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   regulations or rulings  shall apply to  all areas in which  EPA is

   the permitting authority. In  those instances  in which the  State

   is  the permitting  authority under  part C  or  D, any  State may

   adopt and  submit to the  Administrator for approval revisions  to

   its  implementation  plan  to apply  the  regulations  or  rulings

   promulgated under this subsection.

   "(c)  Exemption  for Reactivation  of  Very  Clean Units.-Physical

changes  or changes  in the  method of  operation associated  with the

commencement  of commercial  operations by  a coal-fired  utility unit

after a period of discontinued operation shall not subject the unit to

the  requirements of section 111 or  part C of the  Act where the unit

(1) has  not been in  operation for the  two-year period prior  to the

enactment of the  Clean Air Act Amendments of  1990, and the emissions

from  such unit continue to  be carried in  the permitting authority's

emissions inventory at the  time of enactment, (2) was  equipped prior

to  shut-down  with a  continuous  system  of  emissions control  that

achieves  a removal efficiency  for sulfur dioxide of  no less than 85

percent and  a removal efficiency for particulates  of no less than 98

percent, (3)  is equipped with  low-NOx burners prior  to the time  of

commencement, and (4) is otherwise in compliance with the requirements

of this Act.


   "(a) Definitions.-For purposes of this section-

      "(1) The term `independent power producer' means any person who

   owns  or  operates,  in   whole  or  in  part,  one  or  more  new

   independent power production facilities.

      "(2) The term `new independent power production facility' means

   a facility that-

         "(A) is  used  for the  generation of  electric  energy,  80

      percent or more of which is sold at wholesale;

         "(B)  is  nonrecourse  project-financed  (as  such  term  is

      defined by the Secretary of Energy  within 3 months of the date

      of the enactment of the Clean Air Act Amendments of 1990);

         "(C) does not generate electric energy sold to any affiliate

      (as  defined in section 2(a)(11)  of the Public Utility Holding

      Company Act of 1935) of the facility's owner or operator unless

      the  owner or  operator of  the facility  demonstrates that  it

      cannot obtain allowances from the affiliate; and

         "(D)  is a new  unit required to hold  allowances under this


      "(3)  The  term  `required  allowances'  means  the  allowances

   required to  operate such unit  for so much  of the  unit's useful

   life as occurs after January 1, 2000.

   "(b) Special  Reserve of  Allowances.-Within 36  months after  the

date of  the enactment of  the Clean Air  Act Amendments of  1990, the

Administrator  shall  promulgate  regulations  establishing  a Special

Allowance Reserve containing allowances to be sold under

this  section.  For purposes  of  establishing  the Special  Allowance

Reserve, the Administrator shall withhold-

      "(1)  2.8 percent of the allocation of allowances for each year

   from 1995 through 1999 inclusive; and

      "(2)  2.8 percent of the basic Phase II allowance allocation of

   allowances for  each year beginning in the  year 2000  which would

   (but for this subsection)  be issued for each affected  unit at an

   affected source.  The Administrator shall  record such withholding

   for purposes of  transferring the proceeds of the  allowance sales

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