HR-7173 Section 330 omitted from Senate version

December 20, 2018

4:53 PM

Thoughts as to the impact of omitting provisions of HR-7173 Section 330 from the
Senate version?

Will this present challenges during the reconciliation conference after passage in both
chambers?

In a way, SEC. 330, SUSPENSION OF REGULATION OF FUELS AND EMISSIONS

BASED ON GREENHOUSE GAS EFFECTS weakens the House version by
essentially procrastinating action to correct ineffective carbon fee levels for fuel types
and sectors that fail to meet annual and cumulative targets, but perhaps omitting those
provisions from the Senate version remedies this weakness by simply not specifying
time frames for evaluation other that what is already provide in SEC. 6. NATIONAL
ACADEMY OF SCIENCES REVIEW OF CARBON FEE AND EMISSIONS
REDUCTION SCHEDULE.

Am I interpreting this correctly?

December 20, 2018

8:11 PM

Thanks Doug for the essential questions. 

Here's what _____ had to say (at 3:24) on the all supporter call on Wednesday
regarding your question on the distinction as well as what the updated Energy
Innovation Act Q&A says:

What are the limits placed on greenhouse gas

regulations?
The Senate and House versions of the bill handle regulations differently.

CCL Community Page 1 of 6 December 23, 2018

The Senate version does not immediately impact any EPA authority, except to call for a
review of regulations related to greenhouse gas emissions covered by the carbon fee
after 6 years. No other regulations are to be reviewed.
The House version includes narrow limits on regulations related to greenhouse gas
emissions covered by the carbon fee, so that those emissions are not subject to both
the fee and regulation for the first 10 years.  After that time, if emission targets in the bill
are not being met, regulatory authority over covered emissions would be restored.

Importantly, with both bills, the Clean Air Act will remain the law of the land. The Clean
Air Act is the foundational EPA authority over greenhouse gases and was confirmed by
the Supreme Court’s Massachusetts vs. EPA ruling in 2006. With the House version of
the Energy Innovation and Carbon Dividend Act, EPA regulations on covered
greenhouse gas emissions would be inactive as long as we are meeting the emission
targets in the bill,  but all other aspects of the Clean Air Act would remain. This mainly
affects the Clean Power Plan, which never went into effect, is being challenged in the
courts, and would be superseded by this law.

EPA rules that don’t directly regulate covered greenhouse gases will remain untouched
and still in effect: pollutants like NOx, sulfur, ozone, particulates, and mercury; CAFE
mileage standards for cars and trucks; GHG authority over non-road vehicles and
aircraft; and the methane abatement program that applies to leaked and vented
methane from oil and gas operations. Additionally, states would retain authority to pass
GHG regulations within their borders.

There is overwhelming evidence from recent economic literature that a policy like this
will effectively reduce GHG emissions far more than any existing proposed regulation,
including the Clean Power Plan. This is supported by the REMI report and by a review
of 11 different revenue-neutral carbon pricing plans in a February 2018 issue of Climate
Change Economics.

These carefully written provisions in the policy allow the carbon fee to simply, affordably,
and effectively reduce greenhouse gas from fossil fuels while preserving regulatory
authority.

December 21, 2018

10:21 AM

I am confused by that response ... Section 330 of HR-7173 is completely missing from
the Senate version. Was its omission an oversight, or was it intentional?

What would the impact be if the Senate version is amended to include Section 330 vis-
a-vis if the House version is amended to exclude Section 330 during debate in the
respective chambers or during reconciliation conference?

CCL Community Page 2 of 6 December 23, 2018

I am not clear as to whether Section 330 actually allows early course correction or
procrastinates needed corrective action if annual targets are missed year-by-year.

One way or the other, subsections (e) and (f) seem to be significant, and these
provisions could present a serious challenge (my underscore bold italics emphasis
added):

‘‘(e) SUSPENSION EXPIRATION.—

‘‘(1) DETERMINATION.—The Administrator shall make a determination by

March 30, 2030, and no less than once every five years thereafter,
based on the determination required by section 9903(b) of the Internal
Revenue Code of 1986, as to whether cumulative greenhouse gas
emissions from covered fuels subject to taxation under section 9902 of
such Code during the period from calendar year 2022 through the calendar
year preceding the determination exceed the cumulative emissions for
that period that would have occurred if the emission reduction targets
in section 9903(a)(2) of such Code were met.

‘‘(2) CONSEQUENCE OF CUMULATIVE EMISSIONS EXCEEDANCE.—If

the Administrator determines under paragraph (1) that cumulative
greenhouse gas emissions from covered fuels subject to tax under
section 9902 of the Internal Revenue Code of 1986 exceed the cumulative
emissions for the period covered by the determination that would have
occurred if the emission reduction targets in section 9903(a)(2) of such
Code were met, then the prohibitions in subsection (a) of this section, and in
section 211(c)(5) of this Act, shall cease to apply.

‘‘(f) ASSURING ENVIRONMENTAL INTEGRITY.—

‘‘(1) AUTHORITY.—If the Administrator determines pursuant to subsection

(e)(1) of this section that the emission reduction targets in section 9903 (a)
(2) of the Internal Revenue Code of 1986 are not met—

‘‘(A) subsections (a) and (b) shall cease to apply; and

‘‘(B) the Administrator shall—


‘‘(i) issue such regulations as the Administrator

deems necessary to bring greenhouse gas
emissions from covered fuels subject to taxation
under section 9902 of the Internal Revenue Code of
1986 to levels that are at or below the emission
reductions targets in section 9903(a)(2) of such
Code; and

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 ‘‘(ii) require in such regulations that additional
reductions in greenhouse gas emissions are
achieved to fully compensate for any amount by
which greenhouse gas emissions from covered
fuels subject to taxation under section 9902 of such
Code have exceeded the targets in section 9903(a)
(2) of such Code.

‘‘(2) DEADLINE FOR FINALIZING REGULATIONS.—The Administrator

shall finalize any regulations required by paragraph (1) not later than
two years after the Administrator makes the relevant determination
pursuant to such paragraph.

‘‘(3) ACHIEVEMENT OF ADDITIONAL REDUCTIONS.—Regulations

issued pursuant to paragraph (1) shall ensure that any additional
reductions required by paragraph (1)(B)(ii) are fully achieved by no later
than eight years after the Administrator makes the determination
pursuant to subsection (e)(1) described in paragraph (1).

December 21, 2018

1:04 PM

Thanks Doug, you've highlighted this specific regulatory adjustment section in the
House text in a prior discussion in this thread.

Your question deals with a key section of legislative text in the House version that isn't
in the Senate version. Bottom line, we'll see what happens given that both bills will be
re-introduced in the 116th Congress and CCL will find out if there are differences and
specifically what they are with these new bills.

In the mean time, here's specifically what _____ said on the all supporter call regarding
your question about how CCL views the differences between this legislation:

"For those that did read the House bill HR 7173 you may remember that section eight
pertains to regulations and in this [Senate] bill that part is different. They took out about
three pages and replaced it with about three paragraphs and what those three
paragraphs say is that after six years the administrator of the EPA is instructed to review
regulations imposed on covered fuels and covered emissions for the greenhouse gas
effects and only for their greenhouse gas effects. So what that means is that there is no
regulatory pause in this [Senate] bill, there is just an instruction for the administrator of
the EPA to review existing regulations six year from now and if they're reviewing them

CCL Community Page 4 of 6 December 23, 2018

the implication is that they they may decide the administrator may decide to remove
them at that time. So no regulatory rollback with this one.

CCL feels great about this we feel great about the [House bill], we're going to continue
to be absolutely enthusiastic about both of them. This one is closer to what we always
wanted but we still feel very comfortable with HR 7173 and we are going full speed
ahead supporting both.”

December 22, 2018

11:31 AM

This is excellent, ________!


Glad you provided the link to the Zoom call that I missed and failed to find.

I saw the announcement for the Zoom at about 9:05pm (after it ended) here on the Q&A
Forum ... Friday morning, I discussed this with my CCL Upper Valley Chapter leadership
and after reviewing the email _________ received and searching my inbox I determined
 that I am not on the mailing list, so having the link, I just now SUBSCRIBED and
hopefully will receive advance notification of future zoom meetings.

It is especially helpful to hear specifically what Danny said on the all supporter call and
then to re-reading Section 8 in that light. I have now read carefully the language the
Senate substituted for House's Section 330, but even reading the transcript of Danny's
explanation, I am still in a quandary what it means insofar as making course
corrections under the Senate Section 8 versus House Section 8 subsection 330.

It seems to me one is as vague as the other, begging the question, "What if CO2
reduction targets are not met during 2022-2028 or 2029-2030, as the case may be?"
As important as it is to assure success, I will again suggest what I proffered in this
thread.

Happy Holidays and Hopeful New Year!

Doug

P.S. For sake of comparison for those who have not actually read the two versions of
Section 8, the Senate title and pertinent version follow the House title below (the
pertinent House content subsections (e) and (f) are quoted in my most recent post
above) for the purpose of clearly showing the significant difference and the failure to
provide a safety net that I believe is warranted to protect against failure to achieve
required CO2 emissions reduction results suggested in this thread:


CCL Community Page 5 of 6 December 23, 2018

House title SEC. 8. AMENDMENTS TO THE CLEAN AIR ACT.

Senate title SEC. 8. ENVIRONMENTAL PROTECTION AGENCY REVIEW.

(a) IN GENERAL.—Not earlier than the date that is 6 years after the date of
enactment of this Act, the Administrator of the Environmental Protection
Agency (referred to in this section as the ‘‘Administrator’’) shall evaluate the
effectiveness of the fees imposed by sections 9902, 9904, and 9908 of the
Internal Revenue Code of 1986 at reducing emissions in accordance with
the emissions reduction schedule set forth in section 9903 of such Code.

(b) REVIEW OF REGULATIONS.—

(1) IN GENERAL.—If the Administrator determines that the fees imposed

by sections 9902, 9904, and 9908 of the Internal Revenue Code of 1986
are effectively reducing emissions, such that the emissions reduction
schedule set forth in section 9903 of such Code is met or exceeded, the
Administrator may—

(A) review any regulations imposed on the combustion of any covered fuel

on which a fee is also imposed by section 9902 or 9908 of the Internal
Revenue Code of 1986; and 

(B) review any regulations imposed on any fluorinated greenhouse gas on

which a fee is also imposed by section 9904 of the Internal Revenue
Code of 1986.

###

CCL Community Page 6 of 6 December 23, 2018