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Washington Policy and Regulatory Updates

Our ENS Federal Report provides a summary and the status on select legislative and regulatory actions.
We normally issue a Report when both Chambers are in session.

ENS Federal Report – November 17, 2017

Tax Bill Moves Through House; Senate Unveils Its Version Generating Bipartisan Concerns

On November 16, the House passed the Tax Cuts and Jobs Act (H.R. 1) along a mostly party-line vote of 227 to 205.  The expected outcome punts the bill over to the Senate where passage of a Senate bill is not guaranteed because as many as three Republican Senators and a number of conservative Democrats have raised concerns over provisions that would allow for only temporary tax cuts for individuals while making corporate reductions permanent.  Additionally, with the House bill’s elimination of state and local tax deduction and the Senate expected to follow suit, high-tax state Senators are expected to resist passage of a measure that would impose new tax burdens on their constituents. Also, within the House-passed bill is the elimination of private activity bonds (PABs) that communities have relied upon to support water and wastewater, ports, airports, and solid waste facilities’ financing needs.  And in a last-minute change in the Senate tax bill, the effort to repeal the Affordable Care Act reared its head when Senate Republicans added a provision to eliminate the mandate to buy health insurance in order to capture almost $300 billion in savings to help offset tax cut related revenue losses that are projected to be $1.5 trillion.  Each of these actions along with disputes over other tax matters make for a long list of policy reconciliation challenges in the Senate where the loss of three Republican votes would result in the bill being brought down.  Even with Senate passage, the huge gulf between the two chambers’ approaches to tax cuts may make finalizing a compromise before the end of this year, which has been the holy grail of the White House, problematic and may carry the debate action on the measure into 2018.

Meanwhile Current Year Funding of the Federal Government Remains An Open Issue

Speaker of the House Paul Ryan (R-WI) all but made it official when he announced this week that Congress is likely to pass another stopgap spending bill to avoid a governmental shutdown on December 8 when the Continuous Resolution (CR) expires.  Ryan suggested that additional time is required for the House and Senate Committees on Appropriations to finalize spending bills, once an agreement on overall spending ceilings for defense and domestic spending is reached.  The unanswered question is whether any stopgap bill would run through December, extend into January, or default to a year-long CR.  If the third approach is pursued, it could avoid funding the “wall” since new project spending would be precluded under a CR.  Additionally, if a year-long CR is agreed-upon, federal spending would essentially remain at current spending levels for authorized programs across the federal government.

Disaster Assistance—Take Three

As Congress continues to divine a path forward on tax cuts and spending priorities, the ongoing disaster responses in Florida, Texas, Puerto Rico/U.S. Virgin Islands, and the western wildfires continue.  The Office of Management and Budget (OMB) sent a third budget request for an additional $44 billion in federal emergency assistance.  According to congressional budget leaders, the hope is to move a funding package in December. This might mean that the disaster assistance could be added to the CR to expedite passage.  The request is tens of billions of dollars below requested aid from officials in the affected states and territories, creating a sense that any final aid package will exceed the Administration’s request.  In a separate letter sent to Congress, OMB Director Mick Mulvaney urged Congress to cut as much as $59.23 billion from domestic spending programs to help offset the disaster assistance spending costs.

Brenda Burman Confirmed To Lead Bureau of Reclamation

After Assistant Democratic Leader Richard Durbin (D-IL) lifted his hold on Department of Interior nominee Brenda Burman to be the U.S. Bureau of Reclamation Commissioner, Burman was confirmed by the full Senate on a voice vote on November 16.  Prior to her confirmation, Burman served as the director of water policy for the Salt River Project in Arizona and previously worked for the U.S. Department of the Interior.  Burman will be the nation’s first female commissioner of the U.S. Bureau of Reclamation. Burman’s background also includes working for the Metropolitan Water District of Southern California and the Nature Conservancy.

House Democrats Offer Clean Energy Legislation

On November 16, Rep. Raul Grijalva (D-AZ), the ranking member of the House Committee on Natural Resources introduced the Sustainable Energy Development Reform Act (H.R. 4426). No hearing date has been announced on this measure.  H.R. 4426 is in stark contrast to the Republican sponsored SECURE American Energy Act (H.R. 4239), which was approved by the Committee on November 8 and promotes wider offshore oil and gas drilling and a greater state role in onshore oil and gas permitting.

H.R. 4426 – Key Provisions: (S​​ection-by-Section Analysis)

  • Would require federal regulation of hydraulic fracturing and would set tougher limits on methane venting, flaring, and leaking involved in oil and gas drilling and production on federal lands.
  • Would bar oil drilling in the Arctic National Wildlife Refuge.
  • Permanently authorizes and fully funds the Land and Water Conservation Fund and creates a new fund to help protect, maintain, and restore coastal, ocean, and Great Lakes ecosystems.

Compliance Deadline – Executive Order 13788 – Buy American

On November 15, federal agency compliance plans were required to be submitted to the Director of the Office of Management and Budget and Secretary of Commerce as required by the Buy American and Hire American Executive Order #13788 (E.O.). The Secretary of Commerce is required to report on these plans to the President by late February 2018. The E.O. does not require these plans to be made public.

In April 2017, President Trump signed the Buy American and Hire American Executive Order to reduce Federal waiver applications and hold government agencies responsible for initiatives regarding procuring Made in USA goods. The Executive Order required agencies to:

  • assess the monitoring of, enforcement of, implementation of, and compliance with Buy American Laws within their agencies;
  • assess the use of waivers within their agencies by type and impact on domestic jobs and manufacturing;
  • develop and propose policies for their agencies to ensure that, to the extent permitted by law, Federal financial assistance awards and Federal procurements maximize the use of materials produced in the United States, including manufactured products; components of manufactured products; and materials such as steel, iron, aluminum, and cement.

In addition, the E.O. requires the U.S. Trade Representative to assess the impacts of all U.S. free trade agreements and the World Trade Organization Agreement on Government Procurement on the operation of Buy American Laws, including their impacts on the implementation of domestic procurement preferences.

Congress Continues Review Of Hurricane Disaster Response and Recovery Hearings

This week Congress continued examining the disaster response and recovery efforts in Puerto Rico and the U.S. Virgin Islands, as well as in Texas and Florida.  Congress continues to seek answers on what went right and what went wrong during initial response efforts, and what lessons can be learned to develop and improve the effectiveness of future federal disaster responses.

House Committee on Energy and Commerce

The Subcommittee on Environment hearing entitled “Response and Recovery to Environmental Concerns from the 2017 Hurricane Season” focused on how natural resources and the environment, including  water quality, air quality, and land security, were impacted by the recent hurricanes.  Central to the hearing was a review of the importance of water quality and water system infrastructure resiliency.  The hearing was organized into two panels.  The first panel consisted of U.S. Environmental Protection Agency (USEPA) Regional Office Administrators.  The second panel focused broadly on various natural resources that were compromised by the storms and the response efforts to address the impacts.

The Subcommittee members and witnesses agreed that wastewater and drinking water systems are critical systems for public health.  Committee on Energy and Commerce Ranking Member Frank Pallone (D-NJ), asked USEPA Region 2 Administrator Peter Lopez how Puerto Rico can build more resilient water systems.  Lopez responded that it is an investment issue and that it will be a combination of partnering with nongovernmental entities to help fund and build projects and establishing a funding system that can support the implementation of investments with such partnerships.

The second panel echoed the importance of water systems.  Subcommittee Ranking Member Paul Tonko (D-NY) asked the panel how the Federal Emergency Response Agency (FEMA) can improve the water sector response following natural disasters.  Mike Howe, Executive Director, Texas Section, American Water Works Association, suggested creating a singular, central structure to provide clear leadership for the water sector following natural disasters; something that is lacking today.

Chairman John Shimkus (R-IL), concluded the hearing stating that there are possible solutions to the issues highlighted during the hearing, but cautioned that the solutions are multi-jurisdictional and will take time.

 House Committee on Natural Resources

The hearing considered the financial needs of Puerto Rico and the U.S. Virgin Islands (USVI) to better determine the appropriate level of Federal oversight on the uses of appropriated funds.  The hearing also examined the potential mismanagement of contracts, funds, and resources that may have occurred during the response and rebuilding on the islands.  Members questioned Puerto Rico’s Governor Ricardo Rosselló about the recent Whitefish contract scandal, the status of the Puerto Rico Electrical Power Authority, and what kind of management structure is in place to responsibly oversee the restoration of the electric grid.  Members also questioned USVI’s Governor Kenneth Mapp about how the USVI’s government handles its finances and appropriated funds.  In response, both Governors stated that their governments are serious about responsibly using appropriated funds and are willing to work with Congress to responsibly manage response efforts, but repeated their desires that their respective territories maintain independence to manage monies and response efforts.

Senate Committee on Energy and Natural Resources

The Committee’s hearing on Hurricane Recovery Efforts in Puerto Rico and the U.S. Virgin Islands focused on the initial federal and local governmental emergency responses on the islands. It also continued the ongoing examination of recovery efforts targeting Puerto Rico’s energy infrastructure restoration actions.  Senators inquired about how recovery contracts are selected and awarded and questioned witnesses about the recent Whitefish contract award. Lisa Murkowski (R-AK) concluded the hearing stating that the focus moving forward should be building a more resilient and efficient electric grid.

 Nomination News

  • The Senate Committee on Armed Services favorably reported out the nomination of R.D. James to be the Assistant Secretary of the Army for Civil Works. If confirmed, James would manage the responsibilities of the U.S. Army Corps of Engineers.  The Senate Committee on Environment and Public Works (EPW) will also have to approve James’ nomination before the nomination is voted on by the full Senate.  EPW has yet to schedule a hearing to consider James’ nomination.
  • The Administration nominated Timothy Petty to be the U.S. Department of the Interior Assistant Secretary on Water and Science. Currently, Petty is the Deputy Legislative Director and Legislative Assistant for Senator James Risch (R-ID). He served as Acting Assistant Secretary and Deputy Assistant Secretary for Water and Science during the George W. Bush Administration.  A Senate confirmation hearing on Petty’s nomination has to been set.
  • On November 15, the Senate confirmed the nomination of Mark Esper to be the Secretary of the Army on a vote of 89 – 6.
  • On November 16, U.S. Environmental Protection Agency (USEPA) Administrator Scott Pruitt appointed Alexandra Dunn to be USEPA Region 1 Administrator.

Reports and Stories

Drought Resiliency Grants Announced – The Bureau of Reclamation has released two funding opportunities for fiscal year 2018 through its Drought Response Program, which is part of the Department of the Interior’s WaterSMART program.

 $300 Billion War Beneath the Street: Fighting to Replace America’s Water Pipes – Discusses the water infrastructure crisis in the U.S. and highlights the funding complexities and industry competition complicating efforts to fix the crisis.

California Westlands water settlement in limbo – Provides an update of the current status of the California Westlands water settlement after the annual national defense bill failed to resolve the conflict.

EPA and the Army Propose to Amend the Effective Date of 2015 Defining “Waters of the United States” – The U.S. Environmental Protection Agency and the U.S. Department of the Army are proposing to delay the effective date of the Waters of the U.S. rule by two years. Publication in the Federal Register triggers a 21-day public comment period. The delay will give the agencies time to continue stakeholder meetings across the country ahead of a complete rewrite.  According to the release, this action is separate from the two-step process the agencies propose to take to reconsider the 2015 rule.

Legislation Passed This Week

H.R. 1, Tax Cuts and Jobs Act – The House passed the bill on a vote of 227 – 205.

H.R. 2810, National Defense Authorization Act for Fiscal Year 2018 – The House agreed to the conference report on a recorded vote of 356 – 70, and the Senate agreed to the conference report on a voice vote.

New Legislation

H.R. 4329, To amend the Klamath Basin Water Supply Enhancement Act of 2000 to improve infrastructure, and for other purposes. – Rep. Greg Walden (R-OR)

H.R. 4419, To facilitate and streamline the Bureau of Reclamation and Bureau of Indian Affairs processes for creating or expanding certain water projects, and for other purposes. – Rep. Dan Newhouse (R-WA)

H.R. 4397, To provide tax relief with respect to California wildfires. – Rep. Mimi Walters (R-CA)

S. 2160, A bill to establish a pilot program under the Chief of the Forest Service may use alternative dispute resolution in lieu of judicial review of certain projects. – Sen. Steve Daines (R-MT)

H.R. 4417, To amend the Harmful Algal Bloom and Hypoxia Research and Control Act of 1998 to address harmful algal blooms, and for other purposes. – Rep. Suzanne Bonamici (D-OR)

Congress Next Week

The House and Senate are on Thanksgiving Recess next week.

Next week the Senate Committee on Appropriations plans to release the remaining four spending bills: Defense, Financial Services, Homeland Security, and Interior and Environment.  The Senate will not be in session next week, but the four bills will be released to allow staff-level work to occur during the holiday break.