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October 18, 2013    
Inside This Issue.....
Governor Finishes Acting on Bills, Signs 9 out of Every 10 Bills
Congress Votes to Reopen Government, Raise Debt Ceiling
Most Government Reports Missed During Shutdown Will Not Be Published
Farm Bill Roundup
House to Take Up Water Bill Next Week
High Court to Review EPA Emissions Permitting Process
"Leaked" EPA 2014 RFS Options Not Final
Washington State Sues GMA over GMO Label Battle Finance Reporting
Leadership Conference in Sacramento
Upcoming Meetings
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Governor Finishes Acting on Bills, Signs 9 out of Every 10 Bills  
 

 

By: Dennis Albiani, Legislative Advocate

 

Sunday night, October 13, Governor Jerry Brown finished signing and vetoing bills from the first year of the current legislative session.  He vetoed just under 11 percent of the bills sent to his desk, far fewer than his predecessor Governor Schwarzenegger and less than his previous 2 terms as Governor. 

 

The final count for the year, according to the governor's office: The Legislature sent Governor Brown 896 bills - 800 bills were signed, 96 rejected.  While sending almost 900 bills to the Governor seems like a lot, it was in fact, 20 percent fewer than in the past legislative sessions.

 

Being the first year of a two-year session, and the fact newly elected Legislators have a 12 year horizon in one legislative house, the Legislators were more patient and restrained in introducing legislation and not pushing legislation that needed more work.  This year less bills were introduced, more were held in the house of origin and less bills were sent to the Governor. 

 

Legislation sponsored by AAMSI, the entity managing our association, did quite well this year.  The following sponsored bills were signed into law. 

 

AB 1132 (Eggman) Feed Inspection Program Reauthorization - Extend the sunset on the Feed Inspection Program and provide federal coordination on FSMA implementation including the SAFE program and HACCP equivalent practices.

 

AB 1319 (Eggman) Animal Diseases - This bill will provide cattle producers full indemnification for the actual value of cattle that are seized under brucellosis outbreaks. 

 

SB 348 (Galgiani) Seed Inspection Reauthorization - This bill will reauthorize the Seed Law and extend the sunset provisions. 

 

Key bills acted on by the Governor since our last legislative update include:

 

AB 8 (Perea) - This bill extends fees to fund various air quality improvement programs such as the Carl Moyer program which is popular with agriculture. 

 

SB 168 (Monning) - This bill addressed farm labor contractors who are fined or shut down for excessive labor violations, and then start up a subsequent farm labor contracting business.  Originally, the association opposed, but after working with the author it took a neutral position.

 

SB 435 (Padilla) - Addresses meal and rest periods by requiring an employer to pay an employee for any meal or rest period mandated by law 1 additional hour if the rest period is not provided. 

 

Two agricultural bills were vetoed in the last week including:

 

AB 199 (Holden) - This bill encouraged state institutions to purchase California Grown agricultural products.  In his veto message, the Governor stated that state institutions already purchase over half their products from local California growers and a bill is not necessary. 

 

AB 571 (Gatto) - This bill would have appropriated $5,000,000 from the General Fund Citrus Disease Account at CDFA.  The Governor stated that this type of appropriation for pest diseases was best handled through the budget process. 

 

Water Board Raises Fees

 

Consistent with existing law, the State Water Resources Control Board has the authority to adopt a fee schedule that covers prospective costs for the year.  The irrigated lands regulatory program will see a fee increase of 34.5 percent.  For irrigated agriculture the fee structure includes:

Tier 1 - member of a coalition that collects fees, $100 per coalition and 75 cents per acre.

Tier 2 - Member of a coalition that does not collect the fee, $100 per coalition and $1.27 per acre. 

Tier 3 has a formula based on acreage.  You can access the information via the water board website.

 

The Confined Animal Facilities Program, which includes dairies, feedlots and poultry producers, will see a 46.6% increase in fees split between next year which increases 27% and the following year which will increase 19% over the current fees.     

 
Congress Votes to Reopen Government, Raise Debt Ceiling, Ensure ACA Premium Subsidy Eligibility, Hike Olmsted Dam Budget, Block Chicken Rules, Up Disaster Funds

 

Within hours of Senate Majority Leader Harry Reid (D, NV) and minority leader Sen. Mitch McConnell (R, KY) announcing October 16 they'd reached a deal to extend the continuing resolution (CR) at FY2013 levels through January 15, 2014, and raise the federal debt ceiling through February 7, both chambers approved the legislation and it was on its way to the President's desk.  President Obama promptly signed the bill early October 17, ending a 16-day federal government shutdown and avoiding loss of the Treasury's borrowing authority.

 

The Senate approved the legislation 81-18; the House followed by approving the bill 285-144.  All House Democrats voted "aye," joined by 87 Republicans; 144 Republicans voted "no."  The Senate will not return to Washington, DC, until the week of October 28 to make up for its missed Columbus Day recess; the House remains in session.

 

At one point the Senate package seemed to be in jeopardy as House Speaker John Boehner (R, OH) said his chamber would craft its own package.  However, after two different versions, both which drew opposition from Reid and President Obama, were unable to garner the votes to pass, Boehner agreed to bring the Senate package to the floor, urging his colleagues to vote for it.

 

The deal, which delays solving the two fiscal dilemmas for a few months, allows the Treasury Department to use "extraordinary borrowing authority" if Congress does not increase the debt ceiling by the February date.  The deal also requires the House and Senate to name conferees to reconcile their respective FY2014 budget resolutions, with a deadline of December 13 to report back to the full Congress.

 

In a concession to Republicans seeking to use the fiscal fix as a means of defunding or delaying the Affordable Care Act (ACA), the package includes a provision requiring the Department of Health & Human Services (HHS) to certify to Congress individuals applying for health insurance premium subsidies through health care exchanges are eligible before the subsidies are granted in 2014.  The HHS secretary must submit a report to Congress by January 1, on how she will verify eligibility, with a separate report to Congress by the HHS Inspector General on the effectiveness of the fraud prevention process due by July 1.

 

Raising the hackles among some fiscal conservatives was language in the package adding $2 billion to a budget of about $1 billion to complete the Olmsted lock and dam project on the Ohio River between Kentucky and Illinois.  The Waterways Council, Inc., a group representing commercial interests which rely upon the inland waterway system, said it was pleased with the increase in spending to allow the project to be completed.  In a post-Senate vote press conference, Reid denied the money was an earmark, saying it was a move to save the government money.  "Had we not done this so-called 'anomaly,' the Corps of Engineers would have had to spend before the last day of December $80 million to stop the project," Reid said, adding the project has been ongoing since 1988.  Similar language has been included in the President's budget request and in appropriations bills in both the House and Senate.  

 

Another controversial section of the bill blocks USDA rules designed to assist individual farmers when they negotiate contracts with poultry companies. The language was denounced by several groups, including the National Farmers Union and the Campaign for Contract Agriculture Reform, who said the relationship between farmers and poultry companies is "unbalanced" and the rules assure fairness.  Going back to the 2008 Farm Bill - which USDA said compelled it to write the new rules - poultry industry groups say USDA went beyond its authority and the intent of Congress in writing the rules.  The language effectively shifts the battle over contracting to the Farm Bill, about to go into conference committee action, and generated a letter this week from eight Senators that voiced their objection to striking the farmer protection language.

 

Lastly, the package provides up to $636 million to USDA to fight wildfires if it runs out of existing monies, and allows up to $450 million in emergency relief spending for states dealing with natural disasters, above and beyond a $100-million cap. 

 
Most Government Reports Missed During Shutdown Will Not Be Published

 

Regularly scheduled reporting by various federal agencies and departments suspended during the 16-day government shutdown will not be issued because the various agencies were not able to collect and analyze data.  

 

USDA said this week it has decided the Crop Production and Cotton Ginnings reports that were to be released October 11 are cancelled. New reports will be issued during the regular schedule on November 8.  The October 7 and October 15 Crop Progress reports are also cancelled, and the October 18 Cattle on Feed report is postponed. 

 
Farm Bill Roundup
 

With the continuing resolution, the debt ceiling and the FY2014 budget resolution hurdles temporarily overcome, attention turns to the Farm Bill conference committee.  The Congressional Research Service (CRS) reported this week the Senate bill reduces Farm Bill spending by about $18 billion; the House bill, with its new "nutrition title," reduces overall spending by $52 billion over 10 years.  Here's a digest of developments this week:

 

House Names Conferees; Lucas to Chair full Conference - House leadership last weekend named its conferees to the Farm Bill.  At the same time, it was announced House Agriculture Committee Chair Frank Lucas (R, OK) will chair the overall conference action because the 2008 Farm Bill conference was chaired by the Senate.  GOP conferees will be led by Lucas and include the following committee members: Reps. Michael Conaway (R., TX), Rick Crawford (R, AR), Steve King (R, IA), Randy Neugebauer (R, TX), Austin Scott (R, GA) and Glenn Thompson (R, PA), Mike Rogers (R, AL), Martha Roby (R, AL), Kristi Noem (R, SD), Rodney Davis (R, IL) and Jeff Denham (R, CA).  Non-ag committee conferees are Reps. Steve Southerland (R, FL), leadership conferee; Ed Royce (R, CA), Foreign Affairs Committee; Tom Marino (R, PA), Foreign Affairs Committee; Dave Camp, chair, Ways & Means Committee, and Sam Johnson (R, TX), Ways & Means Committee.

 

Democrat conferees will be led by committee ranking member Rep. Collin Peterson (D, MN), and Reps, Marcia Fudge (D, OH), leadership conferee and chair of the Congressional Black Caucus; Mike McIntyre (D, NC); Jim Costa (D, CA); Tim Waltz (D, MN); Kurt Schrader (D, OR); Jim McGovern (D, MA); Suzan Delbene (D, WA); Filemon Vela (D, TX) and Gloria Negrete McLeod (D, CA). Also named by the Democrats are Reps. Eliot Engel (D, NY), Foreign Affairs Committee, and Sander Levin (D, MI), ranking member, Ways & Means Committee.

 

Farm Bill Conference Kicks Off October 28 - Senate Agriculture Committee Chair Debbie Stabenow (D, OH) told reporters this week she expects the House-Senate Farm Bill conference committee to begin its formal work the week of October 28 when the Senate returns from a week-long recess.  After a meeting of the four respective committee leaders this week, House Agriculture Committee Chair Frank Lucas (R, OK) confirmed conference "begins when schedules coincide." Meanwhile, staff has been meeting over the last several weeks to ensure the conference moves smoothly and the majority of time can be focused on the commodity, nutrition and crop insurance titles.  The Michigan lawmaker also said it's "possible" once the conference committee completes its work the Farm Bill could be added to a budget bill agreement expected in December, but the uncertainty of the budget process is the biggest concern. Stabenow has said the approximately $20 billion in savings her bill provides over 10 years is the kind of bipartisan action budget conferees will look to.  The House bill, while technically reducing overall spending by $52 billion over a decade, hits that mark only because it includes $40 billion in spending cuts to federal nutrition programs merged into the House Farm Bill.  That level of cuts is not likely to survive conference action. Stabenow, a member of the Senate Budget Committee, will be conferee on the conference committee created by the fiscal fix package just signed by the President, as well as the top Democrat on the Farm Bill conference.

 

Groups Waste No Time Getting Preferences to Conferees - The American Soybean Assn. (ASA) "welcomed" Farm Bill conferees and urged cooperation between the House and Senate. The American Farm Bureau Federation (AFBF) and the National Farmers Union (NFU) both sent detailed letters to the conferees this week listing their priorities.  For AFBF, the list begins with a "strong and affordable" crop insurance program, followed by allowing producers a choice of income safety net options.  For NFU, the list begins with a call to preserve permanent farm law - AFBF agrees - but includes possible NFU opposition if laws passed from 1938-1949 are not preserved.   AFBF supports language in the House bill by Rep. Steve King (R, IA) that prohibits states from passing laws that inhibit interstate movement of ag products; NFU opposes the language. Both call for reauthorization and mandatory funding for all livestock disaster programs.  Similar letters went up over the last two weeks from most major commodity groups, "family farm" groups, and several environmental and consumer groups.

 

Crop Insurance Tussles Begin - With the Senate Farm Bill carrying language that would require an income-based means test for participation in federal crop insurance premium subsidies, i.e. 20,000 of the nation's wealthiest farmers - adjusted gross income over $750,000 a year - see their premium subsidy drop from 62% to 47%, and the House this week passing a nonbinding "sense of the House" resolution by House Budget Committee Chair Paul Ryan (R, WI) supporting the means test, the battle over premium subsidies is on.  A letter sent to the full House in advance of the Ryan vote by 46 national ag producer and input groups urged all members to reject the means test resolution because "it undermines strong crop insurance protection." On one side of this tug of war is the Environmental Working Group (EWG) leading a coalition of mainly non-ag groups who want to see the premium subsidy pared back or eliminated altogether. On the other side are traditional farm groups and their champions who contend means testing the premium subsidy program is discriminatory - "it penalizes success" - and will weaken the overall crop insurance program by cutting participation and putting more risk on smaller producers. However, in the rush to find as much overall budget savings in the final Farm Bill as possible, some reductions in crop insurance costs may be inevitable. Critics of the crop insurance program contend it is now the most expensive "farm aid" program at $14 billion in 2012; President Obama recommended cutting the program by $12 billion over 10 years in his last budget request.  Also up for debate will be a Senate provision calling for conservation program participation to qualify for crop insurance benefits; the House does not include the same cross compliance language.

 

Dairy Dueling Begins - A flurry of letters from various parts of the dairy industry flew to Capitol Hill this week signaling the dairy title could become more contentious than previously thought.  A group of major dairy processing companies sent a letter to Sen. Debbie Stabenow (R, MI) calling on her to support language removing any milk supply management program. The Senate bill contains what's called the Dairy Market Stabilization Program (DMSP).  Farmers would be required to enter the production control program as a condition of participating in a dairy margin insurance program.  The margin insurance/production control program was developed by the National Milk Producers Federation and replaces a laundry list of current dairy income supports. While championed by Rep. Collin Peterson (D, MN), ranking member of the House ag panel, the production control language was stripped from the House bill during floor action. Peterson said this week he and House Speaker John Boehner (R, OH) are in a "knock-down, drag-out war" over dairy provisions, with Peterson accusing Boehner of having increased the number of House conferees simply to get the votes to kill the DSMP, once referred to by the Speaker as a "soviet-style" program. The processors call the DMSP provision "government interference" in the milk supply.  The dairy companies were supported by another letter from state and regional food processing and grocery groups. However, the processor/food industry opposition was directly challenged by a 56-member coalition of dairy cooperatives and state and national dairy producer groups who sent a letter coming out strongly in support of the Senate Farm Bill dairy provisions, including DMSP.  They refer to the supply control portion of the bill as "market stabilization," and took on the processors' letter, reminding conferees processors "receive 70% of the amount consumers pay for dairy products." Without the stabilization program, they say, prices could plummet on overproduction, hurting farmers more than processors.

 
House to Take Up Water Bill Next Week

 

Action suspended during House and Senate work on fiscal matters, House Majority Leader Eric Cantor (R, VA) said the House will take to the floor next week its version of the Water Resources Reform & Development Act (WRRDA) that funds harbors and inland waterway projects. 

The bill is generally considered noncontroversial as it streamlines project approval processes, saves money and contains no special interest earmarks, said House Transportation & Infrastructure Committee Chair Bill Shuster (R, PA).

 

The Senate passed its version in May. The biggest difference in the two bills is the House bill requires congressional approval for water projects, while the Senate bill leaves that discretion to the Administration.

 
High Court to Review EPA Emissions Permitting Process; Lets Stand EPA Authority
 

The U.S. Supreme Court this week said it will not review whether EPA has the authority to regulate greenhouse gas (GHG) emissions as a human health risk, but will review whether agency actions to control those emissions under its permitting programs for the automobile and utility industries are valid.

 

The high court decision on nine separate industry petitions for review of overall EPA authority is a blow to those who contend EPA's action to control GHG under its Clean Air Act (CAA) "endangerment finding" are beyond the authority of the agency.  However, both sides of the GHG question claimed victory.

 

The one question the court will hear - actually the consolidation of 15 separate issues - focuses on the vehicle industry, and goes to whether EPA has the authority to require preconstruction permitting for stationary sources under the CAA.   

 

Sources said even if the court sides with industry, it won't affect EPA's current actions relative to permitting new utility plants. 

 
"Leaked" EPA 2014 RFS Options Not Final

 

"Leaked" reports last week that EPA floated to industry its revised FY2014 Renewable Fuel Standard (RFS) were assailed this week by the Administration and the biofuels industry who said nothing is final at EPA as it reviews options on RFS levels next year for various biofuels.   

 

Media reports indicated the agency was considering an overall mandate of 15.2 billion gallons, less than half of the current overall blend mandate. That includes 13 billion gallons of corn-based ethanol, 2.2 billion of advanced biofuels (biodiesel) and 23 million gallons of cellulosic ethanol.  EPA has said over time it is considering as an option reducing the RFS broadly.  

 

EPA Administrator Gina McCarthy told Bloomberg late last Friday, "At this point, EPA is only developing a draft proposal. The Obama Administration remains firmly committed to furthering the development of all biofuels."

 

"The 2014...rulemaking process is not final and we're not going to comment on an unverified 'draft' document'," said Growth Energy CEO Tom Buis in a statement late last week shortly after the "options" reports surfaced. Growth Energy has called on the Obama Administration to investigate the leak of "unverified draft documents."

 

Buis was echoed by Secretary of Agriculture Tom Vilsack who this week restated the Administration's support for biofuels, and said EPA "is currently developing its draft proposal and has not yet reached a final decision regarding that proposal, and will not do so until all stakeholders have had the opportunity to comment and to provide input on what is required for this industry, and the rural communities who depend on it, to continue to thrive."

 

Washington State Sues GMA over GMO Label Battle Finance Reporting
 

The Washington State attorney general sued the Grocery Manufacturers Assn. (GMA) this week, alleging GMA violated state campaign finance laws by illegally collecting and spending - without reporting the identities of contributors - nearly $7 million to defeat a November ballot initiative to require labeling of genetically modified (GM) foods.

 

Defeat of the November 5 ballot question has been a major goal of GMA, along with several of its member food industry companies.  The ballot item would require labeling of foods containing GM ingredients from crops, as well as labeling of seeds and seed products sold in Washington State.  Media reports indicate supporters of ballot item I-522 have raised $5.5 million and spent $5.4 million; opponents have reportedly raised more than $17 million and spent about $13 million.   

 

At issue is GMA's status as the largest donor to the "No on I-522" campaign, and the creation of a GMA internal "defense of brands strategic account."  Companies reportedly pay an assessment to the account to be used to oppose labeling initiatives, and the Washington State attorney general said GMA hides the names of those companies paying into the GMA account.   

 

GMA said it takes care to comply with all state laws and regulations regarding election and campaign financing.  It said it will review the suit and cooperate with state authorities.  The attorney general's office said it's seeking a temporary restraining order to force GMA to comply with state disclosure laws and will seek civil penalties. 

 
Leadership Conference in Sacramento

Your CSA staff and management company AAMSI is pleased to announce its first leadership conference which will be held in Sacramento on October 28-29, 2013.

All members of the Associations that we represent are invited to attend this leadership conference, featuring informative and entertaining sessions intended to enhance professional development and leadership/management skills.  Please make your hotel room reservations directly with the Hyatt Hotel - there is still plenty of rooms.
 


Upcoming Meetings