EPA Avoids Cuts, Most Riders in Omnibus Bill

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By David Schultz, Patrick Ambrosio, Amena H. Saiyid, Ari Natter, Alan Kovski, Pat Rizzuto, Rachel Levenand Rebecca Kern

Dec. 16 — Congress spared the Environmental Protection Agency from deep spending cuts it had considered earlier this year and also omitted almost all of the proposed policy riders aimed at the agency, in a $1.15 trillion omnibus spending bill unveiled Dec. 16.

Funding for the EPA for this fiscal year would remain unchanged from the prior fiscal year under the bill (H.R. 2029), which is the product of weeks of intense, closed-door negotiations between Democratic and Republican leadership in Congress and the White House.

The Interior Department, the Energy Department and other federal agencies that work on environmental issues would see flat or slight increases to their funding under the omnibus bill.

Though Congress debated adding dozens of new policy riders to the bill that would have blocked the EPA from implementing key environmental regulations, almost none of them made it into the final version of the bill.

One notable exception was the inclusion of a rider that would lift a decades-long ban prohibiting U.S. companies from exporting crude oil (See related story).

However, even the environmental riders that had been considered most likely to be included just weeks ago, such as a provision blocking the EPA from implementing its Waters of the U.S. rule, were left out of the final package.

Riders

The bill does contain some riders that had been attached to prior years' omnibus spending packages. These include provisions that would block the Endangered Species Act listing of the sage grouse and prevent the EPA from regulating lead in ammunition under the Toxic Substances Reform Act.

But the lack of new riders on the bill came as a surprise to many who had been closely following the appropriations process throughout 2015 (233 DEN A-1, 12/4/15).

Several Democratic aides told Bloomberg BNA that Republicans abandoned many of these riders as it became clear that Republican leaders in the House would need to rely on Democratic votes to pass the omnibus bill, with many of the most conservative Republicans vowing to vote against any spending package regardless of what it contained.

Evidence of Compromise

Patricia Sinicropi, senior legislative director with the National Association of Clean Water Agencies, said the omnibus represents a true compromise between congressional Republicans and the Obama administration, which also didn't get anything close to what it had requested in its proposed budget earlier this year (22 DEN B-1, 2/3/15).

“One party doesn't get its way in D.C.,” Sinicropi told Bloomberg BNA. “That should be how this process works. One party offers their agenda, the other party offers their agenda, then we meet somewhere in the middle.”

The omnibus bill doesn't include a policy rider to delay a long-awaited rule intended to protect streams from coal mining, one that was highly sought after by some Republicans and feared by some Democrats. Instead, it would require the agency to work with states on developing the rule (RIN 1029-AC63).

EPA Funding

The omnibus bill would fund the EPA at $8.14 billion for the 2016 fiscal year, an identical figure to its 2015 funding level.

(Click image to enlarge.)

DER graphic 12/17/2015

On the one hand, flat funding levels for EPA while other agencies are slated for an increase may seem like a disappointment. However, the omnibus bill appears much more favorable to the agency when viewed through the context of what might have been.

Federal spending bills reported out of the House and Senate Appropriations Committees earlier this year would have slashed the EPA's budget by more than $700 million (H.R. 2822/S. 1645).

Those bills were ultimately scrapped after Democrats forced Republicans to agree to a new budget framework that raised the sequester-level spending caps on federal spending (208 DEN A-14, 10/28/15).

Groups that rely on funding from the EPA were relieved that those spending cuts disappeared but said they were disappointed that Congress isn't providing more money to the agency to implement its new regulations, such as the Waters of the U.S. rule, the Clean Power Plan, the new ozone standards and others.

“It's clear that Congress in the omnibus is making an intentional choice to not resource those initiatives,” Alexandra Dunn, executive director of the Environmental Council of the States, told Bloomberg BNA. “Flat funding does not keep up with the cost of doing business.”

Climate, Air Programs

The omnibus would leave funding for the EPA's climate and air programs mostly flat compared to fiscal 2015, though a few grant programs would receive a boost.

The bill would provide $50 million in funding for grants awarded under the Diesel Emissions Reduction Act. The DERA program received $30 million in fiscal 2015.

The omnibus bill also would double the amount of available targeted airshed grants, which are awarded to nonattainment areas that have the most serious ozone and fine particulate matter pollution issues. That grant program would receive $20 million under the omnibus, compared to $10 million in fiscal 2015.

Bill Becker, executive director of the National Association of Clean Air Agencies, told Bloomberg BNA that he was disappointed the politically popular DERA program received an increase in funding but programs dedicated to implementing the EPA's Clean Power Plan did not.

“No matter what one thinks about the Clean Power Plan,” Becker said, “until or unless it is rejected by the courts, it is the law of the land, one that is a federal mandate that we've not been provided any funding for.”

Water

The wastewater and drinking water utility sector were closely monitoring the omnibus bill to see how congressional appropriators would fund the state revolving funds. That is because the White House, in a shift away from its past water budget-related priorities, had sought less funding for the clean water state revolving fund and more for the drinking water fund (22 DEN B-4, 2/3/15).

Ultimately, Congress funded the clean water state revolving fund program at $1.39 billion, down $55 million from the previous year and $277 million more than the White House requested. Congressional appropriators funded the drinking water state revolving fund at $863.2 million, down $43 million from the prior year and $322 million from the White House request.

Julia Anastasio, executive director at the Association of Clean Water Administrators, told Bloomberg BNA she was glad that the clean water state revolving fund didn't get a “shorter haircut” but said that states are “struggling to keep up with existing Clean Water Act requirements and new mandates that are being added.”

The National Association of Clean Water Agencies, which represents publicly owned wastewater treatment plants, was monitoring the legislation to see whether a policy rider prohibiting combined sewer overflows into the Great Lakes would survive the negotiation process.

It did, according to NACWA's Sinicropi, but only in a heavily diluted version.

“We were able to beat that back,” Sinicropi told Bloomberg BNA. “Overall I think it's a win for ratepayers in the Great Lakes.”

Chemicals and Science Reviews

The omnibus would provide $92.5 million for the EPA's chemicals and endocrine disruptor work, the same as the agency received in fiscal year 2015.

An explanatory statement filed alongside the omnibus bill would require the agency to develop a policy statement on science quality and integrity and conflicts of interest that would apply to its Science Advisory Board, or SAB.

That draft policy, a second policy describing how the SAB's members would be selected and balanced, and a statement describing eligibility requirements for SAB service would have to be submitted to the Government Accountability Office within 90 days of the omnibus becoming law.

Other Agencies

The omnibus bill provides increases for several Interior Department agencies. The National Park Service would get about $1.24 billion, up $237 million from fiscal year 2015; the Bureau of Land Management would get $1.2 billion, up $117 million; and the U.S. Fish and Wildlife Service would get $1.5 billion, up $68 million.

Appropriators addressed concerns about protections for greater sage grouse in two ways. The bill directs $60 million of BLM funds and $3.25 million of FWS funds to be used for sage grouse conservation, while at the same time it bars the FWS from listing the species for protections under the Endangered Species Act through a policy rider that was also attached to the fiscal year 2015 spending bill.

Water infrastructure spending is given a boost through the U.S. Army Corps of Engineers. It would receive $5.99 billion, up $535 million from fiscal 2015. That would include increases in spending on harbors and inland waterways.

The Land and Water Conservation Fund would be reauthorized for three years, with a requirement that more than 50 percent of the spending be directed to state and local recreation, conservation and battlefield protection programs.

On the hazardous materials transportation front, the bill would require the creation within one year of a rule expanding applicability of comprehensive oil spill response plan requirements. The Pipeline and Hazardous Materials Safety Administration has already begun a rulemaking (RIN 2137-AF08) on oil spill response planning and notification that is expected to be proposed in April, according to department documents.

The bill also would slightly increase fiscal year 2016 funding levels for PHMSA to $252 million, up from the prior fiscal year's levels of $244.5 million.

OSMRE Funding

The omnibus would allocate $123.3 million for the Office of Surface Mining Reclamation and Enforcement's regulation and technology activities and $27.3 million for its execution of abandoned mine activities, roughly level with the prior fiscal year's funding. It also includes a number of riders related to mining and funding similar to that requested by the Obama administration for its coal community revitalization plan (see related story).

The omnibus would allocate $990 million to the Nuclear Regulatory Commission, which is a decrease from the $1.03 billion the administration requested in its budget request.

Additionally, the omnibus bill would allocate $319.8 million to the Federal Energy Regulatory Commission, the same amount that the administration requested. In the budget request, the administration said the funding would support 1,480 full-time-equivalent positions at FERC.

For the Energy Department, the omnibus bill would hold funding at $29.7 billion, including $2.1 billion for the Office of Energy Efficiency and Renewable Energy, $986 million for nuclear energy programs and $632 million for fossil fuel research and development.

The bill also would allow at least $160 million in funding for ”clean coal” power plants to be shifted to projects that have “reached financial close or have otherwise secured funding sufficient to construct,” in a move seen benefiting Southern Co. Southern's 582-megawatt carbon capture and storage technology project in Kemper County, Miss., would qualify for such funds under the language.

Other energy highlights in the bill include a rider prohibiting the Army Corps of Engineers from redefining “fill material” that would be continued in fiscal 2016, a win for the mining industry.

That measure is supported by organizations representing mining companies such as Peabody Energy Corp. and Alpha Natural Resources Inc., which fear a revised definition could force mountaintop removal mining activities to be regulated under a more stringent section of the Clean Water Act.

What's Next

After two short-term extensions of the government funding deadline past the end of the 2015 fiscal year, Congress is widely expected to extend the deadline for a third time to Dec. 22.

The office of House Speaker Paul D. Ryan (R-Wis.) told Bloomberg BNA that a vote on the omnibus bill will take place in the House on the morning of Dec. 18, which would set up a vote in the Senate as early as later that same day.

Passage of the omnibus bill would fund the federal government through Sept. 30, 2016.

To contact the reporter on this story: David Schultz in Washington at dschultz@bna.com

To contact the editor responsible for this story: Larry Pearl at lpearl@bna.com

For More Information 
A copy of the explanatory statement accompanying the bill's EPA and Interior sections is available at http://docs.house.gov/meetings/RU/RU00/20151216/104298/HMTG-114-RU00-20151216-SD008.pdf.