Sticking Points for Congressional Energy Conferees.

Thursday revealed major sticking points on Energy legislation during the opening meeting of the conference committee to reconcile the House and Senate versions of the Energy Bill.

Those include: funding for infrastructure, drought and wildfire language, and the Land and Water Conservation Fund.

Senate Energy and Natural Resources Committee Chairwoman Lisa Murkowski (R-Alaska), who co-authored the Senate bill and serves as chair of the conference committee, urged conferees to “prove the skeptics wrong,” adding that her efforts to pass a bill had been “written off by every trade journal three or four times.”

The Senate passed its bill 85-12 in April, and the House passed an amended version 241-178. The House’s more partisan version included much of the House’s own language on energy efficiency, and it added provisions on contentious issues like the California drought and wildfire management.

The drought language would loosen some requirements of the Endangered Species Act, and the wildfire provision would expedite forest management projects. The provision on drought attracted a veto threat from the White House. The Obama administration also criticized the provision on wildfire but stopped short of a veto threat.

The Senate bill avoided those controversial topics because supporters knew that it would threaten their ability to pass the first update to the country’s energy policy since 2007.

Murkowski’s co-author, committee ranking member Sen. Maria Cantwell (D-Wash.), and House Energy and Commerce Committee Chairman Fred Upton (R-Mich.) also gave optimistic opening statements, praising some of the less controversial provisions rather than pushing on the controversial ones.

But the meeting, which allowed most of the 47 conferees to give brief statements, quickly shifted toward a few key issues where members have dug in their heels.

Rep. Frank Pallone (D-N.J.), who had previously expressed his displeasure with both the House and Senate bills, reiterated that he wants to check off three boxes in the final conference report. Pallone wants the final legislation to invest in energy infrastructure, to focus on “direct benefits for consumers,” and to include action on climate change.

Pallone didn’t go into detail on the second and third demands, but he is already dissatisfied with the lack of infrastructure funds in both the House and Senate bills.

After the meeting, Murkowski made no promises, saying conferees would work through the infrastructure issues along with other disagreements.

A few natural resources and land management issues also present challenges. House Natural Resources Committee Chairman Rob Bishop (R-Utah) continued to call for measures addressing the California drought and wildfire management. Cantwell has said that those issues are important, but they should be left out of the energy bill because they’re too contentious to handle now.

The wildfire provision has some bipartisan support on the conference committee. Rep. Peter DeFazio (D-Ore.), who is a conferee, voted for the measure as a standalone bill, and he briefly praised it in his statement on Thursday. Sen. Ron Wyden (D-Ore.) also encouraged members to include language on wildfire management, but he did not mention the House’s measure specifically. Rep. Bruce Westerman (R-Ark.), the bill’s sponsor, is also a conferee.

The Land and Water Conservation Fund is also a sticking point. The Senate bill would permanently reauthorize the fund, but Bishop has said that’s a non-starter without some changes that shift control from the federal government to states. Rep. Cynthia Lummis (R-Wyo.) emphasized her support for similar changes to the conservation fund. Wyden, meanwhile, called permanent reauthorization “a particularly valuable part of the Senate bill.”

Upton has already said he doesn’t think lawmakers will reach a deal before the election. At Thursday’s meeting, Sen. John Barrasso (R-Wy.) accused some House and Senate Democrats, without naming anyone in particular, of dragging their feet.

After the meeting, Murkowski said Barrasso is simply warning members and stakeholders that a new Congress means there will be a full reset on the bill. It would be a waste of the past year’s efforts not to pass something by December.

 

 

Energy issues dominate the hearing schedule in Congress this week.

A House and Senate conference committee on comprehensive energy legislation is scheduled to meet formally for the first time on Thursday. Members will be working out the differences between their two versions of legislation that could be the first update to federal energy policy since 2007. The Senate passed its bill with overwhelming bipartisan support in April, while the House narrowly passed its own version of energy modernization legislation on a party-line vote, meaning there will be significant issues for the conference committee to work through this fall.

The House Energy and Commerce Subcommittee on Energy and Power is scheduled to meet on Wednesday to review the Federal Power Act, particularly the Federal Energy Regulatory Commission and electricity markets over the past 20 years.

There are two House Foreign Affairs hearings scheduled on Thursday afternoon that are focused on energy markets. The Foreign Affairs Subcommittee on the Middle East and North Africa will hold a joint hearing with the Energy Subcommittee of the House Committee on Science, Space and Technology to discuss energy resources in the Eastern Mediterranean. The Foreign Affairs Subcommittee on Asia and the Pacific is also scheduled to meet to discuss opportunities to advance U.S. energy policy in Asia, particularly the region’s dependence on liquefied natural gas from the United States and the economic and security interests involved.

On Friday morning, the House Oversight and Government Reform Subcommittee on Transportation and Public Assets will hold an oversight hearing on the Federal Emergency Management Agency’s response to the devastating flooding that occurred in Louisiana in August. The agency has approved more than $100 million in disaster relief grants for flood victims, but Congress may be asked to provide additional emergency funds to assist with the recovery effort.

While not Energy related per se., on Thursday, the House Financial Services Subcommittee on Oversight and Investigations will meet to discuss the Obama administration’s $400 million cash payment of U.S. taxpayer funds to Iran that has been linked to the release of several U.S. hostages. The payout has come under intense scrutiny, particularly from congressional Republicans. The hearing will focus on the $400 million cash payment and the implications on U.S. efforts to inhibit terrorism financing.

The Iran payout is also the subject of a hearing in the House Judiciary Committee on Wednesday. The Judiciary Subcommittee on the Constitution and Civil Justice is scheduled to hold an oversight hearing on the lack of transparency on money from the Judgment Fund, a permanent Treasury Department account used to pay judgments and claims against the United States.

This Week In Congress: Puerto Rico, Opioids and Energy

 

Members return to Capitol Hill this week after a one-week break and settle in for three weeks of legislative business before the scheduled Memorial Day recess. A new draft of legislation designed to assist Puerto Rico restructure its debt is likely to be released on Wednesday and potentially marked up by the House Natural Resources Committee next week.

On Wednesday, House members will consider another 11 bills under suspension of the rules related to opioid abuse and recovery assistance. The proposals range from expanding access to Naloxone (medication that reverses the effects of an opioid overdose) and improving care for pregnant and postpartum mothers and infants affected by substance abuse or withdrawal symptoms, to increasing access to medication-assisted treatment and allowing prescriptions for certain controlled substances to be partially filled. The House will also consider H.R. 4641, subject to a rule. This legislation would establish an interagency task force to review, modify and update best practices for pain management and how pain medication is prescribed.

During the remainder of the week, the House is expected to consider H.R. 5046, subject to a rule. H.R. 5046 would authorize annual appropriations to the attorney general to make grants to state, local and tribal governments for programs to combat opioid abuse.

Following the expected passage by the House of these opioid-abuse and recovery-assistance bills, the House plans to request a conference with the Senate to resolve the differences between the House-passed bills and the Senate version, the Comprehensive Addiction and Recovery Act (CARA), which passed in March by a vote of 94-1.

The House Judiciary Committee Executive Overreach Task Force continues its series of hearings on “overreach” by the executive branch this week. A hearing scheduled for Thursday will focus on presidential actions in foreign affairs; two previous hearings focused on executive actions involving domestic affairs.

On Wednesday, the House Energy and Commerce Subcommittee on Commerce, Manufacturing and Trade (CMT) will host a highly anticipated hearing on daily fantasy sports, a multibillion dollar industry whose popularity has surged in recent years. Despite the activity’s very large and growing following (an estimated 60 million online users), public debate over whether fantasy sports activities qualify as gambling has led to increased scrutiny, with several states battling industry leaders FanDuel and DraftKings in court over their legality and others passing legislation to establish regulations and consumer protections. In announcing the CMT Subcommittee hearing, the first congressional hearing on daily fantasy sports, Subcommittee Chairman Michael Burgess, R-Texas, stated that the event will provide “a forum for all stakeholders to discuss the many aspects of this complicated issue” and “consider whether there is a federal role to play” in oversight.

Continuing the recent trend of hearings focused on the U.S. tax code and tax reform, the House Ways and Means Tax Policy Subcommittee is scheduled to meet Thursday to discuss member proposals on how to improve the tax code.

On Wednesday, the House Oversight and Government Reform Committee meets to discuss potential reforms to the U.S. Postal Service, an agency that has been plagued with operations issues and financial losses in recent years, largely stemming from the increase in technology and electronic communications.

By its own rules, the House is unable to consider any annual spending bills on the floor prior to May 15, as Congress has not adopted a budget resolution, but this restriction has not stopped the House Appropriations Committee from moving forward with the annual appropriations process. The full committee has already approved its Agriculture, Energy and Water, and Military Construction and Veterans Affairs Appropriations bills for the upcoming fiscal year. The Defense Subcommittee is scheduled to meet Thursday evening to consider its funding bill for FY 2017.

On the committee front this week, the subcommittees of the Senate Armed Services Committee will begin marking up the Senate version of the National Defense Authorization Act for 2017. On Monday and Tuesday, each of the six subcommittees will meet to consider its portion of the annual defense spending blueprint. The full committee will meet in closed session to mark up the bill on Wednesday, Thursday and Friday. The Armed Services Committee is expected to complete its markup this week, allowing for consideration in the full Senate prior to Memorial Day; House action on its version of the bill is also expected this month.

The Senate is still working to find a path forward on the Energy and Water Appropriations measure for fiscal year 2017 and other FY 2017 spending bills, while the House will take up several measures to address opioid abuse and provide addiction-recovery assistance. In the background looms the now-settled selection of Donald Trump as the Republican presidential nominee and a split in Republican ranks over whether to support him, raising questions on the potential impact Trump will have on Senate and House races in November.

The Senate returns to legislative business on Monday and resumes consideration of the legislative vehicle (H.R. 2028) for the FY 2017 Energy and Water appropriations bill, a $37.5 billion funding measure that had previously been viewed as fairly noncontroversial and appeared set for final passage before last week’s recess. The appropriations bill is now held up over an amendment offered by Sen. Tom Cotton, R-Ark., that would prevent the administration from spending any funds to purchase heavy water from Iran. Sen. Cotton has been a leading opponent of the president’s deal with Iran. Opponents of the amendment, all likely to be Democrats, argue it would directly and adversely affect the implementation of the president’s nuclear deal with Iran. The amendment has prompted a veto threat over the underlying bill from the administration, and Senate Democrats have called Sen. Cotton’s amendment a “poison pill.” Prior to the recess, Majority Leader Mitch McConnell, R-Ky., twice attempted to achieve cloture on the Energy and Water bill, but failed to achieve the necessary 60 votes to limit debate. Democrats fear the amendment will pass and will force some of their members, especially those up for reelection, to cast a difficult vote. Leader McConnell will likely try for a third cloture vote this week, although he has given no indication that an agreement has been reached to move forward.

Should the issue over Sen. Cotton’s amendment be resolved, the Senate expects to complete action on the Energy and Water appropriations bill this week. Leader McConnell previously indicated that the Senate will likely take up the Transportation, Housing and Urban Development (T-HUD) funding bill as its second FY 2017 appropriations measure. The legislation, reported unanimously out of the Senate Appropriations Committee in April, provides over $56 billion in funding for the Departments of Transportation, Housing, Urban Development, and other related agencies for the fiscal year that begins on Oct. 1. The Military Construction and Veterans Affairs appropriations bill and the Commerce, Justice and Science appropriations bill have also been reported favorably by the Senate Appropriations Committee and await action by the full Senate. The ability of the Senate to tackle these appropriations bills depends on whether it can find a path forward on the Energy and Water bill. If it cannot, then Leader McConnell’s hopes for completing Senate action on all 12 appropriations bills are likely to collapse amid partisan rancor and recrimination.

If the Senate is unable to move forward on the appropriations front, it is likely to turn its attention to criminal-justice and sentencing-reform legislation. The legislation was favorably reported by the Judiciary Committee several months ago on a 15-5 vote, but the Republicans on the committee split 5-5. Since then, Judiciary Committee Chairman Chuck Grassley, R-Iowa, has been seeking further compromises to attract more Republican support. Prior to last week’s recess, he announced a compromise agreement that has attracted some additional Republican support, making the bill a realistic candidate for floor consideration if the appropriations process on the floor collapses.

The Senate Judiciary Committee will be considering privacy issues at two hearings this week. The full committee meets on Tuesday to discuss oversight and reauthorization of the FISA Amendments Act, the law governing federal surveillance of electronic communications. The current law, which came to widespread public attention through the Edward Snowden leaks, will expire at the end of next year. Leaders of the House and Senate intelligence committees have identified reauthorization as a major priority, though other committees share jurisdiction over the authority and agencies involved. Privacy and civil liberties experts and a representative from cybersecurity industry are scheduled to provide testimony before the committee on Tuesday. The House Judiciary Committee held a closed hearing on the FISA Amendments Act reauthorization in February. The Senate Judiciary Subcommittee on Privacy, Technology and Law meets on Wednesday afternoon to examine the Federal Communications Commission’s proposed privacy rules for internet service providers (ISPs). The privacy proposal, adopted by the FCC on March 31, would limit the ability of ISPs to track the web history of subscribers for targeted advertising purposes by allowing subscribers to opt out, or by requiring the ISPs to obtain express consent before using and sharing the customer data with third parties. The FCC is currently accepting public comments on the proposal through May 27. FCC Chairman Tom Wheeler and Commissioner Ajit Pai are scheduled to testify at the Wednesday hearing, as are Federal Trade Commission Chairwoman Edith Ramirez and Commissioner Maureen Ohlhausen.

 

Hospitals avoid new local-tax burden-Energy and Environment Bills Signed Into Law

New Jersey Governor Chris Christie vetoed a bipartisan proposal that would have required nonprofit hospitals to pay new fees to municipal governments to help cover the cost of police, fire, and other local services in exchange for maintaining the property-tax exemption they have long enjoyed. The bill was prompted by a landmark state tax-court ruling in 2014 that successfully challenged the property-tax exemption enjoyed by nonprofit Morristown Medical Center, given that it also operates several for-profit services at the same Morris County site.

The pocket veto encourages uncertainty where the bill could have secured the legal future of hospitals. Legislators intended their efforts to avoid similar lawsuits around the state, but with the veto the state may see an untimely increase in litigation.

The move was more of a disappointment than a surprise, legislators said.

Energy and Environment Bills Signed Into Law

S-2617/A-3944 (Cardinale/Garcia, McKeon, Auth, Eustace, Pinkin) – Requires DEP to adopt regulations to allow cultivation of commercial shellfish species in certain coastal and inner harbor waters for research, educational, or restoration purposes; requires community engagement process for revision thereof

S-2880/A-4704 (Lesniak, T. Kean/Diegnan, Wisniewski) – Provides up to $25 million in tax credits under Economic Redevelopment and Growth Grant Program for certain infrastructure at Rutgers, the State University of New Jersey

S-3321/A-4927 (Smith, Van Drew, Bateman/Spencer, Rumana) – Authorizes DEP to require public access to waterfront and adjacent shoreline as condition of waterfront development approvals and CAFRA permits

A-1726wGR/S-308 (Eustace, Lagana, Mosquera, Vainieri Huttle, Wimberly/Gordon) – Amends “Flood Hazard Area Control Act” to require DEP to take certain actions concerning delineations of flood hazard areas and floodplains

A-1812/S-2717 (Mosquera, Mazzeo, Andrzejczak/Cruz-Perez, Oroho, Jones) – Extends protections of the new vehicle “lemon law” to new farm tractors purchased or leased in New Jersey

A-1958/S-1848 (Allen, Van Drew) – Concerns exemptions from permits for certain agricultural activities under “Freshwater Wetlands Protection Act”

A-2839/S-2620 (Burzichelli, Space, Phoebus/Oroho, Turner) – “New Jersey Rural Microenterprise Act”

A-3257wGR/S-2125 (Andrzejczak, Mazzeo, Burzichelli/Van Drew) – Provides that determination by county agriculture development board or State Agriculture Development Committee as to what qualifies as farm-based recreational activity in pinelands protection area is binding on Pinelands Commission

A-3850/S-2467 (DeAngelo, Eustace, Mazzeo, Pintor Marin, Benson/Turner, Singer) – Requires BPU to establish procedures allowing electric power and gas supplier customers to switch energy suppliers

Energy and Environment Bills  pocket vetoed

S-564/A-4186 (Smith, Bateman/Eustace, McKeon, Spencer, Benson) – Establishes “Solar Roof Installation Warranty Program” in EDA and transfers $2 million from societal benefits charge to initially fund program

S-1414/A-2405 (Smith, Bateman/Eustace, Benson, Johnson) – Concerns low emission and zero emission vehicles; establishes Clean Vehicle Task Force

SCS for S-1420/ACS for A-1603 (Beach, Whelan, Smith, Sweeney, Bateman, Thompson/Spencer, Eustace, Quijano, Wimberly) – Requires paint producers to implement or participate in paint stewardship program

S-2491/A-4069 (Smith/Danielsen, Pinkin, Benson) – Establishes position of State Oceanographer

S-2711/A-4128 (Smith, Whelan/Mazzeo, DeAngelo, Spencer, Singleton, McKeon, Danielsen, Johnson) –Permits BPU to approve qualified wind energy project; requires BPU to provide application periods for those projects

S-2769/AS for ACS for A-4197, 4206 (Smith, Bateman/Andrzejczak, McKeon, Spencer, Pintor Marin, Dancer, Vainieri Huttle) – Implements 2014 constitutional dedication of CBT revenues for certain environmental purposes; revises State’s open space, farmland, and historic preservation programs

S-3416/A-4808 (Lesniak, Sarlo/Eustace, Gusciora) – Prohibits possession, transport, import, export, processing, sale, or shipment of parts and products of certain animal species threatened with extinction

A-2586/S-1796 (DeAngelo, Quijano, Benson/Greenstein) – Establishes “Energy Infrastructure Study Commission”

A-4384/S-3145 (DeAngelo, Pintor Marin, Danielsen, Schaer, Johnson/Whelan) – Requires BPU to render decision on case within 12 months of final public hearing or hold another public hearing prior to deciding case

A-4763/SS for SCS for S-2973 (McKeon, Spencer, Pinkin/Smith, Bateman, Greenstein, Codey) – Revises “Electronic Waste Management Act”

A-4773/S-3146 (Eustace, Garcia, Gusciora/Lesniak) – Prohibits possession and transport of parts and products of certain animals at PANYNJ airports and port facilities

 

GOP lawmaker target Obama’s climate plan.

House Republicans on Monday released a bill to delay the Obama administration’s plan to limit carbon pollution from existing power plants.

Rep. Ed Whitfield of Kentucky unveiled a draft bill that would allow governors to veto compliance with the federal rule if the governor determines it would cause significant rate hikes for electricity or harm reliability in the state.

The bill also would delay the Environmental Protection Agency’s climate rule until all court challenges are completed.

Whitfield, chairman of the energy and power subcommittee of the House Energy and Commerce panel, said the EPA’s proposed rule to limit carbon pollution from coal-fired power plants is riddled with problems and faces an uphill battle in the courts.

Whitfield and other Republicans cited testimony from an unlikely ally, Harvard Law professor Laurence Tribe, an Obama mentor who has said the proposed EPA rule is unconstitutional.

Tribe, a one time champion of the environmental movement, said the EPA is attempting what he called “an unconstitutional trifecta: usurping the prerogatives of the states, Congress and the federal courts — all at once.”

Senate Majority Leader Mitch McConnell, R-Ky., also cited Tribe’s comments in a letter urging the nation’s 50 governors to defy Obama’s power plant rules by refusing to submit compliance plans to Washington.

Democrats and environmentalists have criticized Tribe, noting that his testimony follows comments he submitted in December on behalf of Peabody Energy Corp., the world’s largest private-sector coal company.

The measure unveiled Monday does not block the EPA rule outright, as previous GOP bills have intended, but Whitfield said he is confident the measure would protect states and consumers.

A spokesman for Sen. Joe Manchin, a West Virginia Democrat who has worked with Whitfield on previous EPA legislation, said the senator is reviewing Whitfield’s proposal.

Whitfield said he has scheduled an April 14 hearing on his bill.

Congress to seek changes in Fracking Rules

But the Obama administration has maintained that the current rules are outdated after technological innovations that have greatly improved the drilling method’s success and expanded its use. It also maintained that 19 of the 32 states in which the rule would apply lack fracking-specific rules.

“It has been very important to the United States in terms of energy independence and also bringing down the price of oil because of increased supplies. So it has been very important, but it also is out ahead of where regulations have been, and that is why we have chosen to put these regulations in place … where fracking has gone — the pressures, the horizontal drilling — all of that is new and our regulations have not kept pace,” Jewell said.

Litigation is typical for new energy and environmental regulations. But while some rules have questionable legal authority — the section of the Clean Air Act on which the proposed Environmental Protection Agency emissions rule for existing power plants relies, for example, has little case law under it — the fracking regulation is less ambiguous.

“I would agree on that,” Kathleen Sgamma, vice president of government and public affairs with the Western Energy Alliance, told the Washington Examiner. “It is hard to challenge regulation.”

Still, Sgamma said the Interior Department’s case is far from ironclad. Aside from the potential flouting of the Administrative Procedure Act, she noted Indian tribes have found fault with how the Obama administration consulted them during the rule-making process.

The rule would apply to energy development on tribal land as well as federal land. Oil and gas resources are a significant revenue source for tribes, accounting for $1.1 billion in federal royalty disbursements in fiscal 2014, according to Interior. That’s more than double the $534 million tribes received in fiscal 2008, before the U.S. drilling boom took off.

Janice Schneider, Interior’s assistant secretary for land and minerals management, said tribes were very much involved in the process.

“We held two sets of regional meetings [in 2012], which yielded substantive discussions on topics that included the applicability of tribal law, validating water sources, inspection and enforcement, well bore integrity and water management,” Schneider said. “Additional individual consultations and larger meetings with tribal representatives have taken place since that time.”

But Republicans on the House Natural Resources Committee said some tribes have told them that wasn’t the case. Committee staff said they’re reaching out to tribes to see if they have concerns about the final rule.

“Tribes with mineral resources were very unhappy when it was first proposed — especially because they were not consulted and since then they have weighed in. The tribes were also unhappy with the substance of the rule. Probably more than anything, what upsets them is that lands held in trust for Indians were being treated under the rule as if they were publicly owned lands,” committee spokeswoman Julia Bell told the Examiner.

Democrats and Republicans may find a common cause with electric cars.

The New Jersey Senate on Monday passed proposed legislation that would allow Tesla Motors Inc. to sell its electric vehicles directly to consumers in the Garden State and undo a controversial regulation that requires manufacturers to sell cars through dealerships.

The bill passed the Senate on a 30-2 vote and will now be sent to the desk of Gov. Chris Christie for his signature. The proposal received overwhelming support in the New Jersey Assembly, passing on a 77-0 vote, with only one abstention.

If approved, the legislation would override a New Jersey Motor Vehicle Commission decision from last year that requires new vehicle sales go through brick-and-mortar franchise agreements.

The legislation allows manufacturers to sell the vehicles at four locations in the state so long as it owns or operates at least one retail facility in New Jersey for servicing vehicles.

On June 5, the Assembly Consumer Affairs Committee advanced the litigation in a 5-0 vote, with Eustace telling the panel he doesn’t expect the changes to disrupt the existing auto market in the near future.

The legislation is part of a multipronged effort to overturn the MVC’s decision, which made New Jersey the third state to ban direct-to-consumer auto sales after Arizona and Texas. The New Jersey ban got a combative response from Tesla, which accused the MVC of buckling under pressure from auto dealership advocates in an official blog post.

Tesla is also attacking the MVC’s decision with a formal challenge in the state Appellate Division and the filing of a Superior Court complaint against the MVC in April alleging it is violating New Jersey’s Open Public Records Act by withholding documents related to its decision. That litigation is pending.

Direct-sales bans in various states have been backed by auto dealer associations that see the new model as a threat to their business model. Tesla only accounts for a fraction of U.S. auto sales: a little more than 22,000 out of 15 million cars sold in the U.S., according to the Federal Trade Commission.

Auto dealers could be left out of the loop if General Motors Co. or another large U.S. automaker decides in the future to make a shift in its business model and also choose to go with direct sales.

Tesla is one of the few areas where Democrats and Republicans could find a common cause. Congressional Republicans, including 2016 presidential hopeful Marco Rubio, have criticized the Tesla sales ban on free-market grounds. Democrats, meanwhile, have backed Tesla’s innovation and the environmental benefits of electric cars. Tesla has sought to leverage the public backlash against the sales bans to pressure lawmakers for a legislative fix.