NRI Standing Committee Newsletter | April 27, 2021

4/27/2021

ncsl newsletter

Below you will find some of the latest agriculture, energy, environment and transportation policy issues we are following in Washington, D.C. If you have questions about any of the stories below,  please reach out to me, Kristen Hildreth (kristen.hildreth@ncsl.org) and I’ll point you in the right direction. My colleague Ben Husch will be away on parental leave through May 2021. 

Top Stories

White House Unveils FY 2022 Budget – Discretionary Request  

President Biden released his budget proposal, separate from the American Jobs Plan, which includes $769.4 billion nondefense discretionary spending for fiscal year (FY) 2022, which is $105.7 billion more than FY 2021.

The proposal would increase the Environmental Protection Agency’s (EPA) budget by 21.3% to $11.2 billion which includes: $3.6 billion for water infrastructure programs, $1.8 billion for climate programs, including a $100 million increase to state and tribal grants, $882 million for the Superfund remedial program, $75 million to increase research on PFAS in order to inform “the regulatory development of designating PFAS as hazardous substances and setting enforceable limits for PFAS under the Safe Drinking Water Act. The proposal includes a total of $1.8 billion investment in environmental justice, to help low-income neighborhoods and communities of color, the proposal also includes $936 million for a new initiative at the EPA to accelerate environmental and economic justice. The proposal also calls for an additional $540 million over FY 2021 levels for a resilient infrastructure community grant program under the Federal Emergency Management Administration.

The proposal calls for a 14% increase in funding for the U.S Department of Transportation (DOT), raising funding levels to $25.6 billion in discretionary funds for FY 2022, which includes: $2.7 billion for Amtrak, $2.5 billion for Capital Investment Grants, $1 billion for Better Utilizing Investments to Leverage Development grants for surface transportation, $625 million for a newly created competitive grant program for passenger rail, $375 million for Consolidated Rail Infrastructure and Safety Improvement Grants, and $250 million for transit grants for low- and no-emission busses. The U.S Army Corps of Engineers would see its budget reduced by 13% from current levels to $6.8 billion, and would aim to "accelerate and improve delivery" of water resource projects by boosting participation from state and local authorities.

The proposal would increase the Department of Energy’s (DOE) budget by more than 10%, for a total in $46.1 billion in discretionary funding of which $1.9 billion is for a Building Clean Energy Projects and Workforce Initiative; $1 billion is for a new Advanced Research Projects Agency for Climate; $8 billion is for investment in technologies including advanced nuclear, electric vehicles and green hydrogen; as well as $2 billion for “transforming the U.S. electrify sector.”

The proposal calls for a 16% increase in the U.S. Department of Agriculture (USDA) budget, raising funding levels to $28 billion which includes: $4 billion for USDA research and education programs, including expanding funding to study carbon sequestration, $1.7 billion for forestry resilience against wildfires, and $717 million for rural water infrastructure, among others.

Additionally, the proposal would increase the Department of Interior’s (DOI) funding by 16% above current levels, and add $450 million for cleaning up orphaned oil and gas wells--double what is currently budgeted for FY 2021. The plan also asks Congress for an additional $200 million for land and water conservation efforts—including the creation of a Civilian Climate Corps under the Department.

Senate Republicans Unveil $568 Billion Infrastructure Plan

Senate Republicans unveiled their own infrastructure plan last week, focusing on roads and bridges, public transit systems, rail, drinking water and wastewater infrastructure, water storage, ports and inland waterways, airports, broadband, and safety. Republicans emphasized that any federal funding should be partnered with spending from state and local governments and should encourage private sector investments and utilization of financing tools. Key principles include avoiding one-size-fits-all requirements, streamlining permitting processes, ensuring all users of infrastructure contribute to the generation of revenue, and preserving the Tax Cuts and Jobs Act, including extending the cap on the state and local tax deduction.

REAL ID Enforcement Deadline Extended, DHS Seeking Public Comment on Digital REAL ID Cards

The Department of Homeland Security announced an extension to the REAL ID full enforcement date by 19 months – from October 1, 2021 to May 3, 2023, due to ongoing COVID-19 pandemic which has “significantly impacted states’ ability to issue REAL ID-compliant driver’s licenses and identification cards, with many driver’s licensing agencies still operating at limited capacity.” Even though all 50 U.S. states, the District of Columbia, and four of five U.S. territories covered by the REAL ID Act and related regulations are now compliant with REAL ID security standards and are issuing REAL ID-compliant driver’s licenses and identification cards, only 43% of all state-issued driver’s licenses and identification cards are currently REAL ID compliant.

In addition, DHS is also seeking comment on how it might establish minimum technical and security standards for mobile and digital REAL ID cards in advance of an upcoming rulemaking.

EPA Unveils Notice of Reconsideration of Withdrawal of California’s CAA Waiver for Cars and Lights Duty Trucks.

The EPA is seeking public comment on its reconsideration of the 2019 rule—The Safer Affordable Fuel-Efficient Vehicles Rule Part One: One National Program Rule (SAFE-1). In 2013 the EPA granted a waiver of Clean Air Act (CAA) section 209 preemption for California’s Advanced Clean Cars Program. SAFE-1 rescinded California’s 2013 CAA waiver which allowed California to enforce its greenhouse gas (GHG) standards for cars and light-duty trucks and its zero-emission vehicle sales mandate, and also interpreted the CAA as not allowing other states to adopt California’s GHG emission standards. While the EPA is taking comment on the reconsideration of the waiver, the National Highway Transportation Safety Administration (NHTSA) is also looking to withdraw prior regulations and legal analysis that barred California and other states from setting vehicle emissions standards more stringent than the federal government under the Energy Policy and Conservation Act. NHTSA is seeking comment on whether the SAFE-1 Rule fell beyond the Agency’s statutory authority by purporting to impose broad preemption requirements. Fourteen states plus D.C. have adopted California's standards through 2025, with three more states—Minnesota, New Mexico and Nevada—working to adopt them as well.

Litigation surrounding the Safer Affordable Fuel-Efficient Vehicles Rule’s CAFE standards rulemaking is currently delayed as the EPA and the NHTSA review the regulation.  Relatedly, EPA’s Office of Inspector General (OIG) found that during the rulemaking process for the SAFE Vehicles Rule, the previous administration did not work collaboratively with the NTHSA in the development of the rule and the EPA’s technical staff’s feedback on modeling, input data, and the preamble text was circumvented. OIG recommended the EPA take steps to improve the joint rulemaking process for future regulations and to document decisions to skip any internal Action Development Process milestones. The report directed the EPA to go back and ensure all comments made during the SAFE Vehicles interagency review in early 2020 are made public in the docket.

Agriculture

Senate Agriculture Committee Passes Climate and Carbon Bill Out of Committee

The Growing Climate Solutions Act of 2021, a bipartisan piece of legislation led by Senate Agriculture Chair Debbie Stabenow (D-Mich.) and Senators Mike Braun (R-Ind.) and John Boozman (R-Ark.), passed out of committee by voice-vote. The bill would create a certification program at the USDA to help farmers increase their adoption of “climate smart practices,” and provide better access to voluntary carbon markets. It would direct $4.1 million in unspent stimulus funds at the USDA to start the program and authorize an appropriation of up to $1 million annually through 2026.

USDA Expanding Conservation Reserve Program and Announces New Climate Incentives

The USDA announced it is expanding its Conservation Reserve Program (CRP) with higher payment rates, new incentives, and a more targeted focus on the program’s role in climate change mitigation. Additionally, USDA is announcing investments in partnerships to increase climate-smart agriculture, including $330 million in 85 Regional Conservation Partnership Program projects and $25 million for On-Farm Conservation Innovation Trials. The CRP provides annual rental payments for 10 to 15 years for land devoted to conservation purposes, as well as other types of payments. USDA’s goal is to enroll up to 4 million new acres in CRP by raising rental payment rates and expanding the incentivized environmental practices under the program.

Energy

Oil and Gas Leasing Freeze to Continue through Summer 2021

The DOI’s Bureau of Land Management’s Acting Director, Nada Culver, said the Department would “exercise its discretion” by not holding oil and gas lease sales in the second quarter (April to June). The action is in line with the president’s Jan. 27 executive order, which temporarily suspended new oil and gas leases on federal land and offshore waters pending a review.

Administration Revokes Prior Legal Opinion Setting Stricter Permitting for Offshore Wind

The DOI rescinded a legal opinion from the previous administration which set a stricter standard for the permitting of offshore projects, including wind, where they might “interfere” with fishermen and other ocean users. The new opinion “reflects the secretary's discretion to make determinations that consider each of the goals in the Outer Continental Shelf Lands Act, rather than to put any one particular use above all others.” The action is in line with the administration’s plans to boost offshore wind and deploy 30 gigawatts of offshore wind power by 2030, in accordance with the president’s January 2020 executive order.

FERC Approves Carbon Pricing Policy, and Lays Out Strategy for Transmission Incentives

The Federal Energy Regulatory Commission (FERC) unveiled a carbon pricing policy, approved 3-2, which does not directly impose a carbon price, but instead provides guidance to power markets that may want to include emission externalities in their pricing programs. Additionally, the FERC issued a new proposal, 3-2, creating an incentive of .5% return on equity for new Regional Transmission Organization members that would last for three years as an effort to attract utilities into RTOsa reduction from a previous plan for promoting transmission which called for doubling the financial incentives for developers in regional transmission organizations. While unveiling these, Chairman Rich Glick stated his desire to work with states and that he “think[s] the states play an important role,” and that the FERC needed to “account for state energy goals.”

Climate Task Force Established at Interior and Rescinds Prior Secretarial Orders

DOI Secretary Deb Haaland signed an order creating a climate task force and rescinding secretarial orders from the previous administration. The task force will “coordinate across the department, including accelerating renewable energy development and identifying actions to foster investments in energy communities.” The task force will also work to improve and increase adaptation and resilience to the impacts of climate change, address current and historic environmental injustice, and protect public health and conserve the DOI-managed lands. The task force will also review how to apply the social cost of greenhouse gas to environmental reviews of projects on DOI-managed land.

Among the secretarial orders rescinded were ones that included measures that expanded permitting for fossil fuel projects and promoted offering as much average as possible for oil production in the Natural Petroleum Reserve-Alaska. office The secretary also issued a withdrawal of an opinion that concluded that the Interior Secretary must promulgate a National Outer Continental Shelf Oil and Gas Leasing Program consisting of a five-year lease schedule with at least two lease sales during the five year plan.

Interagency Working Group Finds $38 Billion in Unspent Funds for Coal Communities

A new report from the Interagency Working Group on Coal and Power Plant Communities and Economic Revitalization said it identified close to $38 billion in existing resources to help spur job creation in communities affected by the decline of the coal industry. Those existing dollars comprise $1.5 billion in broadband grants, $10 billion in a small-business credit initiative, $1.3 billion to address mine-impacted water, as well as brownfield and orphan well cleanup dollars, $8.5 billion from DOE’s Title XVII loan guarantee program—specifically set aside for carbon capture technologies, among others. The working group was established as part of the president’s Jan. 27 executive order – “Tackling the Climate Crisis at Home and Abroad.”

GAO Says the U.S. Isn’t Properly Monitoring Pipes in Gulf of Mexico

The Government Accountability Office (GAO) issued a report finding that the Bureau of Safety and Environmental Enforcement isn’t adequately monitoring close to 9,000 miles of active offshore oil and gas pipelines on the sea floor in the Gulf of Mexico. Given that there is no clear funding source for the removal of these pipelines if they pose safety or environmental risks, GAO recommended the bureau further develop, finalize and implement updated pipeline regulations to address its ability to both ensure active pipeline integrity and address safety and environmental risks associated with pipeline decommissioning.

DOI Delaying Implementation of Valuation Rule

The DOI announced plans to delay, again, a rule which would make changes to the way royalties from oil and gas companies that function on public lands and waters are calculated. The rule allows companies that extract oil and gas from water that is 200 meters deep or more to deduct certain costs, and also allows the consideration of mitigating circumstances when royalty payments are late. The administration delayed the rule in February to April 16 as it sought additional comments, and are now delaying the rule until Nov. 1, while the DOI decides whether to revise or withdraw the prior rule.

Dakota Access Pipeline to Remain Open During Environmental Review

The U.S. Department of Justice told the U.S. District Court for the District of Columbia that the administration has no plans to use its enforcement authority to order the pipeline to shut down, as it undergoes a new environmental analysis. The decision follows court rulings that ordered the Army Corps to re-do environmental studies of the pipeline. The D.C. Circuit earlier this year suggested the Army Corps could have cause to order the line emptied until the new environmental review is completed. The judge ordered the Corps to provide an update by May 3 on when it plans to complete an environmental review of the pipeline.

Separate, but related, the D.C. Circuit Court of Appeals said it will not revisit its January ruling affirming the Corps must conduct a thorough environmental impact study of the Dakota Access pipeline. The U.S. District Court of Appeals from the District of Columbia Circuit upheld a previous ruling which found that the Dakota Access Pipeline’s operations at the Missouri River crossing near the Standing Rock Sioux Reservation did not undergo proper environmental review via the National Environmental Policy Act, thus requiring the U.S. Army Corps of Engineers to proceed with another environmental review.  The denial means DAPL has 150 days, until Sept. 20, to appeal to the Supreme Court.

Environment

Landfill Methane State Deadline Delay Rule Vacated

The D.C. Circuit Court of Appeals vacated the previous administration’s extension of a deadline for the Obama administration’s 2016 rule which placed new standards on methane for new and existing landfills, remanding it back to EPA. The Trump administration delayed the deadline by which states had to submit clean-up plans through August 2019. The Biden administration asked the court to vacate the deadline delay rule as it was based on a part of the Affordable Clean Energy (ACE) rule that extended the period for states to act on rules under Section 111 of the Clean Air Act—including the ACE rule and these landfill regulations. The court struck down the ACE rule, including the EPA’s extension on compliance times for such regulations, in January. The EPA is expected to issue the federal landfill methane plan in May. The EPA last year formally declared that 42 states had failed to submit plans, though at least seven at that time said they planned to submit their own plans while seven more indicated they would accept the federal plan.

EPA Issues Final Conclusions on PFBS Toxicity – Replacing Prior Assessment

The EPA issued a new toxicity assessment for perfluorobutane sulfonic acid (PFBS), a type of PFAS, after withdrawing the version issued by the previous administration due to “scientific integrity” concerns. Of note, the withdrawn version included a range of “toxicity values” rather than a single value. The new assessment restores single toxicity values, as the draft version released by the agency in 2018 had included. The document concludes that PFBS is less toxic than PFOA and PFOS, but is still linked with damage to the thyroid, reproductive organs, fetuses and the kidney.

This action comes as the PFAS Action Act of 2021 was reintroduced in the House. The bill would, under the Clean Water Act, require the EPA to place discharge limits on industrial releases of PFAS, require the EPA to investigate methods to prevent contamination of GenX to surface waters, and require the EPA to establish a national drinking water standard for PFOA and PFOS within two years that protects public health, including the health of vulnerable subpopulations. Additionally, the bill would also designate PFOA and PFOS chemicals as hazardous substances under CERCLA within one year, and require the EPA to determine whether to list other PFAS within five years, and also designate PFOA and PFOS as hazardous air pollutants under the Clean Air Act within 180 days and would require the EPA to determine whether to list other PFAS within five years.

U.S. Greenhouse Gas Emissions Decreased in 2019

EPA’s final annual greenhouse gas inventory indicated that U.S. greenhouse gas emissions decreased by 1.7% in 2019, a reversal from 2018 which saw a 3% increase. The EPA attributes the decline to decreased emissions from fossil fuel combustion, , which saw a 1% decrease in total energy use and the continued shift away from coal and toward natural gas and renewables. Overall, fossil fuel combustion emissions were down 2.7% year over year, driven by an 8.4% reduction from the electric generating sector.

EPA Administrator Directs Agency to Better Incorporate Environmental Justice

In a memo to staff, EPA Administrator Michael Regan directed the agency to take specific steps to better incorporate environmental justice considerations in enforcement, rulemakings and grant decisions. The memo said EPA would take steps to boost enforcement "in communities overburdened by pollution," and incorporate environmental justice into the regulatory development process by maximizing benefits to those communities. Additionally, the memo called for increased engagement with environmental justice communities during rulemakings, permitting actions and enforcement work—with a particular focus on tribal nations. Moving forward, EPA will develop specific timelines, deliverables and measures of accountability, to track and accurately capture the agency’s progress on equity and environmental justice.

Transportation

Senate Republicans Say ‘No’ to Restoring Earmarks as Democrats Revive the Practice

Republicans in the Senate decided to keep their 2019 permanent ban on earmarks, despite Republicans in the House voting to remove their ban last month. There are no firm rules, however, which preclude senators from earmarking, regardless of a party ban, and a number of Senate Republicans have already indicated their plans to propose earmarks.

NCSL Testified Before Senate EPW Committee on Transportation Funding and Financing

NCSL Transportation Program Director Doug Shinkle testified before the U.S. Senate Environment and Public Works Committee last week on the important issue of transportation funding and financing, with a focus on how states have addressed funding shortfalls. NCSL supports a user-fee, formula-based national transportation funding stream, and encourages continued outreach to and consultation with states to develop a shared, long-term vision for funding and financing surface transportation systems that will enhance the nation’s prosperity and quality of life for all Americans. Read what Doug had to say in NCSL’s blog

Thanks for reading. We will be back later this month to fill you in on other federal happenings.

Best,

Kristen

Additional Resources