Environmental Reauthorizations and Regulatory Reform: From the 104th Congress through the 106th

Environmental Reauthorizations and Regulatory Reform: From the 104th Congress through the 106th

Order Code 96-949 ENR
Updated December 27, 2000
CRS Report for Congress
Received through the CRS Web
Environmental Reauthorizations and
Regulatory Reform: From the 104th Congress
through the 106th
John E. Blodgett
Resources, Science, and Industry Division
Summary
The 104th Congress addressed the environmental regulatory process by reviewing
regulatory decisionmaking processes and requiring assessments of unfunded mandates
and of costs and benefits of selected regulations; attaching specific reforms to funding
bills; establishing a House corrections day calendar for bills addressing specific regulatory
problems; and incorporating regulatory reforms into individual program reauthorization
bills. The Office of Management and Budget (OMB) was directed to prepare a report
on the costs and benefits of federal regulations.
The 105th Congress pursued similar regulatory reforms: proposals for
comprehensive cost-benefit/risk analysis of regulations; private property “takings” bills;
revisions of individual environmental statutes; selected riders on appropriations bills; and
oversight of environmental programs. OMB was directed to continue its report on
overall regulatory impacts.
The 106th Congress permanently authorized the annual OMB report, and it enacted
a 3-year pilot project under which Committee Chairmen or Ranking Members could ask
the General Accounting Office (GAO) to evaluate and send reports to Congress on major
rules issued by federal agencies. Section 15 of H.R. 5658, enacted by P.L. 106-554,
required OMB to issue guidelines for federal data quality and provided for a mechanism
for public correction of erroneous data. This report will not be updated.
Introduction
From the beginning of federal environmental programs, the costs they might impose
on industry and business, state and local governments, and consumers and taxpayers have
generated concern. As a result, the evolution of environmental statutes has been paralleled
by efforts to improve cost-benefit analysis and risk assessment to help set priorities and to
determine appropriate levels of regulation. But these developments have not been without
controversy. Proponents of requiring risk assessment and cost-benefit analyses believe
that the resulting data, even if flawed, can usefully inform regulatory decisions; opponents
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fear that statutorily requiring such analyses can result in the Environmental Protection
Agency (EPA) being compelled to conform its decisions to those data, regardless of flaws.
Attention has also focused on costs imposed on state and local governments (“unfunded
mandates”) and on regulatory limitations affecting private property rights (“takings”).
In general, business interests have led support for regulatory reform measures to
reduce their costs, while environmental stakeholders have opposed such measures for fear
they would diminish environmental protections. Through the 103rd Congress, most
legislative initiatives to address these issues were unsuccessful, but the White House
imposed administrative requirements for cost-benefit and risk analyses (Executive Order
12866, October 4, 1993, which superseded earlier E.O.s on the subject) and for analysis
by agencies of takings resulting from regulatory actions (E.O. 12630, March 15, 1988).
The environmental regulatory reform initiatives followed two primary channels: in
one, environmental regulations would be subject to comprehensive regulatory reforms1;
in the other, environmental regulatory programs would be revised statute-by-statute, as
each was reauthorized.2
Regulatory Reform in the 104th Congress
With new Republican majorities in the House and Senate, the 104th Congress
approached the reform of environmental protection regulations in several ways:
Broad-based Reforms of Regulatory Decisionmaking Procedures. The
104th Congress acted on a number of bills revising regulatory decisionmaking processes.
An unfunded mandates bill (P.L. 104-2) provides that points of order may be raised in the
House or Senate to ensure congressional consideration of “unfunded mandates” projected
to impose costs of more than $50 million on states and cities; it also requires agencies to
prepare cost-benefit analyses for regulations costing $100 million or more — in effect
codifying a part of E.O. 12866. It was followed by initiatives for paperwork reduction
(P.L. 104-13) and small business regulatory reform (Title II of P.L. 104-121). The latter
required regulatory flexibility analyses of regulations impacting small business, removed
a bar to judicial review of such analyses, and provided for panels comprised of small
business representatives to advise on the impact of EPA (and other agencies’) regulations.
It also included a Congressional Review Act, which requires agencies to submit new
regulations to the Congress and the General Accounting Office; GAO assesses the
agencies’ compliance with procedures, e.g., regarding cost-benefit analysis, and Congress
has 60 legislative days to review and disapprove the new regulations, with expedited
procedures for Senate action.
A provision of the FY1997 omnibus appropriations bill (P.L. 104-208) directed the
Office of Management and Budget to submit annual reports estimating total annual costs
1 See (name redacted), Federal Regulatory Reform: An Overview, CRS Issue Brief IB95035.
2 Authorizations for appropriations for most environmental statutes had expired by the end of the
104th Congress, so those seeking change anticipated the opportunity to amend them. (A House rule
requires a current authorization before an appropriation bill can be considered, although
requirement is often waived. Permanent program authorities do not expire.)

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and benefits of federal regulations. OMB published the first Report to Congress on the
Costs and Benefits of Federal Regulations on September 30, 1997.
Other comprehensive regulatory reform bills received congressional action but were
not enacted. The House passed H.R. 9, derived from the House Republicans’ “Contract
with America,” which addressed risk assessment, cost-benefit analysis, and regulatory
“takings.” The Senate extensively debated a similar bill, S. 343, reported by the Judiciary
Committee. A regulatory reform package was attached to a bill raising the debt ceiling,
H.R. 2586, which the President vetoed. Disagreements that stymied these efforts to change
regulatory decisionmaking procedures included whether to make cost-benefit analysis just
one factor informing regulatory decisions (as under the unfunded mandates law and E.O.
12866), or to impose a net-benefit test (benefits justify costs) before a regulation could go
forward (as required by H.R. 9 and S. 343); whether to apply new criteria only to new
regulations, or also existing ones; the costs and impacts of “takings” compensation; and
the extent of judicial review.
Appropriations Riders. Numerous regulatory reform riders were attached to
FY1996 appropriations bills for EPA and other agencies. This effort peaked in House
passage of H.R. 2099, the FY1996 VA-HUD-Independent Agencies appropriations bill.
The House approved 17 major riders prohibiting EPA from spending FY1996 funds on a
number of regulatory and enforcement activities. While such riders are not unusual, the
number attached to H.R. 2099, and their content and perceived breadth of impact,
generated much controversy. After legislative skirmishes, many riders were dropped or
softened; in the end, the White House vetoed the bill primarily because of objections to
funding amounts, but also cited “legislative riders that were tacked onto the bill without
any hearings or adequate public input....” EPA’s funding ultimately came through the
Omnibus FY1996 Appropriations Act (P.L. 104-134), which included only narrowly
targeted riders. For FY1997, fewer riders were directed at environmental regulations.
Corrections Day Calendar. Corrections day, an innovation of the 104th
Congress, established a special procedure in the House for taking up bills to correct or
repeal particularly troublesome or obsolete regulatory provisions. A number of bills
directed at environmental regulations appeared on the corrections day calendar, and
several passed.
Program-Specific Reforms: Amendments and Reauthorizations. The
first environmental reauthorization bill considered by the 104th Congress was H.R. 961,
amendments to the Clean Water Act (CWA). After a contentious debate, H.R. 961 passed
the House 240-185; however, the Senate took no action on the bill. With H.R. 961 (and
H.R. 9 and S. 343) stalled in the Senate (and vetoes having blocked many regulatory
riders), momentum shifted toward negotiated reforms directed at individual programs.
These negotiations led to reform of the pesticide regulatory program, enacted as the Food
Quality Protection Act (FQPA), P.L. 104-170, and to amendment and reauthorization of
the Safe Drinking Water Act, P.L. 104-182. With broad agreement that the bills increased
future cost-effectiveness and gave EPA flexibility to address high-priority risks, both
measures passed the House and Senate by wide margins.
In a related area, Congress enacted the Accountable Pipeline Safety and Partnership
Act of 1996 (P.L. 104-304), which requires the Secretary of Transportation to issue
pipeline safety regulations “only upon a reasoned determination that the benefits of the

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intended standard justify its costs.” Environmental groups opposed the bill, saying, inter
alia, that this language set a precedent for imposing a net-benefit test on environmental
regulations.
Regulatory Reform in the 105th Congress
The 105th Congress continued regulatory reform efforts, including comprehensive
bills emphasizing risk- and cost-benefit analyses; private property “takings” reforms; and
reauthorization and amendment of individual statutes, notably Superfund. It also focused
oversight on several environmental program activities — particularly a November 1996
EPA proposal to tighten air quality standards for ozone and particulates.
Comprehensive Regulatory Reform. Efforts to accomplish comprehensive
regulatory reform centered on a bipartisan Senate bill, S. 981, the Regulatory Improve-
ment Act of 1997, introduced by Senators Thompson and Levin. The bill would have
required regulatory agencies to perform cost-benefit analyses and risk assessments on
major new rules — those having an economic impact of more than $100 million per year.
Business and industry groups supported the bill, claiming that it would reduce the cost of
regulation without endangering the environment or the public’s health or safety. Labor,
environmental, and other groups opposed the bill, claiming that it would undermine
existing health, safety, and environmental regulations. S. 981 was reported by the
Governmental Affairs Committee on May 11,1998. Proposed amendments, released July
15, 1998, contained revised language addressing various Administration and public interest
group concerns with the original bill; for example, the proposal raised the threshold for
peer review of cost-benefit analyses to $500 million per year. The Administration gave
qualified support, but no floor action occurred.
For FY1998 and FY1999, Congress continued language in appropriations bills (P.L.
105-61 and P.L. 105-277) that required OMB to report to Congress estimates of the
annual costs and benefits of federal regulatory programs and of major rules; the FY1999
language also directed OMB to issue guidelines to agencies to standardize measures of
costs and benefits and to issue guidance for agencies in meeting their obligations under the
Congressional Review Act, the Regulatory Flexibility Act, and the Unfunded Mandates
Act.
In another initiative, the House Committees on Judiciary and on Government Reform
and Oversight reported H.R. 1704, which would have created a Congressional Office for
Regulatory Analysis to help oversee activities of the Office of Information and Regulatory
Affairs of OMB, to review agency rulemakings and agency compliance with regulatory
review requirements, and to prepare an annual report estimating the total cost and benefits
of all existing federal regulations. No floor action on H.R. 1704 occurred.
Private Property “Takings” Reform.3 Private property “takings” concerns arise
primarily from actions under the Endangered Species Act and the wetlands protection
provision (§404) of the Clean Water Act. In the 105th Congress, initiatives to address
private property “takings” split off from more comprehensive reform proposals. The
House passed a bill, H.R. 1534, that would have simplified and expedited access to the
3 (name redacted),
The Property Rights Issues, CRS Report 95-200.

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federal courts for parties alleging private property “takings.” The Senate Judiciary
Committee reported H.R. 1534 but no floor action occurred.
Reforming Environmental Programs. The success in the 104th Congress in
finding tradeoffs in both the SDWA amendments and the FQPA suggested that
negotiations could lead to agreements on amending other environmental authorizing
statutes. Potential tradeoffs included (1) exchanging more flexibility in a few specific high-
cost requirements (desired by states and localities, industry and business) for procedures
to inform the public of remaining risks (desired by environmental stakeholders) and (2)
bringing down regulatory costs by using market-based management incentives and
disincentives, which many believe achieve environmental goals more cost-effectively than
regulation. Throughout the 105th Congress, Superfund was a focal point of efforts to
achieve compromise reform, but negotiations among stakeholders to resolve disagreements
both on which issues to address and on how to solve them proved unsuccessful.
Oversight of Implementation. In November 1996, EPA proposed tightening
ozone and particulate standards under the Clean Air Act, which requires EPA to set
National Ambient Air Quality Standards on the basis of health. The proposals generated
much controversy. Opponents charged that EPA’s decisions were not supported by
adequate scientific evidence, that costs would be excessive, and that EPA did not follow
proper procedures in proposing them — by failing to comply with requirements of the
Small Business Regulatory Enforcement Fairness Act (SBREFA), the Regulatory
Flexibility Act, and the Unfunded Mandates Reform Act. During the 105th Congress, some
28 days of oversight hearings addressed these issues.
On July 18, 1997, EPA published its final decisions on the standards, to become
effective in September. This triggered the new SBREFA review authority by which
Congress could consider a joint resolution of disapproval, with special procedures in the
Senate to ensure floor consideration within 60 legislative days. Bills to delay the new
standards were introduced, including H.R. 1984 and S. 1084, with a hearing held on the
latter. Neither of these bills was reported from committee, however.
Congress did include a provision in the Transportation Equity Act for the 21st
Century (P.L. 105-178) to codify implementation dates for the new ozone and particulate
air quality standards and also to mesh implementation of a related regional haze regulatory
program proposed by the Agency on July 31, 1997. Some appropriations riders were
enacted, as well. For example, by bipartisan agreement, a rider in the Omnibus
Consolidated and Emergency Appropriations Act, 1999 (P.L. 105-277) extended a
deadline for phasing out methyl bromide, a pesticide.
Regulatory Reform in the 106th Congress
Although EPA administrative reforms addressed some complaints about regulatory
costs and inflexibility, congressional oversight of regulatory actions continued and
regulatory reform efforts persisted.
Comprehensive Regulatory Reform. In the first session, a provision in
P.L. 106-58, the Treasury, Postal, and General Government Appropriations Act for
FY2000, repeated language from earlier years directing OMB to assess total costs and

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benefits of federal regulations. In the second session, this requirement was made
permanent by a provision (§ 624 of H.R. 5658) enacted by the Consolidated
Appropriations Act, 2001 (P.L. 106- 554). The same legislation (§ 515 of H.R. 5658)
directed OMB to write guidelines for federal agencies to follow in “ensuring and
maximizing the quality, objectivity, utility, and integrity of information (including statistical
information) disseminated by Federal agencies in fulfillment of the purposes and provisions
of chapter 35 of title 44, United States Code, commonly referred to as the Paperwork
Reduction Act.” The provision further requires agencies to “establish administrative
mechanisms allowing affected persons to seek and obtain correction of information
maintained and disseminated by the agency that does not comply with the guidelines.”
Also in the second session Congress passed the Truth in Regulating Act (P.L. 106-312,
114 Stat. 1248), which establishes a 3-year pilot project for the General Accounting Office
to evaluate and send reports to Congress on major rules issued by federal agencies.
Specifically, when a new rule is issued, the statute authorizes the chairman or ranking
member of a committee of jurisdiction of either House of Congress to request GAO to
assess the benefits and costs of the rule and to evaluate the agency’s analysis of alternative
approaches.
The House passed H.R. 1074, the Regulatory Right-to-Know Act; H.R. 350,
amending the Unfunded Mandates Act to require a Congressional Budget Office estimate
of impacts; H.R. 391, amending the Small Business Paperwork Reduction Act to limit the
authority of regulators to impose civil fines on small businesses for first-time paperwork
offenses; and H.R. 2372, allowing private property holders to go directly to federal courts
to seek compensation in land “takings” disputes. The Senate took no action on these bills;
its comprehensive reform effort was S. 746, the Regulatory Improvement Act of 1999.
It would have required agencies to prepare cost-benefit analysis and risk assessment of
major new rules. S. 746 was reported from committee but no floor action occurred.
Environmental Programs. A number of narrowly drawn provisions were enacted
(primarily concerning water quality); none of the environmental statutes was reauthorized.
Oversight continued. And in the absence of broader reforms, Congress passed several
appropriations riders addressing a variety of particularly contentious regulatory issues. For
example, one rider, to EPA’s FY2001 appropriations bill (P.L. 106-377), prohibited EPA
from designating areas not in attainment with the new 8-hour ozone air quality standard
prior to a decision by the Supreme Court in American Trucking v. EPA, which challenged
the standard, or June 15, 2001, whichever occurs earlier. A second target was EPA’s
Total Maximum Daily Load (TMDL) program to restore polluted waters. The FY2001
Military Construction and emergency supplemental appropriations law (P.L. 106-246)
included a provision to prevent EPA from spending any funds in FY2000 or FY2001 to
finalize or implement the TMDL program; but EPA finalized the regulations before the
prohibition took effect. EPA's funding bill for FY2001 (P.L. 106-377) included report
language requiring studies by the National Academy of Sciences and EPA on the scientific
basis of the TMDL rule and on the potential costs of implementing the program. Another
target was the Kyoto Protocol to reduce emissions of greenhouse gases, which has not
been submitted to the Senate for ratification. Language to prohibit actions that would
implement or prepare for implementation of the Kyoto Protocol appeared in FY2000
and/or FY2001appropriations bills for EPA and the Departments of Energy, Agriculture,
Interior, Commerce, and State.

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