Analysis - The Institute for Southern Studies

Federalism (Executive Order 13132)
The 1999 Federalism Executive Order 13132 (Federal Register, Vol.64, No. 153, 10 Aug 1999) furthers the policies of the 1995 Unfunded
Mandates Reform Act (UMRA) by establishing federalism principles, federalism policymaking criteria, and a state/local government
consultation process for the development of Federal regulations that have federalism implications. Federalism implications refers to
regulations and other Federal policies and actions that have substantial direct effects on states, on the relationship between the Federal
government and the states, or on the distribution of power and responsibilities among the various levels of government.
For purpose of complying with the Section 6 consultation process of EO 13132, this section of the RIA evaluates whether the CCR regulatory
options may “impose substantial direct compliance costs” on state/local governments. As summarized in Exhibit 7L, the proposed rule might
impose four types of direct costs on the 60 state/local government owner entities identified in Exhibit 7M below:
State/local government owned electric utility plants:
1. Engineering control costs for CCR disposal units located at electric utility plants owned by state/local governments.
2. Ancillary costs for CCR disposal units located at electric utility plants owned by state/local governments.
3. Conversion to dry disposal costs for CCR disposal units located at electricity utility plants owned by state/local governments.
State government environmental agencies:
4. Regulatory implementation, administration, and enforcement costs to RCRA-authorized state government programs/agencies.
Consistent with the “direct cost” scope of EO 13132, not included in Exhibit 7L are potential indirect costs in the form of potential lost annual
revenues to electricity plants associated with potential reductions in CCR sold by plants for beneficial use under the three Subtitle C options for
which such an possible indirect effect is estimated in this RIA.
EPA’s 2008 guidance 194 for compliance with EO 13132 describes two numerical methods (i.e., numerical tests) for evaluating whether an EPA
rule may have federalism implications with respect to “substantial direct compliance costs”:
1. $25 million test: Annualized direct compliance cost expenditures to state/local governments in aggregate of $25 million or more 195
2. 1% test: Annualized direct compliance costs faced by state/local governments is likely to equal or exceed 1% of their annual revenues*
[* Note: Page 29 of “Attachment A: Guidance for Implementing the Federalism 1% Test” to EPA’s Nov 2008 “Guidance on Executive
Order 13132: Federalism” defines small government “general revenue” as “made up of intergovernmental revenue plus revenue from
their own sources and excludes utility, liquor store and employee retirement revenue.” However, given that the CCR proposed rule
affects electric utility industry, this RIA applies the “1% Test” in relation to only State/local government electric utility annual revenue.]
194 The two methods are from page 6 of “EPA’s Action Development Process -- Guidance on Executive Order 13132: Federalism,” OPEI Regulatory Development Series,
Nov 2008, 62 pages at http://intranet.epa.gov/adplibrary/documents/federalismguide11-00-08.pdf
195 Although one of the stated purposes of EO 13132 in its first paragraph is “to further the policies of the 1995 Unfunded Mandates Reform Act (UMRA), EPA’s $25
million annual direct cost trigger is 75% lower than the $100 million annual direct cost trigger prescribed in Section 202 of UMRA.
238