[DOCID: f:hr705.110]
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110th Congress Report
HOUSE OF REPRESENTATIVES
2d Session 110-705
======================================================================
TO AUTHORIZE THE ADMINISTRATOR OF THE ENVIRONMENTAL PROTECTION AGENCY
TO ACCEPT, AS PART OF A SETTLEMENT, DIESEL EMISSION REDUCTION
SUPPLEMENTAL ENVIRONMENTAL PROJECTS, AND FOR OTHER PURPOSES
_______
June 10, 2008.--Committed to the Committee of the Whole House on the
State of the Union and ordered to be printed
_______
Mr. Dingell, from the Committee on Energy and Commerce, submitted the
following
R E P O R T
[To accompany H.R. 3754]
[Including cost estimate of the Congressional Budget Office]
The Committee on Energy and Commerce, to whom was referred
the bill (H.R. 3754) to authorize the Administrator of the
Environmental Protection Agency to accept, as part of a
settlement, diesel emission reduction Supplemental
Environmental Projects, and for other purposes, having
considered the same, report favorably thereon without amendment
and recommend that the bill do pass.
CONTENTS
Page
Purpose and Summary.............................................. 2
Background and Need for Legislation.............................. 2
Hearings......................................................... 3
Committee Consideration.......................................... 3
Committee Votes.................................................. 3
Committee Oversight Findings..................................... 3
Statement of General Performance Goals and Objectives............ 4
New Budget Authority, Entitlement Authority, and Tax Expenditures 4
Earmarks and Tax and Tariff Benefits............................. 4
Committee Cost Estimate.......................................... 4
Congressional Budget Office Estimate............................. 4
Federal Mandates Statement....................................... 5
Advisory Committee Statement..................................... 5
Constitutional Authority Statement............................... 6
Applicability to Legislative Branch.............................. 6
Section-by-Section Analysis of the Legislation................... 6
Changes in Existing Law Made by the Bill, as Reported............ 6
PURPOSE AND SUMMARY
The purpose of H.R. 3754 is to authorize the Administrator
of the Environmental Protection Agency (EPA) to accept, as part
of a settlement, diesel emissions reduction Supplemental
Environmental Projects (SEPs). Such diesel emission reduction
projects may be accepted as part of settling alleged
environmental violations provided that the projects: protect
human health or the environment; are related to the underlying
alleged violation; do not constitute activities that the
defendant would otherwise be legally required to perform; and
do not provide funds for the staff of the Agency or for the
contractors to carry out the Agency's internal operations.
BACKGROUND AND NEED FOR LEGISLATION
In the United States, on-road and off-road diesel engines
and vehicles account for more than half of the nitrogen oxide
and particulate matter emissions from mobile sources. According
to the testimony before the Subcommittee on Energy and Air
Quality on February 19, 2008, these vehicles and engines
produce more than 1,000 tons of particulate matter every day,
resulting in approximately 21,000 premature deaths every year,
as well as increased asthma attacks, heart attacks, and
respiratory problems.
In response to the need for pollution reductions in this
area, EPA now requires all new on-road and off-road heavy duty
vehicles and engines to meet emission standards, which require
the use of pollution control technology. Given the long life
cycle of diesel engines, however, many of the older engines
will remain in vehicle fleets for years. Programs to replace or
retrofit these older engines with pollution control technology
have proven a reliable and cost-effective method for reducing
pollution from these sources. In recognition of this, both
Congress and EPA have acted to promote clean diesel
technologies.
While EPA grants have accounted for some clean diesel
programs, private parties have also funded clean diesel
programs as part of settlements of cases in which EPA alleged
violations of the Clean Air Act. During the period between 2003
and 2006, 37 percent of all diesel retrofit projects were
funded in whole or in part by SEPs, with funding reaching
nearly $62 million.
In Subtitle G, Sections 791-797 of the Energy Policy Act of
2005, Congress authorized $1 billion over 5 years for the
purpose of providing grants and revolving loans to reduce
emissions from diesel engines. The Consolidated Appropriations
Act, 2008 (which became public law 110-161) contained the first
specific appropriation for these diesel emission reduction
programs, but appropriated only $49.2 million. EPA estimates
that these programs, if fully funded, would reduce particulate
matter emissions by 70,000 tons, generate nearly $20 billion in
economic benefit, and return $13 of benefit for every $1
invested.
As a result of specific appropriation of funds by Congress
for clean diesel programs for fiscal year 2008, EPA concluded
that it could violate the Miscellaneous Receipts Act to allow
private parties to include diesel emissions reduction projects
as part of settlements. The Miscellaneous Receipts Act (MRA)
prevents Executive Branch agencies from bypassing the
Congressional appropriations process by augmenting their
budgets through other means. It is the position of EPA that the
MRA prohibits it from accepting SEPs for activities explicitly
covered by a specific appropriation or committee earmark.
H.R. 3754 authorizes EPA to continue its policy of allowing
diesel emission reduction SEPs as a part of settlements of any
alleged violation of environmental law, notwithstanding the
Miscellaneous Receipts Act. This Act continues EPA's policy
requiring that such projects: protect human health or the
environment; are related to the underlying alleged violation;
do not constitute activities that the defendant would otherwise
be legally required to perform; and do not provide funds for
the staff of the Agency or for contractors to carry out the
Agency's internal operations. For purposes of this Act a diesel
emission reduction project shall be considered ``related to''
any Clean Air Act violation.
H.R. 3754 is identical to S. 2146, which passed the Senate
on February 29, 2008.
HEARINGS
The Subcommittee on Energy and Air Quality held on
Wednesday, February 13, 2008, a hearing entitled, ``H.R. 3754:
Authorizing Supplemental Environmental Projects to Incent
Reductions of Diesel Emissions.'' The Subcommittee received
testimony from the following witnesses: The Honorable Jim
Costa, Representative of the 20th District of California; Mr.
Tim Regan, Senior Vice President, Corning Incorporated; and Mr.
Conrad Schnieder, Advocacy Director, Clean Air Task Force.
COMMITTEE CONSIDERATION
Upon conclusion of the Subcommittee hearing held on
February 13, 2008, the Subcommittee on Energy and Air Quality
immediately proceeded to meet in open markup session to
consider H.R. 3754. The Subcommittee favorably forwarded H.R.
3754 to the full Committee for consideration by a voice vote.
No amendments were offered during Subcommittee consideration.
On Thursday, March 13, 2008, the full Committee met in open
markup session and ordered H.R. 3754 favorably reported to the
House by a voice vote. No amendments were offered during full
Committee consideration.
COMMITTEE VOTES
Clause 3(b) of rule XIII of the Rules of the House of
Representatives requires the Committee to list the record votes
on the motion to report legislation and amendments thereto.
There were no record votes taken in connection with ordering
H.R. 3754 reported to the House.
COMMITTEE OVERSIGHT FINDINGS
Regarding clause 3(c)(1) of rule XIII of the Rules of the
House of Representatives, the Subcommittee on Energy and Air
Quality held a legislative hearing on H.R. 3754, and the
oversight findings of the Committee regarding the bill are
reflected in this report.
STATEMENT OF GENERAL PERFORMANCE GOALS AND OBJECTIVES
The purpose of H.R. 3754 is to clarify Congressional intent
to authorize EPA to continue using Supplemental Environmental
Projects to fund diesel emission reduction projects
notwithstanding the Miscellaneous Receipts Act, as long as such
SEPs: protect human health and the environment; are related to
the alleged violation; do not constitute activities the
defendant would otherwise be required to perform; and, do not
provide funds for the staff of the Agency or for the
contractors to carry out the Agency's internal operations.
NEW BUDGET AUTHORITY, ENTITLEMENT AUTHORITY, AND TAX EXPENDITURES
Regarding compliance with clause 3(c)(2) of rule XIII of
the Rules of the House of Representatives, the Committee adopts
as its own the estimate of budget authority and revenues
regarding H.R. 3754 prepared by the Director of the
Congressional Budget Office pursuant to section 402 of the
Congressional Budget Act of 1974.
EARMARKS AND TAX AND TARIFF BENEFITS
Regarding compliance with clause 9 of rule XXI of the Rules
of the House of Representatives, H.R. 3754 does not contain any
Congressional earmarks, limited tax benefits, or limited tariff
benefits as defined in clause 9(d), 9(e), or 9(f) of rule XXI.
COMMITTEE COST ESTIMATE
The Committee adopts as its own the cost estimate on H.R.
3754 prepared by the Director of the Congressional Budget
Office pursuant to section 402 of the Congressional Budget Act
of 1974.
CONGRESSIONAL BUDGET OFFICE ESTIMATE
Pursuant to clause 3(c)(3) of rule XIII of the Rules of the
House of Representatives, the following is the cost estimate on
H.R. 3754 provided by the Congressional Budget Office pursuant
to section 402 of the Congressional Budget Act of 1974:
March 25, 2008.
Hon. John D. Dingell,
Chairman, Committee on Energy and Commerce,
House of Representatives, Washington, DC.
Dear Mr. Chairman: The Congressional Budget Office has
prepared the enclosed cost estimate for H.R. 3754, a bill to
authorize the Administrator of the Environmental Protection
Agency to accept, as part of a settlement, diesel emission
reduction Supplemental Environmental Projects, and for other
purposes.
If you wish further details on this estimate, we will be
pleased to provide them. The CBO staff contact is Susanne S.
Mehlman.
Sincerely,
Peter R. Orszag.
Enclosure.
H.R. 3754--A bill to authorize the Administrator of the Environmental
Protection Agency to accept, as part of a settlement, diesel
emission reduction Supplemental Environmental Projects, and for
other purposes
CBO estimates that enacting H.R. 3754 would have no
significant impact on the federal budget. Enacting the
legislation could affect revenues; however, CBO estimates that
any such impact would be insignificant.
H.R. 3754 contains no intergovernmental or private-sector
mandates as defined in the Unfunded Mandates Reform Act and
would not affect the budgets of state, local, or tribal
governments.
According to the Environmental Protection Agency (EPA),
most environmental violations by businesses or individuals are
resolved through settlement agreements. As part of a
settlement, an alleged violator may voluntarily agree to
undertake an environmentally beneficial project related to the
violation in exchange for a reduction in civil monetary
penalties. Such projects are known as supplemental
environmental projects (SEPs). Civil penalties are recorded on
the budget as miscellaneous receipts (revenues).
Under EPA's SEP policy, if the agency receives a specific
appropriation for grants under the Diesel Emission Reduction
Act (DERA), the agency may no longer agree to diesel SEPs as
part of any enforcement settlement. Because the DERA grant
program was appropriated about $50 million in 2008, EPA cannot
agree to any diesel SEPs during 2008.
H.R. 3754 would allow EPA to accept diesel emission
reduction SEPs as part of a settlement of any alleged
violations of environmental laws under certain conditions. To
the extent the diesel SEPs permitted under this legislation
would decrease the amount of penalties that otherwise would
have been deposited in the Treasury, the federal government
would realize some loss of revenues. However, based on
information from EPA, CBO expects that in most cases, the
diesel SEPs would displace other types of SEPs within a
particular settlement agreement. Thus, we estimate that any
loss of revenues would be less than $500,000 annually.
On February 25, 2008, CBO transmitted a cost estimate for
S. 2146 as ordered reported by the Senate Committee on
Environment and Public Works on February 6, 2008. That bill is
identical to H.R. 3754, and thus the cost estimates are the
same.
The CBO staff contact for this estimate is Susanne S.
Mehlman. This estimate was approved by Theresa Gullo, Deputy
Assistant Director for Budget Analysis.
FEDERAL MANDATES STATEMENT
The Committee adopts as its own the estimate of Federal
mandates regarding H.R. 3754 prepared by the Director of the
Congressional Budget Office pursuant to section 423 of the
Unfunded Mandates Reform Act.
ADVISORY COMMITTEE STATEMENT
No advisory committees within the meaning of section 5(b)
of the Federal Advisory Committee Act would be created by H.R.
3754.
CONSTITUTIONAL AUTHORITY STATEMENT
Pursuant to clause 3(d)(1) of rule XIII of the Rules of the
House of Representatives, the Committee finds that the
Constitutional authority for H.R. 3754 is provided in Article
I, section 8, clause 3, which grants Congress the power to
regulate commerce with foreign nations, among the several
States, and with the Indian Tribes.
APPLICABILITY TO LEGISLATIVE BRANCH
The Committee finds that H.R. 3754 does not relate to the
terms and conditions of employment or access to public services
or accommodations within the meaning of section 102(b)(3) of
the Congressional Accountability Act of 1995.
SECTION-BY-SECTION ANALYSIS OF THE LEGISLATION
Section 1. EPA authority to accept diesel emissions reduction
supplemental environmental projects
Section 1 of H.R. 3754 provides the Environmental
Protection Agency authority to accept diesel emission
Supplemental Environmental Projects as part of a settlement of
any alleged violations of environmental law, provided that the
projects: protect human health or the environment; are related
to the underlying alleged violations; do not constitute
activities defendants would otherwise be legally required to
perform; and do not provide funds for the Agency's internal
operations.
CHANGES IN EXISTING LAW MADE BY THE BILL, AS REPORTED
Regarding clause 3(e) of rule XIII of the Rules of the
House of Representatives, H.R. 3754 does not amend any existing
law.
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