NRI Standing Committee Newsletter | Dec. 21, 2021

1/4/2022

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, Ben Husch Husch (ben.husch@ncsl.org), or my colleague Kristen Hildreth (kristen.hildreth@ncsl.org), and we will point you in the right direction.

Top Stories

As Lead and Copper Rule Revisions Take Effect, EPA Announces Intent to Further Revise

The Environmental Protection Agency (EPA) announced plans to let the Lead and Copper Rule Revisions promulgated under the previous administration take effect on Dec. 16 after finding that the rule will improve public health protections. For more information on the LCRR, please read NCSL’s Info Alert. The agency also revealed plans to propose a new rule that will consider ways of strengthening the agency’s current action level of 15 parts per billion, which when exceeded requires utilities to take steps to control for corrosion and eventually replace pipes. The plan also includes details about how the $3 billion in funding under the IIJA will be allocated to states for lead line replacements, and includes clarification from the Department of Treasury that $350 billion provided in the American Rescue Plan can indeed be used for line replacement and lead faucet and fixture replacement. 

EPA Finalizes GHG Standards for Passenger Cars and Light Trucks MY 2023-2026

The EPA finalized greenhouse gas (GHG) emissions standards for passenger cars and light trucks for model years 2023-2026. The final rule revises current GHG standards beginning in model year 2023 and increases in stringency year-over-year through model year 2026 by 5% to 10% each year—the standards via the SAFE vehicles rule increased at only 1.5% annually. The standards are an increase from what the EPA first proposed in August, reaching 40 mpg by 2026 as compared to 38.2 mpg in the proposal, and 32 mpg via SAFE. For details on the SAFE vehicles rule read NCSL’s Info Alert from 2020.

Additionally, the EPA announced it plans to initiate a separate rulemaking to establish multi-pollutant emission standards under the Clean Air Act for model year 2027 consistent with Executive Order 14037—Strengthening American Leadership in Clean Cars and Trucks. The subsequent rulemaking will set standards through at model year 2030 and will apply to light-duty and medium-duty vehicles.

Biden Orders Release from the Strategic Petroleum Reserve

President Joe Biden ordered the release of 50 million barrels of oil from the nation's petroleum reserves in efforts to lower high fuel costs; 32 million barrels will be released from the U.S. Strategic Petroleum Reserve as an exchange over next several months, while 18 million will come from an accelerated release from previously authorized sales. The release will be coordinated with similar moves by other nations around the globe.

DOI Disbursed $8.78 Billion from Energy Production to States and Tribes

The Department of Interior’s Office of Natural Resources Revenue (ONRR) announced it disbursed $8.78 billion in fiscal year 2021 from energy production on federal and tribal lands, and offshore areas. The disbursements provide funds for states and tribes to pursue a variety of conservation goals, including irrigation and hydropower projects, historic preservation initiatives, and efforts to protect public lands and waters. ONRR disbursed $1.49 billion to the Reclamation Fund; $976 million to the Land and Water Conservation Fund; $150 million to the Historic Preservation Fund; $302 million to federal agencies; $2.71 billion to the Treasury; and $975 million to tribes and individual Indian mineral owners

ONRR also disbursed $2.18 billion in fiscal 2021 to 33 states based on revenue collected from oil, gas, geothermal and mineral production on federal lands within the states’ borders and from offshore oil and gas tracts in federal waters adjacent to their shores. The Gulf producing states and coastal political subdivisions will receive disbursements of fiscal 2021 qualified revenues in 2022. DOI also issued a report advocating for higher fees and more limits on federal oil and gas leasing programs. The changes recommended include boosting annual lease rental payments and raising royalties that energy companies pay.

FDA Proposes Changes to FMSA To Enhance Safety of Agricultural Water

The Food and Drug Administration issued a proposed rule requiring farms to conduct comprehensive assessments that would help identify and mitigate hazards in water used to grow produce. The proposed rule, if finalized, would change certain pre-harvest agricultural water requirements for produce and farms subject to the Produce Safety Rule, Key provisions in the proposed rule include: a requirement for farms to manage their agricultural water; an annual assessment by farms of their pre-harvest agricultural water; a requirement for expedited mitigation measures; and more.

Infrastructure Investment and Jobs Act Updates

For a summary of the Infrastructure Investment and Jobs Act, visit NCSL’s webpage. Updates on related-agency actions are broken down below by policy topic:

Transportation:

USDOT Releases infrastructure Law State by State Amounts for FY 2022

The U.S. Department of Transportation released the official amounts states will receive in formula funds for roads and bridges in FY 2022 following passage of the Infrastructure Investment and Jobs Act in November, which represent a 20% increase over FY 2021. Any discretionary grants awarded to states would be in addition to these amounts. However, because Congress has not yet passed an FY 2022 appropriations bill, states are limited to the amounts appropriated in FY 2021. The current continuing resolution runs through mid-February, at which point Congress could enact an FY 2022 omnibus appropriations bill. Additionally, state-by-state fact sheets for DOT funding via the IIJA can be found here.

Federal Highway Administration Issues Memo on Spending New Infrastructure Funds     
The Federal Highway Administration (FHWA) released updated guidance concerning how recipients of the law’s funds should aim to use those funds. Specifically, the memo notes that recipients should prioritize repairing existing infrastructure rather than building or expanding roads. However, the agency can only encourage states to adopt this mindset: “FHWA will implement policies and undertake actions to encourage—and where permitted by law, require—recipients of Federal highway funding to select projects that improve the condition and safety of existing transportation infrastructure within the right-of-way before advancing projects that add new general purpose travel lanes serving single occupancy vehicles. “

Federal Aviation Administration Sends Nearly $3 Billion to Airports from Infrastructure Law

The Federal Aviation Administration (FAA) announced $2.89 billion made available by the Bipartisan Infrastructure Law to 3,075 airports around the nation. The funds can be invested in runways, taxiways, safety and sustainability projects, as well as terminal, airport-transit connections and roadway projects. For a map of all airports receiving funding, and the amount received, click here.

Environment:

EPA Releases the Implementation Page for IIJA

The EPA launched an implementation webpage for the IIJA which features an interactive breakdown of funding allocations for various EPA programs and funding categories.

EPA Sends Letter to Governors on State Revolving Funds Letter

EPA Administrator Michael Regan sent a letter to governors on water infrastructure provisions of the bipartisan infrastructure law. The letter urges governors to target the funds they are now receiving toward disadvantaged communities, to prioritize lead-line replacement in communities with the highest lead levels, and to prioritize addressing per- and polyfluoroalkyl substances (PFAS) in communities with water contamination. The letter also includes the estimated 2022 state allotments of BIL funds through the SRFs.

EPA Releases Plans to Use $1 Billion to Clear Superfund Backlog

The EPA announced a $1 billion investment from the IIJA to initiate cleanup and clear the backlog of 49 previously unfunded Superfund sites and accelerate cleanup at dozens of other sites across the country. The $1 billion investment is the first wave of funding from the $3.5 billion in the Bipartisan Infrastructure Law to help cleanup polluted Superfund sites in communities. The backlog of previously unfunded sites that will now be receiving funding are in 24 states and territories and all 10 EPA regions, including some communities that have been waiting for cleanup for more than four years.

DOI Released Implementation Guidance to States to Address Orphaned Oil and Gas Wells

The Department of Interior (DOI) released initial guidance for states interested in applying for federal grants that will fund the proper closure and cleanup of orphaned oil and gas wells and well sites. IIJA includes $4.7 billion for orphaned well site plugging, remediation and restoration activities. The new guidance outlines eligible activities that states may use grant funding for, including plugging wells, remediating and reclaiming lands impacted by oil and gas development activities and removing infrastructure associated with the wells. It also includes information on how states can apply for the grant opportunities, and timelines for implementing the programs. Each state may receive up to $25 million initial funding for eligible activities that will help carry out these provisions. States have until Dec. 30, 2021, to notify the department if they intend to apply for a larger formula grant.

Energy:

USDOT and DOE Create Joint Office to Implement New EV Charging Program

U.S. Secretary of Energy Jennifer M. Granholm and U.S. Secretary of Transportation Pete Buttigieg signed a memorandum of understanding to create a Joint Office of Energy and Transportation to support the implementation of the new electric vehicle infrastructure charging program. The program was funded with $7.5 billion to build out a national electric vehicle charging network, with $5 billion sent to states through formula and $2.5 billion open to discretionary awards by the joint office.

Disaster Mitigation & Resiliency:

DOI, USDA, and DHS Announce Wildland Fire Mitigation and Management Commission

The DOI, the U.S. Department of Agriculture and the Department of Homeland Security established a joint Wildland Fire Mitigation and Management Commission as part of IIJA. The commission is tasked with recommending federal policies and strategies to prevent, mitigate, suppress and manage wildland fires, including the rehabilitation of land affected from wildland fires more effectively. It will include representation from federal, state, tribal, county and municipal governments, as well as non-governmental stakeholders from private industry. The commission will build on existing interagency federal efforts such as the Wildland Fire Leadership Council and the White House Wildfire Resilience Interagency Working Group.

Agriculture

USDA Invests in Building and Improving Critical Rural Infrastructure & Climate Smart Initiatives

The USDA announced $4.8 billion in low interest loans and over $372 million in grants aimed at improving critical rural infrastructure in 46 states and Puerto Rico, with funds for projects to expand access to high-speed internet, clean water and reliable electricity across rural America. Overall, 359 projects received assistance through a number of USDA programs, including the Community Connect Grants; Electric Infrastructure Loan and Loan Guarantee Program; Telecommunications Infrastructure Loans and Loan Guarantees; Water and Waste Disposal Loan and Grant Program; Water and Waste Disposal Loan Guarantees; Water and Waste Disposal Technical Assistance and Training Grants; and Water and Waste Disposal Predevelopment Planning Grants.

Additionally, the USDA announced it is investing $633 million to reduce the impacts of climate change on rural communities through 791 projects in all 50 states and Puerto Rico. Programs that will receive funding include Community Facilities Disaster GrantsElectric Loan ProgramRural Energy for America ProgramRural Energy Savings Program, and the Higher Blends Infrastructure Incentive Program. Projects will include improving rural electric infrastructure and grid connectivity; the purchase and installation of renewable energy systems by agricultural producers and rural small businesses; and transportation fueling and biodiesel distribution, to name a few.

USDA Issues Grants to Strengthen Local and Regional Markets for U.S. Agricultural Products

The USDA announced a $90.2 million investment in 203 projects to strengthen and explore new market opportunities for local and regional food businesses. The funding is via the Farmers Market and Local Food Promotion Programs (FMPP) and the Regional Food System Partnerships (RFSP). The grants via the FMPP include those to support the development, coordination and expansion of direct producer to consumer markets and local and regional food business enterprises, while those via the RFSP are intended to support partnerships that connect public and private resources to plan and develop local or regional food systems. USDA also announced the establishment of the Local Food Purchase Assistance Cooperative Agreement Program (LFPA), which will award up to $400 million for emergency food assistance purchases of domestic local foods using American Rescue Plan Funds. The application for eligible state and tribal entities will remain open through April 5, 2022.

USDA Announces Investments in Meat Processing and Food Supply Infrastructure

The USDA announced it would deploy $100 million under the new Food Supply Chain Guaranteed Loan Program to make available nearly $1 billion in loan guarantees to back private investment in processing and food supply infrastructure. USDA will partner with lenders to guarantee loans of up to $40 million to help eligible entities expand meat and poultry processing capacity and finance other food supply chain infrastructure, according to the department.

The USDA also announced an additional investment of $32 million in grants awarded to 167 meat and poultry slaughter and processing facilities to support expanded capacity and efficiency through the Meat and Poultry Inspection Readiness Grant program. The new program, authorized by the Consolidated Appropriations Act of 2021, is aimed at aiding meat and poultry businesses to cover the costs for improvements such as expanding existing facilities, modernizing processing equipment and meeting packaging, labeling and food safety requirements. 

Energy

Department of Energy Finalizes Updates to the “Process Rule” and Other Efficiency Actions

The Department of Energy finalized updates to its “Process Rule,” which is used to develop energy efficiency standards for products ranging from hot water heaters to air conditioners. The new rule returns the DOE framework for developing such rules to what it was prior to the changes by the previous administration. The previous administration’s changes established an energy savings threshold for efficiency standards, and also changed the status of the process rule from a guidance document to a formal rulemaking.

Relatedly, DOE’s Office of Energy Efficiency and Renewable Energy proposed a new minimum requirement for light bulbs, which would undo the previous administration’s determination that the current standards for the bulbs do not need to be amended because more stringent standards aren't economically justified.

FERC Issues Report Suggesting Grid Changes to Ensure Reliability

The Federal Energy Regulatory Commission released a report in light of Winter Storm Uri and its impacts on the build power system in the south central United States. The report outlined new details on how to void similar outages in the future, including substantial changes to the North American Electric Reliability Corp.’s mandatory reliability standards, including a requirement to implement freeze protection measures, and the need for greater coordination between the natural gas and electricity systems.

Environment

EPA and USACE Issue Propose Revising the Definition of WOTUS

The EPA and Department of Army announced the signing of a proposed rule to revise the definition of “waters of the United States.” The agencies propose to restore the pre-2015 definition of “waters of the United States,” updated to reflect consideration of Supreme Court decisions while the agencies continue to consult with states, tribes, local governments, and a broad array of stakeholders in both the implementation of WOTUS and future regulatory actions. The Federal Register notice can be found here.

Senate EPW Republicans Introduce Water Quality Certification Legislation

Draft legislation codifying the Trump Administration’s Water Quality Certification rule was re-introduced by EPW Ranking Member Shelley Moore Capito (R-W.Va.) and has several Republican co-sponsors. The legislation codifies the Trump Administration’s 2020 Clean Water Act Section 401 Certification Rule. The Section 401 Certification Act: specifies statutory and regulatory timelines for a state’s review and action on a Section 401 certification-requiring final action to be taken within one year of receiving a certification request; clarifies the scope of Section 401, including that 401 certification is limited to a project’s actual potential impacts on waters; and reaffirms the agency’s statutory responsibility to provide technical assistance to any party involved in a Section 401 water quality certification process, among others. NCSL has been active in advocating for the preservation of state authority under Section 401 of the Clean Water Act and will continue to do so as the bill moves through Congress.

EPA Natural Gas Processing Plants Must Publicly Report Emissions via New Rule

The EPA issued a rule requiring natural gas processing plants to publicly report emissions of benzene and other hazardous air pollutants. The new rule would require facilities to report emissions to EPA’s Toxics Release Inventory, which is intended to let communities know the types of hazardous pollutants that nearby businesses are discharging. It will take effect next year, with the first reports due in July 2023.

EPA Updates Required Levels of Biofuel Production, as USDA Announces Aid to Biofuel Producers

The EPA released a proposed rule updating required biofuel production levels for 2021 and 2022 in addition to retroactively reducing the 2020 requirement. Specifically, the agency proposed reducing the 2020 requirement from 20 billion gallons to 17 while then increasing the 2021 requirement to 18.52 billion gallons and 20.77 in 2022. The requirements include breakdowns for conventional, cellulosic, biomass-based and advanced biofuel.

Additionally, the USDA announced up to $800 million available to support biofuel producers and infrastructure, including $700 million to provide economic relief to biofuel producers and restore renewable fuel markets affected by the pandemic. The funds will be made available via the new Biofuel Producer Program authorized by the Coronavirus Aid, Relief, and Economic Security Act. USDA will also make $100 million available to increase the sales and use of higher blends of bioethanol and biodiesel in the coming months by expanding the infrastructure for renewable fuels derived from U.S. agricultural products.

Federal Government and States Agree on New Colorado River Water Deal

The lower basin Colorado river states have reached a new agreement with the Bureau of Reclamation to boost the level of Lake Mead. Each party will put up funds—$20 million from California, $20 million from Nevada, $60 million from Arizona and federal matching funds—over the next two years to fund conservation, efficiency and reduction measures.

Transportation

FHA Publishes New Broadband Infrastructure Deployment Final Rule

The Federal Highway Administration published a new Broadband Infrastructure Deployment final rule so broadband Internet installations can be included during road construction. The rule aims to minimize costs, enhance coordination and make construction projects more efficient by employing the so-called “dig once” approach to avoid excavation for separate projects. “By allowing broadband to be installed at the same time as other road improvement projects, we will reduce disruptions to residents, make better use of taxpayer dollars, and deliver economic opportunities to communities,” Transportation Secretary Pete Buttigieg said in a statement. The final rule includes four new requirements for states to implement the updated regulations and is the result of a requirement included in the 2018 omnibus appropriations act.

U.S. DOT Awards $1 Billion via the RAISE Grant Program

The Department of Transportation awarded $1 billion through the Rebuilding American Infrastructure with Sustainability and Equity (RAISE) competitive grant program. Overall, $500 million was awarded for highway projects, $246 million for transit and rail, $180 million for bicycle and pedestrian projects, and $77 for maritime and ports. Additionally, most of the funding is awarded local governments that do not often receive federal highway funding directly, rather than state DOTs. The allocations for the program will see the annual award totals raised from $1 billion to $1.5 billion in FY 2022 with the passage of the IIJA, with the possibility of even more funds through annual Congressional appropriations.

House Passes Ocean Shipping Reform Act of 2021

The House passed a bill, 364-60, which would seek to ensure ocean carriers don't decline to ship U.S. exports and that would give U.S. shipping interests more avenues to seek redress, steps that aim to alleviate a trade imbalance with China and help mitigate ongoing supply chain issues. The bill empowers the Federal Maritime Commission (FMC) to set additional minimum standards through the rule-making process for ocean shipping; seeks to protect U.S. shipping interests from retaliation if they file a complaint with the FMC regarding fees imposed by ocean shippers; and prohibits foreign-flagged ocean carriers from denying U.S. export cargo a berth on their ships. It also requires the FMC to make new rules that prohibit ocean carriers from declining opportunities for U.S. exports, shifts the burden of proof for complaints about excessive port storage fees from the invoiced party to the ocean carrier and authorizes the FMC to self-initiate investigations on an ocean carrier's business practices.

Thanks for reading! We hope everyone has a happy and safe holiday season and we look forward to delivering you more federal updates in the New Year!

Best,

Kristen and Ben

Additional Resources