technology and lowest achievable emission rate as 
those terms apply to covered units. 
‘‘(6) LOWEST ACHIEVABLE EMISSION RATE.— 
The regulations shall revise the definition of ‘lowest 
achievable emission rate’ under section 171, with re-
spect to technology required to be installed by the 
electric generating sector, to allow costs to be con-
sidered in the determination of the lowest achievable 
emission rate, so that, beginning January 1, 2010, 
a covered unit (as defined in section 701) shall not 
be required to install technology required to meet a 
lowest achievable emission rate if the cost of the 
technology exceeds a maximum amount (in dollars 
per ton) that is determined by the Administrator. In 
no event shall such cost be more than twice the 
amount of the applicable cost guideline for best 
available control technology. 
‘‘(7) EMISSION
OFFSETS.—No source within 
the electric generating sector that locates in a non- 
attainment area after December 31, 2009, shall be 
required to obtain offsets for emissions of air pollut-
ants. 
‘‘(8) NO EFFECT ON OTHER REQUIREMENTS.— 
Nothing in this subsection affects the obligation of 
any State or local government to comply with the re-
quirements established under this section con-
cerning— 
‘‘(A) national ambient air quality stand-
ards; 
‘‘(B) maximum allowable air pollutant in-
creases or maximum allowable air pollutant 
concentrations; or 
‘‘(C) protection of visibility and other air 
quality-related values in areas designated as 
class I areas under part C of title I. Addition-
ally, States are required to identify areas with 
adverse local air quality impacts and to impose 
such facility-specific and other measures as are 
necessary to remedy such impacts in light of 
the national pollutant tonnage limitations in 
section 702.’’. 
SEC. 5. REVISIONS TO SULFUR DIOXIDE ALLOWANCE PRO-
GRAM. 
(a) IN GENERAL.—Title IV of the Clean Air Act (re-
lating to acid deposition control) (42 U.S.C. 7651 et seq.) 
is amended by adding at the end the following:
‘‘SEC. 417. REVISIONS TO SULFUR DIOXIDE ALLOWANCE 
PROGRAM. 
‘‘(a) DEFINITIONS.—In this section, the terms ‘af-
fected unit’ and ‘new unit’ have the meanings given the 
terms in section 701. 
‘‘(b) REGULATIONS.—Not later than January 1, 
2006, the Administrator shall promulgate such revisions 
to the regulations to implement this title as the Adminis-
trator determines to be necessary to implement section 
702(a). 
‘‘(c) NEW UNIT RESERVE.— 
‘‘(1) ESTABLISHMENT.—Subject to the annual 
tonnage limitation for emissions of sulfur dioxide 
from affected units specified in section 702(a), the 
Administrator shall establish by regulation a reserve 
of allowances to be set aside for use by new units. 
‘‘(2) DETERMINATION OF QUANTITY.—The Ad-
ministrator, in consultation with the Secretary of 
Energy, shall determine, based on projections of 
electricity output for new units— 
‘‘(A) not later than June 30, 2006, the 
quantity of allowances required to be held in re-
serve for new units for each of calendar years 
2010 through 2014; and 
‘‘(B) not later than June 30 of each fifth 
calendar year thereafter, the quantity of allow-
ances required to be held in reserve for new 
units for the following 5-calendar year period. 
‘‘(3) ALLOCATION.— 
‘‘(A) REGULATIONS.—The Administrator 
shall promulgate regulations to establish a 
methodology for allocating allowances to new 
units. 
‘‘(B) NO JUDICIAL REVIEW.—An allocation 
of allowances by the Administrator under this 
subsection shall not be subject to judicial re-
view. 
‘‘(d) EXISTING UNITS.— 
‘‘(1) ALLOCATION.— 
‘‘(A) REGULATIONS.—Subject to the an-
nual tonnage limitation for emissions of sulfur 
dioxide from affected units specified in section 
702(a), and subject to the reserve of allowances 
for new units under subsection (c), the Admin-
istrator shall promulgate regulations to govern 
the allocation of allowances to affected units 
that are not new units. 
‘‘(B) REQUIRED ELEMENTS.—The regula-
tions shall provide for— 
‘‘(i) the allocation of allowances on a 
fair and equitable basis between affected
units that received allowances under sec-
tion 405 and affected units that are not 
new units and that did not receive allow-
ances under that section, using for both 
categories of units the same or similar allo-
cation methodology as was used under sec-
tion 405; and 
‘‘(ii) the pro-rata distribution of allow-
ances to all units described in clause (i), 
subject to the annual tonnage limitation 
for emissions of sulfur dioxide from af-
fected units specified in section 702(a). 
‘‘(2) TIMING OF ALLOCATIONS.—The Adminis-
trator shall allocate allowances to affected units— 
‘‘(A) not later than December 31, 2006, 
for calendar year 2010; and 
‘‘(B) not later than December 31 of cal-
endar year 2007 and each calendar year there-
after, for the fourth calendar year that begins 
after that December 31. 
‘‘(3) NO JUDICIAL REVIEW.—An allocation of 
allowances by the Administrator under this sub-
section shall not be subject to judicial review. 
‘‘(e) WESTERN REGIONAL AIR PARTNERSHIP.— 
‘‘(1) DEFINITIONS.—In this subsection:
‘‘(A) COVERED STATE.—The term ‘covered 
State’ means each of the States of Arizona, 
California, Colorado, Idaho, Nevada, New Mex-
ico, Oregon, Utah, and Wyoming. 
‘‘(B) COVERED YEAR.—The term ‘covered 
year’ means— 
‘‘(i)(I)(aa) the third calendar year 
after the first calendar year in which the 
Administrator determines by regulation 
that the total of the annual emissions of 
sulfur dioxide from all affected units in the 
covered States is projected to exceed 
271,000 tons in calendar year 2018 or any 
calendar year thereafter; but 
‘‘(bb) not earlier than calendar year 
2016; or 
‘‘(II) if the Administrator does not 
make the determination described in sub-
clause (I)(aa)— 
‘‘(aa) the third calendar year 
after the first calendar year with re-
spect to which the total of the annual 
emissions of sulfur dioxide from all af-
fected units in the covered States first 
exceeds 271,000 tons; but
‘‘(bb) not earlier than calendar 
year 2021; and 
‘‘(ii) each calendar year after the cal-
endar year determined under clause (i). 
‘‘(2) MAXIMUM EMISSIONS OF SULFUR DIOXIDE 
FROM EACH AFFECTED UNIT.—In each covered year, 
the emissions of sulfur dioxide from each affected 
unit in a covered State shall not exceed the number 
of allowances that are allocated under paragraph (3) 
and held by the affected unit for the covered year. 
‘‘(3) ALLOCATION OF ALLOWANCES.— 
‘‘(A) IN GENERAL.—Not later than Janu-
ary 1, 2015, the Administrator shall promul-
gate regulations to establish— 
‘‘(i) a methodology for allocating al-
lowances to affected units in covered 
States under this subsection; and 
‘‘(ii) the timing of the allocations. 
‘‘(B) NO JUDICIAL REVIEW.—An allocation 
of allowances by the Administrator under this 
paragraph shall not be subject to judicial re-
view.’’. 
(b) DEFINITION OF ALLOWANCE.—Section 402 of 
the Clean Air Act (relating to acid deposition control) (42
U.S.C. 7651a) is amended by striking paragraph (3) and 
inserting the following: 
‘‘(3) 
ALLOWANCE.—The 
term 
‘allowance’ 
means an authorization, allocated by the Adminis-
trator to an affected unit under this title, to emit, 
during or after a specified calendar year, a quantity 
of sulfur dioxide determined by the Administrator 
and specified in the regulations promulgated under 
section 417(b).’’. 
(c) TECHNICAL AMENDMENTS.— 
(1) Title IV of the Clean Air Act (relating to 
noise pollution) (42 U.S.C. 7641 et seq.)— 
(A) is amended by redesignating sections 
401 through 403 as sections 801 through 803, 
respectively; and 
(B) is redesignated as title VIII and moved 
to appear at the end of that Act. 
(2) The table of contents for title IV of the 
Clean Air Act (relating to acid deposition control) 
(42 U.S.C. prec. 7651) is amended by adding at the 
end the following: 
‘‘417. Revisions to sulfur dioxide allowance program.’’. 
SEC. 6. RELATIONSHIP TO OTHER LAW. 
(a) EXEMPTION FROM HAZARDOUS AIR POLLUTANT 
REQUIREMENTS RELATING TO MERCURY.—Section 112 
of the Clean Air Act (42 U.S.C. 7412) is amended—
(1) in subsection (f), by adding at the end the 
following: 
‘‘(7) MERCURY
EMITTED
FROM
CERTAIN
AF-
FECTED UNITS.—Not later than 8 years after the 
date of enactment of this paragraph, the Adminis-
trator shall carry out the duties of the Administrator 
under this subsection with respect to mercury emit-
ted from affected units (as defined in section 701).’’; 
and 
(2) in subsection (n)(1)(A)— 
(A) by striking ‘‘(A) The Administrator’’ 
and inserting the following: 
‘‘(A) STUDY, 
REPORT, 
AND
REGULA-
TIONS.— 
‘‘(i) STUDY
AND
REPORT
TO
CON-
GRESS.—The Administrator’’; 
(B) by striking ‘‘The Administrator’’ in 
the fourth sentence and inserting the following: 
‘‘(ii) REGULATIONS.— 
‘‘(I) IN GENERAL.—The Admin-
istrator’’; and 
(C) in clause (ii) (as designated by sub-
paragraph (B)), by adding at the end the fol-
lowing:
‘‘(II) EXEMPTION FOR CERTAIN 
AFFECTED UNITS RELATING TO MER-
CURY.—An affected unit (as defined 
in section 701) that would otherwise 
be subject to mercury emission stand-
ards under subclause (I) shall not be 
subject to mercury emission standards 
under subclause (I) or subsection 
(c).’’. 
(b) TEMPORARY EXEMPTION FROM VISIBILITY PRO-
TECTION REQUIREMENTS.—Section 169A(c) of the Clean 
Air Act (42 U.S.C. 7491(c)) is amended— 
(1) in paragraph (3), by striking ‘‘this sub-
section’’ and inserting ‘‘paragraph (1)’’; and 
(2) by adding at the end the following: 
‘‘(4) TEMPORARY EXEMPTION FOR CERTAIN AF-
FECTED UNITS.—An affected unit (as defined in sec-
tion 701) shall not be subject to subsection 
(b)(2)(A) during the period— 
‘‘(A) beginning on the date of enactment of 
this paragraph; and 
‘‘(B) ending on the date that is 20 years 
after the date of enactment of this paragraph.’’. 
(c) NO EFFECT ON OTHER FEDERAL AND STATE 
REQUIREMENTS.—Except as otherwise specifically pro-
vided in this Act, nothing in this Act or an amendment 
made by this Act— 
(1) affects any permitting, monitoring, or en-
forcement obligation of the Administrator of the En-
vironmental Protection Agency under the Clean Air 
Act (42 U.S.C. 7401 et seq.) or any remedy pro-
vided under that Act; 
(2) affects any requirement applicable to, or li-
ability of, an electric generating facility under that 
Act; 
(3) requires a change in, affects, or limits any 
State law that regulates electric utility rates or 
charges, including prudency review under State law; 
or 
(4) precludes a State or political subdivision of 
a State from adopting and enforcing any require-
ment for the control or abatement of air pollution, 
except that a State or political subdivision may not 
adopt or enforce any emission standard or limitation 
that is less stringent than the requirements imposed 
under that Act. 
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