CRS Report: 97-722 - Air Quality Standards: The Decisionmaking Process

The procedural steps for promulgating or revising NAAQS is set forth in the CAA itself - not, as is usual elsewhere, in the Administrative Procedure Act 15 Affecting this process to varying degrees are several other statutory requirements affecting regulations, notably the Regulatory Flexibility Act, the Unfunded Mandates Reform Act, and the Small Business Regulatory Enforcement Fairness Act. Also affecting the process are executive mandates, notably Executive Order 12866, Regulatory Planning and Review, and Executive Order 12848, Federal Actions to Address Environmental Justice in Minority Populations and Low-Income Populations.

For numerous CAA rulemakings, including the process for promulgating or revising CAA rules, §307 of the CAA modifies the procedures of the Administrative Procedure Act governing rulemaking. The process is codified at 42 U. S.C. 7607(d). In general, the procedures require EPA to establish a "docket" that contains all the crucial elements of the rulemaking, that is open to public inspection, and that represents all the information available for the Administrator's decision. (An additional provision allows evidence not in the docket to be considered in certain cases when the omission was "reasonable.") The key steps of the rulemaking include; (1) notice of the proposed rulemaking, (2) a period available for public comment, (3) promulgation of the rule, which shall include responses to significant comments on the proposal, and (4) an opportunity for judicial review and challenges to the procedural determinations.

As an illustration of the process, on June 12, 1996 EPA published an "Advance Notice of Proposed Rulemaking (ANPR) for National Ambient Air Quality Standards for Ozone and Particulate Matter" (61 Federal Register 29719-2925). This ANPR outlined the basis for EPA having to make the decision, identified the key documents, and indicated the major options under consideration. The Proposed Decisions on ozone and PM were released November 27, 1996, and published December 13 (61 Federal Register 65638-65872). It laid out the proposed decision, requested public comment generally and on specific options, told where and how to access the docket, and provided for a 60-day public comment period (later extended 21 days, until March 12, 1997).

In the case of the ozone and particulate matter proposed NAAQS, EPA received over 25,000 comments during the public comment period. Also, EPA held 4 public hearings.

The ozone and particulate matter final decisions were signed by the Administrator on July 16, 1997.

EPA has concluded that NAAQS reviews are "significant" regulatory actions requiring preparation of an RIA. However, EPA also explicitly states that "Because judicial decisions make clear that cost can not be considered in setting NAAQS, the results of the draft RIA have not been considered in developing this proposal" [National Ambient Air Quality Standard for Ozone: Proposed Decision, pp. 157-158].

The 1996 ozone and PM NAAQS proposals are the first NAAQS rulemakings undertaken since enactment of the Unfunded Mandates Reform Act (UNIRA) and the Regulatory Flexibility Act (RFA). While EPA concluded that the proposals were "significant regulatory actions" as defined by E.O. 12866, EPA concluded that the proposals do not trigger the regulatory analysis provisions of UMRA or RFA.

However, in its PM RIA, EPA does prepare a governmental entities analysis. According to EPA, "This.....is not an unfunded mandates analysis, but provides estimates of the potential budgetary impact of the control measures used in the control strategy-cost analysis affecting State and local government agencies." EPA notes that it "will be useful in guiding future implementation activities...." [PM RIA, p.8-20]

On the issue of assessing the impact of regulations on small businesses, EPA said the ozone and PM proposed NAAQS-

EPA nevertheless concedes interest in the "potential impact" of the NAAQS and notes that discussion of those impacts are included in the RIA. In the RIAs, EPA performs a "Screening Analysis" to "evaluate small entity impacts." This identifies impacts on industries classified by SIC codes.

On the same basis that it decided the Unfunded Mandates and the Regulatory Flexibility Act requirements did not apply when setting NAAQS, EPA concludes "that the small-entity provisions in Section 244 of the Small Business Regulatory Enforcement Fairness Act (SBREFA) do not apply." [National Ambient Air Quality Standard for Ozone: Proposed Decision, p. 164] And similarly, EPA says it "intends to fulfill the spirit of SBREFA on a voluntary basis" by working with the Small Business Administration to hold panel exercises to solicit comments and advice from representatives of small entities.

Besides the regulatory impact assessments required by the statutes discussed above, provisions of the Paperwork Reduction Act may be triggered by reporting requirements. In the ozone and PM proposed rules, EPA indicates that this issue would arise only in implementation and will be addressed in the final RIAs.

Also, Executive Order 12848, Federal Actions To Address Environmental Justice in Minority Populations and Low-Income Populations, requires each federal agency to identify and address, as appropriate, disproportionate adverse health and environmental impacts of programs, policies, and activities on minorities and low-income populations. Again, EPA indicates that analysis of effects on minorities and low-income populations would be appropriately examined in preparation of RIAs in the implementation process.17

EPA's NAAQS decisions are subject to this OMB review: "In view of its important policy implications, this proposal has been judged to be a 'significant regulatory action' within the meaning of the Executive Order, and EPA has submitted it to OMB for review. Changes made in response to OMB suggestions or recommendations will be documented in the public docket and made available for public inspection...." [National Ambient Air Quality Standard for Ozone: Proposed Decision, p.157]

Likewise, drafts of the proposed and final rule are circulated for review to other departments and agencies. In cases of substantive controversy, as with the ozone and PM25 NAAQS, the issue may go to the White Rouse for final adjudication.

EPA's NAAQS rulemaking is subject to several statutory procedural requirements, compliance with which is subject to judicial review. The basic framework is spelled out in the CAA, §307(d), [42 U.S.C. §7607(d)] and details the requirements for public notice and participation in the process. The final rule cannot be based, in whole or part, on any information or data which have not been placed in the rulemaking docket as of the date of its final promulgation. The final rule must be accompanied by a statement of basis and purpose which includes a summary of the factual data upon which the rule is based, the methodology used in obtaining and analyzing the data, the major legal interpretations, and policy considerations underlying the remaking decision. The statement must also contain the agency's response to each of the significant comments, criticisms, and new data submitted in written and oral presentations during the comment period. Courts have also indicated that they will look at the alternatives the agency considered (or believes it should have considered) in assessing necessary compliance. On appeal the court may reverse the rulemaking action if it finds it to be "arbitrary, capricious, an abuse of discretion or otherwise not in accordance with law," a standard by which the courts assess the rule's reasonableness and rationality based on review of the rulemaking record taken as a whole.

Separate compliance issues could be raised by the Administrator's certifications that the ozone and PM NAAQS do not directly impact on small entities and therefore EPA does not have to prepare initial or final Regulatory Flexibility Analyses (RFAs) required by the Regulatory Flexibility Act. EPA contends that such impact, if any, can be assessed only at the time of the submission of state implementation plans, or, in default thereof; proposed federal implementation regulations. The Small Business Administration, among others, has objected to that determination, contending that since EPA has ultimate responsibility for implementing the NAAQS it cannot avoid preparing RFA as part of the NAAQS process.18 The Regulatory Flexibility Act was recently amended by the Small Business Regulatory Enforcement Fairness Act specifically to allow for judicial review of an agency head's certification that a rule will not have a significant economic effect on a substantial number of small entities.

EPA cited the same standards/implementation rationale in deciding that the impact reporting and analysis requirements of the Unfunded Mandates Reform Act of 1995 and the Paperwork Reduction Act were not applicable. Both actions are subject to judicial review.

EPA's decisions that requirements of the Small Business Regulatory Enforcement Fairness Act, the Regulatory Flexibility Act, and the Unfunded Mandates Act do not apply to the ozone and PM NAAQS have been challenged, along with various substantive and procedural aspects of the standards. The outcome of such suits (38 were filed in the U.S. Court of Appeals for the D.C. District during 1997) could have consequences for future NAAQS decisionmaking processes.

August 1992	Ozone NAAQS review initiated
Summer/Fall 1993	Workshops
Spring 1994	Draft Criteria Document available to public and CASAC
July 20 and 21, 1994	CASAC meetings to review draft Criteria Document
March 20 and 21, 1995	CASAC meetings to review revised draft of Criteria Document; also to review draft sections of Staff Paper
September 19 and 20, 1995	CASAC closure on Criteria Document; also closure on primary standard section of Staff Paper
November 28, 1995	CASAC closure letter on Criteria Document sent to Administrator
November 30, 1995	CASAC closure letter on primary standard section of Staff Paper sent to Administrator
March 21, 1996	CASAC subpanel meeting on secondary standard section of Staff Paper
April 4, 1996	CASAC closure letter on secondary standard section of Staff Paper sent to Administrator
June 12, 1996	EPA publishes Advance Notice of Proposed Rulemaking(ANPR) for Ozone & PM NAAQS
July 25 and August 8, 1996	Public Meeting on ANPR
November 27, 1996/December 13 1996	Proposed Decision announced/published in Federal Register; public comment period begins
January 14 and 15, 1997	Public Meetings in four cities on proposal
March 12, 1997	End of public comment period on proposal
Winter/Spring 1997	Congressional hearings on the proposed NAAQS
June 25, 1997	President Clinton endorses the proposed ozone & PM NAAQS, with some modifications
Late June 1997	EPA submits proposed final standards to OMB
July 16, 1997	Administrator signs off on final Ozone & PM NAAQS
July 18, 1997	Final NAAQS published in Federal Register
July 18, 1997	First suit challenging the final standards filed in the U.S. Court of Appeals for the D.C. District
September 16, 1997	Ozone & PM rules become effective

14 see, for example, EPA, "Cost Considerations," National Ambient Air Quality Standards for Ozone; Final Rule, 62 Federal Register 38878-38883 (July 18, 1997).

15 The Clean Air Act Amendments of 1977 substantially revised these procedures. The reasons for the changes and their intent are discussed at length in U.S. Congress, House, Committee on Interstate and Foreign Commerce, Clean Air Act Amendments of 1977, House Rept. No. 95-294, to accompany H R 6161 (95th Congress, 1st session) (Washington, D.C.: U.S. Govt. Print. Off., 1977), pp 318-325

17 RIA for Proposed Particulate Matter Ambient Air Quality Standard (December 1996), p.8-26.

18 Testimony of Jere W. Glover, Chief Counsel for Advocacy, U.S. Small Business Administration, before the Subcommittees on Government Programs and on Regulatory Reform and Paperwork Reduction, House Committee on Small Business (April 17, 1997), p.9

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