Federal Rulemaking
Improvements Needed to Monitoring and Evaluation of Rules Development as Well as to the Transparency of OMB Regulatory Reviews Gao ID: GAO-09-205 April 20, 2009Regulation is one of the principal tools that the government uses to implement public policy. As part of the rulemaking process federal agencies must comply with an increasing number of procedural and analytical requirements. GAO was asked to examine how broadly applicable rulemaking requirements cumulatively have affected (1) agencies' rulemaking processes, in particular including effects of requirements added to the process since 2003, and (2) transparency of the Office of Information and Regulatory Affairs (OIRA) regulatory review process. To address these objectives, GAO reviewed selected rules issued between January 2006 and May 2008 and associated dockets and also interviewed knowledgeable agency and OIRA officials.
The agencies GAO reviewed had little data on the time and resources used to comply with regulatory requirements making it difficult to evaluate the effects of these requirements on rulemaking. All the agencies set milestones for regulatory development. During our review, only the Department of Transportation (DOT) provided data showing that it tracked and reported on milestones, but EPA and FDA provided similar information in their agency comments. The agencies GAO reviewed also could provide little systematic data on the resources they used--such as staff hours, contract costs, and other expenses--in developing rules. DOT and SEC have attempted to identify staff time expended on individual rules but are encountering difficulties generating usable and reliable data. Despite the challenges they have encountered in attempting to track time and resources in rulemaking, agency officials identified potential benefits to the management of their processes if they had such information to evaluate. Systematic tracking and reporting by agencies on their schedules and milestones would also be consistent with internal control standards. Our review of 139 major rules including 16 case-study rules revealed that most triggered analytical requirements under the Paperwork Reduction Act (PRA), Regulatory Flexibility Act (RFA), and Executive Order 12866, but few other requirements. Agency officials reported that requirements added to the rulemaking process by the Office of Management and Budget (OMB) since 2003 sometimes required a learning period when first implemented, but their agencies either already performed the added requirements or recognized the revisions as best practices. The officials instead identified long-standing requirements of the PRA and the RFA as generally requiring a more significant investment of resources. Based on the limited information available, the average time needed to complete a rulemaking across our 16 case-study rules was about 4 years, with a range from about 1 year to nearly 14 years, but there was considerable variation among agencies and rules. OIRA's reviews of agencies' draft rules often resulted in changes. Of 12 case-study rules subject to OIRA review, 10 resulted in changes, about half of which included changes to the regulatory text. Agencies used various methods to document OIRA's reviews, which generally met disclosure requirements, but the transparency of this documentation could be improved. In particular, some prior issues persist, such as uneven attribution of changes made during the OIRA review period and differing interpretations regarding which changes are "substantive" and thus require documentation. Out of eight prior GAO recommendations to improve the transparency OIRA has implemented only one--to clarify information posted about meetings with outside parties regarding draft rules under OIRA review.
RecommendationsOur recommendations from this work are listed below with a Contact for more information. Status will change from "In process" to "Open," "Closed - implemented," or "Closed - not implemented" based on our follow up work.
Director: Team: Phone:GAO-09-205, Federal Rulemaking: Improvements Needed to Monitoring and Evaluation of Rules Development as Well as to the Transparency of OMB Regulatory Reviews
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Report to the Chairman, Committee on Oversight and Government Reform,
House of Representatives:
United States Government Accountability Office:
GAO:
April 2009:
Federal Rulemaking:
Improvements Needed to Monitoring and Evaluation of Rules Development
as Well as to the Transparency of OMB Regulatory Reviews:
GAO-09-205:
GAO Highlights:
Highlights of GAO-09-205, a report to the Chairman, Committee on
Oversight and Government Reform, House of Representatives.
Why GAO Did This Study:
Regulation is one of the principal tools that the government uses to
implement public policy. As part of the rulemaking process federal
agencies must comply with an increasing number of procedural and
analytical requirements. GAO was asked to examine how broadly
applicable rulemaking requirements cumulatively have affected (1)
agencies' rulemaking processes, in particular including effects of
requirements added to the process since 2003, and (2) transparency of
the Office of Information and Regulatory Affairs (OIRA) regulatory
review process. To address these objectives, GAO reviewed selected
rules issued between January 2006 and May 2008 and associated dockets
and also interviewed knowledgeable agency and OIRA officials.
What GAO Found:
The agencies GAO reviewed had little data on the time and resources
used to comply with regulatory requirements making it difficult to
evaluate the effects of these requirements on rulemaking. All the
agencies set milestones for regulatory development. During our review,
only the Department of Transportation (DOT) provided data showing that
it tracked and reported on milestones, but EPA and FDA provided similar
information in their agency comments. The agencies GAO reviewed also
could provide little systematic data on the resources they used”such as
staff hours, contract costs, and other expenses”in developing rules.
DOT and SEC have attempted to identify staff time expended on
individual rules but are encountering difficulties generating usable
and reliable data. Despite the challenges they have encountered in
attempting to track time and resources in rulemaking, agency officials
identified potential benefits to the management of their processes if
they had such information to evaluate. Systematic tracking and
reporting by agencies on their schedules and milestones would also be
consistent with internal control standards.
Our review of 139 major rules including 16 case-study rules revealed
that most triggered analytical requirements under the Paperwork
Reduction Act (PRA), Regulatory Flexibility Act (RFA), and Executive
Order 12866, but few other requirements. Agency officials reported that
requirements added to the rulemaking process by the Office of
Management and Budget (OMB) since 2003 sometimes required a learning
period when first implemented, but their agencies either already
performed the added requirements or recognized the revisions as best
practices. The officials instead identified long-standing requirements
of the PRA and the RFA as generally requiring a more significant
investment of resources. Based on the limited information available,
the average time needed to complete a rulemaking across our 16 case-
study rules was about 4 years, with a range from about 1 year to nearly
14 years, but there was considerable variation among agencies and
rules.
OIRA‘s reviews of agencies‘ draft rules often resulted in changes. Of
12 case-study rules subject to OIRA review, 10 resulted in changes,
about half of which included changes to the regulatory text. Agencies
used various methods to document OIRA‘s reviews, which generally met
disclosure requirements, but the transparency of this documentation
could be improved. In particular, some prior issues persist, such as
uneven attribution of changes made during the OIRA review period and
differing interpretations regarding which changes are ’substantive“ and
thus require documentation. Out of eight prior GAO recommendations to
improve the transparency OIRA has implemented only one”to clarify
information posted about meetings with outside parties regarding draft
rules under OIRA review.
What GAO Recommends:
GAO recommends that, consistent with internal control standards, the
Environmental Protection Agency (EPA), Food and Drug Administration
(FDA), and Securities and Exchange Commission (SEC) track and evaluate
actual performance versus targeted milestones for developing
significant rules to identify process improvement opportunities. GAO
also recommends that OMB should provide additional guidance to agencies
to improve transparency and documentation of the OIRA review process.
In comments on a draft of this report, SEC and OMB generally agreed
with our recommendations. EPA and FDA said they believe they already
have such tracking systems.
View [hyperlink, http://www.gao.gov/products/GAO-09-205] or key
components. For more information, contact Denise M. Fantone at (202)
512-6806 or Fantoned@gao.gov.
Contents:
Letter:
Results in Brief:
Background:
Agencies Have Limited Data on the Time and Resources Used to Address
Regulatory Requirements in Their Rulemaking Processes:
OIRA's Role in the Rulemaking Process Could Be More Transparent:
Conclusions:
Recommendations for Executive Action:
Agency Comments and Our Evaluation:
Appendix I: Summary of Common Regulatory Requirements:
Appendix II: Case Studies of 16 Selected Rules:
Appendix III: Examples of OIRA Review Documentation:
Appendix IV: Comments from the Office of Management and Budget:
Appendix V: Comments from the Securities and Exchange Commission:
Appendix VI: Comments from the Department of Health and Human Services,
Food and Drug Administration:
Appendix VII: Comments from the Environmental Protection Agency:
Appendix VIII: GAO Contact and Staff Acknowledgments:
Related GAO Products:
Tables:
Table 1: Rulemaking Requirements Generally Applicable to Major Rules:
Table 2: Classification of OIRA Review Changes to Case-Study Rules:
Table 3: Documentation of OIRA Reviews for Case-Study Rules:
Figures:
Figure 1: Basic Phases of Rulemaking Processes:
Figure 2: Rulemaking Timelines from Initiation to Final Rule for 16
Case Studies:
Figure 3: Percentage of 139 Major Rules That Triggered Rulemaking
Requirements:
Figure 4: Number of 16 Case-Study Rules That Triggered Rulemaking
Requirements:
Figure 5: NHTSA Summary Memorandum Identifying OIRA Review Changes:
Figure 6: FAA Standard Form to Indicate the Nature of OIRA Review
Changes:
Figure 7: EPA Use of Redline/Strikeout Method to Document OIRA Review
Changes:
Abbreviations:
ANPRM: Advance Notice of Proposed Rulemaking:
APA: Administrative Procedure Act:
CAA: Clean Air Act:
CAFE: corporate average fuel economy:
CDER: Center for Drug Evaluation and Research:
CF: Division of Corporation Finance:
CFSAN: Center for Food Safety and Applied Nutrition:
CRA: Congressional Review Act:
DOT: Department of Transportation:
EDGAR: Electronic Data Gathering, Analysis, and Retrieval System:
EDR: event data recorder:
EPA: Environmental Protection Agency:
FAA: Federal Aviation Administration:
FACA: Federal Advisory Committee Act:
FDA: Food and Drug Administration:
FRDTS: Federal Register Document Tracking System:
GACT: generally available control technologies or management practices:
ICI: Investment Company Institute:
IM: Division of Investment Management:
IQA: Information Quality Act:
LDR: Labor Distribution Reporting:
MACT: maximum achievable control technologies:
NEPA: National Environmental Policy Act:
NHTSA: National Highway Traffic Safety Administration:
NRA: Negotiated Rulemaking Act of 1990:
NTTAA: National Technology Transfer and Advancement Act:
OAR: Office of Air and Radiation:
OIRA: Office of Information and Regulatory Affairs:
OMB: Office of Management and Budget:
OST: Office of the Secretary of Transportation:
OW: Office of Water:
PRA: Paperwork Reduction Act:
RAPIDS: Rule and Policy Information Development System:
RFA: Regulatory Flexibility Act of 1980:
RIN: Regulation Identifier Number:
SBREFA: Small Business Regulatory Enforcement Fairness Act:
SDWA: Safe Drinking Water Act Amendments of 1996:
SEC: Securities and Exchange Commission:
UMRA: Unfunded Mandates Reform Act of 1995:
XBRLe: eXtensible Business Reporting Language:
[End of section]
United States Government Accountability Office:
Washington, DC 20548:
April 20, 2009:
The Honorable Edolphus Towns:
Chairman:
Committee on Oversight and Government Reform:
House of Representatives:
Dear Mr. Chairman:
Regulation is one of the principal tools that the government uses to
implement public policy. Federal regulations affect many aspects of
citizens' lives, whether addressing issues featured in the headlines of
the past year, such as the safety of the food supply and the health of
the housing and financial markets, or other long-standing goals such as
environmental protection and workplace and transportation accident
prevention. Regulations also help ensure the effective distribution of
funds under a range of programs including Medicare, Medicaid, Social
Security, agricultural support, and disaster assistance programs.
Underlying federal regulatory actions is the long-standing rulemaking
process established by the Administrative Procedure Act (APA).[Footnote
1]
As part of that process, Congresses and Presidents have required
agencies to comply with an increasing number of procedural and
analytical requirements prior to issuing a rule. Some requirements
apply only to cabinet departments and independent agencies, while
others also apply to independent regulatory agencies.[Footnote 2] The
goals of these requirements include promoting public participation in
rulemaking, reducing regulatory burdens, requiring more rigorous
regulatory analysis, and enhancing oversight of agencies' rulemaking.
As we have previously reported, these requirements entail a wide range
of procedural, consultative, and analytical actions on the part of the
agencies.[Footnote 3] For example, the Regulatory Flexibility Act (RFA)
requires agencies to examine the impact of their rules on small
entities. The Paperwork Reduction Act (PRA) requires agencies to
provide public notice, solicit comments, and request approval by the
Office of Management and Budget (OMB) before imposing new information
collection requirements. Executive Order 12866 directs agencies (other
than independent regulatory agencies) to assess costs and benefits of
available regulatory alternatives and to submit significant rules to
OMB's Office of Information and Regulatory Affairs (OIRA) for review
before they are published. (See appendix I for a summary of agencies'
responsibilities under broadly applicable regulatory requirements
relevant to the rules we reviewed for this report.)
In the past, Congress has asked us to review the implementation of
specific rulemaking requirements.[Footnote 4] For this report, you
asked us to examine how broadly applicable rulemaking requirements
cumulatively have affected (1) agencies' rulemaking processes and (2)
the transparency of the OIRA review process.[Footnote 5] Specifically,
you asked us to address the following aspects of the rulemaking
process:
* To the extent that information is available, how have changes in
requirements since 2003 affected the complexity, cost, and length of
the rulemaking process?
* How long do agencies take to issue rules?
* What requirements must an agency comply with to issue a major rule?
* What effect do agency interactions with OMB have on rulemaking?
To address the first and second questions, we primarily relied on
reviews of 16 case studies and interviews with officials from
regulatory agencies and OMB. We chose a case-study approach because
agency officials informed us during initial meetings that little
systematic information existed within agencies on the time, staffing,
and contracting costs associated with the development of individual
rules or the required analyses that support rulemakings. To identify
the rules for our case studies, we relied on our Federal Rules
Database.[Footnote 6] The database includes information such as the
type of rule (major or nonmajor),[Footnote 7] priority of the rule (for
example, whether it is a significant rule), and the publication date of
the rule. We drew a sample from final rules issued from January 2006
through May 2008, to increase the likelihood that the rules chosen were
affected by changes in regulatory requirements since 2003 and for which
the staff who were involved would be available to discuss the
rulemaking process.[Footnote 8] We randomly selected 16 major or other
significant final rules from executive branch agencies responsible for
health, safety, and environmental regulations and an independent
regulatory agency for purposes of comparison.[Footnote 9] We examined
two case-study rules each from the Department of Transportation's (DOT)
Federal Aviation Administration (FAA) and National Highway Traffic
Safety Administration (NHTSA), the Environmental Protection Agency's
(EPA) Office of Air and Radiation (OAR) and Office of Water (OW), the
Food and Drug Administration's (FDA) Center for Drug Evaluation and
Research (CDER) and Center for Food Safety and Applied Nutrition
(CFSAN), and the Securities and Exchange Commission's (SEC) Division of
Corporation Finance (CF) and Division of Investment Management (IM).
Although these agencies and offices are not equivalent
organizationally, we treated them as such for purposes of this report
to obtain comparable volumes of major and significant final rules in
our selection process. The agencies, offices, and sample of rules that
we assessed are not representative of all regulatory agencies and all
rules.
We reviewed the agencies' regulatory dockets for each rule selected
using a standardized data collection instrument and discussed what we
found with knowledgeable agency officials and OMB. We defined "changes
in requirements" as changes that OMB identified as significant in its
September 2003 revision of OMB Circular No. A-4,[Footnote 10] which
provides guidance on conducting regulatory analysis, and also OMB's
December 2004 Final Information Quality Bulletin for Peer Review.
[Footnote 11] These changes were implemented since our 2003 report on
OMB's role in the rulemaking process.[Footnote 12]
To answer the third question, we reviewed the statutory and executive
requirements broadly applicable to rulemaking. We also analyzed the 139
major rules, as defined by the Congressional Review Act (CRA), issued
from January 2006 through May 2008 to be consistent with the time
period used for selection of our case studies. To identify the rules,
we again relied on our Federal Rules Database. Based on our tests of
the data in the database, including confirming the quality control
steps used to ensure completeness of the database and tracing database
information back to source documents, we determined that these data
were sufficiently reliable for the purposes of this report. To identify
the requirements that were discussed and that were triggered by the
major rules, we reviewed the relevant GAO major rule report on the rule
and the published final rule.[Footnote 13]
To answer the fourth question, we analyzed the information collected
above and reviewed the dockets of the 12 selected case-study rules from
DOT, EPA, and FDA relying on the same basic methodology we previously
used to report on OMB's role in and affect on rulemaking--reviewing
documents from agencies' and OMB's dockets and interviewing officials
to obtain information about the regulatory review process for selected
rules. We chose these rules because all were subject to review by OMB/
OIRA under Executive Order 12866 and the transparency requirements
under the order. The other 4 case-study rules were not subject to OIRA
review because SEC is an independent regulatory agency. As part of the
fourth question, you also asked us to review the status of GAO
recommendations from GAO-03-929 on improving the transparency of OIRA's
regulatory review process. To report on the status of those
recommendations, we relied on information from our annual update of
open recommendations and interviews with OMB officials.
For reporting purposes, we discuss our findings on the first three
questions in objective one--the effects of rulemaking requirements on
agencies' rulemaking processes, including the complexity, cost, and
length of their processes. Our findings related to the fourth question
and updated findings from our 2003 report are discussed in objective
two--the transparency of OMB's role in the regulatory review process.
We conducted our review from August 2008 through February 2009 in
accordance with generally accepted government auditing standards. Those
standards require that we plan and perform the audit to obtain
sufficient, appropriate evidence to provide a reasonable basis for our
findings and conclusions based on our audit objectives. We believe that
the evidence obtained provides a reasonable basis for our findings and
conclusions based on our audit objectives.
Results in Brief:
During the course of our review, the case-study agencies provided
little data on the time and resources required to develop rules or
comply with broadly applicable regulatory requirements, making it
difficult to evaluate the effects of the requirements on the rulemaking
process. During our review, we found that all the agencies set
milestones for regulatory development, but only DOT provided data that
showed it routinely tracked these milestones. In comments on our draft
report, EPA and FDA subsequently provided some documentation and data
that showed that these agencies also routinely tracked milestones.
Based on the limited information available at the time of our review,
the average time needed to complete a rulemaking across our 16 case-
study rules was about 4 years, with a range from about 1 year to nearly
14 years, but there was considerable variation among agencies and
rules. The agencies also could provide little systematic data on the
resources they use, such as staff hours, contract costs, and other
expenses, in developing individual rulemakings. DOT and SEC have
attempted to identify staff time expended on individual rules but are
encountering difficulties generating usable and reliable data. Despite
the challenges they have encountered in attempting to track time and
resources in rulemaking, agency officials identified potential benefits
to the management of their processes if they had such information.
Systematic tracking and reporting by agencies on their schedules and
milestones would also be consistent with internal control standards.
When issuing major rules, all agencies must comply with broadly
applicable statutory requirements, and agencies other than independent
regulatory agencies are also subject to requirements in executive
orders. However, an agency may not need to include specific analyses if
the substance of the rule or exceptions and thresholds in the
requirement lead the agency to determine that a specific rule did not
trigger the requirement. Our review of 139 major rules and 16 case-
study rules showed that most triggered analytical requirements under
the PRA, the RFA, and (except for independent regulatory agencies such
as SEC) Executive Order 12866, but few other analytical requirements.
Agency officials reported that requirements added to the rulemaking
process by OMB since 2003 that include more rigorous assessment of
economically significant rules sometimes involved a learning period
when first implemented, but their agencies either already performed the
added requirements or recognized the revisions as best practices. The
officials instead identified the long-standing requirements of the PRA
and the RFA as generally requiring a more significant investment of
resources.
OIRA's reviews of agencies' draft rules often resulted in changes to
the rules, but there are opportunities to improve the transparency of
OIRA's reviews. OIRA reviewed 12 of our 16 case-study rules under
Executive Order 12866; SEC's rules are not reviewed by OIRA. OIRA's
reviews resulted in changes to 10 of the 12 rules. Further, we
determined that changes to 5 of the rules (1 DOT, 3 EPA, and 1 FDA)
were significant in that they included changes to the regulatory text
of the rule. For example, one change to the draft text of a FDA rule on
dietary supplements reduced the requirement to save reserve samples
from 3 years to 2 years. Agencies used varying methods to document
OIRA's review of their draft rules, and their documentation generally
met the executive order's requirements to disclose materials they
provided to OIRA and substantive changes made during OIRA's review but
could be improved for greater transparency. In particular, there was
uneven attribution of the sources of changes made during the OIRA
review period and differing interpretations regarding which changes are
"substantive" and thus require documentation. We previously made eight
recommendations to improve the transparency of the OIRA regulatory
review process, but OIRA implemented only one of those recommendations,
that is, to clarify information that OIRA posts about meetings with
nonfederal parties regarding draft rules under OIRA review. OIRA did
not implement the remaining seven recommendations, for example to apply
transparency requirements to both formal and informal OIRA review
periods and to encourage agencies to use best practice methods to
document changes made to rules after submission to OIRA.
To be consistent with internal controls for information in managing
agency operations, we recommend that for significant rules FDA and SEC
routinely track major milestones in regulatory development and report
internally and externally when major milestones are reached against
established targets. EPA, FDA, and SEC should also evaluate actual
performance versus the targeted milestones and when they are different,
determine why. If the administration retains Executive Order 12866 or
establishes similar requirements, we recommend that to improve
transparency of the review process OIRA should (1) instruct agencies to
clearly state in final rules whether the agencies made substantive
changes as a result of the OIRA reviews, (2) define what types of
changes made as a result of the OIRA review process are "substantive"
and need to be publicly identified, (3) direct agencies to clearly
attribute those changes made at the suggestion or recommendation of
OIRA, and (4) standardize how agencies label documentation of these
changes in public rulemaking dockets.
SEC, EPA, FDA, and OMB commented on the recommendations. With regard to
the two recommendations directed to the rulemaking agencies, SEC stated
that the Commission will consider our recommendations, and both EPA and
FDA provided new information on their tracking systems and data. We
note, however, that we had requested this information during our review
to address our second research question, but the information was not
forthcoming. Also, they did not provide this information at the
conclusion of our review either in response to our statements of facts
to the agencies or at our exit conference with the agencies. Because
this information was not provided at the time of our review, we did not
have the opportunity to discuss how the information is used, whether it
is useful, and, most importantly, if it could be used to respond to our
report objectives. We did not audit the new information provided
because of an approaching deadline for OMB to provide recommendations
to the President for a new executive order on federal agency regulatory
review. With regard to our four recommendations to OMB, the agency
stated that these recommendations have merit and warrant further
consideration. In particular, OMB stated that it will give full
consideration to our recommendations as the agency finalizes its own
recommendations to the President for a new executive order on
regulatory review.
Background:
Regulatory agencies have authority and responsibility for developing
and issuing regulations. The basic process by which all federal
agencies develop and issue regulations is spelled out in the APA.
[Footnote 14] This act establishes procedures and broadly applicable
federal requirements for informal rulemaking, also known as notice and
comment rulemaking.[Footnote 15] Among other things, the APA generally
requires agencies to publish a notice of proposed rulemaking in the
Federal Register.[Footnote 16] After giving interested persons an
opportunity to comment on the proposed rule by providing "written data,
views, or arguments," the agency may then publish the final rule. In
addition to the requirements under the APA, an agency may also need to
comply with requirements imposed by other statutes. The APA has been in
place for more than 60 years, but most other statutory requirements on
rulemaking have been imposed more recently.
OMB is responsible for the coordinated review of agency rulemaking to
ensure that regulations are consistent with applicable law, the
President's priorities, and the principles set forth in executive
orders, and that decisions made by one agency do not conflict with the
policies or actions taken or planned by another agency. OMB also
provides guidance to agencies. Some form of centralized review of rules
by the Executive Office of the President has existed for over 30 years.
OIRA was created within OMB by the PRA and given substantive
responsibilities for reviewing and approving agencies' information
collection requests. Since 1981, various executive orders also gave
OIRA substantive regulatory review responsibilities. OIRA's current
regulatory review responsibilities are detailed in Executive Order
12866 related to regulatory planning and review. The order states that
OIRA is to be the "repository of expertise concerning regulatory
issues."
Under Executive Order 12866, OIRA reviews agencies' significant
regulatory actions and is generally required to complete its review
within 90 days after an agency formally submits a draft regulation.
Each agency provides OIRA a list of its planned regulatory actions,
indicating those that the agency believes are significant. After
receipt of this list, the Administrator of OIRA may also notify the
agency that OIRA has determined that a planned regulation is a
significant regulatory action within the meaning of the Executive
Order.[Footnote 17] The order defines significant regulatory actions as
those that are likely to result in a rule that may:
1. have an annual effect on the economy of $100 million or more or
adversely affect in a material way the economy, a sector of the
economy, productivity, competition, jobs, the environment, public
health or safety, or State, local, or tribal governments or
communities;
2. create a serious inconsistency or otherwise interfere with an action
taken or planned by another agency;
3. materially alter the budgetary impact of entitlements, grants, user
fees, or loan programs or the rights and obligations of recipients
thereof; or:
4. raise novel legal or policy issues arising out of legal mandates,
the President's priorities, or the principles set forth in Executive
Order 12866.
The order further directs executive branch agencies to conduct a
regulatory analysis for economically significant regulations (generally
those rules that have an annual effect on the economy of $100 million
or more).[Footnote 18] OIRA historical data show that since 1994 (the
first full calendar year that Executive Order 12866 was in effect),
approximately 15 percent of the rules that OIRA reviewed were
economically significant. For other significant rules, the order
requires agencies to provide an assessment of the potential costs and
benefits of the rule. The executive order also contains several
transparency provisions that require both OIRA and agencies to disclose
certain information about the OIRA review process. For example, the
order requires agencies to publicly identify substantive changes made
to the draft at OIRA's suggestion, and it requires OIRA to disclose
information about communications between OIRA and persons not employed
by the executive branch pertinent to rules under OIRA's review. The
transparency requirements are discussed in more detail later in this
report.
In addition to the responsibilities that OIRA exercises, OMB also
provides guidance to agencies on regulatory requirements. In 2003, for
example, OMB issued revised analytical guidelines for agencies to use
in assessing the regulatory impact of economically significant
regulations in OMB Circular No. A-4.[Footnote 19] In issuing the
guidelines, OMB cited several significant changes from its previous
economic guidance. They included placing a greater emphasis on cost-
effectiveness analysis, using formal probability analysis to assess
uncertainty for rules with more than a billion-dollar annual impact on
the economy, and conducting a more systematic evaluation of qualitative
as well as quantified benefits and costs.[Footnote 20] In addition,
OMB's guidelines recommend that agencies estimate net benefits using a
range of discount rates instead of a single discount rate.[Footnote 21]
In 2004, OMB issued its Final Information Quality Bulletin for Peer
Review, which established governmentwide guidance for conducting peer
reviews of government science documents. The bulletin directs agencies,
including independent regulatory agencies, to subject "influential
scientific information," such as original data and formal analytic
models used in regulatory impact assessments, to an appropriate level
of peer review.
New administrations generally reexamine the rulemaking process and
OMB's role in the process. Most recently, in a memorandum of January
30, 2009, President Obama directed the Director of OMB, in consultation
with representatives of regulatory agencies, to produce within 100 days
a set of recommendations for a new executive order on federal
regulatory review.[Footnote 22] The memorandum stated that the
recommendations should offer suggestions for, among other things, the
relationship between OIRA and the agencies; provide guidance on
disclosure and transparency; encourage public participation in agency
regulatory processes; offer suggestions on the role of cost-benefit
analysis; address the role of distributional considerations, fairness,
and concern for the interests of future generations; identify methods
of ensuring that regulatory review does not produce undue delay;
clarify the role of the behavioral sciences in formulating regulatory
policy; and identify the best tools for achieving public goals through
the regulatory process.
Agencies Have Limited Data on the Time and Resources Used to Address
Regulatory Requirements in Their Rulemaking Processes:
All agencies' rulemaking processes share three basic steps or phases:
initiation of rulemaking actions, development of proposed rules, and
development of final rules. Built into agencies' rulemaking processes
are opportunities for internal and external deliberations and reviews.
Figure 1 provides an overview of these regulatory development steps.
Figure 1: Basic Phases of Rulemaking Processes:
[Refer to PDF for image: illustration]
Initiate action:
Source of rule initiation:
Identify action: Sources of rule initiation:
* External;
* Internal;
* Statutory.
Prioritization, planning, and approval:
* Manage, prioritize, plan, and approve rulemaking;
* Determine anticipated issues;
* Ensure stakeholder input;
* Outline plan for development.
Develop proposed action:
Identify issues and gather data:
* Determine process/work groups;
* Determine needed analysis;
* Optional agency procedures (e.g., ANPRM).
Develop preamble and rule language:
* Statutory and executive order requirements;
* Initial internal and external agency deliberation.
Internal and external agency review:
* Develop and select options;
* Internal and external deliberation and approval processes.
Publish proposed rule:
* Sign and publish notice of proposed rule in Federal Register;
* Stakeholder outreach.
Develop final action:
Receive and review comment:
* Manage public comments on proposed rule;
* Review and consider public comments.
Finalize preamble and rule language:
* Statutory and executive order requirements;
* Optional agency procedures (e.g., supplemental proposal).
Internal and external agency review:
* Internal and external deliberation and approval processes.
Publish final rule:
* Publish final rules in Federal Register;
* Stakeholder outreach.
Source: EPA.
Note: ANPRM is Advance Notice of Proposed Rulemaking.
[End of figure]
During initiation, agency officials identify issues that may
potentially result in a rulemaking. Potential rulemakings may result
from statutory requirements or issues identified through external
sources (for example, public hearings or petitions from the regulated
community) or internal sources (for example, management agendas).
During this phase, agencies gather information that would allow them to
determine whether a rulemaking is needed and to identify potential
regulatory options. At this time, the agencies will also identify the
resources needed for the rulemaking and may draft concept documents to
present to agency management that summarize the issues, present the
regulatory options, and identify needed resources.[Footnote 23] Agency
officials reported that this initial work on a rule is of indeterminate
length and sometimes constitutes a major portion of the process. While
the point at which a rulemaking officially commences may vary by agency
and rule, as a general matter, rulemaking begins only after management
receives, reviews, and approves the concept document.[Footnote 24] At
the latest, according to OIRA, the rulemaking will officially commence
when agency officials assign a Regulation Identifier Number (RIN) for
the proposed rule.
The second phase of the rulemaking process starts when an agency begins
developing the proposed rule. During this phase, an agency will draft
the rule, including the preamble (which is the portion of the rule that
informs the public of the supporting reasons and purpose of the final
rule) and the rule language. The agency will also begin to address
analytical and procedural requirements in this phase. Agency officials
pointed out that these initial analyses form the basis for other
analyses completed later in the process, including those prepared to
address statutory and executive order requirements. Agency officials
stated that development of a rule is a coordinated effort, with
economists, lawyers, and policy and subject matter experts contributing
to individual rulemakings. Also built into this phase are opportunities
for internal and external deliberations and reviews, including official
management approval. OIRA may be involved informally at any point
during the process. For each rule identified by the agency as, or
determined by the Administrator of OIRA to be, a significant regulatory
action, the agency submits the rule to OIRA for formal review--
including the coordination of interagency review. After OIRA completes
its review and the agency incorporates resulting changes, the agency
publishes the proposed rule in the Federal Register for public
comments.
In the third phase of the process, the development of the final rule,
the agency repeats, as needed, the steps used during the development of
the proposed rule. Once the comment period closes, the agency responds
to the comments either by modifying the rule to incorporate the
comments or by addressing the comments in the final rule. This phase
also includes opportunities for internal and external review. Again, if
the agency determines that the rule is significant or at OIRA's
request, the agency submits the rule to OIRA for review before
publication of the final rule. In the event that OIRA's review results
in a change to the final rule, the agency will revise the rule before
publishing it in the Federal Register. Officials noted that addressing
analytical and procedural requirements is faster with a draft of the
proposed rule in hand, but analyses may need to be modified if public
comments change the rule substantially. The final rule as published in
the Federal Register includes the date that the rule becomes effective.
While the agencies share these basic process steps, there are inter-and
intra-agency variations in the management of the rulemaking process.
For example, EPA's OW generally designates one rulemaking team member
as the point of contact through the development of the rule. Officials
at FDA stated that their point of contact may change during the course
of the rulemaking based on the rule's development phase; as the office
working on the rule within the agency changes so does the point of
contact. Agencies also have differing numbers of required internal
reviews, and they may complete tasks within a phase in a different
sequence.
Agencies Identified Milestones for Regulatory Development:
Officials we met with described agency-specific processes for
regulatory development and addressing the procedural and analytical
requirements that applied to their respective rulemakings. These
included identification of "milestones," significant events or stages
in the agency-specific process. Officials also identified some
milestones common to the rulemaking process that apply across the
federal government, such as publishing the proposed and final rule. In
addition, officials at the agencies we spoke with identified the
following agency-specific internal milestones in their regulatory
development process.
* DOT officials at FAA and NHTSA identified common milestones,
including development of a draft concept, management reviews within
administrations, review by the Secretary's Office, and external review.
* EPA identified 14 milestones for nonroutine rulemakings from
initiation to publication of the proposed rule, including assigning a
working group, development and approval of an Analytic Blueprint and
management reviews.[Footnote 25] After the proposed rule is published,
EPA tracks an additional 4 to 5 milestones to develop the final rule.
* FDA officials emphasized that regulatory development is similar
throughout FDA. CFSAN and CDER used milestones such as assigning a
working group, drafting, and conducting analyses and management
clearances.
* SEC officials stated that CF and IM identified as common milestones
generation (typically including public input), drafting, and approval
by the commissioners.
During the course of our review, only DOT provided us with data that
showed it routinely tracked these milestones. In comments on our draft
report, EPA and FDA subsequently provided some documentation and data
that showed that these agencies also routinely tracked milestones.
However, we had requested this information during our review to address
our second research question, but the information was not forthcoming.
Also, they did not provide this information at the conclusion of our
review either in response to our statements of facts to the agencies or
at our exit conference with the agencies. Because this information was
not provided at the time of our review, we did not have the opportunity
to discuss how the information is used, whether it is useful, and, most
importantly, if it could be used to respond to our report objectives.
We did not audit the new information provided because of an approaching
deadline for OMB to provide recommendations to the President for a new
executive order on federal agency regulatory review.
DOT sets target dates for major milestones, such as when the rule is
scheduled to move to OIRA for review. The agency uses the Rulemaking
Management System to monitor both the target and actual dates for these
major milestones in the development of rules for internal management
decision-making purposes. This allows DOT regulatory development staff
and managers to identify a rule's status and determine if the rule is
on or behind schedule, based on target dates. Some of the information
captured in the system includes the stage of the rulemaking (proposed
rule, final rule), a schedule of milestones with target and actual
dates, and an explanation for any delay. For significant regulatory
actions, DOT makes some milestone tracking information publicly
available through the Report on DOT Significant Rulemakings available
on the agency's web site. Among the objectives that DOT officials
attributed to their tracking and reporting efforts were that they
provide opportunities to assess their schedule estimates and improve
internal and external accountability. An official noted, for example,
that tracking and posting the information helped the agency identify
best estimates of schedules.
EPA uses an internal tracking database--Rule and Policy Information and
Development System (RAPIDS)--that contains both projected and actual
dates for meeting major milestones in rule development. This database
provides background information and a timetable on each stage of the
rulemaking, including a schedule of the milestones with both projected
and actual dates. EPA uses the data in RAPIDS to develop management
reports used by EPA managers and executives as a planning and tracking
tool. The reports also serve as a tool to improve the regulatory
development process. EPA makes this tracking information available to
the public on a quarterly basis.
FDA also tracks regulatory milestones through its Federal Register
Document Tracking System (FRDTS). FRDTS is an internal, Web-based
integrated system that allows FDA to track the preparation and approval
process of documents to be submitted to the Federal Register for
publication. Tracking the rulemaking approval process is done for all
rulemakings, however the system only tracks milestones for the latter
stages of the rulemaking's development and clearing process. FDA
management uses the information in FRDTS as one tool in the management
of its regulatory development process.
SEC did not have such systematic tracking and reporting of its
scheduled and actual regulatory milestones. However, implementing such
a system is consistent with standards for internal control.[Footnote
26] According to the standards, for an agency to run and control its
operations, it must have relevant, reliable information relating to
external as well as internal events. Moreover, an acknowledged expert
on the regulatory process has stated that a myriad of formal
requirements and political expectations requires sophisticated
management of the rulemaking process.[Footnote 27] Among other
functional requirements, he noted that scheduling and budgeting for
rulemaking are useful tools for officials to manage regulation
development and control the resources needed to complete a rule.
[Footnote 28] Monitoring and assessing actual performance against
planned targets, identifying reasons for missed targets, and adjusting
resource requirements to fit conditions based on actual experience are
among the ways that agencies could use their rulemaking plans and
milestones as management control and accountability tools.
Length of Time Required to Issue a Rule Varies by Agency and Rule with
Few Common Characteristics:
We found variation in length of time required for the development and
issuance of final rules both within and among agencies. In general,
agency officials agreed that the publication of the final rule marked
the end of the rulemaking process.[Footnote 29] In contrast,
identifying when a rulemaking begins is less definite. All agencies
identified milestones that marked the initiation of a rulemaking in
their agencies, but also asserted that agency staff sometimes worked on
certain issues related to the rulemaking years before commencement of
the actual rulemaking, either as part of earlier, related rulemakings
or policy development for the rule. Based on agency milestones,
officials we spoke with at three of the four agencies provided
estimates for the length of time for an average rulemaking. FDA
officials estimated that a straightforward rulemaking may take up to 3½
to nearly 4 years from initiation to final publication. DOT officials
estimated approximately 1-½ years from the end of the public comment
period following the publication of the proposed rule to final rule.
SEC officials estimated that some rules are completed within 6 months
of publication of a proposed rule to final rule. EPA officials declined
to provide an estimate for an average rulemaking at their agency,
stating that there is too much variation. However, some agency
officials emphasized that the average time required to issue any given
rule could vary from these estimates, as illustrated by the 16 case-
study rules we reviewed (see figure 2).
Figure 2: Rulemaking Timelines from Initiation to Final Rule for 16
Case Studies:
[Refer to PDF for image: stacked horizontal bar chart]
Case Study: DOT: Air tour safety;
Initiated action to publication of proposed rule (Phase I and Phase II
of rulemaking)[B]: 1.75 years;
Publication of proposed rule to publication of final rule (Phase III of
rulemaking): 3.33 years;
Total: 5.08 years.
Case Study: DOT: Human space flight requirements;
Initiated action to publication of proposed rule (Phase I and Phase II
of rulemaking)[B]: 0.92 years;
Publication of proposed rule to publication of final rule (Phase III of
rulemaking): 1 years;
Total: 1.92 years.
Case Study: DOT: Event data recorders;
Initiated action to publication of proposed rule (Phase I and Phase II
of rulemaking)[B]: 1.67 years;
Publication of proposed rule to publication of final rule (Phase III of
rulemaking): 2.17 years;
Total: 2.84 years.
Case Study: DOT: Fuel economy-light trucks;
Initiated action to publication of proposed rule (Phase I and Phase II
of rulemaking)[B]: 1.67 years;
Publication of proposed rule to publication of final rule (Phase III of
rulemaking): 0.67 years;
Total: 2.34 years.
Case Study: EPA: Ethylene oxide emissions;
Initiated action to publication of proposed rule (Phase I and Phase II
of rulemaking)[B]: 3.67 years;
Publication of proposed rule to publication of final rule (Phase III of
rulemaking): 0.5 years;
Total: 4.17 years.
Case Study: EPA: Hazardous air pollutants;
Initiated action to publication of proposed rule (Phase I and Phase II
of rulemaking)[B]: 4.33 years;
Publication of proposed rule to publication of final rule (Phase III of
rulemaking): 0.5 years;
Total: 4.83 years.
Case Study: EPA: Disinfection byproducts 2;
Initiated action to publication of proposed rule (Phase I and Phase II
of rulemaking)[B]: 4 years;
Publication of proposed rule to publication of final rule (Phase III of
rulemaking): 2.42 years;
Total: 6.42 years.
Case Study: EPA: Surface water treatment 2;
Initiated action to publication of proposed rule (Phase I and Phase II
of rulemaking)[B]: 4 years;
Publication of proposed rule to publication of final rule (Phase III of
rulemaking): 2.42 years;
Total: 6.42 years.
Case Study: FDA: Dietary supplements;
Initiated action to publication of proposed rule (Phase I and Phase II
of rulemaking)[B]: 6.08 years;
Publication of proposed rule to publication of final rule (Phase III of
rulemaking): 4.25 years;
Total: 10.33 years.
Case Study: FDA: Lean nutrient claims;
Initiated action to publication of proposed rule (Phase I and Phase II
of rulemaking)[B]: 1.83 years;
Publication of proposed rule to publication of final rule (Phase III of
rulemaking): 1.17 years;
Total: 3.0 years.
Case Study: FDA: Ozone depleting substances[A];
Initiated action to publication of proposed rule (Phase I and Phase II
of rulemaking)[B]: 0.92 years;
Publication of proposed rule to publication of final rule (Phase III of
rulemaking): 0 years;
Total: 0.92 years.
Case Study: FDA: Physician labeling;
Initiated action to publication of proposed rule (Phase I and Phase II
of rulemaking)[B]: 8.83 years;
Publication of proposed rule to publication of final rule (Phase III of
rulemaking): 5.08 years;
Total: 5.91 years.
Case Study: SEC: Electronic shareholder forums;
Initiated action to publication of proposed rule (Phase I and Phase II
of rulemaking)[B]: 0.25 years;
Publication of proposed rule to publication of final rule (Phase III of
rulemaking): 0.42 years;
Total: 0.67 years.
Case Study: SEC: Internet proxies;
Initiated action to publication of proposed rule (Phase I and Phase II
of rulemaking)[B]: 0.75 years;
Publication of proposed rule to publication of final rule (Phase III of
rulemaking): 1.08 years;
Total: 1.83 years.
Case Study: SEC: Mutual fund data reporting;
Initiated action to publication of proposed rule (Phase I and Phase II
of rulemaking)[B]: 0.67 years;
Publication of proposed rule to publication of final rule (Phase III of
rulemaking): 0.42 years;
Total: 1.09 years.
Case Study: SEC: Mutual fund redemption fees;
Initiated action to publication of proposed rule (Phase I and Phase II
of rulemaking)[B]: 1 years;
Publication of proposed rule to publication of final rule (Phase III of
rulemaking): 0.58 years;
Total: 1.58 years.
Source: GAO analysis.
[A] FDA's Ozone Depleting Substances was a direct final rule, and as
such, FDA published a proposed and final rule on the same day.
[B] Initiation was based on agencies' best estimates of when they
initiated the rules. Also, because of the ambiguity in the early stages
of rulemaking--only the end of Phase II of rulemaking, publication of a
proposed rule, has a clearly defined milestone--we did not distinguish
between the first two phases of rulemaking.
[End of figure]
Using two rulemaking milestones common among federal agencies--
publication in the Federal Register of the proposed rule and
publication of the final rule--the length of time for our 16 case-study
rules ranged from approximately half a year (SEC's Mutual Fund Data
Reporting rule) to nearly 5 years (FDA's Physician Labeling rule). As
an illustration of the time investment in regulatory development--as
measured from agency-specific internal milestones--the entire
rulemaking process for the same two rules ranged from slightly over 1
year to 13 years, respectively. Overall the average time from
initiation to final publication of a rule for our 16 case-study rules
was just over 4 years, with the average time for the 4 SEC rules just
over 1 year, the DOT rules taking an average of just over 3 years, and
the EPA and FDA rules taking longer than the overall average at 5-1/2
and 7 years, respectively. For most of our case study rules, the time
to develop the proposed rule was at least as much as the time between
publication of the proposed and final rules. We also found that the
complexity or magnitude of a major rule also did not explain all or
most variation, as some case-study rules that were not major took
nearly as long or longer to be published. (For more detailed
information about the timelines for each of the case-study rules, see
appendix II.)
During our review we identified multiple factors that influence the
time needed to issue a rule, including:
* the complexity of the issues addressed by the rulemakings;
* prioritizations set by agency management that can change when other
priorities, such as new congressional mandates, arise; and:
* the amount of internal and external review required at the different
phases of the rulemaking process.
Some agency officials said that rulemaking for complex topics or for
rules that raise new issues typically takes longer to complete than for
routine rules. Rules that are a management priority or have a statutory
or judicial deadline may move more quickly through the rulemaking
process, while other rules may be set aside as agency staff members
work on other things. Also, rules that require OIRA and interagency
review typically need additional time for the external review process
and, according to some agency officials, trigger additional internal
scrutiny. The priorities and the pace of rulemaking have also been
affected during transitions in presidential administrations. Since
1948, the amount of rulemaking activity has increased in the last
months of every outgoing administration when the party in control of
the White House changed. During every recent transition involving a
change in the party controlling the White House since 1981, this has
been followed by the incoming administration recommending that agencies
delay effective dates for reconsideration of rules published at the end
of the previous administration.[Footnote 30]
Agencies Have Limited Information on Resources Used in Regulatory
Development:
There is little rule-specific tracking of resources used in regulatory
development. Agency officials were unable to identify the staffing or
other resources (such as contracting costs associated with preparing
expert analyses or convening public meetings) for regulatory
development for all rules or for the limited number of case-study
rules. As noted above, internal control standards call for relevant,
reliable and timely information. Regarding staffing, such management
information was not available from agencies we audited. Officials were
able to generally describe how they staff rulemaking, noting that
rulemaking is a coordinated effort, with many individuals from
throughout the agency contributing to specific rulemakings. However,
none of the agencies routinely tracked staff time associated with
rulemakings or were able to provide records of staff time devoted to
case-study rulemakings or supporting analyses. Moreover, agency
officials stated that because many staff within the agencies with
different job functions--attorneys, economists, programs staff, as well
as regulatory developers--contribute to individual rules, they could
not provide after-the-fact estimates.
However, based on their experiences, the agencies' officials identified
ways they have explored using existing agency information for purposes
of improving management of the rulemaking process. For example,
according to a DOT official responsible for rulemaking, having reliable
data on how long it takes to publish a proposed rule and identifying
where the time is spent is critically important for reengineering the
process. The official also pointed out that while the agency knows that
the time of some support staff is all devoted to rulemaking, there is
no data for tracking core program offices' involvement in technical and
lead roles in the rulemaking process. The official noted that these
data could help determine how much of certain staff members' time is
reasonable and how many additional staff days would be needed to speed
up the process. EPA officials stated that they use the tracking
information in the agency's RAPIDS system to help identify best
practices as well as identify those actions that need corrective
measures. FDA officials stated that they track the rulemaking process
from a project management perspective. According to these officials,
this allows the agency to identify areas that appear to "logjam" the
process and to develop mechanisms that would improve the rulemaking
process. In addition, FDA officials stated that agency management meets
to discuss the major milestones reported in the FRDTS to identify areas
of improvement in the regulatory development process. SEC officials
also track some data from a project management perspective. Officials
stated that the former SEC Chairman was interested in knowing how long
it takes to conduct economic analyses. During the course of our review,
EPA, FDA, and SEC did not document these claims or provide specific
examples of how this information was used to improve their rulemaking
process. However, in response to our draft report, the EPA and FDA
provided both documentation and examples to support the information
provided above.
Agency officials described additional details about their tracking
efforts and the limitations of this information. One DOT agency, FAA,
is working on a system, called Labor Distribution Reporting (LDR) that
allows all FAA managers and employees to better understand staff
resources required for achieving agency goals and objectives. However,
using LDR to assess the staff time devoted to rulemaking has proven
challenging for FAA officials responsible for rulemaking activity.
Those officials said that the data generated by LDR have not been
reliable and the information does not necessarily track rulemaking
activity as distinct from other staff responsibilities. Additionally,
attempts to aggregate LDR information by rule proved unwieldy as these
costs are embedded in agency-wide systems that capture information at a
higher level and for multiple purposes. FAA is reengineering its use of
LDR by consolidating and simplifying the codes used with the goal of
providing managers with reliable information on how staff time is used
and how it contributes to meeting agency performance targets. SEC's CF
also tried to do more detailed staff time coding for each rulemaking
project but has now instituted more generic tracking by category of
activity. A CF official also pointed out that CF's coding does not
cover all groups within SEC that contribute to rulemaking projects.
Another SEC official from the Division of Trading and Markets
identified a similar tracking challenge. Although the division has
specific rulemaking offices organized by subject area, not all the work
done by these offices is related to rulemaking.
Similarly, there is limited information available regarding contract
costs. At three of the agencies in our case study--DOT, FDA, and SEC--
analytical and procedural requirements typically are addressed in-house
by agency staff. One agency, EPA, regularly supplements in-house staff
responsible for regulatory development by hiring contractors to conduct
analyses as part of the regulatory development process. The agency does
not track these costs by rulemaking; however, EPA officials were able
to identify some of the costs associated with regulatory development
for four case-study rules. For the two major OW rules--the Surface
Water Treatment 2 rule and the Disinfection Byproducts 2 rule--the
costs related to expert advisory panels, public meetings, travel, and
regulatory analyses for the microbial pathogens and disinfection
byproducts cluster of rules (that includes a total of seven rules
including the two case study rules) were more than $13 million. As
mentioned above, EPA did not track the costs of each of these rules
separately throughout the course of rule development. Identified costs
for the two nonmajor rules--the Ethylene Oxide Emissions rule and the
Hazardous Air Pollutants rule--were less, $100,000 and $780,000,
respectively. EPA officials told us that funding for regulatory
analyses comes from a central budget within the program developing the
rule.
As stated earlier, while it is difficult to pinpoint when the
initiation phase of rulemaking begins, agency officials reported that
developing proposed rules constitutes a significant portion of
regulatory development, so that much of the resource investment in a
rulemaking occurs prior to publication of the proposed rule. For
example, NHTSA's Fuel Economy-Light Trucks rule was just one in a
series of related rulemakings that dated back to the 1970s, informed by
decades of work by that agency. Also, EPA's Disinfection Byproducts 2
rule and the Surface Water Treatment 2 rule were based on the work of
an expert panel convened under the Federal Advisory Committee Act years
before these rules were proposed. Another example mentioned by EPA
officials was a stormwater management rule for the oil and gas industry
that supplemented and was partially based on an earlier nationwide,
multi-industry rulemaking.
Reviews of published rules or rulemaking dockets provide little
information on the resources and level of effort needed for agencies to
comply with specific rulemaking requirements. As pointed out by DOT
officials, neither the text of the rule nor the materials in the
agency's rulemaking docket might indicate all of the resources and the
decision-making process that the agency performed to make such
determinations. Specifically, they noted that dockets would not
necessarily include copies of the underlying analyses if the agency
concluded that the rule did not trigger that requirement. Also, each
requirement that a rule triggers does not necessarily require
preparation of a separate analysis. Agencies can use some analyses to
address more than one requirement (for example, using one benefit-cost
analysis to address multiple analytical requirements).
Even if costs and resources were tracked at the individual rule level,
the resources used to meet general rulemaking requirements would still
need to be captured to provide a complete picture. Rulemaking is an
integral part of agency business, and it would be hard to separate all
that is done for rulemaking from what also contributes to other
operational and policy decisions. Further, given the many other demands
on scarce agency resources, the resources that would be needed to
develop reliable tracking data on individual rules or requirements must
be weighed against other investments.
Many of the Rules GAO Reviewed Triggered Few of the Broadly Applicable
Rulemaking Requirements:
When issuing major rules, agencies must generally comply with the APA
and a number of other broadly applicable procedural and analytical
requirements specified in law. However, one statutory requirement, the
Unfunded Mandates Reform Act of 1995 (UMRA), does not apply to
independent regulatory agencies. EPA and the Occupational Safety and
Health Administration must also comply with a requirement to convene a
small business advocacy review panel under the Small Business
Regulatory Enforcement Fairness Act if their rules would have a
significant economic impact on a substantial number of small entities-
-business or governmental.[Footnote 31] Further, agencies other than
independent regulatory agencies are also subject to requirements in
executive orders. In addition to the broadly applicable requirements,
agencies may need to comply with agency-or program-specific
requirements established by other statutes.
Table 1 lists the 17 broadly applicable statutes and executive orders
with rulemaking requirements that were cited by 10 or more major rules
that we reviewed for this report.[Footnote 32] For each we provide a
high-level characterization of agencies' responsibilities under the
requirement. (Appendix I provides additional information about these
requirements.)
Table 1: Rulemaking Requirements Generally Applicable to Major Rules:
Requirements applicable to rules of all agencies:
Source of requirements: Administrative Procedure Act;
Characterization of agencies' responsibilities: Requirements applicable
to rules of all agencies: Procedures required for informal rulemaking,
also known as notice-and-comment rulemaking.
Source of requirements: Congressional Review Act;
Characterization of agencies' responsibilities: Requirements applicable
to rules of all agencies: Submission of rules to Congress for review.
Source of requirements: Endangered Species Act;
Characterization of agencies' responsibilities: Requirements applicable
to rules of all agencies: Analysis of impact on endangered or
threatened species.
Source of requirements: National Environmental Policy Act;
Characterization of agencies' responsibilities: Requirements applicable
to rules of all agencies: Analysis of environmental impacts.
Source of requirements: National Technology Transfer and Advancement
Act;
Characterization of agencies' responsibilities: Requirements applicable
to rules of all agencies: Use of voluntary consensus standards.
Source of requirements: Paperwork Reduction Act;
Characterization of agencies' responsibilities: Requirements applicable
to rules of all agencies: Analysis of paperwork burden and submission
to OIRA for approval of new information collections.
Source of requirements: Regulatory Flexibility Act;
Characterization of agencies' responsibilities: Requirements applicable
to rules of all agencies: Consideration of regulatory alternatives to
lessen the burden on small entities.
Requirements applicable to rules of cabinet departments and independent
agencies, but not to rules of independent regulatory agencies:
Source of requirements: Unfunded Mandates Reform Act;
Characterization of agencies' responsibilities: Requirements applicable
to rules of all agencies: Analysis of costs and benefits of federal
mandates and consideration of alternatives.
Source of requirements: Executive Order 12372;
Characterization of agencies' responsibilities: Requirements applicable
to rules of all agencies: Consultation with state and local elected
officials.
Source of requirements: Executive Order 12630;
Characterization of agencies' responsibilities: Requirements applicable
to rules of all agencies: Analysis of impact on constitutionally
protected property rights.
Source of requirements: Executive Order 12866;
Characterization of agencies' responsibilities: Requirements applicable
to rules of all agencies: Submission of significant rules for OIRA
review and analysis of costs, benefits, and regulatory alternatives.
Source of requirements: Executive Order 12898;
Characterization of agencies' responsibilities: Requirements applicable
to rules of all agencies: Consideration of environmental justice impact
on minority and low-income populations.
Source of requirements: Executive Order 12988;
Characterization of agencies' responsibilities: Requirements applicable
to rules of all agencies: Ensuring clarity of regulatory language
regarding legal rights and obligations.
Source of requirements: Executive Order 13045;
Characterization of agencies' responsibilities: Requirements applicable
to rules of all agencies: Evaluation of environmental health or safety
effects on children.
Source of requirements: Executive Order 13132;
Characterization of agencies' responsibilities: Requirements applicable
to rules of all agencies: Consultation with state and local officials
on federalism implications.
Source of requirements: Executive Order 13175;
Characterization of agencies' responsibilities: Requirements applicable
to rules of all agencies: Consultation with Indian tribal governments.
Source of requirements: Executive Order 13211;
Characterization of agencies' responsibilities: Requirements applicable
to rules of all agencies: Analysis of effects on energy supply,
distribution, or use.
Source: GAO.
[End of table]
Our review of the 139 major rules published from January 2006 through
May 2008 showed that many of the procedural and analytical requirements
that generally apply to the agencies were not triggered by specific
rules. An agency may not need to include specific analyses if the
substance of the rule or exceptions, exclusions, and thresholds in the
requirement lead the agency to determine that the requirement was not
triggered by a specific rule. For example, if the substance of a rule
includes no new information collections, the agency would not have to
estimate burden hours under the PRA. Exceptions and exclusions can be
either categorical or statute specific. As an example of a categorical
exception, the APA notice-and-comment requirements do not apply to any
rule regarding a military or foreign affairs function of the United
States. Also, the RFA and UMRA requirements do not apply if a rule was
exempt from the APA notice-and-comment requirements. An example of a
statute-specific exemption is section 1601(c) of the Farm Security and
Rural Investment Act of 2002 that generally exempted rules issued by
the Department of Agriculture's Commodity Credit Corporation from the
APA and the PRA requirements.[Footnote 33] The applicability of certain
requirements is also limited by threshold provisions. For example,
agencies only need to prepare UMRA "written statements" for rules that
the agencies believe include a federal intergovernmental or private
sector mandate that may result in expenditures of $100 million or more
(adjusted for inflation) in any year.[Footnote 34] Taken as a whole, an
agency may need to work through a series of determinations for each
rule under each requirement regarding substance, exceptions, and
thresholds.[Footnote 35]
In the 139 major rules we reviewed, the agencies mentioned at least 29
different broadly applicable requirements, but most rules actually
triggered only a handful of the requirements. Our review of the major
rules showed that in addition to the procedural requirements under the
APA and the CRA, the only analytical requirements triggered by 45
percent or more of all rules were the PRA, the RFA, and Executive Order
12866. Collectively, however, the requirements resulted in agencies
providing at least some information on the costs, benefits, or both
associated with 91 percent of the major rules.[Footnote 36] Agencies
also frequently cited the UMRA and Executive Order 13132 related to
federalism, but the rules seldom triggered those requirements. Figure 3
illustrates how often the agencies stated that their rules triggered
the most commonly cited analytical requirements, according to our major
rules reports.
Figure 3: Percentage of 139 Major Rules That Triggered Rulemaking
Requirements:
[Refer to PDF for image: vertical bar graph]
Statute: Paperwork Reduction Act: 66%;
Statute: Regulatory Flexibility Act: 45%;
Statute: Unfunded Mandates Reform Act: 17%;
Executive Order: E.O. 12866 (regulatory review): 84%;
Executive Order: E.O. 13132 (federalism): 5%.
Source: GAO analysis.
Note: Other requirements were triggered by less than 5 percent of the
major rules reviewed.
[End of figure]
Similarly, the 16 case-study rules that we reviewed triggered some, but
not all, of the broadly applicable requirements. All 16 of the rules
discussed requirements under the PRA and the RFA, but only 11 triggered
a PRA analysis and 10 an RFA analysis. Except for the rules promulgated
by SEC, all of the rules discussed UMRA and Executive Order 13132
requirements; however, only 4 rules triggered an UMRA analysis and 3 a
federalism analysis. The 4 case-study rules from DOT, EPA, and FDA that
were economically significant rules also included quantitative cost-
benefit analyses required under Executive Order 12866. Figure 4
illustrates how often the agencies stated that the case-study rules
triggered the most commonly cited analytical requirements. (See the
case studies in appendix II for further details on the regulatory
requirements addressed by each rule.)
Figure 4: Number of 16 Case-Study Rules That Triggered Rulemaking
Requirements:
[Refer to PDF for image: vertical bar graph]
Statute: Paperwork Reduction Act:
Number of case-study rules: 11.
Statute: Regulatory Flexibility Act:
Number of case-study rules: 10.
Statute: Unfunded Mandates Reform Act:
Number of case-study rules: 4.
Executive Order: E.O. 12866 (regulatory review):
Number of case-study rules: 12.
Executive Order: E.O. 13132 (federalism):
Number of case-study rules: 3.
Source: GAO analysis.
Note: UMRA, Executive Order 12866, and Executive Order 13132 do not
apply to the 4 SEC rules because SEC is an independent regulatory
agency.
[End of figure]
Agencies Reported That Recent Regulatory Requirements Presented Some
Challenges Initially:
Agency officials from case-study agencies reported that in some
instances, the new requirements imposed by OMB since 2003 were
challenging initially, requiring additional time and resources.
However, some officials noted that these recent requirements reflected
practices that some agencies had already adopted. For example, FDA had
routinely circulated the regulatory impact analyses of economically
significant rules for peer review before submitting the rules to OMB
prior to the 2004 issuance of the Peer Review Bulletin and while these
regulatory impact analyses are excluded from the requirements of the
Bulletin, FDA continues to circulate them for peer review. FDA
officials agreed that the revised OMB Circular No. A-4 helped to
clarify expectations for their economic analyses and in some cases
resulted in less time needed for OMB review and greater confidence in
the regulatory choices.
Initially incorporating certain aspects of the new requirement for
formal probability analysis to assess uncertainty lengthened the
rulemaking process for one agency. NHTSA officials reported that prior
to issuance of revised Circular No. A-4--which requires formal
probability analysis to assess uncertainty for rules with more than a
billion-dollar annual impact on the economy--NHTSA used a simpler form
of uncertainty analysis, called sensitivity analysis, rather than the
more formal probability analysis. When NHTSA performed its first
probability analysis under OMB Circular No. A-4, it took several weeks
to complete and required contracting resources outside the agency--not
a typical practice for NHTSA. In addition, to meet its statutory
deadline, the agency sent the rule to OIRA for review before completing
the probability analysis. In contrast, EPA had incorporated probability
analysis into its regulatory development process on a case-by-case
basis prior to the issuance of Circular No. A-4 and therefore did not
find that requirement challenging.
Officials from case-study agencies identified two long-standing
analytical and procedural requirements, the PRA regarding information
collections and the RFA regarding analysis of rules' effects on small
entities, as having had more significant effects on time and resources
than the more recent requirements. Some officials said that these
requirements add time to the rulemaking process and may even work at
cross-purposes during the course of regulatory development. Agency
officials at FDA and SEC reported that compliance with the PRA
information collection requirements may add a year or more to the
timeline of regulatory development. As a result, rather than gather new
information to support a rulemaking, agency officials will sometimes
rely on existing information, information available from a more limited
number of sources, or information gathered through public notices. This
can make it more difficult to determine the effect of a regulation on
small entities that may not be represented by a small sample of
interested parties or respond to public notices. FDA officials stated
that the agency posts on its Web site a "Dear Colleague" letter
alerting the small business community to the rulemakings listed in the
semi-annual Unified Agenda and Regulatory Plan that may affect small
business. This letter explains how to contact the agency and encourages
small businesses to become involved early in the rulemaking process.
However, it can still be difficult to determine the effect of a
regulation on small entities. According to the agency officials, this
requires agencies to either move forward with available information or
go through time-consuming approvals for information collections under
the PRA.
OIRA's Role in the Rulemaking Process Could Be More Transparent:
Our review of 12 DOT, EPA, and FDA rules submitted to OIRA for formal
review under Executive Order 12866 indicated that for 10 of the 12
rules, the agencies identified OIRA changes to the rules. Using the
same basic methodology as in our 2003 report on the effect of OIRA's
review process, we used a variety of information sources (such as
agency and OIRA docket materials and interviews with agency officials)
to classify the most significant level of changes attributed to OIRA's
review.[Footnote 37] For each of the 12 rules, we classified the level
of OIRA changes into one of the following three categories:
* Significant changes. Rules in which the most significant changes
affected the scope, impact, or estimated costs and benefits of the
rules as originally submitted to OIRA. Usually, these changes were made
to the regulatory language that would appear in the Code of Federal
Regulations and is legally binding. For example, in an FDA rule on
dietary supplements, OIRA suggested a change in the regulatory language
to reduce the number of years required to save a reserve sample.
However, revisions to a cost-benefit analysis could also be significant
because they affect the reported impact of a rule.
* Other material changes. Rules in which the most significant changes
resulted in the addition or deletion of material in the explanatory
preamble section of the rule. For example, in a DOT rule on event data
recorders, OIRA suggested a change in the explanatory language
clarifying that crash investigators and researchers are able to
download data from the recorders.
* Minor or no OIRA changes. Rules in which there were no changes made
to the draft rule, the most significant changes attributed to OIRA's
suggestions resulted in editorial or other minor revisions, or any
changes in the rule prior to publication were not at the suggestion of
OIRA.
As shown in table 2, we determined that OIRA suggested "significant"
changes for 4 of the 12 case-study rules submitted for Executive Order
12866 reviews, "other material" changes for 4 of the rules, and "minor"
changes for 2 of the rules. OIRA did not suggest any changes for the
remaining 2 rules. Of the 4 rules that had significant changes, 2 were
rules developed and promulgated by EPA and 1 each by DOT and FDA. In
addition 3 of the 4 rules with significant changes were major rules.
(See the case studies in appendix II for further details on the changes
made to rules reviewed by OIRA.)
Table 2: Classification of OIRA Review Changes to Case-Study Rules:
Agency rule: DOT/FAA; Air Tour Safety;
Most significant OIRA review period changes: Significant changes;
Examples of OIRA review changes: Change to regulatory text:
Clarification that annual events limit is either four charitable events
or nonprofit events, not four of each; Change to preamble: Addition of
chart explaining changes proposed by rule from existing regulation.
Clarification of difference between "Operation Specification" and
"Letter of Authorization."
Agency rule: DOT/FAA; Human Space Flight; Requirements;
Most significant OIRA review period changes: Minor or no changes;
Examples of OIRA review changes: The agency did not consider OIRA's
changes significant.
Agency rule: DOT/NHTSA; Fuel Economy-Light Trucks; (major rule);
Most significant OIRA review period changes: Minor or no changes;
Examples of OIRA review changes: The agency did not consider OIRA's
changes significant.
Agency rule: DOT/NHTSA; Event Data Recorders;
Most significant OIRA review period changes: Other material changes;
Examples of OIRA review changes: Changes to preamble: Language change
related to ensuring that crash investigators and researchers are able
to download data from the recorders. Addition to the owner's manual of
a sentence advising owners that a recorder does not store or collect
personal information.
Agency rule: EPA/AR; Ethylene Oxide Emissions;
Most significant OIRA review period changes: Other material changes;
Examples of OIRA review changes: Changes to preamble: Language change
that mentions how EPA could adopt a "mixed approach and issue generally
available control technologies or management practices (GACT) standards
for certain emission points and required maximum achievable control
technologies (MACT) standards for other emission points. In addition,
there is language change regarding cancer risks to individuals exposed
to emissions from regulated source.
Agency rule: EPA/AR; Hazardous Air Pollutants;
Most significant OIRA review period changes: Other material changes;
Examples of OIRA review changes: Changes to preamble: Related section
specifying periodic determinations of pertinent technical factors.
Added language to provide a more balanced discussion of rationale for
selecting "no control." Requested EPA expand its discussion on risks
reduced by emission controls.
Agency rule: EPA/OW; Disinfection Byproducts 2; (major rule);
Most significant OIRA review period changes: Significant changes;
Examples of OIRA review changes: Changes to regulatory text: Changed
repeat compliance monitoring to apply only when more than eight
monitoring locations were required, rather than four. Removed
additional requirements for repeat monitoring.
Agency rule: EPA/OW; Surface Water Treatment 2; (major rule);
Most significant OIRA review period changes: Significant changes;
Examples of OIRA review changes: Change to regulatory text: Addition of
notification of violation requirements for public water systems.
Modification of regulatory section on provision of additional
circumstances under which data can be grandfathered under state
approval; Change to preamble: Indication that regulated systems may
assume state approval of monitoring locations if explicit approval is
not forthcoming.
Agency rule: FDA/CDER; Physician Labeling;
Most significant OIRA review period changes: Other material changes;
Examples of OIRA review changes: Changes to preamble: Deletion of a PRA-
related estimate of the number of respondents. Altered the number of
affected pharmaceutical firms that could be considered small
businesses.
Agency rule: FDA/CDER; Ozone Depleting Substances;
Most significant OIRA review period changes: Minor or no changes;
Examples of OIRA review changes: No changes suggested by OIRA.
Agency rule: FDA/CFSAN; Dietary Supplements; (major rule);
Most significant OIRA review period changes: Significant changes;
Examples of OIRA review changes: Change to regulatory text: Requirement
in the draft rule to save reserve samples for 3 years was changed to 2
years; Change to regulatory impact analysis: Added text justifying the
rulemaking and additional description of calculations of costs
associated with illness and injury associated with contaminated or
mislabeled dietary supplements.
Agency rule: FDA/CFSAN; Lean Nutrient Claims;
Most significant OIRA review period changes: Minor or no changes;
Examples of OIRA review changes: No changes suggested by OIRA.
Source: GAO analysis.
[End of table]
Documentation of OIRA Review Was Sometimes Incomplete:
Executive Order 12866 requires both agencies and OIRA to disclose to
the public certain information about OIRA's regulatory reviews. After
the regulatory action has been published in the Federal Register or
otherwise issued to the public, an agency is required to:
1. make available to the public the information provided to OIRA in
accordance with the executive order;[Footnote 38]
2. identify for the public, in a complete, clear, and simple manner,
the substantive changes between the draft submitted to OIRA and the
action subsequently announced; and:
3. identify for the public those changes in the regulatory action that
were made at the suggestion or recommendation of OIRA.[Footnote 39]
The order requires OIRA to maintain a publicly available log that
includes the following information pertinent to rules under OIRA's
review:
1. the status of rules submitted for OIRA review,
2. a notation of all written communications received by OIRA from
persons not employed by the executive branch, and:
3. information about oral communications between OIRA and persons not
employed by the executive branch.
After the rule has been published or otherwise issued to the public (or
the agency has announced its decision to not publish or issue the
rule), OIRA is required to make available to the public all documents
exchanged between OIRA and the agency during the review by OIRA.
[Footnote 40] An OIRA official also pointed out that OIRA does not
monitor, on a rule-by-rule basis, compliance by rulemaking agencies
with their disclosure obligations under Executive Order 12866.
The case-study agencies generally met the executive order's
requirements to disclose materials they provided to OIRA and
substantive changes made during OIRA's review. In contrast to our study
in 2003, all the agencies we reviewed for this report had documentation
of OIRA's reviews. However, the documentation could be improved for
greater transparency. Executive Order 12866 does not specify how
agencies should document the changes made to draft rules after their
submission to OIRA, nor is there any governmentwide guidance that
directs agencies on how to do so. Nonetheless, some of the
documentation on OIRA's changes was very clear, but in other cases
additional efforts were required to interpret the information. As we
found in 2003, the agencies did not always clearly attribute changes
made at the suggestion of OIRA, and agencies' interpretations were not
necessarily consistent regarding what constitutes a substantive change
that should be documented to comply with the executive order
transparency requirements. For example, different departments within
one agency had varied interpretations, with one office only considering
those changes made to regulatory text as substantive. Table 3 provides
summary information about the type and nature of agencies'
documentation to address Executive Order 12866 transparency
requirements for the 12 case-study rules reviewed by OIRA. (See
appendix III for examples of agencies' OIRA review documentation.)
Table 3: Documentation of OIRA Reviews for Case-Study Rules:
Agency rule: DOT/FAA; Air Tour Safety;
Source of OIRA review documentation: Online public rulemaking docket
(regulations.gov)[A];
How agency documented OIRA review: Memo to internal file;
Whether publicly available documentation attributed source(s) of
changes made to rule: No.
Agency rule: DOT/FAA; Human Space Flight; Requirements;
Source of OIRA review documentation: Testimonial evidence from
officials;
How agency documented OIRA review: N/A (no substantive changes);
Whether publicly available documentation attributed source(s) of
changes made to rule: N/A (no substantive changes).
Agency rule: DOT/NHTSA; Fuel Economy - Light Trucks; (major rule);
Source of OIRA review documentation: Testimonial evidence from
officials;
How agency documented OIRA review: N/A (no substantive changes);
Whether publicly available documentation attributed source(s) of
changes made to rule: N/A (no substantive changes).
Agency rule: DOT/NHTSA; Event Data Recorders;
Source of OIRA review documentation: Online public rulemaking docket
(regulations.gov);
How agency documented OIRA review: Memo to file in docket;
Whether publicly available documentation attributed source(s) of
changes made to rule: Yes.
Agency rule: EPA/OAR; Ethylene Oxide Emissions;
Source of OIRA review documentation: Online public rulemaking docket
(regulations.gov);
How agency documented OIRA review: Redline/strikeout document(s) in
docket;
Whether publicly available documentation attributed source(s) of
changes made to rule: Yes.
Agency rule: EPA/OAR; Hazardous Air Pollutants;
Source of OIRA review documentation: Online public rulemaking docket
(regulations.gov);
How agency documented OIRA review: Redline/strikeout and e-mails in
docket;
Whether publicly available documentation attributed source(s) of
changes made to rule: Yes.
Agency rule: EPA/OW; Disinfection Byproducts 2; (major rule);
Source of OIRA review documentation: Online public rulemaking docket
(regulations.gov);
How agency documented OIRA review: Redline/strikeout and check box form
in docket;
Whether publicly available documentation attributed source(s) of
changes made to rule: No.
Agency rule: EPA/OW; Surface Water Treatment 2; (major rule);
Source of OIRA review documentation: Online public rulemaking docket
(regulations.gov);
How agency documented OIRA review: Redline/strikeout, check box memo to
the file in docket;
Whether publicly available documentation attributed source(s) of
changes made to rule: No.
Agency rule: FDA/CDER; Physician Labeling Rule;
Source of OIRA review documentation: Online public rulemaking docket
(regulations.gov);
How agency documented OIRA review: Redline/strikeout (changed pages
consolidated) in docket;
Whether publicly available documentation attributed source(s) of
changes made to rule: Yes.
Agency rule: FDA/CDER; Ozone Depleting Substances;
Source of OIRA review documentation: OIRA regulatory review Web site
[hyperlink, http://www.reginfo.gov];
How agency documented OIRA review: N/A - Rule classified as "consistent
without change";
Whether publicly available documentation attributed source(s) of
changes made to rule: N/A (no changes).
Agency rule: FDA/CFSAN; Dietary Supplements; (major rule);
Source of OIRA review documentation: Paper docket at FDA because of
difficulties using online docket;
How agency documented OIRA review: Redline/strikeout in docket (62
documents);
Whether publicly available documentation attributed source(s) of
changes made to rule: No.
Agency rule: FDA/CFSAN Lean Nutrient Claims;
Source of OIRA review documentation: Online public rulemaking docket
[hyperlink, http://www.regulations.gov];
How agency documented OIRA review: Note to file (with an unchanged rule
draft);
Whether publicly available documentation attributed source(s) of
changes made to rule: N/A (no changes).
Source: GAO analysis.
[A] Added to the docket subsequent to our review.
[End of table]
As we also found in 2003, agencies sometimes included more information
about OIRA's review than required, and we found such information useful
to more clearly explain what had occurred. For example, EPA included
copies of messages from OIRA outlining suggested changes to draft rules
under review. EPA also included a memo to the docket summarizing the
subjects discussed with OIRA at a meeting about one of the case-study
rules. In the case of one rule that was unchanged by OIRA, FDA's docket
included both an annotated copy of the rule returned to FDA and a memo
to the file noting that there were no changes to the draft rule.
In general, compared to our review in 2003, we found it more difficult
to find agencies' documentation of OIRA's regulatory reviews, primarily
because of difficulties using the search capabilities in the
centralized electronic Federal Docket Management System under
[hyperlink, http://www.regulations.gov]. Using the advanced docket
search function as instructed by the Web site user information to first
find the rule, we searched by the rule title, the RIN, and the rule
Docket ID independently and as they appeared in the published version
of the final rule in the Federal Register. Using those criteria, we
were able to find all four of the DOT case-study rules submitted for
OIRA review but only one each of the 4 FDA rules and 4 EPA rules. We
chose to use paper dockets when the opportunity presented itself for
the FDA case study rules.[Footnote 41]
Agencies' labeling practices also sometimes made it difficult to find
the relevant documentation about OIRA's reviews. Out of 12 dockets, we
were able to identify 5 of the 10 changed rules and 1 of the 2
unchanged rules by searching the docket Web pages for "12866," "OIRA,"
and "OMB." In addition, while the agencies' published rules stated that
the rules had been reviewed by OIRA under Executive Order 12866, most
of the rules did not identify whether substantive changes had been made
during the OIRA review period (and therefore documentation of the
changes should be included in the rulemaking docket). Although there is
no requirement for agencies to do so, including such additional
information would be consistent with how agencies discuss other
rulemaking requirements in published rules and potentially help readers
navigate the docket. Such information, for example, would more clearly
have identified which of our case-study rules' dockets should include
documentation of OIRA review changes.
In response to the disclosure requirements placed on OIRA by Executive
Order 12866, OIRA's meeting logs indicated that parties not employed by
the executive branch initiated meetings with OIRA regarding 7 of the 12
case-study rules, but we do not know what influence meeting discussions
had on OIRA recommendations because there is no requirement for OIRA to
disclose the substance of the meetings. OIRA logged a total of 10
meetings, but 2 of the meetings each concerned 2 rules. Three of these
meetings occurred before formal submission of the draft rule for OIRA
review. There were meetings on all 4 EPA case-study rules. As we found
during our review in 2003, most of the nonfederal parties appeared to
be representatives of regulated entities. In all but 2 of the meetings,
the agency issuing the regulation was represented.
OIRA Implemented Only One of Eight Prior GAO Recommendations to Improve
Transparency of the Regulatory Review Process:
In our 2003 report on the OMB/OIRA regulatory review process, we made
eight recommendations to the Director of OMB to improve the
transparency of the process.[Footnote 42] OMB implemented our
recommendation to improve the clarity of OIRA's meeting log to better
identify participants in OMB meetings with external parties on rules
under review by disclosing the affiliations of participants. In some
cases, the log also identified the clients represented.
However, OIRA did not agree with the seven remaining recommendations in
the 2003 report and did not implement those recommendations. We
recommended that OIRA should do the following:
1. Define the transparency requirements applicable to the agencies and
OIRA in Executive Order 12866 in such a way that they include not only
the formal review period, but also the informal review period when OIRA
says it can have its most important impact on agencies' rules.
2. Change OIRA's database to clearly differentiate within the
"consistent with change" outcome category which rules were
substantively changed at OIRA's suggestion or recommendation and which
were changed in other ways and for other reasons.
3. Reexamine OIRA's current policy that only documents exchanged by
OIRA branch chiefs and above need to be disclosed because most of the
documents that are exchanged while rules are under review at OIRA are
exchanged between agency staff and OIRA desk officers.
4. Establish procedures whereby either OIRA or the agencies disclose
the reason why rules are withdrawn from OIRA review.
5. Define the types of "substantive" changes during the OIRA review
process that agencies should disclose as including not only changes
made to the regulatory text but also other, noneditorial changes that
could ultimately affect the rules' application (for example,
explanations supporting the choice of one alternative over another and
solicitations of comments on the estimated benefits and costs of
regulatory options).
6. Instruct agencies to put information about changes made in a rule
after submission for OIRA's review and those made at OIRA's suggestion
or recommendation in the agencies' public rulemaking dockets, and to do
so within a reasonable period after the rules have been published.
7. Encourage agencies to use "best practice" methods of documentation
that clearly describe those changes.
We discussed the status of these open recommendations with OIRA
representatives annually since 2003 and also as part of this review,
and they confirmed that OIRA had not subsequently implemented any of
the seven remaining recommendations. As discussed above, our current
review indicated that there are still opportunities to improve
transparency for some of these topics, such as better identification of
when agencies made substantive changes to their rules as a result of
the OIRA review process, attributing the sources of changes made during
the review period, and clarifying the definition of substantive
changes. Other issues covered by our 2003 recommendations--such as OIRA
informal reviews and disclosing why rules are withdrawn from OIRA
review--did not arise during this review, but this may reflect the
nature of the specific rules we reviewed and our more limited sample of
case studies.
Conclusions:
Federal regulatory agencies issue many rules to ensure public health
and safety, protect the environment, and facilitate the effective
functioning of financial markets, among other goals. Because these
rules can affect so many aspects of citizens' lives, it is crucial that
rules be carefully developed and considered and that rulemaking
procedures be effective and transparent. To further such goals,
Congresses and Presidents have placed many procedural and analytical
requirements on the rulemaking process over the years. While we and
others have reported on agencies' implementation of individual
requirements, there has been little analysis of the cumulative effects
these requirements have on agencies' rulemaking processes.
Our study of broadly applicable requirements illustrated the
difficulties of evaluating the effects of regulatory requirements on
the rulemaking process with limited data. To the extent that agencies
had information for selected rules, it showed considerable variation in
the time required for issuing final rules that could not be explained
by the number of regulatory requirements, few of which were triggered.
Moreover, the complexity or magnitude of a major rule also did not
explain all or most variation, as some case-study rules were not major
and took nearly as long or longer to be published. This raises the
question of what factors can account for the variations in rule
development. While our findings point to better use of existing
estimates and plans to identify opportunities to improve the rulemaking
process, agencies also recognized more can be done and, in some cases,
have taken steps to answer this question.
We found that early in their rulemaking processes each agency
identified the key milestones it needed to accomplish to produce a
final rule. During the course of our review, only DOT provided data
that it routinely tracked these milestones and reported internally and
externally on the status of milestones for development of the agency's
significant rules. However, in comments on our draft report, EPA and
FDA subsequently provided some documentation and data on their tracking
and reporting of milestones. Although there is no right time for how
long a rulemaking should take, monitoring actual versus estimated
performance enables agency managers to identify steps in the rulemaking
process that account for substantial development time and provides
information necessary to further evaluate whether the time was well
spent. Although not all factors are within an agency's control, some
are. Agency officials we spoke with identified several potential
benefits to monitoring and reporting, including better scheduling and
increased internal and external accountability. This is also consistent
with the internal control standard that an agency must have relevant,
reliable information relating to external as well as internal events.
Additionally, officials in three of the four agencies we audited said
they would benefit from a better understanding of how staff resources
are used, even though agencies' efforts so far have produced limited
results. Information on only one element in the rulemaking process--
length of time--cannot answer whether an agency is managing well.
However, such information can provide insights into the process, such
as when it contributed to our efforts to determine the relative burden
of various regulatory requirements.
Our review of major and case-study rules indicated that the majority of
the rules triggered only a few of the rulemaking requirements. The
requirements that rules most often triggered are among the longest
standing and broadly applicable--the PRA, the RFA, and centralized OIRA
review under Executive Order 12866. The PRA and the RFA generally apply
to all agencies and rules, and officials from each of the agencies
where we conducted case studies cited those requirements as ones that
consistently added time to the rulemaking process and required
investments of agency resources. Similarly, under Executive Order
12866, we observed that a relatively small portion of rules submitted
to OIRA for review have economic consequences significant enough to
trigger the most rigorous analytical requirements, so any burden of
compliance with those requirements is not very widespread. The majority
of rules submitted for OIRA review (around 85 percent historically) are
significant for reasons other than their economic impact.
The case-study agencies generally met the executive order's
requirements to disclose materials they provided for OIRA's review and
substantive changes made during OIRA's review. For those case-study
agencies and rules subject to OIRA review, some agency practices were
more effective than others in communicating review results.
Transparency problems that we identified in the past persist, such as
incomplete attribution of changes and inconsistent definitions of
substantive changes among and within agencies. Also, unlike when
addressing other regulatory requirements--where agencies typically note
in the published rule whether the rule triggered the requirements-
-the agencies did not clearly identify in their final rules when
substantive changes had been made during the OIRA review period. OIRA,
as the agency responsible for providing oversight and guidance to
agencies on regulatory matters, is the principal entity in a position
to ensure consistent compliance across agencies if the administration
retains transparency requirements regarding regulatory review.
Recommendations for Executive Action:
We are making six recommendations to improve the monitoring and
evaluation of rules development and the transparency of the review
process.
To be consistent with internal controls for information in managing
agency operations, we recommend that for significant rules the
Commissioner of FDA and the Chairman of SEC routinely track major
milestones in regulatory development and report internally and
externally when major milestones are reached against established
targets. The Administrator of EPA, the Commissioner of FDA, and the
Chairman of SEC should each also evaluate actual performance versus the
targeted milestones and when they are different determine why.
If the current administration retains Executive Order 12866, or
establishes similar transparency requirements, we recommend that the
Director of OMB, through the Administrator of OIRA, take the following
four actions to more consistently implement the order's requirement to
provide information to the public "in a complete, clear, and simple
manner":
* define in guidance what types of changes made as a result of the OIRA
review process are substantive and need to be publicly identified,
* instruct agencies to clearly attribute those changes "made at the
suggestion or recommendation of OIRA,"
* direct agencies to clearly state in final rules whether they made
substantive changes as a result of the OIRA reviews, and:
* standardize how agencies label documentation of these changes in
public rulemaking dockets.
Agency Comments and Our Evaluation:
We provided a draft of this report to the Department of Health and
Human Services (HHS), DOT, EPA, SEC, and OMB. We received written
comments from HHS/FDA, EPA, SEC, and OMB which are summarized below and
reprinted in appendices IV through VII. However, because EPA and FDA
provided new information as part of agency comments, we did not analyze
the information provided and conduct follow-up discussions with agency
officials prior to publication of this report. We note that we had
asked for this information during our review and the agencies did not
provide at that time. Also, they did not provide this information at
the conclusion of our review either in response to our statements of
facts to the agencies or at our exit conference with the agencies. DOT
provided only technical comments. With regard to the two
recommendations directed to the rulemaking agencies, SEC stated that
the Commission is committed to evaluating and improving all of it
processes and will consider our recommendations as part of that
process.
With regard to our recommendation that for significant rules agencies
routinely track major milestones in regulatory development and report
internally and externally when major milestones are reached against
established targets, FDA commented that the scope of this
recommendation should be more narrow and flexible. Specifically, FDA
commented that: (1) the scope of tracking should be limited to only
economically significant rules because FDA cannot predict with
certainty what rules OMB will consider otherwise significant until
close to rule clearance, (2) alternative tracking approaches should be
permitted since FDA has the FRDTS that tracks the progress of all its
Federal Register documents through the latter stages of the agency's
development and clearance process, and (3) routine reporting on when
major milestones are met should only be internal because reporting
externally may mislead stakeholders and prompt inquiries that draw
resources away from the agency's ability to complete regulations.
While we agree that some flexibility is necessary, we disagree about
narrowing the scope of our recommendation. For example, regarding FDA's
proposal to narrow the scope to only economically significant rules, in
this report we note that about 85 percent of all significant rules are
not economically significant, so such a limitation would drop the bulk
of the agency's regulatory activity. Further, with regard to FDA's
point that it is uncertain what rules OMB will deem significant, in
this report we stated that under Executive Order 12866 the agency, not
OMB, has the primary responsibility to first identify which rules are
significant. Therefore, FDA should be aware of many if not most of the
rules that are deemed significant in its inventory. For those rules
that OMB deems significant only at the latter stages of rulemaking, we
recognize that tracking might have to begin at that stage. Regarding
FDA's second point, we did not recommend one particular system and
recognize that the information in FRDTS provides tracking data on
milestones. However, we note that these data are limited to the latter
stages of the rulemaking process. Because our review showed that the
earlier developmental stages of a rule could be a significant portion
of time spent in regulatory development, there is value in also
tracking milestones in the earlier stages. Regarding FDA's third point,
it is still important to report some information externally as well as
internally to improve the transparency and accountability of the
agency's rulemaking process. Further, we believe that FDA's concern
about the impact that reporting some information externally could have
on agency resources is overstated. None of the agencies we met with
during this review identified responding to public inquiries as a major
factor affecting resources and timeliness. Also, there is nothing that
precludes agencies from providing reasons for delays when externally
reporting this information to reduce the volume of public inquiries.
Therefore, we kept this recommendation addressed to FDA.
With regard to our second recommendation that agencies should also
evaluate actual performance versus the targeted milestones, FDA stated
that the agency is already engaged in quality improvement efforts for
its rulemaking process. Specifically, FDA said that its Policy Council
has quarterly meetings with the agency components and the agency
periodically reviews its rulemaking processes to see if changes are
needed. Also, FDA noted that 12 such reviews have been completed since
1981, and identified two recent pilot projects resulting from these
reviews. However, although FDA said the agency conducted general
evaluations and provided some examples, FDA did not provide information
showing that the agency had specifically evaluated the issue
highlighted in our recommendation. To the extent that FDA has not, we
would still recommend that they specifically evaluate the reasons for
any discrepancies between projected and actual milestones for their
significant rulemakings. Therefore, we kept this recommendation
addressed to FDA. We revised the body of the report where appropriate
in response to the additional information FDA provided in its comments.
Regarding our recommendation that agencies routinely track major
milestones and report internally and externally when major milestones
are reached, EPA clarified that the agency currently tracks key
milestones associated with the rulemaking process and reports this
information internally and externally. Specifically, EPA cited RAPIDS,
an internal tracking system that monitors cross-agency involvement and
senior management reviews. EPA also cited three primary sources for
external reporting, specifically its use of Action Initiation Lists,
the Semiannual Regulatory Agenda, and a quarterly report which they
subsequently identified as EPAStat.[Footnote 43]
Based on the new information and subsequent documentation that we
requested from EPA in response to the agency's comments, we concur that
EPA has a tracking system and internal and external reporting
mechanisms that appear to address our recommendation. Therefore, we
removed this recommendation to EPA. For example, EPA's RAPIDS tracks
information on numerous milestones on all phases of the rulemaking
process. Further, RAPIDS tracks information on rules that are both
economically significant and significant. Similarly, with regard to
internal and external reporting, EPA cited three main sources the
agency uses for external reporting of milestones. We modified the body
of the report to incorporate the new information. We note, however,
that we had requested this information during our review and, because
the information was not provided at the time of our review, we did not
have the opportunity to discuss how the information is used, whether it
is useful, and, most importantly, if it could be used to respond to our
report objectives. We did audit the new information provided because of
the approaching deadline for OMB to provide recommendations to the
President for a new executive order on federal agency regulatory
review.
While not specifically addressing our second recommendation that
agencies should also evaluate actual performance versus the targeted
milestones, EPA comments indicated that agency executives and managers
routinely meet to review milestones on key regulations and review
program performance. Specifically, EPA noted that actions that are
completed on time or early are used by the agency as examples of best
practices and actions that are off-track are identified early and
corrective steps are taken to expedite their completion. Because we
were unaware of this system or its use at the time of our review, we
could not determine whether EPA specifically evaluated discrepancies
between projected and actual milestones to determine reasons why and
took corrective actions. No evidence was provided to draw a conclusion.
Therefore, we kept this recommendation addressed to EPA.
With regard to our four recommendations to OMB to more consistently
implement the Executive Order 12866 requirement that agencies provide
information to the public in a complete, clear, and simple manner, OMB
stated that these recommendations have merit and warrant further
consideration. In particular, OMB stated that it will give full
consideration to the report and its recommendations as the agency
finalizes its recommendations to the President for a new Executive
Order on regulatory review. OMB also said that the report will remind
rulemaking agencies of their responsibility to identify in a complete,
clear, and simple manner the substantive changes between the draft rule
submitted to OIRA for review and the action subsequently announced, and
to identify those changes in the regulatory action that were made at
the suggestion or recommendation of OIRA.
We also received technical comments and clarifications which we
incorporated into this report, where appropriate. EPA provided a
substantive technical comment regarding our classifications of the
level of OIRA changes for three of the case study rules. In light of
the clarifying comments EPA provided, we revised our classification of
the Ethylene Oxide Emissions rule from "significant changes" to "other
material changes." However we did not reclassify the other two EPA
rules because the changes suggested would not be consistent with the
methodology and criteria we used in this and prior reviews of the OIRA
regulatory review process.
As agreed with your office, unless you publicly announce the contents
of this report earlier, we plan no further distribution until 30 days
from the report date. At that time, we will send copies to appropriate
congressional committees, the Secretary of Health and Human Services,
the Secretary of Transportation, the Administrator of EPA, the Chairman
of SEC, and the Director of OMB. The report also will be available at
no charge on the GAO Web site at [hyperlink, http://www.gao.gov].
If you or your staff members have any questions about this report,
please contact me at (202) 512-6806 or fantoned@gao.gov. Contact points
for our Offices of Congressional Relations and Public Affairs may be
found on the last page of this report. GAO staff who made major
contributions to this report are listed in appendix VIII.
Sincerely yours,
Signed by:
Denise M. Fantone:
Director:
Strategic Issues:
[End of section]
Appendix I: Summary of Common Regulatory Requirements:
In this appendix, we provide information on commonly applicable
regulatory requirements established by statutes and executive orders.
We included those requirements identified by 10 or more of the rules we
reviewed for this report or that were relevant to our case-study rules.
We list the requirements within each major section (statutory
requirements and executive orders) in chronological order. For each
requirement, the following paragraphs summarize the general purpose,
applicability and requirements imposed by the initiatives that were
relevant to the rules we examined for this report.
Statutory Requirements:
Administrative Procedure Act:
The Administrative Procedure Act (APA) was enacted in 1946 and
established the basic framework of administrative law governing federal
agency action, including rulemaking.[Footnote 44] Section 553 of Title
5, United States Code, governs "notice-and-comment" rulemaking, also
referred to as "informal" or "APA rulemaking." Section 553 generally
requires (1) publication of a notice of proposed rulemaking, (2)
opportunity for public participation in the rulemaking by submission of
written comments, and (3) publication of a final rule and accompanying
statement of basis and purpose not less than 30 days before the rule's
effective date. Congresses and Presidents have taken a number of
actions to refine and reform this regulatory process since the APA was
enacted.
National Environmental Policy Act of 1969:
The National Environmental Policy Act (NEPA) requires agencies to
consider the potential impact on the environment of federal agency
action, including regulations.[Footnote 45] NEPA directs all agencies
of the federal government to include in proposals for "major Federal
actions significantly affecting the quality of the human environment" a
detailed environmental impact statement addressing certain listed
subjects and applying substantive criteria set forth in the Act.
[Footnote 46]
Federal Advisory Committee Act:
The Federal Advisory Committee Act (FACA) regulates the formation and
operation of advisory committees by federal agencies.[Footnote 47]
Advisory committees, normally comprising of experts in the regulatory
field involved, representatives of affected interest groups, and
representatives of federal and state agencies, generally advise
agencies on the content of rulemaking or on issues while the rulemaking
is in progress. Some statutes require the agencies to use advisory
committees, and others authorize but do not require their use.[Footnote
48]
Endangered Species Act of 1973:
The Endangered Species Act seeks to protect species of animals against
threats to their continuing existence caused by man.[Footnote 49] Under
section 7 of the Act, each federal agency, "in consultation with and
with the assistance of the Secretary" of the Interior shall ensure that
any regulation issued by that agency not jeopardize the continued
existence of any endangered or threatened species. 16 U.S.C. §
1536(a)(2).
Regulatory Flexibility Act:
The Regulatory Flexibility Act (RFA) was enacted in response to
concerns about the effect that federal regulations can have on small
entities.[Footnote 50] The RFA requires independent and other
regulatory agencies to assess the impact of their rules on "small
entities," defined as including small businesses, small governmental
jurisdictions, and certain small not-for-profit organizations. Under
the RFA, an agency must prepare an initial regulatory flexibility
analysis at the time proposed rules are issued, unless the head of the
agency certifies that the proposed rule would not have a "significant
economic impact upon a substantial number of small entities." 5 U.S.C.
§ 605(b). The analysis must include a consideration of regulatory
alternatives that accomplish the stated objectives of the proposed rule
and that minimize any significant impact on such entities. However, the
RFA only requires consideration of such alternatives and an explanation
of why alternatives were rejected; the Act does not mandate any
particular outcome in rulemaking. After the comment period on the
proposed rule is closed, the agency must either certify a lack of
impact, or prepare a final regulatory flexibility analysis, which among
other things, responds to issues raised by public comments on the
initial regulatory flexibility analysis. The agencies must make the
final analysis available to the public and publish the analysis or a
summary of it in the Federal Register. The Act also requires agencies
to ensure that small entities have an opportunity to participate in the
rulemaking process and requires the Chief Counsel of the Small Business
Administration's Office of Advocacy to monitor agencies' compliance.
The RFA applies only to rules for which an agency publishes a notice of
proposed rulemaking (or promulgates a final interpretative rule
involving the internal revenue laws of the United States), and it does
not apply to ratemaking.
Paperwork Reduction Act of 1980:
The Paperwork Reduction Act (PRA) requires agencies to justify any
collection of information from the public to minimize the paperwork
burden they impose and to maximize the practical utility of the
information collected.[Footnote 51] The Act applies to independent and
other regulatory agencies. Under the PRA, agencies are required to
submit all proposed information collections to the Office of
Information and Regulatory Affairs (OIRA) in the Office of Management
and Budget (OMB).[Footnote 52] Information collections generally cover
information obtained from more than ten sources.[Footnote 53] In their
submissions, agencies must establish the need and intended use of the
information, estimate the burden that the collection will impose on
respondents, and show that the collection is the least burdensome way
to gather the information. Generally, the public must be given a chance
to comment on proposed collections of information. 44 U.S.C. § 3506(c),
5 C.F.R. § 1320.11. At the final rulemaking stage, no additional public
notice and opportunity for comment is required, although OMB may direct
the agency to publish a notice in the Federal Register notifying the
public of OMB review.
Negotiated Rulemaking Act of 1990:
The Negotiated Rulemaking of 1990 (NRA) established a statutory
framework for agency use of negotiated rulemaking to formulate proposed
regulations.[Footnote 54] The NRA supplements the rulemaking provisions
of the APA, clarifying the authority of federal agencies to conduct
negotiated rulemaking. Generally, in a negotiated rulemaking,
representatives of the agency and the various affected interest groups
get together and negotiate the text of a proposed rule.
Unfunded Mandates Reform Act of 1995:
The Unfunded Mandates Reform Act (UMRA) was enacted to address concerns
about federal statutes and regulations that require nonfederal parties
to expend resources to achieve legislative goals without being provided
funding to cover the costs.[Footnote 55] UMRA generates information
about the nature and size of potential federal mandates but does not
preclude the implementation of such mandates. UMRA applies to proposed
federal mandates in both legislation and regulations, but it does not
apply to rules published by independent regulatory agencies. With
regard to the regulatory process, UMRA generally requires federal
agencies to prepare a written statement containing a "qualitative and
quantitative assessment of the anticipated costs and benefits" for any
rule that includes a federal mandate that may result in the expenditure
of $100 million or more in any 1 year by state, local, and tribal
governments in the aggregate, or by the private sector.[Footnote 56]
For such rules, agencies are to identify and consider a reasonable
number of regulatory alternatives and from those select the least
costly, most cost-effective, or least burdensome alternative that
achieves the objectives of the rule (or explain why that alternative
was not selected). UMRA also includes a consultation requirement;
agencies must develop a process to permit elected officers of state,
local, and tribal governments (or their designees) to provide input in
the development of regulatory proposals containing significant
intergovernmental mandates. UMRA applies only to rules for which an
agency publishes a notice of proposed rulemaking.
National Technology Transfer and Advancement Act of 1995:
The National Technology Transfer and Advancement Act (NTTAA) directs
federal agencies to use voluntary consensus standards in their
regulatory activities unless the agency provides Congress, through OMB,
with an explanation of why using these standards would be inconsistent
with applicable law or otherwise impracticable.[Footnote 57] Voluntary
consensus standards are technical standards (e.g., specifications of
materials, performance, design, or operation; test methods; sampling
procedures; and related management systems practices) that are
developed or adopted by voluntary consensus standards bodies.
Small Business Regulatory Enforcement Fairness Act:
Congress amended the RFA in 1996 by enacting the Small Business
Regulatory Enforcement Fairness Act (SBREFA).[Footnote 58] SBREFA
included judicial review of compliance with the RFA. SBREFA requires
agencies to develop one or more compliance guides for each final rule
or group of related final rules for which the agency is required to
prepare a regulatory flexibility analysis. SBREFA also requires the
Environmental Protection Agency and the Occupational Safety and Health
Administration to convene advocacy review panels before publishing an
initial regulatory flexibility analysis.
Congressional Review Act:
The Congressional Review Act (CRA) was enacted as part of SBREFA in
1996 to better ensure that Congress has an opportunity to review, and
possibly reject, rules before they become effective.[Footnote 59] CRA
established expedited procedures by which members of Congress may
disapprove agencies' rules by introducing a resolution of disapproval
that, if adopted by both Houses of Congress and signed by the
President, can nullify an agency's rule. CRA applies to rules issued by
independent and other regulatory agencies. CRA requires agencies to
file final rules with both Congress and GAO before the rules can become
effective. GAO's role under CRA is to provide Congress with a report on
each major rule (for example, rules with a $100 million impact on the
economy) including GAO's assessment of the issuing agency's compliance
with the procedural steps required by various acts and executive orders
governing the rulemaking process.
Information Quality Act:
In 2000, the Information Quality Act (IQA) was added as an amendment to
the PRA.[Footnote 60] IQA applies to the same agencies that are subject
to the PRA; the Act applies to independent and other regulatory
agencies. The IQA requires every agency to issue guidelines, with OMB
oversight, to ensure and maximize the quality, objectivity, utility,
and integrity of information disseminated by the agency. Agencies must
also establish administrative mechanisms allowing affected persons to
seek and obtain correction of information maintained and disseminated
by the agency.
On December 16, 2004, OMB issued the Information Quality Bulletin for
Peer Review under the IQA and other authority.[Footnote 61] The
Bulletin establishes minimum standards for when peer review is required
for scientific information, including stricter minimum standards for
the peer review of "highly influential" scientific assessments. The
Bulletin also establishes the types of peer review that should be
considered by agencies in different circumstances. The Bulletin applies
to independent and other regulatory agencies. Agencies must conduct any
required peer reviews early enough to allow the agency to plan its
regulatory approaches. "When an information product is a critical
component of rule-making, it is important to obtain peer review before
the agency announces its regulatory options so that any technical
corrections can be made before the agency becomes invested in a
specific approach or the positions of interest groups have hardened."
70 Fed. Reg. 2668. The result of a peer review is a report, which
agencies must consider making available to potential commenters in the
rulemaking process. "If an agency relies on influential scientific
information or a highly influential scientific assessment...the agency
shall include in the administrative record for that action a
certification that explains how the agency has complied with the
requirements of this Bulletin." 70 Fed. Reg. 2673.
E-Government Act of 2002:
The E-Government Act of 2002 was intended to enhance the management and
promotion of electronic government services and processes.[Footnote 62]
With regard to the regulatory process, the Act requires agencies, to
the extent practicable, to accept public comments on proposed rules by
electronic means and to ensure that publicly accessible federal Web
sites contain electronic dockets for their proposed rules, including
all comments submitted on the rules and other relevant materials.
Executive Orders:
In addition to congressional regulatory reform initiatives enacted in
statutes, presidential initiatives have a key role in the regulatory
process. In fact, centralized review of agencies' regulations within
the Executive Office of the President has been part of the rulemaking
process for more than 30 years.
Executive Order 12372 - Intergovernmental Review of Federal Programs:
This executive order generally requires federal agencies to consult
with state and local elected officials on regulations involving Federal
financial assistance or Federal development that would have an impact
on State and local finances.[Footnote 63]
Executive Order 12630 - Governmental Actions and Interference with
Constitutionally Protected Property Rights:
This executive order requires agencies to limit interference with
private property rights protected under the Fifth Amendment to the
Constitution.[Footnote 64] Agencies must include an analysis of the
impact of proposed regulations on property rights in its submissions to
OMB.
Executive Order 12866 - Regulatory Planning and Review:
The formal process by which OIRA currently reviews agencies' proposed
rules and final rules is essentially unchanged since Executive Order
12866 was issued in 1993.[Footnote 65] Under Executive Order 12866,
OIRA reviews significant proposed and final rules from agencies, other
than independent regulatory agencies, before they are published in the
Federal Register.
The executive order states, among other things, that agencies should
assess all costs and benefits of available regulatory alternatives,
including both quantitative and qualitative measures. It also provides
that agencies should generally select regulatory approaches that
maximize net benefits (unless a statute requires another approach).
Among other principles, the executive order encourages agencies to
tailor regulations to impose the least burden on society needed to
achieve the regulatory objectives. The executive order also established
agency and OIRA responsibilities in the review of regulations,
including transparency requirements. OIRA provides guidance to federal
agencies on implementing the requirements of the executive order, such
as guidance on preparing economic analyses required for significant
rules in OMB Circular No. A-4.
OMB Circular No. A-4:
On September 17, 2003, OMB issued OMB Circular No. A-4, Regulatory
Analysis, which is a guide for preparing the economic analysis of
significant regulatory action called for by the Executive Order.
[Footnote 66] OMB designed the guidelines to help agencies conduct
"good regulatory analyses" and to standardize the way that benefits and
costs of regulations are measured and reported. The guidelines define a
good regulatory analysis as one that includes a statement of the need
for the proposed regulation, an assessment of alternatives, and an
evaluation of the benefits and costs of the alternatives. The
guidelines state that the motivation of the evaluation is to learn if
the benefits of an action are likely to justify the costs, or discover
which of the possible alternatives would be the most cost-effective.
According to OIRA, this Circular contains several significant changes
from previous OMB guidance, including (1) more emphasis on cost-
effectiveness analysis, (2) formal probability analysis for rules with
more than a billion-dollar impact on the economy and (3) more
systematic evaluation of qualitative as well as quantified benefits and
costs.
Executive Order 12898 - Federal Actions to Address Environmental
Justice in Minority Populations and Low-Income Populations:
This executive order requires each agency to develop an "environmental
justice strategy...that identifies and addresses disproportionately
high and adverse human health or environmental effects of its programs,
policies, and activities on minority populations and low-income
populations."[Footnote 67] Each agency must identify rules that should
be revised to meet the objectives of the executive order.
Executive Order 12988 - Civil Justice Reform:
This executive order requires agencies to draft regulations in a manner
that will reduce needless litigation by ensuring the clarity of
regulatory language regarding legal rights and obligations.[Footnote
68] For example, the order requires agencies to draft regulations that
provide a clear legal standard for affected conduct rather than a
general standard, and promote simplification and burden reduction.
Executive Order 13045 - Protection of Children from Environmental
Health Risks and Safety Risks:
This executive order requires that agencies issuing "economically
significant" rules that also concern an environmental health risk or
safety risk that an agency has reason to believe may disproportionately
affect children must submit to OIRA an evaluation of the environmental
health or safety effects of the planned regulation on
children.[Footnote 69] Agencies must also include an explanation of why
the planned regulation is preferable to other potentially effective and
reasonably feasible alternatives considered by the agencies.
Executive Order 13132 - Federalism:
This executive order requires agencies to prepare a federalism summary
impact statement for actions that have federalism implications.
[Footnote 70] Specifically, it provides that "no agency shall
promulgate any regulation that has federalism implications, [or] that
imposes substantial direct compliance costs on state and local
governments," unless the agency (1) has consulted with state and local
officials early in the process, (2) submitted to OMB copies of any
written communications from such officials, and (3) published in the
preamble of the rule "a federalism summary impact statement" describing
the consultations, "a summary of the nature of [state and local]
concerns and the agency's position supporting the need to issue the
regulations, and a statement of the extent to which the concerns of
State and local officials have been met."
Executive Order 13175 - Consultation and Coordination with Indian
Tribal Governments:
This executive order provides that "no agency shall promulgate any
regulation that has tribal implications" unless the agency (1) has
consulted with tribal officials early in the process, (2) submitted to
OMB copies of any written communications from such officials, and (3)
published in the preamble of the rule "a tribal summary impact
statement" describing the consultations, "a summary of the nature of
their concerns and the agency's position supporting the need to issue
the regulation, and a statement of the extent to which the concerns of
tribal officials have been met."[Footnote 71] On issues relating to
tribal self-government, tribal trust resources, or Indian tribal treaty
and other rights, each agency should explore and, where appropriate,
use consensual mechanisms for developing regulations, including
negotiated rulemaking.
Executive Order 13211 - Actions Concerning Regulations That
Significantly Affect Energy Supply, Distribution, or Use:
This executive order requires agencies to prepare and submit to OMB a
"Statement of Energy Effects" for significant energy actions.[Footnote
72] The statement must cover the regulation's "adverse effects on
energy supply, distribution, or use (including a shortfall in supply,
price increases, and increased use of foreign supplies)" and reasonable
alternatives and their effects. The "Statement of Energy Effects" must
be published (or summarized) in the related proposed and final rule.
[End of section]
Appendix II: Case Studies of 16 Selected Rules:
This appendix provides case studies on 16 final rules published between
January 2006 and May 2008 that we reviewed for this report. At the
beginning of each case study the official rule title as published in
the Federal Register is followed by a short title that we used to
identify the rule in the body of our report. The body of each case
study includes identifying information, a brief summary or synopsis of
the rule, a discussion of the regulatory requirements addressed in the
final rule, a summary of the changes to the rule resulting from reviews
of the draft rule by the Office of Management and Budget's (OMB) Office
of Information and Regulatory Affairs (OIRA) (if applicable), and a
timeline of important events in the course of the rulemaking.
* Identifying Information. Identifies the responsible federal agency,
and other unique identifying information, such as the Regulation
Identifier Number (RIN), the citation in the Federal Register of the
final rule, and the docket number in [hyperlink,
http://www.regulations.gov].
* Rule Synopsis. Provides summary information about the substance and
effects of the rule, such as the intent or purpose of the rule, a brief
discussion of the rule's origin, rulemaking history, or regulatory
authority upon which the rule was created.
* Regulatory Requirements Addressed in the Final Rule. Identifies
generally-applicable rulemaking requirements discussed by the agency in
the final rule as published in the Federal Register and either what
additional actions were taken to comply with the triggered requirement
or why the requirement was not triggered. For economically significant
rules that triggered the requirement under Executive Order 12866, we
identified if the agency prepared a cost-benefit analysis, and if
applicable, we also summarize the actions the agency took to address
recent changes to regulatory requirements made by OMB since 2003.
* Changes Resulting from OIRA Review. Describes changes to rules that
were recommended by OIRA during OIRA's review of the rulemaking under
Executive Order 12866.
* Timeline. Identifies key dates such as the dates OIRA received and
completed its reviews, the publication dates of the proposed and final
rules in the Federal Register, the date the public comment period
ended, and other dates mentioned or tracked by agency officials.
National Air Tour Safety Standards (Air Tour Safety):
Identifying Information:
* Agency: Department of Transportation, Federal Aviation
Administration:
* Rule classification: Other Significant:
* RIN: 2120-AF07:
* Federal Register citation: 72 Fed. Reg. 6884:
* Regulations.gov docket number: FAA-1998-4521:
* Date of final rule: February 13, 2007:
Rule Synopsis:
The rule sets safety standards governing commercial air tours. The
objective of the rule is to provide a higher and uniform level of
safety for all commercial air tours. The rule includes provisions
requiring that passengers be briefed on safety procedures, such as
opening exits, exiting the aircraft, and using life preservers. It
requires that passengers in helicopters and planes operating over open
water wear life preservers, and that helicopters operating over open
water be equipped to float. It also gives relief from drug and alcohol
testing for four air tour charity events per year, and increases the
required prior flight time for pilots in those events from 200 to 500
hours. Air tours frequently take place in heavy air traffic and in
areas geographically limited in size with dangerous natural
obstructions. Better oversight of the industry was recommended by the
National Transportation Safety Board, reports of the Department of
Transportation (DOT) Inspector General, and GAO.
Regulatory Requirements Addressed in the Final Rule:
FAA discussed the following generally-applicable statutes and executive
orders in the final rule:
* NEPA: FAA concluded that the rule qualified for a categorical
exclusion from NEPA and that the rule does not involve any significant
impacts to the human environment.
* PRA: The rule included new information collections for which FAA
completed and submitted an Information Collection Request to OIRA for
approval.
* RFA: FAA determined that the rule will have a significant economic
impact on a substantial number of small entities and prepared a final
regulatory flexibility analysis.
* Trade Agreements Act: FAA assessed the potential effect of the rule
and determined that it would have only a domestic impact and therefore
no effect on any international trade-sensitive activity.
* UMRA: FAA determined that the rule would not result in any 1-year
expenditure by state, local, and tribal governments, in the aggregate,
or by the private sector that would meet or exceed the relevant
threshold of $128.1 million.
* Executive Order 12866 (Regulatory Planning and Review): FAA
identified the rule as a significant regulatory action as defined by
the executive order because it raised novel policy issues. FAA
conducted an economic analysis and submitted the rule to OIRA for
review.
* Executive Order 13132 (Federalism): FAA determined that the rule did
not have a substantial direct effect on the states, on the relationship
between the national government and the states, or on the balance of
power and responsibilities among the various levels of government.
Therefore, FAA concluded that the rule did not have federalism
implications.
* Executive Order 13211 (Actions Concerning Regulations That
Significantly Affect Energy Supply, Distribution, or Use): FAA
determined that the rule was not a significant energy action under the
executive order because it was not likely to have a significant adverse
effect on the supply, distribution, or use of energy.
Changes Resulting from OIRA Review:
There was a significant change to the regulatory text. The rule
language was changed to clarify that four charitable or non-profit
events, with no event lasting more than 3 consecutive days, was the
limit, rather than four of each in one calendar year. There were also a
number of other material changes to the rule. OIRA requested the
addition of a chart or matrix explaining the changes made by this rule.
OIRA requested the inclusion of an explanation of the policy of a four-
event limit on charity and nonprofit event flights. OIRA questioned the
source used for support of a requirement that pilots flying charity,
nonprofit or community event flights have 500 hours total flying time.
FAA added an explanation to the rule. OIRA requested clarification of
differences between "Operations Specification" and a "Letter of
Authorization." FAA rewrote the rule section to clarify the
differences. OIRA requested FAA more fully explain the effect of the
rule on operations at the Grand Canyon. FAA added three sentences to
the preamble. OIRA changed the rule at both the proposed and final rule
stages.
Timeline:
* January 2, 2002: Preliminary team concurrence on proposed rule.
* January 2, 2002: Economic evaluation of proposed rule.
* November 2, 2002: Final team concurrence on proposed rule.
* December 9, 2002: Director's concurrence on proposed rule.
* January 8, 2003: First internal level concurrence on proposed rule.
* January 30, 2003: Second FAA internal level concurrence on proposed
rule.
* February 5, 2003: Draft proposed rule transmitted to the Office of
the Secretary of Transportation (OST).
* July 8, 2003: OST approved draft proposed rule.
* July 10, 2003: OIRA received draft proposed rule.
* October 7, 2003: OIRA completed review of proposed.
* October 9, 2003: Issuance of proposed rule.
* October 22, 2003: Proposed rule published in the Federal Register.
* October 21, 2005: Preliminary team concurrence on final rule.
* November 21, 2005: Principal's briefing on final rule.
* January 19, 2006: Economic evaluation of final rule.
* March 27, 2006: Final team concurrence on final rule.
* April 5, 2006: Director's concurrence on final rule.
* April 6, 2006: First internal level concurrence on final rule.
* April 25, 2006: Second FAA internal level concurrence on final rule.
* April 27, 2006: Transmittal to the OST of final rule.
* August 16, 2006: OST approval of draft final rule.
* August 16, 2006: Transmittal to OIRA of final rule.
* September 21, 2006: Meeting between OIRA and nonfederal parties
regarding the rule.
* November 7, 2006: OIRA approval of final rule.
* December 22, 2006: Issuance of final rule.
* February 13, 2007: Final rule published in the Federal Register.
Human Space Flight Requirements for Crew and Space Flight Participants
(Human Space Flight Requirements):
Identifying Information:
* Agency: Department of Transportation, Federal Aviation
Administration:
* Rule classification: Other Significant:
* RIN: 2120-AI57:
* Federal Register citation: 71 Fed. Reg. 75,616:
* Regulations.gov docket number: FAA-2005-23449:
* Date of final rule: December 15, 2006:
Rule Synopsis:
The rule establishes requirements for human space flight, with the
intent of providing an acceptable level of safety to the general public
and ensuring individuals on board are aware of the risks associated
with launch and reentry. The rule sets training and medical standards
for the crew, and requires the operator to inform each space flight
participant in writing of the risks of launch and reentry. Security
requirements in the rule prevent participants from carrying certain
items on board, and safety requirements in the rule require
participants be trained before flight on how to respond to an emergency
situation.
Regulatory Requirements Addressed in the Final Rule:
FAA discussed the following generally-applicable statutes and executive
orders in the final rule:
* NEPA: FAA concluded that the rule qualified for a categorical
exclusion from the requirement for preparation of an environmental
assessment or environmental impact statement.
* PRA: The rule included new information collections for which FAA
completed and submitted an Information Collection Request to OIRA for
approval.
* RFA: The FAA Administrator certified that the rule will not have a
significant economic impact on a substantial number of small entities.
* Trade Agreements Act: FAA assessed the potential effect of the rule
and determined that it will impose the same costs on domestic and
international entities and thus has a neutral trade impact.
* UMRA: FAA determined that the rule would not result in any 1-year
expenditure by state, local and tribal governments, in the aggregate,
or by the private sector that would meet or exceed the relevant
threshold of $120.7 million.
* Executive Order 12866 (Regulatory Planning and Review): FAA
identified the rule as a significant regulatory action as defined by
the executive order because it raised novel policy issues. FAA
conducted an economic analysis and submitted the rule to OIRA for
review.
* Executive Order 13132 (Federalism): FAA determined that the rule did
not have a substantial direct effect on the states, on the relationship
between the national government and the states, or the balance of power
and responsibilities among the various levels of government. Therefore,
FAA concluded that the rule did not have federalism implications.
* Executive Order 13211 (Actions Concerning Regulations That
Significantly Affect Energy Supply, Distribution, or Use): FAA
determined that the rule was not a significant energy action under the
executive order because it was not likely to have a significant adverse
effect on the supply, distribution, or use of energy.
Changes Resulting from OIRA Review:
There were no substantive changes to this rule resulting from OIRA
review.
Timeline:
* March 22, 2005: Preliminary team concurrence on proposed rule.
* April 25, 2005: Economic evaluation of proposed rule.
* April 29, 2005: Principal's briefing on proposed rule.
* May 31, 2005: Final team concurrence on proposed rule.
* June 17, 2005: Director's concurrence on proposed rule.
* July 12, 2005: Legal concurrence on proposed rule.
* July 24, 2005: Office of the FAA Administrator concurrence on
proposed rule.
* July 28, 2005: Proposed rule transmitted to OST.
* September 23, 2005: OST approval of proposed rule.
* September 28, 2005: OIRA received draft proposed rule.
* December 22, 2005: OIRA completed review of draft proposed rule
without change.
* December 22, 2005: Issuance of proposed rule.
* December 29, 2005: Proposed rule published in the Federal Register.
* March 24, 2006: Preliminary team concurrence on final rule.
* April 6, 2006: Economic evaluation of final rule.
* April 27, 2006: Final team concurrence on final rule.
* May 5, 2006: Director's concurrence on final rule.
* May 26, 2006: Final rule transmitted to OST.
* August 29, 2006: OST approval of final rule.
* August 29 2006: OIRA received draft final rule.
* November 9, 2006: OIRA completed review of draft final rule without
change.
* December 1, 2006: Issuance of final rule.
* December 15, 2006: Final rule published in the Federal Register.
Light Trucks, Average Fuel Economy; Model Years 2008-2011 (Fuel Economy-
Light Trucks):
Identifying Information:
* Agency: Department of Transportation, National Highway Traffic Safety
Administration:
* Rule classification: Major, Economically Significant:
* RIN: 2127-AJ61:
* Federal Register citation: 71 Fed. Reg. 17,566:
* Regulations.gov docket number: NHTSA-2005-22223 (proposed rule);
NHTSA-2006-24309 (final rule):
* Date of final rule: April 6, 2006:
Rule Synopsis:
The rule reforms the structure of the corporate average fuel economy
(CAFE) program for light trucks and establishes higher CAFE standards
for model years 2008 through 2011. While this rule was proposed in 2005
and finalized in 2006, it was preceded by a series of rules
establishing fuel economy standards for light trucks (i.e., non-
passenger automobiles) that date back to the 1970s. The rule was
mandated by the Energy Policy Conservation Act of 1975.
Regulatory Requirements Addressed in the Final Rule:
NHTSA discussed the following generally-applicable statutes and
executive orders in the final rule:
* NEPA: NHTSA prepared an environmental assessment for the rule and
concluded that the rule will not have a significant effect on the
quality of the human environment.
* NTTAA: NHTSA consulted with voluntary consensus standards bodies and
incorporated industry standards and definitions, such as an industry
standard on light truck footprint.
* PRA: The rule included new information collections for which NHTSA
completed and submitted an Information Collection Request to OIRA for
approval.
* RFA: NHTSA's Deputy Administrator certified that the rule did not
have a significant economic impact on a substantial number of small
entities.
* UMRA: NHTSA determined that the rule would not result in any 1-year
expenditure by state, local and tribal governments, in the aggregate,
of more than $115 million, but would result in the expenditure of that
magnitude by the private sector. NHTSA concluded that it was required
by statute to set standards at the maximum feasible level achievable by
manufacturers, and thus could not consider regulatory alternatives.
* Executive Order 12866 (Regulatory Planning and Review): NHTSA
identified the rule as a significant regulatory action as defined by
the executive order because of its economic significance. Therefore,
NHTSA conducted an economic analysis and submitted the rule to OIRA for
review.
* Executive Order 12988 (Civil Justice Reform): NHTSA determined that
the rule does not have any retroactive effect.
* Executive Order 13045 (Protection of Children from Environmental
Health Risks and Safety Risks): NHTSA determined that the rule does not
have a disproportionate effect on children.
* Executive Order 13132 (Federalism): NHTSA stated that the statutory
authorization for the rule has a broad preemption provision, and
therefore, the agency was required to establish these standards by law.
* Executive Order 13211 (Actions Concerning Regulations That
Significantly Affect Energy Supply, Distribution, or Use): NHTSA
determined that the rule would not have any adverse energy effects.
* OMB Peer Review Bulletin: NHTSA convened a panel of three external
experts to review the model used in the rule. The peer review reports
and the agency's response to reviews were included in the rulemaking
docket.
Recent Analytic Requirements Addressed:
NHTSA's regulatory impact analysis addressed two of the four analytical
changes in the OMB economic guidelines that GAO reviewed for this
study. For example, the agency assessed uncertainty using a formal
probability analysis and discounted potential future benefits and costs
using discount rates of 7 percent and 3 percent, as directed by the OMB
guidelines. Agency officials said that conducting the probability
analysis was time-consuming, requiring one full-time analyst about 6
weeks to complete. In addition, the officials said, the probability
analysis was conducted after the agency had selected the preferred
regulatory alternative, and as a result, the analysis was not used for
decision-making purposes. The agency did not evaluate qualitative and
quantitative benefits and costs because it monetized all the key
impacts and the agency's analysis did not emphasize cost-effectiveness.
Changes Resulting from OIRA Review:
NHTSA did not consider substantive any of the changes made to either
the draft proposed or draft final rules during the formal review
period, and thus did not docket a record of changes made during the
OIRA review period.
Timeline:
* 1974: DOT/EPA reported to Congress on motor vehicle fuel economy
standards.
* 1975: Energy Policy Conservation Act of 1975 enacted.
* December 29, 2003: NHTSA issued an Advanced Notice of Proposed
Rulemaking under a different RIN (2127-AJ17) soliciting comments on the
structure of the CAFE program and an intent to reform the light truck
CAFE program.
* July 26, 2005: OIRA received the draft proposed rule.
* August 22, 2005: OIRA completed review of the draft proposed rule
with change.
* August 30, 2005: Proposed rule published in the Federal Register.
* March 14, 2006: OIRA staff met with outside parties to discuss this
rule.
* March 23, 2006: OIRA received the draft final rule.
* March 28, 2006: OIRA completed review of the draft final rule
consistent with change.
* April 6, 2006: Final rule published in the Federal Register.
Event Data Recorders:
Identifying Information:
* Agency: Department of Transportation, National Highway Traffic Safety
Administration:
* Rule classification: Other Significant:
* RIN: 2127-AI72:
* Federal Register citation: 71 Fed. Reg. 50,998:
* Regulations.gov docket number: NHTSA-2004-18029 (proposed rule);
NHTSA-2006-25666 (final rule):
* Date of final rule: August 28, 2006:
Rule Synopsis:
The rule establishes standards for the auto industry practice of
installing event data recorders (EDR) in passenger cars and other light
vehicles. The intent of the rule is to standardize data obtained
through EDRs so that data may be most effective and ensure that EDR
infrastructure develops to provide a foundation for automatic crash
notification. The rule requires a minimum set of specified data
elements, standardizes data format, helps ensure crash survivability of
an EDR and its data, and ensures commercial availability of tools
necessary to enable crash investigators to retrieve data from the EDR.
The rule also requires vehicle manufacturers to describe the function
and capability of an EDR in the owner's manual of any vehicle equipped
with an EDR to ensure public awareness. NHTSA promulgated the rule
following years of study by NHTSA and the National Transportation
Safety Board, and after having received three citizen petitions.
Regulatory Requirements Addressed in the Final Rule:
NHTSA discussed the following generally-applicable statutes and
executive orders in the final rule:
* NEPA: NHTSA determined that the rule will not have any significant
impact on the quality of the human environment.
* NTTAA: NHTSA adopted voluntary consensus standards where practicable.
* PRA: The rule did not contain any new information collection
requests.
* RFA: NHTSA's Administrator certified that the rule would not have a
significant economic impact on a substantial number of small entities.
* UMRA: NHTSA determined that the rule would not result in the
expenditure by state, local, or tribal governments, in the aggregate,
or by the private sector, of more than the annual threshold of $118
million.
* Executive Order 12866 (Regulatory Planning and Review): NHTSA
identified the rule as a significant regulatory action as defined by
the executive order. NHTSA conducted an economic analysis and submitted
the rule to OIRA for review.
* Executive Order 12988 (Civil Justice Reform): NHTSA stated that the
rule specified its preemptive effect in clear language.
* Executive Order 13045 (Protection of Children from Environmental
Health Risks and Safety Risks): NHTSA concluded that because the rule
is not economically significant and does not involve health and safety
risks that disproportionately affect children, no further analysis was
necessary under this executive order.
* Executive Order 13132 (Federalism): NHTSA concluded that general
principles of preemption law would operate so as to displace any
conflicting state law or regulation.
Changes Resulting from OIRA Review:
As documented by the agency in memorandums included in the public
docket, OIRA suggested changes to both the proposed and final rule that
NHTSA officials incorporated into the published versions of the rules.
NHTSA incorporated OIRA suggested language to the proposed rule
preamble related to ensuring that crash investigators and researchers
are able to obtain the capability of downloading data from the EDR.
Similarly, NHTSA changed, at OIRA's suggestion, the owner's manual
statement in the text of the proposed rule to include a sentence
advising owners that an EDR does not store or collect personal
information. NHTSA incorporated additional OIRA suggestions to the
final rule, adding to or clarifying the policy discussion in the
preamble, including adding clarifying language to the federalism
discussion. NHTSA incorporated OIRA changes to the owner's manual
statement in the final rule text, explaining that parties with special
equipment, including law enforcement officials, can access information
in an EDR if they have access to the vehicle, and that they may group
EDR data with personal information regularly collected in the course of
a criminal investigation.
Timeline:
* 1991: NHTSA began to examine EDRs as part of the Special Crash
Investigations Program.
* November 9, 1998: NHTSA denied petition for rulemaking on EDRs.
* June 2, 1999: NHTSA denied second petition for rulemaking on EDRs.
* 2001: NHTSA received a third petition for rulemaking on EDRs.
* October 11, 2002: NHTSA published request for comment on the future
role of EDRs in motor vehicles.
* March 9, 2004: OIRA received the draft proposed rule.
* June 3, 2004: OIRA completed review of draft proposed rule consistent
with change.
* December 2003: Preliminary regulatory evaluation completed.
* June 14, 2004: Proposed rule published in the Federal Register.
* April 11, 2006: OIRA received draft final rule.
* July 2006: Final regulatory evaluation completed.
* August 17, 2006: OIRA completed review of draft final rule consistent
with change.
* August 28, 2006: Final rule published in the Federal Register.
Ethylene Oxide Emissions Standards for Sterilization Facilities
(Ethylene Oxide Emissions):
Identifying Information:
* Agency: Environmental Protection Agency, Office of Air and Radiation:
* Rule classification: Other Significant:
* RIN: 2060-AK09:
* Federal Register citation: 71 Fed. Reg. 17,712:
* Regulations.gov docket number: EPA-HQ-OAR-2003-0197:
* Date of final rule: April 7, 2006:
Rule Synopsis:
The rule resulted from the periodic evaluation of the emission
standards for ethylene oxide emissions from sterilization facilities.
In the proposed rule, EPA decided not to impose more stringent emission
standards, determining that additional controls at existing sources
would achieve, at best, minimal emission reduction at a very high cost.
The Clean Air Act requires EPA to assess the risk posed by ethylene
oxide emissions and set more stringent standards as it deems necessary
within 8 years of initially setting standards, taking into account
developments in practices, processes, and control technologies.
Regulatory Requirements Addressed in the Final Rule:
EPA discussed the following generally-applicable statutes and executive
orders in the final rule:
* CRA: EPA filed the rule with the Congress and the Comptroller
General.
* NTTAA: The rule does not involve any technical standards.
* PRA: The rule does not impose any new information collection
requests.
* RFA: EPA determined that the rule would not have a significant
economic impact on a substantial number of small entities.
* UMRA: EPA determined that the rule would not result in expenditures
of $100 million or more to state, local, and tribal governments, in the
aggregate, or to the private sector in any one year.
* Executive Order 12866 (Regulatory Planning and Review): OMB deemed
the rule a significant regulatory action as defined by the executive
order. Therefore, EPA submitted the rule to OMB for review.
* Executive Order 13045 (Protection of Children from Environmental
Health Risks and Safety Risks): EPA "did not have reason to believe"
that the environmental health or safety risks addressed by this rule
presented a disproportionate risk to children.
* Executive Order 13132 (Federalism): EPA determined that the final
rule did not have a substantial direct effects on the states, on the
national government and the states, or on the distribution of power and
responsibilities among the various levels of government. EPA concluded
that the rule did not have federalism implications.
* Executive Order 13175 (Consultation and Coordination with Indian
Tribal Governments): EPA determined that the rule would not have
substantial direct effects on tribal governments, on the relationship
between the federal government and Indian tribes, or on the
distribution of power and responsibilities between the federal
government and Indian tribes.
* Executive Order 13211 (Actions Concerning Regulations That
Significantly Affect Energy Supply, Distribution, or Use): EPA
determined that the rule would not likely have a significant adverse
effect on the supply, distribution, or use of energy.
Changes Resulting from OIRA Review:
An OIRA-initiated change included generally available control
technologies or management practices (GACT) in addition to maximum
achievable control technologies or management practices (MACT) for area
sources of ethylene oxide. Both are standards EPA can use for
controlling emissions of ethylene oxide for area sources. Major sources
are required to use MACT to control emissions. In the proposed rule
OIRA specified that the CAA provides that "EPA is not required to
conduct any review under section 112(f) of the CAA or promulgate any
emissions limitations under that subsection for any source listed
pursuant to section 112(c)(3), for which EPA has issued GACT standards.
Thus, although EPA has discretion to conduct a residual risk review
under section 112(f) for area sources for which it has established
GACT, it is not required to do so." OIRA specified that EPA's residual
risk review is required for each CAA section 112(d) source category,
except area source categories for which EPA issued a GACT standard.
While addressing Executive Order 13045, "Protection of Children from
Environmental Health and Safety Risks," EPA stated that "The public is
invited to submit or identify peer reviewed studies and data, of which
the agency may not be aware, that assessed the results of early life
exposure to ethylene oxide commercial sterilization facility
emissions." During OIRA review this sentence was deleted.
EPA had written that if cancer risks to individuals exposed to
emissions from a regulated source are found above a threshold specified
in the CAA, "we must promulgate residual risk standards for the source
category (or subcategory) which provide an ample margin of safety."
OIRA rewrote the sentence to read "we must decide whether additional
reductions are necessary to provide an ample margin of safety."
Similarly, EPA wrote that in the same circumstance, "we must also adopt
more stringent standards to prevent an adverse environmental effect."
The quotation changed during OIRA review to read "we must determine
whether more stringent standards are necessary to prevent an adverse
environmental effect."
Timeline:
* December 6, 1994: Original emission standards rule published.
* 1997: EPA began developing the methodology for conducting a residual
risk assessment.
* Late 1990s: EPA convened groups to consider changing the technologies
used for ethylene emission control.
* February 13, 2002: EPA assigned a Start Action Number.
* August 3, 2005: OIRA received the draft proposed rule.
* September 27, 2005: OIRA completed review of the draft proposed rule.
* October 24, 2005: The proposed rule is published in the Federal
Register.
* March 22, 2006: OIRA met with nonfederal parties regarding the rule.
* March 23, 2006: OIRA received the draft final rule.
* March 31, 2006: OIRA completed review of the draft final rule.
* April 7, 2006: The final rule was published in the Federal Register.
National Emission Standards for Organic Hazardous Air Pollutants from
the Synthetic Organic Chemical Manufacturing Industry (Hazardous Air
Pollutants):
Identifying Information:
* Agency: Environmental Protection Agency, Office of Air and Radiation:
* Rule classification: Other Significant:
* RIN: 2060-AK14:
* Federal Register citation: 71 Fed. Reg. 76,603:
* Regulations.gov docket number: EPA-HQ-OAR-2005-0475:
* Date of final rule: December 21, 2006:
Rule Synopsis:
The rule established that the original National Emission Standards for
Organic Hazardous Air Pollutants for the synthetic organic chemical
manufacturing industry set in 1994 would mostly remain unchanged.
Although the rule does not impose further controls on the synthetic
organic chemical manufacturing industry, it does amend certain aspects
of the existing regulations. The CAA directs EPA to evaluate the
remaining risk presented by major sources of emissions of hazardous air
pollutants 8 years after promulgation of technology-based standards to
determine if the standards provide an ample margin of safety to protect
public health. The Act also directs EPA to review all standards
regulating hazardous air pollutants every 8 years and revise them as
necessary, taking into account developments in practices, processes,
and control technologies.
Regulatory Requirements Addressed in the Final Rule:
EPA discussed the following generally-applicable statutes and executive
orders in the final rule:
* CRA: EPA filed the final rule with Congress and the Comptroller
General.
* NTTAA: The rule does not involve any voluntary consensus standards.
* PRA: The rule does not impose any new information collection
requests.
* RFA: EPA determined that the rule would not have a significant
economic impact on a substantial number of small entities.
* UMRA: EPA determined that the rule does not contain a federal mandate
that may result in expenditures of $100 million or more on state,
local, and tribal governments, in the aggregate, or the private sector
in any one year.
* Executive Order 12866 (Regulatory Planning and Review): OMB deemed
the rule a significant regulatory action as defined by the executive
order because it raised novel legal and policy issues. Therefore, EPA
submitted the rule to OMB for review.
* Executive Order 12898 (Federal Actions to Address Environmental
Justice in Minority Populations and Low-Income Populations): One of
EPA's environmental justice priorities is to reduce exposure to air
toxics. In the proposed rule, EPA requested comment on the implications
of this priority since some regulated facilities are located near
minority and low-income populations. EPA received one comment regarding
this environmental justice concern that it addressed in the final rule.
* Executive Order 13045 (Protection of Children from Environmental
Health and Safety Risks): EPA "did not have reason to believe" that the
environmental health or safety risks addressed by the rule presented a
disproportionate risk to children.
* Executive Order 13132 (Federalism): EPA determined that the rule did
not have a substantial direct effect on the states, on the relationship
between the national government and the states, or on the balance of
power and responsibilities among the various levels of government.
Therefore, EPA concluded that the rule did not have federalism
implications.
* Executive Order 13175 (Consultation and Coordination with Indian
Tribal Governments): EPA determined that the rule does not have tribal
implications.
* Executive Order 13211 (Actions Concerning Regulations That
Significantly Affect Energy Supply, Distribution, or Use): EPA
determined that the rule would not likely have a significant adverse
effect on the supply, distribution, or use of energy.
Changes Resulting from OIRA Review:
OIRA made several substantive changes to the explanatory text of the
preamble. OIRA cut a section specifying periodic determinations of
pertinent technical factors. It deleted a statement that assumptions
made in the study design did not fully capture the relatively higher
exposure seen by children. It requested additional and more balanced
discussion of the rationale for selecting "no control," and requested
that EPA specify a sample size and expand its discussion on risks
reduced by emission controls. It deleted a section describing some
costs of the regulation and ways for EPA to avoid those costs. OIRA
review resulted in EPA deleting a sentence asserting that it was
required by the CAA under a particular set of circumstances to
promulgate residual risk standards.
Timeline:
* February 14, 2002: EPA assigned a Start Action Number.
* March 16, 2006: OIRA received draft proposed rule.
* March 22, 2006: OIRA met with nonfederal parties regarding the rule.
* May 31, 2006: OIRA completed review of proposed rule.
* June 14, 2006: Proposed rule published in the Federal Register.
* December 11, 2006: OIRA received draft final rule.
* December 14, 2006: OIRA completed review of draft final rule.
* December 21, 2006: Final rule was published in the Federal Register.
National Primary Drinking Water Regulations: Stage 2 Disinfectants and
Disinfection Byproducts Rule (Disinfection Byproducts 2):
Identifying Information:
* Agency: Environmental Protection Agency, Office of Water:
* Rule classification: Major, Significant:
* RIN: 2040-AD38:
* Federal Register citation: 71 Fed. Reg. 388:
* Regulations.gov docket number: EPA-HQ-OW-2002-0043:
* Date of final rule: January 4, 2006:
Rule Synopsis:
The rule is intended to help public water systems deliver safe water
with the benefits of disinfection but with fewer risks from
disinfection byproducts. Certain disinfectants used to treat drinking
water are known to create byproducts posing potential reproductive,
developmental, and cancer risks to humans. Authorized by the Safe
Drinking Water Act Amendments of 1996 (SDWA), the rule is one of a
series of rules, including the Surface Water Treatment 2 rule, intended
to improve the quality of drinking water provided by public water
systems throughout the United States. EPA's first rulemaking on
disinfection byproducts was promulgated in 1979. Because of the complex
and far-reaching implications of the rule, as well as the relationship
between the Disinfection Byproducts 2 rule and the Surface Water
Treatment 2 rule, EPA convened a FACA panel to help develop the
policies in the rule.
Regulatory Requirements Addressed in the Final Rule:
EPA discussed the following generally-applicable statutes and executive
orders in the final rule:
* NTTAA: EPA adopted voluntary consensus standards for monitoring the
levels of disinfection byproducts.
* PRA: The rule contained new information collection requirements for
which EPA completed and submitted an Information Collection Request to
OIRA for approval.
* RFA: EPA certified that the rule would not have a significant
economic impact on a substantial number of small entities. EPA
conducted a SBREFA advocacy review panel.
* UMRA: EPA determined that the rule may contain a mandate resulting in
annual expenditures of more than $100 million for state, local, and
tribal governments, or the private sector. EPA prepared an UMRA
analysis, which included a consideration of the regulatory
alternatives.
* Executive Order 12866 (Regulatory Planning and Review): EPA
identified the rule as a significant regulatory action as defined by
the executive order. Therefore, EPA conducted an economic analysis and
submitted the rule to OIRA for review.
* Executive Order 12898 (Federal Actions to Address Environmental
Justice in Minority Populations and Low-Income Populations): EPA
consulted with minority and low-income stakeholders. EPA determined
that since the rule applies uniformly to all communities, the health
protections provided are equal across all minority and income groups
served by systems regulated by the rule.
* Executive Order 13045 (Protection of Children from Environmental
Health Risks and Safety Risks): EPA concluded that "it has reason to
believe that the environmental health or safety risk...addressed by
this [rule] may have a disproportionate effect on children. EPA
believes that the [rule] will result in greater risk reduction for
children than for the general population."
* Executive Order 13132 (Federalism): EPA determined that the rule did
not have federalism implications because it will not have substantial
direct effects on the states, on the relationship between the states
and federal government, or the distribution of power and
responsibilities among various levels of government.
* Executive Order 13175 (Consultation and Coordination with Indian
Tribal Governments): EPA concluded that the final rule may have tribal
implications because it may impose substantial direct compliance costs
on tribal governments and the federal government will not provide the
funds necessary to pay those costs. A detailed estimate of the tribal
impact was included in the rule.
* Executive Order 13211 (Actions Concerning Regulations That
Significantly Affect Energy Supply, Distribution, or Use): EPA
determined that the rule is not likely to have a significant adverse
effect on the supply, distribution, or use of energy.
Recent Analytic Requirements Addressed:
EPA's regulatory impact analysis addressed the four analytical changes
in the OMB economic guidelines that we reviewed for this study. For
example, the agency analyzed cost-effectiveness, discounted potential
benefits and costs using discount rates of 7 percent and 3 percent,
evaluated potential qualitative and quantitative benefits and costs,
and conducted a probability analysis to assess the uncertainty
associated with some potential impacts. Agency officials said that they
assessed the cost-effectiveness of the regulatory alternatives in the
rule because the OMB guidelines require it but that the three other
analyses were conducted because the agency had already adopted them as
best practices. The officials estimated that the cost-effectiveness
analysis required from 1 to 2 months to complete, partly because the
agency had not yet developed guidance for analyzing the cost-
effectiveness of health-related rules. In addition, agency officials
said that the cost-effectiveness analysis was only of limited use for
selecting a final regulatory alternative.
Changes Resulting from OIRA Review:
The copy of the draft final rule in the docket shows changes throughout
to both the preamble and the rule text itself. Some appear to be
strictly editorial, and others appear to have substantive effect. One
significant change to the rule text itself is in the section on
compliance monitoring requirements. The requirement to repeat
monitoring is changed to apply only when more than eight monitoring
locations are required, rather than four required monitoring locations.
Additional requirements for repeat monitoring have been removed.
Changes to the preamble include the addition of a description of
variances and exemptions in place of a statement that the rule would be
updated "upon completion of affordability discussions with OMB." EPA's
Executive Order 12866 compliance form for the rule, docketed with the
OMB review of the draft of the final rule, describes the OMB changes as
not substantive.
Timeline:
* November 29, 1979: The Total Trihalomethanes Rule, the first
regulation of disinfection byproducts, was published.
* Fall 1992: EPA convened an advisory committee to address the issue of
disinfection and disinfectant byproducts and pathogen control issues;
this led to the first Disinfection Byproducts rule.
* Spring 1993: A Cryptosporidium outbreak in Milwaukee, Wisconsin,
sickened over 400,000 people, roughly 50 percent of users of the
municipal drinking water system.
* 1996: The SDWA required EPA to establish new standards for treatment
of drinking water and the byproducts of the water treatment process.
* 1997: EPA convened a federal advisory committee to finalize SDWA
rulemakings, including the Disinfection Byproducts 2 rule and Interim
Enhanced Surface Water Treatment rule.
* December 16, 1998: The first Disinfection Byproducts rule was
published in the Federal Register.
* March 1999 to July 2000: EPA reconvened the federal advisory
committee to provide technical input on additional SDWA rulemakings,
including the Disinfection Byproducts 2 rule and the Surface Water
Treatment 2 rule.
* August 6, 1999: EPA assigned a Start Action Number for the
rulemaking.
* Late 1999: EPA initiated the pre-panel stages of a SBREFA advocacy
review panel.
* June 23, 2000: Advocacy review panel completed.
* September 2000: Federal advisory committee members signed Agreement
in Principle stating consensus of the group.
* December 29, 2000: Federal advisory committee Agreement in Principle
was published in the Federal Register.
* January 16, 2001: Revisions to the first Disinfection Byproducts
rulemaking were published in the Federal Register.
* October 17, 2001: EPA published pre-proposal draft of Disinfection
Byproducts 2 rule preamble and regulatory language on the agency Web
site for public comment on whether the draft was consistent with
federal advisory committee recommendations.
* July 2003: The agency completed the regulatory impact analysis for
proposed rule.
* August 18, 2003: The proposed rule was published in the Federal
Register.
* February 2005: EPA received notice of intent to sue.
* April 14, 2005: OMB staff met with outside parties to discuss several
rules by the EPA Office of Water, including this rule.
* August 26, 2005: OMB received the draft final rule.
* November 2005: EPA entered into settlement agreement to complete the
rule by December 2005.
* November 23, 2005: OMB completed review of draft final rule with
change.
* December 2005: EPA completed the regulatory impact analysis for final
rule.
* December 15, 2005: EPA Administrator signed the final rule.
* January 4, 2006: The final rule was published in the Federal
Register.
National Primary Drinking Water Regulations: Long Term 2 Enhanced
Surface Water Treatment Rule (Surface Water Treatment 2):
Identifying Information:
* Agency: Environmental Protection Agency, Office of Water:
* Rule classification: Major, Economically Significant:
* RIN: 2040-AD37:
* Federal Register citation: 71 Fed. Reg. 654:
* Regulations.gov docket number: EPA-HQ-OW-2002-0039:
* Date of final rule: January 5, 2006:
Rule Synopsis:
The rule is intended to protect public health against Cryptosporidium
and other microbial pathogens in drinking water. Cryptosporidium is
highly resistant to chemical disinfectants and can cause acute illness
and death for people with weakened immune systems. Authorized by SDWA,
the rule was one of a series of rules, including the Disinfection
Byproducts 2 rule, intended to improve the quality of drinking water
supplied by public water systems throughout the United States. Because
of the complex and far-reaching implications of the rule, as well as
the relationship between the Disinfection Byproducts 2 rule and the
rule, EPA convened a FACA panel to help develop the policies in the
rule.
Regulatory Requirements Addressed in the Final Rule:
EPA discussed the following generally-applicable statutes and executive
orders in the final rule:
* NTTAA: EPA adopted voluntary standards for monitoring the levels of
one pathogen.
* PRA: The rule contained new information collection requirements for
which EPA completed and submitted an Information Collection Request to
OIRA for approval.
* RFA: EPA certified that the rule would not have a significant
economic impact on a substantial number of small entities. EPA
conducted a SBREFA advocacy review panel.
* UMRA: EPA determined that the rule may contain a mandate resulting in
annual expenditures of more than $100 million for state, local, and
tribal governments, in the aggregate, or the private sector. EPA
prepared an UMRA analysis, which included a consideration of the
regulatory alternatives.
* Executive Order 12866 (Regulatory Planning and Review): EPA
identified the rule as a significant regulatory action as defined in
the executive order because of its economic significance. Therefore,
EPA conducted an economic analysis and submitted the rule to OIRA for
review.
* Executive Order 12898 (Federal Actions to Address Environmental
Justice in Minority Populations or Low-Income Populations): EPA
determined that since the rule applies uniformly to all communities,
the health protections provided are equal across all minority and
income groups served by systems regulated by the rule.
* Executive Order 13045 (Protection of Children from Environmental
Health Risks and Safety Risks): EPA determined that the rule was
economically significant and that the environmental risks addressed by
the rule may have a disproportionate effect on children.
* Executive Order 13132 (Federalism): EPA concluded that the rule may
have federalism implications because it may impose substantial direct
costs on state or local governments, and the federal government will
not provide the funds to pay those costs.
* Executive Order 13175 (Consultation and Coordination with Indian
Tribal Governments): EPA concluded that the rule may have tribal
implications because it may impose substantial direct compliance costs
on tribal governments, and the federal government will not provide the
funds necessary to pay those costs.
* Executive Order 13211 (Actions Concerning Regulations That
Significantly Affect Energy Supply, Distribution, or Use): EPA
determined that the rule is not likely to have a significant adverse
effect on the supply, distribution, or use of energy.
Recent Analytical Requirement Addressed:
EPA's regulatory impact analysis addressed the four analytical changes
in the OMB economic guidelines that we reviewed for this study. The
agency analyzed cost-effectiveness, discounted potential benefits and
costs using discount rates of 7 percent and 3 percent, evaluated
potential qualitative and quantitative benefits and costs, and
conducted a probability analysis to assess the uncertainty associated
with some potential impacts. Agency officials said that they assessed
the cost-effectiveness of the regulatory alternatives in the rule
because the OMB guidelines require it but that the three other analyses
were conducted because the agency had already adopted them as best
practices. The officials estimated that the cost-effectiveness analysis
required from 1 to 2 months to complete, partly because the agency had
not yet developed guidance for analyzing the cost-effectiveness of
health-related rules. In addition, agency officials said that the cost-
effectiveness analysis was only of limited use for selecting a final
regulatory alternative.
Changes Resulting from OIRA Review:
According to OMB's public database, OMB received the draft final rule
on March 31, 2005, and review was complete on June 22, 2005. The rule
was subsequently published "consistent with change." EPA's Executive
Order 12866 compliance form for the rule, docketed with the OMB review
of the draft of the final rule, describes the OMB changes as not
substantive. The reviewed copy of the draft final rule shows changes
throughout the draft rule to both the preamble and the rule text
itself. Some appear to be strictly editorial, and others appear to have
substantive effect. Two significant changes to the rule text itself are
addition of notification of violation requirements for public water
systems in section 141.211 of the rule and changes to section 141.703
that provide additional circumstances under which data can be
grandfathered under state approval. Changes to the preamble include
indication that regulated systems may assume state approval of
monitoring locations if explicit state approval is not forthcoming.
Timeline:
* Fall 1992: EPA convened an advisory committee to address the issue of
disinfection and disinfectant byproducts and pathogen control issues;
this led to the first Disinfection Byproducts rule.
* Spring 1993: A Cryptosporidium outbreak in Milwaukee, Wisconsin,
sickened 400,000 people, roughly 50 percent of users of the municipal
drinking water system.
* August 9, 1999: EPA assigned Start Action Number for the rulemaking.
* 1996: The SDWA authorized EPA to establish new treatment standards
for drinking water and byproducts of the water treatment process.
* 1997: EPA convened an issue-specific federal advisory committee to
develop SDWA rulemakings, including Stage 1 DBP Rule and Interim
Surface Water Treatment Rule.
* December 16, 1998: Interim Enhanced Surface Water Treatment Rule was
published in the Federal Register.
* March 1999 to September 2000: EPA reconvened the federal advisory
committee to provide technical input on additional SDWA rulemakings,
including the Long Term 2 Rule.
* Late 1999: EPA initiated the pre-panel stages of a SBREFA advocacy
review panel.
* June 23, 2000: Advocacy review panel completed.
* September 2000: Federal advisory committee members signed Agreement
in Principle stating consensus of the group.
* December 29, 2000: Federal advisory committee Agreement in Principle
was published in the Federal Register.
* January 16, 2001: Revisions to Interim Enhanced Surface Water
Treatment rulemaking were published in the Federal Register.
* October 17, 2001: EPA published pre-proposal draft of Long Term 2
Rule preamble and regulatory language on the agency Web site for public
comment.
* January 14, 2002: The Long Term 1 Rule was published in the Federal
Register.
* December 18, 2002: OIRA received the draft proposed rule.
* March 18, 2003: OIRA completed review of the draft proposed rule with
change.
* June 2003: The agency completed the regulatory impact analysis for
proposed rule.
* August 11, 2003: The proposed rule was published in the Federal
Register.
* February 2005: EPA received notice of intent to sue.
* March 31, 2005: OMB received the draft final rule.
* April 14, 2005: OMB staff met with outside parties to discuss several
rules by the EPA Office of Water, including this rule.
* June 22, 2005: OMB completed review of draft final rule with change.
* November 2005: EPA entered into settlement agreement to complete the
rule by December 2005.
* December 2005: The agency completed the regulatory impact analysis
for final rule.
* December 15, 2005: Final rule was signed.
* January 5, 2006: The final rule published in the Federal Register.
Requirements on Content and Format of Labeling for Human Prescription
Drug and Biological Products (Physician Labeling):
Identifying Information:
* Agency: Food and Drug Administration, Center for Drug Evaluation and
Research:
* Rule classification: Other Significant:
* RIN: 0910-AA94:
* Federal Register citation: 71 Fed. Reg. 3922:
* Regulations.gov docket number: FDA-2000-N-0044:
* Date of final rule: January 24, 2006:
Rule Synopsis:
The rule revises the requirements for the format and content of
labeling for human prescription drugs and biological products, the
information physicians use to learn about and prescribe these products.
The rule governs physician drug labeling which takes the form of
package inserts. Package inserts are used as the basis for a large
uniform prescription drug manual called The Physician's Desk Reference.
FDA stated that the intent of the rule is to enhance the safe and
effective use of prescription drug products and to reduce the number of
adverse reactions resulting from medication errors caused by
misunderstood or incorrectly applied drug information. Specifically,
revisions require the labeling of new and recently approved products to
include highlights of prescribing information and a table of contents,
exclude less important and include more important content, meet new
minimum graphical requirements, be accompanied by all applicable
patient labeling approved by FDA, and clarify certain prescribing
requirements.
Regulatory Requirements Addressed in the Final Rule:
FDA discussed the following generally-applicable statutes and executive
orders in the final rule:
* NEPA: FDA determined that the rule does not have a significant effect
on the human environment.
* PRA: The rule included new information collections for which FDA
completed and submitted an Information Collection Request to OIRA for
approval.
* RFA: FDA believes that the final rule would not have a significant
impact on most small entities in this industry, but it is possible that
a few small firms may be significantly affected by the final rule. FDA
included a final regulatory flexibility analysis in the final rule.
* UMRA: FDA determined that the rule would not result in any 1-year
expenditure by state, local and tribal governments, in the aggregate,
or by the private sector that would meet or exceed the relevant
threshold of $115 million.
* Executive Order 12866 (Regulatory Planning and Review): FDA
identified the rule as a significant regulatory action as defined by
the executive order. FDA conducted an economic analysis and submitted
the rule to OIRA for review.
* Executive Order 12988 (Civil Justice Reform): FDA determined that the
rule does not have any retroactive effect.
* Executive Order 13132 (Federalism): FDA stated that certain state-
level product liability claims would conflict with federal law or
frustrate the purpose of federal regulation. FDA described six
categories of product liability claims that the agency believed would
be preempted by FDA's regulation of prescription drug labeling.
Changes Resulting from OIRA Review:
FDA deleted at OIRA's suggestion an estimate of the number of people
who would submit applications for new drugs and a table detailing the
estimated reporting burden for those subject to FDA's information
collection request. FDA at OIRA's suggestion also increased the number
of affected pharmaceutical firms that could be considered small. We
found in FDA's docket, documentation of OIRA's review for the final
rule but not for the proposed rule. We assume none was required for the
proposed rule as, according to OIRA's [hyperlink,
http://www.reginfo.gov], it was not changed by OIRA review.
Timeline:
* Before 1992: CDER received feedback from physicians in the field that
prescription drug labeling required revision.
* 1992: CDER convened the first focus group on the issue.
* August 2, 2000: OIRA received draft proposed rule.
* December 14, 2000: OIRA completed review of the draft proposed rule
without change.
* December 22, 2000: The proposed rule was published in the Federal
Register.
* August 2003: The draft final rule approved by CDER.
* October 2003: The rule was sent to the Office of Chief Counsel, which
performed a federalism analysis.
* November 2004: The rule received FDA approval and was sent to the
Department of Health and Human Services and OMB simultaneously.
* January 10, 2005: OIRA received the draft final rule.
* April 1, 2005: FDA withdrew the rule from OIRA review at OIRA's
request.
* April 8, 2005: FDA resubmitted the rule for OIRA review.
* January 17, 2006: OIRA completed its review of the final rule with
change.
* January 24, 2006: The final rule was published in the Federal
Register.
Use of Ozone Depleting Substances; Removal of Essential Use
Designations (Ozone Depleting Substances):
Identifying Information:
* Agency: Food and Drug Administration, Center for Drug Evaluation and
Research:
* Rule classification: Other Significant:
* RIN: 0910-AF93:
* Federal Register citation: 71 Fed. Reg. 70,870:
* Regulations.gov docket number: FDA-2006-N-0169:
* Date of final rule: December 7, 2006:
Rule Synopsis:
The Clean Air Act required that FDA, in consultation with EPA,
determine whether an FDA-regulated product that released ozone-
depleting substances was essential. The rule removes the "essential
use" designations granted previously by FDA for seven products emitting
ozone-depleting substances from pressurized containers. As none of the
seven products were being marketed in the United States, the rule
removed unnecessary essential use designations. The products were
granted the designation by a previous FDA rule, which also stated that
if essential use products were no longer marketed in the United States,
the designation could be withdrawn.
Regulatory Requirements Addressed in the Final Rule:
FDA discussed the following generally-applicable statutes and executive
orders in the final rule:
* NEPA: FDA conducted an environmental assessment and considered
potential impacts. FDA concluded that an environmental impact statement
was not required.
* PRA: The rule does not impose any new information collection
requests.
* RFA: FDA certified that the rule would not have a significant
economic impact on a substantial number of small entities.
* UMRA: FDA did not expect the rule to result in any 1-year expenditure
that would meet or exceed the relevant threshold of $118 million.
* Executive Order 12866 (Regulatory Planning and Review): FDA believed
that the rule was not a significant regulatory action as defined by
this executive order. However, OMB requested the rule for review
because of its international implications.
* Executive Order 13132 (Federalism): FDA determined that the rule did
not contain policies that have federalism implications.
Changes Resulting from OIRA Review:
Under Executive Order 12866, FDA did not consider the rule significant
regulatory action as defined by the executive order. However, FDA
believed that OMB would want to review the rule because of the rule's
implications to the Montreal Protocol (Treaty) that included agency
obligations to EPA as stated in the treaty, and also amendments to the
Clean Air Act. OIRA did not suggest any changes to the rule during the
formal OMB review period.
Timeline:
* Early 2006: CDER began drafting the direct-to-final rule.
* May 2006: CDER approval process began.
* July 2006: Economic analysis completed.
* August 2006: Rule approved by CDER's Office of Regulatory Policy.
* September 2006: Rule approved by CDER Director.
* October 2006: Rule approved by Chief Counsel and management at FDA.
* October 23, 2006: OIRA received draft final rule.
* November 28, 2006: OIRA completed review of draft final rule with no
change.
* December 2006: Direct-to-final rule published in the Federal
Register.
Current Good Manufacturing Practice in Manufacturing, Packaging,
Labeling, or Holding Operations for Dietary Supplements (Dietary
Supplements):
Identifying Information:
* Agency: Food and Drug Administration, Center for Food Safety and
Applied Nutrition:
* Rule classification: Major, Economically Significant:
* RIN: 0910-AB88:
* Federal Register citation: 72 Fed. Reg. 34,752:
* Regulations.gov docket number: FDA-1996-N-0028:
* Date of final rule: June 25, 2007:
Rule Synopsis:
The rule establishes the minimum current good manufacturing practice
for manufacturing, packaging, labeling, and holding dietary
supplements.[Footnote 73] FDA was authorized by the Dietary Supplement
Health and Education Act of 1994 to prescribe by regulation good
manufacturing practices for dietary supplements. FDA published an
Advance Notice of Proposed Rulemaking on February 6, 1997 in the
Federal Register. 62 Fed. Reg. 5700. FDA published a proposed rule in
the Federal Register on March 13, 2003.
Regulatory Requirements Addressed in the Final Rule:
FDA discussed the following statutory and regulatory requirements in
the final rule:
* NEPA: FDA determined that the final rule did not trigger the
requirements of NEPA because the action is of a type that does not
individually or cumulatively have a significant effect on the human
environment.
* PRA: The rule included new information collections for which FDA
completed and submitted an Information Collection Request to OIRA for
approval.
* RFA: FDA determined that the rule will have a significant economic
impact on a substantial number of small entities and prepared a final
regulatory flexibility analysis.
* UMRA: FDA determined that the rule may contain a mandate resulting in
annual expenditures of more than $122 million for state, local, and
tribal governments, or the private sector. FDA prepared an UMRA
analysis, which included a consideration of the rule's effects on
future costs.
* Executive Order 12866 (Regulatory Planning and Review): FDA
identified the rule as a significant regulatory action as defined by
the executive order because of its economic significance. Therefore,
FDA conducted an economic analysis and submitted the rule to OIRA for
review.
* Executive Order 13132 (Federalism): FDA determined that the rule did
not have a substantial direct effect on the states, on the relationship
between the national government and the states, or on the balance of
power and responsibilities among the various levels of government. FDA
concluded that the rule did not have federalism implications.
Recent Analytic Requirements Addressed:
FDA's regulatory impact analysis for the final rule included the four
analytical changes in OMB Circular No. A-4 that we reviewed for this
study. For example, the agency analyzed cost-effectiveness and
evaluated some qualitative impacts, discounted future benefits and
costs using discount rates of 3 percent and 7 percent, and conducted a
probability analysis to assess the uncertainty associated with some
potential impacts. FDA officials said that they used the two discount
rates because of Circular No. A-4 but added that they have always
followed OMB guidelines on discount rates. The officials could not
recall whether the cost-effectiveness analysis was conducted
specifically because of Circular No. A-4, but indicated that it is
currently an agency best practice. The officials added that
systematically evaluating qualitative impacts and using probability
analysis to analyze uncertainty are also agency best practices. For
example, the officials said that they analyzed uncertainty using a
probability analysis because it is a best practice when there is a
large degree of uncertainty about the estimated benefits and costs.
According to these officials, OMB Circular No. A-4 is useful because it
made transparent what OMB reviewers expect for analytical support on
economically significant rules and, more generally, because it serves
as a blueprint for conducting a regulatory impact analysis.
Changes Resulting from OIRA Review:
FDA made changes at the suggestion of OIRA to both the preamble and the
regulatory text. FDA sent draft versions of the final rule to OIRA
twice, once in October 2005 and again in June 2006. FDA staff stated
that the rule was not returned by OIRA, but rather as a result of
discussions, FDA staff made a number of changes and sent a second draft
of the rule to OIRA. Our review of both copies of the draft final rule
reviewed by OIRA as docketed by FDA found edits to the rule, both to
the preamble and the rule itself. For example, in addition to editorial
changes, changes to the draft rule text show that a requirement in the
rule to save reserve samples for 3 years was changed to 2 years. This
change is also reflected in the preamble language. Changes to the
regulatory impact analysis--included with the rule in its entirety in
keeping with FDA practice--show additions of text justifying the
rulemaking and additional descriptions of calculations of costs
associated with illness and injury resulting from contaminated or
mislabeled dietary supplements. We found documentation of the final
stage of OMB review on both drafts sent to OMB during that stage.
Timeline:
* October 25, 1994: Dietary Supplement Health and Education Act of
1994, Pub. L. No. 103-417, was enacted, granting FDA authority to
prescribe good manufacturing practices for dietary supplements by
regulation.
* November 1995: Industry group requested that FDA consider a
rulemaking on good manufacturing practices for dietary supplements.
* February 6, 1997: An Advance Notice of Proposed Rulemaking was
published in the Federal Register.
* 1998-1999: FDA management considered and committed to a rulemaking.
* 1999: FDA undertook a series of outreach activities, including public
meetings and tours of dietary supplement manufacturing facilities.
* October 4, 2002: OIRA received the draft proposed rule.
* January 16, 2003: OIRA completed review of the draft proposed rule
with change.
* March 13, 2003: The proposed rule was published in the Federal
Register.
* October 25, 2005: OIRA received the draft final rule.
* November 29, 2005, October 4, 2006, and November 16, 2006: OIRA staff
met with outside parties to discuss this rule.
* May 8, 2007: OIRA completed review of draft final rule with change.
* June 25, 2007: Final rule was published in the Federal Register, and
FDA published an interim final rule on a process for requesting
exemption from the dietary supplement current good manufacturing
practices requirement for 100 percent identity testing of dietary
ingredients.
Food Labeling: Nutrient Content Claims, Expansion of the Nutrient
Content Claim "Lean" (Lean Nutrient Claims):
Identifying Information:
* Agency: Food and Drug Administration, Center for Food Safety and
Applied Nutrition:
* Rule classification: Other Significant:
* RIN: 0910-ZA27:
* Federal Register citation: 72 Fed. Reg. 1455:
* Regulations.gov docket number: FDA-2004-P-0008:
* Date of final rule: January 12, 2007:
Rule Synopsis:
The rule amends FDA's food labeling regulations to allow the use of the
word "lean" more frequently by including it for use with "mixed dishes
not measurable with a cup" that fulfill certain criteria for fat and
cholesterol content.[Footnote 74] The intent was to provide reliable
information that would assist consumers in maintaining healthy dietary
practices. The rule was promulgated in response to a petition by Nestlé
Corporation requesting that the category "mixed dishes not measurable
with a cup" be included among those that can be called "lean."
Regulatory Requirements Addressed in the Final Rule:
FDA discussed the following generally-applicable statutes and executive
orders in the final rule:
* NEPA: FDA determined that the final rule did not trigger the
requirements of NEPA because the action is of a type that does not
individually or cumulatively have a significant effect on the human
environment.
* RFA: FDA certified that the rule would not have a significant
economic impact on a substantial number of small entities.
* PRA: The rule did not contain any new information collection
requests.
* UMRA: FDA did not expect the rule to result in any 1-year expenditure
by state, local, and tribal governments, in the aggregate, or by the
private sector, that would meet or exceed the relevant threshold of
$122 million.
* Executive Order 12866 (Regulatory Planning and Review): FDA
determined that the rule was not a significant regulatory action as
defined by the executive order. However, OMB considered the rule a
significant regulatory action. Therefore, FDA submitted the rule to
OIRA for review.
* Executive Order 13132 (Federalism): FDA determined that the rule
would have a preemptive effect on state law, but concluded that the
preemptive effect of the rule is consistent with Executive Order 13132.
Changes Resulting from OIRA Review:
After 100 days of formal OMB review, the final rule was not changed by
OMB.
Timeline:
* January 9, 2004: Nestlé submitted the petition for the rulemaking.
* April 22, 2004: FDA filed the Nestlé petition for comprehensive
review.
* November 25, 2005: Proposed rule published in the Federal Register.
* February 16, 2006: FDA notified state health commissioners, state
agricultural commissioners, food program directors, and FDA field
personnel and drug program directors of the intended amendment.
* September 12, 2006: OIRA received draft final rule.
* December 21, 2006: OIRA completed review of the draft final rule with
no change.
* January 12, 2007: Final rule published in the Federal Register.
Electronic Shareholder Forums:
Identifying Information:
* Agency: Securities and Exchange Commission, Division of Corporation
Finance:
* Rule classification: Not applicable:
* RIN: 3235-AJ92:
* Federal Register citation: 73 Fed. Reg. 4450:
* Regulations.gov docket number: SEC-2007-1058 (proposed rule); SEC-
2008-0133 (final rule):
* Date of final rule: January 25, 2008:
Rule Synopsis:
The rule encourages the use of online shareholder forums. It removes
legal ambiguity and both real and perceived impediments to private
sector experimentation with the use of the Internet for communication.
SEC stated that such communication technology can potentially better
vindicate shareholders' rights, for example, to elect directors and
improve discussions on a variety of subjects that are now considered
only periodically and indirectly through the proxy process. The rule
gives liability protection to parties maintaining or operating an
electronic shareholder forum.
Regulatory Requirements Addressed in the Final Rule:
SEC discussed the following generally-applicable statutes in the final
rule:
* RFA: SEC analyzed whether the rule would have a significant economic
impact on a substantial number of small entities and prepared both an
initial and final regulatory flexibility analysis.
* PRA: The rule did not include any new information collection
requirements.
Changes Resulting from OIRA Review:
As an independent regulatory agency, SEC is not subject to OIRA
regulatory review under Executive Order 12866.
Timeline:
* 2006: Lawsuit resulted in court decision concerning proxies.
* May 7, 24, and 25, 2007: SEC hosted three proxy roundtables to gather
information from a wide of variety of parties interested in proxy
issues.
* July 12, 2007: Staff formally recommended proposed rule for SEC
consideration.
* July 27, 2007: At an open meeting, SEC approved issuance of proposed
rule.
* August 3, 2007: Proposed rule was published in the Federal Register.
* November 16, 2007: Staff formally recommended adopting final rule to
SEC.
* November 28, 2007: At an open meeting, SEC approved issuance of final
rule.
* January 25, 2008: Final rule was published in Federal Register.
Internet Availability of Proxy Materials (Internet Proxies):
Identifying Information:
* Agency: Securities and Exchange Commission, Division of Corporation
Finance:
* Rule classification: Major:
* RIN: 3235-AJ47:
* Federal Register citation: 72 Fed. Reg. 4148:
* Regulations.gov docket number: SEC-2005-0386 (proposed); SEC-2007-
0134 (final):
* Date of final rule: January 29, 2007:
Rule Synopsis:
The rule provides an alternative method of providing proxy materials to
shareholders by posting the materials on an Internet site and notifying
shareholders of their availability. The rule is voluntary, and issuers
of securities are not required to offer shareholders an electronic
distribution option.
Regulatory Requirements Addressed in the Final Rule:
SEC discussed the following generally-applicable statutory requirements
in the final rule:
* PRA: The rule included new information collections for which SEC
completed and submitted an Information Collection Request to OIRA for
approval.
* RFA: SEC analyzed whether the rule would have a significant economic
impact on a substantial number of small entities and prepared an
initial and final regulatory flexibility analysis.
Changes Resulting from OIRA Review:
As an independent regulatory agency, SEC is not subject to OIRA
regulatory review under Executive Order 12866.
Timeline:
* Spring 2005: SEC regulatory development staff began drafting the
proposed rule.
* November 14, 2005: Staff formally recommended that SEC approve
proposed rule.
* November 29, 2005: SEC approved issuance of proposed rule at an open
meeting.
* December 15, 2005: The proposed rule was published in the Federal
Register.
* November 27, 2006: Staff formally recommended adopting final rule for
SEC consideration.
* December 13, 2006: SEC approved issuance of final rule at an open
meeting.
* January 29, 2007: The final rule was published in the Federal
Register.
Extension of Interactive Data Voluntary Reporting Program on the EDGAR
System to Include Mutual Fund Risk/Return Summary Information (Mutual
Fund Data Reporting):
Identifying Information:
* Agency: Securities and Exchange Commission, Division of Investment
Management:
* Rule classification: Not applicable:
* RIN: 3235-AJ59:
* Federal Register citation: 72 Fed. Reg. 39,290:
* Regulations.gov docket number: SEC-2007-0220 (proposed rule); SEC-
2007-0958 (final rule):
* Date of final rule: July 17, 2007:
Rule Synopsis:
The rule encourages mutual funds to participate in a voluntary
reporting program to tag selected risk/return data in a standard format
in eXtensible Business Reporting Language (XBRL). According to the
preamble, "with almost half of all U.S. households owning mutual
funds...improving the quality of mutual fund disclosure is important to
millions of Americans." When tagged in XBRL, the data become
interactive and can be retrieved, searched, or analyzed by software
applications in an automated fashion. The rule encourages voluntary
participation in a program of electronically tagging risk/return
information by mutual funds, so that SEC can evaluate the usefulness of
such tagging to interested parties. Information submitted would be
included in the Electronic Data Gathering, Analysis, and Retrieval
System (EDGAR) filings.
Regulatory Requirements Addressed in the Final Rule:
SEC discussed the following generally-applicable statutes in the final
rule:
* PRA The rule included new information collections for which SEC
completed and submitted an Information Collection Request to OIRA for
approval.
* RFA: SEC analyzed whether the rule would have a significant economic
impact on a substantial number of small entities and prepared both an
initial and final regulatory flexibility analysis.
Changes Resulting from OIRA Review:
As an independent regulatory agency, SEC is not subject to OIRA
regulatory review under Executive Order 12866.
Timeline:
* March 2006: ICI announced an initiative to create a taxonomy of
interactive data tags for the risk/return summary.
* June 12, 2006: SEC held a public roundtable on the use of interactive
data for mutual funds.
* September 24, 2006: First draft of ICI tags distributed to working
group for comment; SEC staff provided comments on draft taxonomy over
next several weeks.
* January 4, 2007: ICI released the XBRL tags to the public.
* January 18, 2007: Staff formally recommended proposing release for
SEC consideration.
* January 31, 2007: SEC approved issuance of proposed rule.
* February 12, 2007: Proposed rule published in the Federal Register.
* May 16, 2007: ICI submitted taxonomy to XBRL International for
acknowledgment.
* June 6, 2007: Staff formally recommended adopting final rule for SEC.
* June 20, 2007: SEC approved issuance of final rule at an open
meeting.
* July 17, 2007: Final rule was published in the Federal Register.
Mutual Fund Redemption Fees Identifying Information (Mutual Fund
Redemption Fees):
Identifying Information:
* Agency: Securities and Exchange Commission, Division of Investment
Management:
* Rule classification: Major:
* RIN: 3235-AJ51:
* Federal Register citation: 71 Fed. Reg. 58,257:
* Regulations.gov docket number: SEC-2006-0292 (proposed rule); SEC-
2006-1284 (final rule):
* Date of final rule: October 3, 2006:
Rule Synopsis:
The rule amends SEC Rule 22c-2, which permits registered open-end
investment companies (funds) to impose a redemption fee of up to 2
percent on the redemption of fund shares. The rule is intended to allow
funds to recoup some of the direct and indirect costs of frequent
trading and to reduce the dilution of fund shares. The rule also
requires that the fund, regardless of whether it imposes a redemption
fee, enter into a written agreement with each of its intermediaries
(such as broker-dealers or retirement plan administrators) under which
the intermediaries must provide the fund, upon request, information
about the identity of shareholders and information about their
transactions in fund shares. These amendments are designed to address
certain technical issues that arose after the rule was adopted and
reduce the cost of compliance to both funds and financial
intermediaries.
Regulatory Requirements Addressed in the Final Rule:
SEC discussed the following generally-applicable statutory requirements
in the final rule:
* PRA: The rule included new information collections for which SEC
completed and submitted an Information Collection Request to OIRA for
approval.
* RFA: SEC analyzed whether the rule would have a significant economic
impact on a substantial number of small entities and prepared both an
initial and final regulatory flexibility analysis.
Changes Resulting from OIRA Review:
As an independent regulatory agency, SEC is not subject to OIRA
regulatory review under Executive Order 12866.
Timeline:
* March 11, 2005: SEC adopted rule 22c-2 under the Investment Company
Act; in the final notice, SEC solicited additional comment on 22c-2.
* February 3, 2006: Staff formally recommended that SEC amend Rule
22c-2.
* February 28, 2006: SEC approved issuance of proposed amendments to
Rule 22c-2.
* March 7, 2006: The proposed amended rule was published in the Federal
Register.
* September 1, 2006: Staff formally recommended that SEC adopt amended
rule.
* September 27, 2006: SEC approved issuance of final rule.
* October 3, 2006: The final rule was published in the Federal
Register.
This appendix presents examples of different methods that agencies used
to document the OIRA review process under Executive Order 12866 in
their rulemaking dockets (See figures 5, 6, and 7.)
[End of section]
Appendix III: Examples of OIRA Review Documentation:
Figure 5: NHTSA Summary Memorandum Identifying OIRA Review Changes:
[Refer to PDF for image: letter]
U.S. Department of Transportation:
National Highway Traffic Safety Administration:
Memorandum:
Date: March 10, 2009:
Subject: Revisions to Regulatory Action on Event Data Recorders (EDRs):
From: [Signed by] Eric Stas:
Attorney-Advisor, Office of the Chief Counsel:
National Highway Traffic Safety Administration (NHTSA):
To: U.S. DOT Docket Management System:
Docket NHTSA-2006-25666-455:
Section 6(a)(3)(E) of Executive Order 12866, "Regulatory Planning and
Review," requires agencies to identify the substantive changes between
a draft regulatory action suubmitted to the Office of Management and
Budget (OMB) for review and the action subsequently announced.
Changes to the EDR Final Rule:
At the suggestion of OMB, NHTSA modified the draft EDR final rule as
follows:
* Added a discussion regarding why the agency anticipates that EDRs
will require collection of vehicle identification number (VIN)
information, how the agency typically safeguards such information, and
why VIN information is not a 'record' or part of a 'system of records'
under the Privacy Act of 1974 (see Section III.B and Section IV.H.7).
* Clarified that the regulation of in-vehicle subscription services
(e.g., ones designed to link the vehicle with a dispatcher of emergency
medical personnel or roadside assistance) is outside the scope of the
present EDR rulemaking. However, the agency stated its expectation that
consumers are generally made aware at the time of sale as to the
continued availability of such services for a fee (see Section IV.B.*).
* Clarified the agency's position on the preemptive effect of the EDR
final rule (e.g., updated the discussion of State EDR laws, which
increased number during the course of the agencies development of the
final rule, and of how the rule would impact those existing Stare laws
(see Section IV.B.()).
* Added language to the required owner's manual statement to explain
that parties permitted to obtain access to EDR data (such as law
enforcement officials) may be able to combine such data with other
types of personally-identifying information routinely acquired during a
crash investigation (see paragraph 563.11 of the regulatory text of the
final....
Changes to the EDR Final Regulatory Evaluation (FRE):
At the suggestion of OMB, NHTSA modified the FRE as follows:
* Revised Tables IV-3 and IV-4 to reflect the fact that for some
manufacturers whose products do not currently meet all of the
requirements of the EDR final rule, there may be certain computer,
paperwork, and compliance costs associated with conforming their
vehicles to the new requirements. However, the agency continues to
believe that those costs would be de minimis. Accordingly, for those
items, we substituted an estimate of "negligible" cost for the draft
final rule's estimate of"$O" (see Chapter IV).
Source: NHTSA.
[End of figure]
Figure 6: FAA Standard Form to Indicate the Nature of OIRA Review
Changes:
[Refer to PDF for image: document]
Federal Aviation Administration:
Compliance With E.O. 12866:
Section 6(a)(3)(E) of E.O. 12866 requires agencies to identify for the
public, in a complete, clear, and simple manner, those changes in a
regulatory action made at the suggestion or recommendation of the
Office of Information and Regulatory Affairs (OIRA), Office of
Management and Budget. Place a copy of this form in the docket and in
the project folder.
Title of Rulemaking: Enhanced Airworthiness Program for Airplane
Systems/Fuel Tank Safety (EAPAS/FTS):
Regulatory Identification Number: 2120-AI31:
[Empty]: OIRA did not review the rulemaking document.
[Empty]: OIRA reviewed the rulemaking document, but did not suggest or
recommend any changes.
[Check]: OIRA reviewed the rulemaking document, and we have documented
the changes we made at OIRA's suggestion or recommendation in an
attachment to this sheet.
Signature of Analyst: [Illegible]
Date: January 2, 2008:
Attachment:
Source: FAA.
[End of figure]
Figure 7: EPA Use of Redline/Strikeout Method to Document OIRA Review
Changes:
[Refer to PDF for image: document]
Word Perfect Document Compare Summary:
Original document: C:\Documents and Settings\epa\My Documents\Preamble\
Old Drafts\Stage2preamble_OMB_082205.wpd.
Revised document: C:\Documents and Settings\epa\My Documents\Preamble\
Old Drafts\Stage2preamble_final_121405.wpd.
Deletions are shown with the following attributes and color:
[Strikeout] Blue RGB(0,0,255):
Deleted text is shown as full text.
Insertions are shown with the following attributes and color:
Double underline; Redline; Red RGB(255,0,0).
Moved blocks are marked in the new location, and only referenced in the
old location. Moved blocks are shown in the following color:
Orange RGB(255,200,0).
The document was marked with 984 Deletions, 870 Insertions, 1 Move.
Source Water Type: Subpart II;
Population Size Category: less than 500;
Monitoring Frequency[1]: per year;
Distribution System Monitoring Location: Total per monitoring
period[2]: 2;
Distribution System Monitoring Location: Highest TTHM Locations: 1;
Distribution System Monitoring Location: Highest HAA5 Locations: 1;
Distribution System Monitoring Location: Existing Subpart L Compliance
Locations: 0.
Source Water Type: Subpart II;
Population Size Category: 500-3,300;
Monitoring Frequency[1]: per quarter;
Distribution System Monitoring Location: Total per monitoring
period[2]: 2;
Distribution System Monitoring Location: Highest TTHM Locations: 1;
Distribution System Monitoring Location: Highest HAA5 Locations: 1;
Distribution System Monitoring Location: Existing Subpart L Compliance
Locations: 0.
Source Water Type: Subpart II;
Population Size Category: 3,301-9,999;
Monitoring Frequency[1]: per quarter;
Distribution System Monitoring Location: Total per monitoring
period[2]: 2;
Distribution System Monitoring Location: Highest TTHM Locations: 1;
Distribution System Monitoring Location: Highest HAA5 Locations: 1;
Distribution System Monitoring Location: Existing Subpart L Compliance
Locations: 0.
Source Water Type: Subpart II;
Population Size Category: 10,000-49,999;
Monitoring Frequency[1]: per quarter;
Distribution System Monitoring Location: Total per monitoring
period[2]: 4;
Distribution System Monitoring Location: Highest TTHM Locations: 2;
Distribution System Monitoring Location: Highest HAA5 Locations: 1;
Distribution System Monitoring Location: Existing Subpart L Compliance
Locations: 1.
Source Water Type: Subpart II;
Population Size Category: 50,000-249,999;
Monitoring Frequency[1]: per quarter;
Distribution System Monitoring Location: Total per monitoring
period[2]: 8;
Distribution System Monitoring Location: Highest TTHM Locations: 3;
Distribution System Monitoring Location: Highest HAA5 Locations: 3;
Distribution System Monitoring Location: Existing Subpart L Compliance
Locations: 2.
Source Water Type: Subpart II;
Population Size Category: 250,000-999,999;
Monitoring Frequency[1]: per quarter;
Distribution System Monitoring Location: Total per monitoring
period[2]: 12;
Distribution System Monitoring Location: Highest TTHM Locations: 5;
Distribution System Monitoring Location: Highest HAA5 Locations: 4;
Distribution System Monitoring Location: Existing Subpart L Compliance
Locations: 3.
Source Water Type: Subpart II;
Population Size Category: 1,000,000-4,999,999;
Monitoring Frequency[1]: per quarter;
Distribution System Monitoring Location: Total per monitoring
period[2]: 16;
Distribution System Monitoring Location: Highest TTHM Locations: 6;
Distribution System Monitoring Location: Highest HAA5 Locations: 6;
Distribution System Monitoring Location: Existing Subpart L Compliance
Locations: 4.
Source Water Type: Subpart II;
Population Size Category: greater than 5,000,000;
Monitoring Frequency[1]: per quarter;
Distribution System Monitoring Location: Total per monitoring
period[2]: 20;
Distribution System Monitoring Location: Highest TTHM Locations: 8;
Distribution System Monitoring Location: Highest HAA5 Locations: 7;
Distribution System Monitoring Location: Existing Subpart L Compliance
Locations: 5.
Source Water Type: Ground Water;
Population Size Category: less than 500;
Monitoring Frequency[1]: per year;
Distribution System Monitoring Location: Total per monitoring
period[2]: 2;
Distribution System Monitoring Location: Highest TTHM Locations: 1;
Distribution System Monitoring Location: Highest HAA5 Locations: 1;
Distribution System Monitoring Location: Existing Subpart L Compliance
Locations: 0.
Source Water Type: Ground Water;
Population Size Category: 500-9,999;
Monitoring Frequency[1]: per year;
Distribution System Monitoring Location: Total per monitoring
period[2]: 2;
Distribution System Monitoring Location: Highest TTHM Locations: 1;
Distribution System Monitoring Location: Highest HAA5 Locations: 1;
Distribution System Monitoring Location: Existing Subpart L Compliance
Locations: 0.
Source Water Type: Ground Water;
Population Size Category: 10,000-99,999;
Monitoring Frequency[1]: per quarter;
Distribution System Monitoring Location: Total per monitoring
period[2]: 4;
Distribution System Monitoring Location: Highest TTHM Locations: 2;
Distribution System Monitoring Location: Highest HAA5 Locations: 1;
Distribution System Monitoring Location: Existing Subpart L Compliance
Locations: 1.
Source Water Type: Ground Water;
Population Size Category: 100,000-499,999;
Monitoring Frequency[1]: per quarter;
Distribution System Monitoring Location: Total per monitoring
period[2]: 6;
Distribution System Monitoring Location: Highest TTHM Locations: 3;
Distribution System Monitoring Location: Highest HAA5 Locations: 2;
Distribution System Monitoring Location: Existing Subpart L Compliance
Locations: 1.
Source Water Type: Ground Water;
Population Size Category: greater than 500,000;
Monitoring Frequency[1]: per quarter;
Distribution System Monitoring Location: Total per monitoring
period[2]: 8;
Distribution System Monitoring Location: Highest TTHM Locations: 3;
Distribution System Monitoring Location: Highest HAA5 Locations: 3;
Distribution System Monitoring Location: Existing Subpart L Compliance
Locations: 2.
[1] All systems must [strikeout: dual sample set] [insert: monitor]
during month of highest DBP concentrations.
[2] System [strikeout: is] [insert: on manual monitoring and subpart H
systems serving 500-3,300 are] required to take individual TTHM and
HAA5 samples (instead of a dual sample set) at the locations with the
highest TTHM and HAA5 concentrations, respectively. Only one location
with a dual sample set per monitoring period is needed if highest TTHM
and HAA5 concentrations occur at the same location [insert, and month,
if monitored annually.]
(c) Your must recommend subpart V compliance monitoring locations based
on standard monitoring results, system specific study results, and
subpart L compliance monitoring results. You must follow the protocol
in paragraphs (c)(1) through [strikeout: (4)] [insert (8) of this
section.] If required to monitor at more than [strikeout: four]
[insert: eight] locations, you must repeat the protocol as necessary.
[strikeout: alternating between locations with the highest HAA5 LRAA
and the highest TTHM LRAA not previously selected as a subpart V
monitoring location for choosing locations under paragraph (c)(3) and
(c)(4).] If you do not have exiting subpart L compliance....
Source: EPA.
[End of figure]
[End of section]
Appendix IV: Comments from the Office of Management and Budget:
Executive Office Of The President:
Office Of Management And Budget:
Washington, D.C. 20503:
April 7, 2009:
Ms. Denise M. Fantone:
Director, Strategic Issues:
Government Accountability Office:
441 G Street, NW:
Washington, DC 20548:
Dear Ms. Fantone:
Thank you for your letter of February 27, 2009, to Director Orszag in
which you provided a draft copy of your report Federal Rulemaking
Improvements Needed to Monitoring and Evaluation of Rules Development
as well as to the Transparency of OMB Regulatory Review (Report), and
offered us the opportunity to provide comments on the draft report.
Because it is the Office of Information and Regulatory Affairs (OIRA)
within the Office of Management and Budget (OMB) that oversees
implementation of Executive Order I2866 (EO I2866) governing regulatory
review, Director Orszag has asked that I respond to your letter.
We have reviewed the report carefully, particularly those portions
pertaining to OMB review of draft regulations pursuant to EO 12866 and
the recommendations on how OIRA could make the review process more
transparent. Our comments below relate primarily to the report's
findings and recommendations regarding OMB's role in the regulatory
review process.
First let me say that we appreciate your finding that the rulemaking
agencies studied by GAO generally complied with their obligation under
EO 12866 to disclose materials that they provided for, and substantive
changes to the draft rule that occurred during, OIRA review. (Report at
p. 39.) However, we have also noted the concerns in the draft report
regarding certain transparency issues related to the disclosures that
are made by rulemaking agencies pursuant to EO 12866. (Report at p.
40.) In this regard, OIRA does not monitor, on a rule-by-rule basis,
compliance by rulemaking agencies with their disclosure obligations
under EO I2866. (As you know, OIRA is subject to its own disclosure
requirements under both EO I2866 and OIRA's Memorandum of October I8,
200I on "OIRA Disclosure.") However, your report will remind rulemaking
agencies of their responsibility under EO I2866 - once the regulation
has been published in the Federal Register or otherwise made available
to the public - to identify in a complete, clear, and simple manner the
substantive changes between the draft rule submitted to OIRA for review
and the action subsequently announced, and to identify those changes in
the regulatory action that were made at the suggestion or
recommendation of OIRA.
On page 40 of the draft report you recommend that the Director of OMB,
through the Administrator of OIRA, take the following four actions to
more consistently implement the EO's requirement that the agencies
provide information to the public in a complete, clear, and simple
manner:
* define in guidance what types of changes made. as a result of the
OIRA review process arc substantive and need to be publicly identified,
* instruct agencies to clearly attribute those changes "made at the
suggestion or recommendation of OIRA,"
* direct agencies to clearly state in final rules whether they made
substantive changes as a result of the OIRA reviews, and,
* standardize how agencies label documentation of these changes in
public rulemaking dockets.
We believe these recommendations have merit and warrant further
consideration. OIRA takes seriously the disclosure requirements of EO
12866, and OIRA remains committed to a high level of transparency in
the regulatory review process.
We would like to bring to your attention that, on January 30, 2009,
President Obama issued a Memorandum for the Heads of Executive
Departments and Agencies on "Regulatory Review" (74 FR 5977; February
3, 2000). In his Memorandum, the President directed the OMB Director,
in consultation with representatives of regulatory agencies, to produce
within I00 days a set of recommendations for a new EO on Federal agency
regulatory review. The President directed that these recommendations,
among other things: "offer suggestions for the relationship between
OIRA and the agencies; provide guidance on disclosure and transparency;
encourage public participation in agency regulatory processes; offer
suggestions on the role of cost-benefit analysis; address the role of
distributional considerations, fairness, and concern for the interests
of future generations; identify methods of ensuring that regulatory
review does not produce undue delay; clarify the role of the behavioral
sciences in formulating regulatory policy; and identify the best tools
for achieving public goals through the regulatory process."
Since then, OIRA has been reaching out to agencies to solicit
recommendations for revising the regulatory review process, consistent
with the President's Memorandum. In addition, on February 26, 2009, OMB
published a notice in the Federal Register (74 FR 8819) inviting public
comment on how to improve the regulatory review process and the
principles governing the development of regulation. We have received
over I00 comments in response to this notice. These comments are
available to the public at [hyperlink,
http://www.reginfo.gov/public/jsp/EO/fedReaReview/publicCommcnts.jsp].
In addition, we have also met with various stakeholder groups to obtain
their input and have posted a record of these meetings at the same
website address (along with any written materials provided at these
meetings).
Thank you again for the opportunity to comment on the draft report. We
very much appreciate GAO's draft findings and recommendations for
improving the regulatory review process, particularly in the area of
government transparency, one of the key concerns identified by the
President in his January 30 Memorandum. The President also underscored
the importance of transparency in his Memorandum of January 2I, 2009,
"Transparency and Open Government" (74 FR 4685; January 26, 2009). We
will give full consideration to the report and its recommendations as
we finalize our recommendations to the President for a new Executive
Order on regulatory review.
Sincerely,
Signed by:
Kevin F. Neyland
Acting Administrator:
Office of Information and Regulatory Affairs:
[End of section]
Appendix V: Comments from the Securities and Exchange Commission:
United States Securities And Exchange Commission:
The Chairman:
Washington, D.C. 20549:
March 20, 2009:
Timothy A. Bober:
Assistant Director, Strategic Issues:
United States Government Accountability Office:
441 G Street, NW:
Washington, DC 20548:
Dear Mr. Bober,
Thank you for transmitting the GAO's draft report: "Improvements Needed
to Monitoring and Evaluation of Rules Development as well as to the
Transparency of OMB Regulatory Reviews." We were happy to participate
in your review and appreciate the opportunity to comment. We have
transmitted separately a few specific comments on factual portions of
the report concerning the SEC that we believe should be amended for
accuracy.
The SEC strives for an open and efficient rulemaking process that
affords the public a full opportunity to comment. I am committed to
evaluating all the Commission's processes and looking for ways in which
they can be improved. I appreciate and take seriously any suggestions
as to ways in which we can gain efficiencies in our rulemaking process.
It is always important for as to think about how we might do a better
job, and we will consider your recommendations as part of that
evaluation.
Sincerely,
Signed by:
Mary L. Schapiro:
Chairman:
[End of section]
Appendix VI: Comments from the Department of Health and Human Services,
Food and Drug Administration:
Department Of Health & Human Services:
Food and Drug Administration:
Silver Spring, MD 20993:
Date: March 19, 2009:
To: Acting Assistant Secretary for Legislation:
From: Chief of Staff, FDA:
Subject: FDA's General Comments to GAO's Draft Report Entitled, Federal
Rulemaking - Improvements Needed to Monitoring and Evaluation of Rules
Development as Well as to the Transparency of OMB Regulatory Reviews
(GAO-09-205):
FDA is providing the attached general comments to the U.S. Government
Accountability Office's draft report entitled: Federal Rulemaking -
Improvements Needed to Monitoring and Evaluation of Rules Development
as Well as to the Transparency of OMB Regulatory Reviews (GAO-09-205).
FDA appreciates the opportunity to review and comment on this draft
report before it is published.
Signed by:
Susan C. Winkler, R.Ph., Esq.
Attachment:
[End of letter]
FDA's General Comments to the U.S. Government Accountability Office's
(GAO) Draft Report Entitled, Improvements Needed to Monitoring and
Evaluation of Rules Development as Well as to the Transparency of OMB
Regulatory Reviews:
The Food and Drug Administration (FDA) welcomes the opportunity to
comment on GAO's draft report. This document responds to the three
recommendations made by GAO to FDA, the Environmental Protection Agency
(EPA), and the Securities and Exchange Commission (SEC).
GAO Recommendations:
To be consistent with internal controls for information in managing
agency operations, GAO recommends that for significant rules, the
Administrator of EPA, the Commissioner of FDA, and the Chairman of SEC
take the following actions:
1. Routinely track major milestones in regulatory development:
FDA believes that only "economically significant" rules should be
tracked. Even with this more narrow scope, the recommendation would be
difficult to implement. FDA cannot predict with certainty which rules
OMB considers to be significant until the rule is close to final agency
clearance, and FDA does not know the number of rules deemed by OMB to
be significant.
In addition, alternative approaches should be permitted. For example,
FDA maintains a database, the Federal Register Document Tracking System
(FRDTS), to track the progress of all its Federal Register documents
through the latter stages of the agency's development and clearance
process. For potentially significant regulations, the agency not only
uses the FRDTS, but also develops work plans, and holds quarterly
planning meetings with all parties involved in the regulations process,
to keep abreast of progress, problems and possible delays. In addition,
the agency instituted a Policy Council which is comprised of all senior
agency officials involved in the regulations development process. The
Policy Council meets once a month, providing the opportunity to report
to FDA senior management on the progress of meeting major milestones.
2. Report internally and externally when major milestones are reached
against established targets:
FDA already reports internally when major milestones are reached. As
mentioned above, FDA holds quarterly and monthly meetings where major
milestones are discussed and reported. At its monthly meetings, the FDA
Policy Council discusses priorities, resources, and any other issues
that impact the agency regulation development process. For example, the
Policy Council discusses competing priorities and tries to reach
consensus on overall agency priorities. The Policy Council serves as a
venue to disseminate information on new regulatory requirements such as
new statutes and Executive Orders. Moreover, the Policy Council
discusses the allocation of agency resources needed for significant
regulations.
FDA advises against routinely reporting externally when major
milestones are met. Reporting on when major milestones are met as
compared to established targets may mislead stakeholders and
incorrectly suggest that the agency is not working diligently on the
completion of a particular regulation. This reporting may result in
follow-up inquiries from interested parties, and responding to such
inquiries draws resources away from completing the regulation. Although
establishing timeframes upfront for completing a regulation is helpful,
it is not uncommon for deadlines to be revisited in light of public
health emergencies, changes in priorities in response to public health
needs, evolving policy considerations, and the many steps that must be
taken to complete and clear a rule, e.g., the various statutory
requirements that must be addressed.
3) Evaluate actual performance versus the targeted milestones to
determine whether differences are explainable or, if not, if there is a
need for further management reviews:
FDA already engages in quality improvement efforts for its rulemaking
process. In addition to quarterly regulations meetings with each agency
component and the FDA Policy Council meetings, FDA periodically reviews
its regulations development and clearance process to see if changes are
needed to improve the efficiency and timeliness. Since 1981, 12 such
reviews have been conducted and recommended improvements implemented.
Recent improvements include piloting the use of digital signatures for
clearing regulations to reduce the time it takes to clear and publish
regulations in the Federal Register, and piloting the use of a
standardized questionnaire on a wild platform to reduce the time it
takes to develop an economic analysis for a rule.
[End of section]
Appendix VII: Comments from the Environmental Protection Agency:
United States Environmental Protection Agency:
Office Of Policy, Economics And Innovation:
Washington, D.C. 20460:
Internet Address (URL):[hyperlink, http://www.epa.gov]
March 20, 2009:
Ms. Denise M. Fantone:
Director, Strategic Issues:
United States Government Accountability Office:
Washington, D.C. 20548:
Dear Ms. Fantone:
Thank you for providing us the opportunity to comment on the final
draft report entitled Federal Rulemaking: Improvements Needed to
Monitoring and Evaluation of Rules Development as well as to the
Transparency of OMB Regulatory Reviews (GAO-09-205). EPA appreciates
GAO's efforts, despite the short timeframe for review, to evaluate how
changes in broad rulemaking requirements have cumulatively affected:
(1) the agencies' rulemaking process; and (2) the transparency of OMB
regulatory reviews.
We agree with GAO that the small sample size used in the report may not
be representative of all regulatory agencies or all rules within a
specific agency. As you know, EPA develops over 450 final regulations
in a given year. These regulatory actions vary tremendously from
technical amendments consisting of several pages of preamble and rule
text to regulations with supporting documents consisting of hundreds of
pages. Additionally, the development process itself may differ
considerably. Thus, the four EPA case studies are not entirely
representative of the range of regulatory development in the agency.
For example, two out of the four EPA case studies (Stage 2 Disinfection
Byproducts Rule and Longterm 2 Surface Water Treatment Rule) were
developed using an "advisory committee process," which involves outside
stakeholders in most aspects of developing the rule and supporting
data. This approach can result in a long, intense, and very public
development process. This advisory committee rule development process
is less frequently used than the usual notice and comment rulemaking
process. Therefore, drawing recommendations from such a small sample of
rules could be misleading.
EPA would like to make several corrections to the current draft report.
GAO recommends that agencies routinely track major milestones in
regulatory development and report internally and externally when major
milestones are reached against established targets. EPA would like to
clarify that the agency currently does track key milestones associated
with the rulemaking process. This information has been reported
internally and externally. The draft report does not reflect the
agency's efforts in monitoring the regulatory process. The following
data provide information to clarify the systems and processes the
Agency uses to track and report on process milestones.
* EPA has a well-established, agency-wide process for rule development,
referred to as the Action Development Process (ADP). GAO specifically
notes on page I5 of the report that EPA tracks 14 milestones as it
develops a proposed rule under the ADP. After the proposed rule is
published, EPA routinely tracks 4-5 additional milestones to develop
the final rule.
* EPA has an internal tracking system, Rule and Policy Information
Development System (RAPIDS), which monitors cross-Agency involvement
and senior management reviews to ensure timely decisions. In RAPIDS,
EPA routinely tracks milestones in regulatory development by projecting
dates for achieving milestones and subsequently recording actual dates
of completion. Actual dates may differ from projected dates for based
on a variety of management decisions and resource requirements. The ADP
is flexible and programs can adjust milestone dates to address evolving
priorities.
* EPA uses data in RAPIDS, complemented by additional information, to
develop regulatory management reports that are provided to EPA managers
and executives as a forward-looking planning and tracking tool and as a
means to improve the flow of communication between and among program
managers.
* EPA executives and managers routinely meet to review milestones on
key regulations, review program performance, and identify best
practices. During the study period, the EPA Deputy Administrator met,
at approximately 6-week intervals, with program executives and
specifically tracked the attainment of regulation development
milestones for several dozen priority actions. Regulations were tracked
against an agreed upon schedule for a standard set of development
milestones. Actions that are completed on time or early are used by EPA
as examples of best practices. Actions that are off-track are
identified early and corrective steps are taken to expedite their
completion. This data was reviewed weekly at senior staff meetings and
reported to the public quarterly.
* As you are aware, twice a year, the Agency publishes all the agency's
planned actions which are currently under development or review through
EPA's Semiannual Regulatory Agenda. This regulatory agenda provides the
public updated information on the important external milestones and
even highlights those actions in the early pre-rule stages.
* EPA is committed to furthering transparency and has instituted the
practice of providing on-line information to the public as soon as the
Agency begins development of a new rule. EPA is using Action Initiation
Lists to notify the public about new rules and other regulatory
actions. AILS are posted on the EPA Web site at the end of each month
and describe the actions that were approved for commencement. (AILS are
found at [hyperlink, http://www.epa.gov/lawsregs/search/ail.html]).
EPA notes that OMB is currently soliciting comments from agencies and
the public on the topic of OMB regulatory review. EPA is developing its
response.
Again, we appreciate the opportunity to comment on this report and
would be happy to discuss the comments further if needed. Should you
have any questions, please contact Bobbie Trent, our GAO liaison at 202-
566-0983.
Sincerely,
Signed by:
Louise P. Wise:
Acting Associate Administrator:
Office of Policy, Economics and innovation:
Enclosure:
[End of section]
Appendix VIII: GAO Contact and Staff Acknowledgments:
GAO Contact:
Denise M. Fantone, (202) 512-6806 or fantoned@gao.gov:
Acknowledgements:
In addition to the contact named above, Timothy Bober, Assistant
Director; Timothy Guinane; Edward Leslie; Andrea Levine; James McTigue,
Susan Offutt, Melanie Pappasian; Jacquelyn Pontious; Robert Powers;
Joseph Santiago; Wesley Sholtes; William Trancucci, Michael Volpe;
Gregory Wilmoth; and Diana Zinkl made key contributions to this report.
[End of section]
Related GAO Products:
Financial Regulation: A Framework for Crafting and Assessing Proposals
to Modernize the Outdated U.S. Financial Regulatory System. [hyperlink,
http://www.gao.gov/products/GAO-09-216]. Washington, D.C.: January 8,
2009.
Chemical Assessments: Low Productivity and New Interagency Review
Process Limit the Usefulness and Credibility of EPA's Integrated Risk
Information System. [hyperlink,
http://www.gao.gov/products/GAO-08-440]. Washington, D.C.: March 7,
2008.
Telecommunications: FCC Should Take Steps to Ensure Equal Access to
Rulemaking Information. [hyperlink,
http://www.gao.gov/products/GAO-07-1046]. Washington, D.C.: September
6, 2007.
Reexamining Regulations: Opportunities Exist to Improve Effectiveness
and Transparency of Retrospective Reviews. [hyperlink,
http://www.gao.gov/products/GAO-07-791]. Washington, D.C.: July 16,
2007.
Regulatory Flexibility Act: Congress Should Revisit and Clarify
Elements of the Act to Improve Its Effectiveness. [hyperlink,
http://www.gao.gov/products/GAO-06-998T]. Washington, D.C.: July 20,
2006.
Federal Rulemaking: Perspectives on 10 Years of Congressional Review
Act Implementation. [hyperlink,
http://www.gao.gov/products/GAO-06-601T]. Washington, D.C.: March 30,
2006.
Federal Rulemaking: Past Reviews and Emerging Trends Suggest Issues
That Merit Congressional Attention. [hyperlink,
http://www.gao.gov/products/GAO-06-228T]. Washington, D.C.: November 1,
2005.
Electronic Rulemaking: Progress Made in Developing Centralized E-
Rulemaking System. [hyperlink, http://www.gao.gov/products/GAO-05-777].
Washington, D.C.: September 9, 2005.
Regulatory Reform: Prior Reviews of Federal Regulatory Process
Initiatives Reveal Opportunities for Improvements. [hyperlink,
http://www.gao.gov/products/GAO-05-939T]. Washington, D.C.: July 27,
2005.
Economic Performance: Highlights of a Workshop on Economic Performance
Measures. [hyperlink, http://www.gao.gov/products/GAO-05-796SP].
Washington, D.C.: July 2005.
Paperwork Reduction Act: New Approach May Be Needed to Reduce
Government Burden on Public. [hyperlink,
http://www.gao.gov/products/GAO-05-424]. Washington, D.C.: May 20,
2005.
Unfunded Mandates: Views Vary About Reform Act's Strengths, Weaknesses,
and Options for Improvement. [hyperlink,
http://www.gao.gov/products/GAO-05-454]. Washington, D.C.: March 31,
2005.
Unfunded Mandates: Analysis of Reform Act Coverage. [hyperlink,
http://www.gao.gov/products/GAO-04-637]. Washington, D.C.: May 12,
2004.
Rulemaking: OMB's Role in Reviews of Agencies' Draft Rules and the
Transparency of Those Reviews. [hyperlink,
http://www.gao.gov/products/GAO-03-929]. Washington, D.C.: September
22, 2003.
Federal Rulemaking: Procedural and Analytical Requirements at OSHA and
Other Agencies. [hyperlink, http://www.gao.gov/products/GAO-01-852T].
Washington, D.C.: June 14, 2001.
Regulatory Flexibility Act: Implementation in EPA Program Offices and
Proposed Lead Rule. [hyperlink,
http://www.gao.gov/products/GAO/GGD-00-193]. Washington, D.C.:
September 20, 2000.
Federalism: Previous Initiatives Have Little Effect on Agency
Rulemaking. [hyperlink, http://www.gao.gov/products/GAO/T-GGD-99-131].
Washington, D.C.: June 30, 1999.
Regulatory Accounting: Analysis of OMB's Reports on the Costs and
Benefits of Federal Regulation. [hyperlink,
http://www.gao.gov/products/GAO/GGD-99-59]. Washington, D.C.: April 20,
1999.
Federal Rulemaking: Agencies Often Published Final Actions Without
Proposed Rules. [hyperlink,
http://www.gao.gov/products/GAO/GGD-98-126]. Washington, D.C.: August
31, 1998.
Regulatory Management: Implementation of Selected OMB Responsibilities
Under the Paperwork Reduction Act. [hyperlink,
http://www.gao.gov/products/GAO/GGD-98-120]. Washington, D.C.: July 9,
1998.
Regulatory Reform: Agencies Could Improve Development, Documentation,
and Clarity of Regulatory Economic Analyses. [hyperlink,
http://www.gao.gov/products/GAO/RCED-98-142]. Washington, D.C.: May 26,
1998.
Regulatory Reform: Implementation of Small Business Advocacy Review
Panel Requirements. [hyperlink,
http://www.gao.gov/products/GAO/GGD-98-36]. Washington, D.C.: March 18,
1998.
Unfunded Mandates: Reform Act Has Had Little Effect on Agencies'
Rulemaking Actions. [hyperlink,
http://www.gao.gov/products/GAO/GGD-98-30]. Washington, D.C.: February
4, 1998.
Regulatory Reform: Changes Made to Agencies' Rules Are Not Always
Clearly Documented. [hyperlink,
http://www.gao.gov/products/GAO/GGD-98-31]. Washington, D.C.: January
8, 1998.
Managing for Results: Regulatory Agencies Identified Significant
Barriers to Focusing on Results. [hyperlink,
http://www.gao.gov/products/GAO/GGD-97-83]. Washington, D.C.: June 24,
1997.
[End of section]
Footnotes:
[1] Pub. L. No. 404, 60 Stat. 237 (1946), codified in 1966 in scattered
sections of title 5, United States Code.
[2] "Independent agencies" refers to agencies that answer directly to
the President but are not part of cabinet departments, such as the
Environmental Protection Agency (EPA).
"Independent regulatory agencies" refers to the boards and commissions
identified as such in the Paperwork Reduction Act (44 U.S.C. §
3502(5)), such as the Securities and Exchange Commission.
[3] See GAO, Federal Rulemaking: Procedural and Analytical Requirements
at OSHA and Other Agencies, [hyperlink,
http://www.gao.gov/products/GAO-01-852T] (Washington, D.C.: June 14,
2001). See also the Related GAO Products section at the end of this
report.
[4] See GAO, Federal Rulemaking: Past Reviews and Emerging Trends
Suggest Issues That Merit Congressional Attention, [hyperlink,
http://www.gao.gov/products/GAO-06-228T] (Washington, D.C.: Nov. 1,
2005), for a summary of the main findings from reports and testimonies
we prepared during the past decade. Although we found benefits
associated with individual rulemaking requirements--such as encouraging
greater public participation and enhancing the transparency of the
rulemaking process--we also found that they were often less effective
than intended.
[5] We did not examine the effects of agency-or program-specific
requirements on the issuance of regulations, such as EPA's issuance of
regulations under the Clean Air Act (see, for example, 42 U.S.C. §
7607).
[6] The Congressional Review Act (CRA) requires agencies to file rules
with Congress and the Comptroller General before the rules can become
effective. 5 U.S.C. § 801(a)(1)(A). To compile information on all the
rules submitted under the CRA, GAO established a database and created a
standardized submission form to allow more consistent information
collection. The Federal Rules Database is publicly available at
[hyperlink, http://www.gao.gov] under Legal Products.
[7] As defined by CRA, a major rule is generally a rule that the OIRA
Administrator finds has resulted in or is likely to result in (1) an
annual effect on the economy of $100 million or more, (2) a major
increase in costs or prices, or (3) significant adverse effects on
competition, employment, investment, productivity, or innovation. 5
U.S.C. § 804(2). This is similar, but not identical to, the definition
of an economically significant rule under Executive Order 12866 on
regulatory planning and review.
[8] From January 2006 through May 2008, federal agencies issued over
7,000 rules.
[9] As defined in the Introduction to The Regulatory Plan and the
Unified Agenda of Federal Regulatory and Deregulatory Actions, "other
significant" rules are those that are not economically significant but
are considered significant by the agency. This category includes rules
that the agency anticipates will be reviewed under Executive Order
12866 or rules that are a priority of the agency head.
[10] OMB's New Guidelines for the Conduct of Regulatory Analysis, which
was issued on September 17, 2003, became effective for economically
significant proposed rules on January 1, 2004, and for economically
significant final rules on January 1, 2005.
[11] Office of Management and Budget, Memorandum for Heads of
Departments and Agencies on Issuance of OMB's Final Information Quality
Bulletin for Peer Review (Dec. 16, 2004).
[12] GAO, Rulemaking: OMB's Role in Reviews of Agencies' Draft Rules
and the Transparency of Those Reviews, [hyperlink,
http://www.gao.gov/products/GAO-03-929] (Washington, D.C.: Sept. 22,
2003).
[13] GAO's primary role under CRA is to provide Congress with a report
on each major rule containing our assessment of whether the
promulgating federal agency's submissions indicate that it has complied
with the procedural steps required by various statutes and executive
orders governing rulemaking, such as preparation of a cost-benefit
analysis, the PRA, the RFA, and Executive Order 12866. 5 U.S.C. §
801(a)(2)(A).
[14] Certain rulemakings are governed, however, by agency-or program-
specific statutory requirements. For example, certain EPA rulemakings
implementing the Clean Air Act are subject to the more specific
procedural requirements of the Clean Air Act in lieu of the APA
provisions that would otherwise apply. See 42 U.S.C. § 7607.
[15] The APA describes two types of rulemaking, formal and informal.
Formal rulemaking includes a trial-type on-the-record proceeding. Most
federal agencies use the informal rulemaking procedures outlined in 5
U.S.C. § 553.
[16] The APA includes exceptions to notice and comment procedures for
categories of rules such as those dealing with military or foreign
affairs and agency management or personnel. 5 U.S.C. § 553(a). APA
requirements to publish a proposed rule generally do not apply when an
agency finds, for "good cause," that those procedures are
"impracticable, unnecessary, or contrary to the public interest." 5
U.S.C. § 553(b).
[17] The Administrator of OIRA may also waive review of any planned
regulatory action designated by the agency as significant.
[18] Regulatory analysis, such as benefit-cost analysis, is a tool
regulatory agencies use to anticipate and evaluate the likely
consequences of rules.
[19] Although independent regulatory agencies, such as SEC, are not
subject to Executive Order 12866 and Circular No. A-4, they may be
directed to consider the economic effect of their rulemakings by
various statutes.
[20] Office of Information and Regulatory Affairs, "Memorandum for The
President's Management Council on OMB's Circular No. A-4, New
Guidelines for the Conduct of Regulatory Analysis" (Mar. 2, 2004).
[21] Discounting is used to make comparable the benefits and costs that
occur in different time periods. In general, a higher discount rate
gives less weight to benefits and costs occurring in the future
compared to the present. The new guidelines recommend that agencies use
7 percent and 3 percent. Previous guidance recommended using 7 percent
and encouraged the use of sensitivity analysis to assess the effect of
alternative discount rates.
[22] 74 Fed. Reg. 5977 (Feb. 3, 2009).
[23] EPA's concept document is called an analytic blueprint that
identifies the types of regulatory analyses needed for the rulemaking
and ensures that the agency allocates the resources needed throughout
the rulemaking process.
[24] EPA's rulemaking officially begins once the agency assigns a start
action number, that is prior to when management receives, reviews, and
approves the analytic blueprint.
[25] EPA has three classes, or "tiers," of rulemakings. Only the two
higher-priority classes are required to follow this process. Most, but
not all, significant rules would go through this process.
[26] GAO, Standards for Internal Control in the Federal Government
[hyperlink, http://www.gao.gov/products/GAO/AIMD-00-21.3.1]
(Washington, D.C.: November 1999).
[27] Cornelius M. Kerwin, The Management of Regulation Development: Out
of the Shadows (Washington, D.C.: IBM Center for The Business of
Government, 2007), 11.
[28] Ibid., p. 20.
[29] OIRA officials pointed out that a rulemaking that is later subject
to a judicial challenge may not have "ended" with final publication.
[30] For the most recent transition, see 74 Fed. Reg. 4435 (Jan. 26,
2009). See also GAO, Regulatory Review: Delay of Effective Dates of
Final Rules Subject to the Administration's January 20, 2001,
Memorandum, GAO-02-370R (Washington, D.C.: Feb. 15, 2002).
[31] 5 U.S.C. § 609.
[32] When discussing or displaying information on multiple requirements
in this report, we have followed the convention of listing statutes
first followed by executive orders.
[33] 7 U.S.C. § 7991(c).
[34] The dollar threshold for 2008 was approximately $133 million.
[35] See GAO, Unfunded Mandates: Analysis of Reform Act Coverage,
[hyperlink, http://www.gao.gov/products/GAO-04-637] (Washington, D.C.:
May 12, 2004), for an illustration of the complex multistep process
needed to determine whether UMRA is triggered. In that report, we noted
that there are 14 definitional exceptions, exclusions, or other
restrictions applicable to the identification of federal mandates in
rules.
[36] Information on the cost-benefit analysis, if any, that was
prepared for a rule is one of the mandated elements of our major rule
reports under CRA. However, this element reflects requirements from
various statutory or executive orders, rather than any one requirement.
[37] [hyperlink, http://www.gao.gov/products/GAO-03-929].
[38] For all significant rules this information includes, for example,
the text of the draft regulation provided to OIRA and an assessment of
the potential costs and benefits. For economically significant rules,
the information must also include the underlying analysis of benefits
and costs (quantified to the extent feasible).
[39] According to OIRA representatives, the requirement for agencies to
document changes made at the suggestion or recommendation of OIRA only
applies to changes made after draft rules are formally submitted to
OIRA for review.
[40] According to OIRA representatives, the requirement to make
available "all documents exchanged between OIRA and the agency" issuing
the regulation only applies to exchanges made by OIRA staff at the
branch chief level and above, not documents exchanged between OIRA desk
officers and staff in regulatory agencies.
[41] At the time of our review, FDA was transitioning to
regulations.gov and had both paper and online dockets available for its
rules.
[42] [hyperlink, http://www.gao.gov/products/GAO-03-929].
[43] The Semiannual Regulatory Agenda is also known as the Unified
Agenda of Federal Regulatory and Deregulatory Actions.
[44] Pub. L. No. 404, 60 Stat. 237, ch. 324, §§ 1-12 (1946), codified
by Pub. L. No. 89-554 (1996) in 5 U.S.C. §§ 551-559, 701-706, 1305,
3105, 3344, 5372, 7521.
[45] Pub. L. No. 91-190, 83 Stat. 852 (1970), codified at 42 U.S.C. §§
4321-4347.
[46] 42 U.S.C. § 4332.
[47] Pub. L. No. 92-463, 86 Stat. 770 (1972) (codified at 5 U.S.C.
appendix 2).
[48] The Occupational Safety and Health Act of 1970, for example,
authorizes, but does not require, the use of advisory committees for
establishing certain safety and health standards. 29 U.S.C. § 656.
[49] Pub. L. No. 93-205, 87 Stat. 884 (1973).
[50] Pub. L. No. 96-354, 94 Stat. 1164 (1980), codified as amended at 5
U.S.C. §§ 601-612.
[51] The PRA was originally enacted into law in 1980, Pub. L. No. 96-
511, 94 Stat. 2812 (1980). It was reauthorized with minor amendments in
1986, Pub. L. No. 99-591, 100 Stat. 3341 (1986), and was reauthorized a
second time with more significant changes in 1995, Pub. L. No. 104-13,
109 Stat. 163 (1995). 44 U.S.C. §§ 3501-3520.
[52] 44 U.S.C. § 3504.
[53] The PRA generally defines a "collection of information" as the
obtaining or disclosure of facts or opinions by or for an agency from
ten or more nonfederal persons. 44 U.S.C. § 3502(3). Many information
collections, recordkeeping requirements, and third-party disclosures
are contained in or are authorized by regulations as monitoring or
enforcement tools, while others appear in separate written
questionnaires for purposes of developing the regulation.
[54] Pub. L. No. 101-648, 104 Stat. 4969 (1990), codified at 5 U.S.C.
§§ 561-570. The NRA was permanently reauthorized by the Administrative
Dispute Resolution Act of 1996, Pub. L. No. 104-320, § 11, 110 Stat.
2870, 3873 (1996).
[55] Pub. L. No. 104-4, 109 Stat. 48 (1995) (codified in scattered
sections of title 2 of the United States Code).
[56] The dollar thresholds in UMRA are in 1996 dollars and are adjusted
annually for inflation.
[57] Pub. L. No. 104-113, 110 Stat. 775 (1995).
[58] Pub. L. No. 104-121, Title II, 110 Stat. 857(1996) (codified in
scattered sections of title 5 of the United States Code).
[59] 5 U.S.C. §§ 801-808.
[60] Consolidated Appropriations Act of 2001, Pub. L. No. 106-554, §
515, 114 Stat. 2763, 2763A-152,codified at 44 U.S.C. § 3516 note.
[61] 70 Fed. Reg. 2664 (Jan. 14, 2005).
[62] Pub. L. No. 107-347, 116 Stat. 2899 (2002), codified at 44 U.S.C.
§ 3501 note.
[63] 47 Fed. Reg. 30,959 (July 14, 1982).
[64] 53 Fed. Reg. 8859 (Mar. 15, 1988).
[65] 58 Fed. Reg. 51,735 (Sept. 30, 1993).
[66] Available at [hyperlink,
http://www.whitehouse.gov/omb/circulars/a004/a-4.pdf].
[67] 59 Fed. Reg. 7629 (Feb. 11, 1994).
[68] 61 Fed. Reg. 4729 (Feb. 5, 1996).
[69] 62 Fed. Reg. 19,885 (Apr. 21, 1997).
[70] 64 Fed. Reg. 43,255 (Aug. 4, 1999).
[71] 65 Fed. Reg. 67,249 (Nov. 6, 2000).
[72] 66 Fed. Reg. 28,355 (May 18, 2001).
[73] For more information on FDA's dietary supplements program see GAO,
Dietary Supplements: FDA Should Take Further Actions to Improve
Oversight and Consumer Understanding, [hyperlink,
http://www.gao.gov/products/GAO-09-250] (Washington, D.C.: Jan. 29,
2009).
[74] For more information on FDA's food labeling program see GAO, Food
Labeling: FDA Needs to Better Leverage Resources, Improve Oversight,
and Effective Use Available Data to Help Consumers Select Healthy
Foods, [hyperlink, http://www.gao.gov/products/GAO-08-597] (Washington,
D.C.: Sept. 9, 2008).
[End of section]
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