514 
(d) AUCTION SALES.— 
(1) AUCTION SUBACCOUNT.—The Administrator shall establish in 
the special allowance reserve an auction subaccount. The auction sub-
account shall contain allowances to be sold at auction under this sec-
tion in the amount of 250,000 tons per year. 
(2) ANNUAL AUCTIONS.— 
(A) IN GENERAL.—In each year, the Administrator shall con-
duct auctions at which the allowances described in paragraph (1) 
shall be offered for sale in accordance with regulations promul-
gated by the Administrator, in consultation with the Secretary of 
the Treasury. 
(B) AMOUNTS.—The allowances described in paragraph (1) 
shall be offered for sale at auction in the amounts specified in 
table 2. 
TABLE 2—NUMBER OF ALLOWANCES AVAILABLE FOR AUCTION 
Year of Sale 
Spot 
Auction (same 
year) 
Advance Auc-
tion 
2000 and thereafter ...................................................................................
100,000
100,000 
Allowances sold in the spot sale in any year are allowances that may only be used in that year (unless 
banked for use in a later year), except as otherwise noted. Allowances sold in the advance auction in any 
year are allowances that may only be used in the 7th year after the year in which the allowances are first of-
fered for sale (unless banked for use in a later year). 
(C) SUBMISSION OF BIDS.—An auction shall be open to any 
person. A person wishing to bid for allowances shall submit (by 
a date set by the Administrator) to the Administrator (on a sealed 
bid schedule provided by the Administrator) offers to purchase 
specified numbers of allowances at specified prices. 
(D) BID PRICE.—The regulations under subparagraph (A) shall 
specify that the auctioned allowances shall be allocated and sold 
on the basis of bid price, starting with the highest bid and con-
tinuing until all allowances for sale at an auction have been allo-
cated. The regulations shall not permit a minimum price to be set 
for the purchase of withheld allowances. 
(E) USE OF ALLOWANCES.—Allowances purchased at the auc-
tion may be used for any purpose and at any time after the auc-
tion, subject to this subdivision. 
(3) PROCEEDS.— 
(A) IN GENERAL.—Notwithstanding section 3302 of title 31 or 
any other provision of law, within 90 days after receipt, the Ad-
ministrator shall transfer the proceeds from the auction under this 
section, on a pro rata basis, to the owners or operators of the af-
fected units at an affected source from which allowances were 
withheld under subsection (b). No funds transferred from a pur-
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chaser to a seller of allowances under this paragraph shall be held 
by any officer or employee of the United States or treated for any 
purpose as revenue to the United States or the Administrator. 
(B) ALLOWANCES NOT SOLD.—At the end of each year, any al-
lowances offered for sale but not sold at the auction shall be re-
turned without charge, on a pro rata basis, to the owner or oper-
ator of the affected units from whose allocation the allowances 
were withheld. 
(4) ADDITIONAL AUCTION PARTICIPANTS.—Any person holding al-
lowances or to which allowances are allocated by the Administrator may 
submit the allowances to the Administrator to be offered for sale at 
auction under this subsection. The proceeds of any such sale shall be 
transferred at the time of sale by the purchaser to the person submit-
ting the allowances for sale. The holder of allowances offered for sale 
under this paragraph may specify a minimum sale price. Any person 
may purchase allowances offered for auction under this paragraph. The 
allowances shall be allocated and sold to purchasers on the basis of bid 
price after the auction under paragraph (2) is complete. No funds 
transferred from a purchaser to a seller of allowances under this para-
graph shall be held by any officer or employee of the United States or 
treated for any purpose as revenue to the United States or the Admin-
istrator. 
(5) RECORDATION BY EPA.—The Administrator shall record and 
publicly report the nature, prices, and results of each auction under 
this subsection, including the prices of successful bids, and shall record 
the transfers of allowances as a result of each auction in accordance 
with the requirements of this section. The transfer of allowances at the 
auction shall be recorded in accordance with the regulations promul-
gated by the Administrator under this subdivision. 
(6) TERMINATION OF AUCTIONS.—If the Administrator determines 
that, during any period of 3 consecutive calendar years, fewer than 20 
percent of the allowances available in the auction subaccount have been 
purchased, the Administrator may terminate the withholding of allow-
ances and the auction sales under this section. 
(e) CHANGES IN SALES, AUCTIONS, AND WITHHOLDING.—Pursuant to 
rulemaking after public notice and comment, the Administrator may at any 
time decrease the number of allowances withheld and sold under this sec-
tion. 
(f) CONDUCT OF SALES OR AUCTIONS BY OTHER FEDERAL DEPART-
MENTS OR AGENCIES OR BY NONGOVERNMENTAL AGENCIES, GROUPS, OR 
ORGANIZATIONS.—Pursuant to regulations under this section, the Adminis-
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trator may by delegation or contract provide for the conduct of sales or auc-
tions under the Administrator’s supervision by other Federal departments 
or agencies or by nongovernmental agencies, groups, or organizations. 
Subdivision 6—Permits 
Chapter 235—Permits 
Sec. 
235101. Definitions. 
235102. Permit programs. 
235103. Permit applications. 
235104. Permit requirements and conditions. 
235105. Notification to Administrator and contiguous States. 
235106. Other authorities. 
235107. Small business stationary source technical and environmental compliance assistance 
program. 
§ 235101. Definitions 
In this subdivision: 
(1) AFFECTED SOURCE.—The term ‘‘affected source’’ shall have the 
meaning given the term in section 233102 of this title. 
(2) MAJOR
SOURCE.—The term ‘‘major source’’ means any sta-
tionary source (or any group of stationary sources located within a con-
tiguous area and under common control) that is either of the following: 
(A) A major source (as defined in section 211112 of this title). 
(B) A major stationary source (as defined in section 201101 of 
this title or chapter 215). 
(3) PERMITTING
AUTHORITY.—The term ‘‘permitting authority’’ 
means— 
(A) the Administrator; or 
(B) an air pollution control agency authorized by the Adminis-
trator to carry out a permit program under this subdivision. 
(4) SCHEDULE OF COMPLIANCE.—The term ‘‘schedule of compli-
ance’’ means a schedule of remedial measures (including an enforceable 
sequence of actions or operations) leading to compliance with an appli-
cable implementation plan, emission standard, emission limitation, or 
emission prohibition. 
§ 235102. Permit programs 
(a) PROHIBITION.— 
(1) IN GENERAL.—It shall be unlawful for any person— 
(A) to violate any requirement of a permit issued under this 
subdivision; or 
(B) to operate, except in compliance with a permit issued by a 
permitting authority under this subdivision— 
(i) an affected source (as provided in subdivision 5); 
(ii) a major source; 
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(iii) any other source (including an area source) subject to 
standards or regulations under section 211111 or 211112 of 
this title; 
(iv) any other source required to have a permit under chap-
ter 213 or 215; or 
(v) any other stationary source in a category designated (in 
whole or in part) by regulation promulgated by the Adminis-
trator. 
(2) REGULATIONS.—Any regulation under paragraph (1)(B)(v) shall 
include a finding setting forth the basis for the designation made by 
the regulation. 
(3) EFFECT OF SUBSECTION.—Nothing in this subsection shall be 
construed to alter the applicable requirements of this division that a 
permit be obtained before construction or modification. 
(4) EXEMPTIONS.—The Administrator may, consistent with the ap-
plicable provisions of this division, promulgate regulations to exempt 
(in whole or in part) 1 or more categories of sources (except a major 
source) from the requirements of this subsection if the Administrator 
finds that compliance with the requirements is impracticable, infeasible, 
or unnecessarily burdensome on a category. 
(b) MINIMUM ELEMENTS.— 
(1) IN GENERAL.—The Administrator shall promulgate regulations 
establishing the minimum elements of a permit program to be adminis-
tered by an air pollution control agency. 
(2) ELEMENTS TO BE INCLUDED.—The elements shall include each 
of the following: 
(A) Requirements for permit applications, including a standard 
application form and criteria for determining in a timely fashion 
the completeness of applications. 
(B) Monitoring and reporting requirements. 
(C) A requirement under State or local law or interstate com-
pact that the owner or operator of all sources subject to the re-
quirement to obtain a permit under this subdivision pay an annual 
or other periodic fee sufficient to cover all reasonable direct and 
indirect costs required to develop and administer the permit pro-
gram requirements of this subdivision, including the reasonable 
costs of— 
(i) reviewing and acting on any application for such a per-
mit; 
(ii) if the owner or operator receives a permit for a source, 
implementing and enforcing the terms and conditions of the 
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permit (not including any court costs or other costs associ-
ated with any enforcement action); 
(iii) emission monitoring and ambient monitoring; 
(iv) preparing generally applicable regulations or guidance; 
(v) modeling, analyses, and demonstrations; and 
(vi) preparing inventories and tracking emissions. 
(D) Requirements for adequate personnel and funding to ad-
minister the program. 
(E) A requirement that the permitting authority have adequate 
authority to— 
(i) issue permits and ensure compliance by all sources re-
quired to have a permit under this subdivision with each ap-
plicable standard, regulation, or requirement under this divi-
sion; 
(ii) issue permits for a fixed term, not to exceed 5 years; 
(iii) ensure that, on issuance or renewal, permits incor-
porate emission limitations and other requirements in an ap-
plicable implementation plan; 
(iv) terminate, modify, or revoke and reissue permits for 
cause; 
(v) enforce permits, permit fee requirements, and the re-
quirement to obtain a permit, including authority to recover 
civil penalties in a maximum amount of not less than $10,000 
per day for each violation, and provide appropriate criminal 
penalties; and 
(vi) ensure that no permit will be issued if the Adminis-
trator objects to its issuance in a timely manner under this 
subdivision. 
(F) Adequate, streamlined, and reasonable procedures for— 
(i) expeditiously determining when applications are com-
plete; 
(ii) processing applications; 
(iii) public notice, including offering an opportunity for 
public comment and a hearing; and 
(iv) expeditious review of permit actions, including applica-
tions, renewals, or revisions, and including an opportunity for 
judicial review in State court of the final permit action by the 
applicant, any person that participated in the public comment 
process, and any other person that could obtain judicial re-
view of that action under applicable law. 
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(G) To ensure against unreasonable delay by a permitting au-
thority, adequate authority and procedures to provide that a fail-
ure of the permitting authority to act on a permit application or 
permit renewal application (in accordance with the time periods 
specified in section 235103 of this title or, as appropriate, subdivi-
sion 5) shall be treated as a final permit action solely for purposes 
of obtaining judicial review in State court of an action brought by 
any person described in subparagraph (F)(iv) to require that ac-
tion be taken by the permitting authority on the application with-
out additional delay. 
(H) Authority, and reasonable procedures consistent with the 
need for expeditious action by a permitting authority on permit 
applications and related matters, to make available to the public 
any permit application, compliance plan, permit, and monitoring 
or compliance report under section 235103(e) of this title, subject 
to section 211114(c) of this title. 
(I) A requirement that a permitting authority, in the case of a 
permit with a term of 3 or more years for a major source, shall 
require revisions to the permit to incorporate applicable standards 
and regulations promulgated under this division after the issuance 
of the permit. 
(J) Provisions to allow changes within a permitted facility (or 
a facility operating pursuant to section 235103(d) of this title) 
without requiring a permit revision, if— 
(i) the changes are not modifications under any provision 
of subdivision 2; 
(ii) the changes do not exceed the emissions allowable 
under the permit (whether expressed in the permit as a rate 
of emissions or in terms of total emissions); and 
(iii) the facility provides the Administrator and the permit-
ting authority with written notification in advance of the pro-
posed changes (which shall be a minimum of 7 days unless 
the permitting authority provides in its regulations a different 
timeframe for emergencies). 
(3) FEE PROGRAM.— 
(A) DEFINITION OF REGULATED POLLUTANT.—In this para-
graph, the term ‘‘regulated pollutant’’ means— 
(i) a volatile organic compound; 
(ii) a pollutant regulated under section 211111 or 211112 
of this title; and 
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(iii) a pollutant for which a primary NAAQS has been pro-
mulgated (not including carbon monoxide). 
(B) AMOUNT COLLECTED.—The total amount of fees collected 
by a permitting authority under paragraph (2)(C) shall conform 
to the following requirements: 
(i) ADEQUATE REFLECTION OF REASONABLE COSTS.—The 
Administrator shall not approve a program as meeting the re-
quirements of this paragraph unless the State demonstrates 
that, except as otherwise provided in clauses (ii) through (iv), 
the program will result in the collection, in the aggregate, 
from all sources subject to paragraph (2)(C), of an amount 
not less than $25 per ton of each regulated pollutant, or such 
other amount as the Administrator may determine adequately 
reflects the reasonable costs of the permit program. 
(ii) EXCLUSION OF EMISSIONS IN EXCESS OF 4,000 TONS 
PER YEAR.—In determining the amount under clause (i), a 
permitting authority is not required to include any amount of 
regulated pollutant emitted by any source in excess of 4,000 
tons per year of the regulated pollutant. 
(iii) LESSER AMOUNT MEETING REQUIREMENTS.—The re-
quirements of clause (i) shall not apply if the permitting au-
thority demonstrates that collecting an amount less than the 
amount specified under clause (i) will meet the requirements 
of paragraph (2)(C). 
(iv) ANNUAL INCREASE.— 
(I) IN GENERAL.—The fee calculated under clause (i) 
shall be increased (consistent with the need to cover the 
reasonable costs authorized by paragraph (2)(C)) in each 
year by the percentage, if any, by which the Consumer 
Price Index for the most recent calendar year ending be-
fore the beginning of the year exceeds the Consumer 
Price Index for the calendar year 1989. 
(II) CONSUMER PRICE INDEX.—For purposes of this 
clause— 
(aa) the Consumer Price Index for any calendar 
year is the average of the Consumer Price Index for 
all-urban consumers published by the Department 
of Labor, as of the close of the 12-month period 
ending on August 31 of each calendar year; and 
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(bb) the revision of the Consumer Price Index 
that is most consistent with the Consumer Price 
Index for calendar year 1989 shall be used. 
(C) COLLECTION BY THE ADMINISTRATOR.— 
(i) IN GENERAL.—If the Administrator determines under 
subsection (d) that the fee provisions of the operating permit 
program do not meet the requirements of paragraph (2)(C), 
or if the Administrator makes a determination under sub-
section (i) that a permitting authority is not adequately ad-
ministering or enforcing an approved fee program, the Ad-
ministrator may, in addition to taking any other action au-
thorized under this subdivision, collect reasonable fees from 
the sources identified under paragraph (2)(C). The fees shall 
be designed solely to cover the Administrator’s costs of ad-
ministering the provisions of the permit program promulgated 
by the Administrator. 
(ii) PENALTY.—A source that fails to pay a fee lawfully im-
posed by the Administrator under this subparagraph shall 
pay a penalty of 50 percent of the fee amount, plus interest 
on the fee amount computed in accordance with section 
6621(a)(2) of the Internal Revenue Code of 1986 (26 U.S.C. 
6621(a)(2)). 
(iii) SPECIAL FUND.—Any fees, penalties, and interest col-
lected under this subparagraph shall be deposited in the 
Treasury in a special fund for licensing and other services, 
which thereafter shall be available for appropriation, to re-
main available until expended, subject to appropriation, to 
carry out EPA’s activities for which the fees were collected. 
(D) FEE REQUIRED TO BE COLLECTED BY A STATE, LOCAL, OR 
INTERSTATE
AGENCY.—Any fee required to be collected by a 
State, local, or interstate agency under this subsection shall be uti-
lized solely to cover all reasonable (direct and indirect) costs re-
quired to support the permit program as set forth in paragraph 
(2)(C). 
(4) PERMIT REVISIONS.—A revision required by paragraph (2)(I) 
shall be made as expeditiously as practicable and consistent with the 
procedures established under paragraph (2)(F) but not later than 18 
months after the promulgation of standards and regulations described 
in paragraph (2)(I). No such revision shall be required if the effective 
date of the standards or regulations is a date after the expiration of 
the permit term. Such a permit revision shall be treated as a permit 
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renewal if it complies with the requirements of this subdivision regard-
ing renewals. 
(c) SINGLE PERMIT.—A single permit may be issued for a facility with 
multiple sources. 
(d) SUBMISSION; APPROVAL OR DISAPPROVAL.— 
(1) SUBMISSION.—The Governor of each State shall develop and 
submit to the Administrator— 
(A) a permit program under State or local law or under an 
interstate compact meeting the requirements of this subdivision; 
and 
(B) a legal opinion from the attorney general (or the attorney 
for a State air pollution control agency that has independent legal 
counsel, or from the chief legal officer of an interstate agency), 
that the laws of the State or locality provide or the interstate com-
pact provides adequate authority to carry out the program. 
(2) APPROVAL OR DISAPPROVAL.—Not later than 1 year after receiv-
ing a program, and after notice and opportunity for public comment, 
the Administrator shall approve or disapprove the program, in whole 
or in part. The Administrator may approve a program to the extent 
that the program meets the requirements of this division, including the 
regulations issued under subsection (b). If the program is disapproved, 
in whole or in part, the Administrator shall notify the Governor of any 
revisions or modifications necessary to obtain approval. The Governor 
shall revise and resubmit the program for review under this section 
within 180 days after receiving notification. 
(e) ADMINISTRATION AND ENFORCEMENT.— 
(1) DISCRETIONARY
SANCTIONS.—Whenever the Administrator 
makes a determination that a permitting authority is not adequately 
administering and enforcing a program, or portion thereof, in accord-
ance with the requirements of this subdivision, the Administrator— 
(A) shall provide notice to the State; and 
(B) may, prior to the date that is 18 months after the date of 
the notice under subparagraph (A), apply any of the sanctions 
specified in section 215111(b) of this title. 
(2) MANDATORY SANCTIONS.—Whenever the Administrator makes a 
determination that a permitting authority is not adequately admin-
istering and enforcing a program, or portion thereof, in accordance 
with the requirements of this subdivision, on the date that is 18 
months after the date of the notice under paragraph (1)(A), the Ad-
ministrator shall apply the sanctions under section 215111(b) of this 
title in the same manner and subject to the same deadlines and other 
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