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Lead; Amendment to the Opt-out and Recordkeeping Provisions in the Renovation, Repair, and Painting Program
Proposed Rule
Score: 32 / 60
RULE SUMMARY
EPA is proposing several revisions to the Lead Renovation, Repair, and Painting Program (RRP) rule that published in the Federal Register on April 22, 2008. The rule establishes accreditation, training, certification, and recordkeeping requirements as well as work practice standards on persons performing renovations for compensation in most pre-1978 housing and child-occupied facilities. In this document, EPA is proposing to eliminate the ‘‘opt-out’’ provision that currently exempts a renovation firm from the training and work practice requirements of the rule where the firm obtains a certification from the owner of a residence he or she occupies that no child under age 6 or pregnant women resides in the home and the home is not a child-occupied facility. EPA is also proposing to require renovation firms to provide a copy of the records demonstrating compliance with the training and work practice requirements of the RRP rule to the owner and, if different, the occupant of the building being renovated or the operator of the child-occupied facility.
METHODOLOGY
There are twelve criteria within our evaluation within three broad categories: Openness, Analysis and Use. For each criterion, the evaluators assign a score ranging from 0 (no useful content) to 5 (comprehensive analysis with potential best practices). Thus, each analysis has the opportunity to earn between 0 and 60 points.
| Criterion | Score |
|---|---|
Openness | |
| 1. How easily were the RIA , the proposed rule, and any supplementary materials found online? This regulation can be found on regulations.gov using a RIN search. For some reason, the RIA does not appear when using a RIN search, but it does appear when searching on the keywords "Lead" and "opt-out." The regulation can be found on the EPA website via a series of intuitive clicks. | 5/5 |
| 2. How verifiable are the data used in the analysis? Data sources are virtually always cited. Most include links. Some cost figures are based on prices sourced to "review of price lists on the web." | 4/5 |
| 3. How verifiable are the models and assumptions used in the analysis? Studies are cited to justify cost and benefit assumptions, but not market failure assumptions. Studies are often linked. A key assumption that reduces costs—that better test kits for lead paint will be available by 2011—is not very well justified; the reader just has to take EPA's word for it. | 3/5 |
| 4. Was the analysis comprehensible to an informed layperson? The preamble is a good example of how to write a Federal Register notice in "plain English." The RIA is fairly readable; technical economic terms are usually explained. Techincal medical/scientific terms often are not explained. Some degree of specialized knowledge is required to comprehend it fully. | 4/5 |
Analysis | |
| 5. How well does the analysis identify the desired outcomes and demonstrate that the regulation will achieve them? | 4/5 |
| Does the analysis clearly identify ultimate outcomes that affect citizens’ quality of life? The analysis identifies various health effects of lead that the regualtion is intended to reduce: "Removing the opt-out provision will protect individuals (including children under age 6 and pregnant women), who visit, move into, or live adjacent to a home renovated under the opt-out provision, from exposure to lead hazards due to renovation activities." | 5/5 |
| Does the analysis identify how these outcomes are to be measured? The analysis monetizes benefits of various health effects, but notes that not all heatlh effects are measured or monetized. | 4/5 |
| Does the analysis provide a coherent and testable theory showing how the regulation will produce the desired outcomes? The regulation provides consumers with more information about lead hazards and requires contractors to use lead-safe renovation methods. Reduced exposure to lead leads to reduced lead concentrations in blood, which in turn has health effects. | 4/5 |
| Does the analysis present credible empirical support for the theory? The RIA cites a 2007 EPA field study that found the mandated procedures substantially reduced lead levels on floors and window sills. Renovations without safety procedures generated lead levels well in excess of EPA's dust-lead hazard standards. The analysis simply assumes that benefits for the population affected by this regulation are the same as benefits for population affected by existing regulation. Many paragraphs of caveats explain all of this. | 4/5 |
| Does the analysis adequately assess uncertainty about the outcomes? The calculations assume 75 percent compliance, based on previous studies. Some benefits are presented as ranges of estimates, to account for uncertainties, although it is not always clear why the ranges chosen reflect the amount of uncertainty. | 3/5 |
| 6. How well does the analysis identify and demonstrate the existence of a market failure or other systemic problem the regulation is supposed to solve? | 2/5 |
| Does the analysis identify a market failure or other systemic problem? The RIA identifies two market failures: (1) The property owner pays all the costs of the renovation, but lead-safe renovation creates benefits for neighbors, visitors, and future owners that the current owner does not capture, (2) Consumers do not necessarily understand the nature or seriousness of the lead problem, and in the absence of certification they do not necessarily know which contractors use lead-safe practices. | 5/5 |
| Does the analysis outline a coherent and testable theory that explains why the problem (associated with the outcome above) is systemic rather than anecdotal? Both market failure descriptions provide little detail. The first one does a better job of laying out the basic logic of the problem; the second sounds more like an assertion. | 3/5 |
| Does the analysis present credible empirical support for the theory? The market failure discussion is entirely theoretical; no evidence is presented that these market failures actually exist, and their size/scope are not measured. For example, no survey evidence is presented to assess consumers' knowledge about lead hazards or their confidence in contractors, and no evidence is presented showing whether the effects on neighbors are large or small, or whether property values reflect the degree of lead safety. The RIA states that contractors currently covered by the regulation do not furnish a checklist of lead safety steps they took to the consumer, but this does not necessarily mean consumers are poorly-informed. | 1/5 |
| Does the analysis adequately assess uncertainty about the existence or size of the problem? The market failures are presented as a certainty. | 0/5 |
| 7. How well does the analysis assess the effectiveness of alternative approaches? | 4/5 |
| Does the analysis enumerate other alternatives to address the problem? The analysis examines different effective dates, phase-ins for housing of different ages, and different containment, cleaning, and verification requirements. | 5/5 |
| Is the range of alternatives considered narrow (e.g., some exemptions to a regulation) or broad (e.g., performance-based regulation vs. command and control, market mechanisms, nonbinding guidance, information disclosure, addressing any government failures that caused the original problem)? The number of options considered is commendable. However, they are all relatively small changes in the same basic rule. The preamble says EPA seeks comment on an option that would only impose the new requirements for external renovations, as well as several other options somewhat wider in scope, but these options are not analyzed in the RIA. | 2/5 |
| Does the analysis evaluate how alternative approaches would affect the amount of the outcome achieved? It calculates monetized benefits only for the alternative chosen. For other options, it calculates the number of children "protected," which is just the number affected, not the number that would have gotten sick. | 3/5 |
| Does the analysis adequately address the baseline? That is, what the state of the world is likely to be in the absence of federal intervention not just now but in the future? A table shows costs associated with the 2008 rule alongside incremental costs of each alternative. A small survey was conducted to establish baseline incidence of various lead safety practices, in order to avoid counting current practice as a result of the rule change. The baseline is adjusted to reflect expected improvements in test kits that yield fewer false positives for presence of lead paint, but the likelihood of this improvement is not well documented. | 4/5 |
| 8. How well does the analysis assess costs and benefits? | 3/5 |
| Does the analysis identify and quantify incremental costs of all alternatives considered? The baseline is what would happen if the 2008 rule were left in place and not changed. A table shows costs associated with the 2008 rule alongside incremental costs of each alternative. | 5/5 |
| Does the analysis identify all expenditures likely to arise as a result of the regulation? The RIA identifies four different types of costs borne by renovation firms: work practice, training, certification, and checklist. This seems pretty comprehensive. | 5/5 |
| Does the analysis identify how the regulation would likely affect the prices of goods and services? The analysis uses supply and demand curves to illustrate the regulation's effects on three "markets" for home improvement services: "standard practice," "lead-safe," and "do it yourself." | 3/5 |
| Does the analysis examine costs that stem from changes in human behavior as consumers and producers respond to the regulation? It explicitly assumes the regulation has no effect on the quantity of renovations because there are virtually no studies of demand or supply elasticity. The RIA notes that the regulation may have an ambiguous effect on do-it-yourself projects; some owners may shift to DIY in response to cost increases brought about by the regulation. It assumes only 75 percent compliance. | 2/5 |
| If costs are uncertain, does the analysis present a range of estimates and/or perform a sensitivity analysis? There is some acknowledgement of uncertainties, but no formal analysis of cost uncertainty. | 2/5 |
| Does the analysis identify the alternative that maximizes net benefits? Net benefits are not calculated, but the RIA could have done so. | 3/5 |
| Does the analysis identify the cost-effectiveness of each alternative considered? Cost-effectiveness is not calculated, but the RIA could have done so. | 3/5 |
| Does the analysis identify all parties who would bear costs and assess the incidence of costs? It includes a Regulatory Flexibility Act analysis that assesses the effect of costs on small firms and on non-employer firms. There is no discussion of cost incidence for consumers. | 4/5 |
| Does the analysis identify all parties who would receive benefits and assess the incidence of benefits? Benefits are calculated separately for adults and children, residents vs. visitors, neighbors vs. people farther away. Some statistics on different racial groups and income levels are presented, but not with enough analysis to break benefits down in this way, | 4/5 |
Use | |
| 9. Does the proposed rule or the RIA present evidence that the agency used the analysis? The preamble states that this rule is the result of a court settlement. Thus, it is unlikely that the RIA affected the decision. It is hard to connect the RIA with any decisions on the rule. One piece of analysis that may have affected the decision would be the "dust study" that found high levels of lead dust remain if safety precautions are not followed. | 1/5 |
| 10. Did the agency maximize net benefits or explain why it chose another alternative? Net benefits are not calculated, but they could have been calculated from the information in the RIA. | 1/5 |
| 11. Does the proposed rule establish measures and goals that can be used to track the regulation's results in the future? No goals or measures are established. The EPA could conduct something like the "dust study" in the future to assess the effectiveness of the regulation. | 1/5 |
| 12. Did the agency indicate what data it will use to assess the regulation's performance in the future and establish provisions for doing so? There is no discussion of data, and it is not clear that the EPA already has data that could be used to monitor the regulation's outcomes. | 0/5 |
| Total | 32 / 60 |
Additional details
- Agency
- Environmental Protection Agency
- Regulatory Identification Number
- 2070-AJ55
- Agency Name
- Environmental Protection Agency
- Rule Publication Date
- 10/28/2009
- Comment Closing Date
- 11/27/2009