The political economy of regulation

Material Information

The political economy of regulation investigation of the relationship between design and performance standards in surface coal mining
Walker, Kenneth R ( Kenneth Richard )
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xi, 204 leaves : illustrations ; 29 cm


Subjects / Keywords:
Coal mines and mining -- Government policy -- United States ( lcsh )
Coal mines and mining -- Economic aspects -- United States ( lcsh )
Coal mines and mining -- Environmental aspects -- United States ( lcsh )
Kohlepolitik -- Regulierung -- USA
Coal mines and mining -- Economic aspects ( fast )
Coal mines and mining -- Environmental aspects ( fast )
Coal mines and mining -- Government policy ( fast )
United States ( fast )
bibliography ( marcgt )
theses ( marcgt )
non-fiction ( marcgt )


Includes bibliographical references.
General Note:
Submitted in partial fulfillment of the requirements for the degree, Doctor of Philosophy, Graduate School of Public Affairs.
Statement of Responsibility:
by Kenneth Richard Walker.

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University of Colorado Denver
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Auraria Library
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All applicable rights reserved by the source institution and holding location.
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25983280 ( OCLC )
LD1190.P86 1991d .W34 ( lcc )


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THE POLITICAL ECONOMY OF REGULATION: INVESTIGATION OF THE RELATIONSHIP DESIGN AND PERFORMANCE STANDARDS I, I I, I l. IN SURFACE COAL MINING by Kenneth Richard Walker B.A., Park College, 1973 I Central Michigan University, 1979 A thesis submitted to the I I Faculty of the Graduate School of the of Colorado in partial fulfillment of the requirements for the degree of Doctor of Philosophy Graduate School of Public Affairs 1991


I This dissertation for the Doctor of Philosophy I: l degree by Kenneth Richard Walker has been approved for the Graduate School of Public Affairs by Overman Mark A. Emmert Steve W. DelCastillo tf-;oq(


iii Walker, Richard (Ph.D., Public Administration) The Politic'al Economy of Regulation: Investigation Of Between Design and Performance standards in surface Coal Mining Thesis dire'cted by Professor Samuel Overman i I are an 1ncreas1ng of the I social and 1industrial complex in which we live. To examine thi1s premise research concerning political and I I economic policy was conducted on 15 randomly selected coal mines in the state of Tennessee. Data on were collected over a 6-year period I from 1979 through 1984. I Thel primary purpose of this study was to investigate! the approaches of the Carter and Reagan concerning the implementation of design i. and regulations of Public Law 95-87. Analyses were performed to study how different political implement ideologies were used to 1': the same legal mandate, to study how these political iqeologies are of concern to the economics of I industry and' society, and to study the dynamics of design I and performance standards for regulating environmental I I mandates. The:study concluded that: (1) A change in political affects regulatory policy I concerning enforcement practices. It was found that the I number of citations for violations leveled off in 1981,


I I: after Reagan took office, and continued to decline iv throughout :the period of study. The number of citations I I issued for :regulatory noncompliance declined from 372 fn I 1981 to 2131'l.n 1984. (2) Regulatory policy is altered in the direction of economic activity believed by an to be desirable to society and its constituents. Reagan sought to deregulate private t I d th th h d en an spur e economy roug 1ncrease development!. (3) Elaborate rule making activity i constrains activity. Reagan's regulatory reform effort to reduce the stringency of regulation so as to infrease production in the marketplace. (4) The coupling of design and performance standards should be retained. No difference was found in the number of violations for design and associated performance IBoth design and associated performance I I standards to track each other in either a positive or However, there was a change in the overallinumber of citations for both design and I associated performance standards. Such findings support I the theory it is the administration that affects change in policy, and not the regulatory construct design versus performance standards) for I compliance a mandate. 1.' I,


I I I The; form and content of this abstract are approved. I recommend its I 'I, v


' I vi I CONTENTS ; CHAPTER J,: Page I. INTRfDUCTION. . . . . 1 Bac::t:kground. . . . . . . . 1 R L h Q t 11 ues 1ons .................. Hl:th. 1 ypo es1s................................. 1 .1 constra1nts of the study ............... 13 [,' Summary. . . . . . . . . 14 [: Notes ............................. 15 I I I: II. THE POLITICAL DESIGN AND ECONOMIC THEORY I. 0F REGULATORY POLICY .................. 16 [:: The?ry. . . . . . . . . . 16 1.. General Overv1ew......................... 16 I 1,, Env1ronmental Regulat1on Research ........ 29 I' E9,onomic Perspectives on Political Choice. 41 1:. C.onclus1ons on Theory of Econom1c and [ Political Intervention ................ 46 Anl overview of the Surface Mining Control and Reclamation Act of 1977 ... 53 colposition of Public Law 9S-87: Policies bt the Act. . . . . . . . 55 I Provisions of Public Law 95-87 ......... 57 I. I: Regulations Authorized by Public Law 95-87...... . . . . . . 59 '!,: I' coy.rt Challenges. . . . . 63 The. New Regulations. . . 65 f I. t


CHAPTER II. III. vii Page :1 POLIITICAL DESIGN AND ECONOMIC THEORY--Continued Rule Changes Adopted on october 28, 1981: I and Legal Challenges 67 R1.Ae Changes Adopted on June 17, 1982: 1Effects and Legal Challenges............. 75 Na!tional Wildlife Federation v. watt: Against Proposed Regulations.. 76 Regulations Adopted on June 17, 1982 79 I. Ev.aluatl.on of the New RegulatJ.ons 81 Approach: Design Versus :,Performance Standards ......... . 84 I, L surmary. . . . 9 5 Ctirpter Notes ............................ 97 I THE .!INVESTIGATIVE PROCEDURE. 12 3 Method............................... 123 I. comprnents of the Research ...... 123 unlerlying Theory ............. . 124 to Organization Respondents .. 124 Control Over System Studl.ed .. ....... 125 t Research Sample............................. 125 Reselrch Observation Method .... 126 :1 f' d Specl. l.C Proce ures ................... 126 Datal ;Profile and Collection................. 127 Da!ra for Test of the Hypothesis. 12 7 I Type of Data. . . . . . . . 128 I .1' Datla Collection ............... 128 I, Lerels of Measurement .... 129 I ,[I


CHAPTER I, I I viii Page III. THE :INVESTIGATIVE PROCEDURE--Continued I Selected Design and Performance Standards .. 130 Variables .................... 130 Performance Variables ........... 131 Data Analysis ............................ 132 I I. Treatment of the Data ................. 132 I, of the Hypothesis .............. 133 I. Summary. . . . . . . . . . 13 5 IV. FINqiNGS. . . . . . . . . 13 6 I Analysis of summary Data ............. 136 I Arialysis of the Hypothesis ................ 154 I ......................... 159 su.mmary. . 168 V. CONCLUSIONS AND RECOMMENDATIONS ........... 170 Summary .................................... 170 I dl' F1n ;.1ngs .................... 171 Concl us i ens ............................. 173 Discuss ion ................................. 175 Overview of Findings ................... 175 Envi,ronmental Regulatory Political Policy... 177 The :oesign Versus Performance Dilemma.. . 184 Political Economics of Regulatory Policy .... 187 Impl.ications. . . . . . . . 191 Recommendations ............................. 194


I CHAPTER V. CONCLUSIONS AND RECOMMENDATIONS--Continued l ix Page I Notes ............................... 195 BIBLIOGRA.PHY.. . . . . . 197


FIGURE 1. FIGURES Time [sequence Plot Representing Total Design Vio.lations for All Years Studied Page 147 2. Time Sequence Plot Representing Total Performance Vioiations for All Years Studied .... 148 3. 4. Time Sequence Plot Representing Total Design andj: Performance Violations for All Years Studied ................................... I. Threel..:.oimensional Histogram Representing the Frequency of Violations, Design and Performance Standard 1 .................... 5. Three'-Dimensional Histogram Representing the Frequency of Violations, Design and 153 162 Performance Standard 2 ................. 163 6. Histogram Representing the of Violations, Design and Perlformance Standard 3. 166 ; 7. Three,-Dimensional Histogram Representing the Fre'guency of Violations, Design and Performance Standard 4 ...... 167 8. Dimensional Histogram Representing the Frequency of Violations, Design and Per;tormance Standard 5. . . . 169 X


xi TABLES TABLE I Page 1. Comphrison of Design and Performance standards ............................. 4 I 2. Policy........................... 21 I 3. Freqhency Tabulation: Total Design 138 4. Tabulation: Total Performance I Standards ............................. 140 5. Design and Associated Performance Violations, ........................ ....... 141 6. Average Violations per Visit of All Design I Standards for All Years ................ 142 I I 7. Violations per Visit of All Performance for All Years ................... 144 8. Slop.e Analysis of Time Sequence Plot for Total Design Violations ........................ 150 ,I I 9. Analysis of Time Sequence Plot for Total Performance Violations. . . . . 150 I I 10. Slope Analysis of Time Sequence Plot for Total Design Versus Total Performance Violations. 152 I 11. Crosstabulation: Total Performance Standards Total Design Standards ............. 160 I 12. Comparison of Design and Performance Standards. . . . . . . . . 182 I


,, '' I 1: 'I I I CHAPTER I INTRODUCTION Background In i982, the Office of Surface .Mining Reclamation .I I and Enforceil!ent (OSMRE), u.s. Department of the Interior, !I 1': pursued high-priority effort to revise I regulations[(the words regulations, standards, and rules I are used in!terchangeably throughout this paper) under the i Surface Control and Reclamation Act .of 1977 .':1 (SMCRA, her'eafter referred to as the Act) .. The primary l thrust of this effort was to eliminate those surface I I mining rule's believed to be unnecessary and burdensome .I I and replace! regulations remanded or withdrawn. This ,j resulted inl the development of new regulations intended I to ensure of the environment and to provide I for the mining of coal. I I The: attempt to achieve these regulatory reform I I goals debate on design and performance I standard regulations. Such debate is well grounded in I. political ahd economic theory and is discussed in detail I I in Chapter The debate stems from age old I controversirs concerning regulatory and economic policy.


I Specific td surface Mining's law are such issues as reducing exploration and development costs, decreasing permit staff and evaluation costs, lessening industry to consumer transfer costs, and allowing state's rights in enforcing the intent of the Act, as opposed to mandating I national laws. The' reason for regulatory reform may not have been so much the dismissal of unnecessary or burdensome I rules and regulations, but a change in the basic philosophy the process of how the coal industry conforms to regulations. The regulatory reform I I effort awaken the issue of whether industry would now be allowed to individually determine how to achieve regulatory compliance, as opposed to continuing to be directed to I perform mining and reclamation practices by prescribed Unlike regulatory agencies that specify only performance standards as the endpoint or outcome the Act specifies the means or process for!achieving compliance in the form of design standards. iThe Act provided for both design (process I 2 oriented) performance (outcome oriented) regulations. The Act attempted to provide an approach for satisfying the for on-the-ground reclamation success I (means to end). In the process of rule making, this manifested itself in determining the differences between I state regulatory authorities adopting regulations that


are "as str!ingent as" versus adopting those that are "no I less effective than" their federal regulatory I 3 counterpart'. This was to be the battleground for "design standards" "performance standards." I Belpw, is a table that compares design and performance1 standards or regulations. It is important to note that the Act requires design and performance standards ih its model for promulgating regulations to enforce reclamation of surface coal mines. What may be even more notable is to suggest that with respect to Public Law the design and performance standard regulatory reflects differences in the regulatory I ideologies of the two party system in the United States of America.! That distinction is important in evaluating the of the design and performance based l regulatory model. It impacts political and economic policy concerning how laws and ensuing regulations are I, developed and implemented.


4 Table of Design and Performancestandards DE;SIGN (Means) l:i I I National Model : Theoretical Based 1 Specify Method 1 Preventive As stringent As 1.Democratic Model : Federal ism PERFORMANCE (Ends) Local Model Applied Based Specify Result Treatment No Less Effective Than Republican Model States Rights The regulations promulgated by the Democratic I administration emphasized design standards, i.e., the of the methods or practices that an operator use during mining and reclamation. In I contrast, standards stipulate the desired I results, in terms of the conditions to be achieved I I: following mining and reclamation, or the conditions that i are to be maintained in the environment during and after mining. differently, design standards are I concerned with the regulation of practices or means, whereas performance standards emphasize the regulation of outcomes or I 'results. Design standards, unlike performancelstandards, typically emphasize detailed planning (ufually during the permit approval stage) before minirtg operations begin on the ground. Both I. I I.


I !;of course, seek the same outcome--a properly 'I I reclaimed environment. '1: Thel: "as stringent as" rule and the emphasis on I "design standards" are products of the Democratic I : administration of President carter, who implemented the 'I' I law. The "po less effective than" rule and the emphasis I 'I on "performance standards" are the products of the I Republican of President Reagan and an .. I outgrowth of the "state window"1 provision of the initial I regulationsl I The [:,state window was a regulatory rule making I provision etablished to allow each coal mining state "I, 5 options for1achieving regulatory standards not covered by I any federalicounterpart. It was inherited from the Carter admih,istration, and inserted in the regulations in I I response to!claimsby the states that they were faced I with uniquelqeographical or geological problems which I ,I I the1r would have to address. Although the Carter regi111e did not quarrel with this argument, it I state window very narrowly and placed the burden of pfoof of uniqueness on the shoulders of state I officials. '[:f\.s a consequence, many state officials came to believe that the state window was not a viable option. i The officially came off the "state window" on I October nearly 4 months after the proposed rule h I 1 d h c ange was pub 1shed 1n the Fe eral Reg1ster. T e


6 pertinent Section 30 CFR 731.13 was removed entirely from the federal regulations, and new language was adopted which stated that state laws and regulations must be "no less effective" than the Secretary of the Department of the Interior's regulations. This wording replaced the language contained in 30 CFR 730.5{b), which asserted I that the pertinent state surface coal mining laws and I regulations:must be "no less stringent" than federal regulations1 Many environmentalists strongly objected to this arguing that the new language would allow considerable bureaucratic discretion at the state level, which, in turn, would produce a patchwork quilt of I regulations from one state to the next. OSMRE rejected I these arguments, contending that "the rule changes would allow states the necessary flexibility to design programs to meet special circumstances." Although considerable support exists for regulation bf surface coal mining methods through design standards, performance standards emphasize results in terms of the conditions to be achieved following mining I I and reclamation. They are often regarded as "more effective" than design standards because of their builtin flexibility. Their principal weakness is the difficulty qf fashioning enforceable standards, which effectively precludes their use in some cases. Performance standards are not suited for application to


I I I i 7 I I the safety bf structures, fills, and water impoundments. They are apblicable to regulations covering coal I exploration, backfilling and grading, and handling of I topsoil. I The: controversy over design standards and I I performance!' standards has yet to be resolved. Whereas I I performance; standards are more simplistic, the design standards for detailed planning and careful I evaluation bt mining and reclamation methods. The[:purpose of the design (process oriented) and performance! (outcome oriented) based model for regulatory I interventioh is effectiveness. It is a viable construct I I because the::process dimension of design regulations are linked to pblitical aspects when promulgating I, and performance outcome regulations are I' linked to e9onomic considerations. This is illustrated in the rule[making process where differing state : topographic1and climatic characteristics influence design I techniques achieving these process regulations. I Similarly, performance regulations are impacted by I economic considerations passed on the consumer in achieving successful outcome of design regulations. I These philosophies and regulatory approaches for I I I implementing environmental mandates serve as the basis I' for the "design standards" versus the standards" model for achieving environmental


8 Such examinations may provide support for 1.: 1 1 the thes1s that the theory of regu at1on 1s very c ose to :: / the general ,itheory of government policy and that regulation 1s a distinct kind of policy that has spawned d I:, 1 d 1 1. t t I d d a 1st1nct rheoret1ca an emp1r1ca 1 era ure. n ee 1 in economics and political science, government regulation has been ellvated to the status of a subdiscipline. l: Moreover, the mod1cum of knowledge about the development 1: and implementation of public policies requires that the focus at thls stage should be on specific kinds of policies implementing environmental mandates. I., Although design and performance standards satisfy I'' regulatory research could further determine which accomplishes the legislative intent of the law, as oppksed to regulations that are after-the-fact I [:: considerations imposed as controls. The 1:10SMRE 's final permanent regulations were 'I ,I intended to .:balance the concern for uniform performance standards arid design standards against the operator's need for fll1xibility depending upon the coal region, topography, ,climate, and other local factors. A variety of regulatofY mechanisms were used, ranging from explicit design or alternative control measures to I general per'formance standards. These mechanisms f generally reilate to the seriousness of the potential r: 'I


I. I :' damage and the need for state and operator flexibility. 9 !, OSMRE considered design standards, as I opposed to idetailed performance standards, to be the most I I appropriate way to achieve the goals of the Act. Within the constraints of the Act, the final regulations I included standards to ensure that performance standards uniformly achieved and maintained in all coal-produding regions. I In 201(c) (2) of the Act, Congress I I authorized .the Secretary of the Department of the I Interior to: promulgate "such rules and regulations as may i be necessar to carry out the purposes and provisions of I I this Act." I The legislative history of the Act provides I further regarding the criteria to be included in the In considering the bill, the House Committee srated: "Obviously, the mere reproduction of the environmental performance standards in the regulations! would be inadequate.112 One of the fundamental concepts of the Act was a uniform regqlatory program. In this regard it said: "There will be one set of rules, one program in the whole t 113 I coun ry. ., uniform standards are specified, the methods of construction structures, such as fills, roads, ponds, ditcpes, and dams are likely to differ markedly


I i I i I 10 I from state Ito state. Such variations would lead to I i different 11evels of performance from state to state and would distort congressional intent and hamper I I uniform enforcement. I I: OSMRE's approach to implementing the Act was I I endorsed bY! the u.s. District Court for the District of Columbia wh:ich reviewed the initial regulatory program. In finding the Congress intended explicit design standards the Court said: Many of the environmental problems created by surface mining are better regulated through criteria rather than performance standards, and Congress left the decision as to the ranner of regulation to the S.ecretary. With legislative and judicial support, OSMRE structured design standards in the final permanent regulations!: to allow coal operators flexibility where there were different allowable methods for achieving the standards or: the Act. For example, OSMRE established use of sedimentation ponds in conjunction with other sediment control as best available current technology to i control and to achieve applicable water quality I I standards. :State-of-the-art sed1mentat1on pond des1gns I are required. Within certain minimum design standards, I i" however, the operator has the flexibility to adjust I sediment storage volume, detention time, and pond t: configurati6n where it can be demonstrated that I


'1. I I I i i applicable :effluent limitations will be achieved and maintained. I I Research Questions The: study investigated the approaches of the I, I. Carter and Reagan administrations concerning the I: I' implementat[on of design and performance regulations of I I. Public Law 95-87. These regulatory approaches provided i I, an opportunity to study several research questions: I I (1)! What are the dynamics of design and ::performance standards? 11 ( 2) : How were different political administration's was: ideologies used to implement the same legal mandate? (3) How are these political ideologies of concern .to the economics of industry and society? Hypothesis The basic hypothesis considered in this study j The implementation of environmental regulatory policy of different political administrations does not affect change in : enforcement practices concerning design and performance standards within OSMRE. The implementation of environmental : regulatory policy of different political I I I I I I.


i ; I administrations does affect change in enforcement practices concerning design and 1 .. performance standards within OSMRE. The'hypothesis was concerned with the political I I and issues associated with the implementation approach o{ different administrations regarding the dynamics and performance standards. ,. 1: the hypothes1s addressed how different political. a!drninistration's ideologies were used to i implement same legal mandate; how these political .. ideologies of concern to the economics of industry and society!; and, how design and performance standards are of concrrn for regulatory performance. The latter II: I element addressed whether regulat1ons based on design I 12 standards corresponding frequencies. of violations with performance standards. That is, will design have equal, greater, or lesser incidents of violatioks than associated performance standards? The 1: I rationale fbr the hypothesis involved making inferences I about whethbr design criteria were cited equally as often I as performance standards, indicating that I' design criteria and performance outcomes were 1;1 appropriatel'Y matched; whether design standards were cited for more often than associated I performance! :standards, indicating over-engineering; and, r whether design standards were cited less frequently than I' I I. I i I:. 1::


13 associated performance standards, indicating insufficient I. of design standards. ,I Frequent changes in policies and principles of OSMRE have not kept regulations constant. Regulations adopted und'er the original administration were frequently changed by subsequent administrations. These changes influenced :qifferent mining and reclamation practices that may influenced operator and inspector interpretat:ion of regulations, thereby influencing associated enforcement practices. And, any significant shift in enforcement practices could impact environmental I conditions,! which could cause economic shifts to producers and consumers. Constraints of the Study The'constraints of the study were that: 1. 1 .Frequent changes. in policies, I and executive management personnel in i OSMRE have regulations constantly changing. Regulations'adopted under the original administration were changed by subsequent administrations. l' Such changes led to different mining and reclamation practices may have influenced operator and inspector I I interpretations of regulations, thereby influencing associated enforcement practices. I' I I:


I I 14 2. : Violations cannot be held constant, viewed in I the l same way, or compared equally against one another. I 3. 1 Seasonal variations may have caused site ,, that could account for violations. 4. 1 Operator and ownership practices could ,, account for! violations. Summary I i Chapter I provided an overview of the topic under '' investigatibn. Components of the chapter included I Background General Statement, Statement of the I Problem, Purpose of the Study, Hypothesis, and Issue 1,, Constraints! of the Study ..1 I


I ,I, I I, I :I I I I, I Chapter Notes 1. The "state window" rule, 30 CFR Sect. 731.13 (1981), provided: :[,..s part of its program submission or as an amendment t9 an approved State program, a State may request for alternatives to provisions of the of this chapter. For each alternative provision the State shall: 15 (a)iidentify the provision in the regulation of this chapter for which the alternative is requested: (b) i :Describe the alternative proposed and provide statutory dr regulatory language to be used to implement the and (_c) [:Explain .how .and .data, analysis and 1nformat1on, 1nclud1ng 1dent1f1cat1on of sources, demonstrating: I I I -1 (1) that the proposed alternat1ve w1ll be 1n acco'rdance with the applicable provisions of the Act i 'and consistent with the regulations of this chapter and ( 2) that the proposed al te.rnati ve is because of local requ1rements or local envi'ronmental or agricultural conditions. :! 2. H. 95-218, p. 85, 1977 I 3. 123 Record, H3722 daily ed., April 28, 1977. 4. In Re: 1surface Mining Litigation, 452 F. Supp. 327 D D C 19 7 al. l I i I I i I i I I :I


CHAPTER II i'l THE POLITICAL DESIGN AND ECONOMIC THEORY OF REGULATORY 1 POLICY I I. General OverWiew I. I Theory regulation is a pervasive feature of I I' the economic system. It is characteristic of the America+ approach to use government regulation for the politicAl control of the market process. The purpose I I of this chapter is to review the range of theories j'. explaining development and direction of regulatory I' policy, demonstrate how this research addresses I that development. I ,: a definition of regulation is appropriate. I All levels 1f government attempt to control some private sector economic decisions to which the government is not I, I, a party. one such method of control is to assign to a I government Jgency the responsibility of writing rules 1,, I certain kinds of private economic decisions, :' using a administrative process to develop I these rules I Th1s process has two key features. First, the job of Bhe agency is to channel and to alter the I I I I' I .I:


l'i l II 1 17 'I I: direction of an economic activity that is generally I: regarded desirable to society. Second,, because private OWDership of property and its exchange through :1.' markets arei .. protected constitutional rights, the agency must satisf1y elaborate procedural and evidentiary rules I, if it constrain market activities. These rules I give rise t:b the quasi-judicial process by which the I. agency deveilops its policies and means of controlling l'. . .. econom1c w1th1n 1ts sphere of respons1b1l1ty. I The bureaus:'organized to undertake such tasks are herein ..1 referred tol :as regulatory agencies. 1 Included in this classificabion is the Office of surface Mining r and Enforcement (OSMRE) and agencies that I, .. I, control aspects of transactions, such as theprice or the I '' ,, quality of goods transacted, that mandate certain I: features ofJ!the production process, such as emissions I o control methods and worker safety requirements, or that I, control ent:py, as by licensing. Excluded are agencies I that are puplic enterprises, in that their primary I function is::either to procure private goods or to produce I government g1oods, that try to prevent certain types of I. behavior or:l'transactions rather than manage them, that I. manage gover:nment f1nanc1al affa1rs, such as tax I I collection o'r control of the money supply, or that try to alter behavior by subsidy or by placing conditions ( I on government procurement when the government is an I l I I, '! I' t


I i I I .I I important not the sole entity on the demand side of 'I the market j I The1 reason for this focus on regulation is more ,I J,, practical t:qan theoretical. It may well be that the I 18 theory of is very close to the general theory I' of governme'nt policy, being that regulation is typical ;I. I government But regulation is a distinct kind of I I policy has spawned a distinct theoretical and .I empirical !literature. Indeed, in economics and political .1' science, i t,s study has been elevated to the status of a subdiscipl i1rle. Moreover, because understanding of the .i development[,: of the character of public policies is still rather the .focus at this stage should be on ,I "I' specific kinds of policies. I Thi1s discussion does not evaluate the empirical '1:1 literature on the undesirable economic effects of 1:1 I' regulatory Agencies. For a review of this work see 'I 2 Joskow and 1981. Instead, it presumes that agencies do: :have such effects. The purpose here is to I examine thel,literature on government processes and I, ,I' organizations in search of plausible ,,1' of the selection of regulatory policies. In I" I principle, ::theories of government policy making behavior could some basis for evaluating proposals to .I reorganize r regulatory agency, to redesign its mandate, I' or to replace regulation with some other form of I I 1, I : : i


I: di I, I! I 'I I 19 J' government policy, and for predicting the likely long r term effect[' of a regulatory agency. I these proposals rest on theories concerning the behavior of government agencies, private I organizatiohs, and elected political officials. Yet the I proponents hf reform rarely justify their proposals by I I reference t;p explicit theories and empirical observations of the interactions among these groups. Nor is much 'I I I thought normally given to the organizational problems of I "I I structuring; an effective agency at the time the I adopted to establish a new regulatory role '' for the :1' A useful theory of regulatory policy would I provide verifiable propositions on the relationships among structure, responsibility, power, and I performancerof .a regulatory agency. It would provide I : subsidiary on how private organizations 1.: would policy design and cope with the particular regime that is established. :I I Further, a Hseful theory of regulatory pol1cy would I'' predict thelicapaci ty of an agency to control various I aspects of private market behavior and identify optimal I choices of organization, procedures, and policy J 1nstruments1 .for a given policy objective and a given :J.: structure of, the private market to be managed. A useful r: theory would explain why an agency responds favorably to ;ijl I I I; I ,,, I I


I '' 20 some technological innovations and unfavorably to others, and it explain the extent to which an agency's I response is' affected by controllable characteristics such as structure, procedures, powers, methods, and 'b'll. 3 respons1 1 The remainder of the discussion examines the existing related to the activity of regulatory I agencies in search of generalizations that are useful in the sense described above. Although substantial work has been done in recent years on the theory of regulatory agencies, the results are still fragmentary. consequently, most of the literature surveyed here is not ,. addressed specifically to the question of design versus performance regulatory policy. Some is very general, I addressed the properties of all government policy I making processes or even all decision making Some literature is more specific, but is addressed to organizations other than regulatory agencies. tndeed, most research on the public policy I process andlthe behav1or of government off1c1als has not I dealt explicitly with regulation. Consequently, any comprehensive attempt to suggest how work in most of social science might enhance our understanding of the regulatory policy making process must i therefore extract inferences from research that was I, I undertaken for other purposes.


''I I I I: I, i I 21 A of the literature on regulatory policy I'! yields which suggests that general theories of regulation tend to be either legislative or bureaucratic, I I I I' in that the select either the electoral process and the I, incentives on politicians or the bureaucratic I, process and I 'the incentives operating on regulators as the I' f f 1,'1 ocus o ys1s. I 2 1llustrates the relationship that exist between the'l .legislative and bureaucratic processes Ill I I concerning policy. Graphically, it depicts L the direct between the electoral and bureaucratic process. should be noted that the two processes are [' dependent oh each another. Such relationship serves as a I, I cross-checkl for assessing the relative merits of each process in society. 1: h' ac 1ev1ng I. i' .. : a common objective for the good of Table 2.--Regulatory Policy Electoral Process Bureaucratic Process I I I, Legislative I I P.olitical I I' I 1,. Politicians I, I Courts I I. Principle Ends Bureaucratic Economic Outcome Regulators Public Interest Social Choice


' I 22 i.. In the first category or legislativ.e process is I the "Chicago School" of regulatory theory, the I outstandingiproponents of which are Stigler, Posner, and 4 sl 6 Peltzman. 1 The essence of their theory is that I 1 I. regu atJ.on 1.s I a device for transferring votes and contributiops to politicians. The theory predicts that regulators rill use their power to transfer income from I those with less political power to those with more. Predictions 1: on the direction of this income I redistribution are impossible because that redistribution I depends on the costs and benefits of regulation as perceived by, different interest groups and on their ability i '. to thel.r power I Another useful point of I in the political arena. departure in a catalog of behavior theories is to consider models I I based on the straightforward assumption that government I agencies seek to maximize social welfare or the public I I interest. conceptual models of government I bureaucratic behavior are based on this assumption. I I These models differ according to their descriptions of I how governmint officials develop perceptions of the I 1 I pub l.C J.nterest they seek to serve. Two related models I in economic:theory cast grave doubts on the existence of a well defiAed consistent public interest. One is the t I d th t 1 7 8 9 con roversy1surroun e compensa J.on prl.ncl.p e. I, I


I I, The second iis found in the literature on social choice 10 theory. I I I I ,. 23 In 9ontrast to the traditional view that bureaus attempt to serve the general welfare are theories that I view as servants of some well defined interest ; I, e1ther becafpe the agency was set up to serve that cl1ent (the cartel:theory) or because, through the years, I I agencies are vulnerable to being taken over by some special (the capture theory) 11 The special I .. interest group that the organization serves is usually identified as the producers in the market that the agency regulates. 1Another candidate is a professional elite, I such as lawyers in agencies with cumbersome procedures or physicists the old Atomic Energy Commission. Of the theories of regulation that focus on the agencies ves, most also predict outcomes favorable to interests. Roger Noll argued that the 1,' committee stf.ructure in Congress, the mechanism of : judicial and the administrative process all favor I 11 d t t 12 I we organ1ze 1n eres s. Argu1ng one s case 1n a I congressional, regulatory, or judicial hearing is I expensive, organized groups that possess resources to expend in td:ls manner can be expected to influence policies to the extent that the outcomes depend upon the I 1nformat1on !presented in these processes. Bernstein proposed a cycle of agencies in which these


i i agencies from active advocates of generalized .! 24 consumer to passive conduits of the interest of 'I d I 13 organJ.ze Ross Eckert proposed a more direct ,. I form of that regulators expect to become employees o'! organized interests when their regulating d 14 ay are over. The u.s. Senate Committee on Government Operations :< 1977) after examining data on employment histories regulators, concluded that conflict of I interest of. this sort was a serious enough problem to '' warrant proposing the prohibition of employment of former regulators in regulating industries for one year after their 15 terms I I Not:: all structural theories of regulation are ,, pinned to ihterest group aggregation. Michelman proposed that processes, like administrative reviews, serve an important psychological function by giving 1;. people theii "day in court."16 Williamson applied this I 1 f I k t 1 t' 17 genera ra,mewor o prJ.ce regu a J.on. The argument is that "normall" market processes (because of the variability:.of market equilibrium) and governmental interventidhs to improve efficiency can cause arbitrary I ,. and capricious redistribution of income. Administrative I processes a mechanism for ameliorating these I. but they are also processes for defusing I psychological responses to capricious redistribut1on. Through participation in administrative :!.


I processes, !people derive benefits through reduced 'i: demoralizat;ion, should they have their say and still I. 25 lose. The ;interesting, unique feature of this theory is that it att!empts to incorporate noneconomic aspects.of individual .:welfare into a theory of economic welfare, setting up .;the possibility of a tradeoff between economic I efficiency land psychological well being. The theory is I not therefore, with theories emphasizing I bureaucratfc and procedural bias in favor of well organized cj;roups. The latter could be viewed as the cost ., of providiri'g other forms of noneconomic benefits. Bec.ause bureaucracies are created and supported I 1. by legislatilres, a complete process theory of regulation i I I must be connected to electoral politics. For theories i oriented interest group influence, the key issue '' is why legi;$lators want to create regulatory institutions I that are ex'cessively oriented toward the welfare of well I I organized gjroups. Thus, one way to view bureaucratic theories is that they are natural extensions of legislative theories. Questions concerning the operation and organiz:ation of agencies would then no longer be central to :the concern of the political economist, just as question:s about the structure of a competitive firm are not veriy interesting to the economist who studies a perfectly C10mpeti ti ve industry. I I'


'' '' A electoral connection, separated from a d 1 I :f t t 1 t d b pure mo e o 1n eres group po 1 1cs, was propose y ;I I Fiorina and ;Noll. 18 They argued that a national 26 legislature., composed of representatives from single member legiflative districts creates a prisoner's dilemma 1,: for voters and legislatures: A legislator becomes one of many voters on public policy issues affecting the welfare I of all votebs. But he is a monopolist in filling the I: role of an hmbudsman for constituents--that is, in I' providing ihtormation about public activities and interveningtinformally in government processes by virtue of activities on behalf of the home district. To be a facilitator for constituents, the legislator must not bel'a consistent opponent of bureaucratic policy. A voter in district can be in a prisoner's dilemma if I. 1,, the choice is betweeri an opponent of regulation 1,, I' and a propoh:ent who is a good facilitator. The opponent of regulatitn, as one small voice in the legislature, is unlikely a change in policy; hence, the payoff I, to the votef is greater if the proponent of an I< is elected because, in that case, the voter will t'eceive at least some return from the policy. 19 Thef:structure of the regulatory process assumes II importance i;n this model because it determines the extent l to which the: congressman/ombudsman can influence its l outcome by fnformal interventions. Administrative law


can be interpreted as an attempt to escape from the prisoner's rules that or from a set I. fimit the ability of a of formal procedural representative to convert regulation into porkbarrel, but that raise the costs of participating in the process. General theories of regulation have major conceptual First, they are extremely 27 difficult to separate from even more general theories of representative democracy. Regulation is typical government policy. It is the tool frequently sought in problem resolution as a legal means to satisfy matters of public welffre. Regulatory actions affect both the economic ef,ficiency and the distribution of income, and I ; is carried but by a bureaucracy according to the tenets of administrative law. General theories have not yet explained why politicians sometimes choose regulation, I I but other choose other instruments of public policy I to d1str1bute the w1lls of democracy, nor why the inefficiencies of a regulatory bureaucracy differ from those of bureaucracy generally. The second problem is that the inherent inefficiencies of regulation that flow I. from these have no consequence, although one I could not deduce this from the tone of the literature. I I That regulation fails to reach an optimum is fairly uninteresting if no institutions exist that can reach that optimum. For regulatory interventions that deal I


with empirically important market imperfections, the i departure of regulatory equilibrium from perfect I' competition:is not compelling. theories of regulation face an I empirical problem as well. The pluralist theories are 28 built upon comparisons of the economic stakes, the degree of organization, and the resources of the interest groups, yet these variables have proved especially difficult to measure. Empirical tests of interest group theories boil down to an estimate of the I distribution of costs and benefits of an interventionist I policy based on the departure of regulated equilibrium I' from perfect competition. Examples include the study of railroads by Spann and Erickson20 and Stigler's empirical test of his: initial statement of the Chicago School 21 regulatory theory. The way in which these theories have I evolved makes rejection of the null hypothesis virtually I. I impossible pecause the empirical information used to test the theory also the information available to identify i the interest groups. In the absence of any clear way to reject the hypothesis presented, the I theories cah easily become redundant. A nonredundant '" of group theories would go one step farther, tol correlate measures of the political influence of a group its net benefits from regulation. j'


:: : I I 29 I I Moreover, it; could use influence.measures to explain the absence of Uegulation where that is the case. I, I Because of these conceptual and empirical l.i problems, of regulation must.still be accorded less than fLll scientific status. Social scientists have not yet convincingly that they understand what political phrposes are served by regulation; why some industries regulated others are not; why certain I' regulatory c:(pproaches are taken; and, why regulatory I' 1: controls ra:ther than other policy instruments are 1 : .. selected. tintil answers to questions like these are J:: the theory of regulation serves as a convenient tiay of organizing historical material, but not one that is. 1particularly rich in predictive value. 1.: Env1ronmenta1l Requlat1on Research I'' recent extensions of government intervention are actions intended to improve the quality 1:. l of the envirpnment, of consumer products, and of workplaces ... Such agencies as the Environmental ,: Protection the Food and Drug Administration, Consumer Product Safety Commission, the Occupational ti Safety and Haalth Administration, and the Office of I Surface Mining Reclamation and Enforcement are having important effects on the economy. Rapid I: extensions 0f rate and entry regulation in the health 1: the


i 1.1 'i" I: 1: I. care sites and by the federal government have I: I' been accomp1anied by regulatory control, yet relatively I I I. 30 little research on the behavior and performance of these I I' agencies been occurring. I: I" A amount of theoretical research into i information costs, product quality, i consumer and moral hazards underlies a I theoretical1 .case for government intervention in many of '' i these The empirical relevance of these market has proved difficult to document because 'I the informafion that is needed to measure it cannot be easily infefred from market transactions. Even in the case of env!ilronmental externalities, which most I economists require some form of. government 1'1 interventio'n, there is disagreement about the particular I, I instruments! 1to be used and the ability of government I' regulatory to deal with the.problem effectively. I Thel::best developed theoretical models in the area I, of regulation deal with environmental I. external The theoretical characterization I: of the problem is borrowed directly from I' the public finance literature on collective goods, and is i a straightffrward application of samuelson's classic 22 I: paper. wh;i;lt is special about the theory of I is the rather interesting array of I, I I. i' I ],1 I '! I: I' II


I! ) I I 31 I institutional interventions by government that have been '' explored in! 'the theoretical literature. 1 f f t f t Fori examp e, 1 per ec 1n orma 1on were I, ava1lable a:bout the benef1ts and costs of alternat1ve I I I abatement strateg1es for every source of pollution, the I problem, in: .both theory and practice, would be relatively I With perfect, costless information, 1': optimal source specific standards could be legislated. The interesting aspects of the problem are related to the imperfect infor.@ation about sources of emissions, the amount of prllution at each point of reception, and the costs and of abatement that a regulator faces. A regulator ::can know on.iy imperfectly where pollution is created andi received and whether a source is in compliance a regulatory rule. Moreover, regulatory interventiohs generate more information about the I, relevant of environmental problems, so that changes !I: in regulator constraints have two objectives: (1) to produce a mbre efficient result in their own right and I i (2) to generate more information to guide further I alterations! in the regulations. I, I: Mos economic policy analyses of environmental ,{ problems propose the use of negotiations and corrective .. 1' taxes to 1nternal1ze the external1ty. Baunol and Oates I ; set up the problem in a straightforward format, regarding i pollution abatement as having costs to abaters (which i If


II I I !.: 32 I generate a surrogate supply function) and benefits to I: recipients ('which generate a surrogate demand function). 231. The policy problem is seen as imposing an I, emission tax that balances at the margin the costs and i I benefits of.jabatement. Ayres and Kneese, and Leontief I. set up linear models that 1:. I' externalities and in which the appropriate I t h d 24 25 h 1 t t axes appear: as s a ow pr1ces. T e 1mp emen a 1on of taxes may have been advocated in the public I 1: policy in a series of monographs by Kneese and 26 I Schultz. i:: Professor Thomas McGari t/7 has developed a II framework f0r the various approaches a legislature or an i agency can to regulate externalities. It is J! represented l:by a four dimensional model, which makes it possible to \:place any regulatory requirement at a point I along the c9rtinuum of each dimension and thereby II: visualize complete regulatory strategy. Shifts in I I the regulatq>.ry approach would shift the requirement along I one or more l:of the dimensions. The four dimensions are: I! the nature the immediate regulatory goal, the nature 'I' of the regulatory statement, the addressee of the 'I' I regulatory ff:tatement, and the focus of the regulatory j; statement. I' li The[nature ofthe regulatory goal is expressed in 1' I' enforceablej:?tatements which are media quality based I' I, I I I': J:[


I. (e.g., of cancer cases per year or fishable I 33 water), based (e.g., best available technology or lowest acihievable emissions rate), or some balance of !i i the two. In the media quality based approach, the legislature'will set a specific goal for the quality of I the media air, water, populace) which ignores questions of feasibility. The agency then refines and j.: translates the goal into a level of pollutants that will I meet the develops and applies a mathematical model i. I li' that relate$; discharges from individual facilities to the media goal, and then apportions the allowable pollutants ... In the technology based approach, the sets a broad goal that ignores impact on quality of the media. The agency then categorizesthe existing facilities according to I I production nature of product, age, and other attributes, ;discerns the best in each category, judges I. whether the:'technology is transferable and finally sets the standard. by prescribing a particular technology. Of I course agen'ies can also take an in between, cost/benefit approach, requires knowledge of impacts, media I quality, technology. The ,advantages of the media quality approach I include its on the ultimate goal (i.e., the air, water, etc.):: and its ability to incorporate a wide I. variety of options, such as incentives. However, since I


! 34 there is a well defined threshold where no effect II occurs, it difficult to draw the line, especially to accommodatej:ieveryone. Other disadvantages include the I difficulties and uncertainties involved in translating the quality: level into limitations on individual sources and the inappropriateness of the approach to production with a low probability of catastrophic harm. i' The advantages of the technology. based approach include its focus on realistic technological options, its political neutrality and low profile, and its ease of and enforcement. This approach eliminates i the need mathematical models (and valuation of life 1'1 I' or risk) and expensive discharge monitoring devices. :) I However, this approach may be cost inefficient because there is no concern for how much good the regulation I does; it may inequitably impose costs on individual firms as an of timing and may serve to freeze I I technology a:t the particular requirement. In addition, on review, the courts are more likely to send technology based back to the agencies than media quality ones. I McGa!rity's second dimension is known as the 1.: nature of regulatory statement. It ranges from r: commands, the agency prescribes or proscribes I particular 9onduct (e.g., performance level, use of I particular t'echnology) to incentives, where the agency I


35 penalizes undesirable conduct through such schemes as I excise and markets in pollution credits. Professor 1:: McGarity bel;iieved that positive incentives do not fit 1: within his framework because the government simply buys what it wants. The advantages of the command approach include ease of articulation, predictability of impact, and ease possible of!enforcement. Disadvantages include the of perverse incentives and high administrative costs of learning enough about the functioning'of the regulated industry to articulate a specific Also, the process is time consuming, intrusive, the autonomy of the regulated firms and may kill industry's incentive to develop new control .. I An incentive approach is more efficient I because it a.llows more flexibility to individual firms, treats all firms equally (same charge for each unit of undesirable !'conduct) and provides a constant incentive to q; innovate. there is not a great deal of I empirical McGarity believes the administrative costs may be lower. Disadvantages include a disproportionate adverse impact on small businesses, uncertainty 'I 'in enforcement and high investment costs. Incentives ]ose the moral force of commands by i' acknowledging the right to pollute if willing to pay for I it and are for catastrophic hazards because it I


36 is morally politically difficult to sell permits to kill. The: addressee of the regulatory statement is the third and is either the source of the I externalityl(e.g., the polluter, employer) or the receptor ( e the worker exposed to the hazard) This dimension ittvolves a serious question of rights. Does a I person have !:a right to require a factory to reduce I pollution.tb a level which is comfortable for him when it I is cheaper for that person to wear a respirator or other '' I protective A cost/benefit approach is difficult "I I to apply when rights or individual autonomy interests are I I I involved. I The!.fourth and final dimension of McGarity is I i the focus on the regulatory statement_may be broad that or narrow, across industries or case-by-case as 'I in licensing: or permitting. Although the generic l approach may be less costly, it may be inefficient, less l flexible, and subject to stricter judicial review. A I l case-by-case approach may overtax an agency's resources I but allow agency to take into account individual and I' I regional among those regulated. ,I A popular economist's solution to I' J: environmentfl. problems, and one that also relies on processes to achieve efficiency, is to I I' create tradeable licenses to pollute. Externalities are l I '!'


I 1' 1 l I 37 I a problem bbcause of incomplete specifications of property over which polluters and recipients I could, in negotiate once rights were defined : 28 and Dales provided a discussion of tradable pollution licenses that is rich in examples of how such a system might be implemented.29 Montgomery formalized the I I o II theory of licenses and showed the conditions I' under whichi::a given amount of pollution abatement is with the least cost by creating tradable 1 30 1.censes. I I The: fascination of economists with market like I, mechanisms to deal with environmental problems is I'' I. particularly, interesting in light of the largely negative ; I theoretical' results on the effectiveness of decentralized processes that have appeared in the literature. One set of emphasized by Davis and Whinston, 31 32 Montgomery, I and others, has to do with the thinness of I each market for a pollutant. As Arrow pointed 'I out, the appropriate expansion of the set of commodities subject to market transactions that would allow a competitive:solution to the problem of efficient I abatement a separate market for each pollutant that is delivered to each receptor. If the number of polluters I in any particular market is small, price-taking behavior is not likely to conform to actual firm behavior. This


' '. I I 38 undermines phe efficiency of both markets in licenses and iterative I I I' The I processes. second set of problems is that not all equilibria that are reached by an iterative tax scheme or private negotiations over well specified rights are efficient, and that not all efficient equilibria are I I stable even[if price-taking _behavior is followed. The f' 1 l;l d1f 1cu ty 1s that pollutants that produce the I productivity of other production processes (including consumption' production processes of the type hypothesized by Lancaster)33 can never drive the marginal productivity 1': of resourceA. in their processes to zero because firms (or I people) can1 :exit. This means that in some range, pollution must involve economies of scale and discrete exit or entry points (which must make the problem amenable to corner solutions). Noll and Trijonis34 p;ointed out that the earlier approach to calculatingj!prices from general equilibrium models I required on'b to assume either that pollution costs are I of output or that the marginal costs of I abatement ate independent of pollution. Their extension I I, of the Ayre.s-Kneese and Leontief models admits the possibility,::of unbounded effects of pollutants on costs. 35 As Starret .demonstrated in a more realistic model, an iterative can reach an equilibrium at relatively small of abatement, yet the equilibrium may be


II I i I I I I dominated by higher levels of abatement (achieved with higher taxesi) that capture the gains from scale I 1 economies. iMoreover, Montgomery36 showed that the I necessary conditions for an efficient solution to a I ; bargaining requires that pollutants enter all production cost functions separately, and that this condition is inconsistent with the conditions for the I I existence in equilibrium of more than one pollution producing pollution receiving firm. terms of the practicality of implementing environmental policies, the second set of criticisms is 39 probably important than the first. Because the full I extension of the commodity space contemplated by Arrow i is impractical, problems of marginal markets are unlikely 1: to loom in comparison with other difficulties. I I i' Moreover, no one has seriously proposed that receptors I, will be resppnsible for collectively deciding on l pollution taxes or on the number of licenses to pollute I : that will issued, except through the imperfect I mechanism of the representative political process. The :' practical ptoblem is whether a sequence of tax or license messages to:polluters will produce minimum cost responses I. lii so that makers, using whatever magic is at hand, I can measureithe consequences of these 1terat1ons and locate in political processes for I II I .I


I I I, 40 aggregating preferences and in the definitions of separate i I pollution markets. 1.: economists' traditional scheme for using market to correct externalities has rarely i been utilized. corrective tax and tradable license I schemes have almost entirely taken a back seat to direct control of or specification of particular I,, 38 39 control Part of the problem l.s that the economists who advocate these policy instruments have usually the problems of information costs, I administrative feasibility_, and uncertainty that characterize the real world in which these policies must be applied.,! : When economists have considered factors, thf:Y have identified circumstances that lead to a for standards, rather than decentralized I 40 41 market processes. But this cannot be the entire I. '' Mills and White provided a fascinating analysis of'1 the historical evolution of auto emission I controls, presented a convincing case that a workable i tax scheme lias been available and would have been I ; superior to'the course followed by Congress and the Protection Agency.42 For some reason, 'I, there appears to be an administrative and political bias toward rules and standards and away from markets in the i area of envi'ronmental control. Exactly why such a bias I '' exists is uhclear, but eliminating it appears to be a


1.! I I. I I I. prerequisite to implementing decentralized methods in I I this area. i Economic Perspectives on Political Choice i 41 Environmental regulation seeks to reduce harmful emissions br: directly prohibiting them, by mandating I: reductions in emissions to a specified level (performance I standards), :or by requiring some corrective action (design standards). Because there is no doubt that air, water, and qther types of pollution can cause I demonstrable damage to public health and tend to reduce the quality: of life, that environmental regulation produces economic benefits is beyond question.43 The problemlwith environmental regulation is that it is far from In addition to the decision making, i monitoring, 1and enforcement costs associated with antitrust pJlicy or direct regulation .(old style regulation as opposed to new style social regulation}, there are losses associated with regulation induced politicization of an industry.44 This form of government action can does impose huge compliance costs on both : firms and cqnsumers. Of course, to an extent these costs I I are and unavoidable. However, one should want I to answer all questions to be sure that the benefits of I environmental regulation exceed their costs and that I I i I I I I:


42 emissions rductions are achieved at the lowest possible I costs. Unfortunately, owing to the incredible complexity of environmental regulations, it is not possible to categorically conclude that the benefits they produce are sufficient of justify the costs they impose on industry and on the economy in general. Indeed, any meaningful I answer to this question must be viewed on its own merits. Is a particular emissions reducing technology efficient when mandated for a specific firm or plant, in a particular area, from the standpoint of a target I pollutant? Nevertheless, attempts to overcome measurementiand other methodological problems involved in I evaluating the benefits and costs of environmental protection nave been made in recent years. One example is the u.s .. Environmental Protection Agency's analysis of the costs and benefits of compliance with the Clean Air Amendments 6t 1970. This study made numerous assumptions about how governments, and consumers would respond to the ambient standards and timetables set by the law. procedures and methodologies used in this I analysis are instructive, if now somewhat dated. The EPA I found that the benefits of meeting the Clean Air Act standards exceeded the cost of compliance by several billion dollars. The research also divided that data by i' industry, finding substantial differences in the balance I


i i I t t d b f't d t 43 be ween cos I. s an ene 1. s across var1.ous 1.n us This suggesred that air pollution control efforts, at least of type the EPA envisioned at that time, would ,I be far more! :cost beneficial to some industries than to others. I I' In contrast with these results, after years of study of thl research on the relationship between air f pollution and human health, Lester B. Lave and Eugene P. I' Seskin concluded that, if EPA estimates of the costs of 1: cutting and sulfur oxide emissions from stationary to mandated levels were correct, I. realized of such controls from reduced mortality alone would. :;likely exceed total costs by some 70 percent 46 annually. 1: However, the same study also that, at the marg{n, the benefits of achieving current mandated standards fqr mobile sources of air pollution were less than the co1ts. This analysis suggested that a strategy I I emphasizingl::strict standards and enforcement, where I 1. pollution damages are worst, would achieve most of the I P' benefits of 1a more uniform national program but would I 47 reduce costs' measurably. Indeed, most empirical ofl:the benefits and costs of environmental regulat1.on agree on one point: When the objective of bl. 1. 1: d . f t t pu l.C po .l.s a re uct1.on 1.n em1.ss1.ons o a arge pollutant, standards (e.g., mandating a uniform I' I'' percentage feduction in emissions or the use of a single 1: I I,


I I : .I 44 abatement tchnology) will not achieve an efficient I I result. InJ .many cases, uniform standards imply I I compliance costs six to ten times greater than the minimum reqUired to reduce total emissions to some target level. 48 I I Recbgnition of these problems has led to of previously rejected alternatives to regulation.: In fact, economists have for some time argued that' the most efficient institutional arrangement for harmful emissions or other damage producing I is an economic sanction or tax levied on I residual and set to equal the damage caused by 11' 0 0 1ncrements to pollutant concentrat1ons. Under th1s proposal, as to here and how to reduce I emissions l:fvels would be explicitly delegated to firms. Damages or, 1 if damage measurement presented insuperable i problems, emissions would be continuously I monitored aBd penalties would be directly proportional to emissions Many economists argue that such a levy would the cost, reducing total emissions to a I' I 49 target level. In theory, an emissions tax would bring the cost/benefit profile in line with s6ciety, I I I I and polluters would have, therefore, and incentive to invest in pollution abatement equipment up to the point where the chsts and benefits of abatement are equal. ;J Consequently, an emissions tax would lead some to reduce I I.


' .I :1 45 'I pollution a greater extent, some to a lesser extent, the marginal benefits of polluting in each l'f 50 E ... 1 51 d t b d. f case. examp es an an ex ens1ve o y o theoretical ;!analysis indicate that such an institutional I arrangementj::would be extremely cost effective in reducing 'i emissions. 521'i This approach is carried another step by J. 53 1:: H. Dales wno argues that because the market fa1lure 1': I here arisesl:,as a consequence of the absence of a market I in the assinhlative capacity of the environment, the ll.i solution is 1ito create a market where rights or I purchasable !permits to pollute may be bartered among .I polluting Under Dales's scheme, a pollution II control ageriby would establish concentration standards 'I I for a It would then auction off the rights to I. contribute pollution concentrations to the highest b dd L d h d t II f th 1 ers. 1ng to F1s er an Pe erson: 1 e costs and of pollution, or pollution abatement 1: 1,1 are known to1 the control board, the pollution rights I market can l'kad to the same (efficient) level of I: 54 pollution as; a tax." 1'1 1:' Dales's program has never been tried as proposed. 1:: there are pollution rights markets I throughout the United States. In these instances, the EPA has estlblished regional nondegradation standards. Firms are pJbhibited from adding to pollution 1'1 concentratic:>ns except where they can secure an equivalent I: .I I I I '!


46 reduction in emissions elsewhere within the region. I:; Where pollufion concentrations approach optimal levels, this seems to be a nearly ideal solution to the problem: It is enforceable, and controlled by means of :environmental impact statem_ents. Conclusions on Theory of Economic and Political Intervention here has been a fairly traditionall,:approach to market failures. It is justified by its usef1!11lness as a means of identifying potential remedies to regulation. In the final 1 tl! l't' th t t ana ys1s, ?e econom1c rea 1 1es are a sys ems are persuaded the comparative advantage of markets, or any th tl,: 1 t h t b d d o er 1nst1 ut1ona arrangemen w ere 1 can e re uce t t.l: f t t' f t' t d t o a ques o ransac 1on or 1n orma 1on cos s an o the ability. willingness_ of those affected by these costs to and bear them.55 According to Kenneth 1:. Arrow, any iDstitutional arrangement has the potential to reduce losses associated with another, but before 1:: any conclusion can be drawn with respect to the advantage 1': of institutional arrangements, it is necessary tJ;balance information costs under the existing arrangement those of the alternative systems under consideratioh. 56 I


47 The;most plausible case for this proposition is made by carl Dahlman. He argues that, although it may be I: useful for purposes to distinguish between types of I information: cost; search costs, bargaining and decision I costs, and and enforcement costs; these classes all reduce a single one in that they all represent 1 d t th 1 k f f t 57 asses ue o e ac o 1n erma 1on. I Furthermore, imperfect information may justify any form of i.government intervention. For example, if optimal exchanges do not occur because of ignorance, government intervention may be justified, if it is ; assumed that government knows more than private parties II do. However, we may not assume that government knows 58 better. Furthermore, markets work well enough in most instances that the burden of proof ought to rest with I those advocating I intervention. Unfortunately, the burden of proof usually rests with those advocating a change, any change, from the status quo. After all, the first objective of regulatory analysis to be the selection of the right arrangement, that is, making the right choice amon9 alternative instruments of public policy, including cdmpetition. The second objective, where regulation found to be the best or the least worst arrangement, ought to be to regulate I. correctly. :This means combining regulatory targets, I I I i I I I I.


I i I standards, :and monitoring and enforcement strategies so as to the benefits sought by regulation at the 48 least possi,ble total cost. The pursuit of these objectives !can be referred to as regulatory reform. With respect to ithese objectives, insufficient effort has been given to design and evaluation of alternative I I institution'al arrangements. Nevertheless, the following I generalizat:ions can be made. may produce substantial benefits under I four 1. When it promotes effective competition. 2. When it permits the public to enjoy economies of scale to avoid the exercise of monopoly power. From the of the consumer, the benefits of I rre realized in terms of lower prices and a more optimal mix of service attributes, including greater I, I' certainty of service availability. I I 3. 'When it reduces negative externalities, I resulting in a cleaner and .safer physical environment. I Here, the of regulation are reflected in a healthier and aesthetically satisfied public I 4. ,When it reduces the number of mistakes made by parties to private market transactions by standardizing product or service attributes or working I conditions .. I I_


' .I 49 .. I 'I In the "I first instances, when antitrust regulation is used to promote effective competition, it can be I. unambiguousiy concluded that regulation is the best I I option. Also, in this particular instance, the use of I regulation kay reflect no more than the failure to I I consider possible alternatives to antitrust actions. In I each of thelremaining three instances, the benefits of I regulation be secured by alternative government 'I actions. of regulation claim that in these I I 1nstances, the alternative may be more likely to be efficient regulation. !, In the second instance, regulation may not be I' viewed as appropriate means to achieve single plant or I I industry efficiencies. Either some form of franchise and bidding or public provision of goods and I services usually dominates regulation. If it is assumed that potential service suppliers better understand the I, demand characteristics of their market and the production I I and cost in their industry, and if they can be : prevented colluding, then a competitive bidding I i arrangement !should ensure the best supply arrangements I possible in 'any particular market. If it is assumed that I I the regulatqrs are as informed or better informed than I are in the regulated industry, then private ownership no significant function or responsibility I to 'I


Under conditions of externality, regulation may I. 50 be inferior: to the manipulation of market incentives and 1,' I penalties a's a means of reducing externalities. Incentives may take the form of charges (effluent taxes) or marketable rights. it is assumed that where producers I can determi'ne better how to reduce externalities than I regulators, market incentives will outperform regulation. Under conditions of the fourth instance, it is asserted public provision of information (or in the case of certification or enforced disclosure I such as truth in packaging and labeling) will produce more effici;ent outcomes than will a regulatory program q: that the range of goods and services made available, standards of quality, or establishes maximum lev:rls of exposure to health and safety hazards. Once again,: if it is assumed that participants in private market transactions err only because information is absent, public provision of information is I preferable regulation. This assertion is made from the observafion that public provision of information can meet social: and economic objectives without removing I I alternat1ves from the market that some consumers and I' workers would prefer. On other hand, the information cost criterion leads to thk possible conclusion that regulation is I likely to be less costly and more efficient than I I' )'1,


I: .i. 'I :I I I: 51 informationl:provision where difficult probabilistic I judgments are required to avoid mistakes. Relationships between risk, costliness of error, and consumer i preferences:provide perspectives on the choice of I alternative! institutional arrangements in other I I as well. With respect to direct : .I regulation, [we have specified some of the circumstances under which! this institutional arrangement may be I appropriateJ. Unfortunately, because of shortcomings on I the part the regulatory authorities, these circumstancbs are rarely fully satisfied. Nevertheless, there is a degree of similarity in supply and I, I' consumption: (where individual preferences are similar), I total costslare likely to be lowest when purchasing and I negotiationi::of the terms of purchase are delegated to a public authbrity or agent. These inferences are also implicit inl the treatment of externalities. I I '1, The:r,efore, w1th regard to the advantages of regulation versus information provision, it can be viewed I that where the probability of a costly error, rather than outcome, is ihigh and consumer preferences are fairly ). provision of information is likely to be .I more costly!than regulation. Likewise, where the I probabili ty!of error is higher and remedies are similar, I market incentives may be more costly than regulation. I ,.


If has a comparative advantage ,I I, relative tti: i other government actions in certain ,1, instances, why is there so much criticism of it? One 1, reason is cilistrust of government decision making in general. In turn, this distrust frequently reflects a I I I distaste fof interest group politics and its an appreciation of the short term horizon I 52 that political decision making and cynicism toward the claims made about the public interest in I I I I political Allegations of destructive I competitionV the desirability of a zero risk environment, the value of a human life, and the societal ,,1 I benefits of: 'regulation are all too often no more than I. disguises wb;rn by special or exclusive interest. I A reason is that the arguments presented I .I' here may nob be entirely compatible with the models that J most analysts prefer. It is suggested that models to I: take account of a wider variety of institutions, changing I I' technologies and products, consumer preferences, and the I I implications. of. uncertainty for individual and collective I I decision would better inform public policymaking I I than do abstract debates about the relative merits of 'I regulation competition or regulation and information I provision. :Unfortunately, such models are difficult, if not to construct. Furthermore, their use I' I' "I, seldom produces definite qualitative conclusions. I I, ,1, I I' I


53 it could be speculated that so far as the choipe between regulation and other forms of government action is concerned, the perceived bias of economists' against regulation reflects a very real tendency of government to rely too much on regulation. Regulation ,is the instrument most familiar to lawmakers. I It is also ponsistent with the legal approach to problem I solving in bther areas. As Paul Portnoy observes, "We do not tax robbers in the hope that they will find it economical 'to stop robbing. "59 Consequently, regulation is often thb first solution to a problem that lawmakers choose. An 1overview Of The Surface Mining Control and Reclamation Act Of 1977 was on August 3, 1977, that President Carter signed 2, entitled the "Surface Mining control and I Reclamation:Act (SMCRA) of 197711 (hereafter referred to I interchangeably as the Act, Public Law 95-87, or SMCRA). The passage: of Public Law No. 95-87 signaled the end of an era of unmitigated damage to the environment due to I surface and the creation of the Office of Surface Mining Reclamation and Enforcement (hereafter referred to I as OSMRE) .60 The Conference Committee reported the bill 61 out on July. 12, 1977. The bill was passed by the House


62 on July 20 ': 1977, and by the Senate on July 21, 1977. The legisla'tion was very similar to two prior bills ., I passed by the Congress that met with the presidential veto. I 'I Bill 425, passed by the Ninety-third I Congress irl its final days, received a pocket veto by I President Ford. 63 The next session of the 54 Congress passed H.R. 25 which was again vetoed by President R:Ord. The effort to override that veto failed by three votes.M With the passage of the Act Congress attempted to reconcile the demand for an inexpensive, reliable source i I of energy the competing desire for a clean To achieve this goal of the Act, Congress i: adopted a of national performance standards designed to! protect the environment without discouraging 1 i.'. 65 coa produc:t1on. However, Congress divided the I regulatory for the enforcement of these I nat1.onal standards between the states and the SMCRA of i the of the This division of has created problems where the different of OSMRE and the states have colored their interpretatkons of the Act's requirements. Generally, OSMRE has protection of the environment by comprehensive regulations, while the states I' have increased coal production and have I I I :


J I objected rules as an intrusion on their > congressiodcilly granted authority. 67 oi'! above note examines both the conflicting 55 policies in: the Act and the problems caused by differing OSMRE and state interpretations of those policies. It concentrates on those sections of the Act tpat allow states to a:ssume primary responsibility for regulating surface min1ng within their borders. The note also I; examines c of the federal regulations '. rules governing approval of state surface I h m1n1ng programs. As t e note demonstrates, these regulations11create a conflict when OSMRE, the states, 1, industry, ahd the public all offer different views on the I proper role: of the states in the enforcement of the Act's I I surface Finally, the note highlights I' areas of th present regulatory system in need of additional and OSMRE attention. I. Composition of Public Law 95-87: i Policies of the Act I Congress enacted SMCRA to replace state-by-state I, I. regulation with uniform minimum standards governing I f '1 69 b th f d 1 sur ace m1n1ng. However, ecause e e era government had no previous experience in this field, and the coal had a strong interest in maintaining .: "I l


J.! lj, I I, control ove:zr an important state industry, 70 the Act I' I I grants the :states primary regulatory authori ty71 and the ,I, federal only oversight authority. Before passage of the Act, surface mining regulation haphazardous and varied in effectiveness from state to state. Whereas some states enacted i j I: regulatory programs that adequately protected the all too often states remained more 'I 1', responsive to the economic sensitivities of the surface d : t 73 m1n1ng 1n us ry. Because environmental protection regulations[ increase the cost of surface mining, thus less attractive in those states 56 making coall ;production with more 1 t 74 t t 1 d regu a 1ons, many s a es re axe I their envirbnmental protection regulations to reduce I I production Although some states offered !. adequate few risked the cost of implementing regulatory programs providing protection equal to more exacting federal By tsing minimum national standards, a concept I borrowed the Clean Air and Clean Water Acts,n Congress sohght to raise each state to the desired level I I 1 1B d of env1ronmenta protect1on, an to el1m1nate interstate caused by different regulatory I policies. 79 the same time, Congress did not intend to enact standards so stringent as to significantly disrupt coal production. A stated purpose of the Act is to I'


57 II I "assure that the coal supply essential to the Nation's i: energy requ!.ilrements, and to its economic and social well-1' being is and strike a balance between protection I of the envibonment and agricultural productivity and the ,;1': ,1 Nation's need for coal as an essential source of energy. "80 :jq:ongress had hoped that the standards in the 'I' Act, along the regulations which OSMRE and the :::, I states wourr promulgate, would meet the twin goals of protecting the environment and ensuring continued coal 1:: d t 81 pro uc 1on.: I : I '' I' l, Provisions of Public Law 95-8782 I' I I I, TheiAct establishes detailed national standards 1.: that govern1 :surface mining in every coal producing state. II I i For examplel the environmental performance standards of .I I the coal operators in each state to protect .. I prime farmlf1nd and topsoil84 and to minimize the water pollution caused by sediment-laden runoff from mines. 85 I The Act alsb, creates a permit system governing coal I exploration l:and mining, which requires each permit I meet detailed criteria designed to ensure that the opirators can comply with the national I: 861 standards. I Should an operator fail to meet the I I' standards ih! the Act or regulations, or a state fail to :I enforce the,,! Act, the federal government has the authority I I. I .I 'I I. ; I


1.: to enforce In Congress' view, all these I I 58 requirementls were aimed at satisfying the dual concerns j:' of protecti:ng the environment and preventing the disruption coal production.M An [important feature of the Act is that it protects states' tradi tiona! role of regulating surface within their borders. Many states already I I had agencier supervising mining within intransigent national would not Therefore, I recognizing; .that the federal government could never effectivelyJ; oversee operations in each coal producing I' state, Cong.ress contemplated that on nonfederal and r nonindian lrnds, the states would have primary for surface mining regulation within their 90 t borders. 503 of the Act allows a state to J assume responsibility for surface mining by 1;: ga1n1ng approval of 1ts comprehensive state 1': regulatory program.91 Under section SOJ(a), the state must submi t'!-:to the Secretary of the Interior a state I' 1.: program whibh includes: a law providing for regulation in accbrdance tith the penalties for violations of I'' the program a state regulatory authority to administer i th 1 94 I:' t t f d 1 t 95 e p an; F perm1 sys em or m1n1ng an rec ama 1on; I coordination with other permit processes which may apply I I to mining; 96hand rules and regulations consistent with l those issuecl by the Secretary of the Interior.97 If the I


"I I I 59 I Secretary qisapproves the state plan, the state has 60 I' Secretary must again review within 60 days.98 a:pproves the state program as conforming to the requir.ements of the Act, the state assumes the primary regulatory :authority for surface mining within its I, this procedure, the Act ensures that each plan w1ill contain certain minimum national standards 'I, regulating 'surface mining while vesting primary i responsibility in the states. I In :order to guarantee compliance with the Act's I' standards, .congress, in section 504, placed residual I, I enforcement! authority in the Secretary. This provision I directs the[ Secretary to develop and implement a federal regulatory in each state which has failed to b t t I 1 100 d h t t f su m1 1 s pwn pr1macy p an, an 1n eac s a e or 1, which the state has f.kiled to I has disapproved a state plan and the resubmit an acceptable b t t t su s 1 u e.! I Under both circumstances, the Secretary becomes the[ exclusive regulatory authority in that I 102 I state. Section 504 also allows the Secretary to I I intervene and order federal enforcement where a state I fails to enforce, or maintain the provisions !' 103 of an approved state program. By making the federal government ultimate authority under the Act, Congress hoped to attain its goal of implementing surface mining .;


standards nationwide while preventing state-by-state I at the expense of the environment. 104 I I I Federali:;Regulations Authorized by Public Law 95-87 I 60 To !implement the regulatory structure created by I' the Act I os:MRE issued its Permanent Regulatory Program for nonfed,ral and non-Indian Generally, I these rules!. outl1ne the procedures a state must follow in :I submitting !a primacy application and the provisions the state regullatory program must include. 106 They also I '' describe th:e criteria OSMRE uses in approving a state .I'' I plan and th:e conditions under which OSMRE would exercise d 1 f t h t 107 1ts res1 en orcemen aut or1ty 1n Sec 1on 504. I Of importance to the states was the so-called I "state rule, which allowed the state regulatory programs tci contain alternatives to the federal rules if I. I the proved consistent with the federal law and and if local conditions justified the 108 I changes The "state window" rule reflected the I congression:al finding that since each state presents diverse con1ditions, the states should have primary : t 1 1d 1 th th 1 t. 109 con ro 1n 1 ea 1ng w1 ose reg1ona var1a 1.ons. I How,ever, because of congressional emphasis on the I states' reg:Ulatory role, OSMRE's regulations and I I interpretatlion of the Act were criticized for severely I I


I I the states' ability to exercise the power which the Act experience lin 110 granted to them. Despite its lack of th. 111 0 d 1s area, SMRE pursue an aggress1ve 61 regulatoryjpolicy through which the Secretary promulgated I I interim reg{Ilations governing surface mining, while the states developed and submitted their own primacy i plans. 112 OSMRE introduced untested design criteria tJat prescribed exactly how to meet a certain I I goal, rather than relying solely on performance standards I i that would :allow the operator to choose the best method I for reaching that goal. 113 Many states argued that this interim prdgram disregarded the expense to operators of complying J.ith such regulations, 114 and that, in some cases, the 'existing state regulations were already more I I effecti meeting the Act's goals. 115 As a result, I OSMRE lost the cooperation of state agencies that it needed to implement the federal-state division of b ,! t 1' n the Act. 116 respons1 1.i1 y Under its permanent l t. 117 f 11 d h program regu a 1ons, OSMRE o owe t e same course and drew many of the same criticisms. Again, the ,I permanent program regulations issue both design and performance:standards, which led to claims that the I regulatory program would not be responsive to changes in 118 technology However, OSMRE invoked an even greater reaction w1th its interpretation of federal-state I '. responsibilities under the Act. While section 503 and I ,j .! I


62 the "state window" in the regulations appeared to I authorize s.bate alternatives to the federal program, ;:1 OSMRE interpreted this "window" so strictly that states were forced. to adopt the exact federal provisions to gain 1 f th 1' t. 119 OSMRE approva or e1r pr1macy app 1ca 1on. The states protested that both the Act and its legislative history clea:rly indicated that states should assume a lead role regulating surface mining, while OSMRE I should only oversight To the states, inflexibility not only contravened the expressed cbngressional intent, but also defeated the I. I balance whidh the Act struck between protecting the I I. environment.iand not unnecessarily burdening coal d i21 pro uct1on. i In response to the states' objections to the I I OSMRE the Senate passed the Rockefeller ,. Amendment ih September of 1979.122 Section two of the amendment el:tended the filing periods in the Act to give I i the states more time to develop their own programs. More i section three amended section 503(a) (7) of the Act so that state plans would have to be consistent I I I only w1th Act and not w1th the Secretary's 1 1"123 h regu Proponents of the amendment argued t at i: this would ayoid OSMRE's inflexible regulations and restore the primary role of the states which the Act d 124 recogn1ze .. Likewise, during congressional debate on


63 the amendment, several senators voiced their concern that h d tj; d 1 t t 125 OSMRE a congress1ona 1n en I' I' Opponents oif the amendment contended that it would destroy the! Act by the goal of uniform national 126 standards. 1 Ultimately, Representative Morris Udall, : a sponsor o:f the Act, conceded the adequacy of the I existing window" rule and buried the amendment in committee. Nonetheless, the amendment served notice I I that both the states and the Senate obJ'ected to OSMRE's I strict interpretation of federal and state roles under the Act. I ,. I I I Court Challenges In Re: f M R 1 t L' t t 128 sur ace 1n1ng egu a 1on 1 1ga 1on was the legal challenge brought against OSMRE's regulations. After OSMRE announced the interim I 129 regulatory several industry plaintiffs .. ,I challenged ,the design and performance standards for surface minlng contained in 30 CFR parts 714-717 and asked for a: preliminary injunction against implementation I' ', 130 of the program. The District of Columbia Circuit Court of Appeals enjoined enforcement of specific regulationsl.:because they exceeded the requirements of the Act, 131 but regulatory to enjoin the entire interim I program as the plaintiffs requested. 132 I'


I. I i In 1a similar case, In Re: Permanent surface Mining Reg#iation Litigation,1n plairitiffs challenged I:; 64 parts of permanent program regulations specifying the an operator must include in his surface mining application filed with the state regulatory th t 134 au or1. y. ; I Since the regulations required more informatiorf than does the Act, the plaintiffs claimed the I' I, Secretary his authority by promulgating rules i 135 exceeding the requ1.rements set forth by Congress. ,,. I'' importantly, the plaintiffs challenged 30 CFR sectiori 730.5,136 which defined the terms used in section 50Ji'of the Act. Section 503 provided that state programs include laws that regulate surface mining "in with" federal law137 and regulations 138 "consl.stent;!" those 1.ssued by the Secretary. I Section defined "in accordance with" and I tb mean "no less stringent" than I i 139 federal law or regulations. However, one plaintiff, the State df Illinois, claimed that while the states had to be with the Act, they did not have to meet "I r the substantive requirements of the federal Under this theory, Illinois asserted that the se1c::retary had acted arbitrarily and capriciously in requiring state programs to be as stringent as the I federal rerrlulations. It proposed a substitute standard ':Ji! which would require state plans only to be "capable of I I


achieving same regulatory result" as the federal i 141 The Court of Appeals for the District '' of Columbia circuit relied on the rule making authority in the Act :in approving the Secretary's power to issue I' 1. 142 the even though the regulations exceeded the requirements of the Act. these legal challenges, the general I I requirements of the interim and permanent regulatory I d t t 143 H t d programs rema1ne 1n ac owever, con 1nue I. dissatisfadtion with the federal regulations, as I. expressed the Rockefeller Amendment and the surface I m1n1ng led to further attempt to change federal i: ,I regulation :of surface mining. j The New Regulations In !keeping with the Carter administration I 65 1,' philosophy,. OSMRE remained committed to uniform national standards qespite industry and state criticism. The ,I Reagan adml!n1strat1on, however, brought a new regulatory ,I d philosophy 'to the Department of the Interior. This new philosophy had to do with the use of performance standards iather than design standards. The rules promulgated by the Carter administration emphasized design staddards, i.e., the specification of the I. I. practices an operator must use mining and


i: 66 1 t I: rec ama 1on. 1:: In contrast, performance standards stipulate rdesired results in terms of the conditions that are to be achieved following mining and reclamation, 'I' or in of the conditions that are to be maintained I in the envfronment during and following mining." 144 I Stated differently, design standards are concerned with the of practices, whereas performance standards the regulation of results. Design I standards, performance standards, typically stress I' detailed (usually during the permit approval stage) bef9re the actual mining operations begin. Both approaches l'seek the same outcome, which, in this case, is a properly !!reclaimed environment. J:: standards are commonly regarded as I 'I more than design standards because of their .1' built in Their principal weakness is I:' the difficJity of fashioning enforceable standards, which 1: OSMRE readily admits, "effectively precludes their use in i I 146 some cases They do not, for example, apply to the .1. safety of f1lls, and water 1mpoundments. IJ: Performance standards are often viewed as more difficult to adminisJ:er because one is looking for results rather r than specified "how to do's" that can be replicated. I this in mind, the Reagan administration introduced :performance standards in regulations covering, among things, coal exploration, steep slope 1., .I r I:


,. I :: 67 regrading, handling, backfilling and grading, the disposal excess spoil, and the protection of fish and wildlife. l:i I i Noting the above philosophical changes to the 1: and in response to the states' objections to I:; the old and to the administration's '1! commitment deregulation, 147 OSMRE proposed changes to the regulations promulgated under the Act. Two of the most changes that OSMRE made were the permanent 1:: 148 program changes announced on October 28, 1981, and 1:: the to 30 CFR Subchapter C adopted on June 17, 149 : 1: 1982. As 1nterpreted by OSMRE, these new rules governing state's application for primacy under section I' 503 could greatly alter the relationship between the 1.: federal an9j state governments in their joint attempts to 1 t 1: f f th t t. 1 regu a e sur ace m1n1ng. Because o e po en 1a 1mpact 1': of the several environmental groups sued to enjoin 1 1::. h 150 1mp ementaron of t e new regulatory scheme. Changes Adopted on October 28, 1981: I J,; Effects and Legal Challenges I. 1:: I; I! 28th amendments significantly alter the standaJ:a for determining whether state programs comply witJi; the federal regulations. First, the new I regulations:' eliminate the "state window" that had governed of state alternatives to the federal .I


I, I' i' 68 1 t i:: 151 h b d f th t regu a 1ons. T e ma1n ur en o a prov1s1on I forced sta'ttes to justify any alternatives by showing that I local or agricultural conditions required a variance the federal regulations. 152 The Carter ., I, interpretation of the "local conditions" exception, !which made the state's burden of proof almost bl t t 153 t d t t th 1mposs1 e1 o mee, was cr1 1c1ze as con rary o e I original scope of the Act, which had envisioned a b t t 11 t t 1 1 t f 154 su s an 1ai s a e ro e 1n regu a 1ng sur ace m1n1ng. I I' Rather thari rewrite the "state window," the Reagan I reinterpreted the requirements of Section 503 in an effort to inject more flexibility into the II> I' federal regulatory scheme. I Unqer the new administration's approach, OSMRE I' amended 30 Section 730.5, a section which had been challenged lin Re: Permanent surface Mining Regulation II, t. 155 Ll. 1.gat1.on.1, Section 730.5 previously defiried Section 503(a) {1) "in accordance with" and Section 503(a) (7) I language to mean that the state I. could be "no less stringent" than the ': requirement(s of SMCRA and the regulations. 156 The new Section did not alter the interpretation of "in I accordance '," but it did change the definition of to mean "no less effective" than the 1: 157 Secretary's regulatl.ons. This new standard II eliminated need for a "state window" because it I I :


I I 69 allows states to propose their own regulations so long as I, they are as effective as the Secretary's rules. Asa result of the change, one standard applies for approving a state plan's compliance with the Act, but I a separate:standard governs compliance with the I Secretary's.regulations. By Section 503(a) (7) of the Act, Section 730.5(b) of the federal I regulations may allow approval of state regulations which I could not met the old "no less stringent" test. I states may find it easier to comply with I the Secreta:f"Y' regulations than with the terms of the Act I' itself. OSMRE justified the dual standard as giving .. .. states flexibility to develop their own plans. 158 Iii Also, the new rules m1ght restore the federal/state division responsibilities envisioned in Section lOl(f) of the Act i'T'nd echoed in the legislative history159 that states should play the lead role in regulating surface I II mining on nonfederal lands and OSMRE should have only I ht I th t 160 overs1g or1 y. Previously, states had complained ithat the standard for approving state program forced them to mirror the federal regulations I rather alternatives to fit their specialized needs. 161 Section federal I I 'Dhe new "no less effective" standard in I 730:l5 not only adds more flexibility to the 1: 1 regu at1ons but also, cons1stent w1th 1: I. ; I: I I i


I' 1,: .1' f I' 70 congressioJal intent, allows states to address their I '1.: particularl*eeds. ThJ: increased flexibility in Section 730.5 should -1' I have the additional advantage of allowing states to avoid I I' expensive regulations when operators can achieve ll' the same result through a cheaper method. In its II: I' announcement of the final rule, OSMRE provided some I I examples o( state alternatives to specific requirements I' in the rules that would be approved under the new .1: I 162 standard of\ rev1ew. The new standard in Section 730.5 appea1rs to carry out OSMRE's previous attempts to 1'1 .1'' t t 11 lJ t f th d 1 t. 163 o a y e 1,m1na e many o e es1gn regu a 1ons .1.: Irdnically, the new standard achieves the goals Iii of the Amendment: legislation that the I' states had ''kupported as a way to bypass OSMRE's I: '' regulationsi. In that amendment, the states had wanted to II' '!i1 reduce the high cost of the federal regulations and to 1:1 address peculiarities without having to justify a variance fr:qm the federal rules as the old "state window" I 164 provision The amendment sought to achieve this resul tli:by eliminating the federal regulations as a I h fl, 165 bene mark .Pr approv1ng state programs. Although the I, state programs are still relevant in approving state t program subwissions under Section 730.5, the more ;.; flexible for approving state plans should give i: I 1 I r I I 'I: 'I, I I


I i '. 71 '' the statesimuch of the authority they sought through the Rockefeller Amendment. Although the amendment regulations present many advantages for the states, they also contain several potential disadvantages. Critics of the Rockefeller Amendment could likewise accuse the new regulations of defeating the goal of uniform national standards.1 M I The new rules attempt to allow more local alternatives and, if one takes the extreme position, any alternative undermines 1the goal of uniform national standards. 167 However, sdrne alternatives would seem appropriate in light of congressional desire to consider local needs. But, at the other extreme, too many variances would restore the state-by-state competition that the Act I sought to Despite unclear legislative history re9arding how I much local variation Congress considered appropriate, the I" court In Surface Mining Regulation found the absence of a genera.l variance provision in the Act to be I persuasive evidence of a desire to create strong national i 168 standards. The new rules could potentially allow I I many alternfftive state plans to gain approval. In light of this judlicial finding of congressional intent, OSMRE should not by executive decree regulatory I standards tpat Congress would not implement by legislation\ nor the courts require by judicial decision. I


! I I Ho*ever, the major problems with the Act stem more from inherent conflict in the Act itself than I from OSMRE 115 regulatory philosophy. Although Congress I desired national standards and local alternatives, the Act does not draw clear lines between these competing objectives... In the regulations OSMRE attempted to clarify thl. conflict, but where Congress has mandated competing OSMRE has had few guidelines as to which regulatory philosophy it should pursue. As a result, OSMRE could emphasize either policy and still I claim thatiits regulations implement congressional intent. 72 :l1i of the approach OSMRE adopts, one very I important problem remains. Allowing OSMRE to determine I the scope Jf acceptable alternatives introduces much I. I bureaucratic discretion, possibly too much for objective [: The Sierra Club raised this obJ'ection in its 1: comments on: the final rules. OSMRE responded that all local alteJnatives still must meet the standards in the I Act and 169 Nonetheless, OSMRE 's authority I to determirle whether the state alternatives are "no less I effective" [than the Secretary's regulations still i presents possibility of an abuse of discretion. I I Congress authorized only limited local variances in the 170 Act, but :if OSMRE consistently defers to state alternativs, the resulting state programs could create a I '! I


I 73 I, different scheme in each coal-producing state. f Despite conflict in the Act, Congress clearly I' intended tq prevent such state-by-state regulation.171 Although the major threat to effective environmental regulation appears to come from OSMRE's I potential of the rules rather than from I the rules Section 730.5 of the regulations may have additional problem of contradicting the terms of the Act by creating different standards for I. comparing a: state plan to the federal act or to the i federal regulations. On December 24, 1981, the Sierra I I I Club and other environmental groups filed suit on 1n this ground. Suing under authority granted in I Section (1) of the Act, 173 they charged that the I ; October final rule contained several deficiencies. i They argued, 1 that (a) it establishes a separate and weaker for approval under Section 503(a) (7) than under Secti!on 503 (a) ( 1); (b) it eliminates comparison of I the state p'rogram with the Secretary's regulations, as t required by1, Section 503 (a) (7); and (c) it improperly I restricts t'he stringency requirements contained in I Sections 5il(d) and 518(i) of the Act."174 The Sierra '!' Club that the Secretary's action in promulgating ]r the rule wa1 s arbitrary, capricious, and inconsistent with i law, and asked the court to enjoin the Department of the ,,. I Interior an1d OSMRE from taking any action under the new


74 1751 standard. I The Sierra Club suit highlights the conflict irtherent in the Act between national standards ''I and local alternatives. With regard to its second cited I' deficiency,! the Sierra Club had raised the same issue in i its comments on the final rule. At that time, OSMRE I' responded while states could submit alternatives providing same protection as the federal rules, its I rules would continue to serve as a benchmark for I 176 approving state plans. on its third point, the I I Sierra asserted that applying the "no less effective" 1standard, rather than the old "no less stringent" istandard, to review of state provisions for penalties 518(i)] and enforcement (Section I 521(d)] 1n ;the state plan v1olates the Act. However, these are two narrow sections in a complex regulatory scheme, of which require that the entire state I plan be no 1 11177 regu at1ons. I, stringent than the Secretary's Thus, while the plaintiffs preferred the federal policy of disapproving any variances from the I federal this policy has produced backlash from I I 178 coal states, and Congress. Although the I plaintiffs .!failed to gain the requested relief, the suit the conflict in the Act. Finally, a state with a strict regulatory program I, may want td' file an action similar to .the Sierra Club's I in order tdenjoin the use of the new "no less effective" I I I I I' lr


I' I I I 75 standard ,.7cf for state program review. The state with i strict may fear that the new standard would restore interstate by making its coal more expensive I than that i!n other states where programs permit the use I" 180 of cheaper :alternatives to the federal regulations. While this ;situation would explicitly violate Section 101 (g) 181. sfate fears may be unfounded since OSMRE insists that the new rule will not change the quality of ;182 regulat1on.' In add1t1on, the state su1ng to enJoln I the new rules would find itself in the awkward position I., of supporting the old rules which had severely curtailed state authority. Since most states wanted to assume 183 they would face the dilemma of choosing eit:her regulations which limit all states' I power, or those which may give another state a I competitive !::edge. The' ,court upheld the "no less effective" standard in the Sierta Club suit, a result that could alter federal/state relations under the Act by permitting OSMRE I to approve wide variety of local alternatives which the old rules did not permit. The ultimate effect of i environmental regulation on surface mining will depend on I' I the 1nterpr7tat1on OSMRE and the courts give to the "no less effective" standard. I I,


Rule Changes Adopted on June 17, 1982: I Effects and Legal Challenges II In:9rder to complement the October 28th program changes, on June 17, 1982, OSMRE announced several additional !amendments to the surface mining I 1 t I 184 regu a I In general, these amendments alter both the rules gverning approval of state program I and OSMRE's duty to implement a federal I 76 regulatory 'plan in those states without an approved state I 186 I program. Although some of these regulations I originally !proposed on December 4, 1981, were not adopted as final of legal the other June .1, 17th amendclents should streamline the approval process and reduce lthe cost to states of preparing their own I plans. 1:. In 1general, the proposed changes reflect the ,:, I Secretary's' goal of eliminating unnecessary regulations, I I I and do not 'make any substantive alterations to the I. federal design.1 M Many of the changes amend i "I terminolog}'i: in the regulations to be consistent with the final rulel' published on October 28, 1981.189 For I example, the new regulations delete the references to the Regional a position which had been ,.' eliminated a previous reorganization of OSMRE. Other I changes removed the state plan deadlines in the 'I since the deadlines had already passed and I, I.


J I I, I. 1.1 ., 77 all states !wishing to assume primacy had either submitted plans or intended to do so shortly thereafter. 191 since states can submit a plan at any time, 192 this change will benefit those states currently operating under a II' federal pr9gram should they later decide to assume I: primacy. None of these proposals were challenged in court, and IJhe Secretary adopted them as final without further amendment. 193 Wildlife Federation Watt: I Iryjunction Against Proposed Regulations i' the June 17th amendments became final, the I; National Federation (NWF) filed suit challenging I i 194 most of proposed rule changes. NWF charged that I. the Secretary VJ.olated SectJ.on 702(d) of the SMCRA and ,, Section 102:(2) (C) of the National Environmental Policy Act 195 by noM preparing an environmental impact I statement (!EIS) I benefits o,. the parties ar:tived analyzing the potential costs and new rules. On April 16, 1982, the at a settlement agreement enjoining the adoption proposals that would have allowed states to reduce the 'ilevel of public participation presently I I 196 mandated under the rules. However, despite the I I agreement, Secretary, after consideration of the EIS, I was still to adopt substantially the same amendments : I' 1 : I I


I' I I, .. I 78 .;I I Of :pr1mary significance, the settlement agreement l enjoined the proposed change to Section 732.17{g) of the 197 regulat1ons. As originally proposed, the new rule would have .,allowed automatic approval of minor changes to I a state's program laws or regulations, unless the i' Secretary the state that the changes were not 198 m1nor. I Automatic approval would allow states to avoid the costly and time consuming procedures presently I 199 requ1red t9,amend state programs, especially the public provisions.200 Although the ,,. amendment would make sense for truly minor changes to q, state it could have seriously reduced public input, depJnding on the Secretary's perception of "minor." I I The settlement agreement would have allowed "' OSMRE to propose the rule, after considering its ', ,! effects in .a supplemental EIS; however, OSMRE decided to withdraw amendment, inasmuch as both the Act and the I I Administratiive Procedure Act require public notice and I comment amendments can become final. 201 I Similarly, the proposed amendments to Section 732.15 could have seriously reduced the level of public I. presently required under the rules. OSMRE 1, suggested the public participation so that state plans would not have to ,, provide suits in state courts, or allow citizens tQ'I accompany state officials when they. inspected I I I, I I I. I,


79 a mine at a. citizen's request. 202. These amendments could have ,:Festricted citizen access to state court, even I though the ;state exercised primary jurisdiction over I surface and could have reduced citizen access to mine sites!to those rare instances when federal I' t d th th t 203 1nspec ors,exerc1se e1r au or1 y. Under the settlementlagreement, OSMRE agreed to require that II "approved $tate programs must provide at least the same I I level of citizen participation, including provisions for citizens' and citizen access to mine sites, as do I the federal statute and regulations. "204 OSMRE' s : agreement rlot to curtail public participation in this I;, t f h I; I 1 205 1 th f par o t regu at1ons ref ects e 1ntent o the Departmentiof the Interior when it originally announced I 206 the regulatory program. changes, required II I !Regulations Adopted on June 17, 1982 I Inladdition to the irijunction against proposed I alfurther provision of the settlement agreement I I Secretary of the Interior to prepare an I' individual environmental assessment for each rule change I 207 proposed on> December 4, 1981. The Secretary 1'1 'I concluded the initial assessments that the remainder of the prolpsed amendments to subchapter c would not significanthy affect the environment. 208 These 'I I I therefore, were adopted with no substantial


changes the form in which they were originally 209 proposed. 80 The' first of the amendments concerns the content t b 210 requ1rements for sta e program su m1ss1ons. The new rule will the amount of information that states must in conjunction with a proposed surface mining plan, thereby allowing the states to prepare fewer documents and realize some cost savings. The eliminated provisions ,had provided background information about the I state's regulations and its coal industry useful to persons .monitoring that state's surface mining program. As OSMRE noted, however, this information was already and much of it was not needed for OSMRE to make an informed evaluation of a state's 211 proposed plan. More importantly, the revised requirements demonstrate OSMRE's dedication to eliminating' regulations it considers burdensome. Similarly, the Secretary amended the criteria for t t t b 212 approv1ng reJec 1ng a s a e program su m1ss1on. The condense the number of public hearings which a state must hold, 213 but, more significantly, they requirement that states must enact all necessary laws and regulations and submit them to OSMRE for approval within 104 days of the date on which the state filed its primacy plan. 214 Under the new standar9, a state's submitted plan must include state


81 laws and in expected final form, but the I state can amend them up to the time of program 215 approval. OSMRE hoped this arrangement would give states more time to consider rules they needed instead of forcing them to act within 104 days of filing for 216 pr1macy. The amendments also contain changes designed to give the Secretary more discretion in approving state 217 program proposals. According to the old regulations, a state program became effective on publication of the t I 1 th d 1 R t 218 Secre ary s approva 1n e Fe era eg1s er. Under '' the new rule, the Secretary can specify a date when the state program will become effective. 219 In addition, the old rules allowed conditional approval of a state program with minor qeficiencies, but this approval terminated if the state did not correct the deficiencies within a 'f' d t' 220 spec1 1e J;tre. Because the new rule allows the Secretary options should a state fail to correct the d f 221 th d h t e 1c1enc1es, e Secretary can avo1 av1ng o withdraw approval of the entire state program as required d th t 1 t 222 un er e presen regu a 1ons. On the one hand this change grants the states an extended time limit for correcting plan deficiencies, while on the other, it defeats the purpose of a deadline by allowing holes to remain in the overall state regulatory program.


I' II :! ,. !i With only a few alterations, OSMRE adopted the other minor rule changes as final. These rule changes, proposed December 4th, were unaffected by the ;. II settlement.! agreement with NWF. 223 These amendments 82 attempt to. clarify ambiguities in the regulations and to reduce burdensome requirements. While 'I these changes modify the procedures followed by OSMRE and state regulatory authorities, no substantive changes should res1.1lt. I Evaluation of the New Regulations 'I While only time will reveal the ultimate effect I of the revisions to Subchapter c, the scope of the amendments allows for some preliminary observations. In II 'I addition td implementing specific changes in administrative procedure, the amendments reveal a new philosophy ::toward the regulation of surface mining. :i Moreover, they highlight existing problems with the Act and regulations and, in so doing, suggest potential avenues of :!future regulatory reform. I ': Under the Carter administration, the regulatory excesses of OSMRE caused several problems. First, the use of rules, rather than performance standards, imposed high costs on operators with arguably no t' 1 b f t 224 env1ronmen a ene 1 s. The use of performance standards have allowed operators to achieve the ,I


i I : I 225 same by less costly methods. Second, OSMRE's 83 narrow of federal/state division of responsibilities I under the Act compelled the states, in effect, to copy th fd 1 lt. 226 e e era regu a 1ons. I This approach prevented the states developing customized rules where local conditions 1:made application of the national standards unreal is tic. 227 Third, the Act contemplated a balance I between energy and environmental policy so that the rule would protect the environment without causing significant d t 1 d t' 228 re uc 1ons 1n coa pro uc 1on. I However, the costs of complying OSMRE's interpretation of the Act may have actually reduced coal Because of such problems, the federal regulations needed to be reformed i to inject more flexibility and restore the primary role envisioned states. In ,;response to this need for reform, the new administration amended the rules with the stated purpose of restorin9 flexibility to the On I first examination, the language of the changes signals a return to congressional intent. States should have more freedom to to local problems than under the old national In this sense, the new rules come closer to the original regulatory scheme established by Congress. The amendments also reflect the Secretary's I desire to expensive and/or unnecessary I 231 regulat1ons. The new rules eliminate many of the I ,, : I II


'I t t ii t f b 232 d con en requ1remen s or program su m1ss1ons an 'I I 233 streaml1ne the approval process. The old rules required much information that was too trivial to be li I 234 useful to qsMRE 1n evaluat1ng a state program. Consequently, elimination of these old rules allows states to reduce the cost of preparing a plan, yet keep ,, I the basic structure of their surface mining programs in compliance with federal guidelines. 84 In ;;addition, the new regulations evidence a more I approach between the states and OSMRE. By giving primary enforcement powers to the states,235 the I Act seems to envision a broad role for state regulatory 'I ,I The new regulations give the states the flexibility they need to create their own programs, thus 1 1: rel1ev1ng O,SMRE of the burden of implementing a I regulatory 'program in every state covered by the Act. A better relationship would not only make such a statute easier to implement, 236 but also improve the quality of regulation because OSMRE will benefit from state suggestions made on the basis of state ,, expertise. ', To the extent that the new regulations improve efficiency and reduce costs without significantly affecting protection, OSMRE should continue ,, 'I to pursue kinds of rule changes. I, I,


85 Regulatory Approach: Design Versus Performance Standards A major point of contention over revision of the permanent program regulations is one of regulatory approach--the emphasis on design standards versus performance standards. Regulations promulgated under the carter administration contained both design standards and performance standards. The Reagan administration sought to remove some of the specific design standards so as to allow states and coal mine operators more flexibility in adapting to the needs of specific applications. Original program regulations promulgated under Carter tended to use performance standards in combination with specitic detailed design standards to create relatively inflexible national regulations that govern coal mining and reclamation in the United States. Because the acceptability of state regulations is based on the permanent program regulations, this approach allows the :federal government to maintain stringent federal over the content of state programs to produce national uniformity of state regulations. This approach in facilities and structures that meet the national standards but also results in some site specific facilities and structures being underdesigned, whereas others are overdesigned. The underdesigning of structures tends to cause adverse environmental impacts, and overdes;igning may not proportionally decrease


86 environmental impacts but could result in increased cost :J' of operation I The proposed regulations of the Reagan I '. on the other hand, tend to emphasize and general goals to create a more I flexible set of national regulations that are more adaptable to variations in climate, geology, topography, I and other ppysical conditions. This technique of regulation maximizes state control of the specifics of ,, 'I each regulation (often referred to as state primacy) at, the expense of a. national uniformity of state 'i. regulationsr Greater technical expertise of state and federal is required to interpret and apply such ; regulations on a mine-by-mine basis, and by an informed : public in perceiving whether compliance is occurring. :I Undoubtedly, not all state and federal employees I: will be as sophisticated as could be desired. However, on .the basis of OSMRE's experience, it is reasonable fO assume that the overall level of technical I i: sophisticat'ion would not decrease in the future. To the l extent that' this assumption did not hold, adverse impacts could occur; however, this would be ., the case under either regulatory approach. SMCRA. their ij Both regulatory approaches must comply with 'I h h b th t t d Hence, 1f good fa1t 1s s own y e s a es an ;I employees to comply with the intent of SMCRA, I l I I. I


implementation of either technique of regulation should not compliance with SMCRA. Consequently, !! : either regtilatory approach should result in similar .;. 'I levels of environmental protection or impact. I proposed regulations of Reagan would retain design staridards where the difficulty in fashioning enforceable performance standards effectively precluded I. 87 their use (ie.g., for structures, fills, and impoundments) and where SMCRA required them (e.g., for the disposal of 'I coal mine Specific design criteria (e.g., freeboard of ,I diversions must be at least 0.3 foot or the perimeter il slope of must be not steeper than 50 : i percent) allow the operator, the public, the regulatory!authority, and OSMRE to see whether a proposed design or a:.feature of an ongoing operation conforms to a '1. required imply an design criterion. Although design criteria I 'I I, expected level of performance, they cannot I guarantee that the level will be achieved. The effect of nationally design standards is that structures and facilities that meet the national standard are II I underdesigned in some settings and overdesigned in others :I (with environmental and energy costs), but in ,j the the national standard is met. This concept directly relates to levels of environmental impacts. II When structures or facilities are underdesigned, the :j I ill


'I I' :! ;I resulting environmental impacts are likely to be more I 88 adverse than typical 0f the national design. Conversely, I' II when or facilities are overdesigned, less adverse impact is expected. However, increased impact mitigation may not necessarily result. For example, a I temporary qiversion ditch that is constructed to safely pass the rrinoff from a large precipitation event that has a very low probability of occurrence during the period that the diversion is in use, will, in almost all :! instances, 'provide no greater environmental protection than a diversion designed specifically to contain smaller, more probable, precipitation events. The excess capJicity in the larger diversion would remain unused, therefore, no additional improvement to environment:al quality would result. In fact, the ditch may cause additional impacts i: during Inevitably, a specified design is more succes:s ful in some settings than in others. It logically fpllows that a variety of designs adapted to I specific settings would almost certainly work at least as well as a design applied uniformly, irrespective I of local conditions. I I,. In ;contrast, performance standards tend to I emphasize results. They require the achievement of certain without specifying the means by which the operator chooses to achieve the specified results. In IJ

PAGE 100

I, general, with performance standards can be readily when the standards are explicitly :1' specified for effluent limitations). For regulating ;;coal mines, performance standards probably 'i work well impacts that are likely to occur fairly early in mine life; such impacts can be readily recognized !and corrected. But performance standards 'i probably less effectively for impacts that occur I late in mine life or after reclamation. It may be i i economicall1y or technologically infeasible to correct I. such impact:s (after reclamation has been completed) or legally (after bond release). I 89 !I Per!formance standards may well put more burden on the regulatpry authority, not only in enforcing the but also in reviewing proposed permit .. Specifically, for those operations that use a design substantively different from the typical II, design in the area, the regulatory authority must decide whether the: given proposed design will perform as required. ,This determination must be made while .I l reviewing the operator's permit application, before problems have occurred. !I Potential problems can best be ;I prevented the regulatory authority identifies them during the permit review and requires the operator to I make adjustments prior to starting operation. 'I :I Problems that occur during the operation due to

PAGE 101

: I unexpected 1lsite-specific conditions would be identified I and corrected in a similar manner under either type of regulatory.approach. i standards are commonly perceived as 90 more difficult to enforce than design standards.237 Certainly, .:general performance goals are hard to test and are susceptible to differing interpretations, whereas design criteria, for the most part, are specific. For example, requirement for best technology currently : I available (:BTCA) in the revised fish and wildlife is more susceptible to different than the requirement for specific techno log ic a l designs. Accordingly, performance goals may well demand more competence of regulatory and d industry and put a greater burden on the I regulatory :authority in evaluating compliance. 239 The original regulations specify design standards for such facilities and structures as diversion channels, impoundments, sediment ponds, and waste piles, but many of the regu:lations issued under the Reagan administration required qualified registered professional engineers or other certified professionals design, inspect, and certify facilities. Certification of designs by registered :brofessional engineers and other certified professionals is typical of construction activities. These would be held accountable by state !:

PAGE 102

I ,I or certifying agencies for failures of any design they certify. This accountability, plus the training arid experience of these professionals would II generally that facilities are designed so as to perform at.the required level. 91 Eliminating required design criteria from some of !! ,, the would allow regulatory authorities more leeway in approving designs tailored to local needs. This flexi?,ility would have the potential to reduce I impacts, although increased levels of impact could also occur. Moreover, most operators would probably continue to use existing practices and designs where allowed by state reguiations because this is the fastest, most familiar, and most conservative approach. But the proposed by the Reagan administration would I also permit them to use more effective and less costly practices a.nd designs where appropriate. Although this I would not better designs, it would allow for I. technological innovation, and it could lead to gradual improvemen-t::: in designs over time without the need to II revise the :1regulat1ons. The ultimate success of any regulatory program depends upo,n continual improvement and sharing of ,, I knowledge w:i thin the industry and among the regulatory to improve the effectiveness of mining and reclamation. As new technology is developed or operating '!

PAGE 103

' : ; 92 !I methods arT improved, the information needs to be I .I conveyed to operators, professionals, and regulatory authorities to increase the likelihood that environmentally effective designs are adopted. Thus, any 'I improvement in environmental quality would occur more ,, rapidly. based on design criteria may need to be revised to effectively implement new technology, 1 which could result in substantial time delays in realizing any resultant environmental benefit. Performance standards, however, would probably not {or would less .:frequently) need to be changed to incorporate I, state-of-tHe-art designs. 'I participation in inspection and enforcement activities should continue to ensure that regulatory inspection and enforcement activities are carried out in accordance with the requirements of SMCRA. The effectfveness of citizen participation might be :i 'I reduced however, by a greater reliance on performance' standards. Citizens, presented with a much wider varie'ty of designs in surface coal mining operations, may find it more difficult to monitor operator co'mpliance with SMCRA. Certain revisions would specify standards for ,, performance! rather than requiring specific practices or designs, other replace specific standards with .I general goals. Such revisions would affect the 'J ,I d

PAGE 104

93 ,. i! performance standards for roads (Sections 816.150 to I 816.156) by allowing the regulatory authority to approve designs thft are well adapted to specific local They would, of course, also promote designs that meet only the required or minimum standards. Designing to meet required standards in the most i efficient manner will stimulate technological innovations and a general improvement in the state of the art. The analysis no basis for concluding that such ,, revisions necessarily have adverse impacts; they would be likely to increase environmental protection as to redue it. Adopting a revised regulation would ![ better protect the environment in some instances and provide less protection in others, or it would benefit I, one resoure while adversely affecting another. : Regulations under the Republican regime would allow more:' flexibility to the states in developing that are consistent with the OSMRE regulations. Approaches to compliance would vary somewhat awong states. Because individual states would first deterlmine compliance of permit applications with state and then provide primary enforcement of the state regulations and permits, two additional levels of uncertainty would occur, which cannot be clearly quantified in any environmental analysis. It is recognized :ithat states will vary to some degree in ,, ,I O ,, ,,

PAGE 105

94 performing their obligations, with concomitant effects on impacts. 'osMRE oversight reviews of state actions, and the form a:pd timing of required corrections to state il ,, act1ons by.! OSMRE, would create an additional level of uncertainty in this analysis. Because of the compounding of these uncertainties, it is not possible to accurately predict or distinguish between either probable or worst case quantitative impacts of performance standards and design and differences in impacts are ,, essentially equivocal or remote and speculative. OSMRE has not any exceptions to this general conclusion in the specific impacts of each proposed I' I revision to the original regulations promulgated under the Democratic administration. I' I Whtle conclusions concerning design and performance standards are not readily apparent, there are some associations that can be made concerning the political economic policy of implementing The first association is that design regulations are borne of the legislative and political I ., process. involved in the electoral process respond to.constituents through the formation of policies and laws .. :As a result of that legislative process there 'I are impacts on the political and economic structure associated with the cost transfer among producers and consumers I I'

PAGE 106

::. 95 li :' The second association is that performance are an outgrowth of the bureaucratic process. These perf6rmance standards are developed by regulators ., to uphold policies specified by legislators. As a result of that bufeaucratic process there are impacts on the political and economic components of regulation, as well as a social component of regulation, namely--public welfare. [ Summary It'' is easy to advance the general proposition that too effort has been directed toward asking I' whether there should or should not be regulation, and far too little 'effort directed at how to improve the of regulatory policies. Insight on these issues the need for research to study political and economic regulatory policy as an approach for ,I I implementi9g and enforcing legislative mandates. research is needed concerning the I relationship between design and performance standards to gain insigqt into the merits of a process and outcome model for i1mplementing regulations. Also needing research are the qualitative (i.e., political, economic, environmental) ramifications and dynamics associated '1with design and performance regulations I .I.

PAGE 107

96 !I 'I Perhaps the answer to these questions and the rudiments Of a general theory of regulation will not be a comprehens:i ve statement of theory. The latter requires 'I much more additional work, especially of a more formal nature. However, the underlying hypothesis of this general theory of regulation is that agencies try to serve the public interest. Difficulty arises in identifying public interest because it is such an elusive concept. Political issues conflict with the means of ,, implementiAg the public interest, and economic issues distort methods of implementing regulatory mandates. Consequentiy, the legislative and bureaucratic processes II I are judgediby decisions that satisfy the public interest by responses to policies and rules that effect producers, :! consumers, and other institutions. ,. I !i

PAGE 108

' ijl Chapter Notes 1. Roger No;Ll, "What is Regulation?" Social Science Working Paper 324. Pasadena: California Institute of Technology; 1980. 97 2. Paul Jo::;kow and Roger Noll, "Regulation in Theory and Practice: An overview," in Studies in Public Regulation, ed. Gary From. (Cambridge, Mass.: MIT Press, 1980), 35. 3. Roger Noll, Regulatory Policy and the Social Sciences (Berkeley: Univ. of California Press, 1985). 4. G. Stig:J;er, "The Theory of Economic Regulation," Bell Journal oftconomics and Management Science, no. 2 ( 19 7 1 ) : 3 .1 5. RichardPosner, "Taxation by Regulation," Bell Journal f ill d t ( ) o Econom1cs an Managemen Sc1ence, 2 1971 : 22. I 6. Sam Peltzman, "Toward a More General Theory of Journal of Law and Economics, no. 14 (1976): 109-148. 7. J.R. Hidks, "The Foundations of Welfare Economics," Economic Journal, no. 49 (1939): 696-712. 8. N. Kaldcir, "Welfare Propositions in Economics," Economic Jciurnal, no. 49 (1939): 549-552. 'I 9. Tibor, Scitovsky, "A Note on Welfare Propositions in Economics, Review of Economic Studies, no. 9 (1942) 77-88. 10. KennetHJ. Arrow, Social Choice and Individual Values (New York: Wiley and Sons, 1951). 11. Williad J. Baunol and W. E. Oats, "The Use of Standards Pricing for the Protection of the Environment:," Swedish Journal of Economics no. 73 (1971): 42-54 0 12. Roger G1 Noll, Reforming Regulation: An Evaluation of the Ash!Council Proposals (Washington, D.C.: Brookings tristitute, 1971). I. 13 Marver H. Bernstein, Independent! Commission (Princeton: Princeton University Press, 195Si).. II

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,I o: 98 14. Ross Dll Eckert, "Spectrum Allocation and Regulatory Conference on Communications Policy Research (Washington, D.C.: GPO, 1972). 15. u.s., Senate, Committee on Government. study of Federal Regulation. Volume I: Process (Washington, D.C.: 1977). : The GPO, 16. Frank I. Michelman, "Property, Utility and Fairness: Comments the Ethical Foundations of Just Compensation Law," Harvard Law Review, no. 80 (1967): 1165. 17. Oliver E. Williamson, Administrative Decision Making and Pricing: Externality and Compensation Analysis Applied. ed. Julius Margolis (New York: National Bureau of Economid Research, 1970). II 18. Morris !p. Fiorina and Roger G. Noll, "Voters, Bureaucrats and Legislators: A Rational Choice Perspective on the Growth of Bureaucracy," Journal of Public Economics, no. 9 (1978): 239-254 I 19. Roger Noll, Regulatory Policy and the Social Sciences (Serkeley: Univ. of California Press, 1985). 20. Richard. Spann and Edward W. Erickson, "The Economics of Railroad:ing: The Beginning of Cartelization and Regulation,'[" Bell Journal of Economics, no. 1 (1970): 227-244. 21. G. Stigler, "The Theory of Economic Regulation," Bell Journal of and Management Science, rio. 2 (1971): 3.; J 22. P. A. Samuelson, "The Pure Theory of Public Review of Economics and Statistics, no. 36 ( 1954) : 33,2-338. 23. J. Baunol and W. E. Oats, "The Use of Standards Pricing for the Protection of the Environment1," Swedish Journal of Economics, no. 73 ( 1971) : 42.:-54. 24. R. V. Ayres Consumption! ,and no. 59 (19G9): I and c. L. Kneese, "Production, Externalities," American Economic Review, 282-297. 25. w. Leontief, "Environmental Repercussions and the Economic St:ructure: An Input-Output Approach," Review of Economics Statistics, no. 52 (1970): :!

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i' 26. A. V. and c. L. Schultz, Pollution, Prices, and Public.Policy (Washington, D.C.: Brookings Institute, 1975). 27. Administrative Conference of the United States. Col1oauium1'on Regulatory Design in Theory and Practice, 1982-1983 D.C.: GPO, 1983), 27. 28. Ronald cease, "Problem of Social cost," Journal of Law and Economics, no. 3 (1960): 1-44. 99 29. J. H. Dales, Pollution. Property and Prices (Toronto: Univ. of Toronto Press, 1968). 30. David W. Montgomery, "Markets in Licenses and I Eff1.c1.ent Pollut1.on Control Programs," Journal of Economic Theory, no. 5 (1972): 395-418. 31. o. A. Davis and A. Whinston, "Externalities, Welfare, and the Theory of Games," Journal of Political Economy, no. 70 (1962): 241-262. 'I 32. David Montgomery, "Artificial Markets and the Theory of Games," :Public Choice, no. 18 (1974): 25-40. 33. K. LanC,aster, "A New Approach to Consumer Theory," Journal Economy, no. 74 (1966): 132-157. 'I 34. Roger Noll and J. Trijonis, "Mass Balance, General Equilibrium, and Environmental Externalities," American Economic Re:view, no. 61 (1971): 730-735. 35. D. C. Sitarret, "Fundamental Nonconvexities in the Theory of Externalities," Journal of Economic Theory, no. 4 (1974): i 36. David W .. Montgomery, "Separability and Vanishing Externaliti'es," American Economic Review, no. 66 (1976): 174-177. : 37. Kenneth. J. Arrow, Social Choice and Individual Values (New York: llJohn Wiley and Sons, 1951). I 38. Henry and John Steinbrunner, "Salvaging the Federal to Control Auto Pollution," Public Policy, no.i 21 (1973): 1-48. 39. Edwin sl. Mills and Lawrence White, "Government Policies Automotive Emissions Control," Approaches :to Controlling Air Pollution, ed. A. F. Friedlaender (Cambridge, Mass.: MIT Press, 1978). I I' I

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I l 100 40. A. M. and Marc Roberts, "Effluent Charges and Licenses Uncertainty," Journal of Public Economics, no. 5 ( 1976} : 193-208. 41. A. M. and Martin Weitzman, "Regulatory Strategies !i for Pollution Control," Approaches to Controlling:Air Pollution, ed. A. F. Friedlaender (Cambridge,, Mass.: MIT Press, 1978). :I 42. Edwin s. Mills and Lawrence White, "Government Policies Tqwards Automotive Emissions Control," Approaches to Controlling Air Pollution, ed. A. F. Friedlaender (Cambridge, Mass.: MIT Press, 1978). I 43. DanielL. Rubinfeld, "Market Approaches to the Measurement of the Benefits of Air Pollution Abatement," in Advances'in Applied Microeconomics, ed. Ann Friedlander (Cambridge, Mass.: MIT Press, 1978), pp. 24071. :I 44. Bruce and W.T. Hassler, Clean Coal/Dirty Air (New Haven; conn.: Yale University Press, 1981). I' 45. Henry M. Peskin and Eugene P. Seskin, eds., Costs Benefit Ana1ysis and Air Pollution Policy (Washington, D.C.: Urbari1Institute, 1975). 46. Lester 'B. Lave and Eugene P. Seskin, Air Pollution and Human H'ealth (Baltimore: Johns Hopkins Press, 1977}. 4 7. Id. 48. E.S. Mi,lls, ed., Economic Analysis and Environmental Problems (N1ew York: Columbia University Press, 1975}. 49. E.J. Mi:shan, "What Is the Optimal Level of of Political Economy 82, no. 6 (June 1974}: so. Fisher and Frederick M. Peterson, "The Environment: in Economics: A Survey," Journal of Economic Literature no. 4 (1983): 218-227. 51. A.V. Kribese, Pollution. Prices and Public Policy D.C.: Brookings Institute, 1975). I 52. S.E. Atkinson and D.H. Lewis, "A Cost Effectiveness Analysis Alternative Air Quality Control Strategies," Journal of 1Environmental Economics Management 1, no.3 (March 1974): 237-50. !I ,I ,i: I'

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! '' 53. J. H. 11 Land, Water, and Ownership, 11 Canadian Journal of''Economics 1, no. 4 (November 1968) :791-804. 54. See Fisher and Frederick M. Peterson, note so. 55. O.A. Davis and M.I. Kamien, "Externalities, Information, and Alternative Collection Actions," in Public Expenditure and Policy Analysis, ed. Robert A. Haveman and:Julius Margolis (Chicago: Rand McNally, 1970), pp. 82-104. 101 56. Kenneth Arrow, 11The Organization of Economic Activity: I.!?sues Pertinent to the Choice of Market Versus Market Allocation,11 ed. Haveman and Maragolis (Chicago: Rand NcNally, 1970). 57. Carl Dahlman, 11The Problem of Externality," Journal of Law andiJEconomics 23 (April 1979): 148. 58. Id. pp .1 155-56. 59. Paul Portnoy, 11 Efficient Use of Standards and Enforcement,: The Case of Pollution Controls, 11 Policy Analysis 5,' no. 4 (1979): 512. 60. Pub. L .. No. 95-87, 91 Stat. 445 [codified at 30 u.s.c. Sect. 1201-1328 (Supp. V 19810]. 61. H. Rep. No. 493, 95th Cong., 1st Sess. (1977). ,, 62. Id. t 63. Business Week, Jan. 13, 1975, at 40. 64. 121 Cong. Rec. H5205 (daily ed. June 10, 1975). 65. H.R. No. 218, 95th Cong., 1st Sess. 57-60, reprinted in 1977 u.s. Code Cong. & Ad. News 593, 595-599. 66. SMCRA 201, 30 U.S.C. Sect. 1211 (Supp. V 1981). I 67. See 125 Cong. Rec. 23,954-93 (1979) (debate on the 11Rockefelle'r Amendment,11 s. 1403, 96th Cong., 1st Sess. (1979), and1particularly the remarks of Governor Ed Herschler of: Wyoming at 23,965 and the comments of 19 coal state at 23,959-23,964). 'I, 68. For example, under its authority in the Act, OSMRE promulgated!! .an original regulatory program which drew criticism, :including some legal challenges, from both :

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102 states and.industry. see SMCRA Sect. 201(c) (2), 30 u.s.c. Sect. 1211(c) (2) (Supp. V 1981) (general grant of rulemaking !'authority) ; SMCRA Sect. 501 (a), 30 U.S. c. Sect. 1251(a) (Supp. V 1981) (authority to promulgate interim regulatory program); SMCRA sect. 501(b), 30 u.s.c. Sect. 1251(b) (Supp. V 1981) (authority to promulgate permanent regulatory program). 69. SMCRA Sect. 101(g), 30 U.S.C. Sect. 1201(g) (Supp. V 1981). infra text accompanying notes 14-18. I ,, 70. Edgmon'& Menzel, "The Regulation of Coal surface Mining in a Federal System," Natural Resources Journal, 21 (1981): 1 245, 251. 71. SMCRA Sect. 503, 30 U.S.C. Sect. 1253 (Supp. V 1981). Section 503(a) allows a state to assume primary responsibiiity for regulating surface mining within its borders by !'fi;ubmi tting a plan to the Secretary which demonstrates that the state can implement the requirements of the Act. Section 503(b) provides rules on the Secretary's authority to approve a state plan, and Sect. 503() requires notice of disapproval of a state plan by theSecretary. Section SOJ(d) prevents, for one year, of a federal plan in a state not having an approved plan where an injunction has prevented the state from .:preparing its own primacy application. 7 2. See Sen:a te Committee on Energy & Natural Resources, 95th Cong. ,;1 1st Sess., State Surface Mining Laws: A Comparison the Proposed Federal Legislation, and Background ;rnforination (Comm. Print 1977) [hereinafter cited as The report refers to a study comparing the laws or' three major coal producing states, Kentucky, West and Pennsylvania. It concludes that had the best enforcement of the three because its1,laws pressured operators to reclaim the land. Id. at 21-22. However, the report found that the Pennsylvan{a laws were not as strict as the standards in H. R. 131 950:,, 94th Cong., 2d Sess. ( 1976) 1 the predecessor to the 1977' Act. Id. at 103-104. Texas, although not a major coal producing state, had laws quite similar to the proposed federal Act. Id. at 109. : 73. H.R. Rep. No. 218, at 129, reprinted in 1977 u.s. Code Cong. :& Ad. News at 661; accord Rochow, "The Far Side of State Regulation of the Environmental Effects of coal Mining," 81 W. Va. L. Rev. 559, 560 (1979). ,I 74. H.R. No. 218, supra note 2, at 61, reprinted in 1977 u.s. Code Cong. & Ad. News at 599. ,,

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103 75. See id; (Interior & Insular Affairs Committee's reasons for enacting SMCRA Sect. 101(d), (g), 30 u.s.c. Sect. 1201 (d), (g) (Supp. V 1981). 76. See at 25. 77. Edgmon.& Menzel, supra note 70, at 247; see Clean Air Act Sects. ,1:109, 111, 42 u.s.c. Sects. 7409, 7411 (Supp. V 1981) ambient air quality standards and new stationary :.source performance standards); Federal Water Pollution Control Act Sects. 301, 306, 33 u.s.c. Sects 1311, 1316,:(1976 & supp. V 1981) (national effluent limitations and new source performance standards). I 78. SMCRA 101(d), 30 U.S.C. Sect. 1201(d) (Supp. V 1981). Congress found that: "the expansion of coal mining to the Nation's energy needs makes even more urgent the :establishment of appropriate standards to minimize damage to the environment and to productivity of the soil and to protect the health and safety of the public." 79. SMCRA Stect. 101(g), 30 U.S.C. Sect. 1201(g) (Supp. V 1981). Act explicitly states that "surface mining and reclama1tion standards are essential in order to insure that! competition in interstate commerce among sellers produced in different States will not be used to undermine the ability of the several States to improve and maintain adequate standards on coal mining operations their borders." 80. SMCRA 102(f), 30 U.S.C. Sect. 1202(f) (Supp. V 1981) 81. See id.1i; H.R. Rep. No. 218, at 60, reprinted in 1977 U.S. Code Cong. & Ad. News at 598 ("The committee is satisfied tpat the reclamation standards and procedures of the repqrted bill will not result in any serious disruption :of coal supply"); see also H.R. rep. No. 218, at 85-86, in 1977 u.s. Code Cong. & Ad. News at 622; Udall,! "The Enactment of the Surface Mining Control & Reclamatibn Act of 1977 in Retrospect," 81 W. Va. L. Rev. 553 (views of Congressman Udall, a sponsor of the Act) 82. For a explanation of the major provisions of the Act, see. Dale, "The Surface Mining Control & Reclamation:Act of 1977," St. Mary's L. J., 9 (1977): 863. 83. SMCRA sleet. 515, 30 u.s.c. sect. 1265 (Supp. v 1981).

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104 il' 84. SMCRA 515(b) (6)-(7), 30 U.S.C. Sect. 1265(b) (6)1(7) (Supp. V 1981). 85. SMCRA Sect. 515(b) (14), 30 U.S.C. Sect. 1265(b) (14) ,, (Supp. V 1981). Furthermore, the Act allows a state to designate area as unsuitable for all or certain types of mining., SMCRA Sect. 522, 30 u.s.c. Sect. 1272 (Supp. v 1981). 86. SMCRA Sects. 506-512, 30 u.s.c. Sects. 1256-1262 (Supp. V 1981). ,j 87. SMCRA Sect. 521, 30 U.S.C. Sect. 1271 (Supp. V 1981). 88. See notes 15 & 18. 89. SMCRA $ect. 101(f), 30 U.S.C. Sect. 1201(f) (Supp. V 1981) that "because of the diversity in terrain, climate, chemical, and other physical conditions :in areas subject to mining operations, the primary governmental responsibility for developing, authorizing, issuing, and enforcing regulations for surface and reclamation operations subject to this chapter sh0uld rest with the states." 90. H.R. Rep. No. 218, at 63, reprinted in 1977 u.s. Code Cong. & Ad\ News at 601. 91. SMCRA s:ect. 503, 30 U.S.C. Sect. 1253 (Supp. V 1981). 92. SMCRA S'ect. 503(a) (1), 30 U.S.C. Sect.1253(a) (1) (Supp. v 1981). 93. SMCRA 503(a) (2), 30 u.s.c. Sect. 1253(a) (2) (Supp. V 19:81). 94. SMCRA Sect. 503(a) (3), 30 u.s.c. Sect. 1253(a) (3) (Supp. v 1991) 95. SMCRA $ect. 503(a) (4), 30 u.s.c. 1253(a) (4) (Supp. v 1981). 96. SMCRASect. 503(a)(6), 30U.S.C. 1253(a)(6) (Supp. V 1981). see, e.g., Federal Water Pollution Control Act, Sect. 402, u.s.c. Sect. 1342 (1976 & Supp. V 1981) (national P,pllutant discharge elimination system). SMCRA Sect. 503(1:)) (2), 30 U.S.C. Sect. 1253(b) (2) (Supp. V 1981), refers specifically to the Federal Water Pollution control ,,

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I. 105 97. SMCRA $ect. 503 (a)(?), 30 u.s.c. 1253 (a) (7) (Supp. V 1981). 30 cFR Sects. 700-950 (1982) contains regulations issued the Surface Mining Act. 98. SMCRA $ect. 503(c), 30 u.s.c. Sect. 1253(c) (Supp. v 1981) 99. See SMCRA Sect. 515, 30 U.S.C. Sect. 1265 (Supp. V 1981) (Sect 515(b) (2) requiring restoration of the land to its premining land use, or a higher or better use; Sect. 515(b) (3) requiring, with certain exceptions, restoratior\ of the original contour of the land; and Sect. 515(:t:1l) (6) requiring restoration of the topsoil). For a of the standards established by the Act, see Comment', Hodel v. Virginia Surface Mining & Restoratioil Association and Hodel v. Indiana: "A of Environmental Legislation Under the Tenth Amendment and the Commerce Clause," 1 Va. J. Nat. I, 329 (1981). Because Sect. 503(a) (1), 30 u.s.c. Sect:. 1253 (a) (1) (Supp. V 1981), requires that I I I state progr;ams 1nclude laws 1n accordance w1th the requirements of the Act, each state plan must meet the detailed performance standards established in Subchapter v. .. 100. SMCRA t:Sect. 504(a) (1), 30 u.s.c. Sect. 1254(a) (1) (Supp. v 1981) 101. SMCRA Sect. 504(a) (2), 30 u.s.c. Sect. 504(a) (2) (Supp. V see also SMCRA Sect. 503 (b), 30 u.s.c. Sect. 1253 (b) (Supp. V 1981) \ 102. SMCRA Sect. 504(a), u.s.c. Sect. 1254(a) (Supp. V 1981). I 103. SMCRA .$ect. 504(a) (3), 30 U.S.C. Sect. 1254(a) (3) (Supp. V SMCRA Sect. 504(b), 30 u.s.c. Sect. 1254 (b) (Supp. V 1981). SMCRA Sect. 521, 30 U.S.C. Sect. 1271 (Supp.i V 1981), lists the provisions governing federal enfprcement of a state plan. 104. The Committee on Interior and Insular Affairs stated: 11 While it is confident that the delegation of primary regulatory to the states will result in adequate State enforcement, the comiittee is also of the belief that a limited federal oversight role as well as increased oppqrtunity for citizens to participate in the enforcement program are necessary to assure that thelold patterns of minimal enforcement are not ,, I

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:t ;I I 106 H.R. Rep. N.c. 218, at 129, reprinted in 1977, u.s. Code I', Cong. & News at 661. 105. Subchapter c, 30 CFR Sects. 730-736 (1982). This I subchapter I: J.ncludes: General RequJ.rements, Part 730; II Rules on of State Programs, Part 731; Procedures II and Criteria for Approval or Disapproval of State Program Submissions, Part 732; Maintenance of State Programs arid Procedures For Substituting Federal Enforcement of State Programs and Withdrawing Approval of State Programs, Part 733; Implementation of a Federal Program for a state, Part 736. 106. Id. sects. 730-731. 107. Id. 732-733; see also SMCRA Sect. 521, 30 u.s.c. 1271 (Supp. V 1981), containing detailed provisions !!governing enforcement of the Act. 108. The "state window" rule, 30 CFR Sect. 731.13 (1981), provided: As part of its program submission or as an ame:ttdment to an approved state program, a State may!l request approval for alternatives to provisions of the regulations of this chapter. For.each alternative provision the State shall-(a) Identify the provision in the regulation of this chapter for which the alternative is requested; (b) ;1 Describe the alternative proposed and provide or regulatory language to be used to implement the alternative; and (c) Explain how and submit data, analysis and inf9rmation, including identification of sources, demmstrating-l! (1) that the proposed alternative will be in accordance with the applicable provisions of the Act and consistent with the regulations of this chapter and (2) that the proposed alternative is I necessary because of local requirements or ,. local environmental or agricultural conditions. 109. See Sect. 101(f), 30 U.S.C. Sect. 1201(f) (Supp. v j 110. Edgmon! & Menzel, supra note 7, at 258-262. For the grant of authority to the states, see SMCRA Sect. 503, 30 u.s.c. Sect. 1253 (Supp. V 1981). 111. Edgmon; & Menzel, at 251. II

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107 112. SMCRA11Sect. 501, 30 u.s.c. Sect. 1251 (Supp. V 1981}, reqUired the Secretary to promulgate an interim regulatory program. This program was first announced at 42 Fed. Reg. 62,639-62,716 (1977) (codified at 30 CFR Sects. 710-725, 740, 795, 840 (1982)}. 113. For an example of design standards, 30 CFR Sect. 715.17(e) (1982) (requirements on sedimentation ponds). 114. See Gage, "The Failure of the Interim Regulatory Program un4er the surface Mining Control & Reclamation Act of 1977: The Need for Flexible Controls, 81 W. Va. L. Rev. (1979). 115. See Abrams, "The Rockefeller Amendment: Its Origins, Its Effect and Its Future, 82 w. Va. L. Rev. 1241, (1980); see also Gage, supra note 51, at 625, where the author criticizes the inflexibility of the interim regulations and OSMRE's use of design criteria applicable to diverse coal-mining operations. 116. Edgmon'& Menzel, at 256. 117. 30 CFR Sects. 701, 730-745, 760-795, 800-850 (1982). The regulations were originally promulgated at 44 Fed. Reg. 14,902-15,309 (comments), 15,312-15,463 (regulations) (1979) (codified at 30 CFR Sect. 700 (1981)). I I' 118. Gage, .1supra note 51, at 603-606. 119. Edgmon1 & Menzel, supra note 7, at 256; see 30 CFR Sect. 731.1,3 (1981) (state window), supra note 45. 120. See sM:'cRA Sect. 101(f) I 30 u.s.c. Sect. 120l(f) (Supp. V 19,81); SMCRA Sect. 102 (g), 30 u.s.c. Sect. 1202(g) (Supp. V 1981); SMCRA Sect. 503, 30 U.S.C. Sect. 1253 (Supp.: V 1981) (addressing the states' role). In debate on the Rockefeller Amendment, coal state governors, who filed comments supporting the amendment, wanted greater flexibility in the rules so each state could respond to particular needs. 125 Cong. Rec. 23,954-23,993 121. Id. 122. S. 14d3, 96th Cong., 1st Sess. (1979). The bill was named for Governor John D. Rockefeller IV of West Virginia, strongly supported the measure. The Senate passed the .pill by a surprisingly large margin, 68 to 26. 125 Cong. 23,991 (1979). '. !I, I

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, ., li II' .. li For a states' view, see Rockefeller, "A Common Sense Approach to Coal's Role in Resolving America's Energy crisis," 82 w. va. L. Rev. 841 (1980). 108 123. SMCRAi!Sect. 503 (a) (7), 30 U.S. C. Sect. 1253 (a) (7) (Supp. V requires that each state surface mining plan conta:iln "rules and regulations consistent with regulations issued by the Secretary pursuant to this chapter." The Rockefeller Amendment would have struck the phrase "regulations issued by the Secretary pursuant to." 125 Cong. Rec. 23,991 (1979). 'I i 124. Abrams, op. cit., at 1241-1242. 125. See 125 Cong. Rec. 23,954-23,993 (1979). 126. Id. ,, i 127. op. cit., at 1250-1251. 128. 452 F. Supp. 327 (D.D.C. 1978) (denying preliminary injunction).:, modified, 456 F. supp. 1301 (D.D.C. 1978), aff'd in pa:rt and rev'd in part, 627 F.2d 1346 (D.C. Cir. 1980). cases document a protracted legal process. After the court denied injunctive relief against the whole program, 452 F. Supp. at 346, the plaintiffs moved for summary judgment. The court then modified its judgment enjoined the enforcement of specific holding, in general, that the regulations were not arpitrary or capricious and that they were consistent !With the Act. 456 F. Supp. at 1320. Likewise, qn appeal, the court of appeals approved the interim program as a whole, but reversed the district cd4rt on specific regulations and enjoined their 627 F.2d at 1369. 129. Id. 130. 627 at 1352. 'I !. 131. Id. 1358-1363. The circuit court enjoined three specific provisions of the interim regulations: (1) 30 CFR Sect. 715.19(e) (1) (vii) (A) (1978) (expanding on blasting near dwellings from 300 to 1,000 627 F.2d at 1358-1359; (2) 30 Sect. 715.19(e) (2) (ii) (1978) (reducing on particle velocity in blasting from 2 inches per second to 1 inch per second), 627 F.2d at 1359-1360; and (3) 30 CFR Sect. 716.7(a) (2) (1978) (restricting rights of holders falling under the "Grandfather

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109 Exemptidn" for surface mining on prime farmlands), 627 F.2d at :1360-1363. 132. 627 2d at 1353-1357, 1369. 1: 133. This suit has a lenghty history similar to the challenge the interim regulatory program. The Court of Appeals ,;tor the District of Columbia affirmed the district court's denial of the plaintiff's motion for a preliminary injunction against the permit application requirements. In Re: Permanent Surface Mining Regulation Litigation,! 617 F.2d 807 (D.C. Cir. 1980), aff'g per curiam, 13 Rep. Cas. {BNA) 1586 (D.D.C. Aug. 21, 1979). The circuit court, sitting en bane, also affirmed the district court's holding that the Secretary had rulemaking !'authority to expand the information requirement's of Sect. 507, 30 u.s.c. Sect. 1257 (Supp. V 1981), and ,sect. SOB, 30 u.s.c. Sect. 1258 (Supp. V 1981), of the Act. In Re: Permanent surface Mining Regulation ,Litigation, 653 F.2d 514, 526-27 (D.C. Cir. 1981) (en bane), aff'g, 14 Env't Rep. Cas. (BNA) 1083 (D.D.C. Feb'. 26, 1980). For the permanent program regulations:. 134. 653 F.2d at 516-517. The challenge was to the regulations at 30 CFR Sects. 778-784 (1979). These rules supplement information which Sect. 507, 30 u.s.c. Sect. 1257 ;(Supp. V 1981), and pursuant to Sect. 506 (a), 30 u.s.c. Sect. 1256(a) (Supp. v 1981). ,I 135. 653 F.Zd at 516-517. 136. In Re :,I !Permanent surface Mining Regulation Litigation,,: 14 Eriv't Rep. Cas. (BNA) 1083, 1985 (D.D.C. Feb. 26, 19'8:0). Prior to OSMRE's amendments, 30 CFR Sect. 730.5 (1981:}provided: As used in this subchapter unless otherwise indicated consistent with and in accordance with mean-(a) With!lregard to the Act, the state laws and regulations are no less stringent than, meet the minimum t.equirements of and include all applicable provisiotis of the Act. (b) With,;regard to the Secretary's regulations, the State laW,s and regulations are no less stringent than and meet ';the applicable provisions of the regulations of this Chapter. The final r*le, announced on Oct. 28, 1981, amended 30 CFR Sect. to read: "(b) With regard to the Secretary's,regulations, the State laws and regulations are no less;effective than the Secretary's regulations in meeting the', requirements of the Act." 30 CFR Sect. 730.5(b) ''

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I' 110 137. SMCRA1:Sect. 503 (a) (1), 30 u.s.c. Sect. 1253 (a) (1) (Supp. V 1981), requires that state surface mining plans include: ",State law which provides for the regulation of surface mining and reclamation operations in accordance .with the requirements of this Act." 138. See SMeRA Sect. 503(a) (7). 30 u.s.c. Sect. 1253 (a) (7) (Supp. V 1981). 139. Id. 140. In Re: Permanent Surface Mining Regulation Litigation,:' 14 Env't Rep. Cas. (BNA) 1083, 1085 (D.D.C. Feb. 26, 1Q:80). 141. Id. 1085-1087. 142. 653 F.2d at 527. SMCRA Sect. 201(c)(2), 30 U.S.C. Sect. 1211 (.c) (2) (Supp. v 1981), and SMCRA Sect. 501, 30 u.s.c. 1251,' (Supp. V 1981), give the Secretary rulemaking authority. The legislative history supports the court's holding that the regulations can expand the requirements of the Act: In qhoosing the middle path, the committee is mindful of the past failures on the State level bases its approval of H.R. 2 on the that Federal regulations promulgated I under the act fully 1mplement the environmental performance standards. Obviously, the jmere reproduction of the statutory environmental performance standards in the regulations would be inadequate. H.R. Rep. N,o. 218, at 85, reprinted in 1977 u.s. Code Cong. & Ad. News at 622. 143. The Supreme Court rejected constitutional challenges to the Act itself. Hodel v. Virginia Surface Mining & 452 U.S. 264 (1981), and Hodel v. Indiana,1! 452 U.S. 314 (1981). The Court held that the Act was a valid exercise of congressional power under the commerce and it did not violate the tenth amendment or; the due process clause of the fifth amendment. 144. Research Council, "Disposal of Excess Spoil from Coal and the Surface Mining Control and Reclamation,;Act of 1977 (Washington D.C.: National Academy Press, 1981), p. 101. 145. "Coopetation and Conflict: Production":! (Washington, D.C.: 1981) II Regulating coal u.s. Regulatory Council,

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111 II il 146. u.s. Department of the Inter1or, Off1ce of Surface Mining Reclamation and Enforcement, "Environmental Assessment: cumulative Impacts of Adopting OSMRE's Proposed Revisions to the Permanent Program Regulations," May 3, p. IV-5. ll 147. See York Times, Jan. 23, 1982, at 1, col. 3. 148. 46 730-732 July 1, Fed. Reg. (1982)). 19Eh. 46 'I I I 53,376 (1981) (codified at 30 CFR Pts. These changes were originally proposed Fed. Reg. 34,348 (1981). 149. to Subchapter C, 47 Fed. Reg. 26,356 (1982) (codified at 30 CFR Pts. 730-736 (1982)). These amendments :were originally proposed on June 17, 1982. 46 Fed. Reg. 59,482 (1981). Because the original announcement!' of the proposed amendments, contained in the Federal Redster for December 4, 1981, frequently gives a better description of the rule changes than the final announcement on June 17, 1982, these footnotes will refer to both announcements. Virtually all amendments proposed on December 4, 1981, were adopted with little or no change. A !significant exception was a proposed amendment to 30 CFR 732.15(b) (10) (1981), which would reduce citizens' r1ghts to participate in mine inspections and to sue in state courts. See infra text accompanying notes 136-140. 150. See Club v. Watt, 18 Env't Rep. Cas. (BNA) 1565 sept. 17, 1982); National Wildlife Federation 'CNWF) v. Watt, No. 82-0320 (D.D.C. filed Feb. 3, 1982), reported in Env't Rep. (BNA) 1313 (Feb. 12, 1982). NWF.; v. Watt was subsequently settled. Env't Rep. (BNA) 1712 23, 1982). ,I 151. Id. 152. In 30 CFR 732.15(a), OSMRE omitted reference to any standards and procedures for approval of state alternativeli provisions that had been required under the II deleted 731.13 46 Fed. Reg. 53,348 (1981). 153. Only tnree states received approval for their primacy applications under the Carter administration, and this authorii assisted in the review of the application that grantea primacy to Texas, the first state to receive I Secretar1a1:1 approval under the Act. Mosher, "Regulatory Takes Aim at Surface Mining Regulations," 13 Nat'l Journal 971 (1981). I ; !I

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112 il 154. See Sect. 101(f), 30 u.s.c. Sect. 1201(f) (Supp. V 19181). The legislative history to the Act also supports the state role: "This subsection [Sect 503(a)] is amended :to make it clear that a State normally has jurisdictiq;n over surface mining on non-Federal lands under the unless the State enters into an agreement with the sebretary to exercise jurisdiction over Federal coal pursua1nt to sections 521 and 523 of the act." H.R. Rep. No. 218, at 63, reprinted in 1977 u.s. Code Cong. & Ad. News at 601. 155. Id. 156. See 30 CFR Sect. 730.5 (1981) (prior to amendment), supra note 73. Under this standard, the Secretary could not a state plan for being too strict, but the state plan :must be at least as strict as the federal program surface mining and reclamation. 157. See 30 CFR Sect. 730.5 (1982) (as amended Oct. 28, 1981). 158. 46 Fed:. Reg. 53,377 (1981). 'I 159 .. Id. 160. In outlining the purposes of the Act, the Committee on Interior! and Insular Affairs declared: "Thus H.R. 2 is like in that it would enact a set of national performance standards to be applied to all coal mining operations and to be enforced by the with backup authority in the Department of the Interidr." H.R. Rep. No. 218, at 57, reprinted in 1977 u.s. dbde Cong. & Ad. News at 595; see also supra note 88. : 161. Edgmon & Menzel, at 258-259. 162. See 46Fed. Reg. 53,379 ( 1981) ; 163. Mosher, op. cit., at 971. 164. Abrams, op. cit., at 1253. 165. Id. 'i 166. Abrams, op. cit., at 1251. 167. See H.R. Rep. No. 218, at 63, reprinted in 1977 U.S. Code Cong. :& Ad. News at 601.

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113 jl 168. 627 at 1355-1356. The court rejected argument that to be constitutional the Act must contaln a general variance provision. The court found congressional authorization of limited variances sufficient .. 'i 169. 46 Fed. Reg. 53,373 (1981) 170. See 30 CFR Sect. 730.5 (1982). 171. SMCRAjjsect. 101(g), 30 U.S.C. Sect. 1201(g) (Supp. V 1981); see!! also H.R. Rep. No. 218, at 58-60, reprinted in 1977 u.s. Code Cong. & Ad. News at 596-598. 172. Sierra Club v. Watt, 18 Env't Rep. Cas. (BNA) 1565 (D. D.C. Sept. 17, 1982). ,, 173. SMCRA:[sect. 526(a) (1), 30 u.s.c. Sect. 1276(a) (1) (Supp. V provides in part: "Any action by the Secretary promulgating national rules or regulations including pursuant to sections 501, 515, 516, and 523 of::the title shall be subject to judicial review in the United States District Court for the District of Columbia circuit." 174. See Plaintiff's Complaint at 6, Sierra Club v. Watt, 18 Env't Rep. Cas. (BNA) 1565 (D.D.C. Sept. 17, 1982). SMCRA 521(d), 30 U.S.C. Sect. 1271(d) (Supp. V 1981), in "As a condition of.approval of any State program subm1tted pursuant to Sect1on 503 of this Act, the enforcement provisions thereof shall, at a minimum, incorporate sanctions no less stringent than those set forth in this section, and shall contain the same or procedural requirements relating thereto." :i SMCRA Sect. 518(i), 30 u.s.c. Sect. 1268(i) (Supp. V 19:81), provides in part: "As a condition of approval of any State.program submitted pursuant to section 503 of this Act, the civil and criminal penalty provisions ::thereof shall, at a minimum, incorporate penalties rip less stringent than those set forth in this section, shall contain the same or similar procedural requirements relating thereto." As in Sects. 521(d) and 518(i), 30 CFR Sect. 730.5 (1981), before amendment, used the "no less stringent" standard for comparing state programs tq;both the Act and the federal regulations. The amendment version of Sect. 730.5 (1982) requires the state to be "no less effective than" the federal regulations. 175. See Pl:aintiff's Complaint, id. at 6-7. I 176. 46 Reg. 53,378 ( 1981) il

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,, ,, 177. See note 108. 178. Id. 179. 30 CFR Sect. 730.5 (1982), supra note 73. 180. Id. 114 181. SMCRA''Sect. 101(g), 30 U.S.C. Sect. 1201 (Supp. V 1981), dec],ares that "surface mining and reclamation standards are essential in order to insure that competition' in interstate commerce among sellers of coal produced in different states will not be used to undermine ability of the several states to improve and maintain adequate standards on coal mining operations within their borders." I 182. 46 Fed. Reg. 53,377-53,379 (1981). For a contrary view see Abrams, at 1247-1248, where the author notes that when 9SMRE first promulgated national standards under the interim regulatory program, West Virginia found that many of its existing rules were stricter than the federal rul:es. So much confusion ensued as to what law governed that the West Virginia legislature eliminated the stricter state laws. Thus uniform national standards actually le'd to weaker surface mining regulation in West Virginia. 183. Only t'wo states covered by the Act, Georgia and Washington,,; have chosen not to assume primacy. 184. Amendm:ents to subchapter c, 47 Fed. Reg. 26,356 (1982). 185. 30 CFR! Sects. 731-732 ( 1982) 186. Id. The new regulations implement the mandate of ,I SMCRA Sect.:! 504, 30 U.S.C. Sect. 1254 (Supp. V 1981), a provision requiring the Secretary to promulgate a surface mining program in each state that does not gain approval for its ownl plan. 187. SMCRA s'ect. 515(b) (6)-(7) I 30 u.s.c. Sect. 1265(b) (6) Supp. v 1981). I 188. For the Secretary deleted 3 0 CFR Sects. 7 3 0 2 7 3 0 '4 7 31. 11 7 3 2 4 7 3 6 2 7 3 6 3 7 3 6 4 4 7 Fed. Reg. 26,364,.;..26,367 (1982). These regulations paralleled responsibilfties already set out in the Act.

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I I .! 115 189. To consistent with the wording of 30 CFR Sect. 730.5 The new rule changes the "no less stringent :than" standard of Sect. 730.11 to read the Act will supersede state laws or regulations which are "inconsistent with" the Act or federal regulations. 30 CFR Sect .. :730.11 (a) (1982). The new rule directs the Secretary :to publish in the Federal Register a summary of inconsistent state laws and regulations and to provide for comments by interested parties. Id.; see also Amendments,to Subchapter c, 47 Fed. Reg. 26,356, 26,364 (1982) o I Similarly, the standard in 30 CFR Sect. 736.23(a) for preempting state laws or regulations "inconsistent, less stringent or (which] preclude compliance with the purposes ahd requirements of the Act and the Federal program," 'o/as changed to read: (a) .Whenever a Federal program is promulgated or revised for a State, any statutes or regulations I' I State regulat1ng coal explorat1on or suiface coal mining and reclamation operations su:O:j,ect to the Act shall be preempted and by the Federal program insofar as they are: inconsistent with the requirements of the Act anq: the Federal program ... 30 CFR Sect. 736.23 (a) (1982). 'I 190. Along !w1th the proposals made on December 4, 1981, the Secretary changed "Regional Director" to "Director" in 30 CFR sects. 732.11(a), 732.13(d), 732.17(h)(1)(h)(2), 732.17(h)(4), 736.13(b), 736.13(d), (1982). II I Proposed 46 Fed. Reg. 59,482, 59,492 (1981). 191. 46 Reg. 59,483 (1981). Dates were eliminated in Sect. 7j1.12 and Sect. 736.11. Amendments to Subchapter C, 47 Fed. Reg. 26,356, 26,357, 26,362 (1982). 192. 30 CFR Sect. 731.12 (1982) (Submission of State Programs), as amended, reads: "Each State that wishes to regulate cq1al exploration and surface coal mining and reclamatiori operations on non-Federal and non-Indian lands within its boundaries shall submit three copies of a proposed 1program to the Director. A State may submit a proposed prpgram at any time ... Id. Similarly, 30 CFR Sect. (Resubmission of State Programs), reads: "If, by a t!inal decision, the program is disapproved, the State may submit another proposed State program to the Director time ... "Id. 193. Id. ,,

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' p .I I 116 194. NWF ,;.1. Watt, No. 82-0320 (D.D.C. filed Feb. 3, 1982), reported in Env't Rep. (BNA) 1313 (FEB. 12, 1982). The action! is similar to the Sierra Club suit which challenged the october 28th amendments. 195. Naticihal Environmental Policy Act of 1969 Sect. 102 (2) (C) & Supp. V 1981). This section requires preparation of an environmental impact statement for all "major actions significantly affecting the quality of!human environment." 196. Agreement. Between Plaintiffs and Federal NWF v. Watt, No. 82-0320 (D.D.C. April 16, 1982) [herTafter cited as Settlement Agreement]. 197. Id. at 3. 198. The proposed Sect. 732.17(g) would have replaced the last sentence of that subsection with: suc!::h changes to laws and regulations shall be con1s idered approved by the Director unless the Director notifies the State in writing within 60 day.s that the proposed amendment is not minor and ,J thup w1ll be subJect to the procedures of 30 CFR Sect. 732.17{h). If the Director so notifies the the change to the State's laws or regulations shall not take effect for purposes of the State program until approved as an amendment. If !a proposed amendment is approved under this Suosection, the State shall promptly notify the of the date when the proposed amendment is or promulgated and the date of shall be the effective date for the amendment of the State program. 'I Proposed Amendment, 46 Fed. Reg. 59,482, 59,491 (1981). 199. See 39: CFR Sect. 732.17(h) (1982). 200. Id. In order to amend a state program, 30 CFR Sect. 732.17(h) (.1982) requires notice and publication of the proposed in the Federal Register, a public comment per'iod, and public hearings. The Director of OSMRE then 1 1considers all the collected information and approves or: disapproves the amendment. 201. to Subchapter C, 47 Fed. Reg. 26,356, I. 26,361 (1982). The automat1c approval 1dea drew many comments. :States generally supported the proposal while environmental groups vociferously opposed it. I ., ,, I

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:i 1\ 117 :: 202. Propo'sed Amendment, 46 Fed. Reg. 59,482, 59,486 (1981). Qnder SMCRA Sect. 521(a) (1), 30 u.s.c. Sect. 1271 (a) (1) (Supp. V 1981), citizens have a right to accompany .a federal inspector when that inspection results fi;bm information provided by the citizen. Congress consistently emphasized the role that citizens can play in the enforcement process. With regard to citizen access to court, SMCRA Sect. 526(e), 30 u.s.c. Sec.-,:,.1276(e) (Supp. V 1981), currently provides: Action of the state regulatory authority pursuant to'an approved State program shall be subject to judicial review by a court of competent jurisdiction in accordance with state law, but the ava'ilability of such review shall not be construed to 'limit the operation of the rights established insection 520 except as provided therein. Under the proposed Sect. 732.15(b) (10), state programs would not have to provide for citizen suits in state courts. citizen suits could only be brought in federal court under SMCRA Sect. 520(a) (2), 30 u.s.c. Sect. 1270(a) (2) csupp. v 1981). However, in the adopted rules the Secretary did amend 30 CFR Sect. 732.15(b) (15) (1982) to clarify.when judicial review of state actions would be "in accordance with state laws." In the preamble to the new rule, OSMRE stated: The' final rule published today provides that judicial review of state program actions shall be in with State law, except that judicial review of state enforcement actions shall be in acc9rdance with section 526 of the Act. The final further provides that judicial review in accordance with state law shall not be construed to limit the operation of the "citizen suit" established in section 520 of the Act. Amendments 1to Subchapter C, 47 Fed. Reg. 26,356, 26,360 (1982). 203. SMCRA 'sect. 52l(a) {1), JO u.s.c. 1271(a) (1) (Supp. v 1981), commands the Secretary to notify the state regulatory when hejshe receives the information that a pers'on is in violation of the Act or regulations. The section.: further provides: If such State authority exists or the State authority fails within ten days after to take appropriate action to cause said violation to be corrected or to show good cause for such failure and transmit notification of fts action to the Secretary, the Secretary immediately order Federal inspection of the surf1ace coal mining operation at which the alleged violation is. occurring unless the information available to the Secretary is a result of a ,, I I I

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I' 118 previous Federal inspection of such surface coal mining operation. Under this': section, a state has assumed primacy, federal inspection.1 will occur only where the state has failed in its duty tp investigate alleged violations where the Secretary remains unconvinced that the state had good reason for:not taking action. Otherwise, the state would inspect suspected violations and, under the proposed rule, ci reporting the violation would have no right to participate in the state inspection. Proposed Amendments; 46 Fed. Reg. 59,486 (1981). 204. 627 F.2d at 1352. I 205. See 47 Fed. Reg. 17,269 (1982) (Not1ce). Th1s notice reflects the settlement agreement between the Secretary and NWF; see also Amendments to Subchapter C, 47 Fed. Reg. 26,356, 26,359 (1982). 206. 44 Fed. Reg. 14,965, 15,297 (1979). 207. Settlement Agreement, Paragraph VIII. The Secretary did not have to include the individual environmental assessments, in the supplemental EIS prepared pursuant to Paragraph Ii of the agreement. Id. 208. On May:. 3, 1982, OSMRE released an environmental assessment (EA) of the impact of proposed changes to surface regulations, including the amendments to Subchapter The EA revealed that the proposed changes to Subchapter c not "cause or contribute to significant;: .individual or cumulative impacts on the quality of 'the human environment ... 47 Fed. Reg. 18,920, 18,922 (1982). Despite this finding, OSMRE stated that I, the draft supplemental EIS would assess the effect of the proposed re-gulations on state program procedures. Id. 209. The Secretary adopted amendments to Parts 733 and 736 of Subchapter c. Amendments to Subchapter c, 47 Fed. Reg. 26,356jr 26,361-26,363 (1982). The final rules contain only minor variances from the original proposals of December 4, 1981, with the exception that the Secretary not adopt proposed amendments to 30 CFR Sect. 733.12(f) (2) (ii) (1981) (dealing with OSMRE's authority issue permits during periods of substituted federal enforcement). Proposed Amendments, 46 Fed. Reg. 59,482, 59,487-59,488 (1981). 210. Amendments to Subchapter c, 47 Fed. Reg. 26,356, 26,358 see also Proposed Amendments, 46 Fed. Reg. 59,482, 59,484 (1981). The Secretary made broad changes to 30 CFR Sect. 731.14, which list the content

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, ; 119 requirements for state program submissions. First, the amendments,1 delete subsections ( i) (j) and (k) but the requirements of (i) and (j) into subsectiori1 (e). Proposed Amendments, 46 Fed. Reg. 59,482, 591,488 ( 1981) Subsections ( 1) and (m) combine to form a new subsection (i). Id. at 59,490. Next, the amendments strike subsections (h) (1)-(8), (n), and (o). Id. at see also 30 CFR Sect. 731.14 (1982). As the modifications do not reincorporate these requirements elsewhere, :states no longer have to include this information in their program proposals. 211. Amendments to Subchapter C, 47 Fed. Reg. 26,356, 26,358 (1982). I, I 212. See 30 CFR Sect. 732 (1982). According to the settlement agreement, the Secretary had to prepare an individual ::environmental assessment for each rule change. Settlement Agreement, Paragraph VIII. However, the EA indicated that these amendments would have no significant impact on the environment. ,I 213. The Secretary combined Sect. 732.11 and Sect. 732.12 so that 0Sf1:RE will review state plans only once and hold only one puplic hearing. Under the procedures of the 1981 rules,: after OSMRE published a program submission and alloweq.30 days for the public to comment on it, it would hold ,a public meeting. 30 CFR 732.11(a) (1)-(4) (1981). Wlthin 60 days, the Director had to determine whether the program submission contained all the requirements, in Sect. 731.14. Id. Sect. 732.11(b). If the program,! was complete, OSMRE then opened a new public comment period and held another public meeting to deal with substantive matters. Id. Sect. 732.12. After considering1 \ all these comments, the Director would recommend to the Secretary whether or not the program should be approved. Id. Since the new process accelerates consideration of the program submission by holding only one hearing,and comment period, which will examine both the completeness of the program and substantive matters, it the need for most of Sect. 732.11(a) (3)-( 4) (b) ancf (c) See id. Sect 732. 11 ( 1982) ; see also Proposed 46 Fed. Reg. 59,482, 59,484-59,485 (1981): Amendments to Subchapter c, 47 Fed. Reg. 26,356, 26,358-26,359, 26,365 (1981). 214. Under the old rules, the state had to complete its plan by incfyding all enacted laws and regulations within 104 days the date on which a state originally submitted its proposed plan. 30 CFR Sects. 732.11(d), 732.12(b) (2) (1981). Failure to submit all laws and :1'

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!I il it II within the 104 day period resulted in disapproval of the proposed surface mining plan. Id. 'I 120 215. Amendment, 46 Fed. Reg. 59,482, 59,484-5 9 4 8 5 ( 19:81) ; Amendments to Subchapter C, 4 7 Fed. Reg. 26,356, (1982). 216. The old regulation required states to enact laws and regulation!s before the Secretary made a decision on the I state prog+am. The new rule offers the states more flexibility to act within their own time frame. Because a state amend a law or regulation after submitting it in proposed final form, the public has a greater ,, to comment. Amendments to Subchapter c, 47 Fed. Reg. 26,359 (1982). 217. The regulations amend 30 CFR Sect. 732.13 (1981), wh1ch governed the Secretary's decision to approve or !:disapprove a state program. See 30 CFR Sect. 732.13 (1982). Under the settlement agreement, OSMRE had to prepare 1!an EA for each proposed amendment. See supra note 141 accompanying text. The EA indicated that the amendments would have no significant impact on the quality of human environment. I 218. 30 CFR Sect. 732.13(h) (1981). 219. Id. Sect. 732.13(i) (1982). See also Amendments to II Subchapter G, 47 Fed. Reg. 26,356, 26,359 (1982). Among the other subsection (h) was redesignated (i); the last sentences of (f) are now subsection (g); and the subsection (g) has been redesignated (h). Amendments io Subchapter c, 47 Fed. Reg. at 26,359; see also Propos'ed Amendments, 46 Fed. Reg. 59,482, 59,485 (1981). ; 220. 30 CFR':Sect. 732.1J(i) (1)-(4) (1981). i! 221. Id. Sec:;t. 732.13(i) (1981) has become Sect. 731.13(j). :jAs amended, Sect. 732.13(j) (4) reads: If the deficiencies have not been corrected by the set forth in the Secretary's decision under paragraph (j) (J) of this section, the Director notify the Secretary that the deficiencies have! not been corrected and shall within 30 days-,. ( i) Withdraw approval of the State program in I :whole or part, and the extent to :i which approval of the State program is being .. withdrawn; 1 (ii) Substitute direct Federal enforcement of : 1 those portions of the permanent regulatory ij

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222. 30 223. See 224. See 225. Id. 226. See 227. Id. 228. See 229. Id. 230. See I, CFR program that the State has failed to implement; 121 (iii) Initiate procedures in accordance with Parts 733 and 736 to withdraw State program approval and implement a Federal program for the State, including specifying necessary remedial actions to correct continued deficiencies; or (iv) Take any combination of actions under paragraphs (j) (4) and (i) through (iii) of this section. 30 Id. Sect. 732.13(j). Sect. 732.13(j) (1982). supra note 143. supra note 149. ,, supra note 150. stipra note 153. !I note 156. 231. In the proposed rules, OSMRE stated: "OSMRE has drafted these revisions in response to both the Secret(l:ry' s goal of removing burdensome or counter productive regulations and comments from the States and the generai11public." Proposed Amendments, 46 Fed. Reg. 59,482 (1981). 232. See amendments to 30 CFR Sect. 731 ( 1981) 'i 233. See amendments to 30 CFR Sect.732 (1981). 234. See supra note 209. I 235. Id. 236. For a discussion of the problems which can occur when OSMRE the states fail to cooperate, see Edgmon & Menzel, at 251-256. '' 237. Hemenway, Davis, 1980, Performance versus design il U.S. National Bureau of Standards, Office of Eng1neer1ng Standards Report NBS/GCR 80-287, p. 7-8 I:

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122 238. SMCRA Sect. 515(b) (24), 30 U.S.C. Sect. 1265(b) (24) (Supp. V 1'981), requires that an operator "to the extent possible using the best technology currently available, minimize disturbances and adverse impacts of the operation :on fish, wildlife, and related environmental values, and achieve enhancement of such resources where practicable." (codified at 30 CFR Sect. 816.97(a), 816.97(e) '(1983), 48 Fed. Reg. 24,652 (1983)). 239. Id.

PAGE 134

,I CHAPTER III THE INVESTIGATIVE PROCEDURE : General Method The research method selected for conducting this study involves the use of a time-series design of ., multiple observations over a 6-year span of time. ,, Observations will be denoted by inspections to obtain i violations issued against design and performance standards. The category of regulations identified in this ,, study as and performance standards or regulations will the variables. The design standard can be viewed as one that influences the performance standard. I The standard can be viewed as the outcome influenced by the design standard. ; Components of the Research Design of the research design are varied and are included to enhance successful completion of the subject under investigation. They include underlying ;, theory: access to the organization and respondents; study 'I

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: 124 design; researcher control of the system; data collected to test type of data; temporal dimensions; research sample; type of variables; method of observation, and data analysis. Underlying.: Theory The study investigated general theories of economic political intervention techniques associated with government regulation of industry. It addressed the applicability of the design and performance regulation model for regulating environmental mandates. The focus of research reported herein involves qualitative regulation, which attempts to cope with various kinds of market failure problems that are only indirectly linked to prices, profits, market structure. Access to Organization and Respondents ., Permission to conduct the study was obtained from the Director, Office of Surface Mining Reclamation and Enforcement, United States Department of the Interior. I Such authorization allowed access to administrative and enforcement .personnel, as well as access to all documentation concerning violations for noncompliance with mandated design and performance standards. ,I

PAGE 136

125 control over system studied control of the social system under study : was expected. This expectation was grounded in the ,I knowledge that there were few constants (e.g., frequency 'I of inspections, specific design and performance I standards, mines investigated), and many political and ,, economic unknowns. Research Sample A random sample methodology was used to identify 15 surface !coal mines for inclusion in this study. These mines were 'in the state of Tennessee, where federal, state, and !private mine lands were available for selection irom a random sample of coal mines contained within OSMRE's files. The selection of mines in ., Tennessee allowed control for geographic diversity. The:formula for determining the maximum number of elements review is: 10 (5 design and 5 performance standards) multiplied by 15 (surface coal mines) !: multiplied by 4 (inspections per year) multiplied by 6 I (years) equ9ls 3,600 possible elements for manipulation and analysis. Simplified, the equation would appear as :! follows: Maximum element number equals 10 (standards) ,I times 15 (rnfnes) times 4 (inspections per year) times 6 ., I' '!

PAGE 137

126 (years) for a total of 3,600 possible elements for review. The research sample was 90 mines. This number was determined by reviewing the inspection files of 15 I randomly surface coal mines for the 6 years under study (i.e., 15 mines x 6 years= 90 mines). Research Observation Method Specific Pr?cedures Specific methods for accomplishing the proposed research included the following course of action: 1. Submitted appropriate correspondence to the Office of surface Mining Reclamation and Enforcement informing them of my intention to acquire archive data in accordance with the availability of information requirements of the Sur(ace Mining Control and Reclamation Act of 1977. 2. Identified a set of design and performance standards from OSMRE inspection staff to observe for regulation compliance. 'I

PAGE 138

'I 127 : 3 ., Obtained copies of the original inspection and enforcement reports for the sample under study. 4. Obtained reproductions of the inspection and enforcement reports for the sample ., under study. 5. compiled a matrix of all of the notices of violations, cessation orders, and ten-day I notices for selected design and performance standards. Data Profile and Collection ,I Data for of the Hypothesis Qua"ntitative data in the form of numbers of violations for noncompliance with mandated design and performancei standards will be evaluated in a crosssectional ahd longitudinal study. Cross-sectional data ,. were obtained from official inspection reports to classify by 'type, frequency, and central tendency to analyze for,numerous relationships. The longitudinal I component was used in a time-series design to show II changes ove:t;. varying periods of time and to perform '! comparative i,analysis over successive time intervals.

PAGE 139

;.I I I! I d 128 Ty:ge of Data : Discrete or discontinuous data given in inspection: reports showing noncompliance for design and i standards were used in conducting this study. The data based on aggregate mine inspections for the years under study. Data collection Data were gathered from the inspection and enforcement files of the OSMRE's Norris, Tennessee, facility. information was manually obtained and recorded frbm individual inspection reports for computer entry and manipulation. Data were collected by use of the following procedures. 1. Submit appropriate correspondence to OSMRE informing them of my intention to acquire data in accordance with the availability of information requirements of the SMCRA of 1977. 2. Identify the format and medium of exchange of the OSMRE data. 'I

PAGE 140

;o ., 129 3 .. : Obtain a list of the federal, state, and private surface coal mines in the state of Tennessee. 4. Compile a copy of the original inspection and enforcement reports for the sample under study. 5. Obtain reproductions of the media records for the inspection and enforcement reports for the sample under study. Levels of Measurement The trait on which the classification was based for studying regulatory intervention was the number of ,, violations cited for design and performance standards. Ratio scales were used as the level of measurement for classifying incidents of regulatory noncompliance. Selected Design and Performance standards Members of the OSMRE inspection and enforcement staff nationwide were asked to identify five design standards their associated performance standards for investigation in this study. Each standard was selected

PAGE 141

I' I 130 on the bas:is of: (1) its importance for study, (2) the I< possibility that it might be frequently cited, and (3) I, its having' been in effect throughout both the interim and :i the regulatory program. Tbe category of regulations identified in this study as and performance standards or regulations II will represent the variables. The design standard can be d I viewed as one that influences the performance standard. The performance standard can be viewed as the outcome II influenced1iby the design standard. The variables are !: I listed below by the regulation number and general I! description. 'I Design Variables .I The following design standards represent variables cited in the Title 30, Mineral Resources, Code ,, I of Federal Regulations. They are: Dst'.cil 715.17(e) (1) Crest of dam 1 foot higher than design flow 715.14(j) cover toxic material with 4 feet of nontoxic cover. Dstd3 715.14(a) Backfilling and grading: Slope 'I measurement method defined. Dstd4 715.17(e) (iii) Criteria for sediment pond ., design. I

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.. ,, ,. 131 715.20(f) (1) Use reference area to measure I ' success of vegetation. Performance Variables following performance standards represent variables in the Title 30, Mineral Resources, Code of Federal:Regulations. They are: Pstd1 816.49(a) (4) Adequate freeboard. I Pstd2 816.102(f) Cover toxic material with 'I adequate nontoxic cover sufficient to control impact. Pstd3 816.102(a) (1) Backfilling and grading: No method of measurement. Pstd4 816.45 Appropriate sediment control using best technology available. :t Pstds 816.116(a) Success of vegetation is appropriate for land use. Data Analysis Treatment of the Data 'I Treatment of the data included the following: 'I 1. Compiled a matrix of all of the notices of violations, cessation orders, and ten-

PAGE 143

il' 132 day notices for selected design and performance regulations. 2., Plotted the data to show instances of noncompliance or violations (i.e., ten-day notice, notice of violation, and cessation order). 3. 1 Examined the plot of the data to determine if any short-term fluctuations existed. such fluctuations could exist if regulations were remanded, deleted, or .I revised. 4.: Determined the length of the short-term trend for the data that showed a cyclical trend for the reason given in item three I directly above. 6. Analyzed the findings of the research to determine their applicability for posing answers to research concerns identified earlier in the sections entitled "Statement of the Problem, and Purpose of the Study." Analysis of :tthe Hypothesis 'I The implementation of environmental regulatory of different political administrations ddes not affect change in enforcement practices

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'!! 'I !.concerning design and performance standards :within OSMRE. ,I 133 :The implementation of environmental regulatory 1policy of different political administrations .does affect change in enforcement practices :boncerning design and performance standards Within OSMRE. hypothesis was concerned with the political I and economic issues associated with the implementation approach different administrations regarding the dynamics of design and performance standards. !i Specifically, the hypothesis addressed how different 'I political administration's ideologies were used to implement the same legal mandate: how these political ideologies 'iare of concern to the economics of industry and society:: and, how design and performance standards are of concern for regulatory performance. The latter element addressed whether regulations based on design standards have corresponding frequencies of violations 'I with associ:ated performance standards. Ideally, these should be same, inasmuch as there is theoretically a direct between design and performance, given that one designs to achieve performance. If design '! standard violations exceed the associated performance 'I standard viqlations, then they could be indicative of overly strirlgent design requirements, causing unnecessary expense to and consumers. Correspondingly, if I performance '!standard violations exceed the associated

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i I 134 design standard violations, than it could indicate a lack of needed :design requirements to protect the environment, :I causing cost to society. Tfme series analyses were performed to evaluate recent or past performance concerning regulatory I compliance': to: (1) address the merits of the regulatory approach of different political administrations for design and performance standards; and, (2) determine-if compliance changed as a result of political administration changes and regulatory reform efforts. I These analyses were used to discuss: (1) future patterns of regulatdry compliance; and, (2) why these political ideologies of concern to the economics of industry and society:. Crosstabulations comparing the profile for the ,I number of violations for each standard studied, were made between design and its associated perfotmance standard violations for all the years investigated. It is important to note that crosstabulation was used strictly to,, determine the counting occurrences of paired events where citations were issued for regulatory noncompliance. Crosstabulation was not used to determine statistical :significance, or to determine the strength of II the relat1onsh1p between the issuance of citations for design and performance standards. The reason for this dis'claimer is due to the fact that there was 'i

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.; 135 insufficient data regarding the number of events for each cell of crosstabulation matrix. The sample size of .: each cell not permit a valid analysis. Therefore, the strength of the chi-square statistic was insignificant. ,, summary research methods and procedures were ;i discussed for the study undertaken. The discussion ,, included general methods, components of the research design, specific procedures, research sample, data I and treatment of the data. ,I

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:1 I :i CHAPTER IV FINDINGS Analysis of Summary Data data on violations against design standards and associated performance standards were 'I grouped for 15 randomly selected surface coal mines in 'I Tennessee from 1979 through 1984. ,. Taples 3 and 4 present findings for the frequency ;, of violatiQns occurring for the sample for the 6-years investigate.d. The number of violations represent citations to a mine per year for the 6-year period. : Regulations, require 4 inspections per mine site annually. I Frequency lhdicates the number of for a I particular :design or performance standard violated. Table 3 shows that there were no instances where no violatio,:tts were issued against design standards during an inspection. on the average, the mines in the sample I ,, received approximately nine citations for noncompliance 1: against a design standard under study. This average is shown in Table 3 as eleven occurrences where eight citations issued for regulatory noncompliance against design standards. At the opposite high end of I

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,, I: ::
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I .; Table 3.--Freguency Tabulation: 'I Total Design Standards (15 Mines over 6 Years) Number of Frequency, of Violations Violations per Visit per Visit 0 0 1 1 2 1 3 4 4 7 5 8 6 7 7 9 8 11 9 7 10 5 11 9 12 4 13 3 14 4 15 5 16 1 17 0 18 0 19 1 20 1 21 1 22 0 23 0 24 1 n = 90 (15 mines x 6 years) Mean = 8.95556 Standard Deviation = 4.38821 Median = 8 138

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139 Note that Table 4 shows that there were no instances where no violations were issued against performance :standards during an inspection for the mines investigated. The average number of violations against performance standards investigated for the years studied was approximately 8.5. Table 4 shows that there were eight occurrences in which nine violations were issued against performance standards for regulatory noncompliance. At the high end of the scale, there were two occurrences where twenty-two violations were issued against performance standards for regulatory noncompliance. Thus, for performance standards, the sample of 90 mines investigated over the 6-year period resulted in a mean number o.f violations for regulatory noncompliance of 8.55, with a standard deviation of 4.57.

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Table 4.--Freguency Tabulation: Total Performance Standards (15 Mines over 6 Years) Number of Frequency of Violations Violations per Visit per Visit 0 0 1 4 2 7 3 6 4 10 5 7 6 8 7 8 8 5 9 8 10 5 11 7 12 6 13 1 14 1 15 1 16 2 17 1 18 0 19 1 20 0 21 0 22 2 D = 90 (15 mines X 6 years) Mean = 8.55556 Standard Deviation= 4.57426 Median = B 140 Table 5 is a summary statistic table that shows 'I the number of violations for design and associated performance standards for the years 1979 through 1984. It relates specific design standard violations against associated performance standard violations. The ,I'

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141 sample for each year included all 15 mines, or a total of 90 observations for the 6 years. The measure of these observations was the number of inspection violations issued per year per mine for each of the five design and associated standards. This totaled 1,576 inspection violations, which represents the total measurement for instances of regulatory noncompliance. overall, for: the 6-year period, there were 36 more instances of, violations issued for design standards than performance standards. The mean is given by the total violations fbr each design and performance standard, divided by the number of mines, multiplied by the number of years. Table1 5. --Design and Associated Performance Violations. by Standard. 1979-1984 Year D-1/P-1 D-2/P-2 D-3/P-3 D-4/P-4 D-5/P-5 Total D p 1979 05 06.' 16 07 18 07 46 40 06 08 91 68 1980 15 13 17 16 24 14 45 40 10 13 111 96 1981 19 27' 35 23 32 33 71 75 27 30 184 188 1982 25 18 24 25 37 34 76 75 27 28 189 180 1983 12 16' 19 22 26 19 54 56 14 18 125 131 1984 10 08 15 19 19 19 50 47 12 14 106 107 Total 86 88 126 112 156 126 342 333 96 111 806 770 Mean .95 .98 1.4 1.2 1.7 1.4 3.8 3.7 1.1 1.2 8.9 8.5 n=9o

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j' ; : 142 I Tabib 6 shows the average violations per visit for all design standards. Note in Table 5 that standard 1' : 4 showed greater instances of violations than other standards investigated. This accounts for the higher mean figure,shown in Table 6. Table G.--Average Violations Per Visit of all Design Standards for all Years s Years Ave t Total d 1979 1980 1981 1982 1983 1984 Years 1 .333 1.0 1.267 1.667 .a .667 .95 2 1.067 j,l.133 2.333 1.6 1.267 1.0 1.4 3 1.2 1.6 2.133 2.467 1. 733 1. 267 1.7 4 3.067 3.0 4.733 5.067 3.6 3.333 3.8 5 .4 .667 1.8 1.8 .433 .8 1.1 AvejYr Stds. 1. 21 1.48 2.45 2.52 1. 56 1. 41 The reason for this difference can be explained by the fact that standard 4 deals with the hydrologic balance associated with sediment control measures. '' Controlling and runoff from a mine permit area is difficult:due to excessive erosion and earth moving occurring throughout surface coal mining operations. Other relate to localized activity on a site, and may be harder for an inspector to determine the exact

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.. ,. design crite,ria failing to comply with specifications I identified i,n the approved reclamation plan. The. of design standard 1 was found to be lower than all other design standards. The fewer incidents of citations for design standard 1 may be explained by the fact that the crest of dam one foot higher flow (design standard 1) is an easy 143 standard to design for, evaluate, and measure. Also, the mine is in Oak Ridge, Tennessee, area, where considerableexpertise exists in the design and construction of dams and earthen structures. :; I The mean of performance standard 1 was found not to vary appreciably from performance standards 2 and 5, as shown in Table 7, but was noticeable different from performance .standard 3. The difference in performance ,I standard 1, adequate freeboard, may be explained by proper design and construction of structures. Also, 'I adequate (performance standard 1) is somewhat difficult The permittee normally defines adequate perf,ormance rather than the regulatory authority. The mean of design standard 5 was found to be different from design standard 3, but in all other respects standard 5 was the same as the others, except as previously mentioned. The difference in design standard I. 5, the use a reference area to measure success of :i'

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I 144 vegetation is relatively easy to monitor and compare to reclaimed areas. Whereas, with the introduction of the permanent program, design standard 3 on backfilling and I grad1ng became d1ff1cult to measure slopes for approximate original contour. s t d 1 2 3 4 5 1979 .4 .467 .467 2.667 .533 AvejYr Stds .91 Table 7.--Average Violations Per Visit of All Performance Standards for All Years Years 1980 1981 1982 1983 1984 .R67 1.8 1.2 1. 067 533 1. 067 1.533 1.667 1.467 1.267 .933 2.2 2.267 1.267 1.267 2.667 5.0 5.0 3.733 3.133 .867 2.0 2.0 1.2 .933 1. 28 2.51 2.43 1. 75 1. 43 Ave Total Years .98 1.2 1.4 3.7 1.2 The mean of standards 2 and 3 was found to be the similar for design and performance. The resemblance can be explained'by examining the similarities in construct of the two standards. Regulatory standard 2 on cover of toxic material with nontoxic cover took on new dimension in the permanent program after regulatory reform. The new regulations allowed for less than 4 feet of nontoxic cover. Therefore, almost all operators are now using the

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I' 145 less cover. ,; ; Prior to regulatory reform the standard was simple to in the field. The same argument can be made for standard 3 on backfilling and grading. The '' interim regulations defined how to measure slopes to obtain appr6ximate original contour, whereas the new regulations!did not, thus allowing for difference of opinion and.interpretation in the_ field. overall, this analysis shows consistency in both design and standards. With the exception of i regulatory $tandard 4, all design and performance standards had similar means. This analysis shows that ''I' design and performance standards seem to track each other '; throughout the inspection process for determining regulatory ribncompliance. such findings support the notion that and performance standards move in the same and thus, may have no direct relationship to each other. Figure 1 shows a time sequence plot for the years under study f:or design standards 1 through 5. It corresponds to the total of all design standards for all years shown ih Table 5. An examination of Table 8 shows :J' the moving and slopes for the graphic representation illustrated in Figure 1 for the years 1979 through The slope for the period 1980-1981 was 42.75; for 1981-1982 the slope was 4.75, and the slope I I for the period 1982-1983 was -35.5. These positive and

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' 1 146 negative slope values for design standards show that a difference 9ccurred in the number of citations issued for :' noncompliance for each of the reported two year intervals. Figure 2 shows a time sequence plot for the years under study;for performance standards 1 through 5. It corresponds to the total of all performance standards for '' all years shown in : ; .I.

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Sl (I) c 0 :;::; "' 0 40 > a; :20 0 Figure 1.--Time sequence plot representing total design violations for all years studied. TSERIES.D1 TSERIES.D2 .............. .. ... ( .... r .llF, I / I / I I :" : .. _..._ __ i .. TSERIES.DS \ 0 i-. ... ji ...... -: .. :-. -. . ... .. .. .. ..... :;. .. /'' c / / --. "'<-....___ ....-+---:.-: : _,.,. .. ,.. .. -+ _, / -/--. ;... .. ..... 0 0 -; 0 1979 1980 1981 1982 1983 1984 VAa,..

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' g ; IIJ 0 > 'ii eo
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'' l '! 149 '' Table 5. Ap examination of Table 9 shows the moving averages and slopes for the graphic representation illustrated. in Figure 2 for the years 1979 through 1984. I. The slope for the period 1980-1981 was 51.8; for 1981-1982 slope value was 6.75, and for the period 1982-1983 the slope value was -32.5. These positive and negative slqpe values for performance standards show that I a difference occurred in the number of violations I reported for instances of regulatory noncompliance during the periods investigated. Figure 1 for design standards shows that the slope of the.line is positive for standards 1 through 5 for the period 1979-1981. In 1981 the slope of the line begins to decline for standards 2, 3, and 5. Design standards 1 and 4 show positive slopes until 1982, before I, declining. Figure 2 for performance standards shows that the J slope of the line is positive for standards 1 through 5 for the period 1979-1981. In 1981 the slope of the line begins to decl ine for standards 1 and 5. Performance standards 2, J, and 4 show positive slopes until 1982, before declining.

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,, '1 i ,, I ',I I,: I' 150 Table 8. -Slope Analysis of Time Seauence Plot for Total Design Violations (Moving Averages for 2-Year Periods) Year --Moving Average-Slope 1979 91 > 101 1980 111 > 124.25 > 147.5 > 42.75 1981 184 > 167 > 186.5 > 4.75 1982 189 > 171.75 > 157 > -35.5 1983 125 > 136.25 > 115.5 1984 106 9. -Slope Analysis of Time Seguence Plot for Total Performance Violations (Moving Averages for 2-Year Periods) Year --Moving Average-Slope 1979 68 > 82 1980 96 > 112 > 142 > 51.0 1981 188 > 163 > 184 > 6.75 1982 180 > 169.75 > 155.5 > -32.5 1983 131 > 137.25 > 119 1984 107 Figure 3 shows a time sequence plot for the years under study,for total design versus total performance standards each year. It corresponds to the total of all design and performance standards for all years shown

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151 in Table 5 .I 1 An examination of Table 10 shows the moving '' i averages anR slopes for the graphic representation illustrated in Figure 3 for the period 1979 through 1984. The slope value for the period ending in 1981 was 42.25; for the period ending in 1982 the slope was -28.25, and for the period ending in 1983 the slope value was -10.75. These positive and negative slope values for design versus performance standards show that a difference occurred in'the number of violations reported for instances ot regulatory noncompliance during the periods investigateq. Such findings indicate that design and performance track each other, suggesting that .. other forces impact their rise and fall. :l'

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I : 152 I Tatile 10. -SloRe Analysis of Time Segyence Plot for Total Design versus Total Performance Violations (Moving Average for 2-Year Periods) Year ---Moving Average--Slope 91 1979 > 79.5 68 > 84.5 > 89.5 > 12 111 > 96.5 1980 > 103.5 > 25.25 96 > 121.75 > 140 > 23.25 184 > 145 1981 > 186 > 42.25 188 > 187.25 > 188.5 > -0.75 189 > 186.5 1982 > 184.5 > -18 180 > 168.5 > 152.5 > -28.25 125 > 140.25 1983 > 128 > -17 131 > 123.25 > 118.5 > -10.75 106 > 112.5 1984 > 106.5 107

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"' c 0 1a 0 > a; 210 190 12121 90 -60 Figure 3.--Time sequence plot representing total design and performance violations for all years studied. TSERIES.TDS TSERlES.TPS ............................................................................ .. ---r..---: : .. ................ ... /: c-.<............... i f "''\ .. : : ... : l : \ l l l \ ..... L. {' .. .. . .. .. .. .... if : ; \' : ; ;, l '\< l ,. __ ..... ..... ... -' ,. 1979 / _.. / ,. _,.r / l' I' '(__-... .j/ I . ... ... ....... /, /< I : : : I / / :I ) 1980 1981 VAAr!ll 1982 ............ ......................... ........................ ................. 1983 1984 ....

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: A time sequence plot for individual design and performance standards 1 through 5 for the years under study did not show any difference between design and 154 performance standards. However, there was a big change in the overall number of citations for both design and performance. standards. This change suggest that both design and performance standards track one another in either a positive or negative fashion, and that other forces may O.etermine their position shift. Analysis of the Hypothesis The hypothesis was concerned with the political and economiG issues associated with the implementation approach of different administrations regarding the dynamics of design and performance standards. Specifically, the hypothesis addressed how different political administration's ideologies were used to implement the same legal mandate, how these political ideologies of concern to the economics of industry and society,= and how design and performance standards are of concern for regulatory performance. The :lack of difference in citations issued for design standards for the 1979 through 1980 period can be explained by the following explanations. They are:

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. i '' (1): The inspection force of OSMRE was newly trained and somewhat unclear about the interpretation and amount of latitude 155 allowed a mine operator concerning mining and reclamation practices. (2) OSMRE was enforcing under the less restrictive interim regulatory program. The proposed final rules of the permanent regulatory program had not been promulgated for adoption. (3) State regulatory authorities had not assumed primacy to regulate Public Law 95-87. (4) The change in regulatory philosophy from design to performance standards had not been implemented. The given above to address findings I shown in Figure 1 are applicable for performance standards fdr the period 1979 through 1980. I' Expianations for sameness in means of design standards the year 1979-1980 were given above. Reasons for the sameness in means for the year 1981-1982 can be explained as follows: (1) State regulatory authorities assumed primacy to regulate Public Law 95-87.

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! 1 156 (2) A change in political administrations had occurred. (3) A shift in regulatory policy manifested in the change in ideology from "as-stringent as" to "as effective as" when adopting new regulations. (4) The regulatory reform effort had begun with the development of regulations "as effective as" the federal government counterpart. (5) OSMRE's inspection staff maintained a status-quo operations profile because of uncertainty in the agency due to a national reorganization. for the sameness in means for the year 1983-1984 be explained as follows: (1) Policies that resulted from the change in political administrations were firmly established among operators and inspection personnel. (2) The mining industry and mine operators had sufficient time to develop a learning curve for interpreting regulations, and viewpoints of inspection personnel.

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U. I' I 1: i' :i I The "as effective as" ideology gave greater latitude to mine operators for achievement of regulatory standards. Differences for the means of design standards 157 occurred for the years 1980-1981 and 1982-1983. Reasons for the differences in means of design standards for the :I year can be explained as follows: (1)::: A change occurred in political administrations. (2} Less flexible regulations adopted under the "as stringent as" ideology of the Carter administration were being enforced. (3) Inspectors were familiar with regulations adopted under the permanent regulatory program. for the differences in means of design standards for the year 1982-1983 can be explained as follows: (1) The regulatory reform effort of the Reagan administration was established. (2) More flexible regulations adopted under the "as effective as" ideology of the Reagan administration were being enforced. i : I ;

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i' (3) Mine operators and inspectors were familiar with regulations adopted as a l result of the regulatory reform effort. 158 The; explanations given above to address findings shown in Figure 1 are applicable for performance standards for the same years. It is noteworthy that design and performance standard citations for regulatory violations are occurring with the same relative frequency. :Therefore, explanations for similarities and differences in means reflected for design and associated performance standards are the same for the years under study. .II In the hypothesis addressed whether I regulations:1 based on design standards have corresponding frequencies pf violations with associated performance standards. The difference in means for all design and performance:standards, for all years showed 8.9 for '' i I design standards, versus 8.5 for performance standards. Such finding would tend to indicate that there may be corresponding frequencies of violations for design and performance standards. findings suggest that design regulations ,I I are but not excessive to achieve performance I standards. .'Two reasons for the single exception noted above for 1979 results can be explained by the fact that there was no method of measurement for the backfilling

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I 159 and grading: :provisions of standard 3, and this was the I first year bf inspections under the new j i program. This may be the result of excessive design enforcement, or lax enforcement of performance standards. Table 7, presented earlier, showed that there were more violations 9iven for the design standard than the performanceistandard. Crosstabulation Crosstabulations comparing the profile for the number of violations for each standard studied, were made '' between each design and its associated performance standard violations for all the years investigated. It is important to note that crosstabulation was used strictly to determine the counting occurrences of paired I events where.citations were issued for regulatory ,I noncompliande. Crosstabulation was not used to determine statistical 'significance, or to determine the strength of the relationship between the issuance of citations for design and associated performance standards. The reason for this is due to the fact that there was insufficient data regarding the number of events for each cell of matrix. Therefore, the strength of the chi-square statistic was insignificant. i

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'j: : I : 160 The, captions list number of violations by visit. I The upper nulnbers of the matrix list the number of ,I' I i '' occurrences. The lower numbers are the column conditional probabilities, i.e., P(Design Violation; Performance Violation). Table 11 is a crosstabulation that shows the number of times and the percentage of occurrences where l design were equal to, greater than, or less than associated performance standards. It indicates that for the standards under study Table 11.--Crosstabulation: Total Performance Standards versus Total Design Standards : I, standard D = p p > D D > p Total (%) 1 39 25 26 90 (43) (28) (29) (100) 35 23 32 90 (38) (26) (36) (100) i 3 32 19 39 90 (36) ( 21) (43) (100) 4 33 27 30 90 (37) ( 30) (33) (100) 5 33 33 24 90 (37) (37) (28) (100) Tota:l 172 127 151 450 (Per:cent) (38) (28) (34) (100) for the 6 years investigated, that design standards were cited 34 percent more often than their associated

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,, il: ,jl ,,, j performance1 standards. While not statistically I 161 this finding may indicate over engineering ,11 I I: of design Performance standards were cited only 28 percent more often than its associated design standard, which may indicate under engineering. Both design and performance standards were cited 38 percent of the time, which may indicate a balance between ., design and performance standards. There were 39 incidents (43 percent) where design and performance violations were equal, which may indicate ba+ance between design and performance standards. Design violations exceeded performance '' violations times (28 percent), which may indicate over engineering'of design standards. Performance violations exceeded design violations 26 times (29 percent), which may indicate under engineering. Figure 4 is a three-dimensional histogram i representing the frequency of violations for design and associated performance standard 1 for the 6-year period investigated. Note that there were approximately 20 events, or visits where there were no violations issued against this standard. There were 12 visits where 1 design violation was issued, and no citations issued for the associated performance:standard. There were approximately eight

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162 visits where three design and three performance violations 'were issued. Figure 5 is a three-dimensional histogram I representing the frequency of violations for design and associated performance standard 2 for the 6-year period investigated. There were approximately 12 events, or inspection visits where no violations were issued against ,: I, this standard. There were approximately 11 visits where 'i. 1 design vidlation was issued, and no citations '' ,r I Iii

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2B 16 12 >a u c Cl :I cr l B 4 0....._ --Figure 4.--Three-dimensional histogram showing frequency of violations for design and associated performance standard 1. .. ,. ..... ... b '\ ....... brJ . 1 0 ..,.u ... -Dealgn Standard 1

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. -8 i :I 6 l .. 2 Figure 5.-Three-dimensional histogram showing frequency of violations for design and associated performance standard 2. ...-:s ./ n ... /- ... ... ...... .. "' c "e ,_, / tl = ... Ia z;.: / ,o "' ..... w _..,a u Design Standard 2

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issued for associated performance standard. There were approximately 10 visits where 2 design and 2 performance .violations were issued. There were 165 approximately four visits where three design against six performance violations were issued. Figure 6 is a three-dimensional histogram representing the frequency of violations for design and associated performance standard 3 for the six year period investigated. There were approximately 8 events, or inspection visits where no violations issued against this standard. There were .; I approximately seven visits where one design violation was issued, and no citations issued for the associated performance:standard. There were approximately six visits where three design and three performance violation were issued. There were approximately four visits where three design. against four associated performance violations were issued. Figure 7 is a three-dimensional histogram representing, the frequency of violations for design and associated performance standard 4 for the 6-year period investigated. There were zero events, or inspection visits where no violations were issued against this standard. There was one visit where two design violations were issued, and one citation issued for the associated performance standard. There were l I 'I I

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; J 166 approximately 12 visits where 3 design and 3 performance violation were issued. There were approximately 6 visits where 6 design against 12 associated performance violations were issued. rl: i'. I

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19 (:t -l:' 6 c I 4 :<: Figure 6.-Three-dimensional histogram showing frequency of violations for design and associated performance standard 3. ....... ,.--:;; ,.; _(.b -b'IY e ----..,..__ ______ ,- .. /' 1 ue _/..;, Dealgn Standard 3 / .......

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12 10 B >-g CD i 6 .t .. 2 Figure 7 .-Three-dimensional histogram showing frequency of violations for design and associated performance standard 4. ---____ .10 ,....,.,--:;. --, ,/ _<\u -6 r:,'-"0' .. 0 ... ,. ...,!----.$""------------Design 4

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i 169 8 is a three-dimensional histogram representing the frequency of violations for design and associated performance standard 5 for the 6-year period investigated. There approximately 13 events, or inspection visits, where no violations were issued against this standard. There were 12 visits where 2 design were issued, and 1 citation issued for I: I the assoc1.ated performance standard. There were approximately seven visits where four design and four performance violation were issued. Summary The: findings of the study were discussed. The discussion included analysis of summary data, and analysis of the hypothesis. '' Overall, the findings suggest that there is no difference ih design and associated performance standards. The time series analysis showed no difference between design and performance standards. However, there was a big change in the overall number of citations for both design:and performance standards. This suggest that design and performance standards track each other, have no direct relationship to each other, and that the increase or decrease in the number of violations may occur from administrative actions. 'i .I

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en c Q .: ca 0 '$ .. '.

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CHAPTER V CONCLUSIONS AND RECOMMENDATIONS Summary ',' The' 'primary purpose of this study was to investigate the approaches of the Carter and Reagan administrations concerning the implementation of design and regulations of Public Law 95-87. These regulatory provided an opportunity to: (1) ,I j study how different political administration's ideologies were used to implement the same legal mandate; (2) study how these political ideologies are of c6ncern to the economies o:f, industry and society; and, ( 3) study the dynamics of,design and performance standards. Fifteen surface coal mines in the state of Tennessee were randomly selected for this study. Data were collected over a 6-year period from 1979 through 1984 on the number of notices, notices of violations, :and cessation orders cited by inspectors for instances at noncompliance against five design and their associated standards. The design and performance standards were selected by inspectors based t. i

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: 0 0 0 : I 172 on their importance for study, and probability of being I' cited for Findings Fol;Lowing the hypothesis is a statement of findings of! this investigation. was: The:basic hypothesis considered in this study :: The implementation of environmental regulatory of different political administrations does not effect change in enforcement practices concerning design and performance standards within OSMRE. The implementation of environmental regulatory policy of different political administrations does effect change in enforcement practices concerning design and performance standards within OSMRE. Figure 1 in Chapter IV showed a time sequence ',' ,:i plot for the years under study for design standards 1 through 5. It corresponds to the total of all design standards for all years shown in Table 5. Table 8 in Chapter IV showed the moving averages and slopes for the graphic illustrated in Figure 1 for the years 1979othrough 1984. The slope for the period 1980-1981 was 42.75; for 1981-1982 the slope was 4.75, and the slope for the period 1982-1983 was -35.5. These positive and negative slope values for design standards show that

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'1 .:1 I 173 a differen9e occurred in the number of citations issued .I for noncompl1ance for each of the reported two year I intervals. : These findings suggest that administrative changes impacted the number of citations issued for design standards. Figure 2 in Chapter IV showed a time sequence plot for years under study for performance standards 1 through It corresponds to the total of all performancestandards for all years shown in Table 5. Table 9 of .chapter IV showed the. moving averages and slopes for graphic representation illustrated in Figure 2 foi the years 1979 through 1984. The slope ,, value for the period 1980-1981 was 51.8; for 1981-1982 .. the slope value was 6.75, and for the period 1982-1983 the slope value was -32.5. These positive and negative slope values for performance standards show that a difference qccurred in the number of violations reported for instances of regulatory noncompliance during the periods investigated. Figure 1 in Chapter IV for design standards showed that the slope of the line is positive for standards 1: through 5 for the period 1979-1981. In 1981 the slope of the line begins to decline for standards 2, 3, and 5. besign standards 1 and 4 show positive slopes until 1982, before declining. I i

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r I I I i ,'I 174 2 in Chapter IV for performance standards showed slope of the line is positive for :: standards i:through 5 for the period 1979-1981. In 1981 the slope of the line begins to decline for standards 1 and 5. Performance standards 2, 3, and 4 show positive slopes until 1982, before declining. The: results of the time sequence plot In Chapter IV for indi:\ridual design and performance standards 1 through 5 for the years under study did not show any difference between design and performance standards. However, there was a big change in the overall number of citations for both design and performance standards. This change)suggest that both design and performance standards track one another in either a positive or negative fashion, and that other forces may determine their position shift. Conclusions The. :following conclusions drawn from this study are based on. the results of the analyses used in this investigation. The conclusions are: 1. The implementation of environmental regulatory policy of different political administrations effects change in

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175 enforcement practices concerning design and performance standards within OSMRE. This conclusion is supported by the paired movement of both design and performance standards in either a positive or negative direction at critical policy junctures. The number of citations for violations leveled off in 1981, and continued to decline throughout the period of study. The number of citations issued for regulatory noncompliance declined from 372 in 1981 to 213 in 1984. 2. Environmental regulations based on design standards appear to be adequate and not excessive to achieve performance standards. This conclusion is supported by the time series analysis finding that there was no difference in the number of citations for design and performance standards. That is, both design and performance standards tend to track each other. 3. Design and performance standards appear to complement each other in attaining compliance with surface coal mining environmental

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11 I ;, I ,, I 176 This conclusion is supported by the discussed in number two above. 4. Changes in design and performance standards are impacted by changes in administration and regulatory policy. This conclusion is supported by the finding discussed in number one above. 5. Environmental regulatory policy results from an administration's need to channel or alter the d'irection of economic activity it believes desirable to society. This conclusion is :.1. by the finding discussed in number one above. Discussion The' following discussion relates to conclusions arrived at as a result of conducting this study. overview of .Findings I Analysis of finding in Chapter IV reveal that there were no significant differences in the number of citations against violations of SMCRA regulations for the period 1979-1980 (159 and 207 respectively). This period ; I

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177 occurred during the transition of the Carter and Reagan administrations. Therefore, differences in of citations would not be expected to significantly increase. A significant increase in the number of citations issued for noncompliance did occur during the 1980-1981 period (207 and 372 respectively). This shift as explained occurred immediately after the change in administrations. It reflected the change in program implementati,on of the Reagan administration. This change, in which OSMRE personnel were well aware, was further aided by a national reorganization of OSMRE. Throughout the period OSMRE staff, particularly its inspection force were confused about how to interpret existing laws cast in so-called "Reaganism." That confusion, and anger of a disillusioned inspection may have aided ih the increased numbers of citations issued during the 1980-1981 period. It is during this period here the Reagan administration implemented the cartel theory of Baumel and Oates in Chapter II. During this period OSMRE and other federal regulatory agencies were serve a client. In this case it was state regulatory authorities. OSMRE went from a regional organizational structure to a client based support organization. I I

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178 period 1981-1982, citations (372 and 369 respectively) remained relatively stable due to the regulatory 'reform effort; change in philosophy regarding the regulatory process; implementation of the reorganization, and the perceived maintenance of the status-quo by inspection personnel. However, while citations were stable throughout the period, there was a general shift downward for citations issued for design and performance standard violations (design standard 4 and performance standard 1 were exceptions.). For the period 1982-1984, the issuance of citations (?69 and 213 respectively) for noncompliance steadily declined. The decline can be explained in the successful implementation of the Reagan administration policy regarding natural resources management. Essentially.; all goals of the new federalism were accomplished. The Reagan administration bolstered states rights, reduced federal involvement, changed from a design to based standard approach, and weakened authority of decentralized federal bureaus through centralized oversight activity. Environmental Regulatory Political Policy Discussion about these findings pertains to the environmental policies of the Carter and Reagan ,; I'

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179 I ,1 1 administratiions, which proved to be quite different from i one These differences can be realized in almost every area. However, concerning the subject under investigation, the administrations are most widely divergent in their approach to natural resources management, ,implementation of regulatory policy, distribution of goods, and philosophy for development and of social regulations. :carter and Reagan administrations had very different ideas about how to manage environmental resources. According to Paul Portney, the Reagan administration sought to limit federal presence and involvement in energy markets and natural resources d 0 0 t to a ra ;10n. It was believed that this policy would give rise to greater industrial growth and production, and improve 1environmental and natural resources management. In short, Reagan wanted less conservation I and protection of resources in favor of increased production,, industrial growth and business development. The means to achieve limited federal involvement in the regulation of natural resources was implemented with the transfer of regula.tory authority to the states: the adoption of generic regulations; the reduction of federal oversight, and the easement of federal standards to allow for "state program rules.112

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180 I In, ,osMRE program delegation to state regulatory authorities !accelerated under the Reagan Administration. Under the Carter administration, programs received both "final" and: "conditional" approvals before achieving primacy. These conditions were full of stipulations for states to satisfy before achieving full program authority. Reagan, on the other hand, attached far fewer conditions. In many instances, the Reagan administration waved or removed virtually all the conditions imposed by the Carter administration.3 The :reasons that permitted this change of hands delegating regulatory authority to states was the recasting of the "state window rule" of the Carter administration discussed at length in Chapters I and II. This allowed the Reagan administration to change the philosophy for evaluating state program submissions. That is, Reagan shifted from his predecessors regulatory policy of states adopting programs and regulations that were "as stringent as" the federal requirement, to a policy requiring that regulatory standards and programs be "as effective as" the federal counterpart. This broad based performance standard mandated that OSMRE give greater flexibility in comparing federal and state programs, thereby significantly increasing the number of '' state regulatory authorities that would receive primacy from the Secretary of the Interior to regulate Public Law

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' I 181 95-87.4 ,1\ action represents a shift from federalism to states r;ights. It allowed the states the option of I keeping old rules or adopting new more lenient regulations!. Not only did this action transfer greater authority to state agencies, it shifted the emphasis away from design standards favored by the environmentalist and ,I Carter administration to performance standards sought by the industry and Reagan administration. Perhaps the most debated and methodical administration effort to change from design 'to performance standards was OSMRE's revision of its 1979 regulations implementing SMCRA. The rationale for the adoption of performance rather than design originated with reports of the Regulatory Council and the National Academy of Science's National Research council. These were reports of the Carter Administration, which did not receive much I I attention the end of the carter administration.5 However, they served as a nucleus for the Reagan I administration to implement change from design to performance1based regulations. The reason for the Reagan administration's I preference for performance standards is reflected in an excerpt from the environmental impact statement analyzing the effect of proposed OSMRE rule changes: The current design regulations tend to create a relatively inflexible national set of

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'Jl 182 regulations. Because the acceptability of state regulations is based on the permanent regulations, this approach allows the Federal Government to maintain stringent control over State programs. Although this results in facilities and structures that meet national standards, it also results locally in s.ome facilities and structures1 being underdesigned while others overdesigned The draft final regulations, on the other hand, emphasize performance standards and general goals. The regulations are more adaptable to variations in climate, geology, topography, and other physical conditions. This technique of regulation maximizes State control of the specifics of each State's program (often referred to as State primacy) at the of national uniformity State regulations. It should be pointed out that as a result of this change in policy, the number of citations for violations leveled off and continued to decline throughout the period of study. The number of citations issued for regulatory n,oncompliance declined from 372 in 1981 to 213 in 1984. Investigating the regulatory approaches of the two administrations also provided the basis for studying differences in the regulatory ideologies of the two party system in the United States of America. Such a distinction is important to this study because it allows a means for evaluating the dynamics of the approach for implementing the design and performance based regulatory model.

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I' I 183 The comparison shown in Table 12 below represents the in approaches for implementing environmentctl regulatory policy. Table of Design and Performance Standards Design (Means) :rational Model Theoretical Based Specify Method Preventive ?os Stringent As Democratic Model F'ederalism Performance (Ends) Local Model Applied Based Specify Result Treatment As Effective As Republican Model states Rights It is apparent from the above table that a significant. difference in philosophy for implementing regulatory policy existed among the Carter and Reagan administrations. In fact, item 5 of the Regulatory Policy Guidelines developed by the Presidential Task Force, state that "Health, safety, and environmental regulations should address ends rather than means .. The performance based regulations of the Reagan administrati9n essentially returned to state regulatory control a generic rule making process which was formerly subject to scrutiny. However, in lieu of rigorous administrative management review, the Reagan

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I: 'I ,. administration implemented federal oversight. These audits not performance and quality based, but informational in nature. As might be expected, the use of limited 184 rulemaking pY state agencies raises a legitimate concern in support of increased federal oversight. The requirements of complex technological permitting and enforcement activities should require federal involvement until states have demonstrated expertise in the program area. Therefore, federal involvement should exist so that significant environmental impacts are not being misinterpreted in order to receive relatively unexamined, expedited treatment.7 As was pointed out in the OSMRE environmental impact statement referenced above: "This performance approach requires greater technical sophistication on the part of State and Federal employees to interpret and apply such regulations on a mine-by-mine basis, and by the public in perceiving if compliance occurs." 8 Given the above approach to regulatory policy, it is not surprising that OSMRE adopted a "hands off" approach toward state enforcement. However, the agency was forced to rethink its failure to require states to enforce the 'law in March 1983. Such action was taken in response to the National Wildlife Federation v. Watt litigation. The result of the settlement required that

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185 i I federal inspectors write citations when it became I apparent that state in'spectors failed to cite violation : 9 within ten <;lays. The Design :.:versus Performance Dilemma While findings were inconclusive, design standards were found to be only slightly more beneficial in achieving compliance with surface coal mining environmental mandates than their associated performance standards. Overall, design standards received more citations (34 percent) for noncompliance than performance standards (28 percent). This difference, though slight ,, is taken to' imply that design standards can minimize the instances of citations for noncompliance for associated performance standards. It may also indicate an over engineering .of the design standards. This supports regulatory "intervention theory that states that effective design produces desired results. Professor Thomas McGarity's10 framework for the approaches a legislature I. or an agency can take to regulate externalities provides support for., the above findings. The nature of regulatory goal is in enforceable statements which are media quality based (e.g., number of violations per year), technology based (e.g., best available technology or lowest achievable sediment loading), or a balance of the two. rn,,the media quality based approach, the

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, I 1 legislature: set a specific goal for the quality of the media (e.g., air, water, sediment), which ignores .I questions of feasibility. The agency then refines and 186 translates.the goal into a system capable of supporting the level dt pollutants that will met the goal, develops and applies a mathematical model that relates discharges from individual facilities to the media quality goal, and then apportions the allowable pollutants. In the technology:based approach, the legislature generally sets a broad goal]! that ignores impact on the quality of the media. The agency then categorizes the existing facilities according to production processes, nature of I :[I product, age, and other attributes, discerns the best in each categoby, judges whether the technology is transferabLe and finally sets the standard by prescribing a particular technology. Of course agencies can also take an in between, costs/benefit approach, which I requires knowledge of impacts, media quality, and techno! ogy. : The'advantages of the technology based approach include its.focus on realistic technological options, its political neutrality and low profile, and its ease of I implementatibn and enforcement. Design and performance standards addressed in the study indicate that they may complement each other in attaining compliance with surface coal mining

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, I :' 187 ::I environmental mandates. Crosstabulation tests, though not statistically significant, showed that design and associated 'performance standards received the same number of citation9 for noncompliance 38 percent of the time. This can be taken to represents the optimum condition where desig:rt and performance matched each other. In other words:, there was a balance between engineering criteria and performance outcomes 38 percent of the time for the standards under study. Such findings support OSMRE's approach to implementing the Act as endorsed by the U.S. District Court for tpe District of Columbia, which reviewed the initial regulatory program. In finding that the Congress intended explicit design standards the Court said: Many of the environmental problems created by su.'rface mining are better regulated through dsign criteria rather than performance standards, and Congress left the decision to manner of regulation to the Secretary. r With. legislative and judicial support, OSMRE structured the design standards in the final permanent I I regulations to allow coal operators flexibility where ., there were 4ifferent allowable methods for achieving the standards of the Act. Changes in design and performance standards were found, and discussed above, to have an impact as a result ,1, of changes in regulatory policies and administrations. There was a !:reduction of citations in 1981 through 1984

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: I I. (372 to respectively). It is interesting to note that there'was a shift in the number of violations for I;: both design and performance standards during the period, which suppqrts the theory of linkage between design and associated,perfor.mance standards. Thechange in administration, regulatory reform, and political ideology seemed to have played a role in I, the results. such findings are reflective of Bernstein's life cycle theory of agencies in which these agencies age from active advocates of generalized consumer interests to passive bonduits of the interest of organized 12 groups. Political Economics of Regulatory Policy The' :correction of market failures is the general I reason to ipvolve government in a primary private I' economy. Wh:en the market fails to align public and I private interest, the government can intervene to realign choices of consumers and producers. such is the case with OSMRE environmental externalities exist, which produce a gap between social and private costs. In an attempt to energy and environmental costs, the Reagan administration sought to concentrate on the change I resulting from higher prices. This activity confused the difference between average and marginal effects. In ::

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189 theory, "p?blic intervention need not replace the market, but it should influence the choices made at the margin, where the differences between public and private costs could swing a decision. 1113 With the 1980 election complete, the Reagan administration could have established an environmental 1 policy that was favorable to constituents and conservationist of the carter regime. Throughout the 1970s the cost of reducing pollution and regulating environmental concerns grew to more than $40 billion.14 Even with such great amounts of funds being spent on pollution, .it was believed that efforts of ... I agencies, namely the Environmental Protection Agency (EPA), at best marginally successful in reducing pollution. While costs to the public and industry were becoming ex.cessi ve. Crandall and Paul Portney suggest that the new administration would have been well advised to stress "a critical: reexamination of environmental policy rather 15 than regulatory rel1ef." Their rationale for this view is reflectea in the belief that citizens would view relief as an easement of regulatory and environmental standards, and thus as a threat to their health and safety. It should also be pointed out that the supply-side economics of the Reagan administration impacted

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190 environmental policy. Savings from regulating environmental programs represented savings for investment and development. Reduction of environmental spending could aid in supporting costs for building industrial facilities .. Remember that the EPA had implemented an extensive construction grants program. Money from which could be diverted to other program and interest of the Reagan administration. Given the above considerations, it might seem feasible for the Reagan administration to perhaps increase the staff of EPA, enhance capabilities of environmental agencies (OSMRE, etc.), increase ,, expenditure' for environmental monitoring and data collection, search for new market incentives to stimulate business in:terest, and reduce environmental costs without "I increasing environmental risks. On the contrary, the Reagan administration set out to the economy. It utilized a quasijudicial administrative process theory to channel and alter the direction of economic activity that it believed desirable society. Thereby, requiring regulatory agencies to satisfy elaborate rule making activity to constrain activity. President Reagan established a Task Force on Regulatory Relief, chaired by Vice President George Bush. The task force was to be the chief watch dog for the administration. At

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the same Reagan abolished both the Regulatory Council and the Council on Wage and Price Stability. 191 This action effectively moved the regulatory review staff of the Council on Wage and Price Stability to the Office of Management and Budget (OMB). Furthermore, the Regulatory :lmalysis Review Group that had been prominent in the Carter administration was not activated. As a replacement Reagan directed OMB to set up a detailed regulatory review function that supported the Paperwork Control Act of 1980.16 In ;};'ebruary 1981, Reagan signed Executive Order 12291, which replaced the order of President Carter. This action required White House oversight of regulatory actions by the Task Force on Regulatory Relief, and required de.tailed analysis of cost and benefits for all proposed regulations. In short, all regulatory actions under the president to decisions based on cost-benefit d t f:f t. t 17 an cos s-e ec 1veness cr1 er1a. The' result of the Reagan administration's policy on natural resources management is that Congress did create fede.ral regulations that replaced less stringent ones. In the case of OSMRE, it encouraged state regulatory authorities to acquire primacy for the purpose of regulating environmental programs by reducing program condition, and by providing financial incentives. In contrast, the Carter administration offered a coal

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192 leasing prqgram designed to improve the ability of the affected states to guide the timing, location, and amount of federalcoal to be leased.18 Carter's approach drew considerable fire from Reagan who achieved political advantage the alleged federal insensitivity of the federal to state concerns. Implications Regulatory policies not only adversely affect productivit:y growth, costs, and prices, but also convey benefits related to the objectives for which they were established. Eads and Fix state that evidence suggests that "the cbsts of many regulatory measures are more than covered by real benefits attributable to them, even though many. of these benefits are not captured in a national and product account statistics."19 The implication: .of this is that government regulation of the private sector may reduce productivity, but not enough to suggest that regulatory relief would reduce the inflation rate without a slowdown in real output and 20 In the case of national politics delegation and a political constituency appear necessary. The regulated industry must agree not only on the desirability of national legislation, but also on its content. Such

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! : 193 :: agreement may be hard to achieve. In such cases a set of national minimum standards may be established for which :i states may exceed. Another approach would be to use the "state window concept" developed by OSMRE that would allow for considerable freedom in the use of design standards, thus preserving state autonomy. Yet another approach wo.uld be for the establishment of federal standards with state monitoring and enforcement, thereby again maintaining state autonomy. Viewed from the perspective of regulatory relief, delegation of regulatory responsibilities has posed some problems. For example, the assigning of regulatory I, responsibility to states has not led to fewer inefficient rules, and interest groups continue to lobby for increased regulatory protection. The findings of this study have important implications for policy and program implementation considerations. "If environmental policy is to move from central standard setting to more efficient and effective market incentives, legislative constraints must be 21 removed." Opponents of the design based approach to achieving compliance with environmental mandates argue standards are ineffective because they increase cost for additional technical staff to review and approve design criteria; they are inflexible by not allowing the. operator unspecified options for achieving ;

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194 performance:; and, they are difficult to regulate uniformly nationwide. Proponents of the design based approach regulating environmental mandates argue that i design ensures compliance. And, if compliance is the reason for regulating, than design criteria approved for an operation will be more effective than the ., corresponding performance standard. While the research findings were not conclusive, there are notable outcomes from this research. In the past there :were no attempts to quantify regulations what were believed to be subjective in nature. This study attempted to show that it is not only possible, but necessary for proper development and implementation of regulatory mandates. A notable outcome on the subject determined in I the summary statistics that on average 8 notices of violation were issued during an inspection. Such information. is important because it allows OSMRE to effectively plan its penalty assessment conferences, and gives producers an indication of their performance in relation to; the industry as a whole. The conclusions of this study suggest that there may be some. transference from what was learned about regulating coal mining to other environmental mandates. While this study addresses the design and performance question on a

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i' ,I I ','I 195 ,j limited regional basis, it should perhaps be investigated for other areas throughout the nation. Recommendations Thefollowing recommendations are suggested as a result of identified in this study. The recommendations include: 1. Retain design and associated performance standards in future consideration for implementing environmental mandates. 2. Expand the scope of the study to include additional variables such as meteorological and topographical considerations. 3. Consider adoption of national standards for implementation of future environmental mandates on a selective show-cause basis. 4. Provide funding support to state regulatory agencies for the management of environmental resources. 5. Incentive based schemes should have performance standards that permit states to reach regulatory goals any way they wish.

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196 6. Promote performance standards because they permit decentralized administration and are economically efficient.

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197 Chapter Notes 1. Paul R. Portney, ed., Natural Resources and the Environment: The Reagan Approach, (Washington, D.C.: The Urban Institute Press, 1984), xi. 2. George c. Eads and Michael Fix, eds., The Reagan Regulatory Strategy: An Assessment (Washington, D.C.: The Urban Institute Press, 1984), 9. 3. Id. I 161. 4. On September 17, 1982, the u.s. District Court for the District of:Columbia upheld the new standard in Sierra Club y. Watt (D.D.C. No.81-3157, 18 ERC 1565). 5. "Regulatory Striptease--Watt Takes Aim at surface Mining Regulations," National Journal, May 30, 1981, p. 971. 6. U.S. Department of the Interior, Office of surface Mining, "Proposed Revisions to the Permanent Program Regulations Implementing Section 501(b) of the Surface Mining Control and Reclamation Act of 1977,11 Final Environment:al Statement, vol. I, p. II-7-8, January 1983. 7. Id. I 168. 8. Id., S-3. 9. Id., 170. 10. McGarity, Thomas, "Administrative Conference of the United States. Colloquium on Regulatory Design in Theorv and 1982-1983 (Washington, D.C.), p. 27. i: I , 11. In Re: ;surface M1n1ng L1t1gat1on, 452 F. Supp. 327 D. D. C. 1987 .. 12. Marvin H. Bernstein, Requlatina Business by Independent :commission (Princeton: Princeton University Press, 1955). 13. Portney, op. cit., 106-107. 14. Portney, op. cit., 56. 15. Id. 57.

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198 16. Eads and Fix, op. cit., 17-18. 17. Id., 23-24. 18. Portney, op. cit., p. 20. 19. Eads and Fix, op. cit., 79. 20. Id., 80 .. 21. Portney, op. cit., 64.

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I' j i 204 Starret, D1 C. "Fundamental Nonconvexities in the Theory of Journal of Economic Theory 4 180199. Stigler, "The Theory of Economic Regulation." Bell Journal of Economics and Management Science (1971): 22-50. : u.s. Cong. 'House. Rep. No. 218. 95th Cong. 1st Sess. 5760 o I u.s. Cong. :House. Rep. No. 493. 95th Cong. 1st Sess. U.S. Cong. Committee on Government Operations, Studyjof Federal Regulation. Volume I: The Regulatory Appointments Process. Washington, D.C.: Gover#1;nent Printing Office, 1977. u.s. Regulatory council. Regulating Coal Production. D.C.: Government Printing Office, 1981. I u.s. Surface Mining Control and Reclamation Act of 1977. Public 95-87. 30 U.S.C. 1201-1328. 't Williamson) Oliver E. Administrative Decision Making and Pricind; Externality and Compensation Analysis Ed. Julius Margolis. New York: National Bureau of Economic Research, 1970.