```

[Congressional Bills 111th Congress]
[From the U.S. Government Publishing Office]
[S. 2995 Introduced in Senate (IS)]

111th CONGRESS
  2d Session
                                S. 2995

To amend the Clean Air Act to establish a national uniform multiple air 
    pollutant regulatory program for the electric generating sector.

_______________________________________________________________________

                   IN THE SENATE OF THE UNITED STATES

                            February 4, 2010

  Mr. Carper (for himself, Mr. Alexander, Ms. Klobuchar, Ms. Collins, 
 Mrs. Feinstein, Mr. Gregg, Mrs. Shaheen, Mr. Graham, Mr. Kaufman, Mr. 
 Schumer, Mr. Lieberman, and Ms. Snowe) introduced the following bill; 
 which was read twice and referred to the Committee on Environment and 
                              Public Works

_______________________________________________________________________

                                 A BILL

 
To amend the Clean Air Act to establish a national uniform multiple air 
    pollutant regulatory program for the electric generating sector.

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

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Clean Air Act Amendments of 2010''.

SEC. 2. FINDINGS AND PURPOSES.

    Section 401 of the Clean Air Act (42 U.S.C. 7651) is amended to 
read as follows:

``SEC. 401. FINDINGS AND PURPOSES.

    ``(a) Findings.--Congress finds that--
            ``(1) the presence of acidic compounds and associated 
        precursors in the atmosphere and in deposition from the 
        atmosphere represents a threat to natural resources, 
        ecosystems, materials, visibility, and public health;
            ``(2) the principal sources of the acidic compounds and 
        those precursors in the atmosphere are emissions of sulfur and 
        nitrogen oxides from the combustion of fossil fuels;
            ``(3) the problem of acid deposition is of national and 
        international significance;
            ``(4) strategies and technologies for the control of 
        precursors to acid deposition exist now that are economically 
        feasible, and improved methods are expected to become 
        increasingly available over the next decade;
            ``(5) current and future generations of people in the 
        United States will be adversely affected by delaying measures 
        to remedy the problem;
            ``(6) reduction of total atmospheric loading of sulfur 
        dioxide and nitrogen oxides will enhance protection of the 
        public health and welfare and the environment;
            ``(7) control measures to reduce precursor emissions from 
        steam-electric generating units should be initiated without 
        delay;
            ``(8) exposure to sulfur oxides is associated with--
                    ``(A) decreased lung function and respiratory 
                symptoms, in exercising asthmatics; and
                    ``(B) more serious indicators of adverse 
                respiratory effects, such as respiratory-related 
                emergency department visits and hospital admissions, in 
                the general population;
            ``(9) exposure to nitrogen oxides is associated with 
        worsened asthma symptoms, increased respiratory illnesses and 
        symptoms, and serious indicators of adverse respiratory effects 
        such as respiratory-related emergency department visits and 
        hospital admissions;
            ``(10) gaseous emissions of sulfur oxides and nitrogen 
        oxides may be transformed in the atmosphere to form particles;
            ``(11) exposure to those particles has been associated with 
        adverse health and welfare effects, including--
                    ``(A) premature mortality;
                    ``(B) aggravation of respiratory and cardiovascular 
                disease (as indicated by hospital admissions and 
                emergency department visits);
                    ``(C) changes in lung function;
                    ``(D) increased respiratory symptoms (such as 
                coughing, wheezing, and shortness of breath);
                    ``(E) impairment of visibility;
                    ``(F) adverse effects on ecosystem processes;
                    ``(G) impacts on climate; and
                    ``(H) damage or soiling of structures and property;
            ``(12) in addition to the public welfare effects of 
        materials damage and visibility, the ecological effects due to 
        both gas and particle deposition of nitrogen and sulfur 
        compounds include acidification (due to both nitrogen and 
        sulfur), excess nitrogen enrichment, and interactions between 
        sulfur and methylmercury production;
            ``(13) nitrogen oxide can react with volatile organic 
        compounds in the presence of heat and sunlight to form ground-
        level ozone;
            ``(14) exposure to ground-level ozone can--
                    ``(A) cause symptoms such as wheezing and shortness 
                of breath;
                    ``(B) inflame the linings of the lungs;
                    ``(C) aggravate respiratory illnesses such as 
                asthma, emphysema, and bronchitis, leading to increased 
                medication use, school absences, doctor, and emergency 
                department visits and hospital admissions;
                    ``(D) increase susceptibility to respiratory 
                infection;
                    ``(E) in the case of long-term exposure, 
                permanently damage lung tissue; and
                    ``(F) in the case of short-term exposure, be 
                associated with increased nonaccidental and 
                cardiopulmonary mortality;
            ``(15) exposure to ozone damages vegetation and ecosystems;
            ``(16) specifically, ozone exposure can visibly damage the 
        leaves of plants and photosynthesis, the process by which 
        plants produce food;
            ``(17) impaired food production leads to reduced plant 
        growth and reproduction, resulting in reduced forestry 
        production, crop yields, and overall plant vigor;
            ``(18) loss of vigor can result in increased susceptibility 
        of plants to insect attack, disease, harsh weather, and 
        interspecies competition;
            ``(19) all of those adverse effects of ozone have 
        implications for global crop production and food security; and
            ``(20) visible ozone injury to leaves can result in a loss 
        of aesthetic value in areas of special scenic significance, 
        such as national parks and wilderness areas.
    ``(b) Purposes.--The purposes of this title are--
            ``(1) to reduce the adverse public and environmental health 
        effects caused by the emission of sulfur dioxide and nitrogen 
        oxides, including the effects of acid deposition, particulate 
        matter, and ozone, through reductions in annual emissions of 
        sulfur dioxide and nitrogen oxides in the 48 contiguous States 
        and the District of Columbia;
            ``(2) to effectuate those reductions by requiring 
        compliance by affected sources with prescribed emission 
        limitations by specified deadlines, which limitations may be 
        met through alternative methods of compliance provided by an 
        emission allocation and transfer system; and
            ``(3) to encourage energy conservation, use of renewable 
        and clean alternative technologies, and pollution prevention as 
        a long-range strategy, consistent with this title, for reducing 
        air pollution and other adverse impacts of energy production 
        and use.''.

SEC. 3. REVISIONS TO SULFUR DIOXIDE ALLOWANCE PROGRAM.

    (a) In General.--Title IV of the Clean Air Act (relating to acid 
deposition control) (42 U.S.C. 7651 et seq.) is amended by adding at 
the end the following:

``SEC. 417. INTERIM CLEAN AIR INTERSTATE RULE.

    ``(a) In General.--Notwithstanding any other provision of law, the 
Clean Air Interstate Rule and related Federal implementation plans 
promulgated and modified by the Administrator on May 12, 2005 (70 Fed. 
Reg. 25162), April 28, 2006 (71 Fed. Reg. 25288 and 25328), October 19, 
2007 (72 Fed. Reg. 59190), November 2, 2007 (72 Fed. Reg. 62338), April 
28, 2008 (73 Fed. Reg. 22818), and November 3, 2009 (74 Fed. Reg. 
56721), shall remain in force and effect with respect to all provisions 
relating in any way to nitrogen oxides and sulfur dioxide emitted 
through calendar year 2011.
    ``(b) Exceptions.--
            ``(1) In general.--Subsection (a) shall not apply with 
        respect to the response of the Administrator (71 Fed. Reg. 
        25328 (April 28, 2006)) to the petition of the State of North 
        Carolina under section 126.
            ``(2) Ozone programs.--Any provision of the rules referred 
        to in subsection (a) relating to the establishment and 
        implementation of a seasonal ozone emission cap-and-trade 
        program for nitrogen oxides shall not expire, but shall remain 
        in full force and effect, with respect to nitrogen oxides 
        emitted in calendar year 2012 and thereafter.
            ``(3) Revisions.--
                    ``(A) In general.--Notwithstanding paragraph (2), 
                if the Administrator makes the determination described 
                in subparagraph (B), the Administrator may--
                            ``(i) not later than January 1, 2020, and 
                        every 5 years thereafter, revise the provisions 
                        referred to in paragraph (2) to reduce the 
                        total quantity of tons of nitrogen oxides in--
                                    ``(I) the ozone season nitrogen 
                                oxides budget for electric generating 
                                units;
                                    ``(II) any ozone season nitrogen 
                                oxides budget for nonelectric 
                                generating units; and
                                    ``(III) the ozone season nitrogen 
                                oxides trading budget for any State 
                                that is, or the sources in which are, 
                                subject to those provisions; and
                            ``(ii) make those provisions consistent, to 
                        the extent the Administrator determines is 
                        necessary or appropriate, with the requirements 
                        of the regulations promulgated in accordance 
                        with section 419(e).
                    ``(B) Determination.--The determination described 
                in this subparagraph is a determination by the 
                Administrator that emissions should be reduced 
                further--
                            ``(i) to protect public health or the 
                        environment;
                            ``(ii) to assist with attainment or 
                        maintenance with respect to national ambient 
                        air quality standards; or
                            ``(iii) to assist States in meeting 
                        emission reduction obligations under section 
                        110(a)(2)(D).
            ``(4) Elimination of fuel adjustment factors.--Not later 
        than 90 days after the date of enactment of this section, the 
        Administrator may--
                    ``(A) eliminate any allocation of nitrogen oxide 
                allowances based on fuel-adjusted heat-input under 
                sections 96.140, 96.142, 96.340, and 96.342 of title 
                40, Code of Federal Regulations (or successor 
                regulations); and
                    ``(B) use a different distribution method for those 
                nitrogen oxide allowances.

``SEC. 418. PHASE III SULFUR DIOXIDE REQUIREMENTS.

    ``(a) Establishment.--Not later than January 1, 2011, the 
Administrator shall promulgate regulations to establish, for affected 
units in the 48 contiguous States and the District of Columbia, a 
sulfur dioxide allowance trading program to reduce sulfur dioxide 
emissions from affected units.
    ``(b) Applicability.--After January 1, 2012--
            ``(1) each affected unit shall be subject to regulation 
        under this section; and
            ``(2) each source that includes 1 or more such affected 
        units shall be considered to be an affected source under this 
        section.
    ``(c) Limitations on Emissions.--
            ``(1) Prohibition.--
                    ``(A) In general.--Beginning on January 1, 2012, it 
                shall be unlawful for the affected units at an affected 
                source to emit a total number of tons of sulfur dioxide 
                during a calendar year in excess of the number of tons 
                authorized by the sulfur dioxide allowances held for 
                the affected source for that year by the owners and 
                operators of the affected source and affected units.
                    ``(B) Qualification.--Only sulfur dioxide 
                allowances described in paragraphs (2), (3), and (5) of 
                subsection (d) shall be held in order to meet the 
                requirements of subparagraph (A).
            ``(2) Limitation on total emissions.--The Administrator 
        shall issue allowances authorizing an annual tonnage of 
        emissions of sulfur dioxide from affected units in the United 
        States equal to--
                    ``(A) for each of calendar years 2012 through 2014, 
                3,500,000 tons;
                    ``(B) for each of calendar years 2015 through 2017, 
                2,000,000 tons;
                    ``(C) for each calendar years 2018 through 2020, 
                1,500,000 tons; and
                    ``(D) for calendar year 2021 and each calendar year 
                thereafter--
                            ``(i) 1,500,000 tons; or
                            ``(ii) a lesser quantity, if the 
                        Administrator determines that emissions should 
                        be reduced further--
                                    ``(I) to protect public health or 
                                the environment;
                                    ``(II) to assist with attainment or 
                                maintenance with respect to the 
                                attainment of national ambient air 
                                quality standards; or
                                    ``(III) to assist States in meeting 
                                emission reduction obligations under 
                                section 110(a)(2)(D).
            ``(3) Regulations.--The regulations promulgated by the 
        Administrator to carry out this section shall establish 
        requirements for the allowance trading program under this 
        section, including requirements concerning--
                    ``(A) the selection of a designated representative 
                for each affected source, who shall make all 
                submissions to the Administrator under this section for 
                the affected source;
                    ``(B) the issuance, recording, tracking, holding, 
                transfer, auction, and use of sulfur dioxide 
                allowances;
                    ``(C) the monitoring and reporting of emissions, 
                quality assurance of data, and recordkeeping, which 
                shall be consistent with subsections (a) and (d) of 
                section 412, as applied to the owners and operators of 
                an affected unit and an affected source, except that 
                subsection (a) shall apply in lieu of the deadlines for 
                promulgation of regulations under subsections (a) and 
                (d) of section 412;
                    ``(D) excess emission penalties and offsets in 
                accordance with section 411;
                    ``(E) permits in accordance with section 408(h)(3) 
                and title V, as applied to--
                            ``(i) an affected unit and an affected 
                        source; and
                            ``(ii) allowances under subsection (d);
                    ``(F) provisions that require--
                            ``(i) a statement submitted by the 
                        designated representative of an owner or 
                        operator that the owner or operator will hold 
                        allowances authorizing emissions equaling not 
                        less than the actual emissions of the affected 
                        units at the affected source, in accordance 
                        with this section, to be considered to meet the 
                        compliance planning requirements of title V; 
                        and
                            ``(ii) recording by the Administrator of a 
                        transfer of allowances to amend automatically 
                        all applicable permit applications, compliance 
                        plans, and permits; and
                    ``(G) the public availability of all information 
                concerning the activities described in subparagraphs 
                (A) through (E) that is not confidential or is emission 
                data that, pursuant to section 114(c), cannot be 
                confidential.
    ``(d) Allowances.--
            ``(1) In general.--Not later than January 1, 2011, the 
        Administrator shall promulgate regulations providing for the 
        distribution of sulfur dioxide allowances issued in accordance 
        with subsection (c)(2).
            ``(2) Distribution.--The regulations shall provide that--
                    ``(A) the same total number of allowances issued 
                under section 405 that are required to be offered for 
                sale at auction in calendar year 2011 under subsection 
                (c)(7), and paragraphs (1) and (2) of subsection (d), 
                of section 416 shall be auctioned in each of vintage 
                years 2012 through 2017;
                    ``(B) for vintage year 2018 and each calendar year 
                thereafter, the number of allowances auctioned shall 
                increase by 10 percent each year; and
                    ``(C) subject to paragraph (3), the remaining 
                allowances shall be distributed in 2 pools that are 
                determined by the Administrator to provide for a fair 
                and equitable distribution of allowances between--
                            ``(i) affected units that received Phase II 
                        allowance allocations under sections 403 and 
                        405; and
                            ``(ii) affected units that did not receive 
                        any Phase II allowance allocations under 
                        sections 403 and 405.
            ``(3) Requirements relating to pools.--
                    ``(A) In general.--The Administrator shall 
                determine the fairness and equitability of the size of 
                the pools described in paragraph (2)(C) based on the 
                Phase II allowance allocations and not on the current 
                ownership of those allowances.
                    ``(B) Distribution.--
                            ``(i) Accounts.--Allowances in the pool 
                        described in paragraph (2)(C)(i) shall be 
                        distributed to the account of each facility and 
                        each general account in the allowance tracking 
                        system under section 403(c), without cost to 
                        the recipients, in a quantity equal to, as of 
                        the date that is 180 days after the date of 
                        enactment of this section, the proportion 
                        that--
                                    ``(I) the pro rata share of each 
                                such account of the total number of 
                                allowances; bears to
                                    ``(II) the total number of 
                                allowances that were held in all such 
                                accounts.
                            ``(ii) Similar methodology.--Allowances in 
                        the pool described in paragraph (2)(C)(ii) 
                        shall be distributed using the same or similar 
                        allocation methodology as was used under 
                        sections 403 and 405.
                    ``(C) Limitation on number of allowances.--In no 
                case may the total number of allowances distributed 
                under paragraph (2)(C) exceed the annual tonnage 
                limitation for emissions of sulfur dioxide from 
                affected units specified in subsection (c)(2).
            ``(4) Timing of allocations.--Not later than January 1, 
        2011, and each year thereafter, the Administrator shall 
        allocate allowances to affected units.
            ``(5) Previously banked allowances.--
                    ``(A) In general.--Any sulfur dioxide allowances 
                issued under sections 403 through 416 or the rules 
                referred to in section 417(a) for any vintage year 
                before 2012 that are not used to meet any requirements 
                under sections 403 through 416 or those rules, and that 
                are not otherwise retired by the Administrator, may be 
                used to meet requirements under this section.
                    ``(B) Vintage years before 2010.--Each sulfur 
                dioxide emission allowance issued for a vintage year 
                before 2010 shall authorize a quantity of sulfur 
                dioxide emissions equal to 1 ton of sulfur dioxide.
                    ``(C) Vintage year 2010 or 2011.--Each sulfur 
                dioxide emission allowance issued for vintage year 2010 
                or 2011 shall authorize a quantity of sulfur dioxide 
                emissions equal to \1/2\ ton of sulfur dioxide.
            ``(6) No property right.--An allowance issued under this 
        section does not constitute a property right.
    ``(e) Replacement of Sulfur Dioxide Program.--Except as expressly 
provided in this section, the provisions and requirements of sections 
404, subsections (a) through (f), paragraphs (1) through (5) of 
subsection (g), and subsections (h) through (j), of section 405, 
sections 406 through 410, and sections 412 through 416, concerning 
emissions of sulfur dioxide shall not apply to any such emissions in 
calendar year 2012 or any calendar year thereafter.
    ``(f) Effect on Other Requirements.--
            ``(1) No exemption or exclusion.--
                    ``(A) In general.--Nothing in this section exempts 
                or excludes the owner or operator of any affected 
                source or affected unit from compliance with any other 
                applicable requirements of this Act.
                    ``(B) Liability.--Any liability for excess emission 
                penalties under this section shall not limit the 
                application of section 113, 114, 120, or 304 to the 
                owner or operator.
            ``(2) Separate violations.--
                    ``(A) In general.--Each ton of sulfur dioxide 
                emitted in violation of subsection (c)(1), as 
                implemented in the regulations promulgated under 
                subsection (c)(3), shall be a violation of this title.
                    ``(B) Separate days.--For a calendar year during 
                which an emission described in subparagraph (A) occurs, 
                each day of that year shall be a violation of this 
                title.

``SEC. 419. NITROGEN OXIDE CONTROL AND TRADING PROGRAM.

    ``(a) Definitions.--In this section:
            ``(1) Affected unit.--The term `affected unit', with 
        respect to nitrogen oxides, means a fossil fuel-fired electric 
        generating facility (including a co-generation facility) that--
                    ``(A) on or after January 1, 1985, served as a 
                generator with a nameplate capacity greater than 25 
                megawatts; and
                    ``(B) produces electricity for sale.
            ``(2) Zone 1 state.--The term `Zone 1 State' means the 
        District of Columbia or any of the States of Alabama, Arkansas, 
        Connecticut, Delaware, Florida, Georgia, Illinois, Indiana, 
        Iowa, Kentucky, Louisiana, Maine, Maryland, Massachusetts, 
        Michigan, Minnesota, Mississippi, Missouri, New Hampshire, New 
        Jersey, New York, North Carolina, Ohio, Pennsylvania, Rhode 
        Island, South Carolina, Tennessee, Texas, Vermont, Virginia, 
        West Virginia, and Wisconsin.
            ``(3) Zone 2 state.--The term `Zone 2 State' means any 
        State within the 48 contiguous States that is not a Zone 1 
        State.
    ``(b) Establishment.--Not later than January 1, 2011, the 
Administrator shall promulgate regulations to establish 2 nitrogen 
oxide allowance trading programs to reduce nitrogen oxide emissions for 
affected units--
            ``(1) 1 of which programs shall be for affected units in 
        the Zone 1 States; and
            ``(2) the other of which programs shall be for affected 
        units in the Zone 2 States.
    ``(c) Applicability.--Beginning on January 1, 2012, each source 
that includes 1 or more affected units shall be an affected source 
under this section.
    ``(d) Limitations on Emissions.--
            ``(1) Zone 1 prohibition.--
                    ``(A) In general.--Beginning on January 1, 2012, it 
                shall be unlawful for the affected units at an affected 
                source in a Zone 1 State to emit a total quantity of 
                nitrogen oxides during a calendar year in excess of the 
                number of nitrogen oxide allowances held for the 
                affected source for that year by the owners and 
                operators of the affected source and the affected 
                units.
                    ``(B) Limitation.--Only nitrogen oxide allowances 
                described in paragraphs (1)(A) and (6) of subsection 
                (f) shall be held in order to meet the requirements of 
                subparagraph (A).
            ``(2) Zone 2 prohibition.--
                    ``(A) In general.--Beginning on January 1, 2012, it 
                shall be unlawful for the affected units at an affected 
                source in a Zone 2 State to emit a total quantity of 
                nitrogen oxides during a calendar year in excess of the 
                number of nitrogen oxide allowances held for the 
                affected source for that year by the owners and 
                operators of the affected source and the affected 
                units.
                    ``(B) Limitation.--Only nitrogen oxide allowances 
                described in subsection (f)(1)(B) shall be held in 
                order to meet the requirements of subparagraph (A).
            ``(3) Zone 1 state limitations on total emissions.--The 
        Administrator shall issue allowances authorizing an annual 
        tonnage of emissions of nitrogen oxides from affected units in 
        the Zone 1 States that are equal, in the aggregate, to--
                    ``(A) for each of calendar years 2012 through 2014, 
                1,390,000 tons;
                    ``(B) for each of calendar years 2015 through 2019, 
                1,300,000 tons; and
                    ``(C) for calendar year 2020 and each calendar year 
                thereafter--
                            ``(i) 1,300,000 tons; or
                            ``(ii) a lesser quantity, if the 
                        Administrator determines that emissions should 
                        be reduced further--
                                    ``(I) to protect public health or 
                                the environment;
                                    ``(II) to assist with attainment or 
                                maintenance with respect to national 
                                ambient air quality standards; or
                                    ``(III) to assist States in meeting 
                                emission reduction obligations under 
                                section 110(a)(2)(D).
            ``(4) Zone 2 state limitations on total emissions.--The 
        Administrator shall issue allowances authorizing an annual 
        tonnage limitation for emissions of nitrogen oxides from 
        affected units in the Zone 2 States that are equal, in the 
        aggregate, to--
                    ``(A) for each of calendar years 2012 through 2014, 
                510,000 tons;
                    ``(B) for each of calendar years 2015 through 2019, 
                320,000 tons; and
                    ``(C) for calendar year 2020 and each calendar year 
                thereafter--
                            ``(i) 320,000 tons; or
                            ``(ii) a lesser quantity, if the 
                        Administrator determines that emissions should 
                        be reduced further--
                                    ``(I) to protect public health or 
                                the environment;
                                    ``(II) to assist with attainment or 
                                maintenance with respect to national 
                                ambient air quality standards; or
                                    ``(III) to assist States in meeting 
                                emission reduction obligations under 
                                section 110(a)(2)(D).
    ``(e) Regulations.--The regulations promulgated by the 
Administrator to carry out this section shall establish requirements 
for the allowance trading program under this section, including 
requirements concerning--
            ``(1) the selection of a designated representative for each 
        affected source, who shall make all submissions to the 
        Administrator under this section for the affected source;
            ``(2) the issuance, recording, tracking, holding, transfer, 
        auction, and use of nitrogen oxide allowances;
            ``(3) the monitoring and reporting of emissions, quality 
        assurance of data, and recordkeeping, which shall be consistent 
        with section 412(a) and section 412(d), as applied to the 
        owners and operators of an affected unit and an affected 
        source, except that subsection (a) shall apply in lieu of the 
        deadlines for promulgation of regulations under subsections (a) 
        and (d) of section 412;
            ``(4) excess emission penalties and offsets in accordance 
        with section 411;
            ``(5) permits in accordance with section 408(h)(3) and 
        title V, as applied to--
                    ``(A) an affected unit and an affected source; and
                    ``(B) allowances under subsection (f);
            ``(6) provisions that require--
                    ``(A) a statement submitted by the designated 
                representative of an owner or operator that the owner 
                or operator will hold allowances authorizing emissions 
                equaling not less than the actual emissions of the 
                affected units at the affected source, in accordance 
                with this section, to be considered to meet the 
                compliance planning requirements of title V; and
                    ``(B) recordation by the Administrator of a 
                transfer of allowances to amend automatically all 
                applicable permit applications, compliance plans, and 
                permits; and
            ``(7) the public availability of all information concerning 
        the activities described in paragraphs (1) through (5) that is 
        not confidential or is emission data that, pursuant to section 
        114(c), cannot be confidential.
    ``(f) Allowances.--
            ``(1) In general.--Not later than January 1, 2012, the 
        Administrator shall promulgate regulations to establish a 
        methodology for 2 distributions of the nitrogen oxide 
        allowances to--
                    ``(A) each affected unit in a Zone 1 State in 
                accordance with subsection (d)(3); and
                    ``(B) each affected unit in a Zone 2 State in 
                accordance with subsection (d)(4).
            ``(2) Accounting.--The Administrator shall account in the 
        nitrogen oxide allowance distribution methodology for a reserve 
        of allowances for new units in Zone 1 States and Zone 2 States.
            ``(3) Timing of allocations.--Not later than January 1, 
        2011, and each year thereafter, the Administrator shall 
        allocate allowances to affected units.
            ``(4) Distribution of allowances.--
                    ``(A) In general.--The regulations promulgated 
                under paragraph (1) shall provide that the 
                Administrator shall--
                            ``(i) establish an auction for distributing 
                        nitrogen oxide allowances to affected units; 
                        and
                            ``(ii) require--
                                    ``(I) a total of zero nitrogen 
                                oxide allowances in calendar years 2011 
                                through 2013 to be offered for sale in 
                                an auction;
                                    ``(II) that the total number of 
                                nitrogen oxide allowances to be offered 
                                for sale at auction in calendar year 
                                2014 shall--
                                            ``(aa) be the same as the 
                                        total number of sulfur dioxide 
                                        allowances issued under section 
                                        418(d)(2)(A) for that calendar 
                                        year; and
                                            ``(bb) increase by 10 
                                        percent for each calendar year 
                                        thereafter; and
                                    ``(III) subject to subparagraph 
                                (B), that the remaining allowances 
                                shall be distributed in 2 pools that 
                                are determined by the Administrator to 
                                provide for a fair and equitable 
                                distribution of allowances between--
                                            ``(aa) affected units that 
                                        shall receive Zone 1 
                                        allowances; and
                                            ``(bb) affected units that 
                                        shall receive Zone 2 
                                        allowances.
                    ``(B) No allocation based on certain adjustment 
                factors.--The Administrator shall determine the 
                allocation methodology for use in implementing 
                subparagraph (A)(ii)(III), but shall not allocate 
                nitrogen oxide allowances to affected units based on 
                baseline heat input fuel adjustment factors.
            ``(5) Previously banked allowances.--
                    ``(A) In general.--Any nitrogen oxide allowances 
                issued under the rules referred to in section 417(a) 
                concerning annual nitrogen oxide emissions for any 
                vintage year before 2012 that are not used to meet any 
                requirements under those rules, and that are not 
                otherwise retired by the Administrator, may be used to 
                meet requirements under this section concerning annual 
                nitrogen oxide emissions applicable to sources in Zone 
                1 States.
                    ``(B) Nature of allowances.--Each allowance 
                described in subparagraph (A) is a limited 
                authorization to emit, in accordance with the 
                requirements of this section, 1 ton of nitrogen oxide.
            ``(6) No property right.--An allowance issued under this 
        section does not constitute a property right.
    ``(g) Effect on Other Requirements.--
            ``(1) In general.--Nothing in this section exempts or 
        excludes the owner or operator of any affected source or 
        affected unit from compliance with any other applicable 
        requirements of this Act, and any liability for excess emission 
        penalties under this section shall not limit the application of 
        section 113, 114, 120, or 304 to the owner or operator.
            ``(2) Separate violations.--Each ton of nitrogen oxides 
        emitted in violation of paragraph (1) or (2) of subsection (d), 
        as implemented in the regulations promulgated under subsection 
        (e), shall be a violation of this title, and, for a calendar 
        year during which the emission occurs, each day of that year 
        shall be a violation of this title.''.
    (b) Conforming Amendments.--Section 411 of the Clean Air Act (42 
U.S.C. 7651j) is amended--
            (1) in subsection (a), by striking the subsection 
        designation and heading and all that follows through ``That 
        penalty'' and inserting the following:
    ``(a) Excess Emissions Penalty.--The owner or operator of any unit 
or process source subject to the requirements of sections 403, 404, 
405, 406, 407, 409, 410, 417, or 418, or designated under section 419, 
that emits sulfur dioxide or nitrogen oxides for any calendar year in 
excess of the emission limitation requirement applicable to the unit or 
source or in excess of the allowances the owner or operator holds for 
use for the unit or source for that calendar year, shall be liable for 
the payment of an excess emissions penalty, except in a case in which 
the emissions were authorized pursuant to section 110(f). The excess 
emission penalty for the phase II sulfur dioxide requirements under 
section 418 and for the nitrogen oxide control and trading program 
requirements under section 419 shall be calculated on the basis of the 
number of tons emitted in excess of the allowances the operator holds 
for use for the unit for that year, multiplied by 2 times the market 
price of such allowances for the same vintage year emission allowances. 
Any such penalty shall be immediately due and payable without demand to 
the Administrator as provided in regulations to be issued by the 
Administrator under sections 418 and 419. For the requirements 
established under title IV of the Clean Air Act Amendments of 1990, 
that penalty''; and
            (2) in subsection (b), by striking the subsection 
        designation and heading and all that follows through ``The 
        owner or operator of the source shall,'' and inserting the 
        following:
    ``(b) Excess Emission Offset.--The owner or operator of any 
affected source or any affected unit that emits sulfur dioxide or 
nitrogen oxides during any calendar year in excess of the emissions 
limitation requirement of the unit or of the allowances held for the 
unit for the calendar year shall be liable to offset the excess 
emission by an equal tonnage amount in the following calendar year, or 
such longer period as the Administrator may prescribe. The owner or 
operator of the source or the unit shall,''.

SEC. 4. MERCURY REDUCTIONS FOR THE COAL-FIRED ELECTRIC GENERATING 
              SECTOR.

    (a) MACT Mercury Requirement Reductions.--Section 112(d) of the 
Clean Air Act (42 U.S.C. 7412(d)) is amended by adding at the end the 
following:
            ``(11) Electric utility steam generating units.--
                    ``(A) In general.--The Administrator shall regulate 
                coal- and oil-fired electric utility steam generating 
                units under section 112(d).
                    ``(B) Minimum percent reduction in emissions.--In 
                promulgating emission standards for the coal-fired 
                electric utility steam generating units under this 
                section, the Administrator shall--
                            ``(i) ensure that such standards achieve at 
                        least a 90-percent reduction in emissions of 
                        mercury when applied to the listed category as 
                        a whole; and
                            ``(ii) consult with States that already 
                        have a coal-fired electric utility steam 
                        generating unit mercury reduction program in 
                        place before setting the standard.
                    ``(C) Failure to promulgate limitations.--If the 
                Administrator fails to promulgate nationally applicable 
                emission limitations under this paragraph for electric 
                utility steam generating units by January 1, 2012, 
                electric utility steam generating units in existence as 
                of that date shall be required to meet, by not later 
                than January 1, 2015, maximum achievable control 
                technology emission limitations, as determined on a 
                case-by-case basis under section 112(j).''.
    (b) Electric Utility Steam Generating Unit Monitoring and Reporting 
Program.--Section 112 of the Clean Air Act (42 U.S.C. 7412) is amended 
by adding at the end the following:
    ``(t) Mercury Monitoring and Reporting Program.--
            ``(1) Monitoring.--The Administrator shall promulgate 
        regulations requiring--
                    ``(A) the operation, reporting, and certification 
                of continuous emission monitoring systems to accurately 
                measure the quantity of mercury that is emitted by 
                electric coal utility steam generating units; and
                    ``(B) verification and reporting of mercury 
                emissions at each electric coal utility steam 
                generating unit.
            ``(2) Reporting.--
                    ``(A) In general.--Not less often than quarterly, 
                the owner or operator of an affected unit that is an 
                electric coal utility steam generating unit shall 
                submit to the Administrator a report on the monitoring 
                of emissions of mercury carried out by the owner or 
                operator in accordance with the regulations promulgated 
                under paragraph (1).
                    ``(B) Authorization.--Each report submitted under 
                subparagraph (A) shall be authorized by a responsible 
                official of the electric coal utility steam generating 
                unit, who shall certify the accuracy of the report.
                    ``(C) Public reporting.--The Administrator shall 
                make available to the public, through 1 or more 
                published reports and 1 or more forms of electronic 
                media, data concerning the emission of mercury from 
                each electric coal utility steam generating unit.''.

SEC. 5. EFFECT ON OTHER LAW.

    Except as specifically provided in this Act or an amendment made by 
this Act, nothing in this Act modifies or otherwise affects any 
authority or obligation set forth in the Clean Air Act (42 U.S.C. 7401 
et seq.), including sections 110(a)(2)(D), 112, and 126 of that Act (42 
U.S.C. 7410(a)(2)(D), 7412, 7426).
                                 <all>
```