calendar years 2008, 2009, 2010, and 2011, and shall be 
further reduced to 3 million tons for calendar years there-
after.’’. 
SEC. 3. REDUCTION IN TOTAL ANNUAL EMISSIONS OF NI-
TROGEN OXIDES BY AFFECTED FACILITIES. 
(a) TOTAL ANNUAL EMISSIONS.—The Administrator 
of the Environmental Protection Agency shall ensure that 
total annual emissions of nitrogen oxides by affected facili-
ties in the 50 States and the District of Columbia do not 
exceed—
(1) 2.10 million tons for each of calendar years 
2008, 2009, 2010, and 2011; and 
(2) 1.70 million tons for calendar year 2012 
and each calendar year thereafter. 
(b) PENALTY.—The owner or operator of any af-
fected facility that emits nitrogen oxides for any calendar 
year after 2007 in excess of the facility’s emissions limita-
tion requirement, or any allowance the owner or operator 
holds for the facility for that calendar year, under regula-
tions promulgated under this Act or title IV of the Clean 
Air Act (42 U.S.C. 7651 et seq.)—
(1) shall be liable for the payment of an excess 
emissions penalty under section 411 of such title (42 
U.S.C. 7651j), except that the penalty shall be cal-
culated on the basis of the number of tons emitted
in excess of the facility’s emissions limitation re-
quirement multiplied by $6,000; and 
(2) shall be liable to offset the excess emissions 
by an equal tonnage amount in the manner applica-
ble under section 411 of such title (42 U.S.C. 7651j) 
to the owner or operator of any affected source that 
emits excess sulfur dioxide. 
(c) AFFECTED FACILITY.—For purposes of this sec-
tion, the term ‘‘affected facility’’ means a facility with 1 
or more combustion units that serve at least 1 electricity 
generator with a capacity not less than 25 megawatts. 
SEC. 4. MERCURY EMISSION CONTROL. 
(a) REGULATION.—Not later than December 15, 
2004, the Administrator shall promulgate a regulation 
controlling electric utility and industrial source emissions 
of mercury in the 50 States and the District of Columbia. 
(b) PROHIBITION
ON TRANSFER.—The Adminis-
trator may not allow any electric utility or other industrial 
source to transfer any mercury emission allowance. 
SEC. 5. REGULATIONS. 
(a) IN GENERAL.—The Administrator shall promul-
gate regulations to carry out sections 2, 3, and 4 that—
(1) may, except in the case of mercury, provide 
for market-oriented mechanisms, such as emissions 
trading, auctions, or other allocation methods;
(2) shall prevent localized adverse effects on 
public health and the environment; and 
(3) shall ensure that significant emission reduc-
tions are achieved in both the Eastern and Western 
Regions of the United States. 
(b) DEADLINE.—The Administrator shall promul-
gate—
(1) the regulations required under subsection 
(a) to carry out sections 2 and 3 not later than 2 
years after the date of the enactment of this Act; 
and 
(2) the regulations required under subsection 
(a) to carry out section 4 not later than December 
15, 2004. 
SEC. 6. REGIONAL ECOSYSTEMS. 
(a) REPORT.—
(1) IN GENERAL.—Not later than December 31, 
2007, the Administrator shall submit to the Con-
gress a report identifying objectives for scientifically 
credible environmental indicators, as determined by 
the Administrator, that are sufficient to protect sen-
sitive ecosystems of the Adirondack Mountains, mid-
Appalachian 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 shall—
(A) include acid neutralizing capacity as 
an indicator; and 
(B) identify as an objective the objective of 
increasing the proportion of water bodies in 
sensitive receptor areas with an acid neutral-
izing capacity greater than zero from the pro-
portion identified in surveys begun in 1984. 
(3) UPDATED REPORT.—Not later than Decem-
ber 31, 2011, the Administrator shall submit to the 
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, 2011, the Administrator shall determine 
whether emissions reductions called for in this Act 
are sufficient to ensure achievement of the objectives 
stated in subsection (a)(1). 
(2) PROMULGATION.—If the Administrator 
finds under paragraph (1) that emission reductions 
are not sufficient to ensure achievement of the objec-
tives identified in subsection (a)(1), the Adminis-
trator shall promulgate, not later than 2 years after 
making the finding, such regulations, including 
modification of nitrogen oxides and sulfur dioxide al-
lowance allocations or any such measure, as the Ad-
ministrator determines are necessary to protect the 
sensitive ecosystems described in subsection (a)(1). 
SEC. 7. ADMINISTRATOR. 
For purposes of this Act, the term ‘‘Administrator’’ 
means the Administrator of the Environmental Protection 
Agency.
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