As expected, Congress adjourned this week without completing work on several key pieces of legislation. As a result, the House and Senate are expected to reconvene in a lame duck session the week of November 15 and resume consideration of these measures. This alert provides an overview of the status of the major legislative initiatives still pending and looks at the feasibility of further action during the lame duck session.

On September 27, Congress passed a Continuing Resolution (H J Res 107) to fund the government at FY2004 levels through November 20. Prior to leaving town this week, Congress approved a total of $16.5 billion in supplemental emergency disaster and drought assistance and passed the Defense, District of Columbia, Military Construction (which includes provisions for the Alaska Natural Gas pipeline), and Homeland Security appropriations measures. This leaves nine spending bills for consideration in the lame duck session. Two scenarios for completing work on the FY2005 spending bills are likely:

(1) When Congress reconvenes in November they may consider an omnibus appropriations package to wrap up the remaining spending measures before adjourning sine die.
(2) Alternatively, Congress may choose to pass an additional continuing resolution to fund the federal government at FY2004 levels until early 2005 when the 109th Congress can complete action on the remaining spending measures.

The outcome of the November election will almost certainly impact the prospects for completing action on the FY2005 spending bills in a lame duck session. A change in the control of the Administration or Congress could embolden Democrats to delay final action until the 109th Congress. If Republicans retain a majority in the Senate, they may press for passage of an omnibus bill this year. In addition, both the Republican House and Senate appropriations chairmen are giving up their committee gavels in January and are eager to leave on a positive note by completing the FY2005 appropriations process this year.

• Middle-Class tax cut extensions (HR 1308; P. Law 108-311). The bill to extend for five years three individual tax breaks was signed into law by the President on October 4. The bill included energy related tax breaks for clean fuel and electric vehicles and extended credits for electricity produced from certain renewable resources, including wind.

• Corporate taxes/the JOBS bill (HR 4520). The House and Senate accepted a conference agreement to HR 4520 that did not include the energy tax package originally included in the Senate bill. However, the conference agreement did include a number of targeted energy tax incentives that were broken out of the energy bill, such as the green bonds program, an expansion of the Section 45 renewable energy production tax credits, incentives to build the Alaska natural gas pipeline, and credit for the production of low sulfur diesel fuel. The President has indicated he will sign this legislation into law.

• CalFed Bay-Delta Program (HR2828). House and Senate members have sent to the President legislation that authorizes $410 million for water projects in the CalFed Bay-Delta Program from FY2005 through FY2010. This decade-long congressional effort authorizes six federal agencies, with the Interior Department as the lead agency, to conduct water projects in California in accordance with the framework in place for the CalFed Bay-Delta Program. The Department would be required to conduct studies into rural water supply and the feasibility of reclaiming the high-saline Salton Sea. The President is expected to sign the bill into law.

While a number of “high priority” measures are pending in Congress, prospects for action this year are dim. Below is a summary of the pending legislation, categorized as those that are “likely” or “unlikely” to see action.

Likely:

• National Intelligence Legislation (H.R. 10). While both the House and Senate have passed their versions of an intelligence overhaul bill and Members have begun informal negotiations, it appears increasingly unlikely that a deal will be reached before Election Day given the sweeping differences between the two bills. However, if a deal is worked out before November 2, the adjournment resolution (H Con Res 518) gives leaders power to call back Members to vote on the measure.

Unlikely:

• Highway Reauthorization (HR 3550). Conferees were unable to reach a compromise to renew federal highway and mass transit programs for six years. An eight-month extension that runs from October 1, 2004 through May 31, 2005 was passed to push the longer-term effort to next year. Despite the slim possibility it could be approved during a possible lame duck session, House Members pledged to continue working on a six-year bill this year.

• Energy (HR 6, S 2095, HR 4520, HR 4503). A final attempt at moving the energy tax package, originally included in comprehensive energy legislation, through corporate tax legislation (HR 4520) failed. The energy bill’s last hope for passage is as an amendment to an omnibus FY2005 spending bill, should Congress attempt to pass one during a lame duck session. However, prospects for moving the legislation are all but dead for the year as Senate leaders continue to be pessimistic that an MTBE compromise can be achieved, without which the bill would fail.

• Drug Importation (HR 2427, S 2493, S 2328, S 2307). A hot-button topic in the 2004 elections, many Members want to allow importation of cheaper prescription drugs from Canada and other countries – but the White House continues to resist, siting safety concerns. Majority Leader Frist (R-TN) has indicated that importation legislation must be considered through the Committee process. Senate Health, Education, Labor and Pensions Committee Chairman Judd Gregg (R-NH) has said that he will not consider his or any other legislation in committee this year, thus likely killing the issue in the Senate, although supporters continue to push for a vote.

• Water Resources Development Act (S 2773). In June, the Senate Environment and Public Works Committee sent to the full Senate a bill authorizing $4 billion for hundreds of Army Corps of Engineers water projects. Staff members worked to craft a comprehensive set of amendments to the legislation based on a broad critique of the bill by interested stakeholders. While the House version of the bill (HR 2557) passed last fall, the Senate failed to take any action, and it is unlikely that it will act when it reconvenes in November.

For further information on the prospects of legislative action during this lame duck session, please contact Curt Rich or any member of our Public Policy Practice Group.

Based in Washington, DC — with an office in Seattle, Washington — Van Ness Feldman is a nationally recognized law firm specializing in energy, the environment, natural resources, and infrastructure security. Founded in 1977, the firm now has more than 75 attorneys and public policy professionals. A number of our members have served as counsel or chief counsel to congressional committees with jurisdiction over energy and environmental policy, as well as senior advisors to Democratic and Republican Members of Congress on those committees. Others have held high-level appointments in the Department of Energy, the Department of the Interior, the Federal Energy Regulatory Commission, and the Environmental Protection Agency.

This document has been prepared by Van Ness Feldman for informational purposes only and is not a legal opinion, does not provide legal advice for any purpose, and neither creates nor constitutes evidence of an attorney-client relationship.