NRI Standing Committee Newsletter | June 8, 2021

6/8/2021

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

Additionally, NCSL's Natural Resources and Infrastructure Committee is pleased to present its annual Spring Webinar Series. This year, the committee will host five webinars, April 29 through June 24. The schedule is as follows:

  • April 29 | Energy You Can Count On: State and Federal Efforts to Enhance Energy Resilience
  • May 20 | Agriculture Workforce: Challenges and State and Federal Responses
  • May 27 | How Can Emerging Data and Technology Help Combat Distracted Driving?
  • June 10 | State Outdoor Recreation: Climbing to New Heights
  • June 24 | Energy Security: Planning for Every Threat

REGISTER FOR EACH WEBINAR HERE!

Top Stories

Treasury Releases American Rescue Plan Fund Guidance

The Treasury Department released an interim final rule on the Coronavirus State and Local Fiscal Recovery Funds, which were authorized by the American Rescue Plan Act of 2021 (ARPA).

ARPA gives recipients broad flexibility in using the funding to meet the needs of their communities, including for water, sewer and broadband infrastructure. The funds would allow recipients to make necessary investments to improve access to clean drinking water, to support vital wastewater and stormwater infrastructure, and to expand access to broadband internet.

Sections 602(c)(1)(C) and 603(c)(1)(C) of ARPA provide recipients with broad latitude to use the recovery funds for the provision of government services, which can include but are not limited to: maintenance or pay-go-funded building of infrastructure, including roads; modernization of cybersecurity, including hardware, software and protection of critical infrastructure; health services; environmental remediation; school or educational services; and the provision of police, fire and other public safety services. Pay-go infrastructure funding refers to the practice of funding capital projects with cash on hand from taxes, fees, grants and other sources, rather than with borrowed funds.

Specifically, ARPA funds allow recipients to invest in improvements to their water and sewer infrastructure, including projects that address the impacts of climate change.

Treasury guidance indicates that recipients can use the funding for a variety of water infrastructure projects that align with a range of projects that are currently eligible to receive assistance through the Environmental Protection Agency’s Clean and Drinking Water State Revolving Funds, with an emphasis on allowing states to pinpoint high-priority needs within their communities, including:

  • Drinking Water Infrastructure
    • Building or upgrading facilities and transmission, distribution and storage systems.
    • Replacing of lead service lines.
  • Wastewater Infrastructure
    • Constructing and procuring publicly owned treatment infrastructure.
    • Managing and treating stormwater or subsurface drainage water.
    • Facilitating water reuse.

Additionally, fiscal recovery funds may be used to develop effective cybersecurity practices and measures at drinking water systems and publicly owned treatment works. In cases of a natural disaster, the guidance indicates that recipients may also use recovery funds to provide relief, such as interconnecting water systems or rehabilitating existing wells during an extended drought.

For more information on the funds and associated guidance, read NCSL’s write-up here.

Senate Passes Bipartisan Water Infrastructure Bill

The Senate passed the Drinking Water and Wastewater Infrastructure Act of 2021, 89-2, which would authorize funding increases for the nation’s drinking water and sewer systems to $35 billion, with an increased focus on disadvantaged communities. The bill would, among other things, reauthorize funding through fiscal year 2026 for the Clean Water and Drinking Water state revolving fund programs and the Water Infrastructure Finance and Innovation Act project financing program. It would authorize grants from the Environmental Protection Agency to improve drinking water and wastewater systems, including projects to replace lead drinking water pipes. Additionally, the bill would authorize $35 million for the EPA’s technical assistance grants to states and publicly owned water systems to respond to emergency situations that put public health at risk. The bill will now go to the House, where members are currently working on their own measures, which could be brought to conference.

Prior to the bill’s passage, the Senate voted down an amendment, 81-14, from Senator Marco Rubio (R-Fla.) to change the formula for the disbursement of Clean Water State Revolving Funds, an integral state-federal partnership that provides low-cost financing for a variety of critical infrastructure projects. The amendment was presented outside of normal order, which would typically include a hearing and an opportunity for stakeholders to weigh in throughout the formula revision and development processes. NCSL led state and local groups in a letter raising concerns about the amendment and encouraged leadership to ensure state and local elected officials had the opportunity to weigh in, in an open and transparent process, on any changes to the SRF formula. Since the amendment was considered on the floor outside of normal order, stakeholders did not have an opportunity to weigh in on changes to the formula.

Cyberattack on Colonial Pipeline Following Initiative to Improve Cybersecurity

The Colonial Pipeline, which is the largest refined-products pipeline in the United States, suffered a cybersecurity attack on May 7. The pipeline transports 2.5 million barrels per day and about 45% of all fuel, including gasoline, diesel, jet fuel and heating oil, consumed on the East Coast. In response, the administration lifted environmental regulations governing the sale of gasoline in affected states through May 31 to bring more fuel to areas normally supplied by the Colonial system. The Clean Air Act allows the EPA, in consultation with the Department of Energy (DOE), to waive certain fuel requirements to address shortages.

The attack came the same day the DOE announced a new $1.5 million request for proposals for projects that can help U.S. manufacturers both defend against cyberattacks and reduce their energy consumption. A month earlier, the DOE and the Department of Homeland Security’s Cybersecurity and Infrastructure Security Agency launched an initiative to work with industrial control system operations in the electric sector to improve cybersecurity detection. In 2019, a U.S. Government Accountability Office report showed the Transportation Security Administration had only six full-time staff on pipeline security. Cyberattacks on utilities are becoming more frequent, most recently with hackers gaining access to a water treatment facility’s computer system in Florida.

Agriculture

USDA Begins Debt Relief Payments for Minority Farmers and Unveils Cover Crop Growers Relief

USDA’s Farm Service Agency (FSA) published the first notice of funding availability for payments authorized by Congress as part of the American Rescue Plan, which requires the agency to pay 120% of the outstanding eligible loan balances of “socially disadvantaged farmers and ranchers.” ARPA uses Section 2501 of the Food, Agriculture, Conservation, and Trade Act of 1990 as the definition of socially disadvantaged farmers and ranchers. The Treasury will pay 100% of the outstanding balances to clear the debt, and farmers will receive an additional 20% to cover tax liabilities, fees and other loan costs. It is estimated that the programs will send payments to 16,000 farmers.

Additionally, the USDA unveiled a new Pandemic Cover Crop Program, which would support growers with crop insurance policies if they planted a qualifying cover-crop such as rye, oats or radish during the 2021 crop year. The program would provide $5 per acre to farmers, and they have until June 15 to file a cover-crop acreage report with the FSA to receive assistance.

Agriculture Export Forecast Rises to $164 Billion

USDA raised its forecast for agricultural exports to $164 billion in FY 2021, compared with $135.7 billion for FY 2020. In February, the USDA estimated agriculture exports to be around $157 billion but attributed the increase to annual corn exports, which rose from $3.2 billion to $17.2 billion through the end of the fiscal year, according to a quarterly outlook released by the USDA’s Economic Research Service.

Energy

Lawmakers Introduce Bipartisan Legislation to Place DOE at Forefront of Pipeline Security

A bipartisan group of House members, including House Energy and Commerce Committee Chair Frank Pallone (D-N.J.) and Ranking Member Cathy McMorris Rodgers (R-Wash.), announced support for several bipartisan solutions to that would put the Energy Department, rather than the Transportation Security Administration (TSA), in charge of pipeline security. In particular, the Pipeline and LNG Facility Cybersecurity Preparedness Act would instruct the DOE to develop voluntary measures, including new technologies, that pipeline owners could use to defend against cyberattacks, and lay out new procedures to harden the pipeline system. While the bill would only apply to natural gas and hazardous material pipelines and LNG facilities, and not oil pipelines, the announcement included reference to the cybersecurity attack on the Colonial Pipeline, the largest refined-products pipeline in the United States, on May 7. In 2019, a U.S. Government Accountability Office report showed the TSA had only six full-time staff working on pipeline security.

Relatedly, following the hack of Colonial Pipeline, TSA ordered pipeline operators to disclose all cyber incidents within 12 hours to the Department of Homeland Security’s Cybersecurity and Infrastructure Security Agency. The reports must describe the incident's projected impact, technical details associated with the intrusion, and all current and planned responses. Within 30 days, companies must also assess how their cybersecurity practices line up with existing TSA guidance and develop plans to fix any gaps.

Oil and Gas Leases in the ANWR Suspended Pending Environmental Reviews

The administration suspended all oil and gas leases in Alaska’s Arctic National Wildlife Refuge pending a comprehensive analysis under the National Environmental Policy Act. Under the previous administration, the Bureau of Land Management established and began administering an oil and gas program in the Coastal Plain of the Arctic refuge. After the BLM prepared the “Coastal Plain Oil and Gas Leasing Program Environmental Impact Statement,” and held a lease sale on Jan. 6, 2021, it issued 10-year leases on nine tracts covering more than 430,000 acres. The Biden administration issued Executive Order 13990 soon after taking office, placing a temporary moratorium on any oil- and gas-related activities in the refuge.

Offshore Wind Lease Sales Announced in 2022

The Departments of the Interior and Defense announced the opening of roughly 600 square miles of federal waters off the coasts of central and northern California to wind energy leases. The areas are anticipated to produce up to 4.6 gigawatts of electricity. The availability is in line with the administration’s goal of deploying 30 gigawatts of offshore wind by 2030, and follows the approval of an 800 megawatt Vineyard Wind energy project off the coast of Massachusetts.

ISO New England to Eliminate FERC’s Minimum Offer Price Rule

ISO New England said it would file to eliminate its implementation of Federal Energy Regulatory Commission’s (FERC) minimum offer price rule (MOPR) in 2022, telling FERC that the MOPR was limiting the ability of new generation from entering the market. FERC Chair Rich Glick has signaled his support for changes to the previous administration’s MOPR, calling the rule "unsustainable.”

ISO New England’s actions are in line those of others, with PJM Interconnection calling for exemptions from MOPR for certain types of power production, and an announcement that Dominion Energy would not participate in PJM’s capacity auction in 2022-23, as MOPR would “undermine its efforts to meet the state’s clean energy requirements.”

DOE Looks to Increase Energy Efficiency of Light Bulbs

The Department of Energy released a request for information seeking input from stakeholders about the current lighting marketplace, as the administration looks to begin rulemaking aimed at increasing the energy efficiency of light bulbs. The rulemaking follows the January 20 EO, which called on agencies to review several actions by the previous administration. The previous administration issued a final rule in December 2019 that blocked the 2020 phaseout of all incandescent bulbs. The phaseout of the bulbs was defined by the Energy Independence and Security Act of 2007, which increased efficiency standards over time and favored LEDs. The 2020 standards would have required bulbs to use 65% less energy than regular incandescent bulbs, a level that all high-efficiency LEDs meet.

This action is the first of many energy efficiency regulations we are likely to see revised, with DOE notifying the Office of Management and Budget in February that it plans to reconsider 13 regulations, including rules that eased energy and water conservation standards for household appliances such as showerheads, dishwashers, clothes washers and furnaces.

Environment

EPA Announces Intent to Restore State Authority

The Environmental Protection Agency announced its intent to reconsider and revise the 2020 Clean Water Act Section 401 Certification Rule, restoring state authority to protect waters in accordance with executive order 13990. The EPA will begin a stakeholder engagement process this summer, and during that engagement, the 2020 rule will remain in place. Historically, Section 401 has provided states and tribes authority to review and approve, condition or deny any federal permits or licenses that may be required if the project seeking a permit would result in a discharge of pollutants to Waters of United States. However, the 2020 Certification Rule includes reductions in state timelines for review and certification, restrictions on the scope of certification reviews and conditions, and modifications of other related requirements and procedures. For a complete review of the final rule read NCSL’s Info Alert here.

Prior to the EPA’s announcement, Senator John Barasso (R-Wyo.) reintroduced the Water Quality Certification Improvement Act of 2021, which is aimed at amending Section 401 of the CWA to restrict state water quality certification authority. The bill would restrict states to reviewing only water quality certification applications based on water quality impacts; limit state permit reviews to discharges that result from the federally permitted or licensed activity itself, not other sources; and would require states to provide “clear requirements” for water quality certification requests and communicate with applications with 90 days.

Federal Cleanup Plan for States to Reduce Landfill Methane Emissions

The EPA issued federal cleanup plans for 42 states to implement methane emission guidelines and compliance times for municipal solid waste (MSW) landfills where state plans were not in effect. The action follows the delay of the 2016 rule, which set emission guidelines for certain MSW landfills, the third-largest source of greenhouse gasses in the U.S. In April, the U.S. Court of Appeals for the D.C. Circuit vacated the previous administration’s rule delaying the 2016 rule. To date, the EPA has approved plans from eight states, with two more awaiting approval. The EPA has approved negative declarations from three states, finding there are no MSW landfills in those jurisdictions, or that they currently meet the emission requirements. States may still submit their own plans and seek the EPA’s approval prior to the federal deadline.

Cost-Benefit Rule for Air Regulations Rescinded

The EPA rescinded the previous administration’s rule, which established new processes and requirements the agency must undertake in promulgating regulations under the Clean Air Act. Under the previous rule, the EPA would have been required to make decisions about air regulations based on a narrower look at their potential costs and benefits, focusing squarely on those effects directly tied to specific pollutants targeted by rules and not any additional environmental improvements. The agency also would have been directed to focus closely on U.S. benefits, a shift that could have affected future rules aimed at fighting global climate change. The EPA was still able to analyze those additional effects—but they could not drive decisions about whether a regulation is warranted. In its review, the EPA found that there was a lack of “rational basis for the Rule,” and did not indicate that an “actual or theoretical problem existed.” Even with the recission of the rule, the agency must still publicly release information when it considers costs and benefits.

Court Directs EPA to Reconsider Lead Dust Health Standards and Update Soil Standards

The U.S. Court of Appeals for the 9th Circuit has directed the EPA to reconsider its dust-lead health standards, update the definition of lead-based paint, and update its soil-lead standards. The suit came in response to environmental groups’ concerns following the agency updating its lead health standards in 2019. At that point the agency lowered the lead hazard level for household dust and declined to update its lead-based paint definition, citing a lack of information and indicating that it could not revise soil-lead standards, saying they were beyond the scope of the EPA’s rulemaking. The court said that failure on behalf of the agency to collect more information and modify standards to account for new information is in violation of the Toxic Substances Control Act.

Administration Shares Wildland Fire Preparedness and Response Visions

The USDA and the Department of the Interior unveiled their goals for wildland fire management in a memo in which the USDA indicates it would focus on more effective land management to address climate adaptation, conservation and ecological resilience. The DOI stated that it must address “the reality that a changing climate is dueling these fire disasters,” and that it will continue to work with state and local governments to address and mitigate wildfire risk. In 2020, more than 10.3 million acres burned in the United States—a record year for acres burned and more than 50% above the 10-year average.

Court Vacates Three Small Refinery Exemptions

The 10th U.S. Circuit Court of Appeals vacated and remanded three extensions of small refinery exemptions made under the Renewable Fuel Standard, granting the EPA’s request to do so, as they were “outside of the scope of EPA’s statutory authority.” The decision follows a 2020 10th Circuit ruling that only small refineries that had received the exemptions continuously since 2011 qualified for new waivers. The EPA argued before the Supreme Court in late April in support of the earlier 10th Circuit decision; a ruling is expected in late summer.

Transportation

Senate Committee Approves Surface Transportation Reauthorization Bill

The Senate Environment and Public Works Committee unanimously approved a five-year bipartisan reauthorization of the 2015 Fixing America’s Surface Transportation Act—the Surface Transportation Reauthorization Act of 2021. Rail, safety, transit, and funding and financing are under the jurisdiction of the Senate Commerce, Banking and Finance Committees, and those provisions will be added at a later date, before consideration by the full Senate. In the House, the Transportation and Infrastructure Committee has not yet released its surface transportation reauthorization legislation but is expected to do so June 9.

The bill represents a significant early victory for states. Not only would STRA-21 provide $303.5 billion over five years, a 34% increase from the 2015 FAST Act, and a 6% increase from the recent one-year reauthorization, but 90% of total funding from the Highway Trust Fund would be provided to states via the same predictable formula used in previous surface transportation bills. For an overview of how the bill would affect that states, read NCSL’s Info Alert here.

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

Best,

Kristen and Ben

Additional Resources