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2002 Farm Bill (P.L. 107-171): Energy
Related Provisions
The Farm Security and Rural Development Act of 2002
(P.L. 107-171), signed into law May 2002, was the first Farm
Bill to contain an energy title. This legislation was
designed to promote the development of ag-based renewables by
encouraging federal procurement of biobased products,
providing grants and loans for renewable energy projects, and
funding vital research and development in bioenergy.
The following summary provides a brief synopsis of each
provision.
Please
contact Jetta Wong at 202-662-1885 or jwong@eesi.org
for further information.
Federal Procurement of
Biobased Products (Sec. 9002)
Provision: Sec. 9002 makes available $1 mil/yr (FY02-07)
and requires
Federal agencies to purchase biobased products that meet
price, availability, and performance standards; provides for a
voluntary labeling program of certified “Biobased
Products;” and provides financial assistance for testing of
biobased products by manufacturers.
Status: The program has gotten off
to a very slow start, but after four years the final rule on
the first six biobased products was released in March 2006.
Federal agencies now can use this rule to direct their
procurement towards these six products.
The administration’s FY07 budget proposal includes
$2.5 million for this program.
Biodiesel Fuel Education Program (Sec. 9004)
Provision:
Sec. 9004 makes available ($1
mil/yr FY03-07) in grants to conduct a biodiesel fuel
education program. The
intent of the program is to educate government and private
vehicle fleet managers and the public about the benefits of
biodiesel in order to increase demand for this renewable fuel.
Status: With this program USDA
funds the National Biodiesel Board (NBB) and the
University
of
Idaho
to work on the National Biodiesel Education program. The
administration’s FY07 budget proposal includes $1 million
for this program.
Renewable Energy System
& Energy Efficiency Improvements (Sec. 9006)
Provision: Sec. 9006 provides $23 mil/yr (FY03-07) in
grants, loans, and loan guarantees to farmers, ranchers, and
rural small businesses for the development of renewable energy
projects and energy efficiency improvements. The program
is designed to help farmers become net energy producers of
on-farm renewable energy.
Status: With the passage of the
Deficit Reduction Act of 2005 this programs authorization was
cut to $3 million in discretionary funding for FY07.
Every year the Administrations budget has cut funding
for this program and every year proponents of this program
have worked with Congress to fully restore funding to it.
In 2005 a total of 388 grant applications
requesting over $62 million were received from 43
states. Only 150 applicants from 32 states were awarded
funds. The
administration’s FY07 budget proposal includes $10.2 million
for this program.
Biomass Research
and Development Act of 2000 (Sec. 9008)
Provision:
Sec.
9008 reauthorizes and funds the Biomass Research and Development
Act of 2000 at $5 mil FY02, $14
mil/yr FY03-07. The
Biomass Research and Development Act of 2000 requires the
coordination of federally-funded biomass research.
This is to be facilitated by the “Interagency Biomass
R&D Board,” which will report to the “Biomass Research
and Development Technical Advisory Committee.”
The Biomass R&D Technical Advisory Committee is
then required to make recommendations on the strategic
direction of research being funded by the U.S. Department of
Energy (DOE) and the U.S. Department of Agriculture (USDA).
Status:
Since the passage
of the 2002 farm bill the Biomass Research and Development Act
of 2000 had been reauthorized twice. The last and current
authorization may be found in the Energy Policy Act of 2005 (P.L.
109-190), the authorization is $200 mil/yr from FY06-15. The
administration’s FY07 budget proposal includes only $12
million for this program.
Commodity Credit
Corporation Bioenergy Program (Sec. 9010)
Provision: Sec.
9010 provides up to $115.5 million for FY 2003 and up to $150
million annually for FY's 2004-06 to continue
the work of the Commodity Credit Corporation (CCC) Bioenergy Program, which
reimburses ethanol and biodiesel producers for the purchase of
commodities to expand existing production.
The
Secretary of Agriculture makes payments (through the Commodity
Credit Corporation) to eligible producers to encourage
increased purchases of eligible commodities (energy feedstocks).
Payments to eligible producers are based on the increase in
quantity of bioenergy they produce during a fiscal year over
the quantity they produced during the preceding fiscal year.
Status: The list of eligible
feedstocks was expanded in the 2002 Farm Bill to include
animal byproducts and fats, oils and greases (including
recycled fats, oils, and greases). The level of benefits paid
for base production will be gradually phased down from 50% in
2003, to 30% in 2004, 15% in 2005 and eliminated in 2006. The
administration’s FY07 budget proposal did not include funds
for this program.
Authorized Programs Subject to Appropriations:
Biorefinery
Development Grants (Sec. 9003):
Provision:
Creates a grant program to help establish facilities for the
conversion of biomass into electricity, fuels, chemicals, and
other marketable products.
No regulations are currently being developed.
Status:
The administration has never included funding for this program
and no money has ever been appropriated for it.
Energy Audit and Renewable Energy Development Program
(Sec. 9005):
Provision:
Establishes a cost-share grant program to help farmers
identify and assess their renewable energy resources, and
energy efficiency improvement potential.
No regulations are currently being developed.
Status:
The administration has never included funding for this program
and no money has ever been appropriated for it.
Carbon Sequestration Research (Sec. 9009):
Provision: Provides discretionary
authority for competitive grants for research on carbon fluxes
and exchange of greenhouse gases from agriculture. It
authorizes appropriations as necessary to carry out this
provision for FY’s 2003-07.
Section 9009 duplicates currently existing authority
for USDA.
Status: Funding
for this program was authorized, but no money has ever been
requested by the administration nor has money been
appropriated by Congress.
Other Energy Provisions in the Farm Bill:
Value-Added
Agricultural Market Product Development Grants Program (Sec.
6401): An existing
program amended to allow renewable energy systems to qualify
for grants.
Provision: Sec.
6401, which is part of the Rural Development title of
the 2002 Farm Bill, was allocated
$40 million per year in mandatory funding.
The program was created to spur development of
new uses for agricultural products, and the 2002 Farm Bill
amended the program to include renewable energy.
Status:
Every year the Administration’s budget request has
cut funding for this program and every year proponents of this
program have worked with Congress to restore funding to it,
except for FY06 where funding was cut to $20.5 million.
In 2005 a total of 381 grant applications were
received by USDA; 171 projects in 42 states were funded for a
total of $14.6 million.
Conservation
Security Program (Sec. 2001)
Provision: This voluntary program
provides financial and technical assistance to promote
conservation and improvement of soil, water, air, energy,
plant and animal life, and other conservation purposes. The
2002 farm bill as amended allows
loans and loan guarantees for wind systems and methane
digesters.
Status:
The administration’s proposed budget for FY07 caps this
program at $342 million, a $30 million cut compared to the
Congressional Budget Office’s newly released estimate of
full funding of $372 million.
Conservation
Reserve Program (Sec. 2101)
Provision: This voluntary program
continues annual rental payments and cost-share assistance to
establish long-term, resource conserving ground covers on
eligible farmland. The 2002 farm bill amended
the program to allow wind turbines and biomass harvesting on
CRP lands where consistent with soil, water, and wildlife
habitat goals of the CRP program.
Status:
In 2005 payments of $1.7 billion went to participating
producers, allowing producers to earn an average of $4,143 per
farm enrolled.
Environmental Quality Incentives
Program (Sec. 2301)
Provision:
This is a voluntary conservation program for farmers and
ranchers that promote agricultural production and
environmental quality through financial and technical help to
assist eligible participants install or implement structural
and management practices on eligible agricultural land
including anaerobic digesters.
Status:
The administration’s proposed budget for FY07 scaled back
this program by $270 million, from $1.27 billion to $1.0
billion.
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