Washington Report for 3-31-14

By Steve Kopperud

Waters Jurisdiction Proposal Released by EPA

The Environmental Protection Agency (EPA) and the Army Corps of Engineers released a proposed rule designed to “clarify” just how far the agency’s Clean Water Act (CWA) authority extends in protecting “waters of the U.S.,” particularly as that authority applies to streams and wetlands. The agency, explaining the rule is necessary because of the 2002 and 2006 Supreme Court decisions that narrowed CWA authority, said it will hold outreach sessions for stakeholders over the next 90 days across the country to gather feedback before finalizing the rule.

Broadly, the rule extends EPA authority under the CWA “and based on science” to cover most seasonal and rain-dependent streams; wetlands near rivers and streams, while “other types of waters” may have more uncertain connections with downstream waters and protection decisions will be made on a case-by-case basis.

In a nod to agriculture, EPA reiterated numerous “exclusions and exemptions” will continue for agriculture, explaining it has taken input over the last two years from industry meetings and worked with USDA to ensure the proposal addresses farm and ranch concerns with any modification of CWA authority. “Any normal farming activity that does not result in a point source discharge…into waters of the U.S. still does not require a permit,” EPA said. EPA said the new rule will provide greater clarity of what the CWA covers, avoid “economic burden” on farmers and ranchers, encourage voluntary conservation, and be consistent with USDA programs.

While existing CWA ag exemptions will continue, the agency said it worked with USDA’s Natural Resources Conservation Service (NRCS) and will now exempt 53 established NRCS conservation practices based on CWA Sec. 404 “dredged or fill permitting requirements if they occur in waters covered by the CWA.”

Protected by the proposed rule are the following: “…normal farming, silviculture and ranching practices.” These include plowing, seeding, cultivating, minor drainage and harvesting; upland soil and water conservation; agriculture storm water discharges; return flows from irrigated agriculture; construction and maintenance of farm or stock ponds or irrigation ditches on dry land; maintenance of drainage facilities, and construction or maintenance of farm, forest and temporary mining roads.

The rule will not cover the following: Groundwater; tile drains; increase regulation of ditches, protect any new types of water or affect “areas generally previously excluded from jurisdiction.” These include artificially irrigated areas that would revert to upland if irrigation stops; artificial lakes or ponds created by excavating or diking dry land and used for rice growing, stock watering or irrigation; artificial ornamental waters; water-filled depressions resulting from construction; pits excavated in upland for fill, sand or gravel; prior converted cropland, and waste treatment systems (including treatment ponds and lagoons).

Criticism Flies over EPA “Waters of the U.S.” Proposed Rule; Action to Block Promised

Critics focused on “the massive regulatory overreach,” while others say the rule is premature because EPA scientists are still evaluating the underlying science, but criticism of the proposed 371-page “clarification” of EPA’s Clean Water Act (CWA) authority ran deep this week. However, Trout Unlimited likes the proposed rule just fine.

Calling it “the biggest land grab in the history of any agency and in the history of mankind really,” House Appropriations Committee Chair Hal Rogers (R, KY) says he’ll block EPA funding to implement the rule if it’s finalized.

Gina McCarthy, EPA administrator, defended the rule saying it’s needed to end uncertainty and bring predictability back to the CWA regulatory process. “Nobody needs to get a permit under this rule as it is proposed that didn’t need it today,” she said. As to the unevaluated science, she said the rule will not be finalized until all studies have been evaluated and their findings incorporated into the final rule.

Over in the Senate, Energy & Natural Resources Committee Chair Mary Landrieu (D, LA) said the rule “represents another example of this agency overreaching and stepping outside of its bounds without thought to the economic consequences of its actions.” Sen. Barbara Boxer (D, CA), chair of the Senate Environment & Public Works Committee, supports the rule.

Speaking to reporters outside an appropriations panel subcommittee hearing at which EPA Administrator Gina McCarthy was defending her agency’s fiscal needs for FY2015, Rogers said the first step is to withhold federal dollars to implement the rule so that lawsuits can be filed against the agency. Rogers said it wasn’t just the water rule that upset him, but “what they’ve (EPA) been doing to destroy the economy of this country. There is a general concern in the agriculture community.” Rogers says he expects another Supreme Court hearing on the CWA jurisdiction question.

Opponents of the EPA proposal say the regulatory expansion would give the agency authority over “so-called streams that haven’t seen water in a thousand years,” while making permitting for construction on land with bodies of water more difficult or impossible.

McCarthy Staunch in Defense of EPA, RFS; NCGA Blasts Livestock Coalition

While refusing to give details as to what her agency will ultimately do to the Renewable Fuels Standard (RFS) when it finalizes its blend mandate later this year, EPA Administrator Gina McCarthy told House appropriators the agency’s recommendations to reduce RFS biofuel blend levels are based on the fact “energy markets cannot absorb the levels of biofuels required by the law.” She hinted that despite enormous pressure from the biofuels industry to increase the 2015 RFS mandate, the agency may not make significant changes to its proposal to cut the mandate.

Meanwhile, the political name calling continues, with the National Corn Growers Assn. (NCGA), March 24 newsletter column calling livestock interests pushing to lower the RFS for corn ethanol “The Free Corn Coalition.” NCGA contends it’s understandable to complain about $8 corn, but to return to $2 corn is impractical.

McCarthy told lawmakers she couldn’t talk about the RFS proposed blend mandate details, but assured them all comments are being reviewed, adding she’s heard clearly the concerns of the ethanol industry and they’ll be taken into account in the final rule. She added the agency will take a “reasonable approach” to the infrastructure and market limits that inhibit EPA’s ability to set the blend limits at levels prescribed by law, and that the goal of the 2002 RFS law is “really trying to get to advanced cellulosic.”

Vilsack Explains FSA Closures, Farm Bill Deadlines to Appropriators

In defending his FY2015 budget request, Secretary of Agriculture Tom Vilsack tried to play up the good things USDA does, but spent the majority of his testimony before the Senate Appropriations Committee’s ag/FDA subcommittee defending and explaining department actions.

Vilsack said by April 15, producers should be able to apply for disaster assistance based on the permanent disaster assistance programs included in the 2014 Farm Bill. He said getting the Agriculture Revenue Coverage (ARC) and Price Loss Coverage (PLC) commodity risk management programs up and running is more problematic. Producers will be able to update production records this summer and should be able to make elections on program coverage this fall or early winter, but definitely by the end of the year, he said.

Chief among contentious issues is the potential closing or “realignment” of over 200 Farm Service Administration (FSA) county offices. Subcommittee Chair Mark Pryor (D, AR) said the “realignment” referred to in Vilsack’s testimony translates to “quite a few closures.” Vilsack responded the FSA budget has taken serious hits in the last few years, reducing the workforce by 20%. While he does not expect to close any FSA offices in 2014, 2015 is another matter. Vilsack said 30 FSA offices have no full time employees, and another 111 have one employee and are within 20 miles of another office. “I think it’s time we look at how we restructure,” he said.

Vilsack wants to see a system of central FSA offices, branch offices and satellite offices, saying it’s not about saving money but making the system more efficient. Sen. Jon Tester (D, MT) warned of office closures as new Farm Bill programs come on line. “Be very, very, very careful,” Tester warned.

FDA’s Hamburg told “No” on FSMA User Fees; GM Labeling to Stay Voluntary

While the President’s FY2015 budget request for FDA wants $260 million in new user fee authority, including fees for industry to register under the Food Safety Modernization Act (FSMA), House ag appropriators told FDA Commissioner Margaret Hamburg, M.D., not to count on any new fees.

Rep. Robert Aderholt (R, AL), chair of the House Appropriations Committee subcommittee on ag/FDA, said, “In total, FDA is requesting $260 million in new fees, but has failed to gain support from the stakeholders most impacted by the such fees – the regulated food industry. The authorizing committees have not authorized the fees, and I see little chance that would happen during this Congress.” His prediction was echoed by Rep. Nita Lowey (D, NY), ranking member of the subcommittee. Hamburg said FDA needs an additional $400 million to meet her obligations under FSMA.

Hamburg, in response to a question on whether FDA would change its policy on voluntary labeling of foods containing genetically modified (GM) ingredients, said the agency won’t pursue mandatory GM labeling of foods, but would stick with the policy of allowing food producers to label for the presence of GM ingredients if they want. “We have supported voluntary labeling,” she said, saying a recently proposed labeling guidance would be finalized soon. She said, “We’ve found no evidence of safety risks,” in justifying her policy.

ASA not Happy with Imported Argentine Biodiesel Qualifying for RFS

The Environmental Protection Agency (EPA) is currently evaluating whether imported Argentine biodiesel qualifies under the U.S. Renewable Fuels Standard (RFS) and the American Soybean Assn. (ASA) isn’t happy. ASA says the trade association of Argentina’s biodiesel producers – CARBIO, representing about 1.3 billion gallons in production – which made application to EPA, enjoys government export subsidies that could have a major impact on U.S. biodiesel producers.

ASA called for “exhaustive review” of the Argentine application, as well as a public comment period for stakeholders and input from other U.S. agencies, including USDA and the Office of U.S. Trade Representative. ASA also pointed out the European Union (EU) has already imposed anti-dumping duties on Argentine biodiesel “due to significant subsidies that Argentine biodiesel receives as a result of Argentina’s different export tax system.”

Tax Extenders Back on Track for Renewal

Congress allowed over 55 temporary federal tax credits and other breaks, including several incentivizes for the biofuels industry, to expire, only to reauthorize the package and pay benefits retroactively. Despite earlier reports the package was off track and not likely to see action this year, both the Senate Finance Committee and the House Ways & Means Committee confirmed action to extend again – and perhaps permanently – will accelerate over the next month.

Urged by a dozen of his colleagues in a letter he received, Senate Finance Committee Chair Ron Wyden (D, OR) said his committee will take up the dozens of tax breaks that expired December 31, 2013, as early as next week. He wouldn’t comment on when a markup might occur or exactly what’s in the package, but Sen. Orrin Hatch (R, UT), committee ranking member, will join Wyden in providing details of the bipartisan measure next week.

Rep. Dave Camp (R, MI), chair of the House Ways & Means Committee, told his committee he’s looking to find a way to make most of the temporary tax breaks permanent. Camp, who previously has talked about the extenders package in the context of comprehensive tax reform, said he’ll schedule hearings to determine which breaks should qualify for extension and permanent status.

Wyden and Hatch received a letter from a coalition of alternative energy groups urging them to extend the biofuels tax breaks. The credits the coalition wants to see extended include the $1/gallon biodiesel/renewable diesel blender’s credit; the second generation biofuel producer tax credit; the special depreciation allowance for second generation biofuel plant property, and the alternative fuel and alternative fuel mixture excise tax credits.

House Dems Push on Immigration Reform Vote; Ryan says it’s “When, not If”

A long-discussed discharge petition move by House Democrats to try and force a floor vote on immigration reform and give GOP lawmakers incentives to speed up work on the issue, picked up steam this week. However, to be successful, every House Democrat must sign on and a good number of Republicans must also join the effort.

The overall issue of immigration reform legislation moving in 2014 also got a boost from Rep. Paul Ryan (R, WI), chair of the House Budget Committee, when he said, “it’s not a question of if, but when” the House will vote on reform. Immigration reform is necessary to accelerate growth in the U.S. economy, Ryan told a meeting of the U.S. Hispanic Chamber of Commerce this week.

A bill already introduced in the House nearly identical to the Senate-passed omnibus immigration reform package will be the target of the discharge petition procedural gambit.

NLRB “Ambush” Union Election Rule Comments Due April 7; Board to Hold Public Hearing

The comment period on a controversial proposed rule by the National Labor Relations Board (NLRB) to rewrite the rules governing workplace union elections closes April 7, and the board announced it will hold a public hearing on the proposal that week.

The proposed rule would shorten the time required between a union filing for an organizing election and holding the election from six weeks to three weeks. At the same time, challenges to the election filing by employers could not be filed until after the union election. Employers would also be required to provide employee contact information to union organizers to make electronic filing and communication easier.

The rules were first published in 2011 and generated more than 65,000 comments and two days of public hearings. When the NLRB implemented the rules in 2012, a federal court struck down the rules because there weren’t enough NLRB members to constitute a quorum when it finalized the rulemaking.

GOP lawmakers in both the House and Senate attacked the NLRB and the rulemaking saying the rules give preference to the unions during organizing elections. Bills have been filed to block the NLRB from finalizing or implementing the rules. A bill by Sen. Lamar Alexander (R, TN) would allow for a 35-day waiting period between filing for an election and holding an election. The bill would also maintain an employer’s right to file court actions before the election is held. Rep. John Kline (R, MN) introduced an identical House bill. Rep. Phil Roe (R, TN) dropped a bill that would limit the amount of employee information an employer would have to provide to union organizers, with employees choosing how they prefer to be contacted. While the bills have little chance of reaching the President’s desk – where a veto would be likely – they’ve turned up the political heat on the NLRN and the White House.