[Senate Report 110-500]
[From the U.S. Government Publishing Office]



                                                      Calendar No. 1078
110th Congress                                                   Report
   2d Session                     SENATE                        110-500

======================================================================
 
   AN ACT TO ADDRESS THE HEALTH AND ECONOMIC DEVELOPMENT IMPACTS OF 
 NONATTAINMENT OF FEDERALLY-MANDATED AIR QUALITY STANDARDS IN THE SAN 
  JOAQUIN VALLEY, CALIFORNIA, BY DESIGNATING AIR QUALITY EMPOWERMENT 
                                 ZONES

                                _______
                                

               September 24, 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. 3565]

                             together with

                             MINORITY VIEWS

      [Including cost estimate of the Congressional Budget Office]

    The Committee on Environment and Public Works, to which was 
referred the bill (S. 3565) to address the health and economic 
development impacts of nonattainment of federally-mandated air 
quality standards in the San Joaquin Valley, California, by 
designating air quality empowerment zones, reports favorably 
thereon, and recommends that the bill do pass.

                      PURPOSES OF THE LEGISLATION

    This legislation would address the health and economic 
development impacts of nonattainment of federally mandated air 
quality standards in the San Joaquin Valley, California, by 
designating air quality empowerment zones within the Valley 
that may apply for federal grants for the purpose of replacing 
or retrofitting polluting vehicles and engines in order to 
improve the health of the population living in the zones. This 
legislation is intended to establish an empowerment zone model 
that may be applied in the future elsewhere to address areas 
heavily impacted by air pollution.

                    GENERAL STATEMENT AND BACKGROUND

    The San Joaquin Valley faces serious air quality challenges 
that impact the health, development, and economy of the Valley. 
The San Joaquin Valley Air Basin has been designated under the 
Clean Air Act as a nonattainment area with respect to the 8-
hour ozone standard and the PM2.5 standard. In order 
to meet the 8-hour ozone standard under the Clean Air Act, the 
Valley would have to reduce its nitrogen oxide emissions to not 
more than 160 tons per day from the current emissions of 
approximately 624 tons per day.
    Elevated ozone levels in the Valley contributes to asthma 
rates that are 3 times the State average and 5 times the 
national average. Nonattainment of the Clean Air Act standards 
costs the Valley more than $3 billion annually. This 
legislation will address these serious air quality challenges 
by authorizing the designation of geographical areas within the 
Valley as air quality empowerment zones that are eligible for 
Federal grants and technical assistance, to benefit the 
residents of the zone through improved air quality and health. 
These funds will be used to replace or retrofit heavily-
polluting vehicles or engines in order to improve the health of 
the population living in the zones.

                      SECTION-BY-SECTION ANALYSIS

Section 1. Short title

    Section 1 would provide that the Act may be cited as the 
``Air and Health Quality Empowerment Zone Designation Act of 
2008''.

Section 2. Purpose

    Section 2 would state that the purpose of the Act is to 
establish criteria for the designation of specific geographic 
areas as air and health quality empowerment zones that may 
apply for grants authorized for the purpose of replacing or 
retrofitting polluting vehicles or engines in order to improve 
the health of the population living in the zones.

Section 3. Findings

    Section 3 finds that the San Joaquin Valley faces serious 
air quality challenges that impact the health, development, and 
economy of the Valley, and that the failure of the Valley to 
meet the Clean Air Act standards for ozone and PM2.5 
contributes to school absences due to illness, asthma rates 
that are 3 times the State average and 5 times the national 
average, and costs the Valley more than $3 billion annually, an 
area with chronic double-digit unemployment rates. Section 3 
further finds that the Federal Government must partner with the 
Valley and the State to address air quality, health and 
economic development for Valley residents through designation 
of areas within the Valley as air quality empowerment zones 
that are eligible for Federal grants and technical assistance.

Section 4. Definitions

    Section 4 would define the term ``Administrator'' to mean 
the Administrator of the Environmental Protection Agency (EPA). 
The term ``Agency'' would be defined to mean the EPA. Section 4 
would define the term ``Clean Air Act'' to mean the Clean Air 
Act (42 U.S.C. 7401 et seq.). The term ``PM2.5'' 
would be defined to mean particulate matter with a diameter 
that does not exceed 2.5 micrometers. The term ``Strategic 
Plan'' would be defined to mean, with respect to an area, the 
plan contained in the application for designation of the area 
under Section 5 of the Act. Finally, Section 4 would define the 
term ``Valley'' to mean the San Joaquin Valley, California.

Section 5. Air Quality Empowerment Zone designation procedures

    Section 5 would provide that the Administrator of EPA may 
designate areas nominated for designation under this section as 
air and health quality empowerment zones. The designation would 
remain in effect for 10 years or until the Administrator 
revokes the designation. The Administrator may revoke the 
designation if the Administrator determines that the local air 
pollution district in which the designated area is located has 
been designated as being in attainment with the 
PM2.5 and ozone standards under the Clean Air Act, 
or is not complying substantially with, or fails to make 
progress in achieving the goals of, the strategic plan.
    No area may be designated an air and health quality 
empowerment zone unless the area is nominated by the air 
pollution control district with jurisdiction over the area, the 
air pollution control district provides written assurances to 
the Administrator that the strategic plan will be implemented, 
and the Administrator determines that the information provided 
is reasonably accurate. The Application for designation must 
demonstrate that the area meets the eligibility criteria in 
section 6 of the Act, and must include a strategic plan for 
accomplishing the purposes of the Act. The strategic plan must 
describe: the process by which the area is a full partner in 
developing and implementing the plan; the extent to which local 
institutions and organizations have contributed to the planning 
process; the State, local, and private resources that will be 
available and the public/private partnerships that will be 
used; the funding requested under any Federal program in 
support of the Act; baselines, methods, and benchmarks for 
measuring success; and other information that may be required 
by the Administrator.

Section 6. Eligibility criteria

    Section 6 would provide that a nominated area is eligible 
only if the area: (1) has been designated as being in extreme 
nonattainment of the 8-hour ozone national ambient air quality 
standard (NAAQS) and the NAAQS for PM2.5; (2) the 
nominated area has emissions of nitrogen oxides from farm 
equipment of at least 30 tons per day or emissions of volatile 
organic compounds from farming operations of at least 40 tons 
per day in calendar year 2010; (3) the area meets or exceeds 
the national average in asthma rates or school days missed due 
to the adverse health impacts of elevated ozone levels; (4) the 
area experiences unemployment rates higher than the national 
average; and (5) the State or local government will match at 
least 50% of the funds provided by the Federal Government under 
the Act.

Section 7. Eligible grant applicants

    Section 7 would provide that any air pollution control 
district or other local government entity authorized to 
regulate air quality in a State under the Clean Air Act may 
apply for a grant under the Act.

Section 8. Authorization of Air and Health Empowerment grants

    Section 8 would authorize grants to areas designated air 
and health quality empowerment zones under the Act, in an 
amount determined by the Administrator based on need and the 
information provided in the application.
    Section 8 would require the Administrator to make a grant 
to each designated air and health quality empowerment zone on 
the date of the designation and again on the first day of the 
first fiscal year that begins after the date of the 
designation.
    Section 8 would require the air pollution control district 
or other local government entity with Clean Air Act 
jurisdiction over the empowerment zone to oversee the use of 
the grant funds. The grant funds can be used only to carry out 
activities that achieve the purposes of the Act, in accordance 
with the strategic plan, and for activities that benefit the 
residents of the zone through improved air quality and health.
    Section 8 would authorize the appropriation to the 
Administrator of $20,000,000 for each of fiscal years 2009 
through 2013 to provide grants under this Act.

                          LEGISLATIVE HISTORY

    This legislation was sponsored by Senator Boxer. The 
Committee on Environment and Public Works met on September 17, 
2008, when it was ordered favorably reported by voice vote.

                                HEARINGS

    The Committee did not hold hearings on this legislation 
during the 110th Congress.

                             ROLLCALL VOTES

    There were no rollcall votes. The Committee on Environment 
and Public Works met to consider this legislation on September 
17, 2008. A quorum of the Committee being present, it was 
reported favorably without amendment by a voice vote.

                      REGULATORY IMPACT STATEMENT

    In compliance with section 11(b)(2) of rule XXVI of the 
Standing Rules of the Senate, the Committee states that there 
are not expected to be regulatory costs to private entities 
under this legislation, which provides grants to retrofit or 
replace polluting vehicles or engines.

                          MANDATES ASSESSMENT

    In compliance with the Unfunded Mandates Reform Act of 1995 
(Public Law 104-4), the Committee finds that this legislation 
would impose no Federal intergovernmental unfunded mandates on 
State, local or tribal governments, and does not impose private 
sector mandates.

               CONGRESSIONAL BUDGET OFFICE COST ESTIMATE

                                                September 24, 2008.
Hon. Barbara Boxer,
Chairman, Committee on Environment and Public Works,
U.S. Senate, Washington, DC.
    Dear Madam Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for the Air and Health 
Quality Empowerment Zone Designation Act of 2008.
    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.

S. 3565--Air and Health Quality Empowerment Zone Designation Act of 
        2008

    Summary: This legislation would authorize the Environmental 
Protection Agency (EPA) to create air quality empowerment zones 
in the San Joaquin Valley in California. Certain entities 
within those zones would then be eligible for grants to fund 
the replacement or retrofitting of vehicles or engines to 
reduce air pollution. The bill would authorize the 
appropriation of $20 million for each of fiscal years 2009 
through 2013 for EPA to provide such grants. Assuming 
appropriation of the authorized amounts, CBO estimates that 
implementing this legislation would cost $82 million over the 
2009-2013 period and $18 million after 2013. Enacting the bill 
would not affect direct spending or revenues.
    This legislation contains no intergovernmental or private-
sector mandates as defined in the Unfunded Mandates Reform Act 
(UMRA).
    Estimated cost to the Federal Government: The estimated 
budgetary impact of this bill is shown in the following table. 
The costs of this legislation fall within budget function 300 
(natural resources and environment). For this estimate, CBO 
assumes that this legislation will be enacted near the start of 
fiscal year 2009 and that the amounts authorized by the bill 
will be appropriated each year. Estimated outlays are based on 
historical spending patterns for similar programs.

----------------------------------------------------------------------------------------------------------------
                                                                 By fiscal year, in millions of dollars--
                                                         -------------------------------------------------------
                                                            2009     2010     2011     2012     2013   2009-2013
----------------------------------------------------------------------------------------------------------------
                                  CHANGES IN SPENDING SUBJECT TO APPROPRIATIONAuthorization Level.....................................       20       20       20       20       20       100
Estimated Outlays.......................................        8       16       18       20       20        82
----------------------------------------------------------------------------------------------------------------

    Intergovernmental and private-sector impact: This 
legislation contains no intergovernmental or private-sector 
mandates as defined in UMRA. Local governments and pollution 
control districts would benefit from grants authorized by the 
bill. Any costs to those entities, including matching funds to 
comply with grant conditions, would be incurred voluntarily.
    Estimate prepared by: Federal Costs: Susanne S. Mehlman; 
Impact on State, Local, and Tribal Governments: Burke Doherty; 
and Impact on the Private Sector: Amy Petz.
    Estimate approved by: Theresa Gullo, Deputy Assistant 
Director for Budget Analysis.

                    MINORITY VIEWS OF SENATOR INHOFE

    The Air and Health Quality Empowerment Zone Designation Act 
of 2008 should be opposed and returned to the Environment and 
Public Works Committee by the full Senate until a more 
equitable solution is agreed to that does not ignore the 
problems that other areas in the country are facing with 
nonattainment. This bill addresses the health and economic 
development impacts of nonattainment of federally mandated air 
quality standards in the San Joaquin Valley, California, by 
designating air quality empowerment zones within the Valley. 
While the bill has good intentions to help address the severe 
air quality situation in the San Joaquin valley, it 
unfortunately amounts to an earmark specifically for the Valley 
area.
    I have been supportive of the use of diesel retrofits in 
the past as the most cost effective method in reducing 
NOX and particulate matter emissions. But rather 
than creating another separate grant program that authorizes 
$20 million annually and specifically eliminates the 
consideration of other eligible areas that have attainment 
problems, I support efforts to help all other areas who are 
struggling to meet their attainment goals in an equitable 
manner. While the bill's author claims the Act is to function 
as a demonstration program, nothing in the Act calls for it to 
be evaluated by an independent body or leaves it open to 
expansion of other eligible areas.
    I note that these struggling areas, including the San 
Joaquin valley, will only increase as the planning gets 
underway for the newly revised ozone and PM2.5 
designations. These new designations will add more pressure on 
struggling local economies and industries in these uncertain 
economic times. I look forward to working in a bipartisan 
manner on a more comprehensive approach that will address these 
challenges to ensure that our most vulnerable areas of this 
country in nonattainment can continue to achieve economic 
prosperity while their air becomes cleaner.

                                   James M. Inhofe.

                        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.

                                  
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