
From the U.S. Code Online via GPO Access
[wais.access.gpo.gov]
[Laws in effect as of January 23, 2000]
[Document not affected by Public Laws enacted between
  January 23, 2000 and December 4, 2001]
[CITE: 42USC7651b]

 
                 TITLE 42--THE PUBLIC HEALTH AND WELFARE
 
            CHAPTER 85--AIR POLLUTION PREVENTION AND CONTROL
 
                SUBCHAPTER IV-A--ACID DEPOSITION CONTROL
 
Sec. 7651b. Sulfur dioxide allowance program for existing and 
        new units
        

(a) Allocations of annual allowances for existing and new units

    (1) \1\ For the emission limitation programs under this subchapter, 
the Administrator shall allocate annual allowances for the unit, to be 
held or distributed by the designated representative of the owner or 
operator of each affected unit at an affected source in accordance with 
this subchapter, in an amount equal to the annual tonnage emission 
limitation calculated under section 7651c, 7651d, 7651e, 7651h, or 7651i 
of this title except as otherwise specifically provided elsewhere in 
this subchapter. Except as provided in sections 7651d(a)(2), 
7651d(a)(3), 7651h and 7651i of this title, beginning January 1, 2000, 
the Administrator shall not allocate annual allowances to emit sulfur 
dioxide pursuant to section 7651d of this title in such an amount as 
would result in total annual emissions of sulfur dioxide from utility 
units in excess of 8.90 million tons except that the Administrator shall 
not take into account unused allowances carried forward by owners and 
operators of affected units or by other persons holding such allowances, 
following the year for which they were allocated. If necessary to 
meeting the restrictions imposed in the preceding sentence, the 
Administrator shall reduce, pro rata, the basic Phase II allowance 
allocations for each unit subject to the requirements of section 7651d 
of this title. Subject to the provisions of section 7651o of this title, 
the Administrator shall allocate allowances for each affected unit at an 
affected source annually, as provided in paragraphs (2) and (3) \1\ and 
section 7651g of this title. Except as provided in sections 7651h and 
7651i of this title, the removal of an existing affected unit or source 
from commercial operation at any time after November 15, 1990 (whether 
before or after January 1, 1995, or January 1, 2000) shall not terminate 
or otherwise affect the allocation of allowances pursuant to section 
7651c or 7651d of this title to which the unit is entitled. Allowances 
shall be allocated by the Administrator without cost to the recipient, 
except for allowances sold by the Administrator pursuant to section 
7651o of this title. Not later than December 31, 1991, the Administrator 
shall publish a proposed list of the basic Phase II allowance 
allocations, the Phase II bonus allowance allocations and, if 
applicable, allocations pursuant to section 7651d(a)(3) of this title 
for each unit subject to the emissions limitation requirements of 
section 7651d of this title for the year 2000 and the year 2010. After 
notice and opportunity for public comment, but not later than December 
31, 1992, the Administrator shall publish a final list of such 
allocations, subject to the provisions of section 7651d(a)(2) of this 
title. Any owner or operator of an existing unit subject to the 
requirements of section 7651d(b) or (c) of this title who is considering 
applying for an extension of the emission limitation requirement 
compliance deadline for that unit from January 1, 2000, until not later 
than December 31, 2000, pursuant to section 7651h of this title, shall 
notify the Administrator no later than March 31, 1991. Such notification 
shall be used as the basis for estimating the basic Phase II allowances 
under this subsection. Prior to June 1, 1998, the Administrator shall 
publish a revised final statement of allowance allocations, subject to 
the provisions of section 7651d(a)(2) of this title and taking into 
account the effect of any compliance date extensions granted pursuant to 
section 7651h of this title on such allocations. Any person who may make 
an election concerning the amount of allowances to be allocated to a 
unit or units shall make such election and so inform the Administrator 
not later than March 31, 1991, in the case of an election under section 
7651d of this title (or June 30, 1991, in the case of an election under 
section 7651e of this title). If such person fails to make such 
election, the Administrator shall set forth for each unit owned or 
operated by such person, the amount of allowances reflecting the 
election that would, in the judgment of the Administrator, provide the 
greatest benefit for the owner or operator of the unit. If such person 
is a Governor who may make an election under section 7651e of this title 
and the Governor fails to make an election, the Administrator shall set 
forth for each unit in the State the amount of allowances reflecting the 
election that would, in the judgment of the Administrator, provide the 
greatest benefit for units in the State.
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    \1\ So in original. No pars. (2) and (3) have been enacted.
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(b) Allowance transfer system

    Allowances allocated under this subchapter may be transferred among 
designated representatives of the owners or operators of affected 
sources under this subchapter and any other person who holds such 
allowances, as provided by the allowance system regulations to be 
promulgated by the Administrator not later than eighteen months after 
November 15, 1990. Such regulations shall establish the allowance system 
prescribed under this section, including, but not limited to, 
requirements for the allocation, transfer, and use of allowances under 
this subchapter. Such regulations shall prohibit the use of any 
allowance prior to the calendar year for which the allowance was 
allocated, and shall provide, consistent with the purposes of this 
subchapter, for the identification of unused allowances, and for such 
unused allowances to be carried forward and added to allowances 
allocated in subsequent years, including allowances allocated to units 
subject to Phase I requirements (as described in section 7651c of this 
title) which are applied to emissions limitations requirements in Phase 
II (as described in section 7651d of this title). Transfers of 
allowances shall not be effective until written certification of the 
transfer, signed by a responsible official of each party to the 
transfer, is received and recorded by the Administrator. Such 
regulations shall permit the transfer of allowances prior to the 
issuance of such allowances. Recorded pre-allocation transfers shall be 
deducted by the Administrator from the number of allowances which would 
otherwise be allocated to the transferor, and added to those allowances 
allocated to the transferee. Pre-allocation transfers shall not affect 
the prohibition contained in this subsection against the use of 
allowances prior to the year for which they are allocated.

(c) Interpollutant trading

    Not later than January 1, 1994, the Administrator shall furnish to 
the Congress a study evaluating the environmental and economic 
consequences of amending this subchapter to permit trading sulfur 
dioxide allowances for nitrogen oxides allowances.

(d) Allowance tracking system

    (1) The Administrator shall promulgate, not later than 18 months 
after November 15, 1990, a system for issuing, recording, and tracking 
allowances, which shall specify all necessary procedures and 
requirements for an orderly and competitive functioning of the allowance 
system. All allowance allocations and transfers shall, upon recordation 
by the Administrator, be deemed a part of each unit's permit 
requirements pursuant to section 7651g of this title, without any 
further permit review and revision.
    (2) In order to insure electric reliability, such regulations shall 
not prohibit or affect temporary increases and decreases in emissions 
within utility systems, power pools, or utilities entering into 
allowance pool agreements, that result from their operations, including 
emergencies and central dispatch, and such temporary emissions increases 
and decreases shall not require transfer of allowances among units nor 
shall it require recordation. The owners or operators of such units 
shall act through a designated representative. Notwithstanding the 
preceding sentence, the total tonnage of emissions in any calendar year 
(calculated at the end thereof) from all units in such a utility system, 
power pool, or allowance pool agreements shall not exceed the total 
allowances for such units for the calendar year concerned.

(e) New utility units

    After January 1, 2000, it shall be unlawful for a new utility unit 
to emit an annual tonnage of sulfur dioxide in excess of the number of 
allowances to emit held for the unit by the unit's owner or operator. 
Such new utility units shall not be eligible for an allocation of sulfur 
dioxide allowances under subsection (a)(1) of this section, unless the 
unit is subject to the provisions of subsection (g)(2) or (3) of section 
7651d of this title. New utility units may obtain allowances from any 
person, in accordance with this subchapter. The owner or operator of any 
new utility unit in violation of this subsection shall be liable for 
fulfilling the obligations specified in section 7651j of this title.

(f) Nature of allowances

    An allowance allocated under this subchapter is a limited 
authorization to emit sulfur dioxide in accordance with the provisions 
of this subchapter. Such allowance does not constitute a property right. 
Nothing in this subchapter or in any other provision of law shall be 
construed to limit the authority of the United States to terminate or 
limit such authorization. Nothing in this section relating to allowances 
shall be construed as affecting the application of, or compliance with, 
any other provision of this chapter to an affected unit or source, 
including the provisions related to applicable National Ambient Air 
Quality Standards and State implementation plans. Nothing in this 
section shall be construed as requiring a change of any kind in any 
State law regulating electric utility rates and charges or affecting any 
State law regarding such State regulation or as limiting State 
regulation (including any prudency review) under such a State law. 
Nothing in this section shall be construed as modifying the Federal 
Power Act [16 U.S.C. 791a et seq.] or as affecting the authority of the 
Federal Energy Regulatory Commission under that Act. Nothing in this 
subchapter shall be construed to interfere with or impair any program 
for competitive bidding for power supply in a State in which such 
program is established. Allowances, once allocated to a person by the 
Administrator, may be received, held, and temporarily or permanently 
transferred in accordance with this subchapter and the regulations of 
the Administrator without regard to whether or not a permit is in effect 
under subchapter V of this chapter or section 7651g of this title with 
respect to the unit for which such allowance was originally allocated 
and recorded. Each permit under this subchapter and each permit issued 
under subchapter V of this chapter for any affected unit shall provide 
that the affected unit may not emit an annual tonnage of sulfur dioxide 
in excess of the allowances held for that unit.

(g) Prohibition

    It shall be unlawful for any person to hold, use, or transfer any 
allowance allocated under this subchapter, except in accordance with 
regulations promulgated by the Administrator. It shall be unlawful for 
any affected unit to emit sulfur dioxide in excess of the number of 
allowances held for that unit for that year by the owner or operator of 
the unit. Upon the allocation of allowances under this subchapter, the 
prohibition contained in the preceding sentence shall supersede any 
other emission limitation applicable under this subchapter to the units 
for which such allowances are allocated. Allowances may not be used 
prior to the calendar year for which they are allocated. Nothing in this 
section or in the allowance system regulations shall relieve the 
Administrator of the Administrator's permitting, monitoring and 
enforcement obligations under this chapter, nor relieve affected sources 
of their requirements and liabilities under this chapter.

(h) Competitive bidding for power supply

    Nothing in this subchapter shall be construed to interfere with or 
impair any program for competitive bidding for power supply in a State 
in which such program is established.

(i) Applicability of antitrust laws

    (1) Nothing in this section affects--
        (A) the applicability of the antitrust laws to the transfer, 
    use, or sale of allowances, or
        (B) the authority of the Federal Energy Regulatory Commission 
    under any provision of law respecting unfair methods of competition 
    or anticompetitive acts or practices.

    (2) As used in this section, ``antitrust laws'' means those Acts set 
forth in section 12 of title 15.

(j) Public Utility Holding Company Act

    The acquisition or disposition of allowances pursuant to this 
subchapter including the issuance of securities or the undertaking of 
any other financing transaction in connection with such allowances shall 
not be subject to the provisions of the Public Utility Holding Company 
Act of 1935 [15 U.S.C. 79 et seq.].

(July 14, 1955, ch. 360, title IV, Sec. 403, as added Pub. L. 101-549, 
title IV, Sec. 401, Nov. 15, 1990, 104 Stat. 2589.)

                       References in Text

    The Federal Power Act, referred to in subsec. (f), is act June 10, 
1920, ch. 285, 41 Stat. 1063, as amended, which is classified generally 
to chapter 12 (Sec. 791a et seq.) of Title 16, Conservation. For 
complete classification of this Act to the Code, see section 791a of 
Title 16 and Tables.
    The Public Utility Holding Company Act of 1935, referred to in 
subsec. (j), is act Aug. 26, 1935, ch. 687, title I, 49 Stat. 838, as 
amended, which is classified generally to chapter 2C (Sec. 79 et seq.) 
of Title 15, Commerce and Trade. For complete classification of this Act 
to the Code, see section 79 of Title 15 and Tables.

                          Codification

    Another section 403 of act July 14, 1955, as added by Pub. L. 91-
604, Sec. 14, Dec. 31, 1970, 84 Stat. 1710, is classified to section 
7642 of this title.


                             Fossil Fuel Use

    Section 402 of title IV of Pub. L. 101-549 provided that:
    ``(a) Contracts for Hydroelectric Energy.--Any person who, after the 
date of the enactment of the Clean Air Act Amendments of 1990 [Nov. 15, 
1990], enters into a contract under which such person receives 
hydroelectric energy in return for the provision of electric energy by 
such person shall use allowances held by such person as necessary to 
satisfy such person's obligations under such contract.
    ``(b) Federal Power Marketing Administration.--A Federal Power 
Marketing Administration shall not be subject to the provisions and 
requirements of this title [enacting this subchapter, amending sections 
7410, 7411, and 7479 of this title, and enacting provisions set out as 
notes under sections 7403, 7411, and 7651 of this title] with respect to 
electric energy generated by hydroelectric facilities and marketed by 
such Power Marketing Administration. Any person who sells or provides 
electric energy to a Federal Power Marketing Administration shall comply 
with the provisions and requirements of this title.''

                  Section Referred to in Other Sections

    This section is referred to in sections 7651a, 7651c, 7651d, 7651e, 
7651g, 7651h, 7651i, 7651j of this title.
