UMRBA Update

June 1, 2001

Washington News 

• Drinking Water Grants Allotment---In the May 18, 2001 Federal Register, EPA published a notice of the new revised allocation of grants for Drinking Water State Revolving Funds (DWSRFs).  The allotment of DWSRF grant funds is based on each state's proportional share of the total state drinking water needs, as identified in the most recent Drinking Water Needs Survey.  Allocations for FY 1998-2001 had been based on 1995 data.  However, the new 1999 national survey, released in February 2001, changes many state allocations as a result of the data submitted by individual water systems, as well as refinements in the survey methodology.  The percentage of total national need for each of the UMR basin states increases in the new allocation formula.  Assuming an FY 02 appropriation of $823,185,000, as requested in President Bush's budget, the allotments for the five UMR states will be: Illinois ($29,064,700), Iowa ($14,299,600), Minnesota ($15,429,600), Missouri ($11,318,800), and Wisconsin ($15,423,400).  A copy of the Federal Register notice is available on EPA's web site at http://www.epa.gov/fedrgstr/EPA-WATER/2001/May/Day-18/w12579.htm.

• National Flood Insurance Program---The General Accounting Office (GAO) is in the process of conducting a review of the National Flood Insurance Program (NFIP).  While the final report is not scheduled for release until this fall, GAO submitted some of its preliminary results in a May 16 statement to the Senate Appropriations Subcommittee, as part of that panel's hearing on FEMA's FY 02 budget.  The preliminary results focus on the specific issue of measuring the performance of the NFIP.  In accordance with the Government Performance and Results Act (GPRA), FEMA has established various goals and strategies to determine the success of the NFIP, including increasing the number of insurance policies in force.  However, GAO has concluded that, "while these goals provide valuable insights into how well the NFIP’s mission of reducing flood-related losses is being carried out, they do not assess the degree to which the most vulnerable residents—those living in flood-prone areas—participate in the program. Capturing data on the numbers of uninsured and insured structures in flood-prone areas can provide FEMA with another indication of how effectively the program is penetrating those areas most at risk of flooding, whether the financial consequences of floods in these areas are increasing or decreasing, and where marketing efforts can better be targeted."  GAO also suggests that better data are needed on the number of structures in flood-prone areas, before participation rates can be used to measure the success of the NFIP.  Currently, such data are incomplete or inaccurate.  The GAO testimony is available on the GAO website at http://www.gao.gov/new.items/d01736t.pdf.

• Wetlands In-Lieu-Fee Mitigation---The General Accounting Office (GAO) recently released the results of its evaluation of the in-lieu-fee option for mitigating adverse impacts to wetlands, concluding that the efficacy of the approach is not at all clear.  Under the Clean Water Act, developers whose projects affect wetlands must mitigate for those impacts, if they cannot be avoided or minimized.  Developers may perform their own compensatory mitigation or pay third parties for mitigation, usually at locations away from the development site.  One of the options for third party mitigation is an in-lieu-fee arrangement, whereby the developer pays fees to a public entity or private nonprofit organization, which then use accumulated fees to establish wetlands.  In examining the use of in-lieu-mitigation in the Corps of Engineers' Section 404 permitting program, GAO found that 17 of the Corps' districts have established a total of 63 such arrangements.  (None of the three Upper Mississippi River districts currently use such arrangements, according to GAO.)  However, GAO found that "the extent to which the in-lieu-fee option has achieved its purpose of mitigating adverse impacts to wetlands is uncertain," noting that in many cases there has been no effort made to assess whether mitigation efforts have been ecologically successful.  GAO therefore recommends that EPA, in conjunction with the Departments of Army, Commerce, and the Interior, "establish criteria to determine the ecological success of mitigation efforts and develop and implement procedures for assessing success."  In its comments on the GAO report, the Department of Defense took issue with the recommendation, suggesting that instead of establishing criteria to determine ecological success, criteria should be established to determine "that wetlands functions have been adequately compensated."  The GAO report is available on GAO's web site at http://www.gao.gov/new.items/d01325.pdf.

• Delay of Arsenic Rule---In the continuing controversy over the arsenic drinking water rule, on May 22, EPA announced that it is delaying the effective date of the Clinton Administration's January 2001 rule.  The Clinton rule would have lowered the enforceable maximum contaminant level (MCL) for arsenic from 50 parts per billion (ppb) to 10 ppb.  In April, the Bush Administration announced its intent to seek independent reviews of the science and cost estimates supporting that standard.  EPA's May 22 announcement describes its plan for that review and delays the effective date of the Clinton-era rule until February 22, 2002 to allow time for the studies.  The National Academy of Sciences will be conducting the health science review and the National Drinking Water Advisory Council was asked to review the cost of compliance associated with the final arsenic rule.  The May 22 Federal Register notice is available on EPA's web site at http://www.epa.gov/safewater/ars/arsenic_extensionfr.html.

• Hydropower Licensing Reform in President's Energy Plan---On May 17, President Bush released his National Energy Plan based on the report of his National Energy Development Policy Group (NEDPG) led by Vice President Cheney.  The 105 recommendations include a wide variety of actions designed to increase domestic energy supplies, including hydropower generation.  The NEDPG acknowledges that the most significant constraint on expansion of U.S. hydropower generation is physical, meaning most of the best locations have already been developed.  However, "potential does remain for some increases in hydropower generation, and capacity can be optimized by adding additional turbines and increasing efficiency at existing facilities."  The NEDPG claims "the hydropower licensing process is prolonged, costly, and poses regulatory uncertainty."  The group thus recommends that "the President encourage the Federal Energy Regulatory Commission (FERC) and direct federal resource agencies to make the licensing process more clear and efficient, while preserving environmental goals."  In particular, it is recommended that the President "support administrative and legislative reform of the hydropower licensing process[,]...direct federal resource agencies to reach interagency agreement on conflicting mandatory licensing conditions before they submit their conditions to FERC for inclusion in a license[, and]...encourage FERC to adopt appropriate deadlines for its own actions during the licensing process."  The NEDPG report is available on the White House web site at http://www.whitehouse.gov/energy/.

• Farmable Wetlands Pilot Program---In the May 2 Federal Register, the USDA Commodity Credit Corporation published regulations for implementing the Farmable Wetlands Pilot Program under the Conservation Reserve Program (CRP).  The pilot program, which was authorized in the FY 01 Agriculture Appropriations Act, allows for enrollment of certain wetlands and buffer acreage into the CRP.  The pilot program applies to only six states, including Iowa, Minnesota, Montana, Nebraska, North Dakota, and South Dakota.  Enrollment under the pilot is limited to 150,000 acres in any one state.  The revised CRP regulations for the pilot program are available at http://fb-net.org/CRP/WetPilot.htm. 

New Bills

• H.R. 1750 "Clean Water State Revolving Fund Enhancement Act"---Amends the Clean Water Act to authorize annual appropriations of $5.4 billion for the state water pollution control revolving loan funds in FY 02-06.  Introduced May 8, 2001 by John Dingell (D-MI) and 29 others.

• H.R. 1751 "Water Infrastructure Improvement Act"---Amends the Clean Water Act to eliminate certain restrictions on the use of money from the water pollution control state revolving funds (SRFs).  Requirements that foods be used for secondary or more stringent treatment and limiting the amount used for nonpoint source management programs and related ground water protection activities would be eliminated.  Authorizes annual appropriations of $5.4 billion for the water pollution control SRFs in FY 02-06 and directs that these appropriations be allocated among the states based on relative need.  Also includes provisions related to minimum percentages for the states, a set-aside for innovative and alternative projects, discretionary deposits, and a set-aside for marine estuaries.  Introduced May 8, 2001 by John Dingell (D-MI) and 29 others.

• H.R.  1832 "Hydroelectric Licensing and Incentives Act"---Amends Federal Power Act provisions related to imposition of hydropower license conditions by federal land management and fisheries agencies.  Federal agencies would be required to consider various factors before imposing license conditions, including the economic impacts of those conditions, effects on other beneficial public uses, and compatibility with other license conditions.  In addition, federal agencies would be required to document their decision making and would generally have no more than one year to develop their conditions.  The bill also authorizes financial incentives for new hydroelectric production facilities at existing dams and conduits and for increased efficiency at existing non-federal hydropower facilities.  It also directs federal agencies to identify opportunities to increase production at existing federal hydropower facilities.  Introduced May 15, 2001 by Edolphus Towns (R-NY) and 13 others.

• H.R. 1938 "Conservation Enhancement Act"---Extends and modifies several conservation programs administered by the Natural Resources Conservation Service.  Authorizations for the Conservation Reserve Program (CRP), Wetlands Reserve Program (WRP), Environmental Quality Incentives Program (EQIP), Wildlife Habitat Incentives Program (WHIP), and Environmental Conservation Acreage Reserve Program (ECARP) would be extended through 2012.  Increases annual authorized appropriations for ECARP to $500 million.  Increases the WHIP cap to $200 million and directs that $40 million be directed to pilot programs to prevent listing of endangered species and preserve critical habitats.  Makes several modifications to EQIP, including adding confined animal feeding operations to the program priority list and limiting expenditures in conservation priority areas to no more than 50 percent of the EQIP total.  Directs the USDA to seek full enrollment (i.e., 36.5 million acres) for the CRP and authorizes an additional 10 million CRP acres for pilot programs to address local and regional conservation issues.  There would be at least 10 CRP pilot programs, with no one program eligible for more than 1 million acres.  CRP modifications also include provisions for expanded haying and grazing and protection of enrollees' farm program base.  The WRP maximum enrollment would be increased to 2.5 million acres, up to 1 million of which could be enrolled using permanent easements.  The remaining authorized acreage could be enrolled using 30-year easements or restoration cost-share agreements.  The bill also expresses the sense of Congress that at least $1.0 billion should be appropriated annually to NRCS for technical assistance to implement the various conservation programs.  Introduced May 22, 2001 by Jerry Moran (R-KS) and three others.

• H.R. 1949 and S. 932 "Conservation Security Act"---Amends the 1985 Food Security Act to establish a Conservation Security Program designed to encourage conservation on agricultural land that is in production.  Conservation goals include protecting soil, water, and air quality; protecting habitat and species diversity; preserving wetlands; reducing greenhouse gas emissions; and managing invasive species.  To receive any benefits other than technical assistance under the program, participants would be required to have an approved conservation security plan that identifies specific conservation practices and a schedule for their implementation.  To the maximum extent practicable, the plans would also address state and local conservation priorities.  Landowners with approved plans could enter into 5 to 10-year, renewable conservation security contracts with USDA.  The bill identifies three tiers of eligible practices and contract duration and payment amounts would be determined by the tier(s) of practices called for in a landowner's contract.  Annual payments would be capped at $20,000 for tier 1 practices, $35,000 for tier 2 practices, and $50,000 for tier 3 practices.  In addition to basing payments on the practices implemented, the legislation calls on USDA to incorporate outcome-based incentives in the contracts.  Participants in the Conservation Security Program who are already enrolled in other USDA conservation programs would have the option of converting entirely to the Conservation Security Program.  However, land enrolled in the Wetlands Reserve Program and most land enrolled in the Conservation Reserve Program would not be eligible for enrollment in the Conservation Security Program.  The bill authorizes NRCS to use non-USDA employees to assist with education, outreach, monitoring, and evaluation related to the program.  H.R. 1949 was introduced May 22, 2001 by John Thune (R-SD) and 15 others, including Leonard Boswell (D-IA), Tammy Baldwin (D-WI), Jim Oberstar (D-MN), Jo Ann Emerson (R-MO), John Shimkus (R-IL), Jim Ramstad (R-MN), and Betty McCollum (D-MN).  S. 932 was introduced May 22, 2001 by Tom Harkin (D-IA) and 16 others, including Mark Dayton (D-MN), Herb Kohl (D-WI), Paul Wellstone (D-MN), and Richard Durbin (D-IL). 

• H.R. 2021 "Flood Loss Reduction Act"---Directs the Corps of Engineers and the Federal Emergency Management Agency to develop a flood loss reduction plan for the Upper Mississippi River floodplain within six months of enactment.  The two agencies would be required to develop the plan collaboratively with state and local interests and to consider both structural and non-structural measures.  The authority to develop this plan would replace the UMR Comprehensive Plan authorized in Section 459 of the 1999 Water Resources Development Act.  Authorized annual appropriations for the Corps' Flood Mitigation and Riverine Restoration Program (aka Challenge 21) would be increased to $100 million annually through 2010.  In addition, the following counties would be added to the list of priority areas for the program, which emphasizes non-structural approaches to reducing flood damages:  Calhoun and Rock Island Counties, Illinois; Dubuque and Scott Counties, Iowa; Saint Charles and Saint Louis Counties, Missouri; and Buffalo, Crawford, and La Crosse Counties, Wisconsin.  The bill also amends the Stafford Act to increase the percentage of federal disaster funds allocated to hazard mitigation from 15 percent to 25 percent.  This amount would be increased to 30 percent for states that meet certain criteria.  The measure directs the Corps and FEMA to develop an annual ranking of authorized flood damage reduction and predisaster hazard mitigation projects.  Rankings would be based on the extent to which projects address repetitive loss structures, include non-structural features, and restore natural rivers and floodplains.  The Corps and Office of Management and Budget would be required to consider the list in developing annual budget requests.  Introduced May 25, 2001 by Ron Kind (D-WI), Jim Leach (R-IA), and 15 others, including Tammy Baldwin (D-WI), Thomas Barrett (D-WI), Leonard Boswell (D-IA), Lane Evans (D-IL), Gil Gutknecht (R-MN), Kenny Hulshof (R-MO), Bill Luther (D-MN), Betty McCollum (D-MN), Thomas Petri (R-WI), and John Shimkus (R-IL).

• S. 951 "Coast Guard Authorization Act"---Authorizes annual Coast Guard appropriations for FY 00-02.  The Coast Guard has been operating without an annual authorization since FY 00.  The FY 02 authorization for the Coast Guard totals $5.2 billion under the bill.  In addition, the measure includes a variety of personnel provisions and would authorize FY 02 active duty staffing levels of 45,500, an increase of 5,500 over FY 00.  Several marine safety-related reporting requirements and merchant mariner documentation provisions would be modified.  In addition, the Coast Guard would be authorized to borrow up to $100 million from the Oil Spill Liability Trust Fund (OSLTF) in emergencies when response resources are inadequate.  As with other expenditures from the OSLTF, efforts would be made to recover expenditures from the responsible party(ies).  The bill also extends the authorizations for several advisory groups, including the Navigation Safety Advisory Council, the National Boating Safety Advisory Council, and the Towing Safety Advisory Committee.  All three of these groups would be extended through FY 05.  The Coast Guard would be directed to review its existing harbor safety committees and develop one or more prototypes for establishing such committees in more small- and medium-sized ports.  Introduced May 24, 2001 by Olympia Snowe (R-ME) and 7 others.  

• S.J.Res. 14 Disapproves Arsenic Rule Delay---Provides for Congressional disapproval of EPA's May 22, 2001 Federal Register rule delaying the effective date of the arsenic in drinking water standard originally published on January 22, 2001.  EPA's May 22 rule would delay the effective date of the arsenic standard to February 22, 2002.  S.J.Res. 14 would nullify EPA's delay.  Introduced May 22, 2001 by Barbara Boxer (D-CA).

Committee Action

• Regulation of Animal Feeding Operations--- On May 16, the House Water Resources and Environment Subcommittee held a hearing on management options for concentrated animal feeding operations (CAFOs) and EPA's new proposed CAFO regulations.  CAFOs are specifically identified in the Clean Water Act as point sources of pollution subject to regulation.  Under EPA's proposed rule, which is open for public comment through July 30, changes in the definition of a CAFO would increase the number and type of livestock operations that require a permit.  EPA estimates that there are currently 2,000-3,000 CAFO operations nationwide that are under permit and approximately 13,000 facilities subject to permit.  EPA believes that up to 40,000 animal operations would be subject to permit under the new rules and that compliance costs will range from $850 million to $940 million per year.  At the May 16 hearing, the subcommittee heard from farmers and state environmental agency leaders, most of whom opposed the new EPA regulations.  Those in opposition to the new rules variously argue that EPA has overextended its authority to regulate CAFOs and significantly underestimated both the number of CAFOs that would require permits and the cost of compliance with the new regulations.  In addition, they contend that the new rule is unnecessarily duplicative of state programs and that states are in a better position to address the issue with a more flexible combination of regulatory and voluntary approaches.  In his testimony, Russell Harding of the Michigan Department of Environmental Quality called EPA's approach "wrong-headed" and said it  "values process over performance."  In contrast, Jane Nishida of the Maryland Department of the Environment described her state's strong support for EPA's efforts, arguing that "a national approach to the regulation of CAFOs is essential to ensure consistency among the states.  Without a national approach, we will create a situation where large animal operators may move from state to state to find those with the least degree of state regulatory authority."  Background on the CAFO issue and copies of the May 16 testimony are available on the subcommittee web site at http://www.house.gov/transportation/water/05-16-01/05-16-01memo.html.

• Agricultural Conservation Programs---On May 23, the House Subcommittee on Conservation, Credit, Rural Development and Research held the first in a series of hearings devoted to USDA conservation programs.  These hearings are being held in preparation for reauthorization of the Farm Bill.  Witnesses at the May 23 hearing included USDA officials and representatives of various producer groups, including the American Farm Bureau Federation, the American Corn Growers Association, and the National Cattlemen's Beef Association.  Tom Weber, NRCS Deputy Chief of Programs,  acclaimed conservation programs as "proven winners for the farmer and the country as a whole."  He cited the high demand and backlog of applications for such programs as EQIP, WRP, and CRP as an indication of their popularity and success.  Likewise, producer groups praised the voluntary incentive-based approach of USDA's conservation programs and noted that their popularity demonstrates the agricultural community's commitment to environmental stewardship.  While the recommendations for specific program changes differed, there was widespread support expressed for increased funding, enhanced flexibility, and broader access for more types of producers.  With regard to CRP, it was recommended that emphasis be placed on buffer strips and filter strips, rather than entire fields.  In general, there was a preference for keeping land in production and providing incentives for producers to adopt conservation practices.  While there was broad-based support for USDA conservation programs, the representatives of producer groups all agreed that EQIP, in particular, needs reform.  The Farm Bureau urged that EQIP be redesigned so that it helps both crop and livestock producers comply with federal and state environmental regulations. 

The House Conservation Subcommittee has scheduled additional hearings on conservation programs for June 6 and 9.  Witness statements from the May 23 hearing are available on the House Agriculture Committee's web site at http://agriculture.house.gov/hearings/testimony.htm.

• Port and Maritime Transportation Congestion---On May 23, the House Subcommittee on Water Resources and Subcommittee on Coast Guard and Maritime Transportation held a joint oversight hearing on port and maritime transportation congestion.  Delays and congestion on the Upper Mississippi River (UMR) were specifically addressed by two of the witnesses.  Tim Burrack, a representative of the National Corn Growers Association, argued that congestion on the UMR reduces U.S. competitiveness in the world market and hurts the American farmer by reducing the price for grain.  Citing a Texas A&M study commissioned by the corn growers, Burrack explained that Midwestern grain farmers will lose $364 million per year by 2020, if improvements are not made to UMR locks.  Dr. Lester Lave, Chair of the National Research Council's recent review of the Corps' UMRS navigation study, also testified.  He promoted congestion management, rather than capacity expansion, as the solution to crowding and delays.  In particular, he explained that congestion management techniques, such as congestion tolls or service schedules, can prevent gridlock, allow the infrastructure to operate at peak capacity, and give preference to high value customers.  Other panelists included representatives of the Corps of Engineers, Maritime Administration, Coast Guard, American Association of Port Authorities, World Shipping Council, and National Waterways Association.  Testimony is available at http://www.house.gov/transportation/ctisub2.html.

• Coast Guard Authorization---On May 24, the House Transportation and Infrastructure Committee filed its report (H.Rpt. 107-79) on H.R. 1699, authorizing Coast Guard appropriations for FY 2002.  The bill authorizes $4.4 billion for discretionary programs of the Coast Guard, including $3.7 billion for operating expenses, $659 million for acquisition and capital projects, $22 million for research, $15 million for bridge alterations, and $17 million for environmental compliance.  In FY 2001, appropriations for these programs totaled $3.7 billion.

• Recreational Boating Safety---The House Coast Guard and Maritime Transportation Subcommittee held a May 15 hearing on recreational boating safety.  Among those testifying was Coast Guard Rear Admiral Terry Cross, who described the educational, regulatory, and enforcement activities of the National Recreational Boating Safety Program.  In particular, Cross called establishment of the State Recreational Boating Safety Grant Program "perhaps the most important accomplishment of the Federal Boat Safety Act," whose 30th anniversary was the catalyst for the hearing.  Similarly, the President of the National Association of State Boating Law Administrators also praised the state grant program as " a shining example of an ideal State/Federal partnership."  The Association is calling for more stable funding and a comprehensive nationwide needs assessment for boating safety.  Testimony from the May 15 hearing can be found at http://www.house.gov/transportation/ctisub2.html.

• FEMA Appropriations---At a May 16 hearing in the Senate Appropriations Subcommittee on VA-HUD-Independent Agencies, FEMA Director Joe Allbaugh described his goals and priorities for FY 02.  With regard to mitigation, Allbaugh said, "I am here to reassure you that mitigation will not stop....Locally initiated mitigation activities make sense and, in fact, should be the rubber band holding together all our various mitigation programs.  However, we must better quantify the cost-benefit of the Federal dollars spent in this effort."  In particular, Allbaugh stressed the importance of having state and local governments "take a more appropriate degree of fiscal responsibility to protect themselves" and cautioned that "federal disaster assistance may have evolved into both an oversized entitlement program and a disincentive to effective state and local risk management."  Allbaugh also described FEMA's intent to develop objective criteria for disaster declarations, the Administration's proposal to budget for disasters up front rather than using emergency supplemental appropriations, and proposed reforms to the National Flood Insurance Program.  Allbaugh's testimony is posted on the Senate Appropriations Committee web site at http://www.senate.gov/~appropriations/vahud/testimony/fema02.htm.

Future Committee Schedules

• USDA Conservation Programs---In preparation for reauthorization of the Farm Bill, the House Agriculture Subcommittee on Conservation, Credit, Rural Development and Research will continue its series of hearings on conservation programs June 6 and June 9.  Conservation groups, local conservation districts, and state agriculture agencies are expected to testify at the June 6 hearing.  The June 9 hearing will be a field hearing in Weatherford, Oklahoma.

• EPA FY 2002 Appropriations---The Senate VA, HUD, and Independent Agencies Appropriations Subcommittee will hold a hearing on EPA's proposed budget on June 13.

River Basin News

• Grain Export Projections---Professor Phillip Baumel of Iowa State University has authored a report arguing that two models commonly used to project U.S. grain exports consistently overestimate those exports.  The Minneapolis-based Institute for Agriculture and Trade Policy (IATP) commissioned Baumel to conduct the study, "How U.S. Grain Export Projections from Large Scale Agricultural Sector Models Compare with Reality," which examines the USDA Agricultural Baseline and the Food and Agriculture Policy Research Institute (FAPRI) Agricultural Baseline.  The FAPRI model is a federally funded joint effort by Iowa State University and the University of Missouri.  In comparing previous export projections from the models with actual export levels in recent years, Baumel found that the models tended to over predict exports.  According to Baumel, both models were developed to predict the incremental impacts of changes in agricultural policy on farm income, production, and exports and are not designed to project absolute export levels.  Baumel maintains that "the Corps of Engineers, agribusiness, and farm organizations use these projections to make business and infrastructure decisions.  It turns out that they are relying on models that have a tendency to project increasing exports, even in the face of a 20-year downward trend in actual exports."  Baumel was also a member of the National Research Council panel that recently reviewed the Corps' UMRS navigation study.  Baumel's report on export projections is available on IATP's web site at http://www.iatp.org/.

For more information regarding Congressional action and links to related sites, visit http://thomas.loc.gov/.

The UMRBA Update is produced by the staff of the Upper Mississippi River Basin Association, an organization formed by the Governors of Illinois, Iowa, Minnesota, Missouri, and Wisconsin to represent the states' common water resource interests.  Please direct questions and comments to bnaramore@umrba.org.