I
105TH CONGRESS
1ST SESSION
H. R. 2365
To reduce acid deposition under the Clean Air Act, and for other purposes.
IN THE HOUSE OF REPRESENTATIVES
JULY 31, 1997
Mr. SOLOMON (for himself and Mr. MCHUGH) introduced the following bill;
which was referred to the Committee on Commerce
A BILL
To reduce acid deposition under the Clean Air Act, and
for other purposes.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ‘‘Acid Deposition Con-
trol Act’’.
SEC. 2. FINDINGS AND PURPOSES.
(a) FINDINGS.—Congress finds that—
(1) reductions of atmospheric nitrogen oxide
and sulfur dioxide from utility plants, in addition to
the reductions required under the Clean Air Act (42
U.S.C. 7401 et seq.), are needed to reduce acid dep-
osition and its serious adverse effects on public
health, natural resources, building structures, sen-
sitive ecosystems, and visibility;
(2) nitrogen oxide and sulfur dioxide contribute
to the development of fine particulates, suspected of
causing human mortality and morbidity to a signifi-
cant extent;
(3) regional nitrogen oxide reductions of 50
percent in the Eastern United States, in addition to
the reductions required under the Clean Air Act,
may be necessary to protect sensitive watersheds
from the effects of nitrogen deposition;
(4) without reductions in nitrogen oxide and
sulfur dioxide, the number of acidic lakes in the Adi-
rondacks in the State of New York is expected to in-
crease by up to 40 percent by 2040; and
(5) nitrogen oxide is highly mobile and can lead
to ozone formation hundreds of miles from the emit-
ting source.
(b) PURPOSES.—The purposes of this Act are—
(1) to recognize the current scientific under-
standing that emissions of nitrogen oxide and sulfur
dioxide, and the acid deposition resulting from emis-
sions of nitrogen oxide and sulfur dioxide, present a
substantial human health and environmental risk;
(2) to require reductions in nitrogen oxide and
sulfur dioxide emissions;
(3) to support the efforts of the Ozone Trans-
port Assessment Group to reduce ozone pollution;
(4) to reduce utility emissions of nitrogen oxide
by 70 percent from 1990 levels; and
(5) to reduce utility emissions of sulfur dioxide
by 50 percent after the implementation of phase II
sulfur dioxide requirements under section 405 of the
Clean Air Act (42 U.S.C. 7651d).
SEC. 3. DEFINITIONS.
In this Act:
(1) ADMINISTRATOR.—The term ‘‘Adminis-
trator’’ means the Administrator of the Environ-
mental Protection Agency.
(2) AFFECTED FACILITY.—The term ‘‘affected
facility’’ means a facility with 1 or more combustion
units that serve at least 1 electricity generator with
a capacity equal to or greater than 25 megawatts.
(3) NOx ALLOWANCE.—The term ‘‘NOx allow-
ance’’ means a limited authorization to emit, in ac-
cordance with this Act—
(A) 1 ton of nitrogen oxide during each of
the months of October, November, December,
January, February, March, and April of any
year; and
(B) 1⁄2 ton of nitrogen oxide during each of
the months of May, June, July, August, and
September of any year.
(4) MMBTU.—The term ‘‘mmBtu’’ means 1
million British thermal units.
(5) PROGRAM.—The term ‘‘Program’’ means
the Nitrogen Oxide Allowance Program established
under section 4.
(6) STATE.—The term ‘‘State’’ means the 48
contiguous States and the District of Columbia.
SEC. 4. NITROGEN OXIDE ALLOWANCE PROGRAM.
(a) IN GENERAL.—
(1) ESTABLISHMENT.—Not later than 18
months after the date of enactment of this Act, the
Administrator shall establish a program to be known
as the ‘‘Nitrogen Oxide Allowance Program’’.
(2) SCOPE.—The Program shall be conducted
in the 48 contiguous States and the District of Co-
lumbia.
(3) NOx
ALLOWANCES.—The Administrator
shall allocate under paragraph (4)—
(A) for each of calendar years 2000
through 2002, 5,400,000 NOx allowances; and
(B) for calendar year 2003 and each cal-
endar year thereafter, 3,000,000 NOx allow-
ances.
(4) ALLOCATION.—
(A) DEFINITION
OF
TOTAL
ELECTRIC
POWER.—For purposes of this paragraph, the
term ‘‘total electric power’’ means all electric
power generated by utility and nonutility gen-
erators for distribution, including electricity
generated from solar wind, hydro power, nu-
clear power, and the combustion of fossil fuel.
(B) ALLOCATION OF ALLOWANCES.—The
Administrator shall allocate annual NOx allow-
ances to each of the States in proportion to the
State’s share of the total electric power gen-
erated in the 48 contiguous States and the Dis-
trict of Columbia.
(C) 
PUBLICATION.—The 
Administrator
shall publish in the Federal Register a list of
each State’s NOx allowance allocation—
(i) by December 1, 1998, for calendar
years 2000 and 2002;
(ii) by December 1, 2000, for calendar
years 2003 through 2010; and
(iii) by December 1 of each calendar
year after 2000, for the calendar year 5
years previous.
(5) INTRASTATE DISTRIBUTION.—
(A) IN GENERAL.—A State may submit a
report to the Administrator detailing the dis-
tribution of NOx allowances of the State to af-
fected facilities in the State—
(i) not later than September 30,
1999, for calendar years 2000 through
2002;
(ii) not later than September 30,
2001, for calendar years 2003 through
2010; and
(iii) not later than September 30 of
each calendar year after 2001, for the cal-
endar year 5 years previous.
(B) ACTION BY THE ADMINISTRATOR.—If
a State submits a report under subparagraph
(A) not later than September 30 of the calendar
year specified in subparagraph (A), the Admin-
istrator shall distribute the NOx allowances to
affected facilities in the State as detailed in the
report.
(C) LATE SUBMISSION OF REPORT.—A re-
port submitted by a State after September 30
of the specified year shall have no force or ef-
fect.
(D) DISTRIBUTION IN ABSENCE OF A RE-
PORT.—
(i) IN
GENERAL.—Subject to sub-
section (e), if a State does not submit a re-
port under subparagraph (A) not later
than September 30 of the calendar year
specified in subparagraph (A), the Admin-
istrator shall, not later than November 30
of that calendar year, distribute the NOx
allowances for the calendar years specified
in subparagraph (A) to each affected facil-
ity in the State in proportion to the af-
fected facility’s share of the total net elec-
tric power generated in the State.
(ii) DETERMINATION
OF
FACILITY’S
SHARE.—In determining an affected facili-
ty’s share of total net electric power gen-
erated in a State, the Administrator shall
consider the net electric power generated
by the facility and the State to be—
(I) for calendar years 2000
through 2002, the average annual
amount of net electric power gen-
erated, by the facility and the State,
respectively, in calendar years 1995
through 1997;
(II) for calendar years 2003
through 2010, the average annual
amount of net electric power gen-
erated, by the facility and the State,
respectively, in calendar years 1997
through 1999; and
(III) for calendar year 2011 and
each calendar year thereafter, the
amount of net electric power gen-
erated, by the facility and the State,
respectively, in the calendar year 5
years previous to the year for which
the determination is made.
(E) JUDICIAL REVIEW.—A distribution of
NOx allowances by the Administrator under
subparagraph (D) shall not be subject to judi-
cial review.
(b) NOx ALLOWANCE TRANSFER SYSTEM.—
(1) IN GENERAL.—Not later than 18 months
after the date of enactment of this Act, the Adminis-
trator shall promulgate NOx allowance system regu-
lations under which a NOx allowance allocated under
this Act may be transferred among affected facilities
and any other person.
(2) ESTABLISHMENT.—The regulations shall
establish the NOx allowance system under this sec-
tion, including requirements for the allocation,
transfer, and use of NOx allowances under this Act.
(3) USE
OF
NOx
ALLOWANCES.—The regula-
tions shall—
(A) prohibit the use (but not the transfer
in accordance with paragraph (5)) of any NOx
allowance before the calendar year for which
the NOx allowance is allocated; and
(B) provide that the unused NOx allow-
ances shall be carried forward and added to
NOx allowances allocated for subsequent years.
(4) CERTIFICATION OF TRANSFER.—A transfer
of a NOx allowance shall not be effective until a
written certification of the transfer, signed by a re-
sponsible official of the person making the transfer,
is received and recorded by the Administrator.
(c) NOx ALLOWANCE TRACKING SYSTEM.—Not later
than 18 months after the date of enactment of this Act,
the Administrator shall promulgate regulations for issu-
ing, recording, and tracking the use and transfer of NOx
allowances that shall specify all necessary procedures and
requirements for an orderly and competitive functioning
of the NOx allowance system.
(d) PERMIT REQUIREMENTS.—A NOx allowance allo-
cation or transfer shall, on recordation by the Adminis-
trator, be considered to be a part of each affected facility’s
operating permit requirements, without the requirement
for any further permit review and revision.
(e) NEW SOURCE RESERVE.—
(1) IN GENERAL.—For a State for which the
Administrator distributes NOx
allowances under
subsection (a)(5)(D), the Administrator shall place
10 percent of the total annual NOx allowances of the
State in a new source reserve to be distributed by
the Administrator—
(A) for calendar years 2000 through 2003,
to sources that commence operation after 1995;
(B) for calendar years 2004 through 2009,
to sources that commence operation after 1997;
and
(C) for calendar year 2010 and each cal-
endar year thereafter, to sources that com-
mence operation after the calendar year that is
5 years previous to the year for which the dis-
tribution is made.
(2) SHARE.—For a State for which the Admin-
istrator distributes NOx allowances under subsection
(a)(5)(D), the Administrator shall distribute to each
new source a number of NOx allowances sufficient to
allow emissions by the source at a rate equal to the
lesser of the new source performance standard or
the permitted level for the full nameplate capacity of
the source, adjusted pro rata for the number of
months of the year during which the source oper-
ates.
(3) UNUSED NOx ALLOWANCES.—
(A) IN GENERAL.—During the period of
calendar years 2000 through 2005, the Admin-
istrator shall conduct auctions at which a NOx
allowance remaining in the new source reserve
that has not been distributed under paragraph
(2) shall be offered for sale.
(B) OPEN AUCTIONS.—An auction under
subparagraph (A) shall be open to any person.
(C) CONDUCT OF AUCTION.—
(i) METHOD OF BIDDING.—A person
wishing to bid for a NOx allowance at an
auction under subparagraph (A) shall sub-
mit (by a date set by the Administrator) to
the Administrator (on a sealed bid sched-
ule provided by the Administrator) an offer
to purchase a specified number of NOx al-
lowances at a specified price.
(ii) SALE BASED ON BID PRICE.—A
NOx allowance auctioned under subpara-
graph (A) shall be sold on the basis of bid
price, starting with the highest priced bid
and continuing until all NOx allowances
for sale at the auction have been sold.
(iii) NO
MINIMUM
PRICE.—A mini-
mum price shall not be set for the pur-
chase of a NOx allowance auctioned under
subparagraph (A).
(iv) 
REGULATIONS.—The 
Adminis-
trator, in consultation with the Secretary
of the Treasury, shall promulgate regula-
tions to carry out this paragraph.
(D) USE OF NOx ALLOWANCES.—A NOx
allowance purchased at an auction under sub-
paragraph (A) may be used for any purpose
and at and at any time after the auction that
is permitted for use of a NOx allowance under
this Act.
(E) PROCEEDS
OF
AUCTION.—The pro-
ceeds from an auction under this paragraph
shall be distributed to the owner of an affected
source in proportion to the number of allow-
ances that the owner would have received but
for this subsection.
(f) NATURE OF NOx ALLOWANCES.—
(1) NOT A PROPERTY RIGHT.—A NOx allow-
ance shall not be considered to be a property right.
(2) LIMITATION
OF
NOx
ALLOWANCES.—Not-
withstanding any other provision of law, the Admin-
istrator may terminate or limit a NOx allowance.
(g) PROHIBITIONS.—
(1) IN GENERAL.—After January 1, 2000, it
shall be unlawful—
(i) for the owner or operator of an af-
fected facility to operate the affected facil-
ity in such a manner that the affected fa-
cility emits nitrogen oxides in excess of the
amount permitted by the quantity of NOx
allowances held by the designated rep-
resentative of the affected facility; or
(ii) for any person to hold, use, or
transfer a NOx allowance allocated under
this Act, except as provided under this Act.
(2) OTHER
EMISSION
LIMITATIONS.—Section
407 of the Clean Air Act (42 U.S.C. 7651f) is re-
pealed.
(3) TIME OF USE.—A NOx allowance may not
be used before the calendar year for which the NOx
allowance is allocated.
(4) PERMITTING, MONITORING, AND ENFORCE-
MENT.—Nothing in this section affects—
(A) the permitting, monitoring, and en-
forcement obligations of the Administrator
under the Clean Air Act (42 U.S.C. 7401 et
seq.); or
(B) the requirements and liabilities of an
affected facility under the Clean Air Act (42
U.S.C. 7401 et seq.).
(h) SAVINGS PROVISIONS.—Nothing in this section—
(1) affects the application of, or compliance
with, the Clean Air Act (42 U.S.C. 7401 et seq.) for
an affected facility, including the provisions related
to applicable national ambient air quality standards
and State implementation plans;
(2) requires a change in, affects, or limits any
State law regulating electric utility rates or charges,
including prudency review under State law;
(3) affects the application of the Federal Power
Act (16 U.S.C. 791a et seq.) or the authority of the
Federal Energy Regulatory Commission under that
Act; or
(4) interferes with or impairs any program for
competitive bidding for power supply in a State in
which the Program is established.
SEC. 5. INDUSTRIAL SOURCE MONITORING.
Section 412(a) of the Clean Air Act (42 U.S.C.
7651k(a)) is amended in the first sentence by inserting
‘‘, or of any industrial facility with a capacity of 100 or
more mmBtu’s per hour,’’ after ‘‘The owner and operator
of any source subject to this title’’.
SEC. 6. EXCESS EMISSIONS PENALTY.
(a) IN GENERAL.—
(1) LIABILITY.—The owner or operator of an
affected facility that emits nitrogen oxides in any
calendar year in excess of the NOx allowances the
owner or operator holds for use for the facility for
that year shall be liable for the payment of an excess
emissions penalty.
(2) CALCULATION.—The excess emissions pen-
alty shall be calculated by multiplying $6,000 by the
quantity that is equal to—
(A) the quantity of NOx allowances that
would authorize the nitrogen oxides emitted by
the facility for the calendar year; minus
(B) the quantity of NOx allowances that
the owner or operator holds for use for the fa-
cility for that year.
(3) 
OVERLAPPING
PENALTIES.—A 
penalty
under this section shall not diminish the liability of
the owner or operator of an affected facility for any
fine, penalty, or assessment against the owner or op-
erator for the same violation under any other provi-
sion of law.
(b) EXCESS EMISSIONS OFFSET.—
(1) IN GENERAL.—The owner or operator of an
affected facility that emits nitrogen oxide during a
calendar year in excess of the NOx allowances held
for the facility for the calendar year shall offset in
the following calendar year a quantity of NOx allow-
ances equal to the number of NOx allowances that
would authorize the excess nitrogen oxides emitted.
(2) PROPOSED PLAN.—Not later than 60 days
after the end of the year in which excess emissions
occur, the owner or operator of an affected facility
shall submit to the Administrator and the State in
which the affected facility is located a proposed plan
to achieve the offset required under paragraph (1).
(3) CONDITION
OF
PERMIT.—On approval of
the proposed plan by the Administrator, as submit-
ted, modified, or conditioned by the Administrator,
the plan shall be considered a condition of the oper-
ating permit for the affected facility without further
review or revision of the permit.
(c) PENALTY
ADJUSTMENT.—The Administrator
shall annually adjust the penalty specified in subsection
(a) to reflect changes in the Consumer Price Index for
all urban consumers published by the Bureau of Labor
Statistics.
SEC. 7. SULFUR DIOXIDE ALLOWANCE PROGRAM REVI-
SIONS.
Section 402(3) of the Clean Air Act (as added by sec-
tion 401 of Public Law 101–549 (104 Stat. 2584)) (42
U.S.C. 7651a(3)) is amended by inserting before the pe-
riod at the end the following: ‘‘for allowances allocated for
calendar years 1995 through 2002, and 1⁄2 ton of sulfur
dioxide for allowances allocated for calendar year 2003
and each calendar year thereafter.’’.
SEC. 8. REGIONAL ECOSYSTEMS.
(a) REPORT.—
(1) IN GENERAL.—Not later than December 31,
2002, the Administrator shall submit to Congress a
report identifying objectives for scientifically credible
environmental indicators, as determined by the Ad-
ministrator, that are sufficient to protect sensitive
ecosystems of the Adirondack Mountains, Mid-Appa-
lachian Mountains, and Southern Blue Ridge Moun-
tains and water bodies of the Great Lakes, Lake
Champlain, Long Island Sound, and the Chesapeake
Bay.
(2) ACID
NEUTRALIZING
CAPACITY.—The re-
port under paragraph (1) shall—
(A) include acid neutralizing capacity as
an indicator; and
(B) identify as an objective under para-
graph (1) the objective to increase the propor-
tion of water bodies in sensitive receptor areas
with an acid neutralizing capacity greater than
zero from the proportion identified in surveys
begun in 1984.
(3) UPDATED REPORT.—Not later than Decem-
ber 31, 2006, the Administrator shall submit to
Congress a report updating the report under para-
graph (1) and assessing the status and trends of
various environmental indicators for the regional
ecosystems referred to in paragraph (1).
(4) REPORTS UNDER THE NATIONAL ACID PRE-
CIPITATION
ASSESSMENT
PROGRAM.—The reports
under this subsection shall satisfy the report require-
ments set forth in section 103(j)(3)(E) of the Clean
Air Act (42 U.S.C. 7403(j)(3)(E)) for the years
2002 and 2006.
(b) REGULATIONS.—
(1) DETERMINATION.—Not later than Decem-
ber 31, 2006, the Administrator shall determine
whether emissions reductions under section 4 are
sufficient to ensure achievement of the objectives
identified in subsection (a)(1).
(2) PROMULGATION.—If the Administrator de-
termines under paragraph (1) that emissions reduc-
tions under section 4 are not sufficient to ensure
achievement of the objectives identified in subsection
(a)(1), the Administrator shall promulgate, not later
than 2 years after making the finding, such regula-
tions, including modification of nitrogen oxide and
sulfur dioxide allowance allocations or any such
measure, as the Administrator determines are nec-
essary to protect the sensitive ecosystems described
in subsection (a)(1).
SEC. 9. GENERAL COMPLIANCE WITH OTHER PROVISIONS.
Except as expressly provided in this Act, compliance
with this Act shall not exempt or exclude the owner or
operator of an affected facility from compliance with any
other law.
SEC. 10. MERCURY EMISSION STUDY AND CONTROL.
(a) STUDY
AND
REPORT.—The Administrator
shall—
(1) study the practicality of monitoring mercury
emissions from all combustion units that have a ca-
pacity equal to or greater than 250 mmBtu’s per
hour; and
(2) not later than 2 years after the date of en-
actment of this Act, submit to Congress a report on
the results of the study.
(b) REGULATIONS CONCERNING MONITORING.—Not
later than 1 year after the date of submission of the report
under subsection (a), the Administrator shall promulgate
regulations requiring the reporting of mercury emissions
from units that have a capacity equal to or greater than
250 mmBtu’s per hour.
(c) EMISSION CONTROLS.—
(1) IN GENERAL.—Not later than 1 year after
the commencement of monitoring activities under
subsection (b), the Administrator shall promulgate
regulations controlling electric utility and industrial
source emissions of mercury.
(2) FACTORS.—The regulations shall take into
account technological feasibility, cost, and the pro-
jected levels of mercury emissions that will result
from implementation of this Act.
SEC. 11. DEPOSITION RESEARCH BY THE ENVIRONMENTAL
PROTECTION AGENCY.
(a) IN GENERAL.—The Administrator shall establish
a competitive grant program to fund research related to
the effects of nitrogen deposition on sensitive watersheds
and coastal estuaries in the Eastern United States.
(b) CHEMISTRY OF LAKES AND STREAMS.—Not later
than September 30, 1999, and September 30, 2006, the
Administrator shall submit to the Committee on Environ-
ment and Public Works of the Senate and the Committee
on Resources of the House of Representatives a report on
the health and chemistry of lakes and streams of the Adi-
rondacks that were subjects of the report transmitted
under section 404 of Public Law 101–549 (commonly
known as the ‘‘Clean Air Act Amendments of 1990’’) (104
Stat. 2632).
(c) AUTHORIZATION
OF APPROPRIATIONS.—There
are authorized to be appropriated—
(1) to carry out subsection (a), $1,000,000 for
each of fiscal years 1998 through 2003; and
(2) to carry out subsection (b), $1,000,000 for
each of fiscal years 1998, 1999, 2005, and 2006.
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