U.S. GOVERNMENT PRINTING OFFICE

WASHINGTON : 

For sale by the Superintendent of Documents, U.S. Government Printing Office

Internet: bookstore.gpo.gov Phone: toll free (866) 512–1800; DC area (202) 512–1800

Fax: (202) 512–2250 Mail: Stop SSOP, Washington, DC 20402–0001

76–760 2002

EPA RULEMAKING: DO BAD ANALYSES LEAD TO

IRRATIONAL RULES?

HEARING

BEFORE THE

SUBCOMMITTEE ON REGULATORY REFORM

AND OVERSIGHT

OF THE

COMMITTEE ON SMALL BUSINESS

HOUSE OF REPRESENTATIVES

ONE HUNDRED SEVENTH CONGRESS

FIRST SESSION

WASHINGTON, DC, NOVEMBER 8, 2001

Serial No. 107–35

Printed for the use of the Committee on Small Business

(

(II)

COMMITTEE ON SMALL BUSINESS

DONALD MANZULLO, Illinois, Chairman

LARRY COMBEST, Texas

JOEL HEFLEY, Colorado

ROSCOE G. BARTLETT, Maryland

FRANK A. LOBIONDO, New Jersey

SUE W. KELLY, New York

STEVE CHABOT, Ohio

PATRICK J. TOOMEY, Pennsylvania

JIM DEMINT, South Carolina

JOHN R. THUNE, South Dakota

MICHAEL PENCE, Indiana

MIKE FERGUSON, New Jersey

DARRELL E. ISSA, California

SAM GRAVES, Missouri

EDWARD L. SCHROCK, Virginia

FELIX J. GRUCCI, JR., New York

TODD W. AKIN, Missouri

SHELLEY MOORE CAPITO, West Virginia

BILL SHUSTER, Pennsylvania

NYDIA M. VELAZQUEZ, New York

JUANITA MILLENDER-MCDONALD,

California

DANNY K. DAVIS, Illinois

BILL PASCRELL, JR., New Jersey

DONNA M. CHRISTENSEN, Virgin Islands

ROBERT A. BRADY, Pennsylvania

TOM UDALL, New Mexico

STEPHANIE TUBBS JONES, Ohio

CHARLES A. GONZALEZ, Texas

DAVID D. PHELPS, Illinois

GRACE F. NAPOLITANO, California

BRIAN BAIRD, Washington

MARK UDALL, Colorado

JAMES R. LANGEVIN, Rhode Island

MIKE ROSS, Arkansas

BRAD CARSON, Oklahoma

ANIBAL ACEVEDO-VILA, Puerto Rico

DOUG THOMAS, Staff Director

PHIL ESKELAND, Deputy Staff Director

MICHAEL DAY, Minority Staff Director

SUBCOMMITTEE ON REGULATORY REFORM AND OVERSIGHT

MIKE PENCE, Indiana, Chairman

LARRY COMBEST, Texas

SUE KELLY, New York

SAM GRAVES, Missouri

ROSCOE BARTLETT, Maryland

TODD AKIN, Missouri

PAT TOOMEY, Pennsylvania

ROBERT BRADY, Pennsylvania

BILL PASCRELL, JR., New Jersey

CHARLES GONZALEZ, Texas

DAVID D. PHELPS, Illinois

JAMES R. LANGEVIN, Rhode Island

ANIBAL ACEVEDO-VILA, Puerto Rico

BARRY PINELES, Professional Staff Member

(III)

C O N T E N T S

Page

Hearing held on November 8, 2001 ........................................................................ 1

WITNESSES

Lutter, Randall, Resident Scholar, AEI-Brookings Joint Center for Regulatory

Studies .................................................................................................................. 3

Abrams, Fern, Director of Environmental Policy, IPC—Association Connecting

Electronics Industries .......................................................................................... 5

Bopp, Andrew, Executive Director, Society of Glass & Ceramic Decorators ...... 7

Conrad, James, Counsel, American Chemistry Council ....................................... 10

Giesecke, Anne, Director, Environmental Activities, American Bakers Association ........................................................................................................................ 12

APPENDIX

Opening statement: Pence, Hon. Mike ................................................................... 20

Prepared statements:

Lutter, Randall ................................................................................................. 23

Abrams, Fern .................................................................................................... 30

Bopp, Andrew .................................................................................................... 34

Conrad, James .................................................................................................. 39

Giesecke, Anne .................................................................................................. 49

Additional material:

Submission of Harold Koenig, The Annapolis Center for Science-Based

Public Policy .................................................................................................. 55

Letter to Chairman Pence from American Farm Bureau Federation .......... 87

(1)

EPA RULEMAKING: DO BAD ANALYSES LEAD

TO IRRATIONAL RULES?

THURSDAY, NOVEMBER 8, 2001

HOUSE OF REPRESENTATIVES,

SUBCOMMITTEE ON REGULATORY REFORM

AND OVERSIGHT,

COMMITTEE ON SMALL BUSINESS,

Washington, DC.

The subcommittee met, pursuant to call, at 10:25 a.m. in room

2361, Rayburn House Office Building, Hon. Mike Pence (chairman

of the subcommittee) presiding.

Chairman PENCE. The Subcommittee on Regulatory Reform and

Oversight will come to order on the topic of EPA Rulemaking: Do

Bad Analyses Lead to Irrational Rules?

I would like to apologize to the gentleman from Illinois and also

to the distinguished panel of witnesses that we have for my tardiness. Ironically, I was attending a briefing with EPA officials regarding the cleanup of my congressional office from an anthrax

contamination, which suffice it to say that there are good things

the EPA does. Today we may hear a different perspective from

some of our witnesses, but I am grateful for my colleague’s patience

and for the patience of all of those attending.

On June 21, I convened a roundtable on regulation to hear more

than 30 small business trade associations describe for this Chair

the struggles that they and their membership face from the regulatory state. Despite the diversity of concerns raised at the roundtable, one constant theme was evident; the inadequacy of the regulatory analyses that agencies use to support rulemakings. One

agency in particular that was singled out for its poor regulatory

analyses was the Environmental Protection Agency. Today’s hearing will attempt to address those flaws.

Small business owners are very familiar with burdens that federal regulations place on them. Many studies, including those sponsored by the Office of Advocacy of the United States Small Business Administration, have shown that small businesses face disproportionately higher costs to comply with federal regulations, including those issued by the EPA, than their larger business counterparts.

Thus, accurate estimates of cost, if derived from the experiences

of large businesses, may paint a false picture of the economic impact of an EPA regulation on small businesses. If the EPA misjudges the economic impact, will it produce a rational rule if the

vast majority of businesses in America cannot comply?

2

The polestar of the rulemaking process is that the regulations

must be rational. When Congress passed the Administrative Procedure Act in 1946, it believed that the process of notice, comment

and agency response to the public comment would be sufficient conditions to insure a rational outcome.

After the regulatory onslaught of the 1970s, which saw the creation of the EPA and the enactment of many statutes that EPA implements by rulemaking, Congress and the executive branch determined that further refinements were necessary. Congress imposed

new analytical requirements to assess the impacts on small businesses and other small entities. Presidents Reagan, Bush and Clinton produced Executive Orders mandating analysis of costs and

benefits beyond those required by the Administrative Procedure

Act or specific statutes such as the Clean Water Act.

In 1980, Congress enacted the Regulatory Flexibility Act. The

Act represents another tool in the decisional calculus designed to

develop rational rules. The RFA requires federal agencies to consider whether their proposed or final regulations will have a significant economic impact on a substantial number of small businesses. If the regulations do have a sufficient impact, the agencies

are required to consider whether less burdensome alternatives

exist that achieve the same objective.

The authors of the RFA expected that if an agency had two

equally effective alternatives to achieve its regulatory objective it

would logically select the one that is less burdensome on small

businesses. Of course, a critical element of this analytical filter is

the agency’s proper assessment of the impact of the regulation on

small businesses.

If the agency’s cost estimate is incorrect, then its assessment of

the burdens on small business will not be accurate, and the agency

will not seek more effective cost alternatives. Therefore, the analytical requirements of the Administrative Procedure Act and the Regulatory Flexibility Act are crucial. They have been supplemented

by regulatory review mandates by each President since 1980.

While the details are somewhat different, each Executive Order

requires federal agencies like the EPA to conduct cost-benefit analysis for significant regulations, usually those with more than $100

million impact on the economy. If the costs of the proposed or the

final rule outweighs the benefits, then the regulatory action would

be detrimental to the overall welfare of society, and the rational

policy maker, barring statutory imperative to the contrary, would

not seek to implement that particular regulation.

More importantly, regulatory analysis which demonstrates that

the cost of a particular regulation outweigh the benefits should give

policy makers greater pause. That should be a signal for them to

seek other alternatives to meet their statutory objectives, but that

do not impose unnecessary costs on society or commerce. Thus, inadequate and incorrect regulatory analyses, including the scientific

underpinnings of the estimates of costs and benefits, are detrimental to rational rulemaking and that mandated by the Administrative Procedure Act.

Today’s hearing focuses on a cross section of regulations from the

EPA that highlight the problems that can arise from incorrectly

constructed regulatory analyses. They often lead into a realm of irVerDate 11-MAY-2000 04:07 Jan 11, 2002 Jkt 076760 PO 00000 Frm 00006 Fmt 6633 Sfmt 6633 E:\HR\OC\A760.XXX pfrm04 PsN: A760
3

rational rulemaking such as the proposed cross media electronic reporting and record keeping rule, which would in essence require replacement of a substantial amount of existing information systems

that currently keep track of more than 216 pages worth of EPA

mandated record keeping. Proper application of the tools available

to the EPA should eliminate such results.

I look forward to the recommendation of all of our witnesses

today on the corrective actions that the EPA can take to avoid poor

analyses and would now turn to the Ranking Minority Member

who joins us today, the gentleman from Illinois, for any opening

comments that he might have for this panel or on this topic.

Mr. PHELPS. I do not have any. I am just anxious before the vote

to hear from this panel. Thank you.

Chairman PENCE.. Thank you very much.

With that, I will introduce Randall Lutter or Lutter?

Mr. LUTTER. Lutter.

Chairman PENCE. Lutter, thank you, is a resident scholar at the

American Enterprise Institute and a fellow at the AEI-Brookings

Joint Center for Regulatory Studies. He previously served as senior

economist for the environment and regulation on the President’s

Council of Economic Advisors and as staff economist for regulatory

affairs at the OMB.

Mr. Lutter is recognized for five minutes. We thank you for being

with us today.

STATEMENT OF RANDALL LUTTER, RESIDENT SCHOLAR,

AMERICAN ENTERPRISE INSTITUTE, AND FELLOW, AEIBROOKINGS JOINT CENTER FOR REGULATORY STUDIES

Mr. LUTTER. Thank you, Mr. Chairman. Thank you, Members of

the Committee. I am pleased to appear before you to provide my

views on how to improve regulatory analysis at the Environmental

Protection Agency.

For more than ten years I have worked inside and outside government on regulations to reduce risks. I am now with the AEIBrookings Joint Center for Regulatory Studies. A primary objective

of the Center is to hold lawmakers and regulators accountable by

providing thoughtful, objective analyses of existing regulatory programs and new regulatory proposals.

You have asked me for my views on whether EPA’s benefit-cost

analyses are adequate to support sound rulemaking. I would like

to start by making a distinction between two separate purposes of

these analyses. One is to inform decision makers at EPA and elsewhere in the Administration about the economic effects of regulation.

From the perspective of the decision makers who already control

the resources and have the authority to get the quality of analyses

that they want, these analyses may well be adequate. They have

control of the resources, and they can get the answers to the questions that they are interested in learning the answers to.

A second purpose of EPA’s regulatory analyses is to inform Congress and the public about the economic effects of its regulatory decisions. A significant number of EPA’s analyses are inadequate for

this purpose, primarily because the incentives for EPA to prepare

high quality analyses are poor. As an institution, EPA faces incenVerDate 11-MAY-2000 04:07 Jan 11, 2002 Jkt 076760 PO 00000 Frm 00007 Fmt 6633 Sfmt 6602 E:\HR\OC\A760.XXX pfrm04 PsN: A760
4

tives to overstate the net benefits of its rules, particularly those

rules that have very small or negative net benefits.

The biggest cause of poor economic analysis at EPA is the lack

of incentives for more forthright research. The absence of independent review of EPA’s benefit-cost analysis illustrates the lack of

incentives. Courts rarely review EPA’s benefit-cost studies because

environmental laws generally authorize EPA to regulate without

full consideration of the benefits and the costs.

No government body outside the executive branch assesses analytic quality. There are private sector critiques of EPA analyses,

but these are often ineffective because they also comment on the

regulations themselves. Independent observers tend to think that

such comments on the regulations motivate the critiques of the

analyses rather than the other way around.

I would like to make four specific recommendations on how

EPA’s regulatory analyses could be improved. First, Congress

should create a separate Office of Policy Analysis within EPA and

charge that office with doing all risk assessments and all benefitcost analyses of significant regulations.

Currently, EPA program offices charged with administering particular programs oversee most of the economic analysis supporting

these new regulations, but these offices suffer from a conflict of interest; tunnel vision, if you will. The air office naturally supports

air regulations. This conflict of interest could be substantially mitigated if there were a separate office in charge of regulatory analyses within EPA.

Second, Congress should require that EPA’s benefit-cost analyses

adhere to established principles for high quality.

The Office of Management and Budget, where I used to work,

has developed guidelines for doing sound regulatory analyses, yet

it is clear from a careful review of EPA’s economic analyses that

the agency has not taken these guidelines seriously. To add political weight to the guidelines, Congress should adopt the kinds of

principles contained in them and require that an agency such as

OMB certify that EPA adheres to such principles.

Third, Congress should ask an agency other than EPA to conduct

peer review of the economic analyses and of the risk assessments

supporting EPA’s significant rules.

Most of the economic analyses in the risk assessments supporting EPA’s decisions do not go through any sort of outside peer

review. Peer review may be no guarantee of absolute quality, but

mandatory peer review of EPA’s analyses of economically significant rules could provide an important new incentive for EPA to improve the quality of its analysis.

Fourth, Congress should fund regulatory analysis at the General

Accounting Office in accordance with the Truth In Regulating Act

of 2000.

It is important that there be a federal office outside the executive

branch that is capable of assessing the analyses supporting federal

regulations and the regulations themselves. The reason that the

Truth In Regulation Act project is appropriate in discussing the improvement of regulatory analysis at EPA is that EPA is responsible

for a very large share of all costs associated with new federal regulations. Congress could use the information generated by the GenVerDate 11-MAY-2000 04:07 Jan 11, 2002 Jkt 076760 PO 00000 Frm 00008 Fmt 6633 Sfmt 6602 E:\HR\OC\A760.XXX pfrm04 PsN: A760
5

eral Accounting Office to improve regulation and the regulatory

process.

In conclusion, a significant number of EPA’s benefit-cost analyses, while technically very sophisticated, fail to comply with established principles for sound analysis. Improving the quality of the

analysis requires establishing incentives for the agency to do high

quality work.

There are four steps likely to be effective. Congress could create

a separate policy office to conduct the analysis, it could mandate

adherence to sound analytic principles in each of the benefit-cost

analyses and risk assessments prepared by EPA, it could ask an

agency other than EPA to conduct peer review of EPA’s economic

studies and the associated risk assessments, and it should fund the

Truth In Regulating Act research at the General Accounting Office.

Thank you very much. I would be happy to take any questions.

[Mr. Lutter’s statement may be found in the appendix.]

Chairman PENCE. Thank you, Mr. Lutter.

Now Fern Abrams, who is the director of environmental policy

for IPC, which is the Association Connecting Electronics Industries,

responsible for advocating a number of positions in the areas of environment, health and safety. Prior to joining IPC, she served as

manager of environmental affairs at the American Trucking Association, where she focused in particular on Clean Air Act and hazardous water issues.

We thank you for being with us today. You are recognized for

five minutes.

STATEMENT OF FERN ABRAMS, DIRECTOR OF ENVIRONMENTAL POLICY, IPC—THE ASSOCIATION CONNECTING

ELECTRONICS INDUSTRIES

Ms. ABRAMS. Good morning, Chairman Pence and Members of

the Committee. My name is Fern Abrams. I represent IPC, the

trade association for the electronic interconnection industry.

Our 2,800 members manufacture and assemble printed circuit

boards, which are the backbone of the nation’s high tech industries,

including consumer, industrial and defense electronics. On behalf

of our members, I would like to thank you and your staff for organizing this important hearing.

Ninety percent of IPC members that manufacture printed circuit

boards are small businesses. As you know and stated in your opening, the cost of regulatory compliance often has a disproportionate

impact on small businesses. Environmental regulations must be

based on sound scientific and regulatory analysis so that they do

not create unnecessary burdens while failing to achieve their goal

of environmental protection.

IPC members, along with many other industries affected by the

EPA’s proposed effluent limit guidelines for industries that manufacture and maintain metal products, or more commonly known as

MP&M, are deeply concerned that the agency has overestimated

the benefits of the proposed regulation while significantly underestimating the economic impact.

The Clean Water Act requires that effluent limits be based on

best available technology that is economically achievable, yet the

agency has proposed limits that are neither affordable nor achievVerDate 11-MAY-2000 04:07 Jan 11, 2002 Jkt 076760 PO 00000 Frm 00009 Fmt 6633 Sfmt 6602 E:\HR\OC\A760.XXX pfrm04 PsN: A760
6

able. A review of discharge monitoring data indicates that none of

the facilities on which the proposed limits are based could meet the

limits consistently. In fact, some of the proposed limits are so low

that incoming drinking water would not meet them. These are not

achievable limits.

The proposed limits also fail to credibly meet the requirement

that they be economically achievable. The agency has significantly

underestimated the cost of compliance. Their errors include faulty

assumptions concerning technology capabilities, monitoring costs

and facility space constraints, just to name a few out of dozens. For

example, the agency has incorrectly assumed there will be no increase in monitoring costs when IPC member expected increases

range from $1,000 to $350,000 per facility.

The agency’s economic analysis also fails to meet common sense

inspection by projecting that many firms will remain profitable despite facing compliance costs that are several times greater than

their profit margins. This unreasonable analysis is made possible

only because the agency’s economic analysis assumes that compliance costs will be passed on to customers through a 90 percent increase in prices.

This assumption was apparently based on analysis of other unrelated industries conducted over five years ago in a vastly different

economic climate. In reality, over 72 percent of our members have

stated that they would not be able to raise their prices at all.

In addition, the rule’s economic analysis assumes that 50 percent

of printed circuit board facilities will be able to remain in business

without being able to replace worn out equipment or modernize for

15 years. That is an astounding assumption, given that printed circuit board manufacturers must constantly invest in new equipment

to meet customer demands for increasingly smaller electronics.

In addition to underestimating the cost of the proposed regulations, the agency has significantly overestimated its environmental

benefits. Unlike previously effluent limitations rulemakings which

use actual facility wastewater data to estimate the benefits of the

proposed rule, the agency relied upon models to simplify the task

of estimating costs and pollution benefits of this complex regulation

covering 18 different industrial sectors under 200 SIC codes.

By using inadequately detailed models populated with data borrowed from unrelated industries, the agency has fabricated an environmental benefit that does not exist. Pollution removals calculated from actual facility data are 98 percent lower than those

predicted by the agency’s flawed models.

In conclusion, we believe that the agency has not demonstrated

that the rule is cost effective. The agency has estimated the social

costs of the proposed rule are $2.1 billion annually, while the total

benefits that can be valued in dollar terms in categories traditionally analyzed for effluent guidelines are only in the range of $400

million to $1.1 billion annually.

The agency should not promulgate a rule with costs that exceed

its benefits. The agency should follow the recommendations of the

Small Business Regulatory Enforcement Fairness Act panel and remove from this rulemaking industries for which regulation is not

cost effective.

7

Fortunately, the MP&M effluent limits have not yet been finalized. In fact, the agency has been working constructively with affected industries, including printed circuit boards, to try to improve

the quality of its regulatory analysis prior to issuance of a final

rule.

Going forward, the agency must make a better effort to get regulatory analysis right the first time around. It should not be standard practice to propose a rule based almost entirely on faulty analysis and poor assumptions and then depend on industry to try to

uncover mistakes in the very short time for public comment. A

more open regulatory process with regular data exchange between

the agency and affected industries, combined with the early use of

reality checks, would make both proposed and final rules more accurate and effective.

Thank you again for giving IPC the opportunity to express our

concerns, and we welcome any questions.

[Ms. Abrams’ statement may be found in the appendix.]

Chairman PENCE. Thank you very much, Ms. Abrams.

We have a journal vote on the Floor. What we will do is recess

very briefly and do so now. That will permit me and the gentleman

from Illinois to go and record our vote. The Chair will return. I

know Mr. Phelps will return if his schedule permits, and we will

continue with the testimony.

I thank you for your forbearance, and we will return quickly.

[Recess.]

Chairman PENCE. We will return to our testimony in this hearing of the Subcommittee on Regulatory Reform and Oversight.

Andrew Bopp has been the executive director of the Society of

Glass & Ceramic Decorators since 2000. He previously served as

SGCD’s director of communications from 1995 forward. Mr. Bopp

was also communications director for the Association of Incentive

Marketing in Union, New Jersey, and is gratefully recognized for

five minutes. Thank you for your patience.

STATEMENT OF ANDREW BOPP, EXECUTIVE DIRECTOR,

SOCIETY OF GLASS & CERAMIC DECORATORS

Mr. BOPP. Thank you. Thank you for the opportunity to testify

on the TRI lead rule today. As you said, my name is Andrew Bopp.

I am the executive director of the Society of Glass & Ceramic Decorators. We are the trade association of companies that decorate

glass and ceramic tableware, souvenir mugs and other items. This

is a sample of what our members produce, this type of thing.

S.G.C.D. represents 650 companies and a manufacturing segment that is facing increasingly fierce competition from overseas

production facilities, especially in China. Most SGCD members are

small, often family owned companies that have more in common

with the average local print shop than with a large industrial facility. Many of these companies are into their third generation of family ownership. SGCD has members in 37 states, including Indiana,

Pennsylvania and Illinois.

The colors used by glass and ceramic printers contain various

metal bearing borosilicates. Some colors cannot be produced without lead. When fired, they become chemically part of the glass or

ceramic ware. Almost all of these lead bearing colors are used to

8

produce the product. Very little ends up as waste. SGCD and member companies work closely with FDA and other federal and state

agencies to guarantee the safety of all wares.

I am testifying today to point out major flaws in EPA’s economic

analysis of changes to its toxic release inventory reporting threshold for lead and lead compounds. It is important to note that SGCD

has made every attempt to work with EPA as it developed the rule.

This included testimony at the agency’s December 1999, hearing

after the original TRI rule was issued. It is obvious, however, that

the economic analysis was developed without any consideration of

the rule’s impact on glass and ceramic decorators.

I can understand why EPA would balk at evaluating every industry that might possibly be required to complete TRI reports under

the new standard. However, EPA listed stone, clay, glass and concrete products, SIC 32, as being among the five largest lead reporting groups in the 1998 TRI reporting year at the 10,000 pound

threshold.

Even after recognizing the significance of this industry group,

Mr. Chairman, EPA chose to examine glass and ceramic decorators

as part of a wide range of unrelated industries. This was done even

though the other four top 1998 filers were evaluated separately. In

so doing, EPA failed to consider the situation in the glass and ceramic industry where TRI reporting burdens and costs are dramatically greater for small companies than large companies.

It is possible that in some industries the differences in tracking

lead usage may not be great between companies of varying sizes.

However, the use of lead bearing colors in the glass and ceramic

decorating industry is fairly unique. It is important to first note

that every lead bearing color may contain a different quantity of

lead. Every decorator must trace every lead bearing color used and

make different calculations for that color.

You must also consider that large glass and tableware plants

produce and decorate millions of matching plates, bowls, glasses

and related items using a limited number of colors. These colors

are likely to be used in large quantity, though. Some of these colors

do contain lead, and the steps required to trace the lead used are

confined to the numbers of colors used. Such tracking and reporting can be handled efficiently by a large decorator that employs an

environmental compliance department.

On the other hand, the small contract glass and ceramic decorator fills orders that typically number in the dozens or hundreds

of pieces. These small plants may use a greater variety of colors in

a day than a large decorating facility will use in a month.

It is important also to note that none of these small businesses

employ environmental compliance staff to handle such complicated

burdens. There is no indication that EPA even considered the possibility of such a situation for small glass and ceramic decorators.

As a result, EPA’s estimate of the time necessary to compile and

complete the TRI forms of 111 hours per year does not remotely

correspond with reality for small glass and ceramic decorators. Remember, this is a rule that is supported by more than 500 pages

of instructions and guidance.

As a further result, EPA’s compliance cost estimates are correspondingly low. This directly affects the number of companies

9

that the agency believes will feel an impact beyond the one percent

and three percent annual revenue thresholds that are used to determine the rule’s small business impact.

To add insult to injury, EPA’s economic analysis also includes

the ridiculous assertion that there will be no first time filers in SIC

32 based on their research efforts such as they are. In reality, there

are hundreds of small decorators that have never completed a TRI

form for lead or any other TRI substance who must now comply.

Problems started when EPA failed to conduct small business outreach before first issuing the TRI proposal. From the appearance

of the agency’s economic analysis, it is obvious that SGCD’s efforts

to work with the agency after that point were ignored.

I also want to point out that the drastic reduction in the lead

TRI threshold from 10,000 pounds to 100 pounds is based on a scientific premise that EPA has still not sent for independent peer review as it had promised. Given the massive effort and costs required to comply with the new TRI rule, one must ask what purpose do reports of this low threshold serve. There is no evidence

whatsoever that glass and ceramic decorators present an environmental problem in their operations.

In conclusion, I urge the Committee to require federal agencies

to meet with and learn from small businesses before regulatory

proposals are issued. Early outreach will insure that federal agencies properly assess small business impacts and develop proposals

that are tailored to meet agency objectives with the smallest business impact.

In terms of the TRI proposal, EPA’s failure to conduct early

small business outreach and the resulting inadequacy of its economic analysis deprived small businesses of the opportunity to

have their unique situations considered. Due to these omissions

and the large number of scientific uncertainties, I urge you to request the agency to reconsider the lead TRI rule to comply with the

letter, as well as the spirit, of SBREFA while also conducting a

prompt and thorough review of the scientific premise upon which

the rule is based.

Thank you for the opportunity to testify before you today, and

please ask if you have any questions.

[Mr. Bopp’s statement may be found in the appendix.]

Chairman PENCE. Nicely done, Mr. Bopp. Thank you. We will

have questions, I and my colleague, for each of you at the conclusion of the testimony.

James Conrad, Jr., is counsel with the American Chemistry

Council, where he provides legal and policy advice to the regulatory

and legal innovation team. Jamie leads the council’s advocacy regarding environmental innovation, legislation programs, compliance and enforcement issues, governmental management of environmental information and the use of information as a regulatory

or policy tool. He spent eight years in private practice with the

Washington, D.C., office of Davis, Graham, Stubbs & Cleary where

his practice encompassed regulatory advocacy counsel and litigation. He also developed and edits the Environmental Science Desk

Book, which is published by West Group.

With gratitude, he is recognized for five minutes.

10

STATEMENT OF JAMES CONRAD, JR., COUNSEL, AMERICAN

CHEMISTRY COUNCIL

Mr. CONRAD. Thank you, Mr. Chairman and Mr. Phelps. I am

pleased to testify before you today regarding EPA’s recently proposed Cross Media Electronic Reporting and Record keeping Rule

or ‘‘CROMERRR’’. While many American Chemistry Council members are Fortune

500 companies, we estimate that between a third and a half of our

members—or between 60 and 90 percent—meet the SBA standards

for a small business. Many of these members have only a single

manufacturing plant. These smaller companies stand to benefit the

most from the efficiencies made possible by information technologies. Most of these companies already keep records electronically.

Unfortunately, CROMERRR would do nothing to help that process. In fact, it would have the opposite effect, driving businesses

back to using paper records. It would also cost $48 billion in initial

costs—and that is based on EPA’s own numbers.

What exactly is CROMERRR, and why is it so expensive? In a

nutshell, the proposal imposes elaborate technical requirements on

electronic information systems to guard against the remote prospect that data might be tampered with. For example, records must

have secure, computer generated, time stamped audit trails that

identify anyone who ever created or modified the record, when they

did it and what changes they made. No off-the-shelf software does

this now.

Mr. Chairman, the Food and Drug Administration imposed essentially the same regulation on drug companies in 1997. Most of

them are still struggling, four years later, to comply with it. The

average cost of compliance with this rule for drug companies is

over $100 million apiece.

E.P.A. and authorized states regulate a lot more entities than

the FDA does. In fact, EPA’s own cost-benefit analysis estimates

that about 1.2 million facilities file reports under EPA administered laws. These facilities keep a lot of records for EPA as well.

What will it cost for these 1.2 million facilities, most of them small

businesses, to comply with CROMERRR?

E.P.A.’s own analysis estimated that the up-front costs, on aver- age, would be about $40,000, with annual costs thereafter of

$17,000. $40,000 times 1.2 million facilities is $48 billion up front.

That is almost seven times EPA’s annual budget. $17,000 times 1.2 million is $20 billion in annual costs. That is over four times what

the OSHA ergonomics rule would have cost annually.

Now, EPA’s cost-benefit analysis does not contain these $48 bil- lion or $20 billion figures because EPA contends that CROMERRR

is entirely voluntary. In fact, their cost-benefit analysis assumes

that very few companies would even adopt these requirements because of the great cost. The problem, though, is that most people

would have no choice but to comply.

We are not accusing EPA of dishonesty. They just did not analyze their own regulation well enough to understand how it would

work. Here is how it would work. Under CROMERRR, as long as

a piece of information has ever passed through a computer, at any

time in its life, it is an electronic record.

11

Next, the proposal says that any electronic record has to meet all

the technical requirements of CROMERRR or else that record no

longer satisfies the obligation to keep records. You are basically in

violation of your record keeping obligation. You either comply with

CROMERRR, or you switch to paper. What an ironic result: an

EPA rule designed to implement the Government Paperwork Elimination Act driving people to using paper record keeping.

What is worse, if a regulation is generated by a computer in the

first instance, then it is an electronic record from the get go, and

printing it out on a piece of paper does no good.

For example, one of our smallest members has only 100 employees in two plants. In one of those plants they monitor the pressure

on a pump in their air pollution control equipment. That data is

generated by an electronic sensor, and it goes directly into the company’s distributed process control system. Under CROMERRR, that

data is an electronic record from the moment it is created, and

paper is not an option to comply. That company would potentially

have to redo its entire electronic control system.

Mr. Chairman, we agree that EPA has some legitimate concerns

about protecting the integrity of data, but insuring integrity has an

impact, and how much impact depends upon how secure the system

needs to be. That is why OMB’s guidance for implementing the

Government Paperwork Elimination Act calls for agencies to do a

risk analysis to decide how much security is appropriate. That

guidance specifically says not to adopt a one-size-fits-all approach.

EPA never completed that analysis, and they ended up instead

adopting a single, high-security approach.

It may be too late for the drug companies that are spending hundreds of millions of dollars to comply with another rule that was

also supposed to be voluntary. Let’s not make the same mistake

twice. We encourage EPA to withdraw CROMERRR immediately so

that they can sit down with regulated entities large and small and

learn about how these entities keep records and what sort of a

problem there is, if one at all, in this case. The American Chemistry Council is ready and willing to engage in that discussion.

Thanks very much. I would be happy to answer any questions.

[Mr. Conrad’s statement may be found in the appendix.]

Chairman PENCE. Thank you, Mr. Conrad.

Our final witness is the vice-president of environmental activities

at the American Bakers Association, Dr. Anne——

Ms. GIESECKE. Giesecke.

Chairman PENCE [continuing]. Giesecke. Thank you for your assistance.

As vice-president of environmental activities with the American

Bakers Association, Dr. Giesecke has been in charge of identifying

and managing environmental issues and projects related to the

baking industry. Dr. Giesecke is on the governing boards of the

American Society of Baking and Baking Industry Sanitation Standards Committee. Her career focus on environmental issues began

in 1980 with the Department of the Interior and continued with

the U.S. Environmental Protection Agency as an environmental

specialist from 1986 to 1991. She is the author of more than 60 articles related to resource management published in a variety of law

12

reviews and environmental journals and is gratefully recognized for

five minutes.

STATEMENT OF ANNE G. GIESECKE, VICE-PRESIDENT, ENVIRONMENTAL ACTIVITIES, AMERICAN BAKERS ASSOCIATION,

AND CO-CHAIR, CLEAN WATER INDUSTRY COALITION

Ms. GIESECKE. Thank you, Mr. Chairman and Mr. Phelps. On behalf of the Clean Water Industry Coalition chaired by myself and

Meg Hunt of Edison Electric—we call it CWIC—we would like to

thank you for this opportunity.

CWIC is made up of more than 250 companies and associations

representing the nation’s major manufacturing and service industries. CWIC is pleased that this Subcommittee is exploring the

quality of EPA regulatory analyses and whether those analyses are

adequate to support rational rulemaking.

At the onset, it is important to remind everyone that millions of

people working to make our economy function share basic American environmental, health and safety values and want them applied to their workplaces, their homes and their communities. We

certainly support strong environmental and health rules that are

founded on sound science and developed in a deliberative and public process that includes working with the states and the regulated

community so that the requirements achieve the rules’ goals and

are both effective and cost conscious.

The members of CWIC, and I would like to acknowledge the National Association of Manufacturers for their help with this testimony, believe that last year’s rulemaking pursuant to the Clean

Water Act to revise the total maximum daily load, TMDL, regulations was hastily issued and seriously underestimated the available

science and the economic impacts on state and local governments

and the regulated community.

Among the rule’s many problems, it did little to address serious

concerns with current 303(d) lists of impaired waters arising out of

poor or nonexistent available water quality data, thereby establishing a potential for a gross misallocation of scarce resources. The

Clean Water Act requires each state to identify waters that are not

meeting water quality standards after the application of technology

controls on point source dischargers. The resulting list is often referred to as the state’s 303(d) list, and states are required to establish total maximum daily loads, TMDLs, for all waters on this list.

Establishing a TMDL requires a state to determine how much reduction each point and non-point source of pollution on the water

body must make for water quality standards to be met. It is a complex, difficult and expensive calculation that needs science based

monitoring data to be effective and presents a resource management issue for the federal government, the states and the regulated

community.

We believe, therefore, that the process should be targeted toward

those waters clearly established as impaired based on good data

and upon sound scientific analysis. Manufacturers, particularly

those of us in the food sector, need a clean, abundant and affordable water supply.

CWIC has supported many state and local concerns expressed

during this rule writing process. For example, the Association of

13

State and Interstate Water Pollution Control Administrators,

ASIWPCA, the national professional organization of state and

interstate water quality program officials, stated in their June 20,

2000, comments to EPA that, ‘‘State TMDL development and implementation to date clearly demonstrates that the cost estimates

developed by EPA are inadequate, incomplete and misleading. Far

more will be required to develop a TMDL than the $25,000 the

EPA envisions.’’ ASIWPCA members testifying before Congress have estimated

the costs to states of preparing nearly 40,000 TMDLs over 15

years, as presently required, to be between $1 billion and $2 billion

annually. Moreover, in a recent draft cost report mandated by Congress, the National Cost of the TMDL Program, the EPA estimates

that the average annual cost for developing TMDLs will be $63

million to $69 million.

In a recent General Accounting Office study, only six states responded that they have a majority of the data needed to fully assess all their waters. Forty-five states reported a lack of resources,

and several states pointed out that they are operating under state

imposed staffing restrictions. Others said that they are limited in

how many samples they can analyze because of the shortage of laboratory funding. EPA staff admitted that fewer resources are being

devoted to monitoring and assessment at the state level than ever

before.

In addition to these program costs are the costs that will be incurred by the regulated community to participate in TMDL development and even more significant costs of compliance. The capital

and annual operating and maintenance cost for companies is staggering. The Advent Group, a wastewater consulting company, estimates the cost of the TMDL regulations on the regulated community to be between $20 billion and $80 billion over a ten year period.

Was the TMDL rule the result of bad analysis? In a recent National Academy of Sciences National Resource Council study, the

NRC listed numerous errors, the lack of sufficient data and unscientific rationale for proposing the rule. These issues must be addressed in any revision of the TMDL promulgated in July, 2000.

We are hopeful that during the next 18 months steps can be

taken to revise the rule and to establish a framework that is technically, scientifically and programmatically sound.

We applaud you for holding this hearing, and I would be glad to

answer any questions. Thank you.

[Ms. Giesecke’s statement may be found in the appendix.]

Chairman PENCE. I am going to break protocol and recognize the

patient gentleman from Illinois who awaited the Chair for the initial round of questions. The Chair will reserve the opportunity to

question the panel after Mr. Phelps is done.

Mr. PHELPS. Thank you, Mr. Chairman. No apologies necessary.

It is a tough schedule sometimes, so we appreciate your indulgence.

Mr. Conrad, first, industry groups have a paramount job of

record keeping standards, strict standards that should be met. Why

should EPA not have specific requirements for measuring or making sure that your records are legally kept and legally I guess

would be tested in some way, but an alternative?

14

Mr. CONRAD. You are absolutely right. Our members have legal

obligations to retain records and to preserve them and not change

them, and they do that. They are at the risk of criminal prosecution, certainly, if they monkey with them intentionally.

It is also appropriate, I think, in the area of electronic records

to have some degree of security so that the records are not immediately accessible by anybody, but in fact our members have some

sorts of security procedures in place now. The computers where

these data are kept are not accessible to just about anybody. They

have PIN numbers and other kinds of access restrictions.

They have been doing all this for years, and there is, to our

knowledge, no evidence that any of this is insufficient. We are not

aware of any cases where electronic data have been manipulated

or, perhaps more to the point, where the government has had any

difficulty in prosecuting any of these kinds of cases, so I guess our

plea is that we sit down with EPA—and apparently the Justice Department as well—and sort of talk through how we keep these

records and what the concerns are, what would be a cost effective

approach to guaranteeing their security.

Mr. PHELPS. Are you satisfied with the opportunities that groups

were given to participate in public comment meetings, written comments, on the regulations about electronic record keeping? If so,

what concerns were raised by your group at any of the meetings?

Mr. CONRAD. Well, the ironic thing is that this rule actually was

developed in a fairly open fashion, and the EPA did have a couple

of public meetings in the summer of 2000 to lay out what was

going on. Folks actually spoke up.

I happen to have a reliable paper copy of the handout of that

meeting and my notes from it, and I wrote up at the top 16 months

ago with a star next to it, ‘‘People are freaked about not being able

to print out computer documents and sign them. Few people have

or can afford all the electronic audit trail stuff to ensure no

changes.’’ People were raising these concerns at the meeting. I mean, I

knew nothing about this issue until I went to this meeting. I gathered from what I heard over the course of that day that people had

tremendous heartburn about what this could mean from the record

keeping.

We assumed that, having heard that, the agency would take

those concerns into account, and yet the proposal is essentially exactly the same as they talked about back then.

Mr. PHELPS. So what was the agency’s response when these concerns were raised at the meeting?

Mr. CONRAD. They sort of just took notes. I mean, it was sort of

a one-way thing. People explained how they felt, and they wrote

them down, but there was never really a give and take.

Mr. PHELPS. Kind of one of those things the doctor puts down

when you are getting diagnosed. Hmmm. Kind of like that?

Mr. CONRAD. Maybe they couldn’t read their own handwriting.

Mr. PHELPS. Dr. Lutter, you have been an outspoken critic of the

cost-benefit analysis obviously. Would you think it would be most

efficient in some cases for an agency to do an economic analysis

even knowing that data gaps exist and make corrections based

upon public comment?

15

Mr. LUTTER. I am not sure I understand your question. Currently

the agencies prepare economic analyses of regulations, publish

them at the proposal stage and solicit comments on that analysis

along with comments on the rule at the proposal stage. I think that

is an appropriate procedure.

Mr. PHELPS. Well, what I am getting at is when a rule is trying

to be substantiated, the expenditures can be compared with the

final projected benefits. The question is would it be just as cost effective to proceed with publishing the rule and allowing the industry to fill in the gaps?

Mr. LUTTER. Sir, to fill in the gaps in the analysis? No. I think

that is a role for the government to undertake, provided that there

is adequate opportunity for the public and the affected industries

to comment on the appropriateness of the analytic procedure the

agency is following.

Mr. PHELPS. So adequate reliability you think could be achieved.

I think it has been noted that you have established that it cannot

be achieved by peer review, adequate reliability, to replicate agency

analysis, but by systematic, independent efforts to replicate agency

analyses.

Do you believe that the taxpayer is best served using replicating

agency analyses, or is this a theory based on resources and time?

Mr. LUTTER. I would like to focus attention on the key and often

neglected purpose of the economic analysis, which is to inform

Members of Congress and the public about the merit of the regulatory decisions. I think that the existing institutional incentives

that the agency faces do not really promote forthright and neutral

analysis from the agency.

The question is how does one improve those incentives? There

are several procedures. One would be peer review. Surely that is

worth doing. Currently there is no adequate independent peer review of EPA’s regulatory analysis. A separate one in addition to

that—these are complementary approaches—would be for Congress

to fund the Truth In Regulating Act project at the General Accounting Office. I think that that office could, as part of its work,

seek to verify whether or not agency estimates are replicable.

My inspiration for that comment is largely based on longstanding

work in the community of academic economics. Even peer reviewed

articles are not always replicable in the sense that other researchers trying to ask whether identical methods applied to identical

data lead to identical answers discover that they do not.

It is for that purpose that I think it would be very useful to have

a TIRA project at GAO seek to ascertain the replicability of analyses by regulatory agencies.

Mr. PHELPS. Thank you.

Ms. Abrams, representing a large rural district—I have the largest geographic district east of the Mississippi, a lot of small counties with 4,000 or 5,000 in the whole county—one of the greatest

challenges I have had as a state legislator, as well as a congressman now, is to try to work with those people, you know, at whatever degree or level of wastewater treatment plants they have.

It is a Catch-22 in trying to attract industry to small areas that

need jobs that do not have the tax base for other mandates and obligates for the people to get industry to come in. One of the first

16

things they are looking at is what kind of, of course, infrastructure

totally, but water and sewer and waste treatment plants.

In Illinois, most of the small communities, to be able to access

government grants it is based on a matching system like an 80/20

for local, for state, federal flow through money to the economic

commerce agencies, or sometimes 70/30, 90/10.

These small communities, you know, by the mere nature of the

cost of wastewater treatment and those infrastructure needs cannot

attract or do not do a very good job—I should not say cannot—by

their own limitations industry, and yet where industry does exist

the question is when we get into your industry, the metal products

and machinery, do you think your industry avoids passing along

the cost to the townspeople of treating the waste?

Ms. ABRAMS. The industry is already 100 percent regulated by

pre-treatment standards under the existing 413 metal finishing

and 433 standards, so I think to the extent that the EPA has seen

fit, the industry is already pre-treating and covering the large cost

of treatment pursuant and resultant from their processes.

I think it is important to note in the case of this proposed rule

that it is a re-regulation of industries already fully regulated and

that it is opposed by the trade associations representing the publicly owned treatment works because they feel that it imposes a

large cost completely underestimated by EPA on the POTWs to implement a federal effluent limit guideline. They feel that existing

effluent limit guidelines fully protect them and allow them to do

the job that they need to protect the community’s water sources.

They also already have fully delegated authority to impose local

limits that are higher when they see fit to protect either environmental quality or their own economic viability, so they feel that

these standards are wholly unneeded and in fact present a burden,

not a benefit for them and for the communities that you are speaking of.

Mr. PHELPS. Is that a major concern, though, for your industry,

the wastewater treatment cost, or is it just pretty much accepted?

Ms. ABRAMS. Right now it is the cost of doing business. Those

regulations have been around for over a decade. I am not sure

there is a company out there that could tell me off the top of their

head what percentage of their environmental compliance costs it

represents. It is a significant cost, but it is part of being a corporate citizen in America that you need to treat your wastewater.

The issue at hand is that the proposed regulation has no environmental benefit and would increase costs to the extent that we fully

believe over 50 percent of the domestic printed circuit board industry would be unable to compete globally and that there would never

be a new circuit board plant constructed in this country.

Mr. PHELPS. Thank you very much. I may have questions later.

Chairman PENCE. The Chair would also like to thank the panel

for some very provocative and thoughtful presentations.

A few questions starting with Dr. Lutter; not to put you on the

spot after that good exchange. What agency do you think should be

charged with selecting peer reviewers for EPA’s regulatory analyses?

Mr. LUTTER. The simple answer is not EPA.

Chairman PENCE. Okay.

17

Mr. LUTTER. The more complete and truthful answer and much

more informative answer is much harder. In discussions with other

people, NAS or NRC has come to mind, but it is not clear what

would be the perfect answer to that question.

I think what one can say is that it should not be EPA because

the process of picking peer reviewers, and the process of managing

the questions given to the peer reviewers is one that can be controlled in such a way as to make analysis look like it is blessed

when in fact people continue to have serious reservations about its

credibility. This suggests that some non-EPA agency would be more

apt to do that job well.

Chairman PENCE. Ms. Abrams, I have the impression that you

believe the EPA did not perform an effective outreach in developing

and seeking comments on the proposed MP&M rule. What should

EPA have done to improve the outreach in specific recommendations?

Ms. ABRAMS. I think that the EPA made a good effort to outreach. They convened a SBREFA panel, which they do not do for

every proposed rule. They also held public hearings.

I think with respect to the SBREFA panel that there was just

not enough data presented to the SBREFA panel for them to make

adequate review and assessment, and even after the rule had been

published in the Federal Register a good bit of the background data

and analysis was not available in the public record for several

months after that, resulting in an extension of the rulemaking period.

Chairman PENCE. Mr. Bopp, I found some of your testimony really breathtaking.

Mr. BOPP. So do our members.

Chairman PENCE. The estimate of 111 hours per year to make

their way through 500 pages of instruction.

I guess my question is you essentially are saying the EPA failed

to assess the impact specifically on ceramic and glass decorators,

not understanding the nature of the industry essentially as a subset of the regulated class.

Do you have any recommendations about if the EPA did identify

your industry in particular how we would insure that they would

develop regulatory analyses based on the correct data and a correct

understanding?

Mr. BOPP. That is a good question because the correct data was

there. I mean, the rule was first announced and then pulled back,

and then several of our members, small members, testified before

a panel, so it was not a question of them being unaware of us. One

way or the other, it just was not considered, or if it was considered

it did not come out in the research at all.

I guess it would get down to better peer review of the research.

Again, I mean, to come out with something like this, as flawed as

it is. And in the end it was a very, very rushed rule. It was pushed

through officially finally January 17 of this year. There were a lot

of rules that went through that way, and I think not enough care

was given at that point for whatever reasons.

It was not a question of them not getting the information from

us. It was a question of for one reason or another it did not enter

into their economic reports. Therefore, it did not enter into considVerDate 11-MAY-2000 04:07 Jan 11, 2002 Jkt 076760 PO 00000 Frm 00021 Fmt 6633 Sfmt 6602 E:\HR\OC\A760.XXX pfrm04 PsN: A760
18

eration. I guess better peer review, like some others have mentioned, would really help that and, again, someone other than EPA

reviewing their research.

Chairman PENCE. Thank you.

Dr. Giesecke, the EPA originally estimated that the total incremental cost of TMDL was going to be about $220 million, and then

one year later in a draft economic report the cost estimate was

raised to a minimum of $10 billion over ten years.

With your background in this area, how do you account for that

kind of almost logarithmic difference in estimates?

Ms. GIESECKE. They had taken advantage of a regulatory interpretation and determined that they did not have to fully account

for expenses that might be incurred by the states because this was

a delegated authority in most cases, so they simply used a number

limited to what EPA headquarters and regional offices might be expected to incur and not consider what the delegated states and certainly not even in the next estimate what the regulated community

would be subject to in terms of costs.

Chairman PENCE. Thank you.

Mr. Conrad, did the EPA recognize in the CROMERRR circumstances any substantial differences between the chemical industry and the pharmaceutical industry? In your testimony you indicated that 60 to 90 percent of the businesses in your association

are small businesses.

I do not have testimony or information about the nature of the

pharmaceutical industry, but it seems to me there are very few

companies that can survive in that industry that would qualify for

any of this Committee’s jurisdiction.

Mr. CONRAD. Right. Of course, CROMERRR does not just affect

us. I mean, essentially it affects anybody who is required to keep

records under any EPA requirement under any statute, so Clean

Air, Clean Water, RCRA.

I mean, you have all kinds of regulated entities down to the size

of gas stations, as well as all of the consultants and analytical labs

and so on who work for them whose computers have to mesh with

them and who are all affected, so it is a much wider range of facilities.

I am not really familiar with the size distribution of businesses

in the drug industry, but certainly my experience kind of off the

cuff is that drug companies tend to be pretty big, and that they are

gobbling each other up and have a lot more capacity to absorb a

regulation like that.

Frankly, the things they are regulating, I mean, these are things

people eat, as opposed to materials which certainly people have the

potential to be exposed to, but it is a much more attenuated chain

from a regulated facility under EPA to a person than in the case

of drugs.

Chairman PENCE. Thank you.

Having conferred with the gentleman from Illinois, my colleague,

that he does not have any additional questions, we will move to adjourning this hearing with a word of gratitude to each one of you

for greatly illuminating our understanding of the challenges in the

area of the analyses the EPA uses.

19

I particularly appreciate Dr. Lutter’s comment with regard to

using established principles for sound analysis, which will be very

much of a lodestar.

Mr. PHELPS. I would also like to thank the panelists for their

very well designed testimony. Thank you.

Chairman PENCE. With that, again my gratitude for your patience with my schedule today. Enjoy your lunch.

[Whereupon, at 11:45 a.m. the subcommittee was adjourned.]

20

21

22

23

24

25

26

27

28

29

30

31

32

33

34

35

36

37

38

39

40

41

42

43

44

45

46

47

48

49

50

51

52

53

54

55

56

57

58

59

60

61

62

63

64

65

66

67

68

69

70

71

72

73

74

75

76

77

78

79

80

81

82

83

84

85

86

87

88