Appropriations

FY 2015 Budget and Congressional Appropriations

Background

On March 4, 2014 President Barack Obama proposed a budget for fiscal year (FY) 2015, which includes $7.89 billion for EPA, representing a decrease in EPA’s total budget of $309.9 million below FY 2014 levels. The proposal includes $243.2 million in federal grants to state and local air agencies under Sections 103 and 105 of the Clean Air Act, which is an increase of $15 million above FY 2014 levels. While an increase was proposed, it would come at the expense of decreases in core air programs. Specifically, the budget would (1) add $19.8 million to air grants for state work in support of the Climate Action Plan, including the development of state plans; (2) add $4.5 million in air grants for state greenhouse gas (GHG) permitting activities, including the collection and use of GHG emission data; and (3) reduce $9.3 million in air grants from continuing environmental state programs, including the completion of monitoring networks and the compilation of updated emission inventories for updating SIPs. Among the other cuts in the proposed budget is the Diesel Emissions Reduction Act (DERA) grant program, which received $20 million in FY 2014 but would be cut entirely under the FY 2015 budget proposal. The proposed budget also called for fine particulate matter monitoring funds currently provided under Section 103 authority, which do not require matching grants, to begin to be shifted to Section 105, where a 40-percent match is required. The budget also proposes to begin phasing in a new formula for allocating state and local air grants among the regions.

Key Actions

December 16, 2014 – President Obama signed H.R. 83, a $1-trillion federal omnibus spending measure that funds the federal government for the remainder of FY 2015.  The bill, also known as the “CRomnibus,” was adopted by the House on December 11, 2014 by a vote of 219-206 and by the Senate on December 13, 2014 by a vote of 56-40.  The bill (see pp. 31-38 and pp. 83-91 of the report language includes $8.14 billion for EPA in FY 2015, which is approximately $250 million above the President’s request for FY 2015 and $60 million less than enacted in FY 2014.  The bill appropriates $228 million for state and local air grants – the same amount as in FY 2014 and $15 million less than the President requested for FY 2015.  The measure also includes $30 million for the Diesel Emission Reduction Act (DERA), which is $10 million above the FY 2014 amount (the Administration did not request funds for DERA for FY 2015).  In addition, $10 million is included for targeted airshed grants, the same amount as in FY 2014, which would be distributed on a competitive basis to nonattainment areas determined by EPA to be the top five most polluted areas for ozone or fine particulate matter.  The bill also continues funding for PM2.5 monitoring under Section 103 of the Clean Air Act, thus requiring no state or local match, and calls for state and local air grant funds be allocated based on the same formula used last year.  Among the riders included in the bill is one for a $40-million rescission of unobligated balances from the State and Tribal Assistance Grant account; a prohibition on the use of funds for any regulation requiring the issuance of permits under Title V of the Clean Air Act for emissions of carbon dioxide, nitrous oxide, water vapor or methane resulting from biological processes associated with livestock production; a prohibition on the use of funds for a rule that requires mandatory reporting of greenhouse gas emissions from manure management systems; and requirement calling for a report to Congress on federal obligations and expenditures for climate change programs in FYs 2014 and 2015.

September 18, 2014 – Congress adopted a Continuing Resolution (CR) for FY 2015 (H.J. Res. 124) that will keep the federal government in operation from the end of the current fiscal year (September 30, 2014) until December 11, 2014.  The CR is needed because Congress has not yet adopted appropriations legislation to support the federal government for FY 2015.  The CR calls for funding to continue at FY 2014 levels and generally carries existing policy riders through the CR period.  These include prohibitions on the use of federal funding for implementing regulations calling for greenhouse gas Title V permits related to livestock and for efficiency standards for light bulbs, among others, but do not include the more sweeping provisions prohibiting climate change activities under Section 111 that were included in the House bill for FY 2015.  Funding for state and local air grants under Sections 103 and 105 was $228.2 million in FY 2014, so the CR continues funding at that rate for the time being.  The House of Representatives adopted the CR by a vote of 319-108 on September 17, 2014, while the Senate adopted it by a vote of of 78-22 on September 18, 2014.  The President is expected to sign the bill shortly.  Congress will return after the election to address FY 2015 for the remainder of the fiscal year.

August 1, 2014 – The Chairman and Ranking Member of the Senate Appropriations Subcommittee on Interior, Environment, and Related Agencies have issued their recommendations for FY 2015 appropriations for EPA, among other agencies. The Subcommittee has not held mark-up on a funding bill and no action is currently scheduled, so these recommendations serve as an indication of what the Senate would possibly have included in a bill. The Subcommittee recommended funding EPA at a total of about $8 billion, which is similar to the amount enacted in FY 2014 and almost $300 million more than the President requested for FY 2015. With respect to state and local air grants under Sections 103 and 105, the Subcommittee proposed $228.2 million, which is equal to FY 2014 and the House’s FY 2015 bill, and about $15 million less than the President requested for FY 2015. The Senate recommendation included $6.5 million for grants under the Diesel Emission Reduction Act (DERA), as opposed to the House bill containing $20 million and the President’s request of zero funding. As in the House bill, the Senate recommendation called for PM 2.5 grants to remain under Section 103, rather than shifting to Section 105 authority, where matching funds are needed. The Senate recommendation specifically stated that state and local air grants should be allocated using the same formula as in FY 2014. The Senate recommendation did not include any of the riders opposing climate change actions contained in the House bill. No additional action is scheduled in Congress on individual spending bills for the budgets for EPA and most other agencies. It is likely that Congress will adopt a Continuing Resolution in early September to keep the government in operation after September 30, 2014. The Senate recommendations are available here. (See pages 103 and 104 of the report language for state and local grant details). A NACAA table comparing certain elements of the FY 2014 budget, the President’s FY 2015 request, the House bill and the Senate recommendations is available here.

July 15, 2014 – The House Appropriations Committee approved the bill that includes FY 2015 funding for EPA and several other agencies by a vote of 29-19.  The bill, which will now be reported to the full House for consideration, contained the funding levels and air-related riders described in the July 14, 2014 “Key Actions” entry below. During the hearing, Rep. James Moran (D-VA) introduced two amendments that attempted to remove some of these riders.  His first amendment called for the removal of 24 "poison pill provisions" in the bill, including environmental riders related to greenhouse gases (GHG).  That amendment failed by a vote of 19-29.  His second amendment called for the removal of provisions that would bar EPA from regulating GHG for new, modified and existing power plants. The amendment failed 18-19.  The bill will now be referred to the House floor for consideration and voting.

July 14, 2014 – The House Appropriations Committee has publicly issued the draft committee report that accompanies the FY 2015 funding bill including EPA’s appropriation, among others.  The report language provides instructions and additional detail to accompany the text of the bill.  The full Appropriations Committee is scheduled to mark-up the bill on July 15, 2014. In addition to the information NACAA has already reported, the report includes the following statement related to the reallocation of state and local air grants among the regions:  “Further, if EPA is proposing to change state allocation formulas for the distribution of appropriated funds, then EPA should include such proposals in the Congressional justification” (page 56 of the report).  Additionally, the report prohibits the use of EPA’s “Social Costs of Carbon” estimates until further review of the relevant report is complete (pages 64 and 121). The following are provisions previously reported, along with the relevant page numbers in the report:  State and local air grants under Sections 103 and 105 would remain at FY 2014 levels, for a total of $228.22 million (page 161), and PM2.5 monitoring would remain under Section 103 authority (pages 69 and112). Federal funds may not be used for regulations addressing greenhouse gas (GHG) emissions from modified or reconstructed power plants (Section 111[b]) or existing power plants (Section 111[d]) and would prohibit expenditures for new source power plant standards under Section 111(b) if EPA considered technology demonstrated through funding made available by the Energy Policy Act (EPACT) or the IRS Code in setting the standards. (The report language on pages 59, 100 and 102 is not as detailed as the relevant bill language.)  Title V permitting regulations for GHGs related to livestock production and the mandatory reporting of GHG emissions from manure management are prohibited (pages 98 and 120).  The bill includes $30 million for Diesel Emissions Reductions Act (DERA) grants (pages 70 and 160) and $10 million in “Targeted Airshed Grants” (pages 70 and 160).  The report language is available here and the bill language is available here.

July 9, 2014 – The House Appropriations Subcommittee on Interior, Environment, and Related Agencies approved by voice vote the FY 2015 appropriations bill containing EPA's budget.  No amendments were considered during subcommittee mark-up, but Ranking Member Rep. James Moran (D-VA) stated that amendments would be offered during full committee mark-up, expected to be held July 15, 2014. There are several provisions in the bill that pertain to the air program. State and local air grants under Sections 103 and 105 would reportedly remain at FY 2014 levels, for a total of $228.22 million, and PM2.5 monitoring would remain under Section 103 authority (the President had requested $243.2 million for air grants and had proposed shifting PM2.5 monitoring grants to Section 105). The bill would prohibit the use of federal funds for regulations addressing greenhouse gas (GHG) emissions from modified or reconstructed power plants (Section 111[b]) or existing power plants (Section 111[d]) and would prohibit expenditures for new source power plant standards under Section 111(b) if EPA considered technology demonstrated through funding made available by the Energy Policy Act (EPACT) or the IRS Code in setting the standards. The technology demonstration condition (related to funds under EPACT and/or the IRS Code) is intended to prevent EPA from requiring the installation of carbon, capture and sequestration technology at new power plants in its final new source standards. The bill also would prohibit Title V permitting regulations for GHGs related to livestock production and the mandatory reporting of GHG emissions from manure management.  The bill includes $30 million for Diesel Emissions Reductions Act (DERA) grants, which the President’s proposed budget would have eliminated, and also includes $10 million in “Targeted Airshed Grants,” which is a competitive grant program for the most polluted nonattainment areas.  These grants are over and above the $228.22 million for Section 103/105 grants. The total provided for EPA in the draft bill would be $7.5 billion, which is $717 million below FY 2014 levels and $390 million below the President’s requested amount. The bill language is available here (see pages 123 and 129 for GHG language).  EPA developed summary information, including a list of environmental riders in the bill.

May 15, 2014 – NACAA submitted written testimony to the Senate Appropriations Subcommittee on Interior, Environment, and Related Agencies regarding the President’s request for grants to state and local air agencies under Sections 103 and 105 of the Clean Air Act in FY 2015. The President’s request calls for $243.2 million in Sections 103 and 105 grants, which is an increase of approximately $15 million above FY 2014, but also includes a reduction of $9.3 million in "core" program funding. NACAA’s testimony recommended an increase of $35 million above the President’s request for state and local air grants and requested that state and local air agencies be given the flexibility to use the additional funds for the highest priority activities in their areas. The association also opposed EPA’s proposal to shift funding for fine particulate matter (PM2.5) monitoring from Section 103 to Section 105 authority and requested that it be left under Section 103 authority.

April 10, 2014 – Bill Becker testified on behalf of NACAA before the House Appropriations Subcommittee on Interior, Environment, and Related Agencies regarding the President’s request for grants to state and local air agencies under Sections 103 and 105 of the Clean Air Act in FY 2015.

April 3, 2014 – NACAA submitted written testimony to the House Appropriations Subcommittee on Interior, Environment, and Related Agencies regarding the President’s request for grants to state and local air agencies under Sections 103 and 105 of the Clean Air Act in FY 2015. Bill Becker will deliver NACAA’s testimony at the subcommittee hearing on April 10, 2014. The President’s request calls for $243.2 million in Sections 103 and 105 grants, which is an increase of approximately $15 million above FY 2014, but also includes a reduction of $9 million in core program funding. NACAA’s testimony recommended an increase of $35 million above the President’s request for state and local air grants and requested that state and local air agencies be given the flexibility to use the additional funds for the highest priority activities in their areas. The association also opposed EPA’s proposal to shift funding for fine particulate matter (PM2.5) monitoring from Section 103 to Section 105 authority and requested that it be left under Section 103 authority.

March 25, 2014 – EPA provided a detailed Justification of Appropriation Estimates for the proposed FY 2015 budget to Congress, which is a 1,139-page document providing details about the President’s proposed budget announced on March 4, 2014. A similar document is submitted each year to Congress to provide additional detail about the President’s annual request. The section on “Goal 1 – Addressing Climate Change and Improving Air Quality” begins on page 11, the details on state and local air grants begins on page 771 and the section discussing the discontinuation of funding for the Diesel Emission Reductions Act program begins on page 810.

March 4, 2014 – The President proposed the FY 2015 budget for EPA. See page 13 for Addressing Climate Change and Improving Air Quality and page 71 for grant details.

Additional Information