II

106TH CONGRESS

1ST SESSION S. 1949

To promote economically sound modernization of electric power generation

capacity in the United States, to establish requirements to improve

the combustion heat rate efficiency of fossil fuel-fired electric utility

generating units, to reduce emissions of mercury, carbon dioxide, nitrogen

oxides, and sulfur dioxide, to require that all fossil fuel-fired electric

utility generating units operating in the United States meet new source

review requirements, to promote the use of clean coal technologies, and

to promote alternative energy and clean energy sources such as solar,

wind, biomass, and fuel cells.

IN THE SENATE OF THE UNITED STATES

NOVEMBER 17, 1999

Mr. LEAHY introduced the following bill; which was read twice and referred

to the Committee on Finance

A BILL

To promote economically sound modernization of electric

power generation capacity in the United States, to establish requirements to improve the combustion heat rate

efficiency of fossil fuel-fired electric utility generating

units, to reduce emissions of mercury, carbon dioxide,

nitrogen oxides, and sulfur dioxide, to require that all

fossil fuel-fired electric utility generating units operating

in the United States meet new source review requirements, to promote the use of clean coal technologies,

and to promote alternative energy and clean energy

sources such as solar, wind, biomass, and fuel cells.
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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 Power Plant and Modernization Act of 1999’’.

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. Definitions.

Sec. 4. Combustion heat rate efficiency standards for fossil fuel-fired generating

units.

Sec. 5. Air emission standards for fossil fuel-fired generating units.

Sec. 6. Extension of renewable energy production credit.

Sec. 7. Megawatt hour generation fees.

Sec. 8. Clean Air Trust Fund.

Sec. 9. Accelerated depreciation for investor-owned generating units.

Sec. 10. Grants for publicly owned generating units.

Sec. 11. Recognition of permanent emission reductions in future climate change

implementation programs.

Sec. 12. Renewable and clean power generation technologies.

Sec. 13. Clean coal, advanced gas turbine, and combined heat and power demonstration program.

Sec. 14. Evaluation of implementation of this Act and other statutes.

Sec. 15. Assistance for workers adversely affected by reduced consumption of

coal.

Sec. 16. Community economic development incentives for communities adversely

affected by reduced consumption of coal.

Sec. 17. Carbon sequestration.

8 SEC. 2. FINDINGS AND PURPOSES.

9 (a) FINDINGS.—Congress finds that—

10 (1) the United States is relying increasingly on

11 old, needlessly inefficient, and highly polluting pow12 erplants to provide electricity;

13 (2) the pollution from those powerplants causes

14 a wide range of health and environmental damage,

15 including—
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1 (A) fine particulate matter that is associ2 ated with the deaths of approximately 50,000

3 Americans annually;

4 (B) urban ozone, commonly known as

5 ‘‘smog’’, that impairs normal respiratory func6 tions and is of special concern to individuals af7 flicted with asthma, emphysema, and other res8 piratory ailments;

9 (C) rural ozone that obscures visibility and

10 damages forests and wildlife;

11 (D) acid deposition that damages estu12 aries, lakes, rivers, and streams (and the plants

13 and animals that depend on them for survival)

14 and leaches heavy metals from the soil;

15 (E) mercury and heavy metal contamina16 tion that renders fish unsafe to eat, with espe17 cially serious consequences for pregnant women

18 and their fetuses;

19 (F) eutrophication of estuaries, lakes, riv20 ers, and streams; and

21 (G) global climate change that may fun22 damentally and irreversibly alter human, ani23 mal, and plant life;

24 (3) tax laws and environmental laws—
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1 (A) provide a very strong incentive for

2 electric utilities to keep old, dirty, and ineffi3 cient generating units in operation; and

4 (B) provide a strong disincentive to invest5 ing in new, clean, and efficient generating tech6 nologies;

7 (4) fossil fuel-fired power plants, consisting of

8 plants fueled by coal, fuel oil, and natural gas,

9 produce nearly two-thirds of the electricity generated

10 in the United States;

11 (5) since, according to the Department of En12 ergy, the average combustion heat rate efficiency of

13 fossil fuel-fired power plants in the United States is

14 33 percent, 67 percent of the heat generated by

15 burning the fuel is wasted;

16 (6) technology exists to increase the combustion

17 heat rate efficiency of coal combustion from 35 per18 cent to 50 percent above current levels, and techno19 logical advances are possible that would boost the

20 net combustion heat rate efficiency even more;

21 (7) coal-fired power plants are the leading

22 source of mercury emissions in the United States,

23 releasing an estimated 52 tons of this potent

24 neurotoxin each year;
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1 (8) in 1996, fossil fuel-fired power plants in the

2 United States produced over 2,000,000,000 tons of

3 carbon dioxide, the primary greenhouse gas;

4 (9) on average—

5 (A) fossil fuel-fired power plants emit

6 1,999 pounds of carbon dioxide for every mega7 watt hour of electricity produced;

8 (B) coal-fired power plants emit 2,110

9 pounds of carbon dioxide for every megawatt

10 hour of electricity produced; and

11 (C) coal-fired power plants emit 205

12 pounds of carbon dioxide for every million Brit13 ish thermal units of fuel consumed;

14 (10) the average fossil fuel-fired generating unit

15 in the United States commenced operation in 1964,

16 6 years before the Clean Air Act (42 U.S.C. 7401

17 et seq.) was amended to establish requirements for

18 stationary sources;

19 (11)(A) according to the Department of En20 ergy, only 23 percent of the 1,000 largest emitting

21 units are subject to stringent new source perform22 ance standards under section 111 of the Clean Air

23 Act (42 U.S.C. 7411); and
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1 (B) the remaining 77 percent, commonly re2 ferred to as ‘‘grandfathered’’ power plants, are sub3 ject to much less stringent requirements;

4 (12) on the basis of scientific and medical evi5 dence, exposure to mercury and mercury compounds

6 is of concern to human health and the environment;

7 (13) pregnant women and their developing

8 fetuses, women of childbearing age, and children are

9 most at risk for mercury-related health impacts such

10 as neurotoxicity;

11 (14) although exposure to mercury and mercury

12 compounds occurs most frequently through con13 sumption of mercury-contaminated fish, such expo14 sure can also occur through—

15 (A) ingestion of breast milk;

16 (B) ingestion of drinking water, and foods

17 other than fish, that are contaminated with

18 methyl mercury; and

19 (C) dermal uptake through contact with

20 soil and water;

21 (15) the report entitled ‘‘Mercury Study Report

22 to Congress’’ and submitted by the Environmental

23 Protection Agency under section 112(n)(1)(B) of the

24 Clean Air Act (42 U.S.C. 7412(n)(1)(B)), in con25 junction with other scientific knowledge, supports a
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1 plausible link between mercury emissions from com2 bustion of coal and other fossil fuels and mercury

3 concentrations in air, soil, water, and sediments;

4 (16)(A) the Environmental Protection Agency

5 report described in paragraph (15) supports a plau6 sible link between mercury emissions from combus7 tion of coal and other fossil fuels and methyl mer8 cury concentrations in freshwater fish;

9 (B) in 1997, 39 States issued health advisories

10 that warned the public about consuming mercury11 tainted fish, as compared to 27 States that issued

12 such advisories in 1993; and

13 (C) the number of mercury advisories nation14 wide increased from 899 in 1993 to 1,675 in 1996,

15 an increase of 86 percent;

16 (17) pollution from powerplants can be reduced

17 through adoption of modern technologies and prac18 tices, including—

19 (A) methods of combusting coal that are

20 intrinsically more efficient and less polluting,

21 such as pressurized fluidized bed combustion

22 and an integrated gasification combined cycle

23 system;
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1 (B) methods of combusting cleaner fuels,

2 such as gases from fossil and biological re3 sources and combined cycle turbines;

4 (C) treating flue gases through application

5 of pollution controls;

6 (D) methods of extracting energy from

7 natural, renewable resources of energy, such as

8 solar and wind sources;

9 (E) methods of producing electricity and

10 thermal energy from fuels without conventional

11 combustion, such as fuel cells; and

12 (F) combined heat and power methods of

13 extracting and using heat that would otherwise

14 be wasted, for the purpose of heating or cooling

15 office buildings, providing steam to processing

16 facilities, or otherwise increasing total effi17 ciency; and

18 (18) adopting the technologies and practices de19 scribed in paragraph (17) would increase competi20 tiveness and productivity, secure employment, save

21 lives, and preserve the future.

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

23 (1) to protect and preserve the environment

24 while safeguarding health by ensuring that each fos25 sil fuel-fired generating unit minimizes air pollution
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1 to levels that are technologically feasible through

2 modernization and application of pollution controls;

3 (2) to greatly reduce the quantities of mercury,

4 carbon dioxide, sulfur dioxide, and nitrogen oxides

5 entering the environment from combustion of fossil

6 fuels;

7 (3) to permanently reduce emissions of those

8 pollutants by increasing the combustion heat rate ef9 ficiency of fossil fuel-fired generating units to levels

10 achievable through—

11 (A) use of commercially available combus12 tion technology, including clean coal tech13 nologies such as pressurized fluidized bed com14 bustion and an integrated gasification combined

15 cycle system;

16 (B) installation of pollution controls;

17 (C) expanded use of renewable and clean

18 energy sources such as biomass, geothermal,

19 solar, wind, and fuel cells; and

20 (D) promotion of application of combined

21 heat and power technologies;

22 (4)(A) to create financial and regulatory incen23 tives to retire thermally inefficient generating units

24 and replace them with new units that employ high25 thermal-efficiency combustion technology; and
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1 (B) to increase use of renewable and clean en2 ergy sources such as biomass, geothermal, solar,

3 wind, and fuel cells;

4 (5) to establish the Clean Air Trust Fund to

5 fund the training, economic development, carbon se6 questration, and research, development, and dem7 onstration programs established under this Act;

8 (6) to eliminate the ‘‘grandfather’’ loophole in

9 the Clean Air Act relating to sources in operation

10 before the promulgation of standards under section

11 111 of that Act (42 U.S.C. 7411);

12 (7) to express the sense of Congress that per13 manent reductions in emissions of greenhouse gases

14 that are accomplished through the retirement of old

15 units and replacement by new units that meet the

16 combustion heat rate efficiency and emission stand17 ards specified in this Act should be credited to the

18 utility sector and the owner or operator in any cli19 mate change implementation program;

20 (8) to promote permanent and safe disposal of

21 mercury recovered through coal cleaning, flue gas

22 control systems, and other methods of mercury pol23 lution control;

24 (9) to increase public knowledge of the sources

25 of mercury exposure and the threat to public health
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1 from mercury, particularly the threat to the health

2 of pregnant women and their fetuses, women of

3 childbearing age, and children;

4 (10) to decrease significantly the threat to

5 human health and the environment posed by mer6 cury;

7 (11) to provide worker retraining for workers

8 adversely affected by reduced consumption of coal;

9 and

10 (12) to provide economic development incentives

11 for communities adversely affected by reduced con12 sumption of coal.

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) GENERATING UNIT.—The term ‘‘generating

19 unit’’ means an electric utility generating unit.

20 SEC. 4. COMBUSTION HEAT RATE EFFICIENCY STANDARDS

21 FOR FOSSIL FUEL-FIRED GENERATING

22 UNITS.

23 (a) STANDARDS.—

24 (1) IN GENERAL.—Not later than the day that

25 is 10 years after the date of enactment of this Act,
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1 each fossil fuel-fired generating unit that commences

2 operation on or before that day shall achieve and

3 maintain, at all operating levels, a combustion heat

4 rate efficiency of not less than 45 percent (based on

5 the higher heating value of the fuel).

6 (2) FUTURE GENERATING UNITS.—Each fossil

7 fuel-fired generating unit that commences operation

8 more than 10 years after the date of enactment of

9 this Act shall achieve and maintain, at all operating

10 levels, a combustion heat rate efficiency of not less

11 than 50 percent (based on the higher heating value

12 of the fuel), unless granted a waiver under sub13 section (d).

14 (b) TEST METHODS.—Not later than 2 years after

15 the date of enactment of this Act, the Administrator, in

16 consultation with the Secretary of Energy, shall promul17 gate methods for determining initial and continuing com18 pliance with this section.

19 (c) PERMIT REQUIREMENT.—Not later than 10 years

20 after the date of enactment of this Act, each generating

21 unit shall have a permit issued under title V of the Clean

22 Air Act (42 U.S.C. 7661 et seq.) that requires compliance

23 with this section.

24 (d) WAIVER OF COMBUSTION HEAT RATE EFFI25 CIENCY STANDARD.—
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1 (1) APPLICATION.—The owner or operator of a

2 generating unit that commences operation more than

3 10 years after the date of enactment of this Act may

4 apply to the Administrator for a waiver of the com5 bustion heat rate efficiency standard specified in

6 subsection (a)(2) that is applicable to that type of

7 generating unit.

8 (2) ISSUANCE.—The Administrator may grant

9 the waiver only if—

10 (A)(i) the owner or operator of the gener11 ating unit demonstrates that the technology to

12 meet the combustion heat rate efficiency stand13 ard is not commercially available; or

14 (ii) the owner or operator of the generating

15 unit demonstrates that, despite best technical

16 efforts and willingness to make the necessary

17 level of financial commitment, the combustion

18 heat rate efficiency standard is not achievable

19 at the generating unit; and

20 (B) the owner or operator of the gener21 ating unit enters into an agreement with the

22 Administrator to offset by a factor of 1.5 to 1,

23 using a method approved by the Administrator,

24 the emission reductions that the generating unit

25 does not achieve because of the failure to
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1 achieve the combustion heat rate efficiency

2 standard specified in subsection (a)(2).

3 (3) EFFECT OF WAIVER.—If the Administrator

4 grants a waiver under paragraph (1), the generating

5 unit shall be required to achieve and maintain, at all

6 operating levels, the combustion heat rate efficiency

7 standard specified in subsection (a)(1).

8 SEC. 5. AIR EMISSION STANDARDS FOR FOSSIL FUEL-FIRED

9 GENERATING UNITS.

10 (a) ALL FOSSIL FUEL-FIRED GENERATING

11 UNITS.—Not later than 10 years after the date of enact12 ment of this Act, each fossil fuel-fired generating unit, re13 gardless of its date of construction or commencement of

14 operation, shall be subject to, and operating in physical

15 and operational compliance with, the new source review

16 requirements under section 111 of the Clean Air Act (42

17 U.S.C. 7411).

18 (b) EMISSION RATES FOR SOURCES REQUIRED TO

19 MAINTAIN 45 PERCENT EFFICIENCY.—Not later than 10

20 years after the date of enactment of this Act, each fossil

21 fuel-fired generating unit subject to section 4(a)(1) shall

22 be in compliance with the following emission limitations:

23 (1) MERCURY.—Each coal-fired or fuel oil-fired

24 generating unit shall be required to remove 90 per-
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1 cent of the mercury contained in the fuel, calculated

2 in accordance with subsection (e).

3 (2) CARBON DIOXIDE.—

4 (A) NATURAL GAS-FIRED GENERATING

5 UNITS.—Each natural gas-fired generating unit

6 shall be required to achieve an emission rate of

7 not more than 0.9 pounds of carbon dioxide per

8 kilowatt hour of net electric power output.

9 (B) FUEL OIL-FIRED GENERATING

10 UNITS.—Each fuel oil-fired generating unit

11 shall be required to achieve an emission rate of

12 not more than 1.3 pounds of carbon dioxide per

13 kilowatt hour of net electric power output.

14 (C) COAL-FIRED GENERATING UNITS.—

15 Each coal-fired generating unit shall be re16 quired to achieve an emission rate of not more

17 than 1.55 pounds of carbon dioxide per kilowatt

18 hour of net electric power output.

19 (3) SULFUR DIOXIDE.—Each fossil fuel-fired

20 generating unit shall be required—

21 (A) to remove 95 percent of the sulfur di22 oxide that would otherwise be present in the

23 flue gas; and
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1 (B) to achieve an emission rate of not

2 more than 0.3 pounds of sulfur dioxide per mil3 lion British thermal units of fuel consumed.

4 (4) NITROGEN OXIDES.—Each fossil fuel-fired

5 generating unit shall be required—

6 (A) to remove 90 percent of nitrogen ox7 ides that would otherwise be present in the flue

8 gas; and

9 (B) to achieve an emission rate of not

10 more than 0.15 pounds of nitrogen oxides per

11 million British thermal units of fuel consumed.

12 (c) EMISSION RATES FOR SOURCES REQUIRED TO

13 MAINTAIN 50 PERCENT EFFICIENCY.—Each fossil fuel14 fired generating unit subject to section 4(a)(2) shall be

15 in compliance with the following emission limitations:

16 (1) MERCURY.—Each coal-fired or fuel oil-fired

17 generating unit shall be required to remove 90 per18 cent of the mercury contained in the fuel, calculated

19 in accordance with subsection (e).

20 (2) CARBON DIOXIDE.—

21 (A) NATURAL GAS-FIRED GENERATING

22 UNITS.—Each natural gas-fired generating unit

23 shall be required to achieve an emission rate of

24 not more than 0.8 pounds of carbon dioxide per

25 kilowatt hour of net electric power output.
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1 (B) FUEL OIL-FIRED GENERATING

2 UNITS.—Each fuel oil-fired generating unit

3 shall be required to achieve an emission rate of

4 not more than 1.2 pounds of carbon dioxide per

5 kilowatt hour of net electric power output.

6 (C) COAL-FIRED GENERATING UNITS.—

7 Each coal-fired generating unit shall be re8 quired to achieve an emission rate of not more

9 than 1.4 pounds of carbon dioxide per kilowatt

10 hour of net electric power output.

11 (3) SULFUR DIOXIDE.—Each fossil fuel-fired

12 generating unit shall be required—

13 (A) to remove 95 percent of the sulfur di14 oxide that would otherwise be present in the

15 flue gas; and

16 (B) to achieve an emission rate of not

17 more than 0.3 pounds of sulfur dioxide per mil18 lion British thermal units of fuel consumed.

19 (4) NITROGEN OXIDES.—Each fossil fuel-fired

20 generating unit shall be required—

21 (A) to remove 90 percent of nitrogen ox22 ides that would otherwise be present in the flue

23 gas; and
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1 (B) to achieve an emission rate of not

2 more than 0.15 pounds of nitrogen oxides per

3 million British thermal units of fuel consumed.

4 (d) PERMIT REQUIREMENT.—Not later than 10

5 years after the date of enactment of this Act, each gener6 ating unit shall have a permit issued under title V of the

7 Clean Air Act (42 U.S.C. 7661 et seq.) that requires com8 pliance with this section.

9 (e) COMPLIANCE DETERMINATION AND MONI10 TORING.—

11 (1) REGULATIONS.—Not later than 2 years

12 after the date of enactment of this Act, the Adminis13 trator, in consultation with the Secretary of Energy,

14 shall promulgate methods for determining initial and

15 continuing compliance with this section.

16 (2) CALCULATION OF MERCURY EMISSION RE17 DUCTIONS.—Not later than 2 years after the date of

18 enactment of this Act, the Administrator shall pro19 mulgate fuel sampling techniques and emission mon20 itoring techniques for use by generating units in cal21 culating mercury emission reductions for the pur22 poses of this section.

23 (3) REPORTING.—

24 (A) IN GENERAL.—Not less often than

25 quarterly, the owner or operator of a generating
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1 unit shall submit a pollutant-specific emission

2 report for each pollutant covered by this sec3 tion.

4 (B) SIGNATURE.—Each report required

5 under subparagraph (A) shall be signed by a re6 sponsible official of the generating unit, who

7 shall certify the accuracy of the report.

8 (C) PUBLIC REPORTING.—The Adminis9 trator shall annually make available to the pub10 lic, through 1 or more published reports and 1

11 or more forms of electronic media, facility-spe12 cific emission data for each generating unit and

13 pollutant covered by this section.

14 (D) CONSUMER DISCLOSURE.—Not later

15 than 2 years after the date of enactment of this

16 Act, the Administrator shall promulgate regula17 tions requiring each owner or operator of a gen18 erating unit to disclose to residential consumers

19 of electricity generated by the unit, on a regular

20 basis (but not less often than annually) and in

21 a manner convenient to the consumers, data

22 concerning the level of emissions by the gener23 ating unit of each pollutant covered by this sec24 tion and each air pollutant covered by section

25 111 of the Clean Air Act (42 U.S.C. 7411).
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1 (f) DISPOSAL OF MERCURY CAPTURED OR RECOV2 ERED THROUGH EMISSION CONTROLS.—

3 (1) CAPTURED OR RECOVERED MERCURY.—Not

4 later than 2 years after the date of enactment of

5 this Act, the Administrator shall promulgate regula6 tions to ensure that mercury that is captured or re7 covered through the use of an emission control, coal

8 cleaning, or another method is disposed of in a man9 ner that ensures that—

10 (A) the hazards from mercury are not

11 transferred from 1 environmental medium to

12 another; and

13 (B) there is no release of mercury into the

14 environment.

15 (2) MERCURY-CONTAINING SLUDGES AND

16 WASTES.—The regulations promulgated by the Ad17 ministrator under paragraph (1) shall ensure that

18 mercury-containing sludges and wastes are handled

19 and disposed of in accordance with all applicable

20 Federal and State laws (including regulations).

21 (g) PUBLIC REPORTING OF FACILITY-SPECIFIC

22 EMISSION DATA.—

23 (1) IN GENERAL.—The Administrator shall an24 nually make available to the public, through 1 or

25 more published reports and the Internet, facility-spe-
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1 cific emission data for each generating unit and for

2 each pollutant covered by this section.

3 (2) SOURCE OF DATA.—The emission data shall

4 be taken from the emission reports submitted under

5 subsection (e)(3).

6 SEC. 6. EXTENSION OF RENEWABLE ENERGY PRODUCTION

7 CREDIT.

8 Section 45(c) of the Internal Revenue Code of 1986

9 (relating to definitions) is amended—

10 (1) in paragraph (1)—

11 (A) in subparagraph (A), by striking

12 ‘‘and’’;

13 (B) in subparagraph (B), by striking the

14 period and inserting ‘‘, and’’; and

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

16 ‘‘(C) solar power.’’;

17 (2) in paragraph (3)—

18 (A) by inserting ‘‘, and December 31,

19 1998, in the case of a facility using solar power

20 to produce electricity’’ after ‘‘electricity’’; and

21 (B) by striking ‘‘1999’’ and inserting

22 ‘‘2010’’; and

23 (3) by adding at the end the following:

24 ‘‘(4) SOLAR POWER.—The term ‘solar power’

25 means solar power harnessed through—
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1 ‘‘(A) photovoltaic systems,

2 ‘‘(B) solar boilers that provide process

3 heat, and

4 ‘‘(C) any other means.’’.

5 SEC. 7. MEGAWATT HOUR GENERATION FEES.

6 (a) IN GENERAL.—Chapter 38 of the Internal Rev7 enue Code of 1986 (relating to miscellaneous excise taxes)

8 is amended by inserting after subchapter D the following:

9 ‘‘Subchapter E—Megawatt Hour Generation

10 Fees

‘‘Sec. 4691. Imposition of fees.

11 ‘‘SEC. 4691. IMPOSITION OF FEES.

12 ‘‘(a) TAX IMPOSED.—There is hereby imposed on

13 each covered fossil fuel-fired generating unit a tax equal

14 to 30 cents per megawatt hour of electricity produced by

15 the covered fossil fuel-fired generating unit.

16 ‘‘(b) ADJUSTMENT OF RATES.—Not less often than

17 once every 2 years beginning after 2002, the Secretary,

18 in consultation with the Administrator of the Environ19 mental Protection Agency, shall evaluate the rate of the

20 tax imposed by subsection (a) and increase the rate if nec21 essary for any succeeding calendar year to ensure that the

22 Clean Air Trust Fund established by section 9511 has suf23 ficient amounts to fully fund the activities described in

24 section 9511(c).
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1 ‘‘(c) PAYMENT OF TAX.—The tax imposed by this

2 section shall be paid quarterly by the owner or operator

3 of each covered fossil fuel-fired generating unit.

4 ‘‘(d) COVERED FOSSIL FUEL-FIRED GENERATING

5 UNIT.—The term ‘covered fossil fuel-fired generating unit’

6 means an electric utility generating unit that—

7 ‘‘(1) is powered by fossil fuels;

8 ‘‘(2) has a generating capacity of 5 or more

9 megawatts; and

10 ‘‘(3) because of the date on which the gener11 ating unit commenced commercial operation, is not

12 subject to all regulations promulgated under section

13 111 of the Clean Air Act (42 U.S.C. 7411).’’.

14 (b) CONFORMING AMENDMENT.—The table of sub15 chapters for such chapter 38 is amended by inserting after

16 the item relating to subchapter D the following:

‘‘SUBCHAPTER E. Megawatt hour generation fees.’’.

17 (c) EFFECTIVE DATE.—The amendments made by

18 this section shall apply to electricity produced in calendar

19 years beginning after December 31, 2000.

20 SEC. 8. CLEAN AIR TRUST FUND.

21 (a) IN GENERAL.—Subchapter A of chapter 98 of the

22 Internal Revenue Code of 1986 (relating to trust fund

23 code) is amended by adding at the end the following:
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1 ‘‘SEC. 9511. CLEAN AIR TRUST FUND.

2 ‘‘(a) CREATION OF TRUST FUND.—There is estab3 lished in the Treasury of the United States a trust fund

4 to be known as the ‘Clean Air Trust Fund’ (hereafter re5 ferred to in this section as the ‘Trust Fund’), consisting

6 of such amounts as may be appropriated or credited to

7 the Trust Fund as provided in this section or section

8 9602(b).

9 ‘‘(b) TRANSFERS TO TRUST FUND.—There are here10 by appropriated to the Trust Fund amounts equivalent to

11 the taxes received in the Treasury under section 4691.

12 ‘‘(c) EXPENDITURES FROM TRUST FUND.—Amounts

13 in the Trust Fund shall be available, without further Act

14 of appropriation, upon request by the head of the appro15 priate Federal agency in such amounts as the agency head

16 determines are necessary—

17 ‘‘(1) to provide funding under section 12 of the

18 Clean Power Plant and Modernization Act of 1999,

19 as in effect on the date of enactment of this section;

20 ‘‘(2) to provide funding for the demonstration

21 program under section 13 of such Act, as so in ef22 fect;

23 ‘‘(3) to provide assistance under section 15 of

24 such Act, as so in effect;

25 ‘‘(4) to provide assistance under section 16 of

26 such Act, as so in effect; and
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1 ‘‘(5) to provide funding under section 17 of

2 such Act, as so in effect.’’.

3 (b) CONFORMING AMENDMENT.—The table of sec4 tions for such subchapter A is amended by adding at the

5 end the following:

‘‘Sec. 9511. Clean Air Trust Fund.’’.

6 SEC. 9. ACCELERATED DEPRECIATION FOR INVESTOR7 OWNED GENERATING UNITS.

8 (a) IN GENERAL.—Section 168(e)(3) of the Internal

9 Revenue Code of 1986 (relating to classification of certain

10 property) is amended—

11 (1) in subparagraph (E) (relating to 15-year

12 property), by striking ‘‘and’’ at the end of clause

13 (ii), by striking the period at the end of clause (iii)

14 and inserting ‘‘, and’’, and by adding at the end the

15 following:

16 ‘‘(iv) any 45-percent efficient fossil

17 fuel-fired generating unit.’’; and

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

19 ‘‘(F) 12-YEAR PROPERTY.—The term ‘12-

20 year property’ includes any 50-percent efficient

21 fossil fuel-fired generating unit.’’.

22 (b) DEFINITIONS.—Section 168(i) of the Internal

23 Revenue Code of 1986 (relating to definitions and special

24 rules) is amended by adding at the end the following:
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1 ‘‘(15) FOSSIL FUEL-FIRED GENERATING

2 UNITS.—

3 ‘‘(A) 50-PERCENT EFFICIENT FOSSIL

4 FUEL-FIRED GENERATING UNIT.—The term

5 ‘50-percent efficient fossil fuel-fired generating

6 unit’ means any property used in an investor7 owned fossil fuel-fired generating unit pursuant

8 to a plan approved by the Secretary, in con9 sultation with the Administrator of the Envi10 ronmental Protection Agency, to place into

11 service such a unit that is in compliance with

12 sections 4(a)(2) and 5(c) of the Clean Power

13 Plant and Modernization Act of 1999, as in ef14 fect on the date of enactment of this paragraph.

15 ‘‘(B) 45-PERCENT EFFICIENT FOSSIL

16 FUEL-FIRED GENERATING UNIT.—The term

17 ‘45-percent efficient fossil fuel-fired generating

18 unit’ means any property used in an investor19 owned fossil fuel-fired generating unit pursuant

20 to a plan so approved to place into service such

21 a unit that is in compliance with sections

22 4(a)(1) and 5(b) of such Act, as so in effect.’’.

23 (c) CONFORMING AMENDMENT.—The table contained

24 in section 168(c) of the Internal Revenue Code of 1986

25 (relating to applicable recovery period) is amended by in-
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1 serting after the item relating to 10-year property the fol2 lowing:

‘‘12-year property .................................................................... 12 years’’.

3 (d) EFFECTIVE DATE.—The amendments made by

4 this section shall apply to property used after the date of

5 enactment of this Act.

6 SEC. 10. GRANTS FOR PUBLICLY OWNED GENERATING

7 UNITS.

8 Any capital expenditure made after the date of enact9 ment of this Act to purchase, install, and bring into com10 mercial operation any new publicly owned generating unit

11 that—

12 (1) is in compliance with sections 4(a)(1) and

13 5(b) shall, for a 15-year period, be eligible for par14 tial reimbursement through annual grants made by

15 the Secretary of the Treasury, in consultation with

16 the Administrator, in an amount equal to the mone17 tary value of the depreciation deduction that would

18 be realized by reason of section 168(c)(3)(E) of the

19 Internal Revenue Code of 1986 by a similarly-situ20 ated investor-owned generating unit over that pe21 riod; and

22 (2) is in compliance with sections 4(a)(2) and

23 5(c) shall, over a 12-year period, be eligible for par24 tial reimbursement through annual grants made by

25 the Secretary of the Treasury, in consultation with
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1 the Administrator, in an amount equal to the mone2 tary value of the depreciation deduction that would

3 be realized by reason of section 168(c)(3)(D) of such

4 Code by a similarly-situated investor-owned gener5 ating unit over that period.

6 SEC. 11. RECOGNITION OF PERMANENT EMISSION REDUC7 TIONS IN FUTURE CLIMATE CHANGE IMPLE8 MENTATION PROGRAMS.

9 It is the sense of Congress that—

10 (1) permanent reductions in emissions of car11 bon dioxide and nitrogen oxides that are accom12 plished through the retirement of old generating

13 units and replacement by new generating units that

14 meet the combustion heat rate efficiency and emis15 sion standards specified in this Act, or through re16 placement of old generating units with nonpolluting

17 renewable power generation technologies, should be

18 credited to the utility sector, and to the owner or op19 erator that retires or replaces the old generating

20 unit, in any climate change implementation program

21 enacted by Congress;

22 (2) the base year for calculating reductions

23 under a program described in paragraph (1) should

24 be the calendar year preceding the calendar year in

25 which this Act is enacted; and
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1 (3) a reasonable portion of any monetary value

2 that may accrue from the crediting described in

3 paragraph (1) should be passed on to utility cus4 tomers.

5 SEC. 12. RENEWABLE AND CLEAN POWER GENERATION

6 TECHNOLOGIES.

7 (a) IN GENERAL.—Under the Renewable Energy and

8 Energy Efficiency Technology Act of 1989 (42 U.S.C.

9 12001 et seq.), the Secretary of Energy shall fund re10 search and development programs and commercial dem11 onstration projects and partnerships to demonstrate the

12 commercial viability and environmental benefits of electric

13 power generation from—

14 (1) biomass (excluding unseparated municipal

15 solid waste), geothermal, solar, and wind tech16 nologies; and

17 (2) fuel cells.

18 (b) TYPES OF PROJECTS.—Demonstration projects

19 may include solar power tower plants, solar dishes and en20 gines, co-firing of biomass with coal, biomass modular sys21 tems, next-generation wind turbines and wind turbine

22 verification projects, geothermal energy conversion, and

23 fuel cells.

24 (c) AUTHORIZATION OF APPROPRIATIONS.—In addi25 tion to amounts made available under any other law, there
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1 is authorized to be appropriated to carry out this section

2 $75,000,000 for each of fiscal years 2001 through 2010.

3 SEC. 13. CLEAN COAL, ADVANCED GAS TURBINE, AND COM4 BINED HEAT AND POWER DEMONSTRATION

5 PROGRAM.

6 (a) IN GENERAL.—Under subtitle B of title XXI of

7 the Energy Policy Act of 1992 (42 U.S.C. 13471 et seq.),

8 the Secretary of Energy shall establish a program to fund

9 projects and partnerships designed to demonstrate the ef10 ficiency and environmental benefits of electric power gen11 eration from—

12 (1) clean coal technologies, such as pressurized

13 fluidized bed combustion and an integrated gasifi14 cation combined cycle system;

15 (2) advanced gas turbine technologies, such as

16 flexible midsized gas turbines and baseload utility

17 scale applications; and

18 (3) combined heat and power technologies.

19 (b) SELECTION CRITERIA.—

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

21 the date of enactment of this Act, the Secretary of

22 Energy shall promulgate criteria and procedures for

23 selection of demonstration projects and partnerships

24 to be funded under subsection (a).
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1 (2) REQUIRED CRITERIA.—At a minimum, the

2 selection criteria shall include—

3 (A) the potential of a proposed demonstra4 tion project or partnership to reduce or avoid

5 emissions of pollutants covered by section 5 and

6 air pollutants covered by section 111 of the

7 Clean Air Act (42 U.S.C. 7411); and

8 (B) the potential commercial viability of

9 the proposed demonstration project or partner10 ship.

11 (c) AUTHORIZATION OF APPROPRIATIONS.—

12 (1) IN GENERAL.—In addition to amounts

13 made available under any other law, there is author14 ized to be appropriated to carry out this section

15 $75,000,000 for each of fiscal years 2001 through

16 2010.

17 (2) DISTRIBUTION.—The Secretary shall make

18 reasonable efforts to ensure that, under the program

19 established under this section, the same amount of

20 funding is provided for demonstration projects and

21 partnerships under each of paragraphs (1), (2), and

22 (3) of subsection (a).
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1 SEC. 14. EVALUATION OF IMPLEMENTATION OF THIS ACT

2 AND OTHER STATUTES.

3 (a) IN GENERAL.—Not later than 2 years after the

4 date of enactment of this Act, the Secretary of Energy,

5 in consultation with the Chairman of the Federal Energy

6 Regulatory Commission and the Administrator, shall sub7 mit to Congress a report on the implementation of this

8 Act.

9 (b) IDENTIFICATION OF CONFLICTING LAW.—The

10 report shall identify any provision of the Energy Policy

11 Act of 1992 (Public Law 102–486), the Energy Supply

12 and Environmental Coordination Act of 1974 (15 U.S.C.

13 791 et seq.), the Public Utility Regulatory Policies Act

14 of 1978 (16 U.S.C. 2601 et seq.), or the Powerplant and

15 Industrial Fuel Use Act of 1978 (42 U.S.C. 8301 et seq.),

16 or the amendments made by those Acts, that conflicts with

17 the intent or efficient implementation of this Act.

18 (c) RECOMMENDATIONS.—The report shall include

19 recommendations from the Secretary of Energy, the

20 Chairman of the Federal Energy Regulatory Commission,

21 and the Administrator for legislative or administrative

22 measures to harmonize and streamline the statutes speci23 fied in subsection (b) and the regulations implementing

24 those statutes.
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1 SEC. 15. ASSISTANCE FOR WORKERS ADVERSELY AF2 FECTED BY REDUCED CONSUMPTION OF

3 COAL.

4 In addition to amounts made available under any

5 other law, there is authorized to be appropriated

6 $75,000,000 for each of fiscal years 2001 through 2015

7 to provide assistance, under the economic dislocation and

8 worker adjustment assistance program of the Department

9 of Labor authorized by title III of the Job Training Part10 nership Act (29 U.S.C. 1651 et seq.), to coal industry

11 workers who are terminated from employment as a result

12 of reduced consumption of coal by the electric power gen13 eration industry.

14 SEC. 16. COMMUNITY ECONOMIC DEVELOPMENT INCEN15 TIVES FOR COMMUNITIES ADVERSELY AF16 FECTED BY REDUCED CONSUMPTION OF

17 COAL.

18 In addition to amounts made available under any

19 other law, there is authorized to be appropriated

20 $75,000,000 for each of fiscal years 2001 through 2015

21 to provide assistance, under the economic adjustment pro22 gram of the Department of Commerce authorized by the

23 Public Works and Economic Development Act of 1965 (42

24 U.S.C. 3121 et seq.), to assist communities adversely af25 fected by reduced consumption of coal by the electric

26 power generation industry.
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1 SEC. 17. CARBON SEQUESTRATION.

2 (a) CARBON SEQUESTRATION STRATEGY.—In addi3 tion to amounts made available under any other law, there

4 is authorized to be appropriated to the Environmental

5 Protection Agency and the Department of Energy for each

6 of fiscal years 2001 through 2003 a total of $15,000,000

7 to conduct research and development activities in basic

8 and applied science in support of development by Sep9 tember 30, 2003, of a carbon sequestration strategy that

10 is designed to offset all growth in carbon dioxide emissions

11 in the United States after 2010.

12 (b) METHODS FOR BIOLOGICALLY SEQUESTERING

13 CARBON DIOXIDE.—In addition to amounts made avail14 able under any other law, there is authorized to be appro15 priated to the Environmental Protection Agency and the

16 Department of Agriculture for each of fiscal years 2001

17 through 2010 a total of $30,000,000 to carry out soil res18 toration, tree planting, wetland protection, and other

19 methods of biologically sequestering carbon dioxide.

20 (c) LIMITATION.—A project carried out using funds

21 made available under this section shall not be used to off22 set any emission reduction required under any other provi23 sion of this Act.

Æ