093_HB3551

 
                                     LRB093 02591 AMC 02601 b

 1        AN ACT concerning nitrogen oxide.

 2        Be  it  enacted  by  the People of the State of Illinois,
 3    represented in the General Assembly:

 4        Section 5.  The Environmental Protection Act  is  amended
 5    by changing Section 9.9 as follows:

 6        (415 ILCS 5/9.9)
 7        Sec. 9.9.  Nitrogen oxides trading system.
 8        (a)  The General Assembly finds:
 9             (1)  That USEPA has issued a Final Rule published in
10        the  Federal  Register  on  October  27,  1998,  entitled
11        "Finding  of  Significant Contribution and Rulemaking for
12        Certain States in the Ozone  Transport  Assessment  Group
13        Region  for  Purposes  of  Reducing Regional Transport of
14        Ozone", hereinafter referred to as the  "NOx  SIP  Call",
15        compliance  with which will require reducing emissions of
16        nitrogen oxides ("NOx");
17             (2)  That reducing emissions of  NOx  in  the  State
18        helps  the State to meet the national ambient air quality
19        standard for ozone;
20             (3)  That  emissions  trading  is  a  cost-effective
21        means of obtaining reductions of NOx emissions.
22        (b)  The Agency shall propose and the Board  shall  adopt
23    regulations  to  implement  an interstate NOx trading program
24    (hereinafter referred to as the  "NOx  Trading  Program")  as
25    provided  for  in  40 CFR Part 96, including incorporation by
26    reference of appropriate provisions of 40  CFR  Part  96  and
27    regulations  to  address  40  CFR  Section  96.4(b),  Section
28    96.55(c),  Subpart E, and Subpart I.  In addition, the Agency
29    shall propose  and  the  Board  shall  adopt  regulations  to
30    implement  NOx  emission  reduction programs for cement kilns
31    and stationary internal combustion engines.
 
                            -2-      LRB093 02591 AMC 02601 b
 1        (c)  Allocations of  NOx  allowances  to  large  electric
 2    generating  units  ("EGUs") and large non-electric generating
 3    units ("non-EGUs"), as defined by 40 CFR Part 96.4(a),  shall
 4    not  exceed  the  State's  trading  budget  for  those source
 5    categories to be included in the  State  Implementation  Plan
 6    for NOx.
 7        (d)  In adopting regulations to implement the NOx Trading
 8    Program, the Board shall:
 9             (1)  assure  that  the economic impact and technical
10        feasibility of NOx emissions  reductions  under  the  NOx
11        Trading   Program   are   considered   relative   to  the
12        traditional regulatory control requirements in the  State
13        for EGUs and non-EGUs;
14             (2)  provide  that  emission  units,  as  defined in
15        Section 39.5(1) of this Act, may opt into the NOx Trading
16        Program;
17             (3)  provide  for  voluntary   reductions   of   NOx
18        emissions  from  emission  units,  as  defined in Section
19        39.5(1)  of  this  Act,  not  otherwise  included   under
20        paragraph  (c)  or  (d)(2)  of  this  Section  to provide
21        additional  allowances  to  EGUs  and  non-EGUs   to   be
22        allocated  by  the Agency.  The regulations shall further
23        provide that such voluntary  reductions  are  verifiable,
24        quantifiable, permanent, and federally enforceable;
25             (4)  provide  that  the  Agency allocate to non-EGUs
26        allowances that are designated in the  rule,  unless  the
27        Agency  has  been directed to transfer the allocations to
28        another unit subject  to  the  requirements  of  the  NOx
29        Trading Program, and that upon shutdown of a non-EGU, the
30        unit  may  transfer  or  sell the NOx allowances that are
31        allocated to such unit; and
32             (5)  provide  that  the  Agency  shall   set   aside
33        annually  a number of allowances, not to exceed 5% of the
34        total EGU trading budget, to be  made  available  to  new
 
                            -3-      LRB093 02591 AMC 02601 b
 1        EGUs.
 2                  (A)  Those   EGUs   that   commence  commercial
 3             operation, as defined in 40 CFR Section 96.2,  at  a
 4             time  that is more than half way through the control
 5             period in  2003  shall  return  to  the  Agency  any
 6             allowances  that were issued to it by the Agency and
 7             were not used for compliance in 2004.
 8                  (B)  The Agency may charge EGUs  that  commence
 9             commercial  operation,  as defined in 40 CFR Section
10             96.2,  on  or  after  January  1,  2003,   for   the
11             allowances it issues to them.
12                  (C)  The Agency may sell to any Illinois source
13             subject  to 35 Ill. Adm. Code Part 217, Subpart U or
14             W,  (i)  any  unearned   early   reduction   credits
15             allocated  to  non-EGUs  under  Subpart  U, (ii) any
16             remaining early reduction  credits  allocated  under
17             Subpart  U  or  W  that  could not be allocated on a
18             pro-rata, whole  allowance  basis  pursuant  to  the
19             provisions  of  Subpart  U  or W, as applicable, and
20             (iii) any allowances under  Subpart  W  that  remain
21             after  each  3-year allocation period that could not
22             be allocated on a pro-rata,  whole  allowance  basis
23             pursuant to the provisions of Subpart W.
24        (e)  The Agency may adopt procedural rules, as necessary,
25    to   implement  the  regulations  promulgated  by  the  Board
26    pursuant  to  subsections  (b)  and  (d)  and  to   implement
27    subsection (i) of this Section.
28        (f)  Notwithstanding any provisions in subparts T, U, and
29    W  of  Section 217 of Title 35 of the Illinois Administrative
30    Code  to  the  contrary,  compliance  with  the   regulations
31    promulgated  by the Board pursuant to subsections (b) and (d)
32    of this Section is required by May 31, 2004.
33        (g)  To the extent that a court of competent jurisdiction
34    finds  a  provision  of  40  CFR   Part   96   invalid,   the
 
                            -4-      LRB093 02591 AMC 02601 b
 1    corresponding  Illinois  provision shall be stayed until such
 2    provision of 40 CFR Part 96  is  found  to  be  valid  or  is
 3    re-promulgated.  To  the  extent  that  USEPA or any court of
 4    competent  jurisdiction  stays  the  applicability   of   any
 5    provision  of  the NOx SIP Call to any person or circumstance
 6    relating to Illinois, during the period  of  that  stay,  the
 7    effectiveness  of  the corresponding Illinois provision shall
 8    be  stayed.  To  the  extent  that  the  invalidity  of   the
 9    particular  requirement  or application does not affect other
10    provisions or applications of the NOx SIP Call pursuant to 40
11    CFR 51.121 or the NOx trading program pursuant to 40 CFR Part
12    96 or 40 CFR Part 97, this Section, and rules or  regulations
13    promulgated  hereunder,  will  be  given  effect  without the
14    invalid provisions or applications.
15        (h)  Notwithstanding any other provision of this Act, any
16    source or other authorized person that  participates  in  the
17    NOx  Trading  Program  shall  be  eligible  to  exchange  NOx
18    allowances with other sources in accordance with this Section
19    and with regulations promulgated by the Board or the Agency.
20        (i)  There is hereby created within the State Treasury an
21    interest-bearing  special fund to be known as the NOx Trading
22    System Fund, which shall be  used  and  administered  by  the
23    Agency for the purposes stated below:
24             (1)  To  accept  funds from persons who purchase NOx
25        allowances or early reduction credits from the Agency;
26             (2)  (Blank) To disburse the  proceeds  of  the  NOx
27        allowances  sales  pro-rata to the owners or operators of
28        the EGUs that received allowances from the Agency but not
29        from  the  Agency's   set-aside,   in   accordance   with
30        regulations that may be promulgated by the Agency; and
31             (3)  To finance the reasonable costs incurred by the
32        Agency in the administration of the NOx Trading System or
33        other  costs  associated  with  the air pollution control
34        program.
 
                            -5-      LRB093 02591 AMC 02601 b
 1    (Source: P.A.  91-631,  eff.  8-19-99;  92-12,  eff.  7-1-01;
 2    92-279, eff. 8-7-01.)

 3        Section  99.  Effective date.  This Act takes effect upon
 4    becoming law.