19–010

Calendar No. 119

108TH CONGRESS REPORT " SENATE ! 1st Session 108–57

RELIABLE FUELS ACT 

JUNE 3, 2003.—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. 791]

TOGETHER WITH

ADDITIONAL VIEWS

[Including cost estimate of the Congressional Budget Office]

The Committee on Environment and Public Works, to which was 

referred a bill (S. 791) to amend the Clean Air Act to eliminate 

methyl tertiary butyl ether from the United States fuel supply, to 

increase production and use of renewable fuel, and to increase the 

Nation’s energy independence, and for other purposes, having considered the same, reports favorably thereon with an amendment 

and recommends that the bill, as amended, do pass. 

GENERAL STATEMENT

In 1990, the Clean Air Act was amended to include the reformulated gasoline, or RFG, program. The program was designed to address persistent pollution from automobiles. While tailpipe standards for automobiles are effective for new vehicles, the RFG program added additional controls and was able to address emissions 

from vehicles of all ages within the current fleet. RFG program was 

required in metropolitan areas that have the most serious air pollution levels. Although not required to participate, some areas in 

the Northeast, in Kentucky, Texas and Missouri have elected to 

join, or ‘‘opt-in,’’ to the RFG program as a relatively cost-effective 

measure to help combat their air pollution problems. Today, roughVerDate Jan 31 2003 18:33 Jun 04, 2003 Jkt 19010 PO 00000 Frm 000001 Fmt 06659 Sfmt 06601 E:\HR\OC\SR057.XXX SR057
2

ly 35 percent of this country’s gasoline consumption is cleanerburning reformulated gasoline. 

One element of the RFG program was the requirement that RFG 

contain 2.0 percent minimum oxygen content by weight. This provision was of assistance in the goal of making gasoline burn cleaner, 

both in terms of criteria air pollutants and toxic air emissions. The 

addition of oxygen to gasoline resulted in greater supplies of fuel 

being available, given that the principal oxygenate additives are 

not derived from crude petroleum. 

RFG blended with oxygenates has exceeded all pollution reduction goals and substantially and cost-effectively improved the nation’s air quality. According to EPA, RFG has cut smog-forming 

pollutant emissions by over 17 percent, the equivalent of removing 

64,000 tons of harmful pollution from the air we breathe or taking 

10 million vehicles off our roads. RFG has reduced emissions of 

benzene, a known human carcinogen, by some 43 percent, while reducing total toxic air emissions by about 22 percent. Cleaner-burning MTBE accounts for a large part of the overall emission reductions from RFG. 

The program set a variety of content and performance requirements, including a minimum content requirement for oxygen and 

maximum allowable benzene and heavy metal quantities in RFG. 

Through regulatory authority provided by the Act, EPA chose, in 

1993, to adopt performance standards for toxic air pollutants and 

volatile organic compounds (VOCs) rather than the prescriptive 

fuels formula allowed under Section 211(k)(3)(A). These performance standards required a 15 percent reduction in toxic air pollutants from baseline vehicles starting in 1995 and maintained 

through 1999, and required a 22 percent reduction from baseline 

vehicles beginning in 2000, as part of Phase II. Phase II also requires reductions in NOx and VOCs. 

Motor vehicle emissions of carbon monoxide, volatile organic compounds, and, most notably, toxics have been reduced drastically in 

RFG areas. Refiners have produced RFG that exceeded the statutory requirements to reduce toxic emissions, including emissions of 

benzene. Recent data suggest that refiners have achieved a 27 percent or higher reduction in toxic air pollutants in RFG (where 

MTBE was used) from the 1990 baseline. A 1998 study by the 

Northeast States for Coordinated Air Use Management 

(NESCAUM) concluded that Phase II RFG would reduce the public 

cancer risk by 20 percent. 

On March 29, 2001, EPA issued it’s Mobile Source Air Toxics 

Rule (MSAT) to limit air toxics emissions from motor fuels, as required by Section 202(l) of the Act. It is intended to ensure that 

refiners continue over-compliance with RFG and anti-dumping requirements by maintaining their average 1998–2000 toxic emissions performance levels for RFG and conventional gasoline. The 

MSAT rule commits EPA to revisiting additional fuel and vehicle 

MSATs controls in a 2004 rulemaking. The deadline in the CAAA 

for issuance of these regulations was June 1995. 

The final MSATs rule was challenged by a number of parties. On 

May 24, 2001, the States of New York and Connecticut and the Sierra Club, Earth Justice, the Natural Resources Defense Council 

and the U.S. Public Interest Research Group filed suit against 

EPA, charging that the MSATs rule fails to achieve the pollution 

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reductions mandated by the Clean Air Act. Other parties, including 

Hovensa LLC, and International Truck and Engine Corporation 

have filed petitions in the United States Court of Appeals challenging EPA’s final rule on the grounds that it is inconsistent with 

section 202(l) of the Act, that EPA acted arbitrarily and capriciously in promulgating the rule and did not adequately follow required notice and comment rulemaking procedures. On April 25, 

2003, the U.S. Court of Appeals for the D.C. Circuit issued its decision. It denied on the merits the claims of the environmental and 

State petitioners, except for remanding to EPA on the issue of explaining its decision not to require on-board diagnostic equipment 

for new heavy-duty vehicles over 14,000 pounds. 

There is no specific deadline in the Act for EPA to further reduce 

toxic air pollutants from mobile sources. Section 204, however, requires EPA to promulgate final regulations addressing hazardous 

air pollutants from vehicles and fuels by July 1, 2004, as per the 

MSAT rule. The Agency retains general authority to control emissions from motor vehicles of any air pollutant that causes or contributes to air pollution which may reasonably be anticipated to endanger public health or welfare. In a discussion focused on maintaining air toxics reductions from the RFG program, EPA’s Blue 

Ribbon Panel on Oxygenates in Gasoline specifically recommended 

that EPA should explore and implement mechanisms to achieve 

equivalent or improved public results that focus on reducing those 

compounds that pose the greatest risk. 

The Panel recognized that the current mass-based performance 

requirements in the RFG program may not adequately account for 

and consider that the different exhaust components pose differential levels of risk to public health due in large part to their variable 

potency. 

While the RFG program is considered a general success, experts 

acknowledge that there is some uncertainty in estimating the actual quantity of mobile source emissions. It is difficult to verify the 

emission reductions associated with the RFG program as distinct 

from other mobile source emission reduction programs. In May 

2000, the National Research Council recommended that EPA make 

a number of improvements to the Mobile Source Emissions Factor 

model (MOBILE), including estimation of off-road vehicle emissions 

and incorporation of both mobile source toxic emissions and highemitting vehicles. 

More regular revisions and updating of this model is important 

for air quality planners. S. 791 requires the EPA to expedite resolution of the current complex model which generates important 

fuels-related emissions information and provides input for the MOBILE model so that vehicle manufacturers, fuel makers, air quality 

planners, and Congress have accurate information. 

Oxygenates 

The CAAA required that 2 percent by weight of RFG be oxygen. 

This requirement was not included in the Senate Environment and 

Public Works Committee’s reported version of S. 1630, the Clean 

Air Act Amendments of 1989. It was added on the Senate floor 

after vigorous debate and was the only successful floor amendment. 

Proponents of that requirement had expected ethanol to be the oxygenate of choice for fuel providers. It was not regarded as a manVerDate Jan 31 2003 18:33 Jun 04, 2003 Jkt 19010 PO 00000 Frm 000003 Fmt 06659 Sfmt 06601 E:\HR\OC\SR057.XXX SR057
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date to use ethanol, however, even by its sponsors. During floor debate on the measure, Senator Daschle, a co-sponsor of the amendment, stated that the oxygen standard was fuel neutral. (congressional Record, March 29, 1989, page S3513) Most refiners, blenders, and importers opted to use a cheaper and more easily used oxygenate, MTBE, in many nonattainment areas. MTBE currently is 

used in approximately 80 percent of RFG, while ethanol is used in 

slightly less than 20 percent of that fuel. 

In late 1993, EPA issued final regulations implementing the RFG 

program. In 1994, EPA issued another set of final rules that revised the RFG program. The revisions included a requirement that 

renewable oxygenates be used to meet 30 percent of the 2 percent 

oxygen content requirement in RFG. The 1994 rules were challenged by the American Petroleum Institute and the National Petroleum Refiners Association. The DC Circuit Court of Appeals decided that EPA lacked the authority to impose the renewable requirement and vacated the 1994 rulemaking. 

The principal benefits of oxygenates were the reduction of carbon 

monoxide emissions through more complete fuel combustion and 

the reduction of toxic air pollution. The oxygen content requirement 

formally took effect in 1995 and is currently satisfied by refiner use 

of either MTBE or ethanol. Today, approximately four billion gallons of MTBE and 380 million gallons of ethanol (EtOH) are consumed to meet this requirement. Most of the ethanol is produced 

and consumed in the Midwest region of the country, while MTBE 

use is concentrated in the Northeastern States, Texas, and California. Approximately 3.5 percent of ethanol and 30 percent of 

MTBE is imported. In addition to use in the RFG program, ethanol 

and MTBE are used to help reduce emissions in carbon monoxide 

(CO) nonattainment areas as part of the wintertime oxygenated 

fuels program, which began in 1992. Originally, 40 CO nonattainment areas were required to participate in this winter fuel program. Today 15 areas in ten States participate. Approximately 46 

million gallons of MTBE and 240 million gallons of ethanol are 

used each year to satisfy the oxygenate requirement of this program. 

Section 211(k)(2)(B) of the CAA provides EPA the authority to 

waive the oxygen content requirement for RFG, in whole or in part, 

for an ozone nonattainment area upon the determination by the 

Administrator that compliance with the requirement would prevent 

or interfere with the attainment of a National Ambient Air Quality 

Standard (NAAQS). On April 12, 1999, California submitted to 

EPA a petition requesting such a waiver. EPA subsequently denied 

California’s request. In providing the States with access to this 

waiver authority on the condition of meeting a relatively stringent 

test, and under EPA’s authority under Section 211(c)(4), Congress 

sought to balance the desire for uniformity in our nation’s fuel supply with the obligation to empower States to adopt measures necessary to meet national air quality standards. 

OBJECTIVES OF THE LEGISLATION

The Reliable Fuels Act, S. 791, is intended to address existing 

and potential MTBE contamination. 

In order to accomplish this objective, S. 791 achieves the following items:

5

• Authorizes $200 million from the Leaking Underground Storage Tank (LUST) Trust Fund for State grants to clean up MTBE 

and other ether gasoline additives. Also authorizes an additional 

$200 million from the LUST Trust Fund for State and Federal activities to prevent releases and increase compliance under the UST 

program. • Requires EPA to phase down the use of MTBE within 4 years 

of enactment. However, individual States may authorize the use of 

MTBE within their borders if they so desire. • Mandates the use of 5 billion gallons of renewable fuels introduced into commerce by the year 2012. 

• Expands existing EPA authority to allow for regulation of fuel 

additives for protection of water quality (current law only allows 

for regulation to protect air quality). 

• Repeals the Federal oxygen content requirement for RFG 270 

days after date of enactment. 

• Instructs EPA to require fuel and additive manufacturers to 

conduct tests on a regular basis to determine the health and environmental effects of new fuels and fuel additives. 

• Requires EPA to study the health and environmental impacts 

of using other additives as a substitute for MTBE. 

• Requires EPA to release a draft fuel study within 4 years of 

enactment. The study must contain an analysis of the changes in 

emissions of air pollutants and changes in overall air quality due 

to the use of fuels and fuel additives resulting from this bill. The 

final study must be published not later than 5 years from enactment. • Allows States a more streamlined procedure for disallowing 

the waiver of the Reid Vapor Pressure limitation for ethanol-blended gasoline. • Allows Governors to opt-in both classified and non-classified 

areas of the Ozone Transport Region States to the RFG program. • Authorizes a total of $1 billion over four fiscal years for grants 

to merchant MTBE producers for assisting in the conversion to production of other fuel additives.

AREAS THAT USE REFORMULATED GASOLINE 

as of May 19, 2003

Mandatory areas: 

Los Angeles, CA 

San Diego, CA 

Hartford, CT 

New York City (NY–CT–NJ) 

Greater Philadelphia (PA–NJ–DE–MD) 

Chicago, IL (IL–WI–IN) 

Baltimore, MD 

Houston, TX 

Milwaukee, WI 

Sacramento, CA 

San Joaquin Valley, CA

Opt–In Areas: 

6

AREAS THAT USE REFORMULATED GASOLINE—Continued

as of May 19, 2003

State of Connecticut (that portion not adjacent to NYC or Hartford) 

State of Delaware (that portion not part of Philadelphia area) 

District of Columbia 

Kentucky portion of the Cincinnati Metropolitan Area 

Louisville, KY 

Maryland—the DC suburbs and two other nearby counties 

State of Massachusetts 

St. Louis, MO 

New Hampshire portion of Greater Boston 

The State of New Jersey (that portion not adjacent to NYC or Philadelphia 

area) 

New York—Dutchess County (near NYC) and part of Essex County (upstate) 

State of Rhode Island 

Texas—Dallas/Fort Worth area 

Virginia—the DC suburbs, Richmond, Norfolk–Virginia Beach–Newport 

News 

SECTION-BY-SECTION ANALYSIS

Section 1. Short Title and Table of Contents 

The bill is entitled ‘‘The Reliable Fuels Act.’’

TITLE I—GENERAL PROVISIONS

Sec. 101. Renewable Content of Gasoline 

Section 101 sets forth a comprehensive program to increase the 

use of renewable fuels, in the United States. There are several essential components of the program, which have been carefully designed to achieve the overall goals. Changing any of these essential 

components would undermine the objectives of the program. 

The first essential element is the overall size of the renewable 

fuels mandate, and the schedule for its implementation. To ensure 

that the Administrator of the Environmental Protection Agency has 

adequate time to promulgate regulations for implementation of the 

program, the program begins in 2005. The program starts at 2.6 

billion gallons of renewable fuels in 2005, and escalates to 5.0 billion gallons in 2012. Thereafter, the relative percentage of renewable fuels required, as a percentage of gasoline in 2012, remains 

constant. This phase-in schedule is essential to the success of the 

program. The renewable fuels industry must be given an opportunity to ramp-up production capacity and the petroleum industry 

must be given an opportunity to make adjustments to the refining, 

supply and distribution system necessary to successfully implement 

the program. 

The second essential element is the credit trading program. The 

renewable fuels requirement is expected to be satisfied primarily 

with the addition of ethanol to gasoline. Ethanol blended gasoline 

cannot be transported in pipelines because of ethanol’s affinity for 

water. This means that the ethanol will have to be transported sepVerDate Jan 31 2003 18:33 Jun 04, 2003 Jkt 19010 PO 00000 Frm 000006 Fmt 06659 Sfmt 06601 E:\HR\OC\SR057.XXX SR057
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arately to the terminals by rail, truck, or barge. As the distance 

from the location of ethanol manufacture to the terminal gets larger, so do the costs. In addition, adding ethanol to gasoline increases 

the gasoline’s volatility. If the use of ethanol were required in lowvolatility gasoline the industry would be forced to incur the additional costs of offsetting ethanol’s impact on volatility. The credit 

trading provisions allow the ethanol to be used where it makes the 

most economic and environmental sense while providing a mechanism to transfer those credits back to the point of gasoline production or importation so that refiners, blenders, and importers can 

demonstrate compliance with the renewable fuels obligation. 

The credit banking and trading provisions of the bill give the Administrator the flexibility to design a workable program. While refiners, blenders, and importers will ultimately be responsible for 

meeting the renewable fuels obligation, the fact is that most of the 

ethanol that is required under this program will be added to gasoline at the distribution terminals, because ethanol cannot generally 

be transported with gasoline in pipelines. Under the credit banking 

and trading provisions of the bill, the Administrator is required to 

provide for the ‘‘generation of an appropriate amount of credits by 

any person that refines, blends, distributes or imports gasoline that 

contains renewable fuels’’. This would includes the owners and operators of the distribution terminals. 

The program requires the use of renewable fuels in gasoline. The 

requirement can be met by adding ethanol to gasoline (i.e., gasohol), or through the use of alternative fuels like 70 and 85 percent 

ethanol fuels (i.e., E70, E85). In addition, ethanol made from 

celluosic biomass is encouraged by counting each gallon of ethanol 

produced from cellulosic biomass as if it were 1.5 gallons of cornbased ethanol. This should encourage expansion in the cellulosic 

biomass ethanol industry, which makes ethanol from feedstocks 

like woodchips and switchgrass. In addition, the program allows for 

the generation of credits from the use of biodiesel. 

The renewable fuels obligation is an annual average obligation 

for the use of renewable fuels. It is believed that the use of ethanol 

to meet this requirement will be fairly uniform throughout the 

year. Nevertheless, to ensure this, the Administrator is required to 

assess the use of ethanol throughout the year and in the event that 

less than 35 percent is used in either the winter or summer periods, the Administrator is directed to promulgate regulations to ensure that at least 35 percent of the required amount is used in each 

period. If the Administrator promulgates such rules, the life of 

credits will be extended for an additional year. 

The bill provides for waivers from the program under certain circumstances. Upon petition by one or more States, the bill allows 

the Administrator to waive the program, in whole or in part, based 

on a determination that the renewable fuel requirement would severely harm the economy or environment of a State, region, or the 

U.S. in general, or based on a determination that there is an inadequate domestic supply or distribution capacity to meet the renewable fuel requirement. The bill requires the Secretary of Energy to 

assess whether the program requirements would likely result in 

significant adverse impacts on consumers in calendar year 2005 

and if so, requires the program to be waived in calendar year 2005 

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to avoid any such adverse impacts on a national, regional or State 

basis. 

In addition, the bill exempts small refineries from participating 

in the program until 2011, and requires this exemption to be extended for not less than 2 years for any small refinery for which 

compliance with the program is found to impose a disproportionate 

economic hardship as determined by a study conducted by the Secretary of Energy. In the bill, small refineries are allowed to waive 

this exemption and opt-in to the program earlier than 2011, as well 

as petition for an extension of the exemption at any time. 

The bill also requires that a market concentration analysis of the 

ethanol production industry be performed annually by the Federal 

Trade Commission (FTC) to determine whether there is sufficient 

competition within the industry. There is concern among some that 

insufficient competition within the industry, particularly in combination with a federally mandated renewable fuel program, could 

lead to price-setting and other anti-competitive behavior. The FTC 

is to use the Herfindahl-Hirschman Index (HHI) to measure market concentration, which is a standard tool used by the FTC and 

the Department of Justice. Any industry with an HHI score above 

1800 is considered to be highly concentrated. The committee recognizes that the HHI is one among many indicators of possible anticompetitive behavior. 

The bill contains a safe-harbor provision regarding the liability 

of manufacturers and distributors of renewable fuels that are subject to the bill’s mandate. The principle behind this provision is 

simple. No one should be subject to tort liability simply for manufacturing or selling a product that was mandated by Congress. This 

provision is very limited. It applies only to claims that a renewable 

fuel mandated by the act is defective in design or manufacture. 

And, it applies only so long as the applicable requirements of section 211 of the Clean Air Act have been met. These requirements 

include both compliance with requests for information about a 

fuel’s public health and environmental effects and compliance with 

any regulations adopted by the Administrator. If these requirements are not met, the safe harbor protection will not be available, 

and liability will be determined under otherwise applicable law. 

This provision does not affect claims based on the wrongful release of a renewable fuel into the environment. Anyone harmed by 

a release of that kind would retain all the rights he has under current law. Also, it also applies only prospectively, so it does not affect any claims that have already been filed as of the effective date. 

Some have argued that imposition of strict product liability is a 

prerequisite for appropriate remedial actions. Congress disagrees. 

First, negligence theories more than suffice to address possible remedial questions. Second, the use and improvement of the UST 

program in this legislation, provides a fair and efficient mechanism 

to address potential contamination problems. Third, strict liability 

theories are highly inefficient mechanisms for addressing water 

quality concerns. For example, a recent report from the Council of 

Economic Advisors found that using the tort system in this way ‘‘is 

extremely inefficient, returning only 20 cents of the tort cost dollar 

for that purpose.’’ (Council of Economic Advisors, Who Pays for 

Tort Liability Claims? An Economic Analysis of the U.S. Tort Liability System, April 2002, at 9). 

9

In Congress, we have considered liability protections in a variety 

of settings, including medical care, firefighter assistance, educational institutions, firearms, nuclear energy, and many other 

areas. The point is that liability protection makes sense when we 

are seeking to protect a greater principle, such as sound public policy or fairness. 

Of course, there is some uncertainty regarding the long-term 

health and environmental effects of renewable fuels. A major 

strength of this bill is its provision requiring EPA to conduct studies of those effects. If those studies show that additional regulation 

is necessary, the Administrator has the authority to initiate a rulemaking. Liability protection under the bill would depend on full 

compliance with any rules that the Administrator may adopt. This 

balanced approach will protect the public from adverse health and 

environmental impacts from renewable fuels while not exposing 

manufacturers and distributors to tort lawsuits for complying with 

the renewable fuels mandate of the bill. 

Some have contended that this provision would give ‘‘polluters 

. . . sweeping liability exemptions for damage to public health or 

the environment resulting from renewable fuels or their use in conventional gasoline.’’ Nothing could be further from the truth. In the 

first place, the safe harbor provision does not affect claims based 

on the wrongful release of a renewable fuel into the environment. 

Those responsible for releases to the environment receive no protection whatsoever. Moreover, the safe harbor only applies if the 

maker or seller of a renewable fuel complies with EPA regulations 

to protect the public health and environment. Under this bill, the 

Administrator has the authority to control or even prohibit the sale 

of renewable fuels that may adversely affect air or water quality 

or the public health. There is no safe harbor if the Administrator’s 

rules are violated. 

Under existing section 211(h) of the Clean Air Act, the Administrator was required to promulgate regulations to reduce the volatility of conventional (i.e., non-reformulated) gasoline by limiting its 

Reid vapor pressure (RVP). Reid vapor pressure is a method for determining gasoline’s volatility. Those regulations have long since 

been established and they require that during the summer highozone season the RVP of conventional gasoline not exceed 9.0 

pounds per square inch (psi) in ozone attainment areas and northern ozone non-attainment areas, and 7.8 psi in southern ozone nonattainment areas. Section 211(h) also recognizes, however, a 1.0 psi 

RVP waiver for gasoline containing 10 percent denatured anhydrous ethanol. This means that under the Agency’s regulations gasoline containing ethanol can have an RVP of 10.0 psi in ozone attainment areas and northern ozone nonattainment areas, and 8.8 

psi in southern ozone nonattainment areas. In addition to the Federal RVP regulations, the Agency has also approved numerous 

State RVP controls under section 211(c)(4)(C) of the Act, upon a 

demonstration by the State that the RVP controls were necessary 

to achieve a national ambient air quality standard and that there 

were no reasonable and practicable non-fuel measures available 

that would bring about timely attainment. 

The one-pound RVP waiver for ethanol blends of conventional 

gasoline is important for supply reasons. Because of the waiver, 

ethanol can be splash blended into finished gasoline at the disVerDate Jan 31 2003 18:33 Jun 04, 2003 Jkt 19010 PO 00000 Frm 000009 Fmt 06659 Sfmt 06601 E:\HR\OC\SR057.XXX SR057
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tribution terminals. In other words, because of the waiver, the gasoline can be sold either with ethanol or without it. In contrast, if 

the waiver were not allowed, special low volatility blendstocks 

would be required to compensate for ethanol’s impact on gasoline 

volatility. This has implications for the supply and distribution of 

gasoline. Without the one-pound waiver, gasoline could be stranded 

if there is not ethanol available to blend with it. Section 819(c) of 

the bill contains provisions to ensure that there is adequate leadtime and that supply considerations are taken into account. 

Section 101(c) of the bill retains the one-pound RVP waiver for 

ethanol blends of conventional gasoline. However, the bill also provides States an expedited process to eliminate the one-pound waiver in any area of a State if the State demonstrates to the Administrator that the one-pound waiver will increase emissions that contribute to air pollution in any area in the State. It is the intent of 

this provision to require such a demonstration for any area of the 

State for which the one-pound waiver would be eliminated. In addition, while it is the intent of this provision to establish an expedited process by which the State can request the Administrator to 

eliminate the one-pound RVP waiver, it is not the intent to expand 

the authority of the Governor of a State beyond what he or she 

may have under State law. Furthermore, it is expected that the 

supporting documentation submitted by the Governor in support of 

the notification to eliminate the one-pound waiver would include a 

detailed analysis, including urban/regional airshed modeling, of the 

impact of the one-pound waiver on air quality in any area of the 

State where the Governor seeks to have the one-pound waiver 

eliminated. 

Sec. 102. Renewable Fuel 

The bill requires the Administrator to conduct, with respect to 

each conventional gasoline use area and each reformulated gasoline 

use area in each State, a survey to determine the market shares 

of various types of fuels with ethanol or renewable fuels. The report is to be submitted to Congress. 

The bill provides limited Federal assistance for the development 

of ethanol production capabilities. It is the committee’s intent that 

such assistance be targeted to those areas of the country that currently has low rates of ethanol production. 

For example, the bill requires the Secretary of Energy to establish a 10-year program to provide Federal loan guarantees for construction of facilities that convert municipal solid waste into fuel 

ethanol. The Secretary is directed to give preference to applicants 

located in markets with the greatest need for such a facility, either 

because of limited availability of land for waste disposal or because 

of a high level of demand for fuel ethanol due to low local production rates of fuel ethanol. 

The bill also requires the Administrator to provide grants for the 

research, development, and implementation of renewable fuel production technologies. Grant eligibility is limited to entities located 

in ‘‘RFG States,’’ or States containing one or more covered areas as 

defined in section 211(k)(10)(D) of the Clean Air Act (42 U.S.C. 

7411(k)(10)(D)). Eligible entities must be academic institutions or 

consortia comprised of combinations of academic institutions, industry, and government in such States. The bill authorizes $25 milVerDate Jan 31 2003 18:33 Jun 04, 2003 Jkt 19010 PO 00000 Frm 000010 Fmt 06659 Sfmt 06601 E:\HR\OC\SR057.XXX SR057
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lion for each of fiscal years 2004 through 2008 for the grant program. 

In addition, the bill allows the Secretary of Energy to provide 

grants to merchant producers of cellulosic biomass ethanol to assist 

in the construction of production facilities in the United States that 

use cellulosic biomass feedstocks derived from agricultural residues 

or municipal solid waste. The bill authorizes $750 million for such 

grants for fiscal years 2004 through 2006. 

Sec. 103. Survey of Renewable Fuels Consumption 

The bill requires the Administrator to conduct and publish a survey of renewable fuels consumption in the motor vehicle fuels market on a monthly basis. In developing and conducting this survey, 

the Administrator shall protect the confidentiality of the responses 

to the survey and shall include the bill’s specified elements of the 

survey. 

TITLE II—FEDERAL REFORMULATED FUELS

Sec. 201. Short Title 

This subtitle may be cited as the ‘‘Federal Reformulated Fuels 

Act of 2003.’’

Sec. 202. Leaking Underground Storage Tanks 

SUMMARY

The bill authorizes appropriations not to exceed $200 million 

from the Leaking Underground Storage Tank (LUST) Trust Fund 

to be used for cleanup and treatment of MTBE. The bill authorizes 

an additional $200 million over 6 years from the LUST Trust Fund 

for EPA and States to conduct inspections, issue orders, and bring 

actions under Subtitle I of the Solid Waste Disposal Act. 

DISCUSSION

In 1984, Congress enacted, as Subtitle I of the Solid Waste Disposal Act, a comprehensive program to address the problem of leaking underground storage tanks. Among other things, the program 

required EPA to develop leak detection and prevention standards 

for underground storage tanks (USTs). It authorized the Agency to 

compel tank owners and operators either to take corrective action 

to clean up leaking tanks and comply with standards for USTs or 

to close the tanks. States have largely taken the lead in implementing and enforcing the program requirements, including corrective action requirements. 

States receive Federal funds from the LUST Trust Fund. Revenue for this Fund comes from a one-tenth of one cent tax on all 

petroleum products. This tax generates approximately $170 million 

per year. The interest on the principal in the fund generates approximately $70 million annually (roughly the amount of annual 

appropriations from the LUST Trust Fund). 

Amounts are appropriated each year from the Trust Fund for the 

States and EPA to implement and enforce the UST corrective action requirements; to conduct cleanups in certain limited situations 

where there is no financially viable responsible party or where a 

responsible party fails to undertake the appropriate corrective acVerDate Jan 31 2003 18:33 Jun 04, 2003 Jkt 19010 PO 00000 Frm 000011 Fmt 06659 Sfmt 06601 E:\HR\OC\SR057.XXX SR057
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tion; to take corrective action in cases of emergency; and to bring 

cost recovery actions against parties to seek reimbursement of costs 

expended from the Fund to clean up sites. The balance of the Trust 

Fund is approximately $1.3 billion. The annual appropriation from 

the Trust Fund for fiscal year 2001 was approximately $72 million. 

Congress has appropriated approximately $10 million per year 

from general revenues for State implementation of leak prevention 

and detection programs. 

In addition to the Federal LUST Trust Fund, many States have 

also established funds, capitalized through State gas taxes, fees, 

and other mechanisms, to pay for cleanups and to provide assistance to tank owners in complying with other requirements. States 

spend approximately $1 billion per year from their trust funds. In 

recent years, however, the claims against those funds have risen 

dramatically. 

More than a million leaking USTs have been closed under this 

program., EPA estimates that over 740,000 active USTs contain petroleum products. Some of these tanks have leaks, causing potential harm to human health and the environment. A number of recent, high profile contamination cases have highlighted this problem. MTBE has been detected at thousands of leaking UST sites. 

In some cases, drinking water wells have been closed due to these 

releases of MTBE. According to EPA, States have reported more 

than 400,000 confirmed releases from USTs. Cleanups have been 

initiated for approximately 357,000 releases and almost 242,000 

cleanups have been completed. In spite of this progress, many 

thousands of cleanups remain to be completed. EPA, States, and 

the private sector have suggested that lack of resources, both for 

cleanup and for inspections and enforcement, have limited efforts 

to fully address MTBE contamination and leaking USTs. Title 2 of 

this bill addresses these concerns. 

Section 2 reconfirms the authority of the Administrator and the 

States to use funds from the LUST Trust Fund for the cleanup of 

sites contaminated by MTBE from leaking USTs. In addition, Section 2(a) authorizes the Administrator and the States to conduct 

such cleanup activities using specifically designated funds made 

available under new Section 9011(a) from the LUST Trust Fund. 

In order to undertake a corrective action under this subsection, the 

Administrator or a State must still comply with the requirements 

of Section 9003(h)(2) of the Solid Waste Disposal Act. States are to 

exercise this authority in accordance with their cooperative agreements. 

Relatively low levels of MTBE can be detected in groundwater. 

The detection of MTBE, by taste and smell, can make the water 

unpalatable, but not necessarily harmful. This section amends Section 9003 of the Solid Waste Disposal Act to clarify that the Administrator and the States may undertake corrective actions whenever 

the presence of MTBE in groundwater presents a threat to public 

welfare, even in situations where the level of MTBE is not so high 

as to present a threat to human health. 

Section 2 amends Subtitle I of the Solid Waste Disposal Act by 

creating a new Section 9010 giving States greater flexibility in 

their use of LUST funds. New Section 9010 authorizes EPA and 

the States to use funds appropriated from the LUST Trust Fund 

to conduct inspections, issue orders, or bring actions under Subtitle 

13

I. Funding authorized under this section is for both formal enforcement actions, such as judicial actions and administrative orders, 

and related measures to secure compliance, such as notices of violation or warnings. This increased funding for inspections and enforcement related activities will enable States and EPA to secure 

greater compliance with UST standards. Increased compliance will 

avoid future releases and resulting cleanup costs. Funds authorized 

under this provision may be used for cost recovery. 

This section does not change current law on State authority 

under authorized programs or Federal authority to enforce the requirements of Subtitle I. Nor does this provision affect EPA’s authority to use other funds to enforce the UST program. EPA receives funding from sources other than the LUST Trust Fund to 

undertake inspection and enforcement related activities for leak detection and other preventive requirements. Any LUST Trust Fund 

appropriations used for such enforcement activities by EPA are expected to supplement funds that the Agency has been receiving, 

and will continue to receive, from sources other than the LUST 

Trust Fund. 

In addition to authorizing funding for States and EPA for federally authorized programs, this section authorizes States to use 

funds to undertake inspection and enforcement related actions for 

State tank leak detection, prevention, and other requirements 

through State programs with requirements that are similar or 

identical to Subtitle I. State agencies currently receive funding 

from EPA from sources other than the LUST Trust Fund to undertake such activities for leak detection and other preventive requirements. It is expected that States will continue to receive funding 

from EPA from these other sources, as well as from the LUST 

Trust Fund, for these activities. Any LUST Trust Fund appropriations used for enforcement related activities by States should supplement funds that the States have been receiving, and will continue to receive, through grants authorized under Section 2007(f). 

Section 2 also creates a new Section 9011 to increase the levels 

of authorized funding for measures related to corrective actions and 

enforcement. This section authorizes appropriations for two major 

and equally important activities—funding an immediate need to 

address MTBE, which is currently coming from leaking underground tanks and is creating problems in numerous drinking water 

wells, and facilitating inspection and enforcement activities to 

avoid similar problems being created in the future. Section 9011(1) 

authorizes a one-time appropriation of $200 million for corrective 

actions with respect to MTBE. The bill authorizes substantial funding to clean up MTBE contamination in recognition of the fact that 

this problem has arisen, in part, as a result of increased use of 

MTBE by refiners in an effort to meet Federal oxygenate requirements. Section 9011(2) authorizes an additional $200 million over 

the period between fiscal years 2002 through 2007 to conduct inspections or issue orders or bring actions under Subtitle I. There 

is broad consensus that more resources are needed to conduct inspections to ensure that underground tanks comply with applicable 

regulations and to ensure early detection of leaks and other problems. EPA has estimated that it would cost approximately $93 million over what is currently appropriated for the first year, and $70 

million each year thereafter, to inspect facilities on an annual 

14

basis. A biannual inspection schedule would cost approximately $63 

million over what is currently appropriated for the first 2 years 

combined, and $20 million additional annually thereafter. 

Sec. 203. Restriction on the Use of MTBE 

SUMMARY

Section 203 restricts the use of MTBE, but allows States to individually authorize the sale and use of MTBE within their own borders. 

DISCUSSION

While the States can authorize the sale and use of MTBE, they 

cannot require its sale or use. Section 203 also clarifies the Administrator’s authority to allow trace quantities of MTBE notwithstanding the prohibition on MTBE use. This provision recognizes 

that MTBE has been used in gasoline for over 20 years, and as 

such will be present in trace quantities throughout the distribution 

system even after its use in motor fuels is prohibited. Recognition 

of such trace quantities is also appropriate because MTBE may be 

generated as a trace byproduct in the production of other gasoline 

components. 

The bill provides for transition assistance to merchant MTBE 

manufacturers. To be eligible for such assistance, the manufacturer 

must be making MTBE at time of enactment through the time that 

the prohibition on MTBE use takes effect. This provision recognizes 

that although Congress has reconsidered the relative value of 

MTBE, Congress also recognizes that MTBE is an integral part of 

the fuels system as a result of the reformulated gasoline oxygen 

content requirement and that lead-time must be provided to allow 

the industry to transition to substitutes. Essentially, transition assistance is premised on the facts that: (1) MTBE is widely used because of a Federal mandate, the oxygen content requirement; (2) 

MTBE has been effective in addressing the energy and environmental concerns that lay at the heart of a larger Federal program 

requiring the use of RFG; (3) the government, as a result of the 

first two points, bears great responsibility for any attendant losses 

attributable to the change in legal status of MTBE; and (4) failure 

to address the consequences of this change in status may undermine any incentive for additive manufacturers to produce new generations of additives that will be needed to replace MTBE and to 

meet future energy and environmental goals. 

Sec. 204. Elimination of the Oxygen Requirement for Reformulated 

Gasoline 

In addition to repealing the reformulated gasoline oxygen content 

requirement and ensuring that the air toxics benefits of the reformulated gasoline program are maintained, this provision requires 

EPA to simplify the existing reformulated gasoline regulations by 

replacing the less stringent VOC Control Region 2 requirements 

with the more stringent VOC Control Region 1 requirements. 

(204(d)) This change has no effect on the VOC adjustment that currently applies to ethanol blends of reformulated gasoline in Milwaukee and Chicago or on the Agency’s authority to expand that 

adjustment to other reformulated gasoline areas. 

15

Section 204(b). The goal of this provision is to ensure that real 

world air toxic emission reduction benefits are maintained, as recommended by EPA’s Blue Ribbon Panel on Oxygenates in Gasoline. 

The petroleum industry did much better than required by law 

when it came to reducing toxic air pollutant emissions from reformulated gasoline. In fact, the industry did better in Phase I (1995–

1999) of the reformulated gasoline program than it was even required to do under the more stringent Phase II (2000 and beyond) 

requirements. Concerns were raised by the Blue Ribbon Panel that 

some of these real world benefits could be lost as a result of repeal 

of the reformulated gasoline oxygen mandate and phase-down in 

MTBE use. This provision ensures that those real world benefits 

are not lost. 

To ensure that the air toxics benefits of the reformulated gasoline program are maintained, the Administrator promulgated the 

Mobile Source Air Toxics Rule (MSAT Rule) on March 29, 2001. 

That rule requires that refineries and importers continue to attain 

the same level of air toxics performance that they attained in 

1998–2000. The more stringent standards imposed by the rule do 

not apply to incremental volumes of reformulated gasoline production, i.e., production in excess of what the particular refinery or importer produced in 1998–2000. Gasoline production above the baseline volumes is subject to the Phase II reformulated gasoline standards, which require a 21.5 percent reduction in aggregate air toxics 

emissions reductions, relative to 1990 baseline levels. EPA excluded these incremental volumes from the more stringent standard because the Agency did not want to discourage the production 

of reformulated gasoline and because the incremental volume adjustment is ‘‘unlikely to have a material impact on air toxic emissions from gasoline.’’ 66 Fed. Reg. 17230, 17249 (March 29, 2001). 

Section 204(b) of the bill improves EPA’s existing rule in two 

ways. The provision requires EPA to promulgate a rule within 270 

days of enactment to establish ‘‘for each refinery or importer (other 

than a refinery or importer in a State that has received a waiver 

under section 209(b) with regard to gasoline produced for use in 

that State), standards for toxic air pollutants from use of the reformulated gasoline produced or distributed by the refinery or importer that maintain the reduction of the average annual aggregate 

emissions of toxic air pollutants for reformulated gasoline produced 

or distributed by the refinery or importer during calendar year 

1999 and 2000 ....’’ It is the intent of this provision that EPA 

expeditiously revise the mobile source air toxics rule promulgated 

on March 29, 2001, to change the baseline provisions from 1998–

2000 as in the existing rule to 1999–2000. 

In addition, to ensure that the average annual aggregate air 

toxic emission reduction benefits are maintained on a regional 

basis, defined to be a PADD (Petroleum Administration for Defense 

District), the Administrator is required to continue to monitor average annual aggregate air toxics emissions to ensure that the performance achieved in 1999–2000 is maintained into the future. If 

the Administrator determines that average annual aggregate air 

toxics emission reductions are not maintained in any PADD, relative to 1999–2000 performance, the Administrator is required to 

expeditiously revise the mobile source air toxics rule to eliminate 

16

the incremental volume exclusion in MSAT for reformulated gasoline. 

Section 204(c) permits commingling at retail stations of Reformulated Gasoline (RFG) containing ethanol and RFG that does not 

contain ethanol. This provision is intended to increase retailer 

flexibility during times of tight RFG supplies by permitting them 

to switch between different types of RFGs without draining their 

underground storage tanks, while at the same time maintaining 

environmental protections inherent in the RFG program. This provision will be included in section 211(k) of the Clean Air Act. 

As a practical matter, commingling is unlikely to occur on a regular basis. Most gasoline markets are not likely to be supplied with 

various gasoline formulations. In addition, it is undesirable for retailers to switch back and forth between ethanol-blended and other 

types of gasoline due to the effects that ethanol has on dispenser 

seals, and the need for more frequent filter change-outs. However, 

if faced with a tight market, a commingling allowance provides 

flexibility to retailers to supply gasoline to end-users. 

There is concern that widespread commingling of ethanol with 

non-RVP-adjusted gasolines could increase VOC emissions. This 

section requires that retailers certify that the commingled product 

meet all content and emissions performance standards for reformulated gasoline. In addition, emission control strategies already in 

place would limit the amount of VOCs that could actually escape 

into the environment. These include Stage I&II vapor recovery (in 

nonattainment areas), pressure/vacuum valves on tank vents, onboard refueling vapor recovery systems, and on-board vehicle vapor 

controls. This provision is not intended to authorize or allow the 

U.S. Environmental Protection Agency or any other State or Federal Government agency to require that gasoline be reformulated 

to provide an adjustment to offset any potential VOC emissions increase from retail commingling. 

In addition, any party other than the retailer shall not be subject 

to an enforcement action or penalties under section (d) solely arising from the commingling of compliant gasolines by the retailer, 

unless the other party caused commingling that was not intended 

by the retailer or unless the other party failed to complete the 

quality assurance and oversight measures specified under current 

gasoline regulations. 

Section 204(e) This provision expressly preserves baseline adjustments granted previously under 40 CFR 80.915(g) of the Mobile 

Source Air Toxic rule, but only to the extent they are based on the 

1999–2000 base period adopted by this Section. It also allows the 

Administrator to make adjustments applicable to the refinery specific standards that a refiner must meet under clause (b)(2) of Section 204. 

The Administrator may, but is not required, to change a ‘‘clean 

gasoline producer’’ baseline adjustment to reflect the Federal 

MTBE ban, but may not lower a refiner’s baseline to less than the 

average reduction in toxic air emissions in reformulated gasoline 

supplied to PADD I during the calendar years 1999–2000. 

17

Sec. 205. Public Health and Environmental Impacts of Fuels and 

Fuel Additives 

SUMMARY

The bill directs the Administrator to require tests to determine 

potential public health effects of fuels or fuel additives prior to registering fuels or fuel additives and during their use. Studies under 

this provision will be conducted on a regular basis. In addition, 

EPA is instructed to study the health and environmental impacts 

of using ETBE and other additives as a substitute for MTBE. 

DISCUSSION

The existing law requires the Administrator to require fuel and 

additive manufacturers to conduct tests to determine the potential 

health and environmental effects of fuels and fuel additives. 

The Administrator should use this authority to identify and assess any adverse public health, welfare, or environmental effects 

from the use of motor vehicle fuels or fuel additives or the combustion products of such fuels or fuel additives. The Administrator 

should use the authority to assess threats to both air pollution and 

water pollution in order to effectively exercise the authority in Section 211(c) as amended by this legislation. This provision is intended to prevent situations such as the one presented by MTBE 

contamination of water supplies. 

To avoid such recurrences, the Blue Ribbon Panel on Oxygenates 

in Gasoline recommended that EPA and others accelerate ongoing 

research efforts into the inhalation and ingestion health effects, air 

emission transformation byproducts, and environmental behavior of 

all oxygenates and other components likely to increase in the absence of MTBE. This should include research on ethanol, alkylates, 

and aromatics, as well as on gasoline compositions containing those 

components. 

Sec. 206. Analyses of Motor Vehicle Fuel Changes 

SUMMARY

Section 206 requires the Administrator to publish an analysis of 

the changes in emissions of air pollutants and air quality due to 

the implementation of the provisions in S. 791. The analysis is to 

examine changes in all motor vehicle fuels and fuel additives and 

must attempt to identify and quantify any increase in emissions or 

air pollution caused by implementing this bill. A draft analysis is 

to be published within 4 years of enactment, and a final analysis 

is to be published within 5 years of enactment. The Administrator 

should include in the analysis consideration of direct and evaporative emissions, as well as combustion by-products, from the use 

of these fuels and fuel additives in highway and non-road vehicles. 

Section 206 requires the Administrator to develop and finalize an 

emissions model that reasonably reflects the effects of characteristics or components of motor vehicle fuel or emissions from vehicles 

in the motor vehicle fleet during calendar year 2006. 

DISCUSSION

Section 211(c) of the CAA, as amended by this legislation, provides the Administrator with the authority to regulate, control, or 

18

prohibit the manufacture, introduction into commerce, offering for 

sale, or sale of any fuel or fuel additive, if, in the judgment of the 

Administrator, the fuel or fuel additive or emission product causes 

or contributes to air pollution or water pollution that may reasonably be anticipated to endanger the public health or welfare. The 

bill requires the Administrator to exercise this authority with respect to MTBE. The bill also adds water quality as an environmental protection criterion in Title II of the Act. 

Section 202(l) of the Act requires the Administrator to exercise 

the authorities in Sections 211(c) and 202(a) and to promulgate, 

and from time to time revise, regulations containing reasonable requirements to control hazardous air pollutants from motor vehicles 

and fuels. The regulations must reflect the greatest degree of reductions achievable, considering cost and projected available technology, and must focus on those categories of emissions that pose 

the greatest risk to human health or about which significant uncertainties remain. 

The emissions model currently used by EPA to determine compliance in both the RFG and conventional anti-dumping gasoline programs is called the complex model. It uses 1990 average gasoline 

quality and 1990 model year motor vehicle technology as its baseline, and models how changes in gasoline qualities change emissions of these vehicles compared to 1990 gasoline. For purposes of 

this provision, EPA is authorized to update its complex model to 

address changes in motor vehicle technology since 1990. The motor 

vehicle fleet in calendar year 2005 will be different from model 

year 1990 vehicles. The updated model is expected to contain a mix 

of technologies with, for example, the newer Tier 2 technology entering the fleet. 

Developing an emissions model that reflects the actual mix of 

motor vehicle technologies in the fleet during calendar year 2006 

allows EPA to reasonably determine the change in emissions between 1999–2000 and 2005–2006 due to changes in gasoline, as the 

2006 calendar year fleet should still contain the kinds of technologies found in the prior years, although with a different mix of 

technologies. EPA should work with a consortium of the automobile 

and oil industries and other interested and qualified parties to design and conduct the extensive vehicle and fuel combination testing 

that will be necessary to update the complex model, as was done 

in developing the current complex model. 

An updated complex model may be useful for other related applications, such as emissions modeling for State planning. EPA could 

use the updated model in the RFG and conventional gasoline programs, including future RFG rulemakings, where doing so would 

not be inconsistent with the provisions of Section 211(k). 

Sec. 207. Additional Opt-In Areas Under Reformulated Gasoline 

Program 

SUMMARY

This section of the bill provides explicit State authority to allow 

non-classified areas in the Ozone Transport Region to opt-in to the 

RFG program. 

19

DISCUSSION

Currently, 17 States and the District of Columbia rely on the 

RFG program as an emissions control strategy. Appendix II provides a complete list of all RFG areas. The CAAA mandated use 

of RFG in nine areas. Several States (13) have exercised the optin authority of Section 211(k)(6) to require the use of RFG. Areas 

that opted in to the RFG program prior to January 1, 2000, are required to use RFG until December 31, 2003. The Act limits opt-in 

actions to areas that previously violated the 1-hour ozone NAAQS 

and are classified according to their current status in relation to attainment of the NAAQS. States expend considerable resources in 

an effort to avoid violating the NAAQS because of the stringent requirements imposed on nonattainment areas by the CAA. This section allows use of the RFG program for those areas in the Ozone 

Transport Region that seek to use it as an emissions control technique in the State’s strategy for avoiding new violations of the 

NAAQS. Under this provision, once the SIP revision is approved 

the area will be a covered area under the Federal program. 

Sec. 208. Federal Enforcement of State Fuels Requirements 

SUMMARY

This provision requires EPA to enforce State fuels controls and 

prohibitions approved by the Administrator under section 

211(c)(4)(C) of the Act, if the State so requests. 

DISCUSSION

Under section 211(c)(4)(C), EPA may approve an otherwise preempted State fuel control or prohibition if the State submits a revised implementation plan to the Administrator and demonstrates 

that the State fuel controls or prohibitions are necessary to achieve 

the national ambient air quality standard that the State’s plan implements and that there are no other reasonable and practicable 

non-fuel measures available that would bring about timely attainment. Because of the national character of the fuels industry and 

the way that fuels are distributed in fungible streams, State fuel 

controls and prohibitions have long been recognized as the control 

of last resort. The new provision does not change these basic principles. The States would still be required to submit a revised implementation plan that meets the requirements of section 110 of the 

Act, including the requirement that the controls be enforceable by 

the State as a practical matter. This means that States are still required to have their own enforcement programs if they want to impose fuel controls or prohibitions that differ from the controls and 

prohibitions imposed by EPA under section 211 of the Act. The only 

effect of the new provision is that if a State meets all of the existing requirements under section 110 and 211(c)(4), the State can request that the Administrator take a more active role in enforcement of those regulations. 

20

Sec. 209. Fuel System Requirements Harmonization Study 

SUMMARY

The Administrator of the Environmental Protection Agency and 

the Secretary of Energy shall jointly conduct a study of Federal, 

State, and local requirements concerning motor vehicle fuels. 

DISCUSSION

In the last several years, multiple unique gasoline blends required in different parts of the country have led to reduced 

fungibility in gasoline distribution systems and exacerbated shortages when supply disruptions have occurred. Several studies of this 

‘‘boutique fuels’’ problem have identified it as a contributing factor 

to increased price volatility and market tightness. This bill takes 

the first step in addressing boutique fuels by making major 

changes to Federal fuels requirements: a Federal phase-out of 

MTBE; repeal of the RFG oxygen content mandate; and a new Renewable Fuels Standard with a credit banking and trading program. Section 209 takes the next step by requiring DOE and EPA 

to conduct a comprehensive study on how the various fuels requirements affect several things, including (1) the supply of fuels available to consumers; (2) achievement of air quality goals; (3) the fuel 

distribution system; and (4) industry investment in new capacity. 

The EPA and DOE are to recommend to Congress potential 

changes to harmonize fuels requirements nationally and reduce the 

number of specialty fuels. The report recommendations are required to take into account the need to provide advance notice of 

required modifications to refinery and fuel distribution systems in 

order to ensure an adequate supply of motor vehicle fuel in all 

States. 

LEGISLATIVE HISTORY

S. 791 was introduced by Senator Inhofe, on April 4, 2003, and 

was referred to the Committee on Environment and Public Works. 

The committee considered and amended the bill in a business 

meeting on April 9, 2003, and ordered the bill favorably reported, 

as amended by the committee, to the Senate. During the 107th 

Congress, the committee favorably reported a related bill, S. 950, 

the Reformulated Fuels Act, which did not pass the Senate. 

HEARINGS

On March 20, 2003, the Subcommittee on Clean Air, Climate 

Change, and Nuclear Safety held a non-legislative hearing on alternative fuels and fuel additives. The witnesses providing testimony 

were Hon. Jeffrey R. Holmstead, Assistant Administrator for Air 

and Radiation, U.S. Environmental Protection Agency; Hon. David 

Garman, Assistant Secretary for Renewable Energy, U.S. Department of Energy; Mary Hutzler, Director, Office of Integrated Analysis and Forecasting, Energy Information Administration; Fred 

Yoder, President, National Corn Growers Association; Dr. Edward 

Murphy, Downstream General Manager, American Petroleum Institute; Robert Slaughter, President, National Petrochemical and 

Refiners Association; Scott Segal, Partner, Bracewell and Patterson, L.L.P.; Rich Wagman, First Vice Chairman of ARTBA, PresiVerDate Jan 31 2003 18:33 Jun 04, 2003 Jkt 19010 PO 00000 Frm 000020 Fmt 06659 Sfmt 06601 E:\HR\OC\SR057.XXX SR057
21

dent of G.A. and F.C. Wagman, York, Pennsylvania, on behalf of 

the American Road and Transportation Builders Association; A. 

Blakeman Early, Consultant, American Lung Association; Paul J. 

Granger, P.E., Superintendent, Plainview Water District, Plainview, New York; and Craig Perkins, Director, Environment and 

Public Works Management, Santa Monica, California. 

During the 105th through the 107th Congresses, the committee 

held hearings on the use of oxygenated fuels under the requirements of the Clean Air Act. 

On December 9, 1997, the Committee on Environment and Public 

Works held a field hearing in Sacramento, CA on the presence of 

MTBE in the nation’s water supply. Testimony was given by Nancy 

J. Balter, Principal, Center for Environmental Health and Human 

Toxicology, and former Associate Professor of pharmacology, 

Georgetown University Medical Center; Nachman Brautbar, Professor of clinical medicine, University of Southern California School 

of Medicine; Cynthia Dougherty, Director, Office of Groundwater 

and Drinking Water, Environmental Protection Agency; Stephen K. 

Hall, Executive Director, Association of California Water Agencies; 

The Honorable Tom Hayden, California State Senator; The Honorable Richard Mountjoy, California State Senator; Gary Patton, 

Counsel, The Planning and Conservation League; Craig Perkins, 

Director of Environment and Public Works Management, City of 

Santa Monica, California; Peter M. Rooney, Secretary, California 

State Environmental Protection Agency; David Spath, Chief, Drinking Water and Environmental Management Division, California 

State Environmental Protection Agency; and John Zogorski, Chief 

of National Synthesis on Volatile Organic Compounds and MTBE, 

U.S. Geological Survey. 

On September 16, 1998, the Committee on Environment and 

Public Works held a hearing on S. 1576, a bill to amend the Clean 

Air Act to permit the exclusive application of California State regulations regarding reformulated gasoline in certain areas within the 

State. Testimony was given by The Honorable Brian Bilbray, U.S. 

Representative from the State of California; John D. Dunlap, III, 

Chairman, California Air Resources Board; Douglas A. Durante, 

Executive Director, Clean Fuels Development Coalition; The Honorable Dianne Feinstein, U.S. Senator from the State of California; 

Daniel S. Greenbaum, President, Health Effects Institute; Al 

Jessel, Senior Fuels Specialist, Chevron Products Company; and 

Ned Sullivan, Commissioner, Maine Department of Environmental 

Conservation. 

On October 5, 1999, the Subcommittee on Clean Air, Wetlands, 

Private Property and Nuclear Safety of the Committee on Environment and Public Works held a hearing on the Blue Ribbon Panel 

findings on MTBE. Testimony was given by Robert H. Campbell, 

Chairman and Chief Executive Officer, Sunoco, Inc.; The Honorable 

Jake Garn, Vice Chairman, Huntsman Corporation; Daniel S. 

Greenbaum, President, Health Effects Institute; and Michael P. 

Kenny, Executive Officer, California Air Resources Board. 

On June 14, 2000, the Subcommittee on Clean Air, Wetlands, 

Private Property and Nuclear Safety of the Committee on Environment and Public Works held a hearing on the environmental benefits and impacts of ethanol under the Clean Air Act. Testimony was 

given by Dan Greenbaum, President, Health Effects Institute; 

22

Blake Early, Environmental Consultant, American Lung Association; Michael Graboski, Director, Colorado Institute for Fuels and 

High Altitude Engine Research, Colorado Department of Chemical 

Engineering, Colorado School of Mines; Bob Slaughter, Director, 

National Petrochemical & Refiners Association; Jack Huggins, Vice 

President, Williams Energy Services; Jason Grumet, Executive Director, Northeast States for Coordinated Air Use Management; Stephen Gatto, President and Chief Executive Officer, BC International; Gordon Proctor, Director, Ohio Department of Transportation; The Honorable Charles Grassley, United States Senator 

from the State of Iowa; The Honorable Tom Harkin, United States 

Senator from the State of Iowa; The Honorable Richard Durbin, 

United States Senator from the State of Illinois. 

On April 27, 2001, at the Media Center, Salem High School, 

Salem, NH, the committee received testimony on the use of the 

gasoline additive methyl tertiary butyl ether (MTBE), from Christina Miller, homeowner, Derry NH; Hon. Arthur Klemm, New 

Hampshire State Senator, Windham, NH; Robert Varney, Commissioner, New Hampshire Department of Environmental Services, 

Concord, NH; Nancy Kinner, Professor of Civil Engineering, University of New Hampshire, Durham, NH; William Holmberg, 

Biofuel Refiner, Bow, NH; Patty Aho, Executive Director, Maine 

Petroleum Association, Augusta, ME. 

ROLLCALL VOTES

The Committee on Environment and Public Works met to consider S. 791 on April 9, 2003. During consideration of the bill, the 

following amendments were agreed to by voice vote: an amendment 

offered by Senator Murkowski, as amended by her second degree 

amendment, exempting Alaska and Hawaii from certain ethanol 

provisions of the bill; an amendment offered by Senator Clinton, 

modified by a second degree amendment, relative to ethanol market concentration analysis; an amendment offered by Senator Clinton, relative to cellulosic biomass ethanol; an amendment offered 

by Senator Clinton, relative to emissions of toxic pollutants; an 

amendment offered by Senator Clinton, relative to loan guarantees 

for conversion of solid waste facilities to ethanol; an amendment offered by Senator Boxer, modified by an amendment offered by Senator Clinton, relative to research and development of new technologies for cellulosic biomass; an amendment offered by Senator 

Boxer, relative to State and local participation in renewable fuel reports; and three amendments offered by Sentor Boxer, relative to 

health effects on children, pregnant women, and sensitive populations. An amendment offered by Senator Boxer concerning liability treatment of fuels and additives was defeated by 10 noes to 9 

ayes. Voting against the Boxer amendment were Senators Inhofe, 

Baucus, Bond, Crapo, Voinovich, Chafee, Cornyn, Murkowski, 

Thomas, and Allard. Voting in favor were Senators Jeffords, Warner, Reid, Graham, Lieberman, Boxer, Wyden, Carper, and Clinton. 

The bill was ordered reported to the Senate, as amended, by voice 

vote. 

23

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 regulatory authority granted by this bill is structured to 

streamline and make flexible the imposition of any new requirements. 

Section 101 requires the Administrator of the EPA to issue regulations to establish a renewable fuel content requirement applicable to all refineries, blenders, distributors and importers of gasoline 

sold or introduced into commerce in the United States, except in 

Alaska or Hawaii. 

Under Section 203, no regulatory action is required to effect the 

phaseout of MTBE, though the Administrator will need to issue 

regulations to implement and enforce this phaseout. The Administrator’s existing authority to limit the use of fuels or fuel additives 

is expanded by the bill to allow consideration of water pollution effects. 

Section 204 requires EPA to promulgate regulations to establish 

new performance standards for toxic emissions within 270 days of 

enactment. In the event that refiners’ toxics reduction performance 

does not achieve at least the 1999–2000 average in a region, EPA 

must promulgate revised regulations to assure such performance. 

Compliance with the performance standards is managed through 

existing regulatory structures under Section 211(k) of the CAA. 

Also in section 204, EPA must revise the current RFG regulations to ensure that northern RFG gasoline will meet the more 

stringent VOC requirements of southern RFG. 

The provisions in Section 207 regarding additional opt-in areas 

rely entirely on existing authority and regulatory structures for revisions and approvals of SIPs. 

MANDATES ASSESSMENT

In compliance with the Unfunded Mandates Reform Act of 1995 

(Public Law 104–4), the committee finds that S. 791 would impose 

no significant Federal intergovernmental unfunded mandates 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:

U.S. CONGRESS, 

CONGRESSIONAL BUDGET OFFICE, 

Washington, DC, May 6, 2003.

Hon. JAMES M. 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. 791, the Reliable Fuels Act. 

24

If you wish further details on this estimate, we will be pleased 

to provide them. The CBO staff contact is Susanne S. Mehlman (for 

Federal costs), who can be reached at 226–2860, Greg Waring (for 

the State and local impact), who can be reached at 225–3220, and 

Lauren Marks (for the private-sector impact), who can be reached 

at 226–2940. 

Sincerely, 

DOUGLAS HOLTZ-EAKIN

S. 791, Reliable Fuels Act, As ordered reported by the Senate Committee on Environment and Public Works on April 9, 2003

Summary 

Under S. 791, methyl tertiary butyl ether (known as MTBE), a 

widely used motor fuel additive, would be banned 4 years after enactment of the bill—except individual States could choose to continue to allow the use of MTBE by notifying the administrator of 

the Environmental Protection Agency (EPA). The bill would eliminate a requirement under current law for motor fuel to contain 

oxygenates and would require that all motor fuels sold by a refiner, 

blender, or importer contain specified amounts of renewable fuel. 

This renewable fuel standard would largely be met by adding ethanol to gasoline. S. 791 also would authorize funding for several 

grant programs to support research and development of renewable 

fuels technology. Funding also would be authorized for rulemaking, 

studies, and reports to the Congress associated with the renewable 

fuels program. 

The bill’s mandate to use renewable fuels would affect spending 

on farm support programs and also would affect motor fuels tax receipts. CBO estimates that enacting S. 791 would increase direct 

spending by about $170 million over fiscal years 2005 and 2006 but 

in total would reduce direct spending by about $2 billion over the 

2005–2013 period. In addition, CBO estimates that the bill would 

increase revenues by about $130 million over the 2005–2008 period 

and decrease revenues by $2.3 billion over the 2005–2013 period. 

(We estimate no impact on direct spending or revenues before 

2005.) Finally, we estimate that implementing S. 791 would cost 

about $250 million in 2004 and $2.3 billion over the 2004–2008 period, subject to appropriation of the necessary amounts. 

S. 791 contains an intergovernmental mandate as defined in the 

Unfunded Mandates Reform Act (UMRA). However, the mandate 

would impose no duty on State, local, or tribal governments that 

would result in additional spending. Therefore, the threshold established in UMRA ($59 million in 2003, adjusted annually for inflation) would not be exceeded. 

S. 791 contains several private-sector mandates as defined in 

UMRA. While CBO cannot estimate the aggregate cost of all the 

mandates contained in the bill, we expect that the total cost of private-sector mandates would exceed the annual threshold established in UMRA ($117 million in 2003, adjusted annually for inflation). That conclusion is primarily based upon our analysis of the 

renewable fuel standard which would impose substantial costs on 

the motor fuels industry in 2009, the fifth year the standard would 

be in effect. 

25

Estimated Cost to the Federal Government 

The estimated budgetary impact of S. 791 is shown in Table 1. 

The costs of this legislation fall within budget functions 270 (energy), 300 (natural resources and environment), 350 (agriculture), 

370 (commerce and housing credit), and 950 (undistributed offsetting receipts). 

Basis of Estimate 

For this estimate, CBO assumes that the bill will be enacted by 

the end of fiscal year 2003, that the full amounts authorized will 

be appropriated for each fiscal year, and that spending will follow 

historical rates for ongoing or similar activities. 

Spending Subject to Appropriation 

S. 791 contains several provisions that specify amounts authorized to be appropriated for researching methods to improve the production of renewable fuels and amounts to correct contamination 

caused by MTBE. The bill also would authorize unspecified 

amounts to be appropriated for the promulgation of new rules, 

studies, and reports to the Congress associated with the new renewable fuels standard established under the bill. Assuming appropriation of the necessary amounts, CBO estimates that implementing these provisions would cost $249 million in 2004 and $2.3 

billion over the 2004–2008 period. Major components of this estimate are described below.

TABLE 1. ESTIMATED BUDGETARY IMPACT OF S. 791

By Fiscal Year, in Millions of Dollars 

2004 2005 2006 2007 2008

CHANGES IN SPENDING SUBJECT TO 

APPROPRIATION 

Grants for MTBE Producers 

Authorization Level .............................. 250 250 250 250 0

Estimated Outlays ............................... 100 213 250 250 150

Grants to Producers of Cellulosic Biomass Ethanol 

Authorization Level .............................. 100 250 400 0 0

Estimated Outlays ............................... 45 148 283 183 73

Center for Biomass-Based Energy 

Authorization Level .............................. 4 4 4 0 0

Estimated Outlays ............................... 3 4 4 1 0

Grants for Renewable Fuel Production 

Authorization Level .............................. 25 25 25 25 25

Estimated Outlays ............................... 11 20 24 25 25

LUST Program 

Authorization Level .............................. 280 30 30 30 30

Estimated Outlays ............................... 70 106 88 54 43

Loan Guarantees 

Estimated Authorization Level ............ 50 0 50 0 50

Estimated Outlays ............................... 10 30 20 30 20

Clean Air Act Provisions 

Estimated Authorization Level ............ 10 10 7 11 10

Estimated Outlays ............................... 10 10 7 11 10

Total Proposed Changes 

Estimated Authorization Level ............ 719 569 766 316 115

Estimate Outlays ................................. 249 531 676 554 321

26

TABLE 1. ESTIMATED BUDGETARY IMPACT OF S. 791—Continued

By Fiscal Year, in Millions of Dollars 

2004 2005 2006 2007 2008

CHANGES IN DIRECT SPENDING 

Estimated Budget Authority .................................. 0 81 90 ¥9 ¥122

Estimated Outlays ................................................. 0 81 90 ¥9 ¥122

CHANGES IN REVENUES 

Estimated Revenues .............................................. 0 82 47 ¥42 ¥130

NOTE: LUST = Leaking Underground Storage Tanks. 

Grants to MTBE Producers. S. 791 would authorize the appropriation of $1 billion to DOE over the 2004–2007 period for grants 

to assist producers of MTBE to convert facilities to produce alternative fuel additives instead of MTBE. 

Grants to Producers of Cellulosic Biomass Ethanol. S. 791 would 

authorize the appropriation of $750 million to the Department of 

Energy (DOE) over the 2004–2006 period for grants to producers 

of cellulosic biomass ethanol (ethanol derived from such materials 

as plants, grasses, fibers, municipal solid waste, and wood residues) to build production facilities. 

Center for Biomass-Based Energy. This legislation would authorize the appropriation of $12 million over the 2004–2006 period to 

establish a resource center at the University of Mississippi and the 

University of Oklahoma for the purpose of developing new methods 

for the production of ethanol. 

Research and Development Grants for Renewable Fuel Production. S. 791 would authorize the appropriation of $125 million to 

EPA over the 2004–2008 period for grants to certain academic institutions and consortia (consisting of academic institutions, industry, State government agencies, or local government agencies) for 

research and development related to technologies for the production of renewable fuel. 

LUST Program. This legislation would authorize the appropriation of $400 million over the 2004–2008 period from EPA’s Leaking 

Underground Storage Tank (LUST) Trust Fund. This funding 

would be used for grants to States to correct contamination caused 

by MTBE and for enforcement and inspection activities related to 

LUST sites. 

Loan Guarantees. S. 791 would authorize DOE to issue loan 

guarantees to help finance the construction of facilities for the processing and conversion of municipal solid waste into fuel ethanol 

and other commercial by-products. The development of such facilities poses some risk mainly because the technology that would be 

used to convert municipal solid waste into fuel ethanol is new and 

is not well proven. Construction of the first-of-its-kind plant for this 

new manufacturing process is expected to begin sometime before 

the end of 2003 at a site in Middletown, New York. 

For this estimate, we expect that such plants would be debt-financed and sponsors would recover costs through the sale of ethanol and other recyclable materials. The projects also would rely 

heavily on revenues from ‘‘tipping fees’’ (i.e., those fees charged by 

the plant to accept municipal solid waste). According to industry 

experts, the solid waste industry is highly competitive and tipping 

fees fluctuate over time. The prices for ethanol and recycled glass, 

27

metal, and paper also have histories of fluctuating widely. These 

factors pose some additional credit risk for such a project. 

Under credit reform procedures, funds must be appropriated in 

advance to cover the subsidy cost of loan guarantees, measured on 

a present-value basis. Because of the significant level of risk associated with this type of project, the subsidy rate costs of such loan 

guarantees could vary widely. At worst, the government could absorb all of the risk, effectively converting the loan guarantee into 

a grant. S. 791 does not impose any limit on the amount of loan 

guarantees that could be made by DOE. Because the technology for 

converting municipal solid waste into fuel ethanol is very new and 

unproven, CBO estimates that over the next 5 years, DOE would 

probably provide loan guarantees for three projects with a total 

construction cost of about $300 million. In addition, based on information from DOE, CBO assumes that the department would guarantee up to 50 percent of a project’s total investment and that DOE 

would only consider projects with a financial outlook at least equivalent to those of bonds rated CCC by companies like Standard and 

Poors and Moodys. Projects with this rating typically have a cumulative default risk of more than 50 percent. Under these assumptions, CBO estimates that this provision would result in loans 

being guaranteed with about a 50 percent subsidy, requiring appropriations of about $150 million over the 2004–2008 period. 

Motor Fuels and Clean Air Act Provisions. This legislation would 

require EPA to promulgate new rules, prepare studies for the Congress, and implement new programs related to the renewable content of motor fuels and air pollution resulting from the use of motor 

fuels. CBO estimates that implementing these provisions in S. 791 

would cost $10 million in 2004 and $48 million over the 2004–2008 

period. Of the $48 million, more than half would be for EPA’s costs 

to enforce motor fuel standards. Specifically, the bill would require 

that EPA promulgate rules that require motor fuels sold by a refiner, blender, or importer contain specified amounts of renewable 

fuels. Under the bill, by 2012, gasoline sold to consumers would be 

required to include, on an annual average basis, 5 billion gallons 

of renewable fuel. 

Additionally, the bill would require the EPA to conduct annual 

surveys on market shares of various renewable fuels starting in 

December 2006. Such a survey could cost as much as $4 million annually if EPA were to undertake a survey of all retail gasoline 

sales. This legislation also would require EPA, at the request of a 

State, to enforce the State-adopted regulations concerning fuels requirements. State fuels programs can vary. Some programs are 

seasonal, while others are more complex where many fuel parameters are regulated. Specifically, EPA staff would be required to 

travel to the affected cities, take samples, review records, and conduct audits of refiners and importers. Based on information from 

EPA, CBO estimates that implementing this provision would require the equivalent of an additional 22 staff, funding for their 

travel expenses, and funding associated with laboratory sampling 

and technical analysis, resulting in a cost of $5 million annually 

and $25 million over the next 5 years. 

S. 791 also includes several other provisions that would require 

new studies, reports to the Congress, and activities related to banVerDate Jan 31 2003 18:33 Jun 04, 2003 Jkt 19010 PO 00000 Frm 000027 Fmt 06659 Sfmt 06601 E:\HR\OC\SR057.XXX SR057
28

ning the use of MTBE in motor fuels to be prepared by DOE and 

the Federal Trade Commission. 

Direct Spending and Revenues 

CBO estimates that enacting S. 791 would decrease direct spend- ing by about $2 billion over the next 10 years and decrease Federal 

revenues by about $2.3 billion over the same period. The bill’s impact on direct spending and revenues over the 2004–2013 period is 

shown in Table 2.

TABLE 2. ESTIMATED IMPACT OF S. 791 ON DIRECT SPENDING AND REVENUES 

Fiscal Year, in Millions of Dollars 

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

CHANGES IN DIRECT SPENDING AND REVENUES 

Estimated Budget Authority .......... 0 81 90 -9 -122 -276 -359 -434 -477 -489

Estimated Outlays ......................... 0 81 90 -9 -122 -276 -359 -434 -477 -489

Estimated Revenues ...................... 0 82 47 -42 -130 -247 -371 -497 -579 -603

Renewable Fuels Mandate and Agriculture Support Programs. 

The bill’s mandate to increase the renewable content of motor fuels 

would have an impact of Federal spending for farm support programs and would change the amounts collected from Federal motor 

fuels taxes. 

Section 101 of the bill would require that motor fuels sold by a 

refiner, blender, or importer contain specified amounts of renewable fuel. The required volume of renewable fuel would start at 2.6 

billion gallons in 2005 and escalate to 5 billion gallons by 2012. 

The bill also would amend the Clean Air Act to eliminate the requirement for gasoline that is sold in certain regions to contain 2 

percent oxygen by weight. This provision would lower demand for 

gasoline oxygenates, including ethanol. In contrast, because S. 791 

also would ban the use of MTBE 4 years after enactment, the demand for ethanol could increase. However, under S. 791, any State 

may authorize the use of MTBE by simply notifying EPA. Under 

this construction, it is possible that MTBE use would not be affected by the ban. Consequently, CBO has not explicitly included 

the possible effects of a MTBE ban on the demand for ethanol, but 

the net impact of the other provisions in section 101 would increase 

ethanol use over the 2004–2013 period. CBO expects that most of 

the fuel produced to meet the requirements under the act would be 

corn-based ethanol. 

Because ethanol is primarily derived from corn, demand for corn 

would fall or rise with the demand for ethanol. CBO expects that 

lower prices for corn during 2005 and 2006 and higher prices for 

corn during the 2007–2013 period would result. Accordingly, the 

costs of farm price and income supports would slightly increase in 

the first few years but fall in the later years of the estimate period. 

On net, CBO estimates that spending for farm price and income 

supports would decline by about $2 billion over the 2005–2013 period due to the elimination of the oxygenate requirement for motor 

fuels and the ethanol mandate. 

Renewable Fuels Mandate and Revenues. Because ethanol-blended fuels are taxed at a lower rate than gasoline, receipts to the 

Highway Trust Fund from motor fuels would change when ethanol 

use changes. We estimate that enacting this provision would inVerDate Jan 31 2003 18:33 Jun 04, 2003 Jkt 19010 PO 00000 Frm 000028 Fmt 06659 Sfmt 06601 E:\HR\OC\SR057.XXX SR057
29

crease revenues in 2005 and 2006 because the mandated level of 

ethanol use under the bill would be less than CBO’s projection of 

ethanol use under current law. Under current law, we expect ethanol use to grow as the demand for gasoline oxygenates increases. 

After 2006, the amount of ethanol use mandated under the bill 

would exceed the projections in our current-law baseline—leading 

to a loss of revenues. We estimate that the provision would increase net Federal revenues by $129 million over the 2005–2006 

period and reduce them by $2.3 billion over the 2005–2013 period. 

ESTIMATED IMPACT ON STATE, LOCAL, AND TRIBAL GOVERNMENTS

S. 791 would shield manufacturers of gasoline from liability 

claims based on the renewable content of their fuel. Because this 

provision would limit the application of State law, it constitutes an 

intergovernmental mandate as defined in UMRA. However, the 

mandate would impose no duty on States that would result in additional spending. Therefore, the threshold established in UMRA 

($59 million in 2003, adjusted annually for inflation) would not be 

exceeded. 

Other provisions of the bill contain no intergovernmental mandates and would impose no direct costs on State, local, or tribal 

governments. States with EPA approval to enforce clean air standards for motor fuels would have to comply with any new requirements, but they would do so voluntarily. In general, the bill would 

benefit States by authorizing grants and amounts from the LUST 

Trust Fund for a variety of activities. 

ESTIMATED IMPACT ON THE PRIVATE SECTOR

S. 791 contains several private-sector mandates as defined in 

UMRA. While CBO cannot estimate the aggregate cost of all the 

mandates contained in the bill, we expect that the total cost of private-sector mandates would exceed the annual threshold established in UMRA ($117 million in 2003, adjusted annually for inflation). That conclusion is primarily based upon our analysis of the 

renewable fuel standard established under a renewable fuel program, which would impose substantial costs on the motor fuels industry in 2009, the fifth year the standard would be in effect. Numerous other private-sector mandates would be imposed by additional requirements in the renewable fuel program, a ban on the 

use of MTBE in motor fuels, and through other fuel requirements. 

The bill also would authorize an appropriation of $1 billion to the 

Department of Energy over the 2004–2007 period for grants to assist manufacturers of MTBE to convert facilities to produce fuel additives that would substitute for MTBE. 

Renewable Fuel Program 

Renewable Fuels Standard. Section 101 would require domestic 

refiners, blenders, and importers of gasoline to ensure that gasoline 

sold or dispensed to consumers in the contiguous United States 

contains a minimum volume of renewable fuels. The required volume of renewable fuel would start at 2.6 billion gallons in 2005 and 

increase to 5 billion gallons by 2012. CBO expects that the renewable fuel requirement would be met in 2005 and 2006 without additional costs to the motor fuels industry. The industry would begin 

30

to experience additional costs in 2007 as it begins to blend or purchase greater amounts of gasoline containing ethanol or other renewable fuel than it would in the absence of such a standard. In 

the fifth year the standard would be in effect, 2009, CBO estimates 

that the direct costs of the renewable fuel requirement would rise 

to more than $200 million, an amount which would exceed UMRA’s 

annual threshold for private-sector mandates. 

Seasonal Variation in Renewable Fuel Use. Section 101 also 

would direct the Energy Information Administration (EIA) to determine if there are excessive seasonal variations in the amount of renewable fuel blended into gasoline. Refiners might have an incentive to use more of the annual requirement for renewable fuel 

(mostly ethanol) in the winter months, when evaporative emissions 

from gasoline are less of a concern. Sharp seasonal changes in the 

demand for ethanol could lead to large swings in ethanol and gasoline prices. If EIA determines that there are excessive seasonal 

fluctuations, EPA would impose regulations requiring that at least 

35 percent of the renewable fuel standard be blended into gasoline 

in summer months and another 35 percent be blended in winter 

months. At this time, neither EPA nor the motor fuels industry anticipate that such requirements would be necessary. In the event 

that a determination by EIA triggers additional EPA regulations, 

the duty to comply with those regulations would constitute a private-sector mandate. Information provided by industry sources indicated that compliance would not be expensive. 

Eliminate the Ethanol Waiver. Section 101 also would authorize 

States to apply for an exclusion from a waiver that under current 

law allows gasoline blended with ethanol to have higher evaporative properties than gasoline blended with other fuel additives. 

Gasoline blends containing ethanol evaporate more readily at a 

given temperature, contributing to smog formation. States that 

presently use large amounts of ethanol, mostly located in the Midwest, would probably not request an exclusion from the waiver. 

States that have trouble meeting air quality requirements (several 

States in the Northeast) would likely request an exclusion. To the 

extent that gasoline blended with ethanol is currently sold in those 

States, the exclusion would increase the cost of an existing privatesector mandate on refiners who sell in the State. Refiners would 

incur costs as they reduce their use of other highly evaporative 

blendstocks (such as butane). Because we cannot predict what 

States would opt out of the waiver, CBO has no basis to quantify 

those costs; but they are not likely to be large. 

Recordkeeping and Reporting Requirements. As part of the renewable fuel program, sections 102 and 103 would require both 

EPA and DOE to collect data and issue reports on the amount of 

renewable fuel blending and the associated impacts of that blending. Information provided by EPA and the motor fuels industry indicated that the new requirements would be folded into existing 

data collection procedures and that the incremental cost of compliance would be low. 

Safe Harbor. The renewable fuel standard required by the bill 

would substantially increase the amount of renewable fuel that is 

blended into gasoline. Section 101 would shield motor fuel manufacturers and other persons from liability for a defect in design or 

manufacture of a motor vehicle fuel containing renewable fuel. 

31

That protection would be in effect as long as the fuel is in compliance with other applicable Federal requirements. The provision 

would impose a private-sector mandate by limiting existing rights 

to seek compensation under current law. Effective on the date of 

enactment, the provision would have no impact on existing claims 

or court determinations or settlements. Because of the lack of information on both the number of claims that would be filed in the absence of this legislation, and the associated outcomes of those 

claims, CBO cannot determine the cost of this mandate. 

MTBE Ban 

Under the Clean Air Act Amendments of 1990, areas with poor 

air quality are required to add chemicals called ‘‘oxygenates’’ to 

gasoline as a means of reducing certain air pollution emissions. 

One of the most commonly used oxygenates is methyl tertiary butyl 

ether; about 200,000 barrels of MTBE are blended into gasoline 

each day in the United States. Roughly one-third of that amount 

is supplied to refiners by merchant producers and the rest is produced by the refiners themselves or imported. In recent years, concerns have been raised about the adverse effects on groundwater 

supplies from MTBE that leaks from underground tanks, and 16 

States have passed laws to either ban or reduce the local use of 

MTBE. 

Section 203 would ban the use of MTBE in gasoline within 4 

years of the bill’s enactment. At the same time, the provision would 

allow any State to authorize the use of MTBE by simply notifying 

EPA. That is, a nationwide ban with States opting to continue use 

of MTBE may not be fundamentally different from the current situation in which States impose their own local bans. Therefore, it is 

possible that MTBE use would not be affected by the new ban. 

Moreover, CBO anticipates that the renewable fuels standard established in section 101 would, on its own, greatly reduce—if not 

totally eliminate—incentives to use MTBE. 

CBO cannot determine in which States, if any, the Federal 

MTBE ban would be more constraining than the renewable fuel 

standard and, therefore, cannot determine the cost of the mandate. 

In States where the Federal ban would be more constraining, the 

ban could impose costs on refiners and merchant producers. Gasoline refiners would need to replace MTBE with higher-cost 

blendstocks, and merchant producers would likely convert their operations to the production of less-profitable blendstocks, such as 

alkylates or iso-octane. The bill would authorize Federal transition 

grants to merchant producers to convert their facilities amounting 

to $1 billion over the 2004–2007 period. 

Other Fuel Requirements 

Increased Environmental and Public Health Testing. Section 205 

would require fuel manufacturers to test their products regularly 

for any environmental and public health effects of the fuel or additive, as part of the registration process with the EPA. Under current law, such testing occurs at the discretion of the EPA Administrator. Based on information provided by the EPA on the most recent round of testing, CBO expects the cost of regular testing to be 

between $10 million and $20 million every 5 years, which is the period of time over which the EPA expects the testing to take place. 

32

Anti-Backsliding Baseline. Section 204 would direct EPA to establish a more stringent baseline for toxic emissions from reformulated gasoline. The current baseline, which became effective in 

2002, is refinery specific and is based on average 1998 through 

2000 reformulated gasoline parameter values. The bill would establish a baseline that averages parameter values only from calendar 

years 1999 and 2000, meaning that reformulated gasoline will have 

to be slightly cleaner. According to EPA and the refining industry, 

the majority of the industry is already over-compliant with the current baseline. CBO does expect some refineries to experience increased costs in meeting the more stringent emission targets, but 

on the whole CBO does not expect the requirement to be expensive. 

Water Quality Protection Authority. Section 203 would grant new 

authority to the EPA to regulate fuels and fuel additives to protect 

water quality. Presently, EPA has no intention to regulate any fuel 

or additive to protect water quality. Future regulation would be 

based upon environmental and public health testing. Since no information is available at this time about the substances that are 

likely to be regulated in the future, CBO cannot determine the cost 

of the mandate. 

VOC Region Consolidation. Section 204 would consolidate the regional regulations that limit the emissions of volatile organic compounds (VOCs) from gasoline, effectively applying the more stringent standards for gasoline sold in the southern United States to 

that sold in the North. Meeting the more stringent standards 

would impose a private-sector mandate. While CBO expects that 

the mandate would raise the cost of producing gasoline for the 

Northern United States, we anticipate that refiners also would experience some savings because the cost of distributing gasoline 

would fall. Without more information about the magnitude of these 

offsetting effects, CBO cannot determine the net cost of the mandate. 

State Opt-in to Reformulated Gasoline (RFG) Program. Section 

207 would authorize States in the ozone transport region (several 

States in the Northeast) to ask EPA to apply the more stringent 

air emissions standards of the RFG program in areas that are already in attainment of air quality standards. CBO does not have 

information at this time on the areas to which RFG program requirements could apply, and therefore, cannot determine the cost 

of compliance. 

Previous CBO Estimates 

On April 8, 2003, CBO transmitted a cost estimate for H.R. 6, 

a bill to enhance energy conservation and research and development, to provide for security and diversity in the energy supply for 

the American people, and for other purposes. That estimate provided direct spending and revenue effects for a renewable fuels 

mandate that differs from the mandate under S. 791. Under H.R. 

6, CBO estimates that the renewable fuels mandate would increase 

net Federal revenues by $290 million over the 2005–2008 period 

and reduce them by $284 million over the 2005–2013 period. In addition, direct spending would decline by $167 million over the 

2005–2013 period. CBO also estimated that compliance with the renewable fuels standard in H.R. 6 would cost the motor fuels’ industry roughly $140 million in 2009. The renewable fuel standard 

33

under S. 791 ramps up more quickly than the one under H.R. 6, 

which is primarily why CBO expects that the cost of compliance 

with the standard under S. 791 would be greater than that under 

H.R. 6. 

On May 1, 2003, CBO transmitted a cost estimate for H.R. 1644, 

the Energy Policy Act of 2003, as ordered reported by the House 

Committee on Energy and Commerce on April 8, 2003. H.R. 1644 

also contains a mandate for refiners, blenders, and importers to use 

renewable fuels. The amounts of renewable fuels that would be 

mandated by H.R. 1644 and S. 791 are different, and our cost estimates reflect those differences. 

Estimate Prepared By: Federal Spending: Susanne S. Mehlman— EPA and Energy Provisions; David Hull—Agriculture Subsidies; 

Andrew Shaw—Federal Revenues; Greg Waring—Impact on State, 

Local, and Tribal Governments; and Richard Farmer and Lauren 

Marks—Impact on the Private Sector.

Estimate Approved By: Peter H. Fontaine Deputy Assistant Director for Budget Analysis; G. Thomas Woodward Assistant Director 

for Tax Analysis. 

34

ADDITIONAL VIEWS OF SENATORS REID, JEFFORDS, BOXER 

AND CLINTON 

We write separately here on S. 791, the Reliable Fuels Act on 

2003, to underscore the importance of ending methyl tertiary butyl 

ether (MTBE) use, to explain why the committee did not include 

liability exemptions for MTBE contamination, and to urge the full 

Senate to reject any measure that would force taxpayers to pay for 

MTBE cleanup rather than responsible parties. 

MTBE is classified as a possible human carcinogen, and when 

leaked into water even in small amounts causes water to take on 

the taste and smell of turpentine, rendering it undrinkable. MTBE 

leaking from underground storage tanks, recreational water craft 

and abandoned automobiles has lead to growing detections of 

MTBE in drinking water. In fact, the U.S. Geological Survey has 

estimated that MTBE may contaminate roughly one-third of drinking water supplies nationwide. MTBE poses a different threat to 

drinking water relative to the other harmful constituents of gasoline because MTBE is more soluble, more mobile and degrades 

slower than those other constituents. 

Oil companies began adding MTBE to gasoline at least as early 

as 1979, using 215,000 tons in that year alone. By 1986, oil companies were adding 54,000 barrels of MTBE to gasoline each day. By 

1991, 1 year before the Clean Air Act (CAA) oxygenate requirement 

went into effect, oil companies were using more than 100,000 barrels of MTBE per day. By 1997, the volume of MTBE production 

was the second highest of any chemical in the United States. These 

basic facts underscore two extremely important points about the 

committee’s consideration of solutions to the MTBE contamination 

problem. 

First, proposals that simply remove the CAA oxygenate requirement from the law without affirmatively banning MTBE will simply not end MTBE use. As noted above, MTBE was used for octane 

enhancement long before the CAA Amendments of 1990. There is 

no reason to believe that it would not continued to be used if the 

CAA oxygenate requirement were removed from the law, but no 

ban put in place. In another example, in May 1999, two oil companies in the San Francisco area were found to have been adding 

substantial volumes of MTBE to gasoline. At the time, that area 

complied with air standards and therefore the CAA didn’t require 

the addition of an oxygenate. Again, companies were adding MTBE 

to gasoline for reasons wholly independent of the CAA. 

Second, these facts belie the oil companies’ arguments that Congress made oil companies use MTBE, and that therefore lawsuits 

against oil companies should be terminated by Congress and taxpayers should pay to clean up MTBE contamination. MTBE was in 

use well before the passage of the CAA Amendments. The CAA 

does not mandate the use of MTBE. And the fact that there was 

any oxygenate requirement in those amendments at all was due, 

in part, to oil industry lobbying. 

For example, in 1989 testimony before the Senate Committee on 

Environment and Public Works, an ARCO official strongly recommended that the committee include a mandate for MTBE in the 

Clean Air Act Amendments of 1990, touting MTBE’s benefits but 

35

not disclosing its devastating impact on drinking water. Hearings 

Before the Subcommittee on Environmental Protection of the Committee on Environment and Public Works on S. 1630, S. Hrg. 101– 331 at 458 (Sept. 28, 1989). Despite such lobbying, Congress did 

not adopt a MTBE mandate, but rather prescribed that reformulated gasoline contain an oxygenate without specifying a particular 

product. 

At the time of such lobbying, oil companies knew they were recommending a product that would have a devastating impact on 

drinking water. Indeed, where courts have heard oil industry 

claims that they should not be held liable for MTBE contaminated 

drinking water supplies, they have not only rejected those claims 

but have found that companies acted with malice in not disclosing 

the risks of using MTBE. 

In fact, over a dozen communities have sued oil companies for 

knowingly introducing a defective product into the marketplace. 

Several oil companies recently settled one such suit, South Tahoe 

Public Utility District v. Atlantic Richfield Company, et al., for $60 

million. In South Tahoe, it was determined that oil companies were 

guilty of irresponsibly manufacturing and distributing MTBE because these companies knew it would contaminate drinking water. 

It was also found by clear and convincing evidence that two companies had acted with ‘‘malice’’ by failing to warn of the environmental dangers of MTBE. 

Together, documents and sworn testimony in South Tahoe demonstrated that several oil companies knew as early as 1980 that 

MTBE posed a significant threat to the nation’s drinking water, 

that they promoted MTBE to the State and Federal Governments 

without disclosing internal information demonstrating that threat, 

and that they attempted to discredit public scientific studies that 

began to demonstrate that threat. 

Documents and sworn testimony in South Tahoe also revealed 

that oil company officials, showing a callous disregard for our environment, even gave MTBE telling nicknames such as ‘‘Most Things 

Biodegrade Easier’’, ‘‘Menace Threatening our Environment’’ and 

‘‘Major Threat to Better Earnings.’’ Further the case also revealed 

that Shell and ARCO, the first refiners to add MTBE to gasoline, 

estimated that 20 percent of all underground storage tanks—tanks 

likely containing MTBE—were leaking. Several oil companies were 

shown to have both developed and promoted the concept of using 

reformulated gasoline to reduce air emissions. 

For example, ARCO officials testified that ‘‘EPA did not initiate 

. . . reformulated gasoline’’ and that ‘‘[T]he oil industry brought 

[reformulated gasoline] forward as an alternative to what the EPA 

had initially proposed.’’ Documents and sworn testimony also revealed that in 1987 an ARCO representative testified before the 

Colorado Air Quality Control Commission that MTBE would aid in 

reducing air emissions but did not warn of the drinking water contamination threat. This representative testified that he also assisted Arizona and Nevada develop oxygenate programs that relied 

upon MTBE without disclosing the danger. 

In 1986, the Maine Department of Environmental Protection 

issued a scientific report describing the threat posed by MTBE. 

Documents and sworn testimony in South Tahoe revealed a conVerDate Jan 31 2003 18:33 Jun 04, 2003 Jkt 19010 PO 00000 Frm 000035 Fmt 06602 Sfmt 06602 E:\HR\OC\SR057.XXX SR057
36

certed strategy by the oil industry to discredit the article at the 

same time that internal industry documents admitted the soundness of the Maine warning. When the Maine paper prompted EPA 

to issue a notice to oil companies for more information regarding 

MTBE, ARCO responded in 1987 that there was little information 

to suggest MTBE was a threat despite internal ARCO documents 

showing the contrary. 

As South Tahoe demonstrates, terminating the right of communities to seek legal redress against oil companies for MTBE contamination would be a grave injustice. It has not been embraced 

by the committee, it should not be embraced by the Senate and it 

should not become law. 

Just as it is important to clarify oil industry responsibility for 

MTBE contamination, it is also important to clarify a number of 

mischaracterizations that appear in the majority views on the 

MTBE transition program. S. 791 provides for limited transition 

assistance to producers of MTBE to mitigate fuel supply problems, 

such as shortages or disruptions, that might occur as a result of 

the elimination of the widespread use of that fuel additive by this 

legislation. The findings section of S. 791 (section 203) notes that 

it is appropriate for the Congress to provide limited transition assistance in this fashion. Those findings were arrived at after much 

discussion and debate among the various affected parties and were 

first incorporated into legislation as part of H.R. 4, as passed by 

the Senate in 2002 and reintroduced in S. 385. 

The majority views attempt to incorrectly convey that such assistance is premised on two additional factors that appear nowhere 

in the legislation, that cannot be logically inferred from the findings in S. 791, and that do not reflect a committee consensus. 

These incorrect inferences are that, first, the government bears 

‘‘great’’ responsibility for losses the MTBE producers experience as 

a result of Congress’ action to phaseout MTBE; and, second, that 

a failure to provide transition assistance in light of the ban will 

discourage manufacturers from supplying the market with additives that will meet energy and environmental goals. 

The findings state that the fuel industry responded to the fuel 

oxygenate standard established in the CAA of 1990 by investing in 

MTBE production capacity. As noted above, that standard did not 

require or mandate that MTBE be produced or that only MTBE 

could satisfy such a standard. Again, as noted above, the oil industry itself lobbied for the oxygenate requirement and wanted to use 

MTBE to meet it. Therefore, Congress cannot be held responsible 

for voluntary industry decisions to make or not to make investments in MTBE. 

It logically follows that without such responsibility, there certainly is no compensation due to such manufacturers when Congress determines that such a fuel additive is detrimental to water 

quality protection and must be eliminated from widespread use in 

gasoline. Given the history of the CAA oxygenate requirement it is 

impossible to maintain otherwise. The majority views appears to 

seek to set a precedent that would require Congress to provide 

compensation for any parties that choose to invest in manufacturing a product based on their interpretation of congressional inVerDate Jan 31 2003 18:33 Jun 04, 2003 Jkt 19010 PO 00000 Frm 000036 Fmt 06602 Sfmt 06602 E:\HR\OC\SR057.XXX SR057
37

tent and its effect on their product. That is not supported by the 

text of S. 791. 

Finally, the majority views’ inference that the transition program 

reflects the committee view that companies will not invest in fuel 

additives absent compensation is erroneous and not supported by 

S. 791. Additive manufacturers are free to enter the market for the 

production of additives to replace MTBE. The legislation indicates 

that Congress is concerned about the impact on the fuel supply of 

eliminating MTBE, as stated in section 203, and has provided the 

transition assistance to address that issue. 

Congress ‘‘failure’’ to compensate MTBE producers for manufacturing a product which many within the industry knew would pollute drinking water will not affect a business decision by additive 

manufacturers to supply the additive market. This is particularly 

true once the modifications in S. 791 to the CAA are made to ensure future water quality protection by improving testing of fuels 

and fuel additives environmental and public health impacts. Oil 

companies and other additive manufacturers have their own responsibility to place products in commerce that do not have ill effects on the environment and public health. 

As noted above, several companies maliciously failed to discharge 

this responsibility when it came to MTBE. 

The first hearing of this committee on MTBE was chaired by 

Senator Boxer in December 1997, after Santa Monica lost the majority of its drinking water to contamination caused by a then little 

known fuel additive. Since Senator Boxer’s first call to ban MTBE 

now over 5 years ago, this committee has conducted scores of hearings, considered alternate legislative approaches and ultimately approved various versions of legislation similar to S. 791. 

Such legislation approved by this committee has consistently 

called for MTBE’s phase-out. It has also consistently rejected terminating the right of communities affected by MTBE to seek redress 

against oil companies in court. As consideration of S. 791 moves to 

the full Senate, these two principles that have guided committee 

consideration of the MTBE issue must remain in tact if the MTBE 

problem is to be truly and equitably solved. 

38

ADDITIONAL VIEWS OF SENATOR BARBARA BOXER 

I write separately here to strongly oppose the ‘‘safe harbor’’ provision in S. 791, The Reliable Fuels Act of 2003, which creates broad 

liability exemptions for renewable fuels. I also oppose the special 

exemption from the ethanol requirements for two States—Alaska 

and Hawaii—at the expense of others. 

Under the renewable fuels mandate in S. 791, ethanol will be the 

most commonly used renewable fuel for the foreseeable future. Ethanol is a high-octane, water-free alcohol that has been used in gasoline in the United States since 1979 when it was introduced to enhance oxygen content in fuels. 

Section (p) of S. 791 contains a ‘‘safe harbor’’ liability waiver for 

all renewable fuels, renewable fuel additives, and any motor vehicle fuel containing renewable fuel. This language waives all product liability design defect claims, including failure to warn. Any 

claim that has not been filed by the date of enactment of this section will be forever barred. Compliance with laws and regulations 

is not necessary for receiving the liability waiver, except for limited 

compliance with requirements under the Clean Air Act. 

This liability exemption is particularly dangerous because there 

are many unanswered questions about ethanol. It is true that ethanol does not have the same toxic chemicals in it as other fuels and 

fuel additives. It also helps reduce the production of carbon monoxide when fuel is burned. These are real benefits. 

However, ethanol also increases the formation of nitrogen oxides, 

which leads to increases in smog. According to EPA’s 1999 Blue 

Ribbon Panel Report on Oxygenates in Gasoline, ethanol is extremely soluble in water and would spread if leaked into the environment. It may further spread plumes of benzene, toluene, ethyl 

benzene, and xylene because ethanol may inhibit the breakdown of 

these toxic materials. In addition, there are several studies demonstrating that ethanol increases the size and migration of benzene 

plumes. Researchers say that more groundwater wells will experience contamination from methyl tertiary butyl ether (MTBE) and 

benzene, a known carcinogen, if ethanol leaks into water supplies. 

There are also questions about the impact of ethanol on sensitive 

populations, such as children. 

More study is needed. The Blue Ribbon Panel Report makes this 

point in the section entitled ‘‘Recommendations for Evaluating and 

Learning from Experience:′′

The introduction of reformulated gasoline has had substantial air 

quality benefits, but has at the same time raised significant issues 

about questions that should be asked before widespread introduction of a new broadly used product. The unanticipated effects of reformulated gasoline on groundwater highlight the importance of exploring the potential for adverse effects in all media (air, soil, and 

water), and on human and ecosystem health. 

Questions surrounding ethanol’s effects on public health and the 

environment should be answered before Congress grants a broad 

waiver from liability for its harmful effects. We should err on the 

side of caution, and we should err on the side on protecting taxpayers. 

39

If ethanol harms public health or the environment, the liability 

exemption in this bill would shift the burden to the taxpayer in the 

event of a contamination of drinking water supplies, which could 

leave many communities with cleanup costs beyond their ability to 

pay. Polluters, not taxpayers or victims of pollution, should pay for 

harm to pubic health and the environment. 

Supporters of this liability exemption argue that immunity from 

product liability design defect claims is not so broad, that it only 

protects polluters from one type of lawsuit. But, they are ignoring 

the fact that product defect claims are the clearest way to hold accountable those manufacturers (here, primarily the refiners) whose 

products cause injury to public health or the environment. Litigation in California involving drinking water contamination by 

MTBE, agricultural chemicals (i.e. DBCP), dry cleaning compounds 

(perc), and others all rest on claims that products were defective 

in design. 

In a landmark case decided in April 2002, a San Francisco jury 

found that based on the theory that MTBE is a ‘‘defective product,’’ several major oil companies are legally responsible for the environmental harm to Lake Tahoe’s groundwater. The jury also found 

that many of these same oil companies acted with ‘‘malice’’ because 

they were aware of the dangers but withheld the information. The 

oil companies knew of the risks MTBE posed. They also knew there 

were alternatives to MTBE. Yet, they chose to use MTBE and not 

to warn anyone else of the risks. The defendants settled the case 

shortly after the jury verdicts were announced. Costs are expected 

to exceed $45 million to clean up the Lake Tahoe contamination. 

What would have happened if defective product claims could not 

have been made in Tahoe? Basically, Lake Tahoe and its citizens 

could have been forced to bear the cleanup costs, while the polluters got off scot-free. The type of behavior that occurred in Lake 

Tahoe on the part of polluters is exactly what S. 791 seeks to shield 

from liability. Exempting polluters from a defective product claim 

is hardly a narrow exemption. It risks letting the polluters off the 

hook for their wrongdoing entirely and shifting the costs of pollution to the taxpayers. The taxpayers are not responsible for the pollution; the companies are. Taxpayers should not foot the bill; the 

polluters should. Not surprisingly, South Tahoe Public Utility District opposes the liability exemption for ethanol in this bill, asking 

that the burden of cleanups not be shifted to taxpayers. 

Supporters of this exemption also argue that negligence claims 

are an adequate substitute for product liability design defect 

claims. While negligence and design defect liability are related 

legal theories, they are different. And negligence alone is inadequate to protect a community from harm. 

Negligence liability focuses on the defendants’ conduct. In other 

words, it focuses on the conduct of the individuals hired by the oil 

companies. Design defect liability focuses on the product. 

To establish negligence, a public water agency would have to 

show that each defendant knew (or reasonably should have known) 

of the risk posed by the product, and that the defendant acted unreasonably in failing to eliminate the risk. Customary practice in 

an industry—such as commonly using a fuel additive without any 

warning—and the reasonableness of that practice is relevant as a 

40

defense in a negligence action. This makes it difficult for an injured 

party to recover. 

In contrast, an injured public water agency can establish design 

defect liability in one of two ways. First, a product is defective 

where the jury finds that the risk of danger inherent in the challenged design outweighs the benefit of such design. Second, even 

if a product is flawlessly designed or produced, it may still be defective if the manufacturer provides inadequate warnings or use instructions. A failure to warn claim arises only for risks that the 

manufacturer either knew about or that were knowable in light of 

generally recognized and prevailing best scientific knowledge available at the time of the product’s manufacture and distribution. 

Courts impose strict liability for design defects based on strong 

public policy considerations. The costs of injuries caused by defective products should be borne by the manufacturers of those products, rather than by innocent injured parties. This policy is especially strong where the injury occurs to innocent bystanders, like 

public water suppliers, who derive no economic benefit from the defective product. 

Supporters of the liability exemption also argue that it is necessary because the bill is mandating the use of ethanol. Yet Congress regularly mandates that manufacturers meet a variety of 

guidelines and requirements, but does not in so doing exempt all 

manufacturers from State and Federal product liability design defect laws. When gasoline leaks today, there is no loophole; the polluter pays, despite the fact that Congress regulates gasoline. Congress mandated the installation of air bags in automobiles, but did 

not say to those manufacturers that they would not be liable for 

damages caused should their products be defective. We should not 

give a free pass to ethanol. 

Finally, supporters of the liability loophole claim that ethanol is 

safe and no one needs to worry about the liability exemption. If 

they are not worried, they do not need an exemption and should 

not oppose striking it from the bill. 

Ethanol should be subject to liability standards as strong as any 

other fuel additive. We should not shift the burden of cleaning up 

problems caused by ethanol to our communities. The polluter 

should pay. No public policy would be served by immunizing refiners and chemical companies from responsibility for knowingly putting the drinking water resources of the Nation at risk and neglecting to tell anyone. 

The ‘‘safe harbor’’ liability waiver for renewable fuels is opposed 

by a wide variety of local and State governments, water utilities, 

and public health, consumer and environmental organizations. 

These include the Association of Metropolitan Water Agencies and 

American Water Works Association—which together represent 

water systems serving approximately 180 million Americans across 

the country—Association of California Water Agencies, National 

Association of Water Companies, South Tahoe Public Utility District and city of Santa Monica—two cities with firsthand knowledge 

of the devastating effects that groundwater contamination can have 

on communities—American Lung Association, American Public 

Health Association, Cahaba River Society, California Clean Water 

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mental Coalition, Clean Water Action, Consumer Federation of 

America, Environmental Defense, Ecology Center, Environmental 

Working Group, , Friends of the Earth, League of Conservation 

Voters, Mono Lake Committee, National Sludge Alliance, Natural 

Resources Defense Council, New Jersey Coalition Against Toxics, 

New Jersey Environmental Federation, Physicians for Social Responsibility, Rivers Unlimited, Sierra Club, Spring Lake Park 

Groundwater Guardians, and U.S. Public Interest Research Group. 

I am also opposed to the amendment added during Committee 

consideration of the bill to exempt from the ethanol mandate two 

States, Alaska and Hawaii. We have had no explanation of why an 

exemption is needed for Alaska and Hawaii and not for other 

States except some vague claims that the transportation costs will 

be too high and that these areas do not need ethanol to meet Clean 

Air Act requirements. However, these same arguments apply to 

many areas of the county, including my State of California. My 

State also will face high shipping and transportation costs. Also, as 

noted in EPA’s 1999 Blue Ribbon Panel Report on Oxygenates in 

Gasoline, California does not need ethanol to meet its Clean Air 

Act requirements. 

It has also been argued that the waiver is needed because Alaska 

and Hawaii do not need as much ethanol as they will be required 

to use. Again, the same argument can be made for other States. 

And when those States have raised this concern, the authors of the 

bill respond by pointing out that the bill gives States credits that 

they can sell to other States that may need them, thus generating 

revenue for their States. If this argument is good for some States, 

it should also be good for all States. 

If the costs of implementation and the need for ethanol in a State 

are to be factors in determining whether the mandate should apply, 

they should be factors in making a similar determination for all 

States, not just two. Further, although Alaska and Hawaii would 

no longer be required to use renewable fuels under this provision, 

the amount of the national mandate has not decreased accordingly. 

The mandate in this bill was designed taking all States into account, including Alaska and Hawaii. Now that Alaska and Hawaii 

are exempt from the mandate, other States will be forced to use 

greater amounts of ethanol to meet the overall renewable fuels requirements. 

This is an unfair and unnecessary exemption for two States, and 

I oppose it. 

42

ADDITIONAL VIEWS OF SENATOR CORNYN 

These views are submitted to express certain concerns about S. 

791, the Reliable Fuels Act of 2003, as approved by the Senate 

Committee on Environment and Public Works. I believe that S. 791 

will hamper our national energy supply and will diminish the benefits of the reformulated gasoline program to improve air quality. 

IMPORTANCE OF A STRONG NATIONAL ENERGY POLICY AND

IMPEDIMENTS OF S. 791

I am proud to hail from the State of Texas, a State long known 

for its contributions to a strong national energy policy. Without our 

domestic producers, the United States would be even more dependent on foreign oil, much of it coming from very unstable regions of 

the World. Given the state of current events in Iraq, the strike in 

Venezuela, and an unusually cold winter, the need for aggressive 

development of domestic resources is very clear. Oil prices reached 

a peak of nearly $40 a barrel and continue to hover at a 2-year 

high. Prices for gasoline and heating oil reached average all time 

highs in some portions of the country because we have become too 

dependent of foreign imports and easy victims for circumstances 

beyond our control. 

As we see our dependence of foreign oil imports increase, the 

United States has also experienced a decline in refining capacity at 

home. This decline is a direct result of overburdening government 

regulations that make it too expensive for small refiners to stay in 

business or that force refiners to consolidate even further thereby 

eliminating refining capacity. According to testimony we heard 

from the National Petrochemical Refiners Association’s President 

Bob Slaughter in the Senate Subcommittee on Clean Air, Climate 

Change, and Nuclear Safety, current U.S. refiners are running at 

95 percent capacity and will be unlikely to meet future demands 

at this level. 

It is quite apparent that the United States lacks the ability to 

produce sufficient volumes of motor fuels to meet current demand. 

For this reason, I am concerned that S. 791 could further complicate the situation, increase prices for the driving consumer, and 

reduce air quality. 

SECTION 203—RESTRICTIONS ON THE USE OF MTBE

I have grave concerns that this Congress is proposing to eliminate a successful fuel additive from U.S. commerce. Findings simply do not exist to justify a ban. There is a perception that such 

an action is necessary to protect water supplies from contamination. Nothing could be further from the truth. In reality, the major 

threat to water supplies comes from all of the components of gasoline (many of which present much more significant threats to 

human health than MTBE) that leak from underground storage 

tanks. The solution to this problem is not to ban one component of 

gasoline, but to ensure that underground storage tanks do not leak. 

By choosing to ban MTBE for political reasons, the Congress is 

avoiding the real problem that threatens water supplies. In addition, it was the U.S. Congress that essentially mandated the use 

of MTBE when it passed the 1990 Clean Air Act that established 

43

1Northeast States for Coordinated Air Use Management, Relative Cancer Risk of Reformulated Gasoline and Conventional Gasoline Sold in the Northeast, August 1998. 

a 2wt. percent oxygenate requirement for gasoline. While Congress 

did not specifically designate MTBE as the oxygenate refiners 

would be required to use, it was well known at the time that 

MTBE was the most economical and efficient fuel additive in the 

marketplace for refiners to use to meet the Federal requirements. 

Supply and Price Implications 

In addition to being the most used oxygenate to meet the 1990 

Clean Air Act requirements; MTBE serves to extend the U.S. gasoline supply by three to 4 percent. Further, MTBE extends the reformulated gasoline (RFG) pool by 10 to 13 percent. Removing MTBE 

from commerce will create a dramatic energy shortfall leading to 

gasoline price increases between four and ten cents per gallon nationwide. According to a recent U.S. Energy Information Administration study, price increases could be even more drastic in New 

York, New Jersey and California. A three to 4 percent gasoline supply reduction equals the output of five medium-sized United States 

refineries, or the equivalent of 400,000 bpd. This amount is equal 

to or greater than gasoline supplied to the U.S. marketplace from 

Iraq or Venezuela and is equivalent to the gasoline that could be 

supplied by ANWR. 

Air Quality 

By every measure, clean-burning RFG blended with MTBE has 

exceeded all pollution reduction goals, substantially and cost effectively improving the nation’s air quality. MTBE is used in 85 percent of all RFG and the remaining 15 percent of RFG uses ethanol, 

primarily in the Midwest. RFG is currently required by the 1990 

Clean Air Act to reduce smog-forming pollutant emissions by 25 

percent, air toxic emissions by 20 percent, and nitrogen oxide emissions by four to 7 percent. 

Data collected by refiners, EPA, automakers, and others clearly 

shows that RFG-primarily because of the use of MTBE-has actually 

surpassed all emission reduction requirements. Use of RFG with 

MTBE has resulted in emissions benefits of 13 percent above requirements for air toxics; 13 percent more than required for VOCs; 

and an additional 8 percent in NOx reductions. Further, RFG with 

MTBE has reduced emissions of benzene, a known human carcinogen, by 43 percent. 

In 1998, a study by the Northeast States found that RFG with 

MTBE substantially reduced ‘‘the relative cancer risk associated 

with gasoline vapors and automobile exhaust compared to conventional gasoline,’’ concluding that today’s RFG reduces cancer risk 

by 20 percent over conventional gasoline.1

Ban on MTBE is Unprecedented and Arbitrary 

EPA, State health agencies, international health organizations, 

and leading research universities have studied the health effects 

associated with MTBE use in gasoline. The overwhelming majority 

of scientific evaluations from government and world-renowned 

independent health organizations have not indentified any healthVerDate Jan 31 2003 18:33 Jun 04, 2003 Jkt 19010 PO 00000 Frm 000043 Fmt 06602 Sfmt 06602 E:\HR\OC\SR057.XXX SR057
44

2European Union, Risk Assessment and Risk Reduction Strategy, EC Council Regulation No. 

793/93, Official Journal (4 December L319). 

related risks to humans from the intended use of MTBE in gasoline. Furthermore, MTBE does not accumulate in the body, and it 

has not been shown to impair fertility, or damage a developing 

fetus or the genetic structure of cells. Additional studies confirm 

that MTBE reduces toxic air pollutions such as benzene; reduces 

carbon monoxide and greenhouse gas emissions; and substantially 

surpasses all Clean Air Act requirements for the reduction of smogforming compounds. 

Like most chemicals, MTBE has the ability to cause some injury 

at extremely high dosages. Extensive research indicates that the 

MTBE doses required to produce illness in laboratory animals are 

thousands of times greater than those to which humans could conceivably be exposed to in the real world. 

The issues surrounding MTBE are very scientific and complex in 

nature. I believe it would be in poor choice for this Congress to use 

politics to ban a product that has done much to reduce air pollution 

in the United States. Instead, if the Federal Government wishes to 

regulate MTBE, it should be left to the Federal agencies who have 

extensive knowledge of the science behind MTBE and those agencies should work closely with industry and the public to solicit 

input on how to best proceed with the use of MTBE in the gasoline 

supply. 

Global Implications 

Other industrialized nations have also looked at MTBE and have 

formed opinions and policies completely different than those currently proposed by this committee. 

A European Union study/risk assessment on MTBE was released 

in 2002. This study commissioned by the European Union and conducted by the Finnish Environment Institute began in 1997 and 

was carried out in two stages. All known data on the health and 

environmental effects of MTBE, together with the potential for exposure, were evaluated in order to determine the overall risk, and 

the findings set out in a Risk Assessment Report. The EU considered all available scientific and technical information, based on 

more than 20 years of MTBE usage and research, and concluded 

that MTBE is not expected to have any harmful impact on human 

health or the environment.2 The study also concluded that proper 

management of underground storage tanks (USTs) would appropriately address any risk to the environment posed by MTBE in 

gasoline. Indeed, future European Union fuels specifications, recognizing the benefits of MTBE toward improving air quality, will 

likely increase usage of that product in the EU. 

Accordingly, Europe and other U.S. trade partners are likely to 

have concerns with a U.S. ban, which would terminate their current large volume of exports to the United States of MTBE, gasoline containing MTBE, and methanol used to produce MTBE. These 

trade partners can be expected to argue that the ban is a more burdensome restriction on trade in these commodities than is necessary and that it amounts to no more than thinly disguised protectionism for ethanol. These allegations, in turn, can be expected 

45

to exacerbate ongoing severe criticism of other recent U.S. trade 

measures—particularly those relating to steel and softwood lumber—where Europe, Canada, and others have characterized U.S. 

actions as protectionist and extreme. 

Water Contamination and Underground Storage Tanks 

I was pleased with the work completed by the Senate Committee 

on Environment and Public Works on passing meaningful legislation, S. 195, to improve the Federal Underground Storage Tank 

(UST) program. I believe this was a positive step in addressing the 

real problem of gasoline leaking from USTs and polluting drinking 

water supplies-not MTBE. Because of the unpleasant odor and 

taste MTBE can have, it has been easier for local and State water 

agencies to detect MTBE contamination in water sources. However, 

MTBE should be a precursor to gasoline contamination instead of 

the scapegoat because of the other ingredients contained in gasoline are much more harmful and are known carcinogens such as 

benzene and formaldehyde. 

MTBE detections have been found to be at concentrations below 

five parts per billion (ppbs), well below the EPA Consumer Advisory recommendation of 20 to 40 ppbs to avoid unpleasant odor and 

taste. In fact, in California, where MTBE concentrations were once 

among the highest, the California Department of Health Services 

determined that the MTBE contamination rate has declined and 

appears to have stabilized for public water supply wells. This claim 

has also been supported by testimony from the U.S. Geological Society (USGS) before the House Subcommittee on the Environment 

and Hazardous Material. I look forward to working with the Chairman of the Committee and the sponsor of the bill, Senator Chafee, 

to passing this important legislation. 

LACK OF LIABILITY PROTECTION EXTENDED TO MTBE PRODUCERS

As I mentioned in mark up, I believe a major flaw in this legislation is the fact that this committee is extending liability relief to 

one product—ethanol—and not another product—MTBE. 

The context in which we are denying liability protection to 

MTBE producers makes this situation even more disturbing. In 

1990, Congress set out to encourage clean air by passing the 1990 

Clean Air Act Amendments. Included in this landmark legislation 

was a particular fuel standard. Congress knew that MTBE would 

be widely used to satisfy the standard. As a result, manufacturers 

produced and marketed MTBE to satisfy the congressional standard. Now, manufacturers face crippling lawsuits solely because 

they produced a product that Congress encouraged them to 

produce. Because MTBE manufacturers complied with the requirements of a federally mandated program, MTBE should at a minimum receive the equivalent legal treatment as ethanol. 

It is only fair that any fuel producer who responds to a congressional mandate should be protected against legal action based upon 

the use of that mandated product. No one should be penalized for 

obeying the law. The government bears the responsibility for 

MTBE liability. Failure to address this issue only serves to undermine any incentive for additive manufacturers to produce new generations of additives that will be needed to replace MTBE and to 

46

meet future energy and environmental goals. There is a precedent 

for the Federal Government to address liability concerns when the 

government has required a product or process. In the case of nuclear facilities the Federal Government’s role is limited to licensing 

and approving facilities. Regardless of this limited role, specific 

caps have been enacted to limit economic damages arising from liability. In another instance, the Federal Government required that 

a flame retardant, TRIS, be used in children’s sleepwear. TRIS was 

subsequently banned after learning the retardant was carcinogenic. 

The Federal Government limited liability and set up a settlement 

fund to deal with claims made by companies that manufactured 

TRIS. 

Product liability makes the product manufacturer strictly liable 

for placing an unreasonably dangerous product into the market. 

The purpose of product liability is to deter unwanted behavior, but 

such liability cannot deter behavior when the government mandates the product. A narrowly tailored safe harbor provision does 

not interfere with the ability of plaintiffs to obtain relief for truly 

negligent behavior that result in diminished value of resources. 

47

1The Clean Air Act (42 U.S.C. 7401–7626) consists of Public Law 159 (July 14, 1955; 69 Stat. 

322) and the amendments made by subsequent enactments. 

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:

THE CLEAN AIR ACT 1

TITLE I—AIR POLLUTION PREVENTION AND CONTROL 

PART A—AIR QUALITY AND EMISSION LIMITATIONS

FINDINGS AND PURPOSES

SEC. 101. (a) The Congress finds—

* * * * * * *

TITLE I—AIR POLLUTION PREVENTION AND CONTROL 

PART A—AIR QUALITY AND EMISSION LIMITATIONS

Sec. 101. Findings and purposes. 

Sec. 102. Cooperative activities and uniform laws. 

Sec. 103. Research, investigation, training, and other activities. 

Sec. 104. Research relating to fuels and vehicles. 

Sec. 105. Grants for support of air pollution planning and control programs. 

Sec. 106. Interstate air quality agencies or commissions. 

Sec. 107. Air quality control regions. 

Sec. 108. Air quality criteria and control techniques. 

Sec. 109. National ambient air quality standards. 

Sec. 110. Implementation plans. 

Sec. 111. Standards of performance for new stationary sources. 

Sec. 112. Hazardous air pollutants. 

Sec. 113. Federal Enforcement. 

Sec. 114. Inspections, monitoring, and entry. 

Sec. 115. International air pollution. 

Sec. 116. Retention of state authority. 

Sec. 117. President’s air quality advisory board and advisory committees. 

Sec. 118. Control of pollution from federal facilities. 

Sec. 119. Primary nonferrous smelter orders. 

Sec. 120. Noncompliance penalty. 

Sec. 121. Consultation. 

Sec. 122. Listing of certain unregulated pollutants. 

Sec. 123. Stack heights. 

Sec. 124. Assurance of adequacy of state plans. 

Sec. 125. Measures to prevent economic disruption or unemployment. 

Sec. 126. Interstate pollution abatement. 

Sec. 127. Public notification. 

Sec. 128. State boards. 

Sec. 129. Solid waste combustion. 

Sec. 130. Emission factors. 

Sec. 131. Land use authority. 

PART B—OZONE PROTECTION

[Secs. 150 through 159 Repealed]

PART C—PREVENTION OF SIGNIFICANT DETERIORATION OF AIR QUALITY

SUBPART 1

Sec. 160. Purposes. 

48

Sec. 161. Plan requirements. 

Sec. 162. Initial classifications. 

Sec. 163. Increments and ceilings. 

Sec. 164. Area redesignation. 

Sec. 165. Preconstruction requirements. 

Sec. 166. Other pollutants. 

Sec. 167. Enforcement. 

Sec. 168. Period before plan approval. 

Sec. 169. Definitions.

1This table of contents is not part of the Clean Air Act but is included herein for the convenience of the users of this publication. 

SUBPART 2

Sec. 169A. Visibility protection for Federal class I areas. 

Sec. 169B. Visibility. 

PART D—PLAN REQUIREMENTS FOR NONATTAINMENT AREAS

SUBPART 1—NONATTAINMENT AREAS IN GENERAL

Sec. 171. Definitions. 

Sec. 172. Nonattainment plan provisions in general. 

Sec. 173. Permit requirements. 

Sec. 174. Planning procedures. 

Sec. 175. Environmental Protection Agency grants. 

Sec. 175A. Maintenance plans. 

Sec. 176. Limitation on certain Federal assistance. 

Sec. 176A. Interstate transport commissions. 

Sec. 177. New motor vehicle emission standards in nonattainment areas. 

Sec. 178. Guidance documents. 

Sec. 179. Sanctions and consequences of failure to attain. 

Sec. 179B. International border areas. 

SUBPART 2—ADDITIONAL PROVISIONS FOR OZONE NONATTAINMENT AREAS

Sec. 181. Classifications and attainment dates. 

Sec. 182. Plan submissions and requirements. 

Sec. 183. Federal ozone measures. 

Sec. 184. Control of interstate ozone air pollution. 

Sec. 185. Enforcement for Severe and Extreme ozone nonattainment areas for failure to attain. 

Sec. 185A. Transitional areas. 

Sec. 185B. NOx and VOC study. 

SUBPART 3—ADDITIONAL PROVISIONS FOR CARBON MONOXIDE NONATTAINMENT AREAS

Sec. 186. Classifications and attainment dates. 

Sec. 187. Plan submissions and requirements. 

SUBPART 4—ADDITIONAL PROVISIONS FOR PARTICULATE MATTER NONATTAINMENT

AREAS

Sec. 188. Classifications and attainment dates. 

Sec. 189. Plan provisions and schedules for plan submissions. 

Sec. 190. Issuance of RACM and BACM guidance. 

SUBPART 5—ADDITIONAL PROVISIONS FOR AREAS DESIGNATED NONATTAINMENT FOR

SULFUR OXIDES, NITROGEN DIOXIDE, OR LEAD

Sec. 191. Plan submission deadlines. 

Sec. 192. Attainment dates. 

SUBPART 6—SAVINGS PROVISIONS

Sec. 193. General savings clause. 

TITLE II—EMISSION STANDARDS FOR MOVING SOURCES 

Sec. 201. Short title. 

49

PART A—MOTOR VEHICLE EMISSION AND FUEL STANDARDS

Sec. 202. Establishment of standards. 

Sec. 203. Prohibited acts. 

Sec. 204. Injunction proceedings. 

Sec. 205. Civil penalties. 

Sec. 206. Motor vehicle and motor vehicle engine compliance testing and certification. 

Sec. 207. Compliance by vehicles and engines in actual use. 

Sec. 208. Information collection. 

Sec. 209. State standards. 

Sec. 210. State grants. 

Sec. 211. Regulation of fuels. 

Sec. 212. Renewable fuels. 

Sec. 213. Fuel economy improvement from new motor vehicles. 

Sec. 214. Study of particulate emissions from motor vehicles. 

Sec. 215. High altitude performance adjustments. 

Sec. 216. Definitions for part A. 

Sec. 217. Motor vehicle compliance program fees. 

Sec. 218. Prohibition on production of engines requiring leaded gasoline. 

Sec. 219. Urban bus standards. 

PART B—AIRCRAFT EMISSION STANDARDS

Sec. 231. Establishment of standards. 

Sec. 232. Enforcement of standards. 

Sec. 233. State standards and controls. 

Sec. 234. Definitions. 

PART C—CLEAN FUEL VEHICLES

Sec. 241. Definitions. 

Sec. 242. Requirements applicable to clean fuel vehicles. 

Sec. 243. Standards for light-duty clean fuel vehicles. 

Sec. 244. Administration and enforcement as per California standards. 

Sec. 245. Standards for heavy-duty clean-fuel vehicles (gvwr above 8,500 up to 

26,000 lbs). 

Sec. 246. Centrally fueled fleets. 

Sec. 247. Vehicle conversions. 

Sec. 248. Federal agency fleets. 

Sec. 249. California pilot test program. 

Sec. 250. General provisions. 

TITLE III—GENERAL 

Sec. 301. Administration. 

Sec. 302. Definitions. 

Sec. 303. Emergency powers. 

Sec. 304. Citizen suits. 

Sec. 305. Representation in litigation. 

Sec. 306. Federal procurement. 

Sec. 307. General provisions relating to administrative proceedings and judicial review. 

Sec. 308. Mandatory licensing. 

Sec. 309. Policy review. 

Sec. 310. Other authority not affected. 

Sec. 311. Records and audit. 

Sec. 312. Economic impact analyses. 

[Sec. 313. Repealed]

Sec. 314. Labor standards. 

Sec. 315. Separability. 

Sec. 316. Sewage treatment grants. 

Sec. 317. Short title. 

Sec. 317.1 Economic impact assessment. 

[Sec. 318. Repealed]

Sec. 319. Air quality monitoring. 

Sec. 320. Standardized air quality modeling. 

Sec. 321. Employment effects. 

Sec. 322. Employee protection. 

Sec. 323. Cost of emission control for certain vapor recovery to be borne by owner 

of retail outlet. 

50

Sec. 324. Vapor recovery for small business marketers of petroleum products. 

Sec. 325. Exemptions for certain territories. 

Sec. 326. Construction of certain clauses. 

Sec. 327. Authorization of appropriations. 

Sec. 328. Air pollution from outer continental shelf activities.

1There are two sections numbered 317. This section should be numbered 318.

REGULATION OF FUELS

SEC. 211. (a) The Administrator may by regulation designate 

any fuel or fuel additive (including any fuel or fuel additive used 

exclusively in nonroad engines or nonroad vehicles) and, after such 

date or dates as may be prescribed by him, no manufacturer or 

processor of any such fuel or additive may sell, offer for sale, or introduce into commerce such fuel or additive unless the Administrator has registered such fuel or additive in accordance with subsection (b) of this section. 

(b)(1) For the purpose of registration of fuels and fuel additives, the Administrator shall require—

(A) the manufacturer of any fuel to notify him as to the 

commercial identifying name and manufacturer of any additive 

contained in such fuel; the range of concentration of any additive in the fuel; and the purpose-in-use of any such additive; 

and 

(B) the manufacturer of any additive to notify him as to 

the chemical composition of such additive. 

(2) For the purpose of registration of fuels and fuel additives, 

the Administrator ømay also¿ shall, on a regular basis require the 

manufacturer of any fuel or fuel additive—

ø(A) to conduct tests to determine potential public health 

effects of such fuel or additive (including, but not limited to, 

carcinogenic, teratogenic, or mutagenic effects), and¿

(A) to conduct tests to determine potential public health 

and environmental effects of the fuel or additive (including 

carcinogenic, teratogenic, or mutagenic effects); and 

(B) to furnish the description of any analytical technique 

that can be used to detect and measure any additive in such 

fuel, the recommended range of concentration of such additive, 

and the recommended purpose-in-use of such additive, and 

such other information as is reasonable and necessary to determine the emissions resulting from the use of the fuel or additive contained in such fuel, the effect of such fuel or additive 

on the emission control performance of any vehicle, vehicle engine, nonroad engine or nonroad vehicle, or the extent to which 

such emissions affect the public health or welfare. 

Tests under subparagraph (A) shall be conducted in conformity 

with test procedures and protocols established by the Administrator. The results of such tests shall not be considered confidential. 

(3) Upon compliance with the provisions of this subsection, including assurances that the Administrator will receive changes in 

the information required, the Administrator shall register such fuel 

or fuel additive. 

(4) STUDY ON CERTAIN FUEL ADDITIVES AND

BLENDSTOCKS.—

51

(A) IN GENERAL.—Not later than 2 years after the date 

of enactment of this paragraph, the Administrator shall— (i) conduct a study on the effects on public health 

(including the effects on children, pregnant women, minority or low-income communities, and other sensitive 

populations), air quality, and water resources of increased use of, and the feasibility of using as substitutes for methyl tertiary butyl ether in gasoline— (I) ethyl tertiary butyl ether; 

(II) tertiary amyl methyl ether; 

(III) di-isopropyl ether; 

(IV) tertiary butyl alcohol; 

(V) other ethers and heavy alcohols, as determined by then Administrator; 

(VI) ethanol; 

(VII) iso-octane; and 

(VIII) alkylates; and 

(ii) conduct a study on the effects on public health 

(including the effects on children, pregnant women, minority or low-income communities, and other sensitive 

populations), air quality, and water resources of the 

adjustment for ethanol-blended reformulated gasoline 

to the volatile organic compounds performance requirements that are applicable under paragraphs (1) and (3) 

of section 211(k); and 

(iii) submit to the Committee on Environment and 

Public Works of the Senate and the Committee on Energy and Commerce of the House of Representatives a 

report describing the results of the studies under 

clauses (i) and (ii). 

(B) CONTRACTS FOR STUDY.—In carrying out this paragraph, the Administrator may enter into 1 or more contracts with nongovernmental entities such as— (i) the national energy laboratories; and 

(ii) institutions of higher education (as defined in section 101 of the Higher Education Act of 1965 (20 U.S.C. 

1001)). 

(c)(1) The Administrator may, from time to time on the basis 

of information obtained under subsection (b) of this section or other 

information available to him, by regulation, control or prohibit the 

manufacture, introduction into commerce, offering for sale, or sale 

of any fuel or fuel additive for use in a motor vehicle, motor vehicle 

engine, or nonroad engine or nonroad vehicle (A) if in the judgment 

of the Administrator any fuel or fuel additive or emission product 

of such fuel or fuel additive causes, or contributes, to øair pollution 

which¿ air pollution, or water pollution, that may reasonably be 

anticipated to endanger the public health or welfare, or (B) if emission products of such fuel or fuel additive will impair to a significant degree the performance of any emission control device or system which is in general use, or which the Administrator finds has 

been developed to a point where in a reasonable time it would be 

in general use were such regulation to be promulgated. 

(2)(A) No fuel, class of fuels, or fuel additive may be controlled 

or prohibited by the Administrator pursuant to clause (A) of paraVerDate Jan 31 2003 18:33 Jun 04, 2003 Jkt 19010 PO 00000 Frm 000051 Fmt 06602 Sfmt 06601 E:\HR\OC\SR057.XXX SR057
52

graph (1) except after consideration of all relevant medical and scientific evidence available to him, including consideration of other 

technologically or economically feasible means of achieving emission standards under section 202. 

(B) No fuel or fuel additive may be controlled or prohibited by 

the Administrator pursuant to clause (B) of paragraph (1) except 

after consideration of available scientific and economic data, including a cost benefit analysis comparing emission control devices or 

systems which are or will be in general use and require the proposed control or prohibition with emission control devices or systems which are or will be in general use and do not require the 

proposed control or prohibition. On request of a manufacturer of 

motor vehicles, motor vehicle engines, fuels, or fuel additives submitted within 10 days of notice of proposed rulemaking, the Administrator shall hold a public hearing and publish findings with respect to any matter he is required to consider under this subparagraph. Such findings shall be published at the time of promulgation 

of final regulations. 

(C) No fuel or fuel additive may be prohibited by the Administrator under paragraph (1) unless he finds, and publishes such 

finding, that in his judgment such prohibition will not cause the 

use of any other fuel or fuel additive which will produce emissions 

which will endanger the public health or welfare to the same or 

greater degree than the use of the fuel or fuel additive proposed to 

be prohibited. 

(3)(A) For the purpose of obtaining evidence and data to carry 

out paragraph (2), the Administrator may require the manufacturer of any motor vehicle or motor vehicle engine to furnish any 

information which has been developed concerning the emissions 

from motor vehicles resulting from the use of any fuel or fuel additive, or the effect of such use on the performance of any emission 

control device or system. 

(B) In obtaining information under subparagraph (A), section 

307 (a) (relating to subpenas) shall be applicable. 

(4)(A) Except as otherwise provided in subparagraph (B) or (C), 

no State (or political subdivision thereof) may prescribe or attempt 

to enforce, for the purposes of motor vehicle emission control, any 

control or prohibition respecting any characteristic or component of 

a fuel or fuel additive in a motor vehicle or motor vehicle engine—

(i) if the Administrator has found that no control or prohibition of the characteristic or component of a fuel or fuel additive under paragraph (1) is necessary and has published his 

finding in the Federal Register, or 

(ii) if the Administrator has prescribed under paragraph 

(1) a control or prohibition applicable to such characteristic or 

component of a fuel or fuel additive, unless State prohibition 

or control is identical to the prohibition or control prescribed 

by the Administrator. 

(B) Any State for which application of section 209(a) has at any 

time been waived under section 209(b) may at any time prescribe 

and enforce, for the purpose of motor vehicle emission control or 

water quality protection, a control or prohibition respecting any fuel 

or fuel additive. 

ø(C) A State¿

53

(C) AUTHORITY OF STATE TO CONTROL FUELS AND FUEL

ADDITIVES FOR REASONS OF NECESSITY.— (i) IN GENERAL.—A State may prescribe and enforce, for purposes of motor vehicle emission control, a 

control or prohibition respecting the use of a fuel or 

fuel additive in a motor vehicle or motor vehicle engine if an applicable implementation plan for such 

State under section 110 so provides. The Administrator may approve such provision in an implementation plan, or promulgate an implementation plan containing such a provision, only if he finds that the State 

control or prohibition is necessary to achieve the national primary or secondary ambient air quality standard which the plan implements. The Administrator 

may find that a State control or prohibition is necessary to achieve that standard if no other measures 

that would bring about timely attainment exist, or if 

other measures exist and are technically possible to 

implement, but are unreasonable or impracticable. 

The Administrator may make a finding of necessity 

under this subparagraph even if the plan for the area 

does not contain an approved demonstration of timely 

attainment. 

(ii) ENFORCEMENT BY THE ADMINISTRATOR.—In 

any case in which a State prescribes and enforces a 

control or prohibition under clause (i), the Administrator, at the request of the State, shall enforce the control or prohibition as if the control or prohibition had 

been adopted under the other provisions of this section. 

(5) RESTRICTIONS ON USE OF MTBE.— (A) IN GENERAL.—Subject to subparagraph (E), not 

later than 4 years after the date of enactment of this paragraph, the use of methyl tertiary butyl ether in motor vehicle fuel in any State other than a State described in subparagraph (C) is prohibited. 

(B) REGULATIONS.—The Administrator shall promulgate regulations to effect the prohibition in subparagraph 

(A). 

(C) STATES THAT AUTHORIZE USE.—A State described 

in this subparagraph is a State that submits to the Administrator a notice that the State authorizes use of methyl tertiary butyl ether in motor vehicle fuel sold or used in the 

State. 

(D) PUBLICATION OF NOTICE.—The Administrator shall 

publish in the Federal Register each notice submitted by a 

State under subparagraph (C). 

(E) TRACE QUANTITIES.—In carrying out subparagraph 

(A), the Administrator may allow trace quantities of methyl 

tertiary butyl ether, not to exceed 0.5 percent by volume, to 

be present in motor vehicle fuel in cases that the Administrator determines to be appropriate. 

(6) MTBE MERCHANT PRODUCER CONVERSION ASSIST- ANCE.—

(A) IN GENERAL.—

54

(i) GRANTS.—The Secretary of Energy, in consultation with the Administrator, may make grants to merchant producers of methyl tertiary butyl ether in the 

United States to assist the producers in the conversion 

of eligible production facilities described in subparagraph (C) to the production of— (i) iso-octane or alkylates, unless the Administrator, in consultation with the Secretary of Energy, determines that transition assistance for the production 

of iso-octane or alkylates is inconsistent with the criteria specified in subparagraph (B); and 

(ii) any other fuel additive that meets the criteria 

specified in subparagraph (B). 

(B) CRITERIA.—The criteria referred to in subparagraph (A) are that— (i) use of the fuel additive is consistent with this 

subsection; 

(ii) the Administrator has not determined that the 

fuel additive may reasonably be anticipated to endanger public health or the environment; 

(iii) the fuel additive has been registered and tested, or is being tested, in accordance with the requirements of this section; and 

(iv) the fuel additive will contribute to replacing 

quantities of motor vehicle fuel rendered unavailable 

as a result of paragraph (5). 

(C) ELIGIBLE PRODUCTION FACILITIES.—A production 

facility shall be eligible to receive a grant under this paragraph if the production facility— (i) is located in the United States; and 

(ii) produced methyl tertiary butyl ether for consumption in nonattainment areas during the period— (I) beginning on the date of enactment of this 

paragraph; and 

(II) ending on the effective date of the prohibition on the use of methyl tertiary butyl ether under 

paragraph (5). 

(D) AUTHORIZATION OF APPROPRIATIONS.—There is authorized to be appropriated to carry out this paragraph 

$250,000,000 for each of fiscal years 2004 through 2007. 

(d) PENALTIES AND INJUNCTIONS.—

(1) CIVIL PENALTIES.—Any person who violates subsection 

(a), (f), (g), (k), (l), (m), øor (n)¿ (n), or (o) of this section or the 

regulations prescribed under subsection (c), (h), (i), (k), (l), (m), 

øor (n)¿ (n), or (o) of this section or who fails to furnish any 

information or conduct any tests required by the Administrator 

under subsection (b) of this section shall be liable to the United 

States for a civil penalty of not more than the sum of $25,000 

for every day of such violation and the amount of economic 

benefit or savings resulting from the violation. Any violation 

with respect to a regulation prescribed under subsection (c), 

(k), (l), øor (m)¿ (m), or (o) of this section which establishes a 

regulatory standard based upon a multiday averaging period 

shall constitute a separate day of violation for each and every 

55

day in the averaging period. Civil penalties shall be assessed 

in accordance with subsections (b) and (c) of section 205. 

(2) INJUNCTIVE AUTHORITY.—The district courts of the 

United States shall have jurisdiction to restrain violations of 

subsections (a), (f), (g), (k), (l), (m), øand (n)¿ (n), and (o) of this 

section and of the regulations prescribed under subsections (c), 

(h), (i), (k), (l), (m), øand (n)¿ (n), and (o) of this section, to 

award other appropriate relief, and to compel the furnishing of 

information and the conduct of tests required by the Administrator under subsection (b) of this section. Actions to restrain 

such violations and compel such actions shall be brought by 

and in the name of the United States. In any such action, subpoenas for witnesses who are required to attend a district court 

in any district may run into any other district. 

(e)(1) Not later than one year after the date of enactment of 

this subsection and after notice and opportunity for a public hearing, the Administrator shall promulgate regulations which implement the authority under subsection (b)(2) (A) and (B) with respect 

to each fuel or fuel additive which is registered on the date of promulgation of such regulations and with respect to each fuel or fuel 

additive for which an application for registration is filed thereafter. 

(2) Regulations under subsection (b) to carry out this subsection shall require that the requisite information be provided to 

the Administrator by each such manufacturer— (A) prior to registration, in the case of any fuel or fuel additive which is not registered on the date of promulgation of 

such regulations; or 

(B) not later than three years after the date of promulgation of such regulations, in the case of any fuel or fuel additive 

which is registered on such date. 

(3) In promulgating such regulations, the Administrator may— (A) exempt any small business (as defined in such regulations) from or defer or modify the requirements of, such regulations with respect to any such small business; 

(B) provide for cost-sharing with respect to the testing of 

any fuel or fuel additive which is manufactured or processed 

by two or more persons or otherwise provide for shared responsibility to meet the requirements of this section without duplication; or 

(C) exempt any person from such regulations with respect 

to a particular fuel or fuel additive upon a finding that any additional testing of such fuel or fuel additive would be duplicative of adequate existing testing. 

(f)(1)(A) Effective upon March 31, 1977, it shall be unlawful for 

any manufacturer of any fuel or fuel additive to first introduce into 

commerce, or to increase the concentration in use of, any fuel or 

fuel additive for general use in light duty motor vehicles manufactured after model year 1974 which is not substantially similar to 

any fuel or fuel additive utilized in the certification of any model 

year 1975, or subsequent model year, vehicle or engine under section 206. 

(B) Effective upon the date of the enactment of the Clean Air 

Act Amendments of 1990, it shall be unlawful for any manufacturer of any fuel or fuel additive to first introduce into commerce, 

56

or to increase the concentration in use of, any fuel or fuel additive 

for use by any person in motor vehicles manufactured after model 

year 1974 which is not substantially similar to any fuel or fuel additive utilized in the certification of any model year 1975, or subsequent model year, vehicle or engine under section 206. 

(2) Effective November 30, 1977, it shall be unlawful for any 

manufacturer of any fuel to introduce into commerce any gasoline 

which contains a concentration of manganese in excess of .0625 

grams per gallon of fuel, except as otherwise provided pursuant to 

a waiver under paragraph (4). 

(3) Any manufacturer of any fuel or fuel additive which prior 

to March 31, 1977, and after January 1, 1974, first introduced into 

commerce or increased the concentration in use of a fuel or fuel additive that would otherwise have been prohibited under paragraph 

(1)(A) if introduced on or after March 31, 1977 shall, not later than 

September 15, 1978, cease to distribute such fuel or fuel additive 

in commerce. During the period beginning 180 days after the date 

of the enactment of this subsection and before September 15, 1978, 

the Administrator shall prohibit, or restrict the concentration of 

any fuel additive which he determines will cause or contribute to 

the failure of an emission control device or system (over the useful 

life of any vehicle in which such device or system is used) to 

achieve compliance by the vehicle with the emission standards with 

respect to which it has been certified under section 206. 

(4) The Administrator, upon application of any manufacturer of 

any fuel or fuel additive, may waive the prohibitions established 

under paragraph (1) or (3) of this subsection or the limitation specified in paragraph (2) of this subsection, if he determines that the 

applicant has established that such fuel or fuel additive or a specified concentration thereof, and the emission products of such fuel 

or additive or specified concentration thereof, will not cause or contribute to a failure of any emission control device or system (over 

the useful life of any vehicle in which such device or system is 

used) to achieve compliance by the vehicle with the emission standards with respect to which it has been certified pursuant to section 

206. If the Administrator has not acted to grant or deny an application under this paragraph within one hundred and eighty days of 

receipt of such application, the waiver authorized by this paragraph shall be treated as granted. 

(5) No action of the Administrator under this section may be 

stayed by any court pending judicial review of such action. 

(g) MISFUELING.—(1) No person shall introduce, or cause or 

allow the introduction of, leaded gasoline into any motor vehicle 

which is labeled ‘‘unleaded gasoline only,’’ which is equipped with 

a gasoline tank filler inlet designed for the introduction of unleaded 

gasoline, which is a 1990 or later model year motor vehicle, or 

which such person knows or should know is a vehicle designed solely for the use of unleaded gasoline. 

(2) Beginning October 1, 1993, no person shall introduce or 

cause or allow the introduction into any motor vehicle of diesel fuel 

which such person knows or should know contains a concentration 

of sulfur in excess of 0.05 percent (by weight) or which fails to meet 

a cetane index minimum of 40 or such equivalent alternative aroVerDate Jan 31 2003 18:33 Jun 04, 2003 Jkt 19010 PO 00000 Frm 000056 Fmt 06602 Sfmt 06601 E:\HR\OC\SR057.XXX SR057
57

matic level as prescribed by the Administrator under subsection 

(i)(2). 

(h) REID VAPOR PRESSURE REQUIREMENTS.—

(1) PROHIBITION.—Not later than 6 months after the date 

of the enactment of the Clean Air Act Amendments of 1990, 

the Administrator shall promulgate regulations making it unlawful for any person during the high ozone season (as defined 

by the Administrator) to sell, offer for sale, dispense, supply, 

offer for supply, transport, or introduce into commerce gasoline 

with a Reid Vapor Pressure in excess of 9.0 pounds per square 

inch (psi). Such regulations shall also establish more stringent 

Reid Vapor Pressure standards in a nonattainment area as the 

Administrator finds necessary to generally achieve comparable 

evaporative emissions (on a per-vehicle basis) in nonattainment areas, taking into consideration the enforceability of such 

standards, the need of an area for emission control, and economic factors. 

(2) ATTAINMENT AREAS.—The regulations under this subsection shall not make it unlawful for any person to sell, offer 

for supply, transport, or introduce into commerce gasoline with 

a Reid Vapor Pressure of 9.0 pounds per square inch (psi) or 

lower in any area designated under section 107 as an attainment area. Notwithstanding the preceding sentence, the Administrator may impose a Reid vapor pressure requirement 

lower than 9.0 pounds per square inch (psi) in any area, formerly an ozone nonattainment area, which has been redesignated as an attainment area. 

(3) EFFECTIVE DATE; ENFORCEMENT.—The regulations 

under this subsection shall provide that the requirements of 

this subsection shall take effect not later than the high ozone 

season for 1992, and shall include such provisions as the Administrator determines are necessary to implement and enforce 

the requirements of this subsection. 

(4) ETHANOL WAIVER.—For fuel blends containing gasoline 

and 10 percent denatured anhydrous ethanol, the Reid vapor 

pressure limitation under this subsection shall be one pound 

per square inch (psi) greater than the applicable Reid vapor 

pressure limitations established under paragraph (1); Provided, 

however, That a distributor, blender, marketer, reseller, carrier, retailer, or wholesale purchaser-consumer shall be 

deemed to be in full compliance with the provisions of this subsection and the regulations promulgated thereunder if it can 

demonstrate (by showing receipt of a certification or other evidence acceptable to the Administrator) that—

(A) the gasoline portion of the blend complies with the 

Reid vapor pressure limitations promulgated pursuant to 

this subsection; 

(B) the ethanol portion of the blend does not exceed its 

waiver condition under subsection (f)(4); and 

(C) no additional alcohol or other additive has been 

added to increase the Reid Vapor Pressure of the ethanol 

portion of the blend. 

(5) EXCLUSION FROM ETHANOL WAIVER.—

58

(A) PROMULGATION OF REGULATIONS.—Upon notification, accompanied by supporting documentation, from the 

Governor of a State that the Reid vapor pressure limitation 

established by paragraph (4) will increase emissions that 

contribute to air pollution in any area in the State, the Administrator shall, by regulation, apply, in lieu of the Reid 

vapor pressure limitation established by paragraph (4), the 

Reid vapor pressure limitation established by paragraph 

(1) to all fuel blends containing gasoline and 10 percent denatured anhydrous ethanol that are sold, offered for sale, 

dispensed, supplied, offered for supply, transported, or introduced into commerce in the area during the high ozone 

season. 

(B) DEADLINE FOR PROMULGATION.—The Administrator 

shall promulgate regulations under subparagraph (A) not 

later than 90 days after the date of receipt of a notification 

from a Governor under that subparagraph. 

(C) EFFECTIVE DATE.— (i) IN GENERAL.—With respect to an area in a State 

for which the Governor submits a notification under 

subparagraph (A), the regulations under that subparagraph shall take effect on the later of— (I) the first day of the first high ozone season 

for the area that begins after the date of receipt of 

the notification; or 

(II) 1 year after the date of receipt of the notification. 

(ii) EXTENSION OF EFFECTIVE DATE BASED ON DE- TERMINATION OF INSUFFICIENT SUPPLY.— (I) IN GENERAL.—If, after receipt of a notification with respect to an area from a Governor of a 

State under subparagraph (A), the Administrator 

determines, on the Administrator’s own motion or 

on petition of any person and after consultation 

with the Secretary of Energy, that the promulgation of regulations described in subparagraph (A) 

would result in an insufficient supply of gasoline 

in the State, the Administrator, by regulation—

(aa) shall extend the effective date of the 

regulations under clause (i) with respect to the 

area for not more than 1 year; and 

(bb) may renew the extension under item 

(aa) for 2 additional periods, each of which 

shall not exceed 1 year. 

(II) DEADLINE FOR ACTION ON PETITIONS.—The 

Administrator shall act on any petition submitted 

under subclause (I) not later than 180 days after 

the date of receipt of the petition. 

ø(5)¿ (6) AREAS COVERED.—The provisions of this subsection shall apply only to the 48 contiguous States and the 

District of Columbia. 

(i) SULFUR CONTENT REQUIREMENTS FOR DIESEL FUEL.—(1) Effective October 1, 1993, no person shall manufacture, sell, supply, 

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59

1So in original. Probably should refer to section ‘‘325’’. 

merce motor vehicle diesel fuel which contains a concentration of 

sulfur in excess of 0.05 percent (by weight) or which fails to meet 

a cetane index minimum of 40. 

(2) Not later than 12 months after the date of the enactment 

of the Clean Air Act Amendments of 1990, the Administrator shall 

promulgate regulations to implement and enforce the requirements 

of paragraph (1). The Administrator may require manufacturers 

and importers of diesel fuel not intended for use in motor vehicles 

to dye such fuel in a particular manner in order to segregate it 

from motor vehicle diesel fuel. The Administrator may establish an 

equivalent alternative aromatic level to the cetane index specification in paragraph (1). 

(3) The sulfur content of fuel required to be used in the certification of 1991 through 1993 model year heavy-duty diesel vehicles 

and engines shall be 0.10 percent (by weight). The sulfur content 

and cetane index minimum of fuel required to be used in the certification of 1994 and later model year heavy-duty diesel vehicles 

and engines shall comply with the regulations promulgated under 

paragraph (2). 

(4) The States of Alaska and Hawaii may be exempted from 

the requirements of this subsection in the same manner as provided in section 324. 1 The Administrator shall take final action on 

any petition filed under section 324 1 or this paragraph for an exemption from the requirements of this subsection, within 12 

months from the date of the petition. 

(j) LEAD SUBSTITUTE GASOLINE ADDITIVES.—(1) After the date 

of the enactment of the Clean Air Act Amendments of 1990, any 

person proposing to register any gasoline additive under subsection 

(a) or to use any previously registered additive as a lead substitute 

may also elect to register the additive as a lead substitute gasoline 

additive for reducing valve seat wear by providing the Administrator with such relevant information regarding product identity 

and composition as the Administrator deems necessary for carrying 

out the responsibilities of paragraph (2) of this subsection (in addition to other information which may be required under subsection 

(b)). 

(2) In addition to the other testing which may be required 

under subsection (b), in the case of the lead substitute gasoline additives referred to in paragraph (1), the Administrator shall develop and publish a test procedure to determine the additives’ effectiveness in reducing valve seat wear and the additives’ tendencies 

to produce engine deposits and other adverse side effects. The test 

procedures shall be developed in cooperation with the Secretary of 

Agriculture and with the input of additive manufacturers, engine 

and engine components manufacturers, and other interested persons. The Administrator shall enter into arrangements with an 

independent laboratory to conduct tests of each additive using the 

test procedures developed and published pursuant to this paragraph. The Administrator shall publish the results of the tests by 

company and additive name in the Federal Register along with, for 

comparison purposes, the results of applying the same test procedures to gasoline containing 0.1 gram of lead per gallon in lieu of 

60

the lead substitute gasoline additive. The Administrator shall not 

rank or otherwise rate the lead substitute additives. Test procedures shall be established within 1 year after the date of the enactment of the Clean Air Act Amendments of 1990. Additives shall be 

tested within 18 months of the date of the enactment of the Clean 

Air Act Amendments of 1990 or 6 months after the lead substitute 

additives are identified to the Administrator, whichever is later. 

(3) The Administrator may impose a user fee to recover the 

costs of testing of any fuel additive referred to in this subsection. 

The fee shall be paid by the person proposing to register the fuel 

additive concerned. Such fee shall not exceed $20,000 for a single 

fuel additive. 

(4) There are authorized to be appropriated to the Adminis- trator not more than $1,000,000 for the second full fiscal year after 

the date of the enactment of the Clean Air Act Amendments of 

1990 to establish test procedures and conduct engine tests as provided in this subsection. Not more than $500,000 per year is authorized to be appropriated for each of the 5 subsequent fiscal 

years. 

(5) Any fees collected under this subsection shall be deposited 

in a special fund in the United States Treasury for licensing and 

other services which thereafter shall be available for appropriation, 

to remain available until expended, to carry out the Agency’s activities for which the fees were collected. 

(k) REFORMULATED GASOLINE FOR CONVENTIONAL VEHICLES.— (1) EPA REGULATIONS.—øWithin 1 year after the enactment of the Clean Air Act Amendments of 1990 

(A) IN GENERAL.—Not later than November 15, 1991, 

the Administrator shall promulgate regulations under this 

section establishing requirements for reformulated gasoline to be used in gasoline-fueled vehicles in specified nonattainment areas. Such regulations shall require the greatest reduction in emissions of ozone forming volatile organic 

compounds (during the high ozone season) and emissions 

of toxic air pollutants (during the entire year) achievable 

through the reformulation of conventional gasoline, taking 

into consideration the cost of achieving such emission reductions, any nonair-quality and other air-quality related 

health and environmental impacts and energy requirements. 

(B) MAINTENANCE OF TOXIC AIR POLLUTANT EMISSIONS

REDUCTIONS FROM REFORMULATED GASOLINE.—

(i) DEFINITION OF PADD.—In this subparagraph the 

term ‘PADD’ means a Petroleum Administration for 

Defense District. 

(ii) REGULATIONS CONCERNING EMISSIONS OF

TOXIC AIR POLLUTANTS.—Not later than 270 days after 

the date of enactment of this subparagraph, the Administrator shall establish by regulation, for each refinery or importer (other than a refiner or importer in 

a State that has received a waiver under section 209(b) 

with respect to gasoline produced for use in that State), 

standards for toxic air pollutants from use of the reformulated gasoline produced or distributed by the refiner 

61

or importer that maintain the reduction of the average 

annual aggregate emissions of toxic air pollutants for 

reformulated gasoline produced or distributed by the 

refiner or importer during calendar years 1999 and 

2000 (as determined on the basis of data collected by 

the Administrator with respect to the refiner or importer). 

(iii) STANDARDS APPLICABLE TO SPECIFIC REFIN- ERIES OR IMPORTERS.— (I) APPLICABILITY OF STANDARDS.—For any 

calendar year, the standards applicable to a refiner or importer under clause (ii) shall apply to 

the quantity of gasoline produced or distributed by 

the refiner or importer in the calendar year only to 

the extent that the quantity is less than or equal to 

the average annual quantity of reformulated gasoline produced or distributed by the refiner or importer during calendar years 1999 and 2000. 

(II) APPLICABILITY OF OTHER STANDARDS.—For 

any calendar year, the quantity of gasoline produced or distributed by a refiner or importer that 

is in excess of the quantity subject to subclause (I) 

shall be subject to standards for emissions of toxic 

air pollutants promulgated under subparagraph 

(A) and paragraph (3)(B). 

(iv) CREDIT PROGRAM.—The Administrator shall 

provide for the granting and use of credits for emissions of toxic air pollutants in the same manner as provided in paragraph (7). 

(v) REGIONAL PROTECTION OF TOXICS REDUCTION

BASELINES.—(I) IN GENERAL.—Not later than 60 days after 

the date of enactment of this subparagraph, and 

not later than April 1 of each calendar year that 

begins after that date of enactment, the Administrator shall publish in the Federal Register a report that specifies, with respect to the previous calendar year—

(aa) the quantity of reformulated gasoline 

produced that is in excess of the average annual quantity of reformulated gasoline produced in 1999 and 2000; and 

(bb) the reduction of the average annual 

aggregate emissions of toxic air pollutants in 

each PADD, based on retail survey data or 

data from other appropriate sources. 

(II) EFFECT OF FAILURE TO MAINTAIN AGGRE- GATE TOXICS REDUCTIONS.—If, in any calendar 

year, the reduction of the average annual aggregate emissions of toxic air pollutants in a PADD 

fails to meet or exceed the reduction of the average 

annual aggregate emissions of toxic air pollutants 

in the PADD in calendar years 1999 and 2000, the 

Administrator, not later than 90 days after the 

62

date of publication of the report for the calendar 

year under subclause (I), shall—

(aa) identify, to the maximum extent practicable, the reasons for the failure, including 

the sources, volumes, and characteristics of reformulated gasoline that contributed to the 

failure; and 

(bb) promulgate revisions to the regulations promulgated under clause (ii), to take effect not earlier than 180 days but not later 

than 270 days after the date of promulgation, 

to provide that, notwithstanding clause 

(iii)(II), all reformulated gasoline produced or 

distributed at each refiner or importer shall 

meet the standards applicable under clause 

(iii)(I) beginning not later than April 1 of the 

calendar year following publication of the report under subclause (I) and in each calendar 

year thereafter. 

(vi) REGULATIONS TO CONTROL HAZARDOUS AIR

POLLUTANTS FROM MOTOR VEHICLES AND MOTOR VEHICLE FUELS.—Not later than July 1, 2004, the Administrator shall promulgate final regulations to control 

hazardous air pollutants from motor vehicles and 

motor vehicle fuels, as provided for in section 80.1045 

of title 40, Code of Federal Regulations (as in effect on 

the date of enactment of this subparagraph). 

(2) GENERAL REQUIREMENTS.—The regulations referred to 

in paragraph (1) shall require that reformulated gasoline comply with paragraph (3) and with each of the following requirements (subject to paragraph (7)): 

(A) NOx EMISSIONS.—The emissions of oxides of nitrogen (NOx) from baseline vehicles when using the reformulated gasoline shall be no greater than the level of such 

emissions from such vehicles when using baseline gasoline. 

If the Administrator determines that compliance with the 

limitation on emissions of oxides of nitrogen under the preceding sentence is technically infeasible, considering the 

other requirements applicable under this subsection to 

such gasoline, the Administrator may, as appropriate to 

ensure compliance with this subparagraph, adjust (or 

waive entirely), any other requirements of this paragraph 

(including the oxygen content requirement contained in 

subparagraph (B)) or any requirements applicable under 

paragraph (3)(A). 

(B) OXYGEN CONTENT.—The oxygen content of the gasoline shall equal or exceed 2.0 percent by weight (subject 

to a testing tolerance established by the Administrator) except as otherwise required by this Act. The Administrator 

may waive, in whole or in part, the application of this subparagraph for any ozone nonattainment area upon a determination by the Administrator that compliance with such 

requirement would prevent or interfere with the attainVerDate Jan 31 2003 18:33 Jun 04, 2003 Jkt 19010 PO 00000 Frm 000062 Fmt 06602 Sfmt 06601 E:\HR\OC\SR057.XXX SR057
63

ment by the area of a national primary ambient air quality 

standard. 

(C) BENZENE CONTENT.—The benzene content of the 

gasoline shall not exceed 1.0 percent by volume. 

(D) HEAVY METALS.—The gasoline shall have no heavy 

metals, including lead or manganese. The Administrator 

may waive the prohibition contained in this subparagraph 

for a heavy metal (other than lead) if the Administrator 

determines that addition of the heavy metal to the gasoline will not increase, on an aggregate mass or cancer-risk 

basis, toxic air pollutant emissions from motor vehicles. 

(3) MORE STRINGENT OF FORMULA OR PERFORMANCE STAND- ARDS.—The regulations referred to in paragraph (1) shall require compliance with the more stringent of either the requirements set forth in subparagraph (A) or the requirements of 

subparagraph (B) of this paragraph. For purposes of determining the more stringent provision, clause (i) and clause (ii) 

of subparagraph (B) shall be considered independently. 

(A) FORMULA.— (i) BENZENE.—The benzene content of the reformulated gasoline shall not exceed 1.0 percent by volume. 

(ii) AROMATICS.—The aromatic hydrocarbon content of the reformulated gasoline shall not exceed 25 

percent by volume. 

(iii) LEAD.—The reformulated gasoline shall have 

no lead content. 

(iv) DETERGENTS.—The reformulated gasoline 

shall contain additives to prevent the accumulation of 

deposits in engines or vehicle fuel supply systems. 

(v) OXYGEN CONTENT.—The oxygen content of the 

reformulated gasoline shall equal or exceed 2.0 percent by weight (subject to a testing tolerance established by the Administrator) except as otherwise required by this Act. 

(B) PERFORMANCE STANDARD.— (i) VOC EMISSIONS.—During the high ozone season 

(as defined by the Administrator), the aggregate emissions of ozone forming volatile organic compounds 

from baseline vehicles when using the reformulated 

gasoline shall be 15 percent below the aggregate emissions of ozone forming volatile organic compounds 

from such vehicles when using baseline gasoline. Effective in calendar year 2000 and thereafter, 25 percent shall be substituted for 15 percent in applying 

this clause, except that the Administrator may adjust 

such 25 percent requirement to provide for a lesser or 

greater reduction based on technological feasibility, 

considering the cost of achieving such reductions in 

VOC emissions. No such adjustment shall provide for 

less than a 20 percent reduction below the aggregate 

emissions of such air pollutants from such vehicles 

when using baseline gasoline. The reductions required 

under this clause shall be on a mass basis. 

64

(ii) TOXICS.—During the entire year, the aggregate 

emissions of toxic air pollutants from baseline vehicles 

when using the reformulated gasoline shall be 15 percent below the aggregate emissions of toxic air pollutants from such vehicles when using baseline gasoline. 

Effective in calendar year 2000 and thereafter, 25 percent shall be substituted for 15 percent in applying 

this clause, except that the Administrator may adjust 

such 25 percent requirement to provide for a lesser or 

greater reduction based on technological feasibility, 

considering the cost of achieving such reductions in 

toxic air pollutants. No such adjustment shall provide 

for less than a 20 percent reduction below the aggregate emissions of such air pollutants from such vehicles when using baseline gasoline. The reductions required under this clause shall be on a mass basis. 

Any reduction greater than a specific percentage reduction required under this subparagraph shall be treated as satisfying 

such percentage reduction requirement. 

(4) CERTIFICATION PROCEDURES.— (A) REGULATIONS.—The regulations under this subsection shall include procedures under which the Administrator shall certify reformulated gasoline as complying 

with the requirements established pursuant to this subsection. Under such regulations, the Administrator shall 

establish procedures for any person to petition the Administrator to certify a fuel formulation, or slate of fuel formulations. Such procedures shall further require that the Administrator shall approve or deny such petition within 180 

days of receipt. If the Administrator fails to act within 

such 180-day period, the fuel shall be deemed certified 

until the Administrator completes action on the petition. 

(B) CERTIFICATION; EQUIVALENCY.—The Administrator 

shall certify a fuel formulation or slate of fuel formulations 

as complying with this subsection if such fuel or fuels—

(i) comply with the requirements of paragraph (2), 

and 

(ii) achieve equivalent or greater reductions in 

emissions of ozone forming volatile organic compounds 

and emissions of toxic air pollutants than are achieved 

by a reformulated gasoline meeting the applicable requirements of paragraph (3). 

(C) EPA DETERMINATION OF EMISSIONS LEVEL.—Within 

1 year after the enactment of the Clean Air Act Amendments of 1990, the Administrator shall determine the level 

of emissions of ozone forming volatile organic compounds 

and emissions of toxic air pollutants emitted by baseline 

vehicles when operating on baseline gasoline. For purposes 

of this subsection, within 1 year after the enactment of the 

Clean Air Act Amendments of 1990, the Administrator 

shall, by rule, determine appropriate measures of, and 

methodology for, ascertaining the emissions of air pollutants (including calculations, equipment, and testing tolerances). 

65

(5) PROHIBITION.—Effective beginning January 1, 1995, 

each of the following shall be a violation of this subsection: 

(A) The sale or dispensing by any person of conventional gasoline to ultimate consumers in any covered area. 

(B) The sale or dispensing by any refiner, blender, importer, or marketer of conventional gasoline for resale in 

any covered area, without (i) segregating such gasoline 

from reformulated gasoline, and (ii) clearly marking such 

conventional gasoline as ‘‘conventional gasoline, not for 

sale to ultimate consumer in a covered area’’. Any refiner, blender, importer or marketer who purchases 

property segregated and marked conventional gasoline, and 

thereafter labels, represents, or wholesales such gasoline as reformulated gasoline shall also be in violation of this subsection. 

The Administrator may impose sampling, testing, and recordkeeping requirements upon any refiner, blender, importer, or 

marketer to prevent violations of this section. 

ø(6) OPT-IN AREAS.—(A) Upon¿

(6) OPT-IN AREAS.— (A) CLASSIFIED AREAS.— (i) IN GENERAL.—Upon the application of the Governor of a State, the Administrator shall apply the 

prohibition set forth in paragraph (5) in any area in 

the State classified under subpart 2 of part D of title 

I as a Marginal, Moderate, Serious, or Severe Area 

(without regard to whether or not the 1980 population 

of the area exceeds 250,000). In any such case, the Administrator shall establish an effective date for such 

prohibition as he deems appropriate, not later than 

January 1, 1995, or 1 year after such application is received, whichever is later. The Administrator shall 

publish such application in the Federal Register upon 

receipt. 

ø(B) If¿

(ii) EFFECT OF INSUFFICIENT DOMESTIC CAPACITY

TO PRODUCE REFORMULATED GASOLINE.—If the Administrator determines, on the Administrator’s own motion or on petition of any person, after consultation 

with the Secretary of Energy, that there is insufficient 

domestic capacity to produce gasoline certified under 

this subsection, the Administrator shall, by rule, extend the effective date of such prohibition in Marginal, 

Moderate, Serious, or Severe Areas referred to in 

øsubparagraph (A)¿ clause (i) for one additional year, 

and may, by rule, renew such extension for 2 additional one-year periods. The Administrator shall act on 

any petition submitted under øthis paragraph¿ this 

subparagraph within 6 months after receipt of the petition. The Administrator shall issue such extensions 

for areas with a lower ozone classification before 

issuing any such extension for areas with a higher 

classification. 

(B) OZONE TRANSPORT REGION.—

(i) APPLICATION OF PROHIBITION.—

66

(I) IN GENERAL.—On application of the Governor of a State in the ozone transport region established by section 184(a), the Administrator, not 

later than 180 days after the date of receipt of the 

application, shall apply the prohibition specified in 

paragraph (5) to any area in the State (other than 

an area classified as a marginal, moderate, serious, or severe ozone nonattainment area under 

subpart 2 of part D of title I) unless the Administrator determines under clause (iii) that there is insufficient capacity to supply reformulated gasoline. 

(II) PUBLICATION OF APPLICATION.—As soon as 

practicable after the date of receipt of an application under subclause (I), the Administrator shall 

publish the application in the Federal Register. 

(ii) PERIOD OF APPLICABILITY.—Under clause (i), 

the prohibition specified in paragraph (5) shall apply 

in a State—

(I) commencing as soon as practicable but not 

later than 2 years after the date of approval by the 

Administrator of the application of the Governor of 

the State; and 

(II) ending not earlier than 4 years after the 

commencement date determined under subclause 

(I). 

(iii) EXTENSION OF COMMENCEMENT DATE BASED

ON INSUFFICIENT CAPACITY.—

(I) IN GENERAL.—If, after receipt of an application from a Governor of a State under clause (i), 

the Administrator determines, on the Administrator’s own motion or on petition of any person, after 

consultation with the Secretary of Energy, that 

there is insufficient capacity to supply reformulated gasoline, the Administrator, by regulation—

(aa) shall extend the commencement date 

with respect to the State under clause (ii)(I) for 

not more than 1 year; and 

(bb) may renew the extension under item 

(aa) for 2 additional periods, each of which 

shall not exceed 1 year. 

(II) DEADLINE FOR ACTION ON PETITIONS.—The 

Administrator shall act on any petition submitted 

under subclause (I) not later than 180 days after 

the date of receipt of the petition. 

(7) CREDITS.—(A) The regulations promulgated under this 

subsection shall provide for the granting of an appropriate 

amount of credits to a person who refines, blends, or imports 

and certifies a gasoline or slate of gasoline that—

(i) has an oxygen content (by weight) that exceeds the 

minimum oxygen content specified in paragraph (2); 

(ii) has an aromatic hydrocarbon content (by volume) 

that is less than the maximum aromatic hydrocarbon content required to comply with paragraph (3); or 

67

(iii) has a benzene content (by volume) that is less 

than the maximum benzene content specified in paragraph 

(2). 

(B) The regulations described in subparagraph (A) shall 

also provide that a person who is granted credits may use such 

credits, or transfer all or a portion of such credits to another 

person for use within the same nonattainment area, for the 

purpose of complying with this subsection. 

(C) The regulations promulgated under subparagraphs (A) 

and (B) shall ensure the enforcement of the requirements for 

the issuance, application, and transfer of the credits. Such regulations shall prohibit the granting or transfer of such credits 

for use with respect to any gasoline in a nonattainment area, 

to the extent the use of such credits would result in any of the 

following: 

(i) An average gasoline aromatic hydrocarbon content 

(by volume) for the nonattainment (taking into account all 

gasoline sold for use in conventional gasoline-fueled vehicles in the nonattainment area) higher than the average 

fuel aromatic hydrocarbon content (by volume) that would 

occur in the absence of using any such credits. 

(ii) An average gasoline oxygen content (by weight) for 

the nonattainment area (taking into account all gasoline 

sold for use in conventional gasoline-fueled vehicles in the 

nonattainment area) lower than the average gasoline oxygen content (by weight) that would occur in the absence of 

using any such credits. 

(iii) An average benzene content (by volume) for the 

nonattainment area (taking into account all gasoline sold 

for use in conventional gasoline-fueled vehicles in the nonattainment area) higher than the average benzene content 

(by volume) that would occur in the absence of using any 

such credits. 

(8) ANTI-DUMPING RULES.—

(A) IN GENERAL.—Within 1 year after the enactment of 

the Clean Air Act Amendments of 1990, the Administrator 

shall promulgate regulations applicable to each refiner, 

blender, or importer of gasoline ensuring that gasoline sold 

or introduced into commerce by such refiner, blender, or 

importer (other than reformulated gasoline subject to the 

requirements of paragraph (1)) does not result in average 

per gallon emissions (measured on a mass basis) of (i) 

volatile organic compounds, (ii) oxides of nitrogen, (iii) carbon monoxide, and (iv) toxic air pollutants in excess of 

such emissions of such pollutants attributable to gasoline 

sold or introduced into commerce in calendar year 1990 by 

that refiner, blender, or importer. Such regulations shall 

take effect beginning January 1, 1995. 

(B) ADJUSTMENTS.—In evaluating compliance with the 

requirements of subparagraph (A), the Administrator shall 

make appropriate adjustments to insure that no credit is 

provided for improvement in motor vehicle emissions control in motor vehicles sold after the calendar year 1990. 

68

(C) COMPLIANCE DETERMINED FOR EACH POLLUTANT

INDEPENDENTLY.—In determining whether there is an increase in emissions in violation of the prohibition contained in subparagraph (A) the Administrator shall consider an increase in each air pollutant referred to in 

clauses (i) through (iv) as a separate violation of such prohibition, except that the Administrator shall promulgate 

regulations to provide that any increase in emissions of oxides of nitrogen resulting from adding oxygenates to gasoline may be offset by an equivalent or greater reduction 

(on a mass basis) in emissions of volatile organic compounds, carbon monoxide, or toxic air pollutants, or any 

combination of the foregoing. 

(D) COMPLIANCE PERIOD.—The Administrator shall 

promulgate an appropriate compliance period or appropriate compliance periods to be used for assessing compliance with the prohibition contained in subparagraph (A). 

(E) BASELINE FOR DETERMINING COMPLIANCE.—If the 

Administrator determines that no adequate and reliable 

data exists regarding the composition of gasoline sold or 

introduced into commerce by a refiner, blender, or importer in calendar year 1990, for such refiner, blender, or 

importer, baseline gasoline shall be substituted for such 

1990 gasoline in determining compliance with subparagraph (A). 

(9) EMISSIONS FROM ENTIRE VEHICLE.—In applying the requirements of this subsection, the Administrator shall take 

into account emissions from the entire motor vehicle, including 

evaporative, running, refueling, and exhaust emissions. 

(10) DEFINITIONS.—For purposes of this subsection—

(A) BASELINE VEHICLES.—The term ‘‘baseline vehicles’’

mean representative model year 1990 vehicles. 

(B) BASELINE GASOLINE.—

(i) SUMMERTIME.—The term ‘‘baseline gasoline’’

means in the case of gasoline sold during the high 

ozone period (as defined by the Administrator) a gasoline which meets the following specifications:

BASELINE GASOLINE FUEL PROPERTIES 

API Gravity ........................................................... 57.4

Sulfur, ppm ........................................................... 339

Benzene, % ............................................................ 1.53

RVP, psi ................................................................. 8.7

Octane, R+M/2 ...................................................... 87.3

IBP, F .................................................................... 91

10%, F .................................................................... 128

50%, F .................................................................... 218

90%, F .................................................................... 330

End Point, F .......................................................... 415

Aromatics, % ......................................................... 32.0

Olefins, % .............................................................. 9.2

Saturates, % .......................................................... 58.8

(ii) WINTERTIME.—The Administrator shall establish the specifications of ‘‘baseline gasoline’’ for gasoline sold at times other than the high ozone period (as 

defined by the Administrator). Such specifications 

69

1So in original. Subparagraphs (E) and (F) should be indented. 

shall be the specifications of 1990 industry average 

gasoline sold during such period. 

(C) TOXIC AIR POLLUTANTS.—The term ‘‘toxic air pollutants’’ means the aggregate emissions of the following:

Benzene 

1,3 Butadiene 

Polycyclic organic matter (POM) 

Acetaldehyde 

Formaldehyde.

(D) COVERED AREA.—The 9 ozone nonattainment areas 

having a 1980 population in excess of 250,000 and having 

the highest ozone design value during the period 1987 

through 1989 shall be ‘‘covered areas’’ for purposes of this 

subsection. Effective one year after the reclassification of 

any ozone nonattainment area as a Severe ozone nonattainment area under section 181(b), such Severe area 

shall also be a ‘‘covered area’’ for purposes of this subsection. 

(E) 1 REFORMULATED GASOLINE.—The term ‘‘reformulated 

gasoline’’ means any gasoline which is certified by the Administrator under this section as complying with this subsection. 

(F) 1 CONVENTIONAL GASOLINE.—The term ‘‘conventional 

gasoline’’ means any gasoline which does not meet specifications set by a certification under this subsection. 

(11) COMMINGLING.—The regulations under paragraph (1) 

shall permit the commingling at a retail station of reformulated 

gasoline containing ethanol and reformulated gasoline that 

does not contain ethanol if, each time such commingling occurs— (A) the retailer notifies the Administrator before the 

commingling, identifying the exact location of the retail station and the specific tank in which the commingling will 

take place; and 

(B) the retailer certifies that the reformulated gasoline 

resulting from the commingling will meet all applicable requirements for reformulated gasoline, including content 

and emission performance standards. 

(l) DETERGENTS.—Effective beginning January 1, 1995, no person may sell or dispense to an ultimate consumer in the United 

States, and no refiner or marketer may directly or indirectly sell 

or dispense to persons who sell or dispense to ultimate consumers 

in the United States any gasoline which does not contain additives 

to prevent the accumulation of deposits in engines or fuel supply 

systems. Not later than 2 years after the date of the enactment of 

the Clean Air Act Amendments of 1990, the Administrator shall 

promulgate a rule establishing specifications for such additives. 

(m) OXYGENATED FUELS.— (1) PLAN REVISIONS FOR CO NONATTAINMENT AREAS.—(A) 

Each State in which there is located all or part of an area 

which is designated under title I as a nonattainment area for 

carbon monoxide and which has a carbon monoxide design 

value of 9.5 parts per million (ppm) or above based on data for 

the 2-year period of 1988 and 1989 and calculated according to 

70

1Probably should add the word ‘‘as’’ before ‘‘of’’. 

the most recent interpretation methodology issued by the Administrator prior to the enactment of the Clean Air Act 

Amendments of 1990 shall submit to the Administrator a State 

implementation plan revision under section 110 and part D of 

title I for such area which shall contain the provisions specified 

under this subsection regarding oxygenated gasoline. 

(B) A plan revision which contains such provisions shall 

also be submitted by each State in which there is located any 

area which, for any 2-year period after 1989 has a carbon monoxide design value of 9.5 ppm or above. The revision shall be 

submitted within 18 months after such 2-year period. 

(2) OXYGENATED GASOLINE IN CO NONATTAINMENT AREAS.— Each plan revision under this subsection shall contain provisions to require that any gasoline sold, or dispensed, to the ultimate consumer in the carbon monoxide nonattainment area 

or sold or dispensed directly or indirectly by fuel refiners or 

marketers to persons who sell or dispense to ultimate consumers, in the larger of— (A) the Consolidated Metropolitan Statistical Area 

(CMSA) in which the area is located, or 

(B) if the area is not located in a CMSA, the Metropolitan Statistical Area in which the area is located, 

be blended, during the portion of the year in which the area 

is prone to high ambient concentrations of carbon monoxide to 

contain not less than 2.7 percent oxygen by weight (subject to 

a testing tolerance established by the Administrator). The portion of the year in which the area is prone to high ambient concentrations of carbon monoxide shall be as determined by the 

Administrator, but shall not be less than 4 months. At the request of a State with respect to any area designated as nonattainment for carbon monoxide, the Administrator may reduce 

the period specified in the preceding sentence if the State can 

demonstrate that because of meteorological conditions, a reduced period will assure that there will be no exceedances of 

the carbon monoxide standard outside of such reduced period. 

For areas with a carbon monoxide design value of 9.5 ppm or 

more 1 of the date of enactment of the Clean Air Act Amendments of 1990, the revision shall provide that such requirement shall take effect no later than November 1, 1992, (or at 

such other date during 1992 as the Administrator establishes 

under the preceding provisions of this paragraph). For other 

areas, the revision shall provide that such requirement shall 

take effect no later than November 1 of the third year after the 

last year of the applicable 2-year period referred to in paragraph (1) (or at such other date during such third year as the 

Administrator establishes under the preceding provisions of 

this paragraph) and shall include a program for implementation and enforcement of the requirement consistent with guidance to be issued by the Administrator. 

(3) WAIVERS.—(A) The Administrator shall waive, in whole 

or in part, the requirements of paragraph (2) upon a demonstration by the State to the satisfaction of the Administrator 

71

that the use of oxygenated gasoline would prevent or interfere 

with the attainment by the area of a national primary ambient 

air quality standard (or a State or local ambient air quality 

standard) for any air pollutant other than carbon monoxide. 

(B) The Administrator shall, upon demonstration by the 

State satisfactory to the Administrator, waive the requirement 

of paragraph (2) where the Administrator determines that mobile sources of carbon monoxide do not contribute significantly 

to carbon monoxide levels in an area. 

(C)(i) Any person may petition the Administrator to make 

a finding that there is, or is likely to be, for any area, an inadequate domestic supply of, or distribution capacity for, 

oxygenated gasoline meeting the requirements of paragraph (2) 

or fuel additives (oxygenates) necessary to meet such requirements. The Administrator shall act on such petition within 6 

months after receipt of the petition. 

(ii) If the Administrator determines, in response to a petition under clause (i), that there is an inadequate supply or capacity described in clause (i), the Administrator shall delay the 

effective date of paragraph (2) for 1 year. Upon petition, the 

Administrator may extend such effective date for one additional year. No partial delay or lesser waiver may be granted 

under this clause. 

(iii) In granting waivers under this subparagraph the Administrator shall consider distribution capacity separately from 

the adequacy of domestic supply and shall grant such waivers 

in such manner as will assure that, if supplies of oxygenated 

gasoline are limited, areas having the highest design value for 

carbon monoxide will have a priority in obtaining oxygenated 

gasoline which meets the requirements of paragraph (2). 

(iv) As used in this subparagraph, the term distribution 

capacity includes capacity for transportation, storage, and 

blending. 

(4) FUEL DISPENSING SYSTEMS.—Any person selling 

oxygenated gasoline at retail pursuant to this subsection shall 

be required under regulations promulgated by the Administrator to label the fuel dispensing system with a notice that the 

gasoline is oxygenated and will reduce the carbon monoxide 

emissions from the motor vehicle. 

(5) GUIDELINES FOR CREDIT.—The Administrator shall promulgate guidelines, within 9 months after the date of the enactment of the Clean Air Act Amendments of 1990, allowing 

the use of marketable oxygen credits from gasolines during 

that portion of the year specified in paragraph (2) with higher 

oxygen content than required to offset the sale or use of gasoline with a lower oxygen content than required. No credits may 

be transferred between nonattainment areas. 

(6) ATTAINMENT AREAS.—Nothing in this subsection shall 

be interpreted as requiring an oxygenated gasoline program in 

an area which is in attainment for carbon monoxide, except 

that in a carbon monoxide nonattainment area which is redesignated as attainment for carbon monoxide, the requirements 

of this subsection shall remain in effect to the extent such proVerDate Jan 31 2003 18:33 Jun 04, 2003 Jkt 19010 PO 00000 Frm 000071 Fmt 06602 Sfmt 06601 E:\HR\OC\SR057.XXX SR057
72

1 Reference should probably be to section 216(2). See section 220 of Public Law 101–549. 

gram is necessary to maintain such standard thereafter in the 

area. 

(7) FAILURE TO ATTAIN CO STANDARD.—If the Administrator 

determines under section 186(b)(2) that the national primary 

ambient air quality standard for carbon monoxide has not been 

attained in a Serious Area by the applicable attainment date, 

the State shall submit a plan revision for the area within 9 

months after the date of such determination. The plan revision 

shall provide that the minimum oxygen content of gasoline referred to in paragraph (2) shall be 3.1 percent by weight unless 

such requirement is waived in accordance with the provisions 

of this subsection. 

(n) PROHIBITION ON LEADED GASOLINE FOR HIGHWAY USE.— After December 31, 1995, it shall be unlawful for any person to 

sell, offer for sale, supply, offer for supply, dispense, transport, or 

introduce into commerce, for use as fuel in any motor vehicle (as 

defined in section 219(2)) 1 any gasoline which contains lead or lead 

additives. 

(o) RENEWABLE FUEL PROGRAM.— (1) DEFINITIONS.—In this section: 

(A) CELLULOSIC BIOMASS ETHANOL.—The term ‘cellulosic biomass ethanol’ means ethanol derived from any 

lignocellulosic or hemicellulosic matter that is available on 

a renewable or recurring basis, including— (i) dedicated energy crops and trees; 

(ii) wood and wood residues; 

(iii) plants; 

(iv) grasses; 

(v) agricultural residues; 

(vi) fibers; 

(vii) animal wastes and other waste materials; and 

(viii) municipal solid waste. 

(B) RENEWABLE FUEL.— (i) IN GENERAL.—The term ‘renewable fuel’ means 

motor vehicle fuel that—

(I)(aa) is produced from grain, starch, oilseeds, 

or other biomass; or 

(bb) is natural gas produced from a biogas 

source, including a landfill, sewage waste treatment plant, feedlot, or other place where decaying 

organic material is found; and 

(II) is used to replace or reduce the quantity of 

fossil fuel present in a fuel mixture used to operate 

a motor vehicle. 

(ii) INCLUSION.—The term ‘renewable fuel’ includes—

(I) cellulosic biomass ethanol; and 

(II) biodiesel (as defined in section 312(f) of 

the Energy Policy Act of 1992 (42 U.S.C. 

13220(f))). 

(C) SMALL REFINERY.—The term ‘small refinery’ means 

a refinery for which the average aggregate daily crude oil 

73

throughput for a calendar year (as determined by dividing 

the aggregate throughput for the calendar year by the number of days in the calendar year) does not exceed 75,000 

barrels. 

(2) RENEWABLE FUEL PROGRAM.—

(A) REGULATIONS.—

(i) IN GENERAL.—Not later than 1 year after the 

date of enactment of this paragraph, the Administrator 

shall promulgate regulations to ensure that gasoline 

sold or introduced into commerce in the United States 

(except in Alaska and Hawaii), on an annual average 

basis, contains the applicable volume of renewable fuel 

determined in accordance with subparagraph (B). 

(ii) PROVISIONS OF REGULATIONS.—Regardless of 

the date of promulgation, the regulations promulgated 

under clause (i)—

(I) shall contain compliance provisions applicable to refineries, blenders, distributors, and importers, as appropriate, to ensure that the requirements of this paragraph are met; but 

(II) shall not—

(aa) restrict cases in which renewable fuel 

may be used; or 

(bb) impose any per-gallon obligation for 

the use of renewable fuel. 

(iii) REQUIREMENT IN CASE OF FAILURE TO PROMULGATE REGULATIONS.—If the Administrator does not 

promulgate regulations under clause (i), the percentage 

of renewable fuel in gasoline sold or dispensed to consumers in the United States, on a volume basis, shall 

be 1.8 percent for calendar year 2005. 

(B) APPLICABLE VOLUME.—

(i) CALENDAR YEARS 2005 THROUGH 2012.—For the 

purpose of subparagraph (A), the applicable volume for 

any of calendar years 2005 through 2012 shall be determined in accordance with the following table:

Applicable volume of 

‘‘Calendar year: renewable fuel 

(in billions of gallons): 

2005 ................................................................................................... 2.6

2006 ................................................................................................... 2.9

2007 ................................................................................................... 3.2

2008 ................................................................................................... 3.5

2009 ................................................................................................... 3.9

2010 ................................................................................................... 4.3

2011 ................................................................................................... 4.7

2012 ................................................................................................... 5.0.

(ii) CALENDAR YEAR 2013 AND THEREAFTER.—For 

the purpose of subparagraph (A), the applicable volume 

for calendar year 2013 and each calendar year thereafter shall be equal to the product obtained by multiplying—

(I) the number of gallons of gasoline that the 

Administrator estimates will be sold or introduced 

into commerce in the calendar year; and 

74

(II) the ratio that—

(aa) 5,000,000,000 gallons of renewable 

fuel; bears to 

(bb) the number of gallons of gasoline sold 

or introduced into commerce in calendar year 

2012. 

(3) APPLICABLE PERCENTAGES.—

(A) PROVISION OF ESTIMATE OF VOLUMES OF GASOLINE

SALES.—Not later than October 31 of each of calendar years 

2003 through 2011, the Administrator of the Energy Information Administration shall provide to the Administrator 

of the Environmental Protection Agency an estimate of the 

volumes of gasoline sold or introduced into commerce in the 

United States during the following calendar year. 

(B) DETERMINATION OF APPLICABLE PERCENTAGES.—

(i) IN GENERAL.—Not later than November 30 of 

each of calendar years 2005 through 2012, based on 

the estimate provided under subparagraph (A), the Administrator of the Environmental Protection Agency 

shall determine and publish in the Federal Register, 

with respect to the following calendar year, the renewable fuel obligation that ensures that the requirements 

of paragraph (2) are met. 

(ii) REQUIRED ELEMENTS.—The renewable fuel obligation determined for a calendar year under clause 

(i) shall—

(I) be applicable to refineries, blenders, and 

importers, as appropriate; 

(II) be expressed in terms of a volume percentage of gasoline; and 

(III) subject to subparagraph (C)(i), consist of 

a single applicable percentage that applies to all 

categories of persons specified in subclause (I). 

(C) ADJUSTMENTS.—In determining the applicable percentage for a calendar year, the Administrator shall make 

adjustments—

(i) to prevent the imposition of redundant obligations on any person specified in subparagraph 

(B)(ii)(I); and 

(ii) to account for the use of renewable fuel during 

the previous calendar year by small refineries that are 

exempt under paragraph (9). 

(4) CELLULOSIC BIOMASS ETHANOL.—For the purpose of 

paragraph (2), 1 gallon of cellulosic biomass ethanol shall be 

considered to be the equivalent of 1.5 gallons of renewable fuel. 

(5) CREDIT PROGRAM.—

(A) IN GENERAL.—The regulations promulgated under 

paragraph (2)(A) shall provide—

(i) for the generation of an appropriate amount of 

credits by any person that refines, blends, or imports 

gasoline that contains a quantity of renewable fuel that 

is greater than the quantity required under paragraph 

(2); 

75

(ii) for the generation of an appropriate amount of 

credits for biodiesel; and 

(iii) for the generation of credits by small refineries 

in accordance with paragraph (9)(C). 

(B) USE OF CREDITS.—A person that generates credits 

under subparagraph (A) may use the credits, or transfer all 

or a portion of the credits to another person, for the purpose 

of complying with paragraph (2). 

(C) DURATION OF CREDITS.—A credit generated under 

this paragraph shall be valid to show compliance—

(i) subject to clause (ii), for the calendar year in 

which the credit was generated or the following calendar year; or 

(ii) if the Administrator promulgates regulations 

under paragraph (6), for the calendar year in which 

the credit was generated or any of the following 2 calendar years. 

(D) INABILITY TO GENERATE OR PURCHASE SUFFICIENT

CREDITS.—The regulations promulgated under paragraph 

(2)(A) shall include provisions allowing any person that is 

unable to generate or purchase sufficient credits to meet the 

requirements of paragraph (2) to carry forward a renewable 

fuel deficit on condition that the person, in the calendar 

year following the year in which the renewable fuel deficit 

is created—

(i) achieves compliance with the renewable fuel requirement under paragraph (2); and 

(ii) generates or purchases additional renewable 

fuel credits to offset the renewable fuel deficit of the 

previous year. 

(6) SEASONAL VARIATIONS IN RENEWABLE FUEL USE.—

(A) STUDY.—For each of calendar years 2005 through 

2012, the Administrator of the Energy Information Administration shall conduct a study of renewable fuel blending 

to determine whether there are excessive seasonal variations 

in the use of renewable fuel. 

(B) REGULATION OF EXCESSIVE SEASONAL VARIATIONS.—If, for any calendar year, the Administrator of the 

Energy Information Administration, based on the study 

under subparagraph (A), makes the determinations specified in subparagraph (C), the Administrator of the Environmental Protection Agency shall promulgate regulations to 

ensure that 35 percent or more of the quantity of renewable 

fuel necessary to meet the requirements of paragraph (2) is 

used during each of the 2 periods specified in subparagraph (D) of each subsequent calendar year. 

(C) DETERMINATIONS.—The determinations referred to 

in subparagraph (B) are that—

(i) less than 35 percent of the quantity of renewable 

fuel necessary to meet the requirements of paragraph 

(2) has been used during 1 of the 2 periods specified in 

subparagraph (D) of the calendar year; and 

76

(ii) a pattern of excessive seasonal variation described in clause (i) will continue in subsequent calendar years. 

(D) PERIODS.—The 2 periods referred to in this paragraph are—

(i) April through September; and 

(ii) January through March and October through 

December. 

(E) EXCLUSION.—Renewable fuel blended or consumed 

in calendar year 2005 in a State that has received a waiver 

under section 209(b) shall not be included in the study 

under subparagraph (A). 

(7) WAIVERS.— (A) IN GENERAL.—The Administrator, in consultation 

with the Secretary of Agriculture and the Secretary of Energy, may waive the requirements of paragraph (2) in whole 

or in part on petition by 1 or more States by reducing the 

national quantity of renewable fuel required under paragraph (2)—

(i) based on a determination by the Administrator, 

after public notice and opportunity for comment, that 

implementation of the requirement would severely 

harm the economy or environment of a State, a region, 

or the United States; or 

(ii) based on a determination by the Administrator, 

after public notice and opportunity for comment, that 

there is an inadequate domestic supply or distribution 

capacity to meet the requirement. 

(B) PETITIONS FOR WAIVERS.—The Administrator, in 

consultation with the Secretary of Agriculture and the Secretary of Energy, shall approve or disapprove a State petition for a waiver of the requirements of paragraph (2) within 90 days after the date on which the petition is received 

by the Administrator. 

(C) TERMINATION OF WAIVERS.—A waiver granted 

under subparagraph (A) shall terminate after 1 year, but 

may be renewed by the Administrator after consultation 

with the Secretary of Agriculture and the Secretary of Energy. 

(8) STUDY AND WAIVER FOR INITIAL YEAR OF PROGRAM.—

(A) IN GENERAL.—Not later than 180 days after the 

date of enactment of this paragraph, the Secretary of Energy shall conduct for the Administrator a study assessing 

whether the renewable fuel requirement under paragraph 

(2) will likely result in significant adverse impacts on consumers in 2005, on a national, regional, or State basis. 

(B) REQUIRED EVALUATIONS.—The study shall evaluate 

renewable fuel—

(i) supplies and prices; 

(ii) blendstock supplies; and 

(iii) supply and distribution system capabilities. 

(C) RECOMMENDATIONS BY THE SECRETARY.—Based on 

the results of the study, the Secretary of Energy shall make 

specific recommendations to the Administrator concerning 

77

waiver of the requirements of paragraph (2), in whole or in 

part, to prevent any adverse impacts described in subparagraph (A). 

(D) WAIVER.— (i) IN GENERAL.—Not later than 270 days after the 

date of enactment of this paragraph, the Administrator 

shall, if and to the extent recommended by the Secretary of Energy under subparagraph (C), waive, in 

whole or in part, the renewable fuel requirement under 

paragraph (2) by reducing the national quantity of renewable fuel required under paragraph (2) in calendar 

2005. 

(ii) NO EFFECT ON WAIVER AUTHORITY.—Clause (i) 

does not limit the authority of the Administrator to 

waive the requirements of paragraph (2) in whole, or 

in part, under paragraph (7). 

(9) SMALL REFINERIES.— (A) TEMPORARY EXEMPTION.— (i) IN GENERAL.—The requirements of paragraph 

(2) shall not apply to small refineries until calendar 

year 2011. 

(ii) EXTENSION OF EXEMPTION.— (I) STUDY BY SECRETARY OF ENERGY.—Not 

later than December 31, 2007, the Secretary of Energy shall conduct for the Administrator a study to 

determine whether compliance with the requirements of paragraph (2) would impose a disproportionate economic hardship on small refineries. 

(II) EXTENSION OF EXEMPTION.—In the case of 

a small refinery that the Secretary of Energy determines under subclause (I) would be subject to a 

disproportionate economic hardship if required to 

comply with paragraph (2), the Administrator 

shall extend the exemption under clause (i) for the 

small refinery for a period of not less than 2 additional years. 

(B) PETITIONS BASED ON DISPROPORTIONATE ECONOMIC

HARDSHIP.—

(i) EXTENSION OF EXEMPTION.—A small refinery 

may at any time petition the Administrator for an extension of the exemption under subparagraph (A) for 

the reason of disproportionate economic hardship. 

(ii) EVALUATION OF PETITIONS.—In evaluating a 

petition under clause (i), the Administrator, in consultation with the Secretary of Energy, shall consider 

the findings of the study under subparagraph (A)(ii) 

and other economic factors. 

(iii) DEADLINE FOR ACTION ON PETITIONS.—The 

Administrator shall act on any petition submitted by a 

small refinery for a hardship exemption not later than 

90 days after the date of receipt of the petition. 

(C) CREDIT PROGRAM.—If a small refinery notifies the 

Administrator that the small refinery waives the exemption 

under subparagraph (A), the regulations promulgated 

78

under paragraph (2)(A) shall provide for the generation of 

credits by the small refinery under paragraph (5) beginning 

in the calendar year following the date of notification. 

(D) OPT-IN FOR SMALL REFINERIES.—A small refinery 

shall be subject to the requirements of paragraph (2) if the 

small refinery notifies the Administrator that the small refinery waives the exemption under subparagraph (A). 

(10) ETHANOL MARKET CONCENTRATION ANALYSIS.— (A) ANALYSIS.— (i) IN GENERAL.—Not later than 180 days after the 

date of enactment of this paragraph, and annually 

thereafter, the Federal Trade Commission shall perform a market concentration analysis of the ethanol 

production industry using the Herfindahl-Hirschman 

Index to determine whether there is sufficient competition among industry participants to avoid price-setting 

and other anticompetitive behavior. 

(ii) SCORING.—For the purpose of scoring under 

clause (i) using the Herfindahl-Hirschman Index, all 

marketing arrangements among industry participants 

shall be considered. 

(B) REPORT.—Not later than December 1, 2004, and 

annually thereafter, the Federal Trade Commission shall 

submit to Congress and the Administrator a report on the 

results of the market concentration analysis performed 

under subparagraph (A)(i). 

(p) RENEWABLE FUEL SAFE HARBOR.— (1) IN GENERAL.— (A) SAFE HARBOR.—Notwithstanding any other provision of Federal or State law, no renewable fuel (as defined 

in subsection (o)(1)) used or intended to be used as a motor 

vehicle fuel, nor any motor vehicle fuel containing renewable fuel, shall be deemed to be defective in design or manufacture by reason of the fact that the fuel is, or contains, 

renewable fuel, if—

(i) the fuel does not violate a control or prohibition 

imposed by the Administrator under this section; and 

(ii) the manufacturer of the fuel is in compliance 

with all requests for information under subsection (b). 

(B) SAFE HARBOR NOT APPLICABLE.—In any case in 

which subparagraph (A) does not apply to a quantity of 

fuel, the existence of a design defect or manufacturing defect with respect to the fuel shall be determined under otherwise applicable law. 

(2) EXCEPTION.—This subsection does not apply to ethers. 

(3) APPLICABILITY.—This subsection applies with respect to 

all claims filed on or after the date of enactment of this subsection. 

(q) ANALYSES OF MOTOR VEHICLE FUEL CHANGES AND EMIS- SIONS MODEL.— (1) ANTI-BACKSLIDING ANALYSIS.—

(A) DRAFT ANALYSIS.—Not later than 4 years after the 

date of enactment of this paragraph, the Administrator 

shall publish for public comment a draft analysis of the 

79

changes in emissions of air pollutants and air quality due 

to the use of motor vehicle fuel and fuel additives resulting 

from implementation of the amendments made by the Reliable Fuels Act. 

(B) FINAL ANALYSIS.—After providing a reasonable opportunity for comment but not later than 5 years after the 

date of enactment of this paragraph, the Administrator 

shall publish the analysis in final form. 

(2) EMISSIONS MODEL.—For the purposes of this subsection, 

as soon as the necessary data are available, the Administrator 

shall develop and finalize an emissions model that reasonably 

reflects the effects of gasoline characteristics or components on 

emissions from vehicles in the motor vehicle fleet during calendar year 2006. 

(r) ø(o)¿ FUEL AND FUEL ADDITIVE IMPORTERS AND IMPORTATION.—For the purposes of this section, the term ‘‘manufacturer’’

includes an importer and the term ‘‘manufacture’’ includes importation. 

SEC. 212. RENEWABLE FUEL. 

(a) DEFINITIONS.—In this section: 

(1) MUNICIPAL SOLID WASTE.—The term ‘‘municipal solid 

waste’’ has the meaning given the term ‘‘solid waste’’ in section 

1004 of the Solid Waste Disposal Act (42 U.S.C. 6903). 

(2) RFG STATE.—The term ‘‘RFG State’’ means a State in 

which is located 1 or more covered areas (as defined in section 

211(k)(10)(D)). 

(3) SECRETARY.—The term ‘‘Secretary’’ means the Secretary 

of Energy. 

(b) SURVEY OF RENEWABLE FUEL MARKET.—

(1) SURVEY AND REPORT.—Not later than December 1, 2006, 

and annually thereafter, the Administrator shall—

(A) conduct, with respect to each conventional gasoline 

use area and each reformulated gasoline use area in each 

State, a survey to determine the market shares of—

(i) conventional gasoline containing ethanol; 

(ii) reformulated gasoline containing ethanol; 

(iii) conventional gasoline containing renewable 

fuel; and 

(iv) reformulated gasoline containing renewable 

fuel; and 

(B) submit to Congress, and make publicly available, a 

report on the results of the survey under subparagraph (A). 

(2) RECORDKEEPING AND REPORTING REQUIREMENTS.—

(A) IN GENERAL.—The Administrator may require any 

refiner, blender, or importer to keep such records and make 

such reports as are necessary to ensure that the survey conducted under paragraph (1) is accurate. 

(B) RELIANCE ON EXISTING REQUIREMENTS.—To avoid 

duplicative requirements, in carrying out subparagraph 

(A), the Administrator shall rely, to the maximum extent 

practicable, on reporting and recordkeeping requirements 

in effect on the date of enactment of this section. 

80

(3) CONFIDENTIALITY.—Activities carried out under this 

subsection shall be conducted in a manner designed to protect 

confidentiality of individual responses. 

(c) COMMERCIAL BYPRODUCTS FROM MUNICIPAL SOLID WASTE

LOAN GUARANTEE PROGRAM.— (1) ESTABLISHMENT OF PROGRAM.—The Secretary shall establish a program to provide guarantees of loans by private institutions for the construction of facilities for the processing and 

conversion of municipal solid waste into fuel ethanol and other 

commercial byproducts. 

(2) REQUIREMENTS.—The Secretary may provide a loan 

guarantee under paragraph (1) to an applicant if— (A) without a loan guarantee, credit is not available to 

the applicant under reasonable terms or conditions sufficient to finance the construction of a facility described in 

paragraph (1); 

(B) the prospective earning power of the applicant and 

the character and value of the security pledged provide a 

reasonable assurance of repayment of the loan to be guaranteed in accordance with the terms of the loan; and 

(C) the loan bears interest at a rate determined by the 

Secretary to be reasonable, taking into account the current 

average yield on outstanding obligations of the United 

States with remaining periods of maturity comparable to 

the maturity of the loan. 

(4) CRITERIA.—In selecting recipients of loan guarantees 

from among applicants, the Secretary shall give preference to 

proposals that— (A) meet all applicable Federal and State permitting 

requirements; 

(B) are most likely to be successful; and 

(C) are located in local markets that have the greatest 

need for the facility because of— (i) the limited availability of land for waste disposal; or 

(ii) a high level of demand for fuel ethanol or other 

commercial byproducts of the facility. 

(5) MATURITY.—A loan guaranteed under paragraph (1) 

shall have a maturity of not more than 20 years. 

(6) TERMS AND CONDITIONS.—The loan agreement for a 

loan guaranteed under paragraph (1) shall provide that no provision of the loan agreement may be amended or waived without the consent of the Secretary. 

(7) ASSURANCE OF REPAYMENT.—The Secretary shall require that an applicant for a loan guarantee under paragraph 

(1) provide an assurance of repayment in the form of a performance bond, insurance, collateral, or other means acceptable to 

the Secretary in an amount equal to not less than 20 percent 

of the amount of the loan. 

(8) GUARANTEE FEE.—The recipient of a loan guarantee 

under paragraph (1) shall pay the Secretary an amount determined by the Secretary to be sufficient to cover the administrative costs of the Secretary relating to the loan guarantee. 

(9) FULL FAITH AND CREDIT.—

81

(A) IN GENERAL.—The full faith and credit the United 

States is pledged to the payment of all guarantees made 

under this subsection. 

(B) CONCLUSIVE EVIDENCE.—Any guarantee made by 

the Secretary under this subsection shall be conclusive evidence of the eligibility of the loan for the guarantee with respect to principal and interest. 

(C) VALIDITY.—The validity of the guarantee shall be 

incontestable in the hands of a holder of the guaranteed 

loan. 

(10) REPORTS.—Until each guaranteed loan under this subsection has been repaid in full, the Secretary shall annually 

submit to Congress a report on the activities of the Secretary 

under this subsection. 

(11) AUTHORIZATION OF APPROPRIATIONS.—There are authorized to be appropriated such sums as are necessary to carry 

out this subsection. 

(12) TERMINATION OF AUTHORITY.—The authority of the 

Secretary to issue a new loan guarantee under paragraph (1) 

terminates on the date that is 10 years after the date of enactment of this section. 

(d) AUTHORIZATION OF APPROPRIATIONS FOR RESOURCE CENTER.—There is authorized to be appropriated, for a resource center 

to further develop bioconversion technology using low-cost biomass 

for the production of ethanol at the Center for Biomass-Based Energy at the University of Mississippi and the University of Oklahoma, $4,000,000 for each of fiscal years 2004 through 2006. 

(e) RENEWABLE FUEL PRODUCTION RESEARCH AND DEVELOPMENT GRANTS.—

(1) IN GENERAL.—The Administrator shall provide grants 

for the research into, and development and implementation of, 

renewable fuel production technologies in RFG States with low 

rates of ethanol production, including low rates of production 

of cellulosic biomass ethanol. 

(2) ELIGIBILITY.—

(A) IN GENERAL.—The entities eligible to receive a 

grant under this subsection are academic institutions in 

RFG States, and consortia made up of combinations of academic institutions, industry, State government agencies, or 

local government agencies in RFG States, that have proven 

experience and capabilities with relevant technologies. 

(B) APPLICATION.—To be eligible to receive a grant 

under this subsection, an eligible entity shall submit to the 

Administrator an application in such manner and form, 

and accompanied by such information, as the Administrator may specify. 

(4) AUTHORIZATION OF APPROPRIATIONS.—There is authorized to be appropriated to carry out this subsection $25,000,000 

for each of fiscal years 2004 through 2008. 

(f) CELLULOSIC BIOMASS ETHANOL CONVERSION ASSISTANCE—

(1) IN GENERAL.—The Secretary may provide grants to merchant producers of cellulosic biomass ethanol in the United 

States to assist the producers in building eligible production faVerDate Jan 31 2003 18:33 Jun 04, 2003 Jkt 19010 PO 00000 Frm 000081 Fmt 06602 Sfmt 06601 E:\HR\OC\SR057.XXX SR057
82

1The Solid Waste Disposal Act (42 U.S.C. 6901–6992k) consists of title II of Public Law 89–

272 and the amendments made by subsequent enactments. This Act is popularly referred to as 

the Resource Conservation and Recovery Act, after the short title of the law that amended the 

Solid Waste Disposal Act in its entirety in 1976 (P.L. 94–580).

cilities described in paragraph (2) for the production of cellulosic biomass ethanol. 

(2) ELIGIBLE PRODUCTION FACILITIES.—A production facility shall be eligible to receive a grant under this subsection if 

the production facility— (A) is located in the United States; and 

(B) uses cellulosic biomass feedstocks derived from agricultural residues or municipal solid waste. 

(3) AUTHORIZATION OF APPROPRIATIONS.—There is authorized to be appropriated to carry out this subsection— (A) $100,000,000 for fiscal year 2004; 

(B) $250,000,000 for fiscal year 2005; and 

(C) $400,000000 for fiscal year 2006. 

* * * * * * *

SOLID WASTE DISPOSAL ACT 1

[As Amended Through P.L. 106–580, Dec. 29, 2000] 

TITLE II—SOLID WASTE DISPOSAL 

Subtitle A—General Provisions 

SHORT TITLE AND TABLE OF CONTENTS

SEC. 1001. This title (hereinafter in this title referred to as 

‘‘this Act’’), together with the following table of contents, may be 

cited as the ‘‘Solid Waste Disposal Act’’: 

Subtitle A—General Provisions 

Sec. 1001. Short title and table of contents. 

Sec. 1002. Congressional findings. 

Sec. 1003. Objectives. 

Sec. 1004. Definitions. 

Sec. 1005. Governmental cooperation. 

Sec. 1006. Application of Act and integration with other Acts. 

Sec. 1007. Financial disclosure. 

Sec. 1008. Solid waste management information and guidelines. 

Subtitle B—Office of Solid Waste; Authorities of the Administrator 

Sec. 2001. Office of Solid Waste and Interagency Coordinating Committee. 

Sec. 2002. Authorities of Administrator. 

Sec. 2003. Resource recovery and conservation panels. 

Sec. 2004. Grants for discarded tire disposal. 

Sec. 2005. Labeling of certain oil. 

Sec. 2006. Annual report. 

Sec. 2007. General authorization. 

Sec. 2008. Office of Ombudsman. 

Subtitle C—Hazardous Waste Management 

Sec. 3001. Identification and listing of hazardous waste. 

Sec. 3002. Standards applicable to generators of hazardous waste. 

Sec. 3003. Standards applicable to transporters of hazardous waste. 

Sec. 3004. Standards applicable to owners and operators of hazardous waste treatment, storage, and disposal facilities. 

83

Sec. 3005. Permits for treatment, storage, or disposal of hazardous waste. 

Sec. 3006. Authorized State hazardous waste programs. 

Sec. 3007. Inspections. 

Sec. 3008. Federal enforcement. 

Sec. 3009. Retention of State authority. 

Sec. 3010. Effective date. 

Sec. 3011. Authorization of assistance to States. 

Sec. 3012. Hazardous waste site inventory. 

Sec. 3013. Monitoring, analysis, and testing. 

Sec. 3014. Restrictions on recycled oil. 

Sec. 3015. Expansion during interim status. 

Sec. 3016. Inventory of Federal Agency hazardous waste facilities.

Sec. 3017. Export of hazardous waste. 

Sec. 3018. Domestic sewage. 

Sec. 3019. Exposure information and health assessments. 

Sec. 3020. Interim control of hazardous waste injection. 

Sec. 3021. Mixed waste inventory reports and plan. 

Sec. 3022. Public vessels. 

Sec. 3023. Federally owned treatment works. 

Subtitle D—State or Regional Solid Waste Plans 

Sec. 4001. Objectives of subtitle. 

Sec. 4002. Federal guidelines for plans. 

Sec. 4003. Minimum requirements for approval of plans. 

Sec. 4004. Criteria for sanitary landfills; sanitary landfills required for all disposal. 

Sec. 4005. Upgrading of open dumps. 

Sec. 4006. Procedure for development and implementation of State plan. 

Sec. 4007. Approval of State plan; Federal assistance. 

Sec. 4008. Federal assistance. 

Sec. 4009. Rural communities assistance. 

Sec. 4010. Adequacy of certain guidelines and criteria. 

Subtitle E—Duties of the Secretary of Commerce in Resource and Recovery 

Sec. 5001. Functions. 

Sec. 5002. Development of specifications for secondary materials. 

Sec. 5003. Development of markets for recovered materials. 

Sec. 5004. Technology promotion. 

Sec. 5005. Nondiscrimination requirement. 

Sec. 5006. Authorization of appropriations. 

Subtitle F—Federal Responsibilities 

Sec. 6001. Application of Federal, State, and local law to Federal facilities. 

Sec. 6002. Federal procurement. 

Sec. 6003. Cooperation with Environmental Protection Agency. 

Sec. 6004. Applicability of solid waste disposal guidelines to executive agencies. 

Subtitle G—Miscellaneous Provisions 

Sec. 7001. Employee protection. 

Sec. 7002. Citizen suits.

Sec. 7003. Imminent hazard. 

Sec. 7004. Petition for regulations; public participation. 

Sec. 7005. Separability. 

Sec. 7006. Judicial review. 

Sec. 7007. Grants or contracts for training projects. 

Sec. 7008. Payments. 

Sec. 7009. Labor standards. 

Sec. 7010. Law enforcement authority. 

Subtitle H—Research, Development, Demonstration, and Information 

Sec. 8001. Research, demonstrations, training, and other activities. 

Sec. 8002. Special studies; plans for research, development, and demonstrations. 

Sec. 8003. Coordination, collection, and dissemination of information. 

Sec. 8004. Full-scale demonstration facilities. 

Sec. 8005. Special study and demonstration projects on recovery of useful energy 

and materials. 

84

Sec. 8006. Grants for resource recovery systems and improved solid waste disposal 

facilities. 

Sec. 8007. Authorization of appropriations. 

Subtitle I—Regulation of Underground Storage Tanks 

Sec. 9001. Definitions. 

Sec. 9002. Notification. 

Sec. 9003. Release detection, prevention, and correction regulations. 

Sec. 9004. Approval of State programs. 

Sec. 9005. Inspections, monitoring, and testing. 

Sec. 9006. Federal enforcement. 

Sec. 9007. Federal facilities. 

Sec. 9008. State authority. 

Sec. 9009. Study of underground storage tanks. 

øSec. 9010. Authorization of appropriations.¿

Sec. 9010. Release prevention and compliance. 

Sec. 9011. Authorization of appropriations. 

Subtitle J—Demonstration Medical Waste Tracking Program 

Sec. 11001. Scope of demonstration program for medical waste. 

Sec. 11002. Listing of medical wastes. 

Sec. 11003. Tracking of medical waste. 

Sec. 11004. Inspections. 

Sec. 11005. Enforcement. 

Sec. 11006. Federal facilities. 

Sec. 11007. Relationship to State law. 

Sec. 11008. Health impact report. 

Sec. 11009. General provisions. 

Sec. 11010. Effective date. 

Sec. 11011. Authorization of appropriations.

* * * * * * 

*

Subtitle I—Regulation of Underground Storage Tanks 

DEFINITIONS AND EXEMPTIONS

SEC. 9001. For the purposes of this subtitle—

(1) The term ‘‘underground storage tank’’ means any one 

or combination of tanks (including underground pipes connected thereto) which is used to contain an accumulation of 

regulated substances, and the volume of which (including the 

volume of the underground pipes connected thereto) is 10 per 

centum or more beneath the surface of the ground. Such term 

does not include any—

(A) farm or residential tank of 1,100 gallons or less capacity used for storing motor fuel for noncommercial purposes, 

(B) tank used for storing heating oil for consumptive 

use on the premises where stored, 

(C) septic tank, 

(D) pipeline facility (including gathering lines)—

(i) which is regulated under chapter 601 of title 

49, United States Code, or 

(ii) which is an intrastate pipeline facility regulated under State laws as provided in chapter 601 of 

title 49, United States Code, 

and which is determined by the Secretary to be connected 

to a pipeline or to be operated or intended to be capable 

85

of operating at pipeline pressure or as an integral part of 

a pipeline, 

(E) surface impoundment, pit, pond, or lagoon, 

(F) storm water or waste water collection system, 

(G) flow-through process tank, 

(H) liquid trap or associated gathering lines directly 

related to oil or gas production and gathering operations, 

or 

(I) storage tank situated in an underground area (such 

as a basement, cellar, mineworking, drift, shaft, or tunnel) 

if the storage tank is situated upon or above the surface 

of the floor. 

The term ‘‘underground storage tank’’ shall not include any 

pipes connected to any tank which is described in subparagraphs (A) through (I). 

(2) The term ‘‘regulated substance’’ means—

(A) any substance defined in section 101(14) of the 

Comprehensive Environmental Response, Compensation, 

and Liability Act of 1980 (but not including any substance 

regulated as a hazardous waste under subtitle C), and 

(B) petroleum. 

(3) The term ‘‘owner’’ means—

(A) in the case of an underground storage tank in use 

on the date of enactment of the Hazardous and Solid 

Waste Amendments of 1984, or brought into use after that 

date, any person who owns an underground storage tank 

used for the storage, use, or dispensing of regulated 

øsustances¿ substances, and 

(B) in the case of any underground storage tank in use 

before the date of enactment of the Hazardous and Solid 

Waste Amendments of 1984, but no longer in use on the 

date of enactment of such Amendments, any person who 

owned such tank immediately before the discontinuation of 

its use. 

(4) The term ‘‘operator’’ means any person in control of, or 

having responsibility for, the daily operation of the underground storage tank. 

(5) The term ‘‘release’’ means any spilling, leaking, emitting, discharging, escaping, leaching, or disposing from an underground storage tank into ground water, surface water or 

subsurface soils. 

(6) The term ‘‘person’’ has the same meaning as provided 

in section 1004(15), except that such term includes a consortium, a joint venture, and a commercial entity, and the United 

States Government. 

(7) The term ‘‘nonoperational storage tank’’ means any underground storage tank in which regulated substances will not 

be deposited or from which regulated substances will not be 

dispensed after the date of the enactment of the Hazardous 

and Solid Waste Amendments of 1984. 

(8) The term ‘‘petroleum’’ means petroleum, including 

crude oil or any fraction thereof which is liquid at standard 

86

conditions of temperature and pressure (60 degrees Fahrenheit 

and 14.7 pounds per square inch absolute). 

* * * * * * *

RELEASE DETECTION, PREVENTION, AND CORRECTION REGULATIONS

SEC. 9003. (a) REGULATIONS.—The Administrator, after notice 

and opportunity for public comment, and at least three months before the effective dates specified in subsection (f), shall promulgate 

release detection, prevention, and correction regulations applicable 

to all owners and operators of underground storage tanks, as may 

be necessary to protect human health and the environment. 

* * * * * * *

(f) EFFECTIVE DATES.—(1) Regulations issued pursuant to 

øsubsection (c) and (d) of this section¿ subsections (c) and (d), and 

standards issued pursuant to subsection (e) of this section, for underground storage tanks containing regulated substances defined 

in section 9001(2)(B) (petroleum, including crude oil or any fraction 

thereof which is liquid at standard conditions of temperature and 

pressure) shall be effective not later than thirty months after the 

date of enactment of the Hazardous and Solid Waste Amendments 

of 1984. 

* * * * * * *

* * * * * * *

(h) EPA RESPONSE PROGRAM FOR PETROLEUM.— (1) BEFORE REGULATIONS.—Before the effective date of regulations under subsection (c), the Administrator (or a State 

pursuant to paragraph (7)) is authorized to— (A) require the owner or operator of an underground 

storage tank to undertake corrective action with respect to 

any release of petroleum when the Administrator (or the 

State) determines that such corrective action will be done 

properly and promptly by the owner or operator of the underground storage tank from which the release occurs; or 

(B) undertake corrective action with respect to any release of petroleum into the environment from an underground storage tank if such action is necessary, in the 

judgment of the Administrator (or the State), to protect 

human health and the environment. 

The corrective action undertaken or required by this paragraph 

shall be such as may be necessary to protect human health and 

the environment. The Administrator shall use funds in the 

Leaking Underground Storage Tank Trust Fund for payment 

of costs incurred for corrective action under subparagraph (B), 

enforcement action under subparagraph (A), and cost recovery 

under paragraph (6) of this subsection. Subject to the priority 

requirements of paragraph (3), the Administrator (or the State) 

shall give priority in undertaking such actions under subparagraph (B) to cases where the Administrator (or the State) cannot identify a solvent owner or operator of the tank who will 

undertake action properly. 

(2) AFTER REGULATIONS.—Following the effective date of 

regulations under subsection (c), all actions or orders of the 

87

Administrator (or a State pursuant to paragraph (7)) described 

in paragraph (1) of this subsection shall be in conformity with 

such regulations. Following such effective date, the Administrator (or the State) may undertake corrective action with respect to any release of petroleum into the environment from an 

underground storage tank only if such action is necessary, in 

the judgment of the Administrator (or the State), to protect 

human health and the environment and one or more of the following situations exists: 

(A) No person can be found, within 90 days or such 

shorter period as may be necessary to protect human 

health and the environment, who is— (i) an owner or operator of the tank concerned, 

(ii) subject to such corrective action regulations, 

and 

(iii) capable of carrying out such corrective action 

properly. 

(B) A situation exists which requires prompt action by 

the Administrator (or the State) under this paragraph to 

protect human health and the environment. 

(C) Corrective action costs at a facility exceed the 

amount of coverage required by the Administrator pursuant to the provisions of subsections (c) and (d)(5) of this 

section and, considering the class or category of underground storage tank from which the release occurred, expenditures from the Leaking Underground Storage Tank 

Trust Fund are necessary to assure an effective corrective 

action. 

(D) The owner or operator of the tank has failed or refused to comply with an order of the Administrator under 

this subsection or section 9006 or with the order of a State 

under this subsection to comply with the corrective action 

regulations. 

(3) PRIORITY OF CORRECTIVE ACTIONS.—The Administrator 

(or a State pursuant to paragraph (7)) shall give priority in undertaking corrective actions under this subsection, and in 

issuing orders requiring owners or operators to undertake such 

actions, to releases of petroleum from underground storage 

tanks which pose the greatest threat to human health and the 

environment. 

(4) CORRECTIVE ACTION ORDERS.—The Administrator is authorized to issue orders to the owner or operator of an underground storage tank to carry out subparagraph (A) of paragraph (1) or to carry out regulations issued under subsection 

(c)(4). A State acting pursuant to paragraph (7) of this subsection is authorized to carry out subparagraph (A) of paragraph (1) only until the State’s program is approved by the Administrator under section 9004 of this subtitle. Such orders 

shall be issued and enforced in the same manner and subject 

to the same requirements as orders under section 9006. 

(5) ALLOWABLE CORRECTIVE ACTIONS.—The corrective actions undertaken by the Administrator (or a State pursuant to 

paragraph (7)) under paragraph (1) or (2) may include temporary or permanent relocation of residents and alternative 

88

household water supplies. In connection with the performance 

of any corrective action under paragraph (1) or (2), the Administrator may undertake an exposure assessment as defined in 

paragraph (10) of this subsection or provide for such an assessment in a cooperative agreement with a State pursuant to 

paragraph (7) of this subsection. The costs of any such assessment may be treated as corrective action for purposes of paragraph (6), relating to cost recovery. 

(6) RECOVERY OF COSTS.— (A) IN GENERAL.—Whenever costs have been incurred 

by the Administrator, or by a State pursuant to paragraph 

(7), for undertaking corrective action or enforcement action 

with respect to the release of petroleum from an underground storage tank, the owner or operator of such tank 

shall be liable to the Administrator or the State for such 

costs. The liability under this paragraph shall be construed 

to be the standard of liability which obtains under section 

311 of the Federal Water Pollution Control Act. 

(B) RECOVERY.—In determining the equities for seeking the recovery of costs under subparagraph (A), the Administrator (or a State pursuant to paragraph (7) of this 

subsection) may consider the amount of financial responsibility required to be maintained under subsections (c) and 

(d)(5) of this section and the factors considered in establishing such amount under subsection (d)(5). 

(C) EFFECT ON LIABILITY.— (i) NO TRANSFERS OF LIABILITY.—No indemnification, hold harmless, or similar agreement or conveyance shall be effective to transfer from the owner or 

operator of any underground storage tank or from any 

person who may be liable for a release or threat of release under this subsection, to any other person the liability imposed under this subsection. Nothing in this 

subsection shall bar any agreement to insure, hold 

harmless, or indemnify a party to such agreement for 

any liability under this section.

(ii) NO BAR TO CAUSE OF ACTION.—Nothing in this 

subsection, including the provisions of clause (i) of this 

subparagraph, shall bar a cause of action that an 

owner or operator or any other person subject to liability under this section, or a guarantor, has or would 

have, by reason of subrogation or otherwise against 

any person. 

(D) FACILITY.—For purposes of this paragraph, the 

term ‘‘facility’’ means, with respect to any owner or operator, all underground storage tanks used for the storage of 

petroleum which are owned or operated by such owner or 

operator and located on a single parcel of property (or on 

any contiguous or adjacent property). 

(7) STATE AUTHORITIES.— (A) GENERAL.—A State may exercise the authorities in 

øparagraphs (1) and (2) of this subsection¿ paragraphs (1), 

(2), and (12), subject to the terms and conditions of paragraphs (3), (5), (9), (10), and (11), and including the auVerDate Jan 31 2003 18:33 Jun 04, 2003 Jkt 19010 PO 00000 Frm 000088 Fmt 06602 Sfmt 09001 E:\HR\OC\SR057.XXX SR057
89

thorities of paragraphs (4), (6), and (8) of this subsection 

and section 9010 if— (i) the Administrator determines that the State 

has the capabilities to carry out effective corrective actions and enforcement activities; and 

(ii) the Administrator enters into a cooperative 

agreement with the State setting out the actions to be 

undertaken by the State. 

The Administrator may provide funds from the Leaking 

Underground Storage Tank Trust Fund for the reasonable 

costs of the State’s actions under the cooperative agreement. 

(B) COST SHARE.—Following the effective date of the 

regulations under subsection (c) of this section, the State 

shall pay 10 per centum of the cost of corrective actions 

undertaken either by the Administrator or by the State 

under a cooperative agreement, except that the Administrator may take corrective action at a facility where immediate action is necessary to respond to an imminent and 

substantial endangerment to human health or the environment if the State fails to pay the cost share. 

(8) EMERGENCY PROCUREMENT POWERS.—Notwithstanding 

any other provision of law, the Administrator may authorize 

the use of such emergency procurement powers as he deems 

necessary. 

(9) DEFINITION OF OWNER OR OPERATOR.— (A) IN GENERAL.—As used in this subtitle, the terms ‘‘owner’’ and ‘‘operator’’ do not include a person that, without participating in the management of an underground 

storage tank and otherwise not engaged in petroleum production, refining, or marketing, holds indicia of ownership 

primarily to protect the person’s security interest. 

(B) SECURITY INTEREST HOLDERS.—The provisions regarding holders of security interests in subparagraphs (E) 

through (G) of section 101(20) and the provisions regarding 

fiduciaries at section 107(n) of the Comprehensive Environmental Response, Compensation, and Liability Act of 

1980 shall apply in determining a person’s liability as an 

owner or operator of an underground storage tank for the 

purposes of this subtitle. 

(C) EFFECT ON RULE.—Nothing in subparagraph (B) 

shall be construed as modifying or affecting the final rule 

issued by the Administrator on September 7, 1995 (60 Fed. 

Reg. 46,692), or as limiting the authority of the Administrator to amend the final rule, in accordance with applicable law. The final rule in effect on the date of enactment 

of this subparagraph shall prevail over any inconsistent 

provision regarding holders of security interests in subparagraphs (E) through (G) of section 101(20) or any inconsistent provision regarding fiduciaries in section 107(n) of 

the Comprehensive Environmental Response, Compensation, and Liability Act of 1980. Any amendment to the 

final rule shall be consistent with the provisions regarding 

holders of security interests in subparagraphs (E) through 

90

(G) of section 101(20) and the provisions regarding fiduciaries in section 107(n) of the Comprehensive Environmental Response, Compensation, and Liability Act of 1980. 

This subparagraph does not preclude judicial review of any 

amendment of the final rule made after the date of enactment of this subparagraph. 

(10) DEFINITION OF EXPOSURE ASSESSMENT.—As used in 

this subsection, the term ‘‘exposure assessment’’ means an assessment to determine the extent of exposure of, or potential 

for exposure of, individuals to petroleum from a release from 

an underground storage tank based on such factors as the nature and extent of contamination and the existence of or potential for pathways of human exposure (including ground or surface water contamination, air emissions, and food chain contamination), the size of the community within the likely pathways of exposure, and the comparison of expected human exposure levels to the short-term and long-term health effects associated with identified contaminants and any available recommended exposure or tolerance limits for such contaminants. 

Such assessment shall not delay corrective action to abate immediate hazards or reduce exposure. 

(11) FACILITIES WITHOUT FINANCIAL RESPONSIBILITY.—At 

any facility where the owner or operator has failed to maintain 

evidence of financial responsibility in amounts at least equal to 

the amounts established by subsection (d)(5)(A) of this section 

(or a lesser amount if such amount is applicable to such facility 

as a result of subsection (d)(5)(B) of this section) for whatever 

reason the Administrator shall expend no monies from the 

Leaking Underground Storage Tank Trust Fund to clean up releases at such facility pursuant to the provisions of paragraph 

(1) or (2) of this subsection. At such facilities the Administrator 

shall use the authorities provided in subparagraph (A) of paragraph (1) and paragraph (4) of this subsection and section 9006 

of this subtitle to order corrective action to clean up such releases. States acting pursuant to paragraph (7) of this subsection shall use the authorities provided in subparagraph (A) 

of paragraph (1) and paragraph (4) of this subsection to order 

corrective action to clean up such releases. Notwithstanding 

the provisions of this paragraph, the Administrator may use 

monies from the fund to take the corrective actions authorized 

by paragraph (5) of this subsection to protect human health at 

such facilities and shall seek full recovery of the costs of all 

such actions pursuant to the provisions of paragraph (6)(A) of 

this subsection and without consideration of the factors in 

paragraph (6)(B) of this subsection. Nothing in this paragraph 

shall prevent the Administrator (or a State pursuant to paragraph (7) of this subsection) from taking corrective action at a 

facility where there is no solvent owner or operator or where 

immediate action is necessary to respond to an imminent and 

substantial endangerment of human health or the environment. 

(12) REMEDIATION OF CONTAMINATION FROM ETHER FUEL

ADDITIVES.—

91

(A) IN GENERAL.—The Administrator and the States 

may use funds made available under section 9013(1) to 

carry out corrective actions with respect to a release of 

methyl tertiary butyl ether or other ether fuel additive that 

presents a threat to human health, welfare, or the environment. 

(B) APPLICABLE AUTHORITY.—Subparagraph (A) shall 

be carried out— (i) in accordance with paragraph (2), except that a 

release with respect to which a corrective action is carried out under subparagraph (A) shall not be required 

to be from an underground storage tank; and 

(ii) in the case of a State, in accordance with a cooperative agreement entered into by the Administrator 

and the State under paragraph (7). 

* * * * * * *

APPROVAL OF STATE PROGRAMS

SEC. 9004. (a) ELEMENTS OF STATE PROGRAM.—Beginning 30 

months after the date of enactment of the Hazardous and Solid 

Waste Amendments of 1984, any State may, submit an underground storage tank release detection, prevention, and correction 

program for review and approval by the Administrator. The program may cover tanks used to store regulated substances øreferred 

to in 9001(2) (A) or (B) or both¿ referred to in subparagraph (A) or 

(B), or both, of section 9001(2). A State program may be approved 

by the Administrator under this section only if the State demonstrates that the State program includes the following requirements and standards and provides for adequate enforcement of 

compliance with such requirements and standards—

* * * * * * *

SEC. 9005. (a) FURNISHING INFORMATION.—For the purposes of 

developing or assisting in the development of any regulation, conducting any østudy taking¿ study, taking any corrective action, or 

enforcing the provisions of this subtitle, any owner or operator of 

an underground storage tank (or any tank subject to study under 

section 9009 that is used for storing regulated substances) shall, 

upon request of any officer, employee or representative of the Environmental Protection Agency, duly designated by the Administrator, or upon request of any duly designated officer, employee, or 

representative of a State acting parsuant to subsection (h)(7) of section 9003 or with an approved program, furnish information relating to such tanks, their associated equipment, their contents, conduct monitoring or testing, permit such officer at all reasonable 

times to have access to, and to copy all records relating to such 

tanks and permit such officer to have access for corrective action. 

For the purposes of developing or assisting in the development of 

any regulation, conducting any study, taking corrective action, or 

enforcing the provisions of this subtitle, such officers, employees, or 

representatives are authorized—

(1) to enter at reasonable times any establishment or other 

place where an underground storage tank is located; 

92

(2) to inspect and obtain samples from any person of any 

regulated substances contained in such tank; 

(3) to conduct monitoring or testing of the tanks, associated equipment, contents, or surrounding soils, air, surface 

water or ground water, and 

(4) to take corrective action. 

Each such inspection shall be commenced and completed with reasonable promptness. 

(b) CONFIDENTIALITY.—(1) Any records, reports, or information 

obtained from any persons under this section shall be available to 

the public, except that upon a showing satisfactory to the Administrator (or the State, as the case may be) by any person that 

records, reports, or information, or a particular part thereof, to 

which the Administrator (or the State, as the case may be) or any 

officer, employee, or representative thereof has access under this 

section if made public, would divulge information entitled to protection under section 1905 of title 18 of the United States Code, such 

information or particular portion thereof shall be considered confidential in accordance with the purposes of that section, except 

that such record, report, document, or information may be disclosed 

to other officers, employees, or authorized representatives of the 

United States concerned with carrying out this Act, or when 

ørelevent¿ relevant in any proceeding under this Act. 

(2) Any person not subject to the provisions of section 1905 of 

title 18 of the United States Code who knowingly and willfully divulges or discloses any information entitled to protection under this 

subsection shall, upon conviction, be subject to a fine of not more 

than $5,000 or to imprisonment not to exceed one year, or both. 

(3) In submitting data under this subtitle, a person required to 

provide such data may—

(A) designate the data which such person believes is entitled to protection under this subsection, and 

(B) submit such designated data separately from other 

data submitted under this subtitle. 

A designation under this paragraph shall be made in writing and 

in such manner as the Administrator may prescribe. 

(4) Notwithstanding any limitation contained in this section or 

any other provision of law, all information reported to, or otherwise 

obtained, by the Administrator (or any representative of the Administrator) under this Act shall be made available, upon written 

request of any duly authorized committee of the Congress, to such 

committee (including records, reports, or information obtained by 

representatives of the øEvironmental¿ Environmental Protection 

Agency). 

* * * * * * *

øAUTHORIZATION OF APPROPRIATIONS

øSEC. 9010. For authorization of appropriations to carry out 

this subtitle, see section 2007(g).¿

SEC. 9010. RELEASE PREVENTION AND COMPLIANCE. 

Funds made available under section 9013(2) from the Leaking 

Underground Storage Tank Trust Fund may be used for conducting 

93

inspections, or for issuing orders or bringing actions under this subtitle— (1) by a State (pursuant to section 9003(h)(7)) acting 

under— (A) a program approved under section 9004; or 

(B) State requirements regulating underground storage 

tanks that are similar or identical to this subtitle, as determined by the Administrator; and 

(2) by the Administrator, acting under this subtitle or a 

State program approved under section 9004. 

SEC. 9011. AUTHORIZATION OF APPROPRIATIONS. 

In addition to amounts made available under section 2007(f), 

there are authorized to be appropriated from the Leaking Underground Storage Tank Trust Fund, notwithstanding section 

9508(c)(1) of the Internal Revenue Code of 1986—

(1) to carry out section 9003(h)(12), $200,000,000 for fiscal 

year 2003, to remain available until expended; and 

(2) to carry out section 9010—

(A) $50,000,000 for fiscal year 2003; and 

(B) $30,000,000 for each of fiscal years 2004 through 

2008. 

* * * * * * *

UNITED STATES CODE 

TITLE 42—THE PUBLIC HEALTH AND WELFARE 

CHAPTER 84—DEPARTMENT OF ENERGY 

SUBCHAPTER II—ESTABLISHMENT OF DEPARTMENT 

Sec. 7135. Energy Information Administration 

(a) ESTABLISHMENT; APPOINTMENT OF ADMINISTRATOR; COMPENSATION; QUALIFICATIONS; DUTIES.—

* * * * * * *

(l) DATA COLLECTION.—In order to improve the ability to evaluate the effectiveness of the Nation’s energy efficiency policies and 

programs, the Administrator shall, in carrying out the data collection provisions of subsections (i) and (k) of this section, consider—

(1) expanding the survey instruments to include questions 

regarding participation in Government and utility conservation 

programs; 

(2) expanding fuel-use surveys in order to provide greater 

detail on energy use by user subgroups; and 

(3) expanding the scope of data collection on energy efficiency and load-management programs, including the effects of 

building construction practices such as those designed to obtain peak load shifting. 

(m) SURVEY OF RENEWABLE FUELS CONSUMPTION.—

(1) IN GENERAL.—In order to improve the ability to evaluate 

the effectiveness of the Nation’s renewable fuels mandate, the 

Administrator shall conduct and publish the results of a survey 

of renewable fuels consumption in the motor vehicle fuels marVerDate Jan 31 2003 18:33 Jun 04, 2003 Jkt 19010 PO 00000 Frm 000093 Fmt 06602 Sfmt 09001 E:\HR\OC\SR057.XXX SR057
94

ket in the United States monthly, and in a manner designed to 

protect the confidentiality of individual responses. 

(2) ELEMENTS OF SURVEY.—In conducting the survey, the 

Administrator shall collect information retrospectively to 1998, 

on a national basis and a regional basis, including— (A) the quantity of renewable fuels produced; 

(B) the cost of production; 

(C) the cost of blending and marketing; 

(D) the quantity of renewable fuels blended; 

(E) the quantity of renewable fuels imported; and 

(F) market price data. 

* * * * * * *

Æ