The Federal Rulemaking Process: An Overview

The Federal Rulemaking Process:
An Overview
Updated August 28, 2008
Curtis W. Copeland
Specialist in American National Government
Government and Finance Division

The Federal Rulemaking Process:
An Overview
Federal regulation, like taxing and spending, is one of the basic tools of
government used to implement public policy. Although not as frequently examined
as congressional or presidential policy making, the process of developing and
framing rules is viewed by some as central to the definition and implementation of
public policy in the United States. Regulations generally start with an act of
Congress, and are the means by which statutes are implemented and specific
requirements are established. The terms “rule” or “regulation” are often used
interchangeably in discussions of the federal regulatory process. The Administrative
Procedure Act of 1946 defines a rule as “the whole or part of an agency statement of
general or particular applicability and future effect designed to implement, interpret,
or prescribe law or policy.” The procedures that federal agencies are required to
follow in writing regulations is called the rulemaking process, and are the subject of
this report.
During the past 60 to 65 years, Congress and various Presidents have developed
an elaborate set of procedures and requirements to guide the federal rulemaking
process, often with the implicit or explicit goal of reducing the amount of regulatory
burden placed on the public. Statutory rulemaking requirements applicable to a wide
range of agencies include the Administrative Procedure Act, the Regulatory
Flexibility Act, the Paperwork Reduction Act, the Unfunded Mandates Reform Act,
and the Information Quality Act. These and other cross-cutting rulemaking
requirements often require some type of analysis on the part of the rulemaking
agency before issuing a covered rule, but also often give agencies substantial
discretion regarding whether the requirements are applicable. Other statutorily-based
rulemaking requirements are contained in agency- or program-specific laws, which
provide varying levels of discretion regarding the substance of agencies’ rules and
may impose (or exclude) additional analytical or procedural requirements. The most
important of the current set of presidential rulemaking requirements are in Executive
Order 12866, which establishes presidential review of covered agencies’ rulemaking
within the Office of Management and Budget’s Office of Information and Regulatory
Affairs (OIRA). The executive order requires covered agencies to submit their
significant rules to OIRA for review before they become final, and requires those
rules to meet certain minimal standards. Other executive orders and presidential
directives delineate other specific rulemaking requirements incumbent on covered
agencies. However, these requirements also often provide substantial discretion to
agencies regarding whether, and if so how, they are applied.
The purpose of this report is to provide Congress with an overview of the
federal rulemaking process and a brief discussion of the major laws and executive
orders that prescribe the procedures agencies are to apply when promulgating
regulations. This report will be updated when new requirements are put in place or
when the requirements in this report change.

In troduction ......................................................1
Statutory Rulemaking Requirements ..................................4
Federal Register Act............................................5
Administrative Procedure Act....................................6
Exceptions to the APA Notice Requirement.....................7
National Environmental Policy Act................................9
Paperwork Reduction Act......................................10
Regulatory Flexibility Act......................................12
Small Business Regulatory Enforcement Fairness Act................15
Congressional Review Act......................................17
Unfunded Mandates Reform Act.................................19
Information Quality Act........................................21
Peer Review.............................................22
Other Statutory Provisions Related to Rulemaking ..................25
Federal Advisory Committee Act............................25
Trade Agreements Act.....................................25
Negotiated Rulemaking Act.................................25
National Technology Transfer and Advancement Act.............26
Regulatory Right-to-Know Act..............................27
Government Paperwork Elimination Act.......................27
E-Government Act........................................27
Small Business Paperwork Relief Act.........................29
Executive Orders and Directives.....................................29
Executive Order 12866........................................29
Executive Order 13422........................................32
Other Executive Orders and Directives............................33
Conclusion ......................................................36
For Additional Information.........................................38
List of Figures
Figure 1. Federal Rulemaking Process.................................2

The Federal Rulemaking Process:
An Overview
Federal regulation, like taxing and spending, is one of the basic tools of
government used to implement public policy. In fact, the development and framing
of a rule has been described as “the climactic act of the policy making process.”1
Another observer described the rulemaking process as “absolutely central to the
definition and implementation of public policy in the United States,” and said that
“no significant attempt to alter the direction of a public program can succeed without
effective management of the rulemaking process.”2 Regulations generally start with
an act of Congress, and are the means by which statutes are implemented and specific
requirements are established. Federal agencies issue more than 4,000 final rules each
year on topics ranging from the timing of bridge openings to the permissible levels
of arsenic and other contaminants in drinking water. The costs and benefits
associated with all federal regulations have been a subject of great controversy, with
the costs estimated in the hundreds of billions of dollars and the benefits estimates
even higher. The costs federal regulations impose on regulated entities to accomplish
policy goals are not reflected in the federal budget process, and some view these off-
budget regulatory costs as greater than all federal domestic discretionary spending.
Estimates of the benefits of federal regulations are even higher.
The terms “rule” or “regulation” are often used interchangeably in discussions
of the federal regulatory process. The Administrative Procedure Act (APA) of 1946
defines a rule as “the whole or part of an agency statement of general or particular
applicability and future effect designed to implement, interpret, or prescribe law or
policy.”3 The process by which federal agencies develop, amend, or repeal rules is
called “rulemaking,” and is the subject of this report.
Figure 1 illustrates in a general manner the process that most federal agencies
are generally required to follow in writing or revising a significant rule. However,
we should be quick to point out that some aspects of Figure 1 do not apply to all
rulemaking. For example, as discussed later in this report, an agency may, in certain
circumstances, issue a final rule without issuing a notice of proposed rulemaking,
thereby skipping several steps depicted in the figure. On the other hand, some rules
may be published for public comment more than once. Also, independent regulatory

1 Colin Diver, “Regulatory Precision,” in Keith Hawkins and John Thomas, eds., Making
Regulatory Policy (Pittsburgh: University of Pittsburgh Press, 1989), p. 199.
2 Cornelius M. Kerwin, Rulemaking: How Government Agencies Write Law and Make
Public Policy, 2nd ed., (Washington: CQ Press, 1999), p. ix.
3 5 U.S.C. §551 (4).

agencies4 are not required to submit their rules to the Office of Management and
Budget’s (OMB) Office of Information and Regulatory Affairs (OIRA) for review,
and no agency is required to do so for rules that are not “significant.”
Figure 1. Federal Rulemaking Process

Source: CRS.
* The Office of Management and Budget's (OMB) office of Information and Regulatory Affairs
(OIRA) reviews only significant rules, and does not review any rules submitted by independent
regulatory agencies.
4 As used in this report, the term “independent regulatory agencies” refers to the boards and
commissions identified as such in the Paperwork Reduction Act (44 U.S.C. §3502(5)),
including the Federal Communications Commission, the Federal Energy Regulatory
Commission, the Nuclear Regulatory Commission, and the Securities and Exchange
Commission. The term “independent agencies” refers to other agencies that answer directly
to the President, but are not part of Cabinet departments.

Note at the top of Figure 1 that the rulemaking process begins when Congress
passes a statute either requiring or authorizing an agency to write and issue certain
types of regulations. An initiating event (e.g., a recommendation from an outside
body or a catastrophic accident) can prompt either legislation or regulation (where
regulatory action has already been authorized). For example, in response to lethal
chemical releases by plants in Bhopal, India, and West Virginia, Congress enacted
section 313 of the Emergency Planning and Community Right-to-Know Act of 1986
(42 U.S.C. §§11001-11050, 11023). The act required the owners and operators of
certain types of facilities to report the amounts of various toxic chemicals that the
facilities release to the environment above certain thresholds, and requires the
Environmental Protection Agency (EPA) to make this information available to the
public. EPA subsequently issued detailed regulations implementing these
requirements and, using the authority provided to it through the statute, has required
reporting for more than 300 toxic substances in addition to those delineated in the
As this example illustrates, the authority to regulate rests with Congress, and is
delegated, through law, to an agency. The statutory basis for a regulation can vary
greatly in terms of its specificity, from (1) very broad grants of authority that state
only the general intent of the legislation and leave agencies with a great deal of
discretion as to how that intent should be implemented, to (2) very specific
requirements delineating exactly what regulatory agencies should do and how they
should take action. Note also in Figure 1 the roles that Congress and the courts can
play at the end of the rulemaking process, which may result in a rule being returned
to an earlier point in the process or being vacated by the reviewing body. Congress
may also play a role at other stages in the process through its oversight and
appropriations responsibilities.
Implicit within the steps depicted in Figure 1 is an elaborate set of procedures
and requirements that Congress and various Presidents have developed during the
past 60 to 65 years to guide the federal rulemaking process. Some of these
rulemaking requirements apply to virtually all federal agencies, some apply only to
certain types of agencies, and others are agency-specific. Collectively, these
rulemaking provisions are voluminous and require a wide range of procedural,
consultative, and analytical actions on the part of rulemaking agencies. Some
observers contend that the requirements have resulted in the “ossification” of the
rulemaking process, causing agencies to take years to develop final rules.5 For
example, the National Advisory Committee on Occupational Safety and Health noted
that it takes the Occupational Safety and Health Administration (OSHA) within the
Department of Labor an average of 10 years to develop and promulgate a health or
safety standard.6 On the other hand, while these congressional and presidential

5 See, for example, Thomas O. McGarity, “Some Thoughts on ‘Deossifying’ the Rulemaking
Process, Duke Law Journal, vol. 41 (June 1992), pp. 1385-1462; Richard J. Pierce, Jr.,
“Seven Ways to Deossify Agency Rulemaking,” 47 Administrative Law Review, vol. 47,
winter 1995, pp. 59-93; Paul R. Verkuil, “Rulemaking Ossification — A Modest Proposal,”
Administrative Law Review, vol. 47 (summer 1995), pp. 453-459.
6 National Advisory Committee on Occupational Safety and Health, Report and

rulemaking requirements are numerous, it is not clear whether they or some other
factors (e.g., lack of data, congressionally imposed delays, court challenges, etc.) are
the primary cause of the long time-frames that are sometimes required to develop and
publish final rules.
Statutory Rulemaking Requirements
Statutory rulemaking requirements can be generally categorized into two groups
— those that are specific to an individual agency or program and those that are more
cross-cutting in nature, and therefore applicable to a wider range of agencies or
programs. Agency- or program-specific rulemaking requirements may be in
authorizing or appropriating statutes, and can have a significant or even
determinative effect on an agency’s rules and rulemaking procedures. As noted
previously, these statutes sometimes specifically delineate what the agency’s rules
should require. For example, the Employee Retirement Income Security Act (29
U.S.C. §1001 et seq.) gives the Pension Benefit Guaranty Corporation no discretion
in drafting rules that establish minimum pension insurance premium rates, specifying
to the dollar what those rates should be.7 Also, for a number of years the Department
of Transportation (DOT) concluded that it had no discretion in setting the average
fuel economy standards for light trucks, and was required to keep the standard at 20.78
miles per gallon. Agency-specific statutes may also impose specific procedural
requirements on their rulemaking processes (e.g., the conduct of public hearings, the
publication of a notice of proposed rulemaking by a particular date, or the
coordination of rulemaking with another agency). In other cases, though, the statutes
give rulemaking agencies substantial discretion in how rules are developed and what
they require. For example, the Agricultural Adjustment Act provides a broad grant
of rulemaking authority to the Secretary of Agriculture, stating only that agricultural
marketing should be “orderly” but providing little guidance regarding which crops9
should have marketing orders or how to apportion the market among growers.
Agency rulemaking is also often significantly influenced by court decisions
interpreting these agency- or program-specific statutory requirements. For example,
in 1980 the Supreme Court ruled that, before promulgating new health standards,

6 (...continued)
Recommendations Related to OSHA’s Standards Development Process (Washington: June

6, 2000).

7 For example, 29 U.S.C. §1306(a)(3)(A) states that the annual premium rate payable in the
case of a single-employer plan for basic benefits is “an amount equal to the sum of $19 plus
the additional premium (if any) determined under subparagraph (E) for each individual who
is a participant in such plan during the plan year.”
8 DOT’s 1998 appropriations act stated that “(n)one of the funds in this Act shall be
available to prepare, propose, or promulgate any regulations ... in any model year that differs
from the standards promulgated for such automobiles prior to the enactment of this section.”
9 For an examination of the amount of regulatory discretion afforded in specific statutes, see
U.S. General Accounting Office, Regulatory Burden: Some Agencies’ Claims Regarding
Lack of Rulemaking Discretion Have Merit, GAO/GGD-99-20, Jan. 8, 1999.

OSHA must demonstrate that the particular chemical to be regulated poses a
“significant risk” under workplace conditions permitted by current regulations.10 The
court also said that OSHA must demonstrate that the new limit OSHA proposes will
substantially reduce that risk. This decision effectively requires OSHA to evaluate
the risks associated with exposure to a chemical and to determine that these risks are
“significant” before issuing a regulatory standard. Other court decisions have
required OSHA rulemaking to demonstrate the technical and economic feasibility of
its requirements.11 Still other decisions have required agencies to permit meaningful
public participation in rulemaking and to fully explain what they considered and why
they did and did not take particular actions.12
The following discussion of statutory rulemaking requirements focuses solely
on the cross-cutting requirements that are applicable to more than one agency. The
discussion provides descriptions of some of the major rulemaking-related statutes and
is not intended to be a catalogue of all such requirements. Some of these rulemaking
requirements have been in place for more than 70 years, but most have been
implemented within the past 25 years. Some of these statutory requirements apply
to Cabinet departments and independent agencies; others apply to those agencies as
well as the independent regulatory agencies.
Federal Register Act
With the surge of New Deal legislation enacted in the 1930s, Congress made
federal agencies responsible for issuing detailed regulations on a variety of complex
social and economic issues. However, no central regulatory publication system
existed, so there was no efficient way for citizens to know about regulations that
affected them. Therefore, Congress enacted the Federal Register Act, which became
law in July 1935 (44 U.S.C. Chapter 15). The act established a uniform system for
handling agency regulations by requiring (1) the filing of documents with the Office
of the Federal Register, (2) the placement of documents on public inspection, (3)
publication of the documents in the Federal Register, and (4) (after a 1937
amendment) permanent codification of rules in the Code of Federal Regulations.
Publication of a rule in the Federal Register provides official notice of its existence
and contents. Other documents that are generally published in the Federal Register
include presidential proclamations and executive orders, notices, and documents that
the President or Congress require to be published.
Regulations for carrying out the Federal Register Act deal with, among other
things, the format and distribution of the Federal Register and how documents are

10 Industrial Union Department v. American Petroleum Institute, 448 U.S. 607 (1980).
11 See, for example, American Textile Mfrs. Inst., Inc. v. Donovan, 452 U.S. 490 (1981) and
United Steelworkers v. Marshall, 647 F.2d 1189 (D.C. Cir. 1980), cert. denied, 453 U.S. 913
12 See, for example, Motor Vehicle Manufacturers Association v State Farm Mutual
Automobile Insurance Co., 463 U.S. 29 (1983). The Supreme Court said the agency “must
examine the relevant data and articulate a satisfactory explanation of its action, including
a ‘rational connection between the facts found and the choice made.’”

prepared, transmitted, and processed.13 The Office of the Federal Register is
responsible for printing and distributing the Federal Register, and the Office has
published a guide and a drafting handbook explaining how Federal Register
documents are to be prepared. The Federal Register is published each business day,
and is now available electronically.14
Administrative Procedure Act
The most long-standing and broadly applicable federal rulemaking requirements
are in the Administrative Procedure Act (APA) of 1946 (5 U.S.C. §551 et seq.). The
APA was written to bring regularity and predictability to agency decisionmaking, and
provides for both formal and informal rulemaking. Formal rulemaking is used in
ratemaking proceedings and in certain other cases when rules are required by statute
to be made “on the record” after an opportunity for a trial-type agency hearing.
However, few statutes require such on-the-record hearings. Informal rulemaking,
also known as “notice and comment” rulemaking, is used much more frequently, and
is the focus of this section.
In informal rulemaking, the APA generally requires that agencies (Cabinet
departments and independent agencies as well as independent regulatory agencies)
publish a notice of proposed rulemaking (NPRM) in the Federal Register.15 The
notice must contain (1) a statement of the time, place, and nature of public
rulemaking proceedings; (2) reference to the legal authority under which the rule is
proposed; and (3) either the terms or substance of the proposed rule or a description
of the subjects and issues involved. After giving “interested persons” an opportunity
to comment on the proposed rule, and after considering the public comments, the
agency may then publish the final rule, incorporating a general statement of its basis
and purpose. Although the APA does not specify the length of this public comment
period, agencies commonly allow at least 30 days.16 Public comments as well as
other supporting materials (e.g., hearing records or agency regulatory studies but
generally not internal memoranda) are placed in a rulemaking “docket”which must
be available for public inspection. Finally, the APA states that the final rule cannot
become effective until at least 30 days after its publication unless (1) the rule grants
or recognizes an exemption or relieves a restriction, (2) the rule is an interpretative

13 1 C.F.R. ch. I, pts. 1-22.
14 Electronic access to the Federal Register is provided through a Government Printing
Office website at [].
15 Some agencies begin the rulemaking process by publishing an “advance notice of
proposed rulemaking in which the agency notifies the public that it is considering an area
for rulemaking and often requests comments on the appropriate scope or topics of the rule.
The APA does not require the use of advance notices, but some other statutes require it for
particular types of rules. Similarly, agencies may issue a “supplemental notice of proposed
rulemaking” after an NPRM is issued if they wish to obtain public comment on new factual
proposals before issuing a final rule.
16 Executive Order 12866, discussed in detail later in this report, suggests that agencies
allow the public at least 60 days to comment for “significant” rules.

rule or a statement of policy, or (3) the agency determines that the rule should take
effect sooner for good cause, and publishes that determination with the rule.
The final rule cannot adopt a provision if the NPRM did not clearly provide
notice to the public that the agency was considering adopting it. If challenged in
court under the APA, an agency rulemaking can be held unlawful or set aside if it is
found to be “arbitrary, capricious, an abuse of discretion, or otherwise not in
accordance with the law.”17 The court can also “compel agency action unlawfully
withheld or unreasonably delayed.” Amendment or revocation of an existing rule
generally requires the responsible agency to issue a new rule through the APA
Exceptions to the APA Notice Requirement. Although the APA
generally requires agencies to publish NPRMs before promulgating a final rule, the
act provides exceptions to this requirement. For example, the APA states that the
notice and comment procedures generally do not apply when an agency finds, for
“good cause,” that those procedures are “impracticable, unnecessary, or contrary to
the public interest.” When agencies use the good cause exception, the act requires
that they explicitly say so and provide a rationale for the exception’s use when the
rule is published in the Federal Register. The APA also provides explicit exceptions
to the NPRM requirement for certain categories of regulatory actions, such as rules
dealing with military or foreign affairs; agency management or personnel; or public
property, loans, grants, benefits, or contracts. Further, the APA says that the NPRM
requirements do not apply to interpretative rules; general statements of policy; or18
rules of agency organization, procedure, or practice. However, these rules do have
to be published in the Federal Register.
The legislative history of the APA makes it clear that Congress did not believe
that the act’s good cause exception to the notice and comment requirements should
be an “escape clause.” According to the Senate committee’s report accompanying the
APA, a “true and supported or supportable finding of necessity or emergency must
be made and published” when the agency uses the good cause exception.19 The
legislative history also indicates that Congress envisioned agencies using the notice
and comment procedures even in some cases in which the APA’s exceptions applied.
A federal agency’s invocation of the good cause exception (or other exceptions
to notice and comment procedures) is subject to judicial review. After having
reviewed the totality of circumstances, the courts can and sometimes do determine
that an agency’s reliance on the good cause exception was not authorized under the

17 The APA judicial review provisions are codified at 5 U.S.C 701-706.
18 In addition to the APA exceptions, Congress sometimes includes specific exemptions from
notice and comment procedures in other statutes. For example, section 161(d) under title
I of the Federal Agriculture Improvement and Reform Act of 1996 (P.L. 104-127, 110 Stat.
934-935) instructed the Secretary of Agriculture and the Commodity Credit Corporation to
issue regulations not later than 90 days after the date of enactment of the title, without
regard to the notice and comment provisions of the APA.
19 Senate Committee on the Judiciary, “Administrative Procedure Act: Legislative History,”
Senate Document 248, 79th Congress, 2nd Session (1946).

APA.20 The case law has generally reinforced the view that the good cause exception
should be “narrowly construed.”21
Two procedures for noncontroversial and expedited rulemaking were designed
not to involve NPRMs. “Direct final” rulemaking involves agency publication of a
rule in the Federal Register with a statement that the rule will be effective on a
particular date unless an adverse comment is received within a specified period of
time (e.g., 30 days). However, if an adverse comment is filed, the direct final rule is
withdrawn and the agency may publish the rule as a proposed rule under normal
NPRM procedures. Direct final rulemaking can be viewed as a particular application
of the APA’s good cause exception in which agencies claim NPRMs are
“unnecessary.”22 Both Vice President Gore’s National Performance Review and the
Administrative Conference of the United States encouraged agencies to use direct
final rulemaking for noncontroversial rules.23
The Administrative Conference also endorsed the use of what is known as
“interim final” rulemaking, in which an agency issues a final rule without an NPRM
that is generally effective immediately, but with a post-promulgation opportunity for
the public to comment. If the public comments persuade the agency that changes are
needed in the interim final rule, the agency may revise the rule by publishing a final
rule reflecting those changes. Interim final rulemaking can be viewed as another
particular application of the good cause exception in the APA, but with the addition
of a comment period after the rule has become effective.24
In August 1998, the General Accounting Office reported that about half of the

4,658 final regulatory actions published in the Federal Register during 1997 were

20 For discussions of these court cases, see Ellen R. Jordan, “The Administrative Procedure
Act’s ‘Good Cause’ Exemption,” Administrative Law Review, 36, spring 1984, pp. 113-178;
and Catherine J. Lanctot, “The Good Cause Exception: Danger to Notice and Comment
Requirements Under the Administrative Procedure Act,” Georgetown Law Journal, 68 (Feb.

1980), pp. 765-782.

21 See American Federation of Government Employees, AFL-CIO v. Block, 655 F.2d 1153,

1156 (D.C. Cir 1981); and Mobay Chemical Corp. v. Gorsuch, (682 F.2d 419, 426 (3rd Cir.),

cert. denied, 459 U.S. 988 (1982). In another case (Action on Smoking and Health v. CAB,
713 F.2d 795, 800 [D.C. Cir 1983]), the court said that allowing broad use of the good cause
exception would “carve the heart out of the statute.”
22 For more, see Ronald M. Levin, “More on Direct Final Rulemaking: Streamlining, Not
Corner Cutting,” Administrative Law Review, 51 (summer 1999), pp. 757-766.
23 See Office of the Vice President, Improving Regulatory Systems: Accompanying Report
of the National Performance Review (Washington: Sept. 1993). The Administrative
Conference was established by statute as an independent agency in 1964 to promote
improvements in the efficiency, adequacy, and fairness of procedures by which federal
agencies conduct regulatory programs, administer grants and benefits, and perform related
governmental functions. It was abolished in 1995.
24 For more, see Michael Asimow, “Interim Final Rules: Making Haste Slowly,”
Administrative Law Review, 51 (summer 1999), pp. 703-755.

published without NPRMs.25 Seven agencies accounted for about 70% of both the
final actions and the actions without NPRMs. Most of the actions without NPRMs
appeared to involve administrative or technical issues with limited applicability.
However, 11 of the 61 final rules published during 1997 that were “major” (e.g.,
having a $100 million impact on the economy) did not have NPRMs. The agencies
most commonly cited the APA’s good cause exception as their justification for not
publishing NPRMs, frequently noting the time-sensitive nature of the actions being
taken. The agencies also frequently used the categorical exceptions permitted in the
APA (e.g., actions involving agencies’ management or personnel). In some cases
GAO concluded that the agencies’ explanations for why NPRMs were not used were
not clear or understandable, with the agencies sometimes making broad assertions
that an NPRM would delay the issuance of rules that were, in some general sense, in
the public interest. For example, in one case the agency said that soliciting public
comments on the rule was “contrary to the public interest” because the rule
authorized a “new and creative method of financing the development of public
National Environmental Policy Act
The National Environmental Policy Act (NEPA) of 1969 (42 U.S.C. §§4321-
4347) was the first statute to require an “impact statement” as a way to ensure that
federal agencies give special consideration to certain issues during the rulemaking
process. NEPA requires all federal agencies to include in every recommendation or
report related to “major Federal actions significantly affecting the quality of the
human environment” a detailed statement on the environmental impact of the
proposed action. Initially, though, agencies make a threshold determination (known
as an “environmental assessment”) as to whether the rule or other action represents
a significant impact on the environment. If not, the agency issues a “finding of no
significant impact.” If the agency concludes that there is a significant impact, the
agency then prepares a full “ environmental impact statement” describing the likely
effects of the rule.
According to the act and its implementing regulations developed by the Council
on Environmental Quality, the environmental impact statement must delineate the
direct, indirect, and cumulative effects of the proposed action.27 Agencies are also
required to include in the statement (1) any adverse environmental effects that cannot
be avoided should the proposal be implemented, (2) alternatives to the proposed
action, (3) the relationship between local short-term uses of the environment and the
maintenance and enhancement of long-term productivity, and (4) any irreversible and
irretrievable commitments of resources that would be involved if the proposed action
should be implemented. Before developing any such environmental impact

25 U.S. General Accounting Office, Federal Rulemaking: Agencies Often Published Final
Actions Without Proposed Rules, GAO/GGD-98-126, Aug. 31, 1998.
26 See Juan J. Lavilla, “The Good Cause Exemption to Notice and Comment Rulemaking
Requirements Under the Administrative Procedure Act,” The Administrative Law Journal,

3 (fall 1989), pp. 317-423 for another study on the use of the good cause exception.

27 NEPA regulations are codified at 40 CFR Parts 1500-1508.

statement, NEPA requires the responsible federal official to consult with and obtain
comments of any federal agency that has jurisdiction by law or special expertise with
respect to any environmental impact involved. Agencies must make copies of the
statement and the comments and views of appropriate federal, state, and local
agencies available to the President, the Council on Environmental Quality, and to the
public. The adequacy of an agency’s environmental impact statement is subject to
judicial review.
In April 2002, the Chairman of the Council on Environmental Quality
established a task force composed of federal agency employees to review NEPA
implementation practices and procedures. In September 2003, the task force issued
a report containing more than 50 recommendations to expedite the NEPA review
process.28 Among other things, the task force recommended that new guidance be
developed setting standards for the documentation needed to support a determination
that a rule would not have significant environmental effects.
Paperwork Reduction Act
The Paperwork Reduction Act (PRA) (44 U.S.C. §§3501-3520) was originally
enacted in 1980, but was subsequently amended in 1986 and again in 1995. One of
the purposes of the PRA is to minimize the paperwork burden for individuals, small
businesses, and others resulting from the collection of information by or for the
federal government. The act generally defines a “collection of information” as the
obtaining or disclosure of facts or opinions by or for an agency by 10 or more
nonfederal persons. Many information collections, recordkeeping requirements, and
third-party disclosures are contained in or are authorized by regulations as monitoring
or enforcement tools. In fact, these paperwork requirements are the essence of many
agencies’ regulatory provisions.29 The PRA requires agencies to justify any
collection of information from the public by establishing the need and intended use
of the information, estimating the burden that the collection will impose on
respondents, and showing that the collection is the least burdensome way to gather
the information.
The original PRA established the Office of Information and Regulatory Affairs
(OIRA) within the Office of Management and Budget (OMB) to provide central
agency leadership and oversight of government-wide efforts to reduce unnecessary
paperwork burden and improve the management of information resources. Agencies
must receive OIRA approval (signified by an OMB control number displayed on the
information collection) for each collection request before it is implemented, and
those approvals must be renewed at least every three years. Failure to obtain OIRA

28 NEPA Task Force, Report to the Council on Environmental Quality, Modernizing NEPA
Implementation (Washington: Sept. 2003).
29 For example, EPA’s Toxics Release Inventory (TRI) program is essentially a database
created through collections of information imposed on businesses to inform the public about
chemical hazards in their communities. TRI reports require businesses in certain industries
to report the quantity of any of more than 600 chemicals entering each environmental
medium on site, transfers of the chemical in wastes to off-site locations, on-site treatment
methods and efficiency, and source reduction and recycling activities.

approval for an active collection, or the lapse of that approval, represents a violation
of the act, and triggers the PRA’s public protection provision. Under that provision,
no one can be penalized for failing to comply with a collection of information subject
to the act if the collection does not display a valid OMB control number.30 OIRA can
disapprove any collection of information if it believes the collection is inconsistent
with the requirements of the PRA.31
The PRA clearance process is described in the act and implementing
regulations. For new collections, no later than the publication of the NPRM, the
issuing agency must submit the proposed rule and any background information to
OIRA. At the same time the agency is required to publish a notice in the Federal
Register stating that OIRA’s approval is being sought, thereby providing the public
with an opportunity to comment on the proposed collection. For any collection of
information that is not contained in a proposed rule, OIRA staff have up to 60 days
under the statute to review the proposed collection and ensure, among other things,
that the collection is statutorily authorized and necessary, and that the agency’s
paperwork burden estimate (most commonly measured in terms of “burden hours”)
is reasonable.32 At the end of the process the agency is notified of the disposition of
the review. OIRA data indicates that the office takes action on between 3,000 and
5,000 information collection requests (new approvals, renewals, or revisions) each
The 1995 PRA reaffirmed the principles in the original act and gave significant
new responsibilities to OIRA and executive branch agencies. For example, the act
currently requires OIRA to “oversee the use of information resources to improve the
efficiency and effectiveness of governmental operations to serve agency missions.”
The PRA also requires federal agencies to establish a process, independent of
program responsibility, to evaluate proposed collections of information, manage
information resources to reduce information collection burdens on the public, and
ensure that the public has timely and equitable access to information products and
The coverage of the PRA is extremely broad, including actions by both Cabinet
departments and independent agencies as well as independent regulatory agencies,
and covering virtually any type of collection of information that these agencies

30 For an up-to-date inventory of OMB-approved information collections, see
[http://www.wh omb/library/OMBINV .LIST .OF.AGENCIES.html ].
31 Independent regulatory agencies can, by majority vote, void any OIRA disapproval of a
proposed collection of information.
32 An agency’s annual paperwork burden-hour estimate is a function of (1) the frequency of
the information collection, (2) the estimated number of respondents, and (3) amount of time
that the agency estimates it takes each respondent to complete the collection. For example,
if an agency estimates that an information collection conducted twice each year will take
each of the estimated 10,000 respondents 10 hours to complete each time, the total annual
burden hour estimate for the collection is 200,000 burden hours (2 times 10,000 times 10).

“conduct or sponsor.”33 As a result of the 1995 amendments to the act, the PRA’s
clearance requirements clearly cover collections of information “requiring the
disclosure to third parties or the public,”effectively overturning the Supreme Court’s

1990 decision in Dole v. United Steelworkers of America (494 U.S. 26).

One of the key features of the PRA of 1995 was the requirement that OIRA, in
consultation with the agency heads, set annual government-wide goals for the
reduction of information collection burdens by at least 10% in fiscal years 1996 and
1997, and by at least 5% in each of the succeeding four fiscal years. The act also
required OIRA to establish agency burden reduction goals each year representing “the
maximum practicable opportunity in each agency.” At the end of FY1995 (just
before the PRA of 1995 took effect) federal agencies estimated that their information
collections imposed about 7 billion burden hours on the public. Therefore, if all
federal agencies had been able to meet each of the government-wide goals, by
September 30, 2001, the burden-hour estimate would have decreased about 35% to
about 4.6 billion hours. However, this reduction did not occur. In fact, as of
September 30, 2002, the government-wide burden estimate stood at more than 8.2
billion hours — a 17% increase since the PRA of 1995 took effect. Nearly half of
that increase occurred during FY2002 alone, and about 70% occurred during fiscal
years 2001 and 2002.34 The agencies contend that they are often unable to reduce
paperwork requirements without changes in the underlying statutes that require the
information to be collected.
Regulatory Flexibility Act
The Regulatory Flexibility Act (RFA) of 1980 (5 U.S.C. §§601-612), requires
federal agencies to assess the impact of their forthcoming regulations on “small
entities,” which the act defines as including small businesses, small governmental
jurisdictions, and certain small not-for-profit organizations. Under the RFA, Cabinet
departments and independent agencies as well as independent regulatory agencies
must prepare a regulatory flexibility analysis at the time proposed and certain final
rules are issued. The analysis for a proposed rule is referred to as an “initial
regulatory flexibility analysis” (IRFA) and the analysis for a final rule is referred to
as a “final regulatory flexibility analysis.” The RFA requires the analysis to describe,
among other things, (1) the reasons why the regulatory action is being considered; (2)
the small entities to which the proposed rule will apply and, where feasible, an
estimate of their number; (3) the projected reporting, recordkeeping, and other
compliance requirements of the proposed rule; and (4) any significant alternatives to

33 The act’s definition of an agency excludes only the General Accounting Office, the
Federal Election Commission, the governments of the District of Columbia, U.S. territories
and possessions, and government-owned contractor-operated facilities.
34 OMB is required to report to Congress on the implementation of the PRA, and does so
through an annual “information collection budget.” For paperwork estimates as of Sept. 30,

2002, see Office of Management and Budget, Office of Information and Regulatory Affairs,

Managing Information Collection and Dissemination: Fiscal Year 2003 (Washington: Apr.
2003). For an analysis of those data, see U.S. General Accounting Office, Paperwork
Reduction Act: Record Increase in Agencies’ Burden Estimates, GAO-03-691T, Apr. 11,


the rule that would accomplish the statutory objectives while minimizing the impact
on small entities.
However, these analytical requirements are not triggered if the head of the
issuing agency certifies that the proposed rule would not have a “significant
economic impact on a substantial number of small entities.” The RFA does not
define “significant economic impact” or “substantial number of small entities,”
thereby giving federal agencies substantial discretion regarding when the act’s
analytical requirements are initiated. Also, the RFA’s analytical requirements do not
apply to final rules for which the agency does not publish a proposed rule.35
The RFA initially did not permit judicial review of agencies’ actions under the
act. However, amendments to the act in 1996 as part of the Small Business
Regulatory Enforcement Fairness Act (SBREFA) (110 Stat. 857, 5 U.S.C. §601 note)
permitted judicial review regarding, among other things, agencies’ regulatory
flexibility analyses for final rules and any certifications that their rules will not have
a significant impact on small entities. As a result, a small entity that is adversely
affected or aggrieved by an agency’s determination that its final rule would not have
a significant impact on small entities could seek judicial review of that determination
within one year of the date of the final agency action. In granting relief, a court may
remand the rule to the agency or defer enforcement against small entities. The
addition of judicial review in 1996 is generally viewed as a significant strengthening
of the RFA, and is believed to have improved agencies’ compliance with the act.36
The RFA also contains several other notable provisions. For example, section
602 requires each federal agency to publish a “regulatory flexibility agenda” in the
Federal Register each October and April listing regulations that the agency expects
to propose or promulgate which are likely to have a significant economic impact on
a substantial number of small entities.37 Section 610 of the act requires agencies to
review those rules that have or will have a significant impact within 10 years of their
promulgation to determine whether they should be continued without change or
should be amended or rescinded to minimize their impact on small entities. Section
612 of the RFA requires the Chief Counsel of the Small Business Administration’s
(SBA) Office of Advocacy to monitor and report at least annually on agencies’
compliance with the act. SBA’s primary method of monitoring agencies’ compliance
is to review and comment on proposed regulations when they are published for notice
and comment in the Federal Register. However, the statute also specifically

35 Many agencies are apparently aware of this limitation; GAO estimated that in more than
500 final rules published in 1997 the agencies specifically stated that the RFA was not
applicable or that a regulatory flexibility analysis was not required because the action was
not preceded by an NPRM. See GAO/GGD-98-126, p. 31.
36 U.S. Small Business Administration, 20 Years of the Regulatory Flexibility Act:
Rulemaking in a Dynamic Economy (Washington: 2000).
37 This requirement, as well as a similar requirement in Executive Order 12866, is generally
met via entries in the Unified Agenda of Federal Regulatory and Deregulatory Actions. The
Unified Agenda is published twice each year in the Federal Register by the Regulatory
Information Service Center, and provides uniform reporting of data on regulatory activities
under development throughout the federal government.

authorizes the Chief Counsel to appear as amicus curiae (i.e., “friend of the court”)
in any court action to review a rule.
The RFA also requires agencies to ensure that small entities have an opportunity
to participate in the rulemaking process, and the 1996 amendments to the act in
SBREFA put in place special requirements for proposed rules issued by the
Environmental Protection Agency (EPA) and the Occupational Safety and Health
Administration (OSHA). EPA and OSHA are required to convene “advocacy review
panels” before publishing a regulatory flexibility analysis for a proposed rule.
Specifically, the agency issuing the regulation (OSHA or EPA) must notify the SBA
Chief Counsel for Advocacy and provide information on the draft rule’s potential
impacts on small entities and the type of small entities that might be affected. The
Chief Counsel then must identify representatives of affected small entities within 15
days of the notification. The review panel must consist of full-time federal
employees from the rulemaking agency, the Office of Management and Budget, and
SBA’s Chief Counsel for Advocacy. During the panel process, the panel must collect
the advice and recommendations of representatives of affected small entities about
the potential impact of the draft rule. The panel must report on the comments
received and on the panel’s recommendations no later than 60 days after the panel is
convened, and the panel’s report must be made public as part of the rulemaking
record.38 An agency may or may not adopt the panel’s recommendations.
GAO has examined the implementation of the RFA several times within the past
10 to 15 years, and a recurring theme in GAO’s reports is a lack of clarity in the act
and a resulting variability in the act’s implementation. For example, in 1991 GAO
reported that each of the four federal agencies that it reviewed had a different
interpretation of key RFA provisions.39 In 1994 GAO again reported that agencies’
compliance with the RFA varied widely from one agency to another and that agencies
were interpreting the statute differently.40 In a 1999 report on the implementation of
section 610 of the RFA and in a 2000 report on the implementation of the RFA at the
Environmental Protection Agency (EPA), GAO concluded that agencies had broad
discretion to determine what the statute required.41 In all of these reports, GAO
suggested that Congress consider clarifying the act’s requirements and/or give SBA
or some other entity the responsibility to develop criteria for whether and how
agencies should conduct RFA analyses. In 2001, GAO testified that the promise of
the RFA may never be realized until Congress or some other entity defines what a
“significant economic impact” and a “substantial number of small entities” mean in

38 For an examination of the first five advocacy review panels were implemented, see U.S.
General Accounting Office, Regulatory Reform: Implementation of the Small Business
Advocacy Review Panel Requirements, GAO/GGD-98-36, March 18, 1996.
39 U.S. General Accounting Office, Regulatory Flexibility Act: Inherent Weaknesses May
Limit Its Usefulness for Small Governments, GAO/HRD-91-16, Jan. 11, 1991.
40 U.S. General Accounting Office, Regulatory Flexibility Act: Status of Agencies’
Compliance, GAO/GGD-94-105, Apr. 27, 1994.
41 U.S. General Accounting Office, Regulatory Flexibility Act: Agencies’ Interpretations of
Review Requirements Vary, GAO/GGD-99-55, Apr. 2, 1999; U.S. General Accounting
Office, Regulatory Flexibility Act: Implementation in EPA Program Offices and Proposed
Lead Rule, GAO/GGD-00-193. Sept. 20, 2000.

a rulemaking setting.42 However, other observers have indicated that the definitions
of these terms should remain flexible because of significant differences in each
agency’s operating environment.
Periodically, legislation is introduced to amend the RFA. For example, in the
110th Congress, H.R. 4458, the “Small Business Regulatory Improvement Act,” was
introduced on December 12, 2007, and was reported by the House Committee on
Small Business the next day. Among other things, H.R. 4458 would define
“economic impact” as including indirect effects that are “reasonably foreseeable,”
and would clarify that agencies’ reviews of existing rules should not be limited to
rules for which a regulatory flexibility analysis had been conducted. The bill would
also require agencies to develop a plan for the review of all existing rules within 10
years, require more details in agencies’ analyses and notifications, and require annual
reports to Congress on certain agency “determinations” as part of their reviews.
Although some of these provisions address long-standing issues, some provisions
seem unclear and some may add time and costs to the rulemaking process. Most
notably, though, H.R. 4458 does not address GAO’s long-standing concerns about
the lack of clear definitions for key terms in the RFA.43
Small Business Regulatory Enforcement Fairness Act
As noted in the previous section of this report, certain provisions in SBREFA
amended the RFA to permit judicial review and to permit small entities to participate
in EPA and OSHA rulemaking before a proposed rule with a significant impact on
small entities is published. Other provisions in SBREFA did not amend the RFA, but
imposed new rulemaking-related requirements on federal agencies.
For example, section 212 of 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. Specifically, section
212 requires the guides to (1) be published, (2) be designated as “small entity
compliance guides,” and (3) explain the actions a small entity is required to take to
comply with an associated final rule. However, the discretion inherent in the RFA
regarding when a regulatory flexibility analysis is required also applies to whether
compliance guides must be developed. Section 212 gives agencies broad discretion
in other areas as well. For example, it says agencies “may” prepare separate guides
covering groups or classes of similarly affected small entities, and “may” cooperate
with associations of small entities to develop and distribute the guides. Agencies are
given “sole discretion” in the use of plain language in the guides. The statute does
not indicate when the guides must be developed or how they must be “published.”
In December 2001, GAO reported that section 212 of SBREFA did not appear to
have had much of an impact on agencies’ rulemaking activities, and its

42 U.S. General Accounting Office, Regulatory Flexibility Act: Key Terms Still Need to Be
Clarified, GAO-01-669T, Apr. 24, 2001.
43 For more information about the RFA, see CRS Report RL34355, The Regulatory
Flexibility Act: Implementation Issues and Proposed Reforms, by Curtis W. Copeland.

implementation varied across and sometimes within agencies.44 Using the discretion
that the section provided, GAO said “an agency could legally exclude all of its rules
from coverage by the statute, designate a previously published document as its small
entity compliance guide, or develop and publish a guide with no input from small
entities years after the covered rule takes effect.” GAO recommended several
changes it felt were needed to strengthen and clarify the requirements in section 212.
Section 213 of SBREFA required federal agencies regulating the activities of
small entities to establish a program for responding to inquiries concerning
compliance with applicable statutes and regulations. The section also says that in any
civil or administrative action against a small entity, such guidance “may be
considered as evidence of the reasonableness or appropriateness of any proposed
fines, penalties or damages sought against such small entity.”
Section 222 of SBREFA amended the Small Business Act (15 U.S.C. §631 et
seq.) to require the SBA Administrator to designate a “Small Business and
Agriculture Regulatory Enforcement Ombudsman,” who was directed to work with
each agency to ensure that small business concerns have an opportunity to comment
on agencies’ enforcement actions. The ombudsman was directed to annually evaluate
and report on each agency’s enforcement activities, including a rating of the
“responsiveness to small business” of each agency’s regional and program offices.
Section 222 also required the Administrator to establish a “Small Business
Regulatory Fairness Board” in each SBA regional office to report to and advise the
ombudsman on “excessive enforcement actions of agencies against small business
Section 223 of SBREFA requires agencies to provide small entities with some
form of relief from civil monetary penalties. Specifically, subsection 223(a) of the
act required federal agencies regulating the activities of small entities to establish a
policy or program by end of March 1997 for the reduction and, under appropriate
circumstances, the waiver of civil penalties by small entities. In February 2001,
GAO reported on the implementation of section 223 and concluded that all of the
agencies’ penalty reduction and waiver policies were within the broad discretion
afforded by the statute.45 However, GAO also reported that some of the policies
covered only a portion of the agencies’ enforcement actions involving small entities,
and some treated small entities no differently than large entities. The agencies’
policies also differed in terms of how key terms such as “small entity” and “penalty
reduction” were defined, and most were developed before SBREFA took effect.
GAO suggested several changes to the statute to strengthen agencies’ penalty relief
policies and make them more consistent. For example, GAO suggested amending
the act to require agencies to maintain data on the number of enforcement actions
involving small entities and the amount of penalty relief provided. This
recommendation was later implemented with the passage of the Small Business
Paperwork Relief Act of 2002 (P.L. 107-198, 116 Stat. 729), which required (among

44 U.S. General Accounting Office, Regulatory Reform: Compliance Guide Requirement
Has Had Little Effect on Agency Practices, GAO-02-172, Dec. 28, 2001.
45 U.S. General Accounting Office, Regulatory Reform: Implementation of Selected
Agencies’ Civil Penalty Relief Policies for Small Entities, GAO-01-280, Feb. 20, 2001.

other things) that agencies develop and report such information to selected
congressional committees.
Congressional Review Act
The statutory provision commonly known as the Congressional Review Act
(CRA) (5 U.S.C. §§801-808) was included as part of SBREFA as enacted in March
1996, and established expedited procedures by which Congress may disapprove
agencies’ rules by enacting a joint resolution of disapproval.46 Under the CRA,
before any final rule can become effective it must be filed with each House of
Congress and GAO. The act also requires federal agencies to submit to GAO and
make available to each House of Congress a copy of any cost-benefit analysis
prepared for the rule and a report on the agency’s actions related to the RFA and any
other relevant act or executive order. The definition of a “rule” under the CRA is
very broad, and the act applies to rules issued by Cabinet departments and
independent agencies as well as independent regulatory agencies.
If OIRA considers the issuing agency’s rule to be “major” (e.g., has a $100
million impact on the economy), the agency must delay the rule’s effective date by
60 days after the date of publication in the Federal Register or submission to
Congress and GAO, whichever is later. Within 15 calendar days of receiving a major
rule, GAO is required to provide Congress with a report on the rule assessing the
issuing agency’s compliance with the procedural steps required by the various acts
and executive orders applicable to the rulemaking process. Although the CRA
establishes these special requirements for major rules, the CRA procedures for
disapproving regulations apply to all rules, whether or not they are declared to be
Within 60 days after Congress receives an agency’s rule, excluding periods
when Congress is in recess or adjournment, a Member of Congress can introduce a
resolution of disapproval that, if adopted by both Houses and enacted into law, can
nullify the rule, even if it has already gone into effect. Congressional disapproval
under the CRA also prevents the agency from proposing to issue a “substantially
similar” rule without subsequent statutory authorization, but this provision is not
intended to vitiate altogether the agency’s power to establish regulations in the area
in question.
The CRA provides that Senate action on a disapproval resolution under the act
must occur within 60 days of session after the regulation is submitted, and makes
available during that period an expedited procedure intended to ensure that the Senate
can take up and vote on the measure before the period expires. The act establishes no
such expedited procedure for the House. If Congress adjourns less than 60 days of
session after a rule is submitted, a new 60 day period for disapproval under the act
begins on the 15th legislative day of the next session. If a disapproval resolution is

46 For a detailed discussion of CRA procedures, see CRS Report RL31160, Disapproval of
Regulations by Congress: Procedure Under the Congressional Review Act, by Richard S.

rejected by either House of Congress, the rule can take effect immediately (or as
provided by other governing law or rule).
By August 2008, federal agencies had submitted nearly 50,000 rules to GAO
(and presumably, Congress) since the CRA took effect in March 1996, including
more than 750 major rules. However, only one rule had been overturned through
CRA’s procedures — OSHA’s ergonomics standard in March 2001 (P.L. 107-5).
Many reasons have been suggested for why the CRA has not been used more often,47
but chief among them may be the fact that, if the President vetoes a resolution of
disapproval (which is likely if the underlying rule is developed during his
administration), then enactment of the resolution would require approval of a two-
thirds majority in both houses of Congress. The rejection of the ergonomics rule was
the result of a specific set of circumstances created by a transition in party control
of the presidency. The majority party in both houses of Congress was the same as the
party of the incoming President (George W. Bush). When the new Congress
convened in 2001 and adopted a resolution disapproving the rule published under the
outgoing President (William J. Clinton), the incoming President did not veto the
resolution. Congress may be most able to use the CRA to disapprove rules in similar,
transition-related circumstances.48
Congress can also stop agency rulemaking or regulatory enforcement through
provisions added to agency appropriations legislation. There appear to be four types
of such appropriations provisions: (1) restrictions on the finalization of particular
proposed rules, (2) restrictions on regulatory activity within certain areas, (3)
implementation or enforcement restrictions, and (4) conditional restrictions (e.g.,
preventing implementation of a rule until certain actions are taken). Some of these
kinds of provisions have been included in appropriations bills for many years in a
row. The reasons behind these restrictions vary, with some appearing to be based on
economic considerations, some requiring or preventing the implementation of rules
issued at the end of a presidential administration, and some included for various other
reasons. Such provisions are generally applicable only for the period of time and the
agencies covered by the relevant appropriations bill, but (depending on how they are
worded) can be more broadly applicable. Also, to the extent that agencies have
independent sources of funding (e.g., user fees) or implement their regulations

47 A related CRS analysis of the implementation of the CRA describes several possible
impediments to the law’s use. See CRS Report RL30116, Congressional Review of Agency
Rulemaking: An Assessment After Nullification of OSHA’s Ergonomics Standard, by Morton
Rosenberg. See also Morton Rosenberg, “Whatever Happened to Congressional Review of
Agency Rulemaking?: A Brief Overview, Assessment, and Proposal for Reform,”
Administrative Law Review, vol. 51, fall 1999, pp. 1051-1092.
48 See, for example, Susan E. Dudley, “Reversing Midnight Regulations,” Regulation, vol.

24 (Spring 2001), p. 9, who noted that the “veto threat is diminished [after a transition],

since the president whose administration issued the regulations is no longer in office.” For
a discussion of which rules may be carried over and disapproved after a transition, see CRS
Report RL34633, Congressional Review Act: Disapproval of Rules in a Subsequent Session
of Congress, by Curtis W. Copeland and Richard S. Beth.

through state or local governments, some of the limitations may not be as restrictive
as they seem.49
Unfunded Mandates Reform Act
The Unfunded Mandates Reform Act (UMRA) of 1995 was enacted in an effort
to reduce the costs associated with federal imposition of responsibilities, duties, and
regulations upon state, local, and tribal governments and the private sector without
providing the funding appropriate to the costs imposed by those responsibilities.
Title I of UMRA established new procedures designed to ensure that Congress fully
considers the potential effects of unfunded federal mandates before imposing them
in legislation. Among other things, the procedures call for the Congressional Budget
Office to provide statements to authorizing committees about whether reported bills
contain mandates and, if so, the cost of those mandates.50
Title II of UMRA (2 U.S.C. §§1532-1538) contains requirements imposed on
covered federal agencies during the rulemaking process. Specifically, the act requires
Cabinet departments and independent agencies (but not independent regulatory
agencies) to, among other things:
!prepare a written statement containing specific descriptions and
estimates for any proposed rule or any final rule for which a
proposed rule was published that includes any federal mandate that
may result in the expenditure of $100 million or more in any year by
state, local, or tribal governments, in the aggregate, or the private
sector. One of the items required in the written statement is a
qualitative and quantitative assessment of the anticipated costs and
benefits of the mandate (Section 202);
!identify and consider a reasonable number of regulatory alternatives
and select the least costly, most cost-effective, or least burdensome
alternative (or explain why that alternative was not selected) for each
rule for which a written statement is prepared (Section 205);
!develop a plan in which agencies provide notice of regulatory
requirements to potentially affected small governments (Section
203); and
!develop an effective 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 (Section 204).

49 For more information, see CRS Report RL34354, Congressional Influence on Rulemaking
and Regulation Through Appropriations Restrictions, by Curtis W. Copeland.
50 For an overview of UMRA, see CRS Report RS20058, Unfunded Mandates Reform Act
Summarized, by Keith Bea and Richard S. Beth. For a report on the implementation of Title
I of UMRA, see U.S. Congressional Budget Office, A Review of CBO’s Activities in 2002
Under the Unfunded Mandates Reform Act (Washington: May 2003).

OIRA has primary responsibility for monitoring agency compliance with title
II of UMRA, and issued guidance in March 1995 on the implementation of the title
that generally repeated the requirements of the statute. OIRA also publishes an
annual report on the implementation of title II.51
In February 1998, GAO reported that, because of the way the statute was
written, title II of UMRA had little effect on agencies’ rulemaking actions during its
first two years of implementation.52 First, many of the act’s requirements did not
appear to apply to most of the “economically significant” rules (e.g., rules with a
$100 million impact on the economy) that were promulgated during this period. For
example, if a final rule did not have an associated NPRM or imposed a mandate as
a condition of federal financial assistance, the written statement requirement in
section 202 of UMRA does not apply. Second, UMRA does not require agencies to
take the actions specified if the agencies determine that they are duplicative of other
actions or that accurate estimates of the effect of their rules are not feasible. Third,
even when UMRA is triggered, it often requires agencies to take actions that are
identical or similar to actions that they were already required to take. For example,
UMRA’s requirements in sections 202 and 205 for the conduct of cost-benefit
analysis and identification of regulatory alternatives are similar to the requirements
that were already in place under Executive Order 12866, which was issued more than
a year before UMRA was enacted. (See below for a discussion of Executive Order
12866.) The consultation requirements in section 204 are traceable to the notice and
comment requirements in the APA, and are almost identical to the requirements in
Executive Order 12875, which was issued more than a year before UMRA.
In May 2004, GAO again reported that UMRA’s written statement requirements
did not apply to most major or economically significant final rules issued in 2001 and
2002 (only 9 of 122).53 However, GAO also said that some of the rules not triggering
UMRA’s requirements “appeared to have potential financial impacts on affected
nonfederal parties similar to those of the actions that were identified as containing
mandates at or above the act’s thresholds.” In March 2005, GAO reported that
parties from various sectors (businesses, public interest groups, academia, and others)
most commonly cited UMRA’s numerous definitions, exclusions, and exceptions as
problematic and in need of improvement.54

51 In recent years, OIRA’s annual report on UMRA has been combined with its report on the
costs and benefits of federal regulations. See, for example, Office of Management and
Budget, Office of Information and Regulatory Affairs, 2007 Report to Congress on the
Benefits and Costs of Federal Regulations and Unfunded Mandates on State, Local, and
Tribal Entities (Washington: June 2008).
52 U.S. General Accounting Office, Unfunded Mandates: Reform Act Has Had Little Effect
on Agencies’ Rulemaking Actions, GAO/GGD-98-30, Feb. 4, 1998.
53 U.S. General Accounting Office, Unfunded Mandates: Analysis of Reform Act Coverage,
GAO-04-637, May 12, 2004.
54 U.S. Government Accountability Office, Unfunded Mandates: Views Vary About Reform
Act’s Strengths, Weaknesses, and Options for Improvement, GAO-05-454, March 31, 2005.

Information Quality Act
Section 515 of the Treasury and General Government Appropriations Act for
Fiscal Year 2001, generally known as the “Data Quality Act” or the “Information
Quality Act” (IQA) amended the Paperwork Reduction Act and directed OMB to
issue government-wide guidelines that “provide policy and procedural guidance to
Federal agencies for ensuring and maximizing the quality, objectivity, utility, and
integrity of information (including statistical information) disseminated by Federal
agencies.”55 The IQA also instructed agencies (both Cabinet departments and
independent agencies as well as independent regulatory agencies) to issue their own
guidelines not more than one year after the issuance of OMB’s government-wide
guidelines, and to establish administrative mechanisms allowing affected persons to
seek and obtain correction of information maintained and disseminated by the
agency. Finally, the act required agencies to report periodically to the Director of
OMB on the number and nature of complaints received and how such complaints
were handled by the agency. The first agency reports were due by January 1, 2004.
In response to a separate congressional requirement, in April 2004, OMB
provided Congress with a report on the implementation of the IQA during FY2003.56
The report said that agencies received only about 35 substantive correction requests
during the year, and said it was “premature to make broad statements about both the
impact of the correction request process and the overall responsiveness of the
agencies.” Many other correction requests listed in the report were on minor issues
or involved matters that had been dealt with before the IQA was enacted. OMB
indicated that the correction requests came from all segments of society, and said
there was no evidence that the IQA had affected the pace of rulemaking. However,
OMB Watch (a public interest group) said OMB’s report was “seriously flawed” in
that it understated the number of correction requests and did not disclose that nearly
three-quarters of the requests were from industry.57
The IQA builds upon existing agency responsibilities to assure the quality of
information collected, used, or disseminated to the public. Proponents of the act
contend that the law and the OMB and agency guidelines will improve the quality of
agency science and regulation, and force agencies to regulate based on the best
science available. Some of these proponents also maintain that the act will help
agencies defend their regulations against lawsuits and reduce the number of lawsuits
filed. They also point out that in any requests for correction of information, the IQA
places the burden of proof on the affected parties making the request; they must
demonstrate that a specific dissemination does not meet the standards of either the
OMB guidelines or the agency-specific guidelines. However, opponents of the act

55 OMB published those government-wide guidelines in interim form on September 28,
2001, and in updated final form on February 22, 2002. See Office of Management and
Budget, “Guidelines for Ensuring and Maximizing the Quality, Objectivity, Utility, and
Integrity of Information Disseminated by Federal Agencies; Republication,” Federal
Register, vol. 67, no. 36, Feb. 22, 2002, p. 8452.
56 For a copy of this report, see [
57 For a copy of this report, see [].

and the guidelines contend the IQA may have a chilling effect on agency distribution
and use of scientific information. These opponents foresee a flood of information
quality challenges, correction requests, and court suits on a wide range of scientific
issues, which may tie up agency resources and significantly delay health, safety, and
environmental regulations. Opponents have also noted that since “quality” is a
subjective term and some regulations are based on “best available data,” regulations
could be arbitrarily rejected under this new law.
A major test of the IQA may be whether agencies’ denials of information
correction requests are subject to judicial review. In March 2006, the U.S. Court of
Appeals for the Fourth Circuit ruled that the act does not permit judicial review.58
Two district courts had previously reached a similar conclusion,59 and the
Department of Justice had issued a brief stating that the IQA does not permit judicial
review. 60
Peer Review. In a development closely related to the issue of information
quality, in September 2003, OMB published a proposed bulletin on “Peer Review
and Information Quality” that would have, if made final, provided a standardized61
process by which all significant regulatory information would be peer reviewed.
The authorities that OMB cited for this action were the IQA, the Paperwork
Reduction Act, and Executive Order 12866. “Regulatory information” was defined
in the bulletin as any scientific or technical study that “might” be used by federal,
state, local, or international regulatory bodies.
Specifically, the bulletin proposed requiring each federal agency (each executive
agency and independent regulatory agency) to take three actions: (1) have all
“significant regulatory information” that it intends to disseminate peer reviewed
(with information defined as “significant” if OMB determines that it will have a
clear and substantial impact on important public policies or private sector decisions);
(2) have “especially significant regulatory information” subject to the above

58 Salt Institute; Chamber of Commerce of the United States of America v. Michael O.
Leavitt, Secretary of Health and Human Services, No. 05-1097, Mar. 6, 2006.
59 In re: Operation of the Missouri River Sys. Litig., No. 03-MD-1555 at 49 (D. Minn. June
21, 2004) (order granting motions for summary judgment); and Salt Institute and the
Chamber of Commerce of the United States of America v. Tommy G. Thompson, Secretary,
U.S. Department of Health and Human Services, Civil Action No. 04-359, Nov. 15, 2004.
In the Salt Institute case, the court ruled that there is no private right of action under the
IQA, saying that the “language in the IQA reflects Congress’s intent that any challenges to
the quality of information disseminated by federal agencies should take place in
administrative proceedings before federal agencies and not the courts.” The court also said
that judicial review under the APA was not available because the agency’s actions did not
constitute a “final agency action,” and because the agency decisions were within the
discretion provided to the agency by law.
60 For more information on the IQA, see CRS Report RL32532, The Information Quality
Act: OMB’s Guidance and Initial Implementation, by Curtis W. Copeland.
61 Office of Management and Budget, Executive Office of the President, “Proposed Bulletin
on Peer Review and Information Quality,” Federal Register, vol. 68, no. 178, Sept. 15,

2003, p. 54023.

requirements peer reviewed according to even higher standards (with information
deemed “especially significant” if, among other things, it supports a regulatory action
with a $100 million or more impact on the economy or “is relevant to an
Administration policy priority”); and (3) provide OMB at least once each year with
information about upcoming significant regulatory disseminations and the agency’s
plans for conducting peer reviews. The proposed bulletin also said agencies that are
likely to disseminate “significant” or “especially significant” regulatory information
must supplement or amend their information quality guidelines to incorporate the
requirements of the proposed peer review bulletin for “significant” and “especially
significant” information. The proposed bulletin indicated that OMB could waive the
requirements for peer review if an agency made “a compelling case” that a waiver is
necessary (e.g., an imminent health hazard or homeland security threat).
OMB received 187 comments from the public and other agencies on its proposed
peer review bulletin, with some supporting its issuance in final and others calling for
its withdrawal and reconsideration. On April 15, 2004, OMB published a revised
bulletin, and again asked the public for comments.62 The revisions would, if made
!focus the bulletin’s coverage on “influential” scientific information,
not just “regulatory” information;
!narrow the scope of the section describing the characteristics of peer
review for the most important types of information so that it covers
only “scientific assessments” (not all influential information) that,
among other things, have a $500 million annual impact (rather than
a $100 impact on the economy);
!clarify that regulatory impact analyses are not covered by the
bulletin, but the models and data underlying them are covered;
!clarify that the bulletin does not cover information products released
by government-funded scientists unless it represents an official view
of a federal department or agency;
!specify that the responsibility for determining the need for a waiver
from the bulletin’s peer review requirements in the event of an
emergency or otherwise “compelling need” rests with the agencies;
!provide agencies with greater flexibility (e.g., in determining the
appropriate intensity of peer review, and when the comments of
specific reviewers should be disclosed, and in the use of alternative
scientific procedures); and

62 For a copy of the revised peer review bulletin, see [
omb/inforeg/peer_review041404.pdf]. For a summary of the public and agency comments
provided regarding the first bulletin, see [
peer_review_comment.pdf]. Copies of the comments can be viewed at [http://www. omb/inforeg/ 2003iq/iq_list.html ].

!clarify that researchers that receive research grants based on
“investigator-initiated, peer reviewed competitions” can still serve
as peer reviewers.
On December 15, 2004, OMB published a final version of the peer review
bulletin on its website.63 The final bulletin was published in the Federal Register on
January 14, 2005.64 OMB said this version reflects “minor revisions” made in
response to more than 50 comments from the public on the revised bulletin. For
example, the final bulletin requires agencies to disclose the names of peer reviewers
to the public and adds an annual reporting requirement to allow OMB to track how
agencies are using the bulletin. However, agencies are still afforded substantial
discretion to determine when and what type of peer review is required. OMB also
retains substantial discretion in certain areas.
OMB and supporters of the peer review bulletin indicate that peer review
standards across the government are currently inconsistent, and that more consistent
use of peer review can increase the technical quality and credibility of regulatory
science.65 They also assert that peer review can protect science-based regulations
from political criticism and litigation. Opponents view the bulletin as an effort to
inject political considerations into the world of science and to use the uncertainty that
inevitably surrounds science as an excuse to delay new rules that could cost regulated
entities millions or even billions of dollars. They also expressed concerns regarding
the need for the bulletin and OMB’s authority to issue it.66
Other Statutory Provisions Related to Rulemaking
Other statutory provisions have been enacted over the years that, while generally
not imposing new rulemaking requirements per se, can affect the rulemaking process.
Federal Advisory Committee Act. Several statutes either require or permit
the use of advisory committees in the federal rulemaking process. An advisory
committee may be composed of experts in the regulatory field involved,

63 Office of Management and Budget, Final Information Quality Bulletin for Peer Review,
Dec. 15, 2004, available at [
64 Office of Management and Budget, Final Information Quality Bulletin for Peer Review,

70 Federal Register 2664 (Jan. 14, 2005).

65 In a Sept. 20, 2001, memorandum to the President’s Management Council, the OIRA
Administrator previously indicated that, during its reviews of agencies’ draft rules under
Executive Order 12866, it would give a “measure of deference” to regulatory analyses that
had been peer reviewed.
66 For more information, see CRS Report RL32680, Peer Review: OMB’s Proposed,
Revised, and Final Bulletins, by Curtis W. Copeland and Eric A. Fischer.

representatives of the interest groups affected by the rule, and related federal or state
agencies, and may help set the agency’s rulemaking agenda or may simply serve as
a sounding board for agency ideas. The enactment of the Federal Advisory
Committee Act (FACA) of 1972 (5 U.S.C. App. II) established requirements to
ensure that agencies using advisory committees receive impartial and relevant
expertise. Specifically, FACA requires that the advice provided by advisory
committees be objective and accessible to the public. With certain exceptions, each
advisory committee meeting is presumptively open to the public. Adequate advance
notice of the meetings must be published in the Federal Register, and all papers,
records, and minutes of the meetings must generally be made available to the public.
FACA also requires that the advisory committees be fairly balanced in regard to the
points of view of affected interests and the functions performed. The act defines an
advisory committee as any committee or similar group (1) established or used to
obtain advice or recommendation for one or more federal agencies or the President
and (2) that is not composed wholly of full-time federal officers or employees.
Trade Agreements Act. The Trade Agreements Act of 1979 (19 U.S.C.
§§2531-2533) prohibits agencies from setting regulatory standards that create
“unnecessary obstacles to foreign commerce” of the United States. The act
specifically states that legitimate domestic objectives such as safety or health are not
considered unnecessary obstacles. The statute also requires, where appropriate, the
use of performance standards rather than design standards and the consideration of
international standards as the basis of domestic standards.
Negotiated Rulemaking Act. The Negotiated Rulemaking Act of 1990 (5
U.S.C. §§561-570a), as amended and permanently authorized in 1996 (110 Stat.
3870), seeks to overcome what some observers describe as an adversarial relationship
between agencies and affected interest groups that often accompanies agency
rulemaking. The concept of negotiated rulemaking (sometimes referred to as
regulatory negotiation or “reg-neg”) emerged in the 1980s as a supplement to the
traditional procedure for developing regulations. Negotiated rulemaking does not
replace procedures necessary under the APA. Instead, the act encourages (but does
not require) agencies to consider convening a negotiated rulemaking committee
before developing and issuing a proposed regulation under the APA. The committee,
composed of representatives of the agency and the various interest groups that would
be affected by the proposed regulation, addresses areas of concern in the hope that
it can reach agreement on the contents of a proposed regulation. The agency can, if
it agrees, then issue the agreement as a proposed rule, and eventually a final rule
under existing APA requirements. The expectation is that any rule drafted through
negotiated rulemaking would be easier to implement and less likely to be the subject
of subsequent litigation. However, any proposal agreed to by the negotiated
rulemaking committee is not binding on the agency or other parties.
The major provisions of the act require that (1) a negotiated rulemaking
committee consist of at least one member of the agency and no more than 25
members, unless the head of the agency determines that more are needed; (2) the
agency select an impartial “facilitator” to chair meetings, subject to the approval of
the committee by consensus; (3) an agreement on any negotiated rulemaking must
be unanimous, unless the negotiated rulemaking committee agrees to other
conditions; and (4) the head of an agency, when deciding whether to establish a

negotiated rulemaking committee, assure that (a) there are a limited number of
identifiable interests that will be significantly affected by the rule; (b) there is a
reasonable chance that a committee can be convened with a balanced representation
of interested parties willing to negotiate in good faith; and (c) there is a reasonable
likelihood that a committee will reach a consensus on the proposed rule within a
fixed period of time.
An agency may pay reasonable travel and per diem expenses, and reasonable
compensation to negotiating committee members under certain conditions. The
agency must comply with FACA in establishing and administering the committee.
Agency procedural actions related to establishing, assisting, or terminating the
committee are not subject to judicial review, but any judicial review available
regarding the rule resulting from negotiated rulemaking is unaffected.67 Although the
use of negotiated rulemaking was expected to improve rulemaking timeliness and
reduce litigation, one examination of agencies’ efforts in this area indicated that those
expectations were not being fulfilled.68 However, another study indicated that
negotiated rulemaking can improve participants’ perception of the final rule and of
the overall rulemaking process.69 Although the Negotiated Rulemaking Act gives
agencies substantial discretion as to whether the approach should be employed in
rulemaking, Congress has sometimes mandated its use by rulemaking agencies and
established specific procedures and time frames to follow.70
National Technology Transfer and Advancement Act. Section 12(d)
of the National Technology Transfer and Advancement Act (15 U.S.C. §272 note),
adopted in March 1996, generally requires federal agencies to “use technical
standards that are developed or adopted by voluntary consensus standards bodies” to
carry out policy objectives unless doing so is “inconsistent with applicable law or
otherwise impractical.” Agencies are also required to consult with and (if in the
public interest and compatible with agency missions, authority, priorities, and
resources) participate with voluntary, private sector, consensus bodies. This
provision essentially codified policies already in existence in OMB Circular A-119,
and also established reporting requirements and authorized the National Institute of
Standards and Technology (NIST) within the Department of Commerce to coordinate
agencies’ conformity assessment activities. According to NIST, federal agencies use
consensus standards in hundreds of federal procurement or regulatory programs (e.g.,
requiring certification from Underwriters Laboratories that a product is safe or

67 For a complete discussion of negotiated rulemaking, see Administrative Conference of the
United States, Negotiated Rulemaking Sourcebook (Sept. 1995).
68 Cary Coglianese, “Assessing Consensus: The Promise and Performance of Negotiated
Rulemaking,” Duke University Law Journal, vol. 46 (1997), pp. 1255-1349.
69 Laura I. Langbein and Cornelius M. Kerwin, “Regulatory Negotiation versus
Conventional Rulemaking: Claims, Counterclaims, and Empirical Evidence,” Journal of
Public Administration Research and Theory, vol. 10 (2000), pp. 599-632.
70 For more information, see CRS Report RL32452, Negotiated Rulemaking, by Curtis W.

requiring individuals in certain professions meet specific educational or competency
standards). 71
Regulatory Right-to-Know Act. Section 624 of the Treasury and General
Government Appropriations Act, 2001 (31 U.S.C. §1105 note), sometimes referred
to as the “Regulatory Right-to-Know Act,” requires OMB to prepare and submit with
the budget an “accounting statement and associated report” containing an estimate
of the total costs and benefits (including quantifiable and nonquantifiable effects) of
federal rules and paperwork, to the extent feasible, (1) in the aggregate, (2) by agency
and agency program, and (3) by major rule. The accounting statement is also to
contain an analysis of impacts of federal regulation on state, local, and tribal
governments, small businesses, wages, and economic growth. The statute requires
an accounting statement and report for calendar year 2002 “and each year
thereafter.”72 To prepare the report, OMB relies heavily on agencies’ estimates of
costs and benefits for individual rules published during the previous 10 years.
However, if an agency quantified but did not monetize its estimates, OMB monetizes
them using “standard” assumptions. In its reports, OMB attempts to capture the
agencies’ nonquantified benefits and costs in “other information” columns, but73
OMB’s monetized estimates exclude these effects.
Government Paperwork Elimination Act. In 1998, Congress enacted the
Government Paperwork Elimination Act (GPEA) (44 U.S.C. §3504 note), which
required that by October 21, 2003, federal agencies provide the public, when
practicable, with the option of submitting, maintaining, and disclosing information
electronically, instead of on paper. GPEA makes OMB responsible for ensuring that
federal agencies meet the act’s implementation deadline. Although GPEA does not
specifically mention rulemaking, both OMB and rulemaking agencies have indicated
that its requirements have provided an impetus for developing information
technology-based approaches to rulemaking that involves information collection and,
more generally, to regulatory management.
E-Government Act. The E-Government Act of 2002 (44 U.S.C.A. §3601
note) was designed to enhance the management and promotion of electronic
government services and processes, and contains requirements affecting the
rulemaking process. Specifically, section 206 of the act requires agencies, to the
extent practicable, to:
!ensure that a publicly accessible website includes all information
about that agency that is required to be published in the Federal

71 For a discussion of federal policies relating to certification and consensus standards, see
U.S. General Accounting Office, Certification Requirements: New Guidance Should
Encourage Transparency in Agency Decisionmaking, GAO/GGD-99-170, Sept. 24, 1999.
72 The accounting statement requirement had been included in appropriations bills for
several previous years on a year-to-year basis.
73 See [] for copies
of OMB’s reports to Congress on this issue.

!accept public comments on proposed rules “by electronic means,”
!ensure that a publicly accessible federal website contains “electronic
dockets” for proposed rules containing all comments submitted on
the rules as well as “other materials that by agency rule or practice
are included in the rulemaking docket under (the APA), whether or
not submitted electronically.”
The E-Government Act also requires agencies to conduct a “privacy impact
assessment” before initiating a new collection of information that uses information
technology and contains individually identifying information. In addition, the act
established an Office of Electronic Government within OMB, headed by an
Administrator appointed by the President. It requires the Administrator of that office
to work with the Administrator of OIRA in establishing the strategic direction of the
e-government program, and to oversee its implementation.
In January 2003, the Bush Administration launched the “”
website — the first module of its own “e-rulemaking” initiative that would
accomplish many of the objectives of the E-Government Act. The website permits
the public to identify proposed rules that are open for comment government-wide,
and permits the public to comment electronically on those rules.74 The second
module of the e-rulemaking initiative is intended to create one or more electronic
dockets for proposed and final rules. The Environmental Protection Agency (EPA)
is the lead agency for the e-rulemaking initiative.
E-rulemaking has been described as a way to increase democratic legitimacy,
improve regulatory policy decisions, decrease administrative costs, and increase
regulatory compliance. However, the implementation of e-rulemaking in the federal
government has been controversial. Although the migration of agencies into the
government-wide docket was originally planned for 2004, that migration was not
completed until 2008. Congress has objected to how e-rulemaking and several other
e-government projects have been funded (through appropriations transfers or
reimbursements to the projects’ “managing partner” agencies), and has voiced other
concerns about the overall management and appropriateness of the initiatives.
Questions have also been raised regarding the e-rulemaking initiative’s centralized
structure, its costs (more than $53 million spent through FY2008) and expected
financial benefits, the functionality of some of the applications being used, and its
effect on public participation in the rulemaking process.
The reasons why the federal e-rulemaking initiative has had such a difficult first
five years are many, but one appears to be the lack of direct, consistent funding.
From FY2003 through FY2007, Congress appropriated less than $20 million to the
E-Government Fund for all e-government projects — much less than the $345
million authorized in the E-Government Act for that period. Congress has also
required approval by the Appropriations Committees before any transfers or

74 For a comparison of the website with individual agency systems, see U.S.
General Accounting Office, Electronic Rulemaking: Efforts to Facilitate Public
Participation Can Be Improved, GAO-03-90, Sept. 17, 2003.

reimbursements of appropriations are made. Although some have suggested that
better communication is needed between Congress and the executive branch, the
recent conflicts may reflect basic differences of opinion between the two branches
regarding control of federal operations and how the branches should interact. A long-
term issue is whether e-rulemaking should continue to be housed in EPA.75
Small Business Paperwork Relief Act. In June 2002, Congress enacted
and the President signed the Small Business Paperwork Relief Act of 2002 (P.L. 107-
198). The act amended the Paperwork Reduction Act to, among other things, require
each agency to establish a single point of contact to act as a liaison for small business
concerns with regard to information collection and paperwork issues. It also directed
agencies to make a special effort to reduce information collection burdens for small
businesses with fewer than 25 employees. OMB was directed to publish in the
Federal Register and make available on the Internet an annual list of the compliance76
assistance resources available to small businesses. The act also required agencies
to report to Congress on the amount of penalty relief provided to small businesses,
and established a task force to study the feasibility of streamlining information
collection requirements on small businesses.
Executive Orders and Directives
During the past 20 years, each President has issued executive orders and/or
presidential directives designed to guide the federal rulemaking process, often with
the goal of reducing regulatory burden. Although independent regulatory agencies
are generally not covered by these requirements, they are often encouraged to follow
them. By far the most important of the current executive rulemaking requirements
is Executive Order 12866,77 which describes both the principles and the process by
which presidential regulatory review currently takes place.
Executive Order 12866
Centralized review of agencies’ regulations within the Executive Office of the
President has been part of the federal rulemaking process for more than 30 years.
Although each of his three predecessors had some type of review process, the most
significant development in the evolution of presidential review of rulemaking
occurred in 1981, when President Reagan issued Executive Order 12291. The
executive order established a set of general requirements for rulemaking, and
required federal agencies (other than independent regulatory agencies) to send a copy
of each draft proposed and final rule to OMB before publication in the Federal

75 For more information, see CRS Report RL34210, Electronic Rulemaking in the Federal
Government, by Curtis W. Copeland.
76 These lists of compliance assistance resources are available on the OMB website at
[] and on the SBA website at
[ h t t p : / / www.sba.go v/ ombudsma n/ comp l i a nce/ compl i a nceassi st .ht ml ] .
77 Executive Order 12866, “Regulatory Planning and Review,” 58 Federal Register 51735,
Oct. 4, 1993.

Register. It also required covered agencies to prepare a regulatory impact analysis
for each “major” rule (e.g., those with a $100 million impact on the economy). As
a result of this order, OIRA’s responsibilities were greatly expanded from paperwork
reviews to examinations of the substance of covered agencies rules — between 2,000
and 3,000 reviews per year. In 1985, President Reagan expanded OIRA’s influence
further by issuing Executive Order 12498, which required covered agencies (all
except independent regulatory agencies) to submit a regulatory plan to OMB for
review each year that covered all of their significant regulatory actions underway or
On September 30, 1993, President Clinton issued Executive Order 12866, which
revoked Executive Orders 12291 and 12498 and established a new process for OIRA
review of rules.78 Like its predecessors, the new executive order limited OIRA’s
reviews to proposed and final rules published by agencies other than independent
regulatory agencies. However, it also limited OIRA reviews to actions identified by
the rulemaking agency or OIRA as “significant” regulatory actions, defined as those
that were “economically significant” (e.g., those with a $100 million impact on the
economy) or that (1) were inconsistent or interfered with an action taken or planned
by another agency; (2) materially altered the budgetary impact of entitlements, grants,
user fees, or loan programs; or (3) raised novel legal or policy issues. As a result, the
number of rules that OIRA reviewed dropped from between 2,000 and 3,000 per year
to between 500 and 700 per year.
Executive Order 12866 also differs from its predecessors in other respects. For
example, the order requires that OIRA generally complete its reviews of proposed
and final rules within 90 calendar days. It also requires both rulemaking agencies and
OIRA to disclose certain information about how the regulatory reviews were
conducted. For example, agencies are to identify for the public (1) the substantive
changes made to rules between the draft submitted to OIRA for review and the action
subsequently announced, and (2) changes made at the suggestion or recommendation
of OIRA. OIRA is required to, among other things, provide agencies with a copy of
all communications between OIRA personnel and parties outside of the executive
branch, and to maintain a public log of all regulatory actions under review and of all
of the documents provided to the agencies.79
For each significant draft rule, the executive order requires the issuing agency
to provide to OIRA the text of the draft rule, a description of why the rule is needed,
and a general assessment of the rule’s costs and benefits. For draft rules that are
“economically significant,” the executive order requires a detailed cost-benefit
analysis, including an assessment of the costs and benefits of “potentially effective
and reasonably feasible alternatives to the planned regulation.” One of the
“principles of regulation” in the order is that agencies shall “propose or adopt a
regulation only upon a reasoned determination that the benefits of the intended

78 Although issued on September 30, 1993, the executive order was not printed in the
Federal Register until several days later. See The President, “Executive Order 12866 —
Regulatory Planning and Review,” Federal Register, vol. 58, no. 190 (Oct. 4, 1993).
79 For a current list of regulations under OIRA review or reviews completed within the past

30 days, see [].

regulation justify its costs.” The order also says that when setting regulatory
priorities, “each agency shall consider, to the extent reasonable, the degree and nature
of the risks posed by various substances or activities within its jurisdiction.” The
executive order’s “regulatory philosophy” states that unless a statute requires another
regulatory approach, “in choosing among alternative regulatory approaches, agencies
should select those approaches that maximize net benefits.”80
During the formal Executive Order 12866 review process, OIRA analyzes the
draft rule in light of the principles of the executive order and discusses the rule with
staff and officials at the rulemaking agency. OIRA may also discuss the draft rule
with other agencies with whom interagency coordination will be necessary, and may
meet or otherwise communicate with interested stakeholders outside of the federal
government.81 At the end of the review OIRA either concludes that the draft rule is
consistent with the principles of the executive order (the majority of the cases) or
returns the rule to the agency “for further consideration.” In some cases agencies
withdraw their draft rules during OIRA’s review. If the draft is a proposed rule, the
agency may then publish an NPRM. If the draft is a final rule, the agency may then
publish a final rule and allow the rule to take effect. OIRA staff also sometimes
review draft rules informally before their formal submission under the executive
order — particularly when there is a statutory or legal deadline or when a rule has a
large impact on society.
OIRA’s formal review process has not changed substantially since Executive
Order 12866 was issued in 1993.82 However, GAO reported in September 2003 that
there had been several changes in OIRA policies and practices since the current
OIRA Administrator (Dr. John Graham) took office in July 2001, including (1)
increased use of public letters explaining why OIRA returned rules to agencies for
their consideration and suggesting regulatory action, (2) increased emphasis on cost-
benefit analysis and peer review of agencies’ rules, (3) stricter adherence to the 90-
day time limit for OIRA review, (4) improvements in the transparency of the OIRA
review process, and (5) an increase in the size and skills of OIRA’s staff.83
Underlying many of these changes is a shift in how recent OIRA administrators view

80 In January 1996, OIRA published a document that described “best practices” for preparing
the economic analyses called for by the executive order. This document was revised and
issued as guidance in 2000. In September 2003, OMB and the Council of Economic
Advisors finalized new guidance for agencies on regulatory analysis, refining and replacing
the 1996 “best practices” document. For a copy of this guidance, see [http://www. omb/circulars/a004/a-4.pdf].
81 OIRA has indicated that it will try and accommodate any request for a meeting with
parties outside of the federal government. OIRA discloses these contacts on its website at
[]. A representative from the agency
issuing the rule must be invited to any such meeting.
82 Executive Order 13258 reassigned certain responsibilities from the Vice President to the
President’s chief of staff, but otherwise did not change the OIRA review process. See The
President, “Executive Order 13258 — Amending Executive Order 12866 on Regulatory
Planning and Review,” Federal Register, vol. 67, no. 40, Feb. 28, 2002, p. 9385.
83 U.S. General Accounting Office, Rulemaking: OMB’s Role in Reviews of Agencies’ Draft
Rules and the Transparency of Those Reviews, GAO-03-929, Sept. 22, 2003.

the office’s role in the rulemaking process — from “counselor” to the agencies to
regulatory “gatekeeper.” GAO also concluded that, recent changes notwithstanding,
the OIRA review process was still not very transparent to the public, and
recommended several changes in OIRA’s disclosure policies.
GAO and others have also examined agencies’ analyses of economically
significant rules under the executive order.84 For example, in 1998 GAO reported
that some of the 20 economic analyses that it examined from five agencies did not
incorporate all of the best practices set forth in OMB’s guidance.85 Five of the
analyses did not discuss alternatives to the proposed regulatory action and, in many
cases, it was not clear why the agencies used certain assumptions. Also, five of the
analyses did not discuss uncertainty associated with the agencies’ estimates of
benefits and/or costs or document the agencies’ reasons for not doing so.
Executive Order 12866 also includes several other notable requirements. For
example, section 5 of the order requires agencies to periodically review their existing
significant regulations to determine whether they should be modified or eliminated.
In March 1995, President Clinton reemphasized this requirement by directing each
agency to conduct a page-by-page review of all existing regulations. In June 1995,
the President announced that 16,000 pages had been eliminated from the Code of
Federal Regulations. GAO reported on this review effort in October 1997, noting
that the page elimination totals that four agencies reported did not take into account
pages that had been added while the eliminations took place.86 GAO also reported
that about half of the actions taken appeared to have no effect on the burden felt by
regulated entities, would have little effect, or could increase regulatory burden.
Executive Order 13422
On January 18, 2007, President George W. Bush issued Executive Order 13422,
making the most significant amendments to Executive Order 12866 since it was
published. The changes made by this new executive order are controversial,
characterized by some as a “power grab” by the White House that undermines public
protections and lessens congressional authority and by others as “a paragon of
common sense and good government.” The most important changes made by
Executive Order 13422 fall into five general categories: (1) a requirement that
agencies identify in writing the specific market failure or problem that warrants a
new regulation, (2) a requirement that each agency head designate a presidential
appointee within the agency as a “regulatory policy officer” who can control
upcoming rulemaking activity in that agency, (3) a requirement that agencies provide

84 See, for example, Richard D. Morgenstern, ed., Economic Analyses at EPA: Assessing
Regulatory Impact (Washington: Resources for the Future, 1997); and Robert W. Hahn, ed.,
Risks, Costs, and Lives Saved: Getting Better Results from Regulation (Washington: AEI
Press, 1996).
85 U.S. General Accounting Office, Regulatory Reform: Agencies Could Improve
Development, Documentation, and Clarity of Regulatory Economic Analyses, GAO/RCED-

98-142, May 26, 1998.

86 U.S. General Accounting Office, Regulatory Reform: Agencies’ Efforts to Eliminate and
Revise Rules Yield Mixed Results, GAO/GGD-98-3, Oct. 2, 1997.

their best estimates of the cumulative regulatory costs and benefits of rules they
expect to publish in the coming year, (4) an expansion of OIRA review to include
significant guidance documents,87 and (5) a provision permitting agencies to consider
whether to use more formal rulemaking procedures in certain cases.
The changes made by the executive order were controversial, and in the first half
of 2007, two House subcommittees held three oversight hearings on the order. A
provision was added to the appropriations measure funding OMB for FY2008 that
would have prevented the implementation of the executive order, but the measure
was eliminated from the final version of the legislation. The significance of the
changes made to the review process by Executive rder 13422 may become clear only
through their implementation, but those changes represent a clear expansion of
presidential authority over rulemaking agencies. In that regard, Executive Order
13422 can be viewed as part of a broader statement of presidential authority
presented throughout the Bush Administration.88
Other Executive Orders and Directives
Agencies other than independent regulatory agencies must also be aware of an
array of other rulemaking requirements contained in executive orders and presidential
directives. For example:
!Executive Order 13132 on “Federalism” requires covered federal
agencies to “have an accountable process to ensure meaningful and
timely input by State and local officials in the development of
regulatory policies that have federalism implications.”89 The order
defines “federalism implications” as “substantial direct effects on the
States, on the relationship between the national government and the
States, or on the distribution of power and responsibilities among the
various levels of government.” Federal agencies are prohibited from
promulgating any regulation with unfunded federalism implications
unless they have (1) consulted with state and local officials early in
the development of the proposed rule, and (2) prepared a “federalism
summary impact statement” consisting of a description of the prior
consultation with state and local officials, a summary of their
concerns and the agency’s position regarding the need to issue the

87 On the same day that E.O. 13422 was issued, OMB also issued a “Final Bulletin for
Agency Good Guidance Practices” that mirrored, in many respects, the provisions in this
section of the executive order. Unlike the order, however, the bulletin requires agencies to
include certain standard elements in their significant guidance documents, to list those
documents on the agencies’ websites, and to publish a notice in the Federal Register
soliciting public comments on economically significant documents. To view a copy of this
bulletin, see []; and Office
of Management and Budget, “Final Bulletin for Agency Good Guidance Practices,” 72
Federal Register 3432, January 25, 2007.
88 For more information, see CRS Report RL33862, Changes to the OMB Regulatory Review
Process by Executive Order 13422, by Curtis W. Copeland.
89 Executive Order 13132, “Federalism,” 64 Federal Register 43255, Aug. 10, 1999.

rule, and a statement of the extent to which the officials’ concerns
have been met. The order gives agencies substantial discretion
regarding its implementation. For example, it does not define what
type of regulatory action constitutes “substantial direct effects,” and
says the consultation and impact statement requirements apply “to
the extent practicable.”90
!Executive Order 12630 on constitutionally protected property rights
says each agency “shall be guided by” certain principles when
formulating or implementing policies that have “takings”
implications.91 For example, the order says that private property
should be taken only for “real and substantial threats,” and “be no
greater than is necessary.”92
!Executive Order 12889 on the North American Free Trade
Agreement generally requires agencies subject to the APA to
provide at least a 75-day comment period for any “proposed Federal
technical regulation or any Federal sanitary or phytosanitary measure
of general application.”93
!Executive Order 12898 on environmental justice says (among other
things) that each agency must develop a 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.94 It also says that
environmental human health research should include diverse
segments of the population in epidemiological and clinical studies,
and that agencies should identify rules that should be revised to meet
the objectives of the order.
!Executive Order 12988 on civil justice reform generally requires
agencies reviewing existing and new regulations to ensure that they
comply with specific requirements (e.g., “eliminate drafting errors

90 Executive Order 12612, the previous executive order on federalism, also gave federal
agencies broad discretion to determine the applicability of its requirements. GAO examined
the implementation of this order and concluded that its analytical requirements were rarely
implemented. See U.S. General Accounting Office, Federalism: Previous Initiatives Have
Had Little Effect on Agency Rulemaking, GAO/T-GGD-99-3, June 30, 1999.
91 Executive Order 12630, “Governmental Actions and Interference with Constitutionally
Protected Property Rights,” 53 Federal Register 8859, Mar. 18, 1988.
92 For an analysis of how this executive order has been implemented, see U.S. General
Accounting Office, Regulatory Takings: Implementation of Executive Order on Government
Actions Affecting Private Property Use, GAO-03-1015, Sept. 19, 2003.
93 Executive Order 12889, “Implementation of the North American Free Trade Agreement,”

58 Federal Register 69681, Dec. 30, 1993.

94 Executive Order 12898, “Federal Actions to Address Environmental Justice in Minority
Populations and Low-Income Populations,” 59 Federal Register 7629, Feb. 16, 1994.

and ambiguity” and “provide a clear legal standard for affected
conduct”) to improve regulatory drafting in order to minimize
litigation.95 Agencies formulating proposed regulations are directed
to “make every reasonable effort” to ensure that they, among other
things, specify in clear language any preemptive or retroactive
effects, and the effect on existing law.
!Executive Order 13045 on protection of children from
environmental health risks and safety risks says that for any
substantive rulemaking action that is likely to result in an
economically significant rule that concerns an environmental health
risk or safety risk that may disproportionately affect children, the
agency must provide OIRA with (1) an evaluation of the
environmental or safety effects on children and (2) an explanation of
why the planned regulation is preferable to other potentially effective
and reasonably feasible alternatives.96
!Executive Order 13175 on consultation and coordination with Indian
tribal governments generally prohibits agencies from promulgating
any regulation not required by law that has tribal implications and
imposes substantial direct costs on tribal governments unless the
necessary funds are provided or the agency consults with tribal
officials and provides a “tribal summary impact statement”
describing those consultations.97 Similar consultation and impact
statement requirements apply to rules that preempt tribal laws.
!Executive Order 13211 on energy impacts requires agencies (to the
extent permitted by law) to prepare and submit to OMB a “statement
of energy effects” for significant energy actions.98 The statement,
published in the NPRM and the final rule, is to include a detailed
statement of “any adverse effects on energy supply, distribution, or
use” for the action and reasonable alternatives and their effects.
!Executive Order 13272 on small entities generally requires federal
agencies to issue (by February 2003) written procedures and policies
to ensure proper consideration during the rulemaking process of the
impacts of their draft rules on small entities.99 The order also
requires agencies to notify the SBA Chief Counsel for Advocacy of

95 Executive Order 12988, “Civil Justice Reform,” 61 Federal Register 4729, Feb. 7, 1996.
96 Executive Order 13045, “Protection of Children from Environmental Health Risks and
Safety Risks,” 62 Federal Register 19885, Apr. 23, 1997.
97 Executive Order 13175, “Consultation and Coordination with Indian Tribal
Governments,” 65 Federal Register 67249, Nov. 9, 2000.
98 Executive Order 13211, “Actions Concerning Regulations That Significantly Affect
Energy Supply, Distribution, or Use,” 66 Federal Register 28355, May 22, 2001.
99 Executive Order 13272, “Proper Consideration of Small Entities in Agency Rulemaking,”

67 Federal Register 53461, Aug. 16, 2002.

any draft rules that may have a significant economic impact on a
substantial number of small entities, and to give “every appropriate
consideration” to any comments the Chief Counsel provides.
In addition to executive orders, presidential memoranda or directives can also
affect the rulemaking process. For example:
!a March 4, 1995, presidential memorandum directed federal
agencies to (among other things) focus their regulatory programs on
results, not process, and expand their use of negotiated rulemaking.
!an April 21, 1995, memorandum directed agencies to waive or
reduce penalties in certain circumstances, and to reduce the
frequency of reports the public is required to provide to the
!a June 1, 1998, presidential directive required agencies to use plain
language in proposed and final rulemaking documents.
During the past 60 to 65 years, Congress and various Presidents have made
numerous attempts to add structure, economy, efficiency, accountability, and greater
public access and transparency to the regulatory process. In this regard, Congress has
enacted laws such as the Administrative Procedure Act, the Regulatory Flexibility
Act, the Paperwork Reduction Act, and the Unfunded Mandates Reform Act that
require some type of procedure, review, and/or analysis of draft rules by the
rulemaking agencies themselves or by outside parties. Presidential rulemaking
requirements have often focused on coordination of agencies’ regulatory efforts with
the President’s priorities and attempts to improve the quality of regulations through
cost-benefit analysis, risk assessment analysis, and the consideration of specific
factors in the rulemaking process (e.g., environmental justice, children, and property
rights). Underlying many of these congressional and presidential requirements is an
attempt to ensure that certain interests or issues are considered during the rulemaking
process and/or to minimize the burden associated with federal regulations.
However, these rulemaking requirements impose burdens of their own on
rulemaking agencies, and clearly are a factor (although it is unclear whether they are
the most important factor) in the length of time it takes agencies to issue rules.
Federal agencies must be aware of the cross-cutting and the program-specific
statutory and executive requirements underlying their regulations and must craft rules
that are consistent with those requirements — or run the risk of having their rules
returned to them by OIRA or rejected by Congress or the courts. Several of these
statutes and orders indicate that their requirements may be integrated with or satisfied
by the requirements in other statutes or orders. For example, the Regulatory
Flexibility Act states that federal agencies can develop their regulatory agendas and
perform their regulatory flexibility analyses “in conjunction with or as a part of any

other agenda or analysis required by any other law.” Some observers believe that
integration and consolidation of all these requirements could improve the rulemaking
process. In 1993 the Administrative Conference of the United States noted that the
simple requirements in the Administrative Procedure Act for informal rulemaking
had been “overlain with an increasing number of constraints,” including those
imposed by Congress, Presidents, and the courts. The Administrative Conference
recommended a “coordinated framework of proposals aimed at promoting efficient
and effective rulemaking.” Since then, the number of rulemaking requirements has
On the other hand, many of these statutory and executive order provisions
provide the agencies substantial discretion regarding when and how the rulemaking
requirements are to be applied. For example, because the Regulatory Flexibility Act
does not define the term “significant impact on a substantial number of small
entities,” agencies have a great deal of latitude to determine when a regulatory
flexibility analysis is required. Similarly, Executive Order 13132 does not define the
term “significant federalism implications,” so agencies have substantial discretion in
deciding whether the analytical requirements of the order have been triggered. Other
rulemaking requirements are written in such a way that they actually apply to only
a small number of rules. For example, title II of the Unfunded Mandates Reform Act
does not apply to any rules published by independent regulatory agencies or any rules
for which an agency determines there is “good cause” not to publish a notice of
proposed rulemaking. Other rules are exempt from UMRA if they are conditions of
federal financial assistance or enforce constitutional rights.
The discretion and exceptions built into these rulemaking statutes and orders
diminish their impact, and allow agencies knowledgeable of their provisions to avoid
many of the analyses and procedures they seem to require. For example, on hundreds
of occasions, agencies have stated in the preambles to their rules that because they
believed there was “good cause” not to issue a notice of proposed rulemaking, the
requirements of the RFA and/or UMRA do not apply. Agencies also have standard
language that they insert into preambles certifying that their rules do not require
regulatory flexibility analyses or UMRA written statements. And if agencies are not
required to prepare regulatory flexibility analyses for their proposed rules, they are
also exempt from the SBREFA requirements to prepare small entity compliance
guides and (in the case of OSHA and EPA) to convene advocacy review panels.
Because of the inevitability of regulation and its associated burden, efforts to
either tighten existing requirements or impose new ones are likely to continue. A
clear understanding of the existing requirements and how they have been
implemented may inform any such future efforts.

For Additional Information
Kerwin, Cornelius M., Rulemaking: How Government Agencies Write Law and Make
Policy, Third Edition (Washington: CQ Press, 2003).
Lubbers, Jeffrey S., ed., A Guide To Federal Agency Rulemaking, Fourth Edition
(Chicago: ABA Publishing, 2006).
In addition, information regarding a variety of regulatory issues is available at the
following websites:
AEI-Brookings Joint Center for Regulatory Studies
[ h ttp://]
Center for Progressive Regulation
[ h ttp://www.progressi veregu]
Center for Regulatory Effectiveness
[ h ttp://]
Competitive Enterprise Institute
[ h ttp://]
Government Accountability Office (GAO, formerly the General Accounting Office)
Government Printing Office (GPO)
[ h ttp:// .html]
Heritage Foundation
[ h ttp://www.regu]
Office of Management and Budget
OMB Watch
[ h ttp://]
Regulatory Information Service Center
[ h ttp://www.regi]