Friday, August 2, 2013

Explanation of the OMB Review of the NSPS

Explanation of the Office of Management and Budget Process for the Wood Heater New Source Performance Standard

Prepared for the Alliance for Green Heat by the law firm Van Ness Feldman, LLP

            On July 26, 2013 the U.S. Office of Management and Budget (OMB) received for review the Standards of Performance for New Residential Wood Heaters, New Residential Hydronic Heaters and Forced-Air Furnaces, and New Residential Masonry Heaters (hereinafter referred to as the “Wood Heater NSPS”).  The following discussion explains the role of OMB in the rulemaking process and notes some specific information about the Wood Heater NSPS page on OMB’s website, which can be found here:

Background on the OMB Process
            The particular section of OMB that reviews significant draft regulations is called the Office of Information and Regulatory Affairs (OIRA).  OIRA reviews rulemakings to determine whether EPA has considered various alternatives as well as to ensure coordination between federal agencies to avoid inconsistent, incompatible, or duplicative policies.  OIRA reviews approximately 500-700 rules a year.  OIRA can “return” a rule to the drafting agency for further review if it finds that the proposal is deficient.  Often such a process occurs when an agency has not sufficiently examined alternatives in the proposed rule.  OIRA also can suggest that changes be made to a rule before it is released in final form.
            The process of regulatory review is designed to help improve the rulemaking process and create coherent policies across all the agencies of government.  The OMB website notes, “Regulatory analysis is a tool regulatory agencies use to anticipate and evaluate the likely consequences of rules.  It provides a formal way of organizing the evidence on the key effects – good and bad – of the various alternatives that should be considered in developing regulations.  The motivation is to:  (1) learn if the benefits of an action are likely to justify the costs, or (2) discover which of various possible alternatives would be the most cost-effective.”
            OMB is required to review a rule within 90 days, but there is no minimum period for review.  The head of the rulemaking agency may extend the review period.  In addition, the Director of OMB also has the ability to extend the review, but not by more than 30 days.  In practice, however, OMB sometimes takes far longer than 90 days to review a rule, and in rare cases rules can stay at OMB for years.  If the Executive Branch does not want to finalize a rule, it can instead leave it marooned at OMB.  Thus, it is best to think of 90 days as a general rule of thumb from which OMB sometimes deviates, although legally they are required to act within the 90 day review period unless an extension is received.
Information on Wood Heater NSPS Process
            As noted earlier, the Wood Heater NSPS was received by OMB for review on July 26th.  In addition to the general process explained above, there is some specific information about the Wood Heater NSPS that is helpful to understand when consulting the page on the OMB website which tracks rules. 
            First, note that “NPRM” stands for “Notice of Proposed Rulemaking.”  The date for the NPRM listed on the OMB page is September 2013.  This is the aspirational date for EPA to release the proposed rule after OMB review.  There is no settlement agreement pursuant to which EPA is required to release the Wood Heater NSPS by a particular date.  Given that the rule went to OMB in late July, it is possible that the deadline will slip and the rule will not be released until late October or November if OMB takes the whole 90 day period to review the rule.  
            EPA’s website lists the publication date for the Notice of Proposed Rulemaking in November, not September.  It is likely that it will take several weeks after the release of the pre-publication version of the rule before it can be published in the Federal Register.  Therefore, if the pre-publication version is released in late September, in may not be published in the Federal Register until November 2013.  Publication will set the time frame for public comment.
            The date listed for the final rule, November 2014, is similarly a statement of when EPA would like to release the final rule, which includes time for responding to comments received on the proposed rule.  Again, because there is no litigation over EPA’s delayed timing for this rulemaking, this date also is aspirational.  While EPA’s listed date means that the Agency has every intention of hitting this marker, it does not always happen.  It is not possible to say precisely how easy it is to push back the date, other than to note that there are no litigants or a presiding court with which to negotiate, and thus there is much about the timing that is within the Agency’s discretion.  It is important to point out that the Agency could always be sued for delay in issuing its revised NSPS, and if the litigants prevail, a more truncated schedule for the rulemaking may be set by a settlement agreement.
            In addition to the dates for the proposed and final rules, some of the terms listed on the OMB page are helpful to understand.  First, it states that “the statutory final rule deadline is not driving the schedule for this action” and lists “2/26/1996” as the date for the statutory deadline.  This is because under the Clean Air Act, EPA is required to update the NSPS every eight years.  The last time the Wood Heater NSPS was amended was 1988.  Thus, technically, the standards were required to be reviewed in 1996, which means the Agency has fallen woefully behind its schedule for updating the rule.  Consequently, the page correctly notes that the statutory deadline is not “driving the schedule” for this action.
            The page also has a notation that states “small entities affected: businesses.”  The listing in this document is not a conclusion, but just a required statement.  As the EPA’s website explains, “EPA notifies the public when a rulemaking is likely to 1) have any adverse economic impact on small entities even though a Regulatory Flexibility Analysis may not be required and/or 2) have significant adverse economic impacts on a substantial number of small entities.  Thus, this listing puts the pubic on notice that small businesses may be impacted by this rulemaking proceeding and that the appropriate small business analyses will be conducted.
            Further, the page includes the notations “priority: economically significant” and “unfunded mandates: no.”  Like the small entities notation, these are both required to be disclosed to the public. A rule is economically significant if it has potential economic impact of $100 million or more per year, or could “adversely affect in a material way the economy, a sector of the economy, productivity, competition, jobs, the environment, public health or safety, or State, local, or tribal governments or communities.”  Economically significant rules require a more extensive review of the costs and benefits.  The notation that there are no unfunded mandates denotes that the rule does not impose large burdens on state, local, or tribal entities without providing the resources to carry out those responsibilities.

Substantive Description of the Wood Heater NSPS
            In addition to the items above, the OMB page includes a description of what is to be included in the rulemaking.  First, it should be noted that this description holds no legal weight and is just an attempt to summarize what will be in the rule.  Specific terms include:
·      That the rule will “reflect significant advancements in wood heater technologies and design;”

·      “This rule is expected to require manufacturers to redesign wood heaters to be cleaner and lower emitting;” and

·      “[S]treamline the process for testing new model lines by allowing the use of International Standards Organization (ISO)-accredited laboratories and certifying bodies, which will expand the number of facilities that can be used for testing and certification of new model lines.”

            Each of these terms explains what is expected to be in the rule; however, this summary is purely descriptive and is not binding on the Agency.  The description simply represents what EPA was willing to put forth as a summary of the rule’s contents.  The text listed on the OMB site is the same as the abstract found on EPA’s website regarding the proposed rulemaking.  The description is meant to inform the public about the possible changes in the current NSPS, but EPA’s website includes a disclaimer which notes, “The information on this site is not intended to and does not commit EPA to specific conclusions or actions.  For example, after further analysis, EPA may decide the effects of a rule would be different or it may decide to terminate a rulemaking.”
* * *  *  *
Prepared for the Alliance for Green Heat by Van Ness Feldman, LLP

No comments:

Post a Comment