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Fiscal Year 2020 Budget Deal Hinges on Policy Riders

With the threat of a federal default on the debt service looming in early September, Speaker of the House Nancy Pelosi and Secretary of the Treasury Stephen Mnuchin continue to work toward a global spending and debt ceiling increase before Congress recesses for the summer.  According to Mnuchin, an agreement in principle has been reached to raise the debt ceiling and provide for a two-year agreement on overall federal spending.  If true, it would mean that the next two budget cycles, extending through the General Election, would lack the drama of this year when there was no budget blueprint to guide the negotiations over agency spending bills.

As of this writing, the remaining challenge to sealing a deal involves an agreement between Congress and the White House that the twelve annual spending bills will not carry “poison pill” provisions.  For example, the White House is seeking to require that language limiting funding of the border wall be prohibited.  Additionally, spending provisions to deny the use of funding to support the administration’s effort to restructure federal agencies by relocating agency Headquarters staff to offices outside of Washington.

For now, it appears that the urgency to avoid a federal default that could result in a financial crisis is serving as the catalyst to force a compromise.  If an agreement is not finalized by the end of next week, it could cause Congress to delay its August Recess.

House National Defense Legislation Addresses Climate Change

Last week, the House approved the National Defense Authorization Act (H.R. 2500), including numerous amendments to address non-military expenditure authorizations. Among the many provisions was a reaffirmation that climate change poses a grave threat to the national security by including the mandate for the Administration to establish a Climate Security Advisory Council.  This Council would reside within the National Directorate for Intelligence that operates through the Executive Office of the President.  The provision as adopted would vest authority under the National Director of Intelligence who would be supported by representatives from the various federal intelligence agencies. In a nod to the ongoing controversy surrounding the kind of science to rely upon in determining the extent of any threat to national security, the provision requires that the council draw upon the expertise of nonintelligence agency officials in the federal system to ensure that the appropriate science is relied upon in making any recommendations on how to address climate impacts.

House Continues Work on Clean Water Infrastructure Package

The House Committee on Transportation & Infrastructure continues to develop a package of provisions to reauthorize the Clean Water Act’s infrastructure assistance provisions. Central to the effort is, a first in generations, reauthorization of the State Revolving Loan Fund Program.  The core legislation, H.R. 1497, has reportedly been scaled back from a $20 billion authorization to $15.8 billion, although the final numbers have not been set.  In addition, the bill reportedly may include Buy America mandates, affordability standards, and disadvantaged community assistance to help such communities secure affordable federal assistance, among other modifications to guidance on how federal assistance is to be made available.

In addition to the ongoing development of a water infrastructure package, consideration of a provision to afford states with the authority to provide public clean water agencies with permits terms of up to ten years, compared with the current limit of up to five years is under discussion.  The impetus for the discretionary extended permit terms is grounded in the fact that the complicated nature of developing and constructing clean water agency treatment facilities, along with an increasing recognition that watershed approaches to manage water quality needs, could deliver benefits in the form of efficient planning and savings on administrative costs.

Senate Committee Reviews Water Infrastructure Legislation

The Senate Committee on Energy and Natural Resources Subcommittee on Water and Power held a legislative hearing to review newly introduced legislation that addresses water supply and water infrastructure in the West.  One of the bills the subcommittee reviewed is the Drought Resiliency and Water Supply Infrastructure Act (S. 1932).  S. 1932 supports and improves water infrastructure in U.S. Bureau of Reclamation (USBR) states.  As explained in a press release from Senator Dianne Feinstein (D-CA), an original co-sponsor of the bill, S. 1932 extends funding under the Water Infrastructure Improvements for the Nation (WIIN) Act for an additional five years and includes:

  • $670 million for surface and groundwater storage projects, and supporting conveyance.
  • $100 million for water recycling projects.
  • $60 million for desalination projects.
  • Creates a new loan program for water agencies at 30-year Treasury rates (currently about 2.6 percent) to spur investment in new water supply projects. Repayment can be deferred until five years after completion of the project.
  • Authorizes $140 million for habitat restoration and environmental compliance projects, including forest, meadow and watershed restoration and projects that benefit threatened and endangered species.
  • The legislation includes two offsets:
    • Extends existing WIIN Act provisions allowing water districts to prepay their outstanding capital debts and convert to indefinite length water supply contracts to bring in additional revenue within the next 10 years.
    • Creates a process to deauthorize inactive water recycling project authorizations.

During the hearing, there was broad support for the legislation before the subcommittee.  Chairwoman Martha McSally (R-AZ) highlighted in her opening remarks that there is the growing need across the West to develop reliable water supplies.  McSally stated that S. 1932 recognizes this increasing demand by focusing the need for new infrastructure.  She explained that the bill creates a broad set of tools that allow water managers to keep all options on the table while developing their long-term water supply strategies.  Brenda Burman, Commissioner, U.S. Bureau of Reclamation, U.S. Department of the Interior, testified to USBR’s support for the goals of S. 1932 and desire to work with the committee on the legislation.

However, Melinda Kassen, Senior Counsel, Theodore Roosevelt Conservation Partnership (TRCP), testified to three concerns she has regarding S. 1932.  First, S. 1932 needs to ensure state support of the project.  She suggested that when USBR seeks congressional authorization to study or construct a project, it should provide Congress a written statement from the state’s Governor explaining the state’s position on the project and require the Governor’s support for the initial pre- construction and construction grants for non-federal projects.  She also emphasized the need for the bill to require that a project complies with all subsections of the National Environmental Policy Act (NEPA).  Second, S. 1932 should support natural infrastructure.  She suggested that Section 3 of the bill be expanded to include projects that restore natural infrastructure that can retain or store water for later release.  Finally, Kassen stressed the need to ensure accountability under the bill’s goal of accelerating the approval process for authorized projects that have authorized congressional appropriations under WIIN.

The subcommittee also received testimony on the Aquifer Recharge Flexibility Act (S. 1570) and the Water Supply Infrastructure Rehabilitation and Utilization Act (S. 2044).  Under S. 2044, $670 million in additional funding would be provided for surface and groundwater storage projects over five years.  The bill also provides $100 million for water recycling and $60 million for desalination projects.  In a press release, McSally explained that the bill aims to simplify the process for maintaining facilities, ensure funding for key dam safety projects, and create a flood control manuals and reservoir operations pilot program.

Testifying at the hearing were: Brenda Burman, Commissioner, U.S. Bureau of Reclamation, U.S. Department of the Interior; Wade Noble, Attorney for Yuma (AZ) Area Irrigation Districts, Noble Law Office Family Farm Alliance & National Water Resources Association; Marshall Brown, General Manager, Aurora Water, WateReuse Association; Melinda Kassen, Senior Counsel, Theodore Roosevelt Conservation Partnership; and, Wesley Hipke, Recharge Program Manager, Idaho Department of Water Resources.

Legislative Activity This Week

H.R. 2665, Smart Energy and Water Efficiency Act. – Reported out of the House Committee on Energy and Commerce as amended by voice vote.  The bill directs the Secretary of Energy to establish a smart energy and water efficiency program, and for other purposes.

 S. 1857, a bill to amend the National Energy Conservation Policy Act to improve Federal energy and water performance requirements for Federal buildings and establish a Federal Energy Management Program. – Reported out of the Senate Committee on Energy and Natural Resources by voice vote.

New Legislation

S. 2129, A bill to require the Secretary of Transportation to develop best practices for incorporating resilience into emergency relief projects, and for other purposes. – Sen. Tammy Baldwin (D-WI).

H.R. 3794, the Public Land Renewable Energy Development Act of 2019 – Rep. Paul Gosar (R-AZ)

Reports and Regulation

USEPA Sends WOTUS Repeal Rule to White House – The U.S. Environmental Protection Agency sent its Waters of the U.S. (WOTUS) proposed rule to the White House for interagency review.  The proposed rule would replace the 2015 WOTUS rule and is the first step in the two-step repeal and replace process.

8th Annual Private-Public Partnerships Conference – On July 23-24, the U.S. Chamber of Commerce is having their 8th Annual Building Resiliency through Private-Public Partnerships Conference.  The purpose of the conference is to mitigate the effects of natural and human-made disasters and improve the resilience of individuals, businesses and communities.

Congress Next Week

July 24, 2019

House Committee on Natural Resources – Hearing on The Status of the Reclamation Fund and the Bureau of Reclamation’s Future Infrastructure Funding Needs

House Committee on Oversight and Reform – Hearing on PFAS Contamination and the Need for Corporate Accountability

July 25, 2019

House Committee on Natural Resources –  Water, Oceans, and Wildlife Legislative Hearing