Mr. Chairman, Members of the Subcommittee, thank you for inviting me to discuss the Environmental Protection Agency's (EPA's) proposed revisions to the national ambient air quality standards (NAAQS) for particulate matter and ozone. My name is Randy Johnson, and I am a member of the Board of County Commissioners of Hennepin County, Minnesota. I am appearing on behalf of the National Association of Counties (NACo), where I serve as President. NACo represents elected officials in the over-3000 counties in the United States.

Let me start out by making it absolutely clear that NACo supports the goals and ideals of the Clean Air Act. We believe that protecting the environment and wise development of natural resources are obligations shared by citizens, private enterprise, and government at all levels. NACo was an active and supportive participant in the debate on the Clean Air Act Amendments of 1990.

The availability of clean air serves the interests of every American. To argue that groups and local governments which have legitimate reservations about these revisions to the ozone and particulate matter standards are somehow against the ideal of clean air, or that they simply "don't care" about asthmatic children, is patently ridiculous. None of our counties want to be out of compliance with federal standards. We want to be able to assure our citizens that the air they breathe, the water they drink, and the lakes and streams in which they swim meet the highest possible public health standards.

However, appearing before you as an elected official who, like you, must be accountable to voters for the way I spend their money, we have substantial reservations about these revisions.

As local officials, we are not expected to bring much to the debate regarding the details of any science surrounding the revised standards. We can say that the scientific foundations for the revisions, especially for particulate matter, appear to have an unprecedented level of uncertainty. This is evidenced by the lack of consensus among the scientific community. To put it simply, there are more questions than there are answers.

While we are not here to engage in a debate about the details of the science of these standards, we do believe we have standing to raise significant concerns about the potential for imposing exceeding costly new federal mandates on the citizens of this country that may yield few benefits. From the county perspective, there are four major areas of concern:

• credibility of the current air quality standards and continued public financial support for Clean Air Act initiatives
• costs/implications of the standards
• EPA's flawed process in proposing the standards
• an implementation process that is highly uncertain

Credibility

Many of the State Implementation Plans developed as a result of the 1990 Clean Air Act Amendments are just now being implemented. The implementation strategies incorporated in these plans have not been in effect long enough to determine their impact on public health. We need answers to questions about the validity and impacts of the requirements currently imposed on our states, local governments, and businesses before yet another set of requirements begins to overlay the existing ones.

Whether intended or not, the implications of these new standards to counties is that what we are currently doing has been meaningless or futile. Many counties have made enormous efforts to come into compliance with the national air quality standards. Instead of some recognition of accomplishment, the message sent by these new standards is that our efforts have been inadequate, inappropriate, or ineffective. Needless to say, our member counties are disillusioned, dismayed and disappointed. Do we continue to spend millions of dollars, only to find in another five years that someone thinks the public health is still in jeopardy -- that the goal post has been moved again? If we are to be required to commit significant additional resources to further reduce air pollution, we must be assured that these new investments will yield appreciable health benefits.

With respect to continued public support, many states and even more local governments face voter-imposed constraints on our ability to raise revenue. Sooner or later, our constituents will object to financing the implementation of federal mandates if, after the fact, these new investments in air quality turn out to have not accomplished the goal. It is not just our credibility that is at stake; the federal government has an interest in assuring the wise use of limited local dollars.

Costs/Implications of the Standards

I would like to spend some time discussing the financial implications to counties generally if the proposed standards are promulgated as currently drafted. Counties have devoted substantial resources in improving air quality to protect the public health and the environment. We have made significant progress, and in some cases, remarkable progress.

Mr. Chairman, members of the Subcommittee, the proposed revisions for ozone and particulate matter, if implemented, will result in costly federal mandates that may be essentially unnecessary. Extraordinary costs and burdens will fall on units of local government and our business community. Again, let me preface this discussion with the thought that much of this cost impact analysis is necessarily speculative, due to EPA's failure to meet the required procedural requirements imposed, which would have provided detailed financial information.

What we do know is that many new non-attainment areas will be created. Attached to my written testimony, is a state-by-state list of the anticipated reclassifications of counties as non-attainment for either ozone or particulate matter.

In terms of dollar costs alone, EPA's own estimates show that the costs of attaining the proposed ozone standard outweigh the benefits. While EPA estimates that ozone compliance costs would be $600 million nationwide, one of the independent studies that have been done - in this case in Ohio - projects that annual capital expenditures for Ohio utilities alone would exceed $730 million per year. Those costs are estimated to boost utility rates that counties and citizens pay more than 17% in some areas of that state.

Similarly, a study by Sierra Research for the American Petroleum Institute indicated that compliance costs for the Chicago Metropolitan Area alone would be, at a minimum, $2.5 billion per year. The President's own Council of Economic Advisors contradicts EPA's optimistic cost estimates, stating that the actual cost of compliance could be as much as $60 billion -- one hundred times the EPA's estimate.

It is important to note that these costs are all in addition to the costs of complying with current Clean Air Act requirements, which are steadily improving the quality of the air we breathe.

Of course, up-front dollar costs are not the sole measure of adverse impacts. Under the current ozone standards, fewer than 100 counties are classified as non-attainment. Under the proposed revisions, that number could leap to almost 300, according to some sources.

The possible control measures which could be imposed on these counties, along with the stigma which is automatically attached to a designation of non-attainment, can stifle attempts at economic development in these areas. Designation of a county as non-attainment damages our ability to market our communities as safe and clean places to live.

Furthermore, in addition to the current designation scheme of attainment/non-attainment, EPA is proposing to introduce a new category, the so-called Area of Influence (AOI). An AOI could conceivably be in full attainment for ozone and particulate matter, and yet it might be contributing to a condition of non-attainment up to 200 miles away. The control measures which might be imposed upon an AOI have yet to be determined by EPA, but we expect that they might well include the full range of restrictions to which a non-attainment area is subject.

EPA's Flawed Process

In proposing any regulations that are likely to have a significant impact on states and local governments, federal agencies, including EPA, are required to comply with the Unfunded Mandate Reform Act of 1995 (UMRA) and with Executive Order 12866. The purpose of these requirements is to ensure that the regulations proposed and ultimately adopted reflect the legitimate concerns of those that will be affected by them, and that less burdensome alternatives are given serious consideration. In proposing the revisions to the ozone and particulate matter standards, EPA has largely failed to meet either of these legal requirements. The Administration's failure to produce complete cost estimates during the development of the new air quality standards jeopardizes the landmark bipartisan federal policy established by UMRA and Executive Order 12866.

Implementation

County officials are also concerned about being required to comply with federal standards when there are few tools available to attain such compliance, and when there is no body of knowledge about how to achieve compliance. The 1990 Clean Air Act Amendments created classes of non-attainment based on the severity of the air pollution problem, alternative requirements based on the degree of pollution, and varying time frames for attaining compliance based on the complexity of the problems being addressed.

These designations apply only to ozone, however, not to particulate matter. Given the significant unknowns about which parts of the country need to address fine particles, and how much they need to be reduced, and on which sources should we focus, we are very concerned about deadlines and the consequences of failure to meet them.

EPA has made several representations about the implementation process, some of which may be questionable in light of the Clean Air Act's specific language. For example, EPA is promising that counties can avoid the stigma of being classified non-attainment by the creation of a new "transitional" classification for areas in which anticipated regional measures will provide the bulk of the needed ozone reductions. While this approach sounds good in theory, we question whether the Clean Air Act allows a county that clearly violates the numerical standard to be exempt from non-attainment status and thereby avoid the need for local planning requirements and restrictions on economic growth.

We also question how EPA's Fact Sheets can say that the ozone standard can be achieved in nonattainment areas merely by focusing on emissions from utility plants. I quote from EPA's June 25, 1997 Fact Sheet on "Achieving Clean Air in Common Sense, Flexible and Affordable Ways". It says, "This plan focuses on major power plants (which offer the most cost-effective opportunities for reducing pollution) to reduce nitrogen oxide, a key ingredient of smog. These reductions alone should be enough to allow most of the newly non-attainment counties to be able to comply with the new [ozone] standard."

Notwithstanding the fact that expensive new retrofits of power plants will very likely increase all of our electricity rates, we would like to believe that EPA is accurate, but we have our doubts. Keep in mind that there is a citizen suit provision in the Clean Air Act, and while counties might find that EPA is happy with our efforts, national environmental groups which tend to hold governmental entities to the letter of the law, may not agree.

Conclusion

In conclusion, let me again voice my own and NACo's strong support for the goals and ideals of the Clean Air Act. The Act and its subsequent amendments have improved the quality of the air breathed by all Americans.

However, before moving forward with more stringent requirements for ozone and particulate matter, the impact of implementing the current requirements in the State Implementation Plans (that have only recently been approved by EPA) needs to be assessed. New standards should not be imposed until we know how well our current programs are working. We need to solve existing problems before creating a whole host of new problems in implementing the proposed revisions.

Mr. Chairman, members of the Subcommittee: thank you very much for this opportunity to testify on this important issue to the nation's counties. I will be happy to answer any questions I can.

1. County officials represented by NACo are concerned that the revisions will adversely affect the credibility of Clean Air Act requirements with respect to:
   • continued public support for implementation of controls to attain current standards
   • the adequacy of the science on which the new requirements are based
2. County officials are concerned that the potential costs of implementing the standards in the hundreds of new non-attainment areas will be prohibitively costly, and not result in appreciable increases in protecting the public's health.
3. The implications for a county which is declared to be in noncompliance include the potential for stifling economic development efforts and growth in jobs.
4. EPA's process of promulgating the revised standards failed to comply with the Unfunded Mandate Reform Act of 1995 and with Executive Order 12866.
5. Despite EPA representations that implementation strategies will not impose significant new burdens on most counties, county officials are concerned that failure to comply with the Clean Air Act will place local governments in jeopardy from citizen lawsuits.

Accordingly, NACo urges that:

• Congress require EPA to assess the effects of implementation of new requirements in recently approved State Implementation Plans before imposing further restrictions in air emissions;
• Congress delay the implementation of the revised NAAQS for ozone and fine particulate matter until EPA produces estimates of the full costs of compliance to states and local governments; and
• Congress delay the implementation of the revised NAAQS until EPA and the scientific community have adequate time to draw sound conclusions about further reductions in ozone and particulates.

Statement of the Honorable Randy Johnson, County Commissioner, Hennepin County, MN before the Subcommittee on Commercial and Administrative Law, Judiciary Committee, July 29, 1997

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