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Calendar No. 202
109th Congress Report
1st Session 109-133
DIESEL EMISSIONS REDUCTION ACT OF 2005
September 7, 2005.--Ordered to be printed
Mr. Inhofe, from the Committee on Environment and Public Works,
submitted the following
R E P O R T
[to accompany S. 1265]
[Including cost estimate of the Congressional Budget Office]
The Committee on Environment and Public Works, to which was
referred a bill (S. 1265) to make grants and loans available to
States and other organizations to strengthen the economy,
public health, and environment of the United States by reducing
emissions from diesel engines, having considered the same,
reports favorably thereon with an amendment and recommends that
the bill, as amended, do pass.
General Statement and Background
Diesel engines are an important part of the American
economy, but they emit harmful emissions. On-road heavy duty
diesel vehicles, such as transit buses and garbage trucks, and
non-road diesel vehicles, such as construction equipment and
tractors, account for roughly one-half of the nitrogen oxide
and particulate matter emissions from mobile sources
nationwide. These emissions contribute to ozone formation and
fine particulate matter, and they contain numerous other
chemicals that are listed by the Environmental Protection
Agency (EPA) as hazardous air pollutants.
EPA has finalized diesel fuel and new engine regulations
that will reduce diesel emissions from new diesel buses,
freight trucks, and non-road equipment by more than 80 percent
from 2000 levels. EPA's 2001 Highway and 2004 Non-road Diesel
Engine rules will greatly improve the environment and protect
public health, but the full benefits will not be realized until
2030 because of the long lifetime of the 11 million existing
engines. The durability of the diesel engines used to power
school buses, trucks and railroads, agriculture processes, and
emergency response vehicles can last for hundreds of thousands
of miles over a lifetime of more than 30 years.
Additionally, EPA has designated 495 counties nationally as
in nonattainment for the new ozone and/or particulate matter
air quality standards. States must develop State Implementation
Plans to achieve ozone and particulate matter reductions to
meet these new standards.
In order to help States and communities meet these
standards and reduce exposure to harmful diesel emissions,
substantial reductions in those emissions from the nation's
aging diesel fleets are necessary. The voluntary program
established in this bill should build off proven State and
local programs that retrofit, repower, or replace older
engines. Such an initiative would cost-effectively provide
emissions reductions and dramatically accelerate the public
Objectives of the Legislation
The Diesel Emissions Reduction Act of 2005 (S. 1265) would
establish voluntary national and State-level grant and loan
programs for diesel emission reduction projects and programs.
Addressing emissions from existing diesel engines is one of the
most important steps that can be taken to improve air quality
and protect public health.
S. 1265 would:
Authorize $1 billion over 5 years ($200
million annually for fiscal years 2007 through 2011);
Provide that 70 percent of the funds be
distributed by EPA;
Allocate 20 percent of funds to States to
develop retrofit programs with an additional 10 percent
available as an incentive for State's to match the Federal
dollars being provided;
Establish priority areas for projects--such as
those that are more cost-effective and affect the most amount
of people--and focuses the Federal program on public fleets;
Institute programs to help develop new
technologies, encourage more action through non-financial
incentives, and require EPA to conduct outreach to stakeholders
and report on the success of the program.
In developing this legislation, the committee worked with
environmental, industry, and public officials from across the
country. This legislation represents a carefully considered,
bipartisan effort to reduce emissions from existing diesel
Section 1. Short title.
This section provides that the Act may be cited as the
`Diesel Emissions Reduction Act of 2005'.
Sec. 2. Definitions.
This section provides definitions for terms used in the
Act, including ``certified engine configuration,'' ``eligible
entity,'' ``emerging technology,'' ``fleet,'' ``heavy-duty
truck,'' ``medium-duty truck,'' and ``verified technology.''
The term ``fleet'' is defined to make it clear that the Act
applies to all diesel engines whether stationary or mobile. It
also clarifies that a grant or loan can be provided to address
one engine or many.
The committee intends for the idling provisions (advanced
truckstop electrification system and auxillary power unit as
listed under the definition of ``verified technology'') be
implemented through EPA's Smartway Transport Partnership.
Idling technology verification means the technology is
commercially available and is listed through the Smartway
Transport Partnership program.
Sec. 3. National grant and loan programs.
Section 3(a) would establish a national grant and loan
program to be administered by the EPA. The EPA Administrator is
to use 70 percent of the funds made available each fiscal year
to provide grants and low-cost revolving loans to regional,
State, local, or tribal agencies or port authority with
jurisdiction over transportation or air quality and to
nonprofit organizations and institutions that represents or
provides pollution reduction or educational services to persons
or organizations that own or operate diesel fleets or have as
their principal purpose the promotion of air quality or
transportation. Grants and loans are to achieve significant
reductions in diesel emissions in terms of 1) tons of pollution
produced and 2) exposure to the emissions, particularly in poor
air quality areas.
Section 3(b) would provide that not less than 50 percent of
the funds available under the national grant and loan program
are to be provided for the benefit of public fleets. Not less
than 90 percent of the funds available under Section 3 shall be
provided for projects using an engine configuration certified
by EPA or the California Air Resources Board (CARB) or a
pollution control technology verified by EPA or CARB. Not more
than 10 percent of the funds available under the section would
be provided for the development and commercialization of
Section 3(c) establishes detailed requirements for grant or
loan applications. The Administrator is required to give
priority to projects that a) maximize public health benefits;
b) are the most cost-effective; c) serve areas with the highest
population density; that are poor air quality areas, including
nonattainment or maintenance areas, Class I areas, or areas
with toxic air pollutant concerns; that receive a
disproportionate quantity of air pollution from a diesel fleet,
including ports, rail yards, truckstops, terminals, or
distribution centers; or that use a community-based multi-
stakeholder collaborative process to reduce toxic emissions; d)
include a technology that has a long expected useful life; e)
will maximize the useful life of any retrofit technology; f)
conserve diesel fuel; and g) use ultra low sulfur diesel fuel.
Section 3(c)(3)(F) would give priority to proposed projects
that use diesel fuel with a sulfur content of less than 15
parts per million, as the Administrator determines to be
appropriate. Since railroads will not be subject to a 15 parts
per million (ppm) fuel requirement until 2012, the committee
does not expect this priority to be applied to proposed
Under Section 3(d), funds may be used to retrofit buses,
medium-and heavy-duty trucks, marine engines, locomotives, or
non-road engines used in construction, cargo-handling,
agriculture, mining, or energy production equipment. Funds may
also be used for idle-reduction programs.
Subsection 3(d)(2) of the bill prohibits the use of grants
and loans provided under this section for any emission
reduction mandated under Federal, State, or local law.
Voluntary or elective measures are not mandated and are not
subject to this funding prohibition. For example, voluntary or
elective measures could include, but are not limited to, early
emissions reductions, reductions in excess of existing
regulatory requirements, non-regulatory public fleet
reductions, and reductions to meet eligibility requirements for
public works projects or public service contracts.
Additionally, reductions should not be considered mandated if
they are the result of voluntary or elective programs or
projects included in a State Implementation Plan.
Sec. 4. State grant and loan programs.
Section 4(a) provides that the Administrator shall use 30
percent of the funds available in a fiscal year to support
grant and loan programs administered by States that are
designed to achieve significant reductions in diesel emissions.
The Administrator is to provide this funding to the States
``subject to the availability of adequate appropriations.''
Funding for this Act is dependent upon annual appropriations,
and the legislation divides the funding between national and
State programs. Due to this funding structure, there is likely
a level of funding at which it does not make sense to have a
State program because the funding would not even provide enough
to administer a State program. Thus, based on the amount
appropriated for a fiscal year and the number of States that
apply and qualify for funding, the committee expects EPA to
make a determination each year as to whether the States would
be provided under this section. If EPA determines that there
are not adequate appropriations, then all of the funding
provided for the Act would be administered through the national
Section 4(b) requires the Administrator to provide guidance
to the States regarding the application process, permissible
uses of funds, and the cost-effectiveness of emission reduction
technologies, and it requires the establishment of application
Section 4(c) establishes an allocation formula for the
State grant programs. Using not more than 20 percent of the
funds made available to carry out Section 4, EPA is to provide
each of the States 2 percent of the total funds available, if
each of the 50 States qualifies for an allocation. If fewer
than 50 States qualify, the remaining funds are to be allocated
among the qualifying States in proportion to their population.
If a State agrees to match its allocation, the Administrator
shall provide it an additional amount equal to 50 percent of
its allocation. No funds provided under the Act are allowed to
be used by a State as matching funds. Any funds not claimed by
a State for a fiscal year are to be used to carry out the
national program under Section 3.
Section 4(d) provides States with flexibility to establish
programs under this section to meet their needs. The section
provides that Governors may determine the portion of funds to
be provided as grants or loans. A grant or loan may be used for
certified engine configurations or verified pollution control
Sec. 5. Evaluation and report.
Not later than 1 year funds are first made available, and
biennially thereafter, the Administrator shall submit to
Congress a report evaluating the implementation of the programs
under this Act. Section 5(b) provides a list of six items to be
included in these reports.
Sec. 6. Outreach and incentives.
Section 6(b) requires the EPA Administrator to establish a
technology transfer program. The purpose of the program is to
inform stakeholders of the benefits of verified and emerging
technologies and to develop non-financial incentives for those
technologies. Eligible stakeholders include: equipment owners
and operators; engine, equipment, and emission and pollution
control manufacturers; State and local air quality officials;
and community, public health, educational, and environmental
Section 6(c) requires the EPA Administrator to develop
guidance to provide credit to a State for emissions reductions
created by the use of eligible technologies as part of a Clean
Air Act State Implementation Plan. This section should not
delay any guidance that EPA is already in the process of
Section 6(d) requires the EPA Administrator, along with the
Department of Commerce and industry, to inform foreign
countries on the emissions reduction potential of technology
developed or used in the United States.
Sec. 7. Effect of Act.
Section 7 affirms that nothing in the bill affects
authorities under the Clean Air Act.
Sec. 8. Authorization of appropriations.
Section 8 authorizes $200 million annually for the Act in
fiscal years 2007 through 2011.
Senators Voinovich, Carper, Inhofe, Jeffords, Isakson,
Clinton, Hutchison, and Feinstein introduced S. 1265, the
Diesel Emissions Reduction Act of 2005, on June 16, 2005. It
was then referred to the Senate Committee on Environment and
Public Works. A legislative hearing was held by the
Subcommittee on Clean Air, Climate Change, and Nuclear Safety
on July 12, 2005. A full committee business meeting was held on
July 20, 2005, and the committee ordered S. 1265, as amended,
to be reported to the full Senate.
The Subcommittee on Clean Air, Climate Change, and Nuclear
Safety held a hearing on the bill on July 12, 2005. Witnesses
included: Wayne Nastri, Region IX Administrator, U.S.
Environmental Protection Agency; Margaret Keliher, County
Judge, Dallas, Texas; Joseph P. Koncelik, Director, Ohio
Environmental Protection Agency; Michael Cross, Vice President,
Cummins Inc., General Manger, Fleetguard Emissions Solutions;
Conrad Schneider, Advocacy Director, Clean Air Task Force;
Timothy J. Regan, President, Emissions Control Technology
Association; and Stuart Nemser, Founder/Chairman, Compact
Membrane Systems, Inc.
The Committee on Environment and Public Works met to
consider S. 1265 on July 20, 2005. The committee agreed
unanimously to an amendment by Senator Voinovich. The committee
approved S. 1265, as amended, by unanimous consent.
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
In compliance with the Unfunded Mandates Reform Act of 1995
(Public Law 104-4), the committee finds that S. 1265 would not
impose Federal intergovernmental unfunded mandates on State,
local, or tribal governments.
Cost of Legislation
Section 403 of the Congressional Budget and Impoundment
Control Act requires that a statement of the cost of the
reported bill, prepared by the Congressional Budget Office, be
included in the report. That statement follows:
S. 1265, Diesel Emissions Reduction Act of 2005, As ordered reported by
the Senate Committee on Environment and Public Works on July
S. 1265 would authorize the appropriation of $200 million
for each of fiscal years 2007 through 2011 to the Environmental
Protection Agency (EPA) to support grants and loans to States
and other organizations working to reduce emissions from diesel
engines. Under the bill, EPA would establish a technology
transfer program including nonfinancial incentives to promote
the use of technologies that reduce diesel emissions. The bill
also would require EPA to work with the Department of Commerce
to inform foreign countries of the potential of technology used
or developed to reduce emissions in the United States. CBO
estimates that those outreach activities would cost $2 million
CBO estimates that implementing this legislation would cost
$660 million over the next 5 years, assuming appropriation of
the necessary amounts. Enacting S. 1265 would not affect direct
spending or revenues. S. 1265 contains no intergovernmental or
private-sector mandates as defined by the Unfunded Mandates
Reform Act (UMRA). The bill would benefit local and tribal
governments within the State of Alaska; any costs they incur
would result from complying with conditions for receiving
Estimated Cost to the Federal Government
CBO estimates that implementing the bill would cost $660
million over the 2006-2010 period, assuming appropriation of
the amounts authorized for each year. Those estimated outlays
are based on historical patterns for similar activities. The
estimated budgetary impact of S. 1265 is shown in the following
table. The costs of this legislation fall within budget
functions 300 (natural resources and environment) and 370
(commerce and housing credit).
By Fiscal Year, in Millions of Dollars
2006 2007 2008 2009 2010
CHANGES IN SPENDING SUBJECT TO
Grants and Loans to Support
Reductions in Diesel Emissions.
Authorization Level......... 0 200 200 200 200
Estimated Outlays........... 0 100 160 190 200
Estimated Authorization 2 2 2 2 2
Estimated Outlays........... 2 2 2 2 2
Estimated Authorization 2 202 202 202 202
Estimated Outlays........... 2 102 162 192 202
Intergovernmental and Private-Sector Impact
S. 1265 contains no intergovernmental or private-sector
mandates as defined by UMRA. The bill would authorize the
appropriation of $1 billion for grants and loans to promote the
reduction of diesel emissions. States would be eligible to
receive a percentage of those funds for their use in the
administration of programs that are designed to achieve
significant reductions in diesel emissions. Any costs incurred
by State, local, or tribal governments would result from
complying with conditions for receiving Federal assistance.
Estimate Prepared By: Federal Costs: Susanne S. Mehlman;
Impact on State, Local, and Tribal Governments: Lisa Ramirez-
Branum; Impact on the Private Sector: Selena Caldera.
Estimate Approved By: Peter H. Fontaine, 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.