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104th Congress                                             Rept. 104-33
                        HOUSE OF REPRESENTATIVES

 1st Session                                                     Part 2
_______________________________________________________________________


 
             JOB CREATION AND WAGE ENHANCEMENT ACT OF 1995

                                _______


               February 15, 1995.--Ordered to be printed

_______________________________________________________________________


   Mr. Walker, from the Committee on Science, submitted the following

                              R E P O R T

                             together with

  THE TRANSCRIPT FROM THE LEGISLATIVE MARKUP OF THE SCIENCE COMMITTEE

                                and the

             ADDITIONAL, SUPPLEMENTAL, AND DISSENTING VIEWS

                         [To accompany H.R. 9]

      [Including cost estimate of the Congressional Budget Office]

    The Committee on Science, to whom was referred title III of 
the bill (H.R. 9) to create jobs, enhance wages, strengthen 
property rights, maintain certain economic liberties, 
decentralize and reduce the power of the Federal Government 
with respect to the States, localities, and citizens of the 
United States, and to increase the accountability of Federal 
officials, having considered the same, report favorably thereon 
with an amendment and recommend that the bill as amended do 
pass.

                                CONTENTS

                                                                   Page
  I. Amendment........................................................1
 II. Background and need for the legislation.........................16
III. Legislative history and committee actions.......................20
 IV. Summary of Hearings.............................................22
  V. Explanation of the bill as reported: Section-by-section analysis 
     and Committee Views.............................................26
 VI. Committee oversight activities..................................42
VII. Oversight findings and recommendations by the Committee on 
     Government Reform and Oversight.................................42
VIII.Budget analysis and projections.................................42

 IX. Cost estimate of Congressional Budget Office....................42
  X. Impact on inflation.............................................46
 XI. Changes in existing law.........................................47
XII. Committee recommendation........................................47
XIII.Proceedings from Full Committee Markup on Title III of H.R. 9...47


    Additional, supplemental, and dissenting views.

                              I. AMENDMENT

    The amendment is as follows:
    Strike title III and insert the following:

     TITLE III--RISK ASSESSMENT AND COST/BENEFIT ANALYSIS FOR NEW 
                              REGULATIONS

SEC. 3001. FINDINGS.

    The Congress finds that:

          (1) Environmental, health, and safety regulations 
        have led to dramatic improvements in the environment 
        and have significantly reduced human health risk; 
        however, the Federal regulations that have led to these 
        improvements have been more costly and less effective 
        than they could have been; too often, regulatory 
        priorities have not been based upon a realistic 
        consideration of risk, risk reduction opportunities, 
        and costs.

          (2) The public and private resources available to 
        address health, safety, and environmental concerns are 
        not unlimited; those resources need to be allocated to 
        address the greatest needs in the most cost-effective 
        manner and so that the incremental costs of regulatory 
        options are reasonably related to the incremental 
        benefits.

          (3) To provide more cost-effective and cost-
        reasonable protection to human health and the 
        environment, regulatory priorities should be based upon 
        realistic consideration of risk; the priority setting 
        process must include scientifically sound, objective, 
        and unbiased risk assessments, comparative risk 
        analysis, and risk management choices that are grounded 
        in cost-benefit principles.

          (4) Risk assessment has proven to be a useful 
        decision making tool; however, improvements are needed 
        in both the quality of assessments and the 
        characterization and communication of findings; 
        scientific and other data must be better collected, 
        organized, and evaluated; most importantly, the 
        critical information resulting from a risk assessment 
        must be effectively communicated in an objective and 
        unbiased manner to decision makers, and from decision 
        makers to the public.
          (5) The public stake holders must be fully involved 
        in the risk-decision making process. They have the 
        right-to-know about the risks addressed by regulation, 
        the amount of risk to be reduced, the quality of the 
        science used to support decisions, and the cost of 
        implementing and complying with regulations. This 
        knowledge will allow for public scrutiny and promote 
        quality, integrity, and responsiveness of agency 
        decisions.
          (6) Although risk assessment is one important method 
        to improve regulatory decision-making, other approaches 
        to secure prompt relief from the burden of unnecessary 
        and overly complex regulations will also be necessary.

             Subtitle A--Risk Assessment and Communication

SEC. 3101. SHORT TITLE.

    This subtitle may be cited as the ``Risk Assessment and 
Communication Act of 1995''.

SEC. 3102. PURPOSES.

    The purposes of this subtitle are--
          (1) to present the public and executive branch with 
        the most scientifically objective and unbiased 
        information concerning the nature and magnitude of 
        health, safety, and environmental risks in order to 
        provide for sound regulatory decisions and public 
        education;
          (2) to provide for full consideration and discussion 
        of relevant data and potential methodologies;
          (3) to require explanation of significant choices in 
        the risk assessment process which will allow for better 
        peer review and public understanding; and
          (4) to improve consistency within the executive 
        branch in preparing risk assessments and risk 
        characterizations.

SEC. 3103. EFFECTIVE DATE; APPLICABILITY; SAVINGS PROVISIONS.

    (a) Effective Date.--Except as otherwise specifically 
provided in this subtitle, the provisions of this subtitle 
shall take effect 18 months after the date of enactment of this 
subtitle.
    (b) Applicability.--
          (1) In general.--Except as provided in paragraph (3), 
        this subtitle applies to all significant risk 
        assessment documents and significant risk 
        characterization documents prepared by, or on behalf 
        of, or used by, any Federal agency in connection with 
        Federal programs designed to protect human health, 
        safety, and the environment.
          (2) Significant risk assessment document or 
        significant risk characterization document.--(A) As 
        used in this subtitle, the terms ``significant risk 
        assessment document'' and ``significant risk 
        characterization document'' include, at a minimum, risk 
        assessment documents or risk characterization documents 
        included in, or in the administrative record for, each 
        of the following:
                  (i) Any major rule, as defined in subtitle B, 
                promulgated as part of any Federal regulatory 
                program designed to protect human health, 
                safety, or the environment.
                  (ii) Any proposed or final regulatory 
                decision relating to decontamination or other 
                clean-up plans for a facility.
                  (iii) Any report to Congress.
                  (iv) Placement of a substance or health 
                effects value on the Integrated Risk 
                Information System Database maintained by the 
                Environmental Protection Agency.
                  (v) Any regulatory action to place a 
                substance on any official list of carcinogens 
                or toxic or hazardous substances.
Such terms also include any risk assessment or risk 
characterization that forms the basis of a final risk 
assessment or risk characterization guideline or protocol of 
general application.
          (B) The terms ``significant risk assessment 
        document'' and ``significant risk characterization 
        document'' also include such risk assessment and risk 
        characterization documents of agency as--
                  (i) are provided by an agency to the public 
                and are likely to result in an annual effect on 
                the economy of $25,000,000 or more; or
                  (ii) the head of the agency may identify, in 
                consultation with the Director of the Office of 
                Management and Budget.
          (C) Within 15 months after the date of the enactment 
        of this Act, each agency administering programs 
        designed to protect human health, safety, or the 
        environment shall promulgate a rule establishing those 
        additional categories, if any, of risk assessment and 
        risk characterization documents to be considered 
        significant risk assessment documents or significant 
        risk characterization documents for purposes of this 
        subtitle. In establishing such categories, the head of 
        the agency shall consider--
                  (i) the benefits of consistent compliance by 
                documents in the categories concerned with the 
                principles under sections 3104 and 3105;
                  (ii) the administrative burdens of including 
                documents in various categories concerned with 
                the principles under section 3104 and 3105;
                  (iii) the need to make expeditious 
                administrative decisions regarding documents in 
                various categories;
                  (iv) the possible use of a risk assessment or 
                risk characterization in any compilation of 
                risk hazards or health or environmental effects 
                prepared by an agency and commonly made 
                available to, or used by, any Federal, State, 
                or local government agency; and
                  (v) such other factors as may be appropriate.
          (3) Exceptions.--(A) This subtitle does not apply to 
        the following:
                  (i) A situation that the head of the agency 
                considers to be an emergency or to be necessary 
                to maintain military readiness.
                  (ii) A screening analysis, where 
                appropriately labeled as such, including a 
                screening analysis for purposes of product 
                regulation, or premanufacturing notices.
                  (iii) Any individual food, drug, or other 
                product label or to any risk characterization 
                appearing on any such label, if the individual 
                product label is required by law to be approved 
                by a Federal agency prior to use.
                  (iv) Any health, safety, or environmental 
                inspections or individual facility permitting 
                actions.
          (B) No analysis shall be treated as a screening 
        analysis for purposes of subparagraph (A) if the 
        results of such analyses are used as the basis for 
        imposing restrictions on substances or activities.
    (c) Savings Provisions.--The provisions of this subtitle 
shall be supplemental to any other provisions of law relating 
to risk assessments and risk characterizations, except that 
nothing in this subtitle shall be construed to modify any 
statutory standard or statutory requirement designed to protect 
health, safety, or the environment. Nothing in this subtitle 
shall be interpreted to preclude the consideration of any data 
or the calculation of any estimate to more fully describe risk 
or provide examples of scientific uncertainty or variability. 
Nothing in this title shall be construed to require the 
disclosure of any trade secret or other confidential 
information.

SEC. 3104. PRINCIPLES FOR RISK ASSESSMENT.

    (a) In General.--The head of each Federal agency shall 
apply the principles set forth in subsection (b) in order to 
assure that risk assessments and all of their components 
distinguish scientific findings from other considerations and 
are, to the maximum extent feasible, scientifically objective, 
unbiased, and inclusive of all relevant data and rely, to the 
extent available and practicable, on scientific findings. 
Discussions or explanations required under this section need 
not be repeated in each risk assessment document as long as 
there is a reference to the relevant discussion or explanation 
in another agency document.
    (b) Principles.--The principles to be applied are as 
follows:
          (1) When discussing human health risks, a significant 
        risk assessment document shall contain a discussion of 
        both laboratory and epidemiological data of sufficient 
        quality which finds, or fails to find, a correlation 
        between health risks and a potential toxin or activity. 
        Where conflicts among such data appear to exist, or 
        where animal data is used as a basis to assess human 
        health, the significant risk assessment document shall 
        include discussion of possible reconciliation of 
        conflicting information, and as appropriate, 
        differences in study designs, comparative physiology, 
        routes of exposure, bioavailability, pharmacokinetics, 
        and any other relevant factor, including the 
        availability of raw data for review. Greatest emphasis 
        shall be placed on data that indicate a biological 
        basis of the resulting harm in humans. Animal data 
        shall be reviewed with regard to its relevancy to 
        humans.
          (2) Where a significant risk assessment document 
        involves selection of any significant assumption, 
        inference, or model, a Federal agency shall--
                  (A) present a representative list and 
                explanation of plausible and alternative 
                assumptions, inferences, or models;
                  (B) explain the basis for any choices;
                  (C) identify any policy or value judgments;
                  (D) fully describe any model used in the risk 
                assessment and make explicit the assumptions 
                incorporated in the model; and
                  (E) indicate the extent to which any 
                significant model has been validated by, or 
                conflicts with, empirical data.
          (3) No covered Federal agency shall automatically 
        incorporate or adopt any recommendation or 
        classification made by a non-United States-based entity 
        concerning the health effects value of a substance 
        without an opportunity for notice and comment, and any 
        risk assessment document or risk characterization 
        document adopted by a covered Federal agency on the 
        basis of such a recommendation or classification shall 
        comply with the provisions of this subtitle.

SEC. 3105. PRINCIPLES FOR RISK CHARACTERIZATION AND COMMUNICATION.

    In a significant risk assessment document, each Federal 
agency shall assure compliance with each of the following:
          (1) Estimates of risk.--The risk characterization 
        shall describe the populations or natural resources 
        which are the subject of the risk assessment. If a 
        numerical estimate of risk is provided, the agency 
        shall, to extent feasible, provide--
                  (A) the best estimate or estimates for the 
                specific populations or natural resources which 
                are the subject of the characterization (based 
                on the information available to the department, 
                agency, or instrumentality); and
                  (B) a statement of the reasonable range of 
                scientific uncertainties.
        In addition to such best estimate or estimates, the 
        risk characterization may present plausible upper-bound 
        or conservative estimates in conjunction with plausible 
        lower bounds estimates. Where appropriate, the risk 
        characterization may present, in lieu of a single best 
        estimate, multiple estimates based on assumptions, 
        inferences, or models which are equally plausible, 
        given current scientific understanding. To the extent 
        practical and appropriate, the characterization shall 
        provide descriptions of the distribution and 
        probability of risk estimates to reflect differences in 
        exposure variability or sensitivity in populations and 
        uncertainties.
          (2) Exposure scenarios.--Where relevant, the risk 
        characterization shall explain the exposure scenarios 
        used in any risk assessment, and, to the extent 
        feasible, provide a statement of the size of the 
        corresponding population at risk and the likelihood of 
        such exposure scenarios.
          (3) Comparisons.--The Federal agency shall provide a 
        statement that places the nature and magnitude of risks 
        to human health, safety, or the environment in context. 
        Such statement shall include appropriate comparisons 
        with estimates of greater and lesser risks that are 
        familiar to and routinely encountered by the general 
        public as well as other risks. The statement shall 
        identify relevant distinctions among categories of risk 
        and limitations to comparisons.
          (4) Substitution risks.--Each significant risk 
        assessment or risk characterization document referred 
        to in section 3103(b) shall include a statement of any 
        significant substitution risks to human health, where 
        information on such risks is available to the agency.
          (5) Summaries of other risk estimates.--If--
                  (A) a Federal agency provides a public 
                comment period with respect to a significant 
                risk assessment document, or a commenter 
                provides a significant risk assessment 
                document, and a summary of results of such risk 
                assessment, and
                  (B) such risk assessment is consistent with 
                the principles and the guidance provided under 
                this subtitle,
        the agency shall present such summary in connection 
        with the presentation of the agency's risk assessment 
        document, risk characterization document, or the 
        regulation. Nothing in this paragraph shall be 
        construed to limit the inclusion of any comments or 
        material supplied by any person to the administrative 
        record of any proceeding.

SEC. 3106. GUIDELINES, PLAN FOR ASSESSING NEW INFORMATION, AND REPORT.

    (a) Guidelines.--Within 15 months after the date of 
enactment of this subtitle, the President shall issue 
guidelines for Federal agencies consistent with the risk 
assessment and characterization principles set forth in 
sections 3104 and 3105 and shall provide a format for 
summarizing risk assessment results. In addition, such 
guidelines shall include guidance on at least the following 
subjects: criteria for scaling animal studies to assess risks 
to human health; use of different types of dose-response 
models; thresholds; definitions, use, and interpretations of 
the maximum tolerated dose; weighting of evidence with respect 
to extrapolating human health risks from sensitive species; 
evaluation of benign tumors, and evaluation of different human 
health endpoints.
    (b) Plan.--Within 18 months after the date of the enactment 
of this subtitle, each Federal agency shall publish a plan to 
review and, where appropriate, revise any significant risk 
assessment document or significant risk characterization 
document published prior to the expiration of such 18-month 
period if, based on information available at the time of such 
review, the head of the agency determines that the application 
of the principles set forth in sections 3104 and 3105 would be 
likely to significantly alter the results of the prior risk 
assessment or risk characterization. The plan shall provide 
procedures for receiving and considering new information and 
risk assessments from the public. The final plan shall set 
priorities for review, and where appropriate, revision of risk 
assessment documents and risk characterization documents based 
on the potential to more efficiently focus national economic 
resources within Federal programs designed to protect human 
health, safety, or the environment on the most important 
priorities and on such other factors as such Federal agency 
considers appropriate.
    (c) Report.--Within 3 years after the enactment of this 
subtitle, each Federal agency shall provide a report to the 
Congress evaluating the categories of policy and value 
judgments identified under subparagraph (C) of section 
3104(b)(2).
    (d) Public Comment and Consultation.--The guidelines, plan 
and report under this section, shall be developed after notice 
and opportunity for public comment, and after consultation with 
representatives of appropriate State agencies and local 
governments, and such other departments and agencies, offices, 
organizations, or persons as may be advisable.
    (e) Review.--The President shall review and, where 
appropriate, revise the guidelines published under this section 
at least every 4 years.

SEC. 3107. RESEARCH AND TRAINING IN RISK ASSESSMENT.

    (a) Evaluation.--The head of each covered agency shall 
regularly and systematically evaluate risk assessment research 
and training needs of the agency, including the following:
          (1) Research to reduce generic data gaps or 
        redundancies, to address modelling needs (including 
        improved model sensitivity), and to validate default 
        options, particularly those common to multiple risk 
        assessments.
          (2) Research leading to improvement of methods to 
        quantify and communicate uncertainty and variability 
        throughout risk assessment and risk assessment 
        reporting methods that clearly distinguish between 
        uncertainty and variability.
          (3) Research to examine the causes and extent of 
        variability within and among individuals, species, 
        populations, and, in the case of ecological risk 
        assessment, ecological communities.
          (4) Emerging and future areas of research, including 
        research on comparative risk analysis, exposure to 
        multiple chemicals and other stressors, noncancer 
        endpoints, biological markers of exposure and effect, 
        mechanisms of action in both mammalian and nonmammalian 
        species, dynamics and probabilities of physiological 
        and ecosystem exposures, and prediction of ecosystem-
        level responses.
          (5) Long-term needs to adequately train individuals 
        in risk assessment and risk assessment application. 
        Evaluations under this paragraph shall include an 
        estimate of the resources needed to provide necessary 
        training and recommendations on appropriate educational 
        risk assessment curricula.
    (b) Strategy and Actions to Meet Identified Needs.--The 
head of each covered agency shall develop a strategy, schedule, 
and delegation of responsibility for carrying out research and 
training to meet the needs identified in subsection (a).
    (c) Report.--Not later than 6 months after the date of the 
enactment of this Act, the head of each covered agency shall 
submit to the Congress a report on the evaluations conducted 
under subsection (a) and the strategy and schedule developed 
under subsection (b). The head of each covered agency shall 
report to the Congress whenever the evaluations, strategy, and 
schedule are updated or modified.
    (d) Covered Agency Defined.--For purposes of this section, 
the term ``covered agency'' means each of the following:
          (1) The Environmental Protection Agency.
          (2) The Consumer Product Safety Commission.
          (3) The Occupational Health and Safety 
        Administration.
          (4) The Department of Labor.
          (5) The Department of Transportation.
          (6) The Department of Energy.
          (7) The Department of Agriculture.
          (8) The Department of the Interior.
          (9) The Food and Drug Administration.

SEC. 3108. STUDY OF COMPARATIVE RISK ANALYSIS.

    (a) In General.--(1) The Director of the Office of Science 
and Technology Policy shall conduct, or provide for the conduct 
of, a study using comparative risk analysis to rank health and 
environmental risks and to provide a common basis for 
evaluating strategies for reducing or preventing those risks. 
The goal of the study shall be to develop and rigorously test 
improved methods of comparative risk analysis.
    (2) Not later than 90 days after the date of the enactment 
of this Act, the Director, in collaboration with the heads of 
appropriate Federal agencies, shall enter into a contract with 
the National Research Council to provide technical guidance on 
approaches to using comparative risk analysis and other 
considerations in setting environmental risk reduction 
priorities.
    (b) Scope of Study.--The study shall have sufficient scope 
and breadth to evaluate comparative risk analysis and to test 
approaches for improving comparative risk analysis and its use 
in setting priorities for environmental risk reduction. The 
study shall compare and evaluate a range of diverse 
environmental risks, both as to risks to and within an 
environmental medium and risks across environmental media.
    (c) Study Participants.--In conducting the study, the 
Director shall provide for the participation of a range of 
individuals with varying backgrounds and expertise, both 
technical and nontechnical, comprising broad representation of 
the public and private sectors.
    (d) Duration.--The study shall begin within 180 days after 
the date of the enactment of this Act and terminate within 2 
years after the date on which it began.
    (e) Recommendations for Improving Comparative Risk Analysis 
and Its Use.--Not later than 90 days after the termination of 
the study, the Director shall submit to the Congress the report 
of the National Research Council with recommendations regarding 
the use of comparative risk analysis and ways to improve the 
use of comparative risk analysis for decision-making in 
appropriate Federal agencies.

SEC. 3109. DEFINITIONS.

    For purposes of this subtitle:
          (1) Risk assessment document.--The term ``risk 
        assessment document'' means a document containing the 
        explanation of how hazards associated with a substance, 
        activity, or condition have been identified, 
        quantified, and assessed.
          (2) Risk characterization document.--The term ``risk 
        characterization document'' means a document 
        quantifying or describing the degree of toxicity, 
        exposure, or other risk they pose for exposed 
        individuals, populations, or resources.
          (3) Best estimate.--The term ``best estimate'' means 
        an estimate which is based on one of the following:
                  (A) Central estimates of risk using the most 
                plausible assumptions.
                  (B) An approach which combines multiple 
                estimates based on different scenarios and 
                weighs the probability of each scenario.
                  (C) Any other methodology designed to provide 
                the most unbiased representation of the most 
                plausible level of risk, given the current 
                scientific information available to the Federal 
                agency concerned.
          (4) Substitution risk.--The term ``substitution 
        risk'' means a potential risk to human health, safety, 
        or the environment from a regulatory option designed to 
        decrease other risks.
          (5) Federal agency.--As used in this title, the term 
        ``Federal agency'' means an executive department, 
        military department, or independent establishment as 
        defined in part I of title 5 of the United States Code, 
        except that such term also includes the Office of 
        Technology Assessment.
          (6) Document.--The term ``document'' includes 
        material stored in electronic or digital form.
          (7) Prepare.--As used in this title, the term 
        ``prepare'', when referring to risk assessment, risk 
        characterizations, or analyses of risk reduction 
        benefits and costs, includes both the preparation or 
        use of such a document by an agency.

       Subtitle B--Analysis of Risk Reduction Benefits and Costs

SEC. 3201. ANALYSIS OF RISK REDUCTION BENEFITS AND COSTS.

    (a) In General.--Except as provided in section 3103(b)(3) 
and subsection (d), the President shall require each Federal 
agency to prepare the following for each major rule designed to 
protect human health, safety, or the environment that is 
proposed or promulgated by the agency after the date of 
enactment of this Act:
          (1) For each such proposed or promulgated rule, an 
        assessment of incremental costs and incremental risk 
        reduction or other benefits associated with each 
        significant regulatory alternative considered by the 
        agency in connection with the rule or proposed rule. 
        Costs and benefits shall be quantified to the extent 
        feasible and appropriate and may otherwise be 
        qualitatively described.
          (2) For each such proposed or promulgated rule, an 
        identification (including an analysis of the costs and 
        benefits) of reasonable alternatives for achieving the 
        identified benefits of the proposed or promulgated 
        rule, including alternatives--
                  (A) that require no government action;
                  (B) that will accommodate differences among 
                geographic regions and among persons with 
                different levels of resources with which to 
                comply; and
                  (C) that employ performance or other market-
                based standards that permit the greatest 
                flexibility in achieving the identified 
                benefits of the proposed or promulgated rule 
                and that comply with paragraph (3).
          (3) An assessment of the feasibility of establishing 
        a regulatory program that operates through the 
        application of market-based mechanisms.
          (4) An assessment of the aggregate effect of the rule 
        on small businesses with fewer than 100 employees, 
        including the effect of the net employment effect of 
        the rule.
          (5) An analysis of whether the identified benefits of 
        the proposed or promulgated rule are likely to exceed 
        the identified costs of the proposed or promulgated 
        rule, and an analysis of whether the proposed or 
        promulgated rule will provide greater net benefits to 
        society than any of the alternatives to the proposed or 
        promulgated rule, including alternatives identified in 
        paragraph (2).
          (6) At the time of the publication of the final major 
        rule, a final cost-benefit analysis (to be published in 
        the rulemaking record), including a summary of the 
        analysis in a statement of basis and purpose.
          (7) For each such proposed or promulgated rule, to 
        the extent feasible, a comparison of any human health, 
        safety, or environmental risks addressed by the 
        regulatory alternatives to other greater or lesser 
        risks chosen by the head of the agency, including at 
        least 3 other risks regulated by the agency and to at 
        least 3 other risks with which the public is familiar.
          (8) For each final rule, an assessment of the costs 
        and risk reduction or other benefits associated with 
        implementation of, and compliance with, the rule, 
        including, to the maximum extent practicable, a 
        quantitative assessment of the cumulative financial 
        burden that persons producing products that are 
        regulated by the rule will bear in order to comply with 
        the rule and with related existing standards that 
        affect the product or other similar products produced 
        by such persons.
          (9) For each final rule, a certification by the head 
        of the agency of each of the following:
                  (A) A certification that the assessments 
                under subtitle B are based on an objective and 
                unbiased scientific and economic evaluation of 
                all significant and relevant information and 
                risk assessments provided to the agency by 
                interested parties relating to the costs, 
                risks, and risk reduction or other benefits 
                addressed by the rule.
                  (B) A certification that incremental risk 
                reduction or other benefits of any regulatory 
                or non-regulatory option chosen will be likely 
                to justify, and be reasonably related to, the 
                incremental costs incurred by State, local, and 
                tribal governments, the Federal Government, and 
                other public and private entities.
                  (C) A certification that no regulatory or 
                non-regulatory alternative considered by the 
                agency or proposed to the agency during or 
                prior to the public comment period would be 
                more likely to achieve a substantially 
                equivalent reduction in risk in a more cost-
                effective manner or would be more likely to 
                provide flexibility to the regulated entities 
                in achieving the objective of the regulation, 
                along with a brief explanation of why other 
                regulatory or non-regulatory alternatives that 
                were considered by or proposed to the agency 
                were found to be less cost-effective or less 
                flexible.
    (b) Publication.--For each major rule referred to in 
subsection (a) each agency shall publish in a clear and concise 
manner in the Federal Register along with the proposed and 
final regulation, or otherwise make publicly available, the 
information required to be prepared under subsection (a) of 
this section. The agency shall publish in the Federal Register, 
along with the final regulation, the certifications required by 
subsection (a).
    (c) Definitions.--For purposes of this section:
          (1) Costs.--The term ``costs'' includes the direct 
        and indirect costs to the United States Government, to 
        State, local, and tribal governments, and to private-
        sector prices, wage earners, consumers, and the 
        economy, of implementing and complying with a 
        regulatory action.
          (2) Benefit.--The term ``benefit'' means the social 
        and economic benefits that are expected to result 
        directly or indirectly from implementation of a rule or 
        an alternative to a rule.
          (3) Major rule.--The term ``major rule'' means any 
        regulation that is likely to result in an annual 
        increase in costs of $25,000,000 or more.
    (d) Substances and Products.--This section and section 3301 
do not apply to any action authorizing or approving any 
individual substance or product. No government action shall be 
treated as authorizing or approving any individual substance or 
product for the purposes of this subsection if the results of 
such action are used as the basis of imposing bans, 
cancellations, suspensions, or revocations of any previously 
marketed or approved substance or product.
    (e) Cost/Benefit Analysis Guidance.--Within 15 months after 
the date of the enactment of this title, the Office of 
Management and Budget shall issue regulations for Federal 
agencies, consistent with this title, governing the development 
and preparation of analyses of risk reduction benefits and 
costs.
    (f) Applicability.--
          (1) In general.--Notwithstanding any other provision 
        of law, the requirements of this section shall 
        supplement and, to the extent there is a conflict, 
        supersede the decisional criteria for rulemaking 
        otherwise applicable under the statute pursuant to 
        which the rule is promulgated.
          (2) Substantial evidence.--Notwithstanding any other 
        provision of Federal law, no major rule shall be 
        promulgated by any Federal agency pertaining to the 
        protection of health, safety, or the environment unless 
        the requirements of section 3201(a) and (b) are met and 
        the certifications required therein are supported by 
        substantial evidence of the rulemaking record.
    (g) Transitional Plan.--Within 180 days after the date of 
the enactment of this title, Federal agencies, with guidance 
from the Office of Management and Budget, shall develop 
transition plans to assist the agencies, the public, and the 
regulated community in the implementation of this title, 
including any new requirements or procedures needed to 
supplement prior agency practice.
    (h) Reports to Congress.--Federal agencies shall report to 
Congress annually whether their implementation of this title 
has created any significant regulatory or program management 
complications resulting from any differences between the 
certification provisions of this title and the decisional 
criteria for rulemaking that otherwise would have been 
applicable under other statute.

                        Subtitle C--Peer Review

SEC. 3301. PEER REVIEW PROGRAM.

    (a) Establishment.--For regulatory programs addressing 
human health, safety, or the environment, the head of each 
Federal agency shall develop a systematic program for 
independent and external peer review of risk assessments and 
economic assessments used by the agency. Such program shall be 
applicable across the agency and--
          (1) shall provide for the creation of peer review 
        panels consisting of experts and shall be broadly 
        representative and balanced and to the extent feasible 
        and appropriate, include representatives of industry, 
        universities, agriculture, labor, consumers, 
        conservation organizations, and other public interest 
        groups and organizations;
          (2) may provide for differing levels of peer review 
        depending on the significance or the complexity of the 
        problems or the need for expeditiousness;
          (3) shall not exclude peer reviewers with substantial 
        and relevant expertise merely because they represent 
        entities that may have a potential interest in the 
        outcome, provided that interest is fully disclosed to 
        the agency and in the case of a regulatory decision 
        affecting a single entity, no peer reviewer 
        representing such entity may be included on the panel;
          (4) may provide specific and reasonable deadlines for 
        peer review panels to submit reports under subsection 
        (c); and
          (5) shall provide adequate protections for 
        confidential business information and trade secrets, 
        including requiring peer reviewers to enter into 
        confidentiality agreements.
    (b) Requirement for Peer Review.--Each Federal agency shall 
provide for peer review of any evaluation under section 
3201(a)(9)(A) or for purposes of any significant risk or cost 
assessment prepared in connection with any regulation that is 
likely to result in an annual increase in costs of $100,000,000 
or more (other than any regulation or other action taken by an 
agency to authorize or approve any individual substance or 
product). In addition, the Director of the Office of Management 
and Budget may order that peer review be provided for any major 
risk assessment or cost assessment that is likely to have a 
significant impact on public policy decisions.
    (c) Contents.--
          (1) In general.--Each peer review under this section 
        shall include a report to the Federal agency concerned 
        with respect to each of the following:
                  (A) An evaluation of the technical, 
                scientific, and economic merit of the data and 
                methods used for the assessment and analysis.
                  (B) A list of any considerations that were 
                not taken into account in the assessment and 
                analysis, but were considered appropriate by a 
                majority of the members of the peer review 
                panel.
                  (C) A discussion of the methodology used for 
                the assessment and analysis.
          (2) Comments and appendix.--Each peer review report 
        under this subsection shall include--
                  (A) all comments supported by a majority of 
                the members of the peer review panel submitting 
                the report; and
                  (B) an appendix which sets forth the 
                dissenting opinions that any peer review panel 
                member wants to express.
          (3) Separation of assessments.--Peer review of human 
        health, safety, environmental, and economic assessments 
        may be separated for purpose of this subtitle.
    (d) Response to Peer Review.--The head of the Federal 
agency shall provide a written response to all significant peer 
review comments.
    (e) Availability to Public.--All peer review comments or 
conclusions and the agency's responses shall be made available 
to the public and shall be made part of the administrative 
record for purposes of judicial review of any final agency 
action.
    (f) Previously Reviewed Data and Analysis.--No peer review 
shall be required under this section for any data or analysis 
which has been previously subjected to peer review or for any 
component of any evaluation or assessment previously subjected 
to peer review.
    (g) National Panels.--The President shall appoint National 
Peer Review Panels to annually review the risk assessment and 
cost assessment practices of each Federal agency for programs 
designed to protect human health, safety, or the environment. 
The Panel shall submit a report to the Congress no less 
frequently than annually containing the results of such review.

                      Subtitle D--Other Provisions

SEC. 3401. JUDICIAL REVIEW.

    Compliance with the requirements of this title shall be 
reviewable pursuant to the Administrative Procedure Act.

SEC. 3402. PRIORITIZATION OF THREATS AND RESOURCE USE.

    For any risk assessment, risk characterization, cost-
benefit analysis, or peer review program prepared by, or on 
behalf of, any Federal agency under this title, the head of the 
Federal agency shall--
          (1) prioritize threats to human health, safety, and 
        the environment according to--
                  (A) the seriousness of the risk they pose; 
                and
                  (B) the opportunities available to achieve 
                the greatest overall net reduction in those 
                risks with the public and private resources 
                available; and
          (2) prioritize the use of resources available to the 
        agency under those laws to reduce those risks in 
        accordance with the priorities established under 
        paragraph (1), including applying the priorities to the 
        budget, strategic planning, and research activities of 
        the agency.

              II. BACKGROUND AND NEED FOR THE LEGISLATION

    Title III--Risk Assessment and Cost Benefit Analysis for 
New Regulations was introduced as part of H.R. 9, the ``Job 
Creation and Wage Enhancement Act of 1995'' on January 4, 1995. 
Title III was subsequently referred to the Committee on Science 
and additionally to the Committee on Commerce and to the 
Committee on Government Reform and Oversight.
    The Risk Assessment and Cost/Benefit Analysis legislation 
was developed in response to the need to develop clear and 
consistent guidelines on the conduct of risk assessment and 
cost benefit analysis for programs throughout the Federal 
government which regulate and otherwise manage risks to human 
health, safety and the environment. The legislation seeks to 
ensure that these assessments and analyses are formulated using 
the best science available.
    The cost of regulation runs in the hundreds of billions of 
dollars. The problem is that Federal regulatory costs are too 
often out of proportion to the problems that the regulations 
are designed to address. The concern in the area of health, 
safety and environmental regulations is that the Federal 
programs require expenditures of substantial economic resources 
on reductions in risk which are either hypothetical, 
exaggerated or small.
    The concern with Federal risk assessment practices is that 
Federal risk assessment, characterization and communication is 
biased and based on a series of hypothetical assumptions which 
are designed to overstate the risks. In many contexts, Federal 
agencies explicitly state that their risk assessment process is 
designed to produce estimates that ``err on the side of 
safety'' because of scientific uncertainties and to ensure that 
the broadest range of the public is covered. It is generally 
believed that the ``upper bound estimates'' are highly 
improbable and differ from the most plausible level of risk by 
many orders of magnitude. Moreover, the practice of only 
calculating upper bound or worst case estimates of risk 
inappropriately collapses scientific findings with a 
preconceived policy judgment or bias. The perceived 
overstatement of risk is a serious concern among the regulated 
community. Many argue there should be ``best estimates'' or 
estimates of expected value in addition to upper-bound 
estimates to provide a more realistic benchmark.
    Some Federal provisions require consideration of the costs 
and benefits of regulatory alternatives, although the specific 
language authorizing such consideration differs greatly among 
statutes. While these resulting regulatory decisions are 
judicially reviewable, the general standards of review is for 
courts to be deferential to Federal agencies concerning the 
analysis of factual issues. Moreover, many Federal statutes 
prohibit or do not explicitly authorize consideration of costs 
and benefits for determining regulatory requirements.
    The Reagan Administration issued Executive Order 12291 in 
order to encourage agencies to at least try to assess the costs 
and benefits of regulatory options where statutes did not 
otherwise compel such an assessment. As an executive order, the 
assessments were not judicially reviewable. The Clinton 
Administration has replaced Executive Order 12291 with 
Executive Order 12866 which, more or less, continues the 
requirements of 12291.
    Following is a chart from the section of Risk Management 
Budgeting in the Fiscal Year 1992 Budget of the United States 
Government which is a summary of some of the assessments 
performed under Executive Order 12291. The chart illustrates 
the problem. For some regulations, the costs per theoretical 
life saved are in the thousands of dollars. In other cases, the 
costs per theoretical life saved or cancer incidence avoided 
are in the millions or even billions. Many of the costs 
associated with the reduction of perceived risks from chemicals 
are also upper bound estimates and, thus, the true risk 
reduction is even less cost-effective--possibly by several 
orders of magnitude. Accordingly, many advocate giving more 
prominence to the consideration of the relationship between 
costs and benefits and setting regulatory priorities to both 
save money and increase protection by focusing resources on the 
greatest risk reduction opportunities.

                         TABLE C-2. RISKS AND COST-EFFECTIVENESS OF SELECTED REGULATIONS                        
----------------------------------------------------------------------------------------------------------------
                                                                                       Baseline      Cost per   
                                                                                      mortality      premature  
                  Regulation \1\                      Year    Health of    Agency      risk per    death averted
                                                     issued    safety?                 million      ($ millions 
                                                                                       exposed         1990)    
----------------------------------------------------------------------------------------------------------------
Unvented Space Heater Ban.........................     1980  S           CPSC              1,890             0.1
Aircraft Cabin Fire Protection Standard...........     1985  S           FAA                   5             0.1
Auto Passive Restraint/Seat Belt Standards........     1984  S           NHTSA             6,370             0.1
Steering Column Protection Standard \2\...........     1967  S           NHTSA               385             0.1
Underground Construction Standards \3\............     1989  S           OSHA-S           38,700             0.1
Trihalomethane Drinking Water Standards...........     1979  H           EPA                 420             0.2
Aircraft Seat Cushion Flammability Standard.......     1984  S           FAA                  11             0.4
Alcohol and Drug Control Standards \3\............     1985  H           FRA                  81             0.4
Auto Fuel-System Integrity Standard...............     1975  S           NHTSA               343             0.4
Standards for Servicing Auto Wheel Rims \3\.......     1984  S           OSHA-S              630             0.4
Aircraft Floor Emergency Lighting Standard........     1984  S           FAA                   2             0.6
Concrete & Masonry Construction Standards \3\.....     1988  S           OSHA-S              630             0.6
Crane Suspended Personnel Platform Standard \3\...     1988  S           OSHA-S           81,000             0.7
Passive Restraints for Trucks & Buses (Proposed)..     1989  S           NHTSA             6,370             0.7
Side-Impact Standards for Autos (Dynamic).........     1990  S           NHTSA                NA             0.8
Children's Sleepwear Flammability Ban \4\.........     1973  S           CPSC                 29             0.8
Auto Side Door Support Standards..................     1970  S           NHTSA             2,520             0.8
Low-Altitude Windshear Equipment & Training            1988  S           FAA                  NA             1.3
 Standards.                                                                                                     
Electrical Equipment Standards (Metal Mines)......     1970  S           MSHA                 NA             1.4
Trenching and Excavation Standards \3\............     1989  S           OSHA-S           14,310             1.5
Traffic Alert and Collision Avoidance (TCAS)           1988  S           FAA                  NA             1.5
 Systems.                                                                                                       
Hazard Communication Standard \4\.................     1983  S           OSHA-S            1,800             1.6
Side-Impact Stds for Trucks, Buses and MPVs            1989  S           NHTSA                NA             2.2
 (Proposed).                                                                                                    
Grain Dust Explosion Prevention Standards \3\.....     1987  S           OSHA-S            9,450             2.8
Rear Lap/Shoulder Belts for Autos.................     1989  S           NHTSA                NA             3.2
Standards for Radionuclides in uranium Mines \3\..     1984  H           EPA               6,300             3.4
Benzene NESHAP (Original: Fugitive Emissions).....     1984  H           EPA               1,470             3.4
Ethylene Dibromide Drinking Water Standard........     1991  H           EPA                  NA             5.7
Benzene NESHAP (Revised: Coke By-Products) \3\....     1988  H           EPA                  NA             6.1
Asbestos Occupational Exposure Limit \3\..........     1972  H           OSHA-H            3,015             8.3
Benzene Occupational Exposure Limit \3\...........     1987  H           OSHA-H           39,600             8.9
Electrical Equipment Standards (Coal Mines) \3\...     1970  S           MSHA                 NA             9.2
Arsenic Emission Standards for Glass Plants.......     1986  H           EPA               2,660            13.5
Ethylene Oxide Occupational Exposure Limit \3\....     1984  H           OSHA-H            1,980            20.5
Arsenic/Copper NESHAP.............................     1986  H           EPA              63,000            23.0
Haz Waste Listing for Petroleum Refining Sludge...     1990  H           EPA                 210            27.6
Cover/Move Uranium Mill Tailings (Inactive Sites).     1983  H           EPA              30,100            31.7
Benzene NESHAP (Revised: Transfer Operations).....     1990  H           EPA                  NA            32.9
Cover/Move Uranium Mill Tailings (Active Sites)...     1983  H           EPA              30,100            45.0
Acrylonitrile Occupational Exposure Limit \3\.....     1978  H           OSHA-H           42,300            51.5
Coke Ovens Occupational Exposure Limit \3\........     1976  H           OSHA-H            7,200            63.5
Lockout/Tagout \3\................................     1989  S           OSHA-S                4            70.9
Asbestos Occupational Exposure Limit \3\..........     1986  H           OSHA-H            3,015            74.0
Arsenic Occupational Exposure Limit \3\...........     1978  H           OSHA-H           14,800           106.9
Asbestos Ban......................................     1989  H           EPA                  NA           110.7
Diethylstilbestrol (DES) Cattlefeed Ban...........     1979  H           FDA                  22           124.8
Benzene NESHAP (Revised: Waste Operations)........     1990  H           EPA                  NA           168.2
1,2-Dichloropropane Drinking Water Standard.......     1991  H           EPA                  NA           653.0
Haz Waste Land Disposal Ban (1st 3rd).............     1988  H           EPA                   2         4,190.4
Municipal Solid Waste Landfill Standards               1988  H           EPA