[Congressional Bills 107th Congress]
[From the U.S. Government Publishing Office]
[S. 588 Introduced in Senate (IS)]







107th CONGRESS
  1st Session
                                 S. 588

   To reduce acid deposition under the Clean Air Act, and for other 
                               purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                             March 21, 2001

  Mr. Schumer (for himself and Mrs. Clinton) introduced the following 
bill; which was read twice and referred to the Committee on Environment 
                            and Public Works

_______________________________________________________________________

                                 A BILL


 
   To reduce acid deposition under the Clean Air Act, and for other 
                               purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Acid Rain Control Act''.

SEC. 2. FINDINGS AND PURPOSES.

    (a) Findings.--Congress finds that--
            (1) reductions of atmospheric nitrogen oxide and sulfur 
        dioxide from utility plants, in addition to the reductions 
        required under the Clean Air Act (42 U.S.C. 7401 et seq.), are 
        needed to reduce acid deposition and its serious adverse 
        effects on public health, natural resources, building 
        structures, sensitive ecosystems, and visibility;
            (2) nitrogen oxide and sulfur dioxide contribute to the 
        development of fine particulates, suspected of causing human 
        mortality and morbidity to a significant extent;
            (3) regional nitrogen oxide reductions of 50 percent in the 
        Eastern United States, in addition to the reductions required 
        under the Clean Air Act, may be necessary to protect sensitive 
        watersheds from the effects of nitrogen deposition;
            (4) without reductions in nitrogen oxide and sulfur 
        dioxide, the number of acidic lakes in the Adirondacks in the 
        State of New York is expected to increase by up to 40 percent 
        by 2040; and
            (5) nitrogen oxide is highly mobile and can lead to ozone 
        formation hundreds of miles from the emitting source.
    (b) Purposes.--The purposes of this Act are--
            (1) to recognize the current scientific understanding that 
        emissions of nitrogen oxide and sulfur dioxide, and the acid 
        deposition resulting from emissions of nitrogen oxide and 
        sulfur dioxide, present a substantial human health and 
        environmental risk;
            (2) to require reductions in nitrogen oxide and sulfur 
        dioxide emissions;
            (3) to support the efforts of the Ozone Transport 
        Assessment Group to reduce ozone pollution;
            (4) to reduce utility emissions of nitrogen oxide by 70 
        percent from 1990 levels; and
            (5) to reduce utility emissions of sulfur dioxide by 50 
        percent after the implementation of phase II sulfur dioxide 
        requirements under section 405 of the Clean Air Act (42 U.S.C. 
        7651d).

SEC. 3. DEFINITIONS.

    In this Act:
            (1) Administrator.--The term ``Administrator'' means the 
        Administrator of the Environmental Protection Agency.
            (2) Affected facility.--The term ``affected facility'' 
        means a facility with 1 or more combustion units that serve at 
        least 1 electricity generator with a capacity equal to or 
        greater than 25 megawatts.
            (3) NO<INF>x</INF> allowance.--The term ``NO<INF>x</INF> 
        allowance'' means a limited authorization under section 4(3) to 
        emit, in accordance with this Act, quantities of nitrogen 
        oxide.
            (4) MMBTU.--The term ``mmBtu'' means 1,000,000 British 
        thermal units.
            (5) Program.--The term ``Program'' means the Nitrogen Oxide 
        Allowance Program established under section 4.
            (6) State.--The term ``State'' means the 48 contiguous 
        States and the District of Columbia.

SEC. 4. NITROGEN OXIDE ALLOWANCE PROGRAM.

    (a) In General.--
            (1) Establishment.--Not later than 18 months after the date 
        of enactment of this Act, the Administrator shall establish a 
        program to be known as the ``Nitrogen Oxide Allowance 
        Program''.
            (2) Scope.--The Program shall be conducted in the 48 
        contiguous States and the District of Columbia.
            (3) NO<INF>x</INF> allowances.--
                    (A) Allocation.--The Administrator shall allocate 
                under paragraph (4)--
                            (i) for each of calendar years 2004 through 
                        2006, a sufficient number of NO<INF>x</INF> 
                        allowances to reduce utility emission of 
                        NO<INF>x</INF> by 56 percent from 1990 levels; 
                        and
                            (ii) for calendar year 2007 and each 
                        calendar year thereafter, a sufficient number 
                        of NO<INF>x</INF> allowances to reduce utility 
                        emissions of NO<INF>x</INF> by 70 percent from 
                        1990 levels.
                    (B) Use.--Each NO<INF>x</INF> allowance shall 
                authorize an affected facility to emit--
                            (i) 1 ton of nitrogen oxide during each of 
                        the months of October, November, December, 
                        January, February, March, and April of any 
                        year; or
                            (ii) \1/2\ ton of nitrogen oxide during 
                        each of the months of May, June, July, August, 
                        and September of any year.
            (4) Allocation.--
                    (A) Definition of total electric power.--In this 
                paragraph, the term ``total electric power'' means all 
                electric power generated by utility and nonutility 
                generators for distribution, including electricity 
                generated from solar, wind, hydro power, nuclear power, 
                cogeneration facilities, and the combustion of fossil 
                fuel.
                    (B) Allocation of allowances.--The Administrator 
                shall allocate annual NO<INF>x</INF> allowances to each 
                of the States in proportion to the State's share of the 
                total electric power generated in all of the States.
                    (C) Publication.--The Administrator shall publish 
                in the Federal Register a list of each State's 
                NO<INF>x</INF> 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 distribution of 
                NO<INF>x</INF> allowances of the State to affected 
                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 calendar year 
                        that begins 61 months thereafter.
                    (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 Administrator shall distribute 
                the NO<INF>x</INF> allowances to affected facilities in 
                the State as detailed in the report.
                    (C) Late submission of report.--A report submitted 
                by a State after September 30 of a specified year shall 
                be of no effect.
                    (D) Distribution in absence of a report.--
                            (i) In general.--Subject to subsection (e), 
                        if a State does not submit a report under 
                        subparagraph (A) not later than September 30 of 
                        the calendar year specified in subparagraph 
                        (A), the Administrator shall, not later than 
                        November 30 of that calendar year, distribute 
                        the NO<INF>x</INF> allowances for the calendar 
                        years specified in subparagraph (A) to each 
                        affected facility in the State in proportion to 
                        the affected facility's share of the total 
                        electric power generated in the State.
                            (ii) Determination of facility's share.--In 
                        determining an affected facility's share of 
                        total electric power generated in a State, the 
                        Administrator shall consider 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, respectively, 
                                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, respectively, 
                                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, 
                                respectively, in the calendar year 5 
                                years previous to the year for which 
                                the determination is made.
                    (E) Judicial review.--A distribution of 
                NO<INF>x</INF> allowances by the Administrator under 
                subparagraph (D) shall not be subject to judicial 
                review.
    (b) NO<INF>x</INF> Allowance Transfer System.--
            (1) In general.--Not later than 18 months after the date of 
        enactment of this Act, the Administrator shall promulgate 
        NO<INF>x</INF> allowance system regulations under which a 
        NO<INF>x</INF> allowance allocated under this Act may be 
        transferred among affected facilities and any other person.
            (2) Establishment.--The regulations shall establish the 
        NO<INF>x</INF> allowance system under this section, including 
        requirements for the allocation, transfer, and use of 
        NO<INF>x</INF> allowances under this Act.
            (3) Use of no<INF>x</INF> allowances.--The regulations 
        shall--
                    (A) prohibit the use (but not the transfer in 
                accordance with paragraph (5)) of any NO<INF>x</INF> 
                allowance before the calendar year for which the 
                NO<INF>x</INF> allowance is allocated; and
                    (B) provide that the unused NO<INF>x</INF> 
                allowances shall be carried forward and added to 
                NO<INF>x</INF> allowances allocated for subsequent 
                years.
            (4) Certification of transfer.--A transfer of a 
        NO<INF>x</INF> allowance shall not be effective until a written 
        certification of the transfer, signed by a responsible official 
        of the person making the transfer, is received and recorded by 
        the Administrator.
    (c) NO<INF>x</INF> 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 NO<INF>x</INF> allowances that shall specify all necessary 
procedures and requirements for an orderly and competitive functioning 
of the NO<INF>x</INF> allowance system.
    (d) Permit Requirements.--A NO<INF>x</INF> allowance allocation or 
transfer shall, on recordation by the Administrator, 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 NO<INF>x</INF> allowances under subsection 
        (a)(5)(D), the Administrator shall place 10 percent of the 
        total annual NO<INF>x</INF> 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 calendar year 
                thereafter, to sources that commence operation after 
                the calendar year that is 5 years previous to the year 
                for which the distribution is made.
            (2) Share.--For a State for which the Administrator 
        distributes NO<INF>x</INF> allowances under subsection 
        (a)(5)(D), the Administrator shall distribute to each new 
        source a number of NO<INF>x</INF> 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 
        operates.
            (3) Unused no<INF>x</INF> allowances.--
                    (A) In general.--During the period of calendar 
                years 2002 through 2007, the Administrator shall 
                conduct auctions at which a NO<INF>x</INF> 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 NO<INF>x</INF> allowance at an 
                        auction under subparagraph (A) shall submit (by 
                        a date set by the Administrator) to the 
                        Administrator (on a sealed bid schedule 
                        provided by the Administrator) an offer to 
                        purchase a specified number of NO<INF>x</INF> 
                        allowances at a specified price.
                            (ii) Sale based on bid price.--A 
                        NO<INF>x</INF> allowance auctioned under 
                        subparagraph (A) shall be sold on the basis of 
                        bid price, starting with the highest priced bid 
                        and continuing until all NO<INF>x</INF> 
                        allowances for sale at the auction have been 
                        sold.
                            (iii) No minimum price.--A minimum price 
                        shall not be set for the purchase of a 
                        NO<INF>x</INF> allowance auctioned under 
                        subparagraph (A).
                            (iv) Regulations.--The Administrator, in 
                        consultation with the Secretary of the 
                        Treasury, shall promulgate regulations to carry 
                        out this paragraph.
                    (D) Use of no<INF>x</INF> allowances.--A 
                NO<INF>x</INF> allowance purchased at an auction under 
                subparagraph (A) may be used for any purpose and at any 
                time after the auction that is permitted for use of a 
                NO<INF>x</INF> allowance under this Act.
                    (E) Proceeds of auction.--The proceeds from an 
                auction under this paragraph shall be distributed to 
                the owner of an affected source in proportion to the 
                number of allowances that the owner would have received 
                but for this subsection.
    (f) Nature of NO<INF>x</INF> Allowances.--
            (1) Not a property right.--A NO<INF>x</INF> allowance shall 
        not be considered to be a property right.
            (2) Limitation of no<INF>x</INF> allowances.--
        Notwithstanding any other provision of law, the Administrator 
        may terminate or limit a NO<INF>x</INF> allowance.
    (g) Prohibitions.--
            (1) In general.--After January 1, 2002, it shall be 
        unlawful--
                    (A) for the owner or operator of an affected 
                facility to operate the affected facility in such a 
                manner that the affected facility emits nitrogen oxides 
                in excess of the amount permitted by the quantity of 
                NO<INF>x</INF> allowances held by the designated 
                representative of the affected facility; or
                    (B) for any person to hold, use, or transfer a 
                NO<INF>x</INF> allowance allocated under this Act, 
                except as provided under this Act.
            (2) Other emission limitations.--Section 407 of the Clean 
        Air Act (42 U.S.C. 7651f) is repealed.
            (3) Time of use.--A NO<INF>x</INF> allowance may not be 
        used before the calendar year for which the NO<INF>x</INF> 
        allowance is allocated.
            (4) Permitting, monitoring, and enforcement.--Nothing in 
        this section affects--
                    (A) the permitting, monitoring, and enforcement 
                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 NO<INF>x</INF> 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 penalty shall be 
        calculated by multiplying $6,000 by the quantity that is equal 
        to--
                    (A) the quantity of NO<INF>x</INF> allowances that 
                would authorize the nitrogen oxides emitted by the 
                facility for the calendar year; minus
                    (B) the quantity of NO<INF>x</INF> allowances that 
                the owner or operator holds for use for the facility 
                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 operator for the same violation under any other 
        provision 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 NO<INF>x</INF> allowances held for the facility 
        for the calendar year shall offset in the following calendar 
        year a quantity of NO<INF>x</INF> allowances equal to the 
        number of NO<INF>x</INF> 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 submitted, or as modified or 
        conditioned by the Administrator, 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 REVISIONS.

    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 Administrator, that are 
        sufficient to protect sensitive 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 report under paragraph 
        (1) shall--
                    (A) include acid neutralizing capacity as an 
                indicator; and
                    (B) identify as an objective under paragraph (1) 
                the objective of increasing the proportion 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 December 31, 2010, the 
        Administrator shall submit to Congress a report updating the 
        report under paragraph (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 precipitation 
        assessment program.--The reports under this subsection shall be 
        subject to the requirements 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 December 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 determines under 
        paragraph (1) that emissions reductions 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 regulations, 
        including modification of nitrogen oxide and sulfur dioxide 
        allowance allocations or any such measure, as the Administrator 
        determines are necessary 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 regulations 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 September 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 updating 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.
                                 <all>