Public Act 093-0669
 
HB3553 Enrolled LRB093 02578 AMC 02588 b

    AN ACT concerning air pollution.
 
    Be it enacted by the People of the State of Illinois,
represented in the General Assembly:
 
    Section 5. The Environmental Protection Act is amended by
changing Section 9.9 as follows:
 
    (415 ILCS 5/9.9)
    Sec. 9.9. Nitrogen oxides trading system.
    (a) The General Assembly finds:
        (1) That USEPA has issued a Final Rule published in the
Federal Register on October 27, 1998, entitled "Finding of
Significant Contribution and Rulemaking for Certain States
in the Ozone Transport Assessment Group Region for Purposes
of Reducing Regional Transport of Ozone", hereinafter
referred to as the "NOx SIP Call", compliance with which
will require reducing emissions of nitrogen oxides
("NOx");
        (2) That reducing emissions of NOx in the State helps
the State to meet the national ambient air quality standard
for ozone;
        (3) That emissions trading is a cost-effective means of
obtaining reductions of NOx emissions.
    (b) The Agency shall propose and the Board shall adopt
regulations to implement an interstate NOx trading program
(hereinafter referred to as the "NOx Trading Program") as
provided for in 40 CFR Part 96, including incorporation by
reference of appropriate provisions of 40 CFR Part 96 and
regulations to address 40 CFR Section 96.4(b), Section
96.55(c), Subpart E, and Subpart I. In addition, the Agency
shall propose and the Board shall adopt regulations to
implement NOx emission reduction programs for cement kilns and
stationary internal combustion engines.
    (c) Allocations of NOx allowances to large electric
generating units ("EGUs") and large non-electric generating
units ("non-EGUs"), as defined by 40 CFR Part 96.4(a), shall
not exceed the State's trading budget for those source
categories to be included in the State Implementation Plan for
NOx.
    (d) In adopting regulations to implement the NOx Trading
Program, the Board shall:
        (1) assure that the economic impact and technical
feasibility of NOx emissions reductions under the NOx
Trading Program are considered relative to the traditional
regulatory control requirements in the State for EGUs and
non-EGUs;
        (2) provide that emission units, as defined in Section
39.5(1) of this Act, may opt into the NOx Trading Program;
        (3) provide for voluntary reductions of NOx emissions
from emission units, as defined in Section 39.5(1) of this
Act, not otherwise included under paragraph (c) or (d)(2)
of this Section to provide additional allowances to EGUs
and non-EGUs to be allocated by the Agency. The regulations
shall further provide that such voluntary reductions are
verifiable, quantifiable, permanent, and federally
enforceable;
        (4) provide that the Agency allocate to non-EGUs
allowances that are designated in the rule, unless the
Agency has been directed to transfer the allocations to
another unit subject to the requirements of the NOx Trading
Program, and that upon shutdown of a non-EGU, the unit may
transfer or sell the NOx allowances that are allocated to
such unit; and
        (5) provide that the Agency shall set aside annually a
number of allowances, not to exceed 5% of the total EGU
trading budget, to be made available to new EGUs; and .
        (6) (A) provide that those EGUs that commence
commercial operation, as defined in 40 CFR Section 96.2, at
a time that is more than half way through the control
period in 2003 shall return to the Agency any allowances
that were issued to it by the Agency and were not used for
compliance in 2004. (B) The Agency may charge EGUs that
commence commercial operation, as defined in 40 CFR Section
96.2, on or after January 1, 2003, for the allowances it
issues to them.
    (d-5) The Agency may sell NOx allowances to sources in
Illinois that are subject to 35 Ill. Adm. Code 217, either
Subpart U or W, as follows:
        (1) any unearned Early Reduction Credits set aside for
non-EGUs under 35 Ill. Adm. Code 217, Subpart U, but only
to those sources that make qualifying early reductions of
NOx in 2003 pursuant to 35 Ill. Adm. Code 217 for which the
source did not receive an allocation thereunder. If the
Agency receives requests to purchase more ERCs than are
available for sale, allowances shall be offered for sale to
qualifying sources on a pro-rata basis;
        (2) any remaining Early Reduction Credits allocated
under 35 Ill. Adm. Code 217, Subpart U or W, that could not
be allocated on a pro-rata, whole allowance basis, but only
to those sources that made qualifying early reductions of
NOx in 2003 pursuant to 35 Ill. Adm. Code 217 for which the
source did not receive an allocation;
        (3) any allowances under 35 Ill. Adm. Code 217, Subpart
W, that remain after each 3-year allocation period that
could not be allocated on a pro-rata, whole allowance basis
pursuant to the provisions of Subpart W; and
        (4) any allowances requested from the New Source Set
Aside for those sources that commenced operation, as
defined in 40 CFR Section 96.2, on or after January 1,
2004.
    (d-10) The selling price for ERC allowances shall be 70% of
the market price index for 2005 NOx allowances, determined by
the Agency as follows:
        (1) using the mean of 2 or more published market price
indexes for the 2005 NOx allowances as of October 6, 2003;
or
        (2) if there are not 2 published market price indexes
for 2005 NOx allowances as of October 6, 2003, the Agency
may use any reasonable indication of market price.
    (e) The Agency may adopt procedural rules, as necessary, to
implement the regulations promulgated by the Board pursuant to
subsections (b) and (d) and to implement subsections (d-5),
(d-10), (i), and (j) subsection (i) of this Section.
    (f) Notwithstanding any provisions in subparts T, U, and W
of Section 217 of Title 35 of the Illinois Administrative Code
to the contrary, compliance with the regulations promulgated by
the Board pursuant to subsections (b) and (d) of this Section
is required by May 31, 2004.
    (g) To the extent that a court of competent jurisdiction
finds a provision of 40 CFR Part 96 invalid, the corresponding
Illinois provision shall be stayed until such provision of 40
CFR Part 96 is found to be valid or is re-promulgated. To the
extent that USEPA or any court of competent jurisdiction stays
the applicability of any provision of the NOx SIP Call to any
person or circumstance relating to Illinois, during the period
of that stay, the effectiveness of the corresponding Illinois
provision shall be stayed. To the extent that the invalidity of
the particular requirement or application does not affect other
provisions or applications of the NOx SIP Call pursuant to 40
CFR 51.121 or the NOx trading program pursuant to 40 CFR Part
96 or 40 CFR Part 97, this Section, and rules or regulations
promulgated hereunder, will be given effect without the invalid
provisions or applications.
    (h) Notwithstanding any other provision of this Act, any
source or other authorized person that participates in the NOx
Trading Program shall be eligible to exchange NOx allowances
with other sources in accordance with this Section and with
regulations promulgated by the Board or the Agency.
    (i) There is hereby created within the State Treasury an
interest-bearing special fund to be known as the NOx Trading
System Fund. Moneys generated from the sale of NOx allowances
from the New Source Set Aside or the sale of allowances
pursuant to subsection (d-5) of this Section shall be deposited
into the Fund. This Fund , which shall be used and administered
by the Agency for the purposes stated below:
        (1) To accept funds from persons who purchase NOx
allowances from the New Source Set Aside from the Agency;
        (2) To disburse the proceeds of the sale of the NOx
allowances from the New Source Set Aside, to the extent
that proceeds remain after the Agency has recouped the
reasonable costs incurred by the Agency in the
administration of the NOx SIP Call Program, sales pro-rata
to the owners or operators of the EGUs that received
allowances from the Agency but not from the Agency's New
Source Set Aside set-aside, in accordance with regulations
that may be promulgated by the Agency; and
        (3) To finance the reasonable costs incurred by the
Agency in the administration of the NOx SIP Call Program
Trading System.
    (j) Moneys generated from the sale of early reduction
credits shall be deposited into the Clean Air Act Permit Fund
created pursuant to Section 39.5(18)(d) of this Act, and the
proceeds shall be used and administered by the Agency to
finance the costs associated with the Clean Air Act Permit
Program.
(Source: P.A. 91-631, eff. 8-19-99; 92-12, eff. 7-1-01; 92-279,
eff. 8-7-01.)
 
    Section 99. Effective date. This Act takes effect upon
becoming law.