by: Dennis Albiani, Legislative Advocate 

Governor Signs Budget Today

Governor Brown signed the state budget today, one of the earliest signings in recent history, his office announced.  The budget is a $156.4 billion budget that was passed by the Legislature just hours before the Constitutional deadline of June 15th. 

The spending plan includes more money for high-speed rail, Medi-Cal and welfare-to-work, and an expansion of child care and preschool for poor children. It also begins to pay down an estimated shortfall of more than $74 billion in the teachers' pension fund and puts about $1.6 billion into a special rainy-day account.

The budget includes the following additions for agriculture:

• $3 million to fully staff and operate the border stations to help prevent import of exotic pests and diseases
• $1 million in one-time funding and an additional $600,000 and four fulltime positions ongoing for the animal health branch at CDFA.  
• $20 million of cap and trade revenues for carbon reducing actions.
• $4.17 million for Ag Incentive Grant

• In addition to the CDFA budget the ag incentive grant was funded in the governor's budget   

The budget included a few controversial issues including limiting the amount of reserves school boards can maintain, a deal that 25% of all cap and trade revenues will be directed to the High Speed Rail. This is intended to address an injunction by the courts that does not allow the current $9 billion in bonds to be spent until there is a sustainable spending plan. Additionally, the budget extended a sunset of the solar property tax exemption for reassessments on improvements.  

Senator Revives anti GMO Bill

Using a procedure called a "gut and amend" where she strikes the contents of one measure and replaces it with the contents of another, Senator Noreen Evans has revived her anti GMO bill. The measure would mandate labeling on all food products including GMO ingredients. However, the bill does have some exemptions. Senator Evans represents the wine country and she has exempted wine and alcohol, she also exempted internet sales and restaurants.

The bill is opposed by a broad coalition of agriculture, pharmaceutical, food manufacturers, business, retailers and grocers among others. The bill has significant procedural hurdles and deadlines to meet.

It won't be until late July or early August for publication of EPA's final Renewable Fuels Standard (RFS) mandate for 2014-2015, originally expected this month, based on reports and developments this week. Reports at Washington fly-in events held by the National Biodiesel Board (NBB) and the National Renderers Assn. (NRA) indicate the White House has slowed down the final decision on how much alternative fuel must be blended with gasoline, and is most likely to publish the final mandate in August once Congress has gone on recess for a month, in order to avoid political backlash.

USDA, which has a commitment from EPA to consult over the final RFS numbers, said it has not been approached with a draft final package, according to one official involved in the effort. At the same time, EPA has sent no paper to the Office of Management & Budget (OMB) for review prior to publication.

In related news, EPA announced the second delay in the deadline for petroleum refiners to meet the 2013 RFS. Previously the agency delayed reporting from February 28 to June 30; this week the deadline was pushed to September 30. This is further evidence the new 2014 RFS won't be available until later this summer as the agency stated its announcement the petroleum industry needs to know its 2014 obligations before it can finalize 2013 reporting.

House members Rep. Collin Peterson (D, MN) and Rep. Adam Kinzinger (R, IL) circulated a "dear colleague" letter this week to be sent to President Obama urging him to increase the biodiesel RFS above the proposed 1.28 billion gallons a year. The letters says the biodiesel industry can easily meet a much higher RFS for "biomass-based diesel," and reminds EPA its own projections show the industry will hit annual production of 2.4 billion gallons as early as next year. NBB wants the RFS set at 1.7 billion gallons, a move supported by NRA whose members make biodiesel from animal fats and oils.

The letter further expresses the lawmakers' concern that EPA assumes raising the overall RFS for the entire "advanced biofuels" category - which includes biodiesel, renewable diesel and non-corn ethanol - will automatically increase the biodiesel RFS. Kinzinger and Peterson told the agency such a move would likely lead to no increase in U.S. biodiesel use, with the increased RFS for the category being met by increased imports of foreign biofuels, likely South American sugar cane-based ethanol, to meet the higher category number.

The Senate this week stumbled over getting approval for the FY2015 ag/FDA spending bill, as Sen. Barbara Mikulski (D, MD), chair of the Appropriations Committee, bundled three spending bills into a "minibus" - ag/FDA included - and tried to move the package under regular order, meaning amendments, debate and simple majority votes. But just as floor statements began, Senate Majority Leader Harry Reid (D, NV) and Sen. Mitch McConnell (R, KY), Senate minority leader, locked up over Reid's decision all appropriations amendments would require 60 votes to pass.

Senate staff said the amendment vote threshold was more about blocking a McConnell amendment to bar EPA from proceeding with its controversial greenhouse gas (GHG) rulemaking on existing power plants, a move McConnell calls "a war on coal." The White House told Reid earlier this week if the McConnell or a similar amendment survives, a presidential veto is almost assured.

Another proposed amendment with strong bipartisan support and that inspired a White House veto threat was made by Sen. Susan Collins (R, ME) that aimed to delay the Department of Transportation's hours-of-service (HOS) rules, particularly the rest period requirements between trips. And even as the White House said it "strongly opposes" any change to the HOS rules, Sen. Cory Booker (D, NJ) was working the Senate floor to thwart Collins' effort.

The fate of both bills is now unclear. House leadership, having given no schedule for reconsideration, may opt to let the bill go as part of an omnibus package of unapproved spending bills late in the session. The Senate outlook is even grimmer, as Mikulski and Reid try to find a way to move the six spending bills the appropriations committee has approved, while limiting amendments and floor time.

House leaders last week pulled the agriculture/FDA spending bill off the floor because, as appropriations insiders said, the surprising defeat of House Majority Leader Eric Cantor (R, VA) in the Virginia GOP primary "distracted" GOP floor managers of the bill. Cantor's stunning primary loss sent the GOP caucus into rounds of meetings, and at one point House Speaker John Boehner (R, OH), recessed the House so Republicans could meet to talk with Cantor, discuss the process for replacing him as Majority Leader and allow Cantor to make a public statement.

It was announced the debate would resume this week, but a subsequent late-week announcement said the bill may be taken up again "sometime this summer." Veteran appropriations lobbyists interpret that to mean the bill may be dead as a stand-alone bill and will be rolled into the omnibus spending package expected as part of the post-election lame duck session.

The White House threatened early last week to veto the House ag/FDA bill, pointing at objectionable language related to school lunch program waivers, language to allow Women, Infant, Children (WIC) recipients to buy white potatoes with their federal WIC dollars, and underfunding of the Commodity Futures Trading Commission (CFTC).

In the Senate a similar battle was brewing as Sen. John Hoeven (R, ND) introduced a bill to permit school district waivers from federal school lunch rules. The House language requires USDA to create a waiver program allowing schools and districts to opt out of federal breakfast and lunch programs if they can demonstrate a net operating loss on school meals for at least six months, retroactive to July, 2013.

Led by Sen. Pat Roberts (R, KS), 30 GOP Senators this week introduced a bill to block EPA from going forward with its proposal to extend agency Clean Water Act (CWA) authority to "waters of the U.S." (WOTUS).

At the same time, the House Agriculture Committee's subcommittee on conservation, energy and forestry held an oversight hearing on EPA's "interpretive" rule, a related but separate rulemaking specific to the 56 agricultural practices EPA says are exempt from the WOTUS rulemaking.

The Senate bill is designed to stop EPA from regulating "all private and state waters in the U.S." "After calling on EPA and the Army Corps to withdraw the proposed rule, I want to make sure that the expansion of regulatory authority over 'waters of the United States' is shelved for good," Roberts said. He added the legislation would prevent any similar rulemaking in the future.

AFBF, which coordinates ag opposition to the rule, endorsed the bill, saying "as a constitutional matter, the agencies are asserting an authority not granted them by Congress. As a practical matter, it will mean increased enforcement against farmers, greater expenses for permitting, potential delays in managing their operations, and the unquestioned exposure of legal liability attendant with lawsuits from activists."

The interpretive rule was drafted in consultation with USDA's Natural Resources Conservation Service, and along with the Army Corps of Engineers, these agencies signed a memo of understanding on how the rule will be implemented. The agencies say the rule creates a clear path over permitting for the agriculture sector; however, the questioning of USDA officials by the subcommittee revealed strong bipartisan objection to the rule, with most focusing on allegations the new proposal creates more confusion and could make voluntary USDA conservation practices mandatory.

Rep. Glenn "GT" Thompson (R, PA), chair of the subcommittee, said the rule was designed to give farmers and ranchers certainty, but creates new regulatory burdens, more ambiguity and less certainty for producers.   He said testimony from stakeholders shows the new WOTUS rule, if finalized, will continue to confuse and discourage farmers and landowners from engaging in conservation practices. Testifying at the hearing were Robert Bonnie, USDA undersecretary for natural resources and environment; the American Farm Bureau Federation (AFBF), the National Cattlemen's Beef Assn. (NCBA), National Corn Growers Assn. (NCGA), and the Izaak Walton League of America.

The draft $34-billion energy/water FY2015 appropriations bill unveiled last week by the House Appropriations Committee has language blocking EPA from proceeding with its WOTUS rulemaking and this week the full committee beat back 18-31 a Democrat-sponsored amendment to strip the language.  

Todd Batta was confirmed by the Senate this week as USDA assistant secretary for congressional relations. Batta was previously a senior adviser to Secretary Tom Vilsack, handling budget, legislation and regulatory issues. He succeeds Brian Baenig who is now Vilsack's chief of staff.

Batta is a former legislative assistant to Sen. Herb Kohl (D, WI), was a professional staffer on the Senate Agriculture Committee, and personal staff to Sen. Tom Harkin (D, IA).