Appropriations

FY 2016 Budget and Congressional Appropriations

Background

On February 2, 2015, President Barack Obama proposed a budget for fiscal year (FY) 2016, which includes $268.2 million for state and local air grants under Sections 103 and 105 of the Clean Air Act, an increase of $40 million over FY 2015 enacted levels. The increase specifically includes $25 million for implementation of the Clean Power Plan and $15 million for other continuing state and local air quality implementation activities (not specifically tied to the Clean Power Plan.  Within the $25-million increase for the Clean Power Plan, $17.5 million will be provided under Section 103 authority (where matching state and local funds are not required) for modeling, technical analysis and training and $7.5 million under Section 105 for other activities related to the Clean Power Plan.  The President’s budget request also calls for $4 billion for the “Clean Power State Incentive Fund” that would “support states that choose to go beyond their carbon pollution reduction goals in the power sector” (i.e., the Clean Power Plan).  This program would be separate from EPA’s budget, but the agency would administer it. The President’s budget request also calls for $10 million for the Diesel Emissions Reduction Act (DERA) grant program, which is a decrease of $20 million from FY 2015 levels.  For EPA’s total budget, the request calls for $8.59 billion, which is $450 million more than FY 2015 levels.  With respect to fine particulate matter monitoring, which has been funded under Section 103, EPA has announced that it plans to begin a four-year transition of the program to Section 105 authority, which will require matching state and local funds.  NACAA supports the increase of $40 million in state and local air grants and recommends that state and local agencies be given flexibility with respect to how they spend the increases.  NACAA also supports the Administration's proposed $4 billion Clean Power State Incentive Fund.

Key Actions

December 16, 2015 – Congress has released legislation that will fund the federal government for the remainder of FY 2016 (ending September 30, 2016).  The so-called omnibus bill (Senate Amendment to H.R. 2029) is a massive bill that includes all the funding for the 12 annual appropriations bills that Congress had considered earlier this year.  The bill calls for $228.2 million for state and local air grants under Sections 103 and 105 of the Clean Air Act, which is equal to FY 2015 and $40 million less than the President’s proposed budget for FY 2016.  However, it also includes an estimated 0.9 percent across-the-board rescission for all State and Tribal Assistance Grants (reducing grants to $226.5 million). The bill also calls for the continuation of fine particulate matter monitoring under Section 103, which does not require matching funds.  The omnibus does not include some of the environmental riders that had been discussed earlier this year during the appropriations process, including prohibitions on certain climate change-related programs and the implementation of the updated ozone standard.  The bill calls for the following, among other things: $8.1 billion for EPA, which is the same as FY 2015 and $451 million less than the FY 2016 budget request; $50 million for grants under the Diesel Emission Reduction Act (DERA), which is $20 million above FY 2015 and $40 million above the budget request; and $20 million for Targeted Airshed Grants (to be distributed on a competitive basis to nonattainment areas that EPA determines are the top five most polluted areas for ozone or fine particulate matter), which is $10 million more than FY 2015 and $20 million above the budget request.  With respect to the formula for allocating grants among state and local air agencies, the report language calls for EPA to modify the formula for allocating state and local air grants to take into account recent population and demographic shifts.  The bill is expected to be adopted by Congress within several days.  In the meantime, Congress will adopt another Continuing Resolution (CR) today to keep the government in operation until December 22, 2015.  This CR is needed because the previous CR expires today, December 16, 2015.  The Omnibus bill contains EPA-related language beginning on p. 771. The accompanying report language includes EPA provisions on p. 34, EPA funding charts on p. 85 and grant-specific charts on p. 90.

December 11, 2015 –  Congress adopted a Continuing Resolution (CR) that provides funding for the federal government until December 16, 2015.  The CR was needed to avoid a federal government shutdown because Congress had not adopted a bill to fund the government after the expiration of the previous CR on December 11, 2015.

June 25, 2015 – The Senate Appropriations Committee has released the bill language and accompanying report for the FY 2016 funding legislation that includes EPA’s budget, which the Committee approved on June 18, 2015.  The bill calls for $228.2 million for grants to state and local air agencies under Sections 103 and 105 of the Clean Air Act, which is equal to FY 2015 levels and the House bill and $40 million less than the President’s proposed budget.  The bill calls for $7.6 billion for EPA, which is $538.8 million less than FY 2015 and $1 billion less than the President’s request for the agency.  The bill and accompanying report include several provisions related to the air program, including: (1) prohibiting EPA from implementing federal plans in states that do not submit state plans to implement the Clean Power Plan rule; (2) prohibiting EPA from lowering the ozone standard until 85 percent of counties in nonattainment areas come into compliance; (3) retaining funding for PM2.5 monitoring under Section 103, where matching funds are not required, rather than shifting it to Section 105, as the Administration proposed; (4) providing $20 million for Diesel Emission Reduction Act (DERA) grants (compared to $50 million in the House bill and $10 million in the President’s request); (5) prohibiting Title V permitting regulations for GHGs related to livestock production, as well as the mandatory reporting of GHG emissions from manure management; and (6) providing $15 million for Targeted Airshed Grants (compared to $20 million in the House bill and no funding in the President’s request).  The Targeted Airshed Grants are largely for a competitive grant program for the five most polluted nonattainment areas. However, the Senate bill also targets some of the funds for PM2.5 nonattainment areas where woodstoves are a major problem and indicates that funds should be used for stove change-out or similar programs.  Finally, with respect to the allocation of Section 105 grants among the regions, the Senate report language states: “[f]or fiscal year 2016 and beyond, the Committee believes that, in accordance with EPA’s recommendations, the formula determining the allocation of Air Quality Grant’s should be modified to take into account recent population and demographic shifts.”

June 18, 2015 – The Senate Appropriations Committee marked up and approved (by a vote of 16-14) legislation containing EPA’s budget for FY 2016.  The bill had been marked up and approved by the Senate Appropriations Subcommittee on Interior, Environment, and Related Agencies on June 16, 2015.  While the Committee has not yet released bill language, the committee report or many details about the amounts provided, the committee did announce that the bill calls for $7.6 billion for EPA, which is $538.8 million less than FY 2015 and $1 billion less than the President’s request for the agency.  Among the things the bill does is prohibit EPA from “from forcing federal plans on states that do not support the Obama administration’s onerous greenhouse gas regulations” and prohibit EPA from lowering the ozone standard until 85 percent of counties in nonattainment areas come into compliance.  During the full-committee mark-up, several amendments were offered related to EPA’s budget:  Senate Appropriations Subcommittee on Interior, Environment, and Related Agencies Ranking Member, Senator Tom Udall (D-NM), proposed an amendment that would have restored $25 million of the committee’s cuts to state and local air quality grants for implementing climate change regulations and $181 million to EPA’s overall budget (it lost by a vote of 16-14).  Senator Udall also proposed an amendment to strip 11 riders from the bill including the following: measures to keep EPA from implementing federal plans in states that do not submit state plans to implement the Clean Power Plan rule; delays to tightening the ozone standard until 85 percent of counties in nonattainment areas come into compliance; and a provision that would automatically deem burning wood for energy as carbon neutral (the amendment failed by a vote of 16-14).  Senator Udall then offered another amendment specifically to remove the riders that would keep EPA from implementing federal plans in states that do not submit state plans for the Clean Power Plan rule and cut state grant funding for climate programs (the amendment failed by a vote of 15-15).  Those speaking against the amendment noted that the rider would not prohibit states that wish to from implementing the provisions of the Clean Power Plan rule.

June 16, 2015 – The House Appropriations Committee marked up and approved (by a vote of 30-21) legislation containing funding for EPA, among other agencies.  This bill had been approved by the House Appropriations Subcommittee on Interior, Environment, and Related Agencies on June 10, 2015.  The Committee also released the Committee Report that accompanies the bill and provides additional guidance and details related to the legislation.  Details about the bill were included in the June 8-12, 2015 Washington Update.   Since that time, additional information has become available.  For example, with respect to the change in the formula for allocating Section 105 grants among the regions, the report states, “[f]urther, 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.”  The report also indicates that the bill provides resources to allow EPA to address backlogs in SIPs and operating permits.  Additionally, during the full committee mark-up, three air-related amendments were considered.  Rep. Evan Jenkins (R-WV) introduced an amendment that would prohibit EPA from moving forward on the new ozone NAAQS until 85 percent of counties in nonattainment areas have met the existing ozone standard (it passed by a vote of 31-20).  The Subcommittee’s Ranking Member, Rep. Betty McCollum (D-MN), introduced an amendment that would have removed several policy riders from the bill, including those prohibiting funding for greenhouse gas programs (it failed by a vote of 32-19).  The Committee’s Ranking Member, Rep. Nita Lowey (D-NY), introduced an amendment that would strike the provisions in the bill that prohibit EPA from implementing greenhouse gas (GHG) regulations (it failed by a vote of 32-19).  The Administration weighed in on the bill, through a June 15, 2015 letter from the Office of Management and Budget to House leaders expressing concern about the FY 2016 appropriations bill under consideration.  The letter identified various proposed cuts to the President’s budget request that were of special concern, including reductions to EPA programs, such as those for GHGs and state grants.  This bill must now go to the floor of the House for a vote.

June 10, 2015 – By a voice vote, the House Appropriations Subcommittee on Interior, Environment, and Related Agencies approved FY 2016 appropriations legislation for EPA’s budget and that of several other federal agencies.  Some details about the bill are contained in an EPA memo.  The bill would maintain funding for state and local air pollution control agencies under Sections 103 and 105 of the Clean Air Act at FY 2015 levels, for a total of $228.2 million.  The President’s proposed budget called for $268.2 million for state and local air grants.  In addition, the bill would retain PM2.5 monitoring funds under Section 103 authority, where matching funds would not be required, rather than Section 105.  The President’s budget had proposed phasing in a shift of PM2.5 monitoring grants to Section 105.  The House bill would rescind funding for most of EPA’s activities to regulate greenhouse gases from power plants under Section 111 of the Clean Air Act.  Specifically, the bill would prohibit federal funding for regulations addressing greenhouse gas emissions from modified or reconstructed power plants under Section 111(b) and existing power plants under Section 111(d), and would prohibit expenditures for new power plants under Section 111(b), if EPA based these standards on technology demonstrated through funding made available by the Energy Policy Act or the IRS Code.  (The technology demonstration condition is designed to prevent EPA from requiring carbon, capture and sequestration 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 also would prohibit the incorporation of EPA’s “Social Cost of Carbon” estimates into any rulemaking or guidance until they have been reviewed and revised.  The proposal includes $50 million for Diesel Emissions Reductions Act (DERA) grants, as opposed to $10 million requested by the President and $30 million provided in FY 2015.  The bill also includes $20 million in “Targeted Airshed Grants,” which is a competitive grant program for the most polluted nonattainment areas.  That program received $10 million in FY 2015 but the President had proposed eliminated that funding in FY 2016.  The DERA and Targeted Airshed grants are over and above the $228.2 million for Section 103 and 105 grants.   The total provided for EPA in the bill is $7.4 billion, as compared to FY 2015 levels of $8.1 billion and the President’s request of $8.6 billion.  The full House Appropriations Committee is expected to mark-up the bill on June 16, after which report language will likely be available.  Additional details about the bill may be included in the committee’s report.  The Senate Appropriations Subcommittee on Interior, Environment, and Related Agencies is scheduled to hold a mark-up on June 16, 2015 as well.

June 17, 2015 – EPA distributed a memorandum describing the actions of the House Appropriations Committee during mark-up of legislation containing EPA’s FY 2016 budget.

June 2, 2015 – NACAA sent a letter to the leadership of the House and Senate Appropriations Subcommittees on Interior, Environment, and Related Agencies urging them to provide the $40-million increase to state and local air grants that the President had requested under Sections 103 and 105 of the Clean Air Act, for a total of $268.2 million.  While the President’s request called for $25 million of the increase for the implementation of the Clean Power Plan and the other $15 million for other continuing activities, NACAA urged that Congress not set aside a specific amount for the Clean Power Plan but instead provide state and local air quality agencies with flexibility to determine how best to use the additional resources.  NACAA also requested that grant funds for fine particulate matter monitoring remain under Section 103 authority, rather than being shifted to Section 105 authority, as EPA is proposing.  The letters were sent in anticipation of mark-ups covering EPA’s budget scheduled for June 10, 16 and 18, 2015 in both the House and Senate Subcommittees and Committees.

March 24, 2015 – NACAA submitted testimony to the House Appropriations Subcommittee on Interior, Environment, and Related Agencies providing input related to the President’s proposed FY 2016 budget, including grants to state and local air agencies under Sections 103 and 105 of the Clean Air Act.  The President requested $268.2 million for Sections 103 and 105 grants, representing an increase of $40 million above FY 2015 levels.  Of the increased amount, $25 million would be to implement the Clean Power Plan under Section 111(d) and $15 million would be for other continuing state and local air quality implementation activities.  NACAA’s testimony expressed support for the increase in the budget request but recommended that state and local air pollution control agencies be provided with the flexibility to determine how best to use the additional resources.  Additionally, NACAA requested that grant funds for fine particulate matter monitoring not be shifted to Section 105 authority, as EPA is proposing, but remain under Section 103 authority.  Finally, NACAA also expressed support for the $4-billion Clean Power State Incentive Fund and resources for the Diesel Emission Reduction Act (DERA) program, both of which are included in the President’s request.

April 14, 2015 – NACAA submitted testimony to the Senate Appropriations Subcommittee on Interior, Environment, and Related Agencies regarding the Administration’s proposed FY 2016 budget for EPA, including grants to state and local air pollution control agencies under Sections 103 and 105 of the Clean Air Act.  The President’s request included $268.2 million for Sections 103 and 105 grants, which is an increase of $40 million above FY 2015 levels.  Of the proposed increased, $25 million is for to implementation of the Clean Power Plan under Section 111(d) and $15 million is for other continuing state and local air quality implementation activities.  In the testimony, NACAA expressed support for the increase in the budget but recommended that state and local air pollution control agencies be given the flexibility to determine how best to use the additional funds.  NACAA also requested that grant funds for fine particulate matter monitoring not be shifted to Section 105 authority, as EPA is proposing, but remain under Section 103 authority.  Finally, NACAA expressed support for the $4-billion Clean Power State Incentive Fund and resources for the Diesel Emission Reduction Act (DERA) program, both of which are included in the President’s request.

Additional Information