Revised Risk Legislation Moving Forward

A RiskWorld news brief by Amy Charlene Reed, staff editor
E-mail to: reed@tec-com.com

After undergoing months of revisions, a bipartisan regulatory reform bill that requires risk assessment and cost-benefit analysis of major new regulations is again moving forward.

U.S. Senator Fred Thompson, R-Tenn., and U.S. Senator Carl Levin, D-Mich., have introduced the Levin-Thompson Regulatory Improvement Act of 1998, which is a modified version of S. 981 previously introduced in June 1997.

The U.S. Senate Committee on Governmental Affairs was to hold a hearing on the revised bill at 3:00 p.m., Tuesday, February 24, in Room 342 of the Dirksen Senate Office Building. The hearing was open to the public.

Witnesses were to include Governor George Voinovich (R-Ohio), president of the National Governors' Association (NGA); Governor Ben Nelson (D-Nebraska), chair of the NGA Committee on Natural Resources; Robert Litan of Brookings Institution; Frank Mirer of the United Auto Workers; Safe Tables Our Priority (STOP) President Nancy Donley; and Sue Doneth of STOP.

In unveiling the revised bill, the senators emphasized that their intentions are to improve the process that agencies use to develop regulations, not to reduce regulation nor to dictate the outcome of the regulatory process.

Major changes to the previous bill include the following:

Supermandate not imposed. A new savings clause affirms that the bill is not intended to supersede any requirements for rulemaking or opportunity for judicial review applicable under any other federal law.

Judicial review restricted. Under the new judicial review section, regulatory analysis is considered part of the whole rule-making record and shall be considered by the court, to the extent relevant, only in determining whether the final rule is arbitrary and capricious.

Cost-benefit analysis clarified. The cost-benefit passage ascertains that the agency’s determination is a disclosure requirement and does not dictate the substantive outcome of a rule – agencies would not be required to select the most cost-effective alternative but would be required to explain why that option was not chosen. As before, agencies would be required to conduct cost-benefit analyses only for regulations with an expected impact of $100 million or more on the U.S. economy.

Substitution risk more narrowly defined. "Substitution risk" is now defined a "significant" risk instead of just as an "increased" risk. The new language eliminates the requirement for a full risk assessment under the procedures of the bill for significant substitution risks. Agencies would be required to identify and evaluate substitution risks in the regulatory analysis where information on such risks is reasonable available to the agency.

Risk assessment requirements revised. Risk assessment principles have been revised to be less prescriptive to the agencies and more accommodating for non-carcinogenic risks. The new language is intended to more accurately reflect diversity and uncertainties in risk assessment while adding a requirement for agencies to identify central and high-end estimates of risk. Agencies also would be required to notify the public of upcoming risk assessments and to solicit relevant data.

Comparative risk study required. Agencies would be required to conduct a comparative risk study for budget preparations and strategic planning under the Government Performance Act.

State and local government interaction required. Agencies would be required to develop an effective process for state, local, and tribal governments to consult with agencies and provide input as new rules containing federal mandates are developed and old rules are modernized.

Peer review strengthened. The peer review requirement (for risk assessments done for rules addressing risks to health, safety, or the environment) has been modified to enhance the independence and quality of the process, and current standards for conflicts of interest now apply.

Bureaucracy reduced in review of rules. Modifications of the review of rules procedures are intended to reduce the bureaucracy in the original bill by eliminating the need for agency advisory committees.

Related Links

U.S. Senator Carl Levin’s Comments on Regulatory Reform
http://www.senate.gov/member/mi/levin/general/reform.htm

U.S. Senator Fred Thompson’s Web Site
http://www.senate.gov/~thompson/

"Risk Science and Law Panel Weighs Regulatory Reform Bill," RiskWorld article dated September 16, 1997
http://www.riskworld.com/NEWS/97q3/nw7aa047.htm

"U.S. Senate Committee Hears Testimony on Regulatory Reform Bill," RiskWorld article dated September 16, 1997
http://www.riskworld.com/NEWS/97q3/nw7aa049.htm

"Regulatory Reform Bill Requires Risk Assessment, Cost-Benefit Analysis," RiskWorld article dated June 27, 1997
http://www.riskworld.com/NEWS/97q2/Nw7aa037.htm

"What Risk Analysts Should Know About Judicial Review," RiskWorld article dated September 16, 1997
http://www.riskworld.com/NEWS/96q4/nw6aa020.htm

Posted February 16, 1998; updated February 24.

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