State’s share of the total electric power gen-
erated in all of the States.
(C) 
PUBLICATION.—The 
Administrator
shall publish in the Federal Register a list of
each State’s NOx allowance allocation—
(i) by December 1, 2002, for calendar
years 2004 through 2006;
(ii) by December 1, 2004, for calendar
years 2007 through 2009; and
(iii) by December 1 of each calendar
year after 2004, for the calendar year that
begins 61 months thereafter.
(5) INTRASTATE DISTRIBUTION.—
(A) IN GENERAL.—A State may submit to
the Administrator a report detailing the dis-
tribution of NOx allowances of the State to af-
fected facilities in the State—
(i) not later than September 30,
2003, for calendar years 2004 through
2006;
(ii) not later than September 30,
2005, for calendar years 2007 through
2014; and
(iii) not later than September 30 of
each calendar year after 2015, for the cal-
endar year that begins 61 months there-
after.
(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 a specified year shall be of no effect.
(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 electric
power generated in the State.
(ii) DETERMINATION
OF
FACILITY’S
SHARE.—In determining an affected facili-
ty’s share of total electric power generated
in a State, the Administrator shall con-
sider the net electric power generated by
the facility and the State to be—
(I) for calendar years 2004
through 2006, the average annual
amount of electric power generated,
by the facility and the State, respec-
tively, in calendar years 1999 through
2001;
(II) for calendar years 2007
through 2014, the average annual
amount of electric power generated,
by the facility and the State, respec-
tively, in calendar years 2001 through
2003; and
(III) for calendar year 2015 and
each calendar year thereafter, the
amount of electric power generated,
by the facility and the State, respec-
tively, in the calendar year 5 years
previous to the year for which the de-
termination 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 a NOx allowance system reg-
ulation under which a NOx allowance allocated
under this Act may be transferred among affected
facilities and any other person.
(2) ESTABLISHMENT.—The regulation shall es-
tablish the NOx allowance system under this section,
including requirements for the allocation, transfer,
and use of NOx allowances under this Act.
(3) USE OF NOx ALLOWANCES.—The regulation
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
issuing, recording, and tracking the use and transfer of
NOx allowances that shall specify all necessary procedures
and requirements for an orderly and competitive func-
tioning 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 a requirement for
any further permit review or 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 2004 through 2007,
to sources that commence operation after 2000;
(B) for calendar years 2008 through 2013,
to sources that commence operation after 2002;
and
(C) for calendar year 2014 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 2002 through 2007, 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 min-
imum 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 a regula-
tion 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 any time after the auction that is per-
mitted 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, 2002, it
shall be unlawful—
(A) for the owner or operator of an af-
fected facility to operate the affected facility in
such a manner that the affected facility emits
nitrogen oxides in excess of the amount per-
mitted by the quantity of NOx allowances held
by the designated representative of the affected
facility; or
(B) for any person to hold, use, or transfer
a NOx allowance allocated under this Act, ex-
cept 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 that Act.
(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 sub-
mitted, or as modified or conditioned by the Admin-
istrator, the plan shall be considered a condition of
the operating permit for the affected facility without
further review or revision of the permit.
(c) PENALTY
ADJUSTMENT.—The Administrator
shall annually adjust the amount of 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 of the Clean Air Act (42 U.S.C. 7651a)
is amended by striking paragraph (3) and inserting the
following:
‘‘(3) 
ALLOWANCE.—The 
term 
‘allowance’
means an authorization, allocated to an affected unit
by the Administrator under this title, to emit, during
or after a specified calendar year—
‘‘(A) in the case of allowances allocated for
calendar years 1999 through 2006, 1 ton of
sulfur dioxide; and
‘‘(B) in the case of allowances allocated for
calendar year 2007 and each calendar year
thereafter, 1⁄2 ton of sulfur dioxide.’’.
SEC. 8. REGIONAL ECOSYSTEMS.
(a) REPORT.—
(1) IN GENERAL.—Not later than December 31,
2006, 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, Rocky Mountains, and Southern
Blue Ridge Mountains 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 of increasing 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, 2010, 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 be subject to the require-
ments 
applicable 
to 
a 
report 
under 
section
103(j)(3)(E) of the Clean Air Act (42 U.S.C.
7403(j)(3)(E)).
(b) REGULATIONS.—
(1) DETERMINATION.—Not later than Decem-
ber 31, 2010, the Administrator shall determine
whether emissions reductions under section 4 are
sufficient to ensure achievement of the objectives
stated 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 CONTROL.
Not later than December 15, 2004, the Administrator
shall promulgate a regulation controlling electric utility
and industrial source emissions of mercury.
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.—
(1) INITIAL
REPORT.—Not later than Sep-
tember 30, 2001, the Administrator shall submit to
the Committee on Environment 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 Adirondacks
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).
(2) FOLLOWING
REPORT.—Not later than 2
years after the date of the report under paragraph
(1), the Administrator shall submit a report updat-
ing the information contained in the initial report.
(c) AUTHORIZATION
OF APPROPRIATIONS.—There
are authorized to be appropriated—
(1) to carry out subsection (a), $1,000,000 for
each of fiscal years 2000 through 2005; and
(2) to carry out subsection (b), $1,000,000 for
each of fiscal years 2000, 2001, 2007, and 2008.
Æ