[Congressional Bills 109th Congress]
[From the U.S. Government Publishing Office]
[H.R. 1873 Introduced in House (IH)]






109th CONGRESS
  1st Session
                                H. R. 1873

To amend the Clean Air Act to establish a national uniform multiple air 
    pollutant regulatory program for the electric generating sector.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                             April 27, 2005

   Mr. Bass (for himself, Mr. Davis of Florida, Mr. Cooper, and Mr. 
  Bradley of New Hampshire) introduced the following bill; which was 
            referred to the Committee on Energy and Commerce

_______________________________________________________________________

                                 A BILL


 
To amend the Clean Air Act to establish a national uniform multiple air 
    pollutant regulatory program for the electric generating sector.

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

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

    (a) Short Title.--This Act may be cited as the ``Clean Air Planning 
Act of 2005''.
    (b) Table of Contents.--The table of contents of this Act is as 
follows:
Sec. 1. Short title; table of contents.
Sec. 2. Findings and purposes.
Sec. 3. Integrated air quality planning for the electric generating 
                            sector.
Sec. 4. New source review program.
Sec. 5. Revisions to sulfur dioxide allowance program.
Sec. 6. Relationship to other law.

SEC. 2. FINDINGS AND PURPOSES.

    (a) Findings.--Congress finds that--
            (1) fossil fuel-fired electric generating facilities, 
        consisting of facilities fueled by coal, fuel oil, and natural 
        gas, produce nearly \2/3\ of the electricity generated in the 
        United States;
            (2) fossil fuel-fired electric generating facilities 
        produce approximately \2/3\ of the total sulfur dioxide 
        emissions, \1/3\ of the total nitrogen oxides emissions, \1/3\ 
        of the total carbon dioxide emissions, and \1/3\ of the total 
        mercury emissions, in the United States;
            (3)(A) many electric generating facilities have been exempt 
        from the emission limitations applicable to new units based on 
        the expectation that over time the units would be retired or 
        updated with new pollution control equipment; but
            (B) many of the exempted units continue to operate and emit 
        pollutants at relatively high rates;
            (4) pollution from existing electric generating facilities 
        can be reduced through adoption of modern technologies and 
        practices;
            (5) the electric generating industry is being restructured 
        with the objective of providing lower electricity rates and 
        higher quality service to consumers;
            (6) the full benefits of competition will not be realized 
        if the environmental impacts of generation of electricity are 
        not uniformly internalized; and
            (7) the ability of owners of electric generating facilities 
        to effectively plan for the future is impeded by the 
        uncertainties surrounding future environmental regulatory 
        requirements that are imposed inefficiently on a piecemeal 
        basis.
    (b) Purposes.--The purposes of this Act are--
            (1) to protect and preserve the environment and safeguard 
        public health by ensuring that substantial emission reductions 
        are achieved at fossil fuel-fired electric generating 
        facilities;
            (2) to significantly reduce the quantities of mercury, 
        carbon dioxide, sulfur dioxide, and nitrogen oxides that enter 
        the environment as a result of the combustion of fossil fuels;
            (3) to encourage the development and use of renewable 
        energy;
            (4) to internalize the cost of protecting the values of 
        public health, air, land, and water quality in the context of a 
        competitive market in electricity;
            (5) to ensure fair competition among participants in the 
        competitive market in electricity that will result from fully 
        restructuring the electric generating industry;
            (6) to provide a period of environmental regulatory 
        stability for owners and operators of electric generating 
        facilities so as to promote improved management of existing 
        assets and new capital investments; and
            (7) to achieve emission reductions from electric generating 
        facilities in a cost-effective manner.

SEC. 3. INTEGRATED AIR QUALITY PLANNING FOR THE ELECTRIC GENERATING 
              SECTOR.

    The Clean Air Act (42 U.S.C. 7401 et seq.) is amended by adding at 
the end the following:

     ``TITLE VII--INTEGRATED AIR QUALITY PLANNING FOR THE ELECTRIC 
                           GENERATING SECTOR

``Sec. 701. Definitions.
``Sec. 702. National pollutant tonnage limitations.
``Sec. 703. Nitrogen oxide and mercury allowance trading programs.
``Sec. 704. Carbon dioxide allowance trading program.

``SEC. 701. DEFINITIONS.

    ``In this title:
            ``(1) Affected unit.--
                    ``(A) Mercury.--The term `affected unit', with 
                respect to mercury, means a coal-fired electric 
                generating facility (including a cogenerating facility) 
                that--
                            ``(i) has a nameplate capacity greater than 
                        25 megawatts; and
                            ``(ii) generates electricity for sale.
                    ``(B) Nitrogen oxides and carbon dioxide.--The term 
                `affected unit', with respect to nitrogen oxides and 
                carbon dioxide, means a fossil fuel-fired electric 
                generating facility (including a cogenerating facility) 
                that--
                            ``(i) has a nameplate capacity greater than 
                        25 megawatts; and
                            ``(ii) generates electricity for sale.
                    ``(C) Sulfur dioxide.--The term `affected unit', 
                with respect to sulfur dioxide, has the meaning given 
                the term in section 402.
            ``(2) Carbon dioxide allowance.--The term `carbon dioxide 
        allowance' means an authorization allocated by the 
        Administrator under this title to emit 1 ton of carbon dioxide 
        during or after a specified calendar year.
            ``(3) Covered unit.--The term `covered unit' means--
                    ``(A) an affected unit;
                    ``(B) a nuclear generating unit with respect to 
                incremental nuclear generation; and
                    ``(C) a renewable energy unit.
            ``(4) Greenhouse gas.--The term `greenhouse gas' means--
                    ``(A) carbon dioxide;
                    ``(B) methane;
                    ``(C) nitrous oxide;
                    ``(D) hydrofluorocarbons;
                    ``(E) perfluorocarbons; and
                    ``(F) sulfur hexafluoride.
            ``(5) Incremental nuclear generation.--The term 
        `incremental nuclear generation' means the difference between--
                    ``(A) the quantity of electricity generated by a 
                nuclear generating unit in a calendar year; and
                    ``(B) the quantity of electricity generated by the 
                nuclear generating unit in calendar year 1990;
        as determined by the Administrator and measured in megawatt 
        hours.
            ``(6) Mercury allowance.--The term `mercury allowance' 
        means an authorization allocated by the Administrator under 
        this title to emit 1 pound of mercury during or after a 
        specified calendar year.
            ``(7) New renewable energy unit.--The term `new renewable 
        energy unit' means a renewable energy unit that has operated 
        for a period of not more than 3 years.
            ``(8) New unit.--The term `new unit' means an affected unit 
        that has operated for not more than 3 years and is not eligible 
        to receive--
                    ``(A) sulfur dioxide allowances under section 
                417(b);
                    ``(B) nitrogen oxide allowances or mercury 
                allowances under section 703(c)(2); or
                    ``(C) carbon dioxide allowances under section 
                704(c)(2).
            ``(9) Nitrogen oxide allowance.--The term `nitrogen oxide 
        allowance' means an authorization allocated by the 
        Administrator under this title to emit 1 ton of nitrogen oxides 
        during or after a specified calendar year.
            ``(10) Nuclear generating unit.--The term `nuclear 
        generating unit' means an electric generating facility that--
                    ``(A) uses nuclear energy to supply electricity to 
                the electric power grid; and
                    ``(B) commenced operation in calendar year 1990 or 
                earlier.
            ``(11) Renewable energy.--The term `renewable energy' means 
        electricity generated from--
                    ``(A) wind;
                    ``(B) organic waste (excluding incinerated 
                municipal solid waste);
                    ``(C) biomass (including anaerobic digestion from 
                farm systems and landfill gas recovery);
                    ``(D) fuel cells; or
                    ``(E) a hydroelectric, geothermal, solar thermal, 
                photovoltaic, or other nonfossil fuel, nonnuclear 
                source.
            ``(12) Renewable energy unit.--The term `renewable energy 
        unit' means an electric generating facility that uses 
        exclusively renewable energy to supply electricity to the 
        electric power grid.
            ``(13) Sequestration.--The term `sequestration' means the 
        action of sequestering carbon by--
                    ``(A) enhancing a natural carbon sink (such as 
                through afforestation); or
                    ``(B) (i) capturing the carbon dioxide emitted from 
                a fossil fuel-based energy system; and
                    ``(ii) (I) storing the carbon in a geologic 
                formation or in a deep area of an ocean; or
                    ``(II) converting the carbon to a benign solid 
                material through a biological or chemical process.
            ``(14) Sulfur dioxide allowance.--The term `sulfur dioxide 
        allowance' has the meaning given the term `allowance' in 
        section 402.

``SEC. 702. NATIONAL POLLUTANT TONNAGE LIMITATIONS.

    ``(a) Sulfur Dioxide.--The annual tonnage limitation for emissions 
of sulfur dioxide from affected units in the United States shall be 
equal to--
            ``(1) for each of calendar years 2010 through 2013, 
        4,500,000 tons;
            ``(2) for each of calendar years 2014 through 2016, 
        3,500,000 tons; and
            ``(3) for calendar year 2017 and each calendar year 
        thereafter, 2,250,000 tons.
    ``(b) Nitrogen Oxides.--The annual tonnage limitation for emissions 
of nitrogen oxides from affected units in the United States shall be 
equal to--
            ``(1) for each of calendar years 2009 through 2014, 
        1,870,000 tons; and
            ``(2) for calendar year 2015 and each calendar year 
        thereafter, 1,700,000 tons.
    ``(c) Mercury.--
            ``(1) In general.--The annual tonnage limitation for 
        emissions of mercury from affected units in the United States 
        shall be equal to the following:
                    ``(A) For each of calendar years 2010 through 2014, 
                24 tons.
                    ``(B) For calendar year 2015 and each calendar year 
                thereafter, 10 tons.
            ``(2) Maximum emissions of mercury from each affected 
        unit.--
                    ``(A) Calendar years 2010 through 2014.--For each 
                of calendar years 2010 through 2014, the emissions of 
                mercury from each affected unit shall not exceed 
                either, at the option of the operator of the affected 
                unit--
                            ``(i) 50 percent of the total quantity of 
                        mercury present in the coal delivered to the 
                        affected unit in the calendar year; or
                            ``(ii) an annual output-based emission rate 
                        for mercury that shall be determined by the 
                        Administrator based on an input-based rate of 4 
                        pounds per trillion British thermal units.
                    ``(B) Calendar year 2015 and thereafter.--For 
                calendar year 2015 and each calendar year thereafter, 
                the emissions of mercury from each affected unit shall 
                not exceed--
                            ``(i) 30 percent of the total quantity of 
                        mercury present in the coal delivered to the 
                        affected unit in the calendar year; or
                            ``(ii) an annual output-based emission rate 
                        for mercury that shall be determined by the 
                        Administrator.
    ``(d) Carbon Dioxide.--Subject to section 704(d), the annual 
tonnage limitation for emissions of carbon dioxide from covered units 
in the United States shall be equal to--
            ``(1) for each of calendar years 2010 through 2014, the 
        quantity of emissions project to be emitted from affected units 
        in calendar year 2006, as determined by the Energy Information 
        Administration of the Department of Energy based on the 
        projections of the Administration the publication of which most 
        closely precedes the date of enactment of this title; and
            ``(2) for calendar year 2015 and each calendar year 
        thereafter, the quantity of emissions emitted from affected 
        units in calendar year 2001, as determined by the Energy 
        Information Administration of the Department of Energy.
    ``(e) Review of Annual Tonnage Limitations.--
            ``(1) Period of effectiveness.--The annual tonnage 
        limitations established under subsections (a) through (d) shall 
        remain in effect until the date that is 20 years after the date 
        of enactment of this title.
            ``(2) Determination by administrator.--Not later than 15 
        years after the date of enactment of this title, the 
        Administrator, after considering impacts on human health, the 
        environment, the economy, and costs, shall determine whether 1 
        or more of the annual tonnage limitations should be revised.
            ``(3) Determination not to revise.--If the Administrator 
        determines under paragraph (2) that none of the annual tonnage 
        limitations should be revised, the Administrator shall publish 
        in the Federal Register a notice of the determination and the 
        reasons for the determination.
            ``(4) Determination to revise.--
                    ``(A) In general.--If the Administrator determines 
                under paragraph (2) that 1 or more of the annual 
                tonnage limitations should be revised, the 
                Administrator shall publish in the Federal Register--
                            ``(i) not later than 15 years and 180 days 
                        after the date of enactment of this title, 
                        proposed regulations implementing the 
                        revisions; and
                            ``(ii) not later than 16 years and 180 days 
                        after the date of enactment of this title, 
                        final regulations implementing the revisions.
                    ``(B) Effective date of revisions.--Any revisions 
                to the annual tonnage limitations under subparagraph 
                (A) shall take effect on the date that is 20 years 
                after the date of enactment of this title.
    ``(f) Reduction of Emissions From Specified Affected Units.--
Subject to the requirements of this Act concerning national ambient air 
quality standards established under part A of title I, notwithstanding 
the annual tonnage limitations established under this section, the 
Federal Government or a State government may require that emissions 
from a specified affected unit be reduced to address a local air 
quality problem.

``SEC. 703. NITROGEN OXIDE AND MERCURY ALLOWANCE TRADING PROGRAMS.

    ``(a) Regulations.--
            ``(1) Promulgation.--
                    ``(A) In general.--Not later than 180 days after 
                enactment of this section, the Administrator shall 
                promulgate regulations to establish for affected units 
                in the United States--
                            ``(i) a nitrogen oxide allowance trading 
                        program; and
                            ``(ii) a mercury allowance trading program.
                    ``(B) Requirements.--Regulations promulgated under 
                subparagraph (A) shall establish requirements for the 
                allowance trading programs under this section, 
                including requirements concerning--
                            ``(i)(I) the generation, allocation, 
                        issuance, recording, tracking, transfer, and 
                        use of nitrogen oxide allowances and mercury 
                        allowances; and
                            ``(II) the public availability of all 
                        information concerning the activities described 
                        in subclause (I) that is not confidential;
                            ``(ii) compliance with subsection (e)(1);
                            ``(iii) the monitoring and reporting of 
                        emissions under paragraphs (2) and (3) of 
                        subsection (e); and
                            ``(iv) excess emission penalties under 
                        subsection (e)(4).
            ``(2) Mixed fuel, co-generation facilities and combined 
        heat and power facilities.--The Administrator shall promulgate 
        such regulations as are necessary to ensure the equitable 
        issuance of allowances to--
                    ``(A) facilities that use more than 1 energy source 
                to produce electricity; and
                    ``(B) facilities that produce electricity in 
                addition to another service or product.
            ``(3) Report to congress on use of captured or recovered 
        mercury.--
                    ``(A) In general.--Not later than 18 months after 
                the date of enactment of this title, the Administrator 
                shall submit to Congress a report on the public health 
                and environmental impacts from mercury that is or may 
                be--
                            ``(i) captured or recovered by air 
                        pollution control technology; and
                            ``(ii) incorporated into products such as 
                        soil amendments and cement.
                    ``(B) Required elements.--The report shall--
                            ``(i) review--
                                    ``(I) technologies, in use as of 
                                the date of the report, for 
                                incorporating mercury into products; 
                                and
                                    ``(II) potential technologies that 
                                might further minimize the release of 
                                mercury; and
                            ``(ii)(I) address the adequacy of legal 
                        authorities and regulatory programs in effect 
                        as of the date of the report to protect public 
                        health and the environment from mercury in 
                        products described in subparagraph (A)(ii); and
                            ``(II) to the extent necessary, make 
                        recommendations to improve those authorities 
                        and programs.
    ``(b) New Unit Reserves.--
            ``(1) Establishment.--The Administrator shall establish by 
        regulation a reserve of nitrogen oxide allowances and a reserve 
        of mercury allowances to be set aside for use by new units.
            ``(2) Determination of quantity.--The Administrator, 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 
                nitrogen oxide allowances and mercury allowances 
                required to be held in reserve for new units for each 
                of calendar years 2009 through 2014; and
                    ``(B) not later than June 30 of each fifth calendar 
                year thereafter, the quantity of nitrogen oxide 
                allowances and mercury allowances required to be held 
                in reserve for new units for the following 5-calendar 
                year period.
    ``(c) Nitrogen Oxide and Mercury Allowance Allocations.--
            ``(1) Timing of allocations.--The Administrator shall 
        allocate nitrogen oxide allowances and mercury allowances to 
        affected units--
                    ``(A) not later than December 31, 2006, for 
                calendar year 2010; and
                    ``(B) not later than December 31 of calendar year 
                2007 and each calendar year thereafter, for the fourth 
                calendar year that begins after that December 31.
            ``(2) Allocations to affected units that are not new 
        units.--
                    ``(A) Quantity of nitrogen oxide allowances 
                allocated.--The Administrator shall allocate to each 
                affected unit that is not a new unit a quantity of 
                nitrogen oxide allowances that is equal to the product 
                obtained by multiplying--
                            ``(i) 1.5 pounds of nitrogen oxides per 
                        megawatt hour; and
                            ``(ii) the quotient obtained by dividing--
                                    ``(I) the average annual net 
                                quantity of electricity generated by 
                                the affected unit during the most 
                                recent 3-calendar year period for which 
                                data are available, measured in 
                                megawatt hours; by
                                    ``(II) 2,000 pounds of nitrogen 
                                oxides per ton.
                    ``(B) Quantity of mercury allowances allocated.--
                The Administrator shall allocate to each affected unit 
                that is not a new unit a quantity of mercury allowances 
                that is equal to the product obtained by multiplying--
                            ``(i) 0.0000227 pounds of mercury per 
                        megawatt hour; and
                            ``(ii) the average annual net quantity of 
                        electricity generated by the affected unit 
                        during the most recent 3-calendar year period 
                        for which data are available, measured in 
                        megawatt hours.
                    ``(C) Adjustment of allocations.--
                            ``(i) In general.--If, for any calendar 
                        year, the total quantity of allowances 
                        allocated under subparagraph (A) or (B) is not 
                        equal to the applicable quantity determined 
                        under clause (ii), the Administrator shall 
                        adjust the quantity of allowances allocated to 
                        affected units that are not new units on a pro-
                        rata basis so that the quantity is equal to the 
                        applicable quantity determined under clause 
                        (ii).
                            ``(ii) Applicable quantity.--The applicable 
                        quantity referred to in clause (i) is the 
                        difference between--
                                    ``(I) the applicable annual tonnage 
                                limitation for emissions from affected 
                                units specified in subsection (b) or 
                                (c) of section 702 for the calendar 
                                year; and
                                    ``(II) the quantity of nitrogen 
                                oxide allowances or mercury allowances, 
                                respectively, placed in the applicable 
                                new unit reserve established under 
                                subsection (b) for the calendar year.
            ``(3) Allocation to new units.--
                    ``(A) Methodology.--The Administrator shall 
                promulgate regulations to establish a methodology for 
                allocating nitrogen oxide allowances and mercury 
                allowances to new units.
                    ``(B) Quantity of nitrogen oxide allowances and 
                mercury allowances allocated.--The Administrator shall 
                determine the quantity of nitrogen oxide allowances and 
                mercury allowances to be allocated to each new unit 
                based on the projected emissions from the new unit.
            ``(4) Allowance not a property right.--A nitrogen oxide 
        allowance or mercury allowance--
                    ``(A) is not a property right; and
                    ``(B) may be terminated or limited by the 
                Administrator.
            ``(5) No judicial review.--An allocation of nitrogen 
        allowances or mercury allowances by the Administrator under 
        this subsection shall not be subject to judicial review.
    ``(d) Nitrogen Oxide Allowance and Mercury Allowance Transfer 
System.--
            ``(1) Use of allowances.--The regulations promulgated under 
        subsection (a)(1)(A) shall--
                    ``(A) prohibit the use (but not the transfer in 
                accordance with paragraph (3)) of any nitrogen oxide 
                allowance or mercury allowance before the calendar year 
                for which the allowance is allocated;
                    ``(B) provide that unused nitrogen oxide allowances 
                and mercury allowances may be carried forward and added 
                to nitrogen oxide allowances and mercury allowances, 
                respectively, allocated for subsequent years; and
                    ``(C) provide that unused nitrogen oxide allowances 
                and mercury allowances may be transferred by--
                            ``(i) the person to which the allowances 
                        are allocated; or
                            ``(ii) any person to which the allowances 
                        are transferred.
            ``(2) Use by persons to which allowances are transferred.--
        Any person to which nitrogen oxide allowances or mercury 
        allowances are transferred under paragraph (1)(C)--
                    ``(A) may use the nitrogen oxide allowances or 
                mercury allowances in the calendar year for which the 
                nitrogen oxide allowances or mercury allowances were 
                allocated, or in a subsequent calendar year, to 
                demonstrate compliance with subsection (e)(1); or
                    ``(B) may transfer the nitrogen oxide allowances or 
                mercury allowances to any other person for the purpose 
                of demonstration of that compliance.
            ``(3) Certification of transfer.--A transfer of a nitrogen 
        oxide allowance or mercury allowance shall not take effect 
        until a written certification of the transfer, authorized by a 
        responsible official of the person making the transfer, is 
        received and recorded by the Administrator.
            ``(4) Permit requirements.--An allocation or transfer of 
        nitrogen oxide allowances or mercury allowances to an affected 
        unit shall, after recording by the Administrator, be considered 
        to be part of the federally enforceable permit of the affected 
        unit under this Act, without a requirement for any further 
        review or revision of the permit.
    ``(e) Compliance and Enforcement.--
            ``(1) In general.--For calendar year 2009 and each calendar 
        year thereafter, the operator of each affected unit shall 
        surrender to the Administrator--
                    ``(A) a quantity of nitrogen oxide allowances that 
                is equal to the total tons of nitrogen oxides emitted 
                by the affected unit during the calendar year; and
                    ``(B) a quantity of mercury allowances that is 
                equal to the total pounds of mercury emitted by the 
                affected unit during the calendar year.
            ``(2) Monitoring system.--The Administrator shall 
        promulgate regulations requiring the accurate monitoring of the 
        quantities of nitrogen oxides and mercury that are emitted at 
        each affected unit.
            ``(3) Reporting.--
                    ``(A) In general.--Not less often than quarterly, 
                the owner or operator of an affected unit shall submit 
                to the Administrator a report on the monitoring of 
                emissions of nitrogen oxides and mercury carried out by 
                the owner or operator in accordance with the 
                regulations promulgated under paragraph (2).
                    ``(B) Authorization.--Each report submitted under 
                subparagraph (A) shall be authorized by a responsible 
                official of the affected unit, who shall certify the 
                accuracy of the report.
                    ``(C) Public reporting.--The Administrator shall 
                make available to the public, through 1 or more 
                published reports and 1 or more forms of electronic 
                media, data concerning the emissions of nitrogen oxides 
                and mercury from each affected unit.
            ``(4) Excess emissions.--
                    ``(A) In general.--The owner or operator of an 
                affected unit that emits nitrogen oxides or mercury in 
                excess of the nitrogen oxide allowances or mercury 
                allowances that the owner or operator holds for use for 
                the affected unit for the calendar year shall--
                            ``(i) pay an excess emissions penalty 
                        determined under subparagraph (B); and
                            ``(ii) offset the excess emissions by an 
                        equal quantity in the following calendar year 
                        or such other period as the Administrator shall 
                        prescribe.
                    ``(B) Determination of excess emissions penalty.--
                            ``(i) Nitrogen oxides.--The excess 
                        emissions penalty for nitrogen oxides shall be 
                        equal to the product obtained by multiplying--
                                    ``(I) the number of tons of 
                                nitrogen oxides emitted in excess of 
                                the total quantity of nitrogen oxide 
                                allowances held; and
                                    ``(II) $5,000, adjusted (in 
                                accordance with regulations promulgated 
                                by the Administrator) for changes in 
                                the Consumer Price Index for All-Urban 
                                Consumers published by the Department 
                                of Labor.
                            ``(ii) Mercury.--The excess emissions 
                        penalty for mercury shall be equal to the 
                        product obtained by multiplying--
                                    ``(I) the number of pounds of 
                                mercury emitted in excess of the total 
                                quantity of mercury allowances held; 
                                and
                                    ``(II) $10,000, adjusted (in 
                                accordance with regulations promulgated 
                                by the Administrator) for changes in 
                                the Consumer Price Index for All-Urban 
                                Consumers published by the Department 
                                of Labor.

``SEC. 704. CARBON DIOXIDE ALLOWANCE TRADING PROGRAM.

    ``(a) Regulations.--
            ``(1) In general.--Not later than 180 days after the 
        enactment of this section, the Administrator shall promulgate 
        regulations to establish a carbon dioxide allowance trading 
        program for covered units in the United States.
            ``(2) Required elements.--Regulations promulgated under 
        paragraph (1) shall establish requirements for the carbon 
        dioxide allowance trading program under this section, including 
        requirements concerning--
                    ``(A)(i) the generation, allocation, issuance, 
                recording, tracking, transfer, and use of carbon 
                dioxide allowances; and
                    ``(ii) the public availability of all information 
                concerning the activities described in clause (i) that 
                is not confidential;
                    ``(B) compliance with subsection (f)(1);
                    ``(C) the monitoring and reporting of emissions 
                under paragraphs (2) and (3) of subsection (f);
                    ``(D) excess emission penalties under subsection 
                (f)(4); and
                    ``(E) standards, guidelines, and procedures 
                concerning the generation, certification, and use of 
                additional carbon dioxide allowances made available 
                under subsection (d).
    ``(b) New Unit Reserve.--
            ``(1) Establishment.--The Administrator shall establish by 
        regulation a reserve of carbon dioxide allowances to be set 
        aside for use by new units and new renewable energy units.
            ``(2) Determination of quantity.--The Administrator, in 
        consultation with the Secretary of Energy, shall determine, 
        based on projections of electricity output for new units and 
        new renewable energy units--
                    ``(A) not later than June 30, 2006, the quantity of 
                carbon dioxide allowances required to be held in 
                reserve for new units and new renewable energy units 
                for each of calendar years 2010 through 2013; and
                    ``(B) not later than June 30 of each fifth calendar 
                year thereafter, the quantity of carbon dioxide 
                allowances required to be held in reserve for new units 
                and renewable energy units for the following 5-calendar 
                year period.
    ``(c) Carbon Dioxide Allowance Allocation.--
            ``(1) Timing of allocations.--The Administrator shall 
        allocate carbon dioxide allowances to covered units--
                    ``(A) not later than December 31, 2006, for 
                calendar year 2010; and
                    ``(B) not later than December 31 of calendar year 
                2007 and each calendar year thereafter, for the fourth 
                calendar year that begins after that December 31.
            ``(2) Allocations to covered units that are not new 
        units.--
                    ``(A) In general.--The Administrator shall allocate 
                to each affected unit that is not a new unit, to each 
                nuclear generating unit with respect to incremental 
                nuclear generation, and to each renewable energy unit 
                that is not a new renewable energy unit, a quantity of 
                carbon dioxide allowances that is equal to the product 
                obtained by multiplying--
                            ``(i) the quantity of carbon dioxide 
                        allowances available for allocation under 
                        subparagraph (B); and
                            ``(ii) the quotient obtained by dividing--
                                    ``(I) the average net quantity of 
                                electricity generated by the unit in a 
                                calendar year during the most recent 3-
                                calendar year period for which data are 
                                available, measured in megawatt hours; 
                                and
                                    ``(II) the total of the average net 
                                quantities described in subclause (I) 
                                with respect to all such units.
                    ``(B) Quantity to be allocated.--For each calendar 
                year, the quantity of carbon dioxide allowances 
                allocated under subparagraph (A) shall be equal to the 
                difference between--
                            ``(i) the annual tonnage limitation for 
                        emissions of carbon dioxide from affected units 
                        specified in section 702(d) for the calendar 
                        year; and
                            ``(ii) the quantity of carbon dioxide 
                        allowances placed in the new unit reserve 
                        established under subsection (b) for the 
                        calendar year.
            ``(3) Allocation to new units and new renewable energy 
        units.--
                    ``(A) Methodology.--The Administrator shall 
                promulgate regulations to establish a methodology for 
                allocating carbon dioxide allowances to new units and 
                new renewable energy units.
                    ``(B) Quantity of carbon dioxide allowances 
                allocated.--The Administrator shall determine the 
                quantity of carbon dioxide allowances to be allocated 
                to each new unit and each new renewable energy unit 
                based on the unit's projected share of the total 
                electric power generation attributable to covered 
                units.
    ``(d) Issuance and Use of Additional Carbon Dioxide Allowances.--
            ``(1) In general.--
                    ``(A) Allowances for projects certified by 
                independent review board.--In addition to carbon 
                dioxide allowances allocated under subsection (c), the 
                Administrator shall make carbon dioxide allowances 
                available to projects that are certified, in accordance 
                with paragraph (3), by the independent review board 
                established under paragraph (2) as eligible to receive 
                the carbon dioxide allowances.
                    ``(B) Allowances obtained under other programs.--
                The regulations promulgated under subsection (a)(1) 
                shall--
                            ``(i) allow covered units to comply with 
                        subsection (f)(1) by purchasing and using 
                        carbon dioxide allowances that are traded under 
                        any other United States or internationally 
                        recognized carbon dioxide reduction program 
                        that is specified under clause (ii);
                            ``(ii) specify, for the purpose of clause 
                        (i), programs that meet the goals of this 
                        section; and
                            ``(iii) apply such conditions to the use of 
                        carbon dioxide allowances traded under programs 
                        specified under clause (ii) as are necessary to 
                        achieve the goals of this section.
            ``(2) Independent review board.--
                    ``(A) In general.--
                            ``(i) Establishment.--The Administrator 
                        shall establish an independent review board to 
                        assist the Administrator in certifying projects 
                        as eligible for carbon dioxide allowances made 
                        available under paragraph (1)(A).
                            ``(ii) Review and approval.--Each 
                        certification by the independent review board 
                        of a project shall be subject to the review and 
                        approval of the Administrator.
                            ``(iii) Requirements.--Subject to this 
                        subsection, requirements relating to the 
                        creation, composition, duties, 
                        responsibilities, and other aspects of the 
                        independent review board shall be included in 
                        the regulations promulgated by the 
                        Administrator under subsection (a).
                    ``(B) Membership.--The independent review board 
                shall be composed of 12 members, of whom--
                            ``(i) 10 members shall be appointed by the 
                        Administrator, of whom--
                                    ``(I) 1 member shall represent the 
                                Environmental Protection Agency (who 
                                shall serve as chairperson of the 
                                independent review board);
                                    ``(II) 3 members shall represent 
                                State governments;
                                    ``(III) 3 members shall represent 
                                the electric generating sector; and
                                    ``(IV) 3 members shall represent 
                                environmental organizations;
                            ``(ii) 1 member shall be appointed by the 
                        Secretary of Energy to represent the Department 
                        of Energy; and
                            ``(iii) 1 member shall be appointed by the 
                        Secretary of Agriculture to represent the 
                        Department of Agriculture.
                    ``(C) Staff and other resources.--The Administrator 
                shall provide such staff and other resources to the 
                independent review board as the Administrator 
                determines to be necessary.
                    ``(D) Development of guidelines.--
                            ``(i) In general.--The independent review 
                        board shall develop guidelines for certifying 
                        projects in accordance with paragraph (3), 
                        including--
                                    ``(I) criteria that address the 
                                validity of claims that projects result 
                                in the generation of carbon dioxide 
                                allowances;
                                    ``(II) guidelines for certifying 
                                incremental carbon sequestration in 
                                accordance with clause (ii); and
                                    ``(III) guidelines for certifying 
                                geological sequestration of carbon 
                                dioxide in accordance with clause 
                                (iii).
                            ``(ii) Guidelines for certifying 
                        incremental carbon sequestration.--The 
                        guidelines for certifying incremental carbon 
                        sequestration in forests, agricultural soil, 
                        rangeland, or grassland shall include 
                        development, reporting, monitoring, and 
                        verification guidelines, to be used in 
                        quantifying net carbon sequestration from land 
                        use projects, that are based on--
                                    ``(I) measurement of increases in 
                                carbon storage in excess of the carbon 
                                storage that would have occurred in the 
                                absence of such a project;
                                    ``(II) comprehensive carbon 
                                accounting that--
                                            ``(aa) reflects net 
                                        increases in carbon reservoirs; 
                                        and
                                            ``(bb) takes into account 
                                        any carbon emissions resulting 
                                        from disturbance of carbon 
                                        reservoirs in existence as of 
                                        the date of commencement of the 
                                        project;
                                    ``(III) adjustments to account 
                                for--
                                            ``(aa) emissions of carbon 
                                        that may result at other 
                                        locations as a result of the 
                                        impact of the project on timber 
                                        supplies; or
                                            ``(bb) potential 
                                        displacement of carbon 
                                        emissions to other land owned 
                                        by the entity that carries out 
                                        the project; and
                                    ``(IV) adjustments to reflect the 
                                expected carbon storage over various 
                                time periods, taking into account the 
                                likely duration of the storage of the 
                                carbon stored in a carbon reservoir.
                            ``(iii) Guidelines for certifying 
                        geological sequestration of carbon dioxide.--
                        The guidelines for certifying geological 
                        sequestration of carbon dioxide produced by a 
                        covered unit shall--
                                    ``(I) provide that a project shall 
                                be certified only to the extent that 
                                the geological sequestration of carbon 
                                dioxide produced by a covered unit is 
                                in addition to any carbon dioxide used 
                                by the covered unit in 2010 for 
                                enhanced oil recovery; and
                                    ``(II) include requirements for 
                                development, reporting, monitoring, and 
                                verification for quantifying net carbon 
                                sequestration--
                                            ``(aa) to ensure the 
                                        permanence of the 
                                        sequestration; and
                                            ``(bb) to ensure that the 
                                        sequestration will not cause or 
                                        contribute to significant 
                                        adverse effects on the 
                                        environment.
                            ``(iv) Deadlines for development.--The 
                        guidelines under clause (i) shall be 
                        developed--
                                    ``(I) with respect to projects 
                                described in paragraph (3)(A), not 
                                later than January 1, 2006; and
                                    ``(II) with respect to projects 
                                described in paragraph (3)(B), not 
                                later than January 1, 2007.
                            ``(v) Updating of guidelines.--The 
                        independent review board shall periodically 
                        update the guidelines as the independent review 
                        board determines to be appropriate.
                    ``(E) Certification of projects.--
                            ``(i) In general.--Subject to clause (ii), 
                        subparagraph (A)(ii), and paragraph (3), the 
                        independent review board shall certify projects 
                        as eligible for additional carbon dioxide 
                        allowances.
                            ``(ii) Limitation.--The independent review 
                        board shall not certify a project under this 
                        subsection if the carbon dioxide emission 
                        reductions achieved by the project will be used 
                        to satisfy any requirement imposed on any 
                        foreign country or any industrial sector to 
                        reduce the quantity of greenhouse gases emitted 
                        by the foreign country or industrial sector.
            ``(3) Projects eligible for additional carbon dioxide 
        allowances.--
                    ``(A) Projects carried out in calendar years 1990 
                through 2009.--
                            ``(i) In general.--The independent review 
                        board may certify as eligible for carbon 
                        dioxide allowances a project that--
                                    ``(I) is carried out on or after 
                                January 1, 1990, and before January 1, 
                                2010; and
                                    ``(II) consists of--
                                            ``(aa) a carbon 
                                        sequestration project carried 
                                        out in the United States or a 
                                        foreign country;
                                            ``(bb) a project reported 
                                        under section 1605(b) of the 
                                        Energy Policy Act of 1992 (42 
                                        U.S.C. 13385(b)); or
                                            ``(cc) any other project to 
                                        reduce emissions of greenhouse 
                                        gases that is carried out in 
                                        the United States or a foreign 
                                        country.
                            ``(ii) Maximum quantity of additional 
                        carbon dioxide allowances.--The Administrator 
                        may make available to projects certified under 
                        clause (i) a quantity of allowances that is not 
                        greater than 10 percent of the tonnage 
                        limitation for calendar year 2010 for emissions 
                        of carbon dioxide from affected units specified 
                        in section 702(d)(1).
                            ``(iii) Use of allowances.--Allowances made 
                        available under clause (ii) may be used to 
                        comply with subsection (f)(1) in calendar year 
                        2010 or any calendar year thereafter.
                    ``(B) Projects carried out in calendar year 2010 
                and thereafter.--The independent review board may 
                certify as eligible for carbon dioxide allowances a 
                project that--
                            ``(i) is carried out on or after January 1, 
                        2010; and
                            ``(ii) consists of--
                                    ``(I) a carbon sequestration 
                                project carried out in the United 
                                States or a foreign country; or
                                    ``(II) a project to reduce the 
                                greenhouse gas emissions (on a carbon 
                                dioxide equivalency basis determined by 
                                the independent review board) of a 
                                source of greenhouse gases that is not 
                                an affected unit.
    ``(e) Carbon Dioxide Allowance Transfer System.--
            ``(1) Use of allowances.--The regulations promulgated under 
        subsection (a)(1) shall--
                    ``(A) prohibit the use (but not the transfer in 
                accordance with paragraph (3)) of any carbon dioxide 
                allowance before the calendar year for which the carbon 
                dioxide allowance is allocated;
                    ``(B) provide that unused carbon dioxide allowances 
                may be carried forward and added to carbon dioxide 
                allowances allocated for subsequent years;
                    ``(C) provide that unused carbon dioxide allowances 
                may be transferred by--
                            ``(i) the person to which the carbon 
                        dioxide allowances are allocated; or
                            ``(ii) any person to which the carbon 
                        dioxide allowances are transferred; and
                    ``(D) provide that carbon dioxide allowances 
                allocated and transferred under this section may be 
                transferred into any other market-based carbon dioxide 
                emission trading program that is--
                            ``(i) approved by the President; and
                            ``(ii) implemented in accordance with 
                        regulations developed by the Administrator or 
                        the head of any other Federal agency.
            ``(2) Use by persons to which carbon dioxide allowances are 
        transferred.--Any person to which carbon dioxide allowances are 
        transferred under paragraph (1)(C)--
                    ``(A) may use the carbon dioxide allowances in the 
                calendar year for which the carbon dioxide allowances 
                were allocated, or in a subsequent calendar year, to 
                demonstrate compliance with subsection (f)(1); or
                    ``(B) may transfer the carbon dioxide allowances to 
                any other person for the purpose of demonstration of 
                that compliance.
            ``(3) Certification of transfer.--A transfer of a carbon 
        dioxide allowance shall not take effect until a written 
        certification of the transfer, authorized by a responsible 
        official of the person making the transfer, is received and 
        recorded by the Administrator.
            ``(4) Permit requirements.--An allocation or transfer of 
        carbon dioxide allowances to a covered unit, or for a project 
        carried out on behalf of a covered unit, under subsection (c) 
        or (d) shall, after recording by the Administrator, be 
        considered to be part of the federally enforceable permit of 
        the covered unit under this Act, without a requirement for any 
        further review or revision of the permit.
    ``(f) Compliance and Enforcement.--
            ``(1) In general.--For calendar year 2010 and each calendar 
        year thereafter--
                    ``(A) the operator of each affected unit and each 
                renewable energy unit shall surrender to the 
                Administrator a quantity of carbon dioxide allowances 
                that is equal to the total tons of carbon dioxide 
                emitted by the affected unit or renewable energy unit 
                during the calendar year; and
                    ``(B) the operator of each nuclear generating unit 
                that has incremental nuclear generation shall surrender 
                to the Administrator a quantity of carbon dioxide 
                allowances that is equal to the total tons of carbon 
                dioxide emitted by the nuclear generating unit during 
                the calendar year from incremental nuclear generation.
            ``(2) Monitoring system.--The Administrator shall 
        promulgate regulations requiring the accurate monitoring of the 
        quantity of carbon dioxide that is emitted at each covered 
        unit.
            ``(3) Reporting.--
                    ``(A) In general.--Not less often than quarterly, 
                the owner or operator of a covered unit, or a person 
                that carries out a project certified under subsection 
                (d) on behalf of a covered unit, shall submit to the 
                Administrator a report on the monitoring of carbon 
                dioxide emissions carried out at the covered unit in 
                accordance with the regulations promulgated under 
                paragraph (2).
                    ``(B) Authorization.--Each report submitted under 
                subparagraph (A) shall be authorized by a responsible 
                official of the covered unit, who shall certify the 
                accuracy of the report.
                    ``(C) Public reporting.--The Administrator shall 
                make available to the public, through 1 or more 
                published reports and 1 or more forms of electronic 
                media, data concerning the emissions of carbon dioxide 
                from each covered unit.
            ``(4) Excess emissions.--
                    ``(A) In general.--The owner or operator of a 
                covered unit that emits carbon dioxide in excess of the 
                carbon dioxide allowances that the owner or operator 
                holds for use for the covered unit for the calendar 
                year shall--
                            ``(i) pay an excess emissions penalty 
                        determined under subparagraph (B); and
                            ``(ii) offset the excess emissions by an 
                        equal quantity in the following calendar year 
                        or such other period as the Administrator shall 
                        prescribe.
                    ``(B) Determination of excess emissions penalty.--
                The excess emissions penalty shall be equal to the 
                product obtained by multiplying--
                            ``(i) the number of tons of carbon dioxide 
                        emitted in excess of the total quantity of 
                        carbon dioxide allowances held; and
                            ``(ii) $100, adjusted (in accordance with 
                        regulations promulgated by the Administrator) 
                        for changes in the Consumer Price Index for 
                        All-Urban Consumers published by the Department 
                        of Labor.
    ``(g) Allowance not a Property Right.--A carbon dioxide allowance--
            ``(1) is not a property right; and
            ``(2) may be terminated or limited by the Administrator.
    ``(h) No Judicial Review.--An allocation of carbon dioxide 
allowances by the Administrator under subsection (c) or (d) shall not 
be subject to judicial review.''.

SEC. 4. NEW SOURCE REVIEW PROGRAM.

    Section 165 of the Clean Air Act (42 U.S.C. 7475) is amended by 
adding at the end the following:
    ``(f) Revisions to New Source Review Program.--
            ``(1) Definitions.--In this subsection:
                    ``(A) Covered unit.--The term `covered unit' has 
                the meaning given the term in section 701.
                    ``(B) New source review program.--The term `new 
                source review program' means the program to carry out 
                section 111 and this part.
            ``(2) Regulations.--In accordance with this subsection, the 
        Administrator shall promulgate revisions to the new source 
        review program.
            ``(3) Applicability criteria.--Beginning January 1, 2009, 
        the new source review program shall apply only to--
                    ``(A) construction of a new covered unit, which 
                shall include the replacement of an existing boiler; 
                and
                    ``(B) activities that result in any increase in the 
                maximum hourly rate of emissions from a covered unit of 
                air pollutants regulated under the new source review 
                program (measured in pounds per megawatt hour), after 
                netting among covered units at a source.
            ``(4) Performance standards.--Beginning in 2020, all 
        affected units, as that term is defined under section 701 for 
        nitrogen oxides and carbon dioxide, on which construction 
        commenced before August 17, 1971, shall meet the following 
        performance standards:
                    ``(A) 4.5 lbs/MWh for sulfur dioxide; and
                    ``(B) 2.5 lbs/MWh for nitrogen oxides.
            ``(5) Bi-annual definition of best available control 
        technology and lowest achievable emission rate.--The 
        definitions of `best available control technology' under 
        section 169 and of `lowest achievable emission rate' under 
        section 171 shall be revised to require the Administrator to 
        define on a bi-annual basis best available control 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 respect to technology required to 
        be installed by the electric generating sector, to allow costs 
        to be considered 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 pollutants.
            ``(8) No effect on other requirements.--Nothing in this 
        subsection affects the obligation of any State or local 
        government to comply with the requirements established under 
        this section concerning--
                    ``(A) national ambient air quality standards;
                    ``(B) maximum allowable air pollutant increases 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. Additionally, 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 PROGRAM.

    (a) In General.--Title IV of the Clean Air Act (relating 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 `affected 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 Administrator 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 Administrator, 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 reserve 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 allowances 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 review.
    ``(d) Existing Units.--
            ``(1) Allocation.--
                    ``(A) Regulations.--Subject to the annual 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 Administrator shall promulgate 
                regulations to govern the allocation of allowances to 
                affected units that are not new units.
                    ``(B) Required elements.--The regulations shall 
                provide for--
                            ``(i) the allocation of allowances on a 
                        fair and equitable basis between affected units 
                        that received allowances under section 405 and 
                        affected units that are not new units and that 
                        did not receive allowances under that section, 
                        using for both categories of units the same or 
                        similar allocation methodology as was used 
                        under section 405; and
                            ``(ii) the pro-rata distribution of 
                        allowances to all units described in clause 
                        (i), subject to the annual tonnage limitation 
                        for emissions of sulfur dioxide from affected 
                        units specified in section 702(a).
            ``(2) Timing of allocations.--The Administrator 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 calendar year 
                2007 and each calendar year thereafter, for the fourth 
                calendar year that begins after that December 31.
            ``(3) No judicial review.--An allocation of allowances by 
        the Administrator under this subsection 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 Mexico, 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 subclause 
                        (I)(aa)--
                                    ``(aa) the third calendar year 
                                after the first calendar year with 
                                respect to which the total of the 
                                annual emissions of sulfur dioxide from 
                                all affected 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 
                        calendar 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 January 1, 2015, 
                the Administrator shall promulgate regulations to 
                establish--
                            ``(i) a methodology for allocating 
                        allowances 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 review.''.
    (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 Administrator 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 affected units.--Not 
        later than 8 years after the date of enactment of this 
        paragraph, the Administrator shall carry out the duties of the 
        Administrator under this subsection with respect to mercury 
        emitted 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 regulations.--
                            ``(i) Study and report to congress.--The 
                        Administrator'';
                    (B) by striking ``The Administrator'' in the fourth 
                sentence and inserting the following:
                            ``(ii) Regulations.--
                                    ``(I) In general.--The 
                                Administrator''; and
                    (C) in clause (ii) (as designated by subparagraph 
                (B)), by adding at the end the following:
                                    ``(II) Exemption for certain 
                                affected units relating to mercury.--An 
                                affected unit (as defined in section 
                                701) that would otherwise be subject to 
                                mercury emission standards under 
                                subclause (I) shall not be subject to 
                                mercury emission standards under 
                                subclause (I) or subsection (c).''.
    (b) Temporary Exemption From Visibility Protection Requirements.--
Section 169A(c) of the Clean Air Act (42 U.S.C. 7491(c)) is amended--
            (1) in paragraph (3), by striking ``this subsection'' and 
        inserting ``paragraph (1)''; and
            (2) by adding at the end the following:
            ``(4) Temporary exemption for certain affected units.--An 
        affected unit (as defined in section 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 provided in this Act, nothing in this Act or an 
amendment made by this Act--
            (1) affects any permitting, monitoring, or enforcement 
        obligation of the Administrator of the Environmental Protection 
        Agency under the Clean Air Act (42 U.S.C. 7401 et seq.) or any 
        remedy provided under that Act;
            (2) affects any requirement applicable to, or liability 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 requirement 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.
                                 <all>