State of Illinois
91st General Assembly

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[ Introduced ][ Engrossed ][ House Amendment 001 ]
[ Conference Committee Report 001 ]


SB1088 Enrolled                               LRB9102840LDpkA

 1        AN  ACT  to  amend  the  Environmental  Protection Act by
 2    adding Section 9.9.

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

 5        Section  5.   The Environmental Protection Act is amended
 6    by adding Section 9.9 as follows:

 7        (415 ILCS 5/9.9 new)
 8        Sec. 9.9.  Nitrogen oxides trading system.
 9        (a)  The General Assembly finds:
10             (1)  That USEPA has issued a Final Rule published in
11        the  Federal  Register  on  October  27,  1998,  entitled
12        "Finding of Significant Contribution and  Rulemaking  for
13        Certain  States  in  the Ozone Transport Assessment Group
14        Region for Purposes of  Reducing  Regional  Transport  of
15        Ozone",  hereinafter  referred  to as the "NOx SIP Call",
16        compliance with which will require reducing emissions  of
17        nitrogen oxides ("NOx");
18             (2)  That  reducing  emissions  of  NOx in the State
19        helps the State to meet the national ambient air  quality
20        standard for ozone;
21             (3)  That  emissions  trading  is  a  cost-effective
22        means of obtaining reductions of NOx emissions.
23        (b)  The  Agency  shall propose and the Board shall adopt
24    regulations to implement an interstate  NOx  trading  program
25    (hereinafter  referred  to  as  the "NOx Trading Program") as
26    provided for in 40 CFR Part 96,  including  incorporation  by
27    reference  of  appropriate  provisions  of 40 CFR Part 96 and
28    regulations  to  address  40  CFR  Section  96.4(b),  Section
29    96.55(c), Subpart E, and Subpart I.  In addition, the  Agency
30    shall  propose  and  the  Board  shall  adopt  regulations to
31    implement NOx emission reduction programs  for  cement  kilns
SB1088 Enrolled            -2-                LRB9102840LDpkA
 1    and stationary internal combustion engines.
 2        (c)  Allocations  of  NOx  allowances  to  large electric
 3    generating units ("EGUs") and large  non-electric  generating
 4    units  ("non-EGUs"), as defined by 40 CFR Part 96.4(a), shall
 5    not exceed  the  State's  trading  budget  for  those  source
 6    categories  to  be  included in the State Implementation Plan
 7    for NOx.
 8        (d)  In adopting regulations to implement the NOx Trading
 9    Program, the Board shall:
10             (1)  assure that the economic impact  and  technical
11        feasibility  of  NOx  emissions  reductions under the NOx
12        Trading  Program   are   considered   relative   to   the
13        traditional  regulatory control requirements in the State
14        for EGUs and non-EGUs;
15             (2)  provide that  emission  units,  as  defined  in
16        Section 39.5(1) of this Act, may opt into the NOx Trading
17        Program;
18             (3)  provide   for   voluntary   reductions  of  NOx
19        emissions from emission  units,  as  defined  in  Section
20        39.5(1)   of  this  Act,  not  otherwise  included  under
21        paragraph (c)  or  (d)(2)  of  this  Section  to  provide
22        additional   allowances   to  EGUs  and  non-EGUs  to  be
23        allocated by the Agency.  The regulations  shall  further
24        provide  that  such  voluntary reductions are verifiable,
25        quantifiable, permanent, and federally enforceable;
26             (4)  provide that the Agency  allocate  to  non-EGUs
27        allowances  that  are  designated in the rule, unless the
28        Agency has been directed to transfer the  allocations  to
29        another  unit  subject  to  the  requirements  of the NOx
30        Trading Program, and that upon shutdown of a non-EGU, the
31        unit may transfer or sell the  NOx  allowances  that  are
32        allocated to such unit; and
33             (5)  provide   that   the  Agency  shall  set  aside
34        annually a number of allowances, not to exceed 5% of  the
SB1088 Enrolled            -3-                LRB9102840LDpkA
 1        total  EGU  trading  budget,  to be made available to new
 2        EGUs.
 3                  (A)  Those  EGUs   that   commence   commercial
 4             operation,  as  defined in 40 CFR Section 96.2, at a
 5             time that is more than half way through the  control
 6             period  in  2002  shall  return  to  the  Agency any
 7             allowances that were issued to it by the Agency  and
 8             were not used for compliance in 2003.
 9                  (B)  The  Agency  may charge EGUs that commence
10             commercial operation, as defined in 40  CFR  Section
11             96.2,   on   or  after  January  1,  2003,  for  the
12             allowances it issues to them.
13        (e)  The Agency may adopt procedural rules, as necessary,
14    to  implement  the  regulations  promulgated  by  the   Board
15    pursuant   to  subsections  (b)  and  (d)  and  to  implement
16    subsection (i) of this Section.
17        (f)  The regulations promulgated by the Board pursuant to
18    subsections (b) and (d) of this Section shall not be enforced
19    until the later of May 1, 2003,  or  the  first  day  of  the
20    control  season  subsequent to the calendar year in which all
21    of the other states subject to the provisions of the NOx  SIP
22    Call  that  are  located  in  USEPA  Region  V  or  that  are
23    contiguous  to Illinois have adopted regulations to implement
24    NOx trading programs and other  required  reductions  of  NOx
25    emissions  pursuant to the NOx SIP Call, and such regulations
26    have  received  final  approval  by  USEPA  as  part  of  the
27    respective states' SIPS for ozone, or a final FIP  for  ozone
28    promulgated by USEPA is effective for such other states.
29        (g)  To the extent that a court of competent jurisdiction
30    finds   a   provision   of   40  CFR  Part  96  invalid,  the
31    corresponding Illinois provision shall be stayed  until  such
32    provision  of  40  CFR  Part  96  is  found to be valid or is
33    re-promulgated. To the extent that  USEPA  or  any  court  of
34    competent   jurisdiction   stays  the  applicability  of  any
SB1088 Enrolled            -4-                LRB9102840LDpkA
 1    provision of the NOx SIP Call to any person  or  circumstance
 2    relating  to  Illinois,  during  the period of that stay, the
 3    effectiveness of the corresponding Illinois  provision  shall
 4    be   stayed.  To  the  extent  that  the  invalidity  of  the
 5    particular requirement or application does not  affect  other
 6    provisions or applications of the NOx SIP Call pursuant to 40
 7    CFR 51.121 or the NOx trading program pursuant to 40 CFR Part
 8    96  or 40 CFR Part 97, this Section, and rules or regulations
 9    promulgated hereunder,  will  be  given  effect  without  the
10    invalid provisions or applications.
11        (h)  Notwithstanding any other provision of this Act, any
12    source  or  other  authorized person that participates in the
13    NOx  Trading  Program  shall  be  eligible  to  exchange  NOx
14    allowances with other sources in accordance with this Section
15    and with regulations promulgated by the Board or the Agency.
16        (i)  There is hereby created within the State Treasury an
17    interest-bearing special fund to be known as the NOx  Trading
18    System  Fund,  which  shall  be  used and administered by the
19    Agency for the purposes stated below:
20             (1)  To accept funds from persons who  purchase  NOx
21        allowances from the Agency;
22             (2)  To  disburse the proceeds of the NOx allowances
23        sales pro-rata to the owners or  operators  of  the  EGUs
24        that received allowances from the Agency but not from the
25        Agency's  set-aside,  in accordance with regulations that
26        may be promulgated by the Agency; and
27             (3)  To finance the reasonable costs incurred by the
28        Agency in the administration of the NOx Trading System.

29        Section 95.  The State Finance Act is amended  by  adding
30    Section 5.490 as follows:

31        (30 ILCS 105/5.490 new)
32        Sec. 5.490.  The NOx Trading System Fund.
SB1088 Enrolled            -5-                LRB9102840LDpkA
 1        Section  99.  Effective date.  This Act takes effect upon
 2    becoming law.

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