Fiscal Note - SB 0047 - DNR to Perform Risk/Benefit Analysis With Rules
L.R. NO. 0411-01
BILL NO. SB 47
SUBJECT: DNR Rules
TYPE: Original
DATE: January 21, 1997
FISCAL SUMMARY
ESTIMATED NET EFFECT ON STATE FUNDS
FUND AFFECTED FY 1998 FY 1999 FY 2000
General Revenue (Unknown) (Unknown) (Unknown)
Total Estimated
Net Effect on All
State Funds *(Unknown) *(Unknown) *(Unknown)
* Assumed to exceed $100,000 annually
ESTIMATED NET EFFECT ON FEDERAL FUNDS
FUND AFFECTED FY 1998 FY 1999 FY 2000
None $0 $0 $0
Total Estimated
Net Effect on All
Federal Funds $0 $0 $0
ESTIMATED NET EFFECT ON LOCAL FUNDS
FUND AFFECTED FY 1998 FY 1999 FY 2000
Local Government $0 $0 $0
FISCAL ANALYSIS
ASSUMPTION
The Office of the Secretary of State (SOS) assumed the DNR would average 90
to 100 proposed rulemakings following the implementation of this proposal.
The SOS assumed the required analyses would appear in the Missouri Register.
SOS assumes these analyses would be a minimum of five pages each. Based on
the increased volume of filing and publishing rules, the SOS assumed they
would request .08 composing operator, .05 clerk typist and .12 assistant
editor. As a result of this proposal the SOS estimated the additional costs
for publishing and distributing the Missouri Register to be $12,500.
Oversight assumes the duties of the .25 staff contemplated in the SOS
response could be absorbed with existing resources. However, passage of
similar proposals may require the SOS to request additional staff in the
normal budget process.
Officials of the Department of Health (DOH) assumed that the Department of
Natural Resources would propose approximately 60 rules per year in the
Hazardous Waste Program. Each rule would require both an ecological and a
human health risk assessment which would result in 120 risk assessments per
year.
DOH staff assumed, based on past experience, it would take approximately
forty working days to conduct a risk assessment. Therefore, one FTE could
produce approximately six documents per year. DOH officials assume their
department would request twenty-four Environmental Specialists and four Clerk
Typist to implement this proposal. DOH officials noted that their estimates
of staff needed would not include costs for a comparative risk analysis.
DOH assumed comparative risk would be a different discipline which would
require separate staff. DOH officials stated that those FTE would follow a
different scientific methodology than a strict risk assessment. DOH
contacted several private consultants to determine costs for comparisons and
estimated costs ranging between $60,000 and $200,000 to conduct ecological
and human health risk assessments.
The Department of Natural Resources (DNR) assume that this proposal could
result in a long-range fiscal impact. According to DNR officials, most DNR
rules are required under federal or state statute as enacted by Congress or
the state General Assembly. Those rules must be implemented regardless of
whether a rule-specific cost/benefit risk analysis has been conducted. This
proposal would require rule-specific cost/benefit risk analysis which would
significantly increase the cost to develop and adopt rules.
DNR assumed that to the extent the completion of the cost-benefit risk
analysis would delay promulgation of rules with federal deadlines, EPA
authorization could be withdrawn resulting in a loss to the DNR federal fund
exceeding $100,000,000.
The DNR assumes to be complete, a risk assessment should account not only for
human cancer risk, but also for mutalogical effects, immune system defects,
developmental disabilities, organ damage and other impacts of human exposure
to environmental pollutants. However, the non-cancer health impacts are very
poorly understood and reliable data is scarce.
It is very difficult to convert risks to welfare and the environment into
economic terms. Placing a dollar value on human life and health is even more
problematic. However, in order to compare the regulatory costs with the risk
reduction benefits, this would be required.
Because risks are cumulative, DNR assumes it would be very difficult to
estimate the risk or the risk reduction benefits of one rule in isolation
Further, there is very little data available on the combined risk of exposure
to a number of contaminants, such as atmospheric ozone and a pesticide
contaminated water system might have if an individual had those combined
exposures.
Generally, the department has relied upon the EPA, the Department of Health
and the Agency for Toxic Substances and Disease Registry to conduct risk
assessment when needed. In addition, even when the federal statute does not
explicitly set a risk-based standard, EPA frequently engages in some sort of
risk analysis at the national level prior to promulgating a federal rule.
The cost to complete a rule-specific cost/benefit risk analysis would vary
widely from rule to rule, depending upon the number of pollutants to be
regulated, the number of affected facilities, the extent to which data
already exists, etc. The DOH has spent $81,680 to conduct a site specific
human health and ecological risk assessment on lead exposure in Jasper
County, and this study is not yet complete. In addition, EPA officials
stated contractor costs for the risk assessment for Times Beach, Missouri
were approximately $500,000.
In 1980-83, EPA spent $150,000 to assess the risk of human inhalation
exposure to arsenic emissions from an ASARCO plant in Tacoma, Washington.
This cost does not include risk characterization, indirect exposure or
ecological risk assessment which would conservatively add another $188,000.
EPA also spent $35,000 on a site-specific inhalation risk assessment for a
large chemical plant where almost all data was available. This study
evaluated only one chemical, and did not include risk characterization,
indirect exposure or ecological risk assessment which would have added
another $40,000 to the total cost.
Many of the department's rules are administrative in nature. They require
facilities to keep records, submit reports or apply for permits. While these
rules indirectly lead to environmental improvements, they do not lend
themselves to a risk cost/benefit analysis as this bill would require.
Combining the DOH and EPA risk assessment cost data, it is estimated that the
average costs to comply with this legislation would be about $117,000 per
rule. The DNR adopted approximately 102 rules in 1994. If all 102 rules
were subject to the requirements of this legislation the annual cost would be
almost $12 million per year, or the equivalent of 230 new FTEs (assuming
$52,000 annual expenditures, including personal service, fringe benefits, and
expense and equipment.) The FTE would be the staff required to establish a
toxicological/economic /financial analysis unit, dedicated to continuous
research and evaluation activities. DNR assumed General Revenue funding
would be required to support this activity.
The 230 FTE would be the FTE required for the department to establish a
toxicological, economic, and financial analysis unit, dedicated to continuous
research and evaluation activities.
Oversight assumes that primacy would not be jeopardized if funding were made
available to DNR to promulgate rules in a timely fashion.
Oversight assumes for purposes of this fiscal note not all instances of
promulgation of rules would require this type of in-depth study, the total
number of rules promulgated per year could decrease, and the studies would be
long-term in some cases, thus delaying the rule- making process. Oversight
cannot estimate the fiscal impact of this proposal.
FISCAL IMPACT - State Government FY 1996 FY 1997 FY 1998
(10 Mo.)
GENERAL REVENUE FUND
Cost-Department of Natural Resources (DNR)
Risk/Benefit Analysis (Unknown) (Unknown) (Unknown)
Cost-Department of Health (DOH)
Risk/Benefit Analysis (Unknown) (Unknown) (Unknown)
Cost-Secretary of State (SOS)
Risk/Benefit Analysis (Unknown) (Unknown) (Unknown)
FISCAL IMPACT - State Government FY 1996 FY 1997 FY 1998
(10 Mo.)
ESTIMATED NET EFFECT ON
GENERAL REVENUE FUND *(Unknown) *(Unknown) *(Unknown)
* Assumed to exceed $100,000 annually
FISCAL IMPACT - Local Government FY 1996 FY 1997 FY 1998
(10 Mo.)
0 0 0
FISCAL IMPACT - Small Business
No direct fiscal impact to small businesses would be expected as a result of
this proposal.
DESCRIPTION
The act requires the Department of Natural Resources to provide an analysis
of risks and benefits when proposing a rule. The requirement also applies to
boards and commissions within the Department of Natural Resources. The
agency shall provide an estimate of the risk addressed by the rule in
comparison to other risks and shall provide certification that the rule will
substantially advance the purpose of protecting public health and safety and
the environment. If the agency promulgating the rule cannot provide the
analysis of risks and benefits, the reasons for this failure shall be
published with the rule and reported to the General Assembly.
This legislation is not federally mandated, would not duplicate any other
program and would not require additional capital improvements or rental
space.
SOURCES OF INFORMATION
Department of Natural Resources
Department of Health
Office of the Secretary of State
This Fiscal Note is not an official copy and should not be quoted or cited.