Document ID: EPA-HQ-OAR-2002-0058-0639
Agency: epa
Document Type: Supporting & Related Material
Title: 
Posted Date: 2004-02-26T05:00Z

D.
Unfunded
Mandates
Reform
Act
of
1995
Title
II
of
the
Unfunded
Mandates
Reform
Act
of
1995
(
UMRA),
Public
Law
104­
4,
establishes
requirements
for
Federal
agencies
to
assess
the
effects
of
their
regulatory
actions
on
State,
local,
and
tribal
governments
and
the
private
sector.
Under
section
202
of
the
UMRA,
we
generally
must
prepare
a
written
statement,
including
a
cost­
benefit
analysis,
for
proposed
and
final
rules
with
"
Federal
mandates"
that
may
result
in
expenditures
to
State,
local,
and
tribal
governments,
in
the
aggregate,
or
to
the
private
sector,
of
$
100
million
or
more
in
any
1
year.
Before
promulgating
a
rule
for
which
a
written
statement
is
needed,
section
205
of
the
UMRA
generally
requires
us
to
identify
and
consider
a
reasonable
number
of
regulatory
alternatives
and
adopt
the
least
costly,
most
cost­
effective
or
least
burdensome
alternative
that
achieves
the
objectives
of
the
rule.
The
provisions
of
section
205
do
not
apply
when
they
are
inconsistent
with
applicable
law.
Moreover,
section
205
allows
us
to
adopt
an
alternative
other
than
the
least
costly,
most
cost­
effective
or
least
burdensome
alternative
if
the
Administrator
publishes
with
the
final
rule
an
explanation
why
that
alternative
was
not
adopted.
Before
we
establish
any
regulatory
requirements
that
may
significantly
or
uniquely
affect
small
governments,
including
tribal
governments,
we
must
develop
a
small
government
agency
plan
under
section
203
of
the
UMRA.
The
plan
must
provide
for
notifying
potentially
affected
small
governments,
enabling
officials
of
affected
small
governments
to
have
meaningful
and
timely
input
in
the
development
of
regulatory
promulgation
with
significant
Federal
intergovernmental
mandates,
and
informing,
educating,
and
advising
small
governments
on
compliance
with
the
regulatory
requirements.
We
determined
that
the
final
rule
contains
a
Federal
mandate
that
may
result
in
expenditures
of
$
100
million
or
more
for
State,
local,
and
Tribal
governments,
in
the
aggregate,
or
the
private
sector
in
any
1
year.
Accordingly,
we
have
prepared
a
written
statement
(
titled
"
Unfunded
Mandates
Reform
Act
Analysis
for
the
Industrial
Boilers
and
Process
Heaters
NESHAP)"
under
section
202
of
the
UMRA,
which
is
summarized
below.
Statutory
Authority
As
discussed
in
section
I
of
this
preamble,
the
statutory
authority
for
the
final
rulemaking
is
section
112
of
the
CAA.
Title
III
of
the
CAA
Amendments
was
enacted
to
reduce
nationwide
air
toxic
emissions.
Section
112(
b)
of
the
CAA
lists
the
188
chemicals,
compounds,
or
groups
of
chemicals
deemed
by
Congress
to
be
HAP.
These
toxic
air
pollutants
are
to
be
regulated
by
NESHAP.
Section
112(
d)
of
the
CAA
directs
us
to
develop
NESHAP,
which
require
existing
and
new
major
sources
to
control
emissions
of
HAP
using
MACT
based
standards.
This
NESHAP
applies
to
all
industrial,
commercial,
and
institutional
boilers
and
process
heaters
located
at
major
sources
of
HAP
emissions.
In
compliance
with
section
205(
a)
of
the
UMRA,
we
identified
and
considered
a
reasonable
number
of
regulatory
alternatives.
Additional
information
on
the
costs
and
environmental
impacts
of
these
regulatory
alternatives
is
presented
in
the
docket.
The
regulatory
alternative
upon
which
the
final
rule
is
based
represents
the
MACT
floor
for
industrial
boilers
and
process
heaters
and,
as
a
result,
it
is
the
least
costly
and
least
burdensome
alternative.
Social
Costs
and
Benefits
The
regulatory
impact
analysis
prepared
for
the
final
rule
including
the
EPA's
assessment
of
costs
and
benefits,
is
detailed
in
the
"
Regulatory
Impact
Analysis
for
the
Industrial
Boilers
and
Process
Heaters
MACT"
in
the
docket.
Based
on
estimated
compliance
costs
associated
with
the
final
rule
and
the
predicted
change
in
prices
and
production
in
the
affected
industries,
the
estimated
annualized
social
costs
of
the
final
rule
are
$
780
863
million
(
1999
dollars).
Depending
on
the
number
of
affected
facilities
demonstrating
eligibility
for
the
health­
based
compliance
alternatives,
these
annualized
social
costs
could
fall
to
$
746
million.
It
is
estimated
that
5
years
after
implementation
of
the
final
rule,
HAP
will
be
reduced
by
58,500
tpy
due
to
reductions
in
arsenic,
beryllium,
dioxin,
hydrochloric
acid,
and
several
other
HAP
from
industrial
boilers
and
process
heaters.
Studies
have
determined
a
relationship
between
exposure
to
these
HAP
and
the
onset
of
cancer,
however,
there
are
some
questions
remaining
on
how
cancers
that
may
result
from
exposure
to
these
HAP
can
be
quantified
in
terms
of
dollars.
Therefore,
the
EPA
is
unable
to
provide
a
monetized
estimate
of
the
benefits
of
the
HAP
reduced
by
the
final
rule
at
this
time.
However,
there
are
significant
reductions
in
PM
and
in
SO2
that
occur.
Reductions
of
560,000
tons
of
PM
with
a
diameter
of
less
than
or
equal
to
10
micrometers
(
PM10),
159,000
tons
of
PM
with
a
diameter
of
less
than
or
equal
to
2.5
micrometers
(
PM2.5),
and
112,000
tons
of
SO2
are
expected
to
occur.
These
reductions
occur
from
existing
sources
in
operation
5
years
after
the
implementation
of
the
regulation
and
are
expected
to
continue
throughout
the
life
of
the
affected
sources.
The
major
health
effect
that
results
from
these
PM
and
SO2
emissions
reductions
is
a
reduction
in
premature
mortality.
Other
health
effects
that
occur
are
reductions
in
chronic
bronchitis,
asthma
attacks,
and
work­
lost
days
(
i.
e.,
days
when
employees
are
unable
to
work).
While
we
are
unable
to
monetize
the
benefits
associated
with
the
HAP
emissions
reductions,
we
are
able
to
monetize
the
benefits
associated
with
the
PM
and
SO2
emissions
reductions.
For
SO2
and
PM,
we
estimated
the
benefits
associated
with
health
effects
of
PM,
but
were
unable
to
quantify
all
categories
of
benefits
(
particularly
those
associated
with
ecosystem
and
environmental
effects).
Unquantified
benefits
are
noted
with
"
B"
in
the
estimates
presented
below.
Our
primary
estimate
of
the
monetized
benefits
in
2005
associated
with
the
implementation
of
the
proposed
alternative
is
$
16.1
billion
+
B
(
1999
dollars).
This
estimate
is
about
$
15.3
billion
+
B
(
1999
dollars)
higher
than
the
estimated
social
costs
shown
earlier
in
this
section.
These
benefit
estimates
are
in
advance
of
any
facility
demonstrating
eligibility
for
the
health­
based
compliance
alternatives.
Depending
on
the
number
of
affected
facilities
demonstrating
eligibility
for
the
health­
based
compliance
alternatives,
the
benefit
estimate
presuming
the
health­
based
compliance
alternatives
is
$
14.5
billion
+
B,
which
is
$
1.7
billion
lower
than
the
estimate
for
the
final
rule.
This
estimate
is
$
13.8
billion
+
B
higher
than
the
estimated
social
costs
presuming
the
health­
based
compliance
alternatives.
The
Alternative
Estimate
of
benefits
is
$
2.7
billion
+
B
(
1998
dollars),
which
is
about
$
1.7
billion
+
B
higher
than
the
estimated
social
costs.
The
general
approach
to
calculating
monetized
benefits
is
discussed
in
more
detail
earlier
in
this
preamble.
For
more
detailed
information
on
the
benefits
estimated
for
the
final
rule,
refer
to
the
RIA
in
the
docket.
Future
and
Disproportionate
Costs
The
Unfunded
Mandates
Act
requires
that
we
estimate,
where
accurate
estimation
is
reasonably
feasible,
future
compliance
costs
imposed
by
the
rule
and
any
disproportionate
budgetary
effects.
Our
estimates
of
the
future
compliance
costs
of
the
final
rule
are
discussed
previously
in
this
preamble.
We
do
not
feel
that
there
will
be
any
disproportionate
budgetary
effects
of
the
final
rule
on
any
particular
areas
of
the
country,
State
or
local
governments,
types
of
communities
(
e.
g.,
urban,
rural),
or
particular
industry
segments.
This
is
true
for
the
257
facilities
owned
by
54
different
government
bodies,
and
this
is
borne
out
by
the
results
of
the
"
Economic
Impact
Analysis
of
the
Industrial
Boilers
and
Process
Heaters
NESHAP,"
the
results
of
which
are
discussed
previously
in
this
preamble.
Effects
on
the
National
Economy
The
Unfunded
Mandates
Act
requires
that
we
estimate
the
effect
of
the
final
rule
on
the
national
economy.
To
the
extent
feasible,
we
must
estimate
the
effect
on
productivity,
economic
growth,
full
employment,
creation
of
productive
jobs,
and
international
competitiveness
of
the
U.
S.
goods
and
services,
if
we
determine
that
accurate
estimates
are
reasonably
feasible
and
that
such
effect
is
relevant
and
material.
The
nationwide
economic
impact
of
the
final
rule
is
presented
in
the
"
Economic
Impact
Analysis
for
the
Industrial
Boilers
and
Process
Heaters
MACT"
in
the
docket.
This
analysis
provides
estimates
of
the
effect
of
the
final
rule
on
some
of
the
categories
mentioned
above.
The
results
of
the
economic
impact
analysis
are
summarized
previously
in
this
preamble.
The
results
show
that
there
will
be
little
impact
on
prices
and
output
from
the
affected
industries,
and
little
impact
on
communities
that
may
be
affected
by
the
final
rule.
In
addition,
there
should
be
little
impact
on
energy
markets
(
in
this
case,
coal,
natural
gas,
petroleum
products,
and
electricity).
Hence,
the
potential
impacts
on
the
categories
mentioned
above
should
be
minimal.
Consultation
with
Government
Officials
The
Unfunded
Mandates
Act
requires
that
we
describe
the
extent
of
the
EPA's
prior
consultation
with
affected
State,
local,
and
tribal
officials,
summarize
the
officials'
comments
or
concerns,
and
summarize
our
response
to
those
comments
or
concerns.
In
addition,
section
203
of
the
UMRA
requires
that
we
develop
a
plan
for
informing
and
advising
small
governments
that
may
be
significantly
or
uniquely
impacted
by
a
rule.
Although
the
final
rule
does
not
significantly
affect
any
State,
local,
or
Tribal
governments,
we
have
consulted
with
State
and
local
air
pollution
control
officials.
We
also
have
held
meetings
on
the
final
rule
with
many
of
the
stakeholders
from
numerous
individual
companies,
environmental
groups,
consultants
and
vendors,
labor
unions,
and
other
interested
parties.
We
have
added
materials
to
the
docket
to
document
these
meetings.
In
addition,
we
have
determined
that
the
final
rule
contains
no
regulatory
requirements
that
might
significantly
or
uniquely
affect
small
governments.
While
some
small
governments
may
have
some
sources
affected
by
the
final
rule,
the
impacts
are
not
expected
to
be
significant.
Therefore,
the
final
rule
is
not
subject
to
the
requirements
of
section
203
of
the
UMRA.
However,
EPA
did
complete
a
report
containing
analyses
called
for
in
the
UMRA
as
a
response
to
comments
from
many
municipal
utilities
regarding
this
rule
and
its
potential
impacts.
This
report,
"
Unfunded
Mandates
Reform
Act
Analysis
for
the
Industrial
Boilers
and
Process
Heaters
NESHAP,"
is
in
the
docket.