph (1) shall—

23 (A) include acid neutralizing capacity as

24 an indicator; and
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1 (B) identify as an objective under para2 graph (1) the objective of increasing the propor3 tion of water bodies in sensitive receptor areas

4 with an acid neutralizing capacity greater than

5 zero from the proportion identified in surveys

6 begun in 1984.

7 (3) UPDATED REPORT.—Not later than Decem8 ber 31, 2008, the Administrator shall submit to

9 Congress a report updating the report under para10 graph (1) and assessing the status and trends of

11 various environmental indicators for the regional

12 ecosystems referred to in paragraph (1).

13 (4) REPORTS UNDER THE NATIONAL ACID PRE14 CIPITATION ASSESSMENT PROGRAM.—The reports

15 under this subsection shall be subject to the require16 ments applicable to a report under section

17 103(j)(3)(E) of the Clean Air Act (42 U.S.C.

18 7403(j)(3)(E)).

19 (b) REGULATIONS.—

20 (1) DETERMINATION.—Not later than Decem21 ber 31, 2008, the Administrator shall determine

22 whether emissions reductions under section 4 are

23 sufficient to ensure achievement of the objectives

24 stated in subsection (a)(1).
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1 (2) PROMULGATION.—If the Administrator de2 termines under paragraph (1) that emissions reduc3 tions under section 4 are not sufficient to ensure

4 achievement of the objectives identified in subsection

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

6 than 2 years after making the finding, such regula7 tions, including modification of nitrogen oxide and

8 sulfur dioxide allowance allocations or any such

9 measure, as the Administrator determines are nec10 essary to protect the sensitive ecosystems described

11 in subsection (a)(1).

12 SEC. 9. GENERAL COMPLIANCE WITH OTHER PROVISIONS.

13 Except as expressly provided in this Act, compliance

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

15 operator of an affected facility from compliance with any

16 other law.

17 SEC. 10. MERCURY EMISSION STUDY AND CONTROL.

18 (a) STUDY AND REPORT.—The Administrator

19 shall—

20 (1) study the practicality of monitoring mercury

21 emissions from all combustion units that have a ca22 pacity equal to or greater than 250 mmBtu’s per

23 hour; and
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1 (2) not later than 2 years after the date of en2 actment of this Act, submit to Congress a report on

3 the results of the study.

4 (b) REGULATIONS CONCERNING MONITORING.—Not

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

6 under subsection (a), the Administrator shall promulgate

7 a regulation requiring the reporting of mercury emissions

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

9 250 mmBtu’s per hour.

10 (c) EMISSION CONTROLS.—

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

12 the commencement of monitoring activities under

13 subsection (b), the Administrator shall promulgate a

14 regulation controlling electric utility and industrial

15 source emissions of mercury.

16 (2) FACTORS.—The regulation shall take into

17 account technological feasibility, cost, and the pro18 jected reduction in levels of mercury emissions that

19 will result from implementation of this Act.

20 SEC. 11. DEPOSITION RESEARCH BY THE ENVIRONMENTAL

21 PROTECTION AGENCY.

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

23 a competitive grant program to fund research related to

24 the effects of nitrogen deposition on sensitive watersheds

25 and coastal estuaries in the Eastern United States.
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1 (b) CHEMISTRY OF LAKES AND STREAMS.—

2 (1) INITIAL REPORT.—Not later than Septem3 ber 30, 2001, the Administrator shall submit to the

4 Committee on Environment and Public Works of the

5 Senate and the Committee on Resources of the

6 House of Representatives a report on the health and

7 chemistry of lakes and streams of the Adirondacks

8 that were subjects of the report transmitted under

9 section 404 of Public Law 101–549 (commonly

10 known as the ‘‘Clean Air Act Amendments of

11 1990’’) (104 Stat. 2632).

12 (2) FOLLOWING REPORT.—Not later than 2

13 years after the date of the report under paragraph

14 (1), the Administrator shall submit a report updat15 ing the information contained in the initial report.

16 (c) AUTHORIZATION OF APPROPRIATIONS.—There

17 are authorized to be appropriated—

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

19 each of fiscal years 2000 through 2005; and

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

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

Æ