California State Floral AssociationFebruary 18, 2011
In This Issue
Please Take Our Regulatory Survey!
Governor Brown Appoints Craig McNamara
Reforming the State Tax Code
House Continues FY2011 Floor Fight
Attention on House Action
Obama Budget Hikes FDA Food Safety Spending
Ways & Means Approves 1099 Repeal
Sensenbrenner Introduces Bill to Block E15
Vilsack Gets Earful at House Hearing
House Committee Approves Short-term Highway Extension
States Ask for Extension on Water Permits
EPA Seeks Public Comment on Plan to Review Regulations

WE NEED YOUR HELP!

PLEASE TAKE OUR REGULATORY SURVEY!


The California  State Floral Association is part of a coalition of ag and business groups gathering data on regulatory challenges within the state.  As you know, California is suffering high unemployment and a large state budget deficit. Your decisions to hire employees and make new investments in California will determine how soon we return to prosperity and balanced budgets.  

 

 

We would like to ask for your help in our efforts by taking a short survey:

http://www.calrecovery.biz/survey/  

 


The information collected through the survey will help us communicate our concerns to state leaders so that they understand how California's regulatory environment impacts your profitability, investments, and hiring plans.  

 

 

We appreciate your participation!



 

Governor Brown Appoints Craig McNamara As President of the California State Board of Food and Agriculture

SACRAMENTO, February 10, 2011- Governor Jerry Brown has named Craig McNamara as president of the California State Board of Food and Agriculture.

 

"Governor Brown has made an excellent choice in appointing Craig as president of the board," said CDFA Secretary Karen Ross. "Craig is dedicated to the agricultural community of this state and will work tirelessly to ensure the sustainability of our food and farming system. California's farmers and ranchers, along with our diverse stakeholder community, can have no better champion."

 

McNamara has served on the California State Board of Food and Agriculture since 2002. McNamara has been the president of the Center for Land-Based Learning since 1993 and the president of Sierra Orchards since 1980. Previously, he was a partner at Bountiful Harvest Food Company. McNamara is a member of the Public Policy Institute of California, the American Farmland Trust and Roots of Change.

 

The California State Board of Food and Agriculture advises the governor and secretary of food and agriculture of findings as they impact agriculture and consumer needs.  The board conducts forums that bring together local, state, and federal government officials, agricultural representatives, and citizens to discuss current issues of concern to California agriculture.

 

The next meeting of the California State Board of Food and Agriculture is scheduled for February 23, 2011 at CDFA.

 

Senate Select Committee Discusses Reforming the State Tax Code at Recent Hearing

               

At a recent hearing of the Senate Select Committee on Recovery, Reform and Realignment, Senator Blakeslee introduced the panel discussion centering on the role tax policy can play in helping our economy recover from the impact of the economic crisis. Mac Taylor, the legislative analyst, presented an overview of the 4 different types of taxes in California: the personal income tax, the sales and use tax, the corporate tax and the property tax. Although he and the rest of the panel members described our tax system as fundamentally strong, he explained how the volatility of the income tax and high marginal rates contributed to creating a climate in California that did not allow for the favorable business climate and predictability in the markets that our state needs to encourage and promote sustained economic growth. The lack of stability and predictability in the tax code increases risk and cost. The business planning horizon is long term and California's current tax structure does not allow for business to engage in the long-range planning that is essential to job growth.  

 

To address the volatility in the market that impinges on the business climate, he and the rest of the panel recommended broadening the tax base. Although some favor a more consumption based taxation model such as a flat tax or an expansion of the sales tax to include services, the panel as a whole stated that this option was not as attractive as it may first appear because it was  regressive, difficult to monitor and verify, and unlikely to produce the needed revenue. Rather than increasing the sales tax rate or expanding it to include services, the panel felt that broadening the base on the personal income tax side, eliminating tax expenditures, and lowering overall tax rates to encourage investment and growth were better means to increase revenue. The panel also discussed reducing corporate and capital gains taxes to encourage investment.

           
The panel further discussed that California is no longer an island and must compete both domestically and internationally. In comparison to other states and international competitors, California has a high overall corporate tax burden.

 

House Continues FY2011 Floor Fight; Ag Groups Say Ag is Target for Too Many Cuts

 

The newly minted House leadership faced its first significant test of cat herding this week as it brought to the floor its FY2011 appropriations package, legislation seeking nearly $100 billion in spending cuts from President Obama's FY2011 budget request.  The net amount of spending cuts from actual levels is closer to $61 billion below current funding.  House leadership is under pressure to act on an FY2011 spending package before a continuing resolution passed in the last Congress expires March 4.  But almost before floor debate began, 32 national agriculture and food organizations wrote to House appropriators and their House colleagues to let them know agriculture is bearing an unfair share of the budget cuts.   

 

The bill cuts USDA accounts across the board from FY2010 levels, including conservation (cut $173 million), rural development (cut $645 million), foreign agriculture (cut $811 million) and food assistance programs (cut $782 million), as well as reductions in FDA spending (cut $298 million).  "While we applaud the bill's efforts to decrease discretionary spending, we are concerned that agriculture is being required to absorb a disproportionate amount of the discretionary cuts," the groups wrote. "HR 1 would cut $5.21 billion, or 22.4%, from agriculture-related programs and operating budgets during the remaining seven months of FY2011. This is more than double the 10.3% cut proposed in overall non-defense discretionary spending." Within hours of introduction, 583 amendments were filed by both sides of the aisle.  The vast majority of the amendments were political statements, aimed at cutting funding to existing programs, revisiting lost political battles from the previous Congress, with most offered and withdrawn.   

 

A major target of House budget hawks is energy/environmental programs, with the bill proposing to cut $4.5 billion from all programs.  EPA's share of that total amounts to nearly $3 billion, 29% less than overall spending in FY2010.  The major target of specific amendments from both sides of the aisle is EPA and a variety of pending regulations for which members sought to kill FY2011 funding.  The spending package specifically blocks EPA from spending money to promulgate greenhouse gas emissions regulations, new rules opposed by Republicans and coal-state Democrats.  At the same time, 15 organizations sent a letter to House leaders this week supporting an amendment by Rep. John Sullivan (R, OK) to bar EPA from using federal funds to cover the costs related to increasing the ethanol blend rate to 15%.  The groups wrote: "Our organizations rarely agree on any public policy issue, but we are united in opposing the premature introduction of E15."

 

Attention on House Action, But What Will Senate Do on Spending?

 

While all eyes are on how the House will act on the FY2011 continuing resolution and what signals that sends on how it will move on FY2012 spending, the Senate's battle lines over the same issues are being drawn.  Senate Majority Leader Harry Reid (D, NV) acknowledged the need to cut spending, and is aware several of his own party members want to cut deeper than the President's budget request, which he called "the starting point" for spending debate.   

 

That position translates broadly into a five-year freeze on spending at FY2010 levels, or a reduction of $400 billion over 10 years.  Minority Leader Mitch McConnell (R, KY) said he'll work to pass whatever package the House leadership can get through their chamber, calling the Senate Democrat's public position "timid."  The diverse positions also seriously challenge the "gentlemen's agreement" on Senate operations reached earlier this year between Reid and McConnell.  It should also be noted several Senate Democrats have remarked over the last couple of weeks they expect it may take at least a couple of short-term continuing resolutions to keep the government operating while the debate goes on. The 800-lb. gorilla in the room is the possibility of a stalemate resulting in a shutdown of the federal government.

 

 

Obama Budget Hikes FDA Food Safety Spending, Cuts EPA

 

In releasing his $3.73-trillion FY2012 budget proposal, President Obama this week signaled his priority on FDA's overall food safety responsibilities, with a recommended funding increase of $324 million to begin implementation of the estimated $1.4-billion Food Safety Modernization Act (FMSA) signed by the President January 4.  However, that same budget recommends cutting USDA's Food Safety & Inspection Service (FSIS) by about $8 million, and proposing new user fees to cover the government's cost of recalls and other meat and poultry industry regulations. Republicans slammed the White House budget, saying it "punted" tough spending cuts into out years.   

 

While the President's budget - from either party - is generally viewed as a "guide" by congressional appropriators, the following are budget highlights for various agencies:

 

FDA:  Overall, FDA's appropriation recommendation from the White House is about $2.7 billion, not counting user fees, a 5.6% increase from FY2010 levels, and 16% more than contained in the current continuing resolution covering FY2011.  With user fees added, FDA's overall spending level would be about $4.4 billion, nearly 33% more than FY2010.  The Center for Veterinary Medicine (CVM), which oversees animal feed, pet food and animal drugs, would see an increase in spending of more than $21 million from previous years.

 

USDAUSDA's budget would be $144 billion overall, with about $24 billion of that in discretionary spending.  This is about $1.82 billion less than current spending.  In addition to recall user fees, the budget recommends "performance fees," charges that would be levied against egg, poultry and meat companies for infractions of the law.  Flat fees for facility registrations and renewals are also recommended.  Secretary of Agriculture Tom Vilsack this week reported the Administration is recommending changes to the 2008 Farm Bill's formula for direct payments, lowering the maximum payment from $40,000 to $30,000, and supporting reducing the cap on non-farm income from the current $500,000 payment to $250,000. Mandatory spending for the Environmental Quality Incentives Program (EQIP), the Conservation Stewardship Program (CRP) and the Wetlands Reserve Program (WRP) would be reduced by $1 billion over 10 years.   

 

EPA:  The White House is recommending cutting 13% -- about $1.5 billion - out of EPA's budget, dropping overall funding to roughly $9 billion for FY2012.  State funding for water infrastructure programs takes the biggest hit in the Obama budget, slashed by more than $1 billion, while funding for Great Lakes restoration projects is also scaled back.  Another $70 million is cut from the Superfund program, but $46 million is requested for agency greenhouse gas regulation, with $25 million going to the states to implement state permitting programs, and $5 million for EPA's administrative actions.  Also recommended is an enhanced $71-million overall chemical review program, a $16-million increase from current spending.

 

Ways & Means Approves 1099 Repeal

 

Two measures to repeal the controversial 1099 reporting requirements included in the federal health care overhaul were approved late this week by the House Ways & Means Committee.  The Senate has already approved the repeal of the requirement that all transactions over $600 include transmission of a Form 1099.  The first measure approved in the House would repeal the 1099 business tax reporting provision without cost offset; a second measure was approved and would repeal the requirement for businesses, along with owners of rental real estate, and would be offset by allowing the government to take overpayments of health insurance subsidies for new health exchanges.

 

Sensenbrenner Introduces Bill to Block E15

 

While agriculture, automobile and other unrelated industry groups backed House continuing resolution amendments to block EPA's decision allowing a 15% ethanol/gasoline blend rate, Rep. James Sensenbrenner (R, WI) introduced legislation this week to block the new, higher blend rate. "It was premature for the EPA to move forward with its decision considering there are still so many unanswered questions regarding its safety, environmental effects and economic impact," he said.   

 

Sensenbrenner says his concerns are based on several studies that conclude increasing the blend rate decreases engine efficiency, forcing drivers to fill their fuel tanks more often.  He also took a shot at federal support of the ethanol industry, saying, "The ethanol industry has been federally subsidized for more than 30 years and has yet to show signs of economic viability," adding "we should look for opportunities to eliminate wasteful government spending and encourage alternative sources of energy that do not require federal subsidies."  

 

 

Vilsack Gets Earful at House Hearing; Jackson Hears from 32 Senators on Dust Rule

 

This week, Secretary of Agriculture Tom Vilsack in an appearance before the House Agriculture Committee at a hearing on the ag economy, heard from member after member that while they understood the Secretary could not speak for EPA, they wanted him to carry back to the White House the committee's admonition that EPA greenhouse gas regulations, dust rules and others were going to devastate U.S. agriculture. For his part, Vilsack was diplomatic, explaining his department is in contact with EPA, though not daily, and that he heard and understood the message being delivered by the agriculture committee members.   

 

At the same time, 32 Senators sent a letter to Jackson this week asking that she give special consideration to agriculture when evaluating the impact of stringent air particulate rules pending at the agency.  "Given the ubiquitous nature of dust in agriculture settings and many rural environments, and the near impossible task of mitigating dust in most settings, we are hopeful that the EPA will give special consideration to the realities of farm and rural environments, including retaining the current standard," the senators wrote.   

 

 

House Committee Approves Short-term Highway Extension

 

The House Committee on Transportation & Infrastructure this week approved legislation to extend existing surface transportation programs at FY2010 funding levels through the end of 2011, a move designed to allow the development of a comprehensive reauthorization package for federal highway and commuter programs. The move also allows on-going state-run highway construction programs and those about to begin to operate without fear of losing federal funding.  Committee Chair Dan Mica (R, FL) said he expects to begin serious work on a long-term highway program reauthorization in March, beginning the process with a series of field hearings and listening sessions across the country. Those meetings began this week. Department of Transportation Secretary Ray LaHood says he thinks the House can finish a long-term highway bill by August.  

 

States Ask for Extension on Water Permits

 

A six-month extension of the EPA deadline for implementation of the National Pollutant Discharge Elimination System (NPDES) Pesticides General Permit was formally requested last week by state pesticide and water regulators. In a letter to EPA Administrator Lisa Jackson, the Association of State and Interstate Water Pollution Control Administrators, the Association of American Pesticide Control Officials and the National Association of State Departments of Agriculture said the April 9 deadline is unrealistic because the agency has not finalized the model permit for use by the states.  EPA says it will release the permit next month, but the states say there isn't enough time to meet the agency deadline and educate stakeholders who have never operated under the NPDES permitting system. This week, 35 national ag groups sent a letter to Capitol Hill asking Congress to prohibit the NPDES permit implementation.  The letter was sent to coincide with oversight hearings in subcommittees of the House Agriculture Committee and House Transportation & Infrastructure Committee.

 

EPA Seeks Public Comment on Plan to Review Regulations


WASHINGTON
- The U.S. Environmental Protection Agency (EPA) is inviting the public to provide input on a plan that will guide EPA's retrospective reviews of regulations as part of the agency's response to President Obama's January 18, 2011 Executive Order (EO) 13563, "Improving Regulation and Regulatory Review."


EO 13563 directs each federal agency to consider "how best to promote retrospective analysis of rules that may be outmoded, ineffective, insufficient, or excessively burdensome." Specifically, the EO calls on every agency to develop "a preliminary plan, consistent with law and its resources and regulatory priorities, under which the agency will periodically review its existing significant regulations to determine whether such regulations should be modified, streamlined, expanded or repealed to make the agency's regulatory program more effective and/or less burdensome in achieving its regulatory objectives."

EPA shares President Obama's commitment to using common sense and transparency to review federal regulations and will solicit public input regarding the design of its plan via the EPA website through March 20, 2011. EPA will also provide opportunities for input through a public meeting in Washington, D.C. on March 14, and listening sessions in other parts of the countryThese outreach efforts will allow the public to provide EPA with feedback on specific issues, impacts or programs. More information about these meetings will be announced soon.

By late May, EPA will provide the public with its retrospective review plan, as well as the initial list of regulations it plans to review.

More information about EPA's retrospective review website:
http://www.epa.gov/improvingregulations

More information about environmental laws and regulations:
http://www.epa.gov/lawsregs/