EPA Should be Required to Use Cost-Benefit Analysis in its Rulemaking Process, ARTBA Tells Congressional Panel. 11/08/01

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EPA Should be Required to Use
Cost-Benefit Analysis in its Rulemaking
Process, ARTBA Tells Congressional Panel

Contacts:
Greg Smith 202-289-4434 gsmith@artba.org	Matt Jeanneret 202-289-4434 mjeanneret@artba.org	Print this page

Washington, D.C. [November 8, 2001] - Congress needs to revisit the Small Business Regulatory Enforcement Fairness Act (SBREFA) and the Clean Air Act to ensure that federal law requires agencies to include cost-benefit analyses and the potential impacts on small businesses in the rulemaking process, the American Road & Transportation Builders Association (ARTBA) said today. The association submitted testimony to a House Small Business Subcommittee on Regulatory Reform and Oversight hearing entitled "EPA Rulemaking: Do Bad Analyses Lead To Irrational Rules?"

ARTBA based its comments on proposed U.S. Environmental Protection Agency (EPA) ozone and particulate matter standards. According to a 1997 ARTBA study, the new standards could cause states to lose more than $11 billion in federal highway funds, resulting in the loss of almost 950,000 highway construction-related jobs.

"In developing these standards, the EPA never released scientific studies to justify the regulation, failed to reach out to the small business community, failed to do a cost-benefit analysis, and to consider less-costly adequate alternatives," ARTBA President Pete Ruane said.

The EPA first proposed its new standards on July 18, 1997. A court action (Whitman v. American Trucking Association) challenging the standards was filed in 1997 by ARTBA and almost two dozen national business groups. A 1999 ruling by the U.S. Court of Appeals for the D.C. Circuit in ARTBA's favor was subsequently appealed by the EPA to the U.S. Supreme Court, which overturned the lower court in February 2001. The case is currently back before the U.S. Court of Appeals for the D.C. Circuit.

In the case, the Supreme Court said that EPA does not have to consider costs in promulgating new standards. In fact, the court said the EPA was prohibited by the Clean Air Act from considering costs. The Court of Appeals also effectively eliminated many provisions in SBREFA that protect small businesses. SBREFA was enacted to protect small businesses from overzealous federal regulators. However, the court stated that SBREFA did not apply in this situation because it is really the states that will enforce the new standards, not federal regulators.