States get more sway in environmental rulemaking

The Environmental Protection Agency has issued a rule designed to give state and local governments more influence over the implementation of federal environmental policy mandates that could prove burdensome or costly.

The agency announced on Wednesday that it has lowered the threshold for consultation with state and local officials. The EPA now must give states and municipalities a say in any rule that will cost more than $25 million. The previous cutoff was $100 million.

"State and local officials often serve as the front-line managers of federally managed environmental regulations," said EPA Deputy Administrator Marcus Peacock during an afternoon conference call with reporters. "And if we want good rules, early consultation with our partners is crucial."

The EPA's new rule comes more than nine years after President Bill Clinton issued Executive Order 13132, requiring the federal government to consult with elected state and local government officials before proposing regulations or actions that will have a "substantial direct effect" on their operations. Such consultation is typically triggered by a rule's implementation costs or its pre-emption of state and local authority.

In 2001, EPA and several other agencies adopted a definition of "substantial direct effect" that was consistent with the Unfunded Mandates Reform Act, a 1995 law that requires federal agencies to assess the costs and benefits of a final rule that will result in expenditures by state, local and tribal governments of $100 million or more. But the threshold only has been triggered twice for environmental rules since Executive Order 13132 was passed in 1999, both times for major water quality regulations.

"Our actions come at a time when state and local officials are asking for stronger working relationships with their federal partners in solving many of today's major environmental challenges," Peacock said. "This new implementation guidance is a significant step in increasing our collaborative efforts with our state and local partners."

The National Governors Association, which lobbied for the lower threshold, said even rules that require relatively small state expenditures can pose administrative burdens and divert resources from other, more critical, activities.

For example, the EPA requires states to track Clean Water Act permits and compliance monitoring using a new database, NGA stated. The system forces state officials to complete more data forms and fields than in the past.

"Consequently, this federal mandate adds additional requirements on states without additional federal funding and diverts scarce state resources for a federal purpose," the governors group wrote in an April letter to the EPA.

The guidelines do not address how the EPA and state and local governments should settle disputes about determining the actual costs of implementing a rule, Peacock said. The EPA, he said, has the final say in such disputes.

The rule went into effect on Nov. 12. Peacock would not speculate on which upcoming EPA regulations might be subject to the new guidance.