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115th Congress      }                               {         Report
                        HOUSE OF REPRESENTATIVES
 2d Session         }                               {         115-508
======================================================================



 
        RELIEF FROM NEW SOURCE PERFORMANCE STANDARDS ACT OF 2017

                                _______
                                

January 10, 2018.--Committed to the Committee of the Whole House on the 
              State of the Union and ordered to be printed

                                _______
                                

 Mr. Walden, from the Committee on Energy and Commerce, submitted the 
                               following

                              R E P O R T

                             together with

                            DISSENTING VIEWS

                        [To accompany H.R. 453]

      [Including cost estimate of the Congressional Budget Office]

    The Committee on Energy and Commerce, to whom was referred 
the bill (H.R. 453) to deem the Step 2 compliance date for 
standards of performance for new residential wood heaters, new 
residential hydronic heaters, and forced-air furnaces to be May 
15, 2023, 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
Committee Action.................................................     2
Committee Votes..................................................     3
Oversight Findings and Recommendations...........................     5
New Budget Authority, Entitlement Authority, and Tax Expenditures     5
Congressional Budget Office Estimate.............................     5
Federal Mandates Statement.......................................     6
Statement of General Performance Goals and Objectives............     6
Duplication of Federal Programs..................................     6
Committee Cost Estimate..........................................     6
Earmark, Limited Tax Benefits, and Limited Tariff Benefits.......     6
Disclosure of Directed Rule Makings..............................     6
Advisory Committee Statement.....................................     6
Applicability to Legislative Branch..............................     6
Section-by-Section Analysis of the Legislation...................     7
Changes in Existing Law Made by the Bill, as Reported............     7
Dissenting Views.................................................     8

                          PURPOSE AND SUMMARY

    H.R. 453, Relief from New Source Performance Standards Act 
of 2017, was introduced by Representative Collin Peterson (D-
MN) on January 11, 2017.

                  BACKGROUND AND NEED FOR LEGISLATION

    On March 16, 2015, the Environmental Protection Agency 
(EPA) finalized its Standards of Performance for New 
Residential Wood Heaters, New Residential Hydronic Heaters and 
Forced-Air Furnaces, which uses a two phase framework to reduce 
emissions.\1\ The first phase of this rule took effect in 2015 
and has reduced emissions by up to 90 percent with minimal 
economic interruption. However, the second phase of this rule, 
ordered to take effect in 2020, is proving to be much more 
burdensome for manufactures to implement. Manufacturers, most 
of which are small businesses, are having great difficulty 
designing compliant models in the short timeframe allowed by 
the EPA. As a result, some companies have already laid off 
workers, and others fear they will not be able to stay in 
business after 2020. Wood heater users, many of which are low-
income households, face the likelihood of more expensive wood 
heaters and reduced product choice if the second phase is 
implemented as scheduled. To provide more flexibility to 
manufactures and to reduce the potential cost burden on wood 
heater users, H.R. 453 extends by three years the deadlines for 
the second phase of New Source Performance Standards (NSPS) for 
new residential wood heaters.
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    \1\See Final Rule, 80 FR 13671
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                            COMMITTEE ACTION

    On September 13, 2017, the Subcommittee on Environment held 
a hearing on H.R. 453. The Subcommittee received testimony 
from:
           Ryan Parker, President and CEO, Endicott 
        Clay Products;
           Vincent Brisini, Director of Environmental 
        Affairs, Olympus Power, LLC, on behalf of Anthracite 
        Region Independent Power Producers Association 
        (ARIPPA);
           Frank Moore, President, Hardy Manufacturing 
        Company, Inc.;
           Steve Page, President and General Manager, 
        Sonoma Raceway;
           Alexandra E. Teitz, Principal, AT 
        Strategies, LLC, on behalf of Sierra Club; and
           Rebecca Bascom, Professor, Penn State 
        College of Medicine, on behalf of American Thoracic 
        Society.
    On November 15, 2017, the Subcommittee on Environment met 
in open markup session and forwarded H.R. 453, without 
amendment, to the full Committee by a record vote of 12 yeas 
and 10 nays. On December 6, 2017, the full Committee on Energy 
and Commerce met in open markup session and ordered H.R. 453, 
without amendment, favorably reported to the House by a record 
vote of 32 yeas and 21 nays.

                            COMMITTEE VOTES

    Clause 3(b) of rule XIII requires the Committee to list the 
record votes on the motion to report legislation and amendments 
thereto. The following reflects the record votes taken during 
the Committee consideration:


[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

                 OVERSIGHT FINDINGS AND RECOMMENDATIONS

    Pursuant to clause 2(b)(1) of rule X and clause 3(c)(1) of 
rule XIII, the Committee held a hearing and made findings that 
are reflected in this report.

   NEW BUDGET AUTHORITY, ENTITLEMENT AUTHORITY, AND TAX EXPENDITURES

    Pursuant to clause 3(c)(2) of rule XIII, the Committee 
finds that H.R. 453 would result in no new or increased budget 
authority, entitlement authority, or tax expenditures or 
revenues.

                  CONGRESSIONAL BUDGET OFFICE ESTIMATE

    Pursuant to clause 3(c)(3) of rule XIII, the following is 
the cost estimate provided by the Congressional Budget Office 
pursuant to section 402 of the Congressional Budget Act of 
1974:

                                     U.S. Congress,
                               Congressional Budget Office,
                                 Washington, DC, December 21, 2017.
Hon. Greg Walden,
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. 453, the Relief 
from New Source Performance Standards Act of 2017.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Jon Sperl.
            Sincerely,
                                                Keith Hall,
                                                          Director.
    Enclosure.

H.R. 453--Relief from New Source Performance Standards Act of 2017

    H.R. 453 would delay the requirement for compliance with 
the Environmental Protection Agency's (EPA's) performance 
standards for new residential wood heaters, hydronic heaters, 
and forced-air furnaces from 2020 until 2023. The EPA finalized 
the new regulations, which primarily affect manufacturers of 
those heating devices, in 2015.
    Using information from the EPA about its current activities 
related to implementing the regulations, CBO estimates that 
enacting the legislation would not have a significant net 
effect on the agency's workload or spending. CBO expects that 
extending the date would result in more resources being spent 
on assistance with compliance than on enforcement.
    Enacting H.R. 453 would not affect direct spending or 
revenues; therefore, pay-as-you-go procedures do not apply.
    CBO estimates that enacting H.R. 453 would not increase net 
direct spending or on-budget deficits in any of the four 
consecutive 10-year periods beginning in 2028.
    H.R. 453 contains no intergovernmental or private-sector 
mandates as defined in the Unfunded Mandates Reform Act.
    The CBO staff contact for this estimate is Jon Sperl. The 
estimate was approved by H. Samuel Papenfuss, Deputy Assistant 
Director for Budget Analysis.

                       FEDERAL MANDATES STATEMENT

    The Committee adopts as its own the estimate of Federal 
mandates prepared by the Director of the Congressional Budget 
Office pursuant to section 423 of the Unfunded Mandates Reform 
Act.

         STATEMENT OF GENERAL PERFORMANCE GOALS AND OBJECTIVES

    Pursuant to clause 3(c)(4) of rule XIII, the general 
performance goal or objective of this legislation is to extend 
by three years the deadlines for the second phase of New Source 
Performance Standards (NSPS) for new residential wood heaters.

                    DUPLICATION OF FEDERAL PROGRAMS

    Pursuant to clause 3(c)(5) of rule XIII, no provision of 
H.R. 453 is known to be duplicative of another Federal program, 
including any program that was included in a report to Congress 
pursuant to section 21 of Public Law 111-139 or the most recent 
Catalog of Federal Domestic Assistance.

                        COMMITTEE COST ESTIMATE

    Pursuant to clause 3(d)(1) of rule XIII, the Committee 
adopts as its own the cost estimate prepared by the Director of 
the Congressional Budget Office pursuant to section 402 of the 
Congressional Budget Act of 1974.

       EARMARK, LIMITED TAX BENEFITS, AND LIMITED TARIFF BENEFITS

    Pursuant to clause 9(e), 9(f), and 9(g) of rule XXI, the 
Committee finds that H.R. 453 contains no earmarks, limited tax 
benefits, or limited tariff benefits.

                  DISCLOSURE OF DIRECTED RULE MAKINGS

    Pursuant to section 3(i) of H. Res. 5, the Committee finds 
that the following directed rule makings are contained in H.R. 
453:
          Section 2(b): Not later than 60 days after the date 
        of enactment of this Act, the Administrator of the 
        Environmental Protection Agency shall make such 
        technical and conforming changes to rules and guidance 
        documents as may be necessary to implement the Step 2 
        compliance date of May 15, 2023 (as such term is used 
        in the final rule entitled ``Standards of Performance 
        for New Residential Wood Heaters, New Residential 
        Hydronic Heaters and Forced-Air Furnaces'' published at 
        80 Fed. Reg. 13672 (March 16, 2015)).

                      ADVISORY COMMITTEE STATEMENT

    No advisory committees within the meaning of section 5(b) 
of the Federal Advisory Committee Act were created by this 
legislation.

                  APPLICABILITY TO LEGISLATIVE BRANCH

    The Committee finds that the legislation 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.

             SECTION-BY-SECTION ANALYSIS OF THE LEGISLATION

Section 1. Short title

    Section 1 provides that the Act may be cited as the 
``Relief from New Source Performance Standards Act of 2017''.

Section 2. Step 2 compliance date for standards of performance for new 
        residential wood heaters, new residential hydronic heaters, and 
        force-air furnaces

    Section 2(a) extends the deadlines for the second phase of 
New Source Performance Standards (NSPS) to May 15, 2023, for 
new residential wood heaters, new residential hydronic heaters, 
and new residential forced-air furnaces.
    Section 2(b) directs the Administrator of the Environmental 
Protection Agency to make technical and conforming changes to 
rules and guidance documents as necessary to implement 
subsection (a) not later than 60 days after the date of 
enactment of this Act.

         CHANGES IN EXISTING LAW MADE BY THE BILL, AS REPORTED

    This legislation does not amend any existing Federal 
statute.

                            DISSENTING VIEWS

    H.R. 453 delays implementation of the Step 2 emissions 
standards for three categories of new wood-fueled heaters: 
residential wood stoves, hydronic heaters, and forced-air 
furnaces. The current Step 2 compliance date for these 
appliances is 2020, which the bill extends until May 15, 2023. 
No delay of these new standards is justified, and any delay 
will result in a significant cost to the public's health. Wood 
heaters are long-lived appliances; once installed, they operate 
for 25 years or more. So, any delay of the standards translates 
into more decades of added pollution and adverse health 
effects.
    During winter months in regions of the country where wood 
fuel is used predominantly, the majority of particulate matter 
comes from wood heaters. Because the emissions are released 
close to ground level at their homes, there is insufficient 
dispersion of particle pollution, resulting in significant 
human exposure. Wood smoke from these appliances contains 
considerable amounts of fine particle pollution and carbon 
monoxide, as well as benzene, formaldehyde, and other toxic 
pollutants, all of which are harmful to public health. Wood 
heater pollution is associated with irritation of the eyes and 
the respiratory system, increased asthma attacks, aggravation 
of heart or respiratory conditions, changes in lung function 
and premature death.\1\
---------------------------------------------------------------------------
    \1\Environmental Protection Agency, Standards of Performance for 
New Residential Wood Heaters, New Residential Hydronic Heaters and 
Forced-Air Furnaces, 80 Fed. Reg. 13672 (Mar. 16, 2015) (Final Rule).
---------------------------------------------------------------------------
    The federal emissions standards for wood stoves have not 
been updated since they were first established in 1988, nearly 
30 years ago. In March 2015, the Environmental Protection 
Agency (EPA) finalized the wood heaters rule update in response 
to a 2005 petition from seven states and the Northeast States 
for Coordinated Air Use Management (NESCAUM). In their 
petition, the parties requested that EPA list outdoor wood 
boilers as a category of stationary sources and promulgate 
standards of performance for these appliances under section 111 
of the Clean Air Act.\2\ The 2015 rule strengthened the 
standards for residential wood stoves, and also established the 
first standards for products that came onto the market since 
the 1988 rule, including hydronic heaters, forced-air furnaces, 
and masonry heaters. These performance standards were set based 
on existing technology representing the ``best system of 
emissions reduction'' currently available in the industry. 
EPA's 2015 rule does not affect existing appliances or require 
anyone to replace their current stove or heater with a new 
appliance.\3\
---------------------------------------------------------------------------
    \2\Petitions from the states of New York, Connecticut, Maryland, 
Massachusetts, Michigan, New Jersey and Vermont, and the Northeast 
States for Coordinated Air Use Management (NESCAUM) to the U.S. 
Environmental Protection Agency for a rulemaking under 42 U.S.C. 
Sec. 7411(b)(1) Regarding Outdoor Wood Boilers (Aug. 11, 2005).
    \3\Environmental Protection Agency, Overview of Final Updates to 
Air Emissions Requirements for New Residential Wood Heaters (Mar. 16, 
2015) (www.epa.gov/sites/production/files/2015-02/documents/20150204fs-
overview.pdf).
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    Manufacturers of outdoor wood boilers have been aware of 
pollution problems associated with their appliances since the 
late 1990s. Outdoor wood heater installation expanded during 
that time in response to higher prices for conventional heating 
fuels. The number of nuisance complaints from neighbors 
downwind of those who installed these appliances increased 
along with the number of installations of these heating 
appliances.
    New York State issued a report in 2005 documenting the 
pollution and health problems associated with outdoor wood 
heaters. It found these appliances emitted far higher particle 
pollution than that produced by conventional wood stoves. And, 
the report found outdoor wood heaters to emit 1000 times more 
particle pollution than oil furnaces and 1800 times more than 
gas furnaces.\4\ As the numbers of complaints continued to 
grow, local communities adopted ordinances to regulate, 
restrict, and in some cases prohibit the installation and 
operation of these devices.
---------------------------------------------------------------------------
    \4\New York State Office of the Attorney General, Environmental 
Protection Bureau, Smoke Gets in Your Lungs: Outdoor Wood Boilers in 
New York State (Aug. 2005).
---------------------------------------------------------------------------
    EPA initiated a voluntary partnership program with 
manufacturers of hydronic heaters (e.g. outdoor wood heaters) 
in 2007, and then took an additional seven years before issuing 
proposed standards for wood heaters as required under the Clean 
Air Act. During that period the emission performance of these 
appliances improved substantially. In fact, there are currently 
models in each category, other than masonry heaters, that 
already meet the Step 2 standards EPA finalized in 2015.
    The additional three year delay proposed in this bill 
serves only to punish companies that invested in research and 
development of cleaner, more efficient appliances. For example, 
Lamppa Manufacturing, a small Minnesota manufacturer, received 
certification of its wood furnace for the Step 2 standards. In 
fact, the Lamppa furnace exceeds the Step 2 emissions standard 
by 40 percent.\5\ Seeing these developments as an opportunity 
to gain additional market share, Lamppa is planning to expand 
production.
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    \5\Iron Range wood-furnace factory needs room to grow, The Duluth 
News Tribune (Sept. 17, 2017) (www.duluthnewstribune.com/news/4329352-
iron-range-wood-furnace-factory-needs-room-grow); Poised for growth: 
Lamppa Manufacturing achieves highest certification, The Timberjay 
(Aug. 23, 2017) (www.timberjay.com/stories/poised-for-growth,13580).
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    Wood heaters that meet the new emission standards will also 
be more efficient, providing more heat per unit of wood burned. 
Once in place, the greatest on-going expense for these 
appliances is the fuel cost, an important consideration for 
low-income households in the decision about whether to make the 
significant investment required to purchase and install these 
systems. Delaying improvements to these appliances will 
translate into decades of unnecessary, additional fuel 
expenditures for families that are least able to afford higher 
fuel costs, undermining the primary benefit of investing in a 
wood heating system.
    Manufacturers have until 2020 to produce wood heating 
devices that meet the Step 2 standards. Contrary to industry 
claims, EPA reports there are sufficient numbers of independent 
laboratories that can certify compliant wood heating 
appliances. Assertions of a testing ``backlog'' at these 
laboratories have also been rejected.\6\
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    \6\Letter from OMNI-Test Laboratories, Inc. to the Environmental 
Protection Agency regarding test lab capacity and future backlogs 
impacting wood heaters (Nov. 14, 2017).
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    The industry has been aware of the need to innovate and 
produce cleaner, more efficient products for at least 15 years. 
No further delay is necessary. H.R. 453 punishes innovative 
manufacturers, undermines consumers' fuel economy benefits, and 
jeopardizes public health.
    For the reasons stated above, we dissent from the views 
contained in the Committee's report.

                                   Frank Pallone, Jr.
                                           Ranking Member.
                                   Paul D. Tonko
                                           Ranking Member, Subcommittee 
                                               on Environment.

                                  [all]