502 
(3) EPA ACTION ON COMPLIANCE PLANS.—The Administrator shall 
review each proposed compliance plan to determine whether it satisfies 
the requirements of this subdivision, and shall approve or disapprove 
the plan within 6 months after receipt of a complete submission. If a 
plan is disapproved, it may be resubmitted for approval with such 
changes as the Administrator shall require consistent with the require-
ments of this subdivision and within such period as the Administrator 
prescribes as part of the disapproval. 
(4) REGULATIONS; ISSUANCE OF PERMITS.—The Administrator shall 
promulgate regulations, in accordance with subdivision 6, to implement 
a Federal permit program to issue permits for affected sources under 
this subdivision. 
(d) 2d PHASE PERMITS.— 
(1) PERMIT PROGRAM.— 
(A) IN GENERAL.—To provide for permits for— 
(i) new electric utility steam generating units required 
under section 233103(d) of this title to have allowances; 
(ii) affected units or affected sources under section 233105 
of this title; and 
(iii) existing units subject to nitrogen oxide emission reduc-
tions under section 233107 of this title; 
each State in which 1 or more such units or sources are located 
shall submit in accordance with subdivision 6 a permit program 
for approval as provided by that subdivision. 
(B) SUSPENSION OF ISSUANCE OF PERMITS UNDER SUBDIVI-
SION 6.—On approval of the program, for the units or sources 
subject to the approved program the Administrator shall suspend 
the issuance of permits under subdivision 6. 
(2) SUBMISSION
OF
PERMIT
APPLICATIONS
AND
COMPLIANCE 
PLANS.—The owner or operator or the designated representative of 
each affected source under section 233105 of this title shall submit a 
permit application and compliance plan for that source to the permit-
ting authority. 
(3) ISSUANCE OF PERMITS.— 
(A) IN GENERAL.—Each State with an approved permit pro-
gram shall issue permits to the owner or operator, or the des-
ignated representative of the owner or operator, of affected 
sources under section 233105 of this title that satisfy the require-
ments of this subdivision and subdivision 6 and that submitted to 
the State a permit application and compliance plan pursuant to 
paragraph (2). In the case of a State without an approved permit 
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program by July 1, 1996, the Administrator shall issue a permit 
to the owner or operator or the designated representative of each 
such affected source. In the case of an affected source for which 
an application and compliance plan are timely received under 
paragraph (2), the permit application and the compliance plan, in-
cluding amendments thereto, shall be binding on the owner or op-
erator or the designated representative of the owner or operator 
and shall be enforceable as a permit for purposes of this subdivi-
sion and subdivision 6 until a permit is issued by the permitting 
authority for the affected source. 
(B) RENEWALS.—The 3d sentence of section 558(c) of title 5 
shall apply to permits issued by a permitting authority under this 
subdivision and subdivision 6. 
(4) ANNUAL TONNAGE.—A permit issued in accordance with this 
subsection for an affected source shall provide that the affected units 
at the affected source may not emit an annual tonnage of sulfur diox-
ide in excess of the number of allowances to emit sulfur dioxide that 
the owner or operator or designated representative holds for the unit. 
(e) NEW UNITS.—The owner or operator of each source that includes a 
new electric utility steam generating unit shall submit a permit application 
and compliance plan to the permitting authority not later than 24 months 
before the date on which the unit commences operation. The permitting au-
thority shall issue a permit to the owner or operator, or the designated rep-
resentative of the owner or operator, of the unit that satisfies the require-
ments of this subdivision and subdivision 6. 
(f) UNITS SUBJECT TO CERTAIN OTHER LIMITS.—The owner or oper-
ator, or designated representative of the owner or operator, of any unit sub-
ject to an emission rate requirement under section 233107 of this title shall 
submit a permit application and compliance plan for the unit to the permit-
ting authority. The permitting authority shall issue a permit to the owner 
or operator that satisfies the requirements of this subdivision and subdivi-
sion 6, including any appropriate monitoring and reporting requirements. 
(g) AMENDMENT
OF APPLICATION
AND COMPLIANCE PLAN.—At any 
time after the submission of an application and compliance plan under this 
section, the applicant may submit a revised application and compliance plan, 
in accordance with the requirements of this section. In considering any per-
mit application and compliance plan under this subdivision, a permitting au-
thority shall ensure coordination with the applicable electric ratemaking au-
thority, in the case of regulated utilities, and with unregulated public utili-
ties. 
(h) PROHIBITIONS.— 
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(1) FAILURE TO SUBMIT APPLICATION OR COMPLIANCE PLAN.—It 
shall be unlawful for an owner or operator, or designated representa-
tive, required to submit a permit application or compliance plan under 
this subdivision to fail to submit an application or compliance plan in 
accordance with the deadlines specified in this section or to otherwise 
fail to comply with regulations implementing this section. 
(2) OPERATION.—It shall be unlawful for any person to operate any 
source subject to this subdivision except in compliance with the terms 
and requirements of a permit application and compliance plan (includ-
ing amendments thereto) or permit issued by the Administrator or a 
State with an approved permit program. For purposes of this sub-
section, compliance, as provided in section 235104(f) of this title, with 
a permit issued under subdivision 6 that complies with this subdivision 
for sources subject to this subdivision shall be deemed to be compliance 
with this subsection and with section 235102(a) of this title. 
(3) RELIABILITY.—To ensure reliability of electric power, nothing in 
this subdivision or subdivision 6 shall be construed as requiring termi-
nation of operations of an electric utility steam generating unit for fail-
ure to have an approved permit or compliance plan, except that any 
such unit may be subject to the applicable enforcement provisions of 
section 211113 of this title. 
(i) MULTIPLE OWNERS.— 
(1) IN GENERAL.—No permit shall be issued under this section to 
an affected unit until the designated representative of the owner or op-
erator has filed a certificate of representation with regard to matters 
under this subdivision, including the holding and distribution of allow-
ances and the proceeds of transactions involving allowances. 
(2) MULTIPLE HOLDERS OF TITLE OR LEASEHOLD INTEREST; LIFE- 
OF-THE-UNIT, FIRM POWER CONTRACTUAL ARRANGEMENTS.— 
(A) IN GENERAL.—Where there are multiple holders of a legal 
or equitable title to, or a leasehold interest in, an affected unit, 
or where a utility or industrial customer purchases power from an 
affected unit (or units) under life-of-the-unit, firm power contrac-
tual arrangements, the certificate shall state— 
(i) that allowances and the proceeds of transactions involv-
ing allowances will be deemed to be held or distributed in pro-
portion to each holder’s legal, equitable, leasehold, or contrac-
tual reservation or entitlement; or 
(ii) if the multiple holders have expressly provided for a dif-
ferent distribution of allowances by contract, that allowances 
and the proceeds of transactions involving allowances will be 
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deemed to be held or distributed in accordance with the con-
tract. 
(B) PASSIVE LESSORS.—A passive lessor, or a person that has 
an equitable interest through a passive lessor, whose rental pay-
ments are not based, either directly or indirectly, on the revenues 
or income from the affected unit shall not be deemed to be a hold-
er of a legal, equitable, leasehold, or contractual interest for the 
purpose of holding or distributing allowances as provided in this 
subsection, during the term of the leasehold or thereafter, unless 
expressly provided for in the leasehold agreement. 
(C) SINGLE HOLDER.—Except as otherwise provided in this 
subsection, where all legal or equitable title to or interest in an 
affected unit is held by a single person, the certification shall state 
that all allowances received by the unit are deemed to be held for 
that person. 
§ 233109. Election for additional sources 
(a) APPLICABILITY.—The owner or operator of any unit that is not, and 
will not become, an affected unit under section 233103(d) or 233105 of this 
title, or that is a process source under subsection (d), that emits sulfur diox-
ide, may elect to designate that unit or source to become an affected unit 
and to receive allowances under this subdivision. An election shall be sub-
mitted to the Administrator for approval, with a permit application and pro-
posed compliance plan in accordance with section 233108 of this title. The 
Administrator shall approve a designation that meets the requirements of 
this section, and the designated unit or source shall be allocated allowances 
and be an affected unit for purposes of this subdivision. 
(b) ESTABLISHMENT OF BASELINE.—The baseline for a unit designated 
under this section shall be established by the Administrator by regulation, 
based on fuel consumption and operating data for the unit for calendar 
years 1985, 1986, and 1987, or if such data are not available, the Adminis-
trator may prescribe a baseline based on alternative representative data. 
(c) EMISSION LIMITATIONS.—Annual emission limitations for sulfur diox-
ide shall be equal to— 
(1)(A) the baseline; multiplied by 
(B)(i) the lesser of the unit’s actual 1985 sulfur dioxide emission 
rate or allowable 1985 sulfur dioxide emission rate in pounds per mil-
lion British thermal units; or 
(ii) if the unit did not operate in 1985, the lesser of the unit’s actual 
emission rate or allowable emission rate for a calendar year after 1985 
(as determined by the Administrator); divided by 
(2) 2,000. 
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