[DOCID: f:sr266.110]
From the Senate Reports Online via GPO Access
[wais.access.gpo.gov]
Calendar No. 585
110th Congress Report
SENATE
2d Session 110-266
======================================================================
LEGISLATION TO AUTHORIZE THE ADMINISTRATOR OF THE ENVIRONMENTAL
PROTECTION AGENCY TO ACCEPT, AS PART OF A SETTLEMENT, DIESEL EMISSION
REDUCTION SUPPLEMENTAL ENVIRONMENTAL PROJECTS
_______
February 28, 2008.--Ordered to be printed
_______
Mrs. Boxer, from the Committee on Environment and Public Works,
submitted the following
R E P O R T
[To accompany S. 2146]
The Committee on Environment and Public Works, to which was
referred the bill (S. 2146) 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, reports favorably thereon without
amendment and recommends that the bill do pass.
PURPOSE OF THE BILL
The purpose of this legislation is to clarify that the
Administrator of the Environmental Protection Agency (EPA) is
authorized to accept, as part of a settlement, diesel emission
reduction Supplemental Environmental Projects.
GENERAL STATEMENT AND BACKGROUND
EPA estimates there are 11 million diesel engines in
America lacking available control technology that could greatly
reduce harmful pollution. The On and Off-Road vehicles using
these engines produce more than 1000 tons of particulate matter
every day. The pollution causes approximately 21,000 premature
deaths in the United States each year, plus tens of thousands
of Americans suffering from asthma attacks, heart attacks, and
respiratory problems.
Recognizing these harmful effects, EPA now requires all new
on-road heavy duty diesel vehicles to be installed with
pollution control technology. EPA estimates that when the 2001
Highway and 2004 Non-road Diesel Engine rules are fully
implemented harmful diesel emissions will be reduced by more
than 80 percent from 2000 levels. The pollution prevented will
have profound economic and health benefits. EPA estimates that
for every dollar spent on the technology $16 of benefit will be
generated--totaling $66 billion in economic and health benefits
annually.
In addition to reducing pollution from newly constructed
diesel engines, EPA and Congress have acted to retrofit
existing diesel vehicles with pollution control technology. EPA
has been using Supplemental Environmental Projects (``SEPs'')
to fund diesel retrofits, particularly on school buses. These
projects are undertaken by a defendant as part of a settlement
in an environmental enforcement action brought by EPA or the
Department of Justice. They specifically do not include actions
which a defendant is otherwise legally required to perform. So
they generate environmental and public health benefits that
would not have occurred without the settlement.
SEPs have been an important funding stream for diesel
retrofit projects. In December of 2007, EPA entered into a
settlement with American Electric Power containing a federal
SEP designating as much as $21 million for diesel retrofits. In
February 2006, DaimlerChrysler entered into a settlement with
EPA containing a SEP for $3 million for diesel retrofits. In
2004, Toyota agreed to spend $20 million on a diesel retrofit
SEP aimed specifically at school buses. Archer Daniel Midlands
has also spent upwards of $6 million retrofitting school buses
as part of a SEP. Between 2003 and 2006 nearly $62 million in
diesel retrofit projects have been funded by SEPs. Of all the
diesel retrofits installed between 2003 and 2006, 37% were
financed in whole or in part by SEPs.
Also recognizing the importance of reducing pollution from
existing diesel engines, in 2005, Congress included the Diesel
Emissions Reduction Act of 2005 as part of the enacted 2005
Energy Policy Act. The Diesel Emissions Reduction Act
established national and State-level grant and loan programs
for diesel emission reduction projects and programs. Congress
appropriated $49.2 million in funds for this program for the
first time in the FY2008 Omnibus Appropriations Act.
Following Congressional action to fund the diesel retrofit
program, EPA apparently has concluded that the Agency generally
should cease funding diesel retrofit projects via SEPs. EPA
believes that allowing diesel retrofits to be funded by SEPs
once Congress has specifically appropriated monies for that
purpose could violate the Miscellaneous Receipts Act. This
legislation is intended to clarify that Congress did not intend
the funding of the Diesel Emissions Reduction Act to affect
EPA's ability to enter into SEPs that fund diesel retrofit
projects.
The Miscellaneous Receipts Act was passed in order to
ensure that government agencies did not bypass the
appropriations authority of Congress by augmenting their
budgets via other means, for example: user fees, fees for
training courses, parking fees, contract and lease fees and
revenues, monetary awards in court cases involving the
agencies, court costs and fees, or civil penalties. It is a
misunderstanding of Congressional intent to interpret the use
of funds to mitigate environmental damage as part of an
environmental enforcement agreement as an augmentation of a
Congressionally funded grant program to retrofit diesel engines
with pollution control technology. Congress never intended the
Diesel Emissions Reduction Act to limit EPA's ability to
negotiate additional diesel retrofit projects as part of
enforcement settlements.
OBJECTIVES OF THE LEGISLATION
S. 2146 clarifies Congressional intent of the Diesel
Emissions Reduction Act. S. 2146 authorizes EPA to continue to
use SEPs to fund diesel retrofits regardless of the
congressional funding of the Diesel Emissions Reduction Act, as
long as such SEPs: (1) protect human health and the
environment; (2) are related to the alleged violations; (3) do
not constitute activities the defendant would otherwise be
required to perform; and (4) does not provide funds for the
agency to carry out internal operations.
LEGISLATIVE HISTORY
On February 6, 2008, the Committee on Environment and
Public Works favorably reported S. 2146 without amendment by
voice vote. There were no rollcall votes.
REGULATORY IMPACT STATEMENT
In compliance with section 11(b) of rule XXVI of the
Standing Rules of the Senate, the committee makes evaluation of
the regulatory impact of the reported bill.
The bill does not create any additional regulatory burdens,
nor will it cause any adverse impact on the personal privacy of
individuals.
MANDATES ASSESSMENT
In compliance with the Unfunded Mandates Reform Act of 1995
(Public Law 104-4), the committee finds that S. 2146 would not
impose Federal intergovernmental unfunded mandates on State,
local, or tribal governments.
CONGRESSIONAL BUDGET OFFICE ESTIMATE
Section 403 of the Congressional Budget and Impoundment
Control Act requires a statement of the cost of the reported
bill, prepared by the Congressional Budget Office, be included
in the report.
CBO estimates that enacting S. 2146 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.
S. 2146 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.
S. 2146 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.
The CBO staff contact for this estimate is Susanne S.
Mehlman. This estimate was approved by Theresa Gullo, Deputy
Assistant Director for Budget Analysis.
CHANGES IN EXISTING LAW
Section 12 of rule XXVI of the Standing Rules of the Senate
requires the committee to publish changes in existing law made
by the bill as reported. Passage of this bill will make no
changes to existing law.
<all>