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                                                       Calendar No. 71
116th Congress       }                                   {      Report
 1st Session         }                                   {      116-39




                  May 13, 2019.--Ordered to be printed


   Mr. Barrasso, from the Committee on Environment and Public Works, 
                        submitted the following

                              R E P O R T

                         [To accompany S. 747]

      [Including cost estimate of the Congressional Budget Office]

    The Committee on Environment and Public Works, to which was 
referred the bill (S. 747) to reauthorize the diesel emissions 
reduction program, and for other purposes, having considered 
the same, reports favorably thereon without amendment and 
recommends that the bill do pass.

                    General Statement and Background

    Established pursuant to the Energy Policy Act of 2005, the 
Diesel Emissions Reduction Act (DERA) is a voluntary program 
that incentivizes vehicle, engine and equipment owners to 
retrofit existing heavy-duty diesel vehicles, engines and 
equipment with new technology, or replace vehicles, engines and 
equipment through the disbursal of federal and state grants and 
rebates. Diesel engines are reliable and efficient, but older 
ones emit significant amounts of exhaust including particulate 
matter (PM) and nitrogen oxides (NOX), which can 
harm human health. Initially a grant program, the Environmental 
Protection Agency (EPA) started awarding the first DERA grants 
in 2008 with the purpose of reducing diesel exhaust from older 
engines. In January 2011, DERA was reauthorized through fiscal 
year (FY) 2016 and the EPA was given the authority to offer 
rebates in addition to grants pursuant to the Diesel Emissions 
Reduction Act of 2010. EPA started the first rebate program in 
2012 targeting school bus replacement.
    The DERA program is administered by EPA's National Clean 
Diesel Campaign within the Office of Transportation and Air 
Quality. According to the agency's last report to Congress,\1\ 
the DERA program is considered one of the most cost-effective 
federal clean air programs. EPA has estimated that from FY 2008 
through FY 2016, DERA upgraded almost 67,300 vehicles or pieces 
of equipment. Over the same time, the lifetime emission 
reductions attributable to DERA funding totaled 15,490 tons of 
PM and 472,700 tons of NOX. The DERA program also 
has the benefit of reducing greenhouse gas emissions. EPA 
estimates the program reduced carbon dioxide emissions by more 
than 5 million tons and black carbon emissions by 11,620 tons 
from FY 2008 to FY 2016.\2\
    \1\United States Environmental Protection Agency, ``Third Report to 
Congress: Highlights From the Diesel Emission Reduction Program'' (Feb. 
    \2\Information was provided by EPA at Committee's request.
    Part of the program's success is its focus on areas that 
need it most. DERA grants have increasingly been awarded to 
areas that are in nonattainment for PM or ozone, thereby 
maximizing benefits and overall effectiveness. EPA's last 
report reveals that 81 percent of projects awarded are located 
in areas with air quality challenges. Prioritization of goods 
movement projects have proven especially beneficial for 
communities located next to ports, rail yards and distribution 
centers that are disproportionately impacted by higher levels 
of diesel exhaust.
    The DERA program's benefits are far-reaching and cost-
effective. DERA grant recipients can tailor projects to the 
needs of targeted communities with benefits continuing long 
after the project period closes. DERA funding has impacted a 
variety of sectors and supported many clean diesel technologies 
spurring market innovation. According to the EPA's latest 
report, each federal dollar invested in DERA has leveraged as 
much as $3 from non-federal sources, such as other government 
agencies, private organizations, industry, and nonprofit 
organizations. Further, the agency continues to focus on 
maximizing DERA's cost-effectiveness in terms of the 
distribution of funds.
    Demand and necessity for the DERA program will continue. 
Despite the program's success, according to EPA's last report 
to Congress, approximately 10.3 million older diesel engines 
remain in use. EPA estimates that by 2030 over 1 million older, 
higher-emitting diesel engines will still be in use. As DERA is 
the only EPA program focused on providing health benefits from 
the reduction of diesel exhaust, the demand from fleet owners 
has far exceeded DERA's available funds. In fact, funding 
requests for the National Clean Diesel Rebate Program exceeded 
awards by as much as 35:1 and requests in the national grant 
competitions exceeded availability by 7:1. S. 747 answers this 
demand by authorizing the program through FY 2024, which will 
ensure a continuation of the successful DERA program and its 
associated benefits.
    While the DERA program has generally been a success, minor 
changes to the program are appropriate to make implementation 
more equitable across the country. In the past, EPA has denied 
state requests for funding for reasons not directly tied to a 
statutory or regulatory requirement. Current law does not 
explicitly state that EPA must recognize differing diesel 
vehicle, engine, equipment or fleet use concerns that may occur 
(especially between large metropolitan areas and less populated 
areas) when funding DERA projects through the national or state 
program. S. 747 would clarify that in implementing both the 
national competitive program and the state-administered 
program, EPA must recognize that typical diesel vehicle, 
engine, equipment and fleet use differs across the country. For 
example, equipment in less populated areas such as Wyoming may 
have a longer expected useful life than in more populated 
    In addition, S. 747 makes funding of the DERA program more 
equitable. Under current law, all states are eligible for equal 
funding shares under the state-administered program. If states 
choose not to participate in the state-administered program, 
their shares of funding are distributed to participating states 
on a population-weighted basis, which disadvantages less-
populated states. Any funding given to participating states 
that is not used by a state is then reallocated to the national 
competitive program. S. 747 would require all money left over 
from the state-administered program (whether for a state that 
chooses not to participate or allocated to a state but unused) 
to be reallocated to the national competitive program.

                     Objectives of the Legislation

    The bill reauthorizes the Diesel Emissions Reduction Act 
program through FY 2024. The bill also makes it clear that EPA 
must recognize differences in how vehicles, engines, equipment, 
and fleets are used across the country and equalizes funding 
opportunities for all states.

                      Section-by-Section Analysis

Section 1. Short title

    This section states that the Act may be cited as the 
``Diesel Emissions Reduction Act of 2019''.

Section 2. Reauthorization of diesel emissions reduction program

    This section extends the authorization of the program 
through fiscal year 2024.

Section 3. Recognizing differences in diesel vehicle, engine, 
        equipment, and fleet use

    This section changes current law to make it clear that EPA 
must recognize that there are differing diesel vehicle, engine, 
equipment or fleet use concerns in different areas of the 
country as the agency funds DERA projects. Section 3(a) 
clarifies that in prioritizing projects for funding under the 
national competitive program, EPA must ``recogniz[e] 
differences in typical vehicle, engine, equipment, and fleet 
use.'' Section 3(b) commits the agency to ``recognition, for 
purposes of implementing this section, of differences in 
typical vehicle, engine, equipment, and fleet use throughout 
the United States, including expected useful life'' in guidance 
that the agency issues to states to assist in preparing funding 
applications under the state-administered program.

Section 4. Reallocation of unused state funds

    Section 4 changes current law by requiring all money left 
over from the state-administered program (whether for a state 
that chooses not to participate or allocated to a state but 
unused) would be reallocated to the national competitive 

                          Legislative History

    On March 12, 2019, Senator Carper introduced S. 747, the 
Diesel Emissions Reduction Act of 2019. Senators Inhofe, 
Barrasso, Whitehouse, Sullivan, Booker, Capito, Gillibrand, 
Cramer, and Van Hollen were original cosponsors. The bill was 
referred to the Committee on Environment and Public Works.
    The text of S. 747 is nearly identical to the text of S. 
1447, the Diesel Emissions Reduction Act of 2017. Senator 
Carper introduced S. 1447 on June 27, 2017. Senators Inhofe, 
Barrasso, and Whitehouse were original cosponsors. The EPW 
Committee reported S. 1447 by voice vote on July 12, 2017.


    A committee hearing was held on S. 747 on March 13, 2019.

                             Rollcall Votes

    On April 10, 2019, the Committee on Environment and Public 
Works met to consider S. 747. The bill was ordered favorably 
reported without amendment by voice vote. No roll call votes 
were taken.

                      Regulatory Impact Statement

    In compliance with section 11(b) of rule XXVI of the 
Standing Rules of the Senate, the Committee finds that S. 747 
does not create any additional regulatory burdens, nor will it 
cause any adverse impact on the personal privacy of 

                          Mandates Assessment

    In compliance with the Unfunded Mandates Reform Act of 1995 
(Public Law 104-4), the Committee notes that the Congressional 
Budget Office found, S. 747 contains no intergovernmental or 
private-sector mandates as defined in the Unfunded Mandates 
Reform Act (UMRA) and would impose no costs 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:

                                     U.S. Congress,
                               Congressional Budget Office,
                                    Washington, DC, April 26, 2019.
Hon. John Barrasso,
Chairman, Committee on Environment and Public Works,
U.S. Senate, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for S. 747, the Diesel 
Emissions Reduction Act of 2019.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Stephen 
                                                Keith Hall,


    S. 747 would authorize the appropriation of $100 million 
annually through 2024 for the Environmental Protection Agency 
(EPA) to provide grants and rebates for projects and state 
programs that reduce emissions from diesel engines. The bill 
also would require EPA to provide guidance to states about 
technical differences in vehicles, engines, equipment, and 
vehicle fleet use. Finally, the bill would direct that funds 
not allocated to state diesel programs be reallocated to 
projects for retrofitting vehicles. In 2019, $87 million was 
appropriated for those purposes.
    Assuming appropriation of the specified amounts, CBO 
estimates that implementing the bill would cost $410 million 
over the 2020-2024 period and $90 million after 2024 (see Table 
1). The costs of the legislation fall within budget function 
300 (natural resources and environment).

                                                           By fiscal year, millions of dollars--
                                             2019a     2020      2021      2022      2023      2024    2019-2024
Estimated Authorization..................       100       100       100       100       100       100        500
Estimated Outlays........................         0        25        85       100       100       100       410
aS. 747 would authorize appropriations totaling $100 million for 2019. CBO does not estimate any outlays for
  those authorizations because appropriations for 2019 have already been provided.

    The CBO staff contact for this estimate is Stephen Rabent. 
The estimate was reviewed by H. Samuel Papenfuss, Deputy 
Assistant Director for Budget Analysis.

                        Changes in Existing Law

    In compliance with section 12 of rule XXVI of the Standing 
Rules of the Senate, changes in existing law made by the bill 
as reported are shown as follows: Existing law proposed to be 
omitted is enclosed in [black brackets], new matter is printed 
in italic, existing law in which no change is proposed is shown 
in roman:

           *       *       *       *       *       *       *


           *       *       *       *       *       *       *

SEC. 2. [42 U.S.C. 15801] DEFINITIONS.

   Except as otherwise provided, in this Act:
          (1) Department.-- * * *

           *       *       *       *       *       *       *


  (a) In General.-- * * *

           *       *       *       *       *       *       *

  (c) Applications.--
          (1) Expedited process.-- * * *

           *       *       *       *       *       *       *

          (4) Priority.-- In providing a grant, rebate, or loan 
        under this section, the Administrator shall give 
        highest priority to proposed projects that, as 
        determined by the Administrator--
                  (A) * * *

           *       *       *       *       *       *       *

                  (D) include a certified engine configuration, 
                verified technology, or emerging technology 
                that has a long expected useful life , 
                recognizing differences in typical vehicle, 
                engine, equipment, and fleet use throughout the 
                United States;

           *       *       *       *       *       *       *


  (a) In General.-- Subject to the availability of adequate 
appropriations, the Administrator shall use 30 percent of the 
funds made available for a fiscal year under this subtitle to 
support grant, rebate, and loan programs administered by States 
that are designed to achieve significant reductions in diesel 
  (b) Applications.-- The Administrator shall--
          (1) provide to States guidance for use in applying 
        for grant, rebate, or loan funds under this section, 
        including information regarding--
                  (A) the process and forms for applications;
                  (B) permissible uses of funds received[; and] 

           *       *       *       *       *       *       *

                  (D) the recognition, for purposes of 
                implementing this section, of differences in 
                typical vehicle, engine, equipment, and fleet 
                use throughout the United States, including 
                expected useful life; and

           *       *       *       *       *       *       *

  (c) Allocation of Funds.--
          (1) In general.-- For each fiscal year, the 
        Administrator shall allocate among States for which 
        applications are approved by the Administrator under 
        subsection (b)(2)(B) funds made available to carry out 
        this section for the fiscal year.
          (2) Allocation.--
                  (A) In general.-- * * *

           *       *       *       *       *       *       *

                  (C) Reallocation.-- If any State does not 
                qualify for an allocation under this paragraph, 
                the share of funds otherwise allocated for that 
                State under this paragraph shall be reallocated 
                [to each remaining qualified State in an amount 
                equal to the product obtained by multiplying--
                          (i) the proportion that the 
                        population of the State bears to the 
                        population of all States described in 
                        paragraph (1); by
                          (ii) the amount otherwise allocatable 
                        to the nonqualifying State under this 
                        paragraph] to carry out section 792.

           *       *       *       *       *       *       *


  (a) In General.-- There is authorized to be appropriated to 
carry out this subtitle $100,000,000 for each of fiscal years 
2012 through [2016] 2024, to remain available until expended.

           *       *       *       *       *       *       *