by: Dennis Albiani, Legislative Advocate

California Legislature on Recess

The Legislature started their nearly month-long summer recess this week. They reconvene on August 4th. In the meantime, many advocates, staff and administration officials are meeting to address legislative proposals, negotiate language of concern and develop strategic plans for the month-long legislative sprint that follow the legislature's return in August. Additionally, the association is reviewing and taking action on administrative and regulatory actions.    

Water, Water Everywhere - Regulations that is...

While the state is in a drastic drought, the state Legislature and administrative agencies are considering pouring on regulations and adopting policies that may overwhelm many farms, processors, and local businesses.  Below is a discussion of three legislative and regulatory processes occurring in Sacramento that are sure to impact every Californian.

1)      State Water Resources Control Board held a hearing last week taking public comments on their proposed emergency regulations on drought related issues including ones that would "streamline" curtailment orders on surface water diverters.  While curtailments are a legal fact of life, controversy was provoked by the board proposing regulations that are broad-based and do not require a factual analysis of each water right prior to curtailment.  Many believe this will assign all water rights the same priority - impacting the "first in time, first in right" legal framework that has governed CA water law for generations.  The board adopted the regulations on July 1, but did alter the final proposal after two days of testimony. On July 15th, the board will also consider an additional emergency regulations package that will address water conservation actions including providing additional enforcement authority and fines.

2)      Groundwater - there are three groundwater legislative proposals working their way through the legislative process, two of which are parked in their last committee waiting final consideration in August. The three proposals include AB 1739 (Dickinson) sponsored by ACWA, SB 1168 (Pavley) sponsored by the CA Water Foundation and the Governor's proposal - not yet in print.  All three proposals seek to regulate groundwater extractions in California, a first for the state.  They would mandate creation of local groundwater regulatory entities, provide additional powers to the state, and regulate both pump installations and extractions.  This is very controversial, will add additional burdens on most communities, and will add both fees and compliance costs for entities to access groundwater which is currently a property right.  The association is working closely with a coalition of agriculture entities formulating a strategic response including narrowly tailored proposals to establish a foundation for groundwater and protect information such as extraction reporting.

3)      Water Bond - the current $11.17 billion water bond is on the November ballot and has been assigned a number (Proposition 43) but is very likely to be removed from the ballot. The legislature is currently debating whether a smaller bond will replace the current bond. There are several proposals being discussed and entities are working on language and key provisions during the break.  The Governor has provided a $6 billion proposal, SB 848 (Wolk) is currently on the Senate floor with a $10.5 billion price tag, and the Assembly is working on details for an $8.25 billion bond. All three proposals have funding for surface water storage, groundwater remediation, water recycling and delta habitat restoration. However, the amounts and policy language governing implementation vary.

In a tour this week to Missouri and Kansas City, EPA Administrator Gina McCarthy tried to calm agriculture concerns over the agency's proposed "waters of the U.S." (WOTUS) rulemaking, but even before she left Washington, she'd fanned the flames of the controversy. However, she hinted at least a part of the agency effort may be revisited.

In a call with reporters this week prior to heading to the Midwest, McCarthy said the reason for her trip is to counter misinformation in the country. "There are some legitimate concerns out there, but we're hearing some concerns that are just ludicrous," she said. "Some say EPA will regulate small, unconnected waters, including puddles on lawns, driveways and playgrounds, (and) that's just silly." She said some groups opposing the rulemaking are doing so to get themselves attention.

The head of the Missouri Farm Bureau took issue with McCarthy's use of "ludicrous" and "silly" to describe opposition to the WOTUS rulemaking, saying it "poisoned the well" in advance of her appearance on a Missouri farm. However, he stressed his group is still willing to sit down and discuss how the WOTUS rulemaking - and accompanying rules - can be improved.

The EPA rulemaking is a two-part effort. First, there is the joint proposal from EPA and the Army Corps of Engineers to shift Clean Water Act (CWA) permitting authority from "navigable" U.S. bodies of waters, to the WOTUS definition, essentially deleting "navigable" from the scope of authority. Second, there is the so-called "interpretive rule," an agency guidance that would take effect immediately when or if the rule is finalized, on preserving 56 agency agricultural exemptions for "normal farming practices." Its purpose is to coordinate EPA's exemptions with USDA's Natural Resource Conservation Service (NRCS) programs.

While Congress takes dead aim at the WOTUS rulemaking as overreaching by EPA and threatening farms and ranches - both the House Interior-Environmental and Energy-Water FY2015 appropriations bills carry language blocking the rule. Sen. John Barasso (R, WY) will try next week to amend a bill to expand hunting and fishing on federal lands with similar language - the ag focus is the interpretive rule.

Over 90 ag groups this week sent EPA, USDA and the Corps a letter detailing why they believe the EPA-NRCS connection the agency believes will expand agricultural exemptions will have the opposite effect, creating a bureaucratic Catch-22 that will force farmers to abandon current NRCS conservation practices out of fear of legal liability.

What ag groups read in the interpretive rule is a new jurisdictional and enforcement role for NRCS to make the EPA effort work. NRCS is viewed by farmers and ranchers as a resource at USDA to which they turn for voluntary assistance and advice on conservation practices. Now, they say, in order to qualify for the ag exemptions listed by EPA in the interpretive rule, these voluntary NRCS practices and programs will become mandatory, and NRCS will enforce specific requirements and report infractions to EPA in addition to taking its own "enforcement actions."

McCarthy said, "All normal farming practices are exempt; let me be clear, those practices, along with countless others, that are normal farm practices - they do not require a permit. The bottom line is that, if you weren't supposed to get a permit before, you don't need to get one now, period."

The nearly 100 ag groups, including the National Pork Producers Council (NPPC), National Cattlemen's Beef Assn. (NCBA), the National Milk Producers Federation (NMPF) and the American Farm Bureau Federation (AFBF), with support from over 40 GOP Senators and several House members, have called on EPA to withdraw the interpretive rule, or at the very least reissue it as a formal rulemaking, not a guidance, with the legally required public comment process.

McCarthy said she's surprised by the reaction to the interpretive rule because its intent was to link EPA exemptions to NRCS voluntary practices and expand, not narrow, protections for normal farming practices. She said the confusion may be legitimate and hinted EPA could withdraw the guidance because she's "all about results, not process."

The final rule setting the 2014-2015 renewable fuel standard (RFS) mandates for alternative fuels in gasoline is expected "soon," said EPA Administrator Gina McCarthy this week. She said the delay in releasing the final rule - it was expected last month - was to give the administration time to ensure the action would not negatively impact the increased use of biofuels long-term.

McCarthy said she was well aware of concern by various alternative fuels groups about the relatively low volumes contemplated by the agency in last February's proposed rule. She said the rule would be published to ensure those concerns are considered, and "as soon as we can get it right."

In a related development this week, EPA announced it has approved an expanded list of alternative fuels eligible to satisfy mandates, particularly the cellulosic biofuels RFS. The move will help mitigate fuel industry complaints that insufficient commercial cellulosic biofuel is available for gasoline makers to meet the RFS mandate. The agency will allow liquefied natural gas (LNG) produced from biogas in landfills, manure digesters and sewage treatment plants to qualify as a cellulosic biofuel. Electricity generated from biogas that powers electric vehicles will also meet the requirements of the cellulosic biofuel RFS.