[Senate Report 114-284]
[From the U.S. Government Publishing Office]


                                                      Calendar No. 525
114th Congress }                                          { Report
                                 SENATE
 2d Session    }                                          {  114-284

======================================================================
 
                 DIESEL EMISSIONS REDUCTION ACT OF 2016

                                _______
                                

                 June 21, 2016.--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. 2816]

      [Including cost estimate of the Congressional Budget Office]

    The Committee on Environment and Public Works, to which was 
referred the bill (S. 2816) to reauthorize the diesel emissions 
reduction program, 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 equipment and vehicle owners to retrofit 
existing heavy-duty diesel vehicles and engines with new 
technology, or replace 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 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 2016 and the EPA was given the 
authority to offer rebates in addition to grants pursuant to 
the Diesel Emissions Reduction Act of 2010. The EPA started the 
first rebate program in 2012 targeting school bus replacement.
    The DERA program is administered by the Environmental 
Protection Agency's (EPA) National Clean Diesel Campaign within 
the Office of Transportation and Air Quality. According to the 
agency's latest report,\1\ the DERA program is considered one 
of the most cost-effective federal clean air programs. DERA has 
upgraded nearly 73,000 vehicles or pieces of equipment and 
saved over 450 million gallons of fuel. EPA estimates that 
total lifetime emission reductions achieved through DERA 
funding are 14,700 tons of PM and 335,200 tons of 
NOX and have created up to $12.6 billion of health 
benefits.
---------------------------------------------------------------------------
    \1\United States Environmental Protection Agency, ``Third Report to 
Congress: Highlights From the Diesel Emission Reduction Program,'' 
February 2016 available at: https://www.epa.gov/sites/production/files/
2016-03/documents/420r16004.pdf.
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    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 both PM or ozone thereby 
maximizing benefits and overall effectiveness. EPA's latest 
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. In 2013 and 2014, EPA offered $10 million 
for ports-only Request for Proposals that resulted in the 
replacement or retrofit upgrades to hundreds of engines 
operating at or around ports.
    The DERA program 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 other government agencies, private 
organizations, industry, and nonprofit organizations. Further, 
the agency has improved cost-effectiveness by refining the 
Requests for Proposal requirements and by lowering the amount 
of funding for individual projects in which the vehicle or 
fleet owner derives an economic benefit.
    Demand and necessity for the DERA program will continue. 
Despite the program's success, approximately 10.3 million older 
diesel engines remain in use and the EPA estimates that by 2030 
over 1 million older higher emitting diesel engines will still 
be in use. As DERA is the only Federal 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 were exceeded by as much as 35:1 and requests 
for the national grant competitions exceeded availability by 
7:1.
    S. 2816 answers this demand by authorizing the program 
through 2021, which will ensure a continuation of the 
successful DERA program and its associated benefits.

                     Objectives of the Legislation

    The bill reauthorizes the Diesel Emissions Reduction Act 
program through 2021.

                      Section-by-Section Analysis


Section 1. Short title

    This Act may be cited as the ``Diesel Emissions Reduction 
Act of 2016''.

SEC. 2. Reauthorization of Diesel Emissions Reduction Program

    Section 797(a) of the Energy Policy Act of 2005 (42 U.S.C. 
16137(a)) is amended by striking `2016' and inserting ``2021''.

                          Legislative History

    On April 19, 2016, Senator Carper, introduced S. 2816, the 
Diesel Emissions Reduction Act. Senators Inhofe, Capito and 
Boxer, were original cosponsors of the legislation. The bill 
was then referred to the Senate Committee on Environment and 
Public Works.
    On May 18, 2016, the Senate Committee on Environment and 
Public Works conducted a business meeting to consider S. 2816. 
The bill was favorably reported out of Committee by voice vote.

                                Hearings

    No committee hearings were held on S. 2816.

                             Rollcall Votes

    The Committee on Environment and Public Works met to 
consider S. 2816 on May 18, 2016. The bill was ordered 
favorably reported by voice vote. No rollcall votes were taken.

                      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 notes that the Congressional 
Budget Office found, ``S. 2816 contains no intergovernmental or 
private-sector mandates as defined in 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:

                                                     June 14, 2016.
Hon. Jim Inhofe,
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. 2816, the Diesel 
Emissions Reduction Act of 2016.
    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.
    Enclosure.

S. 2816--Diesel Emissions Reduction Act of 2016

    S. 2816 would authorize the appropriation of $100 million 
annually through 2021 for the Environmental Protection Agency 
to provide grants for projects that reduce emissions from 
diesel engines. Assuming appropriation of the authorized 
amounts, CBO estimates that implementing S. 2816 would cost 
$480 million over the 2017-2021 period.
    Pay-as-you-go procedures do not apply to this legislation 
because enacting it would not affect direct spending or 
revenues. CBO estimates that enacting S. 2816 would not 
increase net direct spending or on-budget deficits in any of 
the four consecutive 10-year periods beginning in 2027.
    S. 2816 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.
    Estimated cost to the Federal Government: The estimated 
budgetary impact of S. 2816 is shown in the following table. 
The costs of this legislation fall within budget function 300 
(natural resources and environment).

----------------------------------------------------------------------------------------------------------------
                                                                 By fiscal year, in millions of dollars--
                                                         -------------------------------------------------------
                                                            2017     2018     2019     2020     2021   2017-2021
----------------------------------------------------------------------------------------------------------------
                                 INCREASES IN SPENDING SUBJECT TO APPROPRIATION
 
Authorization Level.....................................      100      100      100      100      100       500
Estimated Outlays.......................................       85       95      100      100      100       480
----------------------------------------------------------------------------------------------------------------

    Basis of estimate: For this estimate, CBO assumes that S. 
2816 will be enacted near the end of fiscal year 2016, that the 
specified amounts will be appropriated in each year starting in 
2017, and that outlays will follow historical spending patterns 
for the program. The program received an appropriation of $50 
million in fiscal year 2016.
    Pay-As-You-Go considerations: None.
    Increase in long-term deficit and direct spending: CBO 
estimates that enacting S. 2816 would not increase net direct 
spending or on-budget deficits in any of the four consecutive 
10-year periods beginning in 2027.
    Intergovernmental and private-sector impact: S. 2816 
contains no intergovernmental or private-sector mandates as 
defined in UMRA and would impose no costs on state, local, or 
tribal governments.
    Estimate prepared by: Federal costs: Jon Sperl; Impact on 
state, local, and tribal governments: Jon Sperl; Impact on the 
private sector: Amy Petz.
    Estimate approved 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:

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ENERGY POLICY ACT OF 2005

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SEC. 101. ENERGY AND WATER SAVING MEASURES IN CONGRESSIONAL BUILDINGS.

  (a) In General.--* * *

           *       *       *       *       *       *       *


SEC. 797. [42 U.S.C. 16137] AUTHORIZATION OF APPROPRIATIONS.

  (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] 2021, to remain available until expended.
  (b) Management and Oversight.--The Administrator may use not 
more than 1 percent of the amounts made available under 
subsection (a) for each fiscal year for management and 
oversight purposes.

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