NJ Bill Spells Out Biodiesel Fuel Tax Exemptions

The New Jersey Assembly on Thursday unanimously passed bipartisan legislation that clarified biodiesel fuel exemptions under the Motor Fuels Tax Act, paving the way for an economic growth spurt in what legislators say is an expanding industry.

The law redefines the biodiesel fuel exemption to “more specifically apply to biobased liquid fuel and bidodiesel fuel,” according to its language, and lists dozens of exemptions for consumers and suppliers, who can claim tax refunds as a result. Currently, the biodiesel fuel exemption is “generally limited to any motor fuel that is derived from agricultural products or animal fats,” the law said. (Credit AP).

Assemblywomen Holly Schepisi, R- Bergen and Passaic, and L. Grace Spencer, D-Essex, sponsored the Assembly version, A4121, which was replaced by the Senate version, S-2599, and passed 76-0. The Senate had given the legislation 38-0 approval in March.

“New Jersey’s geographics makes it a perfect fit for the development of local biofuel production. The growing industry has its sights set on New Jersey, but we are one of only two states in the U.S. that does not have statutes in place for converting natural fats, greases and plants into renewable, clean biofuel in an environmentally friendly way,” Schepisi said in statement after the vote. (Credit AP).

The legislation sends a message to fuel producers that New Jersey is open for business, Schepisi said, and noted that one biodiesel plant can create 200 construction jobs, 35 to 40 “long-term, good-paying” jobs for plant employees and more than 800 jobs in related industries such as trucking and agriculture.

“The industry is experiencing rapid growth, and it is time for New Jersey to get in on the action,” she said. “The expansion of this new industry into our state will put thousands of people to work and ignite needed economic growth waterfront and trackside industrial areas.” (Credit AP).

The Assembly version of the bill was introduced in February and reviewed by the Assembly’s Environment and Solid Waste and Budget committees. The Senate version was sponsored by Sens. Bob Smith, D-Middlesex, and Christopher Bateman, R-Somerset.

Consumers can claim refunds for for fuel used in more than 18 ways, including aircraft, certain autobuses, ambulances, farm machinery, fire engines and motor boats, under the law. Refunds will be given provided there is proof that tax was paid and no refund was previously issued.

Suppliers and distributors can claim refunds for certain exported fuels; certain undyed kerosene; fuel sold to the a federal or state agency or its political subdivisions, departments and agencies; aviation fuel sold to a licensed aviation fuel dealer; liquefied petroleum gas except when delivered to the tank of a highway vehicle; contaminated motor fuel unsuitable for use; fuel returned to a refinery for further processing; certain fuel-grade alcohol or biobased liquid fuel; and fuel that could generate a second tax as result of being exported, sold or distributed, according to the legislation.

Making the state more business friendly to the fuel industries was one of the goals of sweeping changes that New Jersey made to the Motor Fuels Tax Act in 2010. According to a public notice about the changes, modifications would be made to the licensing, reporting and imposition and collection in order to create a more business-friendly environment, simplify tax collection and increase enforcement.

By: Martin J. Milita, Jr. Esq., Sr. Director.

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NJ Assembly Publicly Rejects $225M ExxonMobil Deal

The New Jersey Assembly on Thursday passed a resolution rejecting the state’s $225 million settlement with Exxon Mobile Corp., over refinery pollution.

The Assembly voted 45-16-9 to give approval to a resolution by Assemblyman John McKeon, D- Essex/Morris, denouncing Republican Gov. Chris Christie’s April proposal to resolve claims over hazardous discharges from Exxon refinery sites in Linden and Bayonne that impacted 1,500 acres of wetlands.

“About $50 million is going to go to attorney fees, but $175 million won’t even go to try to restore the ecological treasures that were destroyed,” McKeon said while testifying at a quorum meeting.

The proposed agreement, first publicly announced in March, would resolve the oil giant’s liability for alleged natural resource damages at refinery sites, with the exception of surface water claims. It also covers 16 other Exxon sites, including terminals and small airports, as well as Exxon retail gas stations in the state that had been cited in other natural resource damages claims.

The agreement is currently undergoing a 60-day public comment period.

McKeon’s resolution, AR-242, opposes the settlement and demands that the governor “obtain the maximum compensation possible for the devastating environmental damage incurred by Exxon.”

McKeon, citing decades of contamination, accuses Exxon of improperly disposing of “millions of gallons of crude oil and refined products, seven to 17 feet thick in some cases, and containing hazardous substances such as polycyclic aromatic hydrocarbons, chromium and arsenic” at Linden and Bayonne facilities since the 19th century.

The resolution was borne of hearings, consultations with environmental scientists and other experts and perusal of 56 days of trial transcripts, McKeon said.

“We used to think of what was destroyed there, the wetlands, as things that just supported biology. But we now know how important they are as a barrier against storm surges after Superstorm Sandy,” he said, calling the state’s de facto forfeit of the surface water claims “unacceptable.”

The Christie administration, according to McKeon’s resolution, hasn’t justified settling the case for approximately 3 percent of the $8.9 billion calculated by the Department of Environmental Protection as the value of the natural resource damages, and offered “no verifiable rationale” for including the 16 Exxon sites and the approximately 1,700 retail service stations unrelated to the litigation in the settlement.

The $225 million figure doesn’t cover the cleanup, and though the area can be “cleaned on some level, it can never be restored,” McKeon told the Assembly.

The resolution also blasts Christie in its historical account of the state DEP’s efforts to address more than 4,000 potential natural resource damages claims since 2001. Since Christie took office in 2010, only one such claim has been made, the resolution said.

A Christie spokesman reached on Thursday said to refer to the governor’s previous statements on the issue. The governor said in a March town hall meeting that the settlement has been misrepresented to the public and that Exxon would have to pay whatever price was necessary to “fix everything that they polluted up to state standards.”

The resolution drew opposition from Assemblywoman Holly T. Schepisi, R-Bergen, who questioned the appropriateness of lawmakers’ interventions and warned that legislators weren’t “part and parcel” to all the nuances of the settlement.

“We have never once won a case similar to this. The fact is, this could go on for another 10 years. We could potentially see zero dollars at the end of it,” Schepisi said.

“The administration was trying to defend the indefensible, which is this dirty deal,” club President Jeff Tittel said in a statement released after the vote.

The Senate passed a similar resoluion in March.

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.

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.

Senate Bi-partisanship keeps Hope Alive on Energy-Efficiency Bill

Ohio Republican Rob Portman and New Hampshire Democrat Jeanne Shaheen today reintroducing major energy legislation to cut energy use in commercial buildings, manufacturing plants, and homes, a measure the senators have floated in one form or another since 2011

The bill, despite buy-in from  business and environmental groups, has spent years ensnared in fights over more volatile topics like the Keystone XL pipeline and Obamacare. It has reached the Senate floor twice in the last two years, only to stall out.

Portman and Shaheen, who will float the bill with a bipartisan group of cosponsors, are hopeful they can convince colleagues to avoid letting it become a magnet for controversial amendments.

The Senate has gotten weeks of debates and votes on Keystone out of the way for the moment, culminating this month in a failed attempt to override President Obama’s veto of legislation to authorize the project.

Avoiding controversial amendments, however, would still not ensure the bill is opposition-free. Heritage Action, for example, has opposed previous versions that came to the floor, taking aim at funding authorizations for the bill’s programs and also arguing that the bill duplicates existing federal and state efforts.

The wide-ranging bill’s various provisions include: new and enhanced Energy Department work with manufacturers to develop and commercialize efficient technologies and industrial processes; stronger “model” building codes and assistance to help states and local governments adopt them; an initiative to train people for careers in efficient building design and operation; provisions to boost energy efficiency in federal buildings; language directing energy savings to be incorporated into federally backed mortgages to encourage greater efficiency, and more.

The two senators say the case for the bill is obvious. According to a summary from their offices, the measure would, by 2030, create more than 190,000 jobs, save consumers $16 billion a year, and cut carbon-dioxide emissions by an amount equivalent to taking 22 million cars off the road.

Supporters include the U.S. Chamber of Commerce, the Alliance to Save Energy, the Business Roundtable, the Environmental Defense Fund, and a broad suite of other groups and individual companies, including publically traded Westinghouse and General Electric.

NJ Senate Passes Bill To Force Offshore Wind Approval

The New Jersey Senate passed a bill Thursday that would force the state Board of Public Utilities to approve a wind power plant that could be one of the first in the nation, a plan the board has blocked twice.

The bill, which now goes to the Assembly, would require the BPU to greenlight Fishermen’s Energy LLC’s $188 million, 25-megawatt demonstration plant off the coast of Atlantic City. The Senate also passed a resolution urging the board to adopt regulations from a 2010 law that was meant to push the Garden State to the forefront of wind-generated power.

The New Jersey project has hit administrative roadblocks since Fishermen’s first filed its application in 2011. The matter is back before the New Jersey Appellate Division after the BPU again denied the plans Nov. 21. The regulator previously shot down the application in March, which Fishermen’s appealed, but the court returned the case to the agency in August to consider the $47 million grant commitment from the U.S. Department of Energy.

Bill S2711, sponsored by Democratic state Sens. Bob Smith and Jim Whelan, passed the Senate 22-14 and will now go to the Assembly. Democratic Assemblyman Wayne DeAngelo, head of the Telecommunications Committee and one of the Assembly bill’s sponsors, says he intends to bring the bill up at his committee’s meeting next month.

In addition to mandating approval of the wind farm, the bill also removes language from the New Jersey Offshore Wind Economic Development Act (OWEDA) that requires an applicant to submit an economic cost-benefit analysis to the BPU for approval. That was the grounds for the board’s rejection of the Fishermen’s project.

The BPU has refused to budge from its view that the project wouldn’t provide a net economic and environmental benefit to New Jersey ratepayers, as the OWEDA requires. The regulator also has found that Fishermen’s hasn’t demonstrated financial integrity.

According to the BPU, Fishermen’s hasn’t shown that the project is viable at its proposed price for those subsidies — $199.17 per megawatt-hour — without $100 million in federal funding, and it doesn’t have that money in hand. Uncertainties remain over Fishermen’s receipt of the DOE grant, and there’s still the issue of absent funding from an investment tax credit that would help the developer reach that $100 million figure, the BPU said in its November decision.

The second measure, SR112, sponsored by Smith and Democratic Senate President Steve Sweeney, would push the BPU to implement OWEDA and another law, the Electric Discount and Energy Competition Act.

The law directed the agency to develop an offshore wind renewable energy certificate program that would mandate a percentage of electricity sold in the state to be from wind energy. The offshore wind renewable energy certificates will help finance the project and ultimately be passed on to ratepayers.


The U.S. Senate on Wednesday took up a dozen amendments to the Keystone XL pipeline legislation, passing only one concerning energy retrofitting for schools, two days after Democrats refused to end debate on the bill until all pending amendments had been voted on.

GOP leaders had initially planned to vote on 18 amendments, but put off at least six more until Thursday. Senate Energy and Natural Resources Committee Chairman Lisa Murkowski, R-Alaska, said on the Senate floor she hoped for final passage of the bill on Thursday after votes on the remaining amendments.

Eleven of the amendments failed to garner the required 60 votes needed for passage, according to Senate roll call records. One amendment passed by a voice vote would appoint the U.S. Department of Energy to streamline information about existing federal programs to finance school energy projects.

The Keystone bill would allow Congress to approve an $8 billion project that would link Canada’s tar sands crude oil to refineries 1,700 miles away on the Gulf Coast.

None of the other amendments, from both Republicans and Democrats, got more than 54 votes. Murkowski had proposed removing land from consideration as wilderness areas unless Congress acts on them within a year, coming on the heels of President Barack Obama’s plan to make part of the Arctic National Wildlife Refuge a wilderness area and permanently ban drilling there.

Other failed amendments included campaign finance disclosure requirements for companies that stand to make more than $1 million from the tar sands, by Sen. Sheldon Whitehouse, D-R.I.; removing the lesser prairie chicken from the threatened species list, by Sen. Jerry Moran, R-Kan.; speeding up the approval process for liquefied natural gas exportation to World Trade Organization members, by Sen. Ted Cruz, R-Texas; and a nonbinding statement opposing presidential authority to unilaterally designate new national monuments, by Sen. Steve Daines, R-Mont.

The failed cloture vote on Monday was part of the Democrats’ protest of Senate Majority Leader Mitch McConnell’s bid to end debate before all pending amendments had been decided.

Keystone XL is intended to carry tar sands crude oil from Alberta, Canada, to the Gulf Coast, with a southern 485-mile portion of the proposed span running from the crude market hub at Cushing, Oklahoma, to refineries near Port Arthur, Texas, having already been approved.

The House version of the bill approving the pipeline, bypassing the traditional executive branch approval process needed for projects that cross an international border, passed Jan. 9 with mainly Republican support.

The White House has continued to hold off on approval of the pipeline, despite fierce pressure from GOP lawmakers and business groups and a Nebraska Supreme Court decision earlier this month that upheld the state’s approval of the Keystone route through the state, a case that had been cited by Obama as a major stumbling block for the pipeline.

The administration has threatened to veto any legislation seeking to force its hand, and although lawmakers can override a veto with a two-thirds majority in each chamber, the party makeup of each chamber and related votes so far suggest any such effort would fall short.

GOP-controlled Senate is set to start debating Keystone XL pipeline today

The U.S. House of Representatives on Friday advanced a bill that would approve construction of the controversial Keystone XL pipeline, moving the legislation one step closer to the White House and a showdown with President Barack Obama, who has vowed to veto it. As expected, the GOP-controlled House passed the bill that would bypass White House review of the Keystone XL project, by a 266-153 vote. Twenty-eight Democrats joined all but four of the House’s 242 Republicans in voting yes.

Meanwhile, the GOP-controlled Senate is set to start debating a companion bill today- meaning the legislation could hit Obama’s desk as soon as next week. The Senate already has the 60 votes necessary to advance the legislation. However, a White House spokesman said Friday that Obama was sticking to his veto threat first unveiled on Tuesday:

“The president believes the process should unfold at the State Department,” Deputy Press Secretary Eric Schultz told reporters.

The question then becomes whether the Senate has the 67 votes to override the president.

The Obama administration — specifically, the U.S. Department of State — is taking its time in deciding whether to issue a presidential, cross-border permit for the Keystone XL pipeline, which, if completed, would transport tar sands oil from Canada to the Gulf Coast. The project has become a lightning rod in the debate over U.S. energy and climate policy.

The House vote came hours after the Nebraska Supreme Court upheld the state’s approval of the Keystone XL route through the state, removing a roadblock frequently cited by Obama as part of his hesitation to sign a bill approving the project.

“There has been broad bipartisan support for this project from day one,” House Energy and Commerce Committee chairman Fred Upton, R-Mich., said in a statement Friday. “With the Nebraska roadblock cleared, the president has no excuse left to delay this project. It’s time to build, once and for all.”

Those sentiments were echoed by the U.S. oil industry:

“Congress is leading on Keystone XL in a bipartisan fashion proving Washington can get things done, despite obstacles from the executive branch,” American Petroleum Institute President and CEO Jack Gerard said in a statement Friday. “There are no excuses left. The president should join Congress in standing up for American jobs and energy security.”

Meanwhile, environmental groups were confident Obama would stick to his guns and veto the legislation.

Major Policy Developments for the 114th Congress: ENERGY AND THE ENVIRONMENT

Major Energy Policy Developments

Prospects for Comprehensive Energy Reform Legislation. Although energy legislation has historically been crafted in a bipartisan manner that cuts along  regional lines, prospects for a comprehensive energy bill reaching the White House are not  particularly bright. We anticipate that the House will again move a comprehensive bill similar to  the American Energy Solutions for Lower Costs and More American Jobs Act (H.R. 2), but a more
limited bill would have better prospects to get to the White House, such as one that addresses crude oil exports and LNG exports, energy infrastructure policy, energy efficiency.  Even such a limited package will face resistance, not because of what it contains but because it will be viewed as too limited, given the desire of many stakeholders to move a more comprehensive bill. Moreover, even a limited proposal touching upon controversial issues as we recent saw with the  the Keystone XL pipeline, may prove difficult to move through a closely divided Senate.

In this environment, expect the House and Senate to focus on narrowly tailored energy policies that stand a realistic chance at securing bipartisan, bicameral, and presidential support, such as the Energy Savings and Industrial Competitiveness Act of 2014 introduced by Senators Rob Portman (R-OH) and Jeanne Shaheen (D-NH). But without a change in the Senate’s underlying environment in which every bill becomes a vehicle for anything remotely related to it, even something this noncontroversial could die again.

That being said,expect Senator Lisa Murkowski (R-AK) to lead the Energy and Natural Resources Committee in the 114th Congress. Assuming she wins the December 6 runoff election, Senator Mary Landrieu (D-LA) will become Ranking Member. With a loss, Senator Maria Cantwell (D-WA) will serve as Ranking Member. Senator Murkowski is likely to continue to press  pro-energy development initiatives, including measures to authorize crude oil exports and to ensure revenue sharing by Alaska and other states that have opened (or open) off areas to oil and gas development.

With Senator John McCain likely to become the Chairman of the Armed Services Committee, Senator James Inhofe (R-OK) will likely become Chairman of the EPW Committee, since he has seniority over Senator David Vitter (R-LA) , the current Ranking Member, and has two  years left to serve in that capacity under Republican Caucus precedent. Senator Barbara Boxer (D-CA) will likely serve as Ranking Member.
In the House, Representative Fred Upton (R-MI) will continue to chair the Energy and Commerce Committee and Representative Whitfield (R-KY) will continue to chair the Energy and Power Subcommittee. They are likely to continue to pursue an “all of the above” energy agenda. With Representative Henry Waxman (D-CA) retiring, two Members are vying to serve as Ranking Member: Representatives Anna Eshoo (D-CA) and Frank Pallone (D-NJ). Representative Bobby Rush (D-IL) will likely continue as Ranking Member of the Energy and Power Subcommittee.With Representative Doc Hastings (R-WA) retiring, Representative Rob Bishop (R-UT) is likely to replace him as Chairman of the Natural Resources Committee. He will likely continue to pursue an “all of the above” approach to energy development on federal and tribal lands.Representative Peter DeFazio (D-OR), who had been expected to continue as Ranking Member, will instead likely take the Ranking Member slot on the Natural Resources Committee instead.

Do not anticipate substantial changes at the Department of Energy, the Department of the Interior, or the Environmental Protection Agency. Moreover, the composition of the Federal Energy Regulatory Commission (FERC) is pretty well settled. As a result
of an agreement reached between the White House and the Senate earlier this year, Commissioner Norman Bay will succeed current Chairman Cheryl LaFleur next spring. The Nuclear Regulatory Commission has in place only three commissioners, with two vacancies, and a third about to be created when the current Chairman steps down. The President has nominated two individuals to individuals to fill those slots, but the Senate has not acted on the nominations yet. In the lame duck session, Chairman Landrieu is expected to hold a hearing on the nomination of Colette Honorable to serve as one of the Commissioners, and to favorably report her nomination to the full Senate.

Washington News – Obama Administration/Congress

Washington News – Obama Administration/Congress

The President announced last Thursday and Friday sweeping executive action on immigration. Most notably, his plan expands deferred action to an estimated 5 million undocumented immigrants. This group includes parents of US citizens and lawful permanent residents who have resided the US for more than five years. These individuals would have to agree to pay taxes and pass criminal background checks. If they meet these criteria, they would be granted legal status for three years through deferred action. The President’s action also includes provisions for high-skilled workers in the US legally (or for those planning on entering the US legally). The administrative reforms include job portability for immigrants with employment-based petitions but who are unable to get visas due to low caps, a review of the permanent labor certification program, and guidance on the L-1B intra-company transferee visas. Republicans have sharply criticized the President’s executive order. House Speaker John Boehner said that these actions have obliterated any hope of bipartisan legislation in the next Congress. Soon to be Majority Leader, Mitch McConnell has promised action against the President. While both have ruled out a shutdown or utilizing the debt ceiling to get the Administration to reverse its policy, defunding agencies that would deal with these programs continues to be seriously considered (although visa fees make these types of programs self-sustaining). A number of Republican governors have also made public their plans to sue the President.

In addition to the President’s executive action on immigration, DHS and USCIS are issuing a number of proposed and final rules for legal immigrants. US Citizenship and Immigration Services (USCIS) will publish final rules that grant work authorization to dependent spouses of H-1B guest-workers if they are in the process of obtaining permanent residence through employment (spouses hold H-4 visas and are presently not able to accept employment). DHS Secretary Jeh Johnson issued a memorandum last week where he directs USCIS employees to coordinate with the Department of State on the issuance of green cards so to improve the system of determining when green cards become available to applicants. He also is urging USCIS to reform regulations to allow employment-based visa petitions to remain valid even when the applicant changes jobs or employers. Finally, Johnson’s memo calls for reforms to the OPT program, programs for immigrant entrepreneurs, PERM, U visas, and T visas.

There are a number of agenda items that require attention during the lame-duck session of Congress. Most pressing is funding the government after the current CR (passed before the election) expires December 11. On the week of December 8, an omnibus budget is expected to be revealed although there is no guarantee yet that it will receive a floor vote. While an omnibus bill remains a possibility, it is also likely that some agencies will receive funding for the year while others will be temporarily funded through CRs. It is also possible that Congress passes a CR to extend government funding into the new year, when Republicans control both houses of Congress. Regardless, Republican leadership is intent on avoiding another shutting down. In terms of a national defense authorization bill, the original Senate and House versions had a significant number of differences. However committees are negotiating and nearly all of these differences have been resolved. The bill is not expected to reach the floor until after Thanksgiving. Also, 50 tax breaks are set to expire at the end of the year. While the Senate’s EXPIRE act would renew most of these breaks through 2015, the House’s bill would make some of the breaks permanent. An agreement has not yet been reached. Finally, the Internet access tax ban expires on December 11. The Terrorism Risk Insurance Act and STELA – the Satellite TV law expires December 31. Outgoing Majority Leader Harry Reid will try to get as many nominations through as he can before the end of the year, but Loretta Lynch’s nomination for Attorney General will be dealt with in 2015.

Democrats and Republicans have elected leadership for the next session of Congress, and many committee chairs have been selected. Below are changes to chairmanships in the House. Senate committees remains in flux.


o   Agriculture: K. Michael Conaway (R-TX) will replace Frank Lucas (R- OK) as Chair

o   Armed Services: Mac Thornberry (R- TX) will replace Buck McKeon (R-CA) as Chair

o   Budget: Tom Price (R-GA) will replace Paul Ryan (R-WI) as Chair

o   Energy and Commerce: Frank Pallone (D-NJ) will replace Henry Waxman (D-CA) as the ranking member

o   Ethics: Charlie Dent (R-PA) will replace Mike Conaway as Chair (R-TX). Democrats have yet to select their ranking member.

o   Intelligence: Devin Nunes (R-CA) will replace Mike Rogers (R-MI) as chair

o   Natural Resources: Rob bishop (R-UT) will replace Doc Hastings (R-WA) as chair

o   Oversight and Government Reform: Jason Chaffetz (R-UT) will replace Darrell Issa (R-CA) as chair

o   Small Business: Steve Chabot (R-OH) will replace Sam Graves (R-MO) as chair

o   Transportation and Infrastructure: Peter DeFazio (D-OR) will replace Nick Rahall (D-WV) as the ranking member

o   Veterans’ Affairs: Corrine Brown (D-FL) will replace Mike Michaud (D-ME) as the ranking member

Secretary of Defense, Chuck Hagel is resigning from his position due to friction with the White House over its national security policy, including the Administration’s strategy in Syria and against ISIS/ISIL. Hagel will stay on until a successor is confirmed. Possible nominees include Ashton Carter (a former Deputy Defense Secretary), Michele Flournoy (a former undersecretary of defense), and Democratic Senator from Rhode Island – Jack Reed.

Energy and the Environment

Keystone XL pipeline approval failed to pass the Senate by one vote. Republicans expect to have enough support in the Senate come January to pass the 60 vote threshold. Congressional approval of the Keystone pipeline will be a priority for the Republican majorities in the House and Senate in 2015. The President has yet to indicate whether he will support any such legislation next year, although approval could be a bargaining point between the Administration and Congressional Republicans.

The Obama Administration has decided to delay a decision on quotas for using renewable fuels in gasoline and other products. The EPA made the announcement Thursday and are now a year late in establishing mandates for 2014. The Agency will instead establish retroactive 2014 requirements under the Renewable Fuel Standards in 2015 – the same time it establishes 2015 and 2016 quotas. The EPA could also end up waiving requirements or accept what was produced as meeting the mandate this year. Due to these delays, Congressional and court action are likely. Legislatively, Congress has tried to revise the mandates although nothing has made it to a vote yet. From a legal perspective, the American Fuel and Petrochemical Manufacturers has filed a notice of intent to sue the EPA. They are urging the agency to “take prompt action to promulgate the 2014 standards.”

The EPA has expressed concern over the number of petitions surfacing that seek to withdraw a number of states’ authority over their Clean Water Act permit programs. Presently, the EPA has 19 petitions asking the agency to withdraw state authority to operate their National Pollutant Discharge Elimination System permit programs. 46 states presently have been delegated authority to run this program as they have demonstrated to the EPA their ability to meet minimum federal requirements. However, under the law, groups are able to petition the EPA to suspend said authority if these requirements are not being met. The EPA has publicly stated its preference to act as a co-regulator with states as opposed to withdrawing entire programs from state jurisdiction.

On Thursday, the EPA issued a proposed rule that would establish national emission standards for brick, structural clay product, and clay ceramic manufacturing facilities. The proposal targets hydrogen fluoride, hydrogen chloride and a number of other air toxics. The EPA hopes to reduce the emissions of these air toxics by 440 tons annually. This proposed rule comes amidst a court-ordered deadline following a ruling from the DC Circuit Court of Appeals that found the EPA’s methods of establishing floors and ceiling for emission standards violated the Clean Air Act and created standards that were not rigorous enough.

This January, the Department of Interior will auction the rights to construct wind turbines off the Nantucket and Martha’s Vineyard shores. This would be the federal government’s largest competitive lease sale of offshore wind development, encompassing 742,000 acres (that will be sold off in four lots) that could produce up to 5 gigawatts of wind power. The sale would effectively triple offshore acreage available for wind energy. 12 pre-approved companies will participate in the auction.

The Bureau of Land Management has, for the first time, rejected a solar power plant proposal in Southern California that would have fallen outside land already designated for such purposes. The proposal was put forward by Iberdrola SA. BLM stated that the project would adversely affect wildlife and the ecosystem in the area.