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Conveyor Currents                          October 30, 2015       
In This Issue
Congress Passes Budget/Debt Ceiling Deal after Crop Insurance Fix
House Agriculture Committee Leaders Support Agreement to Avoid Cuts to Crop Insurance
Senate Passes Highway Bill, PTC Implementation Extension
Most Science, Industry Groups Dismiss IARC Report on Meat, Cancer
California Legislative Report
Ryan Elected 54th House Speaker
First PLC, ARC Payments in the Mail: USDA
USDA Commits $210 Million for Ethanol Pumps, Funding for Rural Renewable Energy Projects
House Approves Ex-Im Bank Reauthorization Setting Stage for New Lease on Life
House Joins Senate in Trying to Block EPA Power Plant Carbon Rule
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Congress Passes Budget/Debt Ceiling Deal after Crop Insurance Fix
The full House and Senate this week approved a two-year budget agreement - complete with a federal debt ceiling increase - hammered out with the White House, but not before relenting on cuts to federal crop insurance which threatened to derail the carefully balanced pact.  Swift congressional action, despite some vocal naysayers, avoided a November 3 debt ceiling showdown.

House Agriculture Committee Leaders Support Agreement to Avoid Cuts to Crop Insurance
October 28, 2015
Haley Graves: (202) 225-2171
Liz Friedlander (Peterson): 202-225-1564

House Agriculture Committee Chairman K. Michael Conaway and Ranking Member Collin Peterson issued the following statements after announcing an agreement to avoid the cuts to crop insurance which are included in the Bipartisan Budget Agreement of 2015 scheduled for a vote later today.

Chairman Conaway said, "I want to thank my colleagues who have made it very clear over the last 24 hours that the attempt to gut crop insurance in the budget agreement was not acceptable. Our nation's farmers and ranchers did their part in reigning in our nation's debt in the 2014 farm bill, saving an estimated $23 billion. It is imperative that we do not undermine their trust by attacking the primary tool they use to manage the tremendous risks involved in producing food and fiber.

"Leadership has heeded our concerns by agreeing to completely reverse this disastrous provision in the upcoming omnibus. Crop insurance is working as intended, and private industry deserves to be lauded, not thrown under the bus. I take our leadership at their word when they committed to me and many of my colleagues that we will eliminate these harmful provisions in the not-so-distant future, which is why I will vote in support of the budget agreement today. I encourage my rural-minded colleagues to follow suit and put their support behind this agreement by passing the budget deal on the floor today. While not the easiest path forward, this is a win for rural America and should be viewed as such.

"I will continue fighting against policies that hurt our farmers and ranchers, and I am thankful to leadership for working with us to avoid these harmful cuts."

Ranking Member Collin Peterson said, "I'm pleased that we have an agreement to fix the crop insurance cuts and not open the farm bill. We have assurances that the cuts will be removed and the farm bill will not be raided. We produced a fiscally responsible and bipartisan farm bill in 2014 that saved $23 billion. We've done our part. I can now support the Budget Agreement with these assurances." 

Senate Passes Highway Bill, PTC Implementation Extension
WASHINGTON, Oct. 28, 2015 - The Senate has approved a short-term highway bill extension that included a delay in the mandated implementation of positive train control (PTC), averting a potential shutdown of rail networks across the country.

The Senate passed the legislation with unanimous consent after the House passed it yesterday. The bill funds and extends federal highway authorization through Nov. 20, giving House and Senate lawmakers time to come together on a long-term bill.

The Senate passed a six-year bill in July, and the House Transportation and Infrastructure Committee reported a six-year bill out of committee last week. That bill is expected on the House floor next week.

In a joint statement Wednesday afternoon, Senate Environment and Public Works Committee chair Jim Inhofe, R-Okla., and ranking member Barbara Boxer, D-Calif., said they hope the House bill allows them to come up with a long-term solution.
"It is time for the House and Senate to get to conference so that we can work out our differences and get the job done now," the lawmakers said. "There are no excuses for further delay."

Rail companies were claiming the allotted timeline for implementation of PTC - which was originally scheduled to expireDec. 31 - didn't allow for installation of the broad safety system throughout their networks. PTC is a safety system that allows for remote stopping and starting of trains and requires installation on both train tracks and train cars.

In order to avoid falling out of compliance with federal law, companies that carry hazardous materials or passenger traffic said they would have to shut down traffic on lines that weren't complaint with PTC. The bill extends the implementation deadline through 2018 with benchmarks for rail companies to meet to ensure they are indeed working toward complete implementation.

The bill now goes to President Barack Obama for his signature.

Most Science, Industry Groups Dismiss IARC Report on Meat, Cancer
A report from the United Nations' International Agency for Research on Cancer (IARC) saying processed meat is carcinogenic and red meat is probably carcinogenic received a measured response from most scientific organizations, was refuted outright by most industry groups, and ridiculed on Capitol Hill. 

One scientist said, "IARC continues to use an archaic European evaluation system that conflates 'risk' with 'hazard.'  Science has moved on." Nevertheless, that didn't stop the general media from playing the story far and wide, loud and long. 

The North American Meat Institute (NAMI) responded to the release of the report with a barrage of third-party scientist quotes and alternate research, and the outrage over the simplistic report was also heard in Europe, Australia and South America.  

House Agriculture Committee Chair Mike Conaway said, "These claims are based on a biased selection of studies performed by an organization notorious for distorting and misconstruing data to link even the most innocuous products - everything from glass jars to baby powder - to this terrible disease.  So, unfortunately I was not surprised by the announcement." 

"It is disappointing that the tax dollars of hard-working Americans are being used to support the activist agenda of this international agency," Conaway continued. "As USDA and HHS continue their development of the Dietary Guidelines for Americans, it is my hope that their final guidelines continue to promote a balanced diet with beneficial nutrients derived from a wide variety of safe and wholesome agricultural products."

California Legislative Report 
by: Dennis Albiani, Legislative Advocate   

Groundwater Management Takes Important Steps Forward
The Department of Water Resources (DWR) released several documents necessary for the implementation of the Sustainable Groundwater management Act (SGMA).  This article outlines three important steps to comply with SGMA including Agency formation, basin boundaries and how to petition to change them and what is required to be submitted to DWR to comply.  It is important that local groundwater users, farmers and districts engage immediately with a groundwater agency because the law requires they be established by 2016 or the State Water Resources Control Board can step in and mandate a state run governance structure.  

The 2014 Sustainable Groundwater Management Act established a framework of priorities and requirements to help local agencies sustainably manage groundwater within a basin or subbasin.  SGMA provides a basic minimum standard for outreach and notification regarding the formation of a groundwater sustainability agency (GSA). The information below highlights the requirements that must be followed in order to become or form a GSA. 

Any local agency or combination of local agencies overlying a groundwater basin or subbasin may decide to become a GSA for that basin or subbasin. A GSA is formed by using either a joint powers agreement (JPA), a memorandum of agreement (MOA), or other legal agreement, and DWR must be notified after the GSA has been formed. The definitions for GSA and local agency are as follows:

"Groundwater sustainability agency" means one or more local agencies that implement the provisions of this act or take action to enforce a groundwater sustainability plan, "groundwater sustainability agency" also means each local agency comprising the groundwater sustainability agency.
"Local agency" means a local public agency that has water supply, water management, or land use responsibilities within a groundwater basin.

A local agency is required to submit the following information to DWR in order to complete the GSA formation notification requirements. 
  • A map and narrative indicating (1) the local agency's service area boundaries, (2) the boundaries of the basin or portion of the basin the agency intends to manage, and (3) the other agencies managing or proposing to manage groundwater within the basin.
  • A copy of the resolution forming the new agency.
  • A copy of any new bylaws, ordinances, or new authorities developed by the local agency.
  • A list of the interested parties and a detailed explanation of how the GSA will consider the interests of all beneficial uses and users of groundwater, as well as those responsible for implementing GSPs.

Groundwater Management Boundaries Established

Implementation of the Sustainable Groundwater Management Act (SGMA) took an important step forward last week as the California Water Commission (CWC) adopted the new Department of Water Resources (DWR) groundwater basin boundary regulations. The regulations establish the process for local agencies to request DWR modify the boundaries of a groundwater basin or subbasin.

These regulations specify the information required to comply with Water Code 10722.2, which outlines the process that local agencies need to follow to modify the boundaries of a groundwater basin, including subbasins or the creation of new subbasins. They also identify the methodology and criteria that will be applied by DWR when reviewing and approving the boundary modification requests. SGMA used the existing groundwater basin and subbasin boundaries in California based on Bulletin 118, a comprehensive report on California groundwater resources that is periodically updated by DWR.

For more information on the new regulations or California's existing groundwater basins and subbasins click here.

DWR Announces Guidelines for Groundwater Agencies

Senate Bill 13 (Pavley) amended and clarified numerous Water Code sections of the Sustainable Groundwater Management Act (SGMA). Among other things, SB 13 changed the Department of Water Resources' (DWR) role with respect to reviewing and posting groundwater sustainability agency (GSA) formation notices - these changes generally relate to: (1) notification completeness reviews; (2) overlapping GSA boundaries; and (3) exceeding service area jurisdictions as a GSA. SB 13 also amended the notice of intent provision related to GSA formation.

DWR has developed guidelines for local agencies to use after they have decided to become or form a GSA. Click here
 for a document which outlines the information that must be submitted by a local agency after the decision to become or form a GSA has been made. DWR will be using this information to perform completeness reviews for all GSA formation notices. 

During November and December 2015, DWR will be hosting a webinar with instructions and reviewing GSA formation notifications that have already been posted.  Many local agencies that have formed GSAs will need to seek agreement to resolve overlapping service area boundaries before they can proceed as a GSA.

No Split Roll Tax Coming Up on Ballot
In what many are calling a "significant win for landowners, businesses and commercial real estate," a progressive group support by public employee unions has dropped efforts to add a split roll property tax initiative on next year's ballot.  The California Business Properties Association (CBPA) says that it would have been a $9-billion tax increase imposed on California properties and businesses. However, the group pushing for the effort, called California Calls, said it would try to have the tax added to a ballot at a later date.  Such a measure would have dismantled Proposition 13, which was passed in 1978 and reduced property taxes for both homes and businesses.

Ryan Elected 54th House Speaker
With a pledge to unify House Republicans, empower committee chairs and modernize House rules, Rep. Paul Ryan (R, WI) was elected this week the 54th Speaker of the House, the youngest to wield the leadership gavel in over 150 years. 

The full House vote ended with nine-term Ryan being elected Speaker with 236 votes, 11 votes shy of the full GOP caucus.  House Minority Leader Nancy Pelosi (D, CA) received 184 votes, and Rep. Daniel Webster (R, FL), Ryan's conservative challenger, picking up nine votes.  Ryan was nominated by his GOP colleagues earlier in the week, garnering 200 votes from the 247-member caucus, 43 being cast for Webster. 

Given a House member may vote for anyone as Speaker - even a non-member of Congress - vote totals don't add up to a clean 435. 

Ryan, lobbied hard by colleagues to take a job he repeatedly said he didn't want, asked his colleagues on both sides of the aisle for a "period of healing," and called for bipartisan participation, though most saw it as an olive branch to the House Freedom Caucus (HFC), the 43-member bastion of ultra-conservative House members.  

Outgoing Speaker John Boehner (R, OH) told the packed chamber just before the Ryan vote that he retires from Congress "with no regrets and no burdens."  "If anything, I leave as I started - just a regular guy humbled by the chance to do a big job," Boehner said.  "That's what I'm most proud of - that I'm still just me."

First PLC, ARC Payments in the Mail: USDA
Upwards of $4 billion in farm payments under the new Agriculture Risk Coverage (ARC) and Price Loss Coverage (PLC) programs should be hitting farmers' mailboxes next week, USDA announced this week.  The department says nearly 50% of the 1.7 million farms enrolled for either ARC or PLC will get their "safety net payments" for 2014.  

Checks no longer go out in good years and bad.  The new payments are made only when market forces or weather cause an unexpected or significant drop in crop prices and/or income, the department said.  The example given by Secretary of Agriculture Tom Vilsack went like this:  "The corn price for 2014 is 30% below the historical benchmark used by the ARC-County program, and revenues of the farms participating in the ARC-County program are down by about $20 billion from the benchmark during the same period.  The nearly $4 billion provided today by ARC and PLC safety-net programs, will give assistance to producers where revenues dropped below normal." 

Payments were cut 6.8% due to the 2011 Budget Control Act and sequestration, but when all is said and done, USDA expects ARC and PLC payments will total about $5 billion once all payments are made for the 2014 crop year.  

USDA says that nationally, 91% of corn farms and 66% of wheat farms signed up for ARC-County coverage. For long grain rice, 99% of farms, and for peanuts, 94% of farms opted to go with the PLC program.  Overall, 76% of participating farm acres are under the ARC-County program, and 23% are PLC, with 1% under what's called ARC-Individual. 

USDA Commits $210 Million for Ethanol Pumps, Funding for Rural Renewable Energy Projects
As part of USDA's Biofuels Infrastructure Partnership (BIP), the department announced this week it is investing $210 million in 21 states to install gas station pumps that can pump renewable fuels at blends higher than 10%.  The new investment is on top of a May announcement that the department was pushing out $100 million in match-fund grants to states and corporate partners through BIP.  

The White House announced this week USDA will fund more than 1,100 rural renewable energy projects through a combination of $71 million in grants and $100 million in loans, as part of the Administration's effort to demonstrate its commitment to climate change ahead of a multinational conference in Paris next month.

Among the projects highlighted by the White House announcement are 17 new anaerobic treatment plants which turn farm and food waste - including manure - into energy.   

USDA said the new blender pump investment will increase the number of pumps by 5,000 at 1,400 locations, most pumping "intermediate blends" of corn ethanol, including E15. 

The states included in the investment are Florida, Colorado, Illinois, Indiana, Iowa, Kansas, Louisiana, Maryland, Michigan, Minnesota, Missouri, Nebraska, North Carolina, North Dakota, Ohio, Pennsylvania, South Dakota, Texas, Virginia, West Virginia and Wisconsin. 

House Approves Ex-Im Bank Reauthorization Setting Stage for New Lease on Life
The House this week approved 313-118 a bill to reauthorize the Export-Import Bank for four years and used a rarely successful parliamentary procedure to get the stalled bill out of committee and to the floor for final action. 

Proponents of renewing the Ex-Im Bank used the discharge petition process to move the bill, a strategy that hasn't been used successfully since 2002.  Under the petition process, at least 218 members of the House must sign on to dislodge the bill from committee and move it to the floor.  Even more impressive was the necessary bipartisan signatures were gathered in the face of strong conservative GOP opposition to the bank, which they contend is corporate welfare.  On the floor, a move to recommit the bill to committee was soundly defeated. 

The House action is more targeted messaging than substance, however. The Senate included its renewal of the Ex-Im Bank in its six-year highway bill because the votes likely weren't there for a stand-alone bill.  The House has yet to bring its highway bill to the floor, and the House committee bill does not contain language on Ex-Im Bank.  The full House action this week, however, sends a strong signal to highway bill conferees that the House will accept Senate language renewing the bank.  

Opponents contend the bank provides trade assistance to big companies which can well afford to finance their own trade deals.  Newly elected Speaker Paul Ryan (R, WI) voted against the renewal, and sides with opponents who see the bank's existence as unnecessary.  However, while he could try and block adding language to the House highway bill, observers think he won't risk angering the business community so early in his tenure as Speaker, and the overwhelming GOP support for this week's action sends the new Speaker a strong signal.   

Ex-Im spends more than $20 billion annually in loans and financing to U.S. exporters, and is a go-to source of financing for agricultural equipment makers and other ag exporters.  The bank's authority to offer new financing expired in July, but it continues to manage its current portfolio.  The Business Roundtable says the lapse has already cost U.S. exporters lost international sales, and threatens jobs and economic benefits.

House Joins Senate in Trying to Block EPA Power Plant Carbon Rule
As Sens. Joe Manchin (D, WV), Shelley Moore Capito (R, WV) and Heidi Heitkamp (D, ND), backed by Senate Majority Leader Mitch McConnell (R, KY), introduced a resolution last week under the Congressional Review Act (CRA) to stop EPA's carbon capture rules for both old and new power plants, Rep. Ed Whitfield (R, KY), chair of the House Energy & Commerce Committee's subcommittee on energy and power, quickly followed suit. 

Whitfield introduced two resolutions, one addressing EPA's carbon/C02 reduction rule for existing power plants, and the second address similar action on new power facilities.  He says the rulemakings are setting up consumers for higher utility bills, and will stop EPA from requiring states to set up "a highly complex, intrusive and unworkable regulatory cap-and-trade scheme that would require states to meet mandatory emissions "goals" set by EPA without congressional approval." 

The actions, which allow Congress to overrule an agency rulemaking, likely won't pass with veto-proof majorities, but will bolster legal efforts underway by associations, companies and state governments to stop the carbon reduction/recapture plan published by EPA which would require utilities to reduce carbon emissions 32% from 2005 levels by 2030.

McConnell has dubbed the agency rulemaking "Obama's war on coal," and the lawmaker has gone so far as to advise state governments to not file their respective remediation plans by the June 30, 2016 agency deadline.

Lawyers for the U.S. Chamber of Commerce this week said the various federal lawsuits filed against EPA will not see initial action for weeks, and certainly not before January, 2016. The first expected ruling is on several requests for a stay of the rule, a process hampered as the U.S. Court of Appeals for the District of Columbia gathers briefs from plaintiffs and the government.  The suits themselves will take at least a year or more to wend their way through the courts, the Chamber said. 

So far, actions have been filed by 24 states, led by West Virginia; the U.S. Chamber, on behalf of itself and 15 associations; a consortium of utility companies and trade groups, including the American Public Power Assn. and the United Mine Workers of America, the National Mining Assn., in tandem with the American Coalition for Clean Coal, and Murray Energy Group, a coal company.