[House Report 118-26]
[From the U.S. Government Publishing Office]
118th Congress } { Report
HOUSE OF REPRESENTATIVES
1st Session } { 118-26
======================================================================
TO REPEAL SECTION 134 OF THE CLEAN AIR ACT, RELATING TO THE GREENHOUSE
GAS REDUCTION FUND
_______
March 23, 2023.--Committed to the Committee of the Whole House on the
State of the Union and ordered to be printed
_______
Mrs. Rodgers of Washington, from the Committee on Energy and Commerce,
submitted the following
R E P O R T
together with
MINORITY VIEWS
[To accompany H.R. 1023]
The Committee on Energy and Commerce, to whom was referred
the bill (H.R. 1023) to repeal section 134 of the Clean Air
Act, relating to the greenhouse gas reduction fund, having
considered the same, reports favorably thereon without
amendment and recommends that the bill do pass.
CONTENTS
Page
Purpose and Summary.............................................. 2
Background and Need for Legislation.............................. 2
Committee Action................................................. 3
Committee Votes.................................................. 4
Oversight Findings and Recommendations........................... 7
New Budget Authority, Entitlement Authority, and Tax Expenditures 7
Congressional Budget Office Estimate............................. 7
Federal Mandates Statement....................................... 7
Statement of General Performance Goals and Objectives............ 7
Duplication of Federal Programs.................................. 7
Related Committee and Subcommittee Hearings...................... 7
Committee Cost Estimate.......................................... 8
Earmark, Limited Tax Benefits, and Limited Tariff Benefits....... 8
Advisory Committee Statement..................................... 8
Applicability to Legislative Branch.............................. 8
Section-by-Section Analysis of the Legislation................... 8
Changes in Existing Law Made by the Bill, as Reported............ 8
Minority Views................................................... 9
39-006
PURPOSE AND SUMMARY
H.R. 1023, a bill to repeal section 134 of the Clean Air
Act, relating to the greenhouse gas reduction fund, was
introduced by Rep. Gary J. Palmer (R-AL) on February 14, 2023.
H.R. 1023 repeals the $27 billion program established in the
Clean Air Act to make grants for the purposes of providing
financial assistance to reduce the risk for banks to finance
the rapid deployment of low- and zero-emission energy projects,
such as community and rooftop solar installations.
BACKGROUND AND NEED FOR LEGISLATION
The Inflation Reduction Act (P.L. 117-169) added Section
134, establishing a greenhouse gas reduction fund within the
Clean Air Act. This new provision, unexamined in any
legislative hearing by the Committee prior to enactment,
differed substantially from previous national climate bank and
green bank proposals in Committee legislative hearings,
including during the 117th Congress. Those earlier provisions,
proposed to be set up through the Department of Energy,
included modest efforts to establish oversight of the grants,
Inspector General Review, and other provisions to establish and
oversee a proposed new ``climate,'' or ``green,'' bank
infrastructure, which would receive the taxpayer subsidies, and
keep any proceeds.\1\ Here, the same seed money to support
development of a green banking infrastructure is provided
directly to the EPA Administrator, with none of the oversight
features of previous legislation.
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\1\See, for example, the 10-page provisions establishing a climate
accelerator in Section 33004 of the LIFT Act; the 26-page H.R. 806 in
the 117th Congress, establishing ``a clean energy and sustainability
accelerator''; or the almost identical previous version, a 25-page H.R.
5416 in the 116th Congress, establishing a National Climate Bank. By
contrast, the green banking provisions in the reconciliation package,
and the Inflation Reduction Act here amounted to four- and one-half
pages.
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Under Section 134, EPA is to issue $27 billion in grants by
September 30, 2024, for the purpose of providing various forms
of financing to support expansion of rooftop and community
solar and other greenhouse gas reduction activities determined
by the Administrator, with a priority on projects that
otherwise would not receive financing.
The central goal is to leverage financial institution
investment to pursue local solar development and related
projects--projects already covered by funding in other programs
Congress has enacted or by funding provided by the private
sector seeking to support renewable and zero-emission projects.
A case in point is the now failed Silicon Valley Bank, which
provided substantial financing for community solar development,
participating in more than 60 percent of community solar
financing deals.\2\ The grants provided in Section 134, through
non-profit entities set up to manage the funding, provide
private investors seed money to de-risk their own investments.
The eligible recipients keep all the proceeds of any successful
investments and financing programs so the recipients can
operate these entities perpetually, far beyond any control by
the Inspector General or Congress.
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\2\See ``Bank's implosion puts climate tech companies on edge,'' by
Corbin Hiar and Avery Ellfeldt, PolticoPro, March 14, 2023.
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The climate bank goals and decisions of the Administrator
and grant recipients may conflict with the interests of
ratepayers and taxpayers who are supporters of clean fossil
energy, which are not eligible for financing. Senate testimony
from Texas and Wyoming experts\3\ indicted a national climate
bank's focus on renewable energy and ``transition'' away from
fossil energy conflicts with state taxpayer interests--and the
benefits of their resources for prosperity.
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\3\See Senate Committee on Environment and Public Works
Subcommittee on Clean Air, Climate, and Nuclear Safety hearing
entitled, ``Legislative Hearing on S. 283, National Climate Bank Act,''
April 27, 2021. Testimony by the Honorable Rusty Bell, Commissioner,
Campbell County, Wyoming, and by Jason Isaac, Director Life: Powered, a
project of the Texas Public Policy Foundation.
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Even representatives of minority communities have raised
questions about subsidies for renewable energy and other
electrification projects. Donna Jackson, Director of Membership
Development, National Center for Policy Research, Project 21
testified to the Committee that: ``The problem with minority
communities is that they don't own their homes. What they want
is homeownership, and we have climate policies that restrict
that because it makes the building materials and the cost of
building new homes so expensive that the price creates
artificial scarcity and pushes them out of the marketplace. . .
. Subsidies for solar panels benefits who? The landlords who
own those homes. We are renters, the majority of us, and
creating higher energy costs is increasingly keeping us out of
homeownership.''\4\
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\4\See Testimony of Donna Jackson, Donna Jackson, Director of
Membership Development, National Center for Policy Research, Project
21, at the before Committee on Energy and Commerce hearing entitled
``American Energy Expansion: Strengthening Economic, Environmental, and
National Security,'' January 31, 2023. (energycommerce.house.gov)
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The Committee finds that H.R. 1023 will repeal section 134
of the Clean Air Act, a $27 billion program through which the
EPA serves as conduit for grants to establish a green bank
infrastructure that will pursue financing with limited
oversight and will conflict with taxpayer interests.
COMMITTEE ACTION
On February 7, 2023, the Subcommittees on Energy, Climate,
and Grid Security and Environment, Manufacturing, and Critical
Materials held a joint legislative hearing entitled,
``Unleashing American Energy, Lowering Energy Costs, and
Strengthening Supply Chains,'' on 17 pieces of legislation,
including H.R. 1023. The Subcommittees received testimony from:
The Honorable Mark Menezes, Former United
States Deputy Secretary of Energy, Department of
Energy;
The Honorable Bernard McNamee, Former
Commissioner, Federal Energy Regulatory Commission;
Jeffrey Eshelman, II, President and Chief
Executive Officer, Independent Petroleum Association of
America;
Katie Sweeney, Executive Vice President and
Chief Operating Officer, National Mining Association;
Raul Garcia, Legislative Director for
Healthy Communities, Earthjustice; and
Tyson Slocum, Director of the Energy
Program, Public Citizen.
On February 28, 2023, the Subcommittee on Environment,
Manufacturing, and Critical Materials met in open markup
session and forwarded H.R. 1023, without amendment, to the full
Committee by a record vote of 11 yeas and 6 nays. On March 9,
2023, the full Committee on Energy and Commerce met in open
markup session and ordered H.R. 1023 favorably reported,
without amendment, to the House by a record vote of 27 yeas and
21 nays.
COMMITTEE VOTES
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
OVERSIGHT FINDINGS AND RECOMMENDATIONS
Pursuant to clause 2(b)(1) of rule X and clause 3(c)(1) of
rule XIII, the Committee held hearings and made findings that
are reflected in this report.
NEW BUDGET AUTHORITY, ENTITLEMENT AUTHORITY, AND TAX EXPENDITURES
Pursuant to clause 3(c)(2) of rule XIII, the Committee
finds that H.R. 1023 would result in no new or increased budget
authority, entitlement authority, or tax expenditures or
revenues.
CONGRESSIONAL BUDGET OFFICE ESTIMATE
Pursuant to clause 3(c)(3) of rule XIII, at the time this
report was filed, the cost estimate prepared by the Director of
the Congressional Budget Office pursuant to section 402 of the
Congressional Budget Act of 1974 was not available.
FEDERAL MANDATES STATEMENT
The Committee adopts as its own the estimate of Federal
mandates prepared by the Director of the Congressional Budget
Office pursuant to section 423 of the Unfunded Mandates Reform
Act.
STATEMENT OF GENERAL PERFORMANCE GOALS AND OBJECTIVES
Pursuant to clause 3(c)(4) of rule XIII, the general
performance goal or objective of this legislation is to
increase American energy production and restore energy
leadership by repealing Section 134 of the Clean Air Act.
DUPLICATION OF FEDERAL PROGRAMS
Pursuant to clause 3(c)(5) of rule XIII, no provision of
H.R. 1023 is known to be duplicative of another Federal
program, including any program that was included in a report to
Congress pursuant to section 21 of Public Law 111-139 or the
most recent Catalog of Federal Domestic Assistance.
RELATED COMMITTEE AND SUBCOMMITTEE HEARINGS
Pursuant to clause 3(c)(6) of rule XIII,
(1) the following hearings were used to develop or consider
H.R. 1141:
On January 31, 2023, the Committee on Energy and Commerce
held an oversight hearing, entitled: ``American Energy
Expansion: Strengthening Economic, Environmental, and National
Security''. The Committee received testimony from:
The Honorable Paul Dabbar, Former U.S.
Undersecretary of Energy, Department of Energy;
Donna Jackson, Director of Membership
Development, National Center for Public Policy
Research, Project 21;
Robert McNally, President, Rapidan Energy
Group; and
Ana Unruh Cohen, Ph.D., Former Staff
Director, U.S. House Select Committee on the Climate
Crisis.
(2) The following related hearing was held:
On February 7, 2023, the Subcommittees on Energy, Climate,
and Grid Security and Environment, Manufacturing, and Critical
Materials held a joint hearing entitled, ``Unleashing American
Energy, Lowering Energy Costs, and Strengthening Supply
Chains,'' on 17 pieces of legislation, including H.R. 1023. The
Subcommittees received testimony from:
The Honorable Mark Menezes, Former United
States Deputy Secretary of Energy, Department of
Energy;
The Honorable Bernard McNamee, Former
Commissioner, Federal Energy Regulatory Commission;
Jeffrey Eshelman, II, President and Chief
Executive Officer, Independent Petroleum Association of
America;
Katie Sweeney, Executive Vice President and
Chief Operating Officer, National Mining Association;
Raul Garcia, Legislative Director for
Healthy Communities, Earthjustice; and
Tyson Slocum, Director of the Energy
Program, Public Citizen.
COMMITTEE COST ESTIMATE
Pursuant to clause 3(d)(1) of rule XIII, the Committee
adopts as its own the cost estimate prepared by the Director of
the Congressional Budget Office pursuant to section 402 of the
Congressional Budget Act of 1974. At the time this report was
filed, the estimate was not available.
EARMARK, LIMITED TAX BENEFITS, AND LIMITED TARIFF BENEFITS
Pursuant to clause 9(e), 9(f), and 9(g) of rule XXI, the
Committee finds that H.R. 1023 contains no earmarks, limited
tax benefits, or limited tariff benefits.
ADVISORY COMMITTEE STATEMENT
No advisory committees within the meaning of section 5(b)
of the Federal Advisory Committee Act were created by this
legislation.
APPLICABILITY TO LEGISLATIVE BRANCH
The Committee finds that the legislation does not relate to
the terms and conditions of employment or access to public
services or accommodations within the meaning of section
102(b)(3) of the Congressional Accountability Act.
SECTION-BY-SECTION ANALYSIS OF THE LEGISLATION
Section 1. Repeal of greenhouse gas reduction fund
This section repeals Section 134 of the Clean Air Act and
rescinds the unobligated balance of any amounts made available
under this section.
CHANGES IN EXISTING LAW MADE BY THE BILL, AS REPORTED
With respect to the requirement of clause 3(e) of rule XIII
of the Rules of the House of Representatives, changes in
existing law made by the bill, as reported, this section was
not made available to the Committee in time for the filing of
this report.
MINORITY VIEWS
We oppose H.R. 1023, legislation to repeal Section 134 of
the Clean Air Act (CAA), relating to the Greenhouse Gas
Reduction Fund (GHGRF). H.R. 1023 repeals and rescinds funding
for the GHGRF, which was enacted as part of the Inflation
Reduction Act (IRA). Repealing this program will inhibit the
United States from meeting its climate goals and deprive
communities of the opportunity to invest in clean energy
projects that will help them build a more sustainable future.
BACKGROUND
The GHGRF will invest $27 billion to mobilize financing and
leverage private capital for clean energy projects that reduce
greenhouse gas emissions--with an emphasis on projects that
benefit low-income and disadvantaged communities.
Of the total, $20 billion will be awarded directly from the
Environmental Protection Agency (EPA) to eligible nonprofits.
The eligible nonprofits will then make awards to other
financing entities that will provide financial and technical
assistance for projects that reduce or avoid greenhouse gas
emissions; 40 percent of that funding is required to assist
disadvantaged communities. The remaining $7 billion will be
awarded to state, local and Tribal governments as well as
eligible nonprofits to enable low-income and disadvantaged
communities to deploy or benefit from zero-emission
technologies. In February 2023, EPA announced the initial
program design for the GHGRF after soliciting stakeholder
feedback.\1\ Funding has yet to be awarded.
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\1\Environmental Protection Agency, EPA Announces Initial Program
Design of Greenhouse Gas Reduction Fund (Feb. 14, 2023) (www.epa.gov/
newsreleases/epa-announces-initial-program-design-greenhouse-gas-
reduction-fund).
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The GHGRF is a critical tool for tackling the climate
crisis, lowering energy costs, and advancing environmental
justice. This program has unprecedented potential. It will
improve lives by investing in high-impact, community-based
projects that reduce climate pollution and improve public
health outcomes.
During Committee consideration, proponents of H.R. 1023
characterized the GHGRF as a so called ``slush fund for green
advocacy groups.''\2\ This characterization could not be
further from the truth. In reality, this program builds upon
the successful model and track record of green banks and
community-based lenders--like community development financial
institutions (CDFIs) and credit unions--that have expanded
access to green capital in states, cities, and regions.
Likewise, the GHGRF's $7 billion program for states, local
governments, and Tribes will allow communities to tailor clean
energy solutions to their geographic, market, and regulatory
needs.
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\2\House Committee on Energy and Commerce, Statement of
Representative Gary Palmer, Markup of Seven Bills, 118th Cong. (Feb.
28, 2023).
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The GHGRF promises to play a unique and vital role filling
gaps in accessing green capital. By law, the GHGRF's $20
billion program is required to support projects that otherwise
lack access to capital. For these reasons and more, the GHGRF
has wide support from environmental groups, environmental
justice organizations, financing entities and state and local
governments.\3\
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\3\See eg. Letter from Earthjustice et al., to Rep. Cathy McMorris
Rodgers, Chair, House Committee on Energy and Commerce et al. (Feb. 7,
2023); Letter from National Association of Counties, National League of
Cities, and U.S. Conference of Mayors, to Rep. Cathy McMorris Rodgers,
Chair, House Committee on Energy and Commerce and Rep. Frank Pallone,
Jr., Ranking Member, House Committee on Energy and Commerce (Mar. 7,
2023).
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SUMMARY OF H.R. 1023
H.R. 1023 repeals Section 134 of the CAA, which established
the GHGRF, and rescinds all unobligated funds provided under
the section.
During Committee consideration of H.R. 1023, Democratic
Members offered several amendments intended to minimize the
negative impacts of rescinding the GHGRF without a comparable
program to replace it. The IRA is projected to reduce
greenhouse gas emissions by 42 percent below 2005 levels by
2030, likely more once the GHGRF is fully implemented.\4\ Every
Republican Committee member voted against an amendment to
ensure the U.S. would still meet the projected greenhouse gas
reduction as a result of IRA implementation.
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\4\Rhodium Group, Provisions in the Inflation Reduction Act (Aug.
12, 2022).
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Despite comments from Republican members to the contrary,
human activity is a driver of the climate crisis and without
action, the global temperature will continue to rise, having
deleterious effects on food systems, public health, energy
production, and infrastructure, among other areas. According to
the National Climate Assessment, ``Climate change creates new
risks and exacerbates existing vulnerabilities in communities
across the United States, presenting growing challenges to
human health and safety, quality of life, and the rate of
economic growth.''\5\ Every Republican Committee member voted
against an amendment requiring the EPA Administrator to certify
that disadvantaged communities would not be harmed by the
repeal of the GHGRF before the bill could go into effect.
Climate change has and will continue to disproportionately
impact low-income and vulnerable communities, who have a lower
capacity to prepare for and cope with climate-related events.
By rescinding the over $15 billion in funding dedicated to
disadvantaged communities, the majority would be taking away
resources, good-paying, clean energy jobs, reduced energy
bills, and other opportunities that will create a more
sustainable future for these underserved communities.
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\5\U.S. Global Change Research Program, Impacts, Risks, and
Adaptation in the United States: Fourth National Climate Assessment,
Volume II (2018).
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Finally, the majority indicated that the GHGRF is a risk to
national--security an argument not founded in reality. It's
climate change that poses the serious threat to our nation's
security, which is why the Department of Defense, along with
other federal agencies, have developed climate adaptation and
mitigation plans.\6\
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\6\U.S. Department of Defense, DOD, Other Agencies Release Climate
Adaptation Progress Reports (Oct. 6, 2022) (www.defense.gov/News/News-
Stories/Article/Article/3182522/dod-other-agencies-release-climate-
adaptation-progress-reports/#::text=DOD%20has%20identified
%20climate%20change,existing%20and%20planned%20equipment%20needs).
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CONCLUSION
H.R. 1023 is nothing more than a political vendetta against
the historic climate achievements of the IRA. The majority is
rushing to rescind the GHGRF as they underestimate the real
threat of climate change. The GHGRF will be a transformational
program that will invest in projects that will be driven by and
support local communities. Without a plan in place to address
climate change, Committee Republicans are leaving Americans
even more vulnerable to the impacts of climate change and
robbing them of a once-in-a-generation investment that will
spur the economy, improve health impacts, reduce energy costs,
and create good-paying clean energy jobs.
For the reasons stated above, we dissent from the views
contained in the Committee's report.
Frank Pallone, Jr.,
Ranking Member, Committee on Energy and Commerce.
[all]