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1 | AN ACT concerning air pollution.
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2 | Be it enacted by the People of the State of Illinois, | ||||||
3 | represented in the General Assembly:
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4 | Section 5. The Environmental Protection Act is amended by | ||||||
5 | changing Section
9.9 as follows:
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6 | (415 ILCS 5/9.9)
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7 | Sec. 9.9. Nitrogen oxides trading system.
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8 | (a) The General Assembly finds:
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9 | (1) That USEPA has issued a Final Rule published in the | ||||||
10 | Federal
Register on October 27, 1998, entitled "Finding of | ||||||
11 | Significant Contribution and
Rulemaking for Certain States | ||||||
12 | in the Ozone Transport Assessment Group Region
for Purposes | ||||||
13 | of Reducing Regional Transport of Ozone", hereinafter | ||||||
14 | referred to
as the "NOx SIP Call", compliance with which | ||||||
15 | will require reducing emissions of
nitrogen oxides | ||||||
16 | ("NOx");
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17 | (2) That reducing emissions of NOx in the State helps | ||||||
18 | the State to meet
the national ambient air quality standard | ||||||
19 | for ozone;
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20 | (3) That emissions trading is a cost-effective means of | ||||||
21 | obtaining
reductions of NOx emissions.
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22 | (b) The Agency shall propose and the Board shall adopt
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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
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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 and
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31 | stationary
internal combustion engines.
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32 | (c) Allocations of NOx allowances to large electric |
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1 | generating units
("EGUs") and large non-electric generating | ||||||
2 | units ("non-EGUs"), as defined by 40
CFR Part 96.4(a), shall | ||||||
3 | not exceed the State's trading budget for those source
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4 | categories to be included in
the State Implementation Plan for | ||||||
5 | NOx.
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6 | (d) In adopting regulations to implement the NOx Trading | ||||||
7 | Program, the Board
shall:
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8 | (1) assure that the economic impact and technical | ||||||
9 | feasibility of NOx
emissions reductions under the NOx | ||||||
10 | Trading Program are considered relative to
the traditional | ||||||
11 | regulatory control requirements in the State for EGUs and
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12 | non-EGUs;
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13 | (2) provide that emission units, as defined in Section | ||||||
14 | 39.5(1) of this
Act, may opt into the NOx Trading Program;
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15 | (3) provide for voluntary reductions of NOx emissions | ||||||
16 | from emission units,
as defined in Section 39.5(1) of this | ||||||
17 | Act, not otherwise included under
paragraph (c) or (d)(2) | ||||||
18 | of this Section to provide additional allowances to
EGUs | ||||||
19 | and non-EGUs to be allocated by the Agency. The regulations | ||||||
20 | shall further
provide that such voluntary reductions are | ||||||
21 | verifiable, quantifiable, permanent,
and federally | ||||||
22 | enforceable;
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23 | (4) provide that the Agency allocate to non-EGUs | ||||||
24 | allowances that are
designated in the rule, unless the | ||||||
25 | Agency has been directed to transfer the
allocations to | ||||||
26 | another unit subject to the requirements of the NOx Trading
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27 | Program, and that upon shutdown of a non-EGU, the unit may | ||||||
28 | transfer or sell the
NOx allowances that are allocated to | ||||||
29 | such unit; and
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30 | (5) provide that the Agency shall set aside annually a | ||||||
31 | number of
allowances, not to exceed 5% of the total EGU | ||||||
32 | trading budget, to be made
available to new EGUs ; and
.
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33 | (6)
(A)
provide that those EGUs that commence | ||||||
34 | commercial
operation, as defined
in 40
CFR Section 96.2, at | ||||||
35 | a time that is more than half way through the control
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36 | period in 2003 shall return to the Agency any allowances |
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1 | that were issued to
it by the Agency and were not used for | ||||||
2 | compliance in 2004.
(B) The Agency may charge EGUs that | ||||||
3 | commence commercial operation, as
defined in 40 CFR Section | ||||||
4 | 96.2, on or after January 1, 2003, for the allowances
it | ||||||
5 | issues to them.
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6 | (d-5) The Agency may sell NOx allowances to sources in | ||||||
7 | Illinois that are
subject
to 35 Ill. Adm. Code 217, either | ||||||
8 | Subpart U or W, as follows:
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9 | (1) any unearned Early Reduction Credits set aside for | ||||||
10 | non-EGUs under 35
Ill. Adm. Code 217, Subpart U, but only | ||||||
11 | to those sources that make qualifying
early reductions of | ||||||
12 | NOx in 2003 pursuant to 35 Ill. Adm. Code 217 for which
the | ||||||
13 | source did not receive an allocation thereunder. If the | ||||||
14 | Agency receives
requests to purchase more ERCs than are | ||||||
15 | available for sale, allowances shall
be offered for sale to | ||||||
16 | qualifying sources on a pro-rata basis;
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17 | (2) any remaining Early Reduction Credits allocated | ||||||
18 | under 35 Ill. Adm.
Code 217, Subpart U or W, that could not | ||||||
19 | be allocated on a pro-rata, whole
allowance basis, but only | ||||||
20 | to those sources that made qualifying early
reductions of | ||||||
21 | NOx in 2003 pursuant to 35 Ill. Adm. Code 217 for which the
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22 | source did not receive an allocation;
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23 | (3) any allowances under 35 Ill. Adm. Code 217, Subpart | ||||||
24 | W, that remain
after each 3-year allocation period that | ||||||
25 | could not be allocated on a
pro-rata, whole allowance basis | ||||||
26 | pursuant to the provisions of Subpart W; and
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27 | (4) any allowances requested from the New Source Set | ||||||
28 | Aside for those
sources that commenced operation, as | ||||||
29 | defined in 40 CFR Section 96.2, on or
after
January 1, | ||||||
30 | 2004.
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31 | (d-10) The selling price for ERC allowances shall be 70% of | ||||||
32 | the market
price index for 2005 NOx allowances, determined by | ||||||
33 | the Agency as follows:
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34 | (1) using the mean of 2 or more published market price | ||||||
35 | indexes for the
2005 NOx allowances as of October 6, 2003; | ||||||
36 | or
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1 | (2) if there are not 2 published market price indexes | ||||||
2 | for 2005 NOx
allowances as of October 6, 2003, the Agency | ||||||
3 | may use any reasonable indication
of market price.
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4 | (e) The Agency may adopt procedural rules, as necessary, to | ||||||
5 | implement the
regulations promulgated by the Board pursuant to | ||||||
6 | subsections (b) and (d) and
to implement subsections (d-5), | ||||||
7 | (d-10), (i), and (j)
subsection (i) of
this Section.
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8 | (f) Notwithstanding any provisions in subparts T, U, and W | ||||||
9 | of Section 217
of Title 35 of the Illinois Administrative Code | ||||||
10 | to the contrary, compliance
with the regulations promulgated by | ||||||
11 | the Board pursuant to subsections (b) and
(d) of this Section | ||||||
12 | is required by May 31, 2004.
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13 | (g) To the extent that a court of competent jurisdiction | ||||||
14 | finds a provision
of 40 CFR Part 96 invalid, the corresponding | ||||||
15 | Illinois provision shall
be stayed until such provision of 40 | ||||||
16 | CFR Part 96 is found to be valid or is
re-promulgated. To the | ||||||
17 | extent that USEPA or any court of competent
jurisdiction stays | ||||||
18 | the applicability of any provision of the NOx SIP Call to
any | ||||||
19 | person or circumstance relating to Illinois, during the period | ||||||
20 | of that
stay, the effectiveness of the corresponding Illinois | ||||||
21 | provision shall be
stayed. To the extent that the invalidity of | ||||||
22 | the particular requirement or
application does not affect
other | ||||||
23 | provisions or applications of the NOx SIP Call pursuant to 40 | ||||||
24 | CFR 51.121
or the NOx trading program pursuant to 40 CFR Part | ||||||
25 | 96 or 40 CFR Part 97, this
Section, and rules or regulations | ||||||
26 | promulgated hereunder, will be given
effect without the invalid | ||||||
27 | provisions or applications.
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28 | (h) Notwithstanding any other provision of this Act, any | ||||||
29 | source or other
authorized person that participates in the NOx | ||||||
30 | Trading Program shall be
eligible to exchange NOx allowances | ||||||
31 | with other sources in accordance with
this Section and with | ||||||
32 | regulations promulgated by the Board or the Agency.
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33 | (i) There is hereby created within the State Treasury an | ||||||
34 | interest-bearing
special fund to be known as the NOx Trading | ||||||
35 | System Fund . Moneys generated
from the sale of NOx allowances | ||||||
36 | from the New Source Set Aside or the sale of
allowances |
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1 | pursuant to subsection (d-5) of this Section shall be deposited | ||||||
2 | into
the Fund. This Fund
, which shall be used
and administered | ||||||
3 | by the Agency for the purposes stated below:
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4 | (1) To accept funds from persons who purchase NOx | ||||||
5 | allowances from the
New Source Set Aside from the
Agency;
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6 | (2) To disburse the proceeds of the sale of the NOx
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7 | allowances from the New Source Set Aside, to the extent | ||||||
8 | that proceeds remain
after the Agency has recouped the | ||||||
9 | reasonable costs incurred by the Agency in
the | ||||||
10 | administration of the NOx SIP Call Program,
sales pro-rata | ||||||
11 | to the
owners or operators of the EGUs that received
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12 | allowances from the Agency but not from the Agency's New | ||||||
13 | Source Set Aside
set-aside , in accordance
with regulations | ||||||
14 | that may be promulgated by the Agency; and
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15 | (3) To finance the reasonable costs incurred by the | ||||||
16 | Agency in the
administration of the NOx SIP Call Program
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17 | Trading System .
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18 | (j) Moneys generated from the sale of early reduction | ||||||
19 | credits
shall be deposited into the Clean Air Act Permit Fund | ||||||
20 | created pursuant to
Section 39.5(18)(d) of this Act, and the | ||||||
21 | proceeds
shall be used and administered by the Agency to | ||||||
22 | finance the costs associated
with the Clean Air Act Permit | ||||||
23 | Program.
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24 | (Source: P.A. 91-631, eff. 8-19-99; 92-12, eff. 7-1-01; 92-279, | ||||||
25 | eff.
8-7-01.)
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26 | Section 99. Effective date. This Act takes effect upon | ||||||
27 | becoming law.
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