Sulfur and Nitrogen Emissions Tax Act of 1987

Sulfur and Nitrogen Emissions Tax Act of 1987 - Title I: Excise Tax on Emissions from Certain Boilers and Trust Fund for Revenues Therefrom - Amends the Internal Revenue Code to impose an excise tax, at a rate based on the amount of pollutant emitted, on emissions of sulfur dioxide and nitrogen oxides from certain fossil fuel-burning boilers. Provides that such tax: (1) be phased in over a two-year period; and (2) be adjusted annually for inflation after 1990. Fixes the liability for the tax on the person owning or operating the taxable boiler. Exempts certain boilers from the tax.

Sets forth the methodology for determining the amount of pollutants emitted, generally to be measured by a qualified continuous emissions monitoring device.

Permits: (1) a quarterly credit against the emissions tax for costs of the taxpayer's qualified pollution equipment, based on ratable depreciation over ten years; and (2) an income tax deduction for emissions tax payments.

Establishes in the Treasury the Sulfur and Nitrogen Emissions Trust Fund (SANE Trust Fund) to receive emissions excise tax revenue. Permits expenditures from this fund to: (1) carry out the acid deposition control assistance program under this Act; and (2) pay specified administrative costs.

Authorizes repayable advances to the SANE Fund. Sets limits and conditions to govern such borrowing.

Title II: Acid Deposition Control Assistance Program - Amends the Clean Air Act to authorize the Administrator of the Environmental Protection Agency (Administrator) to make loans, from funds available in the SANE Fund, to qualified persons to either: (1) construct a new electric power generating unit to replace an existing fossil-fuel fired unit; or (2) purchase and install pollution abatement equipment at a fossil-fuel fired unit.

Sets forth: (1) factors to be considered in selecting loan recipients; (2) limitations and conditions applicable to loans for both pollution abatement and new plants; and (3) the circumstances under which the Administrator is authorized to cancel a portion of either type of loan.

Directs the Administrator and the Secretary of the Treasury to: (1) complete a study of the effectiveness of the pollutant emissions tax in reducing the targeted emissions; (2) make recommendations concerning emission control and economic growth; and (3) report to the Congress within five years of this Act's enactment.

Directs the Administrator to study the tax disincentive approach to pollution control and to report the results to the Congress within five years of this Act's enactment.

Authorizes appropriations, for the next fiscal year, of monies remaining in the SANE Fund after loan expenditures. Permits such excess funds to be used for specified purposes, including: (1) research projects relating to clean coal technology, alternative energy, or the environmental effects of pollutant emissions; (2) job retraining programs for workers displaced by the effects of this Act; and (3) programs to mitigate certain environmental damages.

Prohibits the authorization of such appropriations of excess funds if the Administrator fails to submit when due the reports required by this Act.