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[House Report 115-509]
[From the U.S. Government Publishing Office]

115th Congress    }                                          {   Report
                         HOUSE OF REPRESENTATIVES
 2d Session       ]                                          {  115-509

======================================================================

 
    BLOCKING REGULATORY INTERFERENCE FROM CLOSING KILNS ACT OF 2017

                                _______
                                

January 10, 2018.--Committed to the Committee of the Whole House on the 
              State of the Union and ordered to be printed

                                _______
                                

 Mr. Walden, from the Committee on Energy and Commerce, submitted the 
                               following

                              R E P O R T

                             together with

                            DISSENTING VIEWS

                        [To accompany H.R. 1917]

      [Including cost estimate of the Congressional Budget Office]

    The Committee on Energy and Commerce, to whom was referred 
the bill (H.R. 1917) to allow for judicial review of any final 
rule addressing national emission standards for hazardous air 
pollutants for brick and structural clay products or for clay 
ceramics manufacturing before requiring compliance with such 
rule, having considered the same, report favorably thereon 
without amendment and recommend that the bill do pass.

                                CONTENTS

                                                                   Page
Purpose and Summary..............................................     2
Background and Need for Legislation..............................     2
What the Legislation Would Do....................................     3
Committee Action.................................................     4
Committee Votes..................................................     4
Oversight Findings and Recommendations...........................     6
New Budget Authority, Entitlement Authority, and Tax Expenditures     6
Congressional Budget Office Estimate.............................     6
Federal Mandates Statement.......................................     7
Statement of General Performance Goals and Objectives............     7
Duplication of Federal Programs..................................     7
Committee Cost Estimate..........................................     7
Earmark, Limited Tax Benefits, and Limited Tariff Benefits.......     7
Disclosure of Directed Rule Makings..............................     7
Advisory Committee Statement.....................................     7
Applicability to Legislative Branch..............................     8
Section-by-Section Analysis of the Legislation...................     8
Changes in Existing Law Made by the Bill, as Reported............     8
Dissenting Views.................................................     9

                          PURPOSE AND SUMMARY

    H.R. 1917, Blocking Regulatory Interference from Closing 
Kilns (BRICK) Act of 2017, was introduced by Representative 
Bill Johnson (R-OH) on April 5, 2017. The legislation addresses 
the Environmental Protection Agency's (EPA) National Emission 
Standards for Hazardous Air Pollutants (NESHAP) for Brick and 
Structural Clay Products Manufacturing and for Clay Ceramics 
Manufacturing published on October 26, 2015. The bill would 
extend the compliance dates for the final rule to allow for 
completion of judicial review before compliance by the affected 
entities would be required.

                  BACKGROUND AND NEED FOR LEGISLATION

    EPA published its final rule entitled ``NESHAP for Brick 
and Structural Clay Products Manufacturing; and NESHAP for Clay 
Ceramics Manufacturing'' (2015 Brick MACT) on October 26, 
2015.\1\ EPA has promulgated this rule pursuant to section 112 
of the Clean Air Act (CAA), which authorizes the agency to set 
emissions standards for certain sources that emit mercury and 
other hazardous air pollutants (HAP). The final rule applies to 
kilns at brick and structural clay products manufacturing 
facilities, and at clay ceramics manufacturing facilities.\2\ 
Compliance for existing affected sources is required by 
December 26, 2018.\3\
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    \1\See NESHAP for Brick and Structural Clay Products Manufacturing; 
and NESHAP for Clay Ceramics Manufacturing; Final Rule, 80 Fed. Reg. 
65469 (October 26, 2015). EPA published a correction to make two 
technical corrections to the published regulation on December 4, 2015. 
See 80 Fed. Reg. 75817 (December 4, 2015).
    \2\80 Fed. Reg. at 65521, 65544.
    \3\Id. at 65539 and 65566.
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    Prior to issuance of the 2015 Brick MACT, EPA had issued an 
earlier version in 2003.\4\ This earlier rule required brick 
plants to install equipment on their kilns to control hydrogen 
fluoride (HF) and hydrogen chloride (HCl) emissions, and 
particulate matter as a surrogate for metal HAPs including 
mercury, and to create work practices to reduce other 
emissions.\5\ While the brick industry spent millions of 
dollars to comply with the 2003 rule,\6\ almost one year after 
the compliance deadline had passed, that rule was vacated and 
remanded back to EPA by the United States Court of Appeals for 
the District of Columbia with direction to rewrite the rule.\7\
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    \4\See NESHAP for Brick and Structural Clay Products Manufacturing; 
and NESHAP for Clay Ceramics Manufacturing Final Rule, 68 Fed. Reg. 
26690 (May 16, 2003).
    \5\Id.; see also, e.g. Chamber of Commerce Report published 
February 2, 2016, which is entitled, ``Regulatory Indifference Hurts 
Vulnerable Communities, No. 7 in a Series of Regulatory Reports,'' 
available at https://www.uschamber.com/sites/default/files/documents/
files/022360_etra_brick_study_01_29.pdf, p. 7.
    \6\Id.
    \7\Sierra Club v. EPA, 479 F.3d 875 (D.C. Cir. 2007).
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    In developing its revised rule, EPA determined that the 
substantial emissions reductions achieved by the control 
devices installed under the 2003 rule would be the starting 
point for the emissions limits under the current rule.\8\ EPA, 
in its final revised rule, set the level of performance based 
on the controls installed in response to the now vacated 
rule.\9\
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    \8\See, e.g. NESHAP for Brick and Structural Clay Products 
Manufacturing; and NESHAP for Clay Ceramics Manufacturing; Proposed 
Rules, 79 Fed. Reg. 75622, 75627, 75635-36 (Dec. 18, 2014).
    \9\See, e.g. 80 Fed. Reg. at 65473.
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    Legal challenges to the final rule are currently pending in 
the Court of Appeals for the District of Columbia.\10\ For the 
2015 Brick MACT, concerns have been raised regarding the 
legality of the rule, including potentially significant costs, 
which may make compliance impossible for many smaller plants. 
While EPA estimates annual costs to comply with the rule to be 
$25 million, industry estimates have projected the annual costs 
to be potentially up to $100 million or greater.\11\ Concerns 
have specifically been raised that in developing the final 
rule, EPA has incorrectly assumed that brick companies already 
have or can readily borrow the capital needed to install the 
required equipment, and that the costs of the rule can be 
passed on to consumers simply by increasing brick prices.\12\
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    \10\Legal challenges have been filed by environmental organizations 
and regulated entities in the U.S. Court of Appeals for the District of 
Columbia Circuit. See Sierra Club v. EPA, No. 15-1487 (D.C. Cir.), and 
consolidated cases (Case Nos. 15-1492, 15-1493, 15-1496).
    \11\See, e.g. Chamber of Commerce Report at pp. 8-9 (``The Brick 
Industry Association estimates that the annual cost of the Brick MACT 
will be $100 million or more [citation omitted] and that compliance 
will be nearly impossible for many smaller plants.''
    \12\Id. at p. 8.
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    There are an estimated 7,000 workers employed by the brick 
industry nationwide.\13\, \14\
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    \13\See Chamber of Commerce Report published February 2, 2016, 
which is entitled, ``Regulatory Indifference Hurts Vulnerable 
Communities, No. 7.
    \14\See Chamber of Commerce Report at p. 6. For additional 
background, see also, e.g. Brick Industry Association, An Overview of 
the American Brick Industry available at http://www.gobrick.com/
Resources/American-Brick-Industry.
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                     WHAT THE LEGISLATION WOULD DO

    H.R. 1917 would extend the compliance dates of the final 
2015 Brick MACT rule pending judicial review. The bill would 
extend the compliance dates for the period of time that begins 
sixty days after the final rule, or any successor or amended 
rule, appears in the Federal Register, and would end when all 
final legal challenges filed during that period have been 
resolved, and are no longer subject to legal review.
    This bill will ensure that there is adequate time for 
meaningful judicial review before the owners and operators of 
brick manufacturing facilities are required to make significant 
and potentially irreversible decisions regarding capital 
investments, or to operate less or shut down, all before the 
legality of the 2015 Brick MACT is known. While some have 
raised concerns that this bill would create an inappropriate 
precedent, here the agency's original rule was vacated after 
the compliance deadlines had already passed, and H.R. 1917 
seeks to ensure this will not occur with respect to the current 
rule.\15\
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    \15\The EPA's Mercury and Air Toxics (MATS) rule highlights how 
EPA's rules can effectively circumvent meaningful judicial review. For 
example, in Michigan v. EPA, 135 S. Ct. 2699 (2015), the U.S. Supreme 
Court held that EPA had violated the CAA in enacting regulations for 
power plants under Section 112 of the CAA. While the court found the 
rulemaking to be legally flawed, as a practical matter, the court's 
decision was of limited effect, See, e.g. June 30, 2015 EPA Connect, 
The Official Blog of the EPA Leadership (EPA Acting Administrator 
McCabe stated following the decision: ``the majority of power plants 
are already in compliance or well on their way to compliance.''
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                            COMMITTEE ACTION

    On September 13, 2017, the Subcommittee on Environment held 
a hearing on H.R. 1917. The Subcommittee received testimony 
from:
           Ryan Parker, President and CEO, Endicott 
        Clay Products;
           Vincent Brisini, Director of Environmental 
        Affairs, Olympus Power, LLC, on behalf of Anthracite 
        Region Independent Power Producers Association 
        (ARIPPA);
           Frank Moore, President, Hardy Manufacturing 
        Company, Inc.;
           Steve Page, President and General Manager, 
        Sonoma Raceway;
           Alexandra E. Teitz, Principal, AT 
        Strategies, LLC, on behalf of Sierra Club; and
           Rebecca Bascom, Professor, Penn State 
        College of Medicine, on behalf of American Thoracic 
        Society.
    On November 15, 2017, the Subcommittee on Environment met 
in open markup session and forwarded H.R. 1917, without 
amendment, to the full Committee by a record vote of 12 yeas 
and 10 nays. On December 6, 2017, the full Committee on Energy 
and Commerce met in open markup session and ordered H.R. 1917, 
without amendment, favorably reported to the House by a record 
vote of 31 yeas and 23 nays.

                            COMMITTEE VOTES

    Clause 3(b) of rule XIII requires the Committee to list the 
record votes on the motion to report legislation and amendments 
thereto. The following reflects the record votes taken during 
the Committee consideration:

                 OVERSIGHT FINDINGS AND RECOMMENDATIONS

    Pursuant to clause 2(b)(1) of rule X and clause 3(c)(1) of 
rule XIII, the Committee held a hearing and made findings that 
are reflected in this report.

   NEW BUDGET AUTHORITY, ENTITLEMENT AUTHORITY, AND TAX EXPENDITURES

    Pursuant to clause 3(c)(2) of rule XIII, the Committee 
finds that H.R. 1917 would result in no new or increased budget 
authority, entitlement authority, or tax expenditures or 
revenues.

                  CONGRESSIONAL BUDGET OFFICE ESTIMATE

    Pursuant to clause 3(c)(3) of rule XIII, the following is 
the cost estimate provided by the Congressional Budget Office 
pursuant to section 402 of the Congressional Budget Act of 
1974:

                                    U.S. Congrfess,
                               Congressional Budget Office,
                                  Washington, DC, January 10, 2018.
Hon. Greg Walden,
Chairman, Committee on Energy and Commerce,
House of Representatives, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for H.R. 1917, the Blocking 
Regulatory Interference From Closing Kilns Act of 2017.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Jon Sperl.
            Sincerely,
                                                Keith Hall,
                                                          Director.
    Enclosure.

H.R. 1917--Blocking Regulatory Interference From Closing Kilns Act of 
        2017

    H.R. 1917 would extend compliance dates for entities 
affected by any final rule addressing national emission 
standards for hazardous air pollutants (NESHAP) under the Clean 
Air Act for brick, structural clay, and ceramic products 
manufactured in kilns.
    The rules that would be affected are:
           NESHAP for Brick and Structural Clay 
        Products Manufacturing and NESHAP for Clay Ceramics 
        Manufacturing, published in the Federal Register on 
        October 26, 2015;
           NESHAP for Brick and Structural Clay 
        Products Manufacturing and NESHAP for Clay Ceramics 
        Manufacturing: Correction, published in the Federal 
        Register on December 4, 2015; and
           Any final rule that succeeds or amends those 
        rules.
    The NESHAP rule published on October 26, 2015, requires 
manufacturers of brick, structural clay, and ceramic products 
to reduce emissions of hazardous air pollutants from kilns.
    The bill would extend compliance dates for manufacturers to 
allow for resolution of the judicial review process. 
Manufacturers would not need to comply with the rule until a 
specified period after a judgment becomes final (that is, the 
judgment is not subject to further appeal or review) for all 
legal actions filed during the 60 days after the final rule is 
published in the Federal Register.
    Using information from the Environmental Protection Agency 
about current activities related to NESHAP, CBO estimates that 
the costs of modifying existing regulations to comply with H.R. 
1917 would be minimal and would not have a significant effect 
on the agency's workload or spending.
    Enacting H.R. 1917 would not affect direct spending or 
revenues; therefore, pay-as-you-go procedures do not apply.
    CBO estimates that enacting H.R. 1917 would not increase 
net direct spending or on-budget deficits in any of the four 
consecutive 10-year periods beginning in 2028.
    H.R. 1917 contains no intergovernmental or private-sector 
mandates as defined in the Unfunded Mandates Reform Act.
    The CBO staff contact for this estimate is Jon Sperl. The 
estimate was approved by H. Samuel Papenfuss, Deputy Assistant 
Director for Budget Analysis.

                       FEDERAL MANDATES STATEMENT

    The Committee adopts as its own the estimate of Federal 
mandates prepared by the Director of the Congressional Budget 
Office pursuant to section 423 of the Unfunded Mandates Reform 
Act.

         STATEMENT OF GENERAL PERFORMANCE GOALS AND OBJECTIVES

    Pursuant to clause 3(c)(4) of rule XIII, the general 
performance goal or objective of this legislation is to extend 
the compliance deadlines for EPA's 2015 Brick MACT rule pending 
completion of judicial review.

                    DUPLICATION OF FEDERAL PROGRAMS

    Pursuant to clause 3(c)(5) of rule XIII, no provision of 
H.R. 1917 is known to be duplicative of another Federal 
program, including any program that was included in a report to 
Congress pursuant to section 21 of Public Law 111-139 or the 
most recent Catalog of Federal Domestic Assistance.

                        COMMITTEE COST ESTIMATE

    Pursuant to clause 3(d)(1) of rule XIII, the Committee 
adopts as its own the cost estimate prepared by the Director of 
the Congressional Budget Office pursuant to section 402 of the 
Congressional Budget Act of 1974.

       EARMARK, LIMITED TAX BENEFITS, AND LIMITED TARIFF BENEFITS

    Pursuant to clause 9(e), 9(f), and 9(g) of rule XXI, the 
Committee finds that H.R. 1917 contains no earmarks, limited 
tax benefits, or limited tariff benefits.

                  DISCLOSURE OF DIRECTED RULE MAKINGS

    Pursuant to section 3(i) of H.Res. 5, the Committee finds 
that H.R. 1917 contains no directed rule makings.

                      ADVISORY COMMITTEE STATEMENT

    No advisory committees within the meaning of section 5(b) 
of the Federal Advisory Committee Act were created by this 
legislation.

                  APPLICABILITY TO LEGISLATIVE BRANCH

    The Committee finds that the legislation does not relate to 
the terms and conditions of employment or access to public 
services or accommodations within the meaning of section 
102(b)(3) of the Congressional Accountability Act.

             SECTION-BY-SECTION ANALYSIS OF THE LEGISLATION

Section 1. Short title

    Section 1 provides that the Act may be cited as the 
``Blocking Regulatory Interference from Closing Interference 
from Closing Kilns Act of 2017.''

Section 2. Extending compliance dates (Pending Judicial Review) of 
        rules addressing National Emission Standards for Hazardous Air 
        Pollutants for brick and structural clay products manufacturing 
        or clay ceramics manufacturing

    Section 2(a) provides that the term ``compliance date'' 
means the date by which any State, local, or tribal government 
or other person is first required to comply with the rule.
    Section 2(b) provides that the final rules subject to the 
Act include any final rule that addresses National Emission 
Standards for Hazardous Air Pollutants (NESHAP) for brick and 
structural clay products or for clay ceramics manufacturing 
under section 112 of the Clean Air Act (CAA), including any 
final rule that succeeds or amends the Environmental Protection 
Agency's (EPA) final rule published at 80 Fed. Reg. 65469 
(October 26, 2015) and 80 Fed. Reg. 75817 (December 4, 2015).
    Section 2(c) provides that the time period by which the 
compliance dates would be extended would be the period of time 
that begins 60 days after the final rule appears in the Federal 
Register, and ends on the date on which judgment becomes final, 
and no longer subject to further appeal or review, in all 
actions filed during the initial 60 days after the rule appears 
in the Federal Register seeking review of the rule, including 
actions pursuant to CAA section 307.

         CHANGES IN EXISTING LAW MADE BY THE BILL, AS REPORTED

    This legislation does not amend any existing Federal 
statute.

                            DISSENTING VIEWS

    We oppose H.R. 1917, also known as the BRICK Act. This 
legislation would delay implementation of the Environmental 
Protection Agency's (EPA) final Brick and Structural Clay 
Products rule and the final Clay Ceramics Manufacturing rule 
(Brick and Clay MACT) by extending all compliance deadlines 
until ``judgment [on court appeals, motions for stay, and 
administrative stay motions] becomes final, and no longer 
subject to further appeal or review.'' The bill's mechanism for 
extending compliance deadlines establishes a dangerous and 
hazardous precedent. It would specifically encourage the filing 
and perpetuation of frivolous and inappropriate lawsuits to 
delay the legal effect of regulations to protect public health 
and the environment.
    H.R. 1917 is unnecessary: judicial redress in these 
instances is already available to the industry; however, no 
party has yet availed itself of their rights as interested 
parties in these proceedings to request a stay of the rule in 
federal court.

                               BACKGROUND

    Section 112 of the Clean Air Act (CAA) requires EPA to set 
technology-based standards to reduce air toxics. These 
hazardous air pollutants (HAPs) are known or suspected to cause 
cancer and other serious health effects, such as reproductive 
or birth defects or neurological effects, or adverse 
environmental effects. EPA rulemakings aim to reduce the 
release of 187 HAPs, including mercury, cadmium, lead, benzene 
and dioxin.\1\ EPA takes a technology-based approach to 
regulating HAPs in order to achieve substantial reductions in 
air toxics relatively quickly using readily available 
technology.
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    \1\Environmental Protection Agency, About Air Toxics (https://
www.epa.gov/urban-air-toxics/about-urban-air-toxics) (accessed Jan. 9, 
2018).
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    Section 112 requires EPA to develop regulations for 
distinct source categories--like brick kilns--that set specific 
emission limits based on levels already being achieved by 
similar facilities. These regulations are known as Maximum 
Achievable Control Technology (MACT) standards, and the CAA 
required EPA to complete them for all source categories by 
2000. EPA sets minimum emissions levels, known as the MACT 
floor, based on the best-performing sources in a category.
    As such, EPA's Brick and Clay MACT standards are long 
overdue. The D.C. Circuit Court vacated an earlier version of 
EPA's rule in 2007. On remand from the court, EPA developed a 
new proposal and issued a final rule covering the Brick and 
Structural Clay Products industry and the Clay Ceramics 
industry in 2015.\2\
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    \2\Environmental Protection Agency, National Emissions Standards 
for Hazardous Air Pollutants (NESHAP) for Brick and Structural Clay 
Products Manufacturing; and NESHAP for Clay Ceramics Manufacturing, 80 
Fed. Reg. 65470 (Oct. 26, 2015) (Final Rule) (www.gpo.gov/fdsys/pkg/FR-
2015-10-26/pdf/2015-25724.pdf).
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                        SUMMARY OF THE BRICK ACT

    Subsection 2(b) of the BRICK Act delays implementation of 
the final Brick and Structural Clay Products rule and the final 
Clay Ceramics Manufacturing rule, or any subsequent rule, by 
extending all compliance deadlines based on pending judicial 
review. Subsection (c) suspends all compliance deadlines 
starting 60 days after the final rule appears in the Federal 
Register and ending when ``judgment becomes final, and no 
longer subject to further appeal or review.''
    The bill's proponents argue that legislation is needed to 
delay implementation of EPA's Brick and Clay rules until all 
legal challenges are resolved by the courts. However, legal 
challenges to final EPA rules are routine and courts have the 
power on their own to stay the effectiveness of regulations 
under court challenge.
    The bill throws out existing judicial process by 
legislatively granting a blanket extension for any compliance 
deadline, regardless of the merits of the legal challenge or 
the final outcome. This procedure would encourage frivolous 
challenges and additional appeals in order to extend the 
ultimate compliance deadlines set under the EPA final rule.
    At the full committee markup, Ranking Member Pallone noted 
that:

        ``Well-established legal factors exist for granting a 
        stay. These factors take into account whether there is 
        a likelihood of success on the merits, the prospect of 
        irreparable harm to the moving party and other parties, 
        and most importantly, whether granting the stay is in 
        the public interest. The courts have used these factors 
        time and time again to determine whether to grant a 
        stay and for how long. There is no reason for Congress 
        to override this process and the judgment of the 
        court.''\3\
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    \3\House Committee on Energy and Commerce, Statement of Rep. 
Pallone, Debate on H.R. 1917, the ``Blocking Regulatory Interference 
from Closing Kilns (BRICK) Act,'' Full Committee Markup, 115th Cong. 
(Dec. 6, 2017).

    This existing judicial process is the appropriate way to 
seek a stay of a rule, and is preferable to the Congressional 
intervention proposed by the BRICK Act. To date, no one has 
petitioned the court to stay the effectiveness of the Brick and 
Clay rules.
    Furthermore, the BRICK Act is unnecessary since EPA 
recently announced plans to reconsider the Brick and Clay rule, 
which is expected to be finalized by August 2019. Due to these 
plans, EPA asked the D.C. Circuit to indefinitely postpone the 
brick industry's lawsuit on the rule's merits.\4\
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    \4\Respondents' Notice of Action on Brick/Clay Rule and Unopposed 
Motion to Sever and Hold in Abeyance Industry Petitions, Sierra Club, 
et al. v. United States Environmental Protection Agency, et al., D.D.C. 
(No. 15-1487).
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                               CONCLUSION

    We oppose H.R. 1917 and the legislative remedy offered in 
the bill. While we believe the brick and clay industry has 
legitimate reasons to contest the current Brick and Clay MACT 
rule, the industry has not availed itself of the appropriate 
judicial remedy which has always been available to them: 
requesting a stay of the rule by the court. This problem should 
be resolved by the judiciary, not by Congress. Further, the 
bill would incentivize all parties that contest these rules to 
file repeated challenges resulting in endless delay of this 
rulemaking and continued uncertainty about the regulatory 
status of these facilities.
    H.R. 1917 sets an extremely bad precedent. The majority has 
offered this remedy in other legislation in response to other 
CAA authorities and rulemakings. Had Congress adopted a policy 
in the CAA that rulemakings would not be final until all court 
challenges and lawsuits had been resolved, the U.S. would not 
have realized the tremendous public health and environmental 
benefits that our country now enjoys. The CAA does provide 
judicial remedies. When properly petitioned, the courts already 
have ample power under federal statutes to stay agency rule in 
a myriad of instances. A fair and appropriate remedy for 
interested parties who oppose the rule's application and 
enforcement already exists--there is no need for another 
remedy.
    For the reasons stated above, we dissent from the views 
contained in the Committee's report.
                                   Frank Pallone, Jr.,
                                           Ranking Member, Committee on 
                                               Energy and Commerce.
                                   Paul D. Tonko,
                                           Ranking Member, Subcommittee 
                                               on Environment.
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