Federal Update - Agriculture & Energy and
Updated July 21, 2010
House Action Opens Fiscal 2011 Funding Bill Debate
On July 20th, the House Appropriations Committee approved the appropriations subcommittee allocations, also known as 302(b)s, for fiscal year 2011 appropriations bills. The committee allocations fell within the overall budget levels set by the House Budget Enforcement Resolution adopted July 1st that calls for a $14.5 billion reduction to the President’s discretionary budget request. As such, all but two of the allocations, including the Energy & Water and the Interior & Environment bills, are set lower than the FY 2011 budget request from the President. According to the Committee, the Interior & Environment bill is level funded in comparison to FY 2010 enacted levels while the Energy & Water is 3.6% higher than FY 2010 enacted levels. The committee also included modifications to the discretionary spending levels requested by the President since Congress had not enacted proposals to make certain funding mandatory, including a portion of the $1.8 billion in funding requested for the Low Income Home Energy Assistance (LIHEAP) program.
Subcommittee action on draft appropriations legislation had begun earlier in July with the Energy and Water bill being taken up in subcommittee on July 15th. The subcommittee approved a $34.6 billion fiscal 2011 Energy-Water spending bill that would provide $28.1 billion to the Department of Energy, a nearly $1 billion increase over the fiscal 2010 level, but $1.5 billion less than the Administration’s request. Further action on this legislation is expected by the full Appropriations committee on July 22nd, the same day the interior and Environment bill is expected to be marked up at the subcommittee level. On June 30, the House Agriculture Appropriations Subcommittee approved an FY 2011 spending bill that provided $23.1 billion in discretionary spending, $204 million less than fiscal 2010 levels and about $27 million under the President’s request. Full Committee action has not occurred.
Senate Action starts on Fiscal 2011 Funding Bills
On July 15th, the full Senate Appropriations Committee approved an overal plan that would cut $14 billion from President Obama's proposed budget for the upcoming year. Passage of the plan opens the door for committee consideration of individual funding bills as it includes top line spending levels for each appropriations bill, called 302(b) allocations. While many agencies budgets are held flat or cut under the plan it does allocate somewhat more funding for the Energy and Water and Interior and Environment bills than last year.
On July 15th, the Senate Appropriations Committee also approved an FY 2011 spending bill for the Department of Agriculture that provides $23 billion in discretionary spending for the Department of Agriculture and the Food and Drug Administration. The bill includes $109 billion in mandatory spending, slightly higher than the President’s request but nearly $12 billion higher than FY 2010. The single biggest chuck of agriculture funding is the $68.209 billion for the SNAP (Food Stamps) program.
On July 20th, the Senate Energy and Water Development Appropriations Subcommittee approved a draft bill to fund the Energy Department and water infrastructure projects in fiscal 2011. With a total level of funding in the legislation at $34.9 billion the spending bill is $376 million below President Obama’s budget request and $1.5 billion above the fiscal 2010 enacted level, according to the committee. Subcommittee Chairman Byron L. Dorgan (ND) requested that members hold off on offering amendments until the Thursday full committee markup of the legislation. One member, Sen. Patty Murray (WA) indicated she would offer an amendment to restore funding for the Yucca Mountain nuclear waste project during that meeting.
Yucca Mountain Status Update
A key issue during both the House and Senate consideration of the FY 2011 Energy and Water Appropriations legislation is the ongoing funding of the Yucca Mountain nuclear repository. Given the request by the U.S. Department of Energy (DOE) to withdraw the application for a license for the Yucca Mountain repository it is not a surprise that the Administration requested that the program funding be zeroed out. However, a recent ruling by the Atomic Safety and Licensing Board (ASLB) of the Nuclear Regulatory Commission (NRC) on June 29th determined that DOE does not have authority to withdraw the application. The three judge panel ruled that the Secretary does not have the discretion to substitute his policy for that established by Congress under the Nuclear Waste Policy Act. The order also states that at this point the Nuclear Waste Policy Act “mandates progress toward a merits decision by the Nuclear Regulatory Commission on the construction permit.” To access the NRC Order go to: http://www.nrc.gov/reading-rm/doc-collections/commission/orders/2010/2010-13cli.pdf.
As Senate Energy Week Approaches Components of Energy Bill Remain In Play
On July 13th, Majority Leader Reid indicated that he plans to bring a four part energy package to the Senate floor that would include language to address greenhouse gas emissions from power plants, respond to the Gulf of Mexico oil spill, boost U.S. energy efficiency and ramp up clean energy production. It is possible that debate on the legislation could begin as early as the week of July 26th; however, to date the legislative package has not been released by the majority leader. A variety of Senators are working on potential pieces of the package include ongoing negotiations between Sens. John Kerry (MA) and Joe Lieberman (CT) and electric utilities on a sector specific carbon cap. Individual Senators also continue to introduce new legislation to highlight the importance of particular issues ranging from hydro power to carbon capture and sequestration (CCS) to geothermal loan guarantees.
On July 21st, the Senate Energy Committee approved six additional bills adding to the list of possible components for consideration as a part of the broader energy package. The legislation acted on by the committee included legislation on nuclear reactors, plug-in vehicles, solar power and energy efficient procurement.
- S 2843, sponsored by Sen. Debbie Stabenow (MI), was approved by a 13-10 vote. The legislation would restructure the DOE advanced autos program to include medium and heavy-duty trucks.
- S 3396, sponsored by Energy and Natural Resources Chairman Jeff Bingaman (NM), was approved by a 13-10 vote. The bill would direct DOE to establish a program, “Supply Star”, to incentivize companies to increase the energy efficiency of their supply chains.
- S 3460, sponsored by Sen. Bernie Sanders (VT), was approved by a 13-10 and would require DOE to provide funding to states for rebates, loans and other incentives for the purchase and installation of solar energy systems.
- S 3495, co-sponsored by Sens. Byron Dorgan (ND) and Lamar Alexander (TN), was approved by a 19-4 vote, and would provide incentives for the deployment of plug-in electric drive vehicles.
The Committee also passed two bills by voice vote, both dealing with nuclear reactors. S 2052, sponsored by Sen. Mark Udall (CO), would authorize a DOE research and development program that would look into small scale reactors and, as well as ways to lower the costs for all nuclear reactors. S 2812, sponsored by Chairman Bingaman, would require the department to develop and demonstrate in a private-public partnership the licensing process for two small modular reactor designs.
In addition to the latest committee passed legislation there also remains the possibility that components of the American Clean Energy Leadership Act of 2009 (S.1462) passed by the committee last year could also be considered for the new energy package. However, uncertainty about the path forward has led many members to wonder if action on an energy bill is still possible as they wait for word from Sen. Reid.
Restoring American Financial Stability Act of 2010 Includes Increased Regulation of Derivatives
On July 21, President Obama signed H.R. 4173, also known as the “Restoring American Financial Stability Act of 2010” into law, intended to enact a major overhaul of the country’s financial regulations. The legislation includes a provision for derivatives market reform was introduced by Senate Agriculture Committee Chair Blanche Lincoln (Arkansas). Derivatives are used in agricultural commodities sector to manage risk. Key points of the derivatives provision include: (1) enhancement of transparency in market transactions, including requiring virtually all clearable transactions be reported on a timely basis, (2) required mandatory clearing of nearly all swaps, especially financial instruments with specific provisions to provide very limited exceptions, reviewable by the regulator; and (3) nearly all swaps, including over-the-counter derivatives, will be under mandatory trading rules.
Following the legislation’s passage in the Senate, Senator Lincoln stated that “I am proud to have helped craft the bill’s strong derivatives title.” She went on to say that the bill “prevents excessive speculation, stabilizing energy prices for consumers and providing certainty in the commodity markets for our farmers and ranchers.”
The National Farmers Union also expressed support for the bill’s passage. The Union’s president, Roger Johnson, said that “Farmers need stability in commodity markets in order to function. This bill brings meaningful reform to our economy. It reverses the trend of reckless deregulation of the financial sector which has brought great harm to American family farmers and ranchers and our economy as a whole.”
Congressional Republicans expressed concerns that the bill was too comprehensive and addressed areas that were not the cause of the financial crisis. Mississippi Senator Thad Cochran said that “It is unfortunate that this reform effort has morphed into an oversized measure that expands the federal government’s role in everyday commerce. The bill goes well beyond the reforms needed to end the reckless financial actions taken on Wall Street.”
Oberstar Releases Letters of Support for Clarification of Clean Water Act Jurisdiction
On July 20th, Chairman Jim Oberstar (MN) of the House Transportation and Infrastructure committee released two letters of support for legislation to clarify Clean Water Act (CWA) jurisdiction issues. Chairman Oberstar introduced H.R. 5088, the America’s Commitment to Clean Water Act (ACCWA), earlier this year which would strike the word “navigable” from a key phrase in the CWA integral to determining which bodies of water are subject to regulation. Proponents of the legislation have claimed that removing term “navigable” from the definition of the “waters of the United States” restores the original intent of the CWA and does not expand the scope of the legislation. The movement in Congress is aimed at restoring clarity to a regulatory system they feel has become unpredictable and inefficient in the wake of two Supreme Court decisions (Solid Waste Agency of Northern Cook County v. U.S. Army Corps of Engineers in 2001 and Rapanos v. United States in 2006). The legislation has stalled in Committee over concerns that the impact of the legislation would be to apply CWA jurisdiction to a broad array of waters not previously covered by the CWA or which are otherwise under the authority of state and local government. Chairman Oberstar summed up the implications of the letter in his statement saying “Simply put, if a discharge into waters of the United States was not subject to being regulated prior to the Supreme Court cases, it will not become regulated because of the passage of this bill. That is the intent of the bill, and Administrator Jackson and Assistant Secretary Darcy agree.”
House Ag Committee Reports Out Bill Encouraging Energy Efficiency in Rural Areas
H.R. 485, the Rural Energy Savings Program Act, also known as “Rural Star” was reported out of the House Agriculture Committee by voice vote on July 14. The bipartisan bill was introduced by House Majority Whip James Clyburn (South Carolina) and Representative Ed Whitfield (Kentucky). Committee amendments to the bill included a manager’s amendment by the Committee Chairman, Representative Colin Peterson of Minnesota. The bill authorizes the U.S. Department of Agriculture’s Rural Utilities Service to make interest-free loans to eligible entities, including rural electric cooperatives or groups of co-ops. Those entities would then make loans to qualified customers to implement energy efficiency measures. Consumers would repay the loans through their electricity bills at an interest rate below three percent. Funds would be used to retrofit residences and small businesses with structural improvements and investments in cost-effective, off-the shelf technologies designed to reduce energy costs and consumption. Insulation, HVAC systems, boilers and roofs would be eligible uses of the funding; appliances are not be covered by the program. The loan pool authorized by the bill would be $4.9 billion. The estimated $993 million needed to run the program would have to be appropriated.
FDA Draft Guidance on Antibiotic Use in Food Animals
The Food and Drug Administration (FDA) issued draft guidance on June 28th that lays out key principles regarding the use of “medically important” antibiotics in food animals. Medically important drugs are antimicrobial drugs that are important for treating infectious diseases in people, particularly those caused by bacteria. Subtherapeutic use of antibiotics in livestock has sparked concerns about the development of drug resistance bacteria.
The first principle stated in the draft guidance is that only uses “necessary to assure animal health” are considered “judicious.” This means that FDA will not support the use of antibiotics in livestock for growth promotion and for feed efficiency. The second principle is that the use of any medically important antibiotics in food animals should be conducted with oversight from or in consultation with a veterinarian. Currently, these drugs are approved for over-the-counter use, so this would change the way such drugs are dispensed. How exactly veterinary oversight would work is not spelled out in the guidance. In fact, the guidance acknowledges the shortage of food animal veterinarians and the difficulties of treating livestock operations and specifically asks for comments on implementing this change. The public has 60 days to comment on the proposed draft regulations.
EPA Advances Proposal for Management of Coal Ash
Coal Combustion Residuals, often referred to as coal ash, are currently considered exempt wastes under an amendment to RCRA, the Resource Conservation and Recovery Act. In response to the structural failure at the Tennessee Valley Authority’s plant in Kingston, Tennessee, EPA began a process of evaluating whether current regulations needed to be altered to address potential environmental concerns associated with water contamination from coal ash leaching into the ground water or from structural failures of impoundments.
EPA is proposing to regulate for the first time coal ash under RCRA and is considering two possible options for the management of coal ash for public comment. Under the first proposal, EPA would list these residuals as special wastes subject to regulation under subtitle C of RCRA, when destined for disposal in landfills or surface impoundments. Under the second proposal, EPA would regulate coal ash under subtitle D of RCRA, the section for non-hazardous wastes. The coal ash proposal was published in the Federal Register on June 21st (75 Fed. Reg. 35,128). There is a 90-day comment period for the rule and the deadline for public comment is September 20, 2010. A copy of the proposal is available on-line at: http://edocket.access.gpo.gov/2010/pdf/2010-12286.pdf while additional information on the proposed rule can be found at http://www.epa.gov/coalashrule.
EPA has also announced that they will be holding two webinars on the Coal Combustion Residuals Proposed Rule as well as five public hearings across the United States to hear comments on it proposed regulation. According to a notice to be published in the July 15 Federal Register the public meetings will be held in Arlington, Va., on Aug. 30; Denver on Sept, 2; Dallas on Sept. 8; Charlotte, N.C., on Sept. 14; and Chicago on Sept. 16. For more information about the public hearings, go to: http://www.epa.gov/epawaste/nonhaz/industrial/special/fossil/ccr-rule/ccr-hearing.htm.
The webinars are not a part of the official comment process ; however, they will include an explanation of the proposal by EPA staff and an opportunity to address questions from participants. EPA has indicated that they would like to focus the questions submitted during the webinars in the following two areas:
1. Thursday, August 5th, 2:00 pm-3:30 pm - Environmental/Health, Environmental Justice, and Community impacts
2. Thursday, August 12th, 2:00 pm-3:30 pm - Industry and Beneficial Use impacts
To register for the webinars, go to: http://www.epa.gov/epawaste/nonhaz/industrial/special/fossil/ccr-rule/ccr-webinar.htm
Final Recommendations of the Ocean Policy Task Force Announced
On July 19th, the Administration released the Final Recommendations of the Ocean Policy Task Force, which would establish a National Policy for the Stewardship of the Ocean, Coasts, and Great Lakes (National Policy) and create a National Ocean Council (NOC) to strengthen ocean governance and coordination. The recommendations also identify coastal and marine spatial planning as a priority and seek to establish a flexible framework to address conservation, economic activity, user conflict, and sustainable use of the ocean, coasts and the Great Lakes. The planning would be regional in scope, developed cooperatively among federal, tribal, and local authorities, and include substantial stakeholder, scientific, and public input.
The administration adopted these recommendations through an Executive Order issued that same day. For more information on the recommendations go to:
Legislation to Ease Rules for Agriculture Exports to Cuba
On June 30, 2010, the House Agriculture Committee passed HR 4645, entitled the “Travel Restriction Reform and Export Enhancement Act,” which would change a federal requirement that U.S. agriculture exporters to Cuba receive full payment before ships leave port. Instead, in certain circumstances, agriculture products would leave the United States before payment is finalized. In addition to expanding trade with the Caribbean island nation, the measure would overturn 50 years of U.S. policy by allowing increased American travel to Cuba.
One of the legislation’s cosponsors, Kansas Representative Jerry Moran, said that passage of the bill was “a step in the right direction and a victory for America’s farmers and ranchers. Cuba must import nearly 85 percent of its food and current U.S. trade policies hurt American farmers and ranchers.” Representative Moran noted that Cuba must import nearly 85% of its food. However, because current U.S. policies make it more expensive for Cuba to purchase U.S. products, Cuba purchases food from countries like Vietnam and China. He added that “This legislation will standardize our trade policies, increase export sales and create thousands of American jobs without increasing the deficit.”
Many agriculture advocacy groups are happy with the committee vote, but final passage of the bill is unclear. Many Republicans who supported the agriculture portion of the measure were extremely displeased with the lifting of the travel ban. They were concerned that expanded travel allowed more opportunities for American dollars to support the fledgling Cuban economy.
Addressing the opposition’s view, Committee Chairman Collin Peterson said, “Congress should be very clear that this bill won’t end the U.S. embargo on Cuba and won’t allow U.S. banks to extend credit to Cuba. … The current U.S. policies have hand-delivered an export market in our own backyard to Brazilian and European producers and other competitors around the world.”
The bill has been referred to the Foreign Affairs and Financial Services committees for consideration. Foreign Affairs Chairman Howard Berman acknowledged that the travel ban “is an area of primary jurisdiction” for the committee, but said that it was “too early to say” whether his committee would hear the bill.
On the Horizon
Despite a flurry of activity on legislation ranging the full spectrum of congressional activity the ultimate outcome of many of these bills remains uncertain. The congressional calendar has few legislative days remaining before the November elections though early indications are that a lame duck session of Congress is all but inevitable. While many are encouraged by committee action on appropriations legislation it remains unclear if any, let alone all, of them will see individual floor consideration in either chamber. Priority legislative issues, such as comprehensive energy legislation, remain a moving target as procedural concerns and substantive differences on issues complicate attempts to consider legislative packages.
`For more information please contact: Lee Posey (Lee.Posey@ncsl.org), Tamra Spielvogel (Tamra.Spielvogel@ncsl.org) or Max Behlke (Max.Behlke@ncsl.org) or call NCSL’s Washington DC office (202) 624-5400.