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[Congressional Record Volume 158, Number 128 (Thursday, September 20, 2012)]
[Senate]
[Pages S6527-S6528]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

                        MODIFICATIONS TO S. 1956

  Mr. CARDIN. Mr. President, would the Senator from South Dakota enter 
into a colloquy to discuss concerns I have with his bill S. 1956 and a 
suggested amendment I have filed for consideration, which is currently 
running through the hotline process?
  First of all I want to thank my colleagues for their willingness to 
work with me to address some of the concerns I have with this bill as 
it was reported out of the Commerce Committee.
  While I have some ongoing reservations about the precedent and 
potential impacts this bill could have on our relations with our 
closest European allies, I am willing to allow legislation to move 
forward if I may get consent to have my amendment agreed to.
  I would like to discuss my amendment and the process which the 
legislation prescribes the Secretary of Transportation to follow in 
determining whether to prohibit U.S. airlines from participating in the 
European Union's carbon emissions trading scheme.
  The second paragraph of subsection (a), section 3 of the legislation 
contains a provision that is designed to ``hold harmless'' U.S. 
airlines from the fees, taxes or fines that they incur from the EU 
under the emissions trading scheme.
  While the Secretary of Transportation has discretion as to how he 
will act to ``hold harmless'' our air carriers, it is understood that 
these actions could possibly require some form of payment by the 
Federal Government.
  One of my greatest concerns with the bill, which I believe the 
sponsors of the bill share with me, and I appreciate their interest in 
working with me to address this issue, is that any payments that may 
result from this provision not come at the expense of the American 
taxpayer.
  I would like to ask the Senator this question: is it correct that it 
is not his intent that any costs or remunerations triggered by this 
legislation come at the expense of U.S. taxpayer dollars?
  Mr. THUNE. That is correct, it has always been my intent, and it is 
shared by the Congressional Budget Office, and the Secretary of 
Transportation, who will have the primary responsibility of 
implementing this legislation.
  According to the CBO, ``enacting S. 1956 would have no significant 
impact on the federal budget.''
  I ask unanimous consent at this time to have their entire report 
printed in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                                                   August 1, 2012.
     Hon. John D. Rockefeller IV,
     Chairman, Committee on Commerce, Science, and Transportation, 
         U.S. Senate, Washington, DC.
       Dear Mr. Chairman: The Congressional Budget Office has 
     prepared the enclosed cost estimate for S. 1956, the European 
     Union Emissions Trading Scheme Prohibition Act of 2011.
       If you wish further details on this estimate, we will be 
     pleased to provide them. The CBO staff contact is Megan 
     Carroll.
           Sincerely,
                                             Douglas W. Elmendorf.
       Enclosure.
     S. 1956--European Union Emissions Trading Scheme Prohibition 
         Act of 2011
       The European Union (EU) has established the European Union 
     Emissions Trading Scheme (ETS), a regulatory framework 
     related to greenhouse gas emissions. Currently, the ETS 
     covers emissions from air carriers that operate flights 
     within, to, and from EU member states. Negotiations between 
     the U.S. government and the EU about the applicability of the 
     ETS to U.S. air carriers are ongoing, and the potential 
     outcome of those negotiations is unclear.
       S. 1956 would direct the Secretary of Transportation to 
     prohibit U.S. air carriers from participating in the ETS if 
     the Secretary believes such a prohibition to be in the public 
     interest. The bill would direct federal agencies to continue 
     negotiations in pursuit of a worldwide approach to addressing 
     aviation-related emissions and would authorize the Secretary 
     to use existing authorities to ensure that U.S. air carriers 
     are held harmless for any costs they incur if they 
     participate in the ETS.
       CBO estimates that enacting S. 1956 would have no 
     significant impact on the federal budget. We expect that the 
     bill would not alter the scope of diplomatic efforts 
     currently underway or federal agencies' costs to participate 
     in those efforts, which are subject to appropriation. The 
     bill would not affect direct spending or revenues; therefore, 
     pay-as-you-go procedures do not apply.
       S. 1956 contains no intergovernmental mandates as defined 
     in the Unfunded Mandates Reform Act (UMRA) and would not 
     affect the budgets of state, local, or tribal governments.
       S. 1956 would impose a private-sector mandate, as defined 
     in UMRA, if U.S. air carriers would be prohibited from 
     participating in the ETS. The cost of the mandate would 
     depend on how the prohibition is administered by the 
     Department of Transportation. Because information about how 
     the prohibition would be implemented is not available, CBO 
     has no basis for estimating the cost, if any, to U.S. air 
     carriers. Consequently, CBO cannot determine whether the cost 
     of the mandate would exceed the annual threshold established 
     in UMRA for private-sector mandates ($146 million in 2012, 
     adjusted annually for inflation).

[[Page S6528]]

       On September 23, 2011, CBO transmitted a cost estimate for 
     H.R. 2594, the European Union Emissions Trading Scheme 
     Prohibition Act of 2011, as ordered reported by the House 
     Committee on Transportation and Infrastructure on September 
     23, 2011. The two bills are similar, and the CBO cost 
     estimates are the same.
       The CBO staff contacts for this estimate are Megan Carroll 
     (for federal costs) and Amy Petz (for the impact on the 
     private sector). The estimate was approved by Theresa Gullo, 
     Deputy Assistant Director for Budget Analysis.
  Mr. THUNE. Additionally, at a recent Commerce Committee hearing on my 
bill, Secretary LaHood was asked if any possible action of 
implementation could ``include the U.S. government paying EU 
authorities directly or compensating the operators for any fines 
incurred for non-compliance with EU ETS.''
  He responded, ``We have absolutely no intention of asking the U.S. 
taxpayer to pay any ETS fines incurred for non-compliance with EU ETS, 
directly or indirectly.''
  I appreciate Senator Cardin and Lautenberg for coming forward and 
working with me to clarify this point, and I thank them both for 
releasing their hold.
  I am happy that we have been able to come to a bipartisan agreement 
on my bill and look forward to final passage today in the Senate and 
hopefully soon by the House of Representatives so we can send a clear 
message to the EU that ETS is arbitrary, unfair, and a clear violation 
of international law.
  Mr. CARDIN. I appreciate the Sentor clarifying his intent, and I am 
glad he shares my concern.
  I believe my amendment helps make the intent of the legislation 
clear.
  My amendment adds a third paragraph to subsection (a) of section 3 of 
the bill.
  The amendment will explicitly exclude any appropriated funds or user 
fee receipts to be expended on actions taken under the hold harmless 
clause.
  This amendment will ensure that any taxpayer dollars, either through 
appropriations or through user fee receipts, are expressly prohibited 
from supporting actions resulting from the held harmless clause of the 
bill.
  Would my colleague agree that my amendment assures that no U.S. 
taxpayer dollars will be expended on any held harmless actions that may 
result from this bill?
  Mr. THUNE. Yes.
  Mr. CARDIN. I thank the Senator for his cooperation with me on this 
important fiscal matter.
  I want to make it clear to my colleagues, as this bill progresses 
forward or is reconciled with a less thoughtful House proposal, I do 
want my colleagues to understand that should the Senate have to 
reconsider a different proposal in a conference report that I intend to 
reserve my right to object.
  I also want my colleagues to understand that I feel that the United 
States and countries around the globe must take actions to address the 
threat carbon emissions pose to the global environment.
  I think there are some legitimate concerns with the way the EU has 
proposed to take unilateral actions to reduce carbon emissions from the 
aviation sector.
  I don't fault the EU for their leadership in the face of what has 
thus far been nearly 15 years of failed multinational negotiations on 
how we as cooperating nations should be reducing or mitigating aviation 
carbon emissions.
  I would like for the United States to take greater action to address 
this problem, and in many respects I think it is unfortunate that the 
United States has not demonstrated the same kind of leadership that the 
nations of Europe have taken on this issue.

                          ____________________
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