EPA: National Ambient Air Quality Standards for Particulate Matter--Final Rule and National Ambient Air Quality Standards for Ozone

Published by the Government Accountability Office on 1997-08-04.

Below is a raw (and likely hideous) rendition of the original report. (PDF)

      United States
GAO   General Accounting Office
      Washington, D.C. 20548

      Office of the General Counsel


      August 4, 1997

      The Honorable John H. Chafee
      The Honorable Max Baucus
      Ranking Minority Member
      Committee on Environment and Public Works
      United States Senate

      The Honorable Thomas J. Bliley, Jr.
      The Honorable John D. Dingell
      Ranking Minority Member
      Committee on Commerce
      House of Representatives

      Subject:   Environmental Protection Agency: National Ambient Air Quality
                 Standards for Particulate Matter; Final Rule and National Ambient Air
                 Quality Standards for Ozone; Final Rule

      Pursuant to section 801(a)(2)(A) of title 5, United States Code, this is our report on
      two major rules promulgated by the Environmental Protection Agency (EPA),
      entitled "National Ambient Air Quality Standards for Particulate Matter; Final Rule"
      and "National Ambient Air Quality Standards for Ozone; Final Rule" (RIN: 2060-AE66
      and RIN 2060-AE57). We received the rules on July 18, 1997. They were published
      in the Federal Register as final rules on July 18, 1997. 62 Fed. Reg. 38652 and

      Our Office is issuing a combined major rule report on the two rules because the
      rules are closely related and EPA has given the same reasons for certain regulatory
      actions it has taken or not taken. Both rules involve the issuance of National
      Ambient Air Quality Standards (NAAQS) pursuant to provisions of the Clean Air

      The first rule revises the NAAQS for particulate matter (PM) by establishing two
      new PM2.5 standards, set at 15µg/m³, based on the 3-year average of annual
      arithmetic mean PM2.5 concentrations from single or multiple community-oriented

monitors, and 65µg/m³, based on the 3-year average of the 98th percentile of 24-hour
PM2.5 concentrations at each population-oriented monitor within an area; and the
current 24-hour PM10 standard is revised to be based on the 99th percentile of 24-
hour PM10 concentrations at each monitor within an area.

The NAAQS for ozone (O3) are revised by replacing the current 1-hour primary
standard with an 8-hour standard at a level of 0.08 parts per million with a form
based on the 3-year average of the annual fourth highest daily maximum 8-hour
average O3 concentrations measured at each monitor within an area. The current
1-hour secondary standard is replaced by an 8-hour standard identical to the new
primary standard.

EPA states that these revised standards will provide increased protection to the
public, against a wide range of O3-induced and PM-related health effects.

On July 18, 1997, a Petition for Review of these final rules was filed in the United
States Court of Appeals for the District of Columbia Circuit pursuant to the section
307(b)(1) of the Clean Air Act, 42 U.S.C. § 7607(b)(1) and section 242 of the Small
Business Regulatory Enforcement Fairness Act of 1996 (SBREFA), 5 U.S.C. § 611.
The plaintiffs contend that the rules violate the Clean Air Act and SBREFA.
American Trucking Associations, Inc., et. al. v. United States Environmental
Protection Agency (Nos. 97-1440 and 97-1441, July 18, 1997).

If you have any questions about this report, please contact James Vickers, Assistant
General Counsel, at (202) 512-8210. The official responsible for GAO evaluation
work relating to the Environmental Protection Agency is Peter Guerrero, Director,
Environmental Protection Issues. Mr. Guerrero can be reached at (202) 512-6111.

Robert P. Murphy
General Counsel


cc: Mr. Thomas E. Kelly
    Director, Office of Regulatory
      Management and Information
    Environmental Protection Agency

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      ANALYSIS UNDER 5 U.S.C. § 801(a)(1)(B)(i)-(iv) OF MAJOR RULES
                              ISSUED BY
                             FINAL RULE"
                  (RIN: 2060-AE66 and RIN 2060-AE57)

(i) Cost-benefit analysis

The Regulatory Impact Analysis contains cost-benefit analyses for both final rules.
While the Clean Air Act has been interpreted as requiring the setting of standards to
be health-based and not based on cost or other economic considerations, EPA
points out that the consideration of cost is an essential decision-making tool for
implementation of the standards.

The analysis for PM estimates the annual cost of partial attainment in the year 2010
to be $8.6 billion (in 1990$). EPA points out that the Clean Air Act does not require
full attainment by 2010 but estimates full attainment costs of $37 billion per year.
EPA estimates the annual benefits for partial attainment to range from $19 to $104
billion, including 3,300 to 15,600 incidences of premature mortality avoided, which
represent 12% to 70% of the benefit estimate. Full attainment monetized benefits
range from $20 to $110 billion per year, including 3,700 to 16,600 incidences of
premature mortality avoided.

The analysis for ozone estimates partial attainment costs at $1.1 billion per year
and, as above, while the Clean Air Act does not require full attainment by 2010, the
estimated cost of full attainment is $9.6 billion per year. EPA's estimated monetized
annual benefits range from $0.4 to $2.1 billion, including 0 to 330 incidences of
premature mortality avoided, which represents 90% of the high end benefits
estimates. Full attainment monetized benefits range from $1.5 to $8.5 billion
annually, including 0 to 1,300 incidences of premature mortality avoided.

EPA notes that not all benefits from the rules were monetized. For PM, some of
these benefits included reductions in pulmonary functions, cancer, infant mortality
and damage to ecosystems. For ozone, the nonmonetized benefits included
reductions in pulmonary inflammation, chronic respiratory damage/premature aging
of lungs, damage to ecosystems and nitrates in drinking water.

The analyses also estimated the costs and benefits for three alternative standards
each for PM and ozone.

(ii) Agency actions relevant to the Regulatory Flexibility Act, 5 U.S.C. §§ 603-605,
607 and 609

Under section 605(b) of the Act, an agency is exempted from the preparation of
regulatory flexibility analyses concerning the impact of the rule on small entities
otherwise required by the Act if the head of the agency certifies that the rule will
not have a significant economic impact on a substantial number of small entities.
The EPA Administrator made such a certification at the proposal stage of the
NAAQS. The certification was based on EPA's interpretation of the term "impact" in
the Act. EPA concluded that the term refers to the impact of the rule on small
entities subject to the rule's requirements because the purpose of a regulatory
flexibility analysis is to consider ways of easing a rule's requirements as they will
apply to small entities. According to EPA, that purpose cannot be served in the
case of rules such as NAAQS, which do not themselves impose requirements that
apply to small entities. The NAAQS establish levels of air quality that states are
primarily responsible for achieving by adopting plans containing specific control
measures. Because the only choice EPA has in promulgating the NAAQS is the
level of the standard and not its implementation, EPA states that there is nothing it
can do in setting the NAAQS to tailor state implementation measures as they apply
to small entities. However, EPA further states that if and when it issues any rules
addressing state implementation of statutorily required actions, EPA would analyze
and address the impact of those rules on small entities as appropriate under the

Notwithstanding its certification of the proposed rule as exempt from performing a
regulatory flexibility analysis, EPA recognized that the NAAQS would begin a
process of state implementation that could eventually lead to small entities having
to comply with new or different control measures, depending on the implementation
plans developed by the states. Therefore, EPA has undertaken to work with small
entity representatives and states to provide information and guidance on how states
can address small entity concerns when they prepare their implementation plans.
In this connection, EPA analyzed how hypothetical state plans for implementing the
rule might affect small entities. In addition, it convened, along with the Small
Business Administration (SBA), outreach meetings to solicit small entities' concerns
with the new NAAQS. Also with the SBA, it began an interagency panel process to
collect advice and recommendations from small entity representatives to be used to
prepare guidance on how states can lessen any impacts on small entities. Finally,
to supplement the input the EPA receives from its ongoing Clean Air Act Advisory
Committee, EPA has added small entity representatives to the subcommittee on
NAAQS implementation.

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As noted previously, the question of EPA's compliance with the Act is currently
before the Court of Appeals for the District of Columbia Circuit, in accordance with
section 611 of title 5 of the United States Code.

Section 611, as amended on March 29, 1996, now permits judicial review of final
agency actions under the Regulatory Flexibility Act, including agency compliance
with section 604, the preparation of a final regulatory flexibility analysis.
Previously, judicial review had not been permitted. The petitioners sought review
of EPA's actions at the earliest possible time under the new authority, the date of
final agency action and publication of the rules in the Federal Register, July 18,

Our Office has been advised by the Clerk of the Court of Appeals that the initial
submissions of the petitioners are due by August 27, 1997 and from the respondent
on September 11, 1997.

(iii) Agency actions relevant to sections 202-205 of the Unfunded Mandates Reform
Act of 1995, 2 U.S.C. §§ 1532-1535

Under section 202(a) of UMRA, unless otherwise prohibited by law, before
promulgating a proposed or final rule containing federal mandates that may result
either in expenditures in the aggregate by State, local, and tribal governments, or
expenditures by the private sector of $100 million or more in any 1 year, agencies
are required to prepare a written statement containing five items. Those items are:

    (1) an identification of the provision of federal law under which the rule is being
    (2) a qualitative and quantitative assessment of the anticipated costs and
benefits of the federal mandate;
    (3) estimates, to the extent feasible, of future compliance costs of the federal
mandate and any disproportionate budgetary effects upon any particular region;
    (4) estimates, to the extent feasible, by the agency of the effect on the national
economy; and
    (5) a description of the agency's prior consultation with representatives of
affected State, local, and tribal governments, a summary of the comments and
concerns presented by them, and a summary of the agency's evaluation of those
comments and concerns.

EPA states that, because it is precluded by Section 109 of the Clean Air Act
(42 U.S.C. § 7409) from considering economic costs or technical feasibility in setting
the NAAQS, it did not have to prepare a written statement under section 202(a) of
UMRA. EPA cites the "unless otherwise prohibited by law" language in section
202(a) of UMRA, and the Conference Report for UMRA which states "this section
[202] does not require the preparation of any estimate or analysis if the agency is

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prohibited by law from considering the estimate or analysis in adopting the rule" as
the basis for its determination that it is not required to prepare a written statement
under section 202(a).

We disagree with EPA's interpretation of section 202(a) in one respect. EPA is only
prohibited by law from considering any estimate or analysis in setting the NAAQS.
It is not prohibited from identifying the provision of federal law under which the
rules are being promulgated and from describing its outreach efforts with State,
local, and tribal governments. (UMRA section 202(a)(1) and (a)(5)) Thus, EPA
would not be excused from preparing a written statement containing those items
that are not covered by the unless otherwise prohibited by law exclusion. The
Conference Report language for section 202 which states that "items in the written
report be included 'unless prohibited by law' " supports this view.

Nevertheless, even though EPA stated it was not required to prepare written
statements under section 202 of UMRA, it did satisfy the requirements of the
statute. EPA identified in the two rules the provisions of federal law under which
the rules were being promulgated, discussed its consultation efforts, and stated that
a written statement describing EPA's outreach efforts, including a summary of the
comments and concerns presented by State, local, and tribal governments, and a
summary of EPA's evaluation of those comments and concerns would be placed in
the docket. Our Office confirmed that these items are in the docket and available
to the public.

(iv) Other relevant information or requirements under Acts and Executive orders

Administrative Procedure Act, 5 U.S.C. §§ 551 et seq.

Instead of the notice and comment procedures in the Administrative Procedure Act,
the EPA promulgated the rules using the procedures, with similar notice and
comment requirements in section 307(d) of the Clean Air Act, as amended.
(42 U.S.C. § 7607(d)). The use of these procedures for rules pertaining to the
promulgation or revision of any national ambient air quality standard is mandated
by section 307(d)(1)(A) of the Act. (42 U.S.C. § 7607(d)(1)(A)).

On November 27, 1996, EPA announced its proposed revisions of the O3 and PM
standards, which proposals were published in the Federal Register on December 13,
1996 (61 Fed. Reg. 65716 and 65638, respectively) and public comments were
solicited. In addition to establishing a toll-free telephone number and an ability to
receive comments via the Internet, EPA held several public hearings and meetings
in various parts of the country.

EPA received over 50,000 comments, 14,000 telephone calls and 4,000 Internet
messages concerning the proposals. EPA responds to the major issues raised by

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the comments in the preamble to the rules and a comprehensive summary of the
comments is available to the public in the docket for the rulemakings (Docket Nos.
A-95-58 and A-95-54).

Paperwork Reduction Act, 44 U.S.C. §§ 3501-3520

EPA, in its discussion of administrative burden in the Regulatory Impact Analysis,
notes that states have the primary responsibility for designing air quality
management plans which will bring the state into attainment. To aid in the process
by which EPA will identify and oversee nonattainment areas, EPA has established a
subcommittee on ozone and PM under the Federal Advisory Committee Act to make
recommendations. As the work of the subcommittee has not been completed, EPA
states that it cannot prepare an Information Collection Request to submit to the
Office of Management and Budget under the Paperwork Reduction Act at this time.

However, EPA's Analysis contains an approximation of the additional administrative
burden effects that might be expected from the rules based on a hypothetical
determination of nonattainment areas and control measures the states may select.

EPA estimates the marginal administrative costs associated with the rules to be
about $54 million per year.

Statutory authorization for the rule

The rules were promulgated under the authority of sections 108 and 109 of the
Clean Air Act, as amended (42 U.S.C. §§ 7408 and 7409).

Executive Order No. 12866

The final rules are considered to be "significant regulatory actions" under Executive
Order No. 12866 in view of the important policy implications and were reviewed by
the Office of Management and Budget (OMB). A Regulatory Impact Analysis of the
rules was prepared as required by the Order. The Office of Information and
Regulatory Affairs of OMB approved the rules as complying with the requirements
of the Order based on the information supplied by EPA, including the planned
regulatory action document describing the reason for the rule and an assessment of
the costs and budgetary impacts of the rules.

Executive Order No. 12898 (Environmental Justice)

The Order, which requires that each federal agency make achieving environmental
justice part of its mission by identifying and addressing disproportionately high and
adverse human health and environmental effects of its programs, policies and
activities on minorities and low-income populations, was, according to EPA,

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considered in promulgating these rules. EPA states, however, that since the actual
distribution of economic impacts will depend on implementation strategies
employed by the states, it is not possible to assess the environmental justice
concerns at this time. EPA anticipates that the costs associated with the standards
will likely be spread widely across various industries and consumers and the
benefits will likely be concentrated in urban areas with high concentrations of
minority and low-income populations.

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